The Austrian view of the financial crisis

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This Thursday, one of the world’s leading economists of the Austrian school – if not the world’s leading economist of the Austrian school – will be giving the inaugural Hayek Lecture at the London School of Economics. Jésus Huerta de Soto’s magnum opus is his Money, Bank Credit and Economic Cycles (which you can download here), which along with Mises’ Theory of Money and Credit offers one of the fundamental expositions of the Austrian theory of the business cycle.

Professor Huerta de Soto will be speaking on the causes of the current recession – a timely subject of which the Austrian school offers the most cogent and coherent analysis. The Austrian business cycle theory, developed by Mises and Hayek, says that the government manipulation of the money supply creates systemic artificial bubbles in the economy, which creates the appearance of a boom. But, in time, this bubble bursts, leading to a situation not dissimilar from the one we’re in now. You’ve probably already seen the rap video.

Thursday’s lecture should be interesting. It’s free to the public and tickets are available at the door. You can find full details here.