''The Theory of Money and Credit'' is a 1912 economics book written by

Ludwig von Mises Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School economist, historian, logician, and sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberalism. He is ...

, originally published in German as ''Theorie des Geldes und der Umlaufsmittel''. In it Mises expounds on his theory of the origins of money through his

regression theorem The Regression Theorem, first proposed by Ludwig von Mises in his 1912 book ''The Theory of Money and Credit'', states that the value of money can be traced back ("regressed") to its value as a commodity. The theorem claims that at a point in time ...

, which is based on logical argumentation. It is one of the foundational works of the Misesian branch of the

Austrian School The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result exclusively from the motivations and actions of individuals. Austrian scho ...

of economic thought. Commodity money exists today. Mises looks at the origin, nature and value of money, and its effect on determining

monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for federal funds, very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money s ...

. It does not concern all adaptations of money. He uses the so-called ''regression theorem'', a statement backed by a step by step, logical reasoning. Mises explains why money is demanded in its own right. According to Mises, money has historically come about after there has been a demand for the money commodity in a barter economy.

Applications

Along with

Carl Menger Carl Menger von Wolfensgrün (; ; 28 February 1840 – 26 February 1921) was an Austrian economist and the founder of the Austrian School of economics. Menger contributed to the development of the theories of marginalism and marginal utility ...

's '' Principles of Economics'', and

Eugen von Böhm-Bawerk Eugen Ritter von Böhm-Bawerk (; born Eugen Böhm, 12 February 185127 August 1914) was an Austrian economist who made important contributions to the development of the Austrian School of Economics and neoclassical economics. He served intermittent ...

's ''

Capital and Interest ''Capital and Interest'' (german: Kapital und Kapitalzins) is a three-volume work on finance published by Austrian economist Eugen Böhm von Bawerk (1851–1914). The first two volumes were published in the 1880s when he was teaching at the Unive ...

'', the book is one of the foundational works of the Austrian School.

Publication history

* 1912: Vienna: ''Theorie des Geldes und der Umlaufsmittel''. * 1924: 2nd edition in German. * 1934: London: Jonathan Cape Ltd. First translation (by Harold E. Batson) into English. The German word ''Umlaufsmittel'' literally translates as "means of circulation" and was translated into the text of the English version as "fiduciary media". However, the publisher thought the unusual terminology would irritate readers and substituted "money and credit" in the title, thereby losing the specific distinction Mises had made in selecting his original term. Hülsmann, Jörg Guido, 2007. ''Mises: The Last Knight of Liberalism''. p. 217, note 7. * 1953: New Haven, Conn.:

Yale University Press Yale University Press is the university press of Yale University. It was founded in 1908 by George Parmly Day, and became an official department of Yale University in 1961, but it remains financially and operationally autonomous. , Yale Univers ...

. Part Four was added by Mises to this English language edition * 1971: Irvington-on-Hudson, N.Y.: Foundation for Economic Education. * 1978: Irvington-on-Hudson, N.Y.:

Foundation for Economic Education The Foundation for Economic Education (FEE) is an American conservative, libertarian economic think tank. Founded in 1948 in New York City, FEE is now headquartered in Atlanta, Georgia. It is a member of the State Policy Network. FEE offers ...

. * 1981: Indianapolis,. Ind.

Liberty Fund Liberty Fund, Inc. is an American private educational foundation headquartered in Carmel, founded by Pierre F. Goodrich. Through publishing, conferences, and educational resources, the operating mandate of the Liberty Fund was set forth in an un ...

. . 541 pages. Hardcover. (Softcover ). * 2009: Auburn, Al.

Ludwig von Mises Institute Ludwig von Mises Institute for Austrian Economics, or Mises Institute, is a libertarian nonprofit think tank headquartered in Auburn, Alabama, United States. It is named after the Austrian School economist Ludwig von Mises (1881–1973). It ...

. Hardcover

Criticism

According to Michael Hendricks, "the regression theorem does a good job of explaining the creation of money, however it does not necessarily apply to all forms of money."

References

External links

* ''The Theory of Money and Credit'', 1953 edition: *
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* ''The Theory of Money and Credit'', 2009 edition: *
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by

Murray Rothbard Murray Newton Rothbard (; March 2, 1926 – January 7, 1995) was an American economist of the Austrian School, economic historian, political theorist, and activist. Rothbard was a central figure in the 20th-century American libertarian ...

1912 non-fiction books Books by Ludwig von Mises Jonathan Cape books {{Econ-book-stub