Quotes from Ludwig von Mises

Other inflationists realize very well that an increase in the quantity of money reduces the purchasing power of the monetary unit. But they endeavour to secure inflation none-the-less, because of its effect on the value of money; they want depreciation, because they want to favour debtors at the expense of creditors and because they want to encourage exportation and make importation difficult.

Depreciation of money can benefit debtors only when it is unforeseen. If inflationary measures and a reduction of the value of money are expected, then those who lend money will demand higher interest in order to compensate their probable loss of capital, and those who seek loans will be prepared to pay the higher interest because they have a prospect of gaining on capital account.

A third group of inflationists do not deny that inflation involves serious disadvantages. Nevertheless, they think that there are higher and more important aims of economic policy than a sound monetary system. They hold that although inflation may be a great evil, yet it is not the greatest evil, and that the State might under certain circumstances find itself in a position where it would do well to oppose greater evils with the lesser evil of inflation.

The nationalist, too, affirms Socialism, and objects only to its Internationalism. He wishes to combine Socialism with the ideas of Imperialism and the struggle against foreign nations. He is a national, not an international socialist; but he, also, approves of the essential principles of Socialism.1

The phenomenon of money presupposes an economic order in which production is based on division of labour and in which private property consists not only in goods of the first order (consumption goods), but also in goods of higher orders (production goods). In such a society, there is no systematic centralized control of production, for this is inconceivable without centralized disposal over the means of production.

The function of money is to facilitate the business of the market by acting as a common medium of exchange.

Common man does not speculate about the great problems. With regard to them he relies upon other people's authority, he behaves as "every decent fellow must behave," he is like a sheep in the herd. It

Human action is purposeful behavior. Or we may say: Action is will put into operation and transformed into an agency, is aiming at ends and goals, is the ego's meaningful response to stimuli and to the conditions of its environment, is a person's conscious adjustment to the state of the universe that determines his life.

The collapse of an inflation policy carried to its extreme -- as in the United States in 1781 and in France in 1796 -- does not destroy the monetary system, but only the credit money or fiat money of the State that has overestimated the effectiveness of its own policy. The collapse emancipates commerce from etatism and establishes metallic money again.

No people and no part of a people shall be held against its will in a political association that it does not want.

Every expansion of the personal division of labour brings advantages to all who take part in it.

Restrictionistic ideas have never met with any measure of popular sympathy except after a time of monetary depreciation when it has been necessary to decide what should take the place of the abandoned inflationary policy.

A metallic money, the augmentation or diminution of the quantity of metal available for which is independent of deliberate human intervention, is becoming the modern monetary ideal. The significance of adherence to a metallic-money system lies in the freedom of the value of money from State influence that such a system guarantees.

The attempt to restrain prices within limits has to be given up. A government that sets out to abolish market prices is inevitably driven towards the abolition of private property.

The State does not govern the market; in the market in which products are exchanged it may quite possibly be a powerful party, but nevertheless it is only one party of many, nothing more than that. All its attempts to transform the exchange-ratios between economic goods that are determined in the market can only be undertaken with the instruments of the market.

Etatism, as a theory, is the doctrine of the omnipotence of the State, and, as a policy, the attempt to regulate all mundane affairs by authoritative commandment and prohibition. The ideal society of etatism is a particular sort of socialistic community; it is usual in discussions involving this ideal society to speak of State Socialism, or, in some connexions, of Christian Socialism.

They did not suffer shipwreck because the entrepreneurs were not public-spirited, as the socialist-etatistic legend has it. They were bound to fail because the economic organization based upon division of labour and private property in the means of production can function only so long as price-determination in the market is free.

The agents of etatism have certainly not been lacking in zeal and energy. But, for all this, economic affairs cannot be kept going by magistrates and policemen.

Human actions consist always in a choice between two goods or two evils which are not deemed equivalent. Where there is perfect equivalence, man stays neutral; and no action results. But what is good and what is better, or what is bad and what is worse, is decided according to subjective standards, different with different individuals, and changing with the same individuals according to circumstances.

No better is the propensity, very popular nowadays, to brand supporters of other ideologies as lunatics. Psychiatrists

The balance-of-payments theory forgets that the volume of foreign trade is completely dependent upon prices; that neither exportation nor importation can occur if there are no differences in prices to make trade profitable.

When a country has substituted credit money or fiat money for metallic money, because the legal equating of the over-issued paper and the metallic money sets in motion the mechanism described by Gresham's Law, it is often asserted that the balance of payments determines the rate of exchange. But this also is a quite inadequate explanation. The rate of exchange is determined by the purchasing power possessed by a unit of each kind of money.

One must rather ask how much could be produced if competition among producers were abolished.

Even in ancient times general recognition must have been accorded to the view which later in the shape of the maxim pecunia pecuniam parere non potest was to be the basis of all discussion of the problem of interest for hundreds and even thousands of years, and Aristotle undoubtedly did not state it in the famous passage in his Politics as a new doctrine but as a generally-accepted commonplace.2