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Joseph Keckeissen: What Would Mises Say?

April 28, 2014

[Published at Mises.org on March 25, 2009.]

Far from being prosperous, our America is now being buffeted by the worst financial tsunami in generations. All of us want to know what happened. What really caused this unbelievable turbulence?

To answer this, why not turn to the teachings of my late professor, Ludwig von Mises, the greatest economic analyst of the past century?

In the early 1920s, Mises predicted that the newly organized Soviet Union had set up an unviable economic system that would not be able to survive. Mises based his death verdict (made in his book, Socialism, shortly after the Russian Revolution) on the principle that a society cannot rely on political committees to set market prices as the commissars were trying to do; only the freely demonstrated choices of the market can produce functioning prices. All artificial prices are unworkable; they cannot tell the central planners which goods are expensive and which are cheap, so it would be impossible for them to organize production in an efficient way.

Without real prices, there could be no economization. Mises was derided for this analysis, even to the end of his life. But Mises was right, and history has approved his verdict, although he passed away without receiving due accolades. Even posthumously — when the Russian monster collapsed in 1989 — recognition of his genius was scant.

For this reason I consider myself justified in naming him as the greatest analyst ever.

Continue reading at Mises.org.

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From → Articles, Economy

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