'..identifying not only the mainstream failure to recognize the dynamic elements of an economy but also pointing out the deficiencies of mathematical and statistical aggregates to teach us much of anything. We should recall, as Huerta de Soto reminds us, that "mainstream" economists not only failed to get 2008 right, they blew the whole 20th century by failing to predict the collapse of the former Soviet Union. They neither foresaw the collapse of the USSR's planned economy nor understood the fundamental, inherent problems in the world's dominant anti-market economic system of the last hundred years. The impossibility of socialism, both in terms of market information and property rights, was entirely dismissed by the Keynesian establishment .. their acolytes still plaguing us with their demand-side fetishes.''..banking treatise, titled
Money, Bank Credit, and Economic Cycles .. real knowledge and wisdom are never easily obtained, and Huerta de Soto here gives us a granular account of everything we need to know about how modern banking works: the history and legal principles; the mechanics of deposit contracts; the role of interest rates; fractional reserve and credit expansion; business cycles and malinvestment; and updated critiques of Keynes, monetarism, and free banking.
..
Huerta de Soto routes us through the key causal-realist principles, always comparing and contrasting those principles with the neoclassical treatment. He anchors acting man, the entrepreneur with finite knowledge and capital, at the forefront of economic analysis — an individual nowhere found in the floating, non-temporal treatment of homogenous capital in macroeconomics. And he gives us superb brief snapshots of Carl Menger, Eugen von Böhm-Bawerk, Ludwig von Mises, and F.A. Hayek, along with summaries of their major contributions. He concludes with a discussion of the Austrian resurgence of the 1970s, led by Murray Rothbard and Israel Kirzner, while parrying some of the chief empiricist criticisms of Austrian theory and method.
But along with contrasts he also gives us blistering critiques of the supposedly dominant neoclassical paradigm, particularly with respect to the relatively static construct of equilibrium:
<blockquote>It is not surprising that present-day economics, dominated by the mathematical formalism of equilibrium theorists of both perspectives, is deemed to be going through a major crisis. This crisis springs mainly from the following causes: first, theorists’ central preoccupation with states of equilibrium, which have nothing to do with reality but are the only states which can be analysed via mathematical methods; second, the total disregard for the role of dynamic market processes and real-world competition, or the study of these from an unfortunate angle; third, the insufficient attention to the role played in the market by subjective information, knowledge and learning processes; and fourth, the indiscriminate use of macroeconomic aggregates and the concomitant neglect of the study of coordination between the plans of the individual agents who participate in the market. All of these factors explain the lack of understanding in economic science today concerning the weightiest problems of real economic life in our time and, thus, they also account for the state of crisis and increasing loss of prestige in which, by and large, we now find our discipline. The above factors all share a common source: the lack of realism in assumptions, and the attempt to apply a methodology characteristic of the natural sciences to the sciences of human action, a field entirely foreign to it. It is precisely the discipline’s current state of crisis which also explains the strong resurgence, beginning in 1974, of the Austrian school of economics, the members of which have been able to present an alternative paradigm which is far more realistic, coherent and fruitful, with a view to rebuilding our science.</blockquote>
This is vintage Huerta de Soto, identifying not only the mainstream failure to recognize the dynamic elements of an economy but also pointing out the deficiencies of mathematical and statistical aggregates to teach us much of anything. We should recall, as Huerta de Soto reminds us, that "mainstream" economists not only failed to get 2008 right, they blew the whole 20th century by failing to predict the collapse of the former Soviet Union. They neither foresaw the collapse of the USSR's planned economy nor understood the fundamental, inherent problems in the world's dominant anti-market economic system of the last hundred years. The impossibility of socialism, both in terms of market information and property rights, was entirely dismissed by the Keynesian establishment.
But Mises and Hayek were right; Marx and Keynes were wrong. Jesús Huerta de Soto is a worthy heir to the former and a capable slayer of the latter, or at least their acolytes still plaguing us with their demand-side fetishes.'
- Jeff Deist,
..Reading Jesús Huerta de Soto, June 11, 2017
'Until specialists and society in general fully grasp the essential theoretical and legal principles associated with money, bank credit, and economic cycles, we may realistically expect further suffering in the world due to damaging economic recessions which will inevitably and perpetually reappear until central banks lose their power to issue paper money with legal tender and bankers lose their government-granted privilege of operating with a fractional reserve. We now wrap up the book as we began it, with this opinion: Now that we have seen the historic fall of socialism, both in theory and in practice, the main challenge to face both professional economists and lovers of freedom in this new century will be to use all of their intellectual might to oppose the institution of the central bank and the privilege private bankers now enjoy.'
- Jesús Huerta de Soto,
Money, Bank Credit, and Economic CyclesContext(Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..'(Haptonomy - Affectivity) - Praxeology as the Method of the Social Sciences - (Affective) Phenomenology of the Social WorldHuman action originates change.' - 'Repress change, and you repress all that it means. Repressing it is sheer hubris..'Four Hundred Years of Dynamic Efficiency - By Jesus Huerta de Soto(Haptopraxeology) - '..We have lost three centuries as a result of ignoring our scholars!'(Praxeology) - '..Menger’s experience stressed subjective factors..'Praxeology - '...causal-realist economics.' - Joseph T. Salerno