Theory of Employment, Money, Interest, and the Capitalist process. the misesian Case Against Keynes

Abstract

It is my goal to reconstruct some basic truths regarding the process of economic development, and the role played in it by employment, money, and interest. These truths neither originated with the Austrian school of economics, nor are they an integral part of this tradition of economic thinking alone. In fact, most of them were part and parcel of what is now called classical economics, and it was the recognition of their validity that uniquely distinguished the economist from the crackpot. Yet the Austrian school, in particular Ludwig v. Mises and, later, Murray N. Rothbard, has given the clearest and most complete presentation of these truths.¹ Moreover, they have also presented their most rigorous defense by showing them to be ultimately deducible from basic, incontestable propositions (such as that man acts and knows what it means to act) so as to establish them as truths whose denial would not only be factually incorrect but, much more decisively, would amount to logical-praxeological contradictions and absurdities.²