Customer Reviews: The Theory of Money and Credit
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on May 4, 2000
The late great Murray Rothbard described Ludwig von Mises's _The Theory of Money and Credit_ as the best book on money ever written. And so it is.
It is probably best known as the volume which first set out the distinctive Austrian theory of the trade cycle. For that alone, it deserves a place on the bookshelf of everyone who cares about such things (and more people should).
But there's much more to it than that. This volume sets out a complete and groundbreaking theory of money itself: what it is, where it comes from, what it means to speak of its "value," the differences between commodity money and fiat money, the demand for money and what it has to do with banking, and -- crucially -- the jiggery-pokery that becomes possible when the State starts messing around with unsound monetary policy.
This edition also includes a section on "Monetary Reconstruction" written in 1952 (and first included in the 1953 Yale University Press edition).
Plus there's a foreword by Murray Rothbard. And, finally, it's another beautifully crafted volume from the Liberty Fund, practically a steal at the price posted above. You'd have a hard time buying most such books _used_ at this price.
So what are you waiting for? Throw your Samuelson and Keynes in the trash and pick up a book of _real_ economics.
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on August 20, 2011
Get the edition published by the Ludwig von Mises Institute ( It is MUCH better. It contains the forwards and prefaces by the author, the translator, and Murray Rothbard. Additionally, the editing is much, much better. I had this version, but it was so frustrating that I ended up buying the better version in addition.

Amazon sells the STUDY GUIDE to accompany the Mises Institute version, but not the book itself.
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on September 13, 2006
Murray Newton Rothbard has been quoted as saying this book is THE best book ever written on Money & Credit. So having found Rothbard's writings to be outstanding in their own right, I moved on to this Mises classic!

The first thing to note is that this book was first published in 1912 and in German, and although the translation has been accomplished superbly, the style of writing has somewhat of an antequated feel to it; not quite the same free flowing prose you get with Rothbard. Once you get into the feel of it though, this in no way detracts from your understanding of the theory presented.

It has an excellent new Foreward by Rothbard himself, extensive footnoting and index and is hardbound beautifully by the Liberty Fund Press, with dust jacket. There is also a nice Appendix: On The Classification of Monetary Theories, that is very useful and informative.

The book itself is divided into four main Parts:
Part One: The Nature of Money.
Part Two: The Value of Money.
Part Three: Money and Banking.
Part Four: Monetary Reconstruction.(This part was added in 1952).

For me the book really took on a story of two halves. In the first half of the book, Parts 1 & 2, the bulk of the theory is really laid out. It can be slow going as it is extremely in depth but I highly recommend you stick with it as this pays off in the second half of the book!

In Part 3 Mises really starts putting flesh onto the theory when we get into Money & Banking proper with discussion of demand for money, credit, fiduciary paper, rate of interest etc. But towards the end in Chapters 19 & 20 things get MUCH more interesting as equilibrium rates and interest are discussed in detail and he finally talks about gold, the gold standard and banking freedom.

Part 4 is where my heart lies. Here we have the discussion of the principles of sound money versus contemporary currency systems. There's then an excellent discourse on the Return to Sound Money, ie the Classical Gold Standard.

The second half of this wonderful book certainly flowed better for me, but that may also be just because I am more of an investment manager/trader and less of an economist! You feel like you have had Mises teaching you in fine detail and that he has left no stone unturned in your understanding. Mises doesn't read as easily as the prose of Rothbard but that does not detract from the excellence of the material. Superb!

It really IS a truly outstanding work and if not the best book ever written on the subject, it surely has to be at the very least, one of the very best, and as such is certainly a "must-read"!!!

This wonderful, beautifully bound, classic is an absolute "steal" at $20. I still cannot believe it is sold for so little. My recommendation is to buy it while it is still available in this beautiful hardbound edition!

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on December 8, 2011
Beware that the reviews on this book are shared between multiple editions from several publishers, and these are _not_ all equivalent. For a book that is such a landmark, the editions available, and the process of choosing one, are a shambles. In particular, some editions, being from different originals, lack some chapters. Some editions are printed in a way that is visually difficult to read, and some are easier to navigate than others.

Here's what I learned:

-- 1451578172 Red cover, Pacific Publishing 2010: I have this one, and of the ones reviewed here, it is visually the most readable, but still flawed. At 265 pages of 8" x 10" within normal-looking margins, the the font size is small which, proportionately, makes the line-lengths too long. The substantial visual virtue relative to other editions is that the line spacing is more generous. Its table of contents lists subheadings within chapters, which becomes a useful outline of the book.

Odd pages' footers show chapter name, which eases navigation within the book. Don't know what original edition of Mises' this is based on, but it does include Part 4 (chapters 21-23) and Appendix A "Classification of Monetary Theories", and also Appx B "Translators Note." It has no prefaces or introduction (despite the Biographical Note referring to an Intro by Murray Rothbard.)

Probably the biggest blunder in this edition is that in Chapter 2 there are two or three pages discussing utility, in which the variable beta is introduced. Unfortunatly the character for beta is typeset either as a box, or as nothing at all, rendering most of this discussion meaningless.

-- 1467934879 $100 bills cover, CreateSpace 2011: I have this one, and it's not so desirable. According to Amazon's blurb, this is the text of the 1934 edition, though you wouldn't know if from the book itself which contains absolutely no meta information about the original work, nor about the present publisher or publication date. It contains only only chapters 1-20, with no additional foreward, preface, notes etc. Individual pages are numbered, but have no indication of chapter. Smallest print of all editions here, with the entire 20 chapters in 160 pages. (compared to 225 for the Red cover edition).

-- 098406141X Gold-card-containing-bills cover, Signalman Publishing 2010: I have this, and it contains: Chapters 1-23, Appx A and B (like red cover), and also 3 prefaces: 1952, 1934, 1924, and also an intro by Robbins 1934. This edition is large, printed on 8.5 x 11 inch paper. This would have been a good edition had it made use of the large pages to print the text in two columns. Instead, the lines are spread across the entire page width with only half-inch margins, making for excessive eye movement and unnecessary difficulty connecting each line to the next.

-- 1933550554 Grey-blue closeup of credit card. Study Guide... by Murphy, Von Mises Institute publisher, 2011. The current Amazon description would have you believe that this is perhaps the entire Theory of Money and Credit text plus additional study notes. Actually, the wrong description is being shown. This is only a study guide. The correct description can be found at this other ISBN: 9781610162357, though that one is not available from Amazon.
Anyhow, the study guide is a good idea, with the only shortcoming being that it makes many many references to specific page numbers in the original book, and those page numbers don't match any of the editions listed here.

Hope that helps some other customers trying to sort all this out. I just wish someone would take the time to print this text with all its prefaces, chapters, appendices etc in a reasonable font and layout with a decent TOC and with a proper informative footer.

So, the text gets 5 stars for being a landmark, but I'm knocking off two stars because of the disarray.
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on July 18, 2002
I am a BIG fan of Ludwig von Mises. I am aware of what his great contributions are to the science of Economics. All free-market believers are indebted to him for his work. That is precisely why I bought a copy of his Theory of Money and Credit.
I found it VERY DIFFICULT to read, even with a dictionary in hand. So much so that I never finished it. And this even though I have read Rothbard's classic "America's Great Depression" twice.
Admittedly, von Mises wrote the original in German (I think), and translating technical material from another language may be quite difficult.
I give von Mises 5 stars for his Theory, (which really isn't a theory, but FACT). But I must subtract one star for it's lack of readability.
--George Stancliffe
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on December 8, 2011
Amazon's description of this item seems to be messed up currently. What I received was indeed the Study Guide, as the item title shows. This is NOT the original Mises book, nor does it contain the Mises book, contrary to what the description currently says. The correct description of the Guide appears on Amazon for ISBN 978-1610162357, (spiral bound, 262 pages, published 2011). The item received was originally barcoded with 978-1610162357, with a sticker on top with 1933550554 on it, so that's probably part of the problem (see 1933550554 at google books, for example).

Now, as to the Guide itself. As other reviewers have mentioned, apparently describing Mises' book itself, Mises' book is dense, so a study guide is a useful addition. And since this is in fact all Study Guide, and no original book, that's 262 pages of commentary and expansion of the original, which is doubtless helpful.
The Guide follows the same chapter structure as Mises' book, but unfortunately there are many cross-references to specific page numbers in the 1953 edition of Mises' book, which don't match anywhere close to either of the the two editions that I just bought from Amazon. Not fatal but tedious, and pretty much requires going through the guide and penciling in some better numbers. I rated three stars for this lack of foresight.
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on April 26, 2009
After just completing my 2nd read of this text, all I can say is Wow. This is not a fast or light read, and I found myself marking up the margins with notes to keep pace. At times it can be wordy and Von Mises is arguably prone to going off on tangents to prove a circular point. If you are committed to understanding money and are willing to invest the time and energy, then this will be a very rewarding investigation that will shed some light on aspects of our current problems.

In many respects this is a deeply philosophical explanation of money. He begins with the types and functions of money and its measurements of value. "When the free-exchange of goods and services in unknown, money is unwanted" he says. He does offer a simple definition before expanding into finer theory, "The function of money is to facilitate the business of the market by acting as a common medium of exchange."

There is good discussion on aspects of gold reserves and fiat currencies, and in particular commits a considerable portion of the book to defining the value of money. I particularly enjoyed reading about Von Mises perspective on how socialism is an "enemy" of money, when production and distribution are systematically regulated by a central body.

The banking section is very relevant to better understanding our current banking crisis. In this he admits that the Austrian School did not inquire thoroughly into what consequences follow unrestricted extensions of credit or whether it is possible for banks to permanently depress the natural rate of interest. Instead it was content to investigate what would happen if 1 country's banks extended the issue of fiduciary media more than banks in other countries; arriving at the doctrine of "external drain" relating to the English crisis of the mid-19th century.

Von Mises then relates "more recent history" (the book was published in 1934 and updated in 1953, he died in 1973) stating "banks have never gone as far as they might in extending credit and expanding the issue of fiduciary media. They have always left off long before reaching this limit, whether because of uneasiness or on the part of those who had not forgotten earlier crises, or because they had to defer to legislative regulations concerning maximum only this sense we can interpret that it is apparently true that restriction of loans is the cause of economic crises, or at least their immediate impulse; that if banks would only go on reducing the rate of interest on loans they could continue to postpone the collapse of the market....Certainly the banks may postpone the collapse; but nevertheless the moment must eventually come when no further extension of the circulation of fiduciary media is possible. Then the catastrophe occurs, and its consequences are the worse and the reaction against the bull tendency of the market the stronger, the longer the period during which the rate of interest on loans has been below the natural rate of interest and the greater the extent to which roundabout processes of production that are not justified by the state of the capital market have been adopted."

The old-school perspective is very sober and refreshing. This book is laden with all kinds of historical gems, and there is an absolute treasure trove of references to primary source publications, many of which are out of print and yet obtainable. I found the history on the origin of money particularly insightful. The final section of the book deals with monetary restructuring and ideas relating to rebuilding a system of sound currency. Unfortunately I don't get the sense Obama's financial people have a clue regarding this.

I found it astounding to realize just how little I actually understood money and the banking system, and to realize that I am not alone and this relates to the majority of the global population. If you find yourself in this category, this may not be the first step, but it is essential reading. Books like "The Theory of Economic Development", "Bad Money", "The Mystery of Banking", "Web of Debt", and "The Creature from Jekyll Island" all have some negative points but are more user-friendly starts for the novice. Mises book gives the fine mechanical theories of these systems, and is sure to reward anyone who has studied money and banking or already has a working knowledge of the subject.

In any event this study provides an enlightened understanding of our current global economy, especially the risks and threats to our personal "wealth".
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on October 7, 1998
This is the first of the modern works to identify the cause of the business cycle: artificial credit expansion sending miscues to capital goods industries. Though written in 1912, it retains its persuasive power, especially in light of the current financial meltdown. Mises also covers the origin and nature of money and banking. As always LibertyFund puts out a beautiful book.
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on April 3, 2008
The Theory of Money and Credit is the foundation of modern Austrian Economics. The central contribution of this book is its application of marginal utility theory to money. Mises takes a micro-analytic approach to money that differs from the Hume-Fischer-Friedman Quantity Theory significantly. Of course there is some truth in the Quantity Theory. The Quantity Theory also teaches some lessons against inflation.

Mises set the groundwork for Austrian Business Cycle theory, as later developed by Hayek and Garrison. Both the Quantity Theory and the Mises-Hayek theory of trade cycles point to the same root cause: inflation. However, the Mises-Hayek theory explains trade cycles in terms of intertemporal dis-coordination. Hayek owes his Nobel Prize the groundbreaking work of Mises.

The Theory of Money and Credit also served as the basis for the calculation critique of socialism. Mises began to see the significance of monetary calculation in this book. The Austrian theories of the trade cycle and monetary calculation are the two main lines of modern Austrian research. These were the two critical debates of the Interwar Years. Also, Mises formulated his `Regression Theorem' in this book. Without this book, the modern Austrian paradigm would differ beyond recognition. Anyone who wants to learn Austrian economics should read this book.
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on January 13, 2012
This book appears to be a poor re-creation of the original. It was apparently copied by a very poor typist with numerous mistakes. For example, "fat money" rather than "fiat money". I don't know if there is anything better but this one is poor.
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