Who Were the Sea Peoples?

It turns out it is the same way that Keynes solved it: But Hayek had indeed, like Keynes, absorbed the lessons of the Sraffa exchange, and accordingly acknowledges that whereas the rate of increase of the physical amount of anyone input invested at an earlier date and the physical amount of the same input obtained at a later date may, and indeed will, differ for any two commodities, "the value equivalence in terms of the 'numéraire' at the two dates must bear the same ratio to one another for all commodities... This elucidation, we should note, is precisely the same as Keynes's own-rate setup in chapter 17." -- Tyler Beck Goodspeed, Rethinking the Keynesian Revolution , p. 120-1 The fact that Keynes, Hayek and Lachmann all see Sraffa's own-rate challenge as having been answered, and by the same answer that I see as meeting that challenge, gives me a fair amount of confidence I am on sound footing here!

Technical analysis hasn't much of a reputation in academic circles, having been compared to astrology , but Lachmann seems to make a case for why it might be effective, although the following passage never mentions technical analysis explicitly: Let us suppose that on a market a 'set of self-consistent expectations' has had time to crystallize and to create a conception of a 'normal price range'. Suppose that any price between £95 and £110 would be regarded as more or less 'normal', while a wider range of prices, say from £80 to £125, would be regarded as possible. We thus have two ranges, an 'inner range' from 95 to 110 reflecting the prevailing conception of 'normality', and an 'outer range' associated with what is regarded as possible price change. Many economists have started their study of expectations with the notion of a 'range', usually in the form of a probability distribution, but only to discard it at ...

Here is Lachmann: "We have said that the formation of expectations is incidental to the diagnosis of the situation as a whole in which one has to act. How is this done? We analyse the situation, as we see it, in terms of forces to which we attribute various degrees of strength. We disregard what we believe to be minor forces and state our expectations in terms of the results we expect the operation of the major forces to have. Which forces we regard as major and minor is of course a matter of judgment. Here the subjective element of interpretation is seen at work." -- Capital and Its Structure , p. 24, emphasis mine But what is really meant here is not subjective , but personal . (We follow M. Polanyi here in adopting this term.) The entrepreneur is not saying to herself, "Gee, just any old expectations I form will be as good as any others, because it is all just subjective." No, she is striving to make her judgment of what are minor and what are major forces...

"In equilibrium, where, by definition, all values are consistent with each other, the use of money value as a unit of measurement is not necessarily an illegitimate procedure." -- Ludwig Lachmann, Capital and Its Structure , p. 2. Lachmann does not offer further explanation of what he is thinking, at least at this point. Certainly, out of equilibrium, the price of capital goods will change. Furthermore, there will be disagreement about the price of various capital goods. So two entrepreneurs, or two economists, might not reach agreement about the amount of capital in a firm or in a nation. But as long as one recognizes this, so what? As Mises noted, this valuation problem is no different for land or labor: all three are valued for the future income streams they will produce, and out of equilibrium those are always uncertain. If this is all Lachmann means, I agree with him, but I can't see why he calls using the estimated monetary NPV of a capital to "measure...

I own the only salt mine in our area. Salt is a very widely used commodity, but it is not yet money, as it is not universally accepted in essentially all trades. (J.P. Koning might say it has a high degree of "moneyness.") As such, I have opened a side-business: I buy and lend-out all sorts of commodities by paying for them in salt, and when they are returned to me I trade them back in for salt. It is February, and I am looking at two possible loans. One borrower wishes to borrow tomatoes for six months, and the other ice. When I consider the tomato deal, I realize that in August tomatoes are plentiful and will fetch much less salt. In fact, although a pound in February fetches two pounds of salt, I expect that in August a pound of tomatoes will trade for only a pound of salt. Meanwhile, ice is in the reverse circumstances: in the winter, I can get only a pound of salt for a pound of ice, but in August the same amount of ice will fetch two pounds of salt. Since I do my a...