Mises’ Theory of Money and Credit: The Slander Continues
Ludwig von Mises’ pioneering work The Theory of Money and Credit was published in 1912. In it, Mises integrated maroeconomics and microeconomics, presented an imperfect but sound theory of money, applied the principles of marginal utility to money, formulated his regression theorem and presented the first rendering of the Austrian Business Cycle Theory.
Unfortunately upon its’ publication the German language edition recieved a lack-lustre review from one John Maynard Keynes, then editor of the Cambridge Economic Journal:
He reviewed Mises’s book,giving it short shrift. The book, he wrote condescendingly, had “considerable merit” and was “enlightened,” and its author was definitely “widely read,” but Keynes expressed his disappointment that the book was neither “construc tive” nor “original” [Source (pdf, p. 11)]
That’s a pretty harsh review. But here’s the clincher: Keynes later admitted he was not proficient in German!
Keynes impishly admitted that “in German, I can only clearly understand what I already know—sothat new ideas are apt to be veiled from me by the difficulties of the language” [Source (pdf, p. 12)]
Almost a century later, and one U.C. Berkeley Professor named Bradford DeLong has just attempted his own critique of Money and Credit. Let’s see what he has to say about it:
My view is that Money and Credit is very readable–compulsively readable, in fact: I have just spent two and a half hours telling myself “it’s OK; I will just read one more page…”. But it is only readable in a rhetorical-excess-train-wreck mode, for it is also totally bats— insane.
I recommend starting at page 416: read through the defenses of the gold standard as the only monetary system consistent with representative government, the attacks on Keynes, the attacks on the New Deal, the attacks on the United Nations, the blaming of all unemployment on labor unions–or on governments–the attacks on private-sector fractional-reserve banking, and stop with the attacks on all other believers in the gold standard not named “von Mises”,… [Source]
And it goes on. If anyone is confused at the Keynes and New Deal references, DeLong was quoting from the 1944 addition to the book, not the 1912 original.
What’s more tragic is that when Robert P. Murphy was alerted to this post, he quickly reacted with a comment of his own. It was proptly deleted by Professor DeLong. One enterprising young man has gone on to pen a scathing, profanity-free response to the slander.
This incident, like countless others, exemplifies how opponents of sound economics often resort to slander, ad hominem and straw man arguments when they fail to argue against it with reason.
Tu Ne Cede Malis.