Why did the theories of Mises and Hayek originally attract attention?

0:00Well, what Mises and Hayek did in the late 20s, and the thing which really struck the rest of the economic world of economists, was that they more or less predicted the Great Depression. It was he who won in 1927 or 28, and the whole world of establishment economics said there's going to be permanent prosperity. There ain't going to be no depressions no more, no more. And everybody said this. We were living in what the Coolidge-Hoover administration called the New Era. And the reason was we had created this wonderful engine called the Federal Reserve System. The Federal Reserve System was to keep everything in even heel. The idea was if prices fell, the Federal Reserve would pump money in, if prices rose, the Federal Reserve would pick money out. It was all that could be a depression. Well, meantime, while this euphoria was being engaged in, unestablished economists, Mises and Hayek in Austria were saying, We're saying, no, no, there's going to be a depression because, well, because what?

0:57Well, for one thing, they too, along with the classical economists, said that the cause of the business cycle was not an industry or the market economy or industrialization, but the banking system.