Makroökonomischer Formalismus und die Marktwirtschaft

[Title Page and Preface to the German Edition]: The author introduces the essay by critiquing modern economic theory's retreat into 'model-Platonism' and its neglect of real market processes. He identifies three main flaws in equilibrium thinking: its inability to account for competition as a process, the impossibility of a 'capital equilibrium' in a changing world, and its failure to explain economic growth. Lachmann argues that markets should be understood as a 'Sinnzusammenhang' (context of meaning) based on human action rather than mere formal relationships, and he defines 'formalism' as the arbitrary imposition of equilibrium concepts onto social interactions. [Table of Contents]: Detailed table of contents for the essay, outlining sections on the Cambridge vs. Neoclassical debate, macroeconomic formalism as a style of thought, profit rates, growth theory, and technical progress. [Introduction and the Great Discussion]: Lachmann begins the formal analysis by noting that while social sciences benefit from a variety of perspectives, some perspectives distort the subject matter. He introduces the 'Great Discussion' between the Cambridge School (post-Marxist/Neo-Ricardian) and the Neoclassical School. He critiques both for focusing on macro-aggregates like income and investment while ignoring the underlying human plans and actions. He specifically notes the Neoclassical reliance on the 'fictional' Pareto-Optimum as a benchmark for reality. [Macro-Equilibrium and the Definition of Formalism]: This section examines the common ground of the rival schools: the assumption of macro-equilibrium. Lachmann argues that while equilibrium is a valid concept for individual rational action (micro-level), it becomes problematic when applied to the entire economic system. He defines 'macroeconomic formalism' as a style of thought that treats aggregates as having an independent life, ignoring the 'molecular' composition of these variables and the inconsistent actions of market participants. [The Neo-Ricardian Counter-Revolution]: Lachmann analyzes the Cambridge School's rejection of the marginalist revolution and subjectivism. He labels them 'Neo-Ricardians' who seek to return to a world of objective social facts and class-based distribution. In this view, humans do not act spontaneously but merely react to circumstances as 'typical agents' (workers or capitalists). He argues this perspective leaves no room for entrepreneurs or the diversity of individual expectations. [The Failure of Econometric Verification]: Lachmann discusses the Neoclassical School's attempt to use econometrics to save their models. He cites Joan Robinson's critique that statistics cannot capture the mental processes or alternative choices of decision-makers. He argues that since economic action is based on plans, and there are no 'statistics of plans,' econometric measurements cannot verify equilibrium theories in a world of constant disequilibrium. [Stages of the Controversy and the Nature of Profit]: The segment outlines the three stages of the capital controversy, from Robinson's 1953 attack on the production function to the 'reswitching' debate and Pasinetti's 1969 critique. Lachmann then transitions to a defense of profit as a phenomenon of disequilibrium. He argues that a single 'rate of profit' is a fiction; in reality, competition implies diverse profit rates, losses, and constant adjustments. He concludes that markets use capital gains and losses to align the attractiveness of assets despite their different historical origins. [Die intertemporale Austauschrate und die Kritik an Solow]: Lachmann discusses the concept of an intertemporal exchange rate and its relationship to time preference and the neoclassical understanding of interest. He criticizes Robert Solow's 'social rate of return' for being based on a planning perspective and a one-good world model, arguing it is irrelevant to a market economy where capital stocks are heterogeneous and rarely in equilibrium. [Gewinne als Phänomen des Ungleichgewichts]: The author argues that profits are essentially a microeconomic phenomenon arising from price-cost differences in a state of disequilibrium. He rejects the notion of a long-term equilibrium rate of profit, suggesting instead Shackle's 'kaleido-statics' as a more appropriate analytical framework for the ever-changing market reality. [Die Kontroverse zwischen Neoklassik und Cambridge-Schule]: Lachmann examines the dispute between the neoclassical school and the Cambridge school regarding the determination of profit and interest rates. He critiques the Cambridge school's 'normal rate of profit' as a macroeconomic fiction that ignores the microeconomic diversity of rates in the real world. [Steady-State-Wachstum und die Rolle von Erwartungen]: This section critiques the concept of 'steady-state' growth as a fictional ideal type. Lachmann argues that growth equilibrium is impossible in an uncertain world because individual expectations diverge, leading to inevitable malinvestments and inconsistencies that macroeconomic models fail to capture. [Technischer Fortschritt und Marktdynamik]: Lachmann analyzes technical progress as a disequilibrium-producing force. He critiques attempts by Kaldor and others to formalize progress into macroeconomic variables, emphasizing that only the market process can determine which innovations constitute actual progress through a decentralized process of trial and error. [Wirtschaftspolitische Schlussfolgerungen und die Bedeutung der Mikroökonomie]: In the concluding section, Lachmann applies his critique to economic policy, including incomes policy, growth policy, and monetary policy. He emphasizes that macroeconomic aggregates are misleading without understanding their microeconomic composition, and that the stock exchange is the defining institution of a market economy because it balances divergent expectations regarding capital value.