From: Craig Duddy

Sent: Sunday, July 18, 2021 3:04 PM

To: Walter Block <>

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;


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,


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,


From: Craig Duddy

Sent: Tuesday, July 20, 2021 6:47 PM

To: Walter Block <>

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.

Best Regards,


From: Walter Block <>

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.


“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.


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;;;

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; (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;

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;;; 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;

I hope and trust some of this will be of help to you. Where are you now going to school?

Best regards,



5:02 pm on October 29, 2021

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