The Economics of Ludwig von Mises Toward a Critical Reappraisal

[Front Matter and Table of Contents]: Introductory information regarding the Liberty Fund's digital publication of the 1976 symposium papers on Ludwig von Mises. Includes the table of contents, copyright information, and a list of contributors including Fritz Machlup, Israel Kirzner, and Murray Rothbard. [Preface]: Laurence Moss describes the origins of the 1974 symposium held at the Southern Economics Association meeting to reevaluate Mises' thought following his death. It outlines the roles of the participants and the goal of promoting interest in Mises' scientific contributions to foundations of economic science. [Introduction: A Biographical and Intellectual Sketch of Ludwig von Mises]: A detailed biographical overview of Mises, covering his education in Vienna under Wieser and Böhm-Bawerk, his military service, his work on the theory of money and credit, and his challenge to socialist economic calculation. It discusses his move to the United States, the publication of 'Human Action', and his development of 'praxeology' as a comprehensive science of human action. [Opening Remarks: Mises, Keynes, and the Question of Influence]: Fritz Machlup explores the intellectual relationship between Mises and Keynes. He provides evidence from Keynes' 'Treatise on Money' showing that Keynes credited Mises with early insights into the distinction between savings and investment, despite Keynes' earlier dismissive review of Mises' work due to language barriers. [The Monetary Economics of Ludwig von Mises: Part 1 - The Demand for Money]: Laurence Moss analyzes Mises' application of marginal utility theory to money. He critiques Mises' 'regression theorem' and the 'circularity problem,' comparing Mises' approach to Menger's and Patinkin's. The section also highlights Mises' pioneering work on how price expectations influence the demand for money during inflation. [The Monetary Economics of Ludwig von Mises: Part 2 - The Proportionality Theorem]: Moss examines Mises' rejection of the 'proportionality theorem' (the idea that prices change in direct proportion to the money supply). Mises argued that new money injections always cause non-neutral 'distribution effects' and wealth transfers because money enters the economy at specific points rather than all at once. [The Monetary Economics of Ludwig von Mises: Part 3 - The Origin of the Austrian Theory of the Business Cycle]: Moss explains how Mises developed the foundations of the Austrian Theory of the Business Cycle by extending Wicksell's cumulative process. Mises argued that bank credit expansion lowers the market interest rate below the natural rate, leading to a lengthening of the production period and eventual economic collapse unless credit is restricted. [Conclusion: Mises' Contribution to Economic Policy]: Moss concludes his survey of Mises' monetary economics by examining his policy prescriptions. Mises advocated for an international gold standard and free banking to constrain government 'inflationism,' which he viewed as a threat to democratic stability and a cause of wealth redistribution. Moss notes that while Mises shares similarities with modern monetarists, he was more radical in rejecting the 'proportionality theorem,' arguing that money is never neutral and always impacts relative prices. [Ludwig Von Mises And The Theory Of Capital And Interest]: Israel Kirzner explores Mises' contributions to the theory of capital and interest, positioning them as characteristically Austrian and subjectivist. He outlines Mises' departure from Böhm-Bawerk, specifically Mises' insistence that interest is a categorical manifestation of time preference rather than a product of capital's physical productivity. Kirzner also highlights Mises' definition of capital as an accounting tool for economic calculation rather than a physical aggregate of goods. [Mises on Capital and Interest: Summary and Comparisons]: Kirzner provides a six-point summary of Mises' views on capital and interest, emphasizing that interest is not a price for capital services but an expression of time preference. He contrasts Mises' 'extreme' subjectivism with the more technical and empirical approach of Böhm-Bawerk. Mises rejected the 'average period of production' and the role of physical productivity in interest theory, instead focusing on the ex ante choices of acting individuals and the necessity of monetary calculation for the concept of capital. [Mises and the Böhm-Bawerkian Theory]: Kirzner details Mises' disagreements with his mentor, Böhm-Bawerk. Mises sought to strip the theory of its non-subjective and technical elements, arguing that time preference is a praxeological category rather than an empirical psychological observation. He rejected Böhm-Bawerk's definition of capital as an aggregate of produced means of production, adopting instead Menger's view of capital as a monetary accounting concept essential for economic calculation in a market economy. [Mises and the Clark-Knight Tradition]: This section examines Mises' total rejection of the Clark-Knight tradition, which viewed capital as a self-perpetuating fund and interest as the fruit of capital's productivity. Mises dismissed the 'Crusonia plant' model as mysticism, arguing that capital maintenance requires deliberate human decision-making. He utilized the Mengerian framework of higher-order goods to show that factor prices already reflect discounted future services, meaning productivity cannot independently explain interest. Finally, Kirzner notes Mises' insistence that real-world capitalists always perform an entrepreneurial function. [Ludwig Von Mises And Economic Calculation Under Socialism]: Murray Rothbard critiques the 'orthodox' history of the socialist calculation debate, arguing that Mises' original challenge was never actually refuted by Barone or Lange. Rothbard emphasizes that Mises' argument was rooted in the rejection of static Walrasian equilibrium in favor of a dynamic process analysis. He explains that 'market socialism' fails because it ignores the essential entrepreneurial functions of capital allocation, shareholding, and risk-bearing, which cannot be replicated by managers 'playing market' without genuine private property and a capital market. [The Subjectivist Critique of Socialist Calculation]: Rothbard expands Mises' calculation argument by incorporating the subjectivist theory of cost developed by Hayek, Buchanan, and the LSE school. He argues that since costs are subjective mental estimates of forgone alternatives, they cannot be measured or used as objective rules by central planners. Rothbard also extends the argument to the private sector, suggesting that the inability to calculate in the absence of internal markets sets a limit on the size of firms, preventing the emergence of 'One Big Firm' even on a free market. [Ludwig Von Mises And The Justification Of The Liberal Order]: William Baumgarth examines Mises' political philosophy, characterizing it as a modern restatement of Enlightenment liberalism tailored for a complex commercial society. Mises argued that social cooperation through the division of labor creates a harmony of interests, but this order is threatened by the 'neurosis' of intellectuals who promote anti-capitalist ideologies. Baumgarth explores Mises' view that the 'saving lie' of the neurotic—blaming the social order for personal failure—drives the rejection of capitalism despite its superior productivity. [The Praxeological Foundation of Liberalism]: Baumgarth analyzes Mises' attempt to provide a value-free, utilitarian justification for liberty and private property based on the science of human action (praxeology). Mises defended democracy as a mechanism for social peace and advocated for a radical right of jurisdictional self-determination. However, Baumgarth questions whether Mises' disavowal of 'metaphysical' or moral arguments is sufficient, noting that thinkers like Hayek and Rothbard find it necessary to ground liberalism in substantive theories of justice and rights to effectively combat statism. [Critical Discussion Of The Four Papers]: Karen Vaughn provides a critical synthesis of the symposium papers. She highlights Mises' focus on market adjustment processes and disequilibrium, contrasting his work with the static equilibrium models of neoclassical economics (e.g., Patinkin). Vaughn critiques Mises' utilitarian defense of liberalism, arguing that efficiency arguments are vulnerable to empirical refutation (citing Fogel and Engerman on slavery) and that a robust defense of freedom requires a rational system of ethics beyond mere economic productivity. [Closing Remarks by Fritz Machlup]: Fritz Machlup offers concluding reflections on Mises' work, particularly his contributions to the demand for money and the circularity problem. He offers gentle corrections to Mises' views, suggesting that time preference should be viewed as an empirical question rather than a universal category of action. Machlup also clarifies the history of the term 'liberalism' and reinforces the idea that vertically integrated firms face calculation problems similar to those of socialist planners when they bypass market prices. [Appendices: Chronology and Bibliography]: This section contains a detailed chronology of Ludwig von Mises' life and career, from his birth in Lemberg in 1881 to his death in New York in 1973. It also provides an annotated bibliography of his major translated writings, including 'The Theory of Money and Credit', 'Socialism', 'Human Action', and 'Bureaucracy', along with brief descriptions of their central themes and historical significance. [Contributors and Footnotes]: Biographical sketches of the symposium contributors, including William Baumgarth, Israel Kirzner, Fritz Machlup, Laurence Moss, Murray Rothbard, and Karen Vaughn. The section also includes the collected footnotes for the preceding essays, providing references to the works of Mises, Hayek, Wicksell, and others mentioned in the text.