1. The Meaning of Neutrality With Regard to Value Judgments

The fact that the science of economics had its origin in economic policy explains why most economists use expressions in the presentation of the theory that involve judgments and standards of value accepted by all mankind, or certainly by almost all men.

1. The Meaning of Neutrality With Regard to Value Judgments

1. The Basic Concept of Action and its Categorial Conditions

The starting point of our reasoning is not behavior, but action, or, as it is redundantly designated, rational action. Human action is conscious behavior on the part of a human being. Conceptually it can be sharply and clearly distinguished from unconscious activity, even though in some cases it is perhaps not easy to determine whether given behavior is to be assigned to one or the other category.

Names are unimportant; what matters is substance. The term “social liberalism” sounds strange indeed as socialism and liberalism are mutually exclusive. But we are accus­tomed to such terminology. Also, socialism and democracy are irreconcilable in the final analysis, and yet there is the old concept of “Social Democracy,” which is a contradictio in adjecto. If today the Brentano School, which adopted syndical­ism, and some “moderate” etatists designate their move­ment as “social liberalism,” no terminological objection need be raised.

Academic socialism is no homogeneous ideology. In the way syndicalism stands alongside socialism, although they often are not differentiated distinctly, there are two schools of thought in Socialism of the Chair: the Socialist School (state socialism or etatism), and the Syndicalist School (at times called “social liberalism”).

Heinrich Herkner, president of the Association for Social Policy, recently published his autobiography under the sub­title “The Life of a Socialist of the Chair.” In it he made it his task “to facilitate an understanding of the closing era of German academic socialism.”1 ,

Considering the dismal intellectual poverty and sterility of nearly all books and papers defending interventionism, we must take notice of an attempt by Schmalenbach to prove the inevitability of the “hampered economy.”

Schmalenbach starts from the assumption that the capital intensity of industry is growing continuously. This leads to the inference that fixed costs become ever more significant while proportional costs lose in significance.