QuoteProject
The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.
Murray Rothbard
ShareWTF𝕏

Interpretation

What this quote means

The boom-bust cycle is a phenomenon caused by the manipulation of money supply, particularly through bank credit, leading to economic fluctuations.

Murray Rothbard's quote highlights how monetary policies, especially those involving expansion of bank credit, can create cycles of economic prosperity (boom) followed by downturns (bust). This intervention disrupts the natural market balance, leading to periods of unsustainable growth followed by corrections that can result in economic hardship.

Themes

Boom-Bust CycleMonetary InterventionBank CreditEconomicsMarket Fluctuations

In practice

Example use cases

In a discussion on economic policies, one might refer to Rothbard's quote to illustrate the dangers of excessive credit expansion.

More from Murray Rothbard

Human life is not some sort of race or game in which each person should start from an identical mark. It is an attempt by each man to be as happy as possible. And each person could not begin from the same point, for the world has not just come into being; it is diverse and infinitely varied in its parts. The mere fact that one individual is necessarily born in a different place from someone else immediately insures that his inherited opportunity cannot be the same as his neighbor's.
Murray RothbardRead
Ultimately, there is no entity called 'government'; there are only people forming themselves into groups called 'governments' and acting in a 'governmental' manner.
Murray RothbardRead
In the market, the fittest are those most able to serve the consumers; in government, the fittest are those most adept at wielding coercion and/or those most adroit at making demagogic appeals to the voting public.
Murray RothbardRead
No one may threaten or commit violence ('aggress') against another man's person or property. Violence may be employed only against the man who commits such violence; that is, only defensively against the aggressive violence of another. In short, no violence may be employed against a non-aggressor. Here is the fundamental rule from which can be deduced the entire corpus of libertarian theory.
Murray RothbardRead
If government manages to establish paper tickets or bank credit as money, as equivalent to gold grams or ounces, then the government, as dominant money-supplier, becomes free to create money costlessly and at will. As a result, this 'inflation' of the money supply destroys the value of the dollar or pound, drives up prices, cripples economic calculation, and hobbles and seriously damages the workings of the market economy.
Murray RothbardRead
Once one concedes that a single world government is not necessary, then where does one logically stop at the permissibility of separate states? If Canada and the United States can be separate nations without being denounced as in a state of impermissible β€˜anarchy’, why may not the South secede from the United States? New York State from the Union? New York City from the state? Why may not Manhattan secede? Each neighbourhood? Each block? Each house? Each person?
Murray RothbardRead

Similar quotes

Instead of abandoning competition and giving banks protected monopolies once again, the public would be better served by making it easier to close banks when they get into trouble. Instead of making banking boring, let us make it a normal industry, susceptible to destruction in the face of creativity.
Raghuram RajanRead
Trade is now clearly designed to favor the wealthiest and most powerful corporations at the expense of the rest of us. The three wealthiest people on earth now control more assets than the combined incomes of 600 million people in the world's 48 poorest countries.
Jim WallisRead
If stability and efficiency required that there existed markets that extended infinitely far into the future - and these markets clearly did not exist - what assurance do we have of the stability and efficiency of the capitalist system?
Joseph StiglitzRead
Thousands of important and intelligent men have never been able to grasp the principle of comparative advantage or believe it even after it was explained to them
Paul SamuelsonRead
In a globalized economy, jobs no longer need a passport, but workers do.
Chrystia FreelandRead
At the current $5.15 an hour, the federal minimum wage has become a poverty wage. A full-time worker with one child lives below the official poverty line.
Bernie SandersRead

A little wisdom, now and then

Subscribe for the occasional hand-picked quote. No noise.