John Maynard Keynes, rather than Ludwig von Mises, is the economist whose name is currently being invoked on the airwaves in Britain. in his own day, too, Keynes obliterated Mises: it became fashionable to believe that Roosevelt's New Deal was a kind of successful rudimentary application of Keynesianism.Read the whole thing. Also read Andrew Medworth's comment, which identifies the fundamental issue:
Yet Roosevelt's policy of massive intervention by the state to prop up wage rates and inflate credit gets a much better press than it ever deserved. Consider this: in September 1931 the US unemployment rate was 17.4 per cent and the Dow Jones industrial Average stood at 140. By January 1938, unemployment was still at 17.4 per cent, and the Dow Average had dropped to 121.
Mises' followers insist that the present problems in the economies of the West have not been caused by laissez-faire, but by the opposite: politically sensitive central bankers so desperate to prevent any stock market slump that they cut interest rates to a level which turbo-charged the debt markets. So when George Osborne, as he did yesterday, declares that "laissez-faire is dead", the Mises-ites – one of whom is the libertarian ex-Presidential candidate, Congressman Ron Paul – would protest that such a policy was never tried in the first place.
A crucial question, not addressed by this article, is why these disastrous policies were followed in the first place. Here we must turn to moral philosophy. Ayn Rand, herself a great fan of Mises, observed that laissez-faire policies such as the gold standard depend crucially on egoism, the view that self-interest is man's proper fundamental motivation. Government inflation has always been justified by the claim that it helps the poor: ultimately, of course, it harms us all, but if we want to see a change, we must address the moral issues behind the policy debate.Capitalism is the only practical socio-economic system because it is the only moral system.