The Causes of the Economic Crisis: Essays on the Great Depression (LvMI)

In the world before and after the Great Depression, there was a lone voice for sanity and freedom: Ludwig von Mises. In The Causes of the Economic Crisis, a collection of newly published essays by Mises that have been very hard to come by, he presents his business-cycle theory in its most elaborate form, applies it to the prevailing conditions, and discusses the policies that governments undertake that make recessions worse. He recommends a path for monetary reform that would eliminate business cycles and provide the basis for a sustainable prosperity.

Mises was nearly alone among his contemporaries in foreseeing the interwar economic breakdown. In 1923, he warned that central banks will not "stabilize" money; they will distort credit markets and generate booms and busts. In 1928, he departed dramatically from the judgment of his contemporaries and sounded an alarm: "every boom must one day come to an end." Then after the Great Depression hit, he wrote again in 1931, 1933, and 1946, each time explaining that the business cycle results from central-bank-generated loose money and cheap credit, and that the cycle can only be made worse by intervention.

While the German-speaking world knew his essays well and considered him a prophet, the rise of the Nazis in Austria led to Mises having to leave the country, and his writings remained largely inaccessible, never translated into English until after his death. Even then, they were not circulated widely, leading to Mises not receiving the credit he deserves for having warned about the coming depression and having seen the solution.

However, today we have the opportunity to hear Mises speak again through this book, translated by Bettina B. Greaves. In these essays, Mises provides the clearest explanation of the Great Depression ever written, refuting the socialists and Keynesians and anyone who believes that the printing press can provide a way out of trouble. He shows who was responsible for driving the world into economic calamity: the inevitable effects of the government's monopoly over money and banking.

Just as in his attack on socialism, Mises was brilliant, brave, and prescient in his analysis of the Great Depression. He was there, before and after, writing about contemporary events and issuing warnings that the world did not heed, warnings we must heed today.

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