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It is astonishing what foolish things one can temporarily believe if one thinks too long alone, particularly in economics.
Investing is an activity of forecasting the yield over the life of the asset; speculation is the activity of forecasting the psychology of the market.
It has been pointed out already that no knowledge of probabilities, less in degree than certainty, helps us to know what conclusions are true, and that there is no direct relation between the truth of a proposition and its probability. Probability begins and ends with probability.
Nevertheless, if we contemplate a society with a somewhat stable wage-unit, with national characteristics which determine the propensity to consume and the preference for liquidity, and with a monetary system which rigidly links the quantity of money to the stock of the precious metals, it will be essential for the maintenance of prosperity that the authorities should pay close attention to the state of the balance of trade. For a favourable balance, provided it is not too large, will prove extremely stimulating; whilst an unfavourable balance may soon produce a state of persistent depression.
I do not know which makes a man more conservative - to know nothing but the present, or nothing but the past.
It is ideas, not vested interests, which are dangerous for good or evil.
There is no intrinsic reason for the scarcity of capital.
I think that Capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself is in many ways extremely objectionable.
The treasury could fill old bottles with banknotes and bury them..and leave it to private enterprises on well-tried principles of laissez-faire to dig the notes up again.
Dangerous acts can be done safely in a community which thinks and feels rightly, which would be the way to hell if they were executed by those who think and feel wrongly.
Gold is a relic from a time when government's were less trustworthy in these matters (currency debasement) than they are now.
The love of money as a possession-as distinguished from the love of money as a means to the enjoyments and realities of life-will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease
Men will not always die quietly.
Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits-a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.
The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45 [Hayek provided historical background up to page 45; after that came his theoretical model], and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam.
He had one illusion - France; and one disillusion - mankind, including Frenchmen.
Too large a proportion of recent "mathematical" economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.
It economics is a method rather than a doctrine, an apparatus of the mind, a technique of thinking which helps its possessor to draw correct conclusions.
Unlike physics, for example, such parts of the bare bones of economic theory as are expressible in mathematical form are extremely easy compared with the economic interpretation of the complex and incompletely known facts of experience, and lead one a very little way towards establishing useful results.
It is better that a man should tyrannize over his bank balance than over his fellow-citizens.
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