The archive.

Rearmament makes some materials urgently scarce—but which civilian uses should surrender them? In this 1939 magazine article, republished in 1997, Friedrich August von Hayek argues that ranking industries by national importance cannot answer that question: an essential industry may substitute cheaply, while a less essential one may consume far more resources to replace the same input. Through exchanges of tin and copper, he shows how relative prices can reveal sacrifices that administrative quotas conceal. His objection to rationing rests not on officials’ incompetence, but on the production alternatives they would need to know. The article connects this informational problem to military choices between competing supplies, while leaving questions of equity and government finance unresolved. It offers a precise account of why wartime urgency, in Hayek’s view, makes economic calculation more necessary rather than less.

The Ricardo Effect anchors this revision of Hayek's trade-cycle theory: when consumer-goods prices rise while money wages stay fixed, falling real wages make short-period, labour-using methods far more profitable than durable machinery, and firms retreat from the more capitalistic techniques. The result overturns the acceleration principle, for a rise in consumer demand can shrink demand for capital goods. Granting Keynes his unemployment and sticky wages, Hayek still rejects aggregate demand as a sufficient guide; he disaggregates capital into a vertical hierarchy of stage-specific industries and introduces the 'Quotient' to measure how slowly investment yields consumer goods. A boom ends not when all resources are employed but when the structure of production outruns the flow of goods, exposing a scarcity of capital whatever the money rate of interest does.

It is a cumulative process, indeed an explosive process, leading further and further away from an equilibrium position till the stresses become so strong that it collapses.

Peace among formerly sovereign states, this 1939 essay argues, cannot rest on political or military union alone; it requires a genuine common market, and that market quietly disarms the interventionist state. Once goods, people, and capital move freely across internal borders, no member government can prop up local prices, shelter a monopoly, or sustain a restriction scheme dependent on territorial control—and, Hayek adds, the federation itself cannot easily replace those powers, because a large heterogeneous people will not agree on whose industries deserve protection. Economic planning presupposes a shared scale of values that diversity denies. Socialism becomes the limiting case: incompatible with free movement within, and lacking the common purpose a socialist union would require. Federation thus emerges as both a peace project and a liberal constraint, with Robbins and Streit in view.

The whole armory of marketing boards and other forms of monopolistic organizations of individual industries will cease to be at the disposal of state governments.

Cheap borrowing does not make steel, machinery or time more abundant. In this 1939 article, republished in 1997, Hayek asks whether wartime authorities should hold interest rates down when urgent production needs make capital scarcer. His distinctive emphasis is on investment’s timing: a machine that saves more labour overall may still be a poorer choice if its benefits arrive too late. He treats interest chiefly as a means of allocating capital, rather than rewarding saving, and follows that distinction into practical decisions about replacing worn equipment or diverting maintenance resources to armaments. The article offers a compact way to distinguish financial ease from real productive capacity—and explains why, in Hayek’s view, a misleading interest rate can distort the choices of government planners and private entrepreneurs alike.

Why should wartime allies trade as though they were strangers? In this 1939 letter to The Spectator, reprinted in 1997, Friedrich August von Hayek turns Norman Angell’s proposal for Anglo-French federal unity into an immediate economic challenge. Expensive domestic purchases, inferior substitutes and currency restrictions, he argues, weaken the partners’ combined productive capacity. His example of reciprocal luxury trade sharpens the point: suppressing industries poorly suited to military production need not free useful resources for war. This brief intervention shows Hayek testing a political aspiration against practical arrangements, distinguishing unavoidable cross-channel transport difficulties from policy barriers that allies could remove.

Agreement is not enough to make an argument persuasive. In this 1940 review of Carl Snyder’s Capitalism the Creator, Hayek praises the statistical evidence for industrial progress while questioning its power to defeat rival economic explanations. His sharpest objection concerns the word “capitalism”: does it mean production using large quantities of capital, or free enterprise and private ownership? Evidence for the first does not necessarily establish the case for the second. The review offers a compact encounter with Hayek as a sympathetic but exacting critic, showing why he regards explicit theory and precise definitions as indispensable even to conclusions he largely shares.

Yet, although I happen entirely to agree with him on almost all these points, I fear that his facts will convince few who hold contrary opinions.

Wartime scarcity brings Hayek and Keynes into agreement—but leaves a pointed disagreement about what should follow peace. In this 1940 review of Keynes’s How to Pay for the War, Hayek endorses compulsory deferred pay: workers would surrender purchasing power now while retaining claims on future income, rather than losing it through inflation. His defence turns on who bears an unavoidable sacrifice and whether that sacrifice earns compensation. Yet he resists Keynes’s proposed cash repayment after the war, preferring to give holders of deferred balances ownership of productive capital. This short review offers a precise encounter between fiscal necessity, protection of poorer households, and conflicting expectations about postwar spending, showing where Hayek’s substantial support for Keynes’s scheme ends.

The only choice we have is whether or not the inevitable sacrifice of the poor shall at least give them a share in our future income.

Can wartime sacrifice be explained openly, rather than imposed through financial mechanisms the public scarcely notices? In this short 1940 review of Geoffrey Crowther’s Ways and Means of War, republished in 1997, Hayek praises an account of Britain’s economic choices that makes scarcity a matter of competing priorities: nearly anything may be attainable, but not everything at once. His approval sharpens into disagreement when Crowther suggests that reductions in private consumption cannot be openly faced. Hayek argues that citizens who understood the choice between taxation and inflation would prefer honest, explicit burdens. The review offers a compact encounter with his confidence in public understanding—and his insistence that economic leadership must explain the material cost of victory, not merely promise it.

Market socialism arrived as a concession: Lange, Taylor, and Dickinson would keep state ownership yet let a central board set producer-good prices, instruct managers to equate marginal cost with price, and revise figures by trial and error as shortages and surpluses appeared. Hayek treats the maneuver as a mistaking of a static equilibrium model for a living process. Real economic life is ceaseless change—local scarcities, new methods, altered demand, particular machines and contracts—and by the time reports reach the authority and fresh prices issue, the relevant conditions have moved. His socialist manager, forbidden to undercut, speculate, or bid resources away, becomes a rule-following functionary who innovates only by persuading his superiors in advance, while central control of investment quietly restores the planning it claimed to escape.

If this will not lead to the worst forms of bureaucracy, I do not know what will.

Grant the planners their most ingenious model, and the calculation problem still bites—such is Hayek's verdict on competitive socialism in this German essay. Two earlier chapters of the debate may be closed, he allows: calculation in kind, and the fantasy of solving equilibrium's equations. The third, advanced by Oskar Lange, Fred Taylor, and H. D. Dickinson, keeps consumer choice and marginal-cost rules for managers while handing the pricing of producer goods to a central board that adjusts by trial and error. Hayek's objection turns on speed and knowledge: administered prices lag the daily flux of local conditions, made-to-order capital goods resist listing, and without free entry no cheaper method can underbid an incumbent. What survives is only quasi-competition—and, once investment is centrally directed, a standing threat to freedom.

Mit anderen Worten, wenn man wirklich alle diese Gleichungen wissen könnte, so wäre das einzige Mittel, das den menschlichen Kräften zu ihrer Lösung zur Verfügung stünde, die praktische Lösung zu beobachten, die der Markt vornimmt.

English translation: “In other words, even if one really could know all these equations, the only means available to human powers for their solution would be to observe the practical solution that the market carries out.”

Delayed access can change the value of an economic argument: what might once have clarified a debate may arrive after its readers have struggled through the same problems themselves. In this brief review of Erik Lindahl’s Studies in the Theory of Money and Capital, Hayek regrets the late availability in English of ideas first outlined in Swedish. Yet his strongest preference is not for Lindahl’s newer monetary analysis, but for the earlier attempt to integrate capital into price theory in Wicksell’s tradition. He praises the distinction between ex ante and ex post perspectives while questioning economics’ increasingly exclusive monetary focus. The review offers a compact view of Hayek’s priorities: theoretical novelty matters, but so does sustained attention to the “real” problems that monetary debate can leave behind.

A fine collection does not necessarily make a useful reference book. In this short review of Elsie A. G. Marsh’s catalogue of Jacob H. Hollander’s economic library, Hayek brings a bibliophile’s pleasure together with a scholar’s exacting demands. He admires the holdings in pre-Smithian and classical English economics, but shows how abbreviated titles, awkward chronological grouping and missing journal names impede their use. The distinction gives this compact piece its interest: readers encounter Hayek assessing not economic doctrine but the practical means by which its sources can be found and studied. His hope that the library will remain intact and accessible sits alongside an amused prediction that collectors will eventually prize the catalogue itself.