The archive.

International trade is governed proximately by money prices and money costs, yet exchange-rate complications and pre-trade cost comparisons make the doctrine of comparative advantage easy to misread. Setting the Marshall-Viner real-cost approach against opportunity cost—which he defends as a workable approximation to general-equilibrium theory—Haberler concedes that increasing returns, monopoly, wage rigidity, and external economies all qualify the free-trade case, then argues that liberal policy remains preferable precisely because interventionist systems obscure the comparative costs on which rational choice depends. The paired concluding remarks turn to the postwar dollar shortage, where he sides with the optimists against structural pessimism, credits the 1949 sterling devaluation and disinflation with vindicating the classical adjustment mechanism, and rejects discriminatory restrictions against dollar goods in favour of non-discrimination and the most-favoured-nation principle.

Non-discrimination like honesty still remains the best policy.

Economic theory can become more ambitious without becoming more securely tested. That tension runs through Emil Kauder’s 1951 assessment of American economics since Keynes’s General Theory. He identifies two distinct innovations: aggregate analysis, which allows equilibrium to coexist with unemployment, and strategic price theory, in which a firm’s choices depend on its rivals’ responses. Neither amounts, in his account, to a settled replacement for older economics. Kauder weighs their explanatory promise against unstable assumptions, disputed measurements, and the influence of legal and moral conventions on market outcomes. His perspective as a historian of economic thought makes this more than a report on competing schools: readers can see why conceptual novelty, empirical adequacy, and intellectual victory need not coincide.

In 1906 Schumpeter defended mathematical economics; in 1949 he pleaded for historical analysis — a reversal only in appearance, Machlup argues, for the man never lost the one nor lacked the other. What held across four decades was a disciplined pluralism: theory, statistics, and history each earn their keep on the problems they suit, and the sectarian spirit of the Methodenstreit, which made each camp treat its method as the only scientific one, was the real enemy. Machlup follows Schumpeter from bare functional relations toward an eventual acceptance of causal language, and shows how the split between statics and dynamics turns methodological choice into substantive economics: equilibrium explains the circular flow, while the entrepreneur's discontinuous innovation drives development. Methodological individualism, he stresses, is a rule for building explanations, not a creed of laissez-faire.

It follows that the claim usually made for statistical induction and verification must be qualified. Material exposed to so many disturbances as ours is, does not fulfill the logical requirements of the process of induction.

At the heart of Schumpeter's theory of capitalist development lies a startling doctrine: a stationary circular-flow economy would have a zero rate of interest, and the positive rate observed under capitalism springs entirely from innovation financed by newly created bank credit. Haberler weighs this extreme version against a milder one and finds the extreme untenable, since it demands both the absence of time preference and zero marginal productivity of capital, assumptions he doubts once routine investment and ordinary impatience are admitted. Yet he defends Schumpeter's larger dynamic account, ranking its disequilibrium approach above the excessively static equilibrium theory of Mises and Hayek, who deny that credit expansion can permanently enrich the capital stock. The comparative question of whether dynamics raises or lowers interest, he concludes, is a comparatively unimportant detail.

The extreme version of his theory is hardly acceptable.

Can an economy suffer inflation before it reaches full employment? In this 1951 report on the Verein für Sozialpolitik’s conference, Hans Bayer makes Germany’s reconstruction problems a test of Keynesian policy: displaced workers and regional unemployment coexist with scarce productive capacity and entrepreneurs willing to invest. Electricity supply offers a concrete example of why increased demand might raise prices without creating enough jobs. Bayer’s commentary moves beyond reporting the proceedings to argue that employment policy must address production bottlenecks, sectoral coordination, and income distribution. Yet his criticism of Keynes does not lead him to endorse unrestricted markets. The article lets readers examine a specific alternative in the reconstruction debate: public coordination that treats full employment as a consequence of sound production and income arrangements, rather than a sufficient goal in itself.

Can the pursuit of emancipation dissolve the institutions that make personal freedom possible? In this 1951 article, Wilhelm Röpke challenges liberals to examine not only collectivist policies but the emotional allegiances that make them attractive. He interprets progressivism as a secular creed whose promises of equality and mastery can encourage submission to centralized power. His sharpest institutional argument concerns families, property, inheritance, and local or voluntary associations: equalizing individuals may weaken the independent groups that protect them from the state. While acknowledging legitimate demands for justice, Röpke questions even equality of opportunity when it requires continuous administrative intervention. The article offers a deliberately contentious test for reform: what happens to liberty when measurable gains in equality come at the expense of social independence?

Can the word 'profit' keep a precise role in economic theory once production is recognized as action stretched through time and shadowed by uncertainty? Shackle's answer is that it cannot serve as one concept, because it silently names two: the imagined inducement that draws an enterpriser into a venture and the recorded result by which the finished venture is judged. Productive services are committed long before the product's exchange value can be known, so contractual payments merely shift uncertainty onto the equity owner rather than abolishing it. Ex ante profit, on this account, is no scalar to be maximized but a configuration of hoped-for gain and feared loss, handled through focus-gain, focus-loss, and the φ-surface. To confuse that conjectural lure with its retrospective outcome, he warns, is an error bred by static, timeless thinking; the argument was spurred by J. A. Stockfisch and J. Fred Weston.

It is only in a static analysis, the description of a situation which is essentially timeless, that a single concept of ‘profit’ could ever be enough.

Can a theory grounded in the logic of purposeful action explain how people learn from markets? In this 1951 review of Ludwig von Mises’s Human Action, Ludwig Lachmann presses that question while defending economics as an explanation of unfolding plans rather than equilibrium alone. His admiration for Mises does not prevent him from finding a gap: coordination requires changing knowledge, and learning is not simply a logical operation. Lachmann reconstructs an answer from Mises’s account of entrepreneurship, where profits are signals that must be interpreted and productive assets continually recombined. Readers can discover how this emphasis on interpretation and heterogeneous capital changes the diagnosis of economic crises: idle resources may indicate missing complementary assets, not merely insufficient demand. The result is a critical engagement with Mises, not a restatement of his system.

Reviewing R. F. Harrod's admiring life of John Maynard Keynes, Mises grows impatient with its chronicle of clubs, dinners, and distinguished acquaintances, and presses the question the biographer avoids: did Keynes truly shape the age, or merely flatter it? His verdict is deflationary. Governments had practiced inflation, credit expansion, and deficit finance long before The General Theory; Keynes did not inaugurate that policy but dressed it in scientific respectability for progressives who already scorned thrift, laissez faire, and capital accumulation. The title carries the argument: Keynes is symptomatic, not causal—the brilliant emblem of an age of decay that craved painless remedies. His fame, Mises insists, measures the decline of economic understanding rather than any revolution in it.

They longed for short cuts to an earthly paradise: a protective tariff, a cheap money policy, the closed shop, doles, and social security.

Booms and busts, on the popular account, are the market's own disease; Mises answers that they are inflicted—produced by the very banks and governments that claim to cure them. This 1951 essay defends the monetary, or circulation-credit, theory: credit expansion artificially lowers the rate of interest, ignites an unsustainable boom, and guarantees the depression that follows, because bank credit cannot conjure the real capital goods the boom pretends to command. Against Marxian tales of capitalist 'anarchy' and against Alvin Hansen's case for countercyclical management, he redefines the terms of debate—whoever explains the slump controls the remedies thought available. The only safeguard, he concludes, is to let the market rather than the state set interest rates and to refuse credit expansion and deficit spending through the commercial banks.

They fail to realize that it is impossible to substitute additional bank credit for nonexistent capital goods and that therefore an artificially created boom must collapse and turn into a slump.

By the end of the First World War, Hayek recalls, liberalism had all but ceased to be a living tradition for the young, kept alive only in the rhetoric of aging statesmen who no longer stirred the imagination. This short tribute to Ludwig von Mises, given here in the 1967 translation of the 1951 original, traces how economic freedom survived that eclipse through scattered teachers rather than parties: Edwin Cannan and his London pupils, Mises and the Austrian circle, Frank Knight and the Chicago school, and the German neoliberals Walter Eucken and Wilhelm Röpke. Mises holds the centre as the one thinker who rebuilt liberal doctrine most systematically. Liberalism, Hayek concludes, is less a policy preference than an inherited discipline that must be taught, translated and renewed before it can again become a living body of thought.

Gone is the day when the few remaining liberals each went his own way in solitude and derision; gone the day when they found no response among the young.

Twenty years after Richard Kahn's 1931 article first set the multiplier out precisely, this survey weighs what that achievement really was. Kahn's originality, Shackle argues, lay less in an unprecedented intuition than in converting a vague, politically urgent idea about public works into a usable analytical instrument, above all by asking when extra spending would raise output rather than prices. He traces three tributaries into the General Theory: Kahn's employment multiplier, Meade's ex post equality of saving and investment, and Warming's insistence that net saving cannot exist without the investment that generates it. Yet the elementary geometric series, he cautions, conceals problems of aggregation, distribution, timing, and expectation. Comparative statics cannot separate past from future or intention from outcome, which is why he sets Hicks's elegant but deliberately non-expectational trade-cycle model against his own expectation-reaction view.

This is the bare bones of the multiplier principle. Its simplicity and ‘obviousness’ are illusory.