Title Page
by
L. ALBERT HAHN
Copyright
© Copyright 1956 by L. Albert Hahn
Library of Congress Catalog Number: 56-5919
PRINTED IN GREAT BRITAIN BY JARROLD AND SONS LTD, NORWICH,
FOR THE PUBLISHERS,
ABELARD-SCHUMANN LIMITED, 404 FOURTH AVENUE, NEW YORK 16, N.Y.,
38 RUSSELL SQUARE, LONDON, w.c.1, ENGLAND.
Epigraph
The propensity to work,
and not the propensity to spend,
is the foundation
of national income and wealth
FOREWORD
As the English version1 of this book goes to press the economy of the United States, as well as that of many European countries, has reached a state which can be described only as that of a highly inflationary boom. All pertinent data—total investment, demand deposits, consumer credits and production—show clearly a steep upward trend. And many characteristic signs of an overstressed economy, such as bottlenecks in employment and raw materials, backlogs for deliveries, exaggerated stockmarket booms, have made their appearance.
PREFACE
My book, The Economics of Illusion, published in 19491, was essentially a critique of the late Lord Keynes’ General Theory of Employment, Interest and Money. My conclusion was, briefly, that what is new in Keynes’ work is not good, and what is good is not new.
Part I. The Stationary Economy
The Isolated Producer
Everybody tries to live. In order to live one has to consume goods. Goods for consumption are not generally obtainable without work. They are the products of labor. This holds true for individuals, for communities and for the whole of humanity.
Part II. The Changing Economy
J. B. Say’s Law
In the real world the economy changes continuously. Neither what is produced, and by whom and by what methods, nor what is consumed, and by whom and by what methods, remains the same.
What are the causes and effects of the more important changes? These questions will be examined in this section under a specific assumption, namely that the quantity of money present in the economy and the velocity of its turnover do not change.
Part III. The Economy In Inflation and Deflation
The Preconditions of Inflation and Deflation
Part IV. The Business Cycle
Business Cycles are Alternating Inflations and Deflations
Since the beginning of the nineteenth century the economies of industrial countries have experienced peculiar fluctuations at more or less regular intervals. Although showing many differences in detail, they had so many features in common that they are regarded as homogeneous phenomena. They are called business cycles.
Part V. Price Formation on Stock Markets
Significance of the Problem
