The archive.

Profits need not fall for a boom to end: they may simply cease to exceed entrepreneurs’ rising expectations. In this review of G. L. S. Shackle’s Expectations, Investment and Income, Ludwig M. Lachmann welcomes that possibility but presses a harder question: why do expectations change, and why should producers respond alike? His criticism distinguishes an explanation of individual investment decisions from an explanation of economy-wide turning points. Pauses to consolidate existing businesses, he argues, cannot account for the sudden growth of new industries; invoking disappointed expectations leaves entrepreneurial exuberance unexplained. His approval of Shackle’s asymmetric multiplier—different responses to rising and falling incomes—makes this a discriminating assessment of what expectations-based cycle theory promises and what it still needs to explain.

Disagreement over capital theory did not prevent John Bates Clark from becoming a formative teacher for some Austrian economists. In this brief 1939 review of John Bates Clark. A Memorial, Hayek draws on his own acquaintance with Clark to challenge the distant caricature of a believer in natural economic harmony and recall his generosity toward younger scholars. The review’s distinctive contribution is an 1890 letter to Robert Zuckerkandl: Clark remembers believing his early value analysis original, then warmly acknowledges the priority of mainly Austrian thinkers. Hayek places this document beside his testimony to Clark’s teaching, offering a compact glimpse of intellectual debts and personal cordiality that crossed the boundaries of rival economic schools.

Faithful exposition is not the same as a convincing test of a theory. In this short review of Arthur Schweitzer’s study of Spiethoff’s business-cycle theory, Oskar Morgenstern welcomes renewed attention to Spiethoff’s treatment of capital but questions the standards used to assess it. Why demand conformity to a preconceived theoretical system when the conjectures themselves remain untested? Morgenstern offers a concrete alternative: compare rival notions of “capital shortage” and investigate them statistically. His measured judgement distinguishes the value of recovering neglected work from the task of establishing its explanatory strength. The review gives readers a concise instance of economic criticism that asks not merely whether an account is faithful or systematic, but what evidence would help decide between competing explanations.

A peace settlement cannot credibly restrain defeated states if the victors refuse equivalent restraints themselves. In this 1939 letter to The Spectator, republished in 1997, Friedrich August von Hayek argues for an immediate Anglo-French federation as a practical pledge of British commitment to Europe. His case joins two problems often treated separately: the vulnerability of minorities to national economic policy, even under democratic government, and France’s reasonable fear that a Central European federation would reinforce German predominance. Drawing on Central Europe’s mixed populations, Hayek challenges the hope that better borders alone could secure peace. This brief intervention shows why he regarded voluntary limits on British and French sovereignty not as a concession to follow victory, but as a condition for a settlement others could accept on equal terms.

To analyze business cycles, this first volume of Schumpeter's 1939 study contends, is to analyze the whole economic process of the capitalist era, not some detachable pathology bolted onto an otherwise placid system. Progress itself unstabilizes: innovation, carried out by new firms drawing on bank-created credit, repeatedly knocks the economy away from equilibrium and forces the recessions that absorb it. Weaving theory, statistics, and history, he organizes the record around three superimposed waves, Kondratieff, Juglar, and Kitchin, and reads railroadization as the paradigm of long-gestation innovation. A secondary wave of speculation and debt, engaging Fisher's debt-deflation, explains why some depressions turn abnormal and destructive. The volume closes with dense historical outlines from 1787 to 1913 across England, Germany, and the United States, following cotton, steam, steel, and electrification.

Revival is the last and not the first phase of a cycle.

Where the theory was built, this second volume turns to the evidence — prices, output, employment, commodity markets, deposits, loans, and interest — reading every series as the trace of an evolutionary mechanism rather than a barometer that speaks for itself. Schumpeter's method is deliberately anti-barometric: no single index reveals the cycle's true shape, and the Kondratieff–Juglar–Kitchin schema must be used historically, never mechanically. The financial chapters refuse to crown interest as the master cause: it saturates capitalist calculation yet is fundamentally consequential, causal only in a secondary sense, and entrepreneurial demand for credit moves rates before rates move anything. He dissolves the rigid money-market/capital-market divide, denies any secular law of declining interest, and rejects the Hayek–Mises–Hawtrey claim that bank-initiated cheap money originates the cycle.

In this sense interest may indeed be said to hold a central position in the system.

How much can statistical evidence tell us when the economic meaning of what it measures remains unsettled? In this short 1939 review of Solomon Fabricant’s Capital Consumption and Adjustment, Friedrich August von Hayek weighs that difficulty without dismissing the research it complicates. He questions whether business-accounting distinctions adequately capture capital used up in production and changes in its value, yet welcomes Fabricant’s evidence on depreciation, repairs, losses, and the expected useful lives of capital goods. The review offers a compact instance of Hayek’s critical judgement: doubts about aggregate measures coexist with appreciation for carefully documented detail. Its interest lies in this distinction between a study’s unresolved theoretical foundations and the concrete knowledge its statistical work can nevertheless provide.

Painstaking exposition can still miss what holds a theory together. In this 1939 review of R. J. Saulnier’s comparative study of Hawtrey, Robertson, Hayek, and Keynes, G. L. S. Shackle praises scholarly fairness while identifying that precise failure in the treatment of Keynes. For Shackle, the General Theory turns on decisions made in almost complete ignorance of the future—not merely on its individual concepts and analytical devices. His brief assessment also questions Saulnier’s reliance on an earlier formulation of Hayek’s theory and distinguishes criticism of the multiplier’s presentation from refutation of its substance. The review offers a compact encounter with Shackle’s interpretive priorities: attention to uncertainty, to the development of an economist’s thought, and to the difference between explaining a theory’s parts and grasping its unity.

A federation of formerly sovereign states can secure peace, this German-language essay argues, only as an economic union — yet that union disables much of the nation-state's interventionist repertoire and cannot simply hand it to a federal center. Free movement of goods, labor, and capital turns the federation into a single price area, stripping member states of tariffs, monopolies, and independent monetary policy. But protectionism cannot migrate upward either: the solidarities that sell a tariff as aid to "our" producers dissolve among peoples who share no thick common identity, and the same thinness defeats central planning, which presupposes agreement no diverse union possesses. The federation needs only a negative power — to stop states from rebuilding economic borders, not to plan in their place. Federalism, Hayek concludes, completes liberalism rather than enlarging the state.

Das Bundesgebiet wird ein einziger Markt und die Preise in seinen Teilen werden nur um den Betrag der Transportkosten differieren.

English translation: “The federal territory becomes a single market, and prices in its parts will differ only by the amount of transport costs.”

Germany’s falling unemployment and rapid rearmament posed an uncomfortable question: did military mobilization demonstrate economic efficiency, or merely efficiency at serving a narrowly coercive purpose? In this brief symposium contribution, Gottfried Haberler separates employment, consumption and stability as measures of economic performance. He challenges easy comparisons between dictatorships and democracies by contrasting Germany’s employment record with Italy’s, while qualifying the statistical evidence. He also distinguishes a conceivable economic policy—replacing armaments expenditure with civilian investment—from its doubtful political feasibility. Rather than resolving whether democracies could match Germany’s apparent productive effectiveness, Haberler sharpens the question: what would comparable efficiency mean if consumer choice and political freedom were preserved? The contribution offers a compact exercise in judging economic results without confusing productive capacity with the desirability of its ends.

A country can retain its borders yet lose control over the conditions of its domestic life. In this 1939 essay, Emil Lederer examines how totalitarian regimes exert pressure beyond their territories through propaganda, organizations abroad, and the threat of sudden military attack. His distinctive concern is not simply conquest: defensive preparation itself can force democracies to sacrifice wages, leisure, and civilian priorities. German claims over nationals abroad expose the tension between cultural affiliation and political sovereignty; permanent rearmament carries that tension into everyday economic life. Lederer thus offers a concrete way to understand how foreign regimes can constrain democratic choices without formally abolishing national independence—and why military defense alone cannot answer every form of interference.

Borderlines, it is true, still exist between the states, but in its domestic affairs the world has become one unit.

A fall in demand need not mean a fall in spending: the price itself changes the expenditure calculation. In this 1939 article, Gerhard Tintner extends that distinction to consumption planned across time, asking how income, prices, and interest rates alter spending on particular goods and dates. His elasticities separate changes in quantities chosen from the direct effects of prices and discounting. Although total net saving is zero over the planning horizon, borrowing or saving along the way still matters for expenditure responses. The contrast with Irving Fisher sharpens Tintner’s perspective: preferences concern individual goods at particular dates, not merely aggregate expenditure streams. Readers can discover how aggregation preserves these distinctions—and why quantity-demand elasticities alone cannot explain changes in spending.