Saturday, 18 October 2008

Mises and the Financial Crisis

Was Mises right about the causes of the business cycle? Funnily enough, in these troubled times quite a few people are realising that Mises (and Austrian economics in general) has a particularly plausible explanation for the underlying reasons behind crunches like this. See for instance Guido Fawkes' blog-post on the issue, and this comment piece in the Independent(!).

Now I'm not going to try and summarise the theory myself - I'm only an amateur armchair economist, and it would mean the death of the essay I'm supposed to be doing. But I can do the next best thing: link to a couple of the best expositions of the theory I've seen floating around the internet.

Firstly, here's Roderick Long's extremely clear and concise article on Austrian Business Cycle Theory.

Secondly, here's "The Misean explanation of the Banking Crisis".

If you're at all interested in deeper explanations of the crisis than platitudes like "not enough regulation" and "greedy bankers," I'd recommend reading them both.

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