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Failure of New Economics

Failure of New Economics

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Abundance, economics of, 231, 302,
382
"Aggregate" economics, 28, 46, 48-
49, 273-276, 427, 435
Algebra, 291, 306, 362
AM and NZ commodities, 122
American Ice Co., 175, 445
Anderson, Benjamin M., 4n., 32-34,
55, 64n., 88, 126n., 142n., 171,
259n., 292-293, 3Oln., 3l9n.,
438
Anglo-centric views, 197
Apples and orchard, 202
Approximations, successive, 73
"Austrian" school, 14
Autarky, 338, 396
Averages, 28
A-W and XYZ goods, 149

Backman, Jules, 283n.
Balance of payments, 393
Ballistic-missile, 73
Ballvé, Faustino, 205
Bank deposits, turnover, 301
Bank holidays, 174-177
Bank of England, 341, 383
Barrington, Patrick, 133-134
Bastable, C. F., 346
Bastiat, Frederic, 340, 346
Beggar-my-neighbor policies, 339,
344
Bergson, Henri, 69
Beveridge, Sir William, 52n., 338n.,
403-404
Bloomsbury circle, 86, 381, 398
Böhm-Bawerk, E. von, 12, 55, 63,
198, 212-213, 230, 286, 343
Bonds, British Treasury, 161

Bresciani-Turroni, Constantino,
l6ln.
British railways, 175-177
British Treasury bonds, 161
Brothers Karamazov, The, 397
Brown, Harry Gunnison, 438
Bureaucrats, 323, 362
Burns, Arthur F., 320, 326, 438
Business cycle, 319-336
measurement of, 326-327
Butler, Samuel, 93
Buying and selling, 94, 222, 377-378

Cairnes, J. E., lO4n.
"Cambridge school," 24, 55, 197
Candide, 58
Cannan, Edwin, 363n.
Capital, 378-379
confusions about, 217-235
marginal efficiency of, 156-170
scarcity of, 381
Capital goods and consumption
goods, 107-108
Capitalism, 182-183, 246, 375, 396-
397, 434
Capitalists, 359-360
Carlyle, Thomas, 58
Cash-preference, 193
Cassel, Gustav, 293
Central banks, 213
as green cheese factories, 245
Chapman, S. J., 360-36In.
Cheap-money policies, 329, 332,
341, 397, 422-424, 434
and unemployment, 422-424
Chesterton, G. K., 152
Chile, 161
Circulation, velocity of, 300-301

451

452

INDEX

City Products Co., 176, 446
Clark, Colin, 409
Clark, John Bates, 12, 14, 55, 374-
375
"Classical" economics, 10-12, 49,
186, 197, 303-304, 341, 344,
347, 348-349, 385-386, 431
"Classical" economists, 11, 427
"unreasonableness" of, 28-29
Classical "medicine," 393-395, 435
Clemenceau, 441
Coal, prices of, 278
Coffee, 311
Coke production, 320
Cole, G. D. H., 1
Commercial-paper rate, 422-424
Competition, 345
"Conspicuous waste," 360
"Consumer, I Want to be a," 133-

134

Consumer Price Index, 18
Consumption, 49-51, 81 if., 107 ff.
influence on production, 364-371
Consumption "function," 110, 113,
115-121
Consumption goods and capital
goods, 107-108
Coordination, 426, 433
Corn, 240
Cortney, Philip, 126n., 438
Cost-of-production theory, 297
Costs as prices, 296-299, 314
Cournot, Augustin, 101, 104, 106,
290
Credit cycle, 83-84
Crop restriction, 419
Crops, 334-336
Crusoe, Robinson, 92-93, 348
Crusoe economics, 413
Cycle theory (see Business cycle;
Trade cycle)

Darwin, Charles, 2, 427
Deficit spending, 421-422, 430, 436
Definitions, 82-83, 95-96, 120 ff., 428
circular, 80
Deflation, 228
Deflators, implicit price, 412

Demand, 38, 298
"effective," 38, 43, 44, 48, 55, 78,
299, 433
"elasticity" of, 261, 270-271, 304-
305, 308-312
responsiveness of, 304-305
Demand curve, 101-103, 201-202,
261, 270-271, 310
Demand function, aggregate, 99,
274
Depreciation allowances, 123-127,
416-417
Depreciation reserves, 123-127
Depression of 1929, 126
Devon, Ely, 324-326
Dewey, John, 69
Dillard, Dudley, 3, 76, 439
Diocletian, edicts of, 349
Discount rate, 161, 341, 383
Disequilibrium (see Equilibrium)
Dollar, 313
Don Quixote, 441
Douglas, Major, 55, 362, 371-373
Douglas, Paul H., 260, 269, 405-406
Durable assets, 326-328
Dynamics, 69-75, 168-170, 428
(See also Equilibrium; Statics)

Economic Consequences of the
Peace, The,
85-88, 98, 130, 396,
429, 440-444
Economic Journal, 393-397, 435
Economic Report, 411
Economics In One Lesson, 87,
34On., 4O8n.
Economics of Abundance, 233, 302,
382
Economist, The London, 440
Edgeworth, F. Y., 11, 24, 55, 100,
lO4n.
"Effective" demand, 38, 43, 44, 48,
55, 78, 299, 433
"Efficiency" of capital, 157
(See also Marginal efficiency of
capital)
Egg and hen, 93, 202
"Elasticity," concept of, 304, 307-
312, 433

INDEX

453

Employment, 122, 261-262, 288-295,
428
"function," 288-291
optimum, 435
(See also "Full employment")
England, 161
Equilibrium, 49, 52-54, 73, 89, 250-
252, 272, 393-394, 427-428, 429,
433
confusion with "frozen" situa-
tion, 52, 54, 251
of an ice cube, 250-251
and investment, 122
partial vs. complete, 251
Equilibrium price, 378
Escalator clauses, 425
Euthanasia of the rentier, 376-380,
382, 397, 434
Even-flow economy, 71
Evenly rotating economy, 70-71
Ex-ante and ex-post saving and in-
vestment, 228
Exchange control, 345
Expectations, 66-68, 78, 158-165,
171-185, 220, 428, 430
Ex-post and ex-ante saving and in-
vestment, 228

Federal Reserve Chart Book, 450
Fire insurance, and risk, 168, 180
First National City Bank, l62n.
Fisher, Irving, 12, 55, 160, 202, 204,
206-207, 213, 215-216, 243, 307,
343
Forecasting, 57, 420, 435
Forman, H. Irving, 448
Free employee choice, 426
Free trade, 338-339, 395
French Revolution, 349
Friedman, Milton, 114-115n.
"Full employment," 316, 318, 329-
330, 367, 386, 399-408, 435
Function, 46, 288-291, 429, 433
defined, 46, 291
employment, 288-291

Gainsbrugh, M. R., 283n.
Gambling casinos, 182

General Motors Corp., 381
General theory, a demand theory,
378
in a nutshell, 127
restated, 253-262

General Theory of Employment,
Interest, and Money,
1 ff.
German edition, 277
George, Henry, 340
Germany, 161, 277, 338, 419, 442-
444
Gesell, Silvio, 55, 352-354, 434
Gladstonian finance, 356
Godwin, William, 5
Gold, 153-155, 343, 430
Gold-mining, 153-154
Gold standard, 343-346, 391, 435
Government control, 322-326, 342,
347-352
Great Britain, 234, 258
Gross National Product (GNP),
411-412,416,418
Growth, rate of, 417

Haberler, Gottfried, 40-41, 138n,,
197, 438
Hahn, L. Albert, 44, 72, 437
Half-crown, depreciating, 180
Hamilton, Sir William, 5, 6, 7
Hammurabi, Code of, 349
Hansen, Alvin H„ 2, 66, 69, 75, 79-
80, 88-89, 109, 111, 114, 115,
118, 120, 138n., 234, 236-237,
250, 405, 439
Harding, President, 444
Harris, Seymour E., 32n., 4On., 78n.,
114n., 439
Harrod, R. F., 3, 8n., 339n.
Hart, Albert G., 78
Hayek, F. A., 12, 55, 196, 207, 215,
233n., 246n., 282n., 302-303,
437, 438
Heckscher, E., 355
Hen and egg, 93, 202
Hicks, J. R., 66-67, 195
Hobson, J. A., 355, 362, 371-372,
434
"Homespun, let goods be," 337-340

454

INDEX

Hoover, President, 142n., 442
Hume, David, 5, 343
Hutt, W. H., 191, 354, 389, 438
Hypothetical isolation, 73

Ibsen, 215
Ice cube, "equilibrium" of, 250-251
Ice manufacturers, 174-176
Ideas, power of, 391-392
Imaginary constructions, 71
Income, 78 ff., 428
disposable personal, 112-113
national, 409-420
(See also Consumption; Invest-
ment; National Income; Sav-
ings)
Income tax, 386-387
Index numbers, 412
Individualism, 387-388
Industrial production, 449
Industrial Revolution, 246, 432
Industry boundaries, 275n.
Inequalities of income, 374-376
Inflation, 160, 161-165, 228, 301-302,
314-316, 329-332, 367, 396, 418,
419, 426, 430, 433, 434
Chilean, 161
German, 161
perpetual, 329-332
vs. piecemeal adjustment, 279-
286
Insurance, and risk, 168, 180
Insurance companies, 204
Interest rate, 96, 108, 131-133, 158-
162, 184, 186-188, 197-216, 236-
252, 248-250, 295, 312-314, 316-
318, 322-323, 330, 341, 343, 349,
422-424, 428, 429, 430, 448-450
and business cycles, 448-450
long-term, 450
a market price, 317, 434
short-term, 448-450
Interest, theory of, 158-165, 186-196,
197-216, 349, 430, 431, 450
combined, 206-212, 431
exploitation, 215, 317
monetary, 193 ff.
"natural" rate, 248-250

"own rates," 236-252
productivity, 198 ff., 431
time-preference, 198 ff., 431
Investment, 50-51, 428, 430
and employment, 122
ex-ante and ex-post, 228
"full," 384
by government, 184, 385-390
government control of, 322-326
as government spending, 148-152
and savings, 43, 78-97, 142-148,
217-235, 377, 432
socialization of, 385-390, 434
Investment opportunity, 431
Investor, "functionless," 382-383,
434
"Invisible hand," 394

Jevons, W. Stanley, 14, 55, 197,
213, 286, 290, 334-336

Kahn, R. F., 135
Kapital, Das, 63, 287
Karamazov, Ivan, 397
Keats, John, 70
Keynes, John Maynard, 1 ff.
authoritarianism of, 323, 376
circumlocutions of, 305
contradictions in, 43, 90, 156,
296, 331, 343, 387-388, 395-398,
427-428, 435
controversial manners of, 346
on controversy, 8n.
demagogy of, 380
his distrust of a free economy,
323
inconsistencies of, 339
jokes of, 88
Life of, 3, 8n., 339n.
misuse of terms, 49, 52, 79, 156,
170
paradoxes of, 89, 91, 151, 343
policies of, 421-426
"recantation" of, 393-398, 435
style of, 8, 16, 29, 30, 79, 86
terminology of, 49n., 98, 158n.,
170, 188
Keynes, John Neville, 99-100

INDEX

455

Keynesian policies, 421-426
Knight, Frank H., 9n., 16n., 55,
64n., 73n., 74n., 88n„ 143-144n.,
195, 198-199, 254, 286, 308,
389n., 437, 438
Kuznets, Simon, 118, 143, 409-412

Labor, 86
demand for, 259, 269-271
division of, 339
not a lumped total, 25
Labor Relations Board, National,
419
Labor union policy, 259
"Labor-units," 60-65
Lachmann, L. M., 438
Lacy, Mary G., 349n.
Laissez jaire, 277, 340, 390-391, 435
Land, 246-247
Laski, Harold, 444
Law, Bonar, 348
Law, John, 434
Lawrence, Joseph Stagg, 438
League of Nations, 444
Lending, and risk, 165-168
Lenin, 396
Lerner, A. P., 237
"Level" {see Wages, Prices)
Liquidity, 179-180, 430, 431
Liquidity-preference, 186-196, 351,
370
Lloyd George, 441
Lloyd's Bank Review, 324-326
"Loan-expenditure," 148-149, 152-
153
Locke, John, 343
Lodge, Senator, 444

London Economist, The, 440

London Times, 1
Long-run, "all dead in," 180

"Macro-economics," 28, 274, 415,
427
Malthus, Thomas R., 5, 38, 40-43,
57, 58, 355-362, 434
Manchester Guardian, 338
Mandeville, Bernard, 171, 355-362,
434

Mantoux, Etienne, 438
Marget, Arthur W., 437
Marginal efficiency of capital, 156-
172, 232, 319-322, 430, 432, 434
at zero, 232
Marginal theory, 297
Marryat, Captain, 36In.
Marshall, Alfred, 3, 11, 24, 42, 55,
60, 76, 104n., 193-194, 197, 201,
230, 245, 292, 304, 308, 346
Marx, Karl, 2, 4, 11, 55, 63-64, 235,
313, 413
Marxism, 286, 318, 380, 416
and Keynesism, 318
Mathematical economics, 45, 72-74,
98-106, 290-291, 305-308, 311-
312, 429
Mature economy, 234, 370-371
Maximum, Law of the, 349
Medieval Church, 351
Menger, Carl, 14, 55, 286
Menuhin, Yehudi, 62
Mercantilism, 337-373, 443
Mercantilists, 9, 337-373, 434
Midshipman Easy, 36In.
Mill, James, 11, 36
Mill, John Stuart, 5, 6, 7, 11, 34-35,
38, 70, 219, 293n., 294, 340,
346, 362-371
Mink-coat, 185
Misers, 355-361
Mises, Ludwig von, 12, 32, 55, 57n.,
70, 7ln., 104n., 194-196, 203-
204, 213, 215, 246n., 249, 286,
292, 293, 3Oln., 345n., 437, 438
Mitchell, Wesley C, 67, 140-141,
320, 326
"Modernist stuff," 435
Modigliani, Franco, 438
Monetary theory, 291-295, 299-301,
433
"Monetary veil," 212, 294
Money, 189-192, 288-295, 296-318,
430
as "barren," 221, 354, 431
as "link" to future, 294
as medium of exchange, 191, 294-
295

456

INDEX

Money (Cont.)
and prices, 296-318
as productive asset, 189-192, 431
quality of, 300
quantity theory of, 298
as standard of value, 312-313
as store of wealth, 190-191
theory of, 299-301
velocity of circulation, 300-301
Money supply, 432
"Money-wage," (see Wages)
Moneylenders, 316-318
Moore, Geoffrey H., 326-327, 448
Moore, Gerald E., 46n., 29In.
Motives for saving, 128-131
Multiplier theory, 135-155, 429-430

Nation, The, 444
National Bureau of Economic Re-
search, 114-115n., 326, 448
National income, 79, 409-426, 435
"National Income Approach, The,"
409-420, 435
National Industrial Conference
Board, 283-286
National Recovery Administration,
23
National self-sufficiency, 338
Nazi Germany, 277, 338
New Deal, 23
New Republic, The, 444
Newsweek, 448n.
Nietzsche, 71
Nineteen Eighty-four, 277
"Non-Euclidean" economics, 29, 31
"Normal" price, 211
Nourse, Edwin G., 404-405, 406, 438
Nutter, G. Warren, 417

Occam's Razor, 289
Oldsmobile, 381
Open-market operations, 213-214
Operational concept, 103
Orchard and apples, 202
"Orthodox" doctrines, 7
Orwell, George, 277

Output, unconsumed, 82
(See also Income; Investment;
Savings)
"Own rates of interest," 236-252,
432

Packe, Michael St. John, 364n.
Palyi, Melchior, 438
Paper currencies, 154-155
Paper money, 155
Peanut schemes, 185
Petro, Sylvester, 426
Petty, 362
Piano, and stool, 314, 434
Pig iron production, 326
Pigou, A. C, 11, 14, 16, 24, 55, 60,
76, 197, 244, 260, 264-267, 269,
363n., 402-403, 409
Population, 246, 432
Postulates of Keynesian Economics,
13-31
Pound sterling, 258
Poverty and Waste, 36On.
President's Economic Report, 411
Price control, 349
Prices, 288-295, 296-318
interconnectedness of, 385
"level of," 24-25, 278, 296-298, 316
millions of, 278
and money, 295-318
theory of, 301-305
Printing press, race with, 425-426
Probability, 172-173
Production, 449
Production, roundabout, 229
Productivity, of capital, marginal,
157
of labor, marginal, 13-14, 19-20
physical vs. value, 20-21
theory of interest, 198 ff.
Projectiles, 307
"Propensity to consume," 49 ff., 98-
134, 429
marginal, 136
Propensity to work, 378
Protection, 337-339, 396
Prudence, derision of, 127
Pseudo-idleness, 389

INDEX

457

"Psychological law," 50, 106 ff., 429
Pyramids, 152, 441
Pythagoras, 348

Quantity theory of money, 298-301

Rate of return over cost, 431
"Real-wage," (see Wages)
Reconstruction Finance Corpora-
tion, 185, 347
Rentier, euthanasia of, 376-380, 382,
397, 434
Reparations, German, 442-444
Responsiveness, 304-305
Ricardo, David, 2, 3, 11, 36-40, 42,
54-58, 197, 286, 293, 313, 340,
346, 363, 427
Risk, lender's, 165-168
Rist, Charles, 126n., 438
Robbins, Lionel, 126n., 395, 406
Robertson, D. H., 329
Robinson Crusoe, 92-93, 348
Röpke, Wilhelm, 55, 437, 438
Roosevelt Administration, 4, l42n.
Rothbard, Murray N., l5ln.
Roundabout production, 229, 429
Rueff, Jacques, 437-438

Saint Joan, 348
Samuelson, Paul A., 2, 16n., 89
Santayana, George, 5
Saving, 428, 429, 430, 431
capitalistic, 429
as going without dinner, 217
motives for, 128-131, 429
owe our lives to, 244-246
as spending, 42
as villain, 85, 127
(See also Savings)
Savings, 112 ff.
"cake," 86-88
and consumption, 116 ff.
ex-ante and ex-post, 228
and income, 116 ff.
and investment, 43, 78-97, 142-
148, 217-235, 377, 432
and liquidity, 186-188

"printed," 93
(See also Saving)
Say, Jean-Baptiste, 37, 363
Say's Law, 32-43, 357, 368-371, 418,
427
Scarcity, 302-303
Schmidt, Emerson P., 438
Schultz, Henry, 3O9n.
Schumpeter, Joseph A., 2O6n.
Sennholz, Mary, 282n., 354n.
Shaw, Bernard, 171, 346, 348, 398
Shoul, Bernice, 36n., 39
Sinking-funds, 123-127
Small Business Administration, 185
Smith, Adam, 1, 3, 5, 33, 38, 67, 111,
340, 346, 394, 396, 413, 427
Socialism, 385-386, 434
Socialization of investment, 385-390,
434
Southern Railway Co., 176-177, 447
Spadaro, Louis M., 282n.
Speculation, 171-185, 430
Spiegel, Henry William, 2n.
Sraffa, 238
"Stage" theory of history, 382
Stagnationist theory, 234
Standard of value, 312-313
Statics, 69-75, 168-170, 428
(See also Dynamics; Equilibrium)
Stationary economy, 70 ff.
Statisticians, 27, 29
Statistics, 112, 424
and theory, 112
Stigler, George J., lO4n.
Stock market, 94, 172-185
Strachey, Lytton, 86, 171, 441
Sumner, William Graham, 340
Sun-spot theory, 333-336
Supply, curves, 101-103

elasticity of, 308-312
supply function, aggregate, 99
Supply-and-demand theory, 209-211
Swanson, Ernst, W., 438
Sweezy, Paul M., 32n., 41

Tariff Commission, 419
Tariffs, 338n., 345

458

INDEX

Taussig, F. W., 340, 346
Technocrats, 234
Terborgh, George, 234, 438
Theory of Interest, The, 160, 206,
307
Theory o£ prices, 301-305
Thrift, derision of, 54, 127, 130
fear of, 131-134
Time, and interest rate, 204-205,
431
Time dimension, 310
Time-discount, 207 ff., 432
Time-preference theory, 202-206 ff.,
431
Time-usance, 431
Times, London, 1
Totalitarian state and General
Theory,
277
Trade cycle, 319-336
length of, 320-321, 327
measurement of, 320-321, 326-327
"regularity" of, 320-321, 327
Treatise on Money, A, 79, 83-85, 88,
95, 121, 333, 396, 428
Treaty of Versailles, 444

Uncertainty, 172-173
Underconsumption theorists, 434
Unemployment, 301-302. 314, 337,
421-426, 427, 429, 433, 436
class theory of, 286
"frictional," 15-16
involuntary, 15-16, 30
"stable," 257-258
voluntary, 15-16
and wage-rates, 19-20, 263-287
United States, 234, 258
"User-cost," 75-77
Usury laws, 342, 349

Value theory, 291-295, 433
Veblen, Thorstein, 360
Velocity of circulation, 300-301
Viner, Jacob, 16n., 187n., 4O6n.,
425, 438
Viscosity, of economic system, 321
Voltaire, 58

"Wage-goods," 16-17
Wage-rates, 21, 261-287, 299, 312-
314, 331, 427, 428, 433, 434
dispersion of, 283-286
"excessive," 19
flexible, 276-279
and unemployment, 17-19, 280-
282, 331
vs. wage income, 26, 267-269
{See also Wages)
Wages, adjustment of, 314-316
changes never uniform, 27, 30
"level" of, 24-25, 27, 29
"money-wage" vs. "real-wage,"
17-18, 21-23
theory of, 13-31, 201
(See also Wage-rates)
"Wage-units," 60-65, 107, 157, 289,
312-314, 316, 428
Wall Street, 182-183
Walras, Leon, 55, 297
War, economic causes of, 390-391,
435
War debts, 442
Wasson, R. Gordon, 438-439
Watts, V. Orval, 437
Wheat, 238-240, 309-310, 335
Wheeler, Dan H., 278n.
Wilson, President, 440-441
Whitehead, A. N., 100
Wicksell, Knut, 12, 55, 196, 213-
215, 248-250, 292, 293, 297, 43 í
Wicksteed, Philip H., 55, 73n., 201-
202, 211-212, 286
Wild Duck, 215
Wilde, Oscar, 152, 398
Williams, John H., 365, 397n., 420,
439
Withers, Hartley, 36On.
Work, propensity to, 133
Wright, David McCord, 254, 419-
420, 438, 439

Yale Review, 338
Yalta, 443
Young plan, 442

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