As I have mentioned a few times in my last several posts, for the past eighteen months I have been touring the set of Britannica’s Great Books that a friend gave to me. Among the many classic works of history and literature are included some of the classic works of science: Newton’s Principia, Darwin’s Origin of Species, and a score of others.
Reading and thinking over the greatest books of the Western world start to give one the insight that some of the greatest scientists of all time understood time itself in a fundamental way. And they transformed whole fields of science by showing that the comprehension of time changes everything. Newtonian mechanics is based on time as the independent variable. Darwin saw mutation and selection working through the epochs. Einstein saw that time changes with velocity. And so forth.
So in the great books, one sees a greater and greater rift developing as field after field of science breaks free from the static, authoritative, bureaucratic thought of the Roman empire and the Roman church. Throughout history, one can track the progress of the upstart scientists as they finally must turn away from the voice of authority, the voice of the scholastic, the hegemony of conservatism.
And so it is with Mises. Mises’s fundamental comprehension of the role of time transforms economics. Mises as the true liberal scientist finally must overthrow the narrow, static myths of the conservative authorities of both the right and the left. From the regression theorem to the diachronic effects of inflation, from interest as the time preference for money to the Austrian theory of the business cycle, again and again Mises opens the eyes of his readers to the true nature of time in economics.
And what is capital, if not the storage of resources that can be moved
through time and space? If the entrepreneur is not allowed to move
capital through time and space, to apply it at the exact point of
space-time where it has the most utility, then we all become that much
Thus while lesser economists lounge on the beaches with their static analyses and graphs of the equilibrium between supply and demand, Mises launches into the ocean of a truly dynamic economics. The evenly rotating economy that is the (unwitting) basis of all central planning is completely destroyed by Mises’s understanding of the nature of entrepreneurial action over time. Static economics is worse than no economics at all, and Mises knows it.