IN THE FALL OF 1942, as the Allied and Axis nations marshalled their forces for decisive battles at Guadalcanal, El Alamein, and Stalingrad, Joseph A. Schumpeter's Capitalism, Socialism, and Democracy (CSD) was published. Perceived by Schumpeter at the time as a little book of essays somewhat in the nature of a potboiler,' it distilled for the intelligent lay reader almost forty years' thought, observation, and research (1942, p. ix) by the Austrian economist-statesman-banker turned Harvard don. Fifty years later, it remains relevant. In particular, it brought into the main stream of economic discourse the question of what market structures were most favorable to technological change and hence economic growth. Both in the United States and abroad, policy debates over that issue persist. Schumpeter's conjectures on market structure, the work by economists to extend them, and the continuing policy puzzles are the main focus of this anniversay essay. II. The Challenge

This paper reviews the economic literature on welfare reform over the 1990s. A brief summary of the policy changes is followed by a discussion of the methodological techniques that analyze the effects of these changes on outcomes. The paper then critically reviews the econometric and experimental literature on caseload changes, labor force changes, poverty and income changes, and family formation changes. A growing body of evidence suggests that recent policy changes have influenced economic behavior and well-being. One particular set of "new-style" welfare programs seems to show especially promising results, with significantly increased work and earnings and reduced poverty.

This paper reviews the economics literature on welfare reform over the 1990s. A brief summary of the policy changes over this period is followed by a discussion of the methodological techniques utilized to analyze the effects of these changes on outcomes. The paper then critically reviews the econometric and experimental literature on caseload changes, labor force changes, poverty and income changes, and family formation changes. A growing body of evidence suggests that the recent policy changes have influenced economic behavior and well-being in a variety of ways. One particular set of "new-style" welfare programs seems to show especially promising results, with significantly increased work and earnings and reduced poverty.

E BEGAN to conceptualize average total cost functions during the early decades of the twentieth century. But a century before, a German music publishing firm calculated and used in its internal decision making output-dependent average cost estimates for two methods of printing sheet music. This note describes that early experience and juxtaposes against it the relatively late emergence of the ATC curve in the formal literature of economics.

Natural resources, by their nature, are not readily bent to the status of private property. Efficient resource use is complicated by jurisdictional externalities, public goods, non-use values, and beneficiaries spatially separated from the location of resources. The task is made more challenging by ecological complexity that obscures cause (benefits) and effects (costs), and dramatic time lags between individual actions and subsequent social consequences that, together with substantial uncertainty, introduce the chance of irreversibilities. Resource economists have played a major role in the literature on externalities, the development of individual transferable quotas, non-market valuation techniques and common property management.

Economists were among the many scholars uprooted following Hitler's rise to power in 1933. This article reviews a series of books edited by Harald Hagemann and others which provide extensive biographical information on 314 German-speaking economists whose professional opportunities were shattered by Nazi policies. It evaluates the impact of the massive emigration on economic research and teaching in Germany and Austria and in the nations to which most of the economists emigrated. An analysis of 1966-70 data reveals that the emigres' cited publication counts were equivalent to the citations of three leading U.S. economics departments.

casual empiricism, invalid use of inverse probability, introduction of factors external to the theoretical system, and the use of only some of the implications of a formal model that has others that are unrealistic. . . . The basic sources of the defects in Lange's theoretical analysis are the emphasis on formal structure, the attempt to generalize without first specifying in detail the facts to be generalized, and the failure to recognize that the ultimate test of the validity of a theory is not conformity to the canons of formal logic but the ability to deduce facts that have not yet been observed, that are capable of being contradicted by observation, that subsequent observation does not contradict. In consequence, these defects are found in much economic theorizing that is not taxonomic in character. They are, however, especially likely to arise when the taxonomic approach is adopted, as their presence in the writings of saable and careful a theorist as Lange testifies. (Friedman 1946, p. 631) Shortly after the publication of the piece on Lange, Friedman received a probing letter from Edwin Bidwell Wilson. That letter, Friedman's reply, and a second letter of Wilson's are reprinted below. E. B. Wilson (1879-1964) was a scientific generalist of a type that has always been uncommon, and is becoming unknown. Wilson studied under the mathematical physicist J. Willard Gibbs, and his publication of Gibbs' notes on vector analysis and a text of his own on advanced calculus had a great impact upon education in advanced mathematics in the early part of this century. Wilson held faculty positions in mathematics at Yale and mathematics and physics at M.I.T. before he moved in 1922 from being the Chairman of Physics at M.I.T. to Harvard to be Professor of Vital Statistics in the Harvard School of Public Health, a position he held until his retirement. In 1914 he was appointed Managing Editor of the Proceedings of the National Academy of Sciences, a post he held for fifty years, until his death. In 1929 he served as President of the American Statistical