Review of Austrian Economics - The Ludwig von Mises Institute

Book Reviews 121
recent years. He anticipates the kernel of truth in so-called rational
expectations theory by criticizing Keynes for his implicit belief
that inflation can deceive the public persistently and systematically
(p. 72); he anticipates a key aspect of supply-side economics and
its Laffer Curve in noting that governments resort to inflation when
tax rates have been pushed beyond the point of maximum returns
(p. 103). The reader will encounter several such passages which
establish Mises's ideas as precursors of now-fashionable insights.
If there is a weakness that characterizes this collection of essays,
it is Mises's tendency to underestimate the enduring appeal of the
ideas he criticizes. For instance, he writes (p. 140) that "As an
economic doctrine, Keynesianism is now [1964] dead" and (pp. 120-
21) that with the posthumous publication of the third volume of
Marx's Das Kapital [1894], "the essential dogma of the Marxian
philosophy, the class conflict doctrine. . . , was unmasked as a flop."
But even now, as much as then, Keynesian doctrine is still alive, and
Marxian doctrine still masquerades as high theory. In fact, these two
doctrines (Keynesian demand failures and Marxian class conflict)
plus the equally fallacious Ricardian production theory have all been
combined to produce the present-day Post Keynesianism.
Today, as always, the general citizenry needs to understand
economic principles and to recognize economic fallacies. The champions
of freedom, Mises reminds us, can win out only through economic
education. Students of Misesian economics will recognize Mises as
the champion of champions and will be grateful to Bettina Bien
Greaves and the Foundation for Economic Education for giving these
essays and articles a new life.
Roger W. Garrison
Auburn University