Robert Leonard's long anticipated, and brilliant work in intellectual history, Von Neuman, Morgenstern and the Creation of Game Theory (Cambridge, 2010) has a great discussion of the "Austroliberal" approach to the events of the Great Depression and the ideas of Mises, Hayek, Machlup, Haberler, and Morgenstern. And he talks about how they brought this message not only to their peers in scientific works, but to the general public through newspaper columns and to the policy community through policy papers, etc. In these different outlets they criticized the inflationary effects of credit expansion, opposed exchange rate controls, and favored price adjustment rather than protectionism. The means of countering the depression was not more government, but price flexibility and the removal of market restrictions. (see p. 148ff)
Richard Ebeling has done a great service both in his edited volumes of Mises's papers published by Liberty Fund, and in his recent book Political Economy, Public Policy and Monetary Economics (Routledge, 2010) and he discusses this same issue (pp. 117ff), and even gives us the great name of Machlup's economic opinion columns "Two Minute Economics".
Re-reading these arguments one cannot help but think of the immediate application to the world today, and how the policies pursued so far have turned a market correction into an economy wide crisis, and continue to threaten our long term economic health of our civilization. Mises, as quoted by Ebeling, summed up the situation for the economists as follows: "Occasionally, I entertained the hope that my writings would bear practical fruit and show the way for policy. Constantly I have been looking for evidence of a change in ideology. But I have never allowed myself to be deceived. I have to come to realize that my theories explain the degeneration of a great civilization; they do not prevent it. I set out to be a reformer, but only became the historian of decline."
What can we do to follow in Mises's footsteps but resist this conclusion?