"Unfortunately, the problem this appears eventually to lead to, is collapse. The problem is the connection with debt. Debt can be paid back with interest to a much greater extent in a growing economy than a contracting economy because we are effectively borrowing from the future–something that is a lot easier when tomorrow is assumed to be better than today, compared to when tomorrow is worse than today."
Capitalism is a debt based economy, requiring to pre-finance industrial production. In the end, the debt pressure drives the whole process. Something Mises, who never worked in a company his whole life, fundamentally did not understand. He thinks you have to "save" to "invest" later.
You can't just produce "things" out of thin air so the idea that you can finance future production without (someone, somewhere) deferring present consumption is not really valid. All interest is is an incentive for people to defer present consumption for a higher level of future consumption.
Unless, of course, you just print up a bunch of money and then you aren't exactly "borrowing from the future" but taking from the current holders of the currency through lower future consumption due to inflationary devaluation of the currency [--edit--] and also taking from the current holders of the currency by artificially driving up current prices.
And that Robinson Crusoe bloke stuck on an island...
Call them. Tell'em they are doing it wrong. They should start saving first to do some "investments". By the way, Mises never worked one day in his live in any free market enterprise.
> > He thinks you have to "save" to "invest" later.
> Because that's the truth.
Well, start telling this VW, BASF, Dow Chemical, Ford and the whole bunch the next time they take a billion dollar loan in expectation that it will pay off. Even Intel has 30 Billion long term debt.
> You can't just produce "things" out of thin air so the
> idea that you can finance future production without
> (someone, somewhere) deferring present consumption is not > really valid.
Exactly this is what capitalism is about. The the pressure created by debt, is exactly what makes capitalism very dynamic.
> Unless, of course, you just print up a bunch of money and
The idea that "only gold is money" was stupid, is stupid and always will be stupid. Even with gold back money you would be able to take loans. The only thing you would achieve is lower economic growth.
> And that Robinson Crusoe bloke stuck on an island...
THe Robinson Crusoe guy is perfectly a guy that Mises is describing. But he is closer to a middle ages barter economy than to anything called capitalism.
This touches some things:
"In simplest terms, our problem is that we as a people are no longer getting richer. Instead, we are getting poorer, as evidenced by the difficulty young people are now having getting good-paying jobs. As we get poorer, it becomes harder and harder to pay debt back with interest. It is the collision of the lack of economic growth in the real economy with the need for economic growth from the debt system that can be expected to lead to collapse."
https://www.resilience.org/stories/2014-02-12/limits-to-grow...
He wobbles of "saving" and "investing". Sitting on a desk, having worked his whole live beyond a desk and never for a free market enterprise, he tries to understand capitalism.
Do you remember his quote: "
“Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.” — Ludwig von Mises
Wow. Look who is talking. A master or an idiot? You never know. Out of curiosity, can you show me an economic boom that does NOT come with a credit expansion? The sentence is a tautology. Meaningless. "The Banana is big but it's shell is bigger". Wow.
That and a devastating attack against socialism (from which they never recovered) which is the very reason you felt the need to engage in ad hominem attacks...
But, alas, if had ever actually read anything he wrote you would see his insights don't really apply to a barter economy at all -- unless they want to do something crazy and solve the coincidence of wants problem to evolve into an actual modern economy.
