W.H. Hutt

Quotes From

The Keynesian Episode (1979)

• The demand for any commodity is a function of the supply of noncompeting commodities.#Quoted in Steven Horwitz, Microfoundations and Macroeconomics (2000)

The Theory of Idle Resources (1939)

• In ‘pure theory’, the irrational origin of preferences may be taken as part of the data in the light of which a particular result may be explained. As soon as we bring the question of ‘irrationality’ into discussion as a phenomenon to be deplored, we have, strictly speaking, left the field of economic controversy.#
• Regrettable idleness, like other forms of ‘waste’, seems to be the product of arrangements which allow private interest to triumph over social interest. It arises, in other words, because our laws permit competition to be restricted. Hence, no improvement of the monetary system alone is capable of eliminating causes of idleness whilst other existing institutions remain.#
• Both in the practical selection of monetary policies under political systems dominated by ‘pressure groups’, and in the less tangible psychological influences determining typical preference for or tolerance of inflationary theories, the distributive effects have subconsciously loomed more important than the productive.#
• The recognition of certain deficiencies in an existing regime may lead us to suppose that the right system of money, if we could only find it, would automatically correct the results of the refusal to make otherwise desirable adjustments in many spheres.#
• Restriction schemes are threatened less from internal quarrels than from the danger of competition from outside. . . . The greater part of that divergence of interest within . . . would cease entirely if the permanence of a cartel could be assured by the suppression of all external competition.#
• In a ‘pure’ strike between two parties, each side believes that the other will be the more burdened or inconvenienced, and counts on the other side’s continued waste of its services forcing it to acquiesce.#
• Natural monopoly can be observed in practice to be of relatively small importance in comparison with collusive monopoly. In the absence of collusive monopoly (in conspicuous or unrecognized form) there can be little withholding of capacity.#
• The free movement and utilization of resources, regardless of private interests which are thereby injured, is what orthodox economists have in fact meant by competition.#
• The object of public utility control is presumably to restrict entrepreneurial powers in such a way as to convert a monopolistic situation into a competitive one.#
• A monopoly is ‘natural’ when it does not depend on any amalgamation of interests through the purchase of competing resources or any other form of contractual or tacit collusion.#
• The absence of idleness does not imply the absence of waste.#
• When we think of ‘idleness’ in one of the senses in which the condition can be deplored, it is simply a conception which enables us to distinguish the most conspicuous (certainly not the most serious) forms of waste from others.#
• There are no determinants in the price mechanism which apportion output among those who share in the benefits of monopoly. From the social standpoint the division must be arbitrary.#
• In relation to the individual’s own ‘real welfare’ and that of his family, is it not clear that his attitude towards his income-status (or whatever else happens to be the cause of his indifference to ‘real’ wage-rates) must be a relatively negligible factor?#
• To permit a machine to wear out may be socially (or privately) the most profitable way of scrapping it.#
• Their objection as wage-earners to downward wage-rate adjustments seems to be much more serious than their anger as consumers to price increases.#
• We seem usually to be much more vigilant in respect of the price of a thing that we buy than we are in respect of its quality.#
• A taste as such can hardly be ‘irrational’; but that term can be applied to a choice or preference because it may be based upon a false expectation due to its consequences having been wrongly thought out.#
• The physical side of poverty has been greatly overstressed because the propagandist has found it easier to win support by emphasizing that side than by arguing the superficially less plausible case against environmental factors which are not in such concrete evidence.#
• The cause of unemployment in this case [of vagrancy] is a preference. It implies no wrong use of resources, given the social will. If it is a condition which we happen to deplore on moral grounds, then the method of reform lies either in changing the preferences directly (through preaching or teaching) or in changing the environment which apparently gives rise to the despised preferences.#
• If the standards of living which earnings can command from [casual labor] are deplorably low, it is the causes of the cheapness of the labour and not the methods by which it mays to utilize it which must be blamed. And the labour is cheap because other opportunities of employment are barred to those who provide it.#
• Improved institutions which reduced the delays of labour transference . . . would undoubtedly cheapen labour.#
• To the extent that any trade is known to be risky from the point of view of continuity of employment, so must an increment to compensate the workers for such idleness as is liable to be experienced be reckoned as forming part of the remuneration.#
• When an unemployed linotype operator becomes a shop assistant, it is evidence of a much smaller loss of capital than is indicated when a linotype machine is completely scrapped and the steel turned into shop fittings.#
• [Pseudo-idleness] can arise when the unit of equipment can provide more services than it is economic to utilize, whilst it is impossible to obtain at all, or impossible to obtain except at a higher cost, a smaller piece of equipment providing fewer services.#
• We cannot say that a fire station has provided no services in a month in which there have been no fires.#
• In any given state of knowledge and institutions, there are resources which perform their most wanted services through their mere passive existence – the service of availability.#
• In the first and second cases [where children are being educated] they do not happen to be in the labour market, but they are employed in the sense in which capital equipment in the course of its own production is employed.#