Capitalism as It Is and as It Is Seen by the Common Man-Mises

During the boom period primarily fostered by low interest rates, malinvestments can also be made in technology and technological developments.  See Mises below and two pages from Dr. Mark Thornton’s book: The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century.  Richard Duke

“Even in the heyday of liberalism only a few people had a full grasp of the functioning of the market economy.”

Techology a lodestar of capitalism and yet a bastion of socialism—Peter Klein

 

Can Technology Prevent a Recession?

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Economics is so different from the natural sciences and technology on the one hand, and history and jurisprudence on the other hand, that it seems strange and repulsive to the beginner. Its heuristic singularity is viewed with suspicion by those whose research work is performed in laboratories or in archives and libraries. Its epistemological singularity appears nonsensical to the narrow-minded fanatics of positivism. People would like to find in an economics book knowledge that perfectly fits into their preconceived image of what economics ought to be, viz., a discipline shaped according to the logical structure of physics or of biology. They are bewildered and desist from seriously grappling with problems the analysis of which requires an unwonted mental exertion.

The result of this ignorance is that people ascribe all improvements in economic conditions to the progress of the natural sciences and technology. As they see it, there prevails in the course of human history a selfacting tendency toward progressing advancement of the experimental natural sciences and their application to the solution of technological problems. This tendency is irresistible, it is inherent in the destiny of mankind, and its operation takes effect whatever the political and economic organization of society may be. As they see it, the unprecedented technological improvements of the last two hundred years were not caused or furthered by the economic policies of the age. They were not an achievement of classical liberalism, free trade, laissez faire and capitalism. They will therefore go on under any other system of society’s economic organization.”

https://mises.org/wire/capitalism-it-and-it-seen-common-man

SEE:

Keynesian business cycle theories are based on psychological factors
while real business cycle theory rests on external shocks such as technological change. ABCT incorporates both psychology and technology. With artificially low interest rates the economy will experience more investment and
consumption. The price of assets will increase and unemployment will fall,
even below the so-called natural rate of unemployment. Wages, incomes,
and profits will all increase. During this boom Austrians expect the psychology of investors and entrepreneurs to be highly positive. Retirement
stock accounts will increase substantially, variable-income workers in the
service economy, such as waiters and massage therapists, will earn higher
incomes, and novices will earn windfall incomes by endeavors such as flipping houses and day trading stocks. Given the above story about Amazon, it
would also not surprise Austrians that a great deal of new technology would
come about; in fact with ABCT it would be expected. The very nature of

making an economy more roundabout implies new recipes for production
and the introduction of new technologies. So there is a built-in rationale for
a technology shock during a boom.”

The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century, pp. 50-51, Mark Thornton

Mark Thornton

Book: Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century by Dr. Mark Thornton

 

Review by Richard Duke on the Mises Institute website of the book: The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century by Dr. Mark Thornton

 

Book: The Anti-Capitalistic Mentality–Mises