The Freeman 1972 - The Ludwig von Mises Institute

1972 FIXED EXCHANGE RATES AND MONETARY CRISES 1858 Alfred L. Malabre, Jr., "Is It ReallyTime for Monetary Cheer?" Wall StreetJournal (December 2,1971). Malabre'sestimate of the number of devaluations isfar too low. Franz Pick, in the introductionto the second edition of All theMonies of the World (1971), reports thatat least 418 partial or full devaluationstook place in 108 countries between 1954and the end of 1970. 1971 saw an additional99 devaluations: Barron's (January3, 1972), p. 9. This, in spite of theso-called stabilizing influences of the InternationalMonetary· Fund, the organizationdrawn up at the Bretton WoodsConference in July, 1944, officially establishedon December 27, 1945, and put intooperation on March 1, 1947.9 Mises, Human Action, p. 791.10 Ibid., p~ 800.n The Theory of Money and Credit(Foundation for Economic Education,1971), PP. 180-81.12 Human Action, p. 455.13 Ibid., pp. 455-56.14 Ibid., p. 801.15 Ibid., pp. 464-66.16 Ibid. (1949 ed.), p. 462n.17 Karl Marx, Capital (New York:Modern Library), p. 391. This is the firstvolume of Capital. He continued this sameargument in VoL 3 (Chicago: Charles H.Kerr, 1909), pp. 673, 1027. FrederichEngels, Herr Eugen Duering's Revolutionin Science [Anti-Duering] (London:Lawrence & Wishart, [1877] 1934), pp.296-301. For a critique of this concept ofcapitalist contradiction, see Gary North,Marx's Religion of Revolution (Nutley,New Jersey: Craig Press, 1968), p. 154.18 Mises, Human Action, pp. 289 ff. Cf.Frank H. Knight, Risk, Uncertainty andProfit (New York: Harper Torchbook,[1921] 1965), pt. 3.19 Mises, "Economic Calculation in theSocialist Commonwealth," (1920), inF. A. Hayek (ed.), Collectivist EconomicPlanning (London: Routledge & KeganPaul, [1935] 1963). Cf. Mises, Socialism(New Haven, Conn.: Yale UniversityPress, [1922] 1962), pp. 119-62; T. J. B.Hoff, Economic Calculation in the SocialistSociety (London: Hodge, 1949). Foran able refutation of the myth that OskarLange in some way "refuted" Mises onthis point, see Paul Craig Roberts,"Oskar Lange's Theory of Socialist Planning,"The Journal of Political Economy,LXXIX (1971), pp. 562-77. Roberts is notreally happy with Mises' original formulationof his critique, however.20 Mises, Human Action, ch. 20. Cf.Gary North, "Repressed Depression,"THE FREEMAN (April, 1969) ; North,"Downward Price Flexibility and EconomicGrowth," THE FREEMAN (May,1971) .21 Leonard E. Read, Talking to Myself(Foundation for Economic Education,1970), ch. 6.22 Murray N. Rothbard, "The Case fora 100 Per Cent Gold Dollar," in Leland B.Yeager (ed.), In Search of a MonetaryConstitution (Cambridge, Mass.: HarvardUniversity Press, 1962), PP. 100-01.23 Mises, Theory of Money and Credit,p. 240. Cf. North,"Donward Price Flexibility,"pp. 312-13.24 I must admit that the passage inMises' Theory of Money and Credit, "CurrencyReform in Ruritania," does notseem to conform to every other statementwritten by Mises with regard to the politicalcontrol of prices, including rates ofexchange. He calls for a state agency toset a legal parity and "to make this legalparity an effective real market rate, ..."(p. 445). The 'meaning of this obscurepassage is best understood in terms ofhis attack on statist foreign-exchangepolicy which appears on pp. 18-19. Thewhole corpus of Mises' writings is opposedto price controls; a single deviation- if, indeed, it is a deviation - should notbe used to compromise the impact of hisoverall defense of the free market.