The archive.

Stable prices and expanding employment need not mean rising living standards. In this 1938 article, Emil Lederer asks whose consumption Germany sacrifices to make rearmament possible. His answer shifts attention from borrowing techniques to wages held down during industrial recovery: workers, he argues, supply the real resources behind apparently sound public finance. He tests official welfare statistics against declining product quality, actual shop prices, and food diverted to military use, then explains how military orders absorb output that might otherwise support civilian consumption and investment. The article offers a concrete distinction between financial stability and social cost—and between a system sustained by enforced restraint and the more ambitious total-war program that threatens to exceed its material limits.

A firm’s pricing decision depends partly on what it expects its rivals to do—but those expectations may be vague, inaccessible, or incompatible with equilibrium. In this brief 1939 round-table contribution, Fritz Machlup asks how economic analysts and government investigators can study such markets without assuming away the uncertainty that shapes business decisions. Focusing on the conjunction of product differentiation and fewness of sellers, he proposes using empirical and theoretical case studies together to seek manageable assumptions that preserve some realism. The interest lies in his precise account of a methodological tension: conjectures are difficult evidence, yet indispensable to explanation. Readers encounter a practical argument for what monopolistic competition theory can guide investigators to study—and what it should warn them against concluding.

What distinguishes planning for economic recovery from planning for war? In this brief contribution to the 1939 round-table report Divergencies in the Development of Recovery in Various Countries, Emil Lederer separates policies often grouped under a single label by their purposes and economic settings. He treats wartime controls as a response to inflationary war finance, Russian planning as a planned Industrial Revolution, and totalitarian planning as preparation for war. His contrasting account of capitalist business-cycle policy links monetary measures, price controls, regional planning, and public works to overcoming obstacles to expansion. The contribution offers a compact distinction between planning that mobilizes an economy and planning that seeks to restore its growth.

Full employment is both the achievement and, in Josef Herbert Fürth’s account, the vulnerability of Germany’s economic policy: once unemployment disappears, workers gain the bargaining power to demand higher wages. In this brief 1939 round-table contribution to “Divergencies in the Development of Recovery in Various Countries,” Fürth asks whether democracies can borrow that policy without importing its coercion. Italy’s unsuccessful imitation complicates any simple recipe for recovery, but his central concern is the suppression of wage demands through censorship, the destruction of independent labour organizations, and force. His argument offers a pointed test of policy transfer: not merely whether public spending creates jobs, but whether the controls used to sustain the result can coexist with civil rights.

Rejecting a stationary economy need not mean rejecting equilibrium analysis. In this 1939 review of Moses Abramovitz’s An Approach to a Price Theory for a Changing Economy, Ludwig M. Lachmann draws a sharp distinction between claiming that markets tend towards equilibrium and using equilibrium to test whether entrepreneurs’ plans can fit together. He welcomes Abramovitz’s attention to investment, time and expectations, but argues that abandoning market analysis leaves those plans disconnected. Forward markets supply Lachmann’s alternative: a framework for relating expected prices across dates. This brief, pointed review offers a concrete way to reconsider the supposed opposition between equilibrium and change—and shows why Lachmann finds an implicit equilibrium concept in the very approach that rejects it.

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.