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The Joyless Economy focused on the boredom of the idle rich and neglected the boredom of the idle and idled poor. However, their boredom is much more serious than what the book dealt with, because it is chronic and often incurable. It usually begins with the neglect of destitute children who never learn how to concentrate on learning in school, become unruly and often end up unemployable, and have no better way than violence to release their energies.

This paper introduces second-hand markets into the our economic models the better to explain the demise of Say's law in today's economies. It shows that hoarding any commodity can, under certain conditions, depress the economy and that unhoarding often stimulates it. The paper also explains why Keynesian employment policy is losing its effectiveness and why our economy seems to be becoming depression prone. Copyright 1994 by WWZ and Helbing & Lichtenhahn Verlag AG

This review article of Robert H. Frank'sPassions within Reason introduces emotional behavior into the economist's world and discusses the complex interdependence between honesty, rational behavior and information. Honesty and rationality are shown to be very similar as motivations of behavior and mutually reinforcing when character information is available; and honesty appears as a substitute condition of market efficiency when perfect and symmetrical market information, that crucial and oft-stressed but unrealistic necessary condition of efficiency, is lacking. Many of the arguments are not new; but they are brought together and presented here in simple, nontechnical language.

Economists have long been fascinated by the paradox that, given favorable conditions, people's selfish greed for power and profits can annihilate the very power and profits they lust after, and in the process turn the chaos and anarchy of unbridled greed into order and harmony. Ever since the paradox was first noted, generations of economists have admired, taught and argued it, and the Arrow-Debreu theory of general competitive equilibrium is the culmination of the profession's long struggle to understand fully all its conditions and implications. The resulting theory of general equilibrium, with its careful setting out of the many conditions on which the conclusions depend and its clarification of the way in which conclusions and underlying conditions are interconnected, has rightly been hailed as a remarkable intellectual achievement. Of course, the conditions set out have been chosen with a view to obtaining the conclusions, not for their realism; and some of them are admittedly and blatantly unrealistic. Accordingly, the important and remarkable results of the theory pertain to an imaginary economy. However, the theory's portrayal of the market forces that govern resource utilization and allocation resembles our actual economy closely enough to be of great practical importance. Hence the great attention that the theory has received and the consensus that it represents an important milestone in our understanding of the market economy. One must be careful, however, not to read more into general equilibrium theory than what it says. Everybody knows that the U.S. economy is far removed from the theory's imaginary model of perfect competition—the empirical evidence on unemployment and capacity underutilization makes that clear—but the intellectual pleasure one gets from following the theory's elegant logic and beautiful results easily makes one forget its limitations. Economists are often so mesmerized by the magic of perfect competition that they neglect or fail to notice other, equally important

Economics deals with the problem how best to organize production and distribution when the division of labor calls for the specialization of production and the reassembling of the goods and services so produced for the use and consumption of consumers, given their differing needs and tastes. If our bodily needs for food, drink, clothing, shelter, heating, and comforts were the only ones whose satisfaction constituted the good life, rational and knowledgeable consumers would be essential for achieving it: and most consumers could reasonably be assumed to be rational and knowledgeable enough to help resolve those problems.

Lerner was one of the last of the great non-mathematical economists and certainly one of the most original, versatile and prolific members of the profession. Born in Romania in 1905, raised from early childhood in the Jewish immigrant quarter of London’s East End, he went to rabbinical school, started work at 16, working as tailor, capmaker, Hebrew School teacher, typesetter, and then founded his own printing shop. When that went bankrupt at the onset of the Great Depression, he enrolled as an evening student at the London School of Economics to find out the reason for his shop’s failure. There, his outstanding logical faculties soon became evident and won him all the available prizes and fellowships, one of which took him to Cambridge to study with Keynes. He published many major articles already as an undergraduate, was appointed temporary assistant lecturer at the London School of Economics in 1935, assistant lecturer in 1936, and in 1937 a Rockefeller fellowship took him to the United States, where he remained, although his reslessness kept him from settling at any one university for more than a few years. He died in 1982.

SUMMARY The paper develops and renders plausible the hypothesis that modern man is developing an ever greater tolerance and desire for excitement and violence, because scientific and economic progress has so greatly diminished the hardships and hazards of everyday work and existence and of the fight for survival that most people are left with a stimulus deficit, which they try to eliminate. The various sources of deliberately sought-for stimulation, ranging from dangerous sports and gambling to violence, crime and participation in collective hazardous action, are listed and discussed, and the available statistics of their use or incidence compared and analyzed. ZUSAMMENFASSUNG In diesem Beitrag wird plausibel die Hypothese entwickelt und aufgestellt, wonach der moderne Mensch eine immer grossere Gleichgultigkeit gegenuber Aufreizung und Gewalt aufbringt und gleichzeitig den stets starkeren Wunsch danach aussert. Der Grund dafur wird im wirtschaftlichen und wissenschaftlichen Fortschritt geschen, welcher in hohem Masse die Muhen und Gefahren der Alltagsarbeit, der Existenz und des Uberlebenskampfes vermindert hat, so dass die meisten Leute einen Mangel an Antrieben empfinden, den sie zu beseitigen versuchen. Die verschiedenen Quellen absichtlichen Suchens nach Stimulanzvon gefahrlichen Sportarten uber Spielen mit Gewalt bis hin zu Kriminalitat und zur Teilnahme an kollektiven Zufallsspielen - werden aufgezahlt, diskutiert und anhand der verfugbaren Statistiken im Hinblick auf ihre Verwendung und Vorkommen verglichen und analysiert. RESUME Cet article developpe et rend plausible l'hypothese selon laquelle l'homme mo-dene manifeste une tolerance et un besoin, jamais egales, envers les excitants et la violance. En effet, le progres scientifique et economique a tellement diminue les difficultes et les hasards du travail et de l'existence quotidienne, ainsi que la lutte pour la survie, que la plupart des gens manquent de stimulants et cherchent ȩ combler de deficit. L'auteur enumere et decrit les diffeerentes sources d'actions recherchees deliberement pour leur caractere excitant: depuis les sports et les paris dangereux jusqu'ȩ la violence, au crime et ȩ la participation ȩ des actions collectives hasardeuses. II compare et analyse les statistiques disponibles sur ces actions, leur frequence et leurs consequences.

SUMMARY Capitalists in the pricemaker's position protect the pricetakers facing them from being buffeted by economic fluctuations, and competition among them provides pricetakers with market information and other valuable marketing facilities not provided under perfect competition. The nature of all those benefits and the conditions that favored their creation in product markets are analyzed, and the reasons why they failed to develop in labor markets and why the employers’ position as pricemakers has been resented and largely eliminated are explored. Finally, Weitzman's important proposal to introduce Japanese-type profit-sharing wage contracts as a means of securing all the benefits of employers’ domination of the labor market without its costs is shortly summarized. ZUSAMMENFASSUNG Besteht fur eine der Marktseiten die Moglichkeit als Preissetzer aufzutreten, so entstehen der preisnehmenden Marktseite verschiedene Vorteile: Zum einen werden dadurch die wirtschaftlichen Schwankungen stark gedampft, zu anderen fuhrt die Konkurrenz zwischen den Preissetzern zu mehr Marktinformationen und zu einem Angebot verschiedener Marketingleistungen, die bei vollkommenem Wettbewerb nicht bereitgestellt wiirden. Im vorliegenden Beitrag wird die Art dieser Vorteile und die Bedingungen, die fur ihr Zustandekommen in einem Produktemarkt verantwort-lich sind, analysiert. Danach werden die Grunde hergeleitet, weshalb sie sich auf dem Arbeitsmarkt nicht einstellen und weshalb den Arbeitgebern die Rolle als Preissetzer veriibelt wird. Zum Schluss wird kurz Weitzmans Vorschlag zusammengefasst, der, nach japanischem Muster, eine Verankerung der Gewinnbeteiligung im Arbeitsver-trag vorsieht. Damit sollen die Vorteile der Arbeitgeberdominanz auf dem Arbeitsmarkt bewahrt werden, ohne dies mit hohen Kosten zu erkaufen. RESUME Les capitalistes qui fixent les prix protegent les acheteurs des a-coups consecutifs aux fluctuations economiques. La concurrence entre les premiers fournit a ces derniers une information sur le marche, ainsi que ďautres elements marketing tres utiles, qui n'existent pas en concurrence parfaite. Cette etude analyse la nature de tous ces avantages et les conditions qui ont favorise leur apparition sur les marches. Ľauteur essaie de comprendre pourquoi ces avantages ne se sont pas etendus au marche du travail. II explique ainsi pourquoi la position des employeurs est mal percue lorsqu'ils fixent le montant des salaires. Ľarticle se termine par un resume rapide des propositions fort interessantes de Weitzman: ľintroduction de contrat de travail avec participation aux benefices, comme au Japon, permettant de garder tous les avantages de la preeminence des employeurs sur le marche du travail, et ďen supprimer les inconvenients.

_HE concept of external economies is one of the most elusive in ecoI nomic literature. Our understanding of it has been greatly enhanced by the active controversy of the twenties over the nature of the "empty economic boxes"; but full clarity has never been achieved. Definitions of external economies are few and unsatisfactory. It is agreed that they mean services (and disservices) rendered free (without compensation) by one producer to another; but there is no agreement on the nature and form of these services or on the reasons for their being free. It is also agreed that external economies are a cause for divergence between private profit and social benefit and thus for the failure of perfect competition to lead to an optimum situation; but for this there are many reasons, and it is nowhere made clear how many and which of these reasons are subsumed under the heading of "external economies." Nor do examples help to clarify the concept. The literature contains many examples of external economies; but they are as varied and dissimilar as are discussions of the subject. Some give the impression that external economies are exceptional and unimportant; others suggest that they are important and ubiquitous. Indeed, one might be tempted to explain this strange dichotomy by ideological differences between the different authors; but

The paper discusses which inequalities can, and which cannot, be measured by the economist's data. Among the inequalities of wealth, income and consumption, the second is shown to be the most relevant, although it must be corrected for the redistributive effects of taxation and transfer payments and then summed with both the distribution of public goods and services and the distribution of freely rendered non market private services. Beyond the distribution of these measured and measurable components of satisfaction, account is also taken of nonmeasurable sources of welfare, such as work and leisure. Their distribution is shown to be positively correlated with the unequal distribution of money income, and guesses are made concerning their relative importance.

The problem of economic development was among the main preoccupations of the classical economists; and Karl Marx, Max Weber, and their followers continued to be interested in it. The Anglo-Saxon economists and their followers, however, during the century preceding the Second World War, all but forgot about economic development—perhaps because they took it for granted. The growth of most of the advanced economies was impressive enough to be taken for granted; as for the underdeveloped areas, next to nothing was known about their rates of growth, although economists (at least in the advanced countries) seem to have supposed that the magnitude of capital exports to these areas gave them a chance to develop even faster than, and ultimately to catch up with, the more highly developed Western economies. Only England's development received some attention and mild doubts were occasionally raised as to whether her rate of economic growth was as fast as it could and should have been. From the turn of the century onward, blue books and white papers appeared, uneasily comparing British with German and American industrial production, questioning the wisdom of exporting quite so much capital, stressing the need for more aggressive export drives—but next to nothing was done about all this. For one thing, the philosophy of laisser faire still ruled supreme; for another, business fluctuations obscured and rendered difficult a true assessment of the situation; for a third, Britain's continued political supremacy may have lulled concern over the deterioration of her relative economic position. The problem of development came to the forefront of economic discussion only with the Second World War, as a result of two important changes. In the West, political power shifted across the Atlantic; in the East, Russia's war record established her both as an important center of political attraction and as a shining example of the success of planned industrialization and development.

The author criticizes economists for their uncritical acceptance of consumers’ revealed preference and tries to explain the preferences manifest in the United States by tracing them to cultural influences, especially the Puritan Ethic, and to economic factors, such as producers’ domination and economies of scale. Differences between American and European behavior patterns are sought mainly in comparative time budgets and Hawtrey’s distinction between defensive and creative consumption is revived as a framework suitable for such analysis.

SUMMARY Pränt maximisât ion is tenu willi inauy meanings iiid the present article explores some implirations of two of these meanings maximisation of the present discounted value of expected future profits and maximisation ot the internal rate of retùm While in long -mn equilibriuiu the two prin ciples lead to the same result in disequilibrium they lead to different entre preneurial policies concerning current production investment and the repla cement of equipment and the policy of maximising the internal rate of return leads to more economical utilisation of capital Winch of the two maximisation principles is the more rational for the entrepreneur to follow depends on what factors limit the scale and rate of expansion of his operations The internal rate of return is the proper magnitude for him tu maximise if the availability of capital or borrowers or lenders risk is the limiting factor The welfare implications of the dioice of one or the other principle of profit maximisation constitute large subject of which only few selected aspects are discussed here Tentative conclusions are given concerning the influence of the maximising policy on a. the ratt of capital accumulation the allocation of investment funds among different industries and fields of activity and the degree of mechanisation of current investment, Scitovsky Tibor. Sur deux principes de maximation du profit et quelques-unes de leurs implications. In: Revue économique, volume 6, n°3, 1955. pp. 368-386.

America’s economic troubles are blamed on many causes, among them on the improvidence of the general public. Americans are accused of being spendthrifts and of having become more so in these difficult stagflationary years when, so the argument runs, saving is desperately needed to make possible investment and the rise in productivity, which hinges on investment. The accusation is based on statistical evidence, which indeed shows that personal saving as a proportion of disposable personal income in the United States has fallen to its lowest level in 30 years during the late 1970s and has been for a long time quite a bit lower than it is in most Western European countries. During the 1960–78 period, for example, the US saving rate averaged 6.9 per cent, which is just about the same as Sweden’s 6.8 per cent average for the corresponding period and Great Britain’s 6.9 per cent; but significantly lower than Western Germany’s 11.9 per cent, France’s 13.2 per cent, and the Netherland’s 14.7 per cent average.

Publisher Summary Economics, having originated in the age of reason, has adopted the rationality of man as one of its basic postulates. The assumption of human rationality is a powerful simplification of the economist's model of reality; this is neither the first nor the last time that economists sacrifice realism for simplicity. Moreover, economists can proudly point to seeming confirmations of their rationality hypothesis. Many implications of several of the economist's theories of individual behavior are based on this hypothesis; and every time empirical data fail to contradict it, the economist's belief in human rationality is understandably strengthened, whatever psychoanalysts may say to the contrary. Having sounded a warning against a too easy assumption of man's rationality, one may well ask if economists have ever come across proof of man's irrationality. Not surprisingly, perhaps, economists are human. They sometimes do and sometimes do not find what they are looking for; however, very seldom do they find what they are not looking for. Their faith in man's rationality is almost absolute: Perhaps the only generally accepted exception to it is a minor one, known as the money illusion.

In the past, economic progress has mostly taken the form of a rise in labour productivity based on the substitution of mechanical for muscular energy and of material for human resources. The automatic forces of the market reinforced and speeded up that trend by raising the prices and so discouraging the consumption of all those sources of satisfaction that depend solely or mainly on human interaction. An example of these is the performing arts, whose prices rose and use declined with the rise in wages, except where public policies and subsidies slowed or arrested the process.

I am no student of Joan Robinson’s: my interests lie elsewhere. But I was one of her supervisees when I got my first taste of economics at Cambridge in 1930, at age 19. I went to Cambridge only for a short time to learn English and international law; but, getting tired of law, switched to economics for my last two terms. I took Dennis Robertson’s and Maurice Dobb’s lectures and was assigned Joan Robinson as my supervisor, for whom I had to write fortnightly essays.

Cul ture comprises some of the best, most valuable things life has to offer. People involved in a cultural activity or interested in its products instinctively feel it to be so; but instinctive beliefs are not always easy to substantiate by logical reasoning. In the ease of cultural activities, however, a very simple argument establishes them as superior sources of satisfaction, from the individual's as well as from society's point of view.

Payments adjustment and the role of international reserves in facilitating it raise some of the major unsolved economic problems of our day. They can be approached from a number of points of view and at many levels. I propose to stay at the simplest level and discuss the basic aspects of the problem, partly because these are often overlooked in the heat of discussion over the finer points of detail, and partly also because the slow administrative procedures of an international and multilingual congress like the present leave me no other choice. I am forced to write this in the midst of the March gold crisis for delivery half a year later; only by concentrating on the eternal verities of the subject can I hope not to be overtaken by events.

Economic Theory and Reality improves access to Professor Scitovsky’s most important recent work, much of which was originally published either in foreign languages or outside the mainstream literature. As well as improving our understanding of his approach to economics and the contributions which he has made to scholarship, this book addresses key questions about the relevance of economic theory and its future direction.