THE MARKET AS AN ECONOMIC PROCESS by Ludwig M. Lachmann New York: Basil Blackwell, 1986. 173 pp., $29?95.

Israel Kirzner is to be credited for clarifying and developing the theory of capital and interest set out by Ludwig von Mises and for articulating and defending the pure time preference theory of interest. A revisiting of Mises and his critics suggests that the pure time preference theory is best formulated in terms of economic actions and then applied to the anticipated consequences of those actions. Differences between the Misesian and Knightian reckonings of time preference are to be understood in (...) terms of the contrasting conceptions of a zero time preference. Parallels between the time preference theory of interest and a leisure preference theory of wages are explored. Austrian economics is deemed healthy despite lingering puzzles about its theories of interest and wages.On doit au Professeur Kirzner la clarification et le développement de la théorie du capital et de l’intérêt dans la lignée de Ludwig von Mises et l’articulation et la défense de la théorie de l’intérêt comme étant la préférence pure pour le temps. Une relecture des travaux de Mises et de ses critiques suggère qu la théorie de la préférence pure pour le temps est mieux formulée en termes d’actions économiques et ensuite appliquée aux conséquences anticipées de ces mêmes actions. Les différences entre les acceptions Misessiennes et Knigtienne de la préférence pour le temps doivent être comprises en termes de conceptions différentes d’une préférence nulle pour le temps. Les rapprochements entre la théorie de l’intérêt comme préférence pour le temps et la théorie des salaires comme préférence pour les loisirs sont explorés. L’économie autrichienne est jugée saine en dépit des énigmes persistantes qui entourent ses théories de l’intérêt et des salaires. (shrink)

Underlying the analytical framework of Keynes's General Theory is a comparison of capitalism and socialism in terms of risks and consequent rates of interest, rates of investment and capital accumulation, and levels of employment and output. Keynes's social philosophy and corresponding vision of macroeconomic reality biases his comparison in favor of socialism, or, more precisely, in favor of ?a comprehensive socialisation of investment.? Recognizing the significant influence of Keynes's early social philosophy on his subsequent macroeconomics? which is firmly established by (...) Allan Meltzer's ?different? interpretation of Keynes?refocuses criticism of Keynes's analytics, provides a basis for assessing other interpretations of the General Theory, and helps account for the absence of reconciliation among the modern recastings of Keynesian macroeconomics. (shrink)

Keynes's theory of interest is central to his broader argument. However, short‐run policy, which takes the so‐called normal rate of interest as given and aims at affecting the prevailing rate, must be distinguished from long‐run reform, which aims at changing the normal rate. The low demand that Keynes associated with high interest was believed to be inherent in a decentralized, consumption‐oriented economy. Consequently, he advocated reform in the direction of central control. Despite his “moral and philosophical” agreement with Hayek's Road (...) to Serfdom, Keynes differed fundamentally from Hayek in terms of their contrasting perceptions of the market's shortcomings and their judgments about the government's potential for improving the economy's performance. (shrink)