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Über dieses Buch

This book, set out over three-volumes, provides a comprehensive history of economic thought in the 20th century with special attention to the cultural and historical background in the development of theories, to the leading or the peripheral research communities and their interactions, and finally to an assessment and critical appreciation of economic theories.

Volume II addresses economic theory in the period between the two world wars in which the economic theory went through a process of criticism of old mainstream, deconstruction and reconstruction and theoretical ferment which involved the intellectual communities of economists emphasizing their nature of evolving interacting entities.

This work provides a significant and original contribution to the history of economic thought and gives insight to the thinking of some of the major international figures in economics. It will appeal to students, scholars and the more informed reader wishing to further their understanding of the history of the discipline.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Abstract
The Introduction deals firstly with the historical scenario of the period between the two world wars. The war brought the golden age of liberal capitalism to an end and caused a profound social and economic crisis. Then a synthesis of the development of economic theory is presented: those years were characterized by increasing criticisms of the traditional theoretical apparatus, and by the emergence of new lines of thought and a new strand of theoretical innovations. Lastly, the map of economic theory is sketched. Cambridge maintained its importance, Berlin and Vienna, extremely active in the 1920s, substantially vanished in the 1930s when the Nazis came to power. At the same time, new European centers emerged, first in London, and then in Northern Europe. On the other side of the ocean, the United States saw the increasing consolidation of New York, Harvard and Chicago.
Roberto Marchionatti

Chapter 2. Economics in Cambridge and Oxford in the Age of John Maynard Keynes

Abstract
The chapter deals essentially with economics in Cambridge, United Kingdom, with the decline of Pigou’s Marshallian tradition after the 1920s and the emergence of a new generation of young economists around the leading figure of John Maynard Keynes. Keynes’s General Theory of Employment, Interest and Money was the most impactful book of economics of his epoch. It is carefully analyzed together with The Treatise on Probability and other Keynes’s writings in the 1920s, from the Tract of Monetary Reform to the Treatise on Money. The analysis of the main works of the members of the New Cambridge School—Keynes’s close circle and their fellow-travelers—follows: in particular Joan Robinson’s Economics of Imperfect Competition, Michal Kalecki’s Essays in the Theory of Economic Fluctuations and Roy Harrod’s Essay in Dynamic Theory. Lastly, critical developments in Oxford are considered.
Roberto Marchionatti

Chapter 3. Economics in London: The London School of Economics (LSE)

Abstract
This chapter deals with economics at the London School of Economics under the leadership of Lionel Robbins, when the LSE became the main opponent of Cambridge economics in England and one of the world’s most influential new centers in economic theory. Firstly, Robbins’s influential Essay on the nature and Significance of Economic Science, where the neoclassical conception of economics is methodologically systemized, is examined. Then, the most significant contributions of the members gathered around Robbins are analyzed: Friedrich von Hayek’s new Austrian writings on monetary and trade cycle theory and on the concept of equilibrium and the role of knowledge, John Hicks’s neo-Paretian reconsideration of the theory of value and his Walrasian formalization of Keynes’s theory at the beginning of neoclassical synthesis, Abba Lerner’s contributions to the development of neoclassical microeconomics on market efficiency and welfare economics.
Roberto Marchionatti

Chapter 4. Economics in Berlin, Vienna and Other Minor German Centers

Abstract
This chapter deals with economics in Germany and Austria, in particular in the centers of Berlin and Vienna. Firstly, the chapter examines economics in Berlin, where the Historical School lost its dominant position, and mathematical economics was developed in neo-Ricardian perspective in Bortkiewicz’ circle and in the analysis of oligopolistic markets by Heinrich von Stakelberg, and systematic empirical research on business cycles was conducted. The development of some other minor German centers in Kiel and Freiburg is also analyzed. Then, economics in Vienna is considered: here the Austrian School survived in Ludwig von Mises’ seminar, but noteworthy work on economic theory was also carried out in the Wiener Kreis and above all in the Mathematische Kolloquium where Wald’s and von Neumann’s contributions were at the origin of neo-Walrasian theory. This rich economic debate was interrupted after 1933 when Nazis and Austro-Fascists seized power.
Roberto Marchionatti

Chapter 5. Economics in the Rest of Europe

Abstract
This chapter deals with developments in economics in the rest of Europe—Sweden, Norway, Netherland, France, Italy, USSR. Firstly, the development of an original economic thinking in Sweden with the formation of the Neo-Wicksellian Stockholm School with Erick Lindahl, Gunnar Myrdal and Bertil Ohlin is analyzed. Then the development of the small centers of Oslo and Rotterdam is considered: here, Ragnar Frisch and Jan Tinbergen gave a fundamental impetus to the new econometric movement, a theoretical project which attracted scholars from many European countries and the United States. Then the theoretical development in France, Italy and URSS is analyzed: in France, the econometric approach attracted the group of engineer-economists of the Grandes Écoles; in Italy, economic theory developed along the neoclassical mainstream established in the pre-war years; in the Soviet Union, an essentially heterodox work developed in the 1920s thanks to the writings of Kondratieff, Chayanov, Slutsky and many others.
Roberto Marchionatti

Chapter 6. Economics in the United States: New York, Harvard, Chicago and Princeton

Abstract
The chapter deals with the increasing consolidation of many centers of economic studies in United States, a process that in the 1930s was accelerated by the influx of scholars from Europe. Firstly, the chapter examines economics in New York, at Columbia and at the New School for Social Research, main centers of Institutionalism in United States under the leadership of Wesley Mitchell. Then economics at Harvard is considered: the 1930s represented the golden era of the Department of Economics with the works of Schumpeter, Leontief, Chamberlin, Mason and Hansen. Then economics in Chicago is analyzed: Chicago’s economics represented a mixed bag consisting of three groups of scholars, the precursors of the future Chicago School, the institutionalists and the quantitative economists, connected with the econometricians of the Cowles Commission, center of Haavelmo’s econometric revolution. Lastly the birth of game theory at Princeton as result of the collaboration of Morgenstern and von Neumann is examined.
Roberto Marchionatti

Chapter 7. Great Controversies

Abstract
The chapter deals with some of the major controversies of the period between the two world wars. Firstly the controversy on Marshall and the Marshallian Orthodoxy in England and the United States in the 1920s, with the contributions of Pigou, Robertson, Shove, Sraffa, Knight, Robbins, Schumpeter and Young, is analyzed. Secondly, the socialist calculation debate through its different phases—the Austrian phase, dominated by the contribution of von Mises, its sequel in the English-speaking world, and the climax of the debate between Hayek, Lange and Lerner, are considered. Lastly, the chapter deals with the controversy between Keynes and Tinbergen on econometric method.
Roberto Marchionatti

Chapter 8. Between the Two World Wars: The Years of High Theory?

Abstract
This short chapter summarizes the picture that emerges from the narrative of the evolution of economy theory in the twenty-five years between the two world wars and discusses the main interpretations of the period in the history of economics—that of G. L. S. Shackle of “the Years of High theory” and that of Schumpeter, in his History, who emphasizes the continuity with tradition and maintains that the theory of 1945 is superior to the theory of 1900 as regards techniques. Our interpretation, in a perspective closer to Schumpeter than Shackle, recognizes the presence of often interconnected elements of tradition and innovation, which involve the communities of economists emphasizing their nature of evolving interacting entities.
Roberto Marchionatti

Backmatter

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