On the manipulation of money and credit : three treatises on trade-cycle theory

The three treatises in On the Manipulation of Money and Credit were written in German between 1923 and 1931. Together they include some of Mises's most important contributions to monetary and trade-cycle theories and constitute a precursor to Mises's major work, Human Action. Ludwig von Mises (1881–1973) was the leading spokesman of the Austrian School of economics throughout most of the twentieth century. Bettina Bien Greaves is a former resident scholar and trustee of the Foundation for Economic Education and was a senior staff member at FEE from 1951 to 1999. Please note: This title is available as an ebook for purchase on Amazon, Barnes and Noble, and iTunes. Ludwig von Mises / On the Manipulation of Money and Credit: Three Treatises on Trade-Cycle Theory 1 Front Matter 1 Half Title Page, p. i 1 Frontispiece, p. iii 3 Full Title Page, p. v 5 Copyright Page, p. vi 6 Contents, p. vii 7 Foreword, p. xiii 13 Part: On the Manipulation of Money and Credit: Three Treatises on Trade-Cycle Theory, p. 1 17 Part: Stabilization of the Monetary Unit—From the Viewpoint of Theory, p. 1 17 Introduction, p. 3 19 I The Outcome of Inflation, p. 5 21 1. Monetary Depreciation, p. 5 21 2. Undesired Consequences, p. 8 24 3. Effect on Interest Rates, p. 9 25 4. The Run from Money, p. 10 26 5. Effect of Speculation, p. 11 27 6. Final Phases, p. 12 28 7. Greater Importance of Money to a Modern Economy, p. 13 29 II The Emancipation of Monetary Value from the Influence of Government, p. 15 31 1. Stop Presses and Credit Expansion, p. 15 31 2. Relationship of Monetary Unit to World Money—Gold, p. 16 32 3. Trend of Depreciation, p. 17 33 III The Return to Gold, p. 19 35 1. Eminence of Gold, p. 19 35 2. Sufficiency of Available Gold, p. 20 36 IV The Money Relation, p. 22 38 1. Victory and Inflation, p. 22 38 2. Establishing Gold "Ratio", p. 23 39 V Comments on the "Balance of Payments" Doctrine, p. 26 42 1. Refined Quantity Theory of Money, p. 26 42 2. Purchasing Power Parity, p. 27 43 3. Foreign Exchange Rates, p. 28 44 4. Foreign Exchange Regulations, p. 30 46 VI The Inflationist Argument, p. 32 48 1. Substitute for Taxes, p. 32 48 2. Financing Unpopular Expenditures, p. 33 49 3. War Reparations, p. 34 50 4. The Alternatives, p. 35 51 5. The Government's Dilemma, p. 37 53 VII The New Monetary System, p. 39 55 1. First Steps, p. 39 55 2. Market Interest Rates, p. 41 57 VIII The Ideological Meaning of Reform, p. 43 59 1. The Ideological Conflict, p. 43 59 Appendix Balance of Payments and Foreign Exchange Rates, p. 45 61 Part: Monetary Stabilization and Cyclical Policy, p. 51 67 Preface, p. 53 69 Part I: Stabilization of the Purchasing Power of the Monetary Unit, p. 57 73 I The Problem, p. 59 75 1. "Stable Value" Money, p. 59 75 2. Recent Proposals, p. 60 76 II The Gold Standard, p. 62 78 1. The Demand for Money, p. 62 78 2. Economizing on Money, p. 64 80 3. Interest on "Idle" Reserves, p. 66 82 4. Gold Still Money, p. 68 84 III The “Manipulation” of the Gold Standard, p. 69 85 1. Monetary Policy and Purchasing Power of Gold, p. 69 85 2. Changes in Purchasing Power of Gold, p. 71 87 IV “Measuring” Changes in the Purchasing Power of the Monetary Unit, p. 73 89 1. Imaginary Constructions, p. 73 89 2. Index Numbers, p. 76 92 V Fisher’s Stabilization Plan, p. 79 95 1. Political Problem, p. 79 95 2. Multiple Commodity Standard, p. 80 96 3. Price Premium, p. 81 97 4. Changes in Wealth and Income, p. 83 99 5. Uncompensatable Changes, p. 85 101 VI Goods-induced and Cash-induced Changes in the Purchasing Power of the Monetary Unit, p. 87 103 1. The Inherent Instability of Market Ratios, p. 87 103 2. The Misplaced Partiality to Debtors, p. 89 105 VII The Goal of Monetary Policy, p. 92 108 1. Liberalism and the Gold Standard, p. 92 108 2. "Pure" Gold Standard Disregarded, p. 93 109 3. The Index Standard, p. 94 110 Part II: Cyclical Policy to Eliminate Economic Fluctuations, p. 97 113 I Stabilization of the Purchasing Power of the Monetary Unit and Elimination of the Trade Cycle, p. 99 115 1. Currency School's Contribution, p. 99 115 2. Early Trade Cycle Theories, p. 100 116 3. The Circulation Credit Theory, p. 102 118 II Circulation Credit Theory, p. 105 121 1. The Banking School Fallacy, p. 105 121 2. Early Effects of Credit Expansion, p. 107 123 3. Inevitable Effects of Credit Expansion on Interest Rates, p. 109 125 4. The Price Premium, p. 110 126 5. Malinvestment of Available Capital Goods, p. 110 126 6. "Forced Savings", p. 112 128 7. A Habit-forming Policy, p. 113 129 8. The Inevitable Crisis and Cycle, p. 114 130 III The Reappearance of Cycles, p. 117 133 1. Metallic Standard Fluctuations, p. 117 133 2. Infrequent Recurrences of Paper Money Inflations, p. 118 134 3. The Cyclical Process of Credit Expansions, p. 119 135 4. The Mania for Lower Interest Rates, p. 121 137 5. Free Banking, p. 123 139 6. Government Intervention in Banking, p. 125 141 7. Intervention No Remedy, p. 126 142 IV The Crisis Policy of the Currency School, p. 128 144 1. The Inadequacy of the Currency School, p. 128 144 2. "Booms" Favored, p. 130 146 V Modern Cyclical Policy, p. 131 147 1. Pre-World War I Policy, p. 131 147 2. Post-World War I Policies, p. 132 148 3. Empirical Studies, p. 133 149 4. Arbitrary Political Decisions, p. 135 151 5. Sound Theory Essential, p. 137 153 VI Control of the Money Market, p. 139 155 1. International Competition or Cooperation, p. 139 155 2. "Boom" Promotion Problems, p. 141 157 3. Drive for Tighter Controls, p. 142 158 VII Business Forecasting for Cyclical Policy and the Businessman, p. 145 161 1. Contributions of Business Cycle Research, p. 145 161 2. Difficulties of Precise Prediction, p. 146 162 VIII The Aims and Method of Cyclical Policy, p. 148 164 1. Revised Currency School Theory, p. 148 164 2. "Price Level" Stabilization, p. 149 165 3. International Complications, p. 150 166 4. The Future, p. 151 167 Part: The Causes Of the Economic Crisis: An Address, p. 153 169 I The Nature and Role of the Market, p. 155 171 1. The Marxian "Anarchy of Production" Myth, p. 155 171 2. The Role and Rule of Consumers, p. 156 172 3. Production for Consumption, p. 157 173 4. The Perniciousness of a "Producers' Policy", p. 158 174 II Cyclical Changes in Business Conditions, p. 160 176 1. Role of Interest Rates, p. 160 176 2. The Sequel of Credit Expansion, p. 161 177 III The Present Crisis, p. 163 179 A. Unemployment, p. 164 180 1. The market Wage Rate Process, p. 164 180 2. The Labor Union Wage Rate Concept, p. 165 181 3. The Cause of Unemployment, p. 166 182 4. The Remedy for mass Unemployment, p. 167 183 5. The Effects of Government Intervention, p. 168 184 6. The Process of Progress, p. 169 185 B. Price Declines and Price Supports, p. 170 186 1. The Subsidization of Surpluses, p. 170 186 2. The Need for Readjustments, p. 172 188 C. Tax Policy, p. 173 189 1. The Anti-capitalistic Mentality, p. 173 189 D. Gold Production, p. 174 190 1. The Decline in Prices, p. 174 190 2. Inflation as a "Remedy", p. 176 192 IV Is There a Way Out?, p. 177 193 1. The Cause of Our Difficulties, p. 177 193 2. The Unwanted Solution, p. 178 194 Part: The Current Status of Business Cycle Research and Its Prospects for the Immediate Future, p. 179 195 1. The Acceptance of the Circulation Credit Theory of Business Cycles, p. 181 197 2. The Popularity of Low Interest Rates, p. 182 198 3. The Popularity of Labor Union Policy, p. 184 200 4. The Effect of Lower than Unhampered Market Interest Rates, p. 184 200 5. The Questionable Fear of Declining Prices, p. 185 201 Part: The Trade Cycle and Credit Expansion : The Economic Consequences of Cheap Money, p. 187 203 1. Introductory Remarks, p. 189 205 2. The Unpopularity of Interest, p. 189 205 3. The Two Classes of Credit, p. 191 207 4. The Function of Prices, Wage Rates and Interest Rates, p. 192 208 5. The Effects of Politically Lowered Interest Rates, p. 194 210 6. The Inevitable Ending, p. 198 214 Index, p. 199 215 Colophon, p. 208 224 Written in 1923 during a period of German hyperinflation, this book discusses the consequences of the fluctuating purchasing power of paper money and explores such ideas as the outcome of inflation, that is, the result of the increase in the amount of money, and an emancipation of monetary value from the influence of government.