"Income No. 3 must be defined as the maximum amount of money which the individual can spend this week, and still be able to spend the same amount in real terms in each ensuing week."

“Hayek was making us think of the productive process as a process in time, inputs coming before outputs.”

“So long as we confine our attention to income from property, and leave out of account any increment or decrement in the value of prospects due to changes in people's own earning power , Income No. 1 ex post is not a subjective affair, like other kinds of income; it is almost completely objective.”

“The standard stream corresponding to Income No. 3 is constant in real terms... We ask... how much he would be receiving if he were getting a standard stream of the same present value as his actual expected receipts. This amount is his income.”

“I did not begin from Keynes: I began from Pareto, and Hayek.”

“We must give the system sufficient factors of stability to enable it to work; but we must not assume that these forces are so powerful as to prevent the system from being liable to fluctuations. There must be a tendency to rigidity of certain prices, particularly wage-rates; but there must also be a tendency to rigidity of certain price-expectations as well, in order to provide an explanation for the rigidity of these prices... Indeed we should do better to assume a good deal of variation in different people’s elasticities of expectations... Of course the way in which a population is divided with respect to this sort of sensitivity will vary very much in different circumstances... We have to be prepared to deal with a range of possible cases, varying from that of a settled community, which has been accustomed to steady conditions in the past , to that of a community which has been exposed to violent disturbances of prices (and which may have to be regarded, in consequence, as being economically neurotic.”

“There is much of economic theory which is pursued for no better reason than its intellectual attraction; it is a good game. We have no reason to be ashamed of that, since the same would hold for many branches of pure mathematics.”