I appreciate Mason Gaffney’s query about the nature of my book. And
if I could, I will reply using the text of a note I sent to Roger
Sandilands after reading his brilliant compilation of some of the more
difficult-to-find works of Allyn Young. Two of the longer parts within
Roger’s compilation were Kaldor’s notes of Young’s LSE lectures
which were delivered in 1927-29, and the various entries Young wrote in
the 1920s for the Encyclopaedia Britannica. If you would like to see how
economists thought about economic issues prior to the publication of
_The General Theory_, this is the place to go. Hopefully, Roger will be
able to let us know how to obtain copies of his compilation of Young’s
work. But to explain what my book is about, I hope this note I wrote to
Roger will explain how I think of this book myself: 

“I have been meaning to write to you for some time. I took Allyn
Young's LSE lectures and Britannica entries with me as my morning train
reading for many many mornings in a row and it was fantastic. The first
thing that it confirmed for me was that the book I have written on Free
Market Economics is actually what I wanted it to be. It is the book that
an economist schooled in the classical tradition would have written in
the absence of the arrival of the General Theory. I learned an immense
amount from Young but all of it merely deepening my own understanding of
things that I had absorbed from the classical literature generally. I
attach the flyer for the book which you should ask your library to buy
anyway, but if you look at it, you will see that it is classical theory
right down to its downward sloping supply curves and its discussion of
the theory of the cycle in an almost identical way to Young's. 

“The theory of the cycle as Young portrays it (discussed pp 76-84) is
not just the classical stuff in general, but is explicitly soaked
through with Say's Law. He notes that J.-B. Say "pointed out" that "what
is commonly called overproduction is merely ill-balance production" (p
77). And then on the next page, "people do not over-save, they
miscalculate" (p 78). Where can you find that written in a textbook any
more, other than in mine, of course. 

“And if you look at my book, you will even find the history of
economics discussed more or less in the same place, just half way past
the middle (pp 85-88). He not only feels the need to say these things,
but the logic of when to put the history into the text occurs to him in
just the same way and at just the same point as it occurred to me. 

“But it is not merely coincidence that our work is so in parallel,
but it is that he and I both think about things in the same sort of way.
I have the advantage of actually having seen Keynesian economics in
action whereas one can only conjecture just how savage Young would have
been about the GT had he seen it for himself. Given what he has written
here, there is little doubt he would have found the GT nonsense from end
to end. And now, today, instead of discussing Mises and Hayek alone, we
would be also discussing Young.”  

That is where my letter to Roger ends. But to supplement your reading
of Young, for an explanation of the nature of the business cycle as
understood by classical economists, the first edition of Haberler’s
_Prosperity and Depression_ is hard to beat. That is what I built my own
chapters on. But if you go to Young, who unfortunately died at 53 in
1929, you will see these same theories described in more or less exactly
the same way by someone writing before there was even a hint of the
Great Depression to come. 


Dr Steven Kates
School of Economics, Finance
    and Marketing
RMIT University
Level 12 / 239 Bourke Street
Melbourne Vic 3000

Phone: (03) 9925 5878
Mobile: 042 7297 529