At the heart of our difficulties lies the broken link between save and invest.
The following books are recommended as a primer for those who may be expert in the present economic and financial system but who wish to rethink money, economics and the business cycle from a fresh perspective.
The Austrian Theory of the Trade Cycle and Other Essays, a slim volume of just 120 pages — If you read nothing else, please read the first, 10-page essay:
Booms and busts are not endemic to the free market, argues the Austrian theory of the business cycle, but come about through manipulation of money and credit by central banks. In this monograph, Austrian giants explain and defend the theory against alternatives. Includes essays by Mises, Rothbard, Haberler, and Hayek. In his later years, Professor Haberler distributed many of these monographs to friends and associates.
This volume includes:
- Introduction: The Austrian Theory in Perspective (Roger W. Garrison)
- The “Austrian” Theory of the Trade Cycle (Ludwig von Mises)
- Money and the Business Cycle (Gottfried Haberler)
- Economic Depressions: Their Cause and Cure (Murray N. Rothbard)
- Can We Still Avoid Inflation? (Friedrich A. Hayek)
- The Austrian Theory: A Summary (Roger W. Garrison)
Hayek was not only a leading champion of liberty in the 20th century. As this massive book reveals, he was also a great economist whose elaboration on monetary theory and the business cycle made him the leading foe of Keynesian theory and policy in the English-speaking world. Here are collected his most important works on these topics: re-typeset, indexed for the first time, and beautifully bound in a 536-page hardbound book for the ages.
These works have been tragically out of print for many years. Together they constitute a complete presentation of Hayekian money and business cycle theory. Even more, they work together as an excellent elucidation of Austrian macroeconomic theory, which is why this book has already been adopted in some classrooms.
The timing could not be better. The entire world economy is now suffering from the effects of bad monetary policy, and with results that Hayek explains in great detail. With “counter-cyclical” policy again revealed as unworkable, and while the politicians plot to make matters worse, the contents of this book has direct bearing on present and future of monetary policy.
The Road to Serfdom — Inspired by the events of its time, this is the ultimate presentation of the final outcome of comprehensive government intervention in response to economic difficulty:
This book should be read by everybody. It is no use saying that there are a great many people who are not interested in politics; the political issue discussed by Dr Hayek concerns every single member of the community. — The Listener
This book has become a true classic: essential reading for everyone who is seriously interested in politics in the broadest and least partisan sense. — Milton Friedman
This spell-binding book is a classic in the history of liberal ideas. It was singularly responsible for launching an important debate on the relationship between political and economic freedom. It made the author a world-famous intellectual. It set a new standard for what it means to be a dissident intellectual. It warned of a new form of despotism enacted in the name of liberation. And though it appeared in 1944, it continues to have a remarkable impact. — mises.org
Can the market fully manage the money and banking sector? In this major book Jesús Huerta de Soto argues that the market can manage the money and banking sector, that it can again, without inflation, without business cycles, and without the economic instability that has characterized the age of government control.
A complete comprehensive treatise on economic theory, the book is sweeping, revolutionary, and devastating – not only the most extended elucidation of Austrian business cycle theory to ever appear in print but also a decisive vindication of the Misesian-Rothbardian perspective on money, banking, and the law.
Its five main contributions:
- A wholesale reconstruction of the legal framework for money and banking, from the ancient world to modern times
- An application of law-and-economics logic to banking that links microeconomic analysis to macroeconomic phenomena
- A comprehensive critique of fractional-reserve banking from the point of view of history, theory, and policy
- An application of the Austrian critique of socialism to central banking
- The most comprehensive look at banking enterprise from the point of view of market-based entrepreneurship.
De Soto provides also a defense of the Austrian perspective on business cycles against every other theory, defends the 100% reserve perspective from the point of view of Roman and British law, takes on the most important objections to full reserve theory, and presents a full policy program for radical reform.
For further reading, please see this complete reading list for Rethinking Economics.