European Heritage in Economics and the Social Sciences – serie

Ju¨ rgen G. Backhaus 1 Johann Heinrich Gottlob (von) Justi was born in 1702 in Bru¨ cken in Prussia (county of Sangerhausen), studied law and cameral sciences in Wittenberg and Jena, yet had to leave the university, entered the Prussian military service, was captured during the Austrian war of succession by the Austrians but escaped to Leipzig (Saxony) where he studied mineral sciences. In 1750 he was called to a chair ‘‘Cameral Sciences and Rhetorics’’ at the new Theresian Academy of Knights in Vienna. There, he gave two important inaugural lectures which are the focal point of this book. In 1754, Justi was appointed a mineral counsellor in Gottingen ¨ (Hanover), and lectured at the Saxonian University on both state sciences and natural sciences. In 1762, Frederic II (the Great) of Prussia appointed him Prussian captain (highest supervisory position) of mines and general supervisor of fiscal-mineral activities. In 1768 he was accused of embezzlement, and before he could prove his innocence, he died in 1771 as a prisoner in the (decaying) fortress of Ku¨ strin. Due to his death, the case was never decided. But Frederic had obviously made his own decision. When he appointed Justi, the appointee pointed out that he was suffering from weak eye sight and could not readily check the bookkeeping. Frederic replied: You may have weak eyes but you have a bright mind. I shall put two eyes by your side.

This volume is a collection of my essays on Gustav von Schmoller (1838– 1917), Max Weber (1864–1920), and Joseph Alois Schumpeter (1883–1950), published during the past fifteen years. These three intellectual giants are connected with the German Historical School of Economics in different ways. In the history of economics, the German Historical School has been described as a heterodox group of economic researchers who flourished in the Germ- speaking world throughout the nineteenth century. The definition of a “school” is always problematic. Even if the core of a certain idea were identified in the continuous and discontinuous process of the filiation and ramification of thought, it is still possible to trace its predecessors, successors, and sympathizers in different directions, creating an amorphous entity of a school. It is beyond question, however, that Schmoller was the leader of the younger German Historical School, the genuine school with a sociological 1 reality. Schmoller was indeed the towering figure of the Historical School at its zenith.

Nietzsche – Economy and Society: The Closed and the Open Questions a b Jürgen G. Backhaus and Wolfgang Drechsler a University of Erfurt, Germany b Tallinn University of Technology, Estonia Nietzsche’s impact and in?uence anywhere in and on our civilization was and is immense. This has by now been widely recognized in almost all areas, even in the “hard sciences” (see Babich 1999), but Nietzsche is still completely understudied in the ?eld of economics. This is all the more surprising because in?uence paths, both serious (e. g. , Joseph A. Schumpeter) and pop ones (e. g. , Ayn Rand), seem obvious, and because in some of his works, especially M- schliches, Allzumenschliches (1878-1886), a focus on economics is hard to miss. It would thus be only likely that he had some sort of signi?cant in?uence there; yet, one can ?nd hardly any references in the Nietzsche or economics 1 literature on what kind of in?uence that might have been or still is. To remedy this situation, the idea to plan an exploratory conference on Nietzsche and Economics arose. Because of the dif?cult and indeed unusual topic, we found it necessary to even start with a pre-conference, where the issues, questions, sources and possible approaches would be discussed. This pre-conference took place in Heilbronn, in the framework of the Heilbronn Symposia on Economics and the Social Sciences, in June 2000.

One may have various reasons for compiling a volume of papers devoted to and inspired by Walras and Pareto. Pareto succeeded Walras in 1893 on the chair of Political Economy at the University of Lausanne. The relation between the two was not always without tensions, although Pareto, on the occasion of his 25 years jubilee celebration, at least in part, transferred the honours offered to him to Walras. Indeed, one may say that to a substantial extent important parts of the works of Pareto would not have been possible without the insights of Walras.Both eminent scientists also have in common that the image of their inheritance professed to the common university trained economic scholars ('cutes') is a highly restricted caricature of the fullnes of their essential insights and contributions, and students of sociology or politicology may even finish their academic studies without ever having heard the name of Pareto.What cutes "know" about Walras amounts to the following caricature. Walras developed the general economic equilibrium model, but did not care about uniqueness and stability of an equilibrium. It is a model with exchange and production only and it assumes an auctioneer who announces price vectors to establish the equilibrium. The model presupposes perfect information and is static and certainly not dynamic. Walras had a bias towards free competition and laisser faire and neglected monopoly and taxation.Pareto is known by the cutes as the founding father of welfare economics. At best one is informed the notions of Pareto-optimality conditions and the first and second welfare theorems. But welfare economics is in general disappearing from the university research and teaching programs, replaced as it is by consumer and producer surpluses in the nowadays flourishing partial industrial economics programs.In this thought-provoking collection, ten international scholars offer reflections and new interpretations of Walras’andPareto’s unique contributions to topics as broad as the over-arching important of the social sciences, the development of modern microeconomics and (in particular) econometrics, political economy and public choice, and political sociology. Their insights will be of particular interest to researchers and scholars of economic history, political sociology, and the social sciences.

The economic model of behaviour is fundamental not only in economic theory, but also in modern approaches of other social sciences, above all in political science and law. This book provides a comprehensive treatise of the general model, its philosophical and methodological foundations and its applications in different fields. In addition to the basic model, extensions to its assumptions are examined to account for complex applications like low-cost situations with moral behaviour.

During the late 19th and throughout the 20th century, social sciences in general and economics in particular have undergone enormous progress. This has led to something of an embarrassment of riches. While certain topics have been fully researched to the point where the marginal benefit from further research is approaching zero, others have remained largely under-researched or were being ignored altogether.It is this discrepancy which prompted the research paradigm of “Crossing Bridges”. For this volume, ten authors have joined forces to address the problem of under-researched topics, focussing in particular on gaps in interdisciplinary research between economics and other social sciences such as linguistics, art and cultural history. Making use of interdisciplinary methods and approaches, the book makes a case for stronger bonds between the different fields of social science.

Joseph Alois Schumpeter is arguably the most important economist of the 20th century. Most readers are familiar with his Theory of Economic Development and his classic Capitalism, Socialism and Democracy. Less well-known are his seminal works published before he left Europe for the United States in 1942. In particular for the first time the missing Chapter Seven of his Theory of Economic Development has been published in this volume. It tries to put Economic Development into the broader context of culture, law and policy. Many of his earlier writings display a similar integrative approach and are therefore often treated as sociological writings. As Capitalism, Socialism and Democracy shows, he did not dissociate the different social sciences in his own mind but rather strove to keep the unity of the social sciences. Entrepreneurship, style and vision are the unifying concepts of his work.

The economic model of behaviour is fundamental not only in economic theory, but also in modern approaches of other social sciences, above all in political science and law. This book provides a comprehensive treatise of the general model, its philosophical and methodological foundations and its applications in different fields. In addition to the basic model, extensions to its assumptions are examined to account for complex applications like low-cost situations with moral behaviour.

Ju¨ rgen G. Backhaus 1 Johann Heinrich Gottlob (von) Justi was born in 1702 in Bru¨ cken in Prussia (county of Sangerhausen), studied law and cameral sciences in Wittenberg and Jena, yet had to leave the university, entered the Prussian military service, was captured during the Austrian war of succession by the Austrians but escaped to Leipzig (Saxony) where he studied mineral sciences. In 1750 he was called to a chair ‘‘Cameral Sciences and Rhetorics’’ at the new Theresian Academy of Knights in Vienna. There, he gave two important inaugural lectures which are the focal point of this book. In 1754, Justi was appointed a mineral counsellor in Gottingen ¨ (Hanover), and lectured at the Saxonian University on both state sciences and natural sciences. In 1762, Frederic II (the Great) of Prussia appointed him Prussian captain (highest supervisory position) of mines and general supervisor of fiscal-mineral activities. In 1768 he was accused of embezzlement, and before he could prove his innocence, he died in 1771 as a prisoner in the (decaying) fortress of Ku¨ strin. Due to his death, the case was never decided. But Frederic had obviously made his own decision. When he appointed Justi, the appointee pointed out that he was suffering from weak eye sight and could not readily check the bookkeeping. Frederic replied: You may have weak eyes but you have a bright mind. I shall put two eyes by your side.

This volume is a collection of my essays on Gustav von Schmoller (1838– 1917), Max Weber (1864–1920), and Joseph Alois Schumpeter (1883–1950), published during the past fifteen years. These three intellectual giants are connected with the German Historical School of Economics in different ways. In the history of economics, the German Historical School has been described as a heterodox group of economic researchers who flourished in the Germ- speaking world throughout the nineteenth century. The definition of a “school” is always problematic. Even if the core of a certain idea were identified in the continuous and discontinuous process of the filiation and ramification of thought, it is still possible to trace its predecessors, successors, and sympathizers in different directions, creating an amorphous entity of a school. It is beyond question, however, that Schmoller was the leader of the younger German Historical School, the genuine school with a sociological 1 reality. Schmoller was indeed the towering figure of the Historical School at its zenith.

Nietzsche – Economy and Society: The Closed and the Open Questions a b Jürgen G. Backhaus and Wolfgang Drechsler a University of Erfurt, Germany b Tallinn University of Technology, Estonia Nietzsche’s impact and in?uence anywhere in and on our civilization was and is immense. This has by now been widely recognized in almost all areas, even in the “hard sciences” (see Babich 1999), but Nietzsche is still completely understudied in the ?eld of economics. This is all the more surprising because in?uence paths, both serious (e. g. , Joseph A. Schumpeter) and pop ones (e. g. , Ayn Rand), seem obvious, and because in some of his works, especially M- schliches, Allzumenschliches (1878-1886), a focus on economics is hard to miss. It would thus be only likely that he had some sort of signi?cant in?uence there; yet, one can ?nd hardly any references in the Nietzsche or economics 1 literature on what kind of in?uence that might have been or still is. To remedy this situation, the idea to plan an exploratory conference on Nietzsche and Economics arose. Because of the dif?cult and indeed unusual topic, we found it necessary to even start with a pre-conference, where the issues, questions, sources and possible approaches would be discussed. This pre-conference took place in Heilbronn, in the framework of the Heilbronn Symposia on Economics and the Social Sciences, in June 2000.

One may have various reasons for compiling a volume of papers devoted to and inspired by Walras and Pareto. Pareto succeeded Walras in 1893 on the chair of Political Economy at the University of Lausanne. The relation between the two was not always without tensions, although Pareto, on the occasion of his 25 years jubilee celebration, at least in part, transferred the honours offered to him to Walras. Indeed, one may say that to a substantial extent important parts of the works of Pareto would not have been possible without the insights of Walras.Both eminent scientists also have in common that the image of their inheritance professed to the common university trained economic scholars ('cutes') is a highly restricted caricature of the fullnes of their essential insights and contributions, and students of sociology or politicology may even finish their academic studies without ever having heard the name of Pareto.What cutes "know" about Walras amounts to the following caricature. Walras developed the general economic equilibrium model, but did not care about uniqueness and stability of an equilibrium. It is a model with exchange and production only and it assumes an auctioneer who announces price vectors to establish the equilibrium. The model presupposes perfect information and is static and certainly not dynamic. Walras had a bias towards free competition and laisser faire and neglected monopoly and taxation.Pareto is known by the cutes as the founding father of welfare economics. At best one is informed the notions of Pareto-optimality conditions and the first and second welfare theorems. But welfare economics is in general disappearing from the university research and teaching programs, replaced as it is by consumer and producer surpluses in the nowadays flourishing partial industrial economics programs.In this thought-provoking collection, ten international scholars offer reflections and new interpretations of Walras’andPareto’s unique contributions to topics as broad as the over-arching important of the social sciences, the development of modern microeconomics and (in particular) econometrics, political economy and public choice, and political sociology. Their insights will be of particular interest to researchers and scholars of economic history, political sociology, and the social sciences.

During the late 19th and throughout the 20th century, social sciences in general and economics in particular have undergone enormous progress. This has led to something of an embarrassment of riches. While certain topics have been fully researched to the point where the marginal benefit from further research is approaching zero, others have remained largely under-researched or were being ignored altogether.It is this discrepancy which prompted the research paradigm of “Crossing Bridges”. For this volume, ten authors have joined forces to address the problem of under-researched topics, focussing in particular on gaps in interdisciplinary research between economics and other social sciences such as linguistics, art and cultural history. Making use of interdisciplinary methods and approaches, the book makes a case for stronger bonds between the different fields of social science.

Joseph Alois Schumpeter is arguably the most important economist of the 20th century. Most readers are familiar with his Theory of Economic Development and his classic Capitalism, Socialism and Democracy. Less well-known are his seminal works published before he left Europe for the United States in 1942. In particular for the first time the missing Chapter Seven of his Theory of Economic Development has been published in this volume. It tries to put Economic Development into the broader context of culture, law and policy. Many of his earlier writings display a similar integrative approach and are therefore often treated as sociological writings. As Capitalism, Socialism and Democracy shows, he did not dissociate the different social sciences in his own mind but rather strove to keep the unity of the social sciences. Entrepreneurship, style and vision are the unifying concepts of his work.

Poverty still persists in today’s low-income countries despite decades of international aid, and extensive research on the determinants of growth and development. The book argues that meeting this challenge requires a holistic understanding of the context-specific factors that influence economic behavior and structures in poor countries. Contextual Development Economics approaches this task by offering a methodology that allows analysing the dynamic interrelations between economic, cultural and historical determinants of economic life in low-income countries. The book starts with an empirical inquiry into the economic characteristics of low-income countries that create the context by which the specific forms of organising economic activity in these countries are determined. It then looks at how different generations of development economists sought to explain economic realities in low-income countries from the 1940s through today. The book finally synthesises the results from this empirical and methodological analysis with insights from an inquiry into contributions of the German Historical School, from which it borrows the concept of the economic style as a methodological alternative to the universal and hence often irrelevant models of mainstream development economics.This book offers a promising perspective for the future of development economics that will be of interest to researchers and development practitioners alike. It will also be relevant for academics and students with an interest in applications of the method and concepts of the Historical School to contemporary problems.

Physiocracy, or the economic theory that a nation’s wealth comes from is agricultural and land development, was a popular school of thought in France in the 18th century. The contribution and significance of the Physiocrats and Antiphysiocrats are explored in detail through chapter contributions by economists, philosophers, and social historians. The book concludes that neither the Physiocrats, nor the Antiphysiocrats were pure profit maximizers and that they all had the well-being of the commonwealth in mind. It brings to light previous studies only conducted in German and is the first analysis of Pfeiffer in a century, making the book of interest to any student or scholar of political economy and the history of economic thought.The contribution and significance of the Physiocrats and Antiphysiocrats are explored in detail through chapter contributions by economists, philosophers, and social historians. It brings to light previous studies only conducted in German and is the first analysis of Pfeiffer in a century, making the book of interest to any student or scholar of political economy and the history of economic thought.

This book examines utopias in classical political economy and is based on the papers presented by leading scholars at the 22nd Heilbronn Symposium in the Economics and the Social Sciences. The book focuses on the tension between the State and utopia (the State as utopia vs. utopia instead of a state). The contributors also study the question of whether seafaring and landlocked states visualize the commonwealth differently and develop different utopias, and it is concluded they do not. The volume therefore follows the refutation of the Schumpeterian Hypothesis that more concentrated industries stimulate innovation. Though the hypothesis is refuted it still remains important, the chapters argue, because it charts out an entire research program, serves as a benchmark of definite public and private sector boundaries, and defines the grammar of discourse for constitutional economic policy in OECD states.These themes are explored in detail through contributions by economists, philosophers, and social historians. The contributors examine utopias hitherto never or rarely reviewed in the English language, making this book of interest to students and scholars in economics, political science and the history of economic thought.

This reader in the history of economic thought challenges the assumption that today’s prevailing economic theories are always the most appropriate ones. As Leland Yeager has pointed out, unlike the scientists of the natural sciences, economists provide their ideas largely to politicians and political appointees who have rather different incentives that might prevent them from choosing the best economic theory. In this book, the life and work of each of the founders of economics is examined by the best available expert on that founding figure. These contributors present rather novel and certainly not mainstream interpretations of the founders of modern economics. The primary theme concerns the development of economic thought as this emerged in the various continental traditions including the Islamic tradition. These continental traditions differed substantially, both substantively and methodologically, from the Anglo-Saxon orientation that has been dominant in the last century for example in the study of public finance or the very construct of the state itself. This books maps the various channels of continental economics, particularly from the late-18th through the early-20th centuries, explaining and demonstrating the underlying unity amid the surface diversity.  In particular, the book emphasizes the writings of John Stuart Mill, his predecessor David Ricardo and his follower Jeremy Bentham; the theory of Marginalism by von Thünen, Cournot, and Gossen; the legacy of Karl Marx; the innovations in developmental economics by Friedrich List; the economic and monetary contributions and “struggle of escape” by John Maynard Keynes;  the formidable theory in public finance and economics by Joseph Schumpeter; a reinterpretation of Alfred Marshall; Léon Walras, Heinrich von Stackelberg, Knut Wicksell, Werner Sombart, and Friedrich August von Hayek are each dealt with in their own right.

The twin journals, Der Österreichische Volkswirt (The Austrian Economist) and Der Deutsche Volkswirt (The German Economist) were created by Gustav Stolper, godfather of Joseph Schumpeter, first in Vienna and then after the First World War, in Berlin. Schumpeter was to become a frequent contributor of the Berlin-based journal, which combined a successful blend of economic analysis and political and business insider knowledge which Stolper gained with his famous and sought after parties at his Wannsee villa. The two publications offer a kaleidoscope of many different ideas and concepts, some of which are addressed in this book, including philosophy, demography, monetary aspects, foreign developments, employment policy, and politics. The personal and professional contributions of Gustav Stolper and his secretary, Lilo Linke, are also discussed. Very little has been published on these early ventures into economic journalism, and this book will appeal to anyone studying economic journalism or the economic history of early twentieth century Europe.

In Europe, the liberation of the serfs was a project initiated in 1806 with a scheduled completion date of 1810. It was obvious to those who planned the project that the liberation of the serfs involved a complete overhaul of agriculture as it was then known as Europe moved from feudalism to capitalism. For this reason, Prussia was careful in implementing the reform, and did not rush, after seeing the Kingdom of Westphalia perishing under its crushing debt accumulated in part from Napoleon’s failed Russian campaign. The basic hypothesis of this book is that slave labor can never be efficient and will therefore disappear by itself. However, this process of disappearance can take many years. For instance, two generations after the importation of slaves to North America had ended, the states still fought over the issue, and this despite the fact that Ely Whitney had invented the Cotton Gin in 1793 and already then made slavery in cotton production literally superfluous.  While there have been several books on the economics of American slavery, few studies have examined this issue in an international context.  The contributions in this book address the economics of unfree labor in places like Prussia, Westphalia, Austria, Argentina and the British Empire.  The issue of slavery is still a hotly debated and widely studied issue, making this book of interest to academics in history, economics and African Studies alike.

One of the last Prussian Reforms during the Napoleonic Era was the constitution of local autonomy for the cities. Proof of its lasting importance is that it was the cities that carried out the deficit-based employment policies of the early 1930s also had to carry the burden of a democratic reconstitution of Germany in the postwar period. After the crushing defeat at Napoleon’s hands, likewise the reconstitution of Prussia fell to the cities. Today, the same constellation of problems can be found on different stages. Europe, as it is growing together, faces a democracy deficit which ultimately will have to be addressed by the cities. The countries in transition and undergoing transformation likewise will have to find arenas for democratic decision making, which likely will be at the municipal level. Finally, the United States of America also faces a quagmire at the federal level which ultimately will have to be resolved at the state or local level. Contributions to this book examine all of these issues, making it of interest to students in urban studies, public administration, history and political science as well as policy-makers concerned with local government and autonomy.

Poverty still persists in today’s low-income countries despite decades of international aid, and extensive research on the determinants of growth and development. The book argues that meeting this challenge requires a holistic understanding of the context-specific factors that influence economic behavior and structures in poor countries. Contextual Development Economics approaches this task by offering a methodology that allows analysing the dynamic interrelations between economic, cultural and historical determinants of economic life in low-income countries. The book starts with an empirical inquiry into the economic characteristics of low-income countries that create the context by which the specific forms of organising economic activity in these countries are determined. It then looks at how different generations of development economists sought to explain economic realities in low-income countries from the 1940s through today. The book finally synthesises the results from this empirical and methodological analysis with insights from an inquiry into contributions of the German Historical School, from which it borrows the concept of the economic style as a methodological alternative to the universal and hence often irrelevant models of mainstream development economics.This book offers a promising perspective for the future of development economics that will be of interest to researchers and development practitioners alike. It will also be relevant for academics and students with an interest in applications of the method and concepts of the Historical School to contemporary problems.

This book examines utopias in classical political economy and is based on the papers presented by leading scholars at the 22nd Heilbronn Symposium in the Economics and the Social Sciences. The book focuses on the tension between the State and utopia (the State as utopia vs. utopia instead of a state). The contributors also study the question of whether seafaring and landlocked states visualize the commonwealth differently and develop different utopias, and it is concluded they do not. The volume therefore follows the refutation of the Schumpeterian Hypothesis that more concentrated industries stimulate innovation. Though the hypothesis is refuted it still remains important, the chapters argue, because it charts out an entire research program, serves as a benchmark of definite public and private sector boundaries, and defines the grammar of discourse for constitutional economic policy in OECD states.These themes are explored in detail through contributions by economists, philosophers, and social historians. The contributors examine utopias hitherto never or rarely reviewed in the English language, making this book of interest to students and scholars in economics, political science and the history of economic thought.

Physiocracy, or the economic theory that a nation’s wealth comes from is agricultural and land development, was a popular school of thought in France in the 18th century. The contribution and significance of the Physiocrats and Antiphysiocrats are explored in detail through chapter contributions by economists, philosophers, and social historians. The book concludes that neither the Physiocrats, nor the Antiphysiocrats were pure profit maximizers and that they all had the well-being of the commonwealth in mind. It brings to light previous studies only conducted in German and is the first analysis of Pfeiffer in a century, making the book of interest to any student or scholar of political economy and the history of economic thought.The contribution and significance of the Physiocrats and Antiphysiocrats are explored in detail through chapter contributions by economists, philosophers, and social historians. It brings to light previous studies only conducted in German and is the first analysis of Pfeiffer in a century, making the book of interest to any student or scholar of political economy and the history of economic thought.

The twin journals, Der Österreichische Volkswirt (The Austrian Economist) and Der Deutsche Volkswirt (The German Economist) were created by Gustav Stolper, godfather of Joseph Schumpeter, first in Vienna and then after the First World War, in Berlin. Schumpeter was to become a frequent contributor of the Berlin-based journal, which combined a successful blend of economic analysis and political and business insider knowledge which Stolper gained with his famous and sought after parties at his Wannsee villa. The two publications offer a kaleidoscope of many different ideas and concepts, some of which are addressed in this book, including philosophy, demography, monetary aspects, foreign developments, employment policy, and politics. The personal and professional contributions of Gustav Stolper and his secretary, Lilo Linke, are also discussed. Very little has been published on these early ventures into economic journalism, and this book will appeal to anyone studying economic journalism or the economic history of early twentieth century Europe.

In the journal articles, historiographical essays, and numerous references to the political thought of Adriano Olivetti, the term constantly used to characterize his thinking is ‘utopia’. It is from this word, or rather, the misuse of this word, where one can begin to shed light on Olivettian political thinking.The term ‘utopia’, which has come to designate an entire vein of political literature, has also entered into common usage to define an impossible project, a wide-eyed dream; and a ‘utopian’ is that individual who longs for abstract projects instead of concrete ideas. It would be unproductive to resort to the diverse arguments of Firpo, of Mannheim, or of Bloch, of the philosophers of the Frankfurt School or others, since, as Giovanni Sartori has observed, after the word ceases to exist – where utopia is understood to mean impossibility – the impossibilities still remain. So, precisely because the literature on the political thought of Olivetti appears to suffer greatly from ‘empirical’ influences, it seems necessary to confront the complexities of his presumed utopianism with a methodological approach.This book investigates the inherent ‘impossibilities’, if they indeed exist, in the political thought of Olivetti. It also seeks to understand, as a result, if the Olivettian ideal is lacking in any true consistency, since it is secluded from an adequate analysis of historical reality, or if it is, rather, an idealism which does not lose sight of reality, in an attempt to overturn it as the basis for a plausible global vision. This book will be of interests to students and scholars in history, political economy and philosophy.

In Europe, the liberation of the serfs was a project initiated in 1806 with a scheduled completion date of 1810. It was obvious to those who planned the project that the liberation of the serfs involved a complete overhaul of agriculture as it was then known as Europe moved from feudalism to capitalism. For this reason, Prussia was careful in implementing the reform, and did not rush, after seeing the Kingdom of Westphalia perishing under its crushing debt accumulated in part from Napoleon’s failed Russian campaign. The basic hypothesis of this book is that slave labor can never be efficient and will therefore disappear by itself. However, this process of disappearance can take many years. For instance, two generations after the importation of slaves to North America had ended, the states still fought over the issue, and this despite the fact that Ely Whitney had invented the Cotton Gin in 1793 and already then made slavery in cotton production literally superfluous.  While there have been several books on the economics of American slavery, few studies have examined this issue in an international context.  The contributions in this book address the economics of unfree labor in places like Prussia, Westphalia, Austria, Argentina and the British Empire.  The issue of slavery is still a hotly debated and widely studied issue, making this book of interest to academics in history, economics and African Studies alike.

This reader in the history of economic thought challenges the assumption that today’s prevailing economic theories are always the most appropriate ones. As Leland Yeager has pointed out, unlike the scientists of the natural sciences, economists provide their ideas largely to politicians and political appointees who have rather different incentives that might prevent them from choosing the best economic theory. In this book, the life and work of each of the founders of economics is examined by the best available expert on that founding figure. These contributors present rather novel and certainly not mainstream interpretations of the founders of modern economics. The primary theme concerns the development of economic thought as this emerged in the various continental traditions including the Islamic tradition. These continental traditions differed substantially, both substantively and methodologically, from the Anglo-Saxon orientation that has been dominant in the last century for example in the study of public finance or the very construct of the state itself. This books maps the various channels of continental economics, particularly from the late-18th through the early-20th centuries, explaining and demonstrating the underlying unity amid the surface diversity.  In particular, the book emphasizes the writings of John Stuart Mill, his predecessor David Ricardo and his follower Jeremy Bentham; the theory of Marginalism by von Thünen, Cournot, and Gossen; the legacy of Karl Marx; the innovations in developmental economics by Friedrich List; the economic and monetary contributions and “struggle of escape” by John Maynard Keynes;  the formidable theory in public finance and economics by Joseph Schumpeter; a reinterpretation of Alfred Marshall; Léon Walras, Heinrich von Stackelberg, Knut Wicksell, Werner Sombart, and Friedrich August von Hayek are each dealt with in their own right.

One of the last Prussian Reforms during the Napoleonic Era was the constitution of local autonomy for the cities. Proof of its lasting importance is that it was the cities that carried out the deficit-based employment policies of the early 1930s also had to carry the burden of a democratic reconstitution of Germany in the postwar period. After the crushing defeat at Napoleon’s hands, likewise the reconstitution of Prussia fell to the cities. Today, the same constellation of problems can be found on different stages. Europe, as it is growing together, faces a democracy deficit which ultimately will have to be addressed by the cities. The countries in transition and undergoing transformation likewise will have to find arenas for democratic decision making, which likely will be at the municipal level. Finally, the United States of America also faces a quagmire at the federal level which ultimately will have to be resolved at the state or local level. Contributions to this book examine all of these issues, making it of interest to students in urban studies, public administration, history and political science as well as policy-makers concerned with local government and autonomy.