The archive.

Preventing depression without making economic security depend on compulsory controls is the tension at the centre of Shackle’s 1947 review of William J. Fellner’s Monetary Policies and Full Employment. Shackle examines Fellner’s distinction between timely action against recession and an unconditional employment guarantee that could encourage inflationary wage and price demands. His particular interest lies in uncertainty: larger expected profits need not be more dependable, and lower wages need not improve investment prospects. This compact review lets readers see why the composition and reliability of demand matter alongside its volume. Shackle’s approval remains discriminating: he praises Fellner’s practical judgement while challenging an interest-rate analysis that, in his view, confuses planned and realised quantities, stocks and flows.

Do scientists really inhabit an ivory tower, indifferent to a world their theories now visibly reshape? Kaufmann takes the postwar reproach seriously, made newly awkward by the political engagement of atomic physicists, and sorts it into four charges: impractical topics, excessive abstraction, inaccessible prose, and refusal to judge values. Practical value, he answers, is often indirect: Maxwell's electromagnetism and Einstein's mass-energy formula were merely theoretical before they proved decisive. Abstraction he splits into generalization, idealization, and mediate construction, defending each while insisting on the return to concrete phenomena. On Weber's ethical neutrality he grants that science cannot fix ultimate values, yet argues that value judgments are elliptical only until their standards are named. The essay's closing defense is of veracity itself, the philosopher's task of keeping disagreement clear and discussable, even at the cost of the tower.

To foster the spirit of veracity is the foremost educational task of the philosopher. Should the fulfilment of this task relegate him to the ivory tower, then he need not be ashamed of his abode.

In April 1947, with liberalism discredited by war, nationalism, and totalitarianism and its scholars scattered and out of contact, Hayek opened the founding conference at Mont Pèlerin with a plea for reconstruction over nostalgia. Reviving the liberal ideal, he insists, demands a great intellectual task, not fidelity to an inherited creed—least of all from the old liberal who clings to formulas because they are old. Political philosophy cannot rest on economics alone; the crisis of freedom is equally legal, moral, historical, and religious, and the proposed agenda ranges across the rule of law, competitive order, liberalism's relation to Christianity, Germany's future, and European federation. He conceives the gathering not as a propaganda machine but as a closed learned society, its members admitted by election and bound to candid mutual criticism.

The old liberal who adheres to a traditional creed merely out of tradition, however admirable his views, is not of much use for our purpose.

Useful measurements can confirm economic expectations without adequately explaining the relationships they record. This distinction drives Gerhard Tintner’s review of Frederick C. Mills’s study of prices and quantities in business cycles. Tintner acknowledges the study’s suggestive findings, including stronger cyclical patterns in prices than in quantities and marked differences between farm products and capital equipment. Yet he questions the National Bureau’s reference-cycle methods and warns that Mills’s measures of elasticity and flexibility differ from their usual meanings in economic theory. The review offers a compact example of methodological criticism that does not dismiss empirical results: Tintner’s demand is for a more explicit theoretical foundation and more refined statistical techniques, not merely additional measurements.

When Richard Lester marshalled questionnaire evidence to argue that businessmen do not think at the margin, Machlup answered with this compact 1947 reply, reprinted here, that concedes almost nothing. Lester’s executives said employment depends chiefly on sales and orders; Machlup responds that sales expectations were always part of marginal productivity reasoning, not an antimarginalist discovery. He works through Lester’s six conclusions on wage rates, variable costs, factor substitution, and multiprocess plants, insisting that marginal analysis never required rising unit costs and that firms can reckon in incremental rather than average terms. His deeper charge is that Lester mistakes the proximate vocabulary of managers — orders, morale, sales effort — for a refutation of the causal structure economists actually analyze.

Incremental costs and revenues can be known without any knowledge of average costs and revenues; the reverse is not true.

When defeated Austria's socialists revived their demand for socialization in 1947, Bayer insisted the slogan meant nothing unless productive means were lifted from private hands and bound into one national economic plan. Isolated, firm-by-firm nationalization he dismissed as primitive and doomed, recalling the failed German and Austrian experiments after 1918. The argument then plunges into the socialist calculation debate: he rehearses Mises's claim that without a capital-goods market prices cannot rank higher-order goods, weighs Barone, Lange, and Taylor on trial-and-error pricing, and answers Hayek's Road to Serfdom charge that planning breeds arbitrary coercion. Crucially, he enlists Austrian marginal-utility theory as valid for any economy, socialist ones included, to conclude that a price-guided planned order is both theoretically and practically possible.

Der Ordnung der Wirtschaft kann nur zugrunde liegen, entweder das Prinzip der Selbstregulierung oder der bewußten volkswirtschaftlichen Entscheidung.

English translation: “The ordering of the economy can rest only on one of two principles: that of self-regulation, or that of conscious economic decision.”

Historical outcomes, Schumpeter insists, are never explained by naming conditions such as population, capital, or tariffs, since the same factor acts differently through the mechanisms by which an economy answers it. His governing distinction separates the adaptive response, adjustment within existing practice, from the creative response, action outside that range that reshapes the path irreversibly. The agent is the entrepreneur, defined by function rather than social station: not necessarily capitalist, owner, or inventor, but whoever gets a new thing done. Through the example of producing caviar from sawdust he isolates entrepreneurial profit as a temporary surplus erased by imitation, and argues that innovation destroys old capital rather than reallocating it smoothly. A closing inquiry, whether routine, research teams, and bureaucracy will dissolve the entrepreneurial function as capitalism matures, turns the analysis toward the durability of bourgeois civilization itself.

The competition of the man with a significantly lower cost curve is, in fact, the really effective competition that in the end revolutionizes the industry.

Once the Exchequer acquires a duty to stabilize aggregate demand, the old arithmetic of matching revenue to authorized expenditure no longer suffices. Written in 1947 in the wake of Keynes, this essay treats every fiscal stream as a force acting on monetary demand relative to the supply of goods, and builds a pair of indices—deflative P and inflative Q—to measure the initial thrust of a specified receipt or disbursement before secondary reactions unfold. Shackle's taxonomy of pensioners, policemen, postmen, palace-builders, and paper-makers shows why a payment that adds no saleable output pushes prices up while a purchase for resale may prove deflative. A tax label alone, he insists, never fixes the direction of pressure; only the composition of spending does.

The Exchequer, in deciding the size, method and timing of its levies and disbursements, must nowadays be guided by two quite distinct sets of considerations.

An equation can be true at every instant yet fail to explain how income changes. This distinction anchors J. J. Polak and Gottfried Haberler’s brief joint restatement, written to reconcile their preceding contributions on the foreign-trade multiplier. They favour an exports-based multiplier for tracing income adjustment under specified conditions, while warning that an export-surplus formula’s validity as an identity does not establish its causal usefulness. Their treatment of consumption makes the difficulty concrete: a stable relationship between current consumption and previous income need not imply a stable ratio of current consumption to current income. The statement offers a compact lesson in what multiplier reasoning requires—explicit timing, defensible assumptions about constant parameters, and restraint where the available relationships cannot support a general prediction.

Can an expansion of exports generate successive rounds of income when imports rise alongside it? In this 1947 comment, Gottfried Haberler challenges Polak’s foreign-trade multiplier analysis by separating accounting identities from causal sequences. A formula that balances income and expenditure does not, he argues, explain how spending unfolds over time. His distinctive concern is with the assumptions behind the calculation: which expenditure is autonomous, how imports respond to income, and whether the relevant behavioral relationships are stable. Haberler allows that balanced trade can bring idle resources into production, but insists that gains from trade need not be multiplier effects. The reader gains a precise way to distinguish an increase in output from a process of expenditure multiplication—and to see why apparently rival formulas may describe different economic situations.

Anything may happen, but what happens cannot be deduced from the income equation.

Ten years after The General Theory appeared — and in the year of Keynes's death — Haberler set out to weigh the book as a scientific system rather than an object of discipleship, a verdict he revisits sixteen years on without softening it. He grants Keynes the systematic use of income effects, the multiplier, and a transformed vocabulary of macroeconomic model-building, but denies any overturning of monetary and cycle theory's logical foundations. The demonstration of a static competitive underemployment equilibrium, he argues, rests entirely on money-wage rigidity; admit flexible wages and the Keynes and Pigou effects erode it. Say's Law, properly stated, had already been abandoned by serious neoclassical theorists. Praise without idolatry is the essay's discipline.

Hero worship is nowhere less appropriate than in science.

Provisional notes rather than a finished theory, this essay asks how economists and historians should define, measure, and explain long-run change without turning theory into metaphysics. For Schumpeter theory is only an empirical toolbox: growth itself has no all-purpose measure, and he adopts the rise of trend per capita output merely as a working definition. His three theses cut against reductionism, that growth cannot be isolated from politics, institutions, and habit, that no single factor explains it, and that it interacts reciprocally with its supposed causes, while he rejects Marxist determinism outright. Naming a factor like war or the sixteenth-century Spanish precious-metal inflation is worthless, he argues, until its mechanism is specified. Against the automatism of the Smith-Mill-Marshall tradition he sets the creative response and entrepreneurship, the recombination of resources that no prior condition can predict.

Economic growth is not an autonomous phenomenon, that is to say, it is not a phenomenon that can be satisfactorily analyzed in purely economic terms alone.