Ludwig von Mises

That the social life of human beings is subject to definite limitations; that it is governed by a set of laws that are comparable with those of Nature; these are notions that are unknown to the etatist. For the etatist, everything is a question of Macht – power, force, might. And his conception of Macht is crudely materialistic.

That the social life of human beings is subject to definite limitations; that it is governed by a set of laws that are comparable with those of Nature; these are notions that are unknown to the etatist. For the etatist, everything is a question of Macht – power, force, might. And his conception of Macht is crudely materialistic.

– Ludwig von Mises –

The Theory of Money and Credit

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Ludwig von Mises

If we disregard the exchange of present goods for future goods, and restrict our considerations for the time being to those cases in which the only exchanges are those between present goods and present money, we shall at once observe a fundamental difference between the effects of an isolated variation in a single commodity-price, emanating solely from the commodity side, and the effects of a variation in the exchange-ratio between money and other economic goods in general, emanating from the monetary side.

Ludwig von Mises

Big variations in the value of money give rise to the danger that commerce will emancipate itself from the money which is subject to State influence and choose a special money of its own. But without matters going so far as this it is still possible for all the consequences of variations in the value of money to be eliminated if the individuals engaged in economic activity clearly recognize that the purchasing power of money is constantly sinking and act accordingly. If in all business transactions they allow for what the objective exchange-value of money will probably be in the future, then all the effects on credit and commerce are finished with. In proportion as the Germans began to reckon in terms of gold, so was further depreciation rendered incapable of altering the relationship between creditor and debtor or even of influencing trade. By going over to reckoning in terms of gold, the community freed itself from the inflationary policy of the government. Thus it checkmated this inflationary policy, and eventually even the government was obliged to acknowledge gold as a basis of reckoning.

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