2,793 works, 150 years of economic thought. Each one summarized and searchable, with cited passages inside.
Persistent payments imbalance, when it will not soon correct itself, is best met by realigning the exchange rate rather than by controls, reserve losses, borrowing, inflation, or deflation — so run these two Horowitz Lectures. Machlup distrusts the notion of a single equilibrium rate, since money, wages, productivity, and capital flows shift too continually, and prefers to speak of alignment and disalignment. The first lecture reduces the choice to its essentials: adjust supply and demand to the rate, or adjust the rate to supply and demand, counting deflation's unemployment and inflation's distortions as the real costs. The second is political economy, explaining why governments delay until a small early move becomes a wrenching late one, and defending crawling pegs, wider bands, and temporary floating.
Currency speculation is a function of disaligned exchange rates that are expected to undergo adjustment by large jumps.
Two classic claims for socialism — that it produces more efficiently and distributes more justly — organize this pointed commentary, in which Machlup largely concedes Bergson's empirical comparison of Soviet and Western performance in order to train his fire on Tinbergen's case for income equalization. Egalitarian welfare economics, he argues, cannot smuggle equality in as a technical result: it rests on ethical postulates that can be assented to but never proved, on an implausible welfare thermometer of interpersonal utility, and on a neglect of incentives, envy doing much of the work solidarity is supposed to do. Push Tinbergen's logic to the globe, Machlup adds, and it demands a redistribution between rich and poor nations no wealthy electorate would ratify. His closing witness is Stalin, quoted condemning wage-leveling.
In a worldwide referendum I would expect a majority to vote for radical redistribution, so that the poor can share the wealth with the rich—with the result that all would be equally poor.
Economic Man — homo oeconomicus — stood accused of materialism, greed, and a degraded picture of humanity, and Machlup treats that hostility as the real subject of inquiry. Sampling the denunciations of Barton, the Historical School, Carey, and Ruskin, he grants that economists often described the construct badly, equating wealth with material goods and maximization with selfishness. But poor descriptions of a model do not refute the need for one. Reconstructing the methodological quarrel among Mill, Senior, Bagehot, Cairnes, and Wicksteed, he argues that maximization is not egoism and that Economic Man is no portrait of the whole person but a premise within a hypothetico-deductive system — a homunculus, not a man, built to explain how agents react when prices, incomes, and costs change.
The ‘bogey’ to whom this essay will be devoted is Economic Man.
Behind the fashionable slogan of “international liquidity,” Machlup finds a cluster of distinct problems the phrase conveniently blurs: reserve adequacy, exchange-rate adjustment, the status of gold, and the institutional meaning of Special Drawing Rights. Replying to Teschner in a tightly timed conference intervention, he refuses any single-cause story of the Bretton Woods collapse — rapid reserve growth let countries postpone adjustment, but shrinking American gold cover mattered too. He defends the original SDR as an unbacked reserve asset distributed gratis, warns against schemes that would smuggle back the notion of “coverage,” and turns his “Mrs. Machlup’s wardrobe” parable against simplistic reserve-demand estimates. The lecture’s force lies in dismantling the pseudo-precision of monetary reform and asking what its concepts actually measure.
Die Währungsbehörden sind in der Regel optimistisch und glauben immer, daß der gegenwärtige Kurs auch der richtige ist.
English translation: “The monetary authorities are as a rule optimistic and always believe that the prevailing rate is also the correct one.”
Drafted in August 1973 for the German Council of Economic Experts and printed unchanged as a Kiel lecture, this expert memorandum asks whether the dollar was truly undervalued against the floating currencies, above all the D-Mark. Machlup turns a policy question into a methodological one: once rates are set by markets, expectations, capital flows, and official intervention, terms like “undervaluation” and “equilibrium exchange rate” lose any firm meaning, and calling a free-market rate wrong is merely a forecast of future correction. He rejects purchasing-power parity for small index movements, denies any clean statistical split between short- and long-term capital, and names capital flows the strongest of all forces on the exchange market. No durable, correct external value of the dollar, he concludes, can be computed at all.
Die Behauptung, der Dollar sei über- oder unterbewertet, drückt immer ein Mißtrauensvotum aus.
English translation: “The assertion that the dollar is over- or undervalued always expresses a vote of no confidence.”
Money, capital, law, psychology, method: Machlup reads more than fifty years of Hayek’s writing as one sustained inquiry into how coordination arises under limited knowledge — an appraisal offered here in Kurt Leube and Alfred Bosch’s German translation of his 1974 English essay, expanded with a biography and Nobel materials. He joins Hayek’s early Austrian-Wicksellian cycle theory, in which credit expansion lengthens production beyond voluntary saving and forces malinvestment, to the neglected Pure Theory of Capital and its intertemporal equilibrium. He follows the path from the Misesian calculation debate to the deeper problem of dispersed knowledge, where prices coordinate by economizing on what no central planner could ever gather. Of all Hayek’s fields, Machlup ranks capital theory first.
Wenn ich das Fachgebiet auszuwählen hätte, auf dem Hayeks Beiträge am fundamentalsten und bahnbrechendsten waren, dann fiele meine Wahl auf die Kapitaltheorie.
English translation: “If I had to select the field in which Hayek's contributions have been most fundamental and pathbreaking, my choice would fall on capital theory.”
Ludwig von Mises tested a young university student in 1921 by demanding he read English, assigning the major economics books, and admitting him to the seminar only when he returned having read most of them. From that scene Machlup builds a commemorative portrait of Mises as teacher, political seer, and exemplar of liberal conviction. He distinguishes the selective private Privatseminar at the Vienna Chamber of Commerce from the university course, recalls Mises’s foresight about the Kreditanstalt collapse, and frames the emigrations of Hayek, Haberler, and himself as heeding the master’s warning. Defending Mises’s apriorism as theory that still requires judgment in application, he reports socialist economists privately conceding the calculation argument: without genuine markets, prices become administrative fictions rather than guides to allocation.
IT WAS in 1921 that I met my master.
To write the history of an idea, Machlup insists, is not the same as writing the history of the word attached to it — and “economic integration” is a young term for an ancient problem. Growing from his 1974 presidential address to the International Economic Association in Budapest, the book defines complete integration not by treaties or common markets but by the actual use of every potential opportunity for efficient division of labour. From that yardstick it ranges across customs-union theory, factor-price equalisation, optimum currency areas, and the Zollverein, deploying Viner’s distinction between trade creation and trade diversion to show that integration is not automatically beneficial. Its third part becomes an annotated genealogy of contributors, from Hamilton and List to Meade and Mundell.
In this interrelatedness and interdependence among all economic activities I see the essence of general economic integration.
No genuine reform of the international monetary system emerged from the 1976 Jamaica Agreement — so Machlup argues in this sharp commentary answering Dr. Slighton’s defense, which, read carefully, concedes nearly every charge the prosecution had made. The agreement supplies neither an adequate adjustment mechanism nor an orderly means of controlling international liquidity, and liquidity and adjustment, he insists, hang together: reserve-rich countries postpone correction while intervening ones inflate their money supplies. Against the claim that flexible rates impose their own discipline, he notes that internationally, borrowed reserves can enlarge the effective reserve base. He sketches three routes — rules on intervention, a gold-for-SDR substitution account, a Witteveen-style cap — and dismisses “politically impossible” as a temporary condition of education, recalling that dollar devaluation was once unspeakable.
Nothing of what I have said is well thought out: I have spoken impromptu. But I think we must have the courage of saying foolish things because, eventually, out of foolish things, wise things may be distilled.
The vitality of Mises's private seminar, set against Wieser's dull lectures, opens this interview's return to interwar Vienna, where Machlup wrote his dissertation and argued monetary theory, business cycles, and method with Kaufmann, Schutz, and Feigl. Looking back from 1980, he redescribes Mises's a priori economics as a domain of construction—powerful for the pure logic of choice, useless for predicting a concrete steel price—and holds that economics is most fertile in negative predictions and least trustworthy in regression and macro-forecasting. He names methodological individualism and subjectivism as the enduring core of Austrian economics once marginalism became universal, concedes that liquidationist advice failed politically in 1933, and turns Hayek's account of the stable 1920s price level and unsustainable investment against Friedman's neglect of relative prices and costs.
I would say methodological individualism and subjectivism are the most important of the whole lot. Marginalism is internationally accepted. No one is an Austrian just because he is a marginalist.
Before the knowledge economy could be measured, someone had to decide what counts as knowledge-producing activity—otherwise the category would swell to include everything or shrink to nothing. Machlup's foundational answer distinguishes the stock of knowledge held at a moment from the flow disseminated over time, and locates economic significance not in private discovery but in costly circulation: teaching, publication, research, professional service. He separates knowledge industries, defined by their output, from knowledge occupations, defined by the work performed in any industry whatsoever, and ranges across the types and qualities of knowing—practical, intellectual, pastime, spiritual, even unwanted. Opening an eight-volume expansion of his 1962 study, this first volume assembles the conceptual architecture—stock versus flow, generation versus dissemination, industry versus occupation—on which later analyses of human capital and information services would rest.
Generation of knowledge without dissemination is socially worthless as well as unascertainable.
Divisions of knowledge are neither timeless truths nor mere administrative convenience: they are historical settlements, shaped by intellectual expansion, cultural purpose, and institutional power. Tracing the ordering of learning from Aristotle's theoretical-practical-productive triad and Porphyry's tree through Bacon's division into History, Poesy, and Philosophy, Dewey's decimal notation, and the four-faculty structure of the medieval and modern university, Machlup shows how branches split, fuse, vanish, and reappear as erudition grows. He restores science to its broad continental sense against the narrow Anglo-American restriction to natural science, and defends intellectual knowledge pursued for understanding, culture, or delight rather than utility. The second volume of his Knowledge project makes the map of learning itself the object of study, insisting that every classification is provisional and that no partition should be mistaken for the essence of what it orders.
But knowing for fun is a respectable human activity; and having fun need not be judged useless.