The archive.

Does Austrian economic theory necessarily entail a commitment to economic liberalism? In this 1949 article, Hans Bayer argues otherwise, drawing on Hans Mayer’s account of needs, valuation, and income formation to connect Austrian analysis with welfare-oriented planning. His encounter with Keynes is neither rejection nor conversion: he credits the achievement of explaining equilibrium with unemployment while questioning whether aggregate relationships adequately capture differences in income distribution and consumer behaviour. The policy stakes become concrete in Bayer’s argument that unequal bargaining power can depress wages, restrict consumption, and weaken investment. Readers encounter an Austrian perspective in which competition is an instrument rather than an ultimate objective—and in which causal explanation can support institutional correction, planned coordination, and even competitive socialism.

A computer can solve a system of equations without making its answer economically trustworthy. In this brief 1949 discussion contribution, Oskar Morgenstern responds to Leontief’s input-output analysis by asking what calculation can establish when observational errors remain unknown. His concern reaches beyond misleading decimal precision: the many zero entries in industrial tables may make solutions easier and more stable while reflecting gaps in information rather than actual economic relationships. Supportive of the research programme, he nevertheless distinguishes computational feasibility from empirical warrant. Readers encounter an economist treating numerical stability, data collection, and model assumptions as connected responsibilities—not problems that faster machines can settle on their own.

Often accuracy is identified with detail; for example, the giving of figures with many decimal points when the real inaccuracy has already been permitted to enter into a much rougher figure.

Schumpeter traces the entrepreneur through the history of economic thought, from Cantillon and Say who grasped him to Smith, Ricardo, and Marx who dissolved him into the capitalist, in order to isolate a function that ownership, management, and risk-bearing all fail to capture. The entrepreneur is whoever institutes new combinations, breaking routine rather than administering it, and his gain is neither wage nor monopoly rent but a surplus that congeals into industrial fortunes. That function may be corporate or collective as easily as individual, and banks figure not as passive intermediaries but as organs that call new industries into being. The essay's second half turns concept into a research program, pairing theory with the history of firms, finance, and technology, and refusing to equate the cultural imprint of entrepreneurial mentality with direct political rule.

I shall state frankly that I consider power to be one of the most misused words in the social sciences, though the competition is indeed great.

An explanation of interest under perfect foresight need not explain interest under uncertainty. This distinction drives G. L. S. Shackle’s review of Allais’s Économie et Intérêt. After presenting Allais’s reasons why interest remains positive, Shackle questions whether money and liquidity-preference merely obscure deeper forces of thrift and productivity. Might causation also run the other way, with monetary interest rates shaping capital accumulation, income and ultimately time-preference? His objection gives readers a concrete way to distinguish what a model shows to be possible from what it establishes about economic life. Yet the review is no dismissal: Shackle balances his impatience with perfect foresight against admiration for Allais’s analytical precision and the breadth of his investigation.

The fact that a gas-fire can make a room warm does not imply that a warm room must contain a gas-fire.

Six recent English books, by Baster, Franks, Harrod, Jewkes, Meade, and Robbins, give Schumpeter his occasion to ask whether economists have drawn a serious analytic harvest from Britain's postwar experiment in state management. His first move is to prise apart three questions habitually merged under planning: socialism, meaning central control of production; laborism, meaning labor's political ascendancy within a still-private economy; and the sheer readjustment of exports, saving, and solvency after the war. Nationalizing coal or transport, he insists, proves neither socialism nor its absence; the telling fact is that the wage rate has become a political datum, protected as a matter of course while profits and rents are compressed. Britain's dollar shortage he reads as the outward face of domestic maladjustment, conceding that under laborite constraints direct controls may be forced expedients rather than doctrinal choices.

Nevertheless, there is point in keeping these three topics distinct, if only in order to show how they interact to produce the English problem.

Addressed directly to the champions of economic dirigisme, this open letter concedes their ends—higher living standards, human dignity, protection of wage-earners—and attacks only their means. Rueff's wager is that a price held away from its market-clearing level must produce either disorder or coercion: queues, shortages, black markets, rationing, and finally an economic police. Free prices, he counters, are the condition of a society of free persons, and price control is not egalitarian but malthusian, since it organizes scarcity instead of redistributing wealth. The volume pairs the Épître with Le Dilemme français, which frames postwar France's choice starkly: a plan enforced with the coercion of Vichy or Hitler's Germany, or liberated prices disciplined by a balanced budget and honest social intervention.

Dès qu'un produit est taxé, les acheteurs font queue à la porte des boutiques où on le vend.

English translation: “As soon as a product is subject to a price ceiling, buyers queue at the doors of the shops that sell it.”

An investment cannot always be treated as one trial in a repeatable gamble. How, then, can an economist analyse a decision whose consequences may be unique? Shackle locates its motives in present experiences of imagined futures: the gains that excite hope and the losses that command fear. His alternative to numerical probability, “potential surprise,” measures how astonishing an outcome would seem rather than assigning it a share of total likelihood. The resulting model offers a striking account of waiting: an investor may postpone commitment because information is coming, even without knowing what it will say. Readers can examine both the explanatory reach and the psychological demands of a theory in which two compelling possibilities—not an average across all outcomes—govern a venture’s attraction.

How much support does evidence give a scientific theory, apart from the costs of acting on it? Gerhard Tintner approaches this question from econometrics, where choosing between rival economic theories cannot readily be reduced to a calculation of gains and losses. In this 1949 article, he develops Rudolf Carnap’s logical account of confirmation through worked statistical examples. Coin tosses expose a consequential choice: assigning equal weight to patterns of outcomes rather than to individual sequences changes the probabilities used for prediction. Readers can trace how the language used to describe evidence enters the resulting estimates, and why confirming a universal law differs from predicting its next instance. Tintner also marks the framework’s limits: its treatment of categorical attributes does not yet accommodate the continuous variables central to economics and physics.

Can an economy organized around useful work dispense with the supposedly money-bound insights of economics? In this 1949 review of Gustav Wihrheim’s Der betriebswirtschaftliche Kreislauf, Hans Bayer shares the ambition of socially purposeful reconstruction but challenges the framework offered to achieve it. His central distinction is concrete: labor and materials measure productive effort, not whether production satisfies human needs. A national economy likewise cannot be understood simply as an enlarged enterprise. Drawing on Keynes, welfare economics, and competitive socialism, Bayer tests Wihrheim’s planning proposals against questions of purchasing power, investment, and prices. The review offers a constructive disagreement about economic reconstruction: how to make work serve social welfare without mistaking technical coordination for an adequate account of prosperity.

Progressive taxation and family allowances may be defensible without being deductions from justice. In this 1949 Festschrift essay, Alfred Amonn asks what public-finance scholarship can actually establish when rival standards of fairness prescribe opposite tax burdens. He tests ability-to-pay reasoning against incentives to earn, and equal payment for public services against the revenue needs of the state. His distinctive move is to retain familiar tax arrangements while replacing their purported ethical foundations with arguments about collection costs, household stability, and economic consequences. Readers can discover how the same fiscal policy changes meaning when defended as practical necessity rather than moral entitlement—and why, for Amonn, public feelings of injustice still matter even when justice supplies no determinate scientific rule.

A system of equilibrium prices may be internally consistent without explaining how anyone arrives at those prices. This is the tension Leo Illy pursues in this 1949 article, drawing on Hans Mayer’s critique of functional price theory while extending its challenge to Austrian verbal accounts. If demand determines prices, but buyers need prices before they can specify demand, where does explanation begin? Illy directs attention to successive calculations and exchanges rather than simultaneous relations. Concrete examples—shoes, theatre tickets, and cars with different minimum expenditures—also test whether marginal-utility equalization describes actual consumer choices. The article offers less a completed alternative model than a pointed distinction between explaining an economic process and describing its outcome, making clear why temporal sequence matters to Illy’s conception of price theory.

Financing an international payments deficit is not the same as correcting it. This distinction drives Jacques Rueff’s 1949 introductory congress report, which challenges the monetary arrangements of European reconstruction. Drawing on war indemnities, capital movements and his dispute with Keynes over German reparations, Rueff argues that trade can adjust to external obligations—provided inflation does not neutralize the adjustment. His criticism reaches beyond deficit spending: releasing Marshall aid counterpart funds and recycling currency receipts through the IMF can, he contends, replenish the purchasing power that external settlement should absorb. Readers encounter a precise controversy over how assistance works: whether it restores the conditions for monetary convertibility or sustains dependence on further financing. Rueff’s proposal to use Marshall aid to rebuild gold reserves makes that tension concrete.

Ainsi administré, le Fonds monétaire a toutes les apparences d'un système de convertibilité, mais il n'en a aucune des vertus régulatrices.

English translation: “Administered in this way, the Monetary Fund has all the appearances of a system of convertibility, but none of its regulatory virtues.”