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

270 Money, Bank Credit, and Economic Cyclesthat human action processes tend to achieve aims of greatervalue the longer the processes last. Indeed if this were not thecase, i.e., if the actor did not attach greater value to the resultsof longer actions, he would never undertake them and wouldopt for shorter actions instead. In other words, an actor is separatedfrom his goal precisely by a certain length of time (i.e.,by the time necessary to complete the set of stages in his actionprocess). Thus, other things being equal, it is evident thathuman beings will always try to accomplish their goals assoon as possible, and they will only be willing to postpone theattainment of their ends when they subjectively believe thatby doing so they will achieve more valuable objectives. 7We are now ready to discuss the logical notion of time preference,which establishes that, other things being equal, theactor prefers to satisfy his needs or reach his objectives as soonas possible. In other words, when the actor is faced with twogoals of equal subjective value to him, he will always preferthe one he can attain in less time. Or to put it even morebriefly, other things being equal, “present goods” are alwayspreferable to “future goods.” The law of time preference is justanother way of expressing the following essential principle:any actor, in the course of his action, tries to achieve theresults of the action as soon as possible, and he is separatedfrom his ends by a series of intermediate stages involving a certaintime period. Hence time preference is not a psychologicalLachmann,” History of Political Economy 29, no. 3 (Fall, 1997): 523–48; andRoger W. Garrison, Time and Money: The Macroeconomics of Capital Structure(London and New York: Routledge, 2001), pp. 25–26.7 José Castañeda eloquently states:As more auxiliary means are introduced into the productionprocess, the process becomes more lengthy, and in general,more productive. Of course more indirect processes mayexist; that is, ones that are longer or more drawn-out, yet nomore productive. Nevertheless these are not taken intoaccount since they are not applied, and a longer process isonly introduced when it improves productivity.José Castañeda Chornet, Lecciones de teoría económica (Madrid: EditorialAguilar, 1972), p. 385.