Money, Bank Credit, and Economic Cycles - The Ludwig von Mises ...

Bank Credit Expansion and Its Effects on the Economic System 269up his personal action process. Furthermore the future is opento man’s every creative possibility, and at any point the actormay modify his objectives or vary, rearrange and revise thestages of the action processes in which he is involved.Hence in economics time is inseparable from humanaction. It is impossible to conceive of an action which does nottake place in time, one that does not take time. Moreover theactor perceives the passage of time as he acts and goesthrough the different stages in his action process. Humanaction, which is always directed toward the attainment of agoal or the alleviation of a discomfort, invariably takes time,in the sense that it requires the realization and completion ofa series of successive stages. Therefore what separates theactor from the achievement of his goal is the period of timerequired by the series of successive stages that compose hisaction process. 5The following tendency always exists with respect to theactor’s subjective view of the future: as the time periodrequired by an action increases (i.e., as the number and complexityof the successive stages which constitute the actionincrease), the result or aim of the action becomes more valuable.An action can acquire a greater subjective value—interms of the number, duration, and complexity of stagesinvolved—in two ways: by enabling the actor to achieveresults he subjectively values more and could not achieve viashorter human actions; or by facilitating the attainment ofmore results than would be possible through shorter actionprocesses. 6 It is easy to understand the economic principle5 On the subjective, experimental and dynamic conception of time as theonly conception applicable to human action in economics, see chapter 4of the book by Gerald P. O’Driscoll and Mario J. Rizzo, The Economics ofTime and Ignorance (Oxford: Basil Blackwell, 1985), pp. 52–70.6 As Ludwig M. Lachmann has correctly stated, economic developmententails not only an increase in the number of productive stages, but alsoan increase in their complexity, and therefore a change in their composition.Ludwig M. Lachmann, Capital and its Structure (Kansas City:Sheed Andrews and McMeel, 1978), p. 83. See also Peter Lewin, “Capitalin Disequilibrium: A Reexamination of the Capital Theory of Ludwig M.