The archive.

Claims that economic theory scarcely influences policy may depend on what has been excluded from the category of theory. In this contribution to a 1960 discussion, Fritz Machlup tests the boundaries behind Stigler’s and Wilcox’s conclusions: do applied economists, dissenting doctrines, and ideas inherited from earlier generations count? He resists both an academic definition so narrow that it conceals influence and one so broad that every policy choice proves it. His sharper political observation is that disputes over theory’s “unrealism” may concern whose welfare matters—identifiable constituents now or dispersed consumers later—rather than analytical competence. The contribution offers a compact way to distinguish disagreements about economic reasoning from disagreements about its scope, its historical transmission, and the people whose interests it serves.

What makes a theory of capital realistic: attention to tools, or an account of how different resources work together? In this 1960 review of B. S. Keirstead’s Capital, Interest and Profits, Ludwig Lachmann welcomes the challenge to established theories but disputes the proposed alternative. Defining capital as tools, he argues, obscures the complementary relationships that make investment productive. His criticism asks how failed plans reshape investment and how share prices reflect the capital combinations being valued. A closing example—ships making the ocean usable for transport and trade—clarifies his alternative: progress depends not simply on adding equipment, but on discovering better uses for existing resources. This compact review shows what Lachmann demands of an explanation connecting entrepreneurial judgment, capital structure, and economic change.

For Gerhard Tintner, mathematical economics proves its worth through contact with data and the risks of practical advice. His 1960 review of Jan Tinbergen’s Selected Papers praises precisely this combination, pointing to Tinbergen’s willingness to leave concrete policy recommendations open to later scrutiny. Yet Tintner also highlights results that unsettle easy policy assumptions: economic integration can, under specified conditions, lower real income, and increased productivity need not produce desirable outcomes. His strongest interest lies in Tinbergen’s analysis of the optimum economic regime, where formal welfare reasoning encounters ethical choices between capitalism and collectivism. This short review offers a focused account of what Tintner values in economic analysis—and where he sees its mathematical tools clarifying, rather than settling, questions of policy and institutions.

Gerhard Tintner’s brief 1960 review of Harry M. Markowitz’s Portfolio Selection focuses on a concrete trade-off: greater average return cannot be obtained from an efficient portfolio without accepting greater dispersion of returns. Tintner reads this criterion as an application of newer mathematical economics, contrasting its tools with the calculus and mechanical models of the classical tradition. His interest lies in the connection between formal reasoning and practical use: quadratic programming, computational methods, and utility theory promise an analysis that financial analysts can use. The review offers a concise account of why Tintner welcomed Markowitz’s approach, especially its combination of mathematical innovation with exposition accessible to readers lacking extensive mathematical preparation.

By the late 1950s American economists were split over whether rising consumer prices sprang from excess demand or from the wage and price decisions of unions and corporations, and Machlup thought both camps were arguing with blunt concepts. He rebuilds the vocabulary, separating autonomous demand from the induced and supportive kinds, and responsive cost increases from defensive and aggressive ones, then shows that cost-push cannot persist without monetary accommodation while demand-pull can stall against fully administered prices. Reading the postwar record through these lenses, he classes 1945 to 1952 as demand-pull and 1955 to 1959 as cost-push, with aggressive wage-push a likelier culprit than profit-push. His remedy is unfashionable: stable prices require that industries enjoying productivity gains be allowed to cut prices rather than pocket them.

A search of the learned literature would yield scores of definitions of inflation, differing from one another in essentials or in nuances.

Does eliminating successive monopoly mark-ups require merging the firms that impose them? Fritz Machlup and Martha Taber’s article separates the pricing case for vertical integration from technological economies and asks what independent firms can accomplish through contracts. The crucial distinction is concrete: bargaining over price alone differs from agreeing on both price and quantity. Where firms can negotiate the joint-profit-maximizing output, common ownership need not lower consumer prices further; where they cannot control quantities, the result may differ. By connecting economic models to firms’ actual capacity to bargain and commit, the authors clarify when integration can remove output restrictions—and why that gain does not settle the policy question. A merger that improves pricing within an existing monopoly structure may also make that structure harder to challenge.

Why has logic remained perpetually contested? Because, argues this late essay, written in 1957 when its author was seventy-seven, it has confused correctness with truth, judgments with sentences, and genuine judgments with norms and postulates. Logic, Engliš counters, is the science of the order of thought, and thought divides into three irreducible orders: the ontological, which explains what simply exists through cause and effect; the teleological, which explains what is willed through means and ends; and the normological, which explains what ought to be. Mathematics becomes a logic of quantity that asserts nothing about reality, while the paradoxes of the logisticians dissolve once one sees that not every grammatical sentence is a judgment. Economics and law, he holds, first exposed the two non-causal orders that traditional logic had missed.

Nur die Erfahrung ist wahr oder unwahr; deshalb können nur die empirischen Wissenschaften beurteilen, was wahr ist.

English translation: “Only experience is true or untrue; therefore only the empirical sciences can judge what is true.”

Can an enterprise chasing only its own advantage still steady the wider economy? This first volume, restricted to the large firm, answers a cautious yes. Bayer begins where the free-competition model breaks down: its assumptions of perfect transparency, capital mobility, and timeless adjustment are complementary, so that when one fails the whole equilibrium mechanism fails, a disequilibrium he illustrates with the cobweb theorem. Large firms, he argues, narrow the gap to the model through forecasting, long-run planning, and above all diversification, preserving the core stability of market share and employment. Profit, in many cases, ceases to be the goal and becomes a margin of safety that permits growth. Yet he concedes that some firm-level stabilizing merely shifts risk onto suppliers and competitors, so market power must remain checked by competition.

So zeigt sich, daß durch die Stabilisierungsmaßnahmen des einzelnen Unternehmens Kräfte einer Ordnung von unten her eingesetzt werden, die im Sinne einer Gesamtstabilisierung der Wirtschaft wirken können.

English translation: “Thus it becomes evident that through the stabilizing measures of the individual enterprise, forces of an order emerging from below are set in motion which can operate in the direction of an overall stabilization of the economy.”

Intelligent diplomats cannot substitute for an institution that prepares them to decide. In this 1960 article, Oskar Morgenstern asks what the United States State Department needs to turn information and expertise into workable foreign-policy alternatives. His case for decision theory begins with practical shortcomings: language skills unrelated to assignments, negotiators without relevant preparation, and military contingencies lacking an advance political framework. He advocates developing analytical methods specifically for diplomacy, rather than simply importing military techniques or expecting mathematics to deliver immediate answers. The revealing tension is between his confidence in systematic analysis and his acknowledgment that applications may fail. Readers can discover a concrete institutional argument for game theory: its value may begin in how officials frame choices, before it yields solutions.

Liberalism cannot be isolated as a fixed doctrine with a tidy history of its own; it has meaning only within the wider Western revolutionary movement, and its sense shifts with each front it faces. The word itself enters politics with the Spanish Liberales of 1812, beside the new symbols 'conservative' and 'restoration.' From there Voegelin reads liberal reform as a moderated permanent revolution, a way of pursuing the revolution by less destructive means, and takes Auguste Comte as his test case, the thinker whose assault on theology disclosed itself as a replacement religion of humanity. Surveying liberalism's political, economic, religious, and scientific aspects, he warns that successfully driving Christianity out of people produces not rational liberals but ideologues. Toleration and church-state separation survive as sediments; the nineteenth-century bourgeois-capitalist form, he judges, is dead.

Aus der Revolution kann man nicht aussteigen.

English translation: “One cannot opt out of the revolution.”

Macroeconomic reasoning did not begin with Keynes: in this German-language essay Machlup runs the pedigree back through Quesnay, Ricardo, Cournot, Böhm-Bawerk, and Wicksell, then asks what really separates macro- from microtheory. Rejecting viewpoint and aggregation as the decisive test, he favors the absence of relative prices as the mark of a macro model, and insists that macro-relations like the consumption function rest on hidden micro-relations and unstable aggregations. He punctures the claims made for macrotheory's superiority, that it is more measurable, more dynamic, closer to policy, and warns against wringing causal conclusions from ex post identities. The firm of price theory, he reminds readers, is an ideal type, not a real enterprise. His verdict on the contest is deliberately anticlimactic: neither side wins, though microanalysis keeps a philosophical primacy.

Dennoch muß mein Urteil so lauten: kein Sieger und kein Unterlegener.

English translation: “Nevertheless my verdict must be as follows: neither victor nor vanquished.”

A nuclear arsenal can invite the very attack it is meant to prevent if its weapons must be launched before they are destroyed. In this 1960 article, Oskar Morgenstern makes survivability—not sheer destructive power—the test of deterrence, then gives that distinction a concrete geography: mobile, concealed forces dispersed across the oceans, especially missile submarines. His striking contention is that Western security also requires a secure adversary, able to wait rather than strike on uncertain warning. Readers can examine how this reciprocal logic supports arms limits and changes the politics of allied bases, while remaining in tension with his advocacy of nuclear weapons for limited war. The Oceanic System offers not a promise of peace, but an attempt to preserve political judgment under the threat of annihilation.