VII

Marshall Plan and Economic Policy*

THE EUROPEAN SIDE

The great idea of a joint aid program for the western world, as proposed by United States Secretary of State George C. Marshall in June this year, seems to be sharing the fate of so many of the ideas of our time once they are caught up in the vast apparatus that churns out the written and spoken words for the general public. The more that is written and said about them, the more confused and primitive they become. Finally the time comes to ask the classical question: de quoi s’agit-il?

VIII

Set the Rate of Interest Free*

If an individual constantly violates all the elementary and proven rules of good health, if he disregards all warnings and thinks he can just go on living on his physical reserves, he will indeed for some time be able to laugh at the admonitions of his friends and ridicule them as pedantic fussbudgets. For years he will have astonishing achievements to his credit, and as there appear to be no visible harmful consequences, the classical rules of reasonable living seem to be contradicted.

IX

Austerity*

THE INTERNATIONAL CRUSADE AGAINST LUXURY

Not long ago I wanted to buy a new briefcase in a shop in Copenhagen, because my old one was too worn, and I felt it was not a bad idea to buy good quality leather goods in a country famous for its cattle. The shop assistant said he was sorry, but he did not have what I wanted; all he could offer me was a rather dubious substitute, since articles made of genuine cowhide were not sold in Denmark.

X

The Formation and Use of Capital*

TRANSFORMATIONS IN THE ECONOMIC SYSTEM

On looking back over the course of the Western world’s economy since the war, we find growing evidence of a change of outstanding importance. Nearly everywhere, not altogether excluding even Switzerland and the United States, profound transformations have taken place in the ways of capital formation and in the manner of its use, and this has led to one of the most serious upheavals in the economic system.

XI

Keynes and the Revolution in Economics: Economics Old, New, and True*

With the possible exception of Protestant theology, there is hardly a branch of learning today that, like economics, is split into two almost irreconcilable camps with almost no dialogue passing between them any more. This split has its origin in an exceedingly bold revolution in economic thought dating back fifteen years and, perhaps by an unjust simplification, associated with the name of the late Lord Keynes, who died in 1946.

XII

The Fight Against Inflationism*

Was it Disraeli or Gladstone who once said that apart from love, nothing turned men’s heads so much as thinking about money? Be that as it may, there is hardly another field in all the institutions of organized society that is, like this one, both extremely difficult and decisively important for the health or sickness not only of the economy but of society as a whole.

XIII

The Dilemma of Imported Inflation*

I

Among the difficult and increasingly pressing problems of any policy to counteract the inflationary tendencies of an overheated boom, the question of international complications deserves particular attention at this moment. This question can perhaps best be studied in the case of Germany, where a dramatic worsening of the situation is giving rise to a lively discussion. The essential points involved are of such outstanding general interest that it is worth extending the German discussion to the international scale.

XIV

Robbing Peter to Pay Paul: On the Nature of the Welfare State*

There are certain things that no one in his right mind regards as anything other than bad. Their virtually unanimous condemnation provides economic policy with a few elementary guidelines that are beyond dispute today. No one wants poverty, sickness, or prolonged unemployment, and there is no one who would seriously contest the necessity to combat them.

XV

The U. S. Balance-of-Payments Crisis: Diagnosis and Treatment*

When a country such as the United States seems to suffer from a stubborn balance-of-payments deficit, an ailment whose symptom is loss of gold reserves, it is tempting to react in the same way as the economic layman almost invariably does react to such a process.

XVI

World Without a World Monetary System*

Were it not for the pitch-black storm clouds of world politics gathering about Berlin at the moment and overshadowing all else, it would be much more evident that the aspirations, cares, and dangers centered on the problem of international monetary relations have assumed a degree of importance almost without parallel.