'The "Manic-Depressive" Economy .. Furthermore credit expansion excessively and unjustifiably forces economic agents’ reflexes and the pace at which they work. While the expansion lasts, people’s capacity for work is pushed to the limit and their entrepreneurial spirit becomes corrupted. Psychological stress and wear follow and are of high human and personal cost..''..the current monetary system, based on credit expansion, has made it customary for booms and crises to disturb economic development. In other words, it appears as if “manic-depressive” behavior were required of a market economy.
Indeed businessmen, journalists, politicians, union members, and economic agents in general have come to consider the artificial expansionary phase characteristic of a boom to be the normal stage of prosperity, which should be sought and maintained in any way possible. By the same token, expansion’s inevitable consequences, i.e., crisis and recession, are considered a very negative stage which should be avoided at all costs.[55] Economic agents do not recognize the recession as the inevitable result of artificial expansion, and they fail to realize it has the virtue of revealing the errors committed and facilitating the recovery and readjustment of the productive structure.
Furthermore credit expansion excessively and unjustifiably forces economic agents’ reflexes and the pace at which they work. While the expansion lasts, people’s capacity for work is pushed to the limit and their entrepreneurial spirit becomes corrupted. Psychological stress and wear follow and are of high human and personal cost..'
- Jesús Huerta de Soto,
Money, Bank Credit, and Economic Cycles (
pdf),
The "Manic-Depressive" Economy: The Dampening of the Entrepreneurial Spirit and Other Negative Effects Recurring Business Cycles Exert on the Market Economy, page 457
[55] The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the mal-investment and the overconsumption of the boom period and that such an artificially induced boom is doomed. (Mises,
Human Action, p. 575)
Thus it is a grave error to believe real wealth is destroyed by the stock market crash which announces the crisis. On the contrary, the economic destruction takes place much earlier, in the form of generalized malinvestment during the previous stage, the credit boom. The fall in the stock market merely indicates economic agents have finally taken notice of this phenomenon. See also section 14.
Context(Dutch) Haptopraxeologie: Bazaarmodel - Oostenrijkse School, Haptonomie, Plasma Kosmologie (29 mei, 2011)‘..disregarded the subjectivist revolution..’Affective Introspection (
Ethical Affective Ambiance)