The Online Library of Liberty

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• Preface to the New Edition
• Preface to the English Edition
• Preface to the Second German Edition
• Part One: the Nature of Money
• Chapter 1: The Function of Money
• Chapter 2: On the Measurement of Value
• Chapter 3: The Various Kinds of Money
• Chapter 4: Money and the State
• Chapter 5: Money As an Economic Good
• Chapter 6: The Enemies of Money
• Part Two: the Value of Money
• Chapter 7: The Concept of the Value of Money
• Chapter 8: The Determinants of the Objective Exchange Value, Or Purchasing Power, of Money
• Chapter 9: The Problem of the Existence of Local Differences In the Objective Exchange Value of Money
• Chapter 10: The Exchange Ratio Between Money of Different Kinds
• Chapter 11: The Problem of Measuring the Objective Exchange Value of Money and Variations In It
• Chapter 12: The Social Consequences of Variations In the Objective Exchange Value of Money
• Chapter 13: Monetary Policy
• Chapter 14: The Monetary Policy of Etatism
• Part Three: Money and Banking
• Chapter 15: The Business of Banking
• Chapter 16: The Evolution of Fiduciary Media
• Chapter 17: Fiduciary Media and the Demand For Money
• Chapter 18: The Redemption of Fiduciary Media
• Chapter 19: Money, Credit, and Interest
• Chapter 20: Problems of Credit Policy
• Part Four: Monetary Reconstruction
• Chapter 21: The Principle of Sound Money
• Chapter 22: Contemporary Currency Systems
• Chapter 23: The Return to Sound Money
• Appendix A: On the Classification of Monetary Theories
• Appendix B: Translator’s Note On the Translation of Certain Technical Terms
• Biographical Note

Biographical Note

Ludwig von Mises (1881-1973) was the acknowledged leader of the Austrian School of economic thought, a prodigious originator in economic theory, and a prolific author. A library of his books would total twenty-one volumes if confined to first editions, forty-eight volumes if all revised editions and translations were included, and still more if the Festschriften and other volumes containing contributions by him were added.

Von Mises’ writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. His contributions to economic theory include important clarifications on the quantity theory of money, the theory of the trade cycle, the integration of monetary theory with economic theory in general, and a demonstration that socialism must fail because it cannot solve the problem of economic calculation. Mises was the first scholar to recognize that economics is part of a larger science of human action, a science which Mises called “praxeology”.

Ludwig von Mises received doctorates in law and economics from the University of Vienna in 1906. In 1909 he became Economic Advisor to the Austrian Chamber of Commerce (comparable to the U.S. Department of Commerce). After serving in World War I, he became Professor of Economics at the University of Vienna and, in 1934, Professor of International Relations at the Graduate Institute of International Studies in Geneva. In 1945 he became Visiting Professor at New York University where he remained until his retirement in 1969. In a lecturing and teaching career that spanned many continents and more than half a century, Mises numbered among his students one Nobel Laureate, F. A. Hayek, two presidents of the American Economic Association, Gottfried Haberler and Fritz Machlup, and many other economists of international reputation.

His major works are The Theory of Money and Credit (1912), Socialism (1922), Human Action (1949), Theory and History (1957), Epistemological Problems of Economics (1960), and The Ultimate Foundations of Economic Science (1962).

Murray N. Rothbard, who wrote the Introduction, is Professor of Economics at the Polytechnic Institute of New York. He is the author of Man, Economy, and State, America’s Great Depression, and many other books, essays, and articles.

Silver Demereteia of Syracuse

(480-479 )

The silver Demereteia, which is used in the jacket design, was struck by Gelon, Lord of Syracuse, celebrating his victory over the Carthaginians in the decisive battle of Himera in Sicily. On one side of the coin is a charioteer, symbolizing Gelon’s forces, with the winged goddess of Victory, Nike, crowning the chariot with laurel. The lion in flight below represents the defeated Carthaginians. On the other side is a head, possibly that of the goddess Arethusa, since the dolphins surrounding her stand for the sea around the island of Ortygia on which the goddess was worshipped. Or, the head could be that of Gelon’s queen, Demerete, whose name was given to the coin (Demereteia) and all others of the same issue (Demereteion) in honor of her gift of personal jewelry to the treasury of Syracuse in the war with Carthage. Another legend has it that Demerete gained favorable terms for the vanquished Carthaginians and received from them a hundred talents of gold which she contributed to financing the striking of the Demereteia.

The Greeks had learned the art of coinage from the Lydians who had invented it around 700 The Lydian Empire comprised most of what is now Turkey. The first Lydian coinage was developed by private individuals—goldsmiths, bankers, merchants—not by authority of the Emperor. The need for coinage as a reliable medium of exchange derived from Lydia’s position as the industrial power of the ancient world. Prior to the development of coinage, media of exchange were clumsy bars or pieces of metal.

The Greek city states adopted coinage but habitually and shamelessly debased their coins. Said Demosthenes: “the majority of states are quite open in using silver coins diluted with copper and lead.” Only Athens, excepting its one major devaluation by Solon, maintained throughout its history the purity of its coinage, a fact which does much to explain the extension of Athenian commercial and political power over all of Greece.