Seven Figures in the History of Swedish Economic Thought
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Seven Figures in the History of Swedish Economic Thought Knut Wicksell, Eli Heckscher, Bertil Ohlin, Torsten Gårdlund, Sven Rydenfelt, Staffan Burenstam Linder and Jaime Behar Mats Lundahl Stockholm School of Economics, Sweden
Mats Lundahl 2015 Softcover reprint of the hardcover 1st edition 2015 978-1-137-29308-4 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6 10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-67110-6 ISBN 978-1-137-29309-1 (ebook) D O I 1 0. 1 0 5 7 / 9 7 8 1 1 3 7 2 9 3 0 9 1 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Lundahl, Mats, 1946 Seven figures in the history of Swedish economic thought : Knut Wicksell, Eli Heckscher, Bertil Ohlin, Torsten Gårdlund, Sven Rydenfelt, Staffan Burenstam Linder and Jaime Behar / Mats Lundahl. pages cm Summary: Who are the greatest economic thinkers of Sweden? Seventeen essays on seven Swedish economists aim to answer this question, exploring the contributions of Knut Wicksell, Eli Heckscher, Bertil Ohlin, Torsten Gårdlund, Sven Rydenfelt, Staffan Burenstam Linder and Jaime Behar. Swedish academic economists have by and large withdrawn from the public debate but this book celebrates Swedish Economic Thought from Knut Wicksell to the present Provided by publisher. 1. Economics Sweden History. 2. Economists Sweden. I. Title. HB116.5.A2L86 2015 330.092 2485 dc23 2015003451
For Ron and Jane
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Contents List of Figures Preface viii ix 1 Introduction: Unknown Writings 1 2 The Reaction to Knut Wicksell s First Cause Célèbre: The Chief Cause of Social Misfortunes 20 3 Population Growth and Diminishing Returns: Knut Wicksell on the Causes of Poverty 55 4 Knut Wicksell on Population and Poverty: A General Equilibrium Approach 84 5 Foreign Trade and Exchange Rates: The Theoretical Contribution of Eli Heckscher to International Economics 105 6 The Janus Face of Eli Heckscher: Theory, History and Method 122 7 The Beginning of Economic History 145 8 Eli Heckscher and the Colleagues: The Role of Personality for Economic History 152 9 The Economist Bertil Ohlin: Do His Ideas Still Stand Up? 183 10 Torsten Gårdlund: Littérateur and Economist 190 11 Torsten Gårdlund: A Portrait 195 12 Against the Current: Sven Rydenfelt (1911 2005) 232 13 Sven Rydenfelt: The Awkward Polemic 237 14 To Be an Independent Thinker: An Intellectual Portrait of Staffan Burenstam Linder 268 15 Visions and Action 293 16 Jaime Behar (1938 2010) 298 17 A Tradition Lost? The Swedish Economists in the Public Debate 306 Index 326 vii
Figures 4.1 Wage determination in the specific factors model 90 viii
Preface I got into the history of economic doctrines by accident. In July 2000 Staffan Burenstam Linder passed away. I was asked to write a short obituary of him for an in-house publication at the Stockholm School of Economics. When I sat down to begin my task it struck me that I had actually read very little by him, hardly anything, although I had planned to do it for some time and had collected most of his books to that end. His death provided the occasion for me. In the end I wrote not only the obituary but also a longer article which appeared first in another SSE publication, thereafter in Ekonomisk Debatt and finally in an international journal. The article had a favorable reception. When I presented it at the annual meeting of the Economic Research Institute at the school in 2001 at least 30 persons approached me and they all said the same thing: I knew Staffan, but this I did not know about him. After another year I received a telephone call from Carl Uggla. He had read my article and wanted to write a book about Staffan whom he knew well since he had worked politically with him. Both my article and a translation of my review of Uggla s book are included in the present volume. I was responsible for arranging the yearly lectures in memory of Bertil Ohlin at the SSE for 25 years. Every year we invite an outstanding economist who has worked in some of the fields that interested Ohlin, notably international economics and macroeconomics. The lectures have taken place every year since 1987 and most of them have been published in book form. Bertil Ohlin was born in 1899. When the time came to celebrate the centennial of his birthday we decided not to arrange any lectures but a big symposium instead. This yielded a volume with contributions from a large number of prominent international scholars. Ohlin became a recurrent component in my life and each year I meet his children in connection with the lectures. Bertil Ohlin was, however, also a politician, and when the liberal journal Liberal Debatt celebrated its 60th anniversary I was invited to write an article about his economic ideas. The topic was whether they still stand up. An English translation of the article is included here. If you say Ohlin, it is next to impossible not to say Heckscher as well, at least among international economists. The Ohlin symposium was highly appreciated and shortly thereafter the idea was born to arrange a symposium in memory of Eli Heckscher as well. It took place in 2003, commemorating the 50th anniversary of his death in 1952. The Heckscher symposium also resulted in a big conference volume. Earlier the Timbro think tank in Stockholm had taken an interest in Eli Heckscher and had published a volume with some of his texts about the state, liberalism and economic policy, and in connection with the symposium, together with Rolf Henriksson, I ix
x Preface edited a second book which concentrated on his methodological writings, his theoretical contributions and his discussion of the relation between economics and economic history. I have included a later essay of mine here, on Heckscher s views on theory, history and method. In 2009 the Stockholm School of Economics celebrated its 100th anniversary. In connection with this a big coffee table book was produced about the school. In a weak moment I promised to contribute a background text about Eli Heckscher as an international economist. This resulted in an essay about a couple of his theoretical contributions which appears here in an English translation. Heckscher was, however, more of an economic historian than an economist, and in 2007 a book by Ylva Hasselberg about how Heckscher created the new discipline of economic history in Sweden was published. An extended version of the review that I wrote of the book is included here together with a chapter which deals with a special theme inspired by Hasselberg s research: Heckscher s personal relations with his colleagues. Torsten Gårdlund was one of the teachers that I appreciated most at the University of Lund and probably also one of those who influenced me most. Without him I might never have become interested in development issues. Torsten passed away, almost 92 years old, in 2003. Together with Bo Södersten and Lars Jonung I wrote an obituary of him. This was developed into an article together with Bo, for Ekonomisk Debatt, and later into a book, also with Bo as co-author, Torsten Gårdlund. Det goda livets ekonom (Torsten Gårdlund: The Good Life Economist), published in 2009. The portrait of Torsten which is included here is an intermediate good on the way from the article to the book. In 2011 Torsten Gårdlund would have turned 100. In vain I attempted to make the economics department in Lund do something on that occasion but nobody was interested, so instead I wrote a short article in Svensk Linje where I stressed his literary inclination. A translation is included here. The greatest of all Swedish economists, and at the same time one of personally most fascinating, was Knut Wicksell. He has always been celebrated for his originality, with one exception: his writings about the growth of the population and its effects. In 2003 I was asked to write an article about Wicksell s views of poverty for a volume where they were to be compared with those of other great economists. I had read Gårdlund s brilliant biography of Wicksell and the account of his analysis of population was decently fresh in my mind. As far as I could recall, in that field, Wicksell was a pretty stereotyped copy of Malthus, so I was hard to convince. In the end, however, I gave in, thinking that I could probably write a short piece anyway. Once I began, however, I realized how wrong all Wicksell s critics and there were many of them had been. Wicksell was indeed original, in the way he set up his analysis in a general equilibrium perspective. He never published it in any comprehensive form, however. It was not until I had read and compared all his pamphlets, articles and book chapters that the pattern emerged. But
Preface xi once I saw it I wrote both the article and a small book about Wicksell s views in two months. The disposition was completely clear. All I had to do was to write. The article is reproduced here, together with a related piece, published in a volume on development economics, which provides a mathematical formulation of Wicksell s general equilibrium approach. A third piece on Wicksell and population has been added as well, a chapter that deals with the reaction to the speech delivered by Wicksell in front of a temperance lodge in 1880 where he outlined his views for the first time. Most of the texts collected here were published in 2009 in Swedish in a Timbro book that had its origin in my interaction with Fredrik Erixon, who had been instrumental also in the publication of the Heckscher text volume. His enthusiasm was invaluable. The present volume has, however, been extended not only with the essays on Heckscher, Gårdlund and Wicksell. Torsten Gårdlund was not the only one of my teachers that passed away in 2011. Another was Sven Rydenfelt. Again I tried to stir some kind of interest in the department of economics at my alma mater for an event to celebrate Sven s memory and again the idea fell flat, so once more I chose to write something, this time together with my old friend and student companion, Sven-Arne Nilsson, whose mother was Sven s cousin. We offered the piece to one of the newspapers where Sven had contributed a never-ending flow of articles over many decades, but the editor of the page where it would be published was too young ever to have heard of Sven in addition to being of Middle Eastern descent, whereas Sven came from the Scanian highlands, so our generous offer was turned down. In the end the article was published in Ekonomisk Debatt. An English translation has been included here. We have also written a longer presentation of Sven Rydenfelt especially for the present volume. The book also includes a short chapter about my friend Jaime Behar, who was Professor of Latin American Studies at the Institute of Latin American Studies at Stockholm University. The final addition is an original chapter, on the position of the economists in the Swedish debate from Knut Wicksell to the present. Mats Lundahl Stockholm, 8 December 2014