The archive.

Where the theory was built, this second volume turns to the evidence — prices, output, employment, commodity markets, deposits, loans, and interest — reading every series as the trace of an evolutionary mechanism rather than a barometer that speaks for itself. Schumpeter's method is deliberately anti-barometric: no single index reveals the cycle's true shape, and the Kondratieff–Juglar–Kitchin schema must be used historically, never mechanically. The financial chapters refuse to crown interest as the master cause: it saturates capitalist calculation yet is fundamentally consequential, causal only in a secondary sense, and entrepreneurial demand for credit moves rates before rates move anything. He dissolves the rigid money-market/capital-market divide, denies any secular law of declining interest, and rejects the Hayek–Mises–Hawtrey claim that bank-initiated cheap money originates the cycle.

In this sense interest may indeed be said to hold a central position in the system.

How much can statistical evidence tell us when the economic meaning of what it measures remains unsettled? In this short 1939 review of Solomon Fabricant’s Capital Consumption and Adjustment, Friedrich August von Hayek weighs that difficulty without dismissing the research it complicates. He questions whether business-accounting distinctions adequately capture capital used up in production and changes in its value, yet welcomes Fabricant’s evidence on depreciation, repairs, losses, and the expected useful lives of capital goods. The review offers a compact instance of Hayek’s critical judgement: doubts about aggregate measures coexist with appreciation for carefully documented detail. Its interest lies in this distinction between a study’s unresolved theoretical foundations and the concrete knowledge its statistical work can nevertheless provide.

Painstaking exposition can still miss what holds a theory together. In this 1939 review of R. J. Saulnier’s comparative study of Hawtrey, Robertson, Hayek, and Keynes, G. L. S. Shackle praises scholarly fairness while identifying that precise failure in the treatment of Keynes. For Shackle, the General Theory turns on decisions made in almost complete ignorance of the future—not merely on its individual concepts and analytical devices. His brief assessment also questions Saulnier’s reliance on an earlier formulation of Hayek’s theory and distinguishes criticism of the multiplier’s presentation from refutation of its substance. The review offers a compact encounter with Shackle’s interpretive priorities: attention to uncertainty, to the development of an economist’s thought, and to the difference between explaining a theory’s parts and grasping its unity.

A federation of formerly sovereign states can secure peace, this German-language essay argues, only as an economic union — yet that union disables much of the nation-state's interventionist repertoire and cannot simply hand it to a federal center. Free movement of goods, labor, and capital turns the federation into a single price area, stripping member states of tariffs, monopolies, and independent monetary policy. But protectionism cannot migrate upward either: the solidarities that sell a tariff as aid to "our" producers dissolve among peoples who share no thick common identity, and the same thinness defeats central planning, which presupposes agreement no diverse union possesses. The federation needs only a negative power — to stop states from rebuilding economic borders, not to plan in their place. Federalism, Hayek concludes, completes liberalism rather than enlarging the state.

Das Bundesgebiet wird ein einziger Markt und die Preise in seinen Teilen werden nur um den Betrag der Transportkosten differieren.

English translation: “The federal territory becomes a single market, and prices in its parts will differ only by the amount of transport costs.”

Germany’s falling unemployment and rapid rearmament posed an uncomfortable question: did military mobilization demonstrate economic efficiency, or merely efficiency at serving a narrowly coercive purpose? In this brief symposium contribution, Gottfried Haberler separates employment, consumption and stability as measures of economic performance. He challenges easy comparisons between dictatorships and democracies by contrasting Germany’s employment record with Italy’s, while qualifying the statistical evidence. He also distinguishes a conceivable economic policy—replacing armaments expenditure with civilian investment—from its doubtful political feasibility. Rather than resolving whether democracies could match Germany’s apparent productive effectiveness, Haberler sharpens the question: what would comparable efficiency mean if consumer choice and political freedom were preserved? The contribution offers a compact exercise in judging economic results without confusing productive capacity with the desirability of its ends.

A license that shields a small business from competition can also become a debt that makes it harder to survive. This reversal anchors Walter Fröhlich’s 1939 article on Central European experiments in protecting small enterprises, chiefly in Austria. Writing with American fair-trade debates in view, he follows the costs of protection into concrete settings: Vienna taxi licenses, compulsory apprenticeships, and legally fenced-off craft occupations. His argument is that maintained prices invite further entry restrictions, while those restrictions raise fixed costs and obstruct adaptation to changing demand. Readers can discover why higher retail prices need not mean healthier retailers—and how, in Fröhlich’s account, the pursuit of economic security encouraged political expectations that fascist governments’ industrial and military priorities would frustrate.

Why might an entrepreneur postpone an apparently profitable investment—and why might a boom itself create reasons to stop investing? In this 1939 article, G. L. S. Shackle distinguishes the outcomes entrepreneurs envisage from the clearness with which they envisage them. A ship or steel plant commits resources that cannot remain available for a better-informed choice later; waiting can therefore reflect an expectation of improved knowledge rather than simple pessimism. Extending Keynes’s account of equipment valuation, Shackle tentatively argues that rapid investment changes a business enough to make its future less intelligible. Readers can trace how expansion may generate its own pauses, and how subjective uncertainty can affect investment and employment without being reduced to calculable probability.

It is the belief that knowledge, insight, and foresight will improve that causes the so-called apathy.

Remembered by his contemporaries as a banker, abolitionist, and Evangelical of the Clapham circle rather than as an economist, Henry Thornton is here restored by Hayek to the front rank of monetary thought. The introduction to Thornton's Paper Credit of Great Britain reads the 1802 treatise as the point where classical monetary analysis begins, born of the crises of 1793 and 1797 and the Bank Restriction. Hayek credits Thornton with distinguishing internal from external drains, anticipating both liquidity preference and Wicksell's separation of the market and natural rates of interest, and framing the doctrine of forced saving. Against the reduction of everything to over-issue, and against Ricardo's later narrowing, the case is made for a disciplined practical banker who theorized the credit system from within.

“We are all City people and connected with merchants, and nothing but merchants on every side”

Germany's colonies, stripped away at Versailles and held under mandate, are the immediate provocation of this 1939 study, which recasts their loss as economic strangulation rather than wounded vanity. Yet Thurnwald's ambition is systematic: colonization as a recurring human phenomenon, older than capitalism, whose methods he compares across Portuguese slave-raiding, the Spanish encomienda among the Maya of Yucatán, the Dutch cultivation system in Java, the French Code noir and St. Domingue, and British expansion from Virginia to the Gezira cotton scheme. His own Deutsch-Neu-Guinea supplies the opening case, from Rabaul's plantations to goldfields opened by aircraft. He rejects a purely Marxist reading of empire, frames expansion as a biological and social movement of peoples, and ties its future to National Socialist colonial policy.

Kolonisation gehört zu den großen bewegenden und Geschichte schaffenden Kräften der menschlichen Gemeinschaften aller Völker und Zeiten.

English translation: “Colonization belongs among the great moving and history-making forces of human communities in all peoples and ages.”

What mathematics should economists learn, and how should it be taught? In this 1939 review of R. G. D. Allen’s Mathematical Analysis for Economists, Gerhard Tintner values economic applications over the physical examples customary in calculus textbooks. Constrained optimization is his telling case: a technique central to economics receives the sustained attention economists need. His praise also draws a useful distinction between teaching mathematical tools through consumer choice, monopoly, and production, and presenting a continuous economic theory. Yet the book’s predominantly static approach leaves dynamic problems underrepresented. This brief review offers a concrete view of Tintner’s standards for graduate training: mathematical instruction should prepare economists to follow current research, while its omissions should guide their supplementary study.

Hayek’s objection to Keynes’s wartime financing proposal begins with agreement: compulsory savings could restrain civilian spending more fairly and efficiently than inflation. In this short 1939 article, republished here in 1997, the dispute turns instead on what happens when those savings become repayable. Keynes envisages releasing deposits during a postwar slump; Hayek asks whether Parliament could withstand demands for repayment when increased spending would be dangerous. The article offers a concrete encounter between economic design and political pressure, rather than a rehearsal of their wider theoretical disagreements. Hayek’s tentative alternative—converting savers’ government claims into interests in industrial capital—sharpens the central question: how can a workable wartime policy avoid creating an unstable peacetime obligation?

Profit maximization need not settle a price when a sole buyer faces a sole seller. In this theoretical note, Gerhard Tintner makes that difficulty concrete through a steel producer purchasing iron ore from a monopolist supplier. His distinctive question is when buyer control, seller control, and joint profit maximization yield the same outcome. The conditions for their agreement prove exceptional: ordinarily, static analysis establishes a bargaining range rather than a unique input price. By tracing how price-setting authority changes the result, readers can distinguish the constraints imposed by demand and production costs from the distribution of gains between the parties. Tintner’s extension to union–employer wage bargaining sharpens the stakes: on his account, bargaining power, shaped especially by political forces, determines what profit-maximizing equations leave unresolved.