The archive.

Twenty-odd centuries of economic reasoning, from Aristotle and the scholastic doctors through Smith, Ricardo, Walras, and Keynes, pass under review in this vast and unfinished history, assembled from Schumpeter's disordered manuscript by his widow Elizabeth Boody Schumpeter. Its governing distinction separates economic analysis, the evolving box of scientific tools, from the surrounding economic thought and political creed. Tracing the filiation of ideas, Schumpeter insists that competent analysis rests on three techniques, history, statistics, and theory, and that every theorist first works from a pre-analytic 'vision' colored by ideology. He crowns Walrasian general equilibrium the summit of theoretical economics, weighs the scholastics' neglected contributions against the British classical tradition he distrusts, and reconceives capital, from the standpoint of analysis, as a set of restrictions.

practically and analytically, a credit theory of money is possibly preferable to a monetary theory of credit.

Technical sophistication can narrow an economist’s understanding as well as sharpen it. In this review of Joseph Schumpeter’s posthumous History of Economic Analysis, later collected as “Schumpeter on the History of Economics,” Hayek asks what historical scholarship contributes to professional judgment. He admires Schumpeter’s command of original sources and willingness to unsettle familiar rankings, giving neglected thinkers their due while questioning the standing of canonical figures. Yet admiration does not erase disagreement: Hayek distinguishes Marx’s historical influence from his analytical achievement and objects to Schumpeter’s contemptuous treatment of nineteenth-century liberalism. This brief review offers a revealing encounter between two economists’ judgments—and a concrete account of why knowing older arguments matters when applying modern technical knowledge.

Bread and wine, bread and butter, coffee and milk: for Mahr these are never interchangeable along a smooth curve but combine in one determinate best proportion, which income and prices may put out of reach. On that observation rests his assault, first advanced in 1954, on the indifference-curve analysis then spreading from Anglo-American economics through Pareto and Hicks. Taking up Hans Mayer's objections—the fictive 'experiment,' infinite divisibility, unlimited substitutability—he denies that a field of equally valued bundles exists at all, and replaces indifference curves with curves of preferred combinations shifting with income and saturation. Extending the argument to the marginal-utility level, he separates broad need-classes from particular goods and locates the one clear margin in the marginal utility of money rather than in any equalization across commodities.

In Wahrheit gibt es regelmäßig nur ein optimales Kombinationsverhältnis zweier Konsumgüter.

English translation: “In truth, there is regularly only one optimal combination ratio of two consumer goods.”

High wages and competitive exports pose the explanatory puzzle of William Emmanuel Rappard’s 1954 article: what enables American workers to produce so much? Productivity names the result, he argues, without explaining it. His answer connects mass production to workers’ purchasing power and industrial research to the pressure of rivalry. Yet the large firms that finance laboratories also constrain competition—a difficulty he confronts through Galbraith’s account of oligopoly and countervailing power. Written for a congress of French-speaking economists, the article offers a European assessment of American economic performance without equating abundance with cultural superiority. Its distinctive interest lies in this double tension: competition may foster prosperity without resembling textbook markets, and greater material output need not make a civilization more desirable.

A functioning market, this revised Cologne lecture insists, demands not an absent state but a deliberately maintained legal framework — general, predictable rules applied equally to all, sharply distinguished from the discretionary administrative commands that corrode economic coordination. Speaking into the German debate over the soziale Marktwirtschaft and alongside Walter Eucken's ordoliberalism, Hayek presses the case in strict rule-of-law terms and dismantles the textbook ideal of 'perfect competition,' which mistakes an imagined final state for the discovery process by which markets actually work. He defends even the distressed, overinvested industry's right to fail against demands for cartels and protection, holding that competition's painful verdicts perform an accounting no administrative body can replace. The decisive task, he concludes, is educating opinion to accept competition consistently rather than licensing exceptions whenever it turns temporarily harmful.

Was wir wollen, ist nicht universelle Konkurrenz, sondern universelle Möglichkeit der Konkurrenz.

English translation: “What we want is not universal competition, but the universal possibility of competition.”

Between 1933 and 1953, economics was reshaped by three visible debates—Keynesian macroeconomics, the theories of imperfect and monopolistic competition, and the new welfare economics of Hicks and Kaldor—but the deeper story, Lachmann contends, is the slow displacement of static equilibrium by problems of time, knowledge, and expectation. Welfare economics he dismisses as ingenious yet politically remote; Keynesian theory as coherent but valid only for extreme situations of depression or wartime inflation, where factors can be treated as homogeneous. Chamberlin, Robinson, and Harrod exposed the unreality of perfect competition yet still classified market forms statically. The constructive alternative is Swedish Process Analysis, which distinguishes the coherence of a single plan from the compatibility of all plans, together with a redefinition of competition not as a market form but as the process by which knowledge spreads and one form turns into another.

In reality, as every newspaper reader knows, politicians pursue power, not welfare.

Strip a system of its outer layers and something eventually gives way, not gradually but all at once. Morgenstern's essay builds a vocabulary for that threshold, introducing compressibility, the selective reduction of an economy or organization that preserves its defining function, against the kernel, the minimal core below which the thing ceases to be what it was. He resists the picture of total connectedness implied by input-output schemes read as if every cell were indispensable, since such a system would collapse at the first loss. Real economies, armies, and bureaucracies instead shed activities, reorganize, and substitute; war, scarcity, and damage reveal cores that abundance ordinarily hides. Part II turns to economic constants, denying that economics has physics-like constants while insisting on firmer physiological and technological bounds, from caloric minimums to reproduction times, beneath the shifting surface of prices.

A system will be said to be totally connected if the destruction of any of its parts destroys the whole system, i. e., deprives it of all of its functions.

Rappard, a Geneva economist who had taught at Harvard, set out to explain a fact many Europeans preferred to explain away: that the United States enjoyed a material abundance no rival approached, and had done so well before two world wars widened the gap. Offered here in the 1955 English translation of his 1954 French study, and prefaced by Henry Hazlitt, the argument marshals figures on national income, population, and production before turning to observers from Adam Smith and Tocqueville to Mill. The wealth, he concludes, springs less from virgin soil than from labor and its productivity—driven by mass production, the marriage of laboratory and workshop, a sheer passion for output, and above all the spirit of competition that European cartels had smothered. Economic superiority, he cautions, implies no superiority of soul.

The United States are today by far the richest nation in the world because they produce by far the most wealth.

Production takes time—but does taking longer make it more productive? In this review of the second edition of Walter Eucken’s Kapitaltheoretische Untersuchungen, Emil Kauder tests capital theory against technological evidence, drawing on observations of American steelmaking to challenge any simple link between duration and efficiency. He also asks where a production period could actually begin: with the allocation of iron, leather, or a factory building? These concrete difficulties sharpen his objection to Eucken’s measurement procedure. Yet Kauder finds greater promise in Eucken’s treatment of interest, especially where price expectations and interdependent industrial investment loosen the original theoretical framework. The review distinguishes the problems Eucken exposes from the solutions Kauder finds convincing.

That production is time consuming does not necessarily imply that the theory of roundabout production is correct.

American trade policy of the 1950s contained a puzzle Haberler sets out to resolve: Washington condemned imperial preferences and discriminatory tariffs while applauding customs unions, even though a customs union discriminates against outsiders more sharply than a mere preference does. His resolution turns on economic effect rather than the degree of discrimination. A preferential regime keeps separate national tariffs and invites product-by-product bargaining and capture by protected interests; a complete customs union abolishes internal barriers wholesale, adopts a common external tariff, and is far likelier to create trade than to divert it. He judges genuine unions rare, Benelux being the modern instance, and insists Japan's viability depends on worldwide markets rather than an Asian bloc, holding throughout to multilateralism and the most-favoured-nation clause.

If tariff preferences are bad because they imply discrimination, then a customs union should be worse because it implies a higher degree of discrimination.

Where classical physics can specify its variables with precision, the sciences of complex order cannot, and Hayek builds an entire method around that limit. Accepting Popper's view that theories are deductive systems which forbid events and invite falsification, he rejects the further demand that science must always uncover new laws yielding exact predictions. Prediction, on his account, comes in degrees: to exclude a single outcome, narrow a range, or state a disjunction is still to predict. His central instrument is the explanation of the principle, which begins from familiar mechanisms and asks whether their combined operation could generate an observed pattern, evolution by natural selection being the paradigm. For biology, economics, and institutions, the honest goal is orientation and cultivation, not the control the physics template falsely promises.

The practical value of such knowledge consists indeed largely in that it protects us from striving for incompatible aims.

There is no such thing as 'the' interest rate, only a plurality of rates differing by term, market, risk, and realizability—and from that dismantling Mahr builds his central claim. Interest, he holds, has no determinate effect on how much people save but a decisive effect on the form savings take, and thus on the supply of funds for productive investment. Offered here in the German version of a 1955 Italian essay, the study separates risk premia from a narrowed notion of liquidity and faults Keynes for grounding interest wholly in the striving for liquidity. Since saving depends chiefly on income, the rate matters most by steering wealth toward productive credit or away into cash hoards, land, and durable Sachsparen; net interest, Mahr concludes, could never sink to zero of its own accord.

Aber es geht viel zu weit, die Zinserklärung zur Gänze auf dem Liquiditätsstreben zu basieren, wie dies Keynes tut.

English translation: “But it goes much too far to base the explanation of interest entirely on the striving for liquidity, as Keynes does.”