by Mayer et al
[Title and Contributor List]: Title page and comprehensive list of contributors for the fourth volume of 'Wirtschaftstheorie der Gegenwart' (Economic Theory of the Present), edited by Hans Mayer. The volume focuses on business cycles, international trade, public finance, and the economic theory of socialism. [Table of Contents]: Detailed table of contents for Volume IV, listing major sections: Business Cycles and Crises, International Trade, Main Problems of Public Finance, and Economic Theory of Socialism, including an appendix by Edwin Cannan. [Zur Morphologie der Krisen (On the Morphology of Crises)]: Emil Lederer analyzes the nature of economic crises, arguing that all endogenous theories eventually lead to a 'disproportionality theory'. He explores how uneven price elasticity, particularly the lag between wages/fixed incomes and profits, drives the cycle. He emphasizes that rapid capital accumulation necessarily involves a relative decline in mass purchasing power, creating a gap between production capacity and consumption. He also discusses the role of technical progress in creating differential profits and the necessity of credit expansion for realizing business cycles. [Das Studium der Krisen und Wirtschaftszyklen in den Vereinigten Staaten]: Carl Snyder provides a historical and methodological overview of business cycle research in the USA. He traces the evolution from early currency-focused theories to modern statistical analysis. Key figures discussed include Samuel Benner (early periodicity), Wesley Clair Mitchell (comprehensive analysis of profit-driven cycles), Henry Moore (mathematical/periodogram methods), and Warren Persons (Harvard Barometer). Snyder highlights the role of the Federal Reserve and the development of trade volume indices, concluding that while forecasting remains difficult, increased statistical control and central banking have reduced the intensity of financial crises. [Krisenlehre (Theory of Crises)]: Jean Lescure presents a theory of crises centered on the production of capital goods. He argues that a decline in expected profits, caused by production costs rising faster than selling prices (especially in heavy industry and transport), is the primary trigger for downturns. He critiques the contemporary 'monetary' approach to cycle stabilization via discount rates, arguing that credit restriction often kills the recovery rather than preventing the crisis. He suggests that rational price policies by trusts and cartels (lowering prices during depressions to stimulate demand) are more effective than central bank intervention. [Zur Theorie der Handelspolitik (On the Theory of Trade Policy)]: Richard Schüller examines trade policy through the lens of production costs and economic organization. He critiques classical free trade assumptions by highlighting that production factors are not always fully utilized and that individual firms (not just whole sectors) compete based on specific cost structures. He analyzes the impact of tariffs on production versus consumption and discusses modern phenomena like dumping, international cartels, and the role of organized labor/fixed prices in slowing economic adjustment after currency stabilization. He concludes that international conventions and industrial organizations are increasingly replacing traditional tariff policy. [Die Standortstheorie in Einstellung auf die Weltwirtschaft (Location Theory in the Global Economy)]: L.V. Furlan argues that location theory (Standortstheorie) is the core of world economic studies. He uses graphical methods (arrow diagrams of trade flow) to identify global economic centers—primarily Great Britain, the USA, and Germany in the pre-war era. He discusses the shift in financial supremacy from London to New York and attempts to measure the intensity of global economic integration by comparing trade volume to national currency circulation. He notes that while trade is the largest component of international relations, financial and 'invisible' transfers (tourism, remittances) are significant. [National Wealth and the Concept of National Assets]: Explores the definition of national wealth as a relative concept. It distinguishes between private property and national assets, noting that the state acts as a coordinator of diverse private interests rather than a singular owner. [Internal and External Economic Balances]: Defines the internal economic balance (production vs. consumption) and the external balance (imports vs. exports). It details how raw materials, value-added processes, and different types of consumption (technical vs. personal) are accounted for in these balances. [The Development of Economic Balance Theory]: Traces the historical evolution of balance of trade and payment theories. It critiques Mercantilist focus on gold, Physiocratic focus on agriculture, and the transition to modern concepts of payment balances (Zahlungsbilanz) and the author's own concept of the 'Wirtschaftsbilanz' (Economic Balance). [Interstate Value Transfers and the Role of Subjective Value]: Applies marginal utility theory to international transfers, arguing that value is a psychological construct distinct from physical matter. It categorizes transfers into visible goods, invisible services (patents, banking), and securities (payment vs. credit instruments), while distinguishing between bilateral and unilateral transfers. [Interstate Exchange and Payment Systems]: Analyzes international trade as a form of natural exchange mediated by private payment instruments (clearing). It discusses the formation of exchange rates (Wechselkurse), the difference between mint parity and market parity, and how paper money value is estimated internationally. [Interstate Value Shifts and Economic Policy]: Examines how the value of goods changes when moving between different national markets. It critiques the idea of a self-balancing global market, highlighting barriers like transport costs, tariffs, and dumping. It emphasizes that the economic impact of imports depends on whether they are for consumption or production. [Structure of the External Economic Balance]: Provides a detailed systematic classification of the external economic balance (äußere Wirtschaftsbilanz). It categorizes items into three main groups: Trade in Goods (Warentausch), Capital Transfers (Kapitalsübertragungen), and Migrations (Wanderungen), listing specific active and passive components for each. [The Exchange of Goods and Trade Statistics]: Discusses the complexities of measuring trade. It critiques the standard 'Handelsbilanz' for mixing capital transfers with goods exchange and explains the difficulties in determining 'border values' (Grenzwerte). It also challenges the law of diminishing returns in industry and the assumption of price equalization across borders. [International Capital Transfers and Markets]: Analyzes the movement of capital between nations. It distinguishes between lending capital (fixed interest) and entrepreneurial capital (variable profit), noting that capital markets are often segmented by national borders due to legal, currency, and political risks. It also discusses the strategic use of capital exports to promote national exports. [International Migration and its Economic Impact]: Examines the economic consequences of the movement of people. It distinguishes between consumers (tourists, pensioners) and producers (migrant workers). The text discusses the loss of human capital for the home country vs. the benefit of remittances, and the potential disruption of labor market equilibrium in the host country. [The External Balance of Claims (Forderungsbilanz)]: This section distinguishes the external balance of claims (Forderungsbilanz) from the balance of payments. It defines the former as a snapshot of mutual obligations (assets and debts) between a country and the outside world at a specific point in time, rather than a flow of transactions. The text discusses Eduard Kellenberger's proposal to call it an 'international wealth balance' and notes the statistical difficulties in calculating these values precisely, leading to a general classification of creditor and debtor states. [Exchange Rates and the Balance of Payments]: A comprehensive analysis of the relationship between exchange rates and the balance of payments. It explains how international payments are settled via bills of exchange and how rates fluctuate between gold points under a gold standard. The text critiques the 'Purchasing Power Parity' theory (Cassel, Dalberg) and the 'State Theory of Money' (Knapp), arguing that exchange rates are influenced by both the balance of payments and the internal value of money. It also describes the role of speculation, arbitrage, and central bank intervention (discount and foreign exchange policy) in stabilizing rates. [The Theory of Foreign Trade: Introduction and American Perspectives]: Jacob Viner introduces the history of foreign trade theory in the United States. He notes that until the late 19th century, American contributions were largely dogmatic repetitions of English classical theory (Mill) or naive protectionist arguments. He highlights the pivotal work of F.W. Taussig and his students, who moved toward inductive analysis and realistic data usage to update the classical tradition for modern banking and currency systems. Key debates mentioned include gold movements and the relationship between income, prices, and trade gains. [The Adjustment Mechanism of Balances of Payments]: This section examines the theoretical mechanism by which international trade equilibrium is restored after a disturbance. It traces the evolution of the theory from David Hume's 1752 insights to the 'Ricardian' theory of gold movements, which remains dominant in Anglo-American economics. The author distinguishes between disturbances caused by monetary changes (inflation/deflation) and those caused by commercial factors like international loans. A central debate is highlighted between the Thornton-Mill view—which emphasizes a sequence of exchange rate shifts, gold flows, and relative price changes—and Ricardo's more abstract view of immediate demand shifts. The text also incorporates modern refinements by Taussig and others regarding the role of domestic versus traded goods prices and the mediation of the banking system in price level adjustments. [Transfer Problems and Government Debt]: An analysis of the practical application of transfer theory to reparations and inter-allied debts, specifically regarding Germany. The author warns that the smooth functioning of the transfer mechanism depends on factors like tariff barriers and the elasticity of demand. He emphasizes the need for flexible payment schedules for government debts to prevent credit crises and gold drains during periods of economic strain. [Adjustment Mechanisms under Paper Currency]: This section explores how international balances adjust under inconvertible paper currency regimes. Unlike the gold standard, adjustment here relies primarily on exchange rate fluctuations rather than gold movements. The author critiques Gustav Cassel's Purchasing Power Parity (PPP) theory, arguing it is an incomplete explanation because exchange rates are influenced by many factors beyond relative price levels, such as capital transactions and speculation. [The Theory of International Values and Terms of Trade]: The section discusses the theory of international values, focusing on comparative costs and the 'terms of trade'. It critiques the standard price-comparison model by introducing Taussig's distinction between 'net barter' and 'gross barter' terms of trade. The author argues that real productivity and income levels are better indicators of a nation's gain from trade than simple price indices. It also addresses the inclusion of services and interest payments in trade balances and mentions F.D. Graham's mathematical refinements to classical theory. [International Capital Movements (Introduction)]: Title and author attribution for the following section on international capital movements under stable and devalued currencies. [Financing and Financed Countries: The Mechanism of International Capital Movements]: Professor Attilio Cabiati analyzes the complex interactions within international markets, focusing on how goods, gold, and capital move to restore equilibrium following price shifts. He argues that the distribution of savings across borders, managed by banks, aims for maximum productivity, which is achieved when net interest rates are equalized between financing and financed nations. The section emphasizes that the automaticity of equilibrium in countries with stable currencies often leads theorists to underestimate the role of the trade balance, which is actually strictly coordinated with short-term capital markets and foreign exchange markets through the principle of comparative costs. [The Adjustment Process of Productive Forces and Interest Rates]: This section details the internal economic adjustments that occur when the balance of payments is disturbed. It describes the tension between short-term and long-term interest rates and how the market capitalizes these differences, affecting stock values. Cabiati explains how export-oriented industries attract new capital during these shifts, leading to a new equilibrium in the balance of payments characterized by revised exchange rates, discount rates, and interest levels. He warns that attempting to restore equilibrium through a single country's forces alone can lead to destructive economic crises. [The Productive Cycle and International Bank Relations]: Cabiati explores how the length of the productive cycle (from raw material acquisition to final payment) influences international capital movements. He highlights the interdependence of banks across different nations, where unforeseen changes in one country's cycle can cause immobilization in another. Bank policy is framed not as preventing price changes, but as smoothing market fluctuations. The text also discusses how scientific discoveries requiring capital intensification can lengthen the productive cycle, necessitating expanded credit from correspondent banks to prevent rising interest rates from paralyzing progress. Reference is made to R.G. Hawtrey's studies on population growth and production. [Investment Strategies for Creditor Nations and Market Types]: The author outlines four ways a persistent creditor nation can utilize its surplus: reducing interest rates to spur industry, purchasing gold, increasing imports, or investing in foreign securities. Foreign investment is identified as the most effective method for absorbing savings and creating a reserve against future crises. The section introduces a comparison between how economic equilibrium is restored in 'financing' versus 'financed' markets, noting that in financed countries, interest rate changes primarily affect new contracts and lead to increased competition and eventual export pressure. [The Dominance of Financing Markets and the Gold Exchange Standard]: Cabiati contrasts the power of financing markets with financed ones. In financing markets, the banking system controls both imports and exports, allowing discount policy to immediately influence domestic trade and industrial production. Conversely, in financed countries, the central bank has less immediate control, often necessitating larger gold or foreign exchange reserves—leading to the 'Gold Exchange Standard'. The text references Hawtrey's 'Currency and Credit' to explain how financing mechanisms differ when transactions are settled in the currency of the financing center. [Banking Technique, Federal Reserve System, and Credit Elasticity]: A detailed technical analysis of bank credit and the independence of deposit banks from central note-issuing institutes. Cabiati compares the American banking situation before and after the introduction of the Federal Reserve System. He argues that the Federal Reserve provided the necessary elasticity to handle seasonal currency demands through bank credit rather than disruptive gold movements and extreme discount rate fluctuations. This section also touches upon the 'managed currency' debate and the role of international savings movements in maintaining the balance of payments. [The International Securities Market and the Role of Financial Centers]: The author discusses the strategic advantages of being an international financial center. Capital export is not just a financial transaction but a means of expanding national influence through infrastructure projects (railroads, electrical works) in developing nations. While thinkers like Stamp and Hawtrey question if capital export always benefits the home nation's general welfare, Cabiati highlights the cumulative advantages: information networks, currency authority, and the ability to liquidate foreign assets during wartime to protect domestic currency stability. [Crisis Management, London as a Clearinghouse, and Protectionism]: The final section of the chunk examines how crises propagate differently in financing versus financed countries. It highlights London's historical role as the world's 'clearinghouse' and the necessity of its return to gold parity. Cabiati then pivots to the problem of international debt and protectionism, specifically the relationship between Europe and the United States. He argues that for debtor nations to repay loans, creditor nations (like the US) must eventually lower their tariffs, as high duties distort exchange conditions and force the international price of goods to adjust inefficiently. [The Technical Means of Capital Movement and Its Effects]: This section explores the technical mechanisms by which capital moves between countries, arguing that capital movement is ultimately translated into the movement of goods. It details how a country importing savings uses them for consumption or productive capital, and how domestic bank credit functions to facilitate production cycles. The text explains that if domestic funds are insufficient, foreign savings are utilized, which eventually leads to increased imports as domestic prices rise and attract foreign competition. [The Position of the Exporting Country and Balance of Payments]: The author examines the requirements for a country to export savings, noting that it must occur through goods, services, or gold. To send bills of exchange without damaging the exchange rate, the exporting country must have a surplus in its balance of payments derived from increased exports or decreased imports. The choice between these methods depends on comparative costs and the specific needs of the importing country. [Effects on Exchange Rates, Interest Rates, and International Financing]: This segment analyzes specific scenarios of international financing and their impact on exchange rates and interest rates. It discusses how long-term credits and the issuance of stocks or bonds by banks lead to complex arbitrage operations. The author illustrates how price differences for the same security in different markets (e.g., London and Milan) trigger corrective movements that restore equilibrium. [Economic Equilibrium and Capital Export Scenarios]: The text details two primary cases of capital transfer: one where the exporting country reduces its own imports to provide savings, and another where it increases exports of capital goods like machinery. It discusses the resulting shifts in industrial focus and trade directions in both countries. The author also addresses the 'colonial' case where capital export might lead to a future reduction in the exporter's trade as the recipient becomes self-sufficient. [Indirect Financing and the Elasticity of Savings Demand]: The author discusses indirect financing, where capital flows through intermediary countries due to political or cultural barriers (e.g., Western banks financing China through Japan). It contrasts the high elasticity of international savings demand in developed markets with the lower elasticity in markets dominated by small savers. Improvements in credit technology are noted to reduce friction and equalize interest rates globally. [Productivity and the Benefits of Capital Export]: Referencing John Stuart Mill, the author argues that capital export is beneficial if it follows the principle of comparative costs. While it may cause initial local losses due to rising interest rates, the total productivity of the combined nations increases. This process fosters global interdependence and a more efficient territorial division of labor, ultimately raising national income through dividends and expanded trade. [Restoring Equilibrium After Capital Export]: This section outlines how a temporary increase in interest rates caused by capital export triggers various market forces to restore equilibrium. These include shortening production cycles, reducing security prices to attract foreign buyers, increasing savings due to lower consumption, and shifting industrial focus toward international markets. The author notes that international competition usually prevents excessive export from a single market, except in crisis cases. [The Complexity of Capital Flow Statistics and Trade Interdependence]: The author highlights the difficulty of statistically tracking capital movements due to the complex, indirect routes they take through various markets and arbitrage operations. He emphasizes that trade, capital, and labor movements are not isolated events but part of a continuous global flow driven by profit motives. He warns that protectionism and state intervention destroy the wealth generated by this dense network of exchange. [The Nature of Capital Export: Goods, Services, and Consumption Sacrifice]: Drawing on David Ricardo, the author argues that 'capital' itself is not exported; rather, rights to use capital are granted, resulting in the export of goods and services. Capital export requires a temporary restriction of domestic consumption in the financing country to allow for the production of capital goods for the recipient. The section explains how banks facilitate this through deposits and securities, and warns that excessive credit expansion leads to inflation and trade imbalances. [Capital Movement Under Depreciated Currencies]: This section addresses the challenges of capital movement in the post-WWI era of unstable currencies. It discusses how market participants seek guarantees against exchange rate risks. Using the Italian Lira as an example, the author describes the cumulative effects of speculation: exporters delay repatriating foreign currency while importers rush to buy it, both of which accelerate the currency's decline and lead to a new, higher price level for goods. [Market Dynamics and Bank Intervention in Currency Crises]: The author analyzes the behavior of importers and exporters during currency fluctuations, specifically how they use forward contracts and reports to manage risk. When expectations of currency appreciation or depreciation shift suddenly, it causes a 'revirement' where both groups move in the same direction, overwhelming the banks. This leads to increased foreign debt and a stabilization of exchange rates at disadvantageous levels, which in turn drives up domestic price indices. [The Limits of Discount Policy in Depreciated Currencies]: The final section of the chunk evaluates the effectiveness of raising the official discount rate to protect a depreciating currency. While this policy works under a gold standard, it is less effective with a depreciated currency because the risk of further devaluation outweighs the interest premium. High interest rates may harm domestic industry and trade without stopping the currency's fall, as speculators simply look for foreign loans to cover their positions. [Die eben angeführten Umstände komplizieren die Beziehungen]: This section analyzes the structural complications in the capital market following World War I. It details how increased industrial capacity, chaotic price situations, and the destruction of international trade relations necessitated larger amounts of liquid capital while the war simultaneously depleted capital reserves. It also discusses the loss of control by central banks over circulation and the inability of deposit banks to assess international demand due to speculative pressures and inflation. [Der Einfluß der Inflation und Deflation auf die Kapitalsbewegung]: A theoretical comparison of inflation and deflation, arguing they are analogous processes with opposite signs. The author explains how international speculators exploit currency fluctuations in both scenarios, leading to a drain on the national economy. Through detailed examples of currency trading (Pounds vs. 'x' currency), the text demonstrates that systematic state intervention often fails to punish speculators, instead providing them with low-risk profit opportunities at the expense of domestic industry and labor. [Identität der Inflations- und Deflationswirkungen im Handel]: This segment examines the effects of currency instability on import and export balances. It challenges the common assumption that deflation always harms exports, showing that during the process of deflation, exporters and foreign importers may accelerate trades to lock in favorable rates. Using statistical data from Italy in 1926, it illustrates the divergence between domestic purchasing power and international exchange value (Gold vs. Paper Lira), concluding that both inflation and deflation create a labile economic equilibrium. [Die Labilität des Gleichgewichtes der Zahlungsbilanz]: The text discusses the instability of the balance of payments under depreciated currencies. It argues that industrial equilibrium depends on a dual currency value (higher domestic, lower foreign), and that fiscal order or bank credit alone cannot stop currency depreciation if production is built on this disparity. It describes a cyclical crisis where stabilization leads to rising domestic prices, reduced exports, and eventual sudden jumps in exchange rates to cover accumulated foreign debts. [Die Wirkung der Anleihen auf das Gleichgewicht des Güteraustausches]: An analysis of foreign loans in countries with stable versus depreciated currencies. In stable systems, loans for modernization lead to lower costs and long-term balance. In depreciated systems, loans are riskier due to unpredictable repayment values in gold. The author warns that loans in a deflationary period can ruin debtors as asset values drop faster than debts, and in inflationary periods, they may merely fuel over-investment in 'real values' (Sachwerte) rather than productive technical cycles. [Die ausländischen Anleihen und das Emissionsinstitut]: This section examines the role of central banks (Emissionsinstitute) during currency stabilization. It critiques the 'pegging' of currencies and discusses the 'circulatory disease' where a gap persists between long-term and short-term interest rates. It references the German Reichsbank's policies in 1926-1927 and Hjalmar Schacht's theories. Finally, it touches on the global gold shortage and the shift toward the 'Gold Exchange Standard', where central banks hold reserves as assets in the US Federal Reserve rather than physical metal. [Die Grenzen der Besteuerung: Einleitung und Voraussetzungen]: Wilhelm Gerloff begins a treatise on the limits of taxation. He distinguishes between formal prerequisites (legal and administrative organization) and material prerequisites (productivity of labor). He argues that taxes are only sustainable if the social product exceeds the private existence needs of the population. Taxation is defined as an economic phenomenon subject to specific conditions of the private economy's capacity to generate surplus income. [Historische und Subjektive Werttheorien der Besteuerung]: A historical overview of the limits of taxation, from the moral boundaries set by Church Fathers (Augustine, Ambrose) to the subjective value theories of the late 19th century. Gerloff discusses the 'Plusmacher' (tax-maximizers) criticized by Sonnenfels and the development of the 'marginal utility' approach to taxation by Sax, Wieser, and Lindahl. The core problem addressed is finding the equilibrium between public and private needs, where the marginal utility of state services equals the marginal sacrifice of the taxpayer. [Ökonomische Grenzen und Steuerquellen]: Gerloff explores the economic limits of taxation across different income sources: labor, entrepreneurial profit, capital interest, and ground rent. He argues that taxing wages has a natural limit at the cost of social subsistence, while taxing entrepreneurial profit too heavily risks 'amputating the head' of the economy by stifling innovation. He notes that while ground rent could theoretically be taxed away entirely without stopping production, technical difficulties in separating it from other income types make this impossible in practice. [Psychologische und Technische Grenzen der Besteuerung]: This section analyzes the 'active' and 'passive' resistances to taxation. Active resistance includes tax avoidance, deception, and flight, which increase as tax rates rise. Gerloff discusses the 'fiscal-political' limits where the cost of collection outweighs the revenue. He cites Leroy-Beaulieu's view that 12-13% of income is an exorbitant tax burden and Helfferich's warning that excessive taxation breeds a 'selection of swindlers' (Schieber) while crushing the honest citizen. [Ökonomie hoher versus niedriger Steuern]: Gerloff weighs the theories of 'high tax economy' (Mac Culloch, Justi) against 'low tax economy'. Proponents of high taxes argue they stimulate labor and return to the economy; critics argue they destroy capital accumulation and private initiative. The author concludes that the correct measure is determined by the rational ranking of needs (Rangordnung der Bedürfnisse). He ends by quoting Montesquieu on the wisdom required to determine what to take from subjects and what to leave them. [Theorie der Steuermonopole: Begriff und Rechtsnatur]: Karl Theodor von Eheberg discusses the nature of state monopolies. He distinguishes between welfare monopolies (Post, Telegraphy) and fiscal (tax) monopolies. While legal scholars often view monopoly revenue as a 'price', Eheberg argues from a financial science perspective that it is a tax. The monopoly price consists of production costs, entrepreneurial profit, and a state-imposed surcharge that functions as an indirect consumption tax. [Formen und Wirkungen des Steuermonopols]: Eheberg details the types of monopolies (full vs. partial) and their application to goods like salt, tobacco, and alcohol. He analyzes the advantages (higher revenue, quality control, easier regulation) and disadvantages (bureaucratic inefficiency, lack of innovation, interference with private industry). He notes that monopolies are often easier to implement for trade than for production and discusses how the German spirits monopoly was facilitated by existing private cartels. [Zur Theorie der Steuerüberwälzung: Statische Grundlagen]: Richard Strigl introduces the theory of tax shifting (Überwälzung) using the model of a static economy. He defines the static economy as a closed circuit where production factors (labor, land, capital) are paid at cost and the social product is consumed without new capital formation. He uses supply and demand curves to demonstrate how a tax on production factors leads to higher costs for producers and lower net returns for sellers, effectively shifting the burden between owners of production means and consumers. [Überwälzung bei Einkommen- und Verbrauchssteuern]: Strigl examines the shifting of taxes on various stages of production and on income. He argues that while income taxes are generally not shifted, they can be if they alter the supply of labor or capital (e.g., workers demanding higher wages to maintain real income). For consumption taxes, the shift depends on the elasticity of demand and the 'law of diminishing returns' in production. The text establishes that any tax on a production stage tends to affect both pre-production stages and final product prices. [Steuerwirkungen in der dynamischen Wirtschaft]: Strigl shifts from static to dynamic economic analysis, focusing on the taxation of entrepreneurial profit and capital formation. He argues that a tax on pure entrepreneurial profit (surplus over cost) cannot be shifted because it doesn't change the marginal price-determining factors. However, such taxes have 'long-distance effects' (Fernwirkungen) by reducing the pool of capital available for reinvestment and weakening the incentive for competition, which normally drives the economy toward a static equilibrium. [Zusammenfassung der Überwälzungstheorie und Ausblick]: Strigl concludes his analysis by emphasizing the difference between static 'cost-element' taxes and dynamic 'surplus' taxes. He notes that in reality, taxes often hit a mix of economic categories (interest, rent, profit, wages) that legal tax definitions fail to distinguish. He stresses that the verification of shifting theory is difficult because taxes may initially be absorbed by temporary profits before becoming permanent cost elements. The chunk ends with the title of the next section by Edwin R. A. Seligman. [Introduction to the Social Theory of Public Finance]: Seligman introduces the fundamental problems of theoretical public finance, focusing on the relationship between the state and the individual. He argues that existing economic analysis has failed to grasp the depth of these connections and proposes a social theory of finance based on sociological principles, specifically analyzing the nature of common needs. [The Nature of Common Needs]: This section categorizes human needs into separate, reciprocal, and common needs based on how they are satisfied. Seligman argues that society arises from the increasing difficulty of securing economic goods, leading individuals to seek support. He distinguishes between 'reciprocal needs' satisfied through exchange (complementary activity) and 'common needs' satisfied through cooperation (united activity). [Psychological Transformation through Social Association]: Seligman defends the classification of needs based on their mode of satisfaction, arguing that the psychological character of a need itself changes when it is satisfied socially. He provides a table summarizing the relationships between types of satisfaction (unsupported vs. plural), the nature of the relationship, and the resulting activity (isolated, complementary, or united). [The Individual and the Association: Beyond the Organismic Theory]: Seligman explores the nature of the 'Verband' (association). He rejects both the view of the association as a mere sum of individuals and the 'organismic' theories of thinkers like Spencer and Bluntschli. Instead, he argues that the association is a real entity because it transforms the psychology of its members, replacing pure egoism with a sense of obligation, loyalty, and 'esprit de corps'. He critiques the radical individualism of Pareto and Lippmann, asserting that the association is the embodiment of common needs. [Categories of Association Activities and Principles of Contribution]: Seligman classifies the activities of associations into primary (satisfying common needs) and secondary (quasi-singular and quasi-separate). He discusses how costs are distributed, contrasting the principle of absolute equality or 'ability to pay' (for common needs) with the 'cost principle' or 'interest principle' (for specific services provided to members). He concludes that associations primarily exist for common benefits, with individual advantages being secondary factors. [Private and Public Associations: Categories and Definitions]: Mayer distinguishes between private and public associations based on the nature of the needs they satisfy. He categorizes private associations into seven types, ranging from intimate unions like marriage to professional and religious groups. He critiques the common terminology of 'collective needs' vs. 'individual needs' found in German and Italian literature (Sax, Mazzola), arguing that all association-based needs are collective in nature, and the true distinction lies in whether the satisfying medium is a private or public group. [Specific Characteristics of the Public Association (The State)]: This section defines the three positive characteristics of the public association (the state): Fundamentalism, Universalism, and Compulsion (specifically defined as the indissolubility of membership). Mayer argues that the state satisfies fundamental needs like the protection of life and property, which leads to its universal nature (encompassing all residents of a territory). Unlike private associations where membership is dissolvable, state membership is functionally indissoluble, which forms the true basis of state 'coercion'. [Negative Characteristics of Public Associations: Non-Reciprocity, Indivisibility, and Immeasurability]: Mayer introduces three negative characteristics of public associations: Non-reciprocity (the lack of a direct exchange relationship), Indivisibility (the inability to partition the benefits of state action among individuals), and Immeasurability (the inability to quantify the specific benefit an individual receives from fundamental state functions like police or justice). He concludes that these six features (three positive, three negative) define the unique nature of the state in contrast to private associations. [Quasi-Public Elements and Public Revenue Theory]: The text analyzes the nature of public revenues, distinguishing between 'quasi-public' revenues (prices and fees) and true public revenues (taxes). Mayer argues against the term 'quasi-private' for state income, suggesting 'quasi-public' instead for activities where the state acts like a business or provides specific services for a fee. He contrasts the 'interest principle' (dominant in prices/fees) with the 'ability-to-pay principle' (dominant in personal taxes), mapping how different revenue types fall along this spectrum. [The Social Nature of Fiscal Science and the Individual-State Relationship]: This section argues that fiscal science is a branch of social science rooted in the individual's membership in a collective. It resolves the debate over whether the state or the individual is the subject of fiscal science by defining the state as a transformed association of individuals whose needs become collective through association. Fiscal science thus focuses on the fiscal relations between individuals in their public capacity. [Fiscal Science as Political Science and the Classification of Collective Activities]: The author positions fiscal science as both a part of political economy and political science, providing a criterion to distinguish between private and public associations based on fiscal relations. It further analyzes the activities of the collective, distinguishing between primary goals (satisfying common needs) and subordinate or 'quasi-singular' activities that address specific needs of the association or its members. [The Social Theory of Public Finance and the Conflict of Principles]: This concluding section of the previous essay discusses how the social theory of public finance reconciles the conflict between the 'interest principle' and the 'ability to pay principle'. It argues that neither is absolute, but rather each has its own domain and they influence one another depending on specific conditions. [The Theory of Progressive Taxation]: A comprehensive analysis of progressive taxation by Edgard Allix. The essay distinguishes between social-political theories (aimed at wealth redistribution or class interests) and fiscal theories (aimed at tax equality). It explores the 'Compensation Theory', which uses progressive direct taxes to offset regressive indirect taxes, and the 'Theory of Absolute Progression' based on the principle of equal sacrifice. Allix utilizes marginal utility theory to justify progression but notes its practical limitations and the inherent empiricism in setting tax rates. The text also examines the application of progression to income, turnover, and inheritance taxes, concluding that while theoretically imperfect, progression is a necessary tool for approximate justice in modern states. [Modern Tendencies of Italian Theory and Practice in Inheritance Taxation]: Luigi Einaudi discusses two contrasting Italian approaches to inheritance tax: Rignano's theory and De Stefani's 1923 reform. Rignano proposed a tax graduated by the number of transfers (generations) to encourage saving while eventually nationalizing wealth. De Stefani, under the fascist government, abolished inheritance tax within the family to protect the 'historical continuity of the nation' and stimulate capital formation. Einaudi critiques the feasibility of Rignano's plan, noting it might encourage consumption over saving, and explains the ethical and economic rationale behind the Italian family-based tax exemption. [Taxes, Loans, and Currency Expansion as Means of Extraordinary Revenue]: Opening of a new section by Marco Fanno regarding extraordinary state revenues, including taxes, loans, and the expansion of the money supply. [Steuern, Anleihen und Vermehrung des Umlaufes als Mittel außerordentlicher Einnahmen]: Marco Fanno analyzes the three primary methods for a state to secure extraordinary revenue: extraordinary taxes, public loans, and the expansion of the money supply. He establishes a theoretical framework based on marginal utility, where individual income is divided between public needs, private consumption, and savings. Fanno argues that while taxes and loans initially shift the equilibrium between present and future consumption, they differ in their psychological and economic impact. He cites numerous classical and neoclassical economists to support his definitions of savings and interest rates. [The Economic Effects of Extraordinary Taxes, Loans, and Inflation]: This section examines how different revenue methods impact the economy. Extraordinary taxes reduce both consumption and savings to maintain utility equilibrium. Voluntary loans primarily draw from existing savings rather than reducing current consumption, as the future tax burden for interest payments is often underestimated by citizens. Currency expansion (inflation) is characterized as a 'veiled general consumption tax' that reduces real income and forces a reduction in consumption. Fanno notes that while economists generally view inflation as the worst option due to its regressive nature, there is debate regarding the freedom of choice between these three instruments. [Limits of Consumption Reduction and the Transformation of Taxes into Inflation]: Fanno discusses the psychological and economic limits to reducing private consumption. When extraordinary taxes exceed the amount citizens are willing to cut from their consumption, they resort to loans. If the total state demand exceeds the available voluntary savings in the economy, banks must provide credit through inflation. Thus, excessive taxation naturally transforms into currency inflation (forced savings) as the state uses new paper money to acquire goods that citizens refused to surrender voluntarily. There is a definitive limit to fiscal productivity beyond which even inflation cannot increase state revenue. [The Limits of Public Loans and the Necessity of Paper Money Inflation]: The final section explores the limits of public loans. Similar to taxes, if loan emissions exceed voluntary savings, they are covered by bank credits, leading to credit inflation. Fanno explains the calculation of advantage for subscribers using bank loans, noting that as the volume of such loans increases, interest rates rise and the profitability of the subscription falls to zero. When the state's financial needs exceed the combined maximum capacity of taxes and loans (even those supported by credit inflation), the direct issuance of paper money becomes an unavoidable economic necessity. [The Limits of Extraordinary Revenue: Taxes, Loans, and Inflation]: This segment concludes the discussion on the limits of state financing through taxes and loans. It argues that when extraordinary expenditures exceed the sum of voluntary savings and reducible private consumption, inflation becomes a necessity to force consumption below those limits. It compares credit inflation and direct paper money inflation, concluding that credit inflation is preferable because it is more easily liquidated as debtors save to repay bank loans. The choice between these instruments is dictated by the magnitude of the expenditure, illustrating the dominance of economic laws over political will. [Controversial Questions in Tax Theory: The Individualistic Perspective]: Erik Lindahl introduces an analysis of tax theory based on marginal utility, responding to critics of his individualistic approach. He defends the view that state services provide value to individuals rather than just a metaphysical 'state organism.' He argues that while the total utility of the state is immeasurable, the marginal utility of specific expenditure increases can be quantified in monetary terms by observing individual choices between different levels of public service and taxation. This individual valuation includes both personal material benefits and altruistic interests in general welfare. [Determining the Level and Distribution of Taxation]: Lindahl explores how individual valuations determine the total level of state spending and the distribution of the tax burden. He critiques the organic state theory's inability to sum subjective sacrifices, proposing instead that financial calculations are performed from the perspective of individuals or representative average citizens. He argues that the solution to the absolute level of taxation inherently involves its distribution, as political consensus (through parliaments or elections) reflects the point where individual marginal utility matches the tax sacrifice. [Economic Principles of Tax Differentiation and Joint Costs]: Lindahl draws a parallel between tax distribution and private sector price differentiation for products with joint costs (e.g., cotton and cottonseed). He argues that because public services are 'joint goods' whose value varies among citizens based on income and interest, taxing according to ability to pay is an application of the same economic laws that govern market pricing for joint products. This differentiation allows for an expansion of production (or state activity) that benefits all parties by aligning prices with subjective valuations. [The Interest Principle and Political Power in Taxation]: Lindahl elaborates on the 'interest principle' as the primary norm for taxation, where tax burdens are negotiated to reach an equilibrium where all parties agree on the level of expenditure. He acknowledges that real-world taxation deviates from pure individual valuation due to technical limitations and unequal political power. However, he maintains that even shifts in tax pressure (e.g., from indirect to progressive direct taxes) reflect the valuations of the currently dominant political classes. He argues that the interest principle provides a clearer foundation for the 'ability to pay' principle and integrates the questions of tax level and distribution. [The State of Socialist Theory in Germany: Marxism and its Critics]: Franz Oppenheimer reviews the landscape of socialist theory in Germany, noting that leading Marxist theorists (Kautsky, Hilferding, Luxemburg) are often of non-German origin. He summarizes Rosa Luxemburg's theory of accumulation, which posits that capitalism requires 'non-capitalist spaces' to realize surplus value, leading inevitably to imperialism. Oppenheimer critiques the Marxist focus on 'anarchy of production' and their failure to recognize the agrarian roots of economic development. He introduces his own 'liberal socialism,' which emphasizes the sociological origin of the state through conquest and the resulting monopoly on land as the true source of class exploitation. [Critique of Marxian Value and Surplus Value Theory]: The author critiques Marx's value theory as being postulated rather than deduced, arguing it fails as a comprehensive theory because it only explains static competition prices for reproducible goods. He identifies a logical error in Marx's treatment of labor power, where the distinction between the sale of labor substance and the rental of labor services is blurred, leading to a flawed surplus value doctrine. [Capital Accumulation and the Transition to the Collectivist State]: A critique of Marx's laws of capital accumulation and the inevitable transition to a collectivist state. The author argues Marx overlooks the possibility of wages rising enough for workers to accumulate capital themselves and demonstrates that Marx's theory of industrial concentration fails when applied to agriculture due to the law of diminishing returns and the resilience of the peasantry. [Synthesis of Liberalism and Socialism: The Role of Land Monopoly]: The author presents his own theory, arguing that the persistence of capitalism is not due to machinery but to the 'land barrier' (Bodensperre) created by large estates. He proposes that removing monopolies would create true free competition, leading to a synthesis of liberalism and socialism where income differences are based solely on qualification, achieving both justice and efficiency. [Critique of Conrad Schmidt's Economic System]: A sharp critique of Conrad Schmidt's economic theories. The author accuses Schmidt of confusing long-term value with market prices and failing to understand that Marx's value theory was intended primarily to derive surplus value. He mocks Schmidt's 'priestly' tone and his failure to explain the mechanism of profit without assuming class divisions. [Eduard Heimann and the Theory of Ground Rent]: The author addresses the work of Eduard Heimann, acknowledging some of Heimann's criticisms while clarifying his own stance on ground rent. He admits to terminological inconsistencies in earlier editions of his work regarding the distinction between feudal rent and differential rent, and clarifies his views on land speculation within static economic models. [The State of Theoretical Socialism in Germany and the Influence of Oppenheimer]: A concluding overview of socialist theory in Germany, noting that original development has largely moved to Russia. The author reviews a commemorative publication for Karl Kautsky, finding little original theory except for a contribution by Benedikt Kautsky, whom the author claims was influenced by his own ('Oppenheimerian') ideas. [Economic Theories of Contemporary French Socialism]: Edmond Laskine examines why French socialism has contributed relatively little to formal economic theory compared to Germany. He argues that French socialism is primarily ethical, political, and tactical, focusing on issues like the general strike (Sorel) or government participation rather than rigorous economic analysis of value or capital. [Value Theory and Revisionism in French Socialism]: Laskine discusses the attempts to revise French socialist doctrine, highlighting Albert Aftalion's rejection of the labor theory of value in favor of utility-based value (influenced by the Austrian School). Aftalion argues that exploitation stems from private property and monopoly rather than the production process itself, leading to a theory of 'social surplus value' that supports social reform over radical socialism. [French Socialist Perspectives on Production, Finance, and Fiscal Policy]: An overview of French socialist contributions to specific economic fields. It covers Adolphe Landry's production theory, François Simiand's sociological study of wages, and the fiscal debates of the 1920s involving Léon Blum. The author notes a lack of scientific rigor in socialist finance, which often relies on empirical formulas like the preference for direct taxation. [Historical Origins of Italian Socialism and Early Thinkers]: Arturo Labriola traces the history of socialist thought in Italy from medieval religious movements (Franciscanism) to early utopians like Campanella and the revolutionary Vincenzo Russo. He explains that Italy's broken historical development and lack of industrialization delayed the emergence of a cohesive socialist doctrine despite a long history of class conflict. [Carlo Pisacane and the Failure of Early Italian Socialist Theory]: A focus on Carlo Pisacane, who developed a consistent socialist critique of property rights during the Risorgimento. Labriola explains that Pisacane's ideas failed to gain traction because Italy lacked an industrial proletariat and the national movement (led by Mazzini) prioritized political unity over social revolution. [Positivism, Criminology, and the Rise of Reformist Socialism in Italy]: Labriola describes how Italian socialism eventually emerged through the lens of Positivism and criminology (Lombroso, Ferri, Turati). This led to a 'Reformist' Marxism that was essentially a positivist policy for social reform. He also notes the later reaction of revolutionary syndicalism (Sorelism) against this static, positivist interpretation. [The Theoretical Debate on Marx's Capital in Italy]: An account of the intense theoretical debates in Italy following the publication of Volume III of Marx's 'Capital'. Thinkers like Loria, Pareto, and Croce analyzed the consistency of Marx's value and price theories. Labriola laments that this 'magnificent bloom' of economic study was cut short by the rise of Fascism and the practical careerism of the Italian youth. [Neo-Marxism and Agrarian Theory in Russia]: Dymitri Iwantzoff introduces Russian Neo-Marxism, focusing on its unique agrarian theory. Russian theorists argue that the peasant economy is a non-capitalist organization 'sui generis' governed by a 'labor-consumer balance' rather than profit. This internal harmony and the peasant's ability to accept lower returns make the small farm highly resilient against capitalist competition. [Russian Theories of Socialist Construction and the Transition Period]: Iwantzoff analyzes the Russian Communist doctrine of socialist construction. Unlike the transition from feudalism to capitalism, socialism does not 'mature' within the old order but must be consciously built. This leads to theories of 'primitive socialist accumulation' and a view of the transition as a long, painful process where politics must forcibly break economic inertia. [Theses on the Transition from Capitalism to Socialism]: This section outlines the Russian communist school's perspective on the transition to socialism. It argues that socialism does not emerge automatically within capitalism but must be consciously built after a revolutionary collapse. The text details the objective and subjective conditions for revolution, emphasizing that it is not tied to a specific stage of economic maturity but rather to the concentration of production and the organization of the proletariat. It challenges the necessity of a proletarian majority and suggests revolutions may start in the 'weakest links' of the capitalist system. [The Economic Consequences of Revolution: Anarchy and Reconstruction]: This segment discusses the immediate economic aftermath of a proletarian revolution, characterized as an 'objectively inevitable' stage of anarchy and the collapse of productive forces. It attributes this to the proletariat's lack of organizational experience and the resistance of technical intellectuals. However, it posits that through the dictatorship and the 'cleansing' of the collective mind, the proletariat can eventually reorganize the economy, leading to a new social and economic order and the beginning of the 'original accumulation' phase of socialism. [The Economic Theory of the Transition Period and Socialist Accumulation]: This section discusses the challenges of the transition period from capitalism to socialism, focusing on the need for the proletarian state to concentrate material resources. It explores the concept of 'socialist primitive accumulation,' where the state must extract surpluses from non-nationalized sectors (like agriculture and small crafts) to fund the technical reorganization of industry. The text highlights the use of monopoly power and price policy as tools for this accumulation, while citing thinkers like Preobraschenski and Lenin regarding the Russian experience as a model for other nations. [Critical Perspectives on Socialist Construction: Masslow and Brutzkus]: This segment presents critical analyses of socialist economic organization by P. P. Masslow and B. D. Brutzkus. Masslow argues that the success of socialism depends on maintaining a high rate of accumulation rather than just redistribution, warning against unproductive consumption and bureaucracy. Brutzkus provides a comprehensive critique, arguing that without market prices, determining the rentability of enterprises is impossible, leading to a 'socialist super-anarchy' characterized by forced labor, lack of individual responsibility, and the destruction of consumer freedom. [What General Economic Theory Needs Today]: Edwin Cannan reflects on the failure of economic theory to influence public policy during and after World War I. He argues that instead of further refinement of complex theses, the priority should be the popularization of elementary economic principles. Cannan proposes three reforms: clarifying technical terminology to match common usage, replacing the traditional nationalist 'production and distribution' framework with a global individual-centered model, and improving the quality of elementary economic education at universities. [Translator List and Name Index]: A list of translators for the various international contributions in the volume, followed by an extensive alphabetical index of names (A-Z) mentioned throughout the work, including major figures like Marx, Ricardo, Smith, and contemporary researchers. [Subject Index (Sachverzeichnis)]: A comprehensive subject index covering economic terms, theories, and concepts discussed in the volume, ranging from 'Agrartheorie' to 'Zyklus'. [Series Overview: Die Wirtschaftstheorie der Gegenwart]: An overview of the four volumes comprising 'Die Wirtschaftstheorie der Gegenwart' edited by Hans Mayer. It lists the contributors and topics for each volume, covering the state of research in various countries, value and price theory, income formation, business cycles, international trade, finance science, and the economic theory of socialism.
Title page and comprehensive list of contributors for the fourth volume of 'Wirtschaftstheorie der Gegenwart' (Economic Theory of the Present), edited by Hans Mayer. The volume focuses on business cycles, international trade, public finance, and the economic theory of socialism.
Read full textDetailed table of contents for Volume IV, listing major sections: Business Cycles and Crises, International Trade, Main Problems of Public Finance, and Economic Theory of Socialism, including an appendix by Edwin Cannan.
Read full textEmil Lederer analyzes the nature of economic crises, arguing that all endogenous theories eventually lead to a 'disproportionality theory'. He explores how uneven price elasticity, particularly the lag between wages/fixed incomes and profits, drives the cycle. He emphasizes that rapid capital accumulation necessarily involves a relative decline in mass purchasing power, creating a gap between production capacity and consumption. He also discusses the role of technical progress in creating differential profits and the necessity of credit expansion for realizing business cycles.
Read full textCarl Snyder provides a historical and methodological overview of business cycle research in the USA. He traces the evolution from early currency-focused theories to modern statistical analysis. Key figures discussed include Samuel Benner (early periodicity), Wesley Clair Mitchell (comprehensive analysis of profit-driven cycles), Henry Moore (mathematical/periodogram methods), and Warren Persons (Harvard Barometer). Snyder highlights the role of the Federal Reserve and the development of trade volume indices, concluding that while forecasting remains difficult, increased statistical control and central banking have reduced the intensity of financial crises.
Read full textJean Lescure presents a theory of crises centered on the production of capital goods. He argues that a decline in expected profits, caused by production costs rising faster than selling prices (especially in heavy industry and transport), is the primary trigger for downturns. He critiques the contemporary 'monetary' approach to cycle stabilization via discount rates, arguing that credit restriction often kills the recovery rather than preventing the crisis. He suggests that rational price policies by trusts and cartels (lowering prices during depressions to stimulate demand) are more effective than central bank intervention.
Read full textRichard Schüller examines trade policy through the lens of production costs and economic organization. He critiques classical free trade assumptions by highlighting that production factors are not always fully utilized and that individual firms (not just whole sectors) compete based on specific cost structures. He analyzes the impact of tariffs on production versus consumption and discusses modern phenomena like dumping, international cartels, and the role of organized labor/fixed prices in slowing economic adjustment after currency stabilization. He concludes that international conventions and industrial organizations are increasingly replacing traditional tariff policy.
Read full textL.V. Furlan argues that location theory (Standortstheorie) is the core of world economic studies. He uses graphical methods (arrow diagrams of trade flow) to identify global economic centers—primarily Great Britain, the USA, and Germany in the pre-war era. He discusses the shift in financial supremacy from London to New York and attempts to measure the intensity of global economic integration by comparing trade volume to national currency circulation. He notes that while trade is the largest component of international relations, financial and 'invisible' transfers (tourism, remittances) are significant.
Read full textExplores the definition of national wealth as a relative concept. It distinguishes between private property and national assets, noting that the state acts as a coordinator of diverse private interests rather than a singular owner.
Read full textDefines the internal economic balance (production vs. consumption) and the external balance (imports vs. exports). It details how raw materials, value-added processes, and different types of consumption (technical vs. personal) are accounted for in these balances.
Read full textTraces the historical evolution of balance of trade and payment theories. It critiques Mercantilist focus on gold, Physiocratic focus on agriculture, and the transition to modern concepts of payment balances (Zahlungsbilanz) and the author's own concept of the 'Wirtschaftsbilanz' (Economic Balance).
Read full textApplies marginal utility theory to international transfers, arguing that value is a psychological construct distinct from physical matter. It categorizes transfers into visible goods, invisible services (patents, banking), and securities (payment vs. credit instruments), while distinguishing between bilateral and unilateral transfers.
Read full textAnalyzes international trade as a form of natural exchange mediated by private payment instruments (clearing). It discusses the formation of exchange rates (Wechselkurse), the difference between mint parity and market parity, and how paper money value is estimated internationally.
Read full textExamines how the value of goods changes when moving between different national markets. It critiques the idea of a self-balancing global market, highlighting barriers like transport costs, tariffs, and dumping. It emphasizes that the economic impact of imports depends on whether they are for consumption or production.
Read full textProvides a detailed systematic classification of the external economic balance (äußere Wirtschaftsbilanz). It categorizes items into three main groups: Trade in Goods (Warentausch), Capital Transfers (Kapitalsübertragungen), and Migrations (Wanderungen), listing specific active and passive components for each.
Read full textDiscusses the complexities of measuring trade. It critiques the standard 'Handelsbilanz' for mixing capital transfers with goods exchange and explains the difficulties in determining 'border values' (Grenzwerte). It also challenges the law of diminishing returns in industry and the assumption of price equalization across borders.
Read full textAnalyzes the movement of capital between nations. It distinguishes between lending capital (fixed interest) and entrepreneurial capital (variable profit), noting that capital markets are often segmented by national borders due to legal, currency, and political risks. It also discusses the strategic use of capital exports to promote national exports.
Read full textExamines the economic consequences of the movement of people. It distinguishes between consumers (tourists, pensioners) and producers (migrant workers). The text discusses the loss of human capital for the home country vs. the benefit of remittances, and the potential disruption of labor market equilibrium in the host country.
Read full textThis section distinguishes the external balance of claims (Forderungsbilanz) from the balance of payments. It defines the former as a snapshot of mutual obligations (assets and debts) between a country and the outside world at a specific point in time, rather than a flow of transactions. The text discusses Eduard Kellenberger's proposal to call it an 'international wealth balance' and notes the statistical difficulties in calculating these values precisely, leading to a general classification of creditor and debtor states.
Read full textA comprehensive analysis of the relationship between exchange rates and the balance of payments. It explains how international payments are settled via bills of exchange and how rates fluctuate between gold points under a gold standard. The text critiques the 'Purchasing Power Parity' theory (Cassel, Dalberg) and the 'State Theory of Money' (Knapp), arguing that exchange rates are influenced by both the balance of payments and the internal value of money. It also describes the role of speculation, arbitrage, and central bank intervention (discount and foreign exchange policy) in stabilizing rates.
Read full textJacob Viner introduces the history of foreign trade theory in the United States. He notes that until the late 19th century, American contributions were largely dogmatic repetitions of English classical theory (Mill) or naive protectionist arguments. He highlights the pivotal work of F.W. Taussig and his students, who moved toward inductive analysis and realistic data usage to update the classical tradition for modern banking and currency systems. Key debates mentioned include gold movements and the relationship between income, prices, and trade gains.
Read full textThis section examines the theoretical mechanism by which international trade equilibrium is restored after a disturbance. It traces the evolution of the theory from David Hume's 1752 insights to the 'Ricardian' theory of gold movements, which remains dominant in Anglo-American economics. The author distinguishes between disturbances caused by monetary changes (inflation/deflation) and those caused by commercial factors like international loans. A central debate is highlighted between the Thornton-Mill view—which emphasizes a sequence of exchange rate shifts, gold flows, and relative price changes—and Ricardo's more abstract view of immediate demand shifts. The text also incorporates modern refinements by Taussig and others regarding the role of domestic versus traded goods prices and the mediation of the banking system in price level adjustments.
Read full textAn analysis of the practical application of transfer theory to reparations and inter-allied debts, specifically regarding Germany. The author warns that the smooth functioning of the transfer mechanism depends on factors like tariff barriers and the elasticity of demand. He emphasizes the need for flexible payment schedules for government debts to prevent credit crises and gold drains during periods of economic strain.
Read full textThis section explores how international balances adjust under inconvertible paper currency regimes. Unlike the gold standard, adjustment here relies primarily on exchange rate fluctuations rather than gold movements. The author critiques Gustav Cassel's Purchasing Power Parity (PPP) theory, arguing it is an incomplete explanation because exchange rates are influenced by many factors beyond relative price levels, such as capital transactions and speculation.
Read full textThe section discusses the theory of international values, focusing on comparative costs and the 'terms of trade'. It critiques the standard price-comparison model by introducing Taussig's distinction between 'net barter' and 'gross barter' terms of trade. The author argues that real productivity and income levels are better indicators of a nation's gain from trade than simple price indices. It also addresses the inclusion of services and interest payments in trade balances and mentions F.D. Graham's mathematical refinements to classical theory.
Read full textTitle and author attribution for the following section on international capital movements under stable and devalued currencies.
Read full textProfessor Attilio Cabiati analyzes the complex interactions within international markets, focusing on how goods, gold, and capital move to restore equilibrium following price shifts. He argues that the distribution of savings across borders, managed by banks, aims for maximum productivity, which is achieved when net interest rates are equalized between financing and financed nations. The section emphasizes that the automaticity of equilibrium in countries with stable currencies often leads theorists to underestimate the role of the trade balance, which is actually strictly coordinated with short-term capital markets and foreign exchange markets through the principle of comparative costs.
Read full textThis section details the internal economic adjustments that occur when the balance of payments is disturbed. It describes the tension between short-term and long-term interest rates and how the market capitalizes these differences, affecting stock values. Cabiati explains how export-oriented industries attract new capital during these shifts, leading to a new equilibrium in the balance of payments characterized by revised exchange rates, discount rates, and interest levels. He warns that attempting to restore equilibrium through a single country's forces alone can lead to destructive economic crises.
Read full textCabiati explores how the length of the productive cycle (from raw material acquisition to final payment) influences international capital movements. He highlights the interdependence of banks across different nations, where unforeseen changes in one country's cycle can cause immobilization in another. Bank policy is framed not as preventing price changes, but as smoothing market fluctuations. The text also discusses how scientific discoveries requiring capital intensification can lengthen the productive cycle, necessitating expanded credit from correspondent banks to prevent rising interest rates from paralyzing progress. Reference is made to R.G. Hawtrey's studies on population growth and production.
Read full textThe author outlines four ways a persistent creditor nation can utilize its surplus: reducing interest rates to spur industry, purchasing gold, increasing imports, or investing in foreign securities. Foreign investment is identified as the most effective method for absorbing savings and creating a reserve against future crises. The section introduces a comparison between how economic equilibrium is restored in 'financing' versus 'financed' markets, noting that in financed countries, interest rate changes primarily affect new contracts and lead to increased competition and eventual export pressure.
Read full textCabiati contrasts the power of financing markets with financed ones. In financing markets, the banking system controls both imports and exports, allowing discount policy to immediately influence domestic trade and industrial production. Conversely, in financed countries, the central bank has less immediate control, often necessitating larger gold or foreign exchange reserves—leading to the 'Gold Exchange Standard'. The text references Hawtrey's 'Currency and Credit' to explain how financing mechanisms differ when transactions are settled in the currency of the financing center.
Read full textA detailed technical analysis of bank credit and the independence of deposit banks from central note-issuing institutes. Cabiati compares the American banking situation before and after the introduction of the Federal Reserve System. He argues that the Federal Reserve provided the necessary elasticity to handle seasonal currency demands through bank credit rather than disruptive gold movements and extreme discount rate fluctuations. This section also touches upon the 'managed currency' debate and the role of international savings movements in maintaining the balance of payments.
Read full textThe author discusses the strategic advantages of being an international financial center. Capital export is not just a financial transaction but a means of expanding national influence through infrastructure projects (railroads, electrical works) in developing nations. While thinkers like Stamp and Hawtrey question if capital export always benefits the home nation's general welfare, Cabiati highlights the cumulative advantages: information networks, currency authority, and the ability to liquidate foreign assets during wartime to protect domestic currency stability.
Read full textThe final section of the chunk examines how crises propagate differently in financing versus financed countries. It highlights London's historical role as the world's 'clearinghouse' and the necessity of its return to gold parity. Cabiati then pivots to the problem of international debt and protectionism, specifically the relationship between Europe and the United States. He argues that for debtor nations to repay loans, creditor nations (like the US) must eventually lower their tariffs, as high duties distort exchange conditions and force the international price of goods to adjust inefficiently.
Read full textThis section explores the technical mechanisms by which capital moves between countries, arguing that capital movement is ultimately translated into the movement of goods. It details how a country importing savings uses them for consumption or productive capital, and how domestic bank credit functions to facilitate production cycles. The text explains that if domestic funds are insufficient, foreign savings are utilized, which eventually leads to increased imports as domestic prices rise and attract foreign competition.
Read full textThe author examines the requirements for a country to export savings, noting that it must occur through goods, services, or gold. To send bills of exchange without damaging the exchange rate, the exporting country must have a surplus in its balance of payments derived from increased exports or decreased imports. The choice between these methods depends on comparative costs and the specific needs of the importing country.
Read full textThis segment analyzes specific scenarios of international financing and their impact on exchange rates and interest rates. It discusses how long-term credits and the issuance of stocks or bonds by banks lead to complex arbitrage operations. The author illustrates how price differences for the same security in different markets (e.g., London and Milan) trigger corrective movements that restore equilibrium.
Read full textThe text details two primary cases of capital transfer: one where the exporting country reduces its own imports to provide savings, and another where it increases exports of capital goods like machinery. It discusses the resulting shifts in industrial focus and trade directions in both countries. The author also addresses the 'colonial' case where capital export might lead to a future reduction in the exporter's trade as the recipient becomes self-sufficient.
Read full textThe author discusses indirect financing, where capital flows through intermediary countries due to political or cultural barriers (e.g., Western banks financing China through Japan). It contrasts the high elasticity of international savings demand in developed markets with the lower elasticity in markets dominated by small savers. Improvements in credit technology are noted to reduce friction and equalize interest rates globally.
Read full textReferencing John Stuart Mill, the author argues that capital export is beneficial if it follows the principle of comparative costs. While it may cause initial local losses due to rising interest rates, the total productivity of the combined nations increases. This process fosters global interdependence and a more efficient territorial division of labor, ultimately raising national income through dividends and expanded trade.
Read full textThis section outlines how a temporary increase in interest rates caused by capital export triggers various market forces to restore equilibrium. These include shortening production cycles, reducing security prices to attract foreign buyers, increasing savings due to lower consumption, and shifting industrial focus toward international markets. The author notes that international competition usually prevents excessive export from a single market, except in crisis cases.
Read full textThe author highlights the difficulty of statistically tracking capital movements due to the complex, indirect routes they take through various markets and arbitrage operations. He emphasizes that trade, capital, and labor movements are not isolated events but part of a continuous global flow driven by profit motives. He warns that protectionism and state intervention destroy the wealth generated by this dense network of exchange.
Read full textDrawing on David Ricardo, the author argues that 'capital' itself is not exported; rather, rights to use capital are granted, resulting in the export of goods and services. Capital export requires a temporary restriction of domestic consumption in the financing country to allow for the production of capital goods for the recipient. The section explains how banks facilitate this through deposits and securities, and warns that excessive credit expansion leads to inflation and trade imbalances.
Read full textThis section addresses the challenges of capital movement in the post-WWI era of unstable currencies. It discusses how market participants seek guarantees against exchange rate risks. Using the Italian Lira as an example, the author describes the cumulative effects of speculation: exporters delay repatriating foreign currency while importers rush to buy it, both of which accelerate the currency's decline and lead to a new, higher price level for goods.
Read full textThe author analyzes the behavior of importers and exporters during currency fluctuations, specifically how they use forward contracts and reports to manage risk. When expectations of currency appreciation or depreciation shift suddenly, it causes a 'revirement' where both groups move in the same direction, overwhelming the banks. This leads to increased foreign debt and a stabilization of exchange rates at disadvantageous levels, which in turn drives up domestic price indices.
Read full textThe final section of the chunk evaluates the effectiveness of raising the official discount rate to protect a depreciating currency. While this policy works under a gold standard, it is less effective with a depreciated currency because the risk of further devaluation outweighs the interest premium. High interest rates may harm domestic industry and trade without stopping the currency's fall, as speculators simply look for foreign loans to cover their positions.
Read full textThis section analyzes the structural complications in the capital market following World War I. It details how increased industrial capacity, chaotic price situations, and the destruction of international trade relations necessitated larger amounts of liquid capital while the war simultaneously depleted capital reserves. It also discusses the loss of control by central banks over circulation and the inability of deposit banks to assess international demand due to speculative pressures and inflation.
Read full textA theoretical comparison of inflation and deflation, arguing they are analogous processes with opposite signs. The author explains how international speculators exploit currency fluctuations in both scenarios, leading to a drain on the national economy. Through detailed examples of currency trading (Pounds vs. 'x' currency), the text demonstrates that systematic state intervention often fails to punish speculators, instead providing them with low-risk profit opportunities at the expense of domestic industry and labor.
Read full textThis segment examines the effects of currency instability on import and export balances. It challenges the common assumption that deflation always harms exports, showing that during the process of deflation, exporters and foreign importers may accelerate trades to lock in favorable rates. Using statistical data from Italy in 1926, it illustrates the divergence between domestic purchasing power and international exchange value (Gold vs. Paper Lira), concluding that both inflation and deflation create a labile economic equilibrium.
Read full textThe text discusses the instability of the balance of payments under depreciated currencies. It argues that industrial equilibrium depends on a dual currency value (higher domestic, lower foreign), and that fiscal order or bank credit alone cannot stop currency depreciation if production is built on this disparity. It describes a cyclical crisis where stabilization leads to rising domestic prices, reduced exports, and eventual sudden jumps in exchange rates to cover accumulated foreign debts.
Read full textAn analysis of foreign loans in countries with stable versus depreciated currencies. In stable systems, loans for modernization lead to lower costs and long-term balance. In depreciated systems, loans are riskier due to unpredictable repayment values in gold. The author warns that loans in a deflationary period can ruin debtors as asset values drop faster than debts, and in inflationary periods, they may merely fuel over-investment in 'real values' (Sachwerte) rather than productive technical cycles.
Read full textThis section examines the role of central banks (Emissionsinstitute) during currency stabilization. It critiques the 'pegging' of currencies and discusses the 'circulatory disease' where a gap persists between long-term and short-term interest rates. It references the German Reichsbank's policies in 1926-1927 and Hjalmar Schacht's theories. Finally, it touches on the global gold shortage and the shift toward the 'Gold Exchange Standard', where central banks hold reserves as assets in the US Federal Reserve rather than physical metal.
Read full textWilhelm Gerloff begins a treatise on the limits of taxation. He distinguishes between formal prerequisites (legal and administrative organization) and material prerequisites (productivity of labor). He argues that taxes are only sustainable if the social product exceeds the private existence needs of the population. Taxation is defined as an economic phenomenon subject to specific conditions of the private economy's capacity to generate surplus income.
Read full textA historical overview of the limits of taxation, from the moral boundaries set by Church Fathers (Augustine, Ambrose) to the subjective value theories of the late 19th century. Gerloff discusses the 'Plusmacher' (tax-maximizers) criticized by Sonnenfels and the development of the 'marginal utility' approach to taxation by Sax, Wieser, and Lindahl. The core problem addressed is finding the equilibrium between public and private needs, where the marginal utility of state services equals the marginal sacrifice of the taxpayer.
Read full textGerloff explores the economic limits of taxation across different income sources: labor, entrepreneurial profit, capital interest, and ground rent. He argues that taxing wages has a natural limit at the cost of social subsistence, while taxing entrepreneurial profit too heavily risks 'amputating the head' of the economy by stifling innovation. He notes that while ground rent could theoretically be taxed away entirely without stopping production, technical difficulties in separating it from other income types make this impossible in practice.
Read full textThis section analyzes the 'active' and 'passive' resistances to taxation. Active resistance includes tax avoidance, deception, and flight, which increase as tax rates rise. Gerloff discusses the 'fiscal-political' limits where the cost of collection outweighs the revenue. He cites Leroy-Beaulieu's view that 12-13% of income is an exorbitant tax burden and Helfferich's warning that excessive taxation breeds a 'selection of swindlers' (Schieber) while crushing the honest citizen.
Read full textGerloff weighs the theories of 'high tax economy' (Mac Culloch, Justi) against 'low tax economy'. Proponents of high taxes argue they stimulate labor and return to the economy; critics argue they destroy capital accumulation and private initiative. The author concludes that the correct measure is determined by the rational ranking of needs (Rangordnung der Bedürfnisse). He ends by quoting Montesquieu on the wisdom required to determine what to take from subjects and what to leave them.
Read full textKarl Theodor von Eheberg discusses the nature of state monopolies. He distinguishes between welfare monopolies (Post, Telegraphy) and fiscal (tax) monopolies. While legal scholars often view monopoly revenue as a 'price', Eheberg argues from a financial science perspective that it is a tax. The monopoly price consists of production costs, entrepreneurial profit, and a state-imposed surcharge that functions as an indirect consumption tax.
Read full textEheberg details the types of monopolies (full vs. partial) and their application to goods like salt, tobacco, and alcohol. He analyzes the advantages (higher revenue, quality control, easier regulation) and disadvantages (bureaucratic inefficiency, lack of innovation, interference with private industry). He notes that monopolies are often easier to implement for trade than for production and discusses how the German spirits monopoly was facilitated by existing private cartels.
Read full textRichard Strigl introduces the theory of tax shifting (Überwälzung) using the model of a static economy. He defines the static economy as a closed circuit where production factors (labor, land, capital) are paid at cost and the social product is consumed without new capital formation. He uses supply and demand curves to demonstrate how a tax on production factors leads to higher costs for producers and lower net returns for sellers, effectively shifting the burden between owners of production means and consumers.
Read full textStrigl examines the shifting of taxes on various stages of production and on income. He argues that while income taxes are generally not shifted, they can be if they alter the supply of labor or capital (e.g., workers demanding higher wages to maintain real income). For consumption taxes, the shift depends on the elasticity of demand and the 'law of diminishing returns' in production. The text establishes that any tax on a production stage tends to affect both pre-production stages and final product prices.
Read full textStrigl shifts from static to dynamic economic analysis, focusing on the taxation of entrepreneurial profit and capital formation. He argues that a tax on pure entrepreneurial profit (surplus over cost) cannot be shifted because it doesn't change the marginal price-determining factors. However, such taxes have 'long-distance effects' (Fernwirkungen) by reducing the pool of capital available for reinvestment and weakening the incentive for competition, which normally drives the economy toward a static equilibrium.
Read full textStrigl concludes his analysis by emphasizing the difference between static 'cost-element' taxes and dynamic 'surplus' taxes. He notes that in reality, taxes often hit a mix of economic categories (interest, rent, profit, wages) that legal tax definitions fail to distinguish. He stresses that the verification of shifting theory is difficult because taxes may initially be absorbed by temporary profits before becoming permanent cost elements. The chunk ends with the title of the next section by Edwin R. A. Seligman.
Read full textSeligman introduces the fundamental problems of theoretical public finance, focusing on the relationship between the state and the individual. He argues that existing economic analysis has failed to grasp the depth of these connections and proposes a social theory of finance based on sociological principles, specifically analyzing the nature of common needs.
Read full textThis section categorizes human needs into separate, reciprocal, and common needs based on how they are satisfied. Seligman argues that society arises from the increasing difficulty of securing economic goods, leading individuals to seek support. He distinguishes between 'reciprocal needs' satisfied through exchange (complementary activity) and 'common needs' satisfied through cooperation (united activity).
Read full textSeligman defends the classification of needs based on their mode of satisfaction, arguing that the psychological character of a need itself changes when it is satisfied socially. He provides a table summarizing the relationships between types of satisfaction (unsupported vs. plural), the nature of the relationship, and the resulting activity (isolated, complementary, or united).
Read full textSeligman explores the nature of the 'Verband' (association). He rejects both the view of the association as a mere sum of individuals and the 'organismic' theories of thinkers like Spencer and Bluntschli. Instead, he argues that the association is a real entity because it transforms the psychology of its members, replacing pure egoism with a sense of obligation, loyalty, and 'esprit de corps'. He critiques the radical individualism of Pareto and Lippmann, asserting that the association is the embodiment of common needs.
Read full textSeligman classifies the activities of associations into primary (satisfying common needs) and secondary (quasi-singular and quasi-separate). He discusses how costs are distributed, contrasting the principle of absolute equality or 'ability to pay' (for common needs) with the 'cost principle' or 'interest principle' (for specific services provided to members). He concludes that associations primarily exist for common benefits, with individual advantages being secondary factors.
Read full textMayer distinguishes between private and public associations based on the nature of the needs they satisfy. He categorizes private associations into seven types, ranging from intimate unions like marriage to professional and religious groups. He critiques the common terminology of 'collective needs' vs. 'individual needs' found in German and Italian literature (Sax, Mazzola), arguing that all association-based needs are collective in nature, and the true distinction lies in whether the satisfying medium is a private or public group.
Read full textThis section defines the three positive characteristics of the public association (the state): Fundamentalism, Universalism, and Compulsion (specifically defined as the indissolubility of membership). Mayer argues that the state satisfies fundamental needs like the protection of life and property, which leads to its universal nature (encompassing all residents of a territory). Unlike private associations where membership is dissolvable, state membership is functionally indissoluble, which forms the true basis of state 'coercion'.
Read full textMayer introduces three negative characteristics of public associations: Non-reciprocity (the lack of a direct exchange relationship), Indivisibility (the inability to partition the benefits of state action among individuals), and Immeasurability (the inability to quantify the specific benefit an individual receives from fundamental state functions like police or justice). He concludes that these six features (three positive, three negative) define the unique nature of the state in contrast to private associations.
Read full textThe text analyzes the nature of public revenues, distinguishing between 'quasi-public' revenues (prices and fees) and true public revenues (taxes). Mayer argues against the term 'quasi-private' for state income, suggesting 'quasi-public' instead for activities where the state acts like a business or provides specific services for a fee. He contrasts the 'interest principle' (dominant in prices/fees) with the 'ability-to-pay principle' (dominant in personal taxes), mapping how different revenue types fall along this spectrum.
Read full textThis section argues that fiscal science is a branch of social science rooted in the individual's membership in a collective. It resolves the debate over whether the state or the individual is the subject of fiscal science by defining the state as a transformed association of individuals whose needs become collective through association. Fiscal science thus focuses on the fiscal relations between individuals in their public capacity.
Read full textThe author positions fiscal science as both a part of political economy and political science, providing a criterion to distinguish between private and public associations based on fiscal relations. It further analyzes the activities of the collective, distinguishing between primary goals (satisfying common needs) and subordinate or 'quasi-singular' activities that address specific needs of the association or its members.
Read full textThis concluding section of the previous essay discusses how the social theory of public finance reconciles the conflict between the 'interest principle' and the 'ability to pay principle'. It argues that neither is absolute, but rather each has its own domain and they influence one another depending on specific conditions.
Read full textA comprehensive analysis of progressive taxation by Edgard Allix. The essay distinguishes between social-political theories (aimed at wealth redistribution or class interests) and fiscal theories (aimed at tax equality). It explores the 'Compensation Theory', which uses progressive direct taxes to offset regressive indirect taxes, and the 'Theory of Absolute Progression' based on the principle of equal sacrifice. Allix utilizes marginal utility theory to justify progression but notes its practical limitations and the inherent empiricism in setting tax rates. The text also examines the application of progression to income, turnover, and inheritance taxes, concluding that while theoretically imperfect, progression is a necessary tool for approximate justice in modern states.
Read full textLuigi Einaudi discusses two contrasting Italian approaches to inheritance tax: Rignano's theory and De Stefani's 1923 reform. Rignano proposed a tax graduated by the number of transfers (generations) to encourage saving while eventually nationalizing wealth. De Stefani, under the fascist government, abolished inheritance tax within the family to protect the 'historical continuity of the nation' and stimulate capital formation. Einaudi critiques the feasibility of Rignano's plan, noting it might encourage consumption over saving, and explains the ethical and economic rationale behind the Italian family-based tax exemption.
Read full textOpening of a new section by Marco Fanno regarding extraordinary state revenues, including taxes, loans, and the expansion of the money supply.
Read full textMarco Fanno analyzes the three primary methods for a state to secure extraordinary revenue: extraordinary taxes, public loans, and the expansion of the money supply. He establishes a theoretical framework based on marginal utility, where individual income is divided between public needs, private consumption, and savings. Fanno argues that while taxes and loans initially shift the equilibrium between present and future consumption, they differ in their psychological and economic impact. He cites numerous classical and neoclassical economists to support his definitions of savings and interest rates.
Read full textThis section examines how different revenue methods impact the economy. Extraordinary taxes reduce both consumption and savings to maintain utility equilibrium. Voluntary loans primarily draw from existing savings rather than reducing current consumption, as the future tax burden for interest payments is often underestimated by citizens. Currency expansion (inflation) is characterized as a 'veiled general consumption tax' that reduces real income and forces a reduction in consumption. Fanno notes that while economists generally view inflation as the worst option due to its regressive nature, there is debate regarding the freedom of choice between these three instruments.
Read full textFanno discusses the psychological and economic limits to reducing private consumption. When extraordinary taxes exceed the amount citizens are willing to cut from their consumption, they resort to loans. If the total state demand exceeds the available voluntary savings in the economy, banks must provide credit through inflation. Thus, excessive taxation naturally transforms into currency inflation (forced savings) as the state uses new paper money to acquire goods that citizens refused to surrender voluntarily. There is a definitive limit to fiscal productivity beyond which even inflation cannot increase state revenue.
Read full textThe final section explores the limits of public loans. Similar to taxes, if loan emissions exceed voluntary savings, they are covered by bank credits, leading to credit inflation. Fanno explains the calculation of advantage for subscribers using bank loans, noting that as the volume of such loans increases, interest rates rise and the profitability of the subscription falls to zero. When the state's financial needs exceed the combined maximum capacity of taxes and loans (even those supported by credit inflation), the direct issuance of paper money becomes an unavoidable economic necessity.
Read full textThis segment concludes the discussion on the limits of state financing through taxes and loans. It argues that when extraordinary expenditures exceed the sum of voluntary savings and reducible private consumption, inflation becomes a necessity to force consumption below those limits. It compares credit inflation and direct paper money inflation, concluding that credit inflation is preferable because it is more easily liquidated as debtors save to repay bank loans. The choice between these instruments is dictated by the magnitude of the expenditure, illustrating the dominance of economic laws over political will.
Read full textErik Lindahl introduces an analysis of tax theory based on marginal utility, responding to critics of his individualistic approach. He defends the view that state services provide value to individuals rather than just a metaphysical 'state organism.' He argues that while the total utility of the state is immeasurable, the marginal utility of specific expenditure increases can be quantified in monetary terms by observing individual choices between different levels of public service and taxation. This individual valuation includes both personal material benefits and altruistic interests in general welfare.
Read full textLindahl explores how individual valuations determine the total level of state spending and the distribution of the tax burden. He critiques the organic state theory's inability to sum subjective sacrifices, proposing instead that financial calculations are performed from the perspective of individuals or representative average citizens. He argues that the solution to the absolute level of taxation inherently involves its distribution, as political consensus (through parliaments or elections) reflects the point where individual marginal utility matches the tax sacrifice.
Read full textLindahl draws a parallel between tax distribution and private sector price differentiation for products with joint costs (e.g., cotton and cottonseed). He argues that because public services are 'joint goods' whose value varies among citizens based on income and interest, taxing according to ability to pay is an application of the same economic laws that govern market pricing for joint products. This differentiation allows for an expansion of production (or state activity) that benefits all parties by aligning prices with subjective valuations.
Read full textLindahl elaborates on the 'interest principle' as the primary norm for taxation, where tax burdens are negotiated to reach an equilibrium where all parties agree on the level of expenditure. He acknowledges that real-world taxation deviates from pure individual valuation due to technical limitations and unequal political power. However, he maintains that even shifts in tax pressure (e.g., from indirect to progressive direct taxes) reflect the valuations of the currently dominant political classes. He argues that the interest principle provides a clearer foundation for the 'ability to pay' principle and integrates the questions of tax level and distribution.
Read full textFranz Oppenheimer reviews the landscape of socialist theory in Germany, noting that leading Marxist theorists (Kautsky, Hilferding, Luxemburg) are often of non-German origin. He summarizes Rosa Luxemburg's theory of accumulation, which posits that capitalism requires 'non-capitalist spaces' to realize surplus value, leading inevitably to imperialism. Oppenheimer critiques the Marxist focus on 'anarchy of production' and their failure to recognize the agrarian roots of economic development. He introduces his own 'liberal socialism,' which emphasizes the sociological origin of the state through conquest and the resulting monopoly on land as the true source of class exploitation.
Read full textThe author critiques Marx's value theory as being postulated rather than deduced, arguing it fails as a comprehensive theory because it only explains static competition prices for reproducible goods. He identifies a logical error in Marx's treatment of labor power, where the distinction between the sale of labor substance and the rental of labor services is blurred, leading to a flawed surplus value doctrine.
Read full textA critique of Marx's laws of capital accumulation and the inevitable transition to a collectivist state. The author argues Marx overlooks the possibility of wages rising enough for workers to accumulate capital themselves and demonstrates that Marx's theory of industrial concentration fails when applied to agriculture due to the law of diminishing returns and the resilience of the peasantry.
Read full textThe author presents his own theory, arguing that the persistence of capitalism is not due to machinery but to the 'land barrier' (Bodensperre) created by large estates. He proposes that removing monopolies would create true free competition, leading to a synthesis of liberalism and socialism where income differences are based solely on qualification, achieving both justice and efficiency.
Read full textA sharp critique of Conrad Schmidt's economic theories. The author accuses Schmidt of confusing long-term value with market prices and failing to understand that Marx's value theory was intended primarily to derive surplus value. He mocks Schmidt's 'priestly' tone and his failure to explain the mechanism of profit without assuming class divisions.
Read full textThe author addresses the work of Eduard Heimann, acknowledging some of Heimann's criticisms while clarifying his own stance on ground rent. He admits to terminological inconsistencies in earlier editions of his work regarding the distinction between feudal rent and differential rent, and clarifies his views on land speculation within static economic models.
Read full textA concluding overview of socialist theory in Germany, noting that original development has largely moved to Russia. The author reviews a commemorative publication for Karl Kautsky, finding little original theory except for a contribution by Benedikt Kautsky, whom the author claims was influenced by his own ('Oppenheimerian') ideas.
Read full textEdmond Laskine examines why French socialism has contributed relatively little to formal economic theory compared to Germany. He argues that French socialism is primarily ethical, political, and tactical, focusing on issues like the general strike (Sorel) or government participation rather than rigorous economic analysis of value or capital.
Read full textLaskine discusses the attempts to revise French socialist doctrine, highlighting Albert Aftalion's rejection of the labor theory of value in favor of utility-based value (influenced by the Austrian School). Aftalion argues that exploitation stems from private property and monopoly rather than the production process itself, leading to a theory of 'social surplus value' that supports social reform over radical socialism.
Read full textAn overview of French socialist contributions to specific economic fields. It covers Adolphe Landry's production theory, François Simiand's sociological study of wages, and the fiscal debates of the 1920s involving Léon Blum. The author notes a lack of scientific rigor in socialist finance, which often relies on empirical formulas like the preference for direct taxation.
Read full textArturo Labriola traces the history of socialist thought in Italy from medieval religious movements (Franciscanism) to early utopians like Campanella and the revolutionary Vincenzo Russo. He explains that Italy's broken historical development and lack of industrialization delayed the emergence of a cohesive socialist doctrine despite a long history of class conflict.
Read full textA focus on Carlo Pisacane, who developed a consistent socialist critique of property rights during the Risorgimento. Labriola explains that Pisacane's ideas failed to gain traction because Italy lacked an industrial proletariat and the national movement (led by Mazzini) prioritized political unity over social revolution.
Read full textLabriola describes how Italian socialism eventually emerged through the lens of Positivism and criminology (Lombroso, Ferri, Turati). This led to a 'Reformist' Marxism that was essentially a positivist policy for social reform. He also notes the later reaction of revolutionary syndicalism (Sorelism) against this static, positivist interpretation.
Read full textAn account of the intense theoretical debates in Italy following the publication of Volume III of Marx's 'Capital'. Thinkers like Loria, Pareto, and Croce analyzed the consistency of Marx's value and price theories. Labriola laments that this 'magnificent bloom' of economic study was cut short by the rise of Fascism and the practical careerism of the Italian youth.
Read full textDymitri Iwantzoff introduces Russian Neo-Marxism, focusing on its unique agrarian theory. Russian theorists argue that the peasant economy is a non-capitalist organization 'sui generis' governed by a 'labor-consumer balance' rather than profit. This internal harmony and the peasant's ability to accept lower returns make the small farm highly resilient against capitalist competition.
Read full textIwantzoff analyzes the Russian Communist doctrine of socialist construction. Unlike the transition from feudalism to capitalism, socialism does not 'mature' within the old order but must be consciously built. This leads to theories of 'primitive socialist accumulation' and a view of the transition as a long, painful process where politics must forcibly break economic inertia.
Read full textThis section outlines the Russian communist school's perspective on the transition to socialism. It argues that socialism does not emerge automatically within capitalism but must be consciously built after a revolutionary collapse. The text details the objective and subjective conditions for revolution, emphasizing that it is not tied to a specific stage of economic maturity but rather to the concentration of production and the organization of the proletariat. It challenges the necessity of a proletarian majority and suggests revolutions may start in the 'weakest links' of the capitalist system.
Read full textThis segment discusses the immediate economic aftermath of a proletarian revolution, characterized as an 'objectively inevitable' stage of anarchy and the collapse of productive forces. It attributes this to the proletariat's lack of organizational experience and the resistance of technical intellectuals. However, it posits that through the dictatorship and the 'cleansing' of the collective mind, the proletariat can eventually reorganize the economy, leading to a new social and economic order and the beginning of the 'original accumulation' phase of socialism.
Read full textThis section discusses the challenges of the transition period from capitalism to socialism, focusing on the need for the proletarian state to concentrate material resources. It explores the concept of 'socialist primitive accumulation,' where the state must extract surpluses from non-nationalized sectors (like agriculture and small crafts) to fund the technical reorganization of industry. The text highlights the use of monopoly power and price policy as tools for this accumulation, while citing thinkers like Preobraschenski and Lenin regarding the Russian experience as a model for other nations.
Read full textThis segment presents critical analyses of socialist economic organization by P. P. Masslow and B. D. Brutzkus. Masslow argues that the success of socialism depends on maintaining a high rate of accumulation rather than just redistribution, warning against unproductive consumption and bureaucracy. Brutzkus provides a comprehensive critique, arguing that without market prices, determining the rentability of enterprises is impossible, leading to a 'socialist super-anarchy' characterized by forced labor, lack of individual responsibility, and the destruction of consumer freedom.
Read full textEdwin Cannan reflects on the failure of economic theory to influence public policy during and after World War I. He argues that instead of further refinement of complex theses, the priority should be the popularization of elementary economic principles. Cannan proposes three reforms: clarifying technical terminology to match common usage, replacing the traditional nationalist 'production and distribution' framework with a global individual-centered model, and improving the quality of elementary economic education at universities.
Read full textA list of translators for the various international contributions in the volume, followed by an extensive alphabetical index of names (A-Z) mentioned throughout the work, including major figures like Marx, Ricardo, Smith, and contemporary researchers.
Read full textA comprehensive subject index covering economic terms, theories, and concepts discussed in the volume, ranging from 'Agrartheorie' to 'Zyklus'.
Read full textAn overview of the four volumes comprising 'Die Wirtschaftstheorie der Gegenwart' edited by Hans Mayer. It lists the contributors and topics for each volume, covering the state of research in various countries, value and price theory, income formation, business cycles, international trade, finance science, and the economic theory of socialism.
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