Walter Fröhlich’s Review of Wirtschaftstheorie und Wirtschaftspolitik (1954)

Walter Fröhlich’s book review assesses the Festschrift for Alfred Amonn’s seventieth birthday, edited by Valentin F. Wagner and Fritz Marbach. Its governing judgment is that the collection’s uneven coherence should not obscure the importance of individual contributions. Fröhlich introduces Amonn as an economist whose methodological interests developed through engagement with Carl Menger, without uncritical adherence to him. Amonn’s methodological writings had attracted Continental attention but remained insufficiently known among American readers. The review consequently serves both as an evaluation and as a guide to scholarship that might otherwise escape its intended audience.

The Festschrift contains nineteen essays, hardly sufficiently related to justify even a common title.

Fröhlich finds a biographical connection where a systematic intellectual unity is lacking. The theoretical essays, several by economists of Austrian background, reflect Amonn’s origins; the descriptive and institutional studies concerning Switzerland reflect his adopted home. Acknowledging that his selection is necessarily partial, Fröhlich concentrates on theory as the material presumably most interesting to American readers. His review therefore maps the collection’s principal divisions while developing a selective account of its methodological and theoretical contributions. Otto von Zwiedineck-Südenhorst’s essay on subjectivism receives brief appreciation for its recollections of Vienna’s intellectual atmosphere around the turn of the century.

The most substantial methodological discussion concerns Oskar Morgenstern’s “When is a Problem of Economic Policy Solvable,” the collection’s only English-language contribution. Fröhlich welcomes its application of distinctions drawn from logic and mathematics to the often imprecise language of economic policy. Morgenstern distinguishes a unique solution, the number of solutions, alternative numerical sets constituting a solution, the absence of a solution, permanent undecidability about whether solutions exist, and present ignorance concerning solvability. These distinctions remain useful even though economics lacks the axiomatization achieved in physics.

More urgently, a policy problem’s solvability depends on the constraints imposed on permissible means. Balance-of-payments equilibrium might be attainable in general but unattainable if particular price movements, interest-rate changes, or gold flows are ruled out. Conversely, war—and, Fröhlich adds, totalitarianism—can appear to solve problems when restrictions on acceptable means are abandoned. The conceptual move is to make those restrictions explicit rather than treat “solution” as an uncomplicated designation of success.

Greater methodological clarity, indeed, should be required in any discussion of policy problems.

This demand links logical precision to the substantive interpretation of policy: what counts as solving a problem cannot be separated from what a society allows to be done. Fröhlich’s approval is strongest where methodological analysis clarifies the assumptions underlying practical claims.

Gottfried Haberler’s survey of business-cycle theory receives similarly emphatic praise. Fröhlich presents it as an effort to identify a broadly acceptable theoretical structure amid competing approaches. Changes in the money-stream alongside changes in the goods-stream can accommodate Keynesian, Wicksellian, and Schumpeterian explanations. Haberler takes Hicks’s model as an important advance over earlier multiplier–accelerator models, whose outcomes could vary implausibly with small parameter changes. In Hicks’s account, expansion encounters the ceiling imposed by full employment, making those differences less decisive over a substantial range.

Fröhlich nevertheless emphasizes the unresolved issues Haberler identifies. The accelerator remains less securely established than the multiplier, and restricting it to intended changes does not adequately settle the difficulty. The lower turning point is especially uncertain: neither the Pigou effect, whose short-run strength is doubtful, nor Keynesian explanations supply an exclusive answer. Haberler’s recommendation to reconsider capital deepening and relative wage changes introduces a corrective to models and policies preoccupied with aggregate levels. Disaggregation matters because changes within the economy may illuminate movements that aggregate variables alone leave unexplained.

The adjacent essays extend this discussion. Hans Böhi combines production lags with multiplier–accelerator mechanisms, using inventory assumptions and unsatisfied demand to explain fluctuations even with weak accelerators. Herman G. Bieri develops a generalized model in which the Keynesian model becomes a special case, permitting particular influences to be isolated. Fröhlich also notes Alfred Bosshardt’s survey of flexible exchange rates, Fritz Marbach’s taxonomy of monopolistic markets, and Wagner’s distinction between substantive quantity theory and formally elaborated accounting identities. Wagner’s defense of rough quantity-theoretical approximations, even below full employment, fits the review’s appreciation of useful theory without excessive claims to precision.

That appreciation does not extend indiscriminately to every contribution. Hans Meyer’s proposed measurement of subjective value through a time ordinate remains insufficiently developed, while his treatment of the Neumann–Morgenstern approach fails to engage adequately with its merits. Swiss historical and policy studies receive briefer notice as contributions chiefly relevant to specialists.

The conclusion turns from evaluation to scholarly accessibility:

There is a real danger that due to the great number of Festschriften, collections of essays, etc., appearing in Europe and in this country some important contributions may escape even the reasonably diligent and resourceful researcher.

Fröhlich’s selective coverage thus has a bibliographic purpose as well as a critical one. Unspecific book listings conceal valuable papers behind collective titles. His review makes those papers visible while preserving a discriminating judgment about their clarity, theoretical usefulness, and limitations.