Ludwig von Mises Institute

Long run

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The long run is a that period of time that extends beyond the short run. In macroeconomics, the long run can mean a period of time long enough to enable producers of a product to change the quantities of all the resources they employ. In other words, it is a period in which all resources and costs are variable and no resources or costs are fixed. In microeconomics, the long run can mean a period sufficiently long for nominal wages and other input prices to change in response to a change in the nation's price level. Austrian economists often point with concern to the effects of government policy in the long run. Henry Hazlitt notes:[1]

β€œ There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: 'In the long run we are all dead.' And such shallow wisecracks pass as devastating epigrams and the ripest wisdom. ”

Since we are indeed all dead in the long run, according to current scientific predictions concerning the heat death, perhaps it would be more expedient to speak of the medium or intermediate run. In any event, despite the fact that all people are mortal, this does not mean that the actions of the current generation will be so delayed in effect as to not harm that generation, a future generation. It does not show much care or concern for the suffering of those who come after this generation to enact economic policies that will work to the detriment of those future generations.

Ludwig von Mises wrote, "If action is primarily directed toward the improvement of other people's conditions and is therefore commonly called altruistic, the uneasiness the actor wants to remove is his own present dissatisfaction with the expected state of other people's affairs in various periods of the future. In taking care of other people he aims at alleviating his own dissatisfaction. It is therefore not surprising that acting man often is intent upon prolonging the period of provision beyond the expected duration of his own life."[2]

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