Hayek gives a compelling case for the efficiency of capitalism, but he does so by ruling out and assuming away essential features of capitalism. For example, although in parts of his business cycle theory he emphasizes durable goods -- in the restricted sense of referring to roundabout production methods -- but he never addresses the problem of durable capital goods when dealing with the way markets and prices supposedly coordinate the production system. --
Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901