Austrian Economics Perspective on Boom and Bust

Ludwig von Mises wrote in Human Action, 60 years ago:

"The boom produces impoverishment. But still more disastrous are the moral ravages. It makes people despondent and dispirited. The more optimistic they were under the illusory prosperity of the boom, the greater is their despair and their feeling of frustration. The individual is always ready to ascribe his good luck to his own efficiency and to take it as a well-deserved reward for his talent, application and probity. But reverses of fortune he always charges to other people, and most of all to the absurdity of social and political institutions. He does not blame the authorities for having fostered the boom. He reviles them for the inevitable collapse."

(quoted in the article "The Deflating Bubble" by Douglas E. French, FREE Market newsletter Vol. 27, No. 6, June 2009 by Ludwig von Mises Institute)

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