In defence of Heckscher and the idea of Mercantilism

Abstract

In his recent reappraisal of Heckscher's Mercantilism ² Dr. Coleman raised certain questions concerning Heckscher's methodological approach which transcend the immediate problem of the nature and validity of the idea of ‘mercantilism’ and have a bearing upon the broader issue of the relationships between economic conditions, ideas and policy. To the present writer, the danger that Heckscher's development of the idea of mercantilism will drive yet another wedge between the political and the economic historians as Dr. Coleman fears,³ is less serious than the danger that Heckscher's apparent reluctance to admit the influence of economic conditions upon economic ideas,⁴ and his readiness to pass directly from generalizations about economic ideas to generalizations about economic policy, will widen the existing gap between economic historians and historians of economic doctrine, two groups of scholars whose mutual services should be considerable. To the student of economic ideas who seeks to rescue his discipline from the sterile pursuit of tracing the genealogy of particular analytic propositions, of which some of his colleagues seem inordinately fond, the matter is one of crucial importance.     

The Danish agrarian reforms, 1784–1814, and the historians

Abstract

In 1888, Edvard Holm brought out his still much-cited book, Kampen om Landboreformeme i Danmark.¹ By his title, the “conflict over the agrarian reforms”, Holm meant the clash of opinion which preceded and contributed to the reforms initiated under Crown Prince Frederik's de facto regency, beginning in 1784. But the debate begun by Danish landowners, officials, and opinion-makers did not end with the reform era itself. It was continued by Danish historians, who have pursued it with remarkable intensity and no small passion down to the present day.     

Eli heckscher and the problem of synthesis a methodological note

Abstract

If the economic historian Donald McCloskey, well known for his rhetoric and his metaphors, is to be believed, the accomplished exponent of the discipline of economic history ought to possess two vital qualities. The scholar in question must be driven by “the historian's lust for facts and the economist's lust for logic.”¹ In a drastic analogy with the circus world, he likens this scholar to a tightrope walker who, to provoke the applause of the public, forces himself to cycle blindfold over Niagara Falls balancing an eel on his nose! I leave aside the question whether anyone has ever managed to perform this feat or is ever likely to. But the problem is challenging and interesting.     

Sweden's iron ore exports to Germany, 1933–1944

Abstract

Rolf Karlbom's article about Swedish iron ore exports to Germany during the Nazi era¹ is an attempt to examine a very important problem as yet unsolved—the significance of the Swedish ore deliveries to Germany. His study begins with the following two questions:² 1. ‘How much of the total consumption of this raw material by German industry did Swedish ore cover during these years?’

2. ‘How far was access to Swedish iron ore a sine qua non for the continuance of the armaments programme?’

3. These basic questions indicate the main problems. Karlbom's answers to them are not wholly convincing because of some weaknesses in his approach.

     

Housekeeping ideology and equilibrium policy in eighteenth-century Sweden

Abstract

In the last issue of SEHR, Jonas Ljungberg carried out an analysis, based on his price history studies, of various methods of measuring economic/industrial transformation.¹ In the main the article opposes two methodological approaches against each other, the one referring to the works of Josefsson/Örtengren and consisting of the measuring of transformation pressure in the diffusion of relative prices over fixed demarcated periods, and the other alluding to the work of Gerschenkron and measuring transformation by means of a running coupling of variously-constructed indices of price movements. The comments on Ljungberg's methods and results which follow are intended as a criticism of his very imprecise use of the concept of the “Gerschenkron effect” and thus of the concept of transformation. They are not to be construed as an opinion on the general question of methodology, where we entirely share Ljungberg's view as to the general fruitfulness of using index calculations in an historical analysis.     

Prices and industrial transformation

Abstract

One of the contradictions of neo-classical economic theory concerns its view of relative prices. On the one hand it is relative prices that determine the market's equilibrium position and decide what transactions will take place. On the other hand, the pattern of relative prices, or expressed differently the price structure, has been regarded as more or less immutable. Variations in relative prices have been considered short-term phenomena, after which, in time, an adaptation has taken place which has restored the initial situation. The same line of thought was also held by Wesley Mitchell, who in the dispersion of relative prices found a reflection of business cycles, but he maintained that the price system is “yet stable in the essential balance of its interrelations”.¹ F.C. Mills cited Mitchell as his authority in his comprehensive work The Behavior of Prices, and although he felt compelled to raise objections to the inference that relative prices varied rhythmically with the business cycle, he still considered that there was a limit to change in relative prices, i.e. the price structure had a fundamental stability.²     

Joseph Schumpeter in Sweden

Abstract

Different aspects of Schumpeter's relationship with Sweden are explored in this article. Schumpeter visited Sweden a few times in the inter-war period in his capacity of well-known economist. During World War I he also wished to go to Sweden to gather information that would be of assistance to the Austro-Hungarian Empire. Schumpeter refered occasionally to Sweden in his writings, usually as a symbol for socialism and as a threat to capitalism. However, he failed to recognise that Sweden also had a vigorous tradition of entrepreneurship, as exemplified by the Wallenberg family and the Rausings. Schumpeter's view of Swedish economists is also discussed, as is the extent to which Swedish economists have been influenced by Schumpeter.     

Scandinavian iron ore mining and the British steel industry 1870–1914

Abstract

Until the year 1856, when Bessemerpatented his new process for the easier and' cheaper manufacture of wrought iron, the production of iron in Great Britain in the form of cast and wrought iron had predominated over its conversion into steel. In the early 1850s only a very small percentage of the annual output of pig iron was converted into steel. Although in Bessemer's patent, only wrought iron was specified as the object of the new process, it was recognized that the real value of the process lay in its applicability to the conversion of pig iron into: steel in a single short operation. There was an inevitable lag in the widespread adoption of the new process for which a number of factors were responsible. Firstly, there were initial disappointments over the effectiveness of Bessemer's process: although Mushet's addition of spiegeleisen to the molten metal in the converter rescued Bessemerfrom failure,¹ several years of technical improvement and improvization were necessary before the generality of manufacturers were' ready to concentrate on Bessemer steel,² A second important cause of the delay in the widespread adoption of the Bessemer process lay in the susceptibility of the British iron and steel industry to severe cyclical fluctuations. By the middle 1860s, when the conservatism of steel manufacturers was beginning to thaw in the face of successful production by the early pioneers of the Bessemer process, a more general development of Bessemer steel seemed likely. These years, however, were years of the depression which reached its nadir in 1867–8. Only when recovery from this depression was well established at the end of the decade did Bessemer steel really come into its own. The real expansion of Bessemer steel production came, therefore, not in the few years after 1856, but in the few years after 1870. Steel rails accounted for a large part of this increase. In 1867, some 2,277 tons of Bessemer steel rails were made in Great Britain: by 1882 this figure had risen to 1,438,155 tons.³     

The way to industrialisation: A Finnish town history

Abstract

Scientific research on urban history in Finland dates from the end of the 19th century. The pioneer was Professor Carl von Bonsdorff, whose study of 17th century Turku (Åbo) is still a standard work in this field.¹ At the beginning of this century Professor Väinö Voionmaa added to the literature on the old pre-industrial towns his investigation of the rapid growth of Tampere (Tammerfors).² This city, ‘Finland's Manchester’, is a young industrial town; in order to survey its development before the beginning of the 20th century Voionmaa had to take a new quantitative approach. Since then Finnish research on urban history has grown to an extent that is quite out of proportion with the fact that urbanisation here is a late phenomenon. Historical studies now exist of practically every town, generally written by historians with professional training. In Finland historians have perhaps devoted themselves to a greater extent than elsewhere to research in local and thus also town history. The most ambitious attempt to produce a comprehensive history of a town from its foundation to the present is the history of Helsinki on which about ten historians are collaborating, six volumes of which have so far been published.³     

Growth,Poverty, and Inequality under Jokowi

SUMMARY

The political authority of President Joko Widodo (Jokowi) was bolstered in the third quarter of 2015 by a cabinet reshuffle, his coalition's gaining a parliamentary majority, and several foreign-policy developments. Indonesia's request to rejoin OPEC, for example, after having left in 2008, seemed more about international relations than oil prices, while official visits to the Middle East and the United States allowed Jokowi to project his presidency on the international stage. He still faces resistance from within his own party, however.

Jokowi's politically bold reshuffle of economic ministers in August soon yielded a range of policy announcements. In September and October, his government introduced its first substantial set of reforms—a number of economic policy packages intended, among other things, to attract investment and stimulate domestic demand. If even half of these policies are put in place, the impact on Indonesia's economy should be tangible.

Few countries have escaped the effects of falling global commodity prices and China's growth slowdown. At 4.7%, year on year, in the third quarter Indonesia's rate of economic growth again fell short of the government's target. Slowing growth and a negative outlook have lowered market expectations and weakened the rupiah, which is also burdened by the large outstanding external debt held by corporate borrowers. Indonesia's real effective exchange rate has recently begun to depreciate, however, which may stimulate exports. Growth prospects will also improve if the substantial increase in capital and infrastructure spending allocated in the state budget is realised.

Against this backdrop, we focus on what has happened to poverty and inequality in Indonesia since Jokowi took office. The distributional impacts of the current macroeconomic climate are likely to be hardest felt by the poor. Indonesia is well known for its record on poverty reduction, but between September 2014 and March 2015 the share of the population in poverty increased, even though economic growth was close to 5.0%. Slowing growth, rising food prices, the falling real wages of farmers, and the delayed disbursement of fuel-price compensation all had an effect. Such impacts may be mitigated in the medium term by Jokowi's budget reallocations to infrastructure, if realised, and his expansion of social spending.     

Italian colonialism in Eritrea 1882–1941

Abstract

When did Eritrean nationalism emerge? Did it emerge during Italian rule, between 1882 and 1941, or was it a later phenomenon? In other words, does Italian colonialism have any impact on Eritrean nationalism? This is the central question which Tekeste Negash's dissertation raises and attempts to resolve.¹     

The early sawmills industries in Finland

Abstract

The purpose of Dr. Nils Meinander's “Story of the Water-Driven Sawmill” in Finland is quite different from that of his Ph. D. thesis, published five years later. The former was written in celebration of the Finnish Sawmills Owners' Association's fiftieth anniversary and covers the whole field of the history of the early sawmills business in Finland. The latter gives a systematic and detailed account of the use of forest resources and of other problems connected with these industries in three river districts in the most northern part of Ostrobothnia.     

The ‘price revolution’ of the sixteenth century: Some Swedish evidence

Abstract

Since the publication in 1895 of George Wiebe's work, Zur Geschichte der Preisreuolution des XVI. und XVII. Jahrhunderts, ¹ the ‘price revolution’ has been a generally accepted concept found in most historical textbooks. By the ‘price revolution’, Wiebe meant the general rise in commodity prices which occurred in western Europe during the 16th century, the primary cause of which according to him was the influx of silver from the new Spanish possessions in America. His explanation also came to be generally accepted, but perhaps an even more significant contribution to the influence which this book has wielded is the fact that he synthesized in readily usable form the price analyses in existence when he wrote, i.e. at the end of the 19th century. In the 1930s his tables still formed the basis of sweeping conclusions and generalizations.     

Recollections of My Career

Editorial Note:Professor Sumitro Djojohadilcusomo is one of the principal architects of Indonesia's post-independence economic policy. He has held key economic portfolios in both the immediate post-independence era and in the New Order. In addition, as Professor of Economics at the University of Indonesia, and as a tireless lecturer and writer on economic issues, he has been instrumental in shaping the education of several generations of economics students in Indonesia, many of whom are now in key government positions. At the end of August, Professor Sumitro generously agreed to be interviewed on his long career by two members of the BIES editorial board, Anne Booth and Thee Kian Wie. In preparing this interview for publication, the editors have tried to preserve Professor Sumilro's own words to the greatest extent possible; his lucid and entertaining remarks are thus reproduced with a minimum of editing. The interview began with a question to Professor Sumitro about his early training in economies.     

Finnish mortality in the eighteenth century: The sources and the reality

Abstract

Mr. Niels Steensgaard, in his ‘Consuls and Nations in the Levant from 1570 to 1650’¹ referred in note 4, p. 14, to my article on the beginning of Anglo-Turkish relations, and stated: ‘Apparently Horniker is not aware of the existence of the French capitulations of 1569’. There is no point in arguing whether or not I am aware of them, but later on I will give my reasons for omitting reference to them in my article. The implication of Steensgaard's statement, however, is that they were new capitulations, which, of course, they were not. They were a renewal, in the form of a grant,² by Sultan Selim II of the treaty concluded between his predecessor Suleiman I Kanuni and Francis I in 1536.³ Revised capitulations were granted to France in 158l.4 These, and the treaty of 1536, gave the French certain exclusive privileges in the Ottoman Empire. And until 1593, when Elizabeth I of England obtained capitulations which gave her subjects the same privileges as those enjoyed by the French, France was the paramount capitulatory nation in the Levant.     

Landowners and tenants in Norway

Abstract

During the past two decades Norwegian historical research has to a considerable extent been concentrated on problems connected with the peculiar nature of the distribution of landownership in Norway before 1661, in which year the king of Denmark and Norway embarked upon a large-scale selling of Crown lands and secularised ecclesiastical estates. The results of the investigations so far carried out have for the most part been published only in parish or other local histories or in short articles in Norwegian periodicals, especially in Heimen, the organ of Norwegian local historians. It is only quite recently that a more comprehensive work has been published in this field, Halvard Bjørkvik's Jordeige og jordleige i Ryfylke i eldre tid.¹ In the present article I propose first to review this book and then to supplement it with a survey of the results of earlier research.     

Earldoms and baronies as economic enterprises in seventeenth century Finland

Abstract

In his comprehensive monograph of nearly eight hundred pages, the first volume of which was published as an academic dissertation six years ago, Professor Jokipii has undertaken to give an account of the brief history of Finnish earldoms and baronies. With two exceptions these twenty-nine large-scale fiefs lasted in all only a quarter of a century (the third quarter of the seventeenth century). Nevertheless, they made their mark on the later development of Finland.     

A finnish textbook in economic history

Abstract

There is, to my knowledge, no work exactly corresponding to Professor Jutikkala's in any of the major languages. Uudenajan taloushistoria is a comprehensive and very skilful exposition of the economic development of the modern world and certainly much more than simply a good textbook in which material from generally recognized standard works, partial surveys, and particular investigations is brought together and rearranged. However much Professor jutikkala may have drawn upon the available modern literature, upon the writings of Heckscher, Clapham, Cole, Ashton, Ashley, Sombart, and other authorities, his book is stamped first and foremost by his own great familiarity with the vast field of his subject, by his own research and experience-especially in the field of agrarian and social history—and by his great versatility as a scholar. The author is not simply a historian with an economic training; he is also very conscious of the fact that economic development never occurs in society in forms which allow of a purely economic exposition. His method is—to     

Patterns of concentration in the newspaper industry

Abstract

This short paper, presented in 1967 as a thesis, is a resume of seven rather more specialised articles by the same author, together with some conclusions drawn from them. The original articles, running to 253 pages, described the concentration which has taken place in the structure of the Swedish press since 1945, resulting in a reduction of at least one-third in the number of daily newspapers and in the replacement, to a large extent, of fierce competition by local quasi-monopolies. The purely factual events were already known in some detail, in particular from the report of the Investigation into the Press (SOU 1965: 22) for which the author's own efforts were largely responsible. He is also responsible for the view, which rounds off his analysis of the structural development of the Swedish press, that growth and decline in newspapers are the result of a self-generated process of increasing strength within given marketing areas (e.g. local districts), the interaction of circulation, advertising and revenue automatically ensuring a continual increase in the lead of the largest paper until it finally eliminates its weaker competitors. This process is called by the author ‘the circulation spiral’ (upplagespiralen). The principle can be recognised in various forms in recent developments in the press of many western countries. Attention has been drawn to it by the present reviewer in connection with the even higher mortality rate in the Danish press, and it would appear to be relevant to the study of other branches of the economy.     

Swedish foreign trade in the mid-sixteenth century

Abstract

For many years our image of economic conditions in 16th-century Sweden has been that depicted by Eli F. Heckscher: a medieval economy, reorganised by a central government of increasing authority in the person of King Gustav Vasa, and gradually transformed after his death in 1560. Sweden's foreign trade appeared to Heckscher as a particular example of his general rule. Its role in the national economy as a whole was very small: such commodities as were imported in exchange for exports were for the most part luxury goods; the only notable exception was the import of salt, to which Heckscher assigned extreme importance, because a vast consumption of salted food featured in his concept of the Swedish ‘medieval’ pattern of overall consumption. Heckscher saw no reason to postulate any major changes in the form and direction of Swedish trade during the reign of Gustav Vasa himself (1521–60); on the contrary, a theme vigorously argued in his book is that the political liberation of Sweden from the influence of Liibeck in the 1530s did not produce any shift of trade routes: most Swedish foreign trade still went via Lübeck. The customs ledgers of a single year, 1559, had an important influence on Heckscher's views.