Visionary Realism of German Economics: From the Thirty Years' War to the Cold War

Cover
Front Matter
Half-title
Title page
Copyright information
Table of contents
Chapter Int-chapter 20
Introduction
List of (Mostly) Forgotten German-Language Economists33
Chapter One German Economics as Development Economics: From the Thirty Years' War to World War II
Permanent Characteristics of the German Economic Tradition
Cameralist Economic Policy: From Veit von Seckendorff (1626–1692) to Wilhelm von Hörnigk (1640–1714)
The Eighteenth Century: The Birth of Academic Economics and of Specialization in the Field
The ‘Historical Schools’ of the Nineteenth and Twentieth Centuries
The Social Problem and the Verein für Sozialpolitik
1945–47: The Morgenthau Plan Validates the German Economics Tradition
References
Chapter Two The role of the state in economic growth
1. Introduction: ‘‘The Renaissance State’’ vs ‘‘Natural Harmony’’
2. Mechanisms causing and diffusing economic growth and welfare: the view of the production-based...
2.1. Assumptions about the causes of economic growth
2.2. Assumptions about the mechanisms which diffuse growth and welfare
2.3. The different philosophical underpinnings of the activistic-idealistic tradition
3. The three roles of the State
4. New knowledge, systemic effects and positive feedback-loops in Renaissance...
4.1. The size and density of the population
4.2. The different ‘‘qualities’’ of economic activities
4.3. Diversity, synergies and positive feed-back mechanisms in Renaissance economics
Particular factors
General factors
5. The role of the Renaissance State in the light of recent economic theory
6. The two canons of economic theory
7. ‘‘United by a common misconception about our past’’ – the decline and fall of Renaissance economics
8. The role of public enterprises in this system
9. Exogenizing the engines of growth: Adam Smith and the loss of knowledge, institutions...
10. The loss of the state and the revenge of the centaur
Appendix 1
Appendix 2
References and further reading
Chapter Three A Brief Introduction to Veit Ludwig von Seckendorff (1626–1692)
1. Introduction
2. The Thirty Years’ War and the context of Seckendorff’s writings
3. Secckendorff’s life
4. Seckendorff’s writings
5. Seckendorff as a mercantilist/cameralist
6. Conclusion: The right to rule becomes the duty to develop the nation
References
Chapter Four Exploring the Genesis of Economic Innovations: The Religious Gestalt-Switch...
Introduction
1. The tension between creativity and formalism in economics
2. Exploring the sources of growth and forever finding new ones
3. Evolutionary vs. neoclassical economics—the historical roots of the conflict
4. The religious gestalt-switch: From religion as a deterrent, to religion as a promoter of economic growth
5. The gestalt-switch and the industrialization of England
6. Leibniz’ and Wolff’s system: Monads, duties and the holistic attitude to economics
7. Man’s will, invention, and creativity in Wolff’s ‘System of Duties’
8. Conclusion. Understanding Growth: Wolff and the duty to venture beyond a barter-centered economic theory
Chapter Five Johann Heinrich Gottlob von Justi (1717–1771): The Life and Times of an Economist Adventurer
Introduction: ‘State Adventurers’ in English and German Economic History
1. Justi’s Life
2. Justi’s Influence in Denmark-Norway
3. Systematizing Justi’s Writings
4. Justi as the Continuity of the Continental Renaissance Filiation of Economics
5. Economics at the Time of Justi: ‘Laissez-faire with the Nonsense Left out’
6. What Justi knew, but Adam Smith and David Ricardo later left out of Economics
Geography
International Trade Theory and Uneven Economic Development
The Reason for the Urban Bias of Early Economic Development
How Economic Activities Differ & The Role of Skills and Human Learning
Context Matters
Agriculture & Forestry
The Size of the Population & Population Density
The Limitations to the Power of the Nobility
Inventions, Innovations and Technological Change
Colonies
‘Dutch Disease’, or, How Too Much Unearned Wealth Destroys an Economy
7. Conclusion: Lost Relevance that Could be Regained
Bibliography
Chapter Six Jacob BIELFELD’S “ON the Decline of States” (1760) and its Relevance for Today
German Economics: Jacob Bielfeld and his contemporaries
Jacob Bielfeld – a brief account of life and work
The Chapter ‘On the Decline of States’
E-1. Migration
E-2. War
E-3. Excessive demands from neighbouring states
E-4. Imperial over-extension
E-5. Dependency
E-6. Grandiosity of Independence
E-7. Division of Empire (or “Balkanisation”)
E-8. Single sovereign (or Sovereignty is indivisible)
I-1. Unwise Constitutions leading to inequity
I-2. Insane Sovereign
I-3. Requirements of state (Public Administration)
I-4. Relaxation of morals (importance of morals and Rule of Law)
I-5. Excessive Religion
I-6. Oppression / Limits on Liberty (or Despotism)
I-7. Excess of liberty
I-8. Decline of Production. Neglect of agriculture, commerce, sciences, useful arts and passion...
I-9. Arrogance, pride, and idleness
I-10. Senseless laws
I-11. Excessively large colonies
I-12. Epidemics and occupational Health
I-13. Abuse of Spirits and Strong Liquors
I-14. Relaxation of military discipline
I-15. Debt
I-16. Constant internal wrangling
I-16. Interfering with fundamental laws of government
I-17. Regicide or assassination of the sovereign
Bielfeld, Institutions Politiques, volume 2
Ch. XV. On the Decline of States36
Chapter Seven Raw Materials in the History of Economic Policy; Or, Why List (The Protectionist)...
Production-Centred vs.
Barter-Centred Economic Theory
On ‘good’ and ‘bad’ trade
On the differing capacity of economic activities to absorb skills and capital
The ‘Raw and the ‘Cooked’ – The Different Philosophical Underpinnings of Barter-Centred and Production-Centred Economics
Economic Theory: From ‘Physics Envy’ to ‘Biology Envy’ and From ‘Matter’ to ‘Mind’
Cobden and List: The Repeal of the Corn Laws in King’s Taxonomy
Cobden: free trade in corn in order to achieve cheapness of manufactures
List: why protecting agriculture is entirely different from protecting industry
Chapter Eight Compensation Mechanisms and Targeted Economic Growth: Lessons from the History of Economic Policy
8.1 Introduction
8.2 The invention of innovation and the targeting of economic growth
8.3 The activity-specific nature of economic growth and of the possibility for creating compensation mechanisms
8.4 Technological unemployment in early economic thought
8.5 Unemployment and the death of Fordism in a historical perspective
8.6 The future: innovations or a backward-bending supply curve of labour?
References
Chapter Nine Karl Bücher and the Geographical Dimensions of Techno-Economic Change: Production-Based...
1. The Idea of Stages — from Tacitus to Karl Bücher and Carlota Perez
2. Stages, Postmodernity, and Harmony in Economic Theory
3. Anthropocentric Economics: Man and his Needs as the core of Economics
4. Stage Theories and Economic Development: An Overview
4.1 Early Theories – from Cycles to Stages
4.2 Friedrich List and Bruno Hildebrand – the First Modern Stage Theories (1840’s)
4.3 Richard Ely – the Main US Stage Theorist – and his Comparison of Stages (1903)
4.4 Oppenheimer’s Typology of Typologies
4.5 Rostow’s Non-communist Manifesto (1960)
4.6 Porter and the Possibility of Regression (1990)
4.7 Techno-economic Paradigms – Perez and Freeman (1983/1991)
5. Bücher’s Four Techno-Geographic Economic Stages
5.1 Family Economy (Hauswirtschaft)
5.2 Town Economy (Stadtwirtschaft)
5.3 National Economy (Volkswirtschaft)
5.4 The Global Economy
6. Income Distribution Issues in the Four Stages
7. Are Stages ‘Obligatory Passage Points’ – or are Short-cuts Possible?
8. Conclusions and Brief Policy Implications
References
Chapter Ten: Austrian Economics and the Other Canon: The Austrians between the Activistic-Idealistic...
1. Typologies of Economic Theory and the Two Canons
2. The Two Canons Contrasted as Ideal Types
3. Canonical Battles: The Head- on Confrontations
Canonical Methodenstreit 1: Misselden vs. Malynes (1622– 23)
Canonical Methodenstreit 2: Anti- physiocracy vs. Physiocracy & Adam Smith (ca. 1770– 1830)
Canonical Methodenstreit 3: The American System vs. The British System (19th Century United States)
Canonical Methodenstreit 4: The Historical School vs. Marginalism (1883– 1908)
Canonical Methodenstreit 5. The US Institutional vs. The Neoclassical School (20th Century)
4. The Austrians and The Other Canon
5. The 20th Century Closing of the Economic Mind
6. Understanding Human Cognition: Carl Menger and the King Who Wanted to Make the Perfect Map
7. Relevance Lost: The Parallel Paths of Austrian and Neo-Classical Economics
Chapter Eleven Nietzsche and the German Historical School of Economics Neo-Classical Economics
1. Preface: Nietzsche and the late 19th Century Economic Agenda
2. The Kathedersozialist Program
3. Nietzsche and Renaissance Individualism
4. Nietzsche and the German Economic Tradition
5. Nietzsche: Social Justice and Welfare
6. Nietzsche: Entrepreneurship, Gradualism and Uniqueness
7. Nietzsche in the Middle: Kathedersozialismus and the True Third Way
8. Conclusion and Notes on Further Research
Bibliography
Chapter Twelve Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter
1. Creative Destruction in Vogue
2. Creative Destruction before Nietzsche
2.1. Creative Destruction as a Universal Idea
2.2. Creative Destruction as a ‘German’ Idea: From Goethe to Nietzsche and Sombart
2.3. Creative Destruction, Cyclicality, and German Economics
3. Nietzsche and Creative Destruction
1st Principle: Creation and Destruction
2nd Principle: The Opposite of Creation and Destruction is Stagnation
3rd Principle: The Will to Power
4th Principle: Life is that which Constantly Overcomes Itself
5th Principle: Warfare is a Form of Therapy
Summary and Concluding Remarks about the Principles
4. Nietzsche in Economics: From Sombart to Schumpeter
5. Nietzsche and Economics at the Centenary of his Death
5.1. Methodology
5.2. Schumpeterian and Evolutionary Economics
Bibliography
Chapter Thirteen Schumpeter in the Context of two Canons of Economic Thought
Schumpeter and Marx: Lost Sailors in a Sea of Anglo-Saxon Economics
The ‘‘Schizophrenia’’ of Schumpeter’s Thought
Typologies of Economic Theory and Schumpeter’s Duality
Schumpeter and the Other Canon at Harvard
Herbert Somerton Foxwell (1849– 1936): The spirit of Kress Library
Edwin Francis Gay (1867–1946): Gustav Schmoller and the Harvard ‘‘case method’’
Fritz Redlich (1892–1978): The Center for Entrepreneurial Studies at Harvard
Concluding Remarks: Schumpeter Ascending and in Context
References
Chapter Fourteen The Role of Technology in the Creation of Rich and Poor Nations: Underdevelopment...
Introduction
Anglo- Saxon vs German economics: theories of even vs theories of uneven growth
Technological change and Schumpeterian underdevelopment
The uneven advances of the ‘technological frontier’
The two ways in which the benefits from technical change spread
Three cases of Schumpeterian underdevelopment in the Caribbean
Cuban counterpoint of tobacco and sugar
Haiti — economic counterpoint in baseballs and golf balls
The Dominican Republic and technological change in pyjama production
The circular flow and the two economic roles of man
Conclusion: Schumpeterian underdevelopment — policy conclusions past and present
References
Chapter Fifteen Towards an Austro– German Theory of Uneven Economic Development? A Plea for Theorising by Inclusion
1 Introduction
2 Economics as theorising by exclusion
3 A study in the history of theorising by inclusion: why economic development requires ‘manufacturing’
4 Increased poverty as the result of the break-down of the Fordist wage regime
5 Conclusion – creating an Austro–German development economics
References
Chapter Sixteen The Qualitative Shift in European Integration: Towards Permanent Wage Pressures...
Introduction: Types of Economic Integration and Definitions of Capitalism
1. Causes of Uneven Growth as the Basis for a Theory of Types of Economic Integration
2. From an Understanding of Uneven Development to a Taxonomy of Economic Integration
I. Symmetrical Free Trade Areas
A. Listian Integration (From Friedrich List)
B. Peripheral Symmetrical Integration
II. Asymmetrical Free Trade Areas
A. ‘Colonial’ and Non- Integrative
B. Flying Geese, or Sequential Technological Upgrading
C. Welfare Colonialism
D. Integrative and Asymmetrical Integration
3. The New Europe: Cost and Nature of the Integration
3.1 Characteristics of Transition
3.2 Quality of Industrial Change
3.3 International Trends and Regional Diversity add to the Problems
4. Conclusion
Appendix 1: The Flying Geese Pattern of Sequential Economic Development
Bibliography
Chapter Seventeen Primitivization of the EU Periphery: The Loss of Relevant Knowledge
1 Introduction
Knowledge Lost: A Brief Aside on the Financial Crisis
2 The Ignored Knowledge of von Thünen, List and Schumpeter
2.1 Von Thünen’s Model of Concentric Circles
2.2 Friedrich List’s Economic Principles
2.3 Schumpeter’s Concept of Innovation and Creative Destruction
3 Europe’s Failed Response: The Lisbon Strategy as a List of Good Intentions
4 Conclusion
References
Chapter Eighteen Mechanisms of Financial Crises in Growth and Collapse: Hammurabi, Schumpeter, Perez, and Minsky
Introduction
Financial Crises were understood from left to right – but unlearned all along the political axis
The Hammurabi Effect and ‘Debt Deflation’
Hyman Minsky
Carlota Perez: Financial Crises and Technological Change
Save the Financial Economy or Save the Real Economy?
The Growth of the FIRE Sector Displaces the Real Economy
The FIRE Sector Takes Over: The Third World
The FIRE Sector Takes Over: The Second World
The FIRE Sector Takes Over: The First World
Conclusion: The Mentality that Created the Crisis, its Consequences and Possible Remedies
Chapter Nineteen Full Circle: Economics From Scholasticism Through Innovation and Back...
The schoolmen as a prototype of success and decay of science
The start of a new scientific trajectory: Meyen’s 1769 price essay, ‘‘Why is it that economics so far...
Meyen on the relationship between agriculture and manufacturing
Meyen on technology, science and innovations
Meyen on resistance to change
Meyen on ‘‘synergies’’
Meyen on types of nations
Conclusion: history as the way out of scholasticism
References
Chapter Twenty Werner Sombart (1863–1941) and the Swan Song of German Economics
End Matter
Index