The archive.

Paul Samuelson had argued that a theory resting on empirically false assumptions must be discarded; this short polemic answers that the rule would abolish theory as such, since every empirical test yokes a model to assumed occurrences. The sharpest thrust is turned against Samuelson himself. His celebrated factor-price equalization theorem, Machlup notes, derives illuminating conclusions from wildly unrealistic premises about countries, commodities, factors, and technology—precisely the abstract method Samuelson elsewhere condemns. Far from an embarrassment, that theorem exemplifies how strong simple cases point toward truths buried in complex situations. The essay thus enlists a leading formalist's finest work as evidence for the indispensability of unrealistic assumptions in economic reasoning.

What Samuelson does here is to reject all theory.

For the seller who feels himself one among very many, rivals are colleagues rather than threats—and it is this state of mind, not the sheer count of firms, on which Machlup rebuilds the theory of selling. He coins pliopoly for the pressure of potential newcomers, setting it beside polypoly, oligopoly, and monopoly, and defines a true monopolist by the triple absence of all three. Against businessmen who claim they price by average or full cost, he reinterprets such rules as competitive responses to expected demand elasticity, treating cartel ethics and break-even charts as evidence rather than refutation. The analysis ranges across perfect and imperfect polypoly, artificial scarcity and monopoly rents, and the kinked demand curve, always parting the economist's objective calculus from the trader's rough feel for the market.

The concept of the industry is nothing but an expedient device for ruling out negligible or too uncertain interdependence.

No identifiable majority, Hayek contends, ever wanted many of the results modern democratic politics produces, which is precisely why blaming the majority misses the disease. The trouble is that representative assemblies now perform two incompatible tasks at once: laying down general rules of justice and directing the concrete business of government. Once every parliamentary resolution counts as law merely because a legislature passed it, the older ideal of law as an impartial, universal norm dissolves, and party coalitions trade privileges among organized interests. Popular sovereignty he calls a rationalist superstition, the assumption that some unlimited power must exist somewhere. His remedy is a bicameral order with one chamber elected on long, staggered, nonrenewable terms and confined solely to general rules, insulated from the bargaining that governs administration.

Sie ist die Grundlage, die ein friedliches Zusammenleben der Menschen in der Gesellschaft und einen friedlichen Wechsel der Personen, die organisierte Gewalt ausüben, möglich macht.

English translation: “It is the foundation that makes possible a peaceful coexistence of people in society and a peaceful change of the persons who exercise organized force.”

Had the World War been brought to an end in 1917, Engel-Janosi observes, not only European but world history would have run a different course. This 1965 Academy lecture reconstructs one fragile chance at that ending: the secret 1917–18 Freiburg conversations between Count Nikolaus Revertera and the French intelligence officer Abel Armand, mediated by a Swiss physician. Reading the Austrian and French records against each other rather than harmonizing them, the essay turns on a crucial distinction—Armand's written demands over Belgium and Alsace-Lorraine were a maximum programme he privately conceded was negotiable. The channel failed when Berlin refused and Czernin sent no clear reply; its collapse fed the disastrous speech that provoked Clemenceau's denial and the publication of the Sixtus letters. Whether Armand ever held real authority, the author cautions, remains unproven.

An Czernins Rede ist so ziemlich alles verwunderlich, beginnend mit dem Forum, dem Wiener Gemeinderat, das er sich für sie wählte.

English translation: “About Czernin's speech, virtually everything is astonishing, beginning with the forum he chose for it—the Vienna Municipal Council.”

When Machlup rose to lecture at the University of Kiel's three-hundredth anniversary, he chose to turn the tools of economic calculation on higher education itself, in the German original preserved here. He confronts head-on the charge that pricing culture is materialistic, replying that the economist does not judge the intrinsic worth of universities but only makes explicit the valuations already buried in public budgets and private choices. Separating research, teaching, and learning, he shows that students bear the heaviest learning costs through fees and forgone earnings, cites Becker's estimates of private returns near ten to twelve percent, and then adds the external benefits to families, employers, and future generations. The social return on university capital, he calculates from American data, may reach twenty-four percent—roughly double the yield on industrial capital.

Ob die mit einer Million bezahlten Leistungen kulturelle oder materielle Werte darstellen, ist vom Gesichtspunkt der Rationalität gleichgültig.

English translation: “Whether the services paid for with a million represent cultural or material values is, from the standpoint of rationality, immaterial.”

Behind Lyndon Johnson's Great Society, Sennholz sees no new social vision but New Deal liberalism rebranded—an 'Everything Deal' that promises education, medicine, poverty relief, housing, and clean cities while enlarging federal paternalism and eroding the market's disciplines. Nearly cost-free college, he warns, damages the moral fiber of the young; Medicare inserts bureaucracy between doctor and patient; the War on Poverty misreads unemployment, which he calls a cost phenomenon, pricing marginal workers out of jobs through minimum wages and union privileges. Urban renewal clears neighborhoods like bombed-out districts. Widening from domestic policy to Vietnam and a looming dollar crisis of gold outflows and balance-of-payments deficits, this 1965 American Opinion essay treats welfare expansion, no-win war, and monetary fragility as one interlocking symptom of national blindness.

Indeed, the "Great Society" is a Calamity Deal on the eve of the greatest debacles in our history.

The word 'communism,' Sennholz argues, once named a policy program rather than a foreign allegiance—and by that older Marx-Engels meaning, much of it now sits lodged in American institutions. Liberals may cherish civil rights and representative government yet still adopt collectivism's instruments; his distinction is between motive and mechanism. He traces a shared 'ontological materialism' running from Marx through W. W. Rostow's stages of growth and Alvin Hanson's verdict that the market no longer works, then assembles his documentary case: the 1964 Socialist Party platform laid beside Johnson's Great Society, with Norman Thomas boasting that the New Deal had already stripped socialist demands of their taint. Radicalism, in this 1965 American Opinion essay, is not an outside infection but the logical offspring of compromised anti-capitalism.

Even in this land of Washington, Jefferson, and Lincoln, most of the Communist Manifesto has been realized during the last third of a century, and the remaining points are now scheduled on the agenda of President Johnson’s Great Society.

Hidden taxation, coerced redistribution, a levy no legislature dares to vote—Sennholz treats inflation as the welfare state's quiet means of financing promises it cannot openly tax into being. He grounds the argument in Austrian theory: sound money restrains government by forcing spending to face public consent, so officials turn instead to deficits and central-bank credit. He overturns the comforting notion that inflation merely punishes rich creditors and rewards debtors, showing how it devours the savings, pensions, and insurance of prudent, salaried, and retired citizens. Keynesian remedies for unemployment, he charges, all reduce to one word: inflation. The 1965 essay then follows the wreckage into the business cycle, progressive tax brackets, vanishing silver coinage, and the strained gold-dollar standard—a quiet thief that builds dependence even as it steals.

Few policies are more calculated to destroy the existing basis of a free society than the debauchery of its currency.

First published in 1943 and reissued here, this technical study rebuilds foreign-trade theory around the money-income multiplier, discarding the instantaneous multiplier of textbook exposition for a period-by-period sequence in which time itself becomes a variable. Machlup traces how an autonomous export sets off successive rounds of income and induced imports, then layers in induced saving, foreign repercussions across two and three countries, and the capital account, all through numerical model tables and elementary algebra. Foreign trade, he shows, plays a double role—both multiplicand and determinant of the multiplier—so that imports lagging behind exports are what let income rise at all. He closes by refusing the neo-mercantilist temptation, since the multiplier offers no honest warrant for tariffs and quotas once price effects, retaliation, and the gains from international division of labor are admitted.

Only the lag of imports behind exports makes it possible that money income rises as a consequence of the exports.

European governments in the mid-1960s complained that the international monetary system compelled them to lend to America, piling up dollars they never wished to hold; de Gaulle charged that the dollar-exchange standard let the United States run up foreign debt almost for free. These two Wicksell Lectures test that grievance. In the first, Machlup weighs eight hypotheses for the persistent U.S. payments deficit—rejecting relative price inflation outright, crediting European devaluations and America's outsized transfer commitments—while insisting that a deficit is never a bare fact but an artifact of accounting convention. The second reconceives the holding of any foreign reserve, gold included, as an interest-free loan to the rest of the world without maturity, and compares fiduciary reserves, gold, and no reserves at all under freely flexible rates.

Receiving foreign currency implies foreign lending regardless of whether or not the recipient is conscious of his making a loan.

A property right, for Rueff, is a 'container of value' distinct from the thing it holds: its volume equals the value of its contents, and it may be filled true or left false. From this reinterpretation of Article 544 of the Civil Code he builds an entire economics of true and false rights—price controls, deficit finance, and the discounting of unbacked claims all manufacture rights that cannot be exercised, and such false rights are the real engine of inflation and disorder. Conceived as a monetary dynamics extending his 1927 Théorie des phénomènes monétaires into the problem of governing societies, the work defends legal-economic institutions as the 'technique of freedom,' warning that once the State injects false rights the road runs toward rationing, command, and the loss of human dignity.

Le droit, c'est la coque qui enveloppe le fruit.

English translation: “Law is the shell that envelops the fruit.”

Liberty belongs on the revolutionary Left, not with conservatism—this is the wager that organizes Rothbard's sweeping reconstruction of the political spectrum. Classical liberalism, he argues, was originally radical, anti-feudal, and internationalist, the force that overthrew the Old Order of caste, theocracy, and militarism; it decayed only when natural rights gave way to utilitarian compromise. Socialism enters as a confused heir, chasing liberal ends through the conservative means of state power. Following Gabriel Kolko, Rothbard reads American Progressivism and the New Deal not as socialist ruptures but as state monopoly capitalism, in which business secured through regulation the privilege it could not win in competition. Mid-century libertarians erred by mistaking conservatives for allies; the corrective, he insists, is a movement that recovers its antiwar, anti-privilege inheritance and trades short-run despair for long-run confidence.

It was, and still is, middle-of-the-road because it tries to achieve liberal ends by the use of conservative means.