2. Dynamics, Value Premises and Social Engineering

This chapter traces the initial steps of Gunnar Myrdal’s methodological development, beginning with his search for a dynamic price theory in his doctoral dissertation, Prisbildningsproblemet och föränderligheten [The Price Formation Problem and Economic Change]. It deals with his criticism of Knut Wicksell’s formulation of the cumulative process and his own attempt to extend and improve it. The chapter goes on to spell out the development over time of one of Myrdal’s main methodological tenets: the call for the employment of a set of explicitly formulated value premises, his discussion of positive and normative economics and his change of position over time. It also discusses Myrdal’s beginning involvement in politics, his call for an active economic policy and the manifestation of this stance in his works from the 1930s.