The Underlying Consistency (or Inconsistency) between Consumer Preferences and Production Plans Will Determine Whether the Market Process Will Play Itself Out or Do Itself In

The explicit attention to intertemporal allocation of resources allows for a sharp distinction between sustainable and unsustainable growth. The underlying consistency (or inconsistency) between consumer preferences and production plans will determine whether the market process will play itself out or do itself in. Our graphical framework demonstrates the coherence of the Austrian macroeconomics that was inspired early in the last century by Mises, who drew ideas from still earlier writers. It also sheds light on contemporary political debate. Nowadays candidates for the presidency and other high offices vie with one another for votes on the basis of their pledges to “grow the economy”; opposing candidates differ primarily in terms of just how they plan to grow it. The political rhetoric overlooks the fundamental issues of the very nature of economic growth. Is growth something that simply happens when the economy is left to its own devices? Or, is it something that a policy-maker does to the economy?

--Roger W. Garrison, Time and Money: The Macroeconomics of Capital Structure, Foundations of the Market Economy (London: Routledge, 2002), 35.