Jeffrey M. Herbener

It is [my] contention . . . that the wake for all welfare economics is premature, and that welfare economics can be reconstructed with the aid of the concept of demonstrated preference. This reconstruction, however, will have no resemblance to either of the “old” or “new” edifices that preceded it. In fact . . .

Arthur Middleton Hughes

In the misdirection of labor and the distortion of the structure of production during past business cycles, it was fairly easy to point to the places where the excessive expansion had occurred because it was, on the whole, confined to the capital goods industries . . .

Ivan Pongracic

In The Wilhelm Röpke Review, founder and editor Ralph E.

Leland B. Yeager

I regret prolonging the discussion, but remarks by Joseph Salerno, Hans-Hermann Hoppe, and Jeffrey Herbener in the first 1996 issue of this Review foster the impression that my position is so wrong as to require further discussion.

Professor Machovec of Walford College has written what might be called a monograph in the history of economic thought, dealing with the economic profession’s adoption of the general equilibrium theory as the starting point of all economic analysis. He argues that this revolution, which took place in the 1920s, radically altered the way economists would come to view economic phenomena.

Paul Krugman owes much of his considerable reputation as an economic theorist to “new trade theory.” In contrast to traditional trade theory, supporters of the new view deny that free trade is always advantageous: the exceptions largely concern cases of “increasing returns.” “It’s obvious that the new trade theory introduces the possibility that government action can, in effect, create comparative advantage” (p. 110).

If Robert Skidelsky is right, the twentieth century has been dominated by a conflict that ought never to have happened. Throughout most of the century, collectivism was the order of the day. (By a collectivist society, Skidelsky means “one in which state purposes have replaced private purposes in shaping economic and social life” [p. 17]).

Parth J. Shah

Banks under a free-banking system, like banks with fractional reserves under any other system, are susceptible to runs. Free-banking theorists maintain that the option clause would be one effective means of dealing with runs on banks. The option clause, printed on banknotes, would allow banks to defer redemption of their notes provided they pay interest for the period of deferment.

Frank Shostak

It is widely held that financial asset markets always fully reflect all available and relevant information, and that adjustment to new information is virtually instantaneous.1 This way of thinking is also known as the Efficient Market Hypothesis (EMH), and

Jacqueline R. Kasun

Austrian economics has long understood that government subsidies of private activities distort incentives, encouraging recipients to use and/or provide more of the services than would otherwise be the case, and to devote resources to lobbying for the protection and promotion of the services (Hayek 1988; Rothbard 1978, pp. 140–70). An excellent example of these tendencies exists in the government-subsidized family-planning industry.