http://mises.org/books/deflationandliberty.pdf

“In short, the true crux of deflation is that it does not hide the redistribution going hand in hand with changes in the quantity of money. It entails visible misery for many people, to the benefit of equally visible winners. This starkly contrasts with inflation, which creates
anonymous winners at the expense of anonymous losers. Both deflation and inflation are, from the point of view we have so far espoused, zero-sum games. But inflation is a secret rip-off and thus the perfect vehicle for the exploitation of a population through its (false)
elites, whereas deflation means open redistribution through bankruptcy according to the law.”

Nonsense. He said that deflation does not mean stagnation, as monetarists and Keynesians believe, but that it represents a natural consequence of increasing productivity in the gold standard regime. Both Mises and Hayek rejected the monetarist theory of stable prices which you wrongly ascribe to the Austrians. The doctrine you like was developed by Irving Fisher and revamped by Milton Friedman, not by the Austrians. Hayek explicitly and repeatedly criticized the doctrine of price stability. Read his Nobel Prize speech. Read Prices and Production. It’s all over the place. Even Schumpeter thought that the inner working of economic system to liquidate the malinvestment must not be subverted during the recession by the misguided inflationist policies of “price stabilization”. Hayek says the same thing in Prices and Production. Mises explicitly says that every quantity of money is equally good and that recession means recovery.

I hope that you would not find George Selgin a “Rothbardian”, who argues in his book “Less than zero” that the growth deflation is a very good thing, and actually represents a normal occurrence in a healthy economy.

Of course he did that routinely…but in this case, he does it by using the same meaningless metrics that he decries elsewhere. In fact, he uses an even more irrelevant, convoluted statistical maze than his opponents often do. The Austrian position is that real-world experience trumps such academic nitwittery.

For example, he ignores 14% unemployment and the failure of tens of thousands of businesses, in order to claim that things were great because you can make economic numbers look bigger by multiplying them against the deflation that was CAUSING the unemployment, bank runs, and bankruptcies.

Rothbard, unlike real Austrians like Hayek, made the ridiculous claim that deflation was magically good, even though it has exactly the same pricing distortion impact as inflation, causes the same destructive malinvestment, just in the opposite direction.

Hayek gets it right, here:

“On the first issue — whether to use one’s money or whether to hoard it — there is no important difference between us. It is agreed that hording money, whether in cash or in idle balances, is deflationary in its effects. No one thinks that deflation is in itself desirable.” — http://butnowyouknow.wordpress.com/those-who-fail-to-learn-from-history/hayeks-1932-letter-on-the-great-depression/

Hayek was saying that before Rothbard’s time, of course…back when “nobody” was confused enough to think deflation desirable.

Sadly, Rothbard became an advocate of deflation, though he barely seemed to even understand what it was.

Therefore, he takes the devastating fact of runaway deflation, and simply uses it to boost numbers that ignore human action and motivation, like an ivory tower academic.

For instance, from Milton Friedman:

“Figures from Milton Friedman and Anna Schwartz show net national product increased 3 percent per year from 1869 to 1879 and real national product grew at 6.8 percent per year during that time frame.[22] However, since between 1869 and 1879 the population of the United States increased by over seventeen and one-half percent,[23] per capita NNP growth was lower.”

etc.

This is a great example of how ideology (such as on this site) reduces the ability to accurately perceive reality.

That’s a high price to pay for consistency!

Of course it is.

I don’t know how you question “unless the unemployed saw negative wage growth.” Did not their wages by virtue of being unemployed in many cases “grow negatively” by -100% (or in cases of welfare payments some other figure certainly less than their original wage?)

Also, “meh” is not a word.

Unless the unemployed saw NEGATIVE wage growth, on average there was wage growth. But, if by ‘overall’ you mean not EVERYONE (employed or not) saw wage growth, then yes I think we’d all agree.

If you are talking about GNP then it’s true it did grow in many of those years, but this is why no one should respect GNP as a measure of real wealth. In WWII GNP was also very high, but all those tanks didn’t mean a great deal for the individual consumer who got much less.