The archive.

Hayek’s objection to Keynes’s wartime financing proposal begins with agreement: compulsory savings could restrain civilian spending more fairly and efficiently than inflation. In this short 1939 article, republished here in 1997, the dispute turns instead on what happens when those savings become repayable. Keynes envisages releasing deposits during a postwar slump; Hayek asks whether Parliament could withstand demands for repayment when increased spending would be dangerous. The article offers a concrete encounter between economic design and political pressure, rather than a rehearsal of their wider theoretical disagreements. Hayek’s tentative alternative—converting savers’ government claims into interests in industrial capital—sharpens the central question: how can a workable wartime policy avoid creating an unstable peacetime obligation?

Profit maximization need not settle a price when a sole buyer faces a sole seller. In this theoretical note, Gerhard Tintner makes that difficulty concrete through a steel producer purchasing iron ore from a monopolist supplier. His distinctive question is when buyer control, seller control, and joint profit maximization yield the same outcome. The conditions for their agreement prove exceptional: ordinarily, static analysis establishes a bargaining range rather than a unique input price. By tracing how price-setting authority changes the result, readers can distinguish the constraints imposed by demand and production costs from the distribution of gains between the parties. Tintner’s extension to union–employer wage bargaining sharpens the stakes: on his account, bargaining power, shaped especially by political forces, determines what profit-maximizing equations leave unresolved.

Discarding observations can make a statistical test more defensible. In this 1939 mathematical note, Gerhard Tintner confronts a difficulty in time-series analysis: successive differencing may remove a smooth trend, but it also creates correlations even when the original errors are independent. His response is to select differences built from disjoint observations, allowing their variances to be compared using familiar significance tests. He applies the same selection principle to lagged products in deriving a serial-covariance distribution. The note offers a precise encounter with the trade-off between retaining information and securing a tractable sampling distribution. Readers can see how the observations chosen determine which tests become available—and why the assumptions of normality, independence and a sufficiently smooth trend matter.

What makes consumer-credit exercises useful in teaching financial mathematics? In this brief review, Gerhard Tintner assesses Charles H. Mergendahl and Le Baron R. Foster’s pamphlet as a supplement to high-school and college textbooks. He distinguishes an adequate introduction to credit concepts and calculations from the exercises themselves, which he finds thoughtfully designed, interesting and stimulating. The review offers a concise curricular judgement: its interest lies in Tintner’s emphasis on the quality of practice problems, rather than merely their number or subject matter.

The multiplier, in Keynes and Kahn, arrives as a timeless ratio linking investment to income; Machlup's 1939 intervention insists it can only be understood as a dated process. Public wages become shop receipts, which become factory receipts, which only later become incomes to be spent again — and between the rounds lie inventories, pay dates, and spending habits. He builds an 'income propagation period,' tentatively about three months, to measure how long expenditure takes to become income anew, and shows that a higher propensity to consume yields a larger eventual multiple but a longer road to it, so a government minding the coming fiscal year may collect only a fraction. Leakages, he adds, need not mean hoarding; saved funds may repay debt or buy securities, deferring rather than destroying the next round of spending.

For a discussion of time lags, transition phases, and other intertemporal relationships, Keynesian terminology is not well suited.

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.