The archive.

Rearmament makes some materials urgently scarce—but which civilian uses should surrender them? In this 1939 magazine article, republished in 1997, Friedrich August von Hayek argues that ranking industries by national importance cannot answer that question: an essential industry may substitute cheaply, while a less essential one may consume far more resources to replace the same input. Through exchanges of tin and copper, he shows how relative prices can reveal sacrifices that administrative quotas conceal. His objection to rationing rests not on officials’ incompetence, but on the production alternatives they would need to know. The article connects this informational problem to military choices between competing supplies, while leaving questions of equity and government finance unresolved. It offers a precise account of why wartime urgency, in Hayek’s view, makes economic calculation more necessary rather than less.

The Ricardo Effect anchors this revision of Hayek's trade-cycle theory: when consumer-goods prices rise while money wages stay fixed, falling real wages make short-period, labour-using methods far more profitable than durable machinery, and firms retreat from the more capitalistic techniques. The result overturns the acceleration principle, for a rise in consumer demand can shrink demand for capital goods. Granting Keynes his unemployment and sticky wages, Hayek still rejects aggregate demand as a sufficient guide; he disaggregates capital into a vertical hierarchy of stage-specific industries and introduces the 'Quotient' to measure how slowly investment yields consumer goods. A boom ends not when all resources are employed but when the structure of production outruns the flow of goods, exposing a scarcity of capital whatever the money rate of interest does.

It is a cumulative process, indeed an explosive process, leading further and further away from an equilibrium position till the stresses become so strong that it collapses.

Can democratic governments secure recovery without sacrificing the freedoms that make it worthwhile? In this condensed round-table statement, Gottfried Haberler distinguishes falling unemployment from rising production, consumption, and economic welfare: Germany’s apparent advantage changes when armaments, leisure, and consumer choice enter the comparison. His distinctive—and contentious—proposal is to separate authoritarian techniques of cost control from authoritarian political aims. He attributes stalled recovery in France and the United States partly to premature wage and price increases, and suggests that democracies could restrain these pressures and remove productive bottlenecks without adopting comprehensive regimentation. The statement makes visible a difficult tension between employment and freedom while leaving open how democratic institutions might implement the controls he recommends.

Why does construction sometimes continue when rental returns no longer justify building? In this 1940 article, Karl Pribram connects urban ground rent to the institutions that finance development. Location alone, he argues, cannot explain the returns commanded by urban land: changing construction costs, rentals, and interest rates can generate rent even on sites without special advantages. His comparison of European and American building cycles turns on whether these returns actually govern investment. Elastic mortgage credit and expectations of appreciation can sustain construction after yields deteriorate, leaving oversupply and foreclosed properties to obstruct recovery. The article offers a precise way to distinguish rising property values from rising land rent—and to examine why measures that facilitate housing finance may also weaken restraints on speculative building.

An introductory textbook can make economics intelligible without pretending that its problems are settled. In this 1939 review of Frederic Benham’s Economics, Oskar Morgenstern makes that distinction central to his praise. He values Benham’s clear explanation of indifference curves and synthesis of production theory, but especially his willingness to acknowledge where economic analysis falls short. Morgenstern would push this candor further: exposing weak spots can awaken curiosity rather than undermine instruction. His reservations about income theory, risk, and profit sharpen a compact account of what beginners need—breadth, proportion, and reasons to question apparent certainty rather than specialize prematurely.

One of the principal aims of teaching theory should be to avoid barren specialization at too early a stage.

Does listening at home free people from the pressures of a political crowd—or bring propaganda directly to their firesides? In this review of César Saerchinger’s Hello America!—Radio Adventures in Europe, Emil Lederer tests the broadcaster’s claim that the microphone weakens demagogues by stripping away theatrical gestures and exposing insincerity. Father Coughlin and dictatorships’ multilingual short-wave broadcasts supply his counterexamples: manipulation can travel through a seemingly objective argument as readily as through a rant. Lederer values Saerchinger’s insider observations of broadcasting machinery and political figures, while asking what their reach means for public opinion. This brief review captures a precise tension between radio’s promise of independent listening and its capacity to make private homes part of an international political struggle.

Does bank credit drive economic change, or can it merely accommodate movements in trade? In this short review of Valentin F. Wagner’s history of credit theories, Fritz Machlup singles out a selective rehabilitation of the Banking School: Wagner challenges its equation of bank notes with deposits while recovering its view that bank credit may substitute for trade credit without exerting an independent dynamic influence. Machlup’s sympathy for this reconsideration does not blunt his criticism of Wagner’s elaborate classifications, repetitions, and difficult terminology. The review offers a concise encounter with a disputed distinction in monetary theory—and with Machlup’s judgement of where historical scholarship can unsettle accepted doctrine without conclusively overturning it.

Why might urban land rise in value even without any special advantage of location? In this 1939 conference abstract on Europe, Karl Pribram shifts attention from privileged sites to the changing relation between rentals, construction costs, and interest rates. His account of building activity free from governmental interference turns on an asymmetry: rentals could retain their gains through depression while construction costs fell, enlarging the residual return attributed to land. Once capitalized in property prices, that return became a cost for subsequent purchasers. This compact argument offers a precise connection between business fluctuations and land valuation—and explains why Pribram considered “absolute” ground rent potentially more influential for European building activity than the more visible advantages of location.

Why can construction continue as ground rents fall, yet fail to revive when rental returns improve? In this 1939 conference abstract on the United States, Karl Pribram locates a possible answer in mortgage finance. Comparing American building cycles with European experience, he argues that expansive credit can sustain a boom despite declining ground rent, while foreclosed properties held by financial institutions can obstruct recovery long after rental conditions become favorable. His hypothesis challenges the view that American construction cycles arise from forces separate from general business fluctuations. This compact account offers a precise distinction: the forces initiating a cycle may be shared, while mortgage-market institutions alter its duration and amplitude—and weaken ground rent’s power to regulate new building.

Symmetry makes a many-variable probability problem unusually compact in Gerhard Tintner’s 1939 article. He studies a quadratic form in independent standard normal variables with one common coefficient for squared terms and another for cross-products. Its characteristic function separates into just two factors: one for collective movement and one for the remaining contrasts. The interest lies both in this reduction and in Tintner’s effort to turn it into a usable calculation, moving from Fourier inversion and a hypergeometric expression toward tabulated chi-square densities. Readers can trace how coefficient structure determines distributional structure, while distinguishing the robust characteristic-function result from printed density formulas whose signs, normalization, and conditions require verification before numerical use.

Peace among formerly sovereign states, this 1939 essay argues, cannot rest on political or military union alone; it requires a genuine common market, and that market quietly disarms the interventionist state. Once goods, people, and capital move freely across internal borders, no member government can prop up local prices, shelter a monopoly, or sustain a restriction scheme dependent on territorial control—and, Hayek adds, the federation itself cannot easily replace those powers, because a large heterogeneous people will not agree on whose industries deserve protection. Economic planning presupposes a shared scale of values that diversity denies. Socialism becomes the limiting case: incompatible with free movement within, and lacking the common purpose a socialist union would require. Federation thus emerges as both a peace project and a liberal constraint, with Robbins and Streit in view.

The whole armory of marketing boards and other forms of monopolistic organizations of individual industries will cease to be at the disposal of state governments.

Cheap borrowing does not make steel, machinery or time more abundant. In this 1939 article, republished in 1997, Hayek asks whether wartime authorities should hold interest rates down when urgent production needs make capital scarcer. His distinctive emphasis is on investment’s timing: a machine that saves more labour overall may still be a poorer choice if its benefits arrive too late. He treats interest chiefly as a means of allocating capital, rather than rewarding saving, and follows that distinction into practical decisions about replacing worn equipment or diverting maintenance resources to armaments. The article offers a compact way to distinguish financial ease from real productive capacity—and explains why, in Hayek’s view, a misleading interest rate can distort the choices of government planners and private entrepreneurs alike.