Ludwig Von Mises

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Basing his entire economics philosophies on the notion that people are motivated deliberately and mostly by desire and self-serving means, Ludwig Von Mises was, arguably, the pinnacle of the world of business and economics. Highly notable for his laissez-faire policies, support of free markets and personal ownership, with little to no government interference gained him friends like Friedrich Von Hayek, and later Milton Friedman.Ludwig Von Mises was able to demonstrate that the human race can create wealth (not redistribute it) and prosperity only via expanding free markets, by enhancing the division of labor, and by multiplying and building upon private capital investments. To Von Mises, socialism or centralized planning are the enemy of growth, freedom and stability. In his views, socialism is disastrous for a modern economy because the absence of private ownership of land and capital goods prevents any sort of rational pricing, or estimate of costs. Now did Ludwig Von Mises think the same of government intervention — like in the case of our bailouts in the US? Oh yes. Von Mises taught that sooner or later government intervention cripples markets, behave counter-productively, until the public sector’s cumulative prodding leads to overall costs that outweigh the benefits gained from such interventions. What would Ludwig Von Mises advise governments to do during economic downturns? Nothing. He would tell them to leave the market forces to flow according to buyers’ and sellers’ judgement of value and profits respectively; in other words, as determined by the private sector alone, since self-interest will always right the markets.Von Mises was at his height, a dominant figure in the Austrian School of Economics, just when Lenin formed the Soviet Union, Great Britain created centralized panning, China had its communist revolution, and South America was toppled by social ideology. Therefore, he fought hard and became famous — mostly from his exile in the US, after he fled the Nazis — for his intransigence in insisting on a non-inflationary gold standard and on laissez-faire.Theories Von Mises was famous for include: Money and Credit Theory (click here for another link on the same topic); the business cycle; Capitalism vs. Communism; and freedom of choice.

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