2013년 1월 23일 수요일

[발췌: Hayek's Preface to] Monetary Theory and the Trade Cycle

자료: http://mises.org/books/hayekcollection.pdf

지은이: F. A. Hayek (German original, 1928; English translation, 1932)


(...) in revising the translation, I have made numerous minor alteration and additions (mainly confined to the footnotes), the general course of the argument has been left unchanged. The book, therefore, still shows signs of the particular aim with which it was written. In submitting it to a public different from that for which it was originally intended, a few words of explanation are, perhaps, required.

In Germany, somewhat in contrast to the situation in English-speaking countries, monetary explanations of the trade cycle were always, or at least until quite recently, regarded with some mistrust. One of the aim of this studyㅡone on which an English reader may feel that I have wasted unnecessary energyㅡwas to justify the monetary approach to these problems. But I hope that this more explicit statement of the role of the monetary factor will not be found quite useless, for it is not only a justification of the monetary approach but also a refutation of some oversimplified monetary explanations that are widely accepted. In order to save the sound elements in the monetary theories of the trade cycle, I had to attempt, in particular, to refute certain theories that have led to the belief that, by stabilizing the general price level, all the disturbing monetary causes would be eliminated. Although, since this book was written, this belief has been somewhat rudely shaken by the crisis of 1929, I hope that a systematic examination of its foundations will still be found useful. The critique of the program of the "stabilizers," which is in many ways the central theme of this book, has now occupied me for many years, and I deal here only with some special problems that have grown mainly out of these studies, I may perhaps be permitted to refer below to other publications, in which I have partly dealt with certain further theoretical problems and partly attempted to use these considerations for the elucidation of contemporary phenomena.[4] In particular, my ^Prices and Production^, originally published in England, should be considered as an essential complement to the present publication. While I have here[in MTTC] emphasized the monetary causes that start the cyclical fluctuations, I have, in that later publication[in PP], concentrated on the successive changes in the real structure of production, which constitute those fluctuations. This essential complement of my theory seems to me to be the more important since, in consequence of actual economic developments, the over simplified monetary explanations have gained undeserved prominence in recent times. And since, in all my English publications, I have purposely refrained from combining purely theoretical considerations with discussions of current events, it may be useful to add here one or two remarks on the bearing of those considerations on the problems of today.

[이하 1929 주가붕괴 후 경기침체의 원인에 대한 주장]

It is a curious fact that the general disinclination to explain the past boom by monetary factors has been quickly replaced by an even greater readiness to hold the present working of our monetary organization exclusively responsible for our present plight.
  • And the same stabilizers who believed that nothing was wrong with the boom and that it might last indefinitely because prices did not rise, 
  • now believe that everything could be set right again if only we would use the weapons of monetary policy to prevent prices from falling. 
The same superficial view, which sees no other harmful effect of a credit expansion but the rise of the price level, now believes that our only difficulty is a fall in the price level, caused by credit contraction.

There can, of course, be little doubt that, at the present time, a deflationary process is going on and that an indefinite continuation of that deflation would do inestimable harm. (a) But this does not, by any means, necessarily mean that the deflation is the original cause of our difficulties or that we could overcome these difficulties by compensate for the deflationary tendencies, at present operative in our economic system, by forcing more money into circulation.
  • (b) There is no reason to assume that the crisis was started by a deliberate deflationary action on the part of the monetary authorities, or 
  • (c) that the deflation itself is anything but a secondary phenomenon, a process induced by the maladjustments of industry left over from the boom
  • (d) If, however, the deflation is not a cause but an effect of the unprofitableness of industry, then it is surely vain to hope that by reversing the deflationary process, we can regain lasting prosperity. (d') Far from following a deflationary policy, central banks, particularly in the United States, have been making earlier and more far-reaching efforts than have ever been undertaken before to combat the depression by a policy of credit expansionㅡwith the result that the depression has lasted longer and has become more sever than any preceding one. 
  • [e] What we need is a readjustment of those elements in the structure of production and of prices that existed before the deflation began and which then made it unprofitable for industry to borrow. [e'] But, instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion.
It is very probable that the much discussed rigidities, which had already grown up in many parts of the modern economic system before 1929, would, in any case, have made the process of readjustment much slower and more painful. It is also probable that these very resistances to readjustment would have set up a severe deflationary process that would finally have overcome those rigidities. To what extent, under the given situation of a relatively rigid price and wage system, this deflationary process is perhaps not only inevitable but is even the quickest way of bringing about the required result, is a very difficult question, about which, on the basis of our present knowledge, I should be afraid to make any definite pronouncement.

It seems certain, however, that we shall merely make matters worse if we aim at curing the deflationary symptoms and, at the same time (by erection of trade barriers and other forms of state intervention), do our best to increase rather than to decrease the fundamental maladjustments. More than that: while the advantages of such a course are, to say the least, uncertain, the new dangers it creates are great. To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirectionㅡa procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end. It would not be the first experiment of this kind that has been made. We should merely be repeating, on a much larger scale, the course followed by the Federal Reserve System in 1927, an experiment that Mr. A.C. Miller, the only economist on the Federal Reserve Board and at the same time its oldest member, has rightly characterized as "the greatest and boldest operation ever undertaken by the Federal Reserve System," an operation that "resulted in one of the most costly errors committed by it or any other banking system in the last 75 years." It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression. We must not forget that, for the last six or eight years, monetary policy all over the world has followed the advice of the stabilizers. It is high time that their influence, which has already done harm enough, should be overthrown.

We cannot hope for the overthrow of this alluringly simply theory until its theoretical basis is definitely refuted and something better substituted for it. The opponents of the stabilization program still laborㅡand probably always will laborㅡunder the disadvantage that they have no equally simple and clear-cut rule to propose; perhaps no rule at all that will satisfy the eagerness of those who hope to cure all evils by authoritative action. But whatever may be our hope for the future the one thing of which we must be painfully aware at the present timeㅡa fact that no writer on thee problem should fail to impress upon his readersㅡis how little we really know of the forces that we are trying to influence by deliberate management; so little indeed that it must remain an open question whether we would try if we knew more.

Friedrich A. Hayek
The London School of Economics
June 1932

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