In Defense of the Misesian Theory of Interest

The present article is a slightly expanded version of one of the critiques of Professor Laurence S. Moss’ paper directed against the theory of interest of Ludwig von Mises. As a means of abstraction, Moss discussed the economics of a pure exchange economy in terms of the allocation of consumer goods over time in a prisoner-of-war camp. His paper is thoroughly neoclassical rather than Austrian in substance and in form, and hence does not do justice to Mises’ theory of interest, which was developed within the context of his own praxeological framework of analysis. The extent of this injustice is pointed out in the present paper.

Volume 3, Number 2 (1979)