European Economists of the Early Twentieth Century, Volume 2. Studies on Neglected Continental Thinkers of Germany and Italy

Published by EH.NET (December 2003)

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Warren J. Samuels, general editor, European Economists of the Early Twentieth Century, Volume 2. Studies on Neglected Continental Thinkers of Germany and Italy. Cheltenham, UK: Edward Elgar, 2003. xiii + 307 pp. $120 (cloth), ISBN: 1-85898-810-1.

Reviewed for EH.NET by Nicola Giocoli, Department of Economics, University of Pisa

This volume is the second and last of a series dedicated to neglected European economists of the late nineteenth and early twentieth centuries. The first volume, which appeared in 1998, was dedicated to scholars from Belgium, France, the Netherlands and Scandinavia; the present one deals with economists from Germany and Italy. As is easy to understand, such an ambitious project required a specialist’s knowledge of the economic literature of the various countries involved — something that no single historian can possess. For this reason, the general editor of the series, Warren J. Samuels of Michigan State University, has availed himself of the collaboration of six co-editors: Y.S. Brenner and Jan Simonis (both at the University of Utrecht), Riccardo Faucci (University of Pisa), Harald Hagemann (University of Hohenheim), Claude Menard (University of Paris I) and Bo Sandelin (University of G?teborg). The overall outcome is a collection of thirty essays (seventeen in Volume 1 and thirteen in Volume 2) which offer an invaluable amount of information on the life and works of continental economists who are usually considered of second — if not third — rank and, therefore, undeserving of receiving anything more than a brief mention in standard histories of economic thought, but whose work, as Samuels writes in the Introduction to Volume 2, “… was part of the work of the discipline … contributed to — constituted — the spread of ideas … included new ideas whose originality was appreciated, if at all, only later ….” so that it cannot be disregarded, lest our historical accounts be “…myopic, insular and provincial” (xii).

Of the thirteen essays contained in the present volume, six are dedicated to German economists (though we should rather say German-speaking, as two of them were born in Austria) and seven to Italian ones. The Germans are Carl Dietzel (the essay is by Rolf Glaeser), Rudolf Hilferding (M.C. Howard and J.E. King), Alfred K?hler (Christian Gehrke), Georg Friedrich Knapp (Hans-Michael Trautwein), Emil Lederer (Hans Ulrich Esslinger) and G?nter Schm?lders (Bj?rn Frank). The Italians are Costantino Bresciani Turroni and Umberto Ricci (both essays are by Piero Bini), Gustavo Del Vecchio (Riccardo Realfonzo), Giovanni Demaria (Aldo Montesano), Antonio Graziadei (Pietro Maurandi), Achille Loria (Riccardo Faucci and Stefano Perri), and Angelo Messedaglia (Anna Pellanda).

The selection deserves a few comments. First of all, while the goal of the collection was to cover scholars who were scientifically active in the period going from the late nineteenth to the early twentieth century, only eleven out of the thirteen economists meet this requirement (actually, they also satisfy the tighter constraint featured in the book’s title, as their works mainly belong to the early twentieth century). Indeed, neither Carl Dietzel nor Angelo Messedaglia can by any means be considered as belonging to that period, if not on account of their year of death: Dietzel’s pioneering work on public debt and fiscal policy dates back to 1855, while Messedaglia’s contributions to economics are concentrated in the 1850s and 1860s. This is not merely a matter of chronological boundaries. What really makes the essays by Glaeser and Pellanda at odds with the rest of the collection — notwithstanding their intrinsic interest, especially as far as Glaeser’s essay is concerned — is the kind of economic theory that prevailed when their heroes were writing: contrary to the other eleven economists, who had all to come to terms (either favorably or unfavorably) with marginalist/neoclassical economics, the “received view” at the time of Dietzel and Messedaglia was still the classical one, while the main alternative was that offered by the (Old) Historical School. However, and this is my second comment, when exception is made of Dietzel and Messadaglia, the other selected economists do form a coherent whole, perhaps even beyond the editors’ original intentions. When reading through the essays, one cannot fail to realize the common roots of most of their theoretical contributions, namely, the joint necessity to redefine the fundamental categories of the economic discourse in the light of the new marginalist/neoclassical approach, on the one side, and to support, preserve or enrich the wealth of alternative approaches, on the other. Thus, either when challenging bourgeois economics from a Marxian perspective (like in the case of Loria, Hilferding, Graziadei and Lederer), or when trying to integrate classical and neoclassical themes and methods (Del Vecchio, K?hler), or when offering deeper institutional perspectives on monetary issues (Bresciani Turroni, Knapp), or when refusing to get rid of cardinalism in value theory (Ricci), or when defending free trade and laissez-faire policies (again Bresciani Turroni and Ricci), or even when proposing a (truly idiosyncratic) rethinking of the whole of economics (Demaria), the economists in the sample remind us of an important, though often forgotten, truth, i.e., that marginalist/neoclassical economics did not immediately rise to the status of undisputed orthodoxy. Actually, for several decades the new approach had to compete with serious alternatives, while the most brilliant economic minds of that time never ever thought of either embracing or rejecting it sic et simpliciter, as they rather praised, defended and looked for methodological and theoretical pluralism.

A third and final comment on the selection concerns the (admittedly easy) game of “who is missing?” In his Introduction Samuels mentions a few names of German economists that he would have liked to include, but no Italian names. Yet, this reviewer cannot fail to underline the absence of an essay on Marco Fanno. This is both inexplicable, as excellent work has recently been done on him, and very unfortunate, as the addition of a paper on Fanno to those on Bresciani Turroni, Del Vecchio, Ricci and Demaria would have provided the reader of an almost exhaustive assessment of the very best of Italian economics in the interwar years (exception being made of course of Luigi Einaudi and Piero Sraffa, who, however, can hardly be counted among the neglected scholars!).

The latter comment leads me to a general point about the book. What strikes the reader is the difference between the essays dedicated to Italian economists and those on German ones. While each of the former (with the partial exception of the paper by Faucci and Perri — an exception which is justified by the pervasiveness of the theme of capitalist development in Loria’s thought) presents a comprehensive appraisal of the neglected economist’s contributions to economic theory, the latter tend to focus on the single most important book of the author under scrutiny, relegating to a summary paragraph a sketchy presentation of his other works. This feature is, of course, unrelated to the essays’ quality: indeed, the best two papers in the volume are the broad reconstruction of the life and works of Umberto Ricci by Piero Bini and the very detailed analysis of Rudolf Hilferding’s 1910 masterpiece, Financial Capital, by M.C. Howard and J.E. King. Yet, the general impression is that the forgotten Germans somehow exhausted their best theoretical talents in just one big spurt of intellectual creativity which, in turn, also constitutes their main (if not their only) claim to historical appraisal. On the contrary, the neglected Italians are portrayed as fully-fledged professional economists, with all the usual implications of that condition: from the experiencing of academic ups and downs to the production of a regular flow of scientific publications, from the involvement in crucial consulting tasks to the rise to important political responsibilities. Again, this is not to deny that the German scholars also shared similar experiences; yet, the fact remains that these aspects of their life and career only partially emerge from the essays. Thus, to make just a few examples, the reader is left wondering whether the intriguing story of the German group of exiles at the New School’s Graduate Faculty for Social and Political Science in New York would not deserve ampler space in the otherwise excellent papers on K?hler and Lederer; or whether Schm?lders’s sixty-year long career as a professional economist may be effectively summarized by focusing just on his juvenile book on the economics of prohibition; or whether, notwithstanding Glaeser’s emphasis on it, the brief parliamentary experience of Carl Dietzel really had an impact on his intellectual career, especially when compared to the remarkable political duties (as Ministers, government advisors or Chairmen of Constitutional Commissions) of the likes of Bresciani Turroni, Del Vecchio, Ricci and Demaria. To cut a long story short, while the German papers are thorough examinations of the analytical details of single pieces of economic theory — viz., very good examples of history of economic analysis — the Italian ones are more in the tradition of the history of economic thought. Both methods are of course welcome, though the reader may still ask whether the difference is due to some specific institutional feature of the German academic system in the early twentieth century (say, the central role of the habilitation thesis in a scholar’s career) or simply to the personal attitudes of the historians involved in Samuels’s project.

In a sense the previous remarks are preemptively countered by the editor’s insistence (x-xi) that the collection’s goal is first and foremost that of rediscovering individual economists, with no necessary connection with popular themes such as the role of national styles and traditions or the influence of schools of thought. (Indeed, it is in order to stress this feature that the papers are presented in strictly alphabetical order according to the economist’s surname.). Yet, it is precisely because the Italian economists so clearly emerge as part of a real scientific community — that is, as a group of scholars who shared the same sociology and who were constantly dialoguing both among themselves and with their international peers — that it is inevitable to use the essays to also draw some inferences on, say, the troubled existence of an Italian school of Marxian economics or the constant popularity of orthodox views on monetary issues. And even if the German papers offer less room for similar conjectures, the possibility of, say, common theoretical roots for K?hler’s and Lederer’s reflections on technical progress does emerge strongly. This circumstance leads me to what is perhaps the major drawback of the volume. I believe that the reader would have greatly benefited from the inclusion of two brief essays outlining the general framework of, respectively, German and Italian economics in the period under scrutiny and addressing key issues such as the early twentieth-century influence of the Historical School or the comparative importance of general and partial equilibrium analysis (viz., of Pareto and Pantaleoni) on interwar Italian economics. These essays, on account of their necessarily sketchy content, would of course have been useless for those historians who already know the state of the art in the two countries, but this is not the kind of audience to which the book is primarily addressed. If Samuels’s main aim were that of bringing to international attention (especially in English-speaking countries) the life and works of thirteen neglected economists, the reconstruction of the scientific environment in which the latter operated would have been helpful in guiding the reader through the single chapters, thereby making the volume a truly self-contained one. I am aware that both commissioning and writing these two essays would have been no easy tasks, yet they would have looked somehow less daunting had the book’s coverage been formally restricted, as de facto it is, to the period 1900-1940.

Another, though lesser, weakness of the book is its failure in providing an answer to the following question. When looking at the list of the thirteen economists, one immediately recognizes the significant variance of their lifetime fortune. Some of them, like the Italians Loria and Bresciani Turroni and the Germans Knapp and Hilferding, were far from being neglected, as their main works were among the most well-known and intensively debated of their times. Others, like Demaria or Dietzel, seem not to have had any remarkable impact even among their contemporaries. Hence an historical puzzle arises: how could it happen that some relatively famous economists ended up being considered by standard histories of economic thought much in the same way as those rather obscure ones, that is, hardly at all? In other words, how do historians select the leading characters of their histories? It is unfortunate that none of the essays offers even a tentative answer to this question.

Having mentioned the main drawbacks, let me conclude by assessing the book’s achievement and by highlighting its major attractions. Was Samuels’s goal “…to rescue these more or less hitherto neglected economists from the dustbin of history and thereby to contribute to a fuller picture of what was going on in the discipline on the continent of Europe during the period…” eventually achieved? The answer is yes. To convince oneself, just look at Montesano’s or Trautwein’s papers on “impossible” authors such as Demaria and Knapp, appreciate the efforts to extract the gist of their remarkable contributions out of the linguistic intricacies of their economics and then ask how else would one ever happen to read, let alone understand, works featuring expressions such as “entelechian events” or “pantolopic disturbances” were it not for the praiseworthy endeavor of Samuels and his associates. As to the book’s major attractions, one should underline the very high quality of the analytical assessments featuring in most of the papers (the dissection of Loria’s and K?hler’s model by, respectively, Faucci and Perri and Christian Gehrke, deserve a special mention in this respect) and, above all, the fact that these 300-odd pages stand out as a real goldmine of hard-to-recover information for historians of twentieth-century economics. In particular, all essays offer excellent bibliographies of the primary and secondary sources on the various economists; some of these lists (like those by Bini for Bresciani Turroni and Ricci and by Montesano for Demaria) even aim at achieving completeness, at least as far as major works are concerned. This by itself makes the book a remarkable contribution to our discipline.

Nicola Giocoli is Assistant Professor at the Department of Economics of the University of Pisa. Among his recent publications, Modeling Rational Agents: From Interwar Economics to Early Modern Game Theory, Edward Elgar, 2003.