The idea that political freedom can be preserved in the absence of economic freedom, and vice versa, is an illusion. Political freedom is the corollary of economic freedom.
Ludwig Von MisesRead
Library of the Works of Ludwig von Mises”. Here is an article he wrote in 1951, some two years after his magnum opus Human Action appeared, where is lays out his case in a more popular form. The money sentences are “Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. It has happened again and again in the past, and it will happen in the future, too.
Interpretation
What this quote means
A prosperous economy created by monetary expansion is temporary and will inevitably lead to a crisis.
Ludwig von Mises warns that economic prosperity derived from loose monetary policies and credit expansion is deceptive and unsustainable. He argues that history has shown us time and again that such artificial prosperity will ultimately culminate in economic slumps and crises, suggesting a cyclical nature of economic bubbles created by irresponsible policies.
Themes
EconomyProsperityMonetary PolicyCrisisIllusion
In practice
Example use cases
During a finance seminar to emphasize the risks of monetary laxity.
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