Josef Herbert Fürth’s book review evaluates Albert Hunold’s 1951 edited volume on full employment, inflation, and economic planning. Its twelve contributors, drawn from Europe and the United States, collectively challenge indiscriminate expansionist policies. Fürth credits their analysis of inflation and controls but questions whether criticism of mistaken policies adequately establishes a constructive alternative. His central distinction is between demonstrating the dangers of monetary expansion and identifying the conditions under which either expansion or stabilization can secure high employment and production.
The review first situates the volume against the United Nations report on national and international measures for full employment. In his preface, H. D. Gideonse presents the collection as an expert response to that report. Fürth nevertheless finds its scope broader: most contributors examine the theory and practice of planning in scholarly terms. He singles out Gideonse’s denunciatory rhetoric as an exception to this analytical approach, thereby distinguishing the contributors’ shared opposition to indiscriminate expansion from a uniform polemical stance.
Fürth maps the collection through its conceptual, historical, and national studies. Amonn examines economic order and economic status alongside determinism and indeterminism in economic history; Baudin surveys planning from ancient Egypt to modern Israel. Eucken’s posthumous contribution analyzes repressed inflation in postwar Germany, while Roepke defends German policies following the 1948 currency reform. Bresciani-Turroni similarly defends Italian monetary policy. Jewkes considers difficulties in British industrial nationalization, and Iversen examines Denmark’s experience with expansionist measures. Translated papers by Ellis and Viner address the Douglas report on monetary policy and the UN employment report, respectively. This account presents the volume as a coordinated argument supported by different theoretical and national perspectives.
The discussion then narrows to Hayek and Lutz on the general theory of full employment. Hayek argues that expansion can constrain production by generating disproportionalities and rigidities. Lutz identifies a different limitation: increased monetary incomes do not necessarily translate into increased real demand.
Professor Lutz emphasizes that an expansion of money incomes raises employment only if it raises "real" demand and that in an inflation-conscious economy the price level adjusts itself so rapidly to monetary changes that an expansion of money incomes ceases to stimulate "real" demand.
Fürth accepts the importance of these mechanisms without treating them as a sufficient verdict on postwar policy. He states the collection’s achievement in explicitly qualified terms:
The authors have successfully demonstrated that expansionist policies may, and often do, lead to serious inflationary disturbances and hence to stifling direct controls and that policies aimed at maintaining monetary stability need not necessarily lead to deflationary disturbances.
The qualification matters. Expansion can produce inflation and restrictive controls, but stabilization’s capacity to avoid deflation does not establish that it always does so. Fürth counters the collection’s emphasis with postwar experience: expansionist countries generally maintained high production and employment while inflationary pressures eased before the Korean hostilities, whereas several countries prioritizing monetary stability experienced underutilized resources.
He immediately limits this counterevidence. American assistance helped some expansionist countries contain inflation, and shortages of real capital sometimes caused underemployment in stabilizing countries—shortages monetary expansion could not remedy. Neither comparison therefore settles the issue. The review’s decisive conceptual move is from competing general principles to the conditions governing their practical effects:
We cannot hope to solve the problem, however, by repeating elementary principles about which only extremists on both sides could quarrel; we must rather try to determine the exact conditions under which expansionist policies are likely to lead to inflation and stabilizing monetary policies to deflation.
Fürth concludes that the collection’s formidable expertise has been directed more toward exposing the wrong route to optimum employment and production than exploring the right one. The review’s relevance lies in this demand for conditional policy analysis: warnings about inflation are necessary, but they must be joined to an account of how monetary stability, productive capacity, and employment can be reconciled.
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