Comment on Tullock’s “Why Austrians Are Wrong About Depressions”

With regard to Tullock’s “major objection” to the theory, his argument (pp. 3-10) is likewise marred by an apparent unfamiliarity with advanced expositions of the theory. I shall not attempt here to give a point-by-point critique of the author’s main argument that, during a typical Austrian business cycle, “there would be only minor transitional unemployment [and] measured GNP would be higher as a result” (p. 74). It is enough to point out that the author’s conclusion rests on basic misconceptions about Austrian capital theory and structure-of-production analysis.