The archive.

A machine may remain physically sound long after it ceases to earn its owner anything. In this reply to Professor Pigou, Hayek uses that gap to challenge a definition of capital maintenance based on replacing wear and tear while excluding obsolescence. Three investments with identical physical lifetimes but sharply different commercial prospects show why depreciation allowances must depend on expectations, not merely on durable equipment. The distinction matters for taxation as well as accounting: treating foreseeable replacement costs as disposable income would, Hayek argues, penalise industries undergoing rapid technological change. His concise reply separates provision for anticipated losses from saving after unforeseen losses, and asks when a familiar accounting convention serves—or defeats—its practical purpose of preserving future earning capacity.

Admiration does not erase disagreement in Hayek’s 1941 review of Ludwig von Mises’s Nationalökonomie. He welcomes its integration of economic theory, social cooperation, and liberal policy, yet questions its treatment of interest and the intellectual isolation that limits its engagement with contemporary economics. His strongest allegiance concerns method: Mises’s account of human action, Hayek argues, offers a more persuasive foundation for social inquiry than prevailing attempts to borrow methods from the natural sciences. This short review lets readers locate both the shared ground and the friction between two economists often grouped together. It also shows what Hayek values in a systematic treatise: not merely consistency, but the capacity to connect technical arguments with questions of social cooperation and policy.

Understanding Nazi Germany’s appeal need not mean excusing it. In this 1941 joint review, republished in 1997, Hayek welcomes two contrasting corrections to wartime perceptions: Paul Einzig’s exposure of Germany’s promised European order and C. W. Guillebaud’s account of social policies that helped secure German workers’ support. His sharper objection concerns what the reviewers’ subjects share: an apparent willingness to approve Nazi methods while condemning their purposes. Hayek asks whether comprehensive planning itself demands coercion, imposed hierarchies and leaders ruthless enough to enforce them. This brief review lets readers encounter that question in a concrete dispute over how to describe an enemy accurately—and how to judge seemingly desirable policies by the power required to carry them out.

Scientific expertise can explain general laws—but can it supply the changing, local knowledge needed to direct an economy? In this 1941 article, republished here in 1997, Friedrich August von Hayek addresses scientists and engineers drawn to centralized planning. He contrasts their ideal of deliberate construction with the coordination achieved through competitive prices, then asks what happens to intellectual freedom when one authority controls the resources needed to pursue competing purposes. His contention is that comprehensive planning concentrates power over ends, not merely economic means. The article offers a compact encounter with the connection between Hayek’s account of dispersed knowledge and his defence of liberty, while distinguishing policies that sustain competition or supplement its results from those that replace it with a single plan.

Whoever controls the means must decide which ends they are to serve.

An economy’s complexity seems to call for comprehensive direction; Hayek argues that it makes such direction impracticable. In this 1941 article, reprinted in 1997, he shifts attention from the planner’s objectives to the changing, local knowledge needed to use scarce resources well. A shortage of tin makes the problem concrete: how can users decide what to conserve, replace or recover without knowing why supplies have tightened? Hayek’s answer is that competitive prices coordinate adjustments without assembling everyone’s knowledge in one place. His argument depends on genuine competition, not simply the existence of markets, and his acceptance of wartime planning qualifies rather than abandons it. The article offers a compact account of why economic coordination involves discovering possibilities, not merely executing a known design.

What happens when a demand for scientific objectivity excludes the expectations that guide human choice? In this sharply critical 1942 review of Joseph Mayer’s Social Science Principles, Hayek argues that Mayer’s proposed reconstruction of economics misunderstands the theories it seeks to replace. His most concrete objections concern utility—the benefit an individual expects at the moment of acting—and opportunity cost—the alternative forgone, not the cost of that alternative. These distinctions give the brief review its interest beyond Hayek’s severe verdict on the book: they show why, for him, explaining economic action requires attention to subjective expectations. Readers encounter a methodological dispute tested against specific concepts, rather than a general opposition between economics and natural science.

What makes a catalogue useful to a historian of economics: the breadth of its holdings or the precision of its entries? In this short 1942 review, Hayek judges Harvard’s Kress Library catalogue by its practical service to scholarship rather than its ambition or lavishness. He praises reliable descriptions of 7,279 titles, concise annotations drawn from Foxwell’s notes, and explicit acknowledgment of disputed authorship in anonymous publications. His comparison with Higgs’s bibliography distinguishes the scope of a library collection from that of a broader bibliographical undertaking. A closing objection to capitalization adds a lightly humorous qualification. The review offers a concrete glimpse of Hayek as a reader attentive to the editorial details on which historical research depends.

A convincing portrait of a possible future is not proof that it must arrive. In this 1942 review of James Burnham’s The Managerial Revolution, Hayek grants the realism of Burnham’s account of managerial power while challenging its claim to historical inevitability. He finds revealing evidence in Burnham’s portrait of New Deal administrators who both believe they can run society and enjoy doing so; he also questions the supposed detachment of an analysis sympathetic to the emerging order in Germany and Russia. The review offers a compact encounter with Hayek’s distinction between recognizing a danger and accepting its necessity—and with his concern that persuasive predictions can encourage the very developments they describe.

Can stronger incentives to expand output lead to less investment? In this short reply to Nicholas Kaldor, Hayek explains why they can—and why he regards that claim as a development, not a repudiation, of Prices and Production. His defence turns on distinctions easily blurred in arguments about the business cycle: money interest rates versus relative-price incentives, longer production methods versus a larger volume of investment, and rapid delivery of consumer goods versus capital accumulation. Hayek argues that entrepreneurs seeking higher profits may adopt shorter production methods, while monetary accommodation cannot necessarily reconcile investment plans with consumers’ demands. The exchange offers a compact account of what Hayek believed remained constant in his theory as its assumptions changed.

The essential argument is still the same, but the assumptions under which I describe the operation of the mechanism in question are different.

Machinery and labour, Ricardo wrote, are in constant competition; from that maxim Hayek builds a tight reconstruction of the 'Ricardo effect,' the proposition that a general shift in wages relative to product prices alters the comparative profitability of methods combining labour and capital in different proportions. Writing in German in 1942, he makes turnover velocity—Umschlagsgeschwindigkeit—his gauge of capital intensity: a price rise adds the same margin at each sale, lifting the internal rate far more on fast-turnover, labour-heavy methods than on slow, machine-heavy ones. Firms redirect current outlay toward direct labour, even generating unemployment among machine-makers amid strong consumer demand. Testing the extreme of perfectly elastic credit and answering Kaldor and Wilson, Hayek insists that cheap money can obscure real scarcity but never abolish it.

Solange ungenützte Reserven von Arbeitern zu unveränderten Preisen zur Verfügung stehen, bedeuten unbegrenzte Geldmittel unbegrenzte Verfügungsmacht über die Produktionsmittel.

English translation: “So long as unused reserves of workers are available at unchanged prices, unlimited monetary means signify unlimited command over the means of production. But these are not the conditions relevant in a state of full employment, which will prevail near the peak of a boom.”

Between a rise in commodity prices and money wages that lag behind it lies a mechanism Hayek retrieves from Ricardo and sets at the center of capital and cycle theory. When labor grows cheaper relative to selling prices, the methods that pay are not the long, roundabout, machine-intensive ones but the quick-turnover processes that recover and reinvest their outlays fast—so a boom in consumer demand can perversely reduce demand for capital goods as firms work old plant harder, postpone replacement, and shift toward circulating capital. Reworking the wage-price relation through rates of turnover and internal rates of return, Hayek argues against treating the interest rate as the sole determinant of technique, and shows how credit expansion, once incomes and prices rise, pulls resources back toward shorter processes and throws the capital-goods trades into unemployment.

When does a simplifying assumption become an obstacle to explaining interest? In this brief 1943 reply to Lutz’s criticism of The Pure Theory of Capital, Friedrich August von Hayek distinguishes his provisional assumption of a constant income stream from the analysis he believes is needed: preferences for additional income at different future dates. He points to chapters Lutz excludes, but also concedes that their argument is inadequately developed. The revealing tension is between theoretical ambition and analytical tractability: Hayek admits abandoning a fuller treatment when comparisons across many dates became overwhelmingly complicated. This compact comment lets readers see precisely what he defends—and why he regards his treatment of time preference as needing revision.