(Nicholas Cage dressed as David Hume)
Marx was wrong about the causes of boom-and-bust cycle. Keynes was wrong too. Most of modern economists (even, or especially, the Nobel-prize–winning ones), politicians, professors, and radio hosts (even the more conservative ones, like Howie Carr) are wrong. Free market is not to blame. People’s greed is not to blame. If so, who is right and who is to blame?
To hear the answer, listen to this lecture: Economic Depressions — Their Cause and Cure (a part of the The Austrian Theory of the Trade Cycle audio-book). In it, Rothbard explains succinctly why the traditional models are wrong, how they are outside of standard theory of economics regarding supply and demand, what they cannot predict, and what the real causes of the boom-and-bust cycle are. (Summary of the lecture to follow.)
Additional readings: “Consumers Don’t Cause Depressions” (and neither greed nor thrift are to blame), “Did Capitalism Cause Depression?” (a review of a good book on the causes of Great Depression), “The Importance of Capital Theory” (sushi model of economics and critique of one famous Nobel-prize winning economist).