Find counter arguments by entering NameVs… or …VsName.
The author or concept searched is found in the following 10 entries.
| Disputed term/author/ism | Author |
Entry |
Reference |
|---|---|---|---|
| Creative Destruction | Kirzner | Sobel I 16 Creative destruction/Kirzner/Sobel/Clemens: Schumpeter's view of entrepreneurship as a disruptive process of creative destruction is often contrasted with the view of Israel Kirzner, another famous economist who is known for his contributions to our understanding of entrepreneurship. >Creative destruction/Schumpeter. KirznerVsSchumpeter: Unlike Schumpeter, Kirzner stressed the role of entrepreneurs in discovering profit opportunities, acting on them, and in the process closing arbitrage gaps that exist in markets, and bringing markets closer to the competitive equilibrium. Sobel/Clemens: However, these two views are better viewed as complementary. Schumpeter's entrepreneurs innovate and bring disruptions to existing markets, with the firms at the forefront earning above-average profits that subsequently draw imitation and entry from Kirzner's type of entrepreneurs, reducing excess profits through competition and bringing the new market toward equilibrium. >Entrepreneurship/Schumpeter. |
Kirzner I Israel Kirzner Competition and Entrepreneurship Chicago 1978 Sobel I Russell S. Sobel Jason Clemens The Essential Joseph Schumpeter Vancouver 2020 |
| Democratic Theory | Pateman | Brocker I 505 Democratic Theory/Pateman: PatemanVsSchumpeter/PatemanVsSartori: Thesis: The formation of positive attitudes towards democracy is not a question of cognitive competence, but of democratizing a previously undemocratic institutional structure that systematically generates undemocratic attitudes and feelings of individual incompetence: the production of capitalist goods. >Democratic Theory/Schumpeter, Democratic Theory/Sartori. Democracy/Tradition: However, the sphere of goods production must remain undemocratic to ensure productivity and efficiency. There is therefore no alternative to the democratic status quo that would not endanger democracy itself. Brocker I 506 PatemanVsTradition: 1 VsSchumpeter: the normative evaluation scale is incorrectly constructed: the concept of a "classical democracy theory" is a myth. (1) The sources are more heterogeneous than traditionally claimed. History of ideas/Pateman: must not be reduced to pure normativity. Labour/Democratization: 2. PatemanVsSchumpeter: Democratic participation and productivity are not contradictory. VsPateman: Schumpeter does not reconstruct this in the dynamic aspects of his work. Taking into account Schumpeter's analysis of the importance of leadership, creativity and innovation for capitalism Brocker I 507 would have improved the persuasiveness of her argument. 1. Carole Pateman, Participation and Democratic Theory, Cambridge 1970, S. 17. Gary S. Schaal, “Carole Pateman, Participation and Democratic Theory” in: Manfred Brocker (Hg.) Geschichte des politischen Denkens. Das 20. Jahrhundert. Frankfurt/M. 2018 |
PolPate I Carole Pateman Political Culture, Political Structure and Political Change 1971 Brocker I Manfred Brocker Geschichte des politischen Denkens. Das 20. Jahrhundert Frankfurt/M. 2018 |
| Democratic Theory | Schumpeter | Mause I 64f Democratic Theory/Schumpeter: For almost three decades, international democracy theory has been shaped by two books written by economists: Capitalism, Socialism, and Democracy by Joseph A. Schumpeter (1942)(1) and An Economic Theory of Democracy by Anthony Downs (1957(2). In the history of theory there are only a few works on economic democracy theory (cf. the works of Brian Barry 1970) (3). Method/Schumpeter: Method transfer: Schumpeter conceives democracy in analogy to the market, but not yet with neoclassical methodology. The central elements of his economic theory - the creative entrepreneur and competition - are transposed into the political sphere. Schumpeter's elite theory of democracy is thus shaped by his economic theory. For him, democracy is only one method by means of which political elites competing for power can be elected and voted out of office. It no longer has intrinsic value, but is only a means to an end - for the selection of political elites. In summary, the central task of a realistic theory of democracy is "to adequately recognize the vital fact of leadership" (4). N.B.: the personnel of the elite is determined by rivalry and competition. Problem: Schumpeter himself sees weaknesses in this analogy: the quality of personnel cannot be determined as precisely by choice as in the case of goods. I 65 Democratic Theory/Schumpeter: Thesis: Democracy should be reduced to a method of electing or replacing competing elites without bloodshed. >Democratic Theory/Sartori, >Democratic Theory/Pateman. PatemanVsSchumpeter: this is a fatal logic of argumentation: citizens do not meet the normative expectations of classical theory, and therefore democratic participation must be reduced to a minimum in order to not endanger democracy. 1. J. A. Schumpeter, Capitalism, socialism, and democracy. New York 1942. [dt. Kapitalismus, Sozialismus und Demokratie. Tübingen/ Basel 2005. 2. A. Downs, An economic theory of democracy. New York 1957; [dt. Ökonomische Theorie der Demokratie. Tübingen 1968. 3.B. Barry, Sociologists, economists, and democracy. Chicago 1970. 4. Schumpeter, ebenda, deutsch, S. 429. Gary S. Schaal, “Carole Pateman, Participation and Democratic Theory” in: Manfred Brocker (ed.) Geschichte des politischen Denkens. Das 20. Jahrhundert. Frankfurt/M. 2018 |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
| Economic Cycle | Schumpeter | Rothbard III 854 Business cycle/Schumpeter/Rothbard: Joseph Schumpeter's business cycle theory is one of the very few that attempts to integrate an explanation of the business cycle with an analysis of the entire economic system. The theory was presented in essence in his Theory of Economic Development, published in 1912. This analysis formed the basis for the "first approximation" of his more elaborate doctrine, presented in the two-volume Business cycles, published in 1939.(1) Rothbard: The latter volume, however, was a distinct retrogression from the former, for it attempted to explain the business cycle by postulating three superimposed cycles (each of which was explainable according to his "first approximation"). Periodicity: Each of these cycles is supposed to be roughly periodic in length. They are alleged by Schumpeter to be - the three-year "Kitchin" cycle; - the nine-year "Juglar"; and - the very long (50-year) "Kondratieff." These cycles are conceived as independent entities, combining in various ways to yield the aggregate cyclical pattern.(2) RothbardVsSchumpeter: Any such "multicyclic" approach must be set down as a mystical adoption of the fallacy of conceptual realism. Cf. >Conceptual realism. Rothbard III 855 Economic cycles: Rothbard: There is no reality or meaning to the allegedly independent sets of "cycles." The market is one interdependent unit, and the more developed it is, the greater the interrelations among market elements. It is therefore impossible for several or numerous independent cycles to coexist as self-contained units. It is precisely the characteristic of a business cycle that it permeates all market activities. Clycles/Economic theories: Many theorists have assumed the existence of periodic cycles, where the length of each successive cycle is uniform, even down to the precise number of months. T RothbardVsEconomic cycles: the quest for periodicity is a chimerical hankering after the laws of physics; in human action there are no quantitative constants. Praxeological laws can be only qualitative in nature. Therefore, there will be no periodicity in the length of business cycles. It is best, then, to discard Schumpeter's multicyclical schema entirely and to consider his more interesting one-cycle "approximation" (as presented in his earlier book), which he attempts to derive from his general economic analysis. Circular flow equilibrium: Schumpeter begins his study with the economy in a state of "circular flow" equilibrium, i.e., what amounts to a picture of an evenly rotating economy. Rothbard: This is proper, since it is only by hypothetically investigating the disturbances of an imaginary state of equilibrium that we can mentally isolate the causal factors of the business cycle. First, Schumpeter describes the ERE (Evenly Rotating Economy), where all anticipations are fulfilled, every individual and economic element is in equilibrium, profits and losses are zero - all based on given values and resources. >Evenly Rotating Economy/Rothbard. Changes: Then, asks Schumpeter, what can impel changes in this setup? Demand: First, there are possible changes in consumer tastes and demands. This is cavalierly dismissed by Schumpeter as there are possible changes in population and therefore in the labor supply; but these are gradual, and entrepreneurs can readily adapt to them. Saving/investment: (…) there can be new saving and investment. Wisely, Schumpeter sees that changes in saving-investment rates imply no business cycle; new saving will cause continuous growth. Sudden changes in the rate of saving, when unanticipated by the market, can cause dislocations, of course, as may any sudden, unanticipated change. But there is nothing cyclic or mysterious about these effects. (…) Rothbard III 856 Innovation: Schumpeter turned to a fourth element, which for him was the generator of all growth as well as of business cycles - innovation in productive techniques. >Technology, >Inventions, >Progress. Innovations/RothbardVsSchumpeter: (…) innovations cannot be considered the prime mover of the economy, since innovations can work their effects only through saving and investment and since there are always a great many investments that could improve techniques within the corpus of existing knowledge, but which are not made for lack of adequate savings. This consideration alone is enough to invalidate Schumpeter's business-cycle theory. >Innovations/Rothbard. Clusters of innovation: Finally, Schumpeter's explanation of innovations as the trigger for the business cycle necessarily assumes that there is a recurrent cluster of innovations that takes Place in each boom period. Why should there be such a cluster of innovations? Why are innovations not more or less continuous, as we would expect? Schumpeter cannot answer this question satisfactorily. The fact that a bold few begin innovating and that they are followed by imitators does not yield a cluster, for this process could be continuous, with new innovators arriving on the scene. Schumpeter offers two explanations for the slackening of innovatory activity toward the end of the boom (a slackening essential to his theory). On the one hand, the release of new products yielded by the new investments creates diffculties for Old producers and leads to a period of uncertainty and need for „rest“. >Innovations/Schumpeter. 1. Joseph A. Schumpeter, The Theory of Economic Development (Cambridge: Harvard University Press, 193 6), and idem, Business Cycles (New York: McGraw-Hill, 1939). Reprinted by Porcupine Press, 1982. 2. Warren and Pearson, as well as Dewey and Dakin, conceive of the business cycle as made up of superimposed, independent, periodic cycles from eachfield of production activity. See George F. Warren and Frank A. Pearson, Prices (New York: John Wiley and Sons, 193 3); E.R. Dewey and E.F. Dakin, cycles: The Science of Prediction (New York: Holt, 1949). |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
| Innovation | Schumpeter | Rothbard III 856 Innovation/Schumpeter/Rothbard : [In his theory of business cycles] Schumpeter turned to a fourth element, which for him was the generator of all growth as well as of business cycles - innovation in productive techniques. >Business cylcles/Schumpeter. Innovations/RothbardVsSchumpeter: (…) innovations cannot be considered the prime mover of the economy, since innovations can work their effects only through saving and investment and since there are always a great many investments that could improve techniques within the corpus of existing knowledge, but which are not made for lack of adequate savings. This consideration alone is enough to invalidate Schumpeter's business-cycle theory. >Innovations/Rothbard. Clusters of innovation: Finally, Schumpeter's explanation of innovations as the trigger for the business cycle necessarily assumes that there is a recurrent cluster of innovations that takes Place in each boom period. Why should there be such a cluster of innovations? Why are innovations not more or less continuous, as we would expect? Schumpeter cannot answer this question satisfactorily. The fact that a bold few begin innovating and that they are followed by imitators does not yield a cluster, for this process could be continuous, with new innovators arriving on the scene. Schumpeter offers two explanations for the slackening of innovatory activity toward the end of the boom (a slackening essential to his theory). On the one hand, the release of new products yielded by the new investments creates diffculties for old producers and leads to a period of uncertainty and need for „rest“. Hansen stagnation thesis: Schumpeter's second explanation is that innovations cluster in only one or a few industries and that these innovation opportunities are therefore limited. After a while they become exhausted, and the cluster of innovations ceases. This is obviously related to the Hansen stagnation thesis, in the sense that there are alleged to be a certain limited number of "investment opportunities" - here innovation opportunities - at any time, and that once these are exhausted there is temporarily no further room for investments or innovations. Opportunity/RothbardVsSchumpeter: The whole concept of "opportunity" in this connection, however, is meaningless. There is no limit on "opportunity" as long as wants remain unfulfilled. The only other limit on investment or innovation is saved capital available to embark on the projects. But this has nothing to do with vaguely available opportunities which become "exhausted"; the existence of saved capital is a continuing factor. As for innovations, there is no reason why innovations cannot be continuous or take Place in many industries, or Why the innovatory pace has to slacken. KuznetsVsSchumpeter: As Kuznets has shown, a cluster of innovation must assume a cluster of entrepreneurial ability as well, and this is clearly unwarranted. VsVs: Clemence and Doody, Schumpeterian disciples, countered that entrepreneurial ability is exhausted in the act of founding a new firm.(1) But to View entrepreneurship as simply the founding of new firms is completely invalid. Entrepreneurship is not just the founding of new firms, it is not merely innovation; it is adjustment: adjustment to the uncertain, changing conditions of the future.(2) This adjustment takes Place, perforce, all the time and is not exhausted in any ssingle act of investment. 1. S.S. Kuznets, "Schumpeter's Business Cycles," American Economic Review, June, 1940, pp. 262- 63; and Richard V. Clemence and Francis S. Doody, The Schumpeterian System (Cambridge: Addison-Wesley Press, 1950), pp. 52 ff 2. In so far as innovation is a regularized business procedure of research and development, rents from innovations will accrue to the research and development workers in firms, rather than to entrepreneurial profits. Cf. Carolyn Shaw Solo, "Innovation in the Capitalist Process: A Critique of the Schumpeterian Theory," Quarterly Journal of Economics, August, 1951, pp. 417-28. Sobel I 9 Invention/Innovation/Schumpeter/Sobel/Clemens: While invention is the creation or discovery of a new product or process, innovation is the successful introduction and adoption of a new product or process in the commercial marketplace. Innovation is basically the economic application of inventions. while Henry Ford did not invent the automobile, his innovation was the use of the assembly line and large-scale manufacturing that brought the price of the automobile within reach of the average family. In each of these cases, the innovator is different from the inventor, and it is the innovator’s role with which Schumpeter is concerned. Perhaps an even more important factor in distinguishing invention from innovation is that most inventions never turn into innovations - that is, not all inventions are profitable business ideas. Incentives/Schumpeter: According to Schumpeter in his later, and perhaps most famous, book Capitalism, Socialism, and Democracy (CSD)(1), “[i]n some cases, however, it is so successful as to yield profits far above what is necessary in order to induce the corresponding investment. These cases then provide the baits that lure capital on to untried trails” (CSD(1): 90). That is, the lure of profits is the incentive for entrepreneurial discovery and capital investment. This is one reason that government policies that reduce the rewards from innovation can be harmful to economic growth and prosperity. Taxation/innovation/Schumpeter: When regulations or taxes reduce the potential profitability of future innovations, fewer attempts are made to discover them. As Schumpeter notes in his book The Economics of Sociology and Capitalism (ESC)(2): Entrepreneurial profit proper … arises in the capitalist economy wherever a new method of production, a new commercial combination, or a new form or organization is successfully introduced. It is the premium which capitalism attaches to innovation … If this profit were taxed away, that element of the economic process would be lacking which at present is by far the most important individual motive for work toward industrial progress. Sobel I 10 Even if taxation merely reduced this profit substantially, industrial development would process considerably more slowly, as the fate of Austria plainly shows … there is a limit to the taxation of entrepreneurial profit beyond which tax pressure cannot go without first damaging and then destroying the tax object. (ESC(2): 113–114) Sobel I 11 Innovation/economicy/Sobel/Clemens: A growing, vibrant economy depends not only on entrepreneurs discovering, evaluating, and exploiting opportunities to create new goods and services, but also on the speed at which ideas are labeled as successes or failures by the profit-and-loss system. >Business failure/Schumpeter. Innovation/Schumpeter: „Yet innovations in the economic system do not as a rule take place in such a way that first new wants arise spontaneously in consumers and then the productive apparatus swings round through their pressure. We do not deny the presence of this nexus. It is, however, the producer who as a rule initiates economic change, and consumers are educated by him if necessary; they are, as it were, taught to want new things, or things which differ in some respect or other from those which they have been in the habit of using.“ (TED(3): 65) „To produce means to combine material and forces within our reach … To produce other things, or the same things by a different method, means to combine these materials and forces differently. In so far as the “new combination” may in time grow out of the old by continuous adjustment in small steps, there is certainly change, possibly growth, by neither a new phenomenon nor development in our sense. In so far as this is not the case, and the new combinations appear discontinuously, then the phenomenon characterizing development emerges. For reasons of expository convenience, henceforth, we shall only mean the latter case when we speak of new combinations of productive means. Development in our sense is then defined by the carrying out of new combinations.“ (TED(3): 65–66) 1. Schumpeter, Joseph A. (1942). Capitalism, Socialism, and Democracy [CSD]. Harper & Brothers. 2. Schumpeter, Joseph A. (1991). The Economics of Sociology and Capitalism [ECS]. Edited by Richard Swedberg. Princeton University Press. 3. Schumpeter, Joseph A. (1934). The Theory of Economic Development [TED]. Harvard University Press. |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 Sobel I Russell S. Sobel Jason Clemens The Essential Joseph Schumpeter Vancouver 2020 |
| Interest Rates | Schumpeter | Rothbard III 449 Evenly Rotating economy/interest rates/Schumpeter/Rothbard: (…) Joseph Schumpeter pioneered a theory of interest which holds that the rate of interest will be zero in the evenly rotating economy. >Evenly Rotating Economy (ERE)/Rothbard. RothbardVsSchumpeter: It should be clear (…) why the rate of interest (the pure rate of interest in the ERE) could never be zero. It is determined by individual time preferences, which are all positive. To maintain his position, Schumpeter was forced to assert, as does Frank Knight, that capital maintains itself permanently in the ERE. >Frank H. Knight. If there is no problem of maintenance, then there appears to be no necessity for the payment of interest in order to maintain the capital structure. Rothbard III 450 This view (…) is apparently derived from the static state of J.B. Clark and seems to follow purely by definition, since the value of capital is maintained by definition in the ERE. But this, of course, is no answer whatever; the important question is: How is this constancy maintained? And the only answer can be that it is maintained by the decisions of capitalists induced by a rate of interest return. If the rate of interest paid were zero, complete capital consumption would ensue.(1) The conclusive Mises-Robbins critique of Schumpeter’s theory of the zero rate of interest, which we have tried to present above, has been attacked by two of Schumpeter’s disciples.(2) SchumpeterVsVs: First, they deny that constancy of capital is assumed by definition in Schumpeter’s ERE; instead it is “deduced from the conditions of the system.” What are these conditions? There is, first, the absence of uncertainty concerning the future. This, indeed, would seem to be the condition for any ERE. But Clemence and Doody add: “Neither is there time preference unless we introduce it as a special assumption, in which case it may be either positive or negative as we prefer, and there is nothing further to discuss.” With such a view of time preference, there is indeed nothing to discuss. The whole basis for pure interest, requiring interest payments, is time preference, and if we casually assume that time preference is either nonexistent or has no discernible influence, then it follows very easily that the pure rate of interest is zero. The authors’ “proof” simply consists of ignoring the powerful, universal fact of time preference.(3) 1. See Mises, Human Action, New Haven, Conn.: Yale University Press, 1949. Reprinted by the Ludwig von Mises Institute, 1998. pp. 527–29. Also see Lionel Robbins, “On a Certain Ambiguity in the Conception of Stationary Equilibrium” in Richard V. Clemence, ed., Readings in Economic Analysis (Cambridge: Addison-Wesley Press, 1950), I, 176 ff. 2. Richard V. Clemence and Francis S. Doody, The Schumpeterian System (Cambridge: Addison Wesley Press, 1950), pp. 28–30. 3. As has been the case with all theorists who have attempted to deny time preference, Clemence and Doody hastily brush consumers’ loans aside. As Frank A. Fetter pointed out years ago, only time preference can integrate interest on consumers’ as well as on producers’ loans into a single unified explanation. Consumers’ loans are clearly unrelated to “productivity” explanations of interest and are obviously due to time preference. Cf. Clemence and Doody, The Schumpeterian System, p. 29 n. |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
| Participation | Pateman | Brocker I 510 Participation/Pateman: "The existence of a democratic community therefore requires the existence of a participatory society, a society in which all political systems have been democratized and socialization through participation can take place in all areas. The most important area is industry" (1). In doing so, Pateman opposes traditional approaches of democracy theory that reduce the questions of democracy to the political. PatemanVsSchumpeter, PatemanVsSartori: see Democratic Theory/Sartori, Democratic Theory/Schumpeter. Schaal: Pateman does not argue from a socialist perspective, but rather her demand for the extension of democratic mechanisms to non-political areas such as industrial work is based on the systematic explication of the normative ideals of liberalism. VsPateman: her approach of "quasi-empiracy" is criticized by later authors as not convincing enough. Cf., Schonfeld, 1975, (2), Moon 1972 (3). Brocker I 514 Pateman/Schaal: Pateman's Participation and Democratic Theory belongs to the canon of modern (english) classics of participatory democracy theory (Held 1987, 254-264 (4)) and was only replaced as a standard work of participatory democracy theory by Benjamin Barbers Strong Democracy in 1984. 1. Carole Pateman, Participation and Democratic Theory, Cambridge 1970, S. 43 2. Schonfeld, William R., »The Meaning of Democratic Participation«, in: World Politics 28/1, 1975, 134-158. 3. Moon, J. Donald, »Participation and Democracy. A Review Essay«, in: Midwest Journal of Political Science 16/3, 1972, 473-485. 4. David Held, David, Models of Democracy, Cambridge 1987. Gary S. Schaal, “Carole Pateman, Participation and Democratic Theory” in: Manfred Brocker (Hg.) Geschichte des politischen Denkens. Das 20. Jahrhundert. Frankfurt/M. 2018 |
PolPate I Carole Pateman Political Culture, Political Structure and Political Change 1971 Brocker I Manfred Brocker Geschichte des politischen Denkens. Das 20. Jahrhundert Frankfurt/M. 2018 |
| Politics | Schumpeter | Mause I 65 Politics/Schumpeter: Schumpeter's thesis is famous that the citizen "falls to a lower level of mental achievement as soon as he enters the political realm. He argues and analyses in a way that he would readily acknowledge as infantile within the sphere of his real interests. He's becoming primitive again." (1) VsSchumpeter: Schumpeter still saw a lack of rationality in the ignorance of the citizens; later theorists have normatively revalued the same facts as rational ignorance. >Rationality, >Bounded rationality. 1. J. A. Schumpeter, Capitalism, socialism, and democracy. New York 1942. [dt. Kapitalismus, Sozialismus und Demokratie. Tübingen/ Basel 2005, S. 416. |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
| Pure Rate of Interest | Rothbard | Rothbard III 350 Pure interest rate/Evenly rotating economy/Rothbard: [in an evenly rotating economy], there is no entrepreneurial uncertainty, and the rate of net return is the pure exchange ratio between present and future goods. This rate of return is the rate of interest. This pure rate of interest will be uniform for all periods of time and for all lines of production and will remain constant in the evenly rotating economy. >Evenly rotating economy (ERE)/Rothbard. Rothbard III 449 Evenly Rotating economy/interest rates/Schumpeter/Rothbard: (…) Joseph Schumpeter pioneered a theory of interest which holds that the rate of interest will be zero in the evenly rotating economy. RothbardVsSchumpeter: It should be clear (…) why the rate of interest (the pure rate of interest in the ERE) could never be zero. It is determined by individual time preferences, which are all positive. To maintain his position, Schumpeter was forced to assert, as does Frank Knight, that capital maintains itself permanently in the ERE. >Frank H. Knight. Rothbard III 549 We are not asserting that the pure rate of interest is determined by the quantity or value of capital goods available. >Capital goods/Rothbard, >Interest/Rothbard. We are not concluding, therefore, that an increase in the quantity or value of capital goods lowers the pure rate of interest because interest is the “price of capital” (or for any other reason). On the contrary, we are asserting precisely the reverse: namely, that a lower pure rate of interest increases the quantity and value of capital goods available. For „pure rate of interest“ see >Evenly Rotating Economy/Rothbard. The causative principle is just the other way round from what is commonly believed. The pure rate of interest, then, can change at any time and is determined by time preferences. If it is lowered, the stock of invested capital will increase; if it is raised, the stock of invested capital will fall. >Time preference/Rothbard. Rothbard III 550 The pure rate, (…) abstracts from any entrepreneurial uncertainty. It gauges the premium of present over future goods on the assumption that the future goods are known as certain to be forthcoming. In the real world, of course, nothing is absolutely certain, and therefore the pure rate of interest (the result of time preference) can never appear alone. Rothbard III 774 Prices: An increased demand for money, (..) tends to Iower prices all around without changing time preference or the pure rate of interest. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
| Taxation | Say | Rothbard II 40 Taxation/Say/Rothbard: [Say] tended to make it responsible for all the economic evils of society, even, as we have seen, for recessions and depressions. In contrast to almost all other economists, Say had an astonishingly clearsighted view of the true nature of the state and of its taxation. In Say there was no mystical quest for some truly voluntary state, nor any view of the state as a benign semi-business organization supplying services to a public grateful for its numerous ‘benefits’. No; Say saw clearly that the services government indubitably supplies are to itself and to its favourites, and that all government spending is therefore consumption spending by the politicians and the bureaucracy. He also saw that the tax funds for that spending are extracted by coercion at the expense of the tax-paying public. Say goes on to attack the ‘prevalent notion’ that tax monies are no burden on the economy, since they simply ‘return’ to the community via the expenditures of government. Say is indignant: Rothbard II 41 This is gross fallacy; but one that has been productive of infinite mischief, inasmuch as it has been the pretext for a great deal of shameless waste and dilapidation. The value paid to government by the tax-payer is given without equivalent or return: it is expended by the government in the purchase of personal service, of objects of consumption... (1) SayVsSmith, Adam/Rothbard: Thus, in contrast to the naive Smith's purblind assumption that taxation always confers proportional benefit, we see J.B. Say treating taxation as very close to sheer robbery. Taxes/SayVsSchumpeter/Rothbard: He is not impressed with the apologetic notion, properly ridiculed in later years by Schumpeter(2), that all society somehow voluntarily pays taxes for the general benefit; instead, taxes are a burden coercively imposed on society Rothbard II 42 by the ‘ruling power’. Neither is Say impressed if the taxes are voted by the legislature; to him this does not make taxes any more voluntary: for ‘what avails it... that taxation is imposed by consent of the people or their representatives, if there exists in the state a power, that by its acts can leave the people no alternative but consent?’(1) Taxation/production/Say: Moreover, taxation cripples rather than stimulates production, since it robs people of resources that they would rather use differently. Taxation/SayVsRicardo: Say engages in an instructive critique of Ricardo, which reveals the crucial difference over the latter's long-run equilibrium approach and the great difference in their respective attitudes toward taxation. Ricardo had maintained in his Principles(3) that, since the rate of return on capital is the same in every branch of industry, taxation cannot really cripple capital. For, as Say puts it, ‘the extinction of one branch by taxation must needs be compensated by the product of some other, towards which the industry and capital, thrown out of employ, will naturally be diverted’. Here is Ricardo, blind to the real processes at work in the economy, stubbornly identifying a static comparison of long-run equilibrium states with the real world. Taxation/Solution/Say/Rothbard: (…) ‘the best scheme of [public] finance, is to spend as little as possible; and the best tax is always the lightest’. In the next sentence, he amends the latter clause to say ‘the best taxes, or rather those that are least bad...’.(1) 1. Say, Jean-Baptiste. Traité d’Economie Politique, Paris 1803. 2. J.A. Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954), p. 491. 3. Ricardo, D. (1951 [1817]) On the Principles of Political Economy and Taxation, in P. Sraffa (ed.) with the collaboration Of M.H. Dobb, The Works and Correspondence of David Ricardo, Vol. I, Cambridge: Cambridge University Press. (P/b edn 2004, Indianapolis, IN: Liberty Fund.) |
EconSay I Jean-Baptiste Say Traité d’ Economie Politique Paris 1803 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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