Mises Money

Mises presents his Theory of Money and Credit here.

It begins:

Part 1:  The Nature of Money
             Chapter 1:  The Function of Money
                                1.  The General Economic Conditions for the Use of Money.


 Extracting some of his key statements presents fundamental views of money:

The position of the state in the market differs in no way from that of any other parties to commercial transactions........Kings and republics have repeatedly refused to recognize this....  The concept of money as a creature of law and the state is clearly untenable. 

Mises likesd gold:

Sound money still means today what it meant in the nineteenth century: the gold standard. The eminence of the gold standard consists in the fact that it makes the determination of the monetary unit's purchasing power independent of the measures of governments. It wrests from the hands of the "economic tsars" their most redoubtable instrument. It makes it impossible for them to inflate. This is why the gold standard is furiously attacked by all those who expect that they will be benefited by bounties from the seemingly inexhaustible government purse. 

Mises likes it because:

The eminence of the gold standard consists in the fact that it makes the determination of the monetary unit's purchasing power independent of the measures of governments. It wrests from the hands of the "economic tsars" their most redoubtable instrument. It makes it impossible for them to inflate. This is why the gold standard is furiously attacked by all those who expect that they will be benefited by bounties from the seemingly inexhaustible government purse.............

The classical or orthodox gold standard alone is a truly effective check on the power of the government to inflate the currency. Without such a check all other constitutional safeguards can be rendered vain. 

This is how Mises would apply his theory:

One of the main aims of a return to gold is precisely to do away with this system (deficit spending) of waste, corruption, and arbitrary government...........

The first step must be a radical and unconditional abandonment of any further inflation. The total amount of dollar bills, whatever their name or legal characteristic may be, must not be increased by further issuance. No bank must be permitted to expand the total amount of its deposits subject to check or the balance of such deposits of any individual customer, be he a private citizen or the U.S. Treasury, otherwise than by receiving cash deposits in legal-tender banknotes from the public or by receiving a check payable by another domestic bank subject to the same limitations. This means a rigid 100 percent reserve for all future deposits; that is, all deposits not already in existence on the first day of the reform. 

The ideas of dead guys live on.  Mises ideas are living here.

His ideas are still making the case for gold.  We live in a different time.  The function of gold then in a money system is historic fact.  It no longer applies to the current world where there are better ways to perform the function of this thing called money. 

The gold standard crusaders of today are focused on the function of gold as money.  Mises was absolutely correct in his statement about the functional failings of the money system and the need for a solid standard.  The failings are still the failings.  Mises solution of 100% reserve money was right.  His solution of a fixed amount of Solid Money that could not be manipulated was right.

His main political proponent today is Ron Paul.  If Mises was alive today and he would probably say to Ron Paul:  

This is not the same world I lived in.  Things don't change but functions do.  Inflation is still the problem.  Debt money is still the problem.  We need Sound Money.  A gold standard might have been a good idea at my time but in the modern world you have much better ways to perform a function aimed at solving the same old things.  Don't do it with gold.  Functions change, things don't. Do it with your modern technology that manages things and functions in ways that I never could have imagined.  When I lived, the things and its function were the same.  Gold was money.  Now you can separate concepts from the constrains of their physical objects.  Money does not have to be tied to gold anymore.  Use your technology to make money as good as gold, the only thing it would lack is the glitter.  Your marketing people could even figure out a way to give it that.