Ludwig von Misis thoughts on human behavior, socialism, and money and credit have had a major impact on economic thought. He championed true free markets and is seen as a defender of liberty. Former President of the United States Ronald Reagan said "Ludwig von Mises was one of the greatest economic thinkers in the history of Western Civilization. Through his seminal works, he rekindled the flames of liberty. As a wise and kindly mentor, he encourages all who sought to understand the meaning of freedom. We owe him an incalculable debt"(Mises Institute). The remainder of this paper will outline the life of Ludwig von Mises. This will be accomplished by describing the social, political, technical, and economic environment that influenced his ideas. A description of his major ideas in economic thought will be presented. Next, the people and ideas that influenced his approach to economics will be addressed. Finally, the paper will conclude with an assessment of Ludwig von Mises contributions to economic thought.

Overview of the Life of Ludwig von Mises

Ludwig von Misis was born on September 29, 1881 in Lemberg, Austria. He attended a private elementary school, the public

The Ultimate Foundation of Economic Science (Van Nostrand, 1962.)

Human Action is Ludwig von Mises masterwork. Murray Rothbard summarized the importance of Human Action in his essay The Essential Ludwig von Mises with the following statements; "Human Action is IT; it is economics whole, developed from sound praxeological axioms, based squarely on analysis of acting man, the purposive individual as he acts in the real world. It is economics developed as a deductive discipline, spinning out of logical implications of the existence of human action. To the present writer, who had the privilege of reading the book on publication, it was an achievement that changed the course of his life and ideas. For here was a system of economic thought that some of us had dreamed of and never thought could be attained: an economic science, whole and rational, an economics that should have been but never was. An economics provided by Human Action" (Rothbard). The 900 page treatise on economics covers topics such as accounting, advertising, banking, business cycles, bureaucracy, capital, capitalism, charity, competition, debt, devaluation, economics, education, entreprenuership, equality, exchange rates, gold standard, government, history, human action, ideology, individualism, inflation, interest, intervention in markets by government, foreign and domestic investment, labor unions, laissez faire, land reform, markets, mathematics, money, monopoly, morality, mortality, praxeology, prices, profits and loss, public opinion, reason, religion, science, sex, socialism, society, speculation, statistics, tariffs, taxes, theory, time, underdeveloped nations, unemployment, value, wages and war (Koether). The most important ideas derived from Human Action change the very method used to evaluate economics. Mises argues that economics can not be viewed in specialized terms but rather must be viewed as a whole system. This method is referred to as praxeology. Mises also argued against the rising use of mathematics in economics. He states that "the fundamental deficiency implied in every quantitative approach to economic problems consists in the neglect of the fact that there are no constant relations between what are called economic dimensions. There is neither constancy nor continuity in the valuations and in the formation of exchange ratios between various commodities" (Koether). In fact Mises referred to mathematics in economics as "worthless mental gymnastics" because they can not and do not apply to real economic problems. It does not help to think of prices of production as the intersect of two curves, but it does help to realize that price is derived through human action (Koether). Many other ideas are put forth in Human Action but these two are the most prevalent of those that have not already been discussed.

The business cycles of booms and busts that monetary inflation causes are even more damaging to society. When government inflates, it lowers the interest rate below the proper market level, which is dependent on saving. The artificially low interest rate misleads businesses into making uneconomic speculative investments and creates an inflationary boom. When the credit expansion slows or stops, investment errors are revealed bankruptcies and unemployment result. Central banks like the Federal Reserve will ultimately create the business cycle. Mises argued that because money originated as a market commodity, not by government edict or social contract, it should be returned to

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