by Mahr
[Front Matter and Preface]: Front matter and preface for a 1949 Festschrift dedicated to Hans Mayer on his 70th birthday. Editor Alexander Mahr outlines the dual purpose of the work: providing a comprehensive overview of modern economic research and honoring Mayer's contributions to the 'Renaissance' of the Austrian School. It highlights the international collaboration involved, including the patronage of Italian President Luigi Einaudi. [Table of Contents]: The table of contents listing 25 contributions from international scholars including Hans Bayer, Theo Surányi-Unger, François Perroux, Erich Schneider, and Wilhelm Winkler. Topics range from the methodology of the Austrian School and price theory to business cycles, statistics, and state planning. [The Significance of the Austrian School for Modern Economic Science: Part I]: Hans Bayer analyzes the enduring influence of the Austrian School. He critiques the 'glassy' abstraction of purely mathematical value theories (Stackelberg, Pareto) for failing to capture causal-genetic dynamics, a point famously argued by Hans Mayer. Bayer discusses the evolution of the school into 'Neomarginalism' and its influence on the Stockholm School (Wicksell, Myrdal) and French thought (Perroux). He defends the use of the utility concept and explains how the Austrian approach integrates micro- and macro-perspectives through the analysis of needs and price formation. [The Significance of the Austrian School: Game Theory and Sociology]: Bayer explores the intersection of the Austrian School with modern developments like Game Theory and economic sociology. He discusses Morgenstern and Neumann's 'Theory of Games' as a tool for analyzing rational behavior in non-competitive markets. He also addresses Schumpeter's sociological approach to capitalism's development and Perroux's 'dominant effect' in international relations, suggesting these expand the Austrian framework into broader social science. [Keynes from the Perspective of the Austrian School]: Bayer provides a critical evaluation of Keynesian theory through an Austrian lens. He argues that while Keynes is seen as revolutionary, many of his insights were already present in or can be derived from Austrian thought. Bayer critiques Keynes's methodological reliance on aggregates (macroeconomics) and his 'old-fashioned' static equilibrium approach. Specific critiques are leveled at the 'psychological law' of consumption, the theory of liquidity preference vs. productivity of capital, and the effectiveness of wage cuts for achieving full employment. He concludes that Keynesianism benefits from being refined by Austrian causal-genetic analysis. [Critique and Outlook of Keynesian Theory]: Mahr outlines four major deficiencies in Keynesian theory: the reliance on static equilibrium for dynamic problems, the overemphasis on full employment as an end in itself, the failure to account for monopolistic competition, and the lack of a sufficient theoretical explanation for unemployment. He contrasts Keynes's neglect of production and income formation with the more detailed investigations of the Austrian School, specifically citing Hans Mayer and the structural crisis theories of Gustav Gundlach. [Modern Developments in Dynamic Economic Theory]: The author reviews how modern economists like Hicks, Lange, and Samuelson have addressed the dynamic gaps in Keynesian theory. Hicks is credited with expanding statics to capture dynamic processes through expectations, while Samuelson's mathematical approach is critiqued for its diminishing marginal productivity and practical unmanageability. The segment suggests that a synthesis between these Anglo-American mathematical attempts and the Austrian School's causal-behavioral insights would be fruitful. [Welfare Economics and Monopolistic Competition]: This section discusses the evolution of 'Welfare Economics' and the integration of monopolistic competition into economic theory. It highlights the convergence between the Austrian School's view of economic goals and the 'New Welfare Economics' of Samuelson and Hicks. Furthermore, it notes that while Robinson and Chamberlin advanced the study of imperfect competition, the Austrian School (via Von Neumann and Morgenstern's Game Theory) provides the necessary new methods for deeper theoretical grasp. [The Austrian School's Solution to Unemployment and Planning]: Mahr argues that the Austrian School provides a superior theoretical explanation for unemployment by analyzing the difference between personal and functional income distribution. He critiques Keynesian policy for not reaching the 'root' of economic connections. The segment concludes by observing that both the Austrian School and Anglo-American 'Competitive Socialism' (Lerner, Meade) arrive at similar conclusions regarding the necessity of a planned economy to achieve welfare goals. [Analytical Notes on Economic Systems: Quantitative Structure]: Theo Surányi-Unger introduces an analytical framework to measure the quantitative differences between private enterprise and collective planning. He argues that real-world systems are 'composite' or 'mixed' rather than pure types. He proposes a model based on degrees of collectivization (x) and the aggregate amount of want satisfaction (s) to classify economic structures along a spectrum. [The Shape of a Composite Model and Statistical Application]: Surányi-Unger applies statistical measures (mean, standard deviation, skewness, kurtosis) to his composite economic model. He uses US data from 1929–1947, including Gross National Product and public expenditures, to demonstrate shifts between collectivization and reprivatization. The analysis shows how the Great Depression and WWII pushed the US toward collective planning, while post-war periods saw shifts back toward private enterprise. [Communal Welfare and the Evolution of Welfare Economics]: This segment defines the aggregate welfare function in terms of want satisfaction and degrees of collectivization. It traces the historical development of welfare economics through three stages: the 19th-century focus on cardinal utility, the mid-20th-century shift toward ordinal utility and indifference curves, and the 'new' welfare analysis which utilizes index numbers and production theory to avoid interpersonal utility comparisons. The author argues that while ordinal approaches are useful for determining if welfare is raised, they struggle to quantify the optimal balance between private enterprise and collective planning. [Mathematical Foundations of the New Welfare Economics]: The text explores the mathematical representation of the 'new' welfare analysis, treating social welfare as a vector of individual utilities rather than a simple sum. It introduces the Paretoan general index-function of utility and discusses the indeterminacy of marginal utility in shifts between individual and collective satisfactions without specific knowledge of the welfare function's form. It concludes that comparing the merits of collectivization versus private enterprise requires looking at the ratios of marginal utilities. [Sacrifice, Cost, and the National Budget Equation]: This section introduces the concept of sacrifice or 'cost' (c) associated with attaining want satisfaction (s). It defines a parametric constant (C) representing the total aggregate effort a system is willing to undertake, distinguishing between 'stationary' eastern minds and 'progressive' western systems. The author provides a statistical application using US data from 1929–1947, presenting 'National Budget Equations' that map per capita real expenditures across different categories of collectivization against the Gross National Product. [Iso-eupractical Convexity and Normalcy]: Mahr explores the multidimensional indifference map of communal welfare, introducing the term 'iso-eupractical' to describe welfare surfaces. He analyzes the inverse relationship between individual gratification (private enterprise) and collective satisfaction (planning), arguing that the normal shape of these indifference curves is convex to the origin. The section discusses how institutional factors, such as decreasing costs or increasing returns in collective planning, might lead to 'abnormal' concavity or instability, and references Knight and Clark regarding points of satiation and redundancy in economic activities. [Les macrodécisions et la théorie des choix]: François Perroux critiques the mechanistic interpretation of economic life that treats aggregate quantities as self-adjusting. He introduces the concept of 'macrodécisions' and the 'effect of domination,' where one economic plan irreversibly influences others. Perroux argues that the Walrasian-Paretian equilibrium fails to account for organized public constraint and strategic power. He suggests that economic life is a game of strategy involving micro-units, groups, and the State, and notes that a theory of 'public constraint' as a scarce economic good is still lacking. [Die Neutralität der Wirtschaftswissenschaft und der Begriff der Wohlfahrtsökonomie]: Francesco Vito challenges the doctrine of scientific neutrality in economics, arguing that because economic actions aim at human goals which are inherently ethical, economics cannot be separated from ethics. He critiques the 'maximum satisfaction' principle of Jevons and Walras and examines the 'New Welfare Economics' (Kaldor, Hicks). Vito concludes that objective criteria for social welfare changes are impossible without an explicit ethical framework for society, as interpersonal comparisons of utility always rely on value judgments. [Zur Methodenlehre C. Mengers und der österreichischen Schule]: Dobretsberger analyzes Carl Menger's methodology, drawing deep parallels between Menger's 'exact' research direction and Immanuel Kant's transcendental analytic. He argues that Menger's marginal utility laws are not purely empirical but are 'laws of thought' (a priori) used to organize experience. The section traces how Menger's followers (Wieser, Böhm-Bawerk, Strigl, Hayek) interpreted these abstractions and discusses the ideological underpinnings of the Austrian method as a distillation of the market economy system. [De la classification en histoire des doctrines économiques]: Jean Dubergé discusses the shift from chronological/empirical grouping of economic doctrines to rational classification. He highlights the work of Amoroso, Pirou, and Gonnard in distinguishing between 'science' (objective mechanisms) and 'faith' or 'ideology' (subjective values). The segment identifies two distinct problems: the categorization of doctrines (science vs. doctrine) and the historical order of succession within those categories. [Classification of Economic Doctrines by Categories]: The author explores the difficulty of creating a 'natural classification' of economic doctrines based on content due to their inherent heterogeneity. Using theories of interest as an example, he distinguishes between purely scientific explanations (Böhm-Bawerk), policy-oriented mechanisms (Keynes, Wicksell), and normative justifications or condemnations (Marxism). He argues that a stable classification must instead be based on the 'form' or mode of representation of the economic world, rather than shifting historical or social content. [The Relationship Between Economic Science and Doctrine]: This section examines three perspectives on the relationship between economic science and doctrine: as distinct entities (science explains, doctrine acts), as identical (Bertolino's formalist logic), or as a synthesis where science includes the study of ends (Guitton's social Catholicism). The author critiques the attempt to merge the two, noting that science deals with truths (indicative) while doctrine deals with rules and values (imperative), referencing Poincaré's distinction between science and morality. [Methodological Roles of Principles, Social Doctrines, and Theories]: The author proposes a tripartite classification of economic thought into Principles (deductive starting points), Social Doctrines (social facts to be studied), and Economic Theories (the scientific coordination of laws). He argues that the conflict between inductive and deductive methods is a false dilemma, as both are necessary for scientific progress. Social doctrines are treated as objects of sociological investigation, while theories represent the 'crowning' achievement of scientific explanation. [The Evolution of Principles: From Hedonism to Marginalism]: Focusing on the category of 'Principles', the author traces the shift from the Benthamite hedonistic principle (absolute maximization of pleasure) to the marginalist principle of subjective well-being (relative maximization of satisfaction). He highlights how neo-marginalism, by adopting a neutral stance focused on ordinal preferences, moved the psychological content of 'pleasure' outside the core of economic science, treating principles as methodological starting points rather than historical doctrines. [The Selection and History of Economic Truths vs. Errors]: The text debates whether the history of economic thought should be a history of 'truths' only (the restrictive view of J.B. Say, Pantaleoni, and Einaudi) or include 'errors' (the extensive view of Condillac and Michels). The author suggests a middle ground: while science 'already made' focuses on truths, the history of science 'in the making' finds errors more important for understanding the path to discovery. He also argues that scientific theories should be classified pragmatically by subject rather than by nationality. [National Identity and Social Doctrines]: Unlike scientific theories, which are universal, social doctrines are deeply tied to national psychology and historical context. The author argues that social doctrines (like liberalism or socialism) act as 'ideological forces' regardless of their scientific accuracy. He advocates for a classification of social doctrines based on nationality, citing Pirou's work on French doctrines as an example of how national traits like individualism and rationalism differentiate local schools of thought from foreign ones. [The Great Turning Point of Economic Theory]: Julius A. Neubauer discusses the decline of the liberalist epoch, which peaked with J.S. Mill and ended after WWI. He notes that the absolute authority of liberal theory has given way to a general mistrust of economic theories. He critiques the 'dismal science' aspect of classical economics—its passive 'wait and see' approach—and argues that while the failure of liberalism was profound, the current conflict of opinions does not mean a lack of scientific progress. [Historicism, Statistics, and the Need for Theory]: Neubauer critiques the Historical School and the modern 'Statistizismus' (over-reliance on statistics). He argues that while empirical data is necessary, it cannot replace 'Wesensbetrachtung' (essential analysis). He points out the irony of practitioners who claim to reject theory while unconsciously operating on false ones. Theory is defined as a necessary working hypothesis that allows for foresight, which pure empiricism lacks. [The Rise of Marginal Utility and the Keynesian Revolution]: Neubauer reviews the major schools that succeeded liberalism: Marxism (critiqued for its labor theory of value), the Historical School, and the Marginal Utility school (Austrian and Lausanne). He emphasizes the Austrian School's role in preserving the 'spiritual essence' of economics. He then analyzes the 'Keynesian Revolution', suggesting it is a simplification of the Walrasian general equilibrium system adapted for monetary policy and depression-era problems. [National Income, Equilibrium, and Planned Economy]: Neubauer uses mathematical formulas to link Walrasian equilibrium with Fisher's quantity theory and Keynesian income theory. He explains Keynes's depression theory as a result of liquidity preference causing a gap between income and demand. Finally, he discusses the shift toward 'Planwirtschaft' (planned economy), noting that even classical thinkers like Pigou now accept a degree of central planning, but warns that theorists must regain knowledge of real goods and production, not just monetary variables. [Dynamic Theory and the Legacy of Hans Mayer]: Eraldo Fossati pays tribute to Hans Mayer, arguing that Mayer's theory of 'genetic equilibrium' bridges the gap between the Austrian and mathematical schools. Fossati explores how Mayer's work provides dynamic elements for the static general equilibrium theory of Walras. He discusses the 'procès de tâtonnements' and how the path to equilibrium (dynamics) relates to the equilibrium state itself (statics). [Uncertainty and Foresight in Dynamic Theory]: Fossati defines the distinction between static and dynamic theory based on the treatment of time and foresight. Static theory assumes perfect foresight or constant variables, effectively neutralizing time. Dynamic theory, conversely, is characterized by incomplete foresight, uncertainty, and risk. It deals with variables relating to different points in time and the 'expected' values that arise when the future is not perfectly known. [Uncertainty and Risk in Dynamic Economic Analysis]: This section defines uncertainty and risk within the context of dynamic economic theory. It distinguishes between objective risk (statistical frequency) and subjective risk (individual foresight gaps). The author argues that economic subjects use an intuitive, quasi-statistical method based on experience to navigate an uncertain future, where risk is defined as the distance between foresight and reality. [Functional and Causal Treatment of Economic Sequences]: The author discusses the integration of functional and causal treatments in economic theory, focusing on the division of time into periods. This framework allows for the interpretation of economic development through a sequence of plans where the gap between previous foresight and current reality informs future actions and expectations. [Dynamic Marginal Utility and the Theory of the Plan]: This section applies the theory of the plan to marginal utility, specifically regarding the consumption of a fixed stock over time under uncertainty. Using mathematical optimization (Lagrange multipliers), the author derives a dynamic version of Gossen's second law, showing how risk and expected losses discount the marginal utility of future consumption periods. [Revision of Price Theory in Light of Modern Psychology]: Jean Marchal introduces a revision of price theory, critiquing the classical assumptions of perfect competition and perfectly rational agents. He acknowledges the foundational work of the Marginalist school but argues that modern psychological insights necessitate a new approach to understanding how prices are formed in reality. [The Two Types of Homo Oeconomicus: Descartes vs. Pavlov]: Marchal proposes replacing the single rational 'homo oeconomicus' with two distinct types: the 'Man of Descartes' (rational, calculating, pre-existing needs) and the 'Man of Pavlov' (conditioned by environment, reactive to stimuli). He explores how real human behavior is a combination of these two extremes, influenced by social status, institutions, and individual aptitudes. [Revision of Momentary Price Formation and Supply/Demand Curves]: Marchal re-evaluates the formation of momentary prices. He argues that instead of linear supply and demand curves, psychological factors create 'fused' or 'thick' curves (fuseau) where quantities are not precise points but ranges. The final price within these ranges is determined by environmental stimuli and the relative rationality of the buyers and sellers. [Stable Price Determination and Investment in a Dynamic World]: This section examines the determination of stable prices and investment levels in a dynamic, non-static world. Marchal critiques the classical view that current prices dictate production, arguing instead that entrepreneurs act based on 'expected future prices' and costs. He begins to categorize how entrepreneurs interpret price movements (temporary vs. durable). [Les hypothèses de prévision et l'analyse causale des entrepreneurs]: This segment explores how entrepreneurs form expectations about price movements and the difficulties they face in performing causal analysis. It highlights the limitations of individual data, the influence of political factors, and the reliance on collective climates or 'macro-decisions' as noted by Perroux and Keynes. [La rationalité limitée de l'agriculteur et la distinction entre courte et longue période]: The author redefines Marshall's time periods for agriculture based on biological cycles rather than equipment. While farmers act rationally as 'transformers' (switching between wheat, eggs, or meat based on prices), they act as 'Pavlov's man' in the long term due to tradition and technical obstacles, leading to a slow link between price and production cost. [Note sur la théorie de l'indétermination de François Perroux]: A detailed footnote reproducing a letter from François Perroux regarding his priority in developing the theory of 'thick bands' and 'diamonds of indeterminacy' in price theory. He argues against the point-equilibrium of mathematical economics in favor of zones of probability and bargaining power. [Grundprobleme der Preistheorie: Nutzwertlehre vs. Arbeitswertlehre]: Leo Illy begins a new section in German, arguing that the conflict between Marginal Utility theory (Nutzwertlehre) and Socialist Labor Value theory (Arbeitswertlehre) is overstated. He demonstrates that Smith, Ricardo, and Marx all acknowledged utility as a necessary precondition for value, even if they focused on labor as the measure. [Die Kausalfolge der Werte und die Überwindung der Nutzwert-Antinomie]: Illy explains the causal chain of value, asserting that utility is the primary economic principle regardless of political systems. He discusses how classical economists failed to solve the 'water-diamond paradox' because they lacked the concept of marginal utility, which links subjective utility with relative scarcity (Knappheit). [Die Spaltung der Grenznutzentheorie: Wiener Schule vs. Mathematische Ökonomie]: Illy critiques the split between the verbal-causal approach of the Austrian School (Menger, Mayer) and the mathematical-functional approach (Walras, Hicks). He argues that mathematical equilibrium models are fictions that ignore the actual process of economic calculation and price formation in reality. He introduces Hans Mayer's work as a defense of the Austrian realistic-causal method. [Hans Mayers Kritik der funktionellen Preistheorie]: This segment presents Hans Mayer's critique of functional price theories, emphasizing their lack of applicability to real-world economic movements. Mayer argues that static equilibrium descriptions cannot capture the dynamic process of price formation or the complexities of economic crises. He distinguishes between genetic-causal theories and functional ones. [Functional vs. Genetic-Causal Price Theories]: This segment contrasts functional price theories with genetic-causal theories. Functional theories, rooted in the work of John Stuart Mill and later developed by Walras and Pareto, focus on describing the mathematical equilibrium state of prices as a system of simultaneous equations. In contrast, genetic-causal theories, pioneered by Carl Menger and the Austrian School, seek to understand the laws governing the formation of prices through subjective factors like marginal utility. The text highlights the tension between the static mathematical description of equilibrium and the dynamic process of price formation. [Critique of Cournot and the Shift to Subjective Factors]: Hans Mayer analyzes the historical development of mathematical price theory, starting with Cournot. While praising Cournot for the concept of economic interdependence and monopoly price theory, Mayer critiques his 'static' approach for being timeless and failing to capture the causal-temporal sequence of price formation. The segment then introduces Jevons, who attempted to ground functional representation in a causal-genetic foundation by focusing on the subjective factor of marginal utility and individual demand. [The Law of Equalization of Marginal Utility and its Critique]: Mayer critiques the 'Law of Equalization of Marginal Utility' (Gossen's Second Law), which is central to mathematical equilibrium systems. He argues that the assumption of continuous utility scales and simultaneous existence of all needs is a fiction that contradicts reality. Drawing on Wieser, Mayer explains that consumers do not equalize marginal utility across all expenditures but rather prioritize needs based on a hierarchy of importance and complementarity. The segment argues that the lack of continuity in goods and needs invalidates the differentiability required for mathematical equilibrium systems. [The Circular Reasoning in Walrasian Equilibrium]: Mayer identifies a fundamental logical circle in the theories of Walras and Jevons: they attempt to derive prices from demand, but define demand as a function of already existing prices. This 'determination circle' means the theory describes a finished state of equilibrium rather than the process of price formation. Mayer argues that for the consumer to make a choice, prices must be known, yet the theory claims to derive those very prices from the consumer's choice. This critique is extended to modern works like Hicks's 'Value and Capital'. [Critique of Pareto's Indifference Method]: Mayer critiques Pareto's attempt to replace measurable utility with indifference curves. He argues that the assumption of infinite substitutability between all goods is absurd (e.g., replacing bread with salt or furniture with rooms) and ignores the reality of complementarity. Furthermore, the empirical determination of indifference maps is a fiction. Mayer concludes that Pareto's system relies on imaginary elementary relations and an unreal equilibrium state, failing to describe the actual economy. [Critique of Cassel and the Conclusion on Functional Theory]: The final part of Mayer's investigation focuses on Gustav Cassel, who explicitly rejected the analysis of utility and psychological factors, treating demand as a 'tangible fact' dependent on price. Mayer argues this is a regression to a pre-scientific state that ignores the etiology of economic phenomena. He concludes that functional equilibrium theories are systems of analytical truths (identities) that fail to provide synthetic knowledge of reality or explain the dynamic process of price formation. [Bertrand Nogaro on Walras, Pareto, and the Austrian School]: Bertrand Nogaro compares the Lausanne School (Walras, Pareto) with the Austrian School (Menger). He notes that while Walras adopted a utility-based theory similar to the Austrians, he diverged by focusing on mathematical equilibrium and the 'maximum satisfaction' principle. Pareto further distanced himself by rejecting the search for the 'cause' of value in favor of functional interdependence and by maintaining cost as an autonomous factor, unlike the later marginalists who reduced cost to utility sacrifices. [The Illusion of Maximum Satisfaction in Equilibrium]: Nogaro argues that the 'maximum satisfaction' claimed by Walras and Pareto is an illusion. In their systems, the consumer accepts the market price as a given and merely adjusts the quantity purchased to reach a point where the ratio of marginal utilities equals the price. This 'maximum' applies to any price and thus has no real hedonistic significance or explanatory power regarding the value of goods. It is a formal mathematical result rather than a substantive economic one. [Alexander Mahr: Critique of the Law of Marginal Utility Levels]: Alexander Mahr defends Hans Mayer's critique of Gossen's Second Law (the equalization of marginal utility). He argues that the law fails to account for how consumption patterns change with income. When income rises, people do not simply buy more of everything; they buy better quality goods or entirely new categories of goods while keeping some consumption (like bread) constant. This breaks the supposed level of marginal utility. Mahr argues that mathematical economists cling to this law primarily for the sake of maintaining a solvable system of equations, despite its lack of empirical reality. [Ewald Schams: The Alleged Circular Reasoning in Price Theory]: Ewald Schams addresses the 'circular reasoning' (Zirkelschluß) often charged against price theory. The critique suggests that theories explain prices using factors (like income or purchasing power) that are themselves determined by prices. Schams argues that this is not a logical error but a reflection of the 'economic circulation' (Kreislauf). In a division-of-labor economy, income and prices are mutually dependent parts of a cycle. He proposes that the 'circle' is only problematic if one attempts a static, singular definition of price, whereas a methodological focus on the dynamic circulation process resolves the apparent contradiction. [Erich Schneider: Towards a Dynamic Theory of Exchange]: Erich Schneider presents a dynamic analysis of the Walrasian exchange model. Unlike static models that separate price theory from monetary theory, Schneider's dynamic approach integrates them by looking at the temporal flow of income and cash balances. Using a system of linear difference equations, he demonstrates how an economy moves from an initial state toward a stationary equilibrium. He concludes that money is 'neutral' only in the final stationary state; during the transition, the time-lags between earning and spending income result in non-neutrality, merging price and monetary theory into a general theory of economic processes. [Vorbemerkungen: Theoretische Untersuchung von Wirtschaftsmodellen]: The author introduces a theoretical study comparing free market and planned economy models. The investigation focuses on how production rules and immutable economic laws affect economic processes, starting with the price-wage problem and moving toward production accounting and price differentiation. [Lohn und Preis: Das Lohn-Preisgesetz und Marktgleichgewicht]: This section analyzes the relationship between wages and prices, defining the Lohn-Preisgesetz where wages are price components and prices determine real wages. It discusses market equilibrium failures like underconsumption and overproduction crises, and the effects of wage or price freezes on consumers and producers. [Größengesetz von Produktion und Konsum]: The author discusses the 'Größengesetz von Produktion und Konsum', explaining how increased production leads to lower costs and higher consumption. It contrasts the law of increasing industrial returns with the law of diminishing returns in agriculture, framing both as special cases of a general 'Optimumgesetz'. [Ertragsverteilung und Interessenkonflikte]: An exploration of how income distribution is independent of income generation, yet constrained by it. The text examines conflicting interests between industry and agriculture (the 'agrarian scissors') and the tension between capital formation and the demand for cheap money, emphasizing the need for accurate success accounting. [Produktionskosten und Produktionsrechnung]: This section defines the fundamental laws of production costs, including Carey's reproduction cost law. It analyzes the dangers of selling below cost, such as capital erosion (Entkapitalisierung), and how deficits are covered through internal cross-subsidization (Dumping) or public subsidies. [Grenzbetriebe, Kartelle und staatliche Intervention]: The author examines how prices are determined by the 'marginal plant' (Grenzbetrieb) and how technical progress tends to lower differential rents. It discusses the state's role in balancing the preservation of marginal plants for social reasons against preventing monopolies and excessive costs, noting the psychological incentives for productivity in different systems. [Geld- und Einkommenssektor in der Planwirtschaft]: A critique of centrally planned economies where money loses its function as 'minted freedom' (Dostojewski) and becomes 'minted arbitrariness'. The text explains how rationing systems split purchasing power from purchasing rights and how the state replaces taxes with price manipulation and overcompensation between economic sectors. [Probleme der differenzierten Preise]: This section analyzes the theoretical difficulties of price differentiation. It argues that breaking the principle of uniform pricing leads to ficitious accounting, subsidies for certain industries at the expense of others, and the loss of 'fair play' and comparability in economic performance. It evaluates justifications like supporting infant industries or key sectors. [Abschließende Feststellungen: Fiktion vs. Realität in der Wirtschaft]: The conclusion warns that ignoring the law of production costs leads to the destruction of economic foundations. It argues that planned economies tend toward fictions in prices and exchange rates, which eventually makes economic calculation impossible. The author suggests that a new economic ethos and the maintenance of living standards are the ultimate measures of any system's success. [Kostentheorie und Ertragsgesetz: Das Gesetz steigender Kosten]: Erich Carell examines the evolution of the law of diminishing returns into a general 'law of increasing costs'. He discusses the views of Marshall, Schumpeter, and Knight on falling costs and internal/external economies, noting that under static competition, falling costs are often dismissed as leading to monopoly. [Wertmäßige Problematik der Ertragsgesetz-Umkehrung]: Carell critiques the conversion of physical yield laws into value-based cost laws. He argues that this conversion requires assuming constant factor prices, which is economically unrealistic since changing production volumes naturally shifts relative prices (e.g., wages vs. rent). He defines the 'optimal point' as relative to a specific price system rather than an absolute physical maximum. [Grenzen des Gesetzes steigender Kosten in der Volkswirtschaft]: The author concludes that 'laws of increasing costs' (both variable and total unit costs) are problematic for macroeconomic analysis because they ignore the endogenous price changes of production factors. However, the law remains useful as a microeconomic working hypothesis for individual firms with fixed production facilities and constant variable factor prices. [On the Nature and Validity of the Law of Diminishing Returns]: Mahr examines the validity of the law of diminishing returns (Ertragsgesetz), distinguishing between its physical formulation and its value-based 'illustration' as the law of increasing costs. He argues that the law is often simplified by ignoring the complementary nature of production factors (e.g., labor for plowing vs. weeding). While logically universal whenever one factor is held constant, its practical application varies: it is a factual reality in agriculture due to fixed land, but in industry, it applies primarily to individual plants with fixed equipment, whereas the industry as a whole may experience increasing returns until optimal size is reached. He also critiques Carver's view on fixed entrepreneurial activity, noting it violates the assumption of factor homogeneity. [The Law of Increasing Costs and Changes in Factor Prices]: This section analyzes how shifts in demand affect production costs and factor prices within a general equilibrium framework. Mahr demonstrates that if two industries use factors in the same proportions, production can expand at constant costs. However, if factor proportions differ (e.g., capital-intensive pots vs. labor-intensive shoes), a shift in demand changes relative factor prices (wages and interest), altering the optimal factor combination and plant size in both industries. He concludes that the 'law of increasing costs' cannot be derived simply by 'inverting' the law of diminishing returns because the latter assumes constant factor prices, which is generally impossible during a sectoral production expansion under static conditions. [Increasing Costs as a Working Hypothesis for Individual Firms]: Mahr discusses the 'law of increasing costs' as a working hypothesis for individual firms in partial equilibrium analysis. He distinguishes between historical costs and reproduction costs, arguing that fixed costs are only truly 'constant' in relation to output changes, not over time or across technical shifts. The marginal cost curve of a firm is determined by technology and variable factor quantities, making it a 'technological' rather than purely 'economic' curve if factor prices are assumed constant. He emphasizes that this model is a tool for understanding capacity utilization within a single firm, but it cannot explain cost structures for an entire industry expanding its production. [Objectives and Elements of a Cost Plan]: Giuseppe Ugo Papi introduces the 'theory of investment' and the necessity of economic planning for producers. He reviews various methods for comparing investment returns, including the internal rate of return and the present value of expected income, citing Fisher, Keynes, and Boulding. Papi argues that a production plan must be split into a 'cost plan' and a 'price plan.' He emphasizes the principle of marginality in determining the most economical combination of factors and the optimal scale of production where marginal cost equals marginal revenue. The section establishes that planning is an absolute necessity for producers to navigate the complexities of factor proportions and market fluctuations. [Elemento di disconto nel piano di un produttore]: This section examines the role of discounting the future and risk insurance within a producer's economic plan. It distinguishes between technical and economic utilization of plants and discusses how the interest rate (the price of using savings) influences production costs and the rhythm of activity. The author critiques Abramovitz and Fisher regarding the subjective versus objective market rate of interest in discounting future values. [Uniformità di condotta a seguito di variazioni del saggio dell'interesse]: Analysis of how sudden or predicted changes in interest rates affect producer behavior. A sudden rise tends to slow production by increasing costs of labor, raw materials, and inventory, whereas a predicted rise might temporarily intensify activity as producers secure long-term loans and liquidity as insurance against future higher costs. [Variazioni dei prezzi dei fattori produttivi e calcolo del costo]: The author explores the impact of price changes in variable and fixed production factors. He argues that predicting price increases leads to different insurance behaviors (like stockpiling) compared to sudden increases. He also notes the complexity of calculating future costs, as interest rates and factor prices do not always move in perfect complementarity. [Previsione degli aggravii e ribassi dei prezzi]: The section describes how producers react to predicted cost increases through insurance or production contraction. It also covers the reciprocal case: how sudden or predicted decreases in interest rates or factor prices influence the substitution of factors and the expansion of production plants. [Teoria dei piani e fluttuazioni economiche]: The author argues that a well-developed theory of individual economic plans (consumption and cost plans) can absorb the theory of economic fluctuations. By using foresight, discounting, and insurance, producers stabilize the economic structure. He concludes that the study of plans is the most effective way to analyze economic dynamics. [Veränderungen der Umlaufsgeschwindigkeit des Geldes und die Quantitätsgleichung]: Transitioning to German text, this section defines the velocity of money (Umlaufsgeschwindigkeit) using definitions from Wicksell and Fisher. It introduces Fisher's equation of exchange (G x U = P x H) and begins an analysis of the relationships between money supply, velocity, price levels, and trade volume. [Fisher's Determinants of the Velocity of Circulation]: This section examines Irving Fisher's catalog of factors determining the velocity of money circulation (U), including individual habits, payment systems, and general causes like population density. The author argues that Fisher's model assumes a specific economic order of free competition where price levels adjust smoothly to demand, a condition not met in all economic systems. [Lutz's Theory on Velocity and Cash Reserves]: The text discusses Friedrich Lutz's refinement of Fisher's theories, reducing the determinants of velocity to two factors: the synchronization of income and expenditure and the need for cash reserves. Mahr critiques Lutz by distinguishing between the subjective 'need' for reserves and the objective 'existence' of reserves, noting that in certain economic orders, velocity can dictate the level of reserves rather than the other way around. [A New General Equation for Velocity]: Mahr introduces a formal equation to express velocity (U) through turnover volume (A), synchronization (S), and cash reserves (Kr). He argues that while Lutz views U as determined by S and Kr, in specific economic systems, the causal direction can be reversed, where U influences the other variables. [Velocity in the Business Cycle]: Analysis of how velocity changes during economic cycles: increasing during upswings due to profit expectations and credit demand, and decreasing during downswings as confidence collapses and cash reserves are built. The author notes that even before WWI, rigidities in wages and prices meant that trade volume (H) often adjusted alongside price levels (P) in response to changes in the money supply and velocity. [Velocity during Inflation and Stabilization]: This section explores the relationship between money supply, velocity, and prices during hyperinflation. It contrasts the views of Bortkiewicz (who emphasized exchange rates and distrust) with Lutz and Eucken (who emphasized the 'effectiveness' of money and synchronization). Mahr concludes that in late-stage inflation, the adoption of 'gold reckoning' and 'devaluation surcharges' decoupled price increases from simple money supply growth, leading to reduced trade volume. [Velocity in the German War Economy]: A detailed analysis of the German war economy (1939-1944), where the money supply quadrupled without a corresponding rise in prices or trade volume. Mahr explains this through a drastic reduction in velocity (U) caused by price stops and rationing, which made money 'unusable' for immediate consumption. Here, the causal links of the Quantity Theory are inverted: the fixed price level (P) and trade volume (H) force adjustments in the money supply (G) and velocity (U). [Summary and Conclusion on the Quantity Theory]: The author summarizes the findings across different economic systems. He concludes that while Fisher's Quantity Theory (where G, U, and H determine P) applies to the market systems for which it was designed, it fails to describe the German war economy. In the latter, the causal direction is reversed, though the Quantity Equation itself remains a valid accounting identity. [Fisher's Equation and Economic Systems]: The author concludes a discussion on Irving Fisher's quantity equation, examining how different economic systems determine variables like money supply and velocity. It specifically analyzes how state-enforced price blocking alters the behavior of economic subjects and limits the expansion of money and trade volume. [Business Cycles: A Methodological Approach]: Goetz Briefs provides a methodological comparison of business cycle theories, focusing on the contradictory views of Wesley C. Mitchell and Joseph Schumpeter. Mitchell's approach is characterized as empirical and statistical, viewing cycles as arbitrary units of measurement. In contrast, Schumpeter's theory is rooted in a logical 'thought model' starting from a stationary flow (Kreislauf) and identifying 'innovation' by the entrepreneur as the final cause of cyclical development. The essay further classifies other theories (over-investment, under-consumption) as partial explanations that fit into Schumpeter's general framework of final, formal, and material causality. [Planning Towards Recovery]: G. Findlay Shirras examines the shift toward economic planning in post-war Britain. He argues that the 'Planned Economy' is an evolution of 'Liberal Interventionism' necessitated by the massive wealth destruction of WWII and the resulting dollar scarcity. The essay reviews the perspectives of prominent British economists like Robbins, Henderson, and Robertson, concluding that democratic planning is essential for managing imports and exports to restore national prosperity while maintaining individual incentives. [Mass Production and Quality Work in Austrian Reconstruction]: Ferdinand Degenfeld-Schonburg explores the tension between mass production and quality craftsmanship in the context of Austria's post-war reconstruction. While mass production offers cost reduction and rapid satisfaction of 'warenhunger', it risks cultural degradation and the loss of Austria's competitive edge in quality exports. The author argues that Austria must integrate quality into mass production and maintain individual craftsmanship as a foundation for its national culture and export viability. [State Budget and National Economic Plan]: Stantscho Tscholakoff analyzes the relationship between the traditional state budget and the modern comprehensive economic plan. He contrasts socialist planning, which centralizes all production and labor under state authority to eliminate 'anarchy', with non-socialist planning, which uses the budget as a steering mechanism for private enterprise. The essay highlights the changing role of the Finance Minister, who loses coordinating power to the Planning Minister in socialist systems, becoming a technical executor. [The Problem of the Limits of State Credit]: Fritz Neumark discusses the theoretical and practical limits of public debt. He critiques the 'New Philosophy of Public Debt' (Keynesianism) which suggests that internal debt is not a burden because 'we owe it to ourselves'. Neumark argues that high debt levels create real economic and social costs, including regressive income redistribution, reduced fiscal flexibility, and psychological barriers to investment. He advocates for a flexible debt redemption policy tied to the business cycle to maintain confidence and prevent total state control. [Statistics in the Service of Economic Theory]: Introductory heading for a section regarding the role of statistics in economic theory. [Grundsätzliche Erwägungen zur Statistik und Wirtschaftstheorie]: This section explores the fundamental relationship between statistics and economic theory. The author argues that while economic theory is a nomological science seeking laws, statistics serves as an empirical tool for verification, particularly where causal relationships in mass phenomena are concerned. It distinguishes between aprioristic laws of logic or mathematics, which do not require statistical proof, and empirical regularities where statistics plays a constitutive or declarative role. [Die Ertragsgesetze]: The author examines the law of diminishing returns in agriculture and its applicability to industrial production. He discusses whether these laws are natural laws or aprioristic deductions and notes that statistical verification is best achieved through micro-level business statistics (Betriebsstatistik) rather than aggregate national statistics. The section also touches upon dynamic returns of scale and psycho-physical laws of saturation. [Die Preisgesetze]: A comprehensive analysis of price formation, market forms (competition, monopoly, oligopolies), and the role of statistics in measuring price levels. The author critiques the classical labor theory of value (Ricardo) in favor of subjective utility, while acknowledging the difficulty of statistically capturing subjective motives. He discusses the Quantity Theory of Money via the Fisher-style equation and the practical challenges of constructing wholesale and cost-of-living indices. [Die Lohngesetze]: This section treats labor as a commodity whose price (wage) is determined by supply and demand, specifically marginal productivity (or profitability). The author rejects the 'iron law of wages' through statistical evidence of wage variation. He also discusses how institutional factors like unions, state intervention, and planned economies alter the theoretical mechanisms of wage formation, emphasizing the role of statistics in calculating real wages during inflation. [Die Gesetze des Geld- und Kapitalmarktes]: The final section analyzes the formation of interest rates on money and capital markets and the determination of exchange rates. It contrasts the Balance of Payments theory with the Purchasing Power Parity theory for exchange rates. The author notes that while statistics can verify purchasing power shifts, it struggles to accurately capture the 'Balance of Claims' (Forderungsbilanz) due to the difficulty of tracking international capital flows. [Die Gesetze des Verbrauches]: Mahr examines the laws of consumption, noting that economic theory has historically marginalized this field due to a lack of statistical data. He discusses established empirical findings such as Engel's Law regarding food expenditure and Schwabe's Law regarding housing costs, while critiquing their deductive versus inductive origins. The section also highlights the necessity of consumption statistics for calculating cost-of-living indices and national income. [Die Konjunkturforschung]: This section explores the relationship between business cycle theory and statistical research. Mahr argues that the 'Methodenstreit' (dispute over methods) has been revived in the form of 'Theory vs. Statistics.' He posits that while statistics provides the empirical foundation and mathematical tools (like correlation and trend analysis) to identify patterns, economic theory must provide the final causal explanation. The segment concludes that fruitful research requires the inseparable cooperation of both approaches. [Statistik und Wirtschaftslehre: Vorbemerkungen und die ökonometrische Bewegung]: Wilhelm Winkler introduces his contribution on the relationship between statistics and economics. He critiques the traditional German view of statistics as merely a 'subsidiary science' (Hilfswissenschaft) of economics and advocates for its independence as a theory of mass phenomena. He introduces the rise of the econometric movement (Econometric Society) as a synthesis of economic theory and empirical statistics, noting its slow adoption in German-speaking academia. [Das Paretosche Gesetz: Eine ökonometrische Ableitung]: Winkler provides a detailed econometric analysis of Pareto's Law regarding income distribution. He critiques Pareto's original empirical derivation for using summation curves rather than distribution curves. Winkler then attempts to derive the law deductively by testing different mathematical models (hyperbolic vs. exponential) against German income data from 1928. He concludes that the hyperbolic model (Pareto's curve) best fits the reality of decreasing relative differences in higher income brackets. [Namenverzeichnis (Index of Names)]: A comprehensive alphabetical index of authors and thinkers cited throughout the work 'Neue Beiträge zur Wirtschaftstheorie'. Includes major figures from the Austrian School, Classical Economics, and early 20th-century economic theory.
Front matter and preface for a 1949 Festschrift dedicated to Hans Mayer on his 70th birthday. Editor Alexander Mahr outlines the dual purpose of the work: providing a comprehensive overview of modern economic research and honoring Mayer's contributions to the 'Renaissance' of the Austrian School. It highlights the international collaboration involved, including the patronage of Italian President Luigi Einaudi.
Read full textThe table of contents listing 25 contributions from international scholars including Hans Bayer, Theo Surányi-Unger, François Perroux, Erich Schneider, and Wilhelm Winkler. Topics range from the methodology of the Austrian School and price theory to business cycles, statistics, and state planning.
Read full textHans Bayer analyzes the enduring influence of the Austrian School. He critiques the 'glassy' abstraction of purely mathematical value theories (Stackelberg, Pareto) for failing to capture causal-genetic dynamics, a point famously argued by Hans Mayer. Bayer discusses the evolution of the school into 'Neomarginalism' and its influence on the Stockholm School (Wicksell, Myrdal) and French thought (Perroux). He defends the use of the utility concept and explains how the Austrian approach integrates micro- and macro-perspectives through the analysis of needs and price formation.
Read full textBayer explores the intersection of the Austrian School with modern developments like Game Theory and economic sociology. He discusses Morgenstern and Neumann's 'Theory of Games' as a tool for analyzing rational behavior in non-competitive markets. He also addresses Schumpeter's sociological approach to capitalism's development and Perroux's 'dominant effect' in international relations, suggesting these expand the Austrian framework into broader social science.
Read full textBayer provides a critical evaluation of Keynesian theory through an Austrian lens. He argues that while Keynes is seen as revolutionary, many of his insights were already present in or can be derived from Austrian thought. Bayer critiques Keynes's methodological reliance on aggregates (macroeconomics) and his 'old-fashioned' static equilibrium approach. Specific critiques are leveled at the 'psychological law' of consumption, the theory of liquidity preference vs. productivity of capital, and the effectiveness of wage cuts for achieving full employment. He concludes that Keynesianism benefits from being refined by Austrian causal-genetic analysis.
Read full textMahr outlines four major deficiencies in Keynesian theory: the reliance on static equilibrium for dynamic problems, the overemphasis on full employment as an end in itself, the failure to account for monopolistic competition, and the lack of a sufficient theoretical explanation for unemployment. He contrasts Keynes's neglect of production and income formation with the more detailed investigations of the Austrian School, specifically citing Hans Mayer and the structural crisis theories of Gustav Gundlach.
Read full textThe author reviews how modern economists like Hicks, Lange, and Samuelson have addressed the dynamic gaps in Keynesian theory. Hicks is credited with expanding statics to capture dynamic processes through expectations, while Samuelson's mathematical approach is critiqued for its diminishing marginal productivity and practical unmanageability. The segment suggests that a synthesis between these Anglo-American mathematical attempts and the Austrian School's causal-behavioral insights would be fruitful.
Read full textThis section discusses the evolution of 'Welfare Economics' and the integration of monopolistic competition into economic theory. It highlights the convergence between the Austrian School's view of economic goals and the 'New Welfare Economics' of Samuelson and Hicks. Furthermore, it notes that while Robinson and Chamberlin advanced the study of imperfect competition, the Austrian School (via Von Neumann and Morgenstern's Game Theory) provides the necessary new methods for deeper theoretical grasp.
Read full textMahr argues that the Austrian School provides a superior theoretical explanation for unemployment by analyzing the difference between personal and functional income distribution. He critiques Keynesian policy for not reaching the 'root' of economic connections. The segment concludes by observing that both the Austrian School and Anglo-American 'Competitive Socialism' (Lerner, Meade) arrive at similar conclusions regarding the necessity of a planned economy to achieve welfare goals.
Read full textTheo Surányi-Unger introduces an analytical framework to measure the quantitative differences between private enterprise and collective planning. He argues that real-world systems are 'composite' or 'mixed' rather than pure types. He proposes a model based on degrees of collectivization (x) and the aggregate amount of want satisfaction (s) to classify economic structures along a spectrum.
Read full textSurányi-Unger applies statistical measures (mean, standard deviation, skewness, kurtosis) to his composite economic model. He uses US data from 1929–1947, including Gross National Product and public expenditures, to demonstrate shifts between collectivization and reprivatization. The analysis shows how the Great Depression and WWII pushed the US toward collective planning, while post-war periods saw shifts back toward private enterprise.
Read full textThis segment defines the aggregate welfare function in terms of want satisfaction and degrees of collectivization. It traces the historical development of welfare economics through three stages: the 19th-century focus on cardinal utility, the mid-20th-century shift toward ordinal utility and indifference curves, and the 'new' welfare analysis which utilizes index numbers and production theory to avoid interpersonal utility comparisons. The author argues that while ordinal approaches are useful for determining if welfare is raised, they struggle to quantify the optimal balance between private enterprise and collective planning.
Read full textThe text explores the mathematical representation of the 'new' welfare analysis, treating social welfare as a vector of individual utilities rather than a simple sum. It introduces the Paretoan general index-function of utility and discusses the indeterminacy of marginal utility in shifts between individual and collective satisfactions without specific knowledge of the welfare function's form. It concludes that comparing the merits of collectivization versus private enterprise requires looking at the ratios of marginal utilities.
Read full textThis section introduces the concept of sacrifice or 'cost' (c) associated with attaining want satisfaction (s). It defines a parametric constant (C) representing the total aggregate effort a system is willing to undertake, distinguishing between 'stationary' eastern minds and 'progressive' western systems. The author provides a statistical application using US data from 1929–1947, presenting 'National Budget Equations' that map per capita real expenditures across different categories of collectivization against the Gross National Product.
Read full textMahr explores the multidimensional indifference map of communal welfare, introducing the term 'iso-eupractical' to describe welfare surfaces. He analyzes the inverse relationship between individual gratification (private enterprise) and collective satisfaction (planning), arguing that the normal shape of these indifference curves is convex to the origin. The section discusses how institutional factors, such as decreasing costs or increasing returns in collective planning, might lead to 'abnormal' concavity or instability, and references Knight and Clark regarding points of satiation and redundancy in economic activities.
Read full textFrançois Perroux critiques the mechanistic interpretation of economic life that treats aggregate quantities as self-adjusting. He introduces the concept of 'macrodécisions' and the 'effect of domination,' where one economic plan irreversibly influences others. Perroux argues that the Walrasian-Paretian equilibrium fails to account for organized public constraint and strategic power. He suggests that economic life is a game of strategy involving micro-units, groups, and the State, and notes that a theory of 'public constraint' as a scarce economic good is still lacking.
Read full textFrancesco Vito challenges the doctrine of scientific neutrality in economics, arguing that because economic actions aim at human goals which are inherently ethical, economics cannot be separated from ethics. He critiques the 'maximum satisfaction' principle of Jevons and Walras and examines the 'New Welfare Economics' (Kaldor, Hicks). Vito concludes that objective criteria for social welfare changes are impossible without an explicit ethical framework for society, as interpersonal comparisons of utility always rely on value judgments.
Read full textDobretsberger analyzes Carl Menger's methodology, drawing deep parallels between Menger's 'exact' research direction and Immanuel Kant's transcendental analytic. He argues that Menger's marginal utility laws are not purely empirical but are 'laws of thought' (a priori) used to organize experience. The section traces how Menger's followers (Wieser, Böhm-Bawerk, Strigl, Hayek) interpreted these abstractions and discusses the ideological underpinnings of the Austrian method as a distillation of the market economy system.
Read full textJean Dubergé discusses the shift from chronological/empirical grouping of economic doctrines to rational classification. He highlights the work of Amoroso, Pirou, and Gonnard in distinguishing between 'science' (objective mechanisms) and 'faith' or 'ideology' (subjective values). The segment identifies two distinct problems: the categorization of doctrines (science vs. doctrine) and the historical order of succession within those categories.
Read full textThe author explores the difficulty of creating a 'natural classification' of economic doctrines based on content due to their inherent heterogeneity. Using theories of interest as an example, he distinguishes between purely scientific explanations (Böhm-Bawerk), policy-oriented mechanisms (Keynes, Wicksell), and normative justifications or condemnations (Marxism). He argues that a stable classification must instead be based on the 'form' or mode of representation of the economic world, rather than shifting historical or social content.
Read full textThis section examines three perspectives on the relationship between economic science and doctrine: as distinct entities (science explains, doctrine acts), as identical (Bertolino's formalist logic), or as a synthesis where science includes the study of ends (Guitton's social Catholicism). The author critiques the attempt to merge the two, noting that science deals with truths (indicative) while doctrine deals with rules and values (imperative), referencing Poincaré's distinction between science and morality.
Read full textThe author proposes a tripartite classification of economic thought into Principles (deductive starting points), Social Doctrines (social facts to be studied), and Economic Theories (the scientific coordination of laws). He argues that the conflict between inductive and deductive methods is a false dilemma, as both are necessary for scientific progress. Social doctrines are treated as objects of sociological investigation, while theories represent the 'crowning' achievement of scientific explanation.
Read full textFocusing on the category of 'Principles', the author traces the shift from the Benthamite hedonistic principle (absolute maximization of pleasure) to the marginalist principle of subjective well-being (relative maximization of satisfaction). He highlights how neo-marginalism, by adopting a neutral stance focused on ordinal preferences, moved the psychological content of 'pleasure' outside the core of economic science, treating principles as methodological starting points rather than historical doctrines.
Read full textThe text debates whether the history of economic thought should be a history of 'truths' only (the restrictive view of J.B. Say, Pantaleoni, and Einaudi) or include 'errors' (the extensive view of Condillac and Michels). The author suggests a middle ground: while science 'already made' focuses on truths, the history of science 'in the making' finds errors more important for understanding the path to discovery. He also argues that scientific theories should be classified pragmatically by subject rather than by nationality.
Read full textUnlike scientific theories, which are universal, social doctrines are deeply tied to national psychology and historical context. The author argues that social doctrines (like liberalism or socialism) act as 'ideological forces' regardless of their scientific accuracy. He advocates for a classification of social doctrines based on nationality, citing Pirou's work on French doctrines as an example of how national traits like individualism and rationalism differentiate local schools of thought from foreign ones.
Read full textJulius A. Neubauer discusses the decline of the liberalist epoch, which peaked with J.S. Mill and ended after WWI. He notes that the absolute authority of liberal theory has given way to a general mistrust of economic theories. He critiques the 'dismal science' aspect of classical economics—its passive 'wait and see' approach—and argues that while the failure of liberalism was profound, the current conflict of opinions does not mean a lack of scientific progress.
Read full textNeubauer critiques the Historical School and the modern 'Statistizismus' (over-reliance on statistics). He argues that while empirical data is necessary, it cannot replace 'Wesensbetrachtung' (essential analysis). He points out the irony of practitioners who claim to reject theory while unconsciously operating on false ones. Theory is defined as a necessary working hypothesis that allows for foresight, which pure empiricism lacks.
Read full textNeubauer reviews the major schools that succeeded liberalism: Marxism (critiqued for its labor theory of value), the Historical School, and the Marginal Utility school (Austrian and Lausanne). He emphasizes the Austrian School's role in preserving the 'spiritual essence' of economics. He then analyzes the 'Keynesian Revolution', suggesting it is a simplification of the Walrasian general equilibrium system adapted for monetary policy and depression-era problems.
Read full textNeubauer uses mathematical formulas to link Walrasian equilibrium with Fisher's quantity theory and Keynesian income theory. He explains Keynes's depression theory as a result of liquidity preference causing a gap between income and demand. Finally, he discusses the shift toward 'Planwirtschaft' (planned economy), noting that even classical thinkers like Pigou now accept a degree of central planning, but warns that theorists must regain knowledge of real goods and production, not just monetary variables.
Read full textEraldo Fossati pays tribute to Hans Mayer, arguing that Mayer's theory of 'genetic equilibrium' bridges the gap between the Austrian and mathematical schools. Fossati explores how Mayer's work provides dynamic elements for the static general equilibrium theory of Walras. He discusses the 'procès de tâtonnements' and how the path to equilibrium (dynamics) relates to the equilibrium state itself (statics).
Read full textFossati defines the distinction between static and dynamic theory based on the treatment of time and foresight. Static theory assumes perfect foresight or constant variables, effectively neutralizing time. Dynamic theory, conversely, is characterized by incomplete foresight, uncertainty, and risk. It deals with variables relating to different points in time and the 'expected' values that arise when the future is not perfectly known.
Read full textThis section defines uncertainty and risk within the context of dynamic economic theory. It distinguishes between objective risk (statistical frequency) and subjective risk (individual foresight gaps). The author argues that economic subjects use an intuitive, quasi-statistical method based on experience to navigate an uncertain future, where risk is defined as the distance between foresight and reality.
Read full textThe author discusses the integration of functional and causal treatments in economic theory, focusing on the division of time into periods. This framework allows for the interpretation of economic development through a sequence of plans where the gap between previous foresight and current reality informs future actions and expectations.
Read full textThis section applies the theory of the plan to marginal utility, specifically regarding the consumption of a fixed stock over time under uncertainty. Using mathematical optimization (Lagrange multipliers), the author derives a dynamic version of Gossen's second law, showing how risk and expected losses discount the marginal utility of future consumption periods.
Read full textJean Marchal introduces a revision of price theory, critiquing the classical assumptions of perfect competition and perfectly rational agents. He acknowledges the foundational work of the Marginalist school but argues that modern psychological insights necessitate a new approach to understanding how prices are formed in reality.
Read full textMarchal proposes replacing the single rational 'homo oeconomicus' with two distinct types: the 'Man of Descartes' (rational, calculating, pre-existing needs) and the 'Man of Pavlov' (conditioned by environment, reactive to stimuli). He explores how real human behavior is a combination of these two extremes, influenced by social status, institutions, and individual aptitudes.
Read full textMarchal re-evaluates the formation of momentary prices. He argues that instead of linear supply and demand curves, psychological factors create 'fused' or 'thick' curves (fuseau) where quantities are not precise points but ranges. The final price within these ranges is determined by environmental stimuli and the relative rationality of the buyers and sellers.
Read full textThis section examines the determination of stable prices and investment levels in a dynamic, non-static world. Marchal critiques the classical view that current prices dictate production, arguing instead that entrepreneurs act based on 'expected future prices' and costs. He begins to categorize how entrepreneurs interpret price movements (temporary vs. durable).
Read full textThis segment explores how entrepreneurs form expectations about price movements and the difficulties they face in performing causal analysis. It highlights the limitations of individual data, the influence of political factors, and the reliance on collective climates or 'macro-decisions' as noted by Perroux and Keynes.
Read full textThe author redefines Marshall's time periods for agriculture based on biological cycles rather than equipment. While farmers act rationally as 'transformers' (switching between wheat, eggs, or meat based on prices), they act as 'Pavlov's man' in the long term due to tradition and technical obstacles, leading to a slow link between price and production cost.
Read full textA detailed footnote reproducing a letter from François Perroux regarding his priority in developing the theory of 'thick bands' and 'diamonds of indeterminacy' in price theory. He argues against the point-equilibrium of mathematical economics in favor of zones of probability and bargaining power.
Read full textLeo Illy begins a new section in German, arguing that the conflict between Marginal Utility theory (Nutzwertlehre) and Socialist Labor Value theory (Arbeitswertlehre) is overstated. He demonstrates that Smith, Ricardo, and Marx all acknowledged utility as a necessary precondition for value, even if they focused on labor as the measure.
Read full textIlly explains the causal chain of value, asserting that utility is the primary economic principle regardless of political systems. He discusses how classical economists failed to solve the 'water-diamond paradox' because they lacked the concept of marginal utility, which links subjective utility with relative scarcity (Knappheit).
Read full textIlly critiques the split between the verbal-causal approach of the Austrian School (Menger, Mayer) and the mathematical-functional approach (Walras, Hicks). He argues that mathematical equilibrium models are fictions that ignore the actual process of economic calculation and price formation in reality. He introduces Hans Mayer's work as a defense of the Austrian realistic-causal method.
Read full textThis segment presents Hans Mayer's critique of functional price theories, emphasizing their lack of applicability to real-world economic movements. Mayer argues that static equilibrium descriptions cannot capture the dynamic process of price formation or the complexities of economic crises. He distinguishes between genetic-causal theories and functional ones.
Read full textThis segment contrasts functional price theories with genetic-causal theories. Functional theories, rooted in the work of John Stuart Mill and later developed by Walras and Pareto, focus on describing the mathematical equilibrium state of prices as a system of simultaneous equations. In contrast, genetic-causal theories, pioneered by Carl Menger and the Austrian School, seek to understand the laws governing the formation of prices through subjective factors like marginal utility. The text highlights the tension between the static mathematical description of equilibrium and the dynamic process of price formation.
Read full textHans Mayer analyzes the historical development of mathematical price theory, starting with Cournot. While praising Cournot for the concept of economic interdependence and monopoly price theory, Mayer critiques his 'static' approach for being timeless and failing to capture the causal-temporal sequence of price formation. The segment then introduces Jevons, who attempted to ground functional representation in a causal-genetic foundation by focusing on the subjective factor of marginal utility and individual demand.
Read full textMayer critiques the 'Law of Equalization of Marginal Utility' (Gossen's Second Law), which is central to mathematical equilibrium systems. He argues that the assumption of continuous utility scales and simultaneous existence of all needs is a fiction that contradicts reality. Drawing on Wieser, Mayer explains that consumers do not equalize marginal utility across all expenditures but rather prioritize needs based on a hierarchy of importance and complementarity. The segment argues that the lack of continuity in goods and needs invalidates the differentiability required for mathematical equilibrium systems.
Read full textMayer identifies a fundamental logical circle in the theories of Walras and Jevons: they attempt to derive prices from demand, but define demand as a function of already existing prices. This 'determination circle' means the theory describes a finished state of equilibrium rather than the process of price formation. Mayer argues that for the consumer to make a choice, prices must be known, yet the theory claims to derive those very prices from the consumer's choice. This critique is extended to modern works like Hicks's 'Value and Capital'.
Read full textMayer critiques Pareto's attempt to replace measurable utility with indifference curves. He argues that the assumption of infinite substitutability between all goods is absurd (e.g., replacing bread with salt or furniture with rooms) and ignores the reality of complementarity. Furthermore, the empirical determination of indifference maps is a fiction. Mayer concludes that Pareto's system relies on imaginary elementary relations and an unreal equilibrium state, failing to describe the actual economy.
Read full textThe final part of Mayer's investigation focuses on Gustav Cassel, who explicitly rejected the analysis of utility and psychological factors, treating demand as a 'tangible fact' dependent on price. Mayer argues this is a regression to a pre-scientific state that ignores the etiology of economic phenomena. He concludes that functional equilibrium theories are systems of analytical truths (identities) that fail to provide synthetic knowledge of reality or explain the dynamic process of price formation.
Read full textBertrand Nogaro compares the Lausanne School (Walras, Pareto) with the Austrian School (Menger). He notes that while Walras adopted a utility-based theory similar to the Austrians, he diverged by focusing on mathematical equilibrium and the 'maximum satisfaction' principle. Pareto further distanced himself by rejecting the search for the 'cause' of value in favor of functional interdependence and by maintaining cost as an autonomous factor, unlike the later marginalists who reduced cost to utility sacrifices.
Read full textNogaro argues that the 'maximum satisfaction' claimed by Walras and Pareto is an illusion. In their systems, the consumer accepts the market price as a given and merely adjusts the quantity purchased to reach a point where the ratio of marginal utilities equals the price. This 'maximum' applies to any price and thus has no real hedonistic significance or explanatory power regarding the value of goods. It is a formal mathematical result rather than a substantive economic one.
Read full textAlexander Mahr defends Hans Mayer's critique of Gossen's Second Law (the equalization of marginal utility). He argues that the law fails to account for how consumption patterns change with income. When income rises, people do not simply buy more of everything; they buy better quality goods or entirely new categories of goods while keeping some consumption (like bread) constant. This breaks the supposed level of marginal utility. Mahr argues that mathematical economists cling to this law primarily for the sake of maintaining a solvable system of equations, despite its lack of empirical reality.
Read full textEwald Schams addresses the 'circular reasoning' (Zirkelschluß) often charged against price theory. The critique suggests that theories explain prices using factors (like income or purchasing power) that are themselves determined by prices. Schams argues that this is not a logical error but a reflection of the 'economic circulation' (Kreislauf). In a division-of-labor economy, income and prices are mutually dependent parts of a cycle. He proposes that the 'circle' is only problematic if one attempts a static, singular definition of price, whereas a methodological focus on the dynamic circulation process resolves the apparent contradiction.
Read full textErich Schneider presents a dynamic analysis of the Walrasian exchange model. Unlike static models that separate price theory from monetary theory, Schneider's dynamic approach integrates them by looking at the temporal flow of income and cash balances. Using a system of linear difference equations, he demonstrates how an economy moves from an initial state toward a stationary equilibrium. He concludes that money is 'neutral' only in the final stationary state; during the transition, the time-lags between earning and spending income result in non-neutrality, merging price and monetary theory into a general theory of economic processes.
Read full textThe author introduces a theoretical study comparing free market and planned economy models. The investigation focuses on how production rules and immutable economic laws affect economic processes, starting with the price-wage problem and moving toward production accounting and price differentiation.
Read full textThis section analyzes the relationship between wages and prices, defining the Lohn-Preisgesetz where wages are price components and prices determine real wages. It discusses market equilibrium failures like underconsumption and overproduction crises, and the effects of wage or price freezes on consumers and producers.
Read full textThe author discusses the 'Größengesetz von Produktion und Konsum', explaining how increased production leads to lower costs and higher consumption. It contrasts the law of increasing industrial returns with the law of diminishing returns in agriculture, framing both as special cases of a general 'Optimumgesetz'.
Read full textAn exploration of how income distribution is independent of income generation, yet constrained by it. The text examines conflicting interests between industry and agriculture (the 'agrarian scissors') and the tension between capital formation and the demand for cheap money, emphasizing the need for accurate success accounting.
Read full textThis section defines the fundamental laws of production costs, including Carey's reproduction cost law. It analyzes the dangers of selling below cost, such as capital erosion (Entkapitalisierung), and how deficits are covered through internal cross-subsidization (Dumping) or public subsidies.
Read full textThe author examines how prices are determined by the 'marginal plant' (Grenzbetrieb) and how technical progress tends to lower differential rents. It discusses the state's role in balancing the preservation of marginal plants for social reasons against preventing monopolies and excessive costs, noting the psychological incentives for productivity in different systems.
Read full textA critique of centrally planned economies where money loses its function as 'minted freedom' (Dostojewski) and becomes 'minted arbitrariness'. The text explains how rationing systems split purchasing power from purchasing rights and how the state replaces taxes with price manipulation and overcompensation between economic sectors.
Read full textThis section analyzes the theoretical difficulties of price differentiation. It argues that breaking the principle of uniform pricing leads to ficitious accounting, subsidies for certain industries at the expense of others, and the loss of 'fair play' and comparability in economic performance. It evaluates justifications like supporting infant industries or key sectors.
Read full textThe conclusion warns that ignoring the law of production costs leads to the destruction of economic foundations. It argues that planned economies tend toward fictions in prices and exchange rates, which eventually makes economic calculation impossible. The author suggests that a new economic ethos and the maintenance of living standards are the ultimate measures of any system's success.
Read full textErich Carell examines the evolution of the law of diminishing returns into a general 'law of increasing costs'. He discusses the views of Marshall, Schumpeter, and Knight on falling costs and internal/external economies, noting that under static competition, falling costs are often dismissed as leading to monopoly.
Read full textCarell critiques the conversion of physical yield laws into value-based cost laws. He argues that this conversion requires assuming constant factor prices, which is economically unrealistic since changing production volumes naturally shifts relative prices (e.g., wages vs. rent). He defines the 'optimal point' as relative to a specific price system rather than an absolute physical maximum.
Read full textThe author concludes that 'laws of increasing costs' (both variable and total unit costs) are problematic for macroeconomic analysis because they ignore the endogenous price changes of production factors. However, the law remains useful as a microeconomic working hypothesis for individual firms with fixed production facilities and constant variable factor prices.
Read full textMahr examines the validity of the law of diminishing returns (Ertragsgesetz), distinguishing between its physical formulation and its value-based 'illustration' as the law of increasing costs. He argues that the law is often simplified by ignoring the complementary nature of production factors (e.g., labor for plowing vs. weeding). While logically universal whenever one factor is held constant, its practical application varies: it is a factual reality in agriculture due to fixed land, but in industry, it applies primarily to individual plants with fixed equipment, whereas the industry as a whole may experience increasing returns until optimal size is reached. He also critiques Carver's view on fixed entrepreneurial activity, noting it violates the assumption of factor homogeneity.
Read full textThis section analyzes how shifts in demand affect production costs and factor prices within a general equilibrium framework. Mahr demonstrates that if two industries use factors in the same proportions, production can expand at constant costs. However, if factor proportions differ (e.g., capital-intensive pots vs. labor-intensive shoes), a shift in demand changes relative factor prices (wages and interest), altering the optimal factor combination and plant size in both industries. He concludes that the 'law of increasing costs' cannot be derived simply by 'inverting' the law of diminishing returns because the latter assumes constant factor prices, which is generally impossible during a sectoral production expansion under static conditions.
Read full textMahr discusses the 'law of increasing costs' as a working hypothesis for individual firms in partial equilibrium analysis. He distinguishes between historical costs and reproduction costs, arguing that fixed costs are only truly 'constant' in relation to output changes, not over time or across technical shifts. The marginal cost curve of a firm is determined by technology and variable factor quantities, making it a 'technological' rather than purely 'economic' curve if factor prices are assumed constant. He emphasizes that this model is a tool for understanding capacity utilization within a single firm, but it cannot explain cost structures for an entire industry expanding its production.
Read full textGiuseppe Ugo Papi introduces the 'theory of investment' and the necessity of economic planning for producers. He reviews various methods for comparing investment returns, including the internal rate of return and the present value of expected income, citing Fisher, Keynes, and Boulding. Papi argues that a production plan must be split into a 'cost plan' and a 'price plan.' He emphasizes the principle of marginality in determining the most economical combination of factors and the optimal scale of production where marginal cost equals marginal revenue. The section establishes that planning is an absolute necessity for producers to navigate the complexities of factor proportions and market fluctuations.
Read full textThis section examines the role of discounting the future and risk insurance within a producer's economic plan. It distinguishes between technical and economic utilization of plants and discusses how the interest rate (the price of using savings) influences production costs and the rhythm of activity. The author critiques Abramovitz and Fisher regarding the subjective versus objective market rate of interest in discounting future values.
Read full textAnalysis of how sudden or predicted changes in interest rates affect producer behavior. A sudden rise tends to slow production by increasing costs of labor, raw materials, and inventory, whereas a predicted rise might temporarily intensify activity as producers secure long-term loans and liquidity as insurance against future higher costs.
Read full textThe author explores the impact of price changes in variable and fixed production factors. He argues that predicting price increases leads to different insurance behaviors (like stockpiling) compared to sudden increases. He also notes the complexity of calculating future costs, as interest rates and factor prices do not always move in perfect complementarity.
Read full textThe section describes how producers react to predicted cost increases through insurance or production contraction. It also covers the reciprocal case: how sudden or predicted decreases in interest rates or factor prices influence the substitution of factors and the expansion of production plants.
Read full textThe author argues that a well-developed theory of individual economic plans (consumption and cost plans) can absorb the theory of economic fluctuations. By using foresight, discounting, and insurance, producers stabilize the economic structure. He concludes that the study of plans is the most effective way to analyze economic dynamics.
Read full textTransitioning to German text, this section defines the velocity of money (Umlaufsgeschwindigkeit) using definitions from Wicksell and Fisher. It introduces Fisher's equation of exchange (G x U = P x H) and begins an analysis of the relationships between money supply, velocity, price levels, and trade volume.
Read full textThis section examines Irving Fisher's catalog of factors determining the velocity of money circulation (U), including individual habits, payment systems, and general causes like population density. The author argues that Fisher's model assumes a specific economic order of free competition where price levels adjust smoothly to demand, a condition not met in all economic systems.
Read full textThe text discusses Friedrich Lutz's refinement of Fisher's theories, reducing the determinants of velocity to two factors: the synchronization of income and expenditure and the need for cash reserves. Mahr critiques Lutz by distinguishing between the subjective 'need' for reserves and the objective 'existence' of reserves, noting that in certain economic orders, velocity can dictate the level of reserves rather than the other way around.
Read full textMahr introduces a formal equation to express velocity (U) through turnover volume (A), synchronization (S), and cash reserves (Kr). He argues that while Lutz views U as determined by S and Kr, in specific economic systems, the causal direction can be reversed, where U influences the other variables.
Read full textAnalysis of how velocity changes during economic cycles: increasing during upswings due to profit expectations and credit demand, and decreasing during downswings as confidence collapses and cash reserves are built. The author notes that even before WWI, rigidities in wages and prices meant that trade volume (H) often adjusted alongside price levels (P) in response to changes in the money supply and velocity.
Read full textThis section explores the relationship between money supply, velocity, and prices during hyperinflation. It contrasts the views of Bortkiewicz (who emphasized exchange rates and distrust) with Lutz and Eucken (who emphasized the 'effectiveness' of money and synchronization). Mahr concludes that in late-stage inflation, the adoption of 'gold reckoning' and 'devaluation surcharges' decoupled price increases from simple money supply growth, leading to reduced trade volume.
Read full textA detailed analysis of the German war economy (1939-1944), where the money supply quadrupled without a corresponding rise in prices or trade volume. Mahr explains this through a drastic reduction in velocity (U) caused by price stops and rationing, which made money 'unusable' for immediate consumption. Here, the causal links of the Quantity Theory are inverted: the fixed price level (P) and trade volume (H) force adjustments in the money supply (G) and velocity (U).
Read full textThe author summarizes the findings across different economic systems. He concludes that while Fisher's Quantity Theory (where G, U, and H determine P) applies to the market systems for which it was designed, it fails to describe the German war economy. In the latter, the causal direction is reversed, though the Quantity Equation itself remains a valid accounting identity.
Read full textThe author concludes a discussion on Irving Fisher's quantity equation, examining how different economic systems determine variables like money supply and velocity. It specifically analyzes how state-enforced price blocking alters the behavior of economic subjects and limits the expansion of money and trade volume.
Read full textGoetz Briefs provides a methodological comparison of business cycle theories, focusing on the contradictory views of Wesley C. Mitchell and Joseph Schumpeter. Mitchell's approach is characterized as empirical and statistical, viewing cycles as arbitrary units of measurement. In contrast, Schumpeter's theory is rooted in a logical 'thought model' starting from a stationary flow (Kreislauf) and identifying 'innovation' by the entrepreneur as the final cause of cyclical development. The essay further classifies other theories (over-investment, under-consumption) as partial explanations that fit into Schumpeter's general framework of final, formal, and material causality.
Read full textG. Findlay Shirras examines the shift toward economic planning in post-war Britain. He argues that the 'Planned Economy' is an evolution of 'Liberal Interventionism' necessitated by the massive wealth destruction of WWII and the resulting dollar scarcity. The essay reviews the perspectives of prominent British economists like Robbins, Henderson, and Robertson, concluding that democratic planning is essential for managing imports and exports to restore national prosperity while maintaining individual incentives.
Read full textFerdinand Degenfeld-Schonburg explores the tension between mass production and quality craftsmanship in the context of Austria's post-war reconstruction. While mass production offers cost reduction and rapid satisfaction of 'warenhunger', it risks cultural degradation and the loss of Austria's competitive edge in quality exports. The author argues that Austria must integrate quality into mass production and maintain individual craftsmanship as a foundation for its national culture and export viability.
Read full textStantscho Tscholakoff analyzes the relationship between the traditional state budget and the modern comprehensive economic plan. He contrasts socialist planning, which centralizes all production and labor under state authority to eliminate 'anarchy', with non-socialist planning, which uses the budget as a steering mechanism for private enterprise. The essay highlights the changing role of the Finance Minister, who loses coordinating power to the Planning Minister in socialist systems, becoming a technical executor.
Read full textFritz Neumark discusses the theoretical and practical limits of public debt. He critiques the 'New Philosophy of Public Debt' (Keynesianism) which suggests that internal debt is not a burden because 'we owe it to ourselves'. Neumark argues that high debt levels create real economic and social costs, including regressive income redistribution, reduced fiscal flexibility, and psychological barriers to investment. He advocates for a flexible debt redemption policy tied to the business cycle to maintain confidence and prevent total state control.
Read full textIntroductory heading for a section regarding the role of statistics in economic theory.
Read full textThis section explores the fundamental relationship between statistics and economic theory. The author argues that while economic theory is a nomological science seeking laws, statistics serves as an empirical tool for verification, particularly where causal relationships in mass phenomena are concerned. It distinguishes between aprioristic laws of logic or mathematics, which do not require statistical proof, and empirical regularities where statistics plays a constitutive or declarative role.
Read full textThe author examines the law of diminishing returns in agriculture and its applicability to industrial production. He discusses whether these laws are natural laws or aprioristic deductions and notes that statistical verification is best achieved through micro-level business statistics (Betriebsstatistik) rather than aggregate national statistics. The section also touches upon dynamic returns of scale and psycho-physical laws of saturation.
Read full textA comprehensive analysis of price formation, market forms (competition, monopoly, oligopolies), and the role of statistics in measuring price levels. The author critiques the classical labor theory of value (Ricardo) in favor of subjective utility, while acknowledging the difficulty of statistically capturing subjective motives. He discusses the Quantity Theory of Money via the Fisher-style equation and the practical challenges of constructing wholesale and cost-of-living indices.
Read full textThis section treats labor as a commodity whose price (wage) is determined by supply and demand, specifically marginal productivity (or profitability). The author rejects the 'iron law of wages' through statistical evidence of wage variation. He also discusses how institutional factors like unions, state intervention, and planned economies alter the theoretical mechanisms of wage formation, emphasizing the role of statistics in calculating real wages during inflation.
Read full textThe final section analyzes the formation of interest rates on money and capital markets and the determination of exchange rates. It contrasts the Balance of Payments theory with the Purchasing Power Parity theory for exchange rates. The author notes that while statistics can verify purchasing power shifts, it struggles to accurately capture the 'Balance of Claims' (Forderungsbilanz) due to the difficulty of tracking international capital flows.
Read full textMahr examines the laws of consumption, noting that economic theory has historically marginalized this field due to a lack of statistical data. He discusses established empirical findings such as Engel's Law regarding food expenditure and Schwabe's Law regarding housing costs, while critiquing their deductive versus inductive origins. The section also highlights the necessity of consumption statistics for calculating cost-of-living indices and national income.
Read full textThis section explores the relationship between business cycle theory and statistical research. Mahr argues that the 'Methodenstreit' (dispute over methods) has been revived in the form of 'Theory vs. Statistics.' He posits that while statistics provides the empirical foundation and mathematical tools (like correlation and trend analysis) to identify patterns, economic theory must provide the final causal explanation. The segment concludes that fruitful research requires the inseparable cooperation of both approaches.
Read full textWilhelm Winkler introduces his contribution on the relationship between statistics and economics. He critiques the traditional German view of statistics as merely a 'subsidiary science' (Hilfswissenschaft) of economics and advocates for its independence as a theory of mass phenomena. He introduces the rise of the econometric movement (Econometric Society) as a synthesis of economic theory and empirical statistics, noting its slow adoption in German-speaking academia.
Read full textWinkler provides a detailed econometric analysis of Pareto's Law regarding income distribution. He critiques Pareto's original empirical derivation for using summation curves rather than distribution curves. Winkler then attempts to derive the law deductively by testing different mathematical models (hyperbolic vs. exponential) against German income data from 1928. He concludes that the hyperbolic model (Pareto's curve) best fits the reality of decreasing relative differences in higher income brackets.
Read full textA comprehensive alphabetical index of authors and thinkers cited throughout the work 'Neue Beiträge zur Wirtschaftstheorie'. Includes major figures from the Austrian School, Classical Economics, and early 20th-century economic theory.
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