The archive.

Political disagreement need not make methodological criticism futile. In this second installment, Felix Kaufmann asks how social scientists can test one another’s claims without either invoking truths immune to evidence or treating every disagreement as an irreconcilable outlook. His answer begins with rules researchers already accept in practice: standards for truth, but also preferences for simplicity, precision, and explanatory usefulness. This distinction gives concrete purchase on disputed definitions, judgments of justice, and causal explanations that mistake necessary conditions for sufficient ones. Kaufmann’s treatment of value judgments is especially pointed: he argues that scientific legitimacy depends on shared criteria of assessment, not on excluding evaluation altogether. The article offers a way to identify where a dispute concerns evidence, where it concerns research aims, and where clarification can make cooperation possible.

The crucial point, however, is this: to think scientifically is to submit implicitly to definite rules.

Can a demand curve measured across decades remain meaningful if the relationship it describes is itself changing? In this review essay on Henry Schultz’s 1938 treatise, Gerhard Tintner combines admiration for empirical demand research with a pointed challenge to its static assumptions. Dividing historical data into separate periods, he argues, yields successive snapshots without explaining how demand changes. His alternative allows both the position and slope of a demand curve to vary, ideally in response to economically meaningful factors such as population, expectations, and tastes. Equally crucial is testing whether the unexplained residuals are random before trusting statistical significance. The essay offers a concrete encounter with the tension between elegant estimation and economic change—and with Tintner’s insistence that economic theory and statistical diagnosis must develop together.

An exchange-rate change can increase export volumes while reducing receipts in foreign currency—and import expenditure can rise in one currency while falling in another. In this first installment of The Theory of Foreign Exchanges, Fritz Machlup uses such distinctions to connect currency markets with production, consumption, and competition. His central challenge is to explanations that treat national price levels as independently given determinants of exchange rates. By tracing how exporters win customers from competitors, how new goods become tradable, and how overseas payments redirect domestic spending, he shows why exchange rates can move without prior inflation or deflation. Readers gain a concrete way to distinguish accounting identities from behavioural responses, and genuine changes in trade from the effects of the currency used to measure them.

A programme for full employment can be sound in principle yet act too late. In this 1939 review of H. S. Dennison and collaborators’ Toward Full Employment, G. L. S. Shackle welcomes their proposals while testing the assumptions that would make them effective. Why wait for unemployment to rise visibly before launching public works? What if prosperity fails to repay the debt incurred during a slump? His sharpest monetary objection follows borrowed money beyond its first use: the economic consequences depend on successive recipients, not simply on the original loan’s purpose. This short review offers a concrete encounter with Shackle’s policy judgement—sympathetic to measures supporting effective demand, but alert to timing, uncertain fiscal outcomes, and the limits of credit classifications.

Scientific cooperation need not depend on agreement about what science ultimately is. In this review of the early installments of the International Encyclopedia of Unified Science, Felix Kaufmann supports the project while rejecting its physicalist doctrine: the claim that biological, psychological, and sociological concepts can be reduced to physical concepts. His concern is concrete—efforts to eliminate metaphysical pseudo-problems may also discard genuine questions. Judgments about probability, formalization, and linguistics test another requirement of unity: whether specialists can make their problems intelligible beyond their own disciplines. The review offers a critical participant’s perspective on an ambitious cooperative enterprise, distinguishing the value of shared inquiry from the adequacy of its philosophical framework.

Each reader should be enabled to obtain a coherent view of the problems dealt with, even if he cannot understand every detail.

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.

Full employment is both an economic objective and a condition of political survival in John Strachey’s programme for a transition towards socialism. In this short review, G. L. S. Shackle credits Strachey with understanding Keynes while questioning his circuitous route from orthodox socialist principles to Keynesian policy. His most pointed reservation concerns institutions: how can consumers remain free to choose if industries’ relative outputs are settled in advance? Shackle’s response lets readers see a sympathetic economist distinguish persuasive proposals for investment and consumption from an unresolved problem of planning. His closing admission that the book has changed his own thinking gives this appraisal a personal stake without dissolving its critical judgement.

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.

A comprehensive account of trade controls is not necessarily an account of trade planning. This distinction anchors Gottfried Haberler’s brief 1940 review of Heinrich Heuser’s Control of International Trade. Haberler values the book’s otherwise hard-to-find material on import quotas, exchange controls, and bilateral clearing and payment agreements, while noting its omission of the broader planning questions raised by the Russian and German systems. His judgement gives teachers of international trade a concrete assessment of the book’s usefulness, tempered by criticism of its editing and organization. The review offers a compact example of how Haberler separates descriptive coverage, theoretical analysis, and practical usability in assessing economic scholarship.

Gerhard Tintner’s brief review of S. Koller’s Graphische Tafeln zur Beurteilung statistischer Zahlen judges the book by its usefulness in statistical calculation. He identifies its nomograms—graphical aids covering several statistical distributions—and singles out the well-chosen practical examples as a help to users. The review offers a compact recommendation grounded in usability rather than theoretical novelty, showing precisely what Tintner valued in this medical statistician’s handbook.

When do statistical graphs substantiate an economic theory, rather than merely illustrate it? In this brief review of Joseph A. Schumpeter’s Business Cycles, Oskar Morgenstern admires the attempt to connect entrepreneurial innovation and credit expansion with economic history, yet questions the evidentiary force of its statistics. His objections are concrete: specialized business-cycle measurements go unused, and graphs sometimes lack scales and index bases. Neither criticism cancels his appreciation of Schumpeter’s discussion of time series and economic waves. The review offers a compact example of methodological judgement: Morgenstern distinguishes theoretical ambition, historically informed explanation, and independently useful statistical evidence without demanding that admiration exclude disagreement.

Written as Keynesian ascendancy pushed Austrian cycle theory to the margins, this reconstruction insists that its critics had mistaken its character: the theory is not a static contrast between saving and credit but a dynamic account of how investment reshapes the interdependence of industries over time. Its hinge is irreversibility—investment transforms fluid resources into specific, complementary capital that mistaken expectations can no longer unwind. Lachmann gives the theory a sectoral anatomy of consumers' goods, equipment, raw-material, and 'dynamic key' industries, and joins the Lundberg effect to the Ricardo effect to show how falling real wages during a boom divert entrepreneurs from long-period deepening toward speculation. Candid about limits, he finds the nineteenth-century railway booms fit the model but concedes that the 1929 crisis, with its stable prices and rising raw-material stocks, does not.

Once "free Capital" has been converted into buildings and machinery, any failure of events to conform to expectations will upset everything.