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Economic Policy: Thoughts for Today and Tomorrow Paperback – February 10, 2007
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Below are key lessons from the book, in the form of excerpts:
1- "An often unrealized fact about capitalism is this: savings mean benefits for all those who are anxious to produce or to earn wages."
2- "An increase in real wages results not only in an increase in population, it results also, and first of all, in an improvement in the average standard of living...We must realize, however, that this higher standard of living depends on the supply of capital...A country becomes more prosperous in proportion to the rise in the invested capital per unit of its population."
3- "You have read in many newspapers and speeches, about the so-called German economic miracle - the recovery of Germany after its defeat and destruction in the Second World War. But this way no miracle. It was the application of the principles of the free market economy, of the methods of capitalism, even though they were not applied completely in all respects. Every country can experience the same "miracle" of economic recovery, although I must insist that economic recovery does not come from a miracle; it comes from the adoption of - and is the result of - sound economic policies."
4- "Freedom in society means that a man depends as much upon other people as other people depend upon him. Society under the market economy, under the conditions of "economia libre," means a state of affairs in which everybody serves his fellow citizens and is served by them in return."
5- "...Under modern capitalistic conditions, there is what has been technically described by sociologists as "social mobility." The operating principle of this social mobility, according to the Italian sociologist and economist Vilfredo Pareto, is "la circulation des elites" (the circulation of the elites). This means that there are always people who are at the top of the social ladder, who are wealthy, who are politically important, but these people - these elites - are continually changing."
6- "The idea that there is a third system - between socialism and capitalism, as its supporters say - a system as far away from socialism as it is from capitalism but that retains the advantages and avoids the disadvantages of each - is pure nonsense. People who believe there is such a mythical system can become really poetic when they praise the glories of interventionism. Once can only say they are mistaken. The government interference which they praise brings about conditions which they themselves do not like."
7- "For it is not the way in which the money is spent, it is the way in which the government obtains this money that brings about those consequences we call inflation and which most people in the world today do not consider as beneficial."
8- "The economists describe this state of affairs by saying "wages are determined by the marginal productivity of labor."...It is a fact that the scale of wages is determined by the amount a man's work increases the value of the product."
9- "But unions cannot industrialize the country, they cannot raise the standard of living of the workers. And this is the decisive point: One must realize that all the policies of a country that wants to improve its standard of living must be directed toward an increase in the capital invested per capital."
10- "...Such an independence does not exist. Man is not a being that, on the one hand, has an economic side and, on the other hand, a political side, with no connection between the two. In fact, what is called the decay of freedom, of constitutional government and representative institutions, is the consequence of the radical change in economic and political ideas. The political events are the inevitable consequence of the change in economic policies."
11- "We must fight all that we dislike in public life. We must substitute better ideas for wrong ideas. We must refute the doctrines that promote union violence. We must oppose the confiscation of property, the control of prices, inflation, and all those evils from which we suffer. Ideas and only ideas can light in the darkness. These ideas must be brought to the public in such a way that they persuade people. We must convince them that these ideas are the right ideas and not the wrong ones."
Von Mises' "Economic Policy" is a short book (only one hundred pages) and it contains six lectures that he gave in Argentina. These lectures cover the standard topics one would expect: benefits of capitalism, problems with socialism, evils of government intervention, etc. But while there are many similar sources of this information, von Mises does a truly great job of explaining things in the clearest way possible. Every idea of his is backed up with both intuitive reasoning and historical examples, and the general world-view that he builds is sensible.
Does that mean everything he says is compelling? No; his justification for the gold standard was weak and his thoughts on the Roman Empire are simplistic. But I would still recommend this book for someone who wants to read about free-market, capitalist economic policy. Regardless of whether you agree with the man, he is an excellent first read on the subject.
Over all, if you're already familiar with such topics, this book will be somewhat repetitive and you probably won't learn too much from it. However, if just starting to learn about economics and you're looking for a good book to start with, this book will suit you just fine.