Volume 12, Number 1 (Fall 1990)

A standard theorem in neoclassical public finance holds that income taxes are preferred to equal revenue excise taxes. Herbener (1988) rejects this theorem because the proof is (a) based upon methodologically suspect indifference curves and (b) must follow a certain conceptual ordering-namely the excise tax must first be placed upon consumers who are then given the option of facing an equal-revenue income tax and not vice versa. This comment demonstrates that indifference curves are not required to prove the theorem nor must the proof of the theorem follow a specific order.

So long as men are mortal, wealth must be transferred between the generations and so long as parents care for their children, the dominant means of doing so will be through family inheritance. The transference of wealth through family benefits bequest or and heir, strengthens family ties, and increases long-term savings. When the state intervenes in this process, it increases its coffers at the expense of the smooth operation of family, society, and economy.

[Originally published in the Review of Austrian Economics 2 (1988).]

Why do we have booms and recessions? The conventional Keynesian view is that recessions are a failure of consumer demand. Keynesians, however, are not entirely clear on why consumers periodically act in unison to reduce their consumption. A more logical answer to the question is the Mises-Hayck theory of the business cycle. The ideas of Ludwig von Mises and Friedrich A. Hayek, central to the Austrian school of economics, suggest an entirely different approach to the business cycle from what has become the conventional wisdom for the last 40 years.

This is a useful, clearly written study of the philosophical origins of Menger’s theorizing in economics. As the author points out in his conclusion: philosophy has been an accompanying presence at every stage in the development of Austrian economics. Moreover, “Action, that leitmotif of praxeology, has in the Austrian tradition received a distinctly Aristotelian analysis. Austrian economics and a realistic philosophy seem made for each other.”

The present glut in the money markets, with excessively cheap money and its attendant evils and dangers to the credit structure of the country, is due to the concurrence of three main causes: 

1. The unprecedented flow of gold to the United States.
2. The current business reaction.
3. Excessive Federal Reserve Bank earning assets, due to a feeling on the part of the Federal Reserve authorities that they owe it to their stockholders to earn expenses and dividends at all times.

The text of a speech given by University of California at Los Angeles professor of economics Benjamin M. Anderson on May 11, 1943, which deals with the subject of foreign exchange stabilization.

Delivered before the Chamber of Commerce of the State of New York, New York City, February 3, 1944.

While there are many economists and philosophers who have defended the right to become wealthy, few have defended wealth per se. But in fact, the simple existence of wealth is economically of great importance, quite apart from the familiar need for society to accumulate capital for investment. Wealth and the inequality it breeds are actually central to the functioning of our entire economic system.