How (Some) Socialists Became Capitalists: The Cases of Three Prominent Intellectuals David R. Henderson Capitalism, Socialism, and Irony: Understanding Schumpeter in Context Jerry Z. Muller Cliometrics, Child Labor, and the Industrial Revolution Jane Humphries The Reproving of Karl Polanyi Santhi Hejeebu and Deirdre McCloskey Indian Development and Poverty: Making Sense of Sen et al. Shyam J. Kamath The Rise and Fall of the German Miracle Wolfgang Kerber and Sandra Hartig Is Inequality Bad for Our Health? Jeffrey Milyo and Jennifer M. Mellor Between Vienna and Cambridge: The Risky Business of New Austrian Business-Cycle Theory Barkley J. Rosser, Jr. Foucault on the Prison: Torturing History to Punish Capitalism Karl von Schriltz Index to Volume XIII (1999)

How (Some) Socialists Became Capitalists: The Cases of Three Prominent Intellectuals | David R. Henderson

Abstract: Three prominent economists born early in the twentieth century—James Buchanan, Jack Hirshleifer, and Simon Rottenberg—switched from a belief in socialism in their twenties or thirties to strong support for free markets. Interviews show that for all three, and especially for Buchanan and Rottenberg, what changed them is what they learned in their economics classes. For Hirshleifer, another major influence was the pact between Hitler and Stalin, which caused him to be more skeptical about leftist ideas and made him more open to intellectual criticisms of socialism.

Capitalism, Socialism, and Irony: Understanding Schumpeter in Context | Jerry Z. Muller

Abstract: The significance of the major claims of Joseph Schumpeter's best-known work, Capitalism, Socialism, and Democracy, have often been misunderstood by readers unattuned to its ironic mode of presentation. The book reaffirms two themes that were central to Schumpeter's thought from its very beginning, namely the significance of creative and extraordinary individuals in social processes, and the resentment created by the innovations they introduce. The thesis that socialism would replace capitalism, but that it would bring about few of the advantages imagined by socialists and many disadvantages with which they had not reckoned, was an ironic proposition, which Schumpeter put forth in a manner designed to overcome intellectuals' dogmatic resistance to capitalism.

Cliometrics, Child Labor, and the Industrial Revolution | Jane Humphries

Abstract: Ten years ago, Clark Nardinelli shocked conventional historians by reinterpreting child labor as a sensible response to the Industrial Revolution. Nardinelli's exculpation of child labor follows from the way in which he deploys neoclassical economic theory. How relevant is his neoclassical model to the early industrial economy, and how realistic is methodological individualism to the decisions that sent young children into the appalling work places of early industrial Britain? Rather than seeing neoclassical economics as a substitute for historical judgment, as Nardinelli suggests, I propose that we use it critically to probe the meanings and implications of child labor in historical context.

The Reproving of Karl Polanyi | Santhi Hejeebu and Deirdre McCloskey

Abstract: Karl Polanyi's The Great Transformation has had enormous influence since its publication in 1944. In form, this influence has been salutary: Polanyi targets one of the main weaknesses of modern economics. But in substance, Polanyi's influence has been baneful. Mirroring the methodological blindness he criticizes, Polanyi insists on the all-or-nothing existence/nonexistence of laissez faire—and on its all-or-nothing goodness/badness.

Indian Development and Poverty: Making Sense of Sen et al. | Shyam J. Kamath

Abstract: The work of Amartya Sen and his collaborators on Indian economic development compares three Indian states so as to demonstrate the superior performance of interventionist, left-wing governments in West Bengal and Kerala compared to the more typical state of Uttar Pradesh. A careful analysis of the evidence, however, shows that Sen et al. ignore the anti-interventionist implications of their own evidence of corruption in the state of uttar Pradesh; dramatically overstate the success of leftist governments in West Bengal; and overlook the role of Kerala's culture and its private education system in accounting for its famously high levels of literacy and female independence.

The Rise and Fall of the German Miracle | Wolfgang Kerber and Sandra Hartig

Abstract: The fast recovery of Germany's economy after World War II—the so-called "German miracle"—can be explained by the market-oriented economic policies pursued in the 1950s, based upon ideas of Ordoliberalism. The slowing growth rates and increasing economic difficulties since the 1970s seem to have resulted from the extension of interventionist and redistributionist policies beyond those sanctioned by Ordoliberalism. The roots of the German economic decline are political: already in the 1950s, a broad consensus existed about the need to integrate market-oriented economic policy with a highly redistributory welfare state in a "social market economy."

Is Inequality Bad for Our Health? | Jeffrey Milyo and Jennifer M. Mellor

Abstract: A number of recent studies suggest that income and social inequality (as opposed to poverty itself) have detrimental consequences for people's health. These studies argue that while the poor may suffer the most from inequality, the rich also suffer. On closer inspection, however, it emerges that the basic arguments and evidence that inequality has a causal effect on health are wanting in many respects.

Between Vienna and Cambridge: The Risky Business of New Austrian Business-Cycle Theory | Barkley J. Rosser, Jr.

Abstract: Tyler Cowen's "New Austrian" theory of business cycles is based on risk analysis and the assumption of rational expectations. This contrasts with the Old Austrian view, which questions the feasibility of measuring economic risk. Despite Cowen's admirable eclecticism, the way he applies risk analysis to business cycles suffers from serious inconsistencies, and his use of rational expectations is mistaken in the face of economic complexity—a phenomenon that was accurately understood by the traditional Austrians.

Foucault on the Prison: Torturing History to Punish Capitalism | Karl von Schriltz

Abstract: Michel Foucault has been an academic cause célèbre for some time, spawning untold thesis papers and dissertations illuminating oppression's invisible fingerprints on history, literature, gender, and government. Yet for all his centrality in American higher education, Foucault's books are not studied so much for their substantive content as for their underlying insights into the forces shaping society. This paper confronts this paradox through a critique of the apotheosis of Foucaultian analysis, Discipline and Punish: The Birth of the Prison. Discipline and Punish can be understood as a masterful harnessing of leftist assumptions about capitalism to reconfigure history. The extent to which Foucault distorts history to support his thesis, however, seriously undermines the practical relevance of his brand of social science.

Index to Volume XIII (1999)

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