Mises Institute today published a tribute to Ludwig von Mises that was written on the occasion of his 90th birthday in 1971. Authored by Murray Rothbard, it shows Mises the radical in both approach and practice of economics.
Mises shows that the market economy is a finely constructed, interrelated web; and coercive intervention at various points of the structure will create unforeseen troubles elsewhere. The logic of intervention, then, is cumulative; and so a mixed economy is unstable — always tending either toward full-scale socialism or back to a free-market economy. . .
The instability of the interventionist welfare-state system is now making fully clear the fundamental choice that confronts us between socialism on the one hand and capitalism on the other. Perhaps the most important single contribution of von Mises to the economics of intervention is also the one most grievously neglected in the present day: his analysis of money and business cycles. We are living in an age when even those economists supposedly most devoted to the free market are willing and eager to see the state monopolize and direct the issuance of money. Yet Mises has shown that
. there is never any social or economic benefit to be conferred by an increase in the supply of money;
. the government's intervention into the monetary system is invariably inflationary;
. therefore, government should be separated from the monetary system, just as the free market requires that government not intervene in any other sphere of the economy.