Butos and Koppl on Varieties of Subjectivism: Keynes and Hayek

I have just finished reading this paper:

Butos, W. N. and R. Koppl, 1997. “The Varieties of Subjectivism: Keynes and Hayek on Expectations,” History of Political Economy 29.2: 327–359.

There appear to be other downloadable versions of it on the web.

This is an excellent paper, and is thought-provoking, enjoyable and intelligent. I will summarise the paper, with comments on some points.

Keynes and Hayek, Butos and Koppl note, held a subjectivist approach to economics and Keynes’s early work on the business cycle shared Wicksellian foundations with that of Hayek (Butos and Koppl 1997: 327). Keynes’s epistemology is seen as “a form of foundationalism or justificationalism” (Butos and Koppl 1997: 330–331, quoting O’Donnell 1989: 93), which is a “constructivist” or “Cartesian” rationalism (Butos and Koppl 1997: 331). Some remarks on Keynes’s view of ethics follow (Butos and Koppl 1997: 331–333). I know that Keynes was influenced by Moore’s Principia Ethica. Keynes said that he rejected the consequentialist portions of that treatise, though this statement is perhaps questionable when looking at Keynes’s practical moral reasoning (see Braithwaite 2005 [1975]: 243-244). My own view is that the virtue ethics that Keynes said he adhered to is merely a subspecies of teleological/consequentialist ethics: virtue ethics and utilitarianism all come under the same general category.

To return to Butos and Koppl, Hayek, they argue, repudiated rationalism for an “evolutionary epistemology” (Butos and Koppl 1997: 333) and Hayek came to identify himself with Popper’s Critical Rationalism (Butos and Koppl 1997: 334). Hayek held that human thought and even rational thought were “a patterned behavioral response to environmental stimuli” (Butos and Koppl 1997: 336; 334–336). On reading this, I immediately thought that Hayek’s view of human thought seems to verge on a crude form of behaviourism. Yet, according to Butos and Koppl, that is not so (Butos and Koppl 1997: 336).

Butos and Koppl make a crucial point about Hayek’s view of how we have reliable knowledge of the future:

“Hayek .. equated knowledge with practice. This matters for our argument because social practice is largely the product of blind evolution. From a Hayekian perspective, we shall argue, the reliability of our knowledge of the future, of our long-term expectations, does not depend so much on the rationality of our projections as on the properties of the economy’s selection processes. If Hayek’s view holds water, it undercuts the sort of general epistemic critique attempted by Keynes, Shackle, and Lachmann. Alternatively, if Keynes’s views on knowledge are substantially correct, then Hayek's faith in the efficacy of social evolution was misplaced.” (Butos and Koppl 1997: 337).

I think there is a great deal of merit in the remark highlighted in yellow, but not without qualification. Strangely, Butos and Koppl never develop it and overlook its importance. This is arguably the best insight of the whole paper, and I will devote attention to it in what follows.

Now Hayek’s view is that cultural evolution is group selection (Butos and Koppl 1997: 340). I would argue that human societies have certain social practices and institutions which have indeed developed to reduce uncertainty associated with the future, and economic uncertainty. Institutions influence modern capitalism (such as law courts that enforce contracts, buffer stocks, and even central banks) and have been developed precisely to deal with uncertainty. We can conceive them as external entities capable of reducing uncertainty by interventions designed to influence the state of the economic system. If I lend money, what happens if the debtor refused to pay? Law and order and contract law are basic human institutions without which commerce would be impossible. I would call in the law to demand repayment. The threat of force, or its actual use, by an entity with a monopoly on force is how it has been historically done (we call it government).

Other social conventions or institutions that reduce uncertainty (for example, forward/future markets for commodities, and even money) are so deeply ingrained that we think of them now as a fundamental part of capitalism. To the extent that such social practices and institutions exist, they do indeed help to reduce uncertainty about the future. For example, central banks developed in the 19th and 20th centuries precisely because business and financial interests wanted a system that would reduce the uncertainty caused by liquidity crises and financial panics in unregulated financial markets and banking systems.

But what happens when there remain economic phenomena that are still affected by fundamental uncertainty? The level of investment is just such a phenomenon. There is a massive hole here in Hayek’s view of the “properties of the economy’s selection processes.” Before macroeconomic interventions designed to stabilise the business cycle, there were no mechanisms to reliably end recessions and depressions. The crucial Keynesian insight is that the postulated neoclassical equilibrating mechanisms to restore full employment do not work, do not even exist, or are simply unreliable (e.g., wage and price flexibility, an alleged market-clearing equilibrium interest rate for the capital market, belief in the gross substitution axiom, etc.).

I also take issue with the idea that the “social practices” that reduce uncertainty (including institutions which underlie the market or that we now think of as a fundamental part of it) are merely the product of blind evolution. If “blind” is supposed to mean unconscious, undirected or unplanned, I think this is patently false. Human design is highly relevant. Law and order systems (such as contract law and its enforcement) have been designed and directed, and developed; they are not products of blind evolution.

Butos and Koppl discuss Keynes’s distinction between short-term and long-term expectation (Butos and Koppl 1997: 340). Events in the future relevant for long term expectation – and essentially investment decisions – are subject to fundamental uncertainty. A discussion of Keynes’s views on probability follows (Butos and Koppl 1997: 342–347). There is a statement early in Chapter 12 of Keynes’s The General Theory of Employment, Interest, and Money that supports this:

“It would be foolish, in forming our expectations, to attach great weight to matters which are very uncertain.¹ It is reasonable, therefore, to be guided to a considerable degree by the facts about which we feel somewhat confident, even though they may be less decisively relevant to the issue than other facts about which our knowledge is vague and scanty. For this reason the facts of the existing situation enter, in a sense disproportionately, into the formation of our long-term expectations; our usual practice being to take the existing situation and to project it into the future, modified only to the extent that we have more or less definite reasons for expecting a change.

The state of long-term expectation, upon which our decisions are based, does not solely depend, therefore, on the most probable forecast we can make. It also depends on the confidence with which we make this forecast-on how highly we rate the likelihood of our best forecast turning out quite wrong. If we expect large changes but are very uncertain as to what precise form these changes will take, then our confidence will be weak.

The state of confidence, as they term it, is a matter to which practical men always pay the closest and most anxious attention. …

[footnote]
1. By ‘very uncertain’ I do not mean the same thing as ‘very improbable’…” (Keynes 1936: 148).

The footnote can only refer to radical uncertainty, and it is obvious that this concept is crucial to Keynes’s theory of long-term expectation.

Butos and Koppl refer to “animal spirits” in Keynes’s thought (Butos and Koppl 1997: 349), but I think that concept, as Keynes understood it, is largely irrelevant to the theory of subjective expectations, and certainly in the modern Post Keynesian theory of subjective expectations, which can draw on modern psychology and behavioural literature.

From p. 349, Butos and Koppl try to identify Hayek’s theory of expectations. They note that Hayek’s famous 1937 paper “Economics and Knowledge” (1937: 33–54) does not, in the end, provide any such theory. Hayek’s view of knowledge is “that the evolutionary conditions of the economic environment influence the reliability of economic expectations” (Butos and Koppl 1997: 350–351). But here is precisely the problem: modern capitalist economies lacked an “evolutionary condition of the economic environment” to provide macroeconomic stability and stabilise the level of investment until the Keynesian revolution. In other words, if Hayek’s view is that economic expectations of the future influencing investment will be made reliable by some social convention or institution produced by social evolution, then they were unreliable exactly because until the 1930s there are no such effective social conventions or institutions. Keynesianism provided the solution.

Hayek argues that

“‘the process of selection that shaped customs and morality could take account of more factual circumstances than individuals could perceive, and in consequence tradition is in some respects superior to, or “wiser” than, human reason’ … . Hayek’s position suggests something similar for the market place. The homegrown traditions bred by market competition are shaped by more factual circumstances than market participants can perceive, and in consequence tried and true business practices may sometimes embody greater wisdom than rational calculation can achieve. In short, … Hayek advances a ‘rational theory of tradition.’” (Butos and Koppl 1997: 351),

This eventually leads to Kirzner’s view of the entrepreneur in capitalism, I have little doubt.

But I don’t see how this at all overcomes Keynes’s views on subjective expectation in the investment decision, and long term expectations in particular. In fact, one can conclude that Hayek’s view of expectations is a serious flaw in his whole thinking, and inferior to Keynes’s.

All in all, this is an excellent paper, raising many issues that deserve further treatment. I think, however, that Austrians would do better to engage directly with the modern Post Keynesian theory of subjective expectations, rather than simply look at Keynes.


BIBLIOGRAPHY

Braithwaite, R. B. 2005 [1975]. “Keynes as a Philosopher,” in M. Keynes (ed.), Essays on John Maynard Keynes, Cambridge University Press, Cambridge.

Hayek, F. A. 1937. “Economics and Knowledge,” Economica n.s. 4.13: 33–54.

Keynes, J. M. 1936. The General Theory of Employment, Interest, and Money, Macmillan, London.

O’Donnell, R. M. 1989. Keynes: Philosophy, Economics and Politics, St. Martin’s Press, New York.

Bruce Caldwell on Keynes and Hayek

Another interesting video here, and this time a talk by Bruce Caldwell on Keynes and Hayek, a short lecture in a roundtable discussion on “John Maynard Keynes of Bloomsbury: Four Short Talks,” which (like the last video) was an event of the Center for the History of Political Economy at Duke University (2009).

Skidelsky versus Selgin on Keynes and Hayek

The LSE debate between Skidelsky and Selgin is finally available as an audio file:

Keynes Vs. Hayek, BBC, 2011.

This BBC audio file has been edited, and we do not have the whole debate here. The entire unedited podcast of the debate will be available next week on the LSE events website.

Professor George A. Selgin was the main defender of Hayek, which was a good choice by whoever organised this debate. I rather like Selgin’s work on fractional reserve banking; he is an intelligent libertarian, and is in a class of his own, over and above other Austrians, quite frankly.

Let’s review the debate below:

(1) Skidelsky’s Opening Remarks
Skidelsky’s makes some excellent points:

(i) Hayekian liquidationism was tried in Weimar Germany from 1931–1933: this caused a severe deflationary depression causing untold suffering and bringing the Nazis to power:

“Economic breakdown [sc. during the Great Depression] led to political upheaval which in turn destroyed the international status quo. Germany was the most striking example of this complex interaction. Without the depression Hitler would not have gained power. Mass unemployment reinforced all the resentments against Versailles and the Weimar democracy that had been smouldering since 1919. Overnight the National Socialists were transformed into a major party; their representation in the Reichstag rose from 12 deputies in 1928 to 107 in 1930. The deflationary policies of the Weimar leaders sealed the fate of the Republic” (Adamthwaite 1977: 34).

“Austerity and the Weimar Republic,” June 5, 2011.

(ii) Hayek changed his mind late in life, and admitted he had been wrong in supporting the effects of a “secondary deflation” after 1930:

“Hayek on Secondary Deflation,” January 24, 2011.

By failing to respond to these points in any coherent way, the apologists for Hayek in this debate clearly lost it in my mind. I think Skidelsky swept the floor in the first few minutes, and there was not much left for him to do but show why the Austrian business cycle theory (ABCT) is false to complete his demolition of them, though Skidelsky unfortunately failed to do this. Later in the debate Skidelsky (19.30) points out that without economic security, when millions of peoples’ lives are destroyed by deflationary depression, our political freedom is endangered: and he is right.

(2) Jamie Whyte’s Response to Skidelsky (7.02–)
Whyte’s talk is a feeble “rebuttal” to Skidelsky. Let’s take some of his outright errors:

“since Keynesian policies were last popular and unsuccessful in the 1970s…”

This strange statement demonstrates both ignorance and factual error: if Whyte means that Keynesian stimulus was unsuccessful during the severe negative supply shocks under the first and second oil crises, he has shown basic ignorance of what Keynesian policy even is. You do not use stimulus in a period where very severe supply shocks have occurred: in these circumstances demand contractions are in order. And when the oil crises ended Keynesian stimulus was used quite successfully in a number of countries, so even here Whyte is wrong. If Whyte wants a successful example of Keynesian stimulus after the second oil shock, he needed to look no further than Reaganomics after 1982.

“… as it did during the Great Depression, the Keynesian policies followed by the Hoover and Roosevelt administrations, which were supposed to shorten the length of the downturn, caused it to be the longest in known history” (10.11– )

This is one of the most pathetically false statements in the whole debate. Why? What we call the Great Depression in the US was technically the severe contraction that occurred from 1929–1933 under Hoover.

While it is true that Hoover was a proponent of a type of corporatism and adopted a number of limited interventions from 1929–1933, Hoover did not engage in any remotely effective Keynesian countercyclical fiscal policy, as I have shown here:

“Herbert Hoover’s Budget Deficits: A Drop in the Ocean,” May 24, 2011.

The idea that Hoover adopted “Keynesian policies” is pure nonsense, an insult to the intelligence.

When Roosevelt came into office a weak recovery was just beginning. Roosevelt’s policies stabilised the financial system, created employment for considerable numbers of people and, to the extent that he tried countercyclical fiscal policy, he was successful. Of course, not all aspects of the New Deal were constructive. It was, to some extent, the result of the corporatist mentality that had permeated the American business elite in the 1920s. But it also had very beneficial aspects, and fiscal policy was one of them. The US experienced a recovery and falling unemployment in every year of Roosevelt’s administration until 1937, when Roosevelt foolishly listened to the advocates of austerity and tried budget balancing. The effect was to plunge the economy back into recession in 1937. The real failure of Roosevelt’s New Deal was simply that expansionary fiscal policy was not great enough to stimulate the economy back to full employment. Roosevelt was too timid.

Whyte’s claim that Keynesian macroeconomic policy has insufficient empirical evidence is rubbish. Virtually every Western country on earth used Keynesianism from 1945–1973, and we had the most prosperous period in modern human history in terms of unparalleled real GDP growth, productivity growth, and real wage growth.

(3) Selgin’s Remarks

Curiously, Selgin concedes that Hayek eventually supported quantitative easing and monetary stabilisation as a policy needed in the early 1930s. What, then, becomes of the need to liquidate malinvestments required by Hayek’s trade cycle theory? Did Hayek think that the malinvestments had cleared by 1930? Was, then, all the suffering after 1930 unnecessary?

Selgin presents a caricature of Keynes at 17.20 onwards, claiming that Keynes advocated injecting money into an economy by building pyramids or digging holes in the ground. Keynes, of course, did not seriously advocate this: he said that if you could find nothing else of use to do with the money, then (facetiously) said you might do those things.

Selgin’s main point in his talk is little more than an attempt to revive the moribund Austrian business cycle theory (ABCT). This theory in the form developed by Hayek relies on the Wicksellian natural rate of interest, and posits that when the bank rate of interest falls below the unique natural rate of interest, unsustainable malinvestments occur that lead to a bust (for a summary of ABCT, see Garrison 1997).

However, Piero Sraffa had already demonstrated in 1932 that outside of a static equilibrium there is no single natural rate of interest in a barter or money-using economy, and Hayek never really addressed this problem for his trade cycle theory.

There is in fact one Austrian honest enough to admit how damaging Sraffa’s critique of Hayek was: Robert Murphy. Murphy points out the following:

“In his brief remarks [in Hayek 1932], Hayek certainly did not fully reconcile his analysis of the trade cycle with the possibility of multiple own-rates of interest. Moreover, Hayek never did so later in his career. His Pure Theory of Capital (1975 [1941]) explicitly avoided monetary complications, and he never returned to the matter. Unfortunately, Hayek’s successors have made no progress on this issue, and in fact, have muddled the discussion. As I will show in the case of Ludwig Lachmann—the most prolific Austrian writer on the Sraffa-Hayek dispute over own-rates of interest—modern Austrians not only have failed to resolve the problem raised by Sraffa, but in fact no longer even recognize it.

Austrian expositions of their trade cycle theory never incorporated the points raised during the Sraffa-Hayek debate. Despite several editions, Mises’ magnum opus (1998 [1949]) continued to talk of ‘the’ originary rate of interest, corresponding to the uniform premium placed on present versus future goods. The other definitive Austrian treatise, Murray Rothbard’s (2004 [1962]) Man, Economy, and State, also treats the possibility of different commodity rates of interest as a disequilibrium phenomenon that would be eliminated through entrepreneurship. To my knowledge, the only Austrian to specifically elaborate on Hayekian cycle theory vis-à-vis Sraffa’s challenge is Ludwig Lachmann.”
(Murphy, “Multiple Interest Rates and Austrian Business Cycle Theory,” pp. 11–12).

But even Lachmann’s (1994: 154) proposed solution does not work:

“Lachmann’s demonstration—that once we pick a numéraire, entrepreneurship will tend to ensure that the rate of return must be equal no matter the commodity in which we invest—does not establish what Lachmann thinks it does. The rate of return (in intertemporal equilibrium) on all commodities must indeed be equal once we define a numéraire, but there is no reason to suppose that those rates will be equal regardless of the numéraire. As such, there is still no way to examine a barter economy, even one in intertemporal equilibrium, and point to ‘the’ real rate of interest.”
(Murphy, “Multiple Interest Rates and Austrian Business Cycle Theory,” pp. 14).

The Austrian business cycle theory is false, as I have shown here in numerous posts:

“Austrian Business Cycle Theory: The Various Versions and a Critique,” June 21, 2011.

“Austrian Business Cycle Theory (ABCT) and the Natural Rate of Interest,” June 18, 2011.

“Robert P. Murphy on the Sraffa-Hayek Debate,” July 19, 2011.

“Vaughn on Mises’s Trade Cycle Theory,” June 29, 2011.

“Hayek on the Flaws and Irrelevance of his Trade Cycle Theory,” June 29, 2011.

“ABCT and Full Employment,” July 1, 2011.

With the recognition that a Hayekian trade cycle theory explanation of the Great Depression is a worthless explanation, most of Selgin’s arguments also collapse.

I had a brief exchange with Selgin on the issue of Sraffa’s critique of Hayek on the Cobdencentre.org blog here:

John Phelan, “Hayek vs Keynes at the LSE,” 27 July 11.

Selgin stated that

“Sraffa’s supposed ‘refutation’ of Hayek has itself been convincingly refuted. See Joseph Conard’s discussion of commodity ‘own rates of interest’ in his Introduction to the theory of interest (1959), pp. 123-7, the gist of which is that, contrary to what Sraffa and Keynes claimed, ‘With given and uniform expectations the rates of interest on different commodities are identical in equilibrium, provided only that they be measured in the same standard.’”

This is not, however, any “refutation” of Sraffa. I don’t deny that Hayek’s business cycle theory uses Wicksellian monetary equilibrium theory, nor did Sraffa. Sraffa already admitted that a unique natural rate would exist in an imaginary, fantasy world of static equilibrium or what Mises later called his Evenly Rotating Economy [ERE]. But a unique natural rate in static equilibrium is irrelevant to the real world. The “unique natural rate of interest” in a growing money-using economy or even a growing barter economy does not exist. Therefore, in the former case, there is simply no natural rate the bank rate can equal to allegedly prevent the cycle effects from happening.

What is particularly peculiar is that Selgin is an advocate of free banking: a financial system where banks have the power to create fiduciary media over and above the stock of commodity money. On a purely logical level, if Selgin advocates the Austrian business cycle theory (ABCT), then his support for a free banking system would (on the logic of ABCT) be a recipe for perpetual malinvestment!

Selgin also complains that low interest rates in the US fuelled the bubbles in the 1990s and 2000s: but he totally ignores the role of effective financial regulation in preventing the flow of credit to speculative investments which cause bubbles. When many nations dismantled the previous system of effective financial regulation in the 1980s and 1990s, this is precisely when asset bubbles and financial instability emerged again in Western economies.

Selgin makes the truly absurd claim that “there’s been no episode of a depression cured by fiscal expansion” (33.09). Jamie Whyte makes the same ignorant statement: he claims “the Keynesians’ position has been tried many times and it doesn’t work” (39.11). Really?

What on earth do Selgin and Whyte think happened in the US, and many other countries, in 1939–1945? Now in these years we were driven by the crisis of WWII to have wasteful command economies driven into massive fiscal expansion by war, but this episode showed us beyond any shadow of a doubt that massive fiscal expansion cures depression.

What is a tragedy is that in the 1930s and even now we are unable to have government spending on the same scale required, in constructive public works programs, infrastructure and social spending, jobs programs, and R&D outlays, to stimulate our economies back into full employment.

When Selgin complains that the banks are dysfunctional, he is of course right. Selgin is also right in railing against the crony capitalist bailout of America’s banks by Bush in 2008. What he ignores is that progressives, Post Keynesians, and even many New Keynesians did not support the form in which the bailout took: instead, they proposed a very different type of bailout to clean the financial system up and re-regulate it effectively.

What was badly needed in his debate was a clear Post Keynesian set of policy solutions. First, Post Keynesians already have a theory to explain the type of cycle that plunged us into the crisis in 2008: this is Hyman Minsky’s financial instability hypothesis, a far more convincing explanation of many business cycles, where asset bubbles and excessive private debt are driving the boom. Hyman Minsky’s financial instability hypothesis theory has been developed by the Post Keynesian Steve Keen, and by the heterodox economist Richard C. Koo (in the context of Japan’s lost decade).

What was required in 2008-2009 was a bailout that also cleared the banks of bad assets and non-performing loans without collapsing the economy, as in, for example, the Swedish model of fixing their financial system in the early 1990s:

“The Swedish Solution: Sweden’s Bank Bailout versus Japan’s and the US’s,” May 20, 2011.

In comments below (on this post), Selgin endorses a similar type of intervention to stabilise the financial system that could have been used in 2008, and in this he might very well agree with James Galbraith. In this video below (from 1.50 minutes), Galbraith tells us what should have been done in 2008: a pass-through receivership for the major banks by federal regulators.



Post Keynesians would go further: we also need to reduce the unsustainable level of private debt. This might even require writing off or restructuring a great deal of mortgage debt, credit card debt, and personal and business debt (the central bank’s power to create money can be used to protect depositors and other creditors, where necessary, to prevent catastrophic bankruptcies of creditors). After the issue of excessive private debt has been addressed, more Keynesian stimulus on a large scale is needed, as well as employment programs to deal with unemployment directly.

All in all, a good debate, but there were many issues that could also have been raised. In my view, the Keynesians won.

Links on the Debate

Victoria Chick, Douglas Coe, and Ann Pettifor, “Eight Fallacies in the LSE Keynes/Hayek Debate,” http://www.primeeconomics.org/?p=635
A very nice review of the debate from the Keynesian side, and some myths debunked.

“Hayek vs Keynes at the LSE,” 27 July 11,
http://www.cobdencentre.org/2011/07/hayek-vs-keynes-at-the-lse/
A review of the debate from the Austrian perspective.

George Selgin, “Behind the Scenes at the Hayek v. Keynes Debate,” August 3rd, 2011
http://www.freebanking.org/2011/08/03/behind-the-scenes-at-the-hayek-v-keynes-debate/
George Selgin gives some background on the debate.

Keynes v Hayek, and why Keynes had to win,
http://www.taxresearch.org.uk/Blog/2011/08/04/keynes-v-hayek-and-why-keynes-had-to-win/


Note: Apology to Selgin

Please note that I had originally written above:

Selgin tells us that the solution he wanted in 2008 was to “liquidate Bear Stearns, liquidate Fannie Mae and Freddie Mac. Liquidate, in short, the whole sub prime apparatus … and, yes, that would have meant letting insolvent banks … go bust.”

In other words, he wanted to see the financial sector collapse, and this would have plunged the world into a deflationary depression. Since Selgin’s Austrian trade cycle theory (ABCT) is incoherent, his economic justification for such a collapse is non existent ...

I was wrong. Due apologies to Professor Selgin.

George Selgin has corrected me in comments below: he did not support a financial sector collapse in 2008 by these remarks, but instead advocates a policy something like the Swedish bailouts of early 1990s, as well as the normal method by which the FDIC deals with insolvent banks: allowing deposits to be “guaranteed by the government, the banks are then liquidated, shareholders wiped out, senior management fired, assets than sold off to pay for the losses. Whatever is left over goes to the bondholders.”

In urging this, I can only agree completely. In fact, I note that James Galbraith supported almost the same policy, in the video above.


BIBLIOGRAPHY

Adamthwaite, A. P. 1977. The Making of the Second World War, Allen & Unwin, London and Boston.

Garrison, R. W. 1997. “Austrian Theory of Business Cycles,” in D. Glasner and T. F. Cooley (eds), Business Cycles and Depressions: An Encyclopedia, Garland Pub., New York. 23–27

Hayek, F. A. von, 1932. “Money and Capital: A Reply,” Economic Journal 42 (June): 237–249.

Lachmann, L. M. 1994. Expectations and the Meaning of Institutions: Essays in Economics (ed. by D. Lavoie), Routledge, London.

Murphy, Robert P. “Multiple Interest Rates and Austrian Business Cycle Theory.”

Sraffa, P. 1932a. “Dr. Hayek on Money and Capital,” Economic Journal 42: 42–53.

Sraffa, P. 1932b. “A Rejoinder,” Economic Journal 42 (June): 249–251.