David R. Henderson  

Mises in the Wall Street Journal

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Mark Spitznagel has a piece in the Wall Street Journal on Ludwig von Mises' classic book, The Theory of Money and Credit. It's good that Spitznagel is calling our attention to this classic, which is still worth reading. But he makes two errors, one of which has been noticed in the blogosphere and the other of which hasn't.

Pierre Lemieux has noted by e-mail that Spitznagel is incorrect in claiming that Keynes's General Theory "was peppered with fancy math." It wasn't. It was largely literary and, as Lemieux points out, if Keynes had used more math, we probably would have had a better idea what he was saying. The unfortunate result of Keynes's dense writing style (which he seemed to reserve for GT--his Economic Consequences of the Peace is crystal clear), as Jeff Hummel has pointed out, is that interpreting Keynes's GT is a cottage industry.

But the other error is what Spitznagel says about how Mises's 1912 classic was received. Spitznagel writes, "Not surprisingly few people noticed, as it was published only in German." Assume, as seems clear, that he meant to put a comma after "surprisingly." If all he means is that few people read it, then that's true. After all, how many economists were there back then? But if he means that few economists read it, I think he's wrong. When I researched Mises' history to write his bio in the Concise Encyclopedia of Economics, I learned that Theory of Money and Credit was used widely as a textbook in monetary theory for a decade or two after its publication. I could be wrong: all of my notes that I used for the bios were burned in my February 2007 fire. But I think I'm right.

Moreover, and now I'm going beyond Spitznagel here to make a more general point, the tone of the bulk of Mises's book, written in 1912, is that of someone who sees himself in the mainstream. This is indirect evidence that Mises was not simply ignored. Contrast this, by the way, with the later sections written after World War II.

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CATEGORIES: Austrian Economics

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fundamentalist writes:

Keynes' GT did have fancy math in it, not as much as economics today, but far more than Mises used, which I think was Spitznagel's point. Spitznagel didn't err. He didn't claim that Keynes' work was all math. He specifically wrote that it was "peppered" with fancy math; not that it was all fancy math. Spitznagel's mentioning of the math in GT is important because in a few words he highlights the growing dependence upon math in economics and suggests that Keynes was trying to appeal to the math crowd.

Mises did see himself as mainstream most of his life. His monetary theory came from the currency school. But Theory of Money and Credit wasn't translated into English until the late 1930's, so how could it have been widely used as a text book except in the German speaking world?

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