From: Craig Duddy
Sent: Sunday, July 18, 2021 3:04 PM
To: Walter Block <[email protected]>
Subject: The Ricardo Effect
Dear Professor Walter Block,
I have been working for a couple months now on a paper about Hayek’s Ricardo effect. Though I have way overshot my targets multiple times and will likely now have to turn it into a book. I am working extremely hard to have it out by next month, and I was wondering if you have the time if you’d be interested in taking a look and giving me your thoughts on it. The layout of the paper/book I have now is;
Introduction
Hayek’s Theory of the Ricardo Effect
Internal Rates of Return and Interest Rates
The Problem of Real Wages
The Conflict at LSE
The Structure of Production
Clark, Knight and Bohm-Bawerk
Hayek vs Keynes
Capital re-switching and Cambridge
The Productivity of Investment
The Pure Time Preference Theory of Interest
A Rehabilitation of the Ricardo Effect
At present there is a few chapters unfinished and I am pouring everything I know into it and its around 90 pages as we speak. I hope that you’ll be able to see my contributions to economic theory, and I am looking forward to seeing you speak at Mises U.
All the best,
Craig.
From: Walter Block
Sent: 19 July 2021 05:12
To: Craig Duddy
Subject: RE: The Ricardo Effect
Dear Craig:
Send me this material. I’ll take a peek at least at part of it, probably not all of it.
Stay safe.
Best regards,
Walter
From: Craig Duddy
Sent: Tuesday, July 20, 2021 6:47 PM
To: Walter Block <[email protected]>
Subject: RE: The Ricardo Effect
Dear Professor Walter Block,
I’ll leave the link to the work below, it is unfinished and unedited currently but I’d love to hear your thoughts on some of the sections that are finished.
https://docs.google.com/document/d/1_p3LRopXfcnbLjRHeeMDrGm62kIBX3xbCZ76UJB5sNk/edit?usp=sharing
Best Regards,
Craig
From: Walter Block <[email protected]>
Sent: Saturday, July 24, 2021 2:59 PM
To: ‘Craig Duddy’
Subject: RE: The Ricardo Effect
Dear Craig:
The entire manuscript needs a bit of copy editing.
Suggestion: submit this to a journal like the Review of Austrian Economics, or the Quarterly Journal of Austrian economics, and get substantive critiques.
I can’t respond to all of what you write, I’ve got too many other commitments. I’ll focus on just two.
1.
“When calculating labour costs businessmen do not look at real wages. They instead look at the relative ratio of prices between specific wages rates, which are based on both marginal productivity of labor and marginal costs. Within the typical business cycle, one that normally lasts for several years, entrepreneurs focus on short-run production, thus only making nominal prices relevant. This means there is no need to adjust for inflation. Pricing of labor is appraised from the given employees marginal productivity but also to sales and profits.”
I disagree with this. Ceteris paribus, businessmen who ignore real wages will go bankrupt. (copy editing: it should be wage rates, not wages rates; it should be employees’, not employees). The ratio of wage rates and prices IS real wages, so I’m confused about that sentence. Entrepreneurs do not “focus on short-run” anything. Rather, they focus on present discounted values, if they want to prosper. “Sales and profits” are incorporated into discounted marginal revenue productivity, and thus your ”also” is misplaced.
2.
That Skousen diagram near footnote 16. More copy editing: you should number your pages. You don’t criticize Skousen, rather, you rely on him.
I’m a bit of a critic of his:
Block, Walter E. 2020. “Unblocking Progress in Austrian Economics: Response to Skousen.” Revista Procesos de Mercados, Vol. 18, No. 1, pp. 313-326; https://docs.google.com/viewerng/viewer?url=http://www.procesosdemercado.com/wp-content/uploads/2020/07/Vol_XVII_1_2020_Notas-1.pdf&hl=es; https://search.proquest.com/openview/2bb6dc0192967b03d7e94362bd35ffbb/1?pq-origsite=gscholar&cbl=686495;
Barnett II, William and Walter E. Block. 2016. “Gross Output – Another Government Con.” Revista Procesos de Mercado Autumn, Volume XIII, no. 2, pp. 13-39; http://www.procesosdemercado.com/pdf/2016-2-new/PM2016_2_02_Arti%CC%81culo%201.pdf (critique of Skousen)
Barnett, William II and Walter E. Block. 2006. “On Hayekian Triangles.” Procesos De Mercado: Revista Europea De Economia Politica; Vol. III, No. 2, Fall, pp. 39-141; http://mises.org/journals/scholar/block18.pdf; http://www.academia.edu/1359916/On_Hayekian_Triangles; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1880543
This might also be of interest to you:
Block, Walter E. 1990. “The Discounted Marginal Value Product – Marginal Value Product Controversy: A Note,” Review of Austrian Economics, Vol. IV, pp. 199-207; http://www.mises.org/journals/rae/pdf/rae4_1_7.pdf;
http://www.mises.org/journals/rae/pdf/R4_7.pdf; reprinted as Block, Walter E. 1994. “On Marginal Productivity Theory,” Peter Boettke, ed., The Elgar Companion to Austrian Economics, Hants, England: Edward Elgar, pp. 123-130; http://www.academia.edu/1355567/The_Discounted_Marginal_Value_Product_-_Marginal_Value_Product_Controversy_A_Note
I hope and trust some of this will be of help to you. Where are you now going to school?
Best regards,
Walter
5:02 pm on October 29, 2021
