Crises and Cycles in Economic Dictionaries and Encyclopaedias 0415499038, 9780415499033

Citation preview

Crises and Cycles in Economic Dictionaries and Encyclopaedias

Economic dictionaries have a long history, dating back to Chomel’s Dictionnaire oeconomique, the first edition of which was published in 1709. Some of these dictionaries offer ponderous articles that have been widely influential, or were used as reference material, or marked important turning points in the development of their writer’s ideas. Some dictionaries aimed at systematizing knowledge, others at supplying materials for conversation (Konversationslexikon), others still at registering the most recent advances in the discipline. Accordingly, some entries expounded new ideas, others summarized their author’s thoughts, others still were brilliant surveys of the field at their time. The history of a notion (or set of notions) as expounded in dictionary entries (or in encyclopaedias of a broader scope) thus offers a very peculiar perspective. Editors can be expected to choose the best writers from among those they know and with whose ideas they feel some affinity to discuss each particular subject. On the other hand, dictionaries (especially the most ambitious ones) almost guarantee a respectable and influential outlet for an author’s view, as they are likely to become reference texts for some time. This book aims at investigating from the perspective of the major economic dictionaries notions related to economic crises and cycles. The project consists of giving an extensive summary of a number of significant entries on this subject, with an introductory essay to each entry, placing them (and the dictionary to which they belong) in their context, giving some details of the author of the dictionary entry, and assessing the entry’s (and its author’s) contribution. The broad picture, including the history of these encyclopaedic tools, is examined in the introductory essays. Daniele Besomi is an independent researcher in the history of economic thought and a research fellow of the Centre d’Études Interdisciplinaires Walras Pareto, University of Lausanne, Switzerland.

Routledge Studies in the History of Economics

1. Economics as Literature Willie Henderson

11. Equilibrium and Economic Theory Edited by Giovanni Caravale

2. Socialism and Marginalism in Economics 1870–1930 Edited by Ian Steedman

12. Austrian Economics in Debate Edited by Willem Keizer, Bert Tieben and Rudy van Zijp

3. Hayek’s Political Economy The socio-economics of order Steve Fleetwood

13. Ancient Economic Thought Edited by B. B. Price

4. On the Origins of Classical Economics Distribution and value from William Petty to Adam Smith Tony Aspromourgos 5. The Economics of Joan Robinson Edited by Maria Cristina Marcuzzo, Luigi Pasinetti and Alesandro Roncaglia 6. The Evolutionist Economics of Léon Walras Albert Jolink 7. Keynes and the ‘Classics’ A study in language, epistemology and mistaken identities Michel Verdon 8. The History of Game Theory, Volume 1 From the beginnings to 1945 Robert W. Dimand and Mary Ann Dimand 9. The Economics of W. S. Jevons Sandra Peart 10. Gandhi’s Economic Thought Ajit K. Dasgupta

14. The Political Economy of Social Credit and Guild Socialism Frances Hutchinson and Brian Burkitt 15. Economic Careers Economics and economists in Britain 1930–1970 Keith Tribe 16. Understanding ‘Classical’ Economics Studies in the long-period theory Heinz Kurz and Neri Salvadori 17. History of Environmental Economic Thought E. Kula 18. Economic Thought in Communist and Post-Communist Europe Edited by Hans-Jürgen Wagener 19. Studies in the History of French Political Economy From Bodin to Walras Edited by Gilbert Faccarello 20. The Economics of John Rae Edited by O. F. Hamouda, C. Lee and D. Mair

21. Keynes and the Neoclassical Synthesis Einsteinian versus Newtonian macroeconomics Teodoro Dario Togati

33. Contributions to the History of Economic Thought Essays in honour of R. D. C. Black Edited by Antoin E. Murphy and Renee Prendergast

22. Historical Perspectives on Macroeconomics Sixty years after the ‘General Theory’ Edited by Philippe Fontaine and Albert Jolink

34. Towards an Unknown Marx A commentary on the manuscripts of 1861–63 Enrique Dussel

23. The Founding of Institutional Economics The leisure class and sovereignty Edited by Warren J. Samuels 24. Evolution of Austrian Economics From Menger to Lachmann Sandye Gloria 25. Marx’s Concept of Money The God of commodities Anitra Nelson 26. The Economics of James Steuart Edited by Ramón Tortajada 27. The Development of Economics in Europe since 1945 Edited by A. W. Bob Coats 28. The Canon in the History of Economics Critical essays Edited by Michalis Psalidopoulos 29. Money and Growth Selected papers of Allyn Abbott Young Edited by Perry G. Mehrling and Roger J. Sandilands 30. The Social Economics of Jean-Baptiste Say Markets and virtue Evelyn L. Forget 31. The Foundations of Laissez-Faire The economics of Pierre de Boisguilbert Gilbert Faccarello 32. John Ruskin’s Political Economy Willie Henderson

35. Economics and Interdisciplinary Exchange Edited by Guido Erreygers 36. Economics as the Art of Thought Essays in memory of G. L. S. Shackle Edited by Stephen F. Frowen and Peter Earl 37. The Decline of Ricardian Economics Politics and economics in post-Ricardian theory Susan Pashkoff 38. Piero Sraffa His life, thought and cultural heritage Alessandro Roncaglia 39. Equilibrium and Disequilibrium in Economic Theory The Marshall–Walras divide Michel de Vroey 40. The German Historical School The historical and ethical approach to economics Edited by Yuichi Shionoya 41. Reflections on the Classical Canon in Economics Essays in honour of Samuel Hollander Edited by Sandra Peart and Evelyn Forget 42. Piero Sraffa’s Political Economy A centenary estimate Edited by Terenzio Cozzi and Roberto Marchionatti 43. The Contribution of Joseph Schumpeter to Economics Economic development and institutional change Richard Arena and Cecile Dangel

44. On the Development of Long-run Neo-Classical Theory Tom Kompas 45. F. A. Hayek as a Political Economist Economic analysis and values Edited by Jack Birner, Pierre Garrouste and Thierry Aimar 46. Pareto, Economics and Society The mechanical analogy Michael McLure 47. The Cambridge Controversies in Capital Theory A study in the logic of theory development Jack Birner 48. Economics Broadly Considered Essays in honour of Warren J. Samuels Edited by Steven G. Medema, Jeff Biddle and John B. Davis 49. Physicians and Political Economy Six studies of the work of doctoreconomists Edited by Peter Groenewegen 50. The Spread of Political Economy and the Professionalisation of Economists Economic societies in Europe, America and Japan in the nineteenth century Massimo Augello and Marco Guidi 51. Historians of Economics and Economic Thought The construction of disciplinary memory Steven G. Medema and Warren J. Samuels 52. Competing Economic Theories Essays in memory of Giovanni Caravale Sergio Nisticò and Domenico Tosato 53. Economic Thought and Policy in Less Developed Europe The nineteenth century Edited by Michalis Psalidopoulos and Maria-Eugenia Almedia Mata 54. Family Fictions and Family Facts Harriet Martineau, Adolphe Quetelet and the population question in England 1798–1859 Brian Cooper

55. Eighteeth-Century Economics Peter Groenewegen 56. The Rise of Political Economy in the Scottish Enlightenment Edited by Tatsuya Sakamoto and Hideo Tanaka 57. Classics and Moderns in Economics, Volume I Essays on nineteenth and twentieth century economic thought Peter Groenewegen 58. Classics and Moderns in Economics, Volume II Essays on nineteenth and twentieth century economic thought Peter Groenewegen 59. Marshall’s Evolutionary Economics Tiziano Raffaelli 60. Money, Time and Rationality in Max Weber Austrian connections Stephen D. Parsons 61. Classical Macroeconomics Some modern variations and distortions James C. W. Ahiakpor 62. The Historical School of Economics in England and Japan Tamotsu Nishizawa 63. Classical Economics and Modern Theory Studies in long-period analysis Heinz D. Kurz and Neri Salvadori 64. A Bibliography of Female Economic Thought to 1940 Kirsten K. Madden, Janet A. Sietz and Michele Pujol 65. Economics, Economists and Expectations From microfoundations to macroeconomics Warren Young, Robert Leeson and William Darity Jnr.

66. The Political Economy of Public Finance in Britain, 1767–1873 Takuo Dome 67. Essays in the History of Economics Warren J. Samuels, Willie Henderson, Kirk D. Johnson and Marianne Johnson 68. History and Political Economy Essays in honour of P. D. Groenewegen Edited by Tony Aspromourgos and John Lodewijks 69. The Tradition of Free Trade Lars Magnusson

78. Economic Development and Social Change Historical roots and modern perspectives George Stathakis and Gianni Vaggi 79. Ethical Codes and Income Distribution A study of John Bates Clark and Thorstein Veblen Guglielmo Forges Davanzati 80. Evaluating Adam Smith Creating the wealth of nations Willie Henderson

70. Evolution of the Market Process Austrian and Swedish economics Edited by Michel Bellet, Sandye Gloria-Palermo and Abdallah Zouache

81. Civil Happiness Economics and human flourishing in historical perspective Luigino Bruni

71. Consumption as an Investment The fear of goods from Hesiod to Adam Smith Cosimo Perrotta

82. New Voices on Adam Smith Edited by Leonidas Montes and Eric Schliesser

72. Jean-Baptiste Say and the Classical Canon in Economics The British connection in French classicism Samuel Hollander 73. Knut Wicksell on Poverty No place is too exalted Knut Wicksell 74. Economists in Cambridge A study through their correspondence 1907–1946 Edited by M. C. Marcuzzo and A. Rosselli 75. The Experiment in the History of Economics Edited by Philippe Fontaine and Robert Leonard 76. At the Origins of Mathematical Economics The economics of A. N. Isnard (1748–1803) Richard van den Berg 77. Money and Exchange Folktales and reality Sasan Fayazmanesh

83. Making Chicago Price Theory Milton Friedman–George Stigler correspondence, 1945–1957 Edited by J. Daniel Hammond and Claire H. Hammond 84. William Stanley Jevons and the Cutting Edge of Economics Bert Mosselmans 85. A History of Econometrics in France From nature to models Philippe Le Gall 86. Money and Markets A doctrinal approach Edited by Alberto Giacomin and Maria Cristina Marcuzzo 87. Considerations on the Fundamental Principles of Pure Political Economy Vilfredo Pareto (Edited by Roberto Marchionatti and Fiorenzo Mornati) 88. The Years of High Econometrics A short history of the generation that reinvented economics Francisco Louçã

89. David Hume’s Political Economy Edited by Carl Wennerlind and Margaret Schabas 90. Interpreting Classical Economics Studies in long-period analysis Heinz D. Kurz and Neri Salvadori 91. Keynes’s Vision Why the Great Depression did not return John Philip Jones 92. Monetary Theory in Retrospect The selected essays of Filippo Cesarano Filippo Cesarano 93. Keynes’s Theoretical Development From the tract to the general theory Toshiaki Hirai 94. Leading Contemporary Economists Economics at the cutting edge Edited by Steven Pressman 95. The Science of Wealth Adam Smith and the framing of political economy Tony Aspromourgos 96. Capital, Time and Transitional Dynamics Edited by Harald Hagemann and Roberto Scazzieri 97. New Essays on Pareto’s Economic Theory Edited by Luigino Bruni and Aldo Montesano 98. Frank Knight and the Chicago School in American Economics Ross B. Emmett 99. A History of Economic Theory Essays in honour of Takashi Negishi Edited by Aiko Ikeo and Heinz D. Kurz 100. Open Economics Economics in relation to other disciplines Edited by Richard Arena, Sheila Dow and Matthias Klaes 101. Rosa Luxemburg and the Critique of Political Economy Edited by Riccardo Bellofiore

102. Problems and Methods of Econometrics The Poincaré lectures of Ragnar Frisch 1933 Edited by Olav Bjerkholt and Ariane Dupont-Keiffer 103. Criticisms of Classical Political Economy Menger, Austrian economics and the German historical school Gilles Campagnolo 104. A History of Entrepreneurship Robert F. Hébert and Albert N. link 105. Keynes on Monetary Policy, Finance and Uncertainty Liquidity preference theory and the global financial crisis Jorg Bibow 106. Kalecki’s Principle of Increasing Risk and Keynesian Economics Tracy Mott 107. Economic Theory and Economic Thought Essays in honour of Ian Steedman John Vint, J. Stanley Metcalfe, Heinz D. Kurz, Neri Salvadori and Paul Samuelson 108. Political Economy, Public Policy and Monetary Economics Ludwig von Mises and the Austrian tradition Richard M. Ebeling 109. Keynes and the British Humanist Tradition The moral purpose of the market David R. Andrews 110. Political Economy and Industrialism Banks in Saint-Simonian economic thought Gilles Jacoud 111. Studies in Social Economics Léon Walras Translated by Jan van Daal and Donald Walker

112. The Making of the Classical Theory of Economic Growth Anthony Brewer

122. Marshall, Marshallians and Industrial Economics Edited by Tiziano Raffaelli

113. The Origins of David Hume’s Economics Willie Henderson

123. Austrian and German Economic Thought Kiichiro Yagi

114. Production, Distribution and Trade Edited by Adriano Birolo, Duncan Foley, Heinz D. Kurz, Bertram Schefold and Ian Steedman

124. The Evolution of Economic Theory Edited by Volker Caspari

115. The Essential Writings of Thorstein Veblen Edited by Charles Camic and Geoffrey Hodgson 116. Adam Smith and the Economy of the Passions Jan Horst Keppler 117. The Analysis of Linear Economic Systems Father Maurice Potron’s pioneering works Translated by Christian Bidard and Guido Erreygers 118. A Dynamic Approach to Economic Theory: Frisch Edited by Olav Bjerkholt and Duo Qin 119. Henry A. Abbati: Keynes’ Forgotten Precursor Serena Di Gaspare 120. Generations of Economists David Collard 121. Hayek, Mill and the Liberal Tradition Edited by Andrew Farrant

125. Thomas Tooke and the Monetary Thought of Classical Economics Matthew Smith 126. Political Economy and Liberalism in France The contributions of Frédéric Bastiat Robert Leroux 127. Stalin’s Economist The economic contributions of Jenö Varga André Mommen 128. E. E. Slutsky as Economist and Mathematician Crossing the limits of knowledge Vincent Barnett 129. Keynes, Sraffa, and the Criticism of Neoclassical Theory Essays in honour of Heinz Kurz Neri Salvadori and Christian Gehrke 130. Crises and Cycles in Economic Dictionaries and Encyclopaedias Edited by Daniele Besomi

Crises and Cycles in Economic Dictionaries and Encyclopaedias

Edited by Daniele Besomi

First published 2012 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Simultaneously published in the USA and Canada by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2012 Selection and editorial matter, Daniele Besomi; individual chapters, the contributors The right of Daniele Besomi to be identified as the author of the editorial matter and of the authors for their individual chapters of this work has been asserted in accordance with the Copyright, Designs and Patent Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record has been requested for this book ISBN: 978-0-415-49903-3 (hbk) ISBN: 978-0-203-81654-7 (ebk) Typeset in Times New Roman by Keystroke, Station Road, Codsall, Wolverhampton

Contents

List of figures and tables List of contributors Symbols and conventions

xxi xxiii xxv

PART I

Introductory 1 Introduction Daniele Besomi

1 3

1.1 Dictionaries as a literary genre 4 1.1.1 Encyclopaedias, dictionaries, lexica and glossaries 4 1.1.2 The fragmentation of knowledge 6 1.1.3 Dictionary architecture 8 1.1.4 The encyclopaedic goal 12 1.1.5 The elected audience 13 1.1.6 Dictionaries and textbooks 16 1.1.7 A literary genre 16 1.2 Dictionary articles and the history of economic thought 17 1.3 Structure and limits of this project 20 2 A brief history of economic dictionaries: an essay in bibliography Daniele Besomi 2.1 2.2 2.3 2.4

Introduction 27 Economics and practical arts 27 Commercial, business and financial dictionaries 28 Political economy and economics 31 2.4.1 The nineteenth century 31 2.4.2 The twentieth century 34 2.4.3 Internet publications 38 2.5 The encyclopaedias of the social sciences 39 2.5.1 The nineteenth century 39 2.5.2 The twentieth century 41

27

xii Contents 2.6 From general to particular: hyperspecialized dictionaries 42 2.7 Biographical dictionaries 43 2.8 The chronological, spatial and dimensional distribution of dictionaries 44 3 Naming crises: a note on semantics and chronology Daniele Besomi

54

3.1 Introduction 54 3.1.1 Words in prominent position 54 3.1.2 ‘Panics produce texts’ 55 3.2 Semantics and chronology 57 3.2.1 Glut 57 3.2.2 Distress 59 3.2.3 Embarrassment 60 3.2.4 Stagnation 62 3.2.5 Panic 66 3.2.6 Bubble 70 3.2.7 Depression 74 3.2.8 Crisis 78 3.2.9 Cycle 89 3.2.10 Fluctuations 102 3.2.11 Recession 108 3.3 Concluding note on the choice of terms 111 4 Dictionary reconstructions of the history of the theories of crises and cycles: a meta-taxonomy Daniele Besomi 4.1 4.2 4.3 4.4 4.5 4.6

Categorizing business cycle theories 133 Early surveys of the literature 134 Say’s Law and overproduction 135 Optimist liberals and pessimist socialists 138 Old vs. new theories 139 The aetiological approach 141 4.6.1 The origins of the causal taxonomy 141 4.6.2 The aetiological approach in dictionaries 145 4.7 Abandoning the causal representation 146 4.8 The formal properties of models 147 4.9 Digging rather than skating: the quest for a fundamental line of division 149 4.9.1 Say’s law (again) 150 4.9.2 Schools of thought and chronological narrations 151 4.9.3 Exogenous vs. endogenous approaches 154 4.9.4 Stability vs. instability 156

133

Contents xiii 4.10 Miscellaneous approaches 159 4.10.1 A chronosophical approach 161 PART II

The classic dictionaries 5 Between progress and decline: crises in early French dictionaries and encyclopaedias (1830–1840) Ludovic Frobert

165

167

5.1 French dictionaries c. 1830 167 5.2 French Liberals before 1848: progress punctuated by crises 168 5.3 The French Republicans: the possibility of progress without crisis 169 5.4 The Saint-Simonians and their dissident movements: progress through the alternation of periods 171 5.5 The Fourierists: crises as indicators of the corruption and decomposition of ‘civilization’ 173 5.6 Conclusion 174 6 The analysis of crises in early French dictionaries and encyclopaedias Daniele Besomi

177

6.1 6.2 6.3 6.4 6.5

Entries on crises in early French dictionaries 177 The definition of crises 178 The phenomenology and the causes of crises 179 The function of crises 182 Dictionaries and the literature on crises in the first half of the nineteenth century 183 6.5.1 The definitions 184 6.5.2 On causality 186 6.6 Summing up: Garnier’s entry on commercial crisis 190 7 Wilhelm Roscher’s crises theory: from production crises to sales crises Harald Hagemann 7.1 7.2 7.3 7.4

The Brockhaus encyclopaedia 197 Wilhelm Roscher 198 Roscher on crises 200 Assessment 205

197

xiv Contents 8 Charles Coquelin: banking monopoly and commercial crises Daniele Besomi

209

8.1 The Dictionnaire de l’économie politique 209 8.1.1 History and revisions 211 8.1.2 Influence 211 8.2 Charles Coquelin 211 8.3 Crises in the Dictionnaire de l’économie politique 212 8.3.1 The entries relating to crises 212 8.3.2 Summary of Coquelin’s entry on commercial crises 213 8.4 Assessment 216 9 Commercial crisis and credit in the first Spanish general encyclopaedia (1851–1855) Jesús Astigarraga and Juan Zabalza

225

9.1 Introduction 225 9.2 The Enciclopedia moderna (1851–1855) 226 9.3 José Joaquín Mora as author of the entries for credit and commercial crisis in Enciclopedia moderna 227 9.4 Credit and commercial crises in Enciclopedia moderna 229 9.4.1 CRISIS COMERCIAL in Enciclopedia moderna 230 9.4.2 CRÉDITO in Enciclopedia moderna 231 9.5 Concluding assessment of the entries on credit and crisis in Enciclopedia moderna 233 10 Expectations and crises in Auguste Ott’s Dictionnaire des sciences politiques et sociales Daniele Besomi 10.1 10.2 10.3 10.4

238

Ott’s dictionary and the Encyclopédie théologique 238 Auguste Ott 240 Crises in Ott’s Dictionnaire 241 Assessment 244

11 Gerolamo Boccardo on internally generated commercial crises Daniele Besomi 11.1 The Dizionario della economia politica 249 11.1.1 Editorial history 251 11.1.2 Reception 252 11.2 Gerolamo Boccardo 253 11.3 Crises in Boccardo’s dictionary 255 11.3.1 The first edition 255 11.3.2 The later editions 258 11.4 Assessment 260

249

Contents xv 12 Clément Juglar (1863–1891): tracking and interpreting the periodic return of crises Cécile Dangel-Hagnauer

265

12.1 The dictionaries 265 12.1.1 The Dictionnaire général de la politique 267 12.1.2 The Nouveau dictionnaire d’économie politique 269 12.2 Joseph Clément Juglar 272 12.3 The entries 273 12.3.1 CRISES COMMERCIALES in the Dictionnaire général de la politique 274 12.3.2 CRISES COMMERCIALES in the Nouveau dictionnaire d’économie politique 279 12.4 Concluding remarks 281 13 Henry D. Macleod’s Dictionary of political economy: Britain’s first, aborted attempt Cécile Dangel-Hagnauer

286

13.1 A biographical, bibliographical, historical and practical dictionary of political economy 286 13.2 Henry Dunning Macleod 288 13.2.1 Presumptuousness and innovativeness 289 13.2.2 Macleod’s particular brand of political economy 291 13.2.3 Wasting opportunities and leaving one’s mark 292 13.3 CRISIS, COMMERCIAL 292 13.3.1 The origin and the causes of crises 293 13.3.2 The history of commercial catastrophes 295 13.3.3 The opinions of ‘authorities’ on the subject of crises 299 13.3.4 On the course of action to pursue in the event of commercial crises 300 13.4 Concluding remarks 302 14 Adolf Wagner: economic crises, capitalism and human nature Vitantonio Gioia 14.1 14.2 14.3 14.4 14.5

307

The Handwörterbuch der Volkswirthschaftslehre 307 Adolf Heinrich Gotthilf Wagner 308 The German debate on crises and Wagner’s contribution 311 The mechanics of crises and their explanation 314 Capitalism, crises and economic motives 317

15 Émile de Laveleye: economic crises, Christianity and socialism Ludovic Frobert 15.1 La Grande encyclopédie 320 15.1.1 A positivist encyclopaedia 320

320

xvi Contents 15.1.2 Laveleye and the Grande Encyclopédie 322 15.2 Émile de Laveleye 322 15.3 Crises 326 15.4 A sower of ideas 329 16 Of the ‘old’ Palgrave entries on crises Pascal Bridel

332

16.1 The ‘old’ Palgrave 332 16.2 The authors 334 16.3 The entries 336 17 From crises to cycles: Tugan-Baranovsky and the Brockhaus–Efron 343 (1895–1915) François Allisson 17.1 The Brockhaus–Efron encyclopaedic dictionary 343 17.2 Mikhail Ivanovich Tugan-Baranovsky 345 17.3 Summary of Tugan’s ECONOMIC CRISES 346 17.3.1 Brockhaus–Efron (1895) 347 17.3.2 Small Brockhaus–Efron (1909) 350 17.3.3 New Brockhaus–Efron (1915) 351 17.4 Assessment 352 17.4.1 From the book to the entry: writing for an encyclopaedia 353 17.4.2 The terminology: from crises to cycles 353 17.4.3 Rewriting history: the status of encyclopaedic knowledge 354 17.4.4 A Western theory in a Russian encyclopaedia? 355 17.5 Tugan’s original references 355 17.5.1 Tugan’s bibliography (1895) 355 17.5.2 Tugan’s bibliography (1909) 357 17.5.3 Tugan’s bibliography (1915) 357 18 Heinrich Herkner: inequality of income distribution, overcapitalization and underconsumption Harald Hagemann 18.1 18.2 18.3 18.4

361

Conrad’s Handwörterbuch der Staatswissenschaften 361 Heinrich Herkner 362 Herkner on crises 366 Assessment 371

19 Wilhelm Lexis: crises and overproduction Harald Hagemann 19.1 Elster’s Wörterbuch der Volkswirtschaft 374 19.2 Wilhelm Lexis 376

374

Contents xvii 19.3 Lexis on crises and overproduction 378 19.4 Assessment 381 20 Arthur Spiethoff: from economic crises to business cycle theory Vitantonio Gioia 20.1 20.2 20.3 20.4 20.5

The Handwörterbuch der Staatswissenschaften 385 Arthur Spiethoff 387 Krisen 388 Overproduction and business cycles 392 Concluding remarks 396

21 Konyus’s ‘Economic conjuncture’ in the Granat encyclopaedia Vincent Barnett 21.1 21.2 21.3 21.4

401

The encyclopaedia 401 The author 402 The entry 404 Assessment 408

22 Wesley Mitchell, Arthur Burns and Trygve Haavelmo on business cycles: the two Encyclopaedia of the social sciences (1930–1935 and 1968) Pier Francesco Asso and Luca Fiorito 22.1 22.2 22.3 22.4 22.5

385

411

The Encyclopaedia of the social sciences, 1930–1935 411 Wesley C. Mitchell on business cycles 414 The International encyclopaedia of the social sciences 418 Arthur Burns on business cycles 420 Haavelmo’s entry on business cycles 423

23 Tinbergen on dynamics and conjuncture in Stridiron’s Bedrijfseconomische encyclopedie Peter Rodenburg 23.1 The encyclopaedia 427 23.1.1 History and revisions 428 23.1.2 Influence 428 23.2 The author 429 23.3 Business cycles in the Bedrijfseconomische encyclopedie 430 23.3.1 The entries relating to business cycles 430 23.3.2 Tinbergen’s entry on business cycle theory 431 23.4 Assessment 434

427

xviii Contents PART III

The recent dictionaries

441

24 Nikolai Kondratiev and long waves in recent dictionaries and encyclopaedias Francisco Louçã

443

24.1 Introduction 443 24.2 Predecessors and long waves of debates 444 24.3 Nikolai Kondratiev 446 24.3.1 The reception of Kondratiev’s ideas 446 24.3.2 Kondratiev’s analysis of long waves 447 24.4 The assessment of the contemporary polemic on Kondratiev’s contribution to the dictionaries 451 24.5 The impact of Kondratiev’s writings 452 24.5.1 Schumpeter 453 24.5.2 Frisch and Tinbergen 454 24.5.3 Other contributions 455 24.6 The assessment of the modern debate by the recent dictionaries 456 24.7 Conclusion 458 25 Political business cycles Jan-Peter Olters

463

25.1 Introduction 463 25.2 Modelling political business cycles 466 25.2.1 Precursory studies 466 25.2.2 Strategic politicians and myopic voters 467 25.2.3 Politics in a rational world 469 25.2.4 Recent innovations 472 25.3 Concluding remarks 475 26 Nonlinear business cycles in recent dictionaries Giorgio Colacchio 26.1 Introduction 485 26.2 Nonlinear business cycle in business cycle entries: escaping from the linear world 487 26.3 Nonlinear business cycles in entries related to economic dynamics: into the mysterious realm of nonlinear dynamics 493 26.4 Nonlinear business cycles in dictionaries of the social sciences: towards other lands? 494 26.5 Concluding remarks 495

485

Contents xix 27 An assessment of real business cycles in recent dictionaries Marc Pilkington

501

27.1 Introductory remarks 501 27.2 The emergence of RBC theory 503 27.2.1 The ill-suited use of ‘real business cycles’ 503 27.2.2 Linking the RBC approach with new classical macroeconomics 504 27.3 Why ‘real’ theories? 505 27.4 Business cycles and stylized facts 509 27.4.1 Characterization of business cycles 509 27.4.2 Stylized facts and methodological choices 510 27.5 The integration of growth and fluctuations 513 27.5.1 Going beyond the dichotomy between growth and business cycles 513 27.5.2 Random walks and the non-deterministic nature of growth 514 27.6 The calibration method and the construction of general equilibrium models 515 27.7 Real business cycle theory under criticism 517 27.7.1 Predicting the turning points 517 27.7.2 The role of technological shocks 517 27.7.3 Cyclical variations in employment 519 27.7.4 New econometric challenges 519 27.7.5 Money neutrality 520 27.7.6 The evaluation of counter-cyclical fiscal policies 521 27.8 Concluding remarks 522 28 Back to crises: post-war dictionaries and the resilience of an old category Daniele Besomi and Giorgio Colacchio 28.1 Introduction 526 28.2 Crises as the turning point of the cycle: French language dictionaries 527 28.3 Crises as a branch of Marxian theory vs. the business cycle as bourgeois economics: the case of German dictionaries 531 28.4 Crises as a pathology 533 28.5 Crises in the history of ideas 535 28.6 Crises and cycles as distinct logical categories 538 28.7 The epistemics of crises and cycles theories 539 28.8 Crises vs. cycles 544

526

xx Contents 29 A bibliography of specialized dictionaries of economics and related 549 subjects Daniele Besomi 29.1 29.2 29.3 29.4

Introductory remarks 549 Economic dictionaries, by compiler 550 Economic dictionaries, by title 590 General encyclopaedias cited in the text, by title 613

Name and subject index Index of dictionaries and dictionary entries cited

618 665

Figures and tables

Figures 2.1 2.2 2.3 2.4 2.5 2.6 3.1 3.2 3.3 3.4 3.5 25.1

Number of specifically economic dictionaries, by size Number of specifically economic dictionaries, by language Number of social sciences dictionaries, by size Number of social sciences dictionaries, by language Number of dictionaries concerned with economics, by language and size Number of dictionaries concerned with economics, by size and language Frequency of occurrences of specific terms in titles of writings on crises and cycles, 1815–1860 Frequency of occurrences of specific terms in titles of writings on crises and cycles, 1861–1905 Frequency of occurrences of specific terms in titles of writings on crises and cycles, 1906–1945 Frequency of occurrences of specific terms in titles of writings on crises and cycles, 1928–1975 Frequency of occurrences of specific terms in titles of writings on crises and cycles, 1969–2009 Stylized development of the PBC literature

46 47 48 49 50 51 113 114 115 116 117 465

Tables 25.1 The PBC literature according to the cycle’s length 25.2 PBCs in economic dictionaries, encyclopaedias and handbooks

476 477

Contributors

François Allisson is a PhD student in History of Economic Thought at the Centre d’Études Interdisciplinaires Walras Pareto, University of Lausanne, Switzerland. Pier Francesco Asso is Professor of History of Economics at the University of Palermo, Italy. Jesús Astigarraga is Associate Professor of Political Economy and History of Economic Thought at the University of Zaragoza, Spain. Vincent Barnett is an independent researcher with interests in Russian history, the history of economic thought and the economic history of the film industry. Daniele Besomi is an independent researcher and a Research Fellow at the Centre d’Études Interdisciplinaires Walras Pareto, University of Lausanne, Switzerland. Pascal Bridel is Professor of Economics at the Centre d’Études Interdisciplinaires Walras Pareto, University of Lausanne, Switzerland. Giorgio Colacchio is Associate Professor of Economics at the University of Salento in Lecce, Italy. Cécile Dangel-Hagnauer is Associate Professor of Economics at the University of Nice-Sophia Antipolis and member of GREDEG/CNRS, France. Luca Fiorito is Associate Professor of History of Economic Thought at the University of Palermo, Italy. Ludovic Frobert is Senior Researcher at the Centre National de la Recherche Scientifique (CNRS), TRIANGLE/ENS-Lyon, France. Vitantonio Gioia is Professor of History of Economic Thought at the University Salento, Italy. Harald Hagemann is Professor of Economic Theory at the University Hohenheim, Stuttgart, Germany. Francisco Louçã is Professor of Economics at ISEG, Technical University of Lisbon, Portugal.

xxiv Contributors Jan-Peter Olters is Head of the World Bank Office in Podgorica, Montenegro. Marc Pilkington is a Lecturer at Nice Sophia Antipolis University, France, where he holds the position of Professeur Agrégé. Peter Rodenburg is Assistant Professor in the History of Economic Thought at the Department of European Studies, University of Amsterdam, the Netherlands. Juan Zabalza is Associate Professor of History of Economic Thought at the University of Alicante, Spain.

Symbols and conventions

While each chapter carries its own reference list, dictionaries and encyclopaedias are listed (by compiler and by title) in a general bibliography at the end of the volume (Chapter 29); citations are preceded by the symbol →. In references, attributed authorship or publication dates of anonymous or unpublished writings are cited between square brackets. Unless otherwise specified, translations from languages other than English are by the author of the chapter concerned, and citations reproduce the original emphasis. The titles of entries are cited in small capitals in the original language; nonobvious translations are supplied on the first occurrence in each chapter.

Part I

Introductory

1

Introduction Daniele Besomi*

Les dictionnaires sont les meilleurs moyens de propager les sciences, d’accélérer leurs progrès, et de les faire arriver rapidement au plus haut degré qu’elles puissent atteindre. Le plus grand perfectionnement de la pensée humaine est dans sa diffusion. (PRÉFACE, →Ganilh, Dictionnaire analytique d’économie politique, 1826, p. xxvii) Crises, cycles and other distressful phenomena intrinsic to the dynamics of capitalist economies have been, and still are, the subject of a vast literature, often topical (coming in waves following the events themselves: see Chapter 3) but sometimes also dedicated. There are therefore multiple viewpoints from which the subject can be studied historically. In this volume we examine how these phenomena have been and are discussed in encyclopaedias and specialized dictionaries. These reference works played an important role in the popularization but also in the systematization of knowledge during the nineteenth century and the early twentieth century, and – judging from the continuing exponential increase in their publication – are still widely used in the support of teaching and, to a lesser extent, research. What is recorded in dictionaries is therefore rather influential, in particular for those works recognized by contemporaries to be authoritative. Yet the choice of this perspective is perhaps unnatural enough to require an explanation. Encyclopaedia writings, in fact, nowadays can hardly claim to lie at the cutting edge of research, the outcome of which is normally housed in dedicated treatises and articles, and their purpose is related much more to the diffusion of

* I am grateful to the participants and especially the discussants (Marco Guidi and Michael Trautwein) of the session on crises in economic dictionaries held at the 2008 ESHET conference in Prague. The project behind this book is one of the outcomes of a Research network on business cycle and crises theories. Some of the participants have contributed chapters (Pascal Bridel, Cécile Dangel-Hagnauer, Ludovic Frobert, Harald Hagemann); others contributed to the preliminary discussions (Muriel DalPont Legrand and Alain Raibaut). My gratitude extends to all. The contributors have sometimes commented on each other’s chapters; these discussions are collectively acknowledged here.

4 Daniele Besomi knowledge than to its conception. Nevertheless, dictionary articles have not always been rearguard materials, while the peculiar nature and style of such writings define a literary genre offering, individually and as a class, a precious vantage point for assessing the state of the reflections on specific topics such as crises and cycles, and on their perception by the scholarly community (both qualified academics and those being trained) and laypeople. The texts so produced, in fact, carry some features that make them particularly interesting for historians of thought due to the selection of materials they discuss, the structure of the argument and their expert authorship. Most of these articles – in particular, those incorporated in large encyclopaedic works, thus having enough space to expound their argument in full – place the subject in the context of contemporary debates on crises, and thus reveal the perspective their prominent authors deemed to be noteworthy. This introductory chapter begins by characterizing the scientific–literary genre of dictionary and the structure and purpose of this project.

1.1 DICTIONARIES AS A LITERARY GENRE

1.1.1 Encyclopaedias, dictionaries, lexica and glossaries Before entering into a characterization of dictionaries as a literary genre, it is necessary to delimit the nature of such works considered in this volume. Lexicographic works concerning economics (exclusively or not) are a motley set of objects. As we shall see below (Section 1.2), they include a wide range of sizes, purposes, languages, editorial histories and intended audiences. And they have different names: we have dictionaries, encyclopaedias, encyclopaedic dictionaries, lexica, vocabularies and glossaries, which correspond to different kinds of reference works. The distinction between these kinds of works in practice is rather fuzzy. Several of them – both of general scope and specifically addressed to economics or the social sciences – actually carry more than one of these denominations in their title. Famously, Diderot and d’Alembert’s Encyclopedia (1751–1780) was titled Encyclopédie ou dictionnaire raisonné des sciences, des arts et des métiers. Similarly, Chambers’s Cyclopædia (1728) and the first edition of the Encyclopædia Britannica (1768–1781) were both subtitled Universal dictionary of arts and sciences. Whitelaw combined three terms as follows: The popular encyclopaedia: or, ‘Conversations lexicon’: being a general dictionary of arts, sciences, literature, biography, history, ethics, and political economy (1834–1842). Several specifically economic and commercial works were equally generous in qualifying themselves, as for instance →Macardy’s Commercial cyclopaedia: or, Dictionary of practical commerce (1833), →Rotteck’s Staats-Lexikon. Encyklopädie der sämmtlichen Staatswissenschaften für alle Stände (1834–1843), →Guillaumin’s Encyclopédie du commerçant, the main title of which was Dictionnaire du commerce et des marchandises (1837–1839), →Antonelli’s Enciclopedia del negoziante ossia Gran dizionario del commercio, dell’industria, del banco e delle manifatture (1839–1843), →Pitman’s commercial encyclopædia and dictionary of business

Introduction 5 (Slater 1912–1913), →Müller and Löffelholz’s Bank-Lexikon: Handwörterbuch für das Bank- und Sparkassenwesen (1953), or →Mori’s Nuovo dizionario di economia: la prima enciclopedia dei termini economici (1989).1 Although dictionaries and encyclopaedias are complex objects, difficult to pin down to an exhaustive and mutually exclusive list of features, they can be usefully distinguished on the ground of the nature of their entries. The basic function of ‘dictionaries’ is to define the words of a language, or a subset of them, to which dictionaries may add information as to the etymology, use, pronunciation, variants, history, grammatical forms and functions, and synonyms, occasionally supplemented by citations illustrating the use of the various sense of words. ‘Encyclopaedias’ provide instead information on all or some branches of knowledge. Dictionaries thus relate linguistic knowledge about words, aiming at clarifying their meaning and their usage in speech within the cultural organization to which they belong, while encyclopaedias relate to knowledge about facts, objects or theories, thereby providing extra-linguistic information.2 Dictionaries thus define terms, while encyclopaedias deal with concepts. Encyclopaedias can, and do, carry entries on people, while proper names are excluded from dictionaries.3 Encyclopaedic dictionaries perform both functions. The designation of ‘lexicon’, in English, is usually associated with sectorial rather than general dictionaries, that is, dictionaries covering one or a few disciplines.4 ‘Vocabularies’, commonly termed ‘glossaries’, often have a more limited scope, as they list a selection of words or phrases relating to a discipline or a special subject and are sometimes appended to treatises, although some are printed as autonomous volumes.5 In practice, the spectrum of the reference works concerning economics and related disciplines listed in the bibliography of specialized dictionaries in Chapter 29 (more than 650 titles, a number of which went through several editions) forms a continuum, as scarcely any specialized dictionary can avoid incorporating some encyclopaedic ingredients. Yet its extremes are easily discernible. On one side, we have the writings sharing the features of specialized encyclopaedias, carrying more or less detailed entries not only defining the concept under discussion but also reporting the economic understanding concerning it, supplying essential (occasionally rich) bibliographies and offering a systematization of the subject within the corpus of economic knowledge. On the other side, there are the writings limiting themselves to a definition of the word under examination, or very little more. The latter naturally offer short entries for each heading, so that the former kind of works result in much larger numbers of pages; the length of these volumes6 (indicated in the bibliography) offers a rough proxy for their position in the spectrum. In this book we are essentially concerned with encyclopaedic entries on crises, cycles and related topics in general and specialized encyclopaedias, the length of which range from a few pages to small treatises of more than 80 pages7 – without, of course, disdaining information on the etymology and usage of these notions (on which, see Chapter 3).

6 Daniele Besomi

1.1.2 The fragmentation of knowledge Dictionaries and encyclopaedias are reference works, devised to be consulted rather than read from cover to cover. Accordingly, what characterizes these works as a literary genre, and distinguishes them from the remainder of the specialized and educational literature, is their breaking down of knowledge into a number of semimonographic articles, usually presented in alphabetical order and connected with other relevant articles by means of a system of cross-references. This feature has a number of implications. In the early days of specialized dictionaries, the fragmentation of knowledge was perceived as a problem. Boccardo, for instance, opened the preface to his →Dizionario della economia politica (1857–1863) with a defence of dictionaries as a useful quick reference tool (see Chapter 11). He conceded, however, that ‘if the purpose of scientific dictionaries were to teach methodically the science, as intended by the French encyclopedists, and to substitute treatises in presenting doctrines as logically connected between each other, the critics would be justified in their anathemas’ (p. vii).8 In reviewing Boccardo’s Dizionario, Rosa – defending dictionaries and other forms of popularization against the ‘aristocracy of knowledge’ that disdained them in the name of the purity of form and expression – also admitted that the breaking down of knowledge hinders ‘that orderly, logical and magnificent treatment that elevates science by mean of eloquence and gives it the power of the arts’, but maintained that the growth of knowledge requires the creation of dictionaries as convenient and economical repositories of science: ‘to many treatises, as they grew more and more vast and complex, alphabetical subject index have been added at the end. It was thus found to be expedient to start with the alphabetical order at the outset, and to write dictionaries instead of compiling treatises governed by arbitrary classification’ (Rosa, 1857, pp. 114–116). Two further potential dangers were pointed out by Chailley, in the INTRODUCTION to his and Say’s →Nouveau dictionnaire d’économie politique (1891–1892). The first concerns the homogeneity of the articles: A dictionary is rarely the accomplishment of one person alone. Normally it is the result of the collaboration of several people, and it seems preferable that this is so. Although these people may have wide agreement on the fundamental traits of the discipline, they are bound to differ on one aspect or another. This gives rise to disagreements and inconsistencies that may mislead the reader. (p. vi) At the time of writing, Chailley had already (unknowingly) witnessed the extinction of the major one-man dictionaries: in particular →Ganilh’s Dictionnaire analytique d’économie politique (1826), quoted as an example to be superseded by →Coquelin and Guillaumin’s Dictionnaire de l’économie politique (see Chapter 8), of which Say and Chailley purported to be a new edition (see Chapter 12); →McCulloch’s Dictionary, practical, theoretical, and historical, of commerce and commercial navigation (1832–1839, and various subsequent editions); →Ott’s

Introduction 7 Dictionnaire des sciences politiques et sociales, 1854–1855 (see Chapter 10); →Macleod’s Dictionary of political economy, 1863 (aborted at letter C: see Chapter 13); and finally →Boccardo’s Dizionario (Boccardo, as we have seen, had criticized Guillaumin and Coquelin precisely on the ground of the danger of inconsistency pointed out by Chailley). The second of Chailley’s concerns pertains to the quasi-monographic character of the articles: Each article forms a unity. It is a small self-contained and self-standing treatise on its chosen subject. But in life as in science there is no such thing as a selfstanding and self-contained subject. Isolating it is an expedient for studying it. Phenomena are chained to other phenomena which alter their original physiognomy and meaning. Questions are coupled to other questions which modify their original position and correct their scope. The dictionary form, with its separate articles, is itself a [. . .] cause of errors. (p. vi) Say and Chailley’s dictionary, like most others at the time, used a system of cross-references that partly remedied the problem. →Seligman’s Encyclopaedia of the social sciences (1930–1935) attempted to offset the atomizing effect of this fragmentation by means of special surveys of social sciences, of long general articles of an historical character, and of ‘symposium treatment’ offering different perspectives on special problems (Lasswell, 1936, p. 388; Lentini, 1999, pp. 262–263). Yet the problem of the fragmentation of knowledge leading to a partial understanding of problems not only remains, but grows worse with the increased specialization of scientific disciplines. This leads to further breaking down of the main topics into subentries, so that Chailley’s two problems merge into one, as the potential lack of homogeneity affects not only the dictionary as a whole, but even a specific topic. The subject matter of this book, crises and cycles, offers a neat example. While up to the Second World War most dictionaries carried one or two entries on cycles or crises, in recent dictionaries we find a plethora of articles discussing one or another special aspects of the problem.9 While there are crossreferences to some (but by no means all) cognate entries, it is generally not remarked in the apparatus that crises pertain as essentially as does ‘equilibrium’ (and related concepts) to the discussion of the ‘normal’ behaviour of the economic system; but crises are usually discussed separately from their antithesis and rarely (if at all) do the corresponding entries cross-refer to each other. Moreover, it happens that entries within the same dictionary go as far as incorporating, without discussion, views that are antithetic to each other – such as, for example, TRADE CYCLE by Medio and BUSINESS CYCLES by Dotsey and King in →The new Palgrave (1987).10 This problematic situation is still unresolved. As neatly summed up by the Encyclopædia Britannica, Those who favoured this more fragmented approach argued that by focussing on the smaller part of the whole, the editors could facilitate the user’s search

8 Daniele Besomi for specific information and that the liberal provision of cross-references would facilitate a recombination of the fragments by those interested in the bigger picture. Against this practice, it was argued that most cross-references are not followed up by most readers, that the shorter fragmented pieces work against a correct understanding of the larger subject, and that fragmentation inevitably involved a great amount of repetition of basic information throughout all of the related articles. (ENCYCLOPÆDIA, online version, June 2010)

1.1.3 Dictionary architecture The breaking down of information into separate monographic articles implies that dictionaries and encyclopaedias have a double structure, to which correspond specific editorial decisions by the compilers. The microstructure consists in the organization of the information given by each individual entry; it must be fairly homogeneous throughout the dictionary or encyclopaedia, normally more in the former than in the latter. Editors have ample margin as to the kind, amount and presentation of knowledge that may be planned for each entry. This can range from mere definition of terms, devised for quick consultation, to properly monographic articles. The presentation may systematically emphasize, for instance, the historical development of the discipline,11 or stress instead the latest laws, theorems and analytical results; again, it may focus on theoretical or policy issues; or the choice can be left to each individual contributor. The amplitude of the bibliography is also a matter on which preliminary and systematic decisions can be made.12 Some encyclopaedic works allow for variants in the microstructure, with entries devised for quick consultation or essential information as opposed to more complex and elaborate articles.13 The macrostructure, or nomenclature, consists in the general organization of the work, and includes the word-list and the arrangement of articles. While the fractionization of knowledge into distinct fragments involves some problems for the unity of the whole, the compilation of the list of articles and the choice of contributors offers ground for the deployment of the editor’s strategy.14 This applies particularly to encyclopaedic dictionaries: first, one must choose which topics are to be included, on the basis of a judgement of relevance and pertinence. Thus, for example, the notion of ‘crisis’ has not been always present in economic dictionaries: it first appeared in the 1830s, and about a century later it made room for the notion of ‘cycle’ (see more details in Section 1.2 below and in Chapter 3). Second, being concerned with concepts rather than with terms, an encyclopaedia can use any of a family of words belonging to the same semantic field as a gateway to discuss the field itself (and, as we shall see in Chapter 3, the choice of the representative term is not neutral). For instance, an encyclopaedia discussing ‘business cycles’ (or, not equivalently, ‘business fluctuations’) does not need to carry entries on ‘recovery’ or ‘recession’; these terms should instead feature in a dictionary.15 Encyclopaedic works can also include in their word-list some complex concepts in the form of multi-word concepts. →O’Hara’s Encyclopaedia of political economy (1999),

Introduction 9 for instance, includes entries such as GOODWIN CYCLE AND PREDATOR–PREY or NUTCRACKER THEORY OF THE BUSINESS CYCLE. Paradoxically, in spite of being ordered alphabetically, such works need an index for navigation, and they often carry both a thematic and an alphabetical one. Having decided the word-list, dictionary compilers must make a second decision concerning the most suitable contributors to discuss the chosen terms. Here, the breaking down of knowledge typical of the dictionary approach can produce its best result, as each topic can be assigned for discussion to an authority in the specific field. Indeed, some dictionary entries have become classics in their field, and the subject of crises and cycles is no exception. Among the authors of such entries we have, in fact, some of the best writers on the subject, even by today’s standards, such as Jugular, who was in high demand, as he wrote three entries on crises: CRISES COMMERCIALES for →Block’s Dictionnaire général de la politique (1863, revised 1873), CRISES COMMERCIALES for →Say and Chailley’s Nouveau dictionnaire d’économie politique (1891, 2nd edition 1900), and CRISES FINANCIÈRES ET COMMERCIALES (with Des Essars) for →Say’s Dictionnaire des finances (1889) (see Chapter 12); Tugan-Baranovsky, who contributed entries on ECONOMIC CRISES for the three editions of the Russian Brockhaus–Efron (1895, 1909, 1915) (see Chapter 17); Spiethoff, who contributed a very long entry on KRISEN for →Elster’s Handwörterbuch der Staatswissenschaften, 1925 (see Chapter 20), Mitchell (BUSINESS CYCLES), Hawtrey (CREDIT), again Spiethoff (OVERPRODUCTION), Kuznets (CONJUNCTURE) and Lescure (CRISES) for →Seligman’s Encyclopaedia of the Social Sciences (1930–1935) (see Chapter 22 on Mitchell’s entry); and Tinbergen, who wrote CONJUNCTUURTHEORIE (business cycle theory), CONJUNCTUURSTATISTIEK (business cycle statistics), BEWEGINGSTYPEN (types of motion) and DYNAMICA (dynamics) for →Stridiron’s Bedrijfseconomische encyclopedie (1947) (Chapter 22). A number of other entries, while not being authored by world authorities in the field, were at any rate drafted by clearly competent and knowledgeable writers. The choice of the ‘best’ author for an entry16 is far from a matter of course, but reflects a number of constraints, and takes place compatibly with the dictionary’s chosen aim such as the belonging to one or another school of thought (on this, see Section 1.1.4 below). Apart from the potential writers’ availability to contribute on request, language is probably the main constraint. English is nowadays the scientific lingua franca, so that encyclopaedic works in that language can easily draw from a worldwide choice of potential contributors. For other languages things are not so easy, as translations involve additional costs that only a limited number of projects can afford. This constraint has the straightforward implication that any pre-existing national tradition concerning the approach to a subject is consolidated by its recording in dictionaries. Again, crises and cycles offer a good case in point, with some national approaches being crystallized in dictionary entries, in particular concerning terminology, the history of the discipline, and the very definition of the subject matter (see Chapters 3, 4 and 28). A further constraint in the choice of contributors relates to the editors’ understanding of the various issues at stake in the various fields covered by the dictionary

MODELS

10 Daniele Besomi or encyclopaedia and on their acquaintance with the writers in each of these subfields. As disciplinary knowledge becomes more and more specialized, hardly anyone can master the entire spectrum; this is all the more true for broader scope encyclopaedias, such as works covering the whole of the social sciences. The choice of collaborators thus becomes the subject of a complex strategic approach. This is exemplified in the contrast between Seligman, the editor of the first edition of the →Encyclopaedia of the social sciences (1930–1935), and his assistant, Alvin Johnson. Seligman argued that special sections of the encyclopaedia should be sub-edited by eminent collaborators who would in turn assign each specific article to other writers of their choice. Johnson feared that this approach would bring each field under the control of some schools or academic ‘clusters’, and suggested instead that the supervision should be handed down to a number of competent assistant editors with a solid interdisciplinary background who would select, upon consultation with a number of advisers, the topics to be discussed, while the final decision as to the assignment of the articles should be retained by the encyclopaedia’s editors. The latter was the procedure eventually adopted (Gemelli, 1999, pp. 154–155). While the involvement of eminent writers in the encyclopaedic project contributes to its overall authority, by tying the reference work to the personality and the research of its authors it also contributes to its caducity: ‘the encyclopedia becomes a living organism, thereby precarious’ (Rey, 1982, p. 107), condemned to continuously renovate itself in order to survive. Prestigious contributors are bound to leave their mark on the entries they author. They obviously privilege their own perspectives on the topic they are discussing and on the literature about it. Again, cycles and crises offer a clear example of this. In most entries written in the nineteenth century and in the first part of the twentieth century, the recognized authorities were plainly expounding their own view on crises (see in particular Chapters 7, 8, 10, 12, 14, 15, 17, 19, 20, 22, 23); indeed, they were selected precisely for the views they were upholding. During the twentieth century, especially in the second part, encyclopaedic articles apparently offer less personal perspectives, in particular by taking into account alternative views. But the problem of crises and cycles is so intrinsically connected with one’s beliefs as to the working of the capitalist system that one can hardly avoid taking sides – often the very definition of concepts characterizes a specific perspective. The third ingredient of the macrostructure is the ordering of the entries. The overwhelming majority of encyclopaedic works choose the alphabetical arrangement. Some use mixed systems. One consists in alphabetically ordered articles within methodically arranged volumes, beginning from Panckoucke’s Encyclopédie méthodique par ordre des matières (Methodical encyclopaedia by order of subject matter), an update and rearrangement by subject matter of Diderot and d’Alembert’s Encyclopédie (with volumes on commerce, edited by Baudeau under the title →Encyclopédie méthodique. Commerce, three volumes, 1783–1784; on →Économie politique et diplomatique, edited by Démeunier, 1784–1788, four volumes; and on finance, edited by Surgy under the title →Dictionnaire

Introduction 11 encyclopédique des finances, 1784–1787, three volumes). An example examined in this volume is →Ott’s Dictionnaire des sciences politiques et sociales (1854), part of Migne’s Encyclopédie théologique (see Chapter 10), while a more recent instance is the breaking down of →Eatwell, Milgate and Newman’s The new Palgrave: A dictionary of economics (1987) into a number of thematic volumes.17 Another mixed alphabetical and methodic order is that worked out by the Encyclopædia Britannica through its various editions, where large general treatises on each distinct science were combined with smaller entries on specific terms;18 a similar scheme was followed by the Granat Encyclopaedic dictionary (1910–1948) (see Chapter 21). There are also a few examples of encyclopaedic dictionaries specialized in economics that have chosen a fully methodical arrangement, such as Perroux’s →L’univers économique et social, 1960, vol. 9 of the Encyclopédie française,19 or Brémond and Gélédan’s →Dictionnaire des théories et mécanismes économiques, 1984;20 both carry chapters or sections, rather than entries, related to cycles. In Brémond and Gélédan there is an article titled CROISSANCE ET CRISES, while in Perroux the discussion of LE CYCLE DANS LE DÉVELOPPEMENT (cycles as part of the development process) is articulated in two chapters, with sections written by four contributors, on cycles after the Second World War, and on national and international stabilization policies. The pure alphabetical order is apparently paradoxical. Encyclopaedias, in their etymology, are meant to be ‘instruction in a cycle’. As Coleridge complained, ‘a strange abuse has been made of the word encyclopaedia! It signifies, properly, grammar, logic, rhetoric, and ethics and metaphysics, which . . . formed a circle of knowledge. . . To call a huge unconnected miscellany of the omne scibile, in an arrangement determined by the accident of initial letters, an encyclopaedia, is the impudent ignorance of your Presbyterian book-makers’.21 Editors of encyclopaedias have been painfully aware of this problem since (at least) Chambers’s Cyclopædia (1728), and have sought to minimize the disruptive effect of the alphabetical order–disorder by means of methodic indexes, cross-references,22 differentiated micro-structures allotting more space to main entries, by using mixed methodic and alphabetical arrangements or by offering an historical presentation of knowledge (see Yeo, 1991). An alphabetized text breaks the linear and closed classificatory structure of a systematic presentation of knowledge, and substitutes it with an open structure (Rey, 1982, pp. 32–33). This implies a loss of coherence as related terms are dispersed throughout the entire encyclopaedia, and notions that should be understood in order to comprehend a term may happen to be placed in a different volume.23 The alphabetical order itself, however, contributes to hiding this lack of coherence (Rey, 1982, p. 104), as well as making it more difficult to grasp the choices and priorities of the editors, and rendering less obvious any gaps and inconsistencies. The list of entries, however, being freed from a more rigid structure, can be revised and expanded – which is precisely what happened to the entries on crises and cycles (see Section 1.1.2), and specific information can be more easily retrieved. By abandoning the linear structure of the argument, encyclopaedias ask

12 Daniele Besomi readers to construct their own reading path, in an active and critical way. Crossreferences and thematic indexes do not reinstate linearity, but supply some guidance in a web-like structure (Kilcher, 2007, pp. 79–80). Notably, the alphabetical structure may itself be rendered obsolete by the increasing diffusion of electronic reference works (Landau, 2001, p. 19).24

1.1.4 The encyclopaedic goal Dictionaries and encyclopaedias are planned from the outset with some purposes of rather different nature in mind. All have the explicit purpose of transmitting and making readily accessible knowledge, although there is a difference between informing (making known) and teaching (making comprehensible). Also, depending on the target readership (on which, see Section 1.1.5), the choice between the informative and the educational approaches will produce different kinds of articles – e.g. more attentive to the details or to a general perspective, respectively (Van Doren, 1962, pp. 23–24). Encyclopaedias also have an epistemological project – although this is often not explicitly expounded to the reader – guiding the way in which knowledge is organized. Some encyclopaedias of the Enlightenment were concerned not only with collecting knowledge and making it accessible, but also with organizing and systematizing it, in parallel with the attempts by philosophers such as Bacon, Leibnitz, Kant and Descartes to draw out the relationships between different branches of knowledge, and the taxonomic efforts of Linnaeus.25 Later attempts were not so ambitious,26 yet all encyclopaedic projects must lie on some epistemological premise. This is not the place to attempt a classification of the views guiding general-purpose or even economic encyclopaedias, but among the latter, two opposite stances are worth recording as an example of how different premises may shape form and contents of the articles they contain. On the one hand we have →Coquelin and Guillaumin’s Dictionnaire de l’économie politique (1852–1854), the very title of which was meant to indicate that there is one ‘true’ doctrine of economics, which admits of some shades of opinion but is clearly distinguishable from fallacious reasoning, and which is immutable and not subject to evolution except in some minor details (see Chapter 8). The implication of such a view is that each article depicts the conclusive (or virtually conclusive) doctrine on each subject. On the opposite side of the spectrum we find Lunghini’s Dizionario di economia politica (1982–1990), which starts instead from the opposite assumption that rather different, often not mutually compatible, economic doctrines coexist, each being the product of a history consisting in the development not only of analytical methods but also of worldviews, and that the concepts they develop, even if often designated with the same term, may have completely different premises, meaning and implications, so that dictionary entries must be essentially historical in their treatment.27 One may naively assume that encyclopaedias and dictionaries are essentially scholarly in their attitude, and therefore have no bias in favour of or against any philosophical perspective, ideology or school of thought (see e.g. Stover, 1962, p. 35). Although this is the case for most renowned reference works, the history of

Introduction 13 both general-purpose works and those especially devoted to economics or the social sciences proves that this is a delusion. Diderot and d’Alembert’s Encyclopédie criticized the government, satirized the Calvinist clergy and supported an atheistic materialism. Larousse’s Grand dictionnaire universel du XIXe siècle (1865–1890) was anti-clerical, the German Brockhaus was Protestant, while Herder’s Konversations-Lexikon (1854–1857) was Catholic.28 Some encyclopaedic works have even been directly commissioned by governments, such as the →Dizionario di politica (1940), edited by the Italian Fascist Party (see Lentini, 1999, pp. 258 and 270). Among social sciences dictionaries, some make explicit their standpoint in the title (→Klose’s Katholisches Soziallexikon, 1964, 2nd edition 1980, and →Herzog et al.’s Evangelisches Staatslexikon, 1987). Others do so in the prefaces. →Coquelin and Guillaumin’s Dictionnaire (1852–1854), for instance, upheld the viewpoint of the French Liberal school, as did its successor →Nouveau dictionnaire d’économie politique, edited by Say and Chailley (1891, p. vii) (see Chapters 8 and 12). Another example is the contrast between →Rotteck and Welcker’s Staats-Lexikon, which was inspired by liberal ideas (see Chapter 14), and the →Görres-Gesellschafts Staatslexikon, which was edited precisely with the intent of counterbalancing Rotteck’s. Elster, on the contrary, explicitly specified in the introduction that his →Wörterbuch der Volkswirtschaft was not partisan (Höhmann, 2001, pp. 190–191; see Chapter 19). The dictionaries dedicated to specific schools of thought, such as Marxism, Keynesian economics, social market economy and free-market economics (see Chapter 2, Section 2.6), are presumably sympathetic to their respective subjects. Other dictionaries do not explicitly declare their stance, and readers must seek (if they have the instruments for doing so) to understand it themselves. Two examples will suffice. →Napoleoni’s Dizionario di economia politica (1956), which uses throughout the Marxist method of criticism of political economy without needing to explain it explicitly in the PREFAZIONE, could be translated into Spanish under Franco’s regime with a reviewer emphasizing the ‘ecletic and liberal tendency’ (Ruiz Damiel, 1964, p. 128). The first edition of → The new Palgrave (1987) claimed to respect the multiplicity of economic views by means of multiple entries on the same subject under different titles, but was nonetheless found to be ‘tendentious’ and biased, in particular in favour of the Sraffian school (Stigler, 1988, pp. 1732–1733 and especially Blaug, 1988, dismissed as unfair by Milgate, 1992; for a discussion, see Bailey, 1994). Finally, being the product of commercial enterprises, most encyclopaedic works are subject to market constraints. All preliminary decisions concerning the size of the dictionary and target audience are a function of the expected marketability of the product, in turn depending on national conditions and on the times. Needless to say, this affects the possible length and the shaping of the contents of each individual entry, and is a factor to be evaluated when consulting an article.

1.1.5 The elected audience The aims of encyclopaedic enterprises are intimately related to the public to which the work is addressed. Their modern history begins with the Enlightenment, when

14 Daniele Besomi science was becoming increasingly important but still out of reach (most scientific works were still written in Latin) of a general reading public that was rapidly increasing in size. Scientific contributions, moreover, were also becoming more numerous, and it became progressively more difficult to keep track of all developments. So, on the one hand there developed dictionaries explaining the technical jargon (Layton, 1965), and encyclopaedias with an explicitly systematic educational aim. Science and technology were at the core of these enterprises, as witnessed by the subtitles of most of them in words such as ‘dictionary of science and art’ (among those already cited here, Chambers’s Cyclopaedia, the Britannica, Diderot and d’Alembert’s Encyclopédie). At first, these works were concerned with collecting and presenting knowledge in a manageable form, with the purpose of offering connections between subjects to make the starting point for further inquiries. They were thus primarily addressed to savants. In the early nineteenth century, a kind of reference work aimed at the general educated public became vastly diffused throughout Europe. The format of the ‘conversation-lexicon’,29 consisting in short anonymous articles written in a simple style, aimed at providing arguments for after-dinner conversations for the consolidating bourgeoisie, was made popular by the →Conversations-Lexikon published by Brockhaus (who acquired it from Löbel) under different titles from the first edition in 1796–1808. Quickly, similar works were published throughout Europe and beyond (either autonomously or adapted from the Brockhaus); in the English version, they often carried the adjective ‘popular’ (as distinct from ‘learned’, not as suitable to everybody), such as →Whitelaw’s Popular encyclopaedia: or, ‘Conversations lexicon’: being a general dictionary of arts, sciences, literature, biography, history, ethics, and political economy (1834–1842) or →Lieber’s Encyclopaedia Americana. A popular dictionary of arts, sciences, literature, history, politics and biography (1829–1835), based upon the 7th edition of the Brockhaus. Here, the choice of the public was explicit. The →Encyclopédie des gens du monde (1833–1844), for example, also written in the spirit of the Brockhaus, declares that it is addressed to the gens du monde (the bourgeois aspiring to knowledge), as distinct from the lower classes (le peuple) and from the savants who look to other encyclopaedias for a different kind of knowledge; it is aimed to a public with some time to spare, more numerous than the savants and less ignorant than the ordinary people (DISCOURS PRÉLIMINAIRE, pp. vi–vii). Meanwhile, some cheap encyclopaedias, aiming at a still wider audience, were also published, such as a number of elementary encyclopaedias in France, for instance Vanderest’s Encyclopédie élémentaire du XIXe siècle, ou Résumé des connaissances humaines . . . exposées dans un ordre qui fait ressortir essentiellement la philosophie des faits littéraires, historiques et scientifiques (Paris: L. Hachette, 1843, 1 vol. in 16°, p. 580) and the Penny Cyclopaedia (London: Knight, 1833–1846, 27 volumes and 2 supplements) – from which the articles on constitution, political economy, trade and commerce, administration and law which constituted →Long’s Political dictionary (1845–1846) were extracted. Specialized dictionaries had a specific kind of public. The earliest dictionaries of economics were dedicated to traders, merchants and occasionally to bankers and

Introduction 15 industrialists (see Chapter 2, Section 2.3). Social sciences dictionaries (Chapter 2, Section 2.5) were dedicated to a general public, such as ‘statesmen and citizens’, to take the subtitle of one of the first works of this kind, →Robinet’s Dictionnaire universel des sciences morales, économique, politique et diplomatique; ou bibliothèque de l’homme d’État et du citoyen (1777–1783). Before the institutionalization of economics, the public of dictionaries of political economy could not consist only of the few specialists on the subject, who could hardly have constituted a sufficiently solid market. Most works of this kind were thus also addressed to other categories of readers: those in charge of public or collective interests, who have no time for the methodical study of economics, and those who have occasionally studied economics and need handy replies to any problem that they may face (INTRODUCTION, →Coquelin and Guillaumin, Dictionnaire de l’économie politique, 1852, p. xiii; see Chapter 8); civil servants, merchants and capitalists (GLI EDITORI A CHI LEGGE, in →Boccardo’s Dizionario della economia politica e del commercio, 1857, vol. 1; see Chapter 11); the educated Germans who want to get rapidly acquainted with the basic views on the subject and want to form their own opinion, but also commerce chambers and economic associations (VORWORT, →Rentzsch, Handwörterbuch der Volkswirthschaftslehre, 1866, p. iv; see Chapter 14). Towards the end of the century, when the studies of economics were being institutionalized, a new kind of reader appeared on the scene: students. The first dictionary explicitly aimed to them seems to have been Piernas y Hurtado’s thin Vocabulario de la economía (1877, 192 pages), aimed at redefining terms for the classroom in order to attack the prevalent liberal optimism (Astigarraga et al., 2001, pp. 38–40). More ponderous was Palgrave’s Dictionary of political economy (1894– 1899; see Chapter 16), shortly followed by Elster’s Wörterbuch der Volkswirtschaft (1898; see Chapter 19). Soon students became a large and appetizable market; this, combined with the exponential growth of the literature, made it interesting to publish ready-made reference books for students. Indeed, they have become the main target of economic lexicography, at least in terms of the number of works published. The larger (and more expensive) of these works are meant to be bought by libraries; those meant to be sold to students are much smaller in size, and are therefore much more limited in scope. Similar to the latter are quick reference works addressed to the general public, such as newspaper readers. This specific genre has enjoyed a long and glorious tradition, beginning at least from Hübner’s Zeitungslexikon, first published in 1704 as Reales Staats- und ZeitungsLexikon (Leipzig: Gleditsch, p. 1284), renamed Reales Staats-, Zeitungs- und Conversations-Lexikon in the 4th edition, 1709, thus becoming the first work to explicitly denote itself as a conversations-lexicon, and going through 31 editions until 1828. During the twentieth century, some such dictionaries specialized in economics and a few of them were published by the economic editors of large newspapers. The first of these was explicitly addressed to newspaper readers and students (→Bower, A Dictionary of economic terms for the use of newspaper readers and students, 1905). In terms of effort, the major editorial enterprises are still the scholarly works addressed to academics and graduate students (such as →The new Palgrave (1987,

16 Daniele Besomi 2008), even if it nominally targets students) or, if addressed to a generalist public, the large works seeking contributions from well-known experts in their fields (such as the →International encyclopedia of the social sciences, 200830). This is the kind of work in which we are primarily interested in this volume.

1.1.6 Dictionaries and textbooks Ideally, ‘Dictionaries are instruments of self-teaching and they have all the characteristics of all didactic books: they contain definitions, they give information which is presented as the knowledge and the opinion of the community in general – as opposed to the knowledge and opinions of the lexicographer, and they give this information in an “objective”, undisputable way’ (Béjoint, 1994, p. 18). Although this expectation of objectivity is rather unwarranted, both for encyclopaedic works (see Section 1.1.4) and for textbooks and other teaching materials, there are indeed obvious similarities but also specific differences between these kinds of books. First, textbooks are by definition aimed at students, while dictionaries can, and often do, address a different readership, which may, or may not, include students. Second, while both dictionaries and textbooks are instruments of learning, textbooks are meant to guide the student through one or more courses, while dictionaries are works of reference on special subjects. This results in a different arrangement of the materials: while most encyclopaedic works are alphabetically ordered, textbooks have a linear structure, and are far more systematic in the presentation. Third, dictionaries’ fragmentation of knowledge is in contrast with textbooks’ effort to present an overall picture of the discipline’s problems, methods and results. This is amplified by the fact that textbooks are usually written by a single author, or a small group of authors, while the numerous collaborators of encyclopaedic enterprises only interact via the mediation of the editors.

1.1.7 A literary genre The features of specialized dictionaries and encyclopaedias outlined above deeply affect the style of articles included in such works, characterizing a specific genre of scientific literature. To begin with, articles are monographic and self-contained, meant to be read independently of the rest of the work; they are connected to the rest of the body of knowledge by the dictionary’s architecture by means of crossreferences. They normally include a definition of the concept to which they refer (we thus find, in the earliest entries on ‘crises’ in encyclopaedias, the very first tentative definitions of the term: see Chapter 6), sometimes also its etymology and more rarely the history of use of the term. Authorship of articles is normally expert and often authoritative – a feature which encyclopaedia makers started advertising by the early nineteenth century (see Yeo, 1991, p. 46), continuing until the most recent encyclopaedic productions, which highlight the presence of Nobel laureates among their contributors. Nowadays, we expect encyclopaedic articles to depict the state of consolidated knowledge at the time of writing, thus to lie in the rearguard rather than illustrating

Introduction 17 the latest tendencies of thought. But during most of the nineteenth century and also in the early part of the twentieth, encyclopaedias occasionally housed original pieces of research in many fields, including some articles later developed into textbooks or treatises (Yeo, 1991, p. 46) – Nassau Senior’s Outline of the science of political economy (1836), to cite an example from economics, consists in the article on POLITICAL ECONOMY for the Encyclopaedia metropolitana (1817–1845). Also, some articles on crises were either fully original (for instance, Ott’s, Chapter 10, or Roscher’s, Chapter 7), or contained innovative and interesting additions (for instance, Coquelin: Chapter 8), brought together the results of years of research (Spiethoff: Chapter 20) or summed up results recently published elsewhere in a much expanded form (Tugan-Baranovsky: Chapter 17), occasionally producing much clearer versions by eliminating unnecessary redundancies and improving the organization of the presentation (Juglar: see Chapter 12 and Dangel-Hagnauer, 2010). The latter feature reflects the fact that articles are assigned a limited number of pages, within a range depending on the dictionary’s overall planned size (which translates, for the entries on crises and cycles, from one or two paragraphs in the smallest dictionaries to several dozen pages in the largest ones). The author is thus compelled to be selective, focus only on the essential features, and supply within this space all the necessary information. This produces concise, systematic and synthetic expositions of the subject – whether an original piece of research or a compendium of the facts and shared knowledge about a topic.

1.2 DICTIONARY ARTICLES AND THE HISTORY OF ECONOMIC THOUGHT The features of the dictionary genre described above, joined with the production of both a myriad of smaller dictionaries aimed at students and laypeople – thus, highly influential in the diffusion of knowledge – and especially of a smaller but significant number of monumental reference works depicting the state of the art at their time, and sometimes even offering glimpses of research in the making (for a brief history of economic dictionaries, see Chapter 2), make encyclopaedic articles a particularly interesting source of documents for the history of economic thought. In general terms, the very fact that well-qualified (and sometimes excellent) authors agree to distil in a few self-contained pages aimed not only at specialists but also at a more generalist public everything they deem to be important concerning a subject is itself a sufficient reason of interest, even though the treatment is bound to be somewhat disconnected from the remainder of the body of knowledge. One can reasonably expect to find authoritative statements and good guides to the relevant literature, although perhaps not fully up to date and sometimes espousing one or another special viewpoint. More specifically concerning the subject of this book, crises and cycles, the features of the dictionary genre are productive of consequences. Some lie in the nature of each specific encyclopaedic article, and are explored in Part II of this volume,

18 Daniele Besomi where 30 such entries are discussed, summarized and analysed, and the dictionaries or encyclopaedias that house them and the author who wrote them are presented. Some of these – in particular Juglar, Tugan-Baranovsky, Mitchell, Spiethoff, Tinbergen – were undisputedly among the best authorities in the field at the time, and their entries clearly show it; some entries have been widely cited by contemporaries – Coquelin’s (as witnessed by Boccardo’s entries), Roscher’s, Wagner’s, Herkner’s and Spiethoff’s; some have so far remained unknown, in spite of their high quality, outside their country of origin, due to obvious language barriers – Tugan’s, Tinbergen’s, Konyus’s; one (Ott) remained unknown due to the outsider character of its author, but anticipates theoretical developments that took place only six decades later; and some are retrospectively rather disappointing, denying the systematic character and the relevance of the phenomenon at a time when major lines of research into it were developing – Macleod, Laveleye, and the entries in Palgrave’s Dictionary of political economy – their interest lying more in what they fail to say or explicitly deny than in what they affirm. While the merits of each of these entries will be discussed in their respective chapters, it is important to stress here that these articles, together with those that it has not been possible to discuss individually in this volume, also have a collective significance. The very first macro-structural decision of dictionary compilers (Section 1.1.3) concerns the choice of the concepts entering the word-list, which involves decisions as to both the inclusion or exclusion of a concept, and the appropriate name for it.31 There is nothing ‘natural’ and objective in such a decision, as the case of crises and cycles illustrates. Although crises have repeatedly affected the mercantile world at least since the early eighteenth century and have accordingly been discussed in the contemporary literature, the notion of ‘crisis’ – under any of the alternative names used to indicate troubled states of the economy, such as ‘distress’, ‘embarrassment’, ‘panic’, ‘mercantile delusion’, ‘glut’, ‘pressure’, ‘commercial revulsion’ or ‘convulsion’ – did not make it to any dictionary heading until the mid-1830s,32 when a number of dictionaries and encyclopaedias started carrying entries on ‘commercial crises’ or, more often, ‘commercial crisis’ in the singular (see Chapters 5 and 6). Although most crises had hitherto affected Britain and, to a lesser extent, the United States, these reference works were all French, while this notion was conspicuous for its absence in English-language dictionaries – including in particular →McCulloch’s 1832 Dictionary . . . of commerce and commercial navigation, notwithstanding the author’s numerous writings on the subject (e.g. McCulloch, 1826). This is not to say that there was no room for crises in dictionaries; they were, however, discussed parenthetically under different headings, such as BANK OF ENGLAND (in →Montefiore’s Commercial dictionary, 1803), CORN LAWS AND CORN TRADE and BANKS (ENGLISH PRIVATE AND PROVINCIAL) (in →McCulloch’s 1832 Dictionary), PAPER-MONEY – BANKS (McCulloch, in →Encyclopædia Britannica, 7th edition, 1838) or CREDIT (in Lieber’s →Encyclopaedia Americana, 1830). The recording of commercial crises as dedicated entries in dictionaries and encyclopaedias sanctions the acknowledgement of the importance of such phenomena, which at some point were recognized to be frequent and relevant enough to deserve

Introduction 19 a proper definition and contextualization within the body of economic knowledge – first in France, Germany and Italy, and at long last (slowly and timidly) also in the English language (see Chapter 6). At the time the first encyclopaedic entries on crises were published, the term ‘crisis’ itself was already predominant in the French literature to describe the phenomenon, and was therefore the natural and undisputed choice. After the 1837 crisis, it became the dominant term also in English, so that most entries published up to the 1920s were headed ‘crisis’ – often accompanied by the qualifier ‘commercial’, occasionally alone, or with the attribute ‘production’ (Roscher: see Chapter 7), ‘financial’ (Juglar and Des Essars, CRISES FINANCIÈRES ET COMMERCIALES, in →Say, Dictionnaire des finances, 1889) or ‘industrial’ (CRISE COMMERCIALE ET INDUSTRIELLE, in →Monbrion’s Dictionnaire universel du commerce, de la banque et des manufactures, 1838: see Chapter 6). As the focus on crises was progressively substituted by an emphasis on the entire cycle at the beginning of the twentieth century, dictionaries and encyclopaedias slowly adapted. At first they carried entries on ‘crises’ but explained that the ‘new theories of crises’ saw them as part of a cycle; then they started carrying entries on both crises and cycles; and finally, after the Second World War, most entries were titled ‘business cycles’ or ‘trade cycle’ (see Chapter 3, Sections 3.3.8–9 and Chapter 4, Section 4.5). The term ‘crisis’, however, persisted in the French language, where it was used more or less interchangeably with ‘cycle’, and has had a resurgence since the 1970s, when some dictionaries chose to reintroduce it in the word-list with the intent of emphasizing a distinction between crises and cycles (see Chapter 28). The issues at stake here are not purely terminological, but conceptual, theoretical, and to some extent involve worldview switches not devoid of political implications. Incorporating ‘crises’ as a distinct entry in encyclopaedias implies the recognition that such phenomena are not marginal and occasional, but affect the economic system at its core; this questions the idea that the economic system is self-adjusting – even if some writers of dictionary entries did their best to prove the opposite, the very fact of doing so revealing that the proposition denied was elsewhere being affirmed with sufficient insistence to call for a rejection. Substituting ‘crises’ with ‘cycles’ involves again a different kind of understanding of the working of the economic system, no longer in terms of sudden and violent cessation of an overspeculative phases, bringing the system back to ‘normal’ (as the prevalent explanation of crises during the nineteenth-century ran), but in terms of fairly gentle, regular and somewhat mechanical alternation of general ups and downs. Besides the inclusion or exclusion of ‘crises’ or of ‘cycles’ in the word-list, the very definitions of these phenomena add further specification to their understanding. As it turns out, these definitions show some variability through time and space, but tend to be characterized by national traditions.33 For instance, most French dictionaries during the nineteenth century defined crises as a generic disturbance to the smooth flow of affairs, while German dictionaries emphasized instead the disruption of the equilibrium of supply and demand – thus pointing at different potential culprits, and involving different theoretical relationships among the

20 Daniele Besomi various components of the economic system (see Chapter 3, Section 3.2.8.3 and Chapter 4, Section 4.3). The chronological unfolding of dictionary entries on crises and cycles naturally reflects, perhaps with some delay, the developments in the field and the attitude towards the subject, and is therefore broadly illustrative of its history. The very multiplying of entries concerned with these phenomena under different headings epitomizes the growing complexity of the subject and the increasing richness of its treatment. The appearance of some subheadings, such as ‘remedies to the cycle’, political business cycles (Chapter 25) or cycles of different length (Chapter 24), and the increased focus on mathematical approaches, or again the emphasis given to the history of the discipline (Chapter 4), show that research has firmly taken certain turns that after some point become non-renounceable. This is not to say that dictionaries capture everything. What they leave out is retrospectively also interesting, as indicating what, at the time, was not thought to be of sufficient relevance to be included. Whether by inclusion or by exclusion, dictionaries are perceived, by authors and readers alike, as a repository (or perhaps the repository, when talking of major dictionaries) in which to record, systematize and assess what should be known on the subject for contemporary (and perhaps also future) users – be they laypeople, students or scholars. And it is precisely as readers interested in such a legacy that in this volume we look at these dictionary entries, examining both the knowledge they want to transmit and what they fail to capture or decide not to convey.

1.3 STRUCTURE AND LIMITS OF THIS PROJECT As described in the preceding section, the bulk of this book (Part II) consists of 19 chapters, each devoted to one significant entry on cycles or crises in specialized dictionaries or encyclopaedias (or occasionally a small set of them), mostly written before the Second World War. Each chapter devoted to a single entry has a section explaining the features, scope and purpose of the dictionary or encyclopaedia; one presenting the author and the merits that led him34 to be selected for the task; one describing the entry; and one assessing its historical relevance and impact. As explained in Section 1.1.2, recent dictionaries have multiplied the number of cycle-related entries, sometimes juxtaposing inconsistent entries without placing them in context. For these works, a structuring of chapters as described above would not be appropriate. We have instead selected five recurring themes and surveyed their treatment across post-war dictionaries: long waves, political business cycles, real and equilibrium business cycles, non-linear business cycles, and crises. Significantly, there is no chapter dedicated to business cycles in general. Major dictionaries, in fact, either do not carry entries for this term and discuss instead cycles with one or more of the above qualifications, or camouflage specific business cycle approaches under one of the above headings; the definitions of ‘business cycles’ in recent dictionaries, whether major works or quick reference

Introduction 21 tools, are discussed in Chapter 3, Section 3.2.9, while the historical approaches to the subject are surveyed in Chapter 4. The first part of this book includes a brief history of dictionaries of economics and related subjects, a chapter on the semantics of cycles and crises, focusing in particular on the usage in encyclopaedic entries, and a general survey of the dictionary treatment of the history of doctrines of crises and cycles. Besides their obvious purpose of clarifying terminological issues in historical terms and, respectively, of examining and classifying the various readings of the history of the subject, these chapters are also designed to partially remedy an obvious limitation of this project. Space constraints have made it necessary to be selective in the choice of dictionary entries to be analysed in Part II, thus creating some regrettable gaps. In Chapter 3, the definitions of crises, cycles and other related terms given in the neglected dictionaries have also been considered, in order to reconstruct a full panoramic view of how the related notions have changed through time and across nations. This chapter also finds a place for the general notion of ‘business cycle’ (without specific qualifiers) emerging from post-war dictionaries and not otherwise surveyed in Part III. Equally important is the way in which dictionary contributors have dealt with the previous history of the subject (Chapter 4): while often not really illuminating the alleged subject of such reconstructions, the history of doctrines offered by a particular author is normally very informative on the author himself or herself, on the contributor’s perspective on the previous developments, and on the place in it where the writer believes his or her contribution belongs.

NOTES 1 For a list of titles of reference works concerning economics, see the general bibliography (Chapter 29, Section 29.2). 2 Encyclopaedias can thus be translated into other languages, while linguistic dictionaries cannot (Lara, 1989, p. 284; Béjoint, 1994, pp. 23 and 30). 3 ‘Dictionaries of proper names’, strictly speaking, supply encyclopaedic information, and belong therefore to the category of encyclopaedic dictionaries. 4 Some, however, characterize a lexicon as a dictionary with words arranged semantically rather than alphabetically (Béjoint, 1994, p. 15). 5 See, for instance, DICTIONARY and ENCYCLOPÆDIA in Encyclopædia Britannica, 2010; Lara, 1989; Rey, 1982, pp. 17–24; Béjoint, 1994, pp. 21–23; GLOSSARY, DICTIONARY, ENCYCLOPEDIA, LEXICON in Hartmann and James, 1998; Van Hoof, 1994, pp. 9–11; Green, 1996, pp. 1016 and passim. For a rejection of this (and any other) distinction between dictionaries and encyclopaedias, see Haimann, 1980 and 1982, contra Frawley, 1981. 6 The size of general dictionaries is normally measured by the number of entries (see e.g. Landau, 2001, pp. 28–32). Here we are interested in both depth and extension. 7 In Chapter 3 on the semantics of crises and cycles, however, reference is occasionally made also to the definitions given in ‘minor’ dictionaries. 8 Although Boccardo was referring to the fact that knowledge broken down to special articles cannot claim to represent (and therefore substitute for) the whole, his admission points to a recognized contradiction between the unifying methodological intent of general encyclopaedias and the disciplinary specialization of sectorial dictionaries (Gemelli, 1999, p. 135).

22 Daniele Besomi 9 The 2nd edition (2008) of the →New Palgrave features the following: CREDIT CYCLE; TRADE CYCLE; REAL BUSINESS CYCLES; KONDRATIEFF CYCLES; BUSINESS CYCLE MEASUREMENT; MONETARY BUSINESS CYCLE MODELS (STICKY PRICES AND WAGES); KUZNETS SWINGS; POLITICAL BUDGET CYCLES; POLITICAL BUSINESS CYCLES; GROWTH AND CYCLES; MONETARY BUSINESS CYCLES (IMPERFECT INFORMATION); CHAOTIC DYNAMICS IN ECONOMICS; CURRENCY CRISES; BANKING CRISES; CURRENCY CRISES MODELS; UNDERCONSUMPTIONISM; COBWEB THEOREM; GREAT DEPRESSION (MECHANISMS); GREAT DEPRESSION, MONETARY AND FINANCIAL FORCES IN; GREAT DEPRESSION; BANKRUPTCY, ECONOMICS OF; MULTIPLIER–ACCELERATOR INTERACTION. The 2nd edition of the International encyclopedia of the social sciences (2008) also carries several entries on the topic, including BUBBLES; BULL AND BEAR MARKETS; BUSINESS CYCLES, THEORIES; BUSINESS CYCLES, EMPIRICAL LITERATURE; BUSINESS CYCLE, REAL; BUSINESS CYCLE, POLITICAL; COBWEB CYCLES; ECONOMIC CRISES; DEPRESSION, ECONOMIC; RECESSION; GREAT TULIP MANIA; INTERNET BUBBLE; LONG WAVES; NONLINEAR SYSTEMS; OVERPRODUCTION; PANIC; PANICS; PONZI SCHEME; SOUTH SEA BUBBLE; STAGNATION; UNDERCONSUMPTION. 10 While carrying multiple entries under different titles on the same subject was part of the strategy of The new Palgrave for taking into account different views, the result often strikes one as inconsistent rather than catholic, due to the lack of contextualization. The same problem of contradictory entries failing to cross-refer to each other was pointed out by Blaug (1988, pp. 15–16) regarding other topics in The new Palgrave. 11 In the PRESENTAZIONE of his →Dizionario di economia politica (1982–1990), Lunghini explains that it is based on the premise that economics is a science that does not progress in a linear and cumulative way, with the newest contributions superseding the older theoretical approaches; each concept incorporates instead its own history. The microstructure reflects this approach: ‘The introduction to each entry supplies a preliminary definition of the concept. The first Part highlights its changing contents, its position and its momentum within each major epoch of the history of economic analysis: the classical economists, Marx, the neoclassical economists, Keynes, and the postKeynesians. Part 2 describes the current state of the art’ (vol. 1, pp. 10–11). The wordlist consists of only 40 subjects (ordered following a thematic rather than alphabetical arrangement), but each concept is discussed at great length – around 80 pages each. 12 Coquelin and Guillaumin (→Dictionnaire de l’économie politique, 1852–1854) seem to have been the first compilers to have decided to include in all entries a bibliography of the relevant writings on each subject matter (see Chapter 8). 13 Some reference works explicitly emphasize this distinction. Most famously, the Encyclopædia Britannica physically separated general treatises, large articles and short entries into distinct volumes – a methodic part, one dedicated to knowledge in depth, and one for quick reference (see below in this section, in particular note 18). Among economic dictionaries, →Brémond and Gélédan’s Dictionnaire économique et social (1981) announces in the title that it offers 100 thematic articles and 1,200 definitions. Without physically separating different kinds of entries, several (if not most) recent economic dictionaries allot different numbers of words for different typologies of entries. As the PREFACE to the first edition of →The new Palgrave (1987) explains, ‘there is obviously a rough and ready correlation between the size of entry and the importance which the editors attach to the person or subject concerned, but the correlation is very far from perfect’. 14 Occasionally, encyclopaedic works lack such structure. Wikipedia is an obvious case in point: although there are portals (with subportals) for specific disciplines (some, such as mathematics, are highly structured, while others, such as economics, more poorly so), ‘Each page in Wikipedia can be annotated with multiple categories, organized into a loose ontology of topics. However, any user can add or change a category assignment to any article or category. The resulting category structure is noisy, ill-

Introduction 23

15 16

17 18

19

20

21

22

formed, and difficult to make sense of’ (Kittur et al., 2009, p. 1509 and passim). The case of →Krünitz’s Ökonomisch-technologische Enzyklopädie is equally interesting. In spite of its title, this is the largest general-purpose encyclopaedia ever printed: 242 volumes, published between 1773 and 1858. The project grew inordinately, especially after Krünitz’s death, as new entries were added to the original word-list to update previously published entries with the new scientific discoveries. This lack of coherence induced the editors of the digital edition (www.kruenitz.uni-trier.de) to reorganize the materials, superimposing an extraneous system of classification: they used the Dewey decimal library classification system (Seifert, 2007). The time between planning and completion of an encyclopaedic work is likely to undermine the consistency of all large editorial projects, and not only in extreme cases such as Krünitz’s. See e.g. Béjoint, 1994, p. 30; Rey, 1982, p. 19. With the advent of the internet and the extreme facilitation of communications, authors often have chances to offer their services to compilers of encyclopaedias. Circular messages posted on mailing lists asking for contributors and suggestions of topics to be discussed are not exceptional. The editors normally make the final choice. In the Wikipedia experiment, however, articles are the result of anonymous collaborative (or competitive) writing. As a reaction, the editor of the 2nd edition of the →International encyclopedia of the social sciences (2008) emphasizes that all its articles are signed and include the identification of authors – the ‘experts’, as opposed to ‘popular’ authorship – as part of the vision of the new edition (Darity, INTRODUCTION, pp. xi, xiii, xv). General equilibrium, 1989; Finance, 1989; The invisible hand, 1989; Capital theory, 1990; Marxian economics, 1990; Money, 1989; Problems of the planned economy, 1990; Time series and statistics, 1990; Social economics, 1989; The world of economics, 1991. This feature was introduced since the first edition (1768–1771). Since its 15th edition (1952, revised 1985, currently under revision), the Encyclopædia Britannica is physically divided into three sections: the methodic Propædia, or Outline of knowledge; the Micropædia, or Ready reference and index; and the Macropædia, or Knowledge in depth. In the AVANT-PROPOS to Perroux’s volume, Gaston Berger explains that the encyclopaedia ‘is not a juxtaposition of monographs where each author has written his small part without caring much of the others. The encyclopaedia aims at making the reader understand; for this, it engages in choosing the viewpoints from which one may grasp the entirety and take hold of the unity [of knowledge]’ (pp. 902–908). In their presentation of the dictionary, the authors explain that ‘each article constitutes a whole, collecting elements of information often dispersed in traditional works. Historical data and economic analysis are often compared. Microeconomic and macroeconomic approaches are discussed together. . . . All the elements that contribute to the understanding of a phenomenon are reunited within the same article. This approach enables us to unify knowledge and better understand the connections. It corresponds to the natural movement of thought which suggests that one looks for information in the perspective of the problem to be solved. The grouping together by themes enables the reader to perceive more immediately the problems related to those themes, and the comparison of different problems invites the reader to ponder more actively on the consistency of each current of thought’ (PRÉSENTATION, in Brémond and Gélédan, →Dictionnaire des théories et mécanismes économiques, 1984, p. 6). Coleridge, letter to Robert Southey, July 1803, in Coleridge, 2000, p. 956. Coleridge authored in 1817 the (no longer extant) prospectus of the Encyclopaedia metropolitana, which aimed at reintroducing a rational arrangement of the articles in a ‘methodical compendium of human knowledge. See e.g. Yeo, 1991, pp. 34–39. Cross-references are part of the codes of all dictionaries. They lie both at the micro level, as they connect words used in the text of the entry to the article discussing them, and at the macro level, as they connect the entry heading with other concepts related to it (Rey-Debove, 1971, p. 59, and more in detail, 1989).

24 Daniele Besomi 23 On these and other difficulties, noted by Coleridge, see Yeo, 1991, pp. 39–40. 24 While electronic editing offers the chance of structuring the materials at hand along multiple dimensions, one of the two dictionaries available online (The new Palgrave) is rather disappointing, while the other, the Gablers Wirtschaftslexikon, has opted for a structure emerging from the network of links between entries: see Section 2.4.3. 25 Scholarship diverges on the relative importance of this issue. Cernuschi (1996), for instance, places the ‘tree of knowledge’ at the centre of Diderot’s organizing effort, while Yeo maintains that the systematic classification of the sciences ‘was not the dominant impetus or the central organizing element of the encyclopaedic project’ (1991, p. 27). 26 See, however, among the encyclopaedias discussed in this volume, Berthelot’s Grande encyclopédie, 1885–1892 (Chapter 15). 27 See note 11 for the implications of this assumption for the microstructure of the entries. An historical approach (though not as systematically pursued) is also explicitly sought by The new Palgrave (PREFACE to the first edition, 1987). 28 ENCYCLOPÆDIA, in Encyclopædia Britannica, online version June 2010; see Green, 1996, pp. 14–15 and Chapter 15, for different biases affecting dictionaries, in the form e.g. of the exclusion of words, or prescriptivism, in particular in deference to political correctedness. 29 The first work of this kind, however, was published early in the eighteenth century by the publisher Johann Friedrich Gleditsch in Leipzig with a preface by Johann Hübner, under the title Reales Staats- und Zeitungs-Lexicon Worinnen sowohl die Religionen und Orden, die Reiche und Staaten, Meere, Seen, Flüsse, Städte, Vestungen, Schlösser, Häfen, Berge, Vorgebürge, Pässe, Wälder und Unterschieder der Meilen, die Linien deutscher Häuser, die in verschiedenen Ländern üblichen Ritter-Orden, ReichsTäge, Gerichte Civil und Militair-Chargen zu Wasser und Lande, Müntzen, Maß und Gewichte, die zu der Kriegs-Bau-Kunst, Artillerie, Feld Lägern, Schlacht-Ordnungen, Schiffahrten, Unterschied der Schiffe, und derer darzu gehörigen Sachen gebräuchlichen Benennungen, als auch Andere in Zeitungen und taglicher Conversation aus allerhand Sprachen bestehende Termini Artis, denen Gelehrten und Ungelehrten zu sonderbarem Nutzen klar und deutlich beschrieben werden (1704). It went through 31 editions by Gleditsch, the latest of which was published in 1824–1828, and through a number of republications and translations by other publishers. 30 The previous edition of the →International encyclopedia of the social sciences (edited by Sills, 1968) was addressed to ‘serious scholars’ (most likely to look up articles in fields other than their own) and students (expected to look up topics in their own field) (Sills, 1962, pp. 31–32). 31 For a generous sample of the crises-related entries in dictionaries, surely including most of the articles of some length in the main European languages, see the Index of entries cited in this volume. 32 The medical meaning of ‘crisis’ was, of course, previously recorded by general encyclopaedias and medical dictionaries. 33 National traditions in the understanding and in the way of approach to the subject thus overlap with national traditions in the use and diffusion of the dictionary literature (Section 1.2), and with the national tradition in the making of encyclopaedias (Meschonnic, 1996, p. 22). 34 Among writers on this subject, women seem to be represented even worse than in economics generally; it seems that none authored encyclopaedia articles on crises before the Second World War.

Introduction 25 REFERENCES Astigarraga, J., Zabalza, J. and Almodovar, A., 2001, Dictionaries and encyclopaedias on political economy in the Iberian Peninsula (18th, 19th and 20th centuries), Storia del Pensiero Economico, 41, pp. 25–63. Bailey, R. E., 1994, A voyage round economics: the new Palgrave dictionaries of economics, and money and finance, Economic Journal, 104: 424, May, pp. 660–677. Béjoint, H., 1994, Tradition and innovation in modern English dictionaries (Oxford: Clarendon Press). Blaug, M., 1988, Economics through the looking glass. The distorted perspective of the new Palgrave dictionary of economics (London: Institute of Economic Affairs). Cernuschi, A., 1996, L’arbre encyclopédique des connaissances. Figures, opérations, métamorphoses. In R. Schaer (ed.), Tous les savoirs du monde. Encyclopédies et bibliotèques, de Sumer au XXIe siècle (Paris: Bibliothèque Nationale de France / Flammarion), pp. 377–382. Coleridge, S. T., 2000, Collected letters of Samuel Taylor Coleridge, edited by L. Griggs, Vol. 2, 1801–1806 (Oxford: Oxford University Press). Dangel-Hagnauer, C., 2010, Clément Juglar on commercial crises: the dictionary articles, Research in the history of economic thought and methodology, 28A, pp. 97–113. Frawley, W., 1981, In defense of the dictionary: a response to Haiman, Lingua, 55, pp. 53–61. Gemelli, G., 1999, Enciclopedie ed enciclopedisti d’oltre Oceano tra l’età di Hoover e la guerra fredda. In G. Gemelli (ed.), Enciclopedie e scienze sociali nel XX secolo (Milan: FrancoAngeli), pp. 135–186. Green, J., 1996, Chasing the sun. Dictionary makers and the dictionaries they made (New York: Holt). Haimann, J., 1980, Dictionaries and encyclopedias, Lingua, 50, pp. 329–357. Haimann, J., 1982, Dictionaries and encyclopedias again, Lingua, 56, pp. 353–355. Hartmann, R. R. and James, G., 1998, Dictionary of Lexicography (London: Routledge). Höhmann, D., 2001, Opere enciclopediche e dizionari specialistici in campo economico nell’area di lingua e cultura tedesca (dal Settecento ad oggi), Storia del Pensiero Economico, 41, pp. 181–212. Kilcher, A. B., 2007, Theorie der alphabetisierten Textes. In P. Michel, M. Herren and M. Rüesch (eds), Allgemeinwissen und Gesellschaft. Akten des internationalen Kongresses über Wissenstransfer und enzyklopädische Ordnungssysteme, vom 18. bis 21. September 2003 in Pragins (Aachen: Shaker Verlag), pp. 75–94. Kittur, A., Chi, E. H., and Suh, B., 2009, What’s in Wikipedia? Mapping topics and conflict using socially annotated category structure. In Proceedings of the 27th international Conference on Human Factors in Computing Systems (Boston, MA, USA, 4–9 April, 2009) (New York: ACM), pp. 1509–1512. Landau, S. I., 2001, Dictionaries: the art and craft of lexicography (Cambridge: Cambridge University Press, 2nd edition). Lara, L. F., 1989, Dictionnaire de langue, encyclopédie et dictionnaire encyclopédique: le sens de leur distinction. In F. J. Hausmann, O. Reichmann, H. E. Wiegard and L. Zgusta (eds), Dictionaries. An international encyclopedia of lexicography (Berlin, New York: Walter de Gruyter), pp. 280–287. Lasswell, D. D., 1936, The Encyclopaedia of the Social Sciences in review, International Journal of Ethics, 46: 3, April, pp. 388–396. Layton, D., 1965, Diction and dictionaries in the diffusion of scientific knowledge: an aspect

26 Daniele Besomi of the history of the popularization of science in Great Britain, British Journal for the History of Science, 2: 7, pp. 221–234. Lentini, O., 1999, L’Encyclopaedia of the social sciences e il Dizionario di politica. In G. Gemelli (ed.), Enciclopedie e scienze sociali nel XX secolo (Milan: FrancoAngeli), pp. 253–287. McCulloch, J. R., 1826, Commercial revulsions, Edinburgh Review, LXXXVII, June, pp. 70–93. Meschonnic, H., 1996, L’encyclopédie sortant de son mot pour se voir. In R. Schaer (ed.), Tous les savoirs du monde. Encyclopédies et bibliothèques, de Sumer au XXI e siècle (Paris: Bibliothèque Nationale de France/Flammarion), pp. 19–23. Milgate, M., 1992, Reviewing the reviews of the New Palgrave, Revue Européenne des Science Sociales, XXX, pp. 279–312. Rey, A., 1982, Encyclopédie et dictionnaires (Paris: PUF). Rey-Debove, J., 1971, Étude linguistique et sémiotique des dictionnaires Français contemporains (Le Hague and Paris: Mouton). Rey-Debove, J., 1989, Les systèmes de renvois dans le dictionnaire monolingue. In H. E. Wiegard and L. Zgusta (eds), Dictionaries. An international encyclopedia of lexicography, Vol. 1 (Berlin and New York: de Gruyter), pp. 931–937. Rosa, G., 1857, Dizionario della economia politica e del commercio tanto teorico come pratico del Professor Gerolamo Boccardo, Archivio storico italiano, N.S. V: 2, pp. 114–132. Ruiz Damiel, S., 1964, [Review of] Napoleoni (Claudio) Diccionario de economía política, Moneda y crédito, 88, March, pp. 128–130. Seifert, H.-U., 2007, Dewey meets Krünitz. A classificatory approach to lexicographic material. In P. Michel, M. Herren and M. Rüesch (eds), Allgemeinwissen und Gesellschaft. Akten des internationalen Kongresses über Wissenstransfer und enzyklopädische Ordnungssysteme, vom 18. bis 21. September 2003 in Pragins (Aachen: Shaker Verlag), pp. 95–104. Sills, D. L., 1962, The New Encyclopedia of the Social Sciences, American Behavioral Scientist, 6: 1, September, pp. 31–34. Stigler, G. J., 1988, Palgrave’s Dictionary of Economics, Journal of Economic Literature, 26: 4, December, pp. 1729–1736. Stover, C. F., 1962, Change and rationality in encyclopedism, American Behavioral Scientist, 6: 1, September, pp. 35–38. Van Doren, C., 1962, The idea of an encyclopedia, American Behavioral Scientist, 6: 1, September, pp. 23–26. Van Hoof, H., 1994, Petite histoire des dictionnaires (Louvain-la-Neuve: Peeters). Yeo, R., 1991, Reading encyclopedias: science and the organization of knowledge in British dictionaries of arts and sciences, 1730–1850, Isis, 82: 1 March, pp. 24–49.

2

A brief history of economic dictionaries An essay in bibliography Daniele Besomi

2.1 INTRODUCTION So far, no complete and detailed history of economic dictionaries has been compiled, in spite of the pervasive usage of such reference tools by laypeople, students and researchers. While the large number of such publications in different languages may make the picture appear confused, it is nonetheless possible to recognize some patterns and attempt a preliminary classification. This is the aim of the present chapter. It relies on the extensive bibliography of economic dictionaries given in Chapter 29, compiled through a systematic search of the catalogues of the national libraries and collective OPACs of several countries, which has led to the listing of the full bibliographic information concerning some 1,160 editions of 650 titles.1 This does not guarantee completeness: in the languages of which I do not have any understanding I have almost surely missed much more than I could find; on the other hand, for German, Italian, French and English, and perhaps also Spanish and Portuguese, I am fairly confident that I have captured by far the largest part of the items. The following Sections 2.2 to 2.7 offer a systematization of these materials, describing the major dictionaries classified by their scope, presented in chronological order. Within the two largest groups of dictionaries considered – those concerned with economics and with the social sciences – it has been possible to recognize different traditions related to their languages. Section 2.8 briefly illustrates these features by means of diagrams constructed using the data concerning size, date of publication and language drawn from the Bibliography.

2.2 ECONOMICS AND PRACTICAL ARTS The first dictionary qualifying itself as ‘economic’ was →Chomel’s Dictionnaire oeconomique, first published in 1709 as a folio volume of 1,040 pages. The abbreviated title, however, is deceptive. The Dictionnaire was concerned with all the means of increasing one’s wealth, health and well-being, the best way of breeding all sorts of domestic animals from sheep to silkworms, gardening, botany, the

28 Daniele Besomi fabrication of soap and the weaving of cotton, the trade of horses and other animals, and, in brief, everything that a merchant, manufacturer, banker, magistrate and gentilhomme should know to become richer – all arranged in alphabetical order. Dictionaries like Chomel’s, focusing on practical arts, enjoyed some popularity during the eighteenth and early nineteenth centuries. Chomel’s went through five augmented editions, the last of which was published in 1767, witnessing its perceived usefulness. Similarly, →Zincke’s Allgemeines oeconomisches Lexicon, a 3,000-page work, was re-edited six times between 1731 and 1800. Of much larger size was →de Félice’s Encyclopédie oeconomique ou système général I° d’oeconomie rustique, . . . II°. d’oeconomie domestique. . . III°. d’oeconomie politique, published in 1770–1771 in 16 volumes; this is the first work explicitly containing ‘political economy’ in its title, but it was also mainly concerned with agriculture and home economics. The last work of this kind was →Lübeck’s Allgemeines ökonomisches Lexikon, published in 1812. Equally deceptive in its title is →Krünitz’s Oekonomische Encyklopädie. Published in 242 volumes between 1773 and 1858, notwithstanding its subtitle allgemeines System der Staats- Stadt- Haus- und Landwirthschaft (general system of state, city, home and agrarian economics), it was a general-purpose encyclopaedia – the largest ever published. An excerpt in 34 volumes, titled Auszug aus des J. G. Krünitz ökonomisch-technologischer Encyklopädie, was edited by →Schütz and others between 1786 and 1830.

2.3 COMMERCIAL, BUSINESS AND FINANCIAL DICTIONARIES Also in the eighteenth century there began the publication of a number of commercial dictionaries, which continued throughout the nineteenth century. The first of the kind was →Savary’s successful Dictionnaire universel de commerce. First published posthumously in 1723 (2 volumes, almost 4,000 columns, plus a supplement of about 1,300 columns), it went through a reprint (1726), a second edition incorporating the supplement in 1741, a third enlarged edition in 1741–1742, a fourth edition incorporating materials from Diderot’s Encyclopédie in 1759–1765, and a ‘portable’ version of the latter in 1761–1762. It was translated into German as Allgemeine Schatz-Kammer der Kaufmannschafft (1741–1743), and into Italian as Dizionario di commercio dei signori Fratelli Savary (1770). Postlethwayt prepared an expanded English translation under the title →Universal dictionary of trade and commerce, translated from the French of the celebrated Monsieur Savary, inspector general of the manufactures for the King, at the Custom-house of Paris: with large additions and improvements, incorporated throughout the whole works; which more particularly accommodate the fame to the trade and navigation of these Kingdoms, and the laws, customs, and usage, to which all traders are subject, first published in two volumes in 1751–1755 and further re-edited until 1774. In the eighteenth century we also have →Ludovici’s Eröffnete Akademie der Kaufleute, oder vollständiges Kaufmanns-Lexicon (1752–1756, 2nd edition

A brief history of economic dictionaries 29 1767–1768) in Germany; in Britain there were published →Rolt’s New dictionary of trade and commerce (1756; 2nd edition 1761; 3rd edition by Schedel in 1797– 1801) and →Mortimer’s New and complete dictionary of trade and commerce (1766–1767); while in France we have →Lacombe’s Dictionnaire du citoyen, ou Abrégé historique, théorique et pratique du commerce (1761), →Baudeau’s Encyclopédie méthodique: Commerce (1783–1784) – part of Pancoucke’s Encyclopédie méthodique, a thematic rearrangement of Diderot and d’Alembert’s Encyclopédie – and →Peuchet’s Dictionnaire universel de la géographie commerçante (1798–1799). In the first three decades of the nineteenth century a few more commercial dictionaries were published, among them the first explicitly pocket dictionary related to economics (→Crosby’s merchant’s and tradesman’s pocket dictionary, 1808; 2nd edition 1810) and also → [Buisson]’s Dictionnaire universel de commerce, banque, manufactures, douanes, pêche, navigation marchande (1805) and →Mortimer’s General dictionary of commerce, trade and manufactures2 (1810; 2nd updated and enlarged edition 1819 by Dickinson; 3rd edition, 1823). Later, →Monbrion’s Dictionnaire universel du commerce, de la banque et des manufactures (1838–1839), →Fort’s Neuestes Universal-Lexicon der gesammten kaufmännischen Wissenschaften, für Kaufleute, Fabrikanten u. überhaupt jeden Geschäftsmann (1852; 4th edition, 1864–1865) and →Cerboni’s Enciclopedia di amministrazione, industria e commercio (1891–1905, five volumes) started enlarging the scope of these dictionaries by including other sorts of entrepreneurial activities, in particular business and banking, witnessing with some delay the transition from a mercantile to an industrial economy. In the middle part of the nineteenth century a few more titles were published, but the scene was mainly occupied by →McCulloch’s Dictionary, practical, theoretical, and historical, of commerce and commercial navigation: illustrated with maps and plans, first published in 1832 and subsequently updated, reprinted, supplemented, translated and adapted many times in several countries and languages, including after the author’s death – the last time in 1882. McCulloch’s dictionary inspired the French publisher Guillaumin to produce his own →Encyclopédie du commerçant. Dictionnaire du commerce et des marchandises (1837–1839; 1841; augmented edition by Granges, 1855). Although it incorporated a hundred or so articles translated from McCulloch, Guillaumin attempted to produce an original work. This was successful enough to establish his publishing house on solid foundations and enable him to become the most important publisher of economic writings in nineteenth-century France. Although commercial in its title, this dictionary also contained a number of entries clearly denoted as belonging to ‘économie politique’. The discipline was explicitly referred to in the title of another commercial dictionary later published by Guillaumin, the →Dictionnaire universel théorique et pratique du commerce et de la navigation, marchandises: produits naturels et produits fabriqués . . . Géographie commerciale: état, nature et mouvement du commerce de chaque place . . . Droit commercial terrestre et maritime . . . Navigation . . . Marine marchande . . . Douanes . . . Economie politique appliquée (1859–1861; 1863). Although not explicitly mentioned in the title or

30 Daniele Besomi explicitly demarcated, some entries included by McCulloch had a similar scope. In CORN LAWS AND CORN TRADE, for instance, McCulloch aimed at ascertaining ‘the principles which ought to pervade this department of commercial legislation’ (1832, 377 pages). These commercial dictionaries thus partly overlapped in scope the first dictionaries specifically dedicated to political economy, which were being published more or less at the same time (see Section 2.4.1 below). Towards the end of the nineteenth century, commercial dictionaries eventually gave way to business dictionaries of a more general scope. The first to drop altogether the reference to ‘commerce’ was →Pitman’s business man’s guide: a handbook for all engaged in business, a small reference work of about 300 pages, which went through 14 editions from 1903 to 1967. Its first compiler, Slater, also edited a larger work for the same publisher, →Pitman’s commercial encyclopædia and dictionary of business: a reliable and comprehensive work of reference on all commercial subjects, specially designed and written for the busy merchant, the commercial student and the modern man of affairs, in four volumes, which first appeared in 1912–1913 (4th edition in two volumes in 1930). Most business dictionaries, however, especially those published after the Second World War are small – less than 600 pages (and often less than 300). Only in recent years have a few major multi-volume reference books been produced: →Malonis’s Encyclopedia of business (2000), →Kaliski’s Encyclopedia of business and finance (2001; 2nd edition, 2007), →Hillstrom’s Encyclopedia of small business (2002; 3rd edition, 2007) and →Wankel’s Encyclopedia of business in today’s world (2009). Meanwhile, banking and finance dictionaries followed a history parallel to, and occasionally intersecting with, that of commercial and business dictionaries. It began in the eighteenth century, with three enterprises in French. The first specimen was a small (421 pages) →Dictionnaire des finances, published in 1727 by Jones in Paris. It was followed by the successful →La banque rendue facile aux principales nations de l’Europe, compiled by Pierre Giraudeau, which contained a short glossary of banking terms: Recueil en forme de dictionnaire contenant l’explication de plusieurs termes de commerce, de terre, de mer & de banque. The first two editions (1741 and 1754) were published in Geneva, the later ones (from 1769 to 1799) in Lyon. Much more ponderous was the →Dictionnaire encyclopédique des finances, compiled in three volumes by Rousselot de Surgy (1784–1787) as part of Panckoucke’s Encyclopédie méthodique. The next work specifically dedicated to finance, and the first in English, came almost a century later: →A counting-house dictionary compiled by Bithell (a small volume of about 300 pages, in three editions between 1882 and 1903), while the subsequent →Dictionnaire des finances, edited by Léon Say and published in two volumes in 1889–1894, was surely more scholarly. In the early twentieth century there followed →Weston and Crew’s Dictionary of economic and banking terms (four editions between 1913 and 1937, about 250 pages) and →Munn’s Encyclopedia of banking and finance in English (1st edition, 1924, 600 pages; 9th edition under the title The St. James encyclopedia of banking and finance in 1993 in three volumes); in Italian there were →Monetti’s Enciclopedia di

A brief history of economic dictionaries 31 amministrazione, ragioneria, commercio, banca, borsa (1933–1944, in five volumes), →D’Andrea’s Piccola enciclopedia di banca e borsa (1934, 350 pages), and the →Enciclopedia bancaria, edited by the Confederazione Fascista delle Aziende del Credito e della Assicurazione (two volumes, 1942); →FrançoisMarsal’s Encyclopédie de banque et de bourse (five volumes, 1928–1930) in French; and →Palyi and Quittner’s Handwörterbuch des Bankwesens in German (four editions between 1933 and 1999, increased from 600 to 1,700 pages). In the post-war years, financial dictionaries multiplied, as did all other works of this kind (see Section 2.8, Figures 2.1–2.4). A number of them are small, but some are worth citing. The →Bank-Lexikon was first published in 1953 under the editorship of Müller and Löffelholz as a volume of just under 1,000 pages. Eventually, it had more than doubled by the 10th edition in 1988, titled GablerBank-Lexikon, but shrank again in subsequent editions, the latest of which (the 13th) was published in 2002. →Bernard and Colli’s Dictionnaire économique et financier was also revised several times, from the 1,100 pages of the 1st edition in 1975 to the 1,500 pages of the 6th edition in 1996; an abridged edition also exists, titled →Vocabulaire économique et financier (1976, 415 pages). →Büschgen’s Handwörterbuch der Finanzwirtschaft (1976; 1990) was resumed as →Gerke’s Handwörterbuch des Bank- und Finanzwesens, which had two editions, 1995 (2,122 pages) and 2001 (2,444 pages). Also voluminous, but not re-edited, was the →The new Palgrave dictionary of money and finance edited by Newman, Milgate and Eatwell (three volumes, 2,500 pages, 1992; corrected reprint, 1994). Smaller, but regularly updated, is →Villeneuve’s Dictionnaire technique de la bourse et des marchés financiers, which started publication in 1990 with 233 pages and has grown to the 876 pages of the 8th edition in 2010.

2.4 POLITICAL ECONOMY AND ECONOMICS The production of specialized dictionaries of economics (or dictionaries of political economy, following the terminology current during most of the nineteenth century 3) began in the mid-1820s. During the nineteenth century an abundant handful of highquality works were published – a small enough crop to permit a full description in Section 2.4.1. Section 2.4.2 illustrates how the production of dictionaries slowed down in the first half of the twentieth century to explode after the 1960s with a myriad books of this kind aimed at students and laypeople; the publication of some extensive and high-quality reference works also resumed in the second half of the century (see Section 2.8, Figure 2.1).

2.4.1 The nineteenth century The first dictionary fully dedicated to political economy was →Ganilh’s Dictionnaire analytique d’économie politique (1826; Spanish translation, 1827; 1834), the work of one man. One of its purposes was educational. Ganilh argued that while treatises can scare off most readers, intelligent laypeople may be introduced to the discipline

32 Daniele Besomi by dictionary articles presenting each subject with clarity and simplicity while showing the connections between topics by means of cross-references. ‘Books have made dictionaries, and dictionaries induce the study of books’ (1826, p. xxv). The second purpose echoes the encyclopaedic project of Diderot and d’Alembert. As the Encyclopédie showed how sciences are related to each other and illustrated their analytical and synthetic relationships, thus presenting them in their systematic relationship, the special encyclopaedic dictionaries ‘are for each science what the universal dictionary has been for the universality of sciences’. Dictionaries are therefore not only the best way of propagating a science, but also the best way of accelerating their progress and helping them to reach their highest degree of perfection (pp. xxvi–xxvii). Ganilh’s work was followed by →Sandelin’s Répertoire général d’économie politique ancienne et moderne, published in six volumes between 1846 and 1848. Strictly speaking, this is not a pure dictionary, but rather a collection of extracts from various writings of economists on specific subjects alphabetically organized in the form of a dictionary; the articles thus lack the self-containment that characterizes the genre. The first economic dictionary compiled with modern criteria is →Coquelin and Guillaumin’s Dictionnare de l’économie politique. First published in two volumes in 1852–1853, and reprinted almost identically in 1854, 1864 and 1873, this work was very influential. Some articles were translated into Italian by Francesco Ferrara for his Biblioteca dell’economista, almost 40 entries of the original dictionary were translated and incorporated into Lalor’s Cyclopaedia of political science; other dictionaries frequently cited it; contemporaries expressed positive judgements (Jevons, for instance, described ‘Guillaumin’s excellent Dictionnaire de l’économie politique’ as ‘on the whole the best work of reference in the literature of the science’, although he criticized it for not mentioning Cournot: Jevons, 1879); and it is found to be ‘still useful today’ (De Vivo, 2006, p. 121). Indeed, a cursory internet search shows several hundred citations of entries from the dictionary. Its purpose was ambitious: systematizing the ultimate truths that emerged from the ‘ocean of contradictory doctrines’, taking care that in spite of the shades of opinion ‘the same general doctrine prevailed’ so that the dictionary ‘could serve as a guide to the reader’. For this reason, the title Dictionnaire de l’économie politique was chosen, in contrast to Ganilh’s Dictionnaire d’économie politique, with the article indicating uniqueness. Particular care was devoted to the biographical and bibliographical part, with the explicit aim of providing a complete bibliography of the subject (Guillaumin, PRÉFACE to the Dictionnaire, 1853; see Chapter 8). Next came →Boccardo’s Dizionario della economia politica e del commercio, first published in four volumes in 1857–1863, and later updated in two larger volumes in 1875–1877 and 1881–1882. Meanwhile, Boccardo also edited the 6th edition of the Nuova enciclopedia italiana, a general-purpose encyclopaedia in 25 volumes, 1875–1888. Boccardo’s purpose was similar to Ganilh’s, as he saw dictionaries as ‘the most efficacious means for propagating knowledge’ to practical, busy people who needed a guide to their business and at the same time wanted to

A brief history of economic dictionaries 33 learn about some aspects of the subject without being forced to read entire treatises. He seems to have found a hostile environment for such an enterprise, as he had to defend it from the criticism levelled against the presentation of a parcelled (and by its nature disordered) view of the knowledge of the subject (pp. vii–ix). Reviewing other dictionaries, Boccardo found McCulloch’s lacking in theoretical depth, and Coquelin and Gillaumin’s as suffering an excessive focus on theoretical principles (entry DIZIONARI ECONOMICI E COMMERCIALI). The latter, moreover, being written by several authors, incorporated some inconsistencies, to avoid which Boccardo wrote his Dizionario single-handedly. Nevertheless, he borrowed heavily from Coquelin and Guillaumin (see Chapter 11). The first English →Dictionary of political economy was initiated, and entirely written, by Macleod, but publication was aborted at letter C (1863). The publication of an English dictionary was welcomed with interest and appreciation in Britain. It carried several biographical and bibliographical entries, while the remainder of the articles focused mainly on currency and banking issues (see Chapter 13). Next in line was the German →Handwörterbuch der Volkswirthschaftslehre, edited by Rentzsch (1866, 2nd edition, 1870). Explicitly missionary, it aimed at spreading Manchester liberalism in Germany. It was addressed to scholars, to whom it offered a comprehensive view of economic theories as a means towards problem-solving; to economic corporations; and to social scientists, for whom the Handwörterbuch would be a reference work (see Chapter 14). Spain also had a dedicated dictionary: the thin →Vocabulario de la economía (192 pages), an attack on liberal optimism aimed at the classroom (the first of this kind), compiled by Piernas y Hurtado in 1877 (Astigarraga et al., 2001, pp. 38–40). The next major dictionary of political economy was →Say and Chailley-Bert’s Nouveau dictionnaire d’économie politique, first published in two volumes in 1891–1992, enlarged with a supplementary volume in 1897 and re-edited in 1896– 1900. It was intended to supersede the outdated Coquelin and Guillaumin, and to remedy some problems affecting it, in particular the lack of cross-references, which isolated the various entries, and the excessive number of collaborators, which opened the dictionary to contradictory statements. Say and Chailley thus reduced the number of contributors, assigned homogeneous groups of entries to the same writer, and insisted that matters of doctrine (‘our doctrines are those of the Liberal school’) were cleared in advance with the editors (Chailley, INTRODUCTION, pp. vi–vii; see Chapter 12, Section 12.1.2). The first economics dictionary in English to reach completion was →Palgrave’s three-volume Dictionary of political economy (1894–1899). It was explicitly aimed at students, reflecting the institutionalization that economics had gone through in recent years. Its primary purpose (as declared in the Introduction to Volume 1) was, in fact, ‘to provide the student with such assistance as may enable him to understand the position of economic thought at the present time, and to pursue such branches of inquiry as may be necessary for that end’. The Dictionary was reprinted in full in 1899–1901; an appendix was added in 1908; the three volumes were reprinted separately and repeatedly with corrections in 1906–1915, and reprinted again in 1976. The 2nd edition, with revised and new materials printed from corrections of

34 Daniele Besomi the old plates, was compiled by Higgs as Palgrave’s dictionary of political economy, 1925–1926. In the words of one of the reviewers of the second edition, summing up well the reception and influence of the Dictionary, ‘no book on our shelves is so well-thumbed. Like McCulloch’s Commercial Dictionary in another day, we do not quote Palgrave – we use it’ (Hollander, 1926, p. 666; see Chapter 16). A difference in style between the latter two dictionaries, well depicted by the French editor when asked to review the British work, is worth noting. Chailley noted that while the articles in the Nouveau dictionnaire were essentially concerned with theory and fundamental principles, leaving in the background data or specific applications, Palgrave followed the opposite approach, detailing first and very precisely facts and figures, only hinting at the doctrinal aspects and leaving the reader to find his way in the maze of the abundant references supplied (good and mediocre together). Chailley also noted that Palgrave was more like an encyclopaedia because it gave a better account of men, facts and institutions. Finally, while the Palgrave assumes that its readers were to some extent informed on the subjects dealt with and showed ‘only a modicum of desire for reform and for crusade’, the Nouveau dictionnaire presupposed instead that it had to teach the reader everything, and its authors often advocated reform (in a liberal sense) (Chailley-Bert, 1897). The last economic dictionary of the nineteenth century was →Elster’s Wörterbuch der Volkswirtschaft, a two-volume work first published in 1898 (there were revised editions in 1906–1907 and 1910–1911). In the absence of a comprehensive textbook in German, the Wörterbuch was primarily conceived for students – and accordingly the price was kept as low as possible – and subordinately for those who followed with interest the contemporary economic and social issues. The dictionary aimed at being ‘popular’ in the best sense of the word, while giving a strictly scientific account of the current economic knowledge, thus not serving any one party, in contrast to the explicitly partisan approach of some of the German social sciences encyclopaedias, and also to some general-purpose encyclopaedias written more or less at the same time (see Section 2.5.1), but reflecting a scientific view of social and economic development (Elster, VORWORT to the 1st edition; see Chapter 19).

2.4.2 The twentieth century The first part of the twentieth century was characterized by the scarcity of economic dictionaries. Other than later editions of works initiated at the end of the previous century, the production of new major reference works was altogether suspended, with the only exception being two Japanese dictionaries, the →Keizai-Daijisho [Comprehensive dictionary of the economy] by the Tokyo publisher Do¯bun-Kwan (nine volumes, appeared between 1910 and 1916; 2nd edition in five volumes in ¯ saka 1916) and the →Keizaigaku jiten [Dictionary of economics], edited by the O Sho¯ka Daigaku Keizai Kenkyu¯jo (Economic Institute of Osaka University of Commerce) and published in seven volumes in Tokyo between 1930 and 1936 (2nd edition, 1954, 1,750 pages; 3rd edition, 1992, 1,500 pages).

A brief history of economic dictionaries 35 These years saw, however, the appearance of small dictionaries devised as quick reference works for students, newspaper readers and the lay public. The pioneer was a British →Dictionary of economic terms for the use of newspaper readers and students, edited by Bower, first published in 1905 (166 pages), subsequently revised up to the 10th edition in 1936 and taken up under different titles up to 1974. Nevertheless, most of these economic dictionaries published by the Second World War were German or Japanese. In German we have →Heller’s Nationalökonomie (four editions between 1926 and 1933, between 190 and 330 pages; translated and frequently updated in Spanish as Diccionario de economía política between 1937 and 1969); →Thalheim’s Das ABC der Volkswirtschaft (1934, 325 pages); →Bülow’s Wörterbuch der Wirtschaft (1936, 455 pages; five more editions by Bülow and Langen, 1954–1970; 7th to 11th edition by Recktenwald, 1975–1990; 12th and 13th editions by Grüske and others, 1994, 2003, the latter 623 pages), and →Feldmann’s ABC der Wirtschaft (1940, 149 pages). In Japanese there are →Takahashi’s Kokumin keizai jiten (1933, 635 pages), the →Shinshu¯ Keizaigo jiten [New economic terms dictionary], by the economic department of the Osaka Mainichi newspaper (1933, 500 pages; 2nd edition, 1938; 3rd edition, 1940, both under new titles), and →Ichikawa’s Saikin keizai mondai kaisetsu [Reviews of modern economic problems] (1939, 242 pages). In other countries we only have the American →Handbook of economic terms by Horton (1935, 137 pages) and the Brazilian →Dicionário econômico-comercial e financeiro, edited by Gomes (1942). Since the war, and in particular beginning from the 1960s, there has been an exponential increase in the number of small and very small economic dictionaries, which are now too numerous to be listed here, and a resumption of the compilation of ‘fair-sized’ (let us say, above 1,000 pages or in two volumes) and, less frequently, large reference works (see Section 2.8). Let us present them by language,4 beginning with French. The first economic dictionary published after the 2nd edition of Say’s (1900–1901) is due to →Romeuf et al., who produced a 1,200-page work titled Dictionnaire des sciences économiques (1956–1958). There followed (chronologically) about 50 small or very small dictionaries, until in 1990 Greffe et al. produced an →Encyclopédie économique (2,188 pages in two volumes). Aimed at undergraduate students and laypeople with a general background in economics but without specific knowledge of specialized issues, the Encyclopédie was organized thematically rather than alphabetically.5 The 58 articles are grouped in three parts: ‘Perspective and methods’, ‘Analysis’ and ‘Organization and structures’. After that, apart from the →Dictionnaire des sciences économiques by Jessua et al. (2001, 1,069 pages), all the other economic reference works in French (about 60) were again of small size. Italy also had to wait a long time from the publication of Boccardo’s latest edition in 1881–1882 to the next specialized dictionary, which was →Napoleoni’s Dizionario di economia politica. Published in 1956, it numbered 60 long articles (29 of which were written by the editor), for a total of 1,722 pages. In the Preface, Napoleoni argues that while normally dictionaries are compiled when a discipline

36 Daniele Besomi has reached a solid organization of its materials, this was not the case for economics. Definitions were not agreed upon, the relationships between different parts of the discipline were not clear, and the very nature of economics was still the subject of controversies. The Dizionario accordingly aimed not at defining concepts once and for all, but at delineating the main problems of contemporary economics; it was not an arriving point, but a starting point for future research and systematization. The next major dictionary was produced (almost) single-handedly by →G. U. Papi: Dizionario di economia (1967, 1,511 pages), with an educational intent but also reversing Napoleoni’s perspective. In the Preface, in fact, Papi pointed out that he only expounded the ‘receptum’ of economics, that is, the consolidated system of knowledge that lies at its foundations, while omitting approaches in their becoming, which would better be considered in due time by the history of economic thought. Explicitly taking as its starting point, like Napoleoni, the idea that economic concepts are not given once and for all but are the product of their own history, the next major Italian economic dictionary (→Dizionario di economia politica, edited by Lunghini, 1982–1990) is constructed along historical lines. Each of the 40 long entries (approximately averaging 60 pages, spread over 16 volumes, ordered not alphabetically but by the proximity of their subjects) discusses the approach to the subject of the classical economists, Marx, the neoclassical economists, Keynes and the post-Keynesians, before examining the current state of the theory. The remaining 30 or so Italian post-war dictionaries are much smaller than these, except for →Stefanelli’s Capire l’economia: dizionario critico del capitalismo contemporaneo (1977, 1,000 pages), or intended for students and laypeople. Up to the demise of the Francoist regime, most of the economic dictionaries published in Spain were translations of foreign work, including a surprising title such as Napoleoni’s Dizionario di economia politica. Thereafter, some reference works were produced at home, two of which were outstanding for their size. The →Economía Planeta: diccionario enciclopédico, edited by Martínez Cortina, does not seem to have been reviewed in any listed journal. It consisted, however, of eight volumes with a total of about 4,000 pages, published in 1988. →Prado’s Enciclopedia práctica de economía was first published in eight thematic volumes in 1983–1984, followed by a second edition in 20 volumes in 1987–1988 dedicated to topics such as ‘wealth and money’, ‘aggregate demand’, ‘crisis and business cycles’. The work is suitable for undergraduate students and laypeople, with its long articles written in a simple style and its magazine-like layout. In post-war years, about 100 economics dictionaries have been published in English.6 Most of these are small works addressed to students or laypeople. A handful are fair-sized: →Magill’s International encyclopedia of economics, two volumes, 1,735 pages, 1997, which, judging from the lack of reviews, does not seem to have attracted the attention of the profession; →Greenwald’s7 Encyclopedia of economics, first published in 1982, 2nd edition 1994, also translated into French, totalling 306 articles (no biographies) spread over 1,070 pages. It was aimed at practitioners, teachers, and graduate and undergraduate students in economics, econometrics, statistics and marketing. It was welcomed for offering articles of an intermediate size between mere definitions and lengthy articles (and thus difficult

A brief history of economic dictionaries 37 to digest) in specialized encyclopaedias (Lachmann, 1983). And finally, →O’Hara’s Encyclopedia of political economy, 1999, approximately 450 entries discussed over 1,300 pages. The title explicitly refers to ‘political economy’ (and it is the first English language dictionary to have done so since the latest edition of Palgrave’s Dictionary, followed only by →Jones’s Routledge encyclopedia of international political economy, 20018), to indicate interest in the work of those who revive this tradition as opposed to the ‘economics’ focusing on rational choices and the maximization of utility and profits functions, with the purpose of reducing fragmentation among different schools of political economy. Outstanding among English language dictionaries of economics is naturally the →The new Palgrave dictionary of economics, first published in four volumes (about 4,000 pages) in 1987 (Eatwell et al.) with a second edition by Durlauf and Blume in eight volumes, published in 2008 (7,356 pages). Although it nominally targets students, most reviewers find it too advanced for undergraduates, but its utility for graduate students and for researchers is undoubted. It offers multiple entries on each topic, in order to take into account the diversity of views in economics, but has been nonetheless charged with bias in favour of Marxist and Sraffian economics, an imputation denied by the editors (Stigler, 1988, pp. 1732–1733 and Blaug, 1988, dismissed as unfair by Milgate, 1992; for a discussion, see Bailey, 1994). The largest number of economics dictionaries are written in German (see Section 2.8, Figures 2.2 and 2.5). In the post-war years, at least 63 titles for a total of 220 editions have been published. Again, a large share of these are small or very small works; there are, however, some fair-sized dictionaries, most of which are characterized by their extension to a large number of headings rather than depth of treatment, and two larger works. →Preuss and Bachert’s Meyers Handbuch über die Wirtschaft was first published in 1966, and revised and updated in 1970 and 1974. It consisted of a systematic part with essays discussing wide themes such as ‘production, ‘demand’, ‘money and credit’, and a lexicon of about 10,000 words. It spanned about 1,100 pages, so that the dictionary entries were necessarily short: KONJUNKTURTHEORIES (business cycle theories), for instance, occupies half a column. →Bader’s Ökonomisches Lexikon (1967, 1970–1971, 1978–1980) is an East German reference work. It numbers 15,000 entries over 2,400 pages on political economy from the perspective of a socialist country, thus also including planning and management, economic cybernetics, mathematics and computing, as well as other disciplines to the extent that these priorities affect the economy. →Geigant et al.’s Lexikon der Volkswirtschaft was first published in 1975. The original 580 pages grew in leaps to over 1,200 by the 7th edition of 2000. This dictionary contains numerous short entries which attempt nonetheless to cover a wide spectrum of perspectives on each subject; yet the references are reduced to two or three for each entry, which effectively neutralizes the effort. →Rittershofer’s Wirtschafts-Lexikon: über 4000 Stichwörter für Studium und Praxis (2000, 2002, 2005, 2009) targets, as the title explains, students and practical people, defining 4,000 terms in little more than 1,000 small pages in a relatively large typeface. →Dichtl and Issing’s Vahlens grosses Wirtschaftslexikon (1987, 14,000 entries in 2,164 pages; 1993, 11,000 entries in 2,471 pages) was aimed not at theoretical

38 Daniele Besomi economists but at those who, in their everyday work, encounter economic terms that require an explanation. The entries are short but rigorous and to the point, and terminologically related entries are kept separate but spatially brought together (the German construction of composite words around a main term naturally helps), so that several facets of the same problem can be examined (e.g. next to KONJUNKTUR, the state of an economy, we have a constellation of entries concerning business cycles: theory (KONJUNKTURTHEORIE), policy, forecast, indicators, models, phases, etc.). A different approach was taken by →Glastetter’s Handwörterbuch der Volkswirtschaft (1978, 2nd edition, 1980). In the intention of the editor, this Handwörterbuch was to stand between a textbook and a reference work. Written by a team of young collaborators, it contains 112 long articles in 1,746 columns, 25 of which are on economic theory, the others on institutions, economic and social policy, and finance. Numerous other key words cross-refer to these main articles – for example, the first article for the letter K is KONJUNKTURTHEORIE, which is preceded by 25 key words referring to other articles, such as KOMPARATIVE KOSTEN, referring to ‘theory of international trade’. As to the two larger dictionaries, the →Wirtschafts-Lexikon compiled for the Wiesbaden-based publisher Gabler was first published under the editorship of Sellien and others in 1956 as a 3,476-column work in two volumes. It is presently in its 17th edition (2010, edited by Roberts), and has more than doubled in size, being printed in eight volumes for a total of 3,614 pages. Like most of the dictionaries cited above, this also divides knowledge into a large number of entries, as it aimed from the outset to supply fast and reliable information to students, scientists and working people. Far more extensive was the →Handwörterbuch der Wirtschaftswissenschaft, edited by Albers and Zottmann, and published in ten volumes (the tenth being an index) from 1976 to 1983. With its 7,000 pages, it was surely the largest enterprise of its time specifically devoted to economics, now surpassed only by the 2nd edition of The new Palgrave. It is the successor of the even more extensive social sciences encyclopedia →Handwörterbuch der Sozialwissenschaften, which in turn succeeded the →Handwörterbuch der Staatswissenschaften (see Section 2.5); it was, however, judged that social sciences had so much extended their scope beyond economics that the task of covering the entire field was hopeless. It was also decided not to include articles on specific institutions or biographical materials (included instead in the New Palgrave). Topics are grouped into major problem areas, and discussed very extensively and in depth with good bibliographies, giving the dictionary some thematic arrangement within the alphabetical organization of the materials.

2.4.3 Internet publications This survey would not be complete without a reference to internet publications. Wikipedia carries (in various languages) numerous entries on economics, some of which are extensive, while others are reduced to a bare minimum. It suffers the disadvantage of being an editorless publication, made worse by the fact that some topics are perceived more as an ideological battleground than a field for scientific inquiry.

A brief history of economic dictionaries 39 Two of the above-mentioned dictionaries have an internet version. The New Palgrave dictionary of economics online (www.dictionaryofeconomics.com), accessed by subscription only, gives the full text of both the 1st and 2nd editions. Essentially, it only uses two of the facilities of an electronic version of text: the possibility of searching through the text, and the possibility of constantly updating and upgrading its entries. Having rendered obsolete the alphabetical order, the electronic edition of The new Palgrave fails, however, to suggest a different arrangement. The only feeble attempt to give the entries a structure is based on the Journal of Economic Literature (JEL) classification scheme (developed more than half a century earlier for printed materials), which has not been implemented systematically.9 Far more interesting in this respect is Gablers Wirtschaftslexikon (available free of charge at http://wirtschaftslexikon.gabler.de). Each entry is accompanied by a graph depicting the links between the chosen topic and the related subjects. This graph is constructed by an undisclosed algorithm picking the five ‘most important’ cross-references of the main article, and the five most important cross-references of each of the latter, and shows the network of mutual connections between these topics; each of the topics can be placed in turn at the centre of its own network, so that in principle the entire surrounding field can be explored and the entry be placed in context – at least, in the context chosen by the algorithm. The structure thus emerging is not directly planned by the editors, but is constructed by starting from the entries themselves.

2.5 THE ENCYCLOPAEDIAS OF THE SOCIAL SCIENCES Almost at the same time as economic dictionaries were blooming in the nineteenth century, a number of ponderous encyclopaedias of the social sciences – also including economic information, and sometimes giving it pride of place – were being published, in particular in Germany. They were, however, preceded in the eighteenth century by the anonymous →The Politician’s dictionary; or, A summary of political knowledge containing remarks on the interests, connections, forces, revenues, wealth, credit, debts, taxes, commerce, and manufactures of the different states of Europe. Alphabetically digested for the use of those who would wish to understand whatever occurs in the science of politics ([Allen] 1775, two volumes, 847 pages), and the monumental →Dictionnaire universel des sciences morales, économique, politique et diplomatique by Robinet, a 30-volume in quarto, alphabetically organized work dedicated to the ‘homme d’État’ and the ‘citoyen’ (1777–1783), containing extremely long essays (COMMERCE, for instance, begins in Volume 12 and ends in Volume 13 after 645 pages).

2.5.1 The nineteenth century During the nineteenth century, most of what we nowadays call ‘social science’ fell under the heading of ‘politics’ (in English and French) and ‘Staat’ in German (meaning country, state or nation).

40 Daniele Besomi In English, the first such work was →Long’s Political dictionary (1845–1846), soon reprinted as The standard library cyclopædia of political, constitutional, statistical, and forensic knowledge (1848–1849, 1853–1860 and 1893), 1,826 pages, with articles drawn or adapted from the Penny cyclopedia, a general low-cost reference work. This was followed by two American works, →Lalor’s three-volume Cyclopædia of political science, political economy, and of the political history of the United States (1881–1884 and 1888–1890) and, with a different emphasis, →Bliss’s Encyclopedia of social reform: including political economy, political science, sociology and statistics (1897, 2nd edition, 1908, about 1,400 pages). In France, there were →Block’s Dictionnaire général de la politique (1863– 1864, two volumes, 2,300 pages; 2nd edition, 1873–1874. See Chapter 12), from which a smaller version was extracted (→Block, Petit dictionnaire politique et social, 1896, 800 pages), and the remarkable →Dictionnaire des sciences politiques et sociales, a one-man work by Auguste Ott, 1854, three volumes, 2,000 pages, part of the 171-volume thematic Encyclopédie théologique organized by Migne (Chapter 10). While these works were small relative to the task at hand, in Germany social scientists not only began earlier than French and English colleagues, but they thought and wrote at large. →Rotteck and Welcker’s Staats-Lexikon. Encyklopädie der sämmtlichen Staatswissenschaften für alle Stände, an encyclopaedic work ‘for all ranks’ which supported liberal ideas, took 12 volumes when first published in 1834–1835, and grew to 14 by the 3rd edition of 1856–1866. →Bluntschli and Brater’s Deutsches Staats-Wörterbuch was originally published in 11 volumes (1857–1870), and soon republished in a reduced form in three volumes as →Bluntschli’s Staatswörterbuch in drei Bänden (1869–1872). →Wagener’s Staats- und Gesellschafts-Lexikon took 23 volumes for a total of 18,624 pages (1859–1867). The →Staatslexikon, edited by Bruder and Bachem for the GörresGesellschaft zur Pflege der Wissenschaft im katholischen Deutschland (society for the cultivation of science in Catholic Germany), was an encyclopaedia founded on Catholic principles, stressing moral and religious viewpoints over material interests and explicitly written to counterbalance Rotteck and Welcker’s StaatsLexikon. When first published in 1889–1897, and up to the 5th edition in 1929, it spanned five volumes. Finally, the →Handwörterbuch der Staatswissenschaften, edited by Conrad, Elster, Lexis and Loening between 1890 and 1895, was produced in six volumes and two supplements, which grew to seven volumes at the 2nd edition (1898–1901) and to eight volumes by the 3rd and 4th editions (1909–1911 and 1923–1929) (see Chapters 18 and 20). Also, there was room in Germany for smaller dictionaries: besides the reduced Bluntschli, there were also →Baumstark’s Staatslexicon in einem Bande; staatswissenschaftliches Handbuch der politischen Aufklärung für die Gebildeten aller Stände (for the educated people of all ranks), published in 1852, 2,844 columns in one volume, as advertised in the title itself; →Mohl’s Encyklopädie der Staatswissenschaften, published in 1859, 760 pages; and two smaller volumes with the same title as Mohl’s, one edited by →Bülau in 1832 (287 pages) and the other by →Rinne in 1846 (111 pages).

A brief history of economic dictionaries 41

2.5.2 The twentieth century Similarly to the unfolding of purely economic dictionaries, in the twentieth century the production of small social sciences dictionaries devised as quick reference books for students and laypeople multiplied, in particular from the 1960s and with a second leap in the 1990s, although not to the same extent. Again, I will only describe the major works, but it is worth noting that such an increase is due in large part to French publishers, as in the post-war years they produced more than 60 such dictionaries (separately counting different editions), often citing in the title both social sciences and economics. This is more than half of the total of such reference works, of which only one totals more than 1,000 pages – namely, the →Dictionnaire des sciences humaines by Mesure and Savidan (2006, 1,264 pages). With regard to German language works, two of the nineteenth-century social sciences encyclopaedias were continued, under new editorship and revised titles, in the second half of the twentieth century. →Conrad and Elster’s Handwörterbuch der Staatswissenschaften was entirely recast, and its title modernized into →Handwörterbuch der Sozialwissenschaften. It was published between 1956 and 1966 under Beckerath’s editorship; it totalled 12 volumes with over 9,000 pages (the general social sciences entries were dropped when the dictionary evolved into a dictionary of economics – the Handwörterbuch der Wirtschaftswissenschaft discussed above in Section 2.4.2). →Bruder’s Staatslexikon was taken over by the Görres-Gesellschaft and continued as the 6th edition during 1957–1963 under the title →Staatslexikon: Recht, Wirtschaft, Gesellschaft; it grew to 8 volumes plus 3 supplements, which was reduced to a total of 7 by the 7th edition in 1985–1993. An entirely new work of a different kind was →Brunner, Conze and Koselleck’s Geschichtliche Grundbegriffe. Historisches Lexikon zur politisch-sozialen Sprache in Deutschland (Dictionary of socio-political language in Germany), 1972–1997, 8 volumes in 9 (2nd edition, 2004, 9,000 pages). This dictionary contains 120 very long essays, ordered alphabetically, each concerning the evolving usage and semantics of some key concepts in political and social language, often analysing the concepts that were discussed in previous specialized dictionaries. In Italy, only one major work was published: →Bedeschi’s Enciclopedia delle scienze sociali, 1991–2001, 9 volumes. Like all other lexicographical works of this extension, it also offers articles discussing their topic in reasonable detail and with essential bibliographies. In English there are two major titles. The first work of large extension was Seligman’s Encyclopaedia of the social sciences, published in 1930–1935 in 15 volumes. The project was continued under the editorship of Sills: the International encyclopedia of the social sciences, published in 1968, totalling 18 volumes (see Chapter 22 on both Sills and Seligman). Its 2nd edition (2008) by Darity totals nine volumes. In all versions there is a large share of economic entries. There are fewer such entries in →Smelser and Baltes’s International encyclopedia of the social & behavioral sciences, published in 26 volumes in 2001.

42 Daniele Besomi 2.6 FROM GENERAL TO PARTICULAR: HYPERSPECIALIZED DICTIONARIES As economics becomes specialized into more and more distant subdisciplines, and different schools of thought become more and more restricted in their language and schemes, and are increasingly incapable of communicating with each other, dictionaries explicitly dedicated to specific fields or schools are being published, a phenomenon that started in the 1960s. This new wave of dictionaries has some predecessors. The first seems to be the →Dictionnaire d’économie charitable, four volumes (1855–1864), by MartinDoisy, part of Migne’s Encyclopédie théologique. In the 1920s, a four-volume →Handwörterbuch der Arbeitswissenschaft, edited by Giese (1927–1930), discussed various aspects of labour economics; on the same subject was the much slimmer →Land, labor, and wealth: a handbook of economic terms, edited by Winsor and Winsor Evans in 1942 (117 pages). Among the specific subfields, the one better mapped out is banking and finance, as discussed in Section 2.3 above. Environmental economics also has three dictionaries: →Grafton et al., Dictionary of environmental economics, science, and policy, 2001, 362 pages; →Markandya’s Dictionary of environmental economics, 2001, 196 pages; and →Olsson and Piekenbrock’s Kompakt-Lexikon Umweltund Wirtschaftspolitik, 1993, 1996 and 1998, c. 400 pages. There are two dictionaries of international economics: →Voloshin et al., Spravochnik ekonomistamezhdunarodnika [Dictionary of international economics] (1990, 397 pages) and →Hinkelman’s Dictionary of international trade (1994, 279 pages). Three dictionaries are devoted to macro- and micro-economics: →Snowdon and Vane, An encyclopedia of macroeconomics, 2002, 720 pages; and, respectively, →Sluchaj’s Dovidnyk bazovych terminiv ta ponjat z mikroekonomiky (Dictionary of the basic terms of microeconomics) (1998, 254 pages), and →Oberender’s Grundbegriffe der Mikroökonomie (1985, 187 pages; 8th edition, 2003, 299 pages). International political economy has its own dictionary: →Routledge encyclopedia of international political economy, edited by Jones, 1991, 1,864 pages in three volumes, and there are two for law and economics: →Newman’s The new Palgrave dictionary of economics and the law, 1998, three volumes; and the →Encyclopedia of law and economics, edited by Bouckaert and de Geest, the first edition of which consisted of five thematic volumes (2000), to which eight further volumes have been added between 2008 and 2010. Mathematical economics is discussed in →Beckmann et al., Handwörterbuch der mathematischen Wirtschaftswissenschaften, 1979, with volumes on economic theory, econometrics and statistics, and operations research. Four more dictionaries are devoted to econometrics: the first was the brief →Lexique du calcul économique et de l’économétrie, edited by Olmi and July (1970, 183 pages), followed by →Darnell’s Dictionary of econometrics (1994, 485 pages) and by two reissues of the 2nd edition of →The new Palgrave, namely, Microeconometrics and Macroeconometrics and time-series analysis, 2010. Cycles and crises have also stimulated the production of some dictionaries. Two are concerned with a particular event:

A brief history of economic dictionaries 43 →McElvaine, Encyclopedia of the Great Depression (2004, 1,194 pages), and →Leab’s The Great Depression and the New Deal: a thematic encyclopedia (2010, c. 800 pages). Others are more general: →Mayberry’s ABCs of the financial crisis: a dictionary of terms, 2008, is a slim glossary of 24 pages. Much more ponderous are →Ciment’s Booms and busts: an encyclopedia of economic history from tulipmania of the 1630s to the global financial crisis of the 21st century (2010, 1,000 pages) and →Glasner’s Business cycles and depressions: an encyclopedia (1997, 779 pages), both describing historical events and theoretical aspects. The first, and most abundant, stream of dictionaries specialized in specific schools of thought concerned Marxist and socialist economics. They flourished from the mid-1960s to the end of the 1980s. The first of this kind was →Miyakawa’s Marukusu keizaigaku jiten (Dictionary of Marxist economics, 1965, 326 pages), followed by →Luchterhand et al.’s Wörterbuch der Ökonomie: Sozialismus (1967, 539 pages, 6th edition in 1984, edited by Ehlert), →Kuruma’s Marx-Lexikon zur politischen Ökonomie (1973, 468 pages, original in Japanese) and several others, most of them in German except the →Dizionario Marx Engels edited by Papi (1983, 415 pages) and on the French side the →Livre de Poche on Le marxisme (1976, 212 pages, also translated into Italian) and more recently →Bidet’s Dictionnaire Marx contemporain (2001, 589 pages). These are counterbalanced on the opposite side by a →Mises made easier: a glossary for Ludwig von Mises’ Human action (P. L. Greaves, 1974, 157 pages) and →Foldvary’s Dictionary of free-market economics (1998, 307 pages, German translation, 2000), while in the middle ground there is a →Lexikon soziale Marktwirtschaft by Hasse (2002, 527 pages). Keynesian economics also has its dictionaries: →Cate’s Encyclopedia of Keynesian economics (1997, 638 pages, 2nd edition in preparation) and →The Elgar companion to post Keynesian economics, edited by King (2003, 405 pages).

2.7 BIOGRAPHICAL DICTIONARIES Biographical dictionaries of economists are a recent genre. While already in the nineteenth century some dictionaries advertised the biographical part in their title (e.g. →Macleod’s Dictionary of political economy: biographical, bibliographical, historical, and practical, 1863), the first specifically biographical dictionary was →Mai’s Men and ideas in economics: a dictionary of world economists, past and present, a 270-page work published in 1975, presenting not only economists but also philosophers, statesmen and others who have contributed to the shaping of economic ideas. It was followed by a Biographical supplement to →Sills’s International encyclopedia of the social sciences, published in 1979. →Blaug’s Who’s who in economics. A biographical dictionary of major economists started publication in 1983 (435 pages) and is regularly updated; the latest edition so far is the fourth (2003, 1,235 pages). Other similar works with the same scope do not reach the same extension: →Brémond and Salort’s Dictionnaire des grands économistes (1992, 2nd edition 1997) only numbers 180 pages; →Beaud and Dostaler’s La pensée économique depuis Keynes: historique et dictionnaire des

44 Daniele Besomi principaux auteurs (1993, English translation 1995) totals 598 pages; →Deubel and Montoussé’s Dictionnaire des auteurs en sciences économiques et sociales (2003) has 350 pages dedicated to ‘165 authors in economics, sociology and political sciences’; →Hesse’s Ökonomen-Lexikon (2003) numbers 464 pages, with 600 entries on entrepreneurs, thinkers and politicians of the economic world; and →Teulon’s Dictionnaire des grands économistes: 2500 ans d’histoire de la pensée économique (2009) has 416 pages. There are also some specializations within the specialization, with biographical dictionaries referring to economists of certain categories or nationality. We thus have →Dimand, Dimand and Forget’s Biographical dictionary of women economists (2000, 520 pages), →Katz’s Nobel laureates in economic sciences: a biographical dictionary (1989) and →Arestis and Sawyer’s Biographical dictionary of dissenting economists (1992, 2000, c. 700 pages), and some geographically defined works: →Rutherford’s Biographical dictionary of British economists (2004, 1,330 pages), →Emmett’s Biographical dictionary of American economists (2006, 921 pages), →King’s Biographical dictionary of Australian and New Zealand economists (2007, 337 pages) and the →Biographical dictionary of European economists, in preparation by Gehrke and Kurz.

2.8 THE CHRONOLOGICAL, SPATIAL AND DIMENSIONAL DISTRIBUTION OF DICTIONARIES The verbal description of the preceding sections has already given some idea of the distribution of encyclopaedic dictionaries over time, language and size. This can be made more precise by means of a few diagrams illustrating the size and language distribution of specifically economics dictionaries and of social sciences encyclopaedias per decade of publication, and giving an overall picture of how the total of the dictionaries related to economics (not only the two categories above, but also commercial, financial, biographical and hyperspecialized dictionaries, and works concerned with economics and administration, economics and statistics, and economics and law, of which there are a few) are distributed per size and per language. Some observations additional to those expressed in previous sections are in order. The first is that the modal language of dictionaries is German, followed by English and French (Figure 2.5). Given the relative size of the markets, it is apparent that German and, to a larger degree, French readers are supplied with a much larger choice of dictionaries than English readers. It would be interesting to complement these data with the respective print runs to ascertain the density of the distribution, but the data so far suggest that there is a better market – and thus a wider usage – of dictionaries in German- and French-speaking countries. The second observation is that the vast majority of economics dictionaries are small (the favourite format lies somewhere between 300 and 600 pages) (Figure 2.6), especially those published since the 1960s (Figures 2.1 and 2.3). Thus, they are likely to be of a ‘popular’ kind (often in the best sense of the word) or thought

A brief history of economic dictionaries 45 of as an aid for study. This applies to all languages, the share of works shorter than 1,000 pages being between 65 per cent (Italian) and 75 per cent (French) in all cases (Figure 2.5). This suggests that in Germany and France dictionaries are used more often than in English-speaking countries as a teaching and learning aid, and the habit so learned is possibly continued into adult age. Thirdly, the explosion of the number of dictionaries published in the last part of the twentieth century is due almost exclusively to small reference works, which were practically absent in the nineteenth century. The publication of medium-sized dictionaries increased a little, while the output of major reference works has remained more or less constant since the middle of the nineteenth century (with the exception of the early part of the twentieth century), notwithstanding the large increase in their potential users (Figures 2.1 and 2.3). Fourthly, it may be observed that not only have the Germans produced more dictionaries, but also they have produced a large share of voluminous reference works. While about one-third of the small and medium-sized dictionaries are written in German, the German share of dictionaries producing four or more volumes is 46 per cent of the total of such works. In contrast, French dictionaries are prevalently small, and large works are scarce. While in the nineteenth century France had produced some high-quality works of medium to large size, the large output of dictionaries published in the second half of the twentieth century consisted mostly of small reference books. English works take a larger than average share of mediumsized dictionaries (two to three volumes, or over 1,000 pages). The Italians lean slightly more than average towards large dictionaries (Figures 2.2 and 2.6). These monumental works, with long articles discussing the matter in depth, are dedicated more to researchers and teachers than to students; this in turn suggests that German language countries see dictionaries as a way of diffusing knowledge not only among students, but also among educators and scientists, so far as economics and the social sciences are concerned, at any rate. Finally, while in purely numerical terms the century of dictionaries is not the nineteenth, as is commonly maintained, but the twentieth, the nineteenth century is surely an epoch when economic and social sciences dictionaries and encyclopaedias were all first-rate, not only in size but also in terms of quality. These features indicate that as the production of economics and social sciences dictionaries is subject to very different national traditions which evolve over time, their usage in learning, teaching and research is also likely to differ substantially. This suggests that perhaps it is not only the specific contents of economic dictionaries that are of interest: the usage that is made of these references works should perhaps also be subject to investigation.

46 Daniele Besomi 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10

0–300 pp.

301–600 pp.

601–1000 pp.

4–5 vols.

6–8 vols.

9 vols. or more

Figure 2.1 Number of specifically economic dictionaries, by size.

2–3 vols.

2000s

1990s

1980s

1970s

1960s

1950s

1940s

1930s

1920s

1910s

1900s

1890s

1880s

1870s

1860s

1850s

1840s

1830s

1820s

0

A brief history of economic dictionaries 47 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10

German

French

English

Italian

2000s

1990s

1980s

1970s

1960s

1950s

1940s

1930s

1920s

1910s

1900s

1890s

1880s

1870s

1860s

1850s

1840s

1830s

1820s

0

Other languages

Figure 2.2 Number of specifically economic dictionaries, by language.

48 Daniele Besomi 35

30

25

20

15

10

5

0–300 pp.

301–600 pp.

601–1000 pp.

4–5 vols.

6–8 vols.

9 vols. or more

Figure 2.3 Number of social sciences dictionaries, by size.

2–3 vols.

2000s

1990s

1980s

1970s

1960s

1950s

1940s

1930s

1920s

1910s

1900s

1890s

1880s

1870s

1860s

1850s

1840s

1830s

0

A brief history of economic dictionaries 49 35

30

25

20

15

10

5

German

French

English

Italian

2000s

1990s

1980s

1970s

1960s

1950s

1940s

1930s

1920s

1910s

1900s

1890s

1880s

1870s

1860s

1850s

1840s

1830s

0

Other languages

Figure 2.4 Number of social sciences dictionaries, by language.

50 Daniele Besomi 375 350 325 300 275 250 225 200 175 150 125 100 75 50 25 0 German

French

English

Italian

0–300 pp.

301–600 pp.

601–1000 pp.

4–5 vols.

6–8 vols.

9 vols. or more

Other 2–3 vols.

Figure 2.5 Number of dictionaries concerned with economics, by language and size.

A brief history of economic dictionaries 51 325 300 275 250 225 200 175 150 125 100 75 50 25

German

10

01

3

2-

ls

vo

. 5

4-

.

ls

vo

6

French

8

6-

.

ls

vo

e

. pp

rm or

-6

1 30

00

.o

0-

00

.

ls

3

00

pp

vo

.

pp

9

0

English

Italian

Other

Figure 2.6 Number of dictionaries concerned with economics, by size and language.

52 Daniele Besomi NOTES 1 While sometimes different editions only incorporate a few corrections and updates, on other occasions they are major revisions and constitute an altogether different work, usually not in its inspiration but in its contents. Whether or not this is the case, reeditions are a measure of the commercial success of a dictionary, thus of its perceived usefulness. 2 This work is similar to, but not identical with, the above-cited →New and complete dictionary of trade and commerce compiled by the same author in 1766–1767. 3 Although the term ‘economics’ was introduced in 1875 by Macleod, readily accepted by Marshall and Jevons, and generally in use by the 1920s instead of ‘political economy’ (see Groenewegen, POLITICAL ECONOMY, →The new Palgrave dictionary of economics, 1987), the first dictionary carrying the term ‘economics’ in its title was published only in 1948, namely, Horton and Schnappen’s Dictionary of modern economics (if we do not count →Janzen’s Everyday terms in economics, 1941, and →Wilson’s Helping yourself to understand economics, 1947, which amount to just over 100 pages between them). 4 Among the dictionaries written in languages I do not understand, the bibliographic data suggest that the following dictionaries deserve a reference, if their contents match their size in quality: in Japanese there are the already mentioned post-war editions of the →O¯saka Sho¯ka Daigaku Keizai Kenkyu¯jo’s Keizaigaku jiten; and in Russian there is the →Ekonomicheskaya entsiklopediya: politicheskaya ekonomiya, edited by Rumyantsev in 1972–1980, four volumes totalling about 2,400 pages. 5 Like →Perroux’s 1960 L’univers économique et social, part of the thematic Encyclopédie française by L. Febvre and G. Berger. 6 Bibliographic data suggest that dictionaries published in India may deserve a separate treatment, but I have not had direct access to them (one excepted). There are at least six works titled Encyclopaedic dictionary of economics; two of them are fair-sized: →Dinakar, 2009, 1,424 pages, and →Ghodke, published in 1985–1986 in five volumes totalling 1,162 pages for 3,258 entries, where the definitions consist of citations of relevant writers on each subject. One, edited by →Pande and Mithani (1994), is definitely to be ranked among the major dictionaries, as it counts 3,932 pages in 11 volumes. 7 Greenwald is also the editor of a →Dictionary of modern economics, first published in 1965, later editions 1973 and 1983, with a concise version in 1984. 8 The expression was also used to translate in 1985 the title of →Volkov’s Politicheskaya ekonomiya: slovar’ (1981). 9 The JEL scheme only works, and not even very well, up to the first digit (a search for E32, for instance, ‘Business fluctuations and cycles’, only gives three hits, from which the main entry TRADE CYCLE, as well as all but one of the other 20 or so entries on this subject in The new Palgrave (for a list see note 9 to Chapter 1), is missing. The higher level E3, ‘Prices, business fluctuations and cycles’, returns 19 hits but still only captures 3 of the above-mentioned list).

REFERENCES Astigarraga, J., Zabalza, J. and Almodovar, A., 2001, Dictionaries and encyclopaedias on political economy in the Iberian Peninsula (18th, 19th and 20th centuries), Storia del Pensiero Economico, 41, pp. 25–63. Bailey, R. E., 1994, A voyage round economics: the new Palgrave dictionaries of economics, and money and finance, Economic Journal, 104: 424, May, pp. 660–677. Blaug, M., 1988, Economics through the looking glass: the distorted perspective of the new Palgrave dictionary of economics (London: Institute of Economic Affairs).

A brief history of economic dictionaries 53 Chailley-Bert, J., 1897, [Review of Palgrave’s Dictionary of political economy], Economic Journal, 7: 26, June, pp. 260–264. De Vivo, G., 2006. [Review of] The biographical dictionary of British economists. Contributions to Political Economy, 25: 1, pp. 121–126. Hollander, J. H., 1926, [Review of Palgrave’s Dictionary of political economy], American Economic Review, 16: 4, December, pp. 666–668. Jevons, W. S., 1879. Preface to the 2nd edition. The theory of political economy (London: Macmillan). Lachmann, W., 1983, [Review of] Greenwald, D. (ed.), Encyclopedia of economics, Kyklos, 36: 2, pp. 325–326. Milgate, M., 1992, Reviewing the reviews of the New Palgrave, Revue Éuropéenne des Science Sociales, XXX, pp. 279–312. Stigler, G. J., 1988, Palgrave’s Dictionary of economics, Journal of Economic Literature, 26: 4, December, pp. 1729–1736.

3

Naming crises A note on semantics and chronology Daniele Besomi

3.1 INTRODUCTION The terms used by writers who described or theorized economic troubles have shown a notable variety over time and space, and several of these terms have themselves undergone changes of meaning and of implications. At first the process was tentative and somehow varied: some terms fell into disuse and were never resurrected; others were coined only after some decades to reflect a different perception of the phenomenon; at different times, one term or another dominated the scene, to which often a specific interpretation of the phenomenon corresponded. This chapter aims at chronologically mapping the terminological and conceptual changes having taken place in the literature, even though only a very limited number of terms eventually became dictionary entries – the main ones being ‘crisis’ or ‘crises’ and ‘business (or trade) cycle’, with occasional appearances of ‘panics’, ‘bubbles’, ‘fluctuations’ and a few others. It will proceed by examining the etymology of a number of such terms – with the invaluable help of the Oxford English dictionary (OED) – and describing and tracing the evolution of their meaning in the economic literature, with particular care as regards their treatment in dictionaries. These are given pride of place not only because they are the subject of this book, but also because they often offer explicit and precise definitions of terms, which is not always the case in the general literature (see, for instance, Chapter 6, Section 6.5.1, on the first definitions of ‘crisis’ offered by dictionaries).

3.1.1 Words in prominent position Tracking down, for the purpose of establishing the chronology of the usage of words, all the occurrences of such terms in the body of a massive and still largely uncharted literature would, of course, be an impossible task. Some words, however, are placed in more important and visible positions than others. The title of a book, a pamphlet, an article in the specialized or popular press, and even more so the heading of a dictionary entry, is chosen to represent in a condensed form the gist of the message of the entire writing. The terms used in titles are thus carefully selected by the authors or editors as representative and immediately understandable

Naming crises 55 by the potential readership, and thus offer a fairly good sample of the concepts and expressions in use at any time. This will be the starting point of this chapter. Titles of writings are indexed by various means, and numerous searchable databases exist, in particular specialized and general periodical contents indexes and library catalogues. Econlit covers the relevant economic literature since 1969; JSTOR covers well the economic literature in well-established and time-honoured periodicals – that is, beginning from the end of the nineteenth century; both sources suffer from being biased towards English language texts, but jointly provide a meaningful basis of analysis for writings in this language since the 1930s. For earlier times, things are a bit more complicated. Only since the end of the nineteenth century has the literature been hosted in periodicals; most of the earlier materials took the form of treatises or, more frequently, pamphlets, which by their nature are scattered in various libraries in the world, and can only be accessed via the corresponding catalogues. Through the years, I have been compiling and continuously updating my own catalogue of writings on crises, cycles and various forms of economic distress, from the sixteenth century up to the present time, by browsing catalogues and indexes, and following references given in the literature itself. This database includes overall about 8,500 titles in various languages, 2,700 of them relating to the nineteenth century and 3,000 to the first four decades of the twentieth century. Although it is not complete and it is biased towards my own research interests,1 I am confident it represents a fairly good share of the relevant literature up to and including the inter-war years, and I will thus use it (compiling references in English, French, German and Italian) as a basis for the analysis of this period. Writings on these subjects take many forms: articles in professional journals, books, reviews, dictionary entries, pamphlets, newspapers articles, proceedings of round tables, etc. All are counted,2 not because their contents are thought of as having the same relevance, but for the simple fact of having used one term instead of another.3 The results are presented in the Appendix to this chapter in the form of bar diagrams representing the number of occurrences of some terms, selected on the basis of my own judgement – formed while compiling my database and refined in the course of the writing of this chapter – on their relevance and frequency of occurrence.

3.1.2 ‘Panics produce texts’ Such diagrams show at once the relative frequency of appearance of each term, and the cumulative number of writings on cycles and crises year after year. Before entering into the study of the terminology, a first observation concerning the fluctuations in the number of writings is in order. It has frequently been observed that output of writings on cycles is itself cyclical: economic distress naturally induces professional economists, but also (especially in the nineteenth century, when the profession did not count many practitioners) laypeople, to investigate the causes of the phenomenon and suggest remedies. As aptly summarized by Ann Fabian, ‘panics produce texts’ (1989, p. 128). Contemporary writers on crises have themselves noted the phenomenon. Marx, for instance, wrote to Lassalle that

56 Daniele Besomi the time of crises, in England, is also the time of theoretical research (letter of 23 January 1855, in Marx and Engels, 1967). Mills noted that ‘It is scarcely a matter for surprise, and still less for regret, that every commercial crisis occurring in this country is promptly followed by a literature of pamphlets, discussing the phenomena and their supposed causes, while they are yet a matter of painful interest to the public mind’ (1868, p. 11). Similarly, Aftalion remarked that ‘in the financial and industrial chronicles of the specialised press or of daily papers [there appear] articles on the occasion of each crisis – countless instances could be cited’ (1913, Vol. 1, pp. 289–290), and Richter confirmed that ‘One of the clear results of the severe depression of 1921 was the output of a large volume of literature on the subject of business cycles in their economic and social aspects’ (1923, p. 153). Durbin agreed on the phenomenon, but was sceptical on the quality of such writings: ‘One of the most dangerous by-products of a period of depression is the crop of false economic theories which win popular credence and gain political support’ (1933, p. 17). So far, however, there was no measure of this supposed correlation between the outburst of crises and the production of literature on the subject. The diagrams reproduced in the Appendix to this chapter clearly illustrate4 the phenomenon. The number of writings on crises and cycles clearly peaks immediately after the outbreak of each crisis (nowadays, due to the lengthening of waiting lists for publication, the delay can be relevant). The first two notable peaks in my series (not represented in the diagrams as they only number a few items, which however jump to the eye as compared to the absence of such writing in the adjacent years) are dated 1793, corresponding to the commercial and financial crisis, and 1800, when a scarcity of wheat caused a rise in its price, resulting in riots between August and October. The next peak, in 1816–1817, follows the depression (1815–1817) at the end of the Napoleonic Wars. In 1819 the United States witnessed its first major crisis, duly recorded in a number of commentaries. The following peaks closely correspond to the panics of 1825 and 1837, the crises of 1847 (which must have very much impressed contemporaries, as the number of writings on record would not be equalled until the 1929–1932 great slump) and 1857, and the Guernsey crisis of 1866. The crisis of 1873 does not seem to have much upset writers, whereas 1879 and 1885–1886 witnessed a large amount of literature on the ‘great depression’ (1873–1896). The following peaks correspond to the panic of 1893 and the crises of 1907 and 1914. The amount of literature rose sharply after the First World War; after an intermediate peak in 1923 (corresponding to the 1921–1923 period of sharp deflation), there followed an outpouring of literature on the great slump, which peaked in 1931–1933. The 1937 recession scared commentators into writing almost as much as on the previous occasion. After the first post-war peak in 1950, literature on the subject petered out for two decades, when the business cycle was about to be declared dead. Up to the early 1980s, writings on this subject accounted for about 0.5 per cent of the total of items listed in Econlit. Since the recession of the early 1980s, the entries on this subject have continued to increase, progressing more by leaps than in a wavelike fashion. From about 60 entries per year in 1978–1982 there was a jump to around 150 (1983–1985), then 250 (1986–1990),

Naming crises 57 350 (1991–1993), 410 (1994–1997), up to around 680 (1998–2005, with a first leap forward corresponding to the Asian (1997) and Russian (1998) financial crises, and a peak with the internet bubble in 2000), and temporarily down to 560 in 2006–2007. Although data concerning 2008 and 2009 are still very partial, they already show a clear hike in the proportion of writings devoted to the recent financial crisis.

3.2 SEMANTICS AND CHRONOLOGY The recurrence of specific terms to denote the events related to crises shows clearly recognizable patterns, which will help to characterize the context in which these words are (or have been) used. This is what will be done in the rest of this chapter, where the meanings and usages of the various terms are presented more or less in the chronological order of their first application to economic crises or related phenomena.5

3.2.1 Glut The first term associated with an imperfect working of the market is ‘glut’. According to the OED, it was first used in the sense of ‘A supply of any mercantile commodity which is greatly in excess of the demand; freq. a glut in the market’ in 1594, when Plat suggested that one should buy a ‘store of Roses [for the distillation of rose water] when you finde a glut of them in the market’ (p. 31). Its usage as a verb, meaning ‘To overstock with mercantile goods. Chiefly, to glut the market’ (OED) goes back to 1624: after some ships loaded with fish came to the ports and made a good profit, when the others ‘came to the same ports, that were all ready furnished, so glutted the market, that the price was abated’ (Smith, 1624, 1907 reprint, Vol. 2, p. 68). The term frequently recurs in the literature of the seventeenth to nineteenth centuries. An interesting example is the following passage by Defoe: It is very unjust and unfair Dealing by the Publick, first to glut the Market, and over-run it with Goods, and then complain that the Market is dull: How should the Respiration of Trade be preserved, when ’tis choak’d and suffocated with Goods? When Blackwell Hall is empty, the Trade breathes; but when we see it piled up to the Ceilings; the Yards, the Passages and Staircases throng’d, Trade suffers, it is oppress’d with Quantity, and must die if not relieved. (1728, p. 267) As John Stuart Mill noted, the term belonged to mercantile language and was equivalent to over-supply (Mill, 1848, Bk. III, Ch. 14, § 1). This sense of the term is indeed not found in early general-purpose encyclopaedias or dictionaries, such as →Chambers’s Cyclopædia (1728) or →Johnson’s Dictionary (1755). Mercantile dictionaries do not carry an entry on gluts, although the term is occasionally found in the text. Under the heading ASSIENTO (an obsolete contract

58 Daniele Besomi relating to the slave trade), for instance, Mortimer (→New and complete dictionary of trade and commerce, 1766) and the anonymous compiler of the →Politician’s dictionary ([Allen] 1775) both reported that the French ‘at length over-glutted the market, and became sufferers’. The term frequently appears in →McCulloch’s Dictionary . . . of commerce and commercial navigation (1832); for instance, discussing the amplifying effect of corn laws upon the natural fluctuations of crops, he stressed that this system ‘forces up prices in years when the harvest is deficient, while it leaves the market to be glutted when it is abundant’ (CORN LAWS AND CORN TRADE, p. 891). The diffusion of the term does not seem to have made it necessary to define it, until the very notion of glut became the subject of a controversy.6 In his Definitions, Malthus thus specified as follows its meaning: according to the best authorities in books and conversation, what is meant by the glut of a particular commodity is such an abundant supply of it compared with the demand as to make its price fall below the costs of production; and what is meant by a general glut, is such an abundance of a large mass of commodities of different kinds, as to make them all fall below the natural price, or the ordinary costs of production, without any proportionate rise of price in any other equally large mass of commodities. (1827, p. 46) The term ‘glut’ was occasionally used in the title of writings in the classical era, e.g. in an anonymous pamphlet with A few remarks upon the true origin of rent, gluts, a corn trade, and the new issue of gold (1826) and in Thompson’s Exposition of fallacies on rent, tithes, &c. containing an examination of Mr. Ricardo’s . . . doctrine of the impossibility of a general glut (1826), while recent usage is mostly limited to historical examinations of the classical debate, beginning from Sowell’s article ‘The general glut controversy reconsidered’ (1963). ‘Glut’ only seems to have made it to the word-list of dictionaries on two occasions. In →[Long]’s Political dictionary (1845–1846) the term merely crossrefers to the unsigned entry on DEMAND AND SUPPLY, where it is argued that production creates not only goods but also an effective demand for commodities so ‘that a universal glut of all commodities is impossible’ (p. 731). The term is used interchangeably with ‘overproduction’, for which there is no entry (not even as a simple cross-reference) in the dictionary. In →Palgrave’s Dictionary of political economy, the short entry on the subject is signed by Cannan, who did not hide his contempt for the very usage of this term: ‘GLUT is a name (cp. glutton) given to abundance by those who, for any reason good or bad, look on it as pernicious’. Thus sellers ‘say that there is a glut, or that the market is glutted, whenever there is so much of the commodity they sell that it cannot be disposed of at prices fairly remunerative to them. Purchasers on the other hand merely say that the commodity is plentiful and cheap’. Cannan cites Malthus’s definition above, briefly refers to the Ricardo–Say–Mill vs. Malthus–Sismondi controversy, but refers to the entries on DÉBOUCHÉS, THÉORIE DES and OVER-PRODUCTION (see Chapter 16).

Naming crises 59

3.2.2 Distress ‘Distress’ is defined by the Oxford English dictionary as ‘The sore pressure or strain of adversity, trouble, sickness, pain, or sorrow; anguish or affliction affecting the body, spirit, or community’ (OED, 2a); this is the passive sense of ‘The action or fact of straining or pressing tightly, strain, stress, pressure; fig. pressure employed to produce action, constraint, compulsion; less usually, pressure applied to prevent action, restraint’ (OED, 1a). The term has been applied to conditions of economic suffering since at least the 1720s, when an anonymous writer addressed the electors of Members of Parliament, pointing out that the way they used the power, the trust and the property they possessed ‘will always have the most universal and affecting Influence on the Success or Prosperity, the Distress or Misery, of this [. . .] Renown’d Native Country’ (Anonymous, 1722, p. 1). The first systematic occurrences associated distress with poverty, in particular following a scarcity of food, such as in Hustler’s pamphlet The occasion of the dearness of provisions, and the distress of the poor (1767) or in Brooke’s The true causes of our present distress for provisions (1800). The extension to banking and finance seems to be due to the French. Their term ‘détresse’ indicates either the sentiment of powerlessness, neglect and solitude experienced in a difficult and anguishing situation, or the difficult and anguishing situation itself, in particular with reference to the dramatic lack of material resources (Le Grand Robert). In the Étrennes financières of 1789 we find the expression ‘throwing banking and finance into distress’ (‘jetter dans la détresse la banque et la finance’: Martin, 1789, p. 121); in the following year Boislandry wrote some Observations sur les dangers du papier-monnoie & sur l’insuffisance de cette ressource: pour remédier a la détresse actuelle des finances (Boislandry, 1790); and Clavière thought that the assignats were a consequence, not the cause, of the distress of public finance (‘il faudroit ne pas oublier que c’est la détresse des finances qui conduit aux assignats, et ne pas attribuer à ceux-ci l’effet de la détresse’: 1790, p. 99). With the 1793 crisis ‘distress’ began to be associated with commerce, manufacture and credit also in English. Patrick Colquhoun produced some Reflections on the causes which have produced the present distress in commercial credit (1793), and James Currie wrote of the ‘general distress in the commercial and manufacturing interests’ (1793, p. 17) and made it clear that that he understood ‘distress’ as the opposite of ‘prosperity’ (p. 1). Not only must such terms have been widely perceived as antonymous, but the view that prosperity is, in some way, the cause of distress was held by enough people to induce Richard Brinsley Sheridan to openly dispute it during a debate before the House of Commons: ‘To assert that the distress of commercial credit was owing to the great prosperity of the country might make a very sonorous period, but would not be much relished in the city. It would be considered as but a poor compliment to congratulate a man on his having proved himself one of the most industrious manufacturers, or enterprising merchants, by getting into the Gazette as a bankrupt’ (Great Britain, Parliament, 1793, p. 31). The opposite view was reasserted during the same debate by Mr Rose, who said, ‘That the time of the greatest prosperity of a country might be the time of the greatest

60 Daniele Besomi distress to commercial credit, appeared from what happened in this country in 1772’ (ibid, p. 33). ‘Distress’ is a fairly elastic term. It can refer to individuals (The precipitation and fall of Mess. Douglas, Heron, and Company, late bankers in Air, with the causes of their distress and ruin, Anonymous, 1778), to classes (for instance Suggestions for producing public improvements, and affording employment for the distressed manufacturers and the labouring poor, Phillips, 1816, or Letters addressed to the Earl of Liverpool . . . on the distress of the mercantile, shipping, agricultural, and manufacturing interests, Pinsent, 1820, or A letter to the . . . Earl of Liverpool, . . . on the means of relieving the present distress of the farmer, Torrens, 1816), or more frequently to the entire nation (for instance, Exposition of one principal cause of the national distress, particularly in manufacturing districts, Anonymous, 1817; Letters . . . on the pecuniary distresses of the country, Sinclair, 1797; or ‘Commercial distress of the country’, McCulloch, 1816). Although rarely, it has also been used in the plural – suggesting awareness that such phenomena are recurrent – the first time as early as 1796 when Mr Swanwick, in a debate before the Congress of the United States, disputed the view that ‘our late commercial calamities were no proof of our want of prosperity’ by referring to ‘commercial distresses’ (Carpenter, 1796, p. 49); similarly, Sinclair wrote of ‘pecuniary embarrassments’ (1797, p. 61 and passim) and ‘pecuniary distresses’ (p. 61); Anderson maintained ‘there is no doubt that, while this nefarious system [the possibility of issuing paper money] is continued, as no bounds can be set to speculation, distresses and embarrassments will be felt at irregular periods’ (1797, p. 39); later, Joplin wrote that ‘our national distresses proceed from a destruction of income, . . . and that our distresses arise from this species of derangement, or limitation of the national industry, . . . originally produced by pressures or scarcities of money in the London Money Market’ (1844, p. 85). Notwithstanding this variety of usages, a common feature needs to be stressed. The term ‘distress’ is used in a passive and subjective sense, as a condition suffered by people. The term thus refers to the consequences of the crisis, rather than characterizing the event itself or identifying its causes. It is therefore scarcely useful in theoretical terms. Indeed, its usage was characteristic of the first attempts to discuss the phenomenon, but was soon substituted by more suitable concepts (see Figure 3.1). It was the prevalent descriptor until the 1837 panic, remained in use (although only among a minority of writers) during the 1847 crisis, and rapidly fell into disuse afterwards. No dictionaries record its meaning in association with crises; there are, however, two entries on its connotation in jurisprudence in →[Long]’s Political dictionary (1845–1846) and in →[Knight]’s Standard library cyclopaedia (1853–1860).

3.2.3 Embarrassment An ‘embarrassment’ is defined by the OED as ‘1. embarrassed state or condition: a. of (or with reference to) affairs, circumstances, etc.; often in pecuniary sense. 2. Something which embarrasses; an impediment, obstruction, encumbrance. In pl.

Naming crises 61 often = “pecuniary difficulties”’. The term is also used in French (‘embarras’), also meaning impediment, obstruction, in general and in the medical sense with reference to digestion; the idiom ‘embarras d’argent’ means poverty, lack or scarcity of money (Le Grand Robert de la langue française). The earliest occurrence I have been able to find was expressly used in the sense of ‘pecuniary difficulties’, which appeared in the same passage as ‘pecuniary embarrassments’ in a 1797 pamphlet by Sinclair (p. 11). In 1801, Boyd and Francis Baring used the expression ‘general embarrassment’ to indicate a state of obstructed monetary circulation. Boyd wrote of the ‘notorious embarrassment of the general circulation of the metropolis’ (1801, p. 5), and disputed Barings’s claim (1801, p. 8) that the ‘general embarrassment’ was caused by a reduction of banknotes (Boyd, 1801, p. xxii). A few years later the expression ‘commercial embarrassments’ became a shorthand descriptive for a situation of general commercial difficulty. We find it in the body of text and in the title of a number of writings. Among these, an anonymous merchant expounded some Considerations on the causes which have produced our present commercial embarrassments (1811); McCulloch, in a review also using several other expressions for crises, discussed ‘Commercial embarrassments and trade with France’ (1819); an anonymous writer produced a pamphlet titled An enquiry into the causes of the present commercial embarrassments in the United States (Anonymous 1, 1819); Joplin discussed The cause and cure of our commercial embarrassments (1841), and [Duncan] discussed Mercantile embarrassments, and the present state of the banking system (1842). The expression, however, is more easily found in the popular press, both in Britain and the United States, and must therefore have exerted some appeal (for example, see Orleans Gazette, 1819; Raleigh Register, 1819; Bristol Mercury, 1819; Providence Patriot, 1822; Hampshire Telegraph and Sussex Chronicle, 1825; The Times, 1826a and 1826b; New York Spectator, 1837; The Economist, 1846; Bankers’ Magazine (Anonymous 1, 1850)). It occasionally appeared in the body of text of some later publications (mostly magazines). There are no dictionaries carrying dedicated entries to ‘embarrassment’. The term, however, is occasionally used in dictionaries. The first occurrence is in the entry BANK OF ENGLAND of →Montefiore’s Commercial dictionary: ‘As the public attention was particularly drawn to the imperial loan at the time, and as it formed the prominent feature in the remonstrances from the bank, it has been considered as the sole cause of the general embarrassment. But it was the magnitude of the sum, not the description of service, which created the difficulty’ (1803, n.p.). The term is used a few times in James Mill’s entry on BANKING in the 1824 supplement of the →Encyclopædia Britannica with reference to the business of central banks: ‘the embarrassments to which the Bank of England has been occasionally exposed from the fluctuations of commerce, and from the effects of political alarms’ (p. 78); and ‘the Bank of France was considerably embarrassed by the drain of its specie’ (p. 89; see also pp. 83 and 84). Ganilh estimated that ‘paper [money] embarrasses internal circulation, while gold and silver coins facilitate and encourage it’ (CRÉDIT, in →Dictionnaire analytique d’économie politique, 1826, p. 185). Juglar used the term as a descriptive of the state of affairs

62 Daniele Besomi during a crisis or its successive liquidation, or even as synonymous with both, as for example in the following passages: ‘the excesses of domestic and foreign trade, at prices inflated by speculation rather than at their natural level. This is the main cause of all embarrassments’ (CRISES COMMERCIALES, in →Block’s Dictionnaire général de la politique, 1863, p. 621: see Chapter 12); ‘in December, in the midst of the embarrassments of a painful liquidation . . .’ (p. 620); or ‘whereas commercial embarrassments last a fairly short time, at most one or two years, prosperous times extend over several years, six to seven on average’ (p. 621). Macleod also used the expression ‘embarrassments in the mercantile world’ (CRISIS, COMMERCIAL, in his →Dictionary of political economy, 1863, p. 631; see Chapter 13). Much later, a couple of entries used the term ‘embarrassment’ in relation to economic difficulties pertaining to individuals. In the entry CRÉDIT MOBILIER in →Bliss’s Encyclopedia of social reform, for instance, it is reported that a seller of the shares of Crédit Mobilier asserted that from them no embarrassment could follow (1897, p. 396); Mitchell also used the term in this sense: ‘In the face of threatened bankruptcy an embarrassed house may sacrifice accumulated stocks for what can be had’ (BUSINESS CYCLES, in →Seligman’s Encyclopaedia of the social sciences, 1933, p. 106; see Chapter 22).

3.2.4 Stagnation The Oxford English dictionary defines ‘stagnation’ as follows: ‘1. The condition of being stagnant; an instance of this. a. of water, ice or air. b. Phys. of blood, sap, etc. in a living body. 2. fig. Unhealthy absence of activity, energy, etc. Also spec. in Econ., an absence or low rate of growth’. Economic usage through history, however, is actually more varied. While indeed generally indicating the absence (or, rather, a low level) of economic activity, the term has been used in at least five distinct ways. The precise definition offered by the OED has been employed only recently, and features in some dictionary entries. For instance, in Géhanne’s CRISES ET FLUCTUATIONS ÉCONOMIQUES, ‘stagnation’ is used as follows: the downwards phase of the business cycle can be characterized by a non-negative slope of the GDP curve, ‘a simple stagnation of the rate of growth rather than a depression’ (1995, →Dictionnaire thématique des sciences économiques et sociales, Vol. 2, p. 99). Similarly, in the entry on ECONOMIC CYCLES for →Kaliski’s Encyclopedia of business and finance, it is stated that during the contracting phase of the cycle ‘There might be a period of stagnation during which there is no growth or even a decline in economic activity’ (P. Luft, 2001, p. 262). Two dedicated entries explicitly define the term consistently with the OED definition: Penrose’s STAGNATION for →Sills’s International encyclopedia of the social sciences (1968, p. 137), and Dutt’s entry under the same title for the second edition of the same encyclopaedia (2008, p. 83). As we shall see below, the adoption of this definition is somehow problematic as it is inconsistent with the usage of classical economists, to whom, however, a reflection on ‘stagnation’ is attributed. The earliest usage of the term was more generically applied to any situation in which trade (whether in individual branches, or generally) or credit take place at

Naming crises 63 a very slow pace. An anonymous writer, inquiring into the effects of the introduction of copper money, argued that the subsequent inflation would halt domestic trade: ‘All domestick Commodities being raised [in price], there must either follow an entire Stagnation of Trade, or a proportionable Rise of all foreign Commodities’ (Anonymous, 1724, p. 29). The following example illustrates the metaphorical transfer of the verbal form from medicine, and opposes ‘paralysis’ and ‘stagnation’ to ‘prosperity’, while pointing out that trade is only stalled to a degree: ‘War to a Trading Nation is a Degree of Death; it is a strong Paralytick, it stagnates the Blood; and, in a word, is fatal, if not to the Trade itself in general, yet to the Prosperity and Health of it’ (Anonymous 2, 1729, p. 24).7 Similarly, Madden writes that the preference for ‘coin money’ over paper money ‘stagnates our Affairs and Business to a great Degree’ (1738, p. 180). Analogous examples are scattered through eighteenth- and nineteenth-century literature, also in French, German and Italian. The term first appeared in titles in 1819 (an anonymous Friendly Address to the Manufacturers in those districts which are now suffering from the stagnation of trade) and 1820 (J.-B. Say’s Lettres à M. Malthus sur différens sujets d’économie politique, notamment sur les causes de la stagnation générale du commerce, promptly translated into English). ‘Stagnation’ in this sense is naturally also used in dictionaries. The first appearance seems to be in the entry on COMMERCE in →Ganilh’s Dictionnaire analytique d’économie politique, where it is argued that if a country limits the imports of foreign products, it is hindered in producing its own goods, and eventually ‘will become stationary, or rather reduced to a stagnation8 from which it will never be able to emerge’ (1826, p. 145). McCulloch used the term in reporting of the diminished consumption caused by ‘the loss of a great part of our colonial possessions, the stagnation of commerce, and difficulty of obtaining employment, occasioned by the American war’ (CORN LAWS AND CORN TRADE, →McCulloch’s Dictionary of . . . commerce and commercial navigation, 1834, p. 405). Occasionally, such generic usage reappears in later writings, including contemporary dictionaries. A common feature to this usage of ‘stagnation’ as a slowing down of trade is that how slow is not defined with precision: surely, trade never comes to a complete stoppage, but a slowdown (with respect to some unspecified standard) will produce noticeable effects, giving the impression that everything is stalled. In spite of the fuzziness on this precise point, even this generic usage of ‘stagnation’ has some advantages with respect to the notion of ‘distress’ (see Section 3.2.2). While the latter is referred to a condition subjectively felt by individuals or by collectivities, the idea of ‘stagnation’ refers to a state of trade. ‘Distress’ thus refers to the consequences of the economic difficulties, while ‘stagnation’ tries to characterize them. When crises started to be explicitly discussed, ‘stagnation’ in the sense of languishing trade was mentioned (in particular in French dictionaries) as one of the features of crises. The following considerations are offered in the entry on CRISE COMMERCIALE ET INDUSTRIELLE in →Monbrion’s Dictionnaire universel du commerce, de la banque, et des manufactures. The author argues that unforeseen excesses of production cause a reduction of prices and a complete stagnation in manufacture and trade, and that ‘such a stagnation becomes in a way necessary to

64 Daniele Besomi give time for the excess of products to be absorbed by the daily consumption and exportation. For this reason after a crisis, as a natural reaction, one should expect that activity in general increases, because industry must satisfy the arrears of demand for consumption that were left in suspense during the stagnation’ (1838, p. 637; see Chapter 6). Ott also discussed the role of the stagnation of trade in the generation of a crisis: ‘Eventually the market will be glutted insomuch as only a small number of products can be sold, and at a considerable loss. Sales, purchases and production will then stop. And if this phenomenon affects important goods, those involving large masses of capital and occupying a large number of workers, or if it affects a large number of goods at once, then the stagnation in these branches will spread to all others, and there will be a full commercial crisis’ (CRISE, in →Ott’s Dictionnaire des sciences politiques et sociales, 1854, p. 1389; see Chapter 10). Garnier thought instead of stagnation as one of the consequences of a crisis: ‘in most cases social and political shocks, revolutions and all sorts of unrests produce a general crisis, the effects of which . . . are, in brief, uncertainty about the future, shrinkage of consumption, of exchanges and of production by means of a general stagnation, which is synonymous with diminution of wages and profits, that is, with straits and misery’ (CRISES COMMERCIALES, →Guillaumin’s Dictionnaire universel, théorique et pratique du commerce et de la navigation, 1859, p. 921; see Chapter 6, Section 6.6). This introduces the third usage of ‘stagnation’. Sometimes the term was used (often in opposition to ‘prosperity’) to indicate either periods of bad times generally, or a specific phase of the cycle. This usage is already found in early writings, such as in the following passages: ‘as Plenty is the constant Attendant of Peace, so Poverty is the never-failing Companion of War; which proceeds, entirely, from the certain Stagnation of Trade under the latter, and its prosperous and flourishing Condition under the former’ (Anonymous, 1743, p. 5), and ‘panics, runs for gold, fluctuations in the currency, and all the old vicissitudes of periods of high prosperity, alternating with seasons of extreme scarcity and stagnation of trade, recurred with as deplorable a frequency and intense severity as ever’ ([Page] 1842, p. 97). As to the term being used referring to a phase of the cycle, there are examples in dictionaries. The entry on CREDIT in →Lieber’s Encyclopaedia Americana was among the first writings to describe the circular and periodic path (the ‘ebbs and flows’) through which credit passes, at one point of which ‘the acceleration of industry, and the extension of credit, go on until a surplus and stagnation are again produced’ (1830, p. 9). The most famous early description of such a circle, in ten phases, one of which is ‘stagnation’, is due to Overstone, and naturally we find it occasionally cited in dictionary entries – for instance, Herkner’s KRISEN for →Conrad’s Handwörterbuch der Staatswissenschaften (1890, p. 891; see Chapter 18) and much later in Vosgerau’s KONJUNKTURTHEORIE, in →Albers et al.’s Handwörterbuch der Wirtschaftswissenschaften (1978, p. 479). A fourth usage of the term ‘stagnation’ is associated with Hansen’s thesis of the maturity of capitalism (1938), further elaborated by Kalecki, Steindl and others. Dictionaries began to incorporate a discussion of this theme in business cycle entries two decades after the first publication, beginning with Johr’s KONJUNKTUR (II)

Naming crises 65 POLITIK for the →Handwörterbuch der Sozialwissenschaften. John was, however, more interested in discussing the permanent character of the suggested remedies, as opposed to the more time-specific interventions implied, for example, by the Keynesian approach (1959, p. 118). Other dictionaries classified the ‘secular stagnation’ approach among the theories of underconsumption and oversaving (W. Weber, KONJUNKTUR UND KRISE, in →Klose’s Katholisches Soziallexikon, 1964, p. 555; and Ciocca, CRISI ECONOMICHE: IL NOVECENTO, in →Carmagnani and Vercelli, Economia e storia, 1978, p. 146; King also cites Steindl in this context: UNDERCONSUMPTION, →Elgar companion to post Keynesian economics, 2003, p. 372). A Marxist dictionary reported Joan Robinson’s benevolent but critical reinterpretation of Rosa Luxemburg as an early version of the secular stagnation thesis (V. Holesovsky, KONJUNKTUR UND KRISE, in →Frenzel’s Ökonomie (Marxismus in Systemvergleich), 1973, p. 305). The few dictionary entries dedicated to ‘stagnation’ all discuss (some nonexclusively) the term in this connection. The first was →Hanson’s Dictionary of economics and commerce (1965), which defined the STAGNATION THESIS as ‘the belief that in advanced economies saving might be so great as to make the maintenance of full employment difficult’, adding that ‘few people now hold this view’. →Taylor’s New dictionary of economics also carried a short entry on STAGNATION, THEORY OF, explaining that mature economies are characterized by a much lower schedule of the marginal efficiency of capital than was the case in the nineteenth century, so that investment opportunities have declined (1966, p. 274). These entries were followed by a short sceptical entry on SECULAR-STAGNATION THESIS (MATURE-ECONOMY THESIS) in the →McGraw-Hill dictionary of modern economics (1983), where Hansen’s original interpretation of the US having reached maturity in the 1930s is rejected as the events after 1939 proved ‘that the depression of the 1930s was, in fact, only a deep cyclical contraction which ushered in decades of economic growth in even the most mature industrial economies. Nevertheless, fears of secular stagnation are revived during each downturn. In the early 1960s, secular stagnationists pointed to the prevailing high unemployment rate in the United States as a confirmation of the stagnation thesis’. →The new Palgrave carried a long and detailed entry on STAGNATION by Josef Steindl (1987; the entry was not retained in the 2nd edition, 2008), where the origin of various strains of the idea of secular stagnation is traced to the recognition of historical patterns of stagnation and decadence of society, to the biological analogy with maturity and ageing, and to the dogmatic belief that all class systems must sooner or later decay. Steindl refers to long waves as an alternative interpretation of the stagnation of the 1930s, but dismisses it as being based on little theories and carries on by reviewing the ideas of Hansen, Sweezy, Kalecki, Sylos-Labini and his own. The two entries titled STAGNATION for the first and second editions of the →International encyclopedia of the social sciences (Penrose, 1968, and Dutt, 2008) start with a definition of the term based on the rate of growth of output being close to zero (Dutt adds, and Penrose implicitly maintains, that such a condition relates

66 Daniele Besomi to a relatively long period of time). On the basis of this notion, they examine the economists’ discussions of the various possible occurrences of such circumstances. Their examination in this context of the classical economists’ notion that the system will eventually tend to a ‘stationary state’ seems to suggest that the classics used the term in this sense, while this does not seem to be the case: the few occurrences of the term in the writings of Smith, Ricardo and Malthus are all consistent with the idea of temporarily languishing trade. Both these entries also discuss the idea of stagnation developed in the framework of Keynesian economics, and the issue of the stagnation in less-developed countries. The fifth usage of the term ‘stagnation’ is associated with the declining phase of long waves (on which, see Chapter 24), or at least with the long-run trend. Medio, for instance, in the entry on TRADE CYCLE for the 2nd edition of →The new Palgrave (2008), remarked that ‘There also exists an inverse causal relation running from trend to cycle; that is, the characteristics of a cycle, in particular its amplitude and duration, are markedly different according to whether the economy is in a phase of stagnation or prosperity’. In the same dictionary, Solomou uses the word in passing in the same sense, with reference to the years preceding and following the Second World War: ‘the most significant long-run growth variations are associated with the growth stagnation of the 1930s and the resurgence of growth in the 1940s’ (Solomou, KONDRATIEFF CYCLES, →The new Palgrave, 2008). Similarly, J. N. Cohen characterized the lowest phase of the long wave as follows: ‘When the leading sector’s life cycle reaches maturity and declines, the economy will have lost its underlying engine of growth. Stagnation will begin and it will continue until a new technology is found’ (LONG-WAVE THEORY, in Clegg and Bailey, 2008, p. 832).

3.2.5 Panic The Oxford English dictionary defines ‘panic’ as follows: ‘1.a. A sudden feeling of alarm or fear of sufficient intensity or uncontrollableness as to lead to extravagant or wildly unthinking behaviour, such as that which may spread through a crowd of people; the state of experiencing such a feeling. Also: an instance or episode of such feeling; a scare. 1.b. A condition of widespread apprehension in relation to financial and commercial matters, leading to hasty measures to secure against possible loss.’ The general meaning 1a predates in usage the specific meaning relating to financial matters. Examples of the former, in fact, can be noted in the first half of the seventeenth century, while the first occurrence of the latter I have been able to find dates from exactly a century later. In 1742, an anonymous Member of Parliament, discussing the flood of bank bills issued by the Royal Bank of France, eventually leading to the bursting of the Mississippi bubble, pointed out that ‘the immense Sum which was emitted in Bank-Bills, was more than the Cash or Specie in the Bank was sufficient to circulate; especially upon any extraordinary Draught; so that the Bank, being unable to stand the Shock of the least Panic, was suddenly broke’ (Anonymous 1, 1742, p. 15). The same passage is cited in full, in a pamphlet critical of the view that the Regent was not responsible for defrauding his citizens,

Naming crises 67 with the added question: ‘Sir, whence did that Panic arise, but from the Suspicion of the Regent’s Conduct? (Anonymous 2, 1742, p. 14). The term ‘Panic’ reappears indicating a ‘Time of Danger, [with] People’s running for their Money’ in a 1756 pamphlet attributed to [Magens] (p. 27). In the following year, Harris explained that debasing the standard of money ‘would make a havoc alike of all property, and create universal panics and distrust, not easily to be afterwards repaired’ (1757,Vol. 2, pp. 108–109), and that ‘No alteration can be made in the standard of money without an opprobrious breach of the public faith with all the world; . . . without the risk of producing infinite disorders, distrusts and panics among ourselves’ (ibid., p. 31). In the following six decades the term was used only occasionally. In 1816 it was endorsed by Ricardo. He argued that even the best scheme to prevent fluctuations of the value of the currency other than those to which the standard itself is subject would fail and generate an embarrassment on those extraordinary occasions, when a general panic seizes the country, and when everyone is desirous of possessing the precious metals as the most convenient mode of realizing or concealing his property. Against such panics, Banks have no security, on any system; from their very nature they are subject to them, as at no time can there be in a Bank, or in a country, so much specie or bullion as the monied individuals of such country have a right to demand. Should every man withdraw his balance from his banker on the same day, many times the quantity of bank notes now in circulation would be insufficient to answer such a demand. A panic of this kind was the cause of the crisis in 1797. (Ricardo, 1816, pp. 28–29) At the outburst of the November 1825 crisis the term made it first to the title of an anonymous pamphlet, A brief sketch of the causes and consequences of the present panic ([Hart] 1825), and again appeared in the title and text of a number of writings in the following year; thereafter it was used frequently, in particular on the occasion of the 1847, 1857, 1866, 1873 and especially 1907 crises. The usage quickly petered out from the titles of writings, to reappear occasionally from the 1990s. Few dictionaries carry entries on panics, although naturally some use the term in discussing related subjects. The early encyclopaedias only record the general meaning. In the first edition of →Chambers’s Cyclopædia (1728), for instance, PANIC, or Panic-Fear, is defined as ‘a Term used for a needless, or ill-grounded Fright’. The origin of the expression is indicated as being either in a trick played by the god Pan, whose soldiers were in large minority but scared the enemy without engaging in battle by producing a lot of noise in an echoing valley, or by the same god scaring the Titans by means of a shell used as a trumpet. A similar entry is found in →Johnson’s Dictionary of the English language (1755).9 The first dictionary referring to financial panics seems to be →Montefiore’s Commercial dictionary (1803). The consequences of a fear caused by a noneconomic event are outlined: ‘the general rumour of a French invasion, which was

68 Daniele Besomi confirmed in the minds of many, by the landing of a handful of French troops in Wales . . . occasioned a panic, which gave rise to an immediate demand for money, to which neither gold nor silver bullion could be applied, as nothing would be accepted but the circulating coin of the kingdom’; again, a few pages below: ‘suppose that a general panic or discredit rose to such a height, as to incline all those who could, to realize their notes in gold . . .’ (BANK OF ENGLAND, not paginated; references are from the 12th and 15th pages of the article). For the rest of the century, ‘panics’ featured in dictionaries as mainly indicating ‘run on the banks’. For instance, in the entry on BANQUES in →Ott’s Dictionnaire des sciences politiques et sociales, the general panic referring to the same episode of the fear of a French invasion in 1797 is described as follows: ‘panic became general. The immoderate demand for money, after having caused the cracking of several country banks, placed in serious difficulties the Bank of England, which was authorized to suspend payments in species until the end of the war’ (p. 640). More generally in the same entry, Ott commented that independently of the paper money system, whether John Law’s or Proudhon’s, whenever a commercial disturbance occurs, a panic will follow. The rumour spreads that some traders have gone bankrupt, that discounts will not be paid for on the due date; the holders of banknotes, then, upon realizing that guarantees are failing, want to change their money into some visible and concrete value. People run to buy precious metals, or even any commodity. The sellers of goods in turn are scared, raise their prices, and soon refuse to accept paper money. The entire system collapses, only a few speculators resist amidst universal ruin (p. 647). Similarly, Macleod, in the entry on CRISIS, COMMERCIAL for his own →Dictionary of political economy (1863; see Chapter 13), writes: In ordinary times, raising the rate of discount checks the undue expansion of credit and the demand for notes, and prevents the efflux of gold. But in times of panic, though of course the rate of discount ought to be raised to attract gold from abroad, and to prevent its export, it has no effect whatever in checking the demand for notes. It is then not a question of profit, but of existence. When the power and the resources of the Bank are visibly diminishing before the eyes of the commercial public, every one thinks only of his own security. In such circumstances, raising the rate of discount has only the effect of making the demand for notes stronger. Every one will rush to over-provide himself, and then hoard away the notes. (p. 646) In the last two decades of the century, some dictionaries started reflecting on the relationship of panics and crises.10 Raffalovich saw panics as one of the possible features of crises (‘sudden accidents, which often have the features of a panic’: CRISE, in →Guyot and Raffalovich, Dictionnaire du commerce, de l’industrie et de la banque, 1898, p. 1127). White saw panics as the first phase of the crisis: Each period of abnormal and exciting prosperity is followed by a violent collapse, whose phases are a money panic, a sudden rise in the rate of interest,

Naming crises 69 a run on the banks, and most frequently a suspension of cash payments; then a fall of prices of commodities, securities and real property; failures of mercantile and manufacturing houses and corporations, a partial suspension of industry, a fall of wages and the enforced idleness of great numbers of laborers, often culminating in riots and social anarchy. The money panic is generally of short duration, but the crisis is frequently protracted through a series of years. (COMMERCIAL CRISES, in →Lalor’s Cyclopædia of political science, p. 524) Hadley, in the entry on COMMERCIAL CRISES for the 3rd edition of →Johnson’s new universal cyclopædia (1893), shifted the emphasis from bank runs onto financial panics more generally. He pointed out that Crises are often confounded with panics. There is almost always a connection between the two; but a crisis really means something much wider and longer than a panic. A panic starts among a group of speculators – perhaps in Wall Street, perhaps in the Chicago Produce Exchange, perhaps in the London money market. There are many failures, with much forced liquidation; but when the liquidation is accomplished the matter may be soon over. The panic is purely financial; the crisis which may follow is industrial. It affects not merely the speculators, but the producers; not merely the dealers in securities, but the laborers; not merely the bankers, but the community as a whole. Panics are possible under any system, but the chance for crises, affecting all industry for such a long time, is peculiar to modern industry, and forms perhaps the gravest charge which the socialists can make against the existing industrial system. (pp. 423–424) Similarly, in the unsigned entry on CRISES (COMMERCIAL AND MONETARY), in →Bliss’s New encyclopedia of social reform (1908) it is maintained that ‘A crisis . . . must not be confused with a panic. A panic starts with a group of speculators, perhaps occasioned by some disastrous event or report of a disastrous effect. The market is upset. Weaker firms fail; yet there is no general crisis and the market soon recovers. A crisis lasts longer and is general, tho it is often connected with panics’ (p. 341). The entry on PANICS in →Pitman’s business man’s guide (1907, p. 329) – one of the two dedicated articles – also includes any financial panic in its short definition, but does not discuss their relationship to crises, for which there is no entry. The word ‘panic’ occasionally recurs in dictionaries published throughout the twentieth century, but less frequently than before. This reflects the general usage of the term. As this shows a revival of occurrences since the late 1980s, recent dictionaries have again started featuring the word. Some dictionaries (e.g. the →Gale encyclopedia of U.S. economic history, 1999, and →Glasner’s Business cycles and depressions, 1997) carry entries on various historical panics without,

70 Daniele Besomi however, devoting a specific theoretical article to the general subject. →The new Palgrave, 2nd edition (2008), carries an entry by Calomiris on BANKING CRISES, in which panics are considered as one of the possible sources of banking distress, the other being exogenous shocks. O’Hara, in the entry on ECONOMIC CRISES for the →International encyclopedia of the social sciences (2008), states that crises typically lead to, or are associated with, financial crises taking place in the early phase of the recession; the term ‘panic’ is used as essentially synonymous with ‘financial crisis’, described as runs on the banking and financial systems. The same →International encyclopedia of the social sciences (2008) carries an interesting dedicated entry on PANICS by Spotton Visano. Following Friedman and Schwartz, the possibility that financial panics precede crises is considered, although the opposite can happen; the historical evidence is said to be sufficiently ambiguous to leave scope for debate. The sociological and psychological interpretations of panic phenomena are then related to economic interpretation. The view that a collective mind is formed through contagion, that is, the transmission of behaviour from one individual to another, is related to the views in the tradition of Friedman and Schwartz. The interpretation of crowds phenomena as a simple sum of individual behaviours (convergence among like-minded people) is the basis of the explanations of panics as a rational behaviour of individuals who have fears about the solvency of the banking system. The view of the emergence of a distinctive collective behaviour when the existing norms and conventions are challenged by unusual circumstances is the basis of the historical interpretations (such as Spotton Visano’s own, or Kindleberger’s) that explain financial instability on the grounds of the appearance of unusual conduct in conditions of financial distress and sudden loss of liquidity.

3.2.6 Bubble The Oxford English dictionary reports the following figurative meaning of ‘bubble’: ‘3. Anything fragile, unsubstantial, empty, or worthless; a deceptive show. From 17th c. onwards often applied to delusive commercial or financial schemes, as the Mississippi bubble, the South Sea bubble’; correspondingly, used as an adjective, it means ‘Unsubstantial, fragile, delusive; often with reference to fraudulent commercial undertakings, as in bubble company, scheme’. The dating for the reference to delusive financial schemes, however, is unsubstantiated.11 The earliest example cited by the OED is Swift’s humorous poem ‘The bubble’ (1721). There are some earlier occurrences, but none going as far back as the seventeenth century. A piece titled Credit restored satirized the establishment of the South Sea Company in 1711 as a means of financing Britain’s war debt. ‘Bubble’ premonitorily rhymed with ‘trouble’: ‘Those extravagant Rogues would have spent in a trice, / What they gain’d with much Danger and Trouble; / But our Governors prudent have found this Device, / That they might not their Families bubble’ (Maynwaring, 1711). Humorous writings were the cradle for most of the early occurrences of the term ‘bubble’ as applied to financial matters and, needless to say, the events related to the South Sea bubble were the first target. No less than eight pieces employing the

Naming crises 71 term ‘bubble’ were published in 1720 and 1721. Some of them, carrying the term in their title, were of a burlesque character (among these, there is a set of South Sea bubble playing cards), while only a few writings that were trying more seriously to make sense of the events used the term ‘bubble’. An essential ingredient of the usage of the term ‘bubble’ at the time was the fraudulent character of the schemes involved, made more apparent in its use as a verb; before 1720, this was indeed the main implication of the usage as adjective (‘bubble company’) or as a noun and a verb, as in the following example: ‘it is all a Trick, a Juggle, to bubble and cheat a deluded Nation, and make them take a glittering Bauble for true Gold, and make the Trade appear with a Face different from what it ought to wear’ (Anonymous, [1713]). The first dedicated dictionary entry, in →Mortimer’s New and complete dictionary of trade and commerce (1766), is fully centred around the theme of deception: BUBBLES, by which the public have been tricked and deceived, are of two kinds, viz., 1. Those which we may properly enough term trading-bubbles. And, 2. Stock, or funds-bubbles. The former have been of various kinds, and the latter at different times; as in France and England in 1719 and 1720, and when any remarkable alterations have been made, with regard to the property of our monied corporations. (n.p.) Trading-bubbles concern projects for which subscriptions are obtained beforehand, often on the basis of undue magnification of the prospective profits. The author of the entry suggests as a ‘way to prevent the public being made a bubble of ’ the periodic publication of faithful balance sheets, following the accounting methods adopted by private merchants, and certified by ‘gentlemen of the best education, and of the most knowledge of the world’. Stock-bubbles refer instead to the trading of titles relating to the public debt. Such schemes should be directed on behalf of the public by some ‘among these who are of the best abilities without doors . . . before schemes can be formed and executed to the public detriment. This vigilant inspection, this constant scrutiny of the most judicious proprietors, who have no share in the direction of public companies, is certainly the way to prevent those calamities, which have been so often experienced’. Another source of deception lies in stock-jobbing, ‘or stock-bubbling, if you please’, which ‘seems, at present, to be brought to a kind of science’: Those who make stock-dealing their employment, and lie in wait to take advantage of the innocent, the unwary, and ignorant, make it their business to get such intelligence, and will answer their end, either by buying or selling stocks; and, if such can obtain no real intelligence, to occasion a fluctuation in the stocks, they make no great difficulty to invent such as will answer their purpose. To which end, it is common to propagate one thing in the city, and whisper another at St. James’s, and write different from either both at home and abroad. Have we not known at critical conjunctures, that letters have been

72 Daniele Besomi forged as coming from foreign correspondents, with intelligence only to raise or fall stocks, according to the intention of the forgers? An interesting observation is that dealing in stocks not only fails to produce any wealth, but distracts people from engaging in the activities that really enrich the nation: ‘while men’s minds are engaged in shuffling of property from hand to hand among ourselves only, which makes us never the richer, with all the bustle of these transactions, they neglect solid and useful commerce, which alone can make the nation really richer’. The term ‘bubble’ retained the connotation of fraudulent scheme through most of the nineteenth century. In 1824, for instance, in his Treatise on the laws of commerce and manufacture, the barrister Joseph Chitty still describes Bubbles as ‘deceitful enterprizes’ which, ‘by holding out a prospect of sudden wealth, introduce into the minds of the commercial classes a spirit of gambling, and a contempt for the slow profits of regular industry, while their failure involved all, who were even remotely connected with them, in beggary and ruin’ (p. 253). In describing what later became known as the ‘Bubble Act’,12 passed in 1720 and repealed in 1825, Chitty explicitly refers to the ‘false pretense of public good’ and ‘mischievous projects’, and qualifies the South Sea scheme as a ‘fraudulent design’ (pp. 254–255). An even stronger identification of bubbles with fraud is found after the railways speculations of 1847, when criminal law was invoked to deal with those ‘who perverted . . . the Stock Exchange . . . so openly as to “rig” bubble schemes, concocted to rob the public, up to bubble premiums, and who received large bribes for so openly rigging the market’ (Anonymous, from the Railway Gazette, 25 November 1848, cited in Salt, 1850, p. 82). Similarly, but less strongly, towards the end of the century we find in a newspaper that the ‘Union [Générale] was a bubble company of the ordinary kind, a vulgar swindle’ (Anonymous, 1882). In two entries on bubbles in →Palgrave’s Dictionary of political economy (1894), the overtly fraudulent implication of bubbles was set aside to focus on the inflated value of stocks. Bubbles were defined as follows: ‘joint-stock undertakings the shares of which were “blown up by the air13 of great words”’ (J. Bonar, BUBBLE ACT, Vol. 1, p. 182); and ‘term . . . commonly applied since the 17th century to any unsound commercial undertaking accompanied by a high degree of speculation’ (Nicholson, BUBBLES, HISTORY OF, p. 182). Note that while it is made clear that the object of speculation is an ‘unsound undertaking’, it is not specified what a ‘sound undertaking’ would be. The following dictionary entry dedicated to bubbles was published in →Seligman’s Encyclopaedia of the social sciences. W. L. Thorp correctly traced the first usage to early in the eighteenth century, reported William Blackstone’s narrow definition (in the commentary on a statute enacted in 1721: Blackstone, 1822, Book 4, p. 116) as ‘unwarrantable undertakings by unlawful subscription’, and noted: ‘But the term has since acquired a more general application, and is used with reference to any situation in which the cumulative effects of widespread speculation has been to enhance prices to a point of having no apparent relation to the object of speculation’ (BUBBLES, SPECULATIVE, 1931, p. 24). After tracing the

Naming crises 73 history of some famous bubbles, Thorp added that ‘the bubble is fundamentally a psychological phenomenon. It is based on the principle of projection. The speculator . . . sees only the anticipated profit. The character of his position, emotional rather than rational, makes him extremely susceptible to rumor, and assures a severe crisis when the reaction sets in’ (p. 27). The theme of rationality returned with force in the 1980s, when rational expectations theory brought a new perspective on bubbles and opened a lively discussion on the phenomenon – more precisely, on whether such a phenomenon exists. The dividing line passes through the very definition of the term. Those who admit the existence of the phenomenon incorporate in their definition a cumulative mechanism in which a price rise is driven by expectations of further price rises, and explicitly stress that such phenomena are intrinsically fragile. In the entry INTERNET BUBBLE for →Darity’s International encyclopedia of the social sciences (2008), for instance, R. J. Klotz defines a bubble as ‘an unsustainable increase in the price of an asset type driven by the expectation of further price increases rather than fundamental characteristics. Bubbles are a concern of social science since they result from individual calculations about the behavior of others in society’ (p. 109). Similarly, the →VNR Dictionary of business and finance (1980) defines a BUBBLE as an ‘investment that may or may not be intrinsically and dangerously speculative, but which becomes so as irrational buying pushes it higher and higher, far beyond the real value of its underlying assets’. Spotton and O’Hara write that ‘Speculative bubbles describe a process denoting movements in asset prices that cannot be justified on any reasonable economic grounds, and are not sustainable’, and explain that they ‘occur when competitive bidding, motivated by repetitive and selffulfilling expectations of capital gains, drives up asset prices in excess of any reasonable value for the asset’ (SPECULATIVE BUBBLES AND FUNDAMENTAL VALUES, in →O’Hara’s Encyclopedia of political economy, 1999, pp. 1079–1080). Kindleberger writes of bubbles as a condition in which ‘Rising prices [lead] to further price increases’ (FINANCIAL CRISES, in →Deane and Kuper, A lexikon of economics, 1988, p. 138), and in →The new Palgrave loosely defines them ‘as a sharp rise in price of an asset or a range of assets in a continuous process, with the initial rise generating expectations of further rises and attracting new buyers – generally speculators interested in profits from trading in the asset rather than its use or earning capacity. The rise is usually followed by a reversal of expectations and a sharp decline in price often resulting in financial crisis’ (BUBBLES, in 1st edition 1987; and BUBBLES IN HISTORY, in 2nd edition, 2008). In the entry on BUBBLE in →Dobson’s Bulls, bears, boom, and bust, it is explained that ‘when prices for a commodity rise far beyond the intrinsic value of that commodity, a bubble can occur. Speculators continue bidding the price up until, quite abruptly, demand or interest in the commodity evaporates’ (2007, p. 4). In the entry BUBBLE THEORY (OF SPECULATIVE MARKETS) in →Lee and Lee, Encyclopedia of finance (2006, p. 40), bubbles are defined as referring ‘to security prices that move wildly above their true values and eventually burst’. In the entry on BUBBLES for →Darity’s International encyclopedia of the social sciences (2008), J. E. Leightner writes of the phenomenon taking place ‘when there is excessive investment in

74 Daniele Besomi financial assets, such as stocks, or in real assets, such as housing. The bubble “bursts” when the value of the investment plummets’ (p. 378). These definitions are characterized by the absence of a precise reference as to what the ‘true value’ is, or when speculation becomes ‘excessive’. The alternative approach to bubbles takes instead as a starting point the notion of ‘fundamental value’ of an asset, defined as ‘the present value of the stream of cash flows that its holder expects to receive. These cash flows include the series of dividends that the asset is expected to generate and the expected price of the asset when sold’ (S. S. C. Steimetz, BUBBLES, in →Henderson’s Concise encyclopedia of economics, 2007). Bubbles are said to occur ‘when an asset’s price movements do not reflect changes in the asset’s fundamental value’ (Baddeley, SPECULATIVE BUBBLES, in →Snowdon and Vane, An encyclopedia of macroeconomics, 2002, p. 668; similarly, Iraola and Santos, SPECULATIVE BUBBLES, in →The new Palgrave, 2008) or ‘if the price exceeds the asset’s fundamental value’ (Brunnermeier, BUBBLES, in →The new Palgrave, 2008); similarly, if ‘an asset is persistently trading at a price higher than its fundamental value, we would say that its price exhibits a bubble and that the asset is overvalued by an amount equal to the bubble – the difference between the asset’s trading price and its fundamental value’ (Steimetz, BUBBLES, cited). If investors are subject to rational expectations, however, such a situation is impossible, as markets are by definition bound to be efficient. ‘Bubbles’ are thus defined in such a way as not to exist in a rational world, and thus to be interpreted – if observed ex post, as the ‘fundamental value’ taken as a reference point is not an intrinsic feature of the asset but the unobservable result of expectations concerning its future value – as irrational phenomena.14

3.2.7 Depression The earliest occurrences of the term ‘depression’, or more frequently of the corresponding verb ‘to depress’, in relation to economic matters, refer to the old-fashioned figurative meaning reported in the Oxford English dictionary as follows: ‘4. Fig. The action of putting down or bringing low, or the fact or condition of being brought low (in station, fortunes, etc.). Now rare’. The earliest occurrences date from the late seventeenth century, and further examples are found throughout the eighteenth century. A few instances will suffice. A writer argued that high interest discourages trade and wholly depresses land (Anonymous, 1692, pp. 60–61). Ferguson reckons that the constitution of the India Company by an act of the Scottish Parliament would ‘encrease the Trade, and raise the grandeur of the Dutch, and [. . .] depress and lessen the Trade of England’ (1695, p. 58). In Paxton, 1704 we find: ‘this . . . must naturally depress the Value of our Goods’ (p. 64). Bath laments that ‘heavy Taxes [. . .] impoverish the People, and depress our Trade (1734, p. 52). Towards the end of the eighteenth century, we find the first occurrences of the term used in the sense of ‘5. a. A lowering in quality, vigour, or amount; the state of being lowered or reduced in force, activity, intensity, etc. In mod. use esp. of trade; spec. the Depression, the financial and industrial ‘slump’ of 1929 and subsequent years. Also attrib.’ (OED). Interestingly, among the first occurrences

Naming crises 75 we find ‘depression’ used in contraposition to ‘prosperity’, both referring to the economic state of the country as a whole. In The wealth of nations, for instance, Smith writes that ‘statuaries and painters are not likely to be worse rewarded in times of wealth and prosperity, than in times of poverty and depression’ (1776, 1979 ed., p. 208). After the term ‘depression’ in this sense became widespread enough to make it to the title of a publication (Brand’s pamphlet A determination of the average depression of the price of wheat in war, 1800), Francis Randolph suggests the parameters by which prosperity and depression are to be measured: ‘the return of the Customs, the price of Stock, the facility of negociating loans, and the favourable terms on which they are borrowed, compose a sort of state barometer, which we are told to consult, if we would ascertain the height of Britain’s prosperity. Should these indicate no depression,15 we assume a lofty attitude’ (1808, pp. 71–72). By 1823, the pair ‘prosperity and depression’ made it to the title of a book by Mathew Carey, The crisis: A solemn appeal . . . on the destructive effects of the present policy of this country, on its agriculture, manufactures, commerce, and finances. With a comparison between the extraordinary prosperity of Great Britain, and the general depression in the United States. Although the early usage of ‘prosperity’ and ‘depression’ as antonymous indicates that writers were already aware of the alternation of good and bad states of affairs, the emphasis soon shifted to crises and the causes of their outbreaks. The terminology in use from the 1837 crisis onwards is characterized by the predominance of the words ‘crisis’ and ‘panic’ (see Sections 3.2.8 and 3.2.5 respectively). Towards the middle of the nineteenth century, the term ‘depression’ indicated a low or very low level of, say, prices, as in the following examples: ‘when the price is ruinously depressed’ (Macleod, CREDIT, in his own →Dictionary of political economy, 1863, p. 588); or: when, in the case of abundant crops, ‘the surplus is thrown upon the market, it cannot fail . . . to cause a ruinous depression. Now, this was the precise situation of this country at the end of the war. . . . The first luxuriant crop must have occasioned a ruinous decline of prices’ (McCulloch, CORN LAWS AND CORN TRADE, in his own →Dictionary of . . . commerce and commercial navigation, 1834, p. 412). The notion of ‘depression’ as a specific state of affairs was not really explored, witnessing that the idea of a ‘cycle’ characterized by the alternation and chained causation of prosperity and depression was not yet ripe (see Section 3.2.9). By the late 1870s, however, the term ‘depression’ became predominantly applied to the new economic situation, and was consistently used to describe economic disturbances in the last two decades of the century. Its meaning, however, changed again. The new notion of ‘depression’ arose from the necessity of distinguishing the sudden and violent character of crises, as they had occurred from the second to the sixth decades of the century, from the sluggish and persistent character of the depressions of the mid-1870s, the mid-1880s and the mid-1990s. While on previous occasions the recovery from crises was relatively quick, the effects of the crisis of 1873 were still felt in 1879. By 1876, the question became (as aptly titled by The Economist) ‘Why the commercial depression is so protracted’ (Anonymous 2, 1877), and within three years the word ‘depression’ was being used more frequently than the word ‘crisis’ in the titles of writings (see Figure 3.3). The

76 Daniele Besomi terminological switch, however, was not accompanied by a reflection on the precise meaning of terms. There seems to have been a sentiment that the state of trade differed from the old crises, and there were indeed some attempts to compare them,16 but without explicitly codifying the outcome of the inquiry into definitional statements. The few attempts at defining the depression did not distinguish this concept from the old notion of glut. Price, for instance, wrote as follows: ‘What is the meaning of the expression – commercial depression? Want of buyers, deficiency of buying power, markets unable to take off the goods made and repay their cost of production. Makers and sellers are depressed; they cannot find the indispensable buyers’ (1879, p. 270); similarly, Millington: ‘“Depression of Trade,” simplified, means a limitation upon the part of the community to purchase the various commodities for subsistence which have been produced; hence the various markets are glutted with valuable goods for which purchasers are not forthcoming, from which cause the whole commercial community are injuriously affected and workmen thrown out of employment’ ([1885], p. 3). Dictionary writers attempted instead to distinguish between crises and depressions, precisely focusing on the sudden and violent character of the former as opposed to the chronic and creeping features of the latter. This is exemplified by the entry on CRISES (COMMERCIAL AND MONETARY) for →Bliss’s Encyclopedia of social reform, 1897: ‘A time of general difficulty and pressure in commercial and monetary circles, if acute, is called a crisis; if prolonged it is usually called a period of depression’ (p. 430). Notably, some of the first of such entries were in French (Laveleye’s CRISE in the →Grande encyclopédie, 1886–1902 (see Chapter 15), and Raffalovich’s CRISE, in →Guyot and Raffalovich, Dictionnaire du commerce, de l’industrie et de la banque, 1898) and German (Herkner’s KRISEN, in →Conrad, Handwörterbuch de Staatswissenschaften, 1892 (see Chapter 18) and Wellstein’s KRISEN, in →Bruder’s Staatslexikon, 1911, p. 525), and all referred to the English term ‘depression’ (the corresponding passages are cited in Section 3.2.8.4). When the notion of ‘cycle’ had firmly taken over the emphasis on ‘crises’ in the theoretical discussion on economic disturbances, the term ‘depression’ changed meaning again. In most twentieth-century dictionaries the term is associated either with the descending phase of the cycle generally, or with a specific phase of the cycle. The former of these meanings echoes the opposition of ‘prosperity’ and ‘depression’ in use in the early nineteenth century. The setting, however, is new, as the reference is not to generic states of good and bad trade but to a systematic alternation, and mutual causation, of phases of intensification and regression of economic activity. An early example is found in White’s entry on COMMERCIAL CRISES in →Lalor’s Cyclopædia of political science, which is remarkable for the first appearance of the pendulum analogy for describing the cycle: ‘These undulations of trade, of alternately high and low prices, of alternate activity and depression in business, have their root in the mental and moral constitution of mankind’ (1882, p. 524). ‘The pendulum has now (1881) begun to swing back, and there are many signs that the country has started on a new career of prosperity, to be succeeded by another crisis, another period of commercial depression, revulsion, stagnation’ (p. 525). Similarly, →Pitman’s business man’s encyclopedia

Naming crises 77 uses the term as follows: ‘Just as a period of industrial activity leads to a period of depression and sooner or later to a commercial crisis, so a period of depression leads up to another spell at industrial activity’ (COMMERCIAL CRISIS, 1927). Similarly, F. Vinci, in the entry CRISI ECONOMICA for →the Dizionario di politica by the Partito Nazionale Fascista, describes a cycle based on the excess of investment characterizing prosperity and the supervening of pessimism during depression, and explains that a new cycle will follow this phase (1940, p. 690). More recently, C. D. Romer’s entry on BUSINESS CYCLES in the →Fortune encyclopedia of economics also writes in similar terms, but in an interpretative framework resembling more the early nineteenth century’s than the one prevailing a century later. The definition runs as follows: ‘Periods of economic expansion are typically called booms; periods of economic decline are called recessions or depressions. The combination of booms and recessions, the ebb and flow of economic activity, is called the business cycle’ (1993, p. 173). The business cycle, however, is not seen as a necessity: the alternation of booms and depressions is chronological but not causal, precisely as a succession of heads is bound to alternate with a succession of tails in the throwing of a coin. Indeed, as the author herself suggests, the term ‘fluctuation’ would better represent the phenomenon than the term ‘cycle’ (see Sections 3.2.9 and 3.2.10 on cycles and on fluctuations). Most dictionary entries in the twentieth century referred to ‘depressions’ as a specific phase of the cycle: ‘The typical business cycle is usually divided into four successive stages: recovery, prosperity, recession, and depression’ (BUSINESS CYCLES, in →Horton et al., Dictionary of modern economics, 1948), or ‘The fluctuation is from a period of prosperity, or boom, down through a recession, to depression, or slump, then a recovery to prosperity through a period known as revival’ (TRADE CYCLE, in →Taylor, A new dictionary of economics, 1966). Medio stresses that the name of the four traditionally recognized phases may vary, and suggests that the two main phases – expansion and contraction – are divided as follows: the recovery, during which the system begins raising from the lowest point; the prosperity, or boom, when the system raises above the normal level to reach the peak; during the recession the system returns down towards its normal level, while during the depression it keeps falling below that point until the movement is reversed again at the trough (CICLO, in →Lunghini, Dizionario di economia politica, 1983, Vol. 10, p. 12). There are also, however, divisions in stages in a different number of phases. Weinberger, for instance, reported the five phases listed by the Harvard Institute: ‘Depression, Recovery, Prosperity, Financial Strain, Industrial Crisis’ (KONJUNKTUR U. KRISEN, 1929, in the 5th edn of the →Staatslexikon, edited by Sacher – English in the original). →Munn’s Encyclopedia of banking and finance distinguished instead seven phases: crisis, emergency liquidation, depression, readjustment, revival, prosperity, and overextension and speculation. The depression is described as follows: ‘This is a period of “hard times” in which the disturbance in the normal equilibrium between supply and demand is still felt. Prices are low and efforts are made to work off the excess of goods. There is a drastic curtailment of production, resulting in wide-spread unemployment, reduction or elimination of profits, accumulation of money supply

78 Daniele Besomi through the deflation of credit, and a general practice of economy. There is a constant “feeling for the bottom” in the price movement’ (BUSINESS CYCLE, in all editions from 1924 to 1993). Finally, some writers reserve the name ‘depression’ for particularly deep contractions of economic activity. In dictionaries this distinction seems to date from Burns’s entry on BUSINESS CYCLES: GENERAL in →Sills’s International encyclopedia of the social sciences, which used ‘recession’ to indicate moderate downturns lasting about a year and ‘depressions’ to indicate longer and deeper contractions (1968, p. 229).17 Mullineux takes up the emphasis on the severity of the contraction, and distinguishes recessions from depressions on the grounds of whether the contracting phase of the economy shows a ‘slower than average growth (a recession), or a period of negative growth (a depression)’ (BUSINESS CYCLES, in →Kuper and Kuper, The social science encyclopedia, 1985, p. 83). Similarly, we find in →Hillstrom’s Encyclopedia of small business that ‘A particularly severe recession is known as a depression’ (BUSINESS CYCLES, 2007, p. 114); Géhanne also contrasts the mild character of a recession with the ‘brutal’ downturn and the cumulative process associated to a depression (CRISES ET FLUCTUATIONS ÉCONOMIQUES, in →Géhanne, Dictionnaire thématique des sciences économiques et sociales, 1995, Vol. 2, p. 84). Pollard emphasizes instead the duration aspect. He explains that ‘By general consent’, the declining phases of none of the shortand medium-length cycles are normally termed depressions. ‘That term is reserved for longer periods of more serious adversity on an international scale, in particular the Great Depressions of c. 1873–1896 and of the 1930s. By analogy, the distressed years following the Napoleonic wars and the years since the downturn of 1973 have also been included in that category. In view of the fact that these seem to have occurred at fairly regular intervals, attempts have not been lacking to explain them as part of an alternating movement also.’ Pollard thus discusses depressions in the context of long waves (DEPRESSIONS, in →Eatwell et al., The new Palgrave, 1987). Keen points out that while ‘There is an accepted statistical definition of a recession, developed by the National Bureau of Economic Research, as the period from the peak to the trough of a range of cyclical economic data’, ‘No such accepted statistical definition exists for the much more severe and infrequent phenomenon of a depression. At the minimum, depressions are recessions extended in either severity or duration; symptomatically, they are marked by financial crises and falling prices’ (DEPRESSION, ECONOMIC, in →Darity, International encyclopedia of the social sciences, 2008, Vol. 2, p. 302).

3.2.8 Crisis 3.2.8.1 Etymology The term ‘crisis’ originates from a Greek term meaning ‘discrimination’, ‘decision’, and from the corresponding verb meaning ‘to decide’. The original usage in English, dating from the sixteenth century, was in the field of medicine; the term indicates ‘The point in the progress of a disease when an important development or change

Naming crises 79 takes place which is decisive of recovery or death; the turning-point of a disease for better or worse; also applied to any marked or sudden variation occurring in the progress of a disease and to the phenomena accompanying it’. Later, it was also used in a figurative sense as ‘A vitally important or decisive stage in the progress of anything; a turning-point; also, a state of affairs in which a decisive change for better or worse is imminent; now applied esp. to times of difficulty, insecurity, and suspense in politics or commerce’ (OED). 3.2.8.2 Usage The first, isolated occurrence on record of the use of the term to indicate a financial crisis is found in the dedication of a pamphlet with some Reflections on the late alarming bankruptcies in Scotland, published in the wake of the June 1772 financial crisis (Boswell, 1772). It was ‘Addressed to all ranks: But particularly to the different classes of men from whom payments may soon be demanded. With advice to such, how to conduct themselves at this crisis.’ The term ‘crisis’ was occasionally used in an economic sense at the time of the 1793 and 1797 crises, and in correspondence with the high price of provisions of 1800, but it was only with the panic of 1825 that it began to recur with some frequency, mostly within the text. Its final consecration took place with the 1837 crisis, on which occasion it became the most used catchword in titles, and so it remained from the 1847 panic until the mid-1870s, when the situation was better described by means of the term ‘depression’ (see Section 3.2.8.4). ‘Crisis’ was normally accompanied by the qualifier ‘commercial’, occasionally by ‘monetary’, ‘financial’ and more rarely by ‘industrial’. Later, the adjective ‘economic’ encompassed the previous qualifiers to stress the pervasive character of crises. As Huart (1911) explained, ‘we prefer to use the qualifier “economic” rather than “commercial” as used by Juglar. A commercial crisis, in fact, is but one of the forms of the crisis, and as such it does not sufficiently characterize the universality of modern crises. Economic crisis – a term already used by Yves Guyot (Le commerce et les commerçants, Ch. XI, p. 180) and by W. G. LangworthyTaylor, La théorie cinématique des crises économiques (Lincoln, Nebraska, 1904) – indicates instead that all branches of the national economy are affected – not only trade, but also industry, finance, agriculture, the banking system, etc.’.18 The relatively late use of the term ‘crisis’ applies to both Britain and the United States. In French, the expression ‘crise commerciale’ came into common use a few years earlier than in English. It is found in an article in Mercure de France, where it is remarked that ‘the political crisis is not less severe than the commercial crisis’ (Anonymous, 1810), and most famously by Sismondi in his detailed discussion of the phenomenon in 1819 (p. iv). It is thus in this language that the term was first recorded in dictionaries, beginning with Lemonnier’s CRISES COMMERCIALES in Duckett’s →Dictionnaire de la conversation et de la lecture (1835). The first such entry in English is due to Macleod in 1863; meanwhile, eight more French entries were published,19 two of which translated into Italian;20 an original Italian entry was published in 1857 by Boccardo (see Chapter 11), and three German dictionaries also preceded Macleod, beginning with Roscher’s entry dated 1849.21

80 Daniele Besomi The term ‘crisis’ returned to prominence in the titles of writings on these phenomena with the panics of 1893 and 1904, and remained predominant until the First World War. After the war, the term ‘cycle’, which had already been preferred by a few occasional writers in the previous decades, fully conquered the field. By the mid-1920s, the notion of ‘cycle’ had successfully replaced that of ‘crises’ (dictionaries, however, have been slow to catch up22), except for a temporary resurgence in 1931–1932. Since the late 1990s, however, there has been a strong resurgence in the use of the word ‘crisis’. In the 1960s and 1970s, writings with ‘crisis’ or ‘crises’ in the title accounted for about 10 per cent of the total writings listed in Econlit on economic troubled times. This percentage rose to about 20 per cent after the depression of the early 1980s and suddenly jumped to about 50 per cent in 2000, remaining well over 30 per cent even in the prosperous years after 2004, apparently rising again (but data are not yet final) with the 2008 financial crisis (see the Appendix to this chapter). 3.2.8.3 Dictionary definitions in the nineteenth century Throughout the nineteenth century, ‘crises’ were defined in dedicated dictionary entries (before this was done in the general literature: see Chapter 6, Section 6.5.1) in one of the following ways. (1) Most writers characterized crises as disturbances or perturbations, or more often as the effect of such disturbances. A frequent variant of this view resorted to the metaphor of crises as a pathological state. (2) Some writers instead defined ‘crises’ with reference to some essential phenomenon characterizing them. The notion of ‘crisis’ as a disruption was articulated in two different ways. Some writers offered a generic version, simply stating that crises are (the effect of) a disturbance, without, however, specifying precisely what is disturbed. Most French entries fall in this category, as well as the only two Italian and Spanish dictionaries of the nineteenth century offering dedicated entries on crises. This is partly explained by the fact that the word ‘crise’ in French, and also in Italian, admits of a looser and more varied meaning than in German and English. The first known dedicated entry on commercial crises falls into this category. Lemonnier wrote that ‘A commercial crisis occurs every time that the regularity of the movements of exchange of which trade consists is destroyed, suspended or restrained’ (CRISES COMMERCIALES, in →Duckett’s Dictionnaire de la conversation et de la lecture, 1835, p. 216). According to Blanqui, ‘the term CRISE COMMERCIALE applies to the disturbances which, from time to time, affect trade and industry, under the influence of different causes, internal or external’ (→Encyclopédie des gens du monde, 1836, p. 257). The latter qualification is important. Most authors of dictionary entries acknowledged that the source of disruption can be exogenous or endogenous; so far as the definition of crisis is concerned, only the perturbation matters. Coquelin also defined CRISES COMMERCIALES as ‘a sudden disturbance of business, which perturbs its progress and to a certain extent suspends its course’ (→Dictionnaire de l’économie politique, 1852, p. 526). Boccardo reminded his readers of the medical origin of the term CRISI, which he defined as ‘any

Naming crises 81 perturbation of the social interests, intense or not so deep; it must be temporary and ephemeral, otherwise it would not be a crisis but a chronic disease that would lead to the ruin of society’ (→Dizionario della economia politica e del commercio, 1857, p. 731). Garnier was very explicit in defining a crisis as ‘a disruption (“perturbation”) of the natural state, an anomalous situation in which the nature of [the system] struggles against the morbid cause in order to return to a better situation. The CRISES COMMERCIALES are sudden disruptions of the natural economic state; more precisely, they are disruptions in the general function of exchange, which is as necessary to social life as blood circulation is necessary to animal life’ (→Dictionnaire universel théorique et pratique du commerce et de la navigation, 1859, p. 920). Similarly, a Spanish writer defined CRÍSIS ECONÓMICAS as ‘upheavals affecting the production or exchange and, as a consequence, the consumption of wealth’ (→Piernas y Urtado, Vocabulario de la economía, 1877). White defined COMMERCIAL CRISES as ‘disturbances of the course of trade at given times, arising from the necessity of readjusting its conditions to the common standard and measure of value’ (→Lalor, Cyclopædia of political science, 1882, p. 523). The →Brockhaus Conversations-Lexikon stated that ‘HANDELSKRISEN are disruptions and disturbances of the working life’, normally taking place via over-speculation, sinking of prices, extravagant credit, discovery of new land, etc. (Vol. 8, 1884, p. 784). The 7th edition of →Pierers Universal-KonversationsLexikon reported that the word HANDELSKRISIS is used in several senses. In the strictest sense, it indicates a diseased condition of the economy, concerning goods or stocks (‘speculation crisis’). More generally, such events can be called ‘economic crises’, while other special names are available to indicate ‘supply crises’, ‘industrial crises’ or ‘credit crises’ (1890, p. 68). Lexis also saw crises as a disruption, but specified that by an economic crisis in a general sense, we designate any temporary disruption of economic life which causes a larger circle of people to suffer serious disadvantages (KRISEN, in →Elster’s Wörterbuch der Volkswirtschaft, 1898, p. 119), while crises in the strict sense again are disturbances in economic life which, however, determine a turning point, a reversal from one situation to another, namely, from an ascending but not sustainable movement to a collapse (p. 120; see Chapter 19). Raffalovich also defined CRISE as ‘a disruption disturbing the regular progress of business’ (→Guyot and Raffalovich, Dictionnaire du commerce, de l’industrie et de la banque, 1898, p. 1127). All these definitions of crises as disturbances or pathological conditions imply a comparison with some ‘normal’ or ‘healthy’ state of the system. At that time, however, such states were not qualified with precision, thus leaving the definition in some way incomplete if not even circular (for ‘normal’ was often conceived as absence of anomalies, just as ‘health’ was defined as absence of ‘disease’23). Lemonnier and Raffalovich referred to the regularity of trade, Blanqui to the ‘usual course of business’ (p. 257) but also to the necessity that each producer ‘proportions his supply to [the existing] demand’ (p. 258); but that was about it. A second group of writers conceiving crises as a perturbation were more precise in defining the problem, as they referred to disturbances to the equilibrium of supply and demand. All writers in this group are German. This choice is not merely

82 Daniele Besomi terminological, but reflects a specific view as to the working of the economic system. Most writers at the time did not dispute Say’s law24 and in particular its implication that general overproduction is impossible. Some explicitly accepted it and accordingly could only think of crises as originating from political interferences, exogenous shocks such as wars or bad crops, or from miscalculations on the part of some entrepreneurs, leading to overproduction in some branches, the counterpart of which was underproduction in other branches of the economy. Other writers circumvented Say’s law by moving the problem to difficulties arising in the monetary and credit system, and accordingly emphasized perturbations arising from the banking system or redefined crises as a time of suspension of payments (more on this below). In Germany, some writers were openly critical of Say’s law, and their definition of crises directly focused on this issue. The earliest instance among dictionary contributors is offered by Roscher, who pointed out that the disturbances known as commercial or monetary crises (Handelskrisen and Geldkrisen, respectively) affect the equilibrium of production and consumption, which is one of the most important conditions of prosperity. These disturbances can be compared to a disease affecting the entire economic body. Yet he preferred the term PRODUKTIONSKRISEN as better capturing the essence of the disease, because only on occasion is the blame exclusively on the commercial or on the monetary side of the economy (→Die Gegenwart, 1849, pp. 723–724; see Chapter 7). Schäffle, in the entry on trade policy in →Bluntschli’s Deutsches Staats-Wörterbuch, also treated commercial crises as the result of periodically recurring disturbances in the equilibrium between production and consumption (HANDEL, HANDELSPOLITIK, 1859, p. 638). The anonymous author (perhaps Ernst von Hallen?) of the entry HANDELSKRISIS for the 4th edition of →Meyers Konversationslexikon reported that all deeply intervening illnesses of the economic system, causing intense disturbances of the equilibrium between production and consumption, are denoted as commercial crises. The term, however, is incorrect: the disturbance does not necessarily arise in trade, but pre-eminently in consumption and production; the expression ‘production crisis’ is better, but ‘economic crisis’ would be even more suitable. Moreover, production and consumption never actually balance in full in the course of economic advance; not all imbalances, however, deserve the name of crisis. This is only applied when the suffering they cause reaches a certain spreading and severity (1888, Vol. 8, p. 87). Herkner maintained that the word KRISEN indicates economic disturbances of various nature – normally disturbances in the equilibrium between production and demand (→Conrad, Handwörterbuch de Staatswissenschaften, 1892, p. 891; see Chapter 18). TuganBaranovsky also defined crises as ‘different types of economic shocks, related to a disruption of the balance between demand and supply on the market of goods or capital’ (ECONOMIC CRISES, in→Brockhaus–Efron Encyclopedic dictionary, 1895, 1909, 1915: see Chapter 17).25 The second class of definitions of ‘crisis’ picks some characteristic feature of the phenomenon and places it at the centre of the description. Some, rather trivially, simply rely on the idea of hard times. Dupin, for instance, defined commercial crises as ‘the difficult and transitory situations in which the trade of a nation is sometimes

Naming crises 83 thrown’ (note the verb in the passive. CRISE COMMERCIALE, →Encyclopédie du dix-neuvième siècle, 1846, p. 308). Similarly, →Meyers Konversationslexikon defines HANDELSKRISIS as an ‘unfortunate condition in the commercial relationships of a nation, caused by a meeting of circumstances unfavourable to trade, such as wars and similar’ (1849, Vol. 14, p. 1030). The same term is defined in →Pierer’s Universal-Lexikon, 1857, as ‘a confluence of circumstances important for commerce that bring some business close to ruin or to a complete standstill, while enriching others’. Laveleye defined economic crises as ‘the serious troubles of a system of exchange based on credit’; he divided them into commercial and monetary, industrial, and speculative, without, however, supplying a precise definition of either of them (CRISE, in →Berthelot’s Grande encyclopédie, Vol. 13, p. 380; see Chapter 15). Fowler defined CRISES, COMMERCIAL AND FINANCIAL for →Palgrave’s Dictionary of political economy as ‘times of difficulty in commercial matters, when pressure becomes acute’ (1894, Vol. 1, p. 455; see Chapter 16). Some writers defined crises as an interruption of business. Ott, for instance, defined a commercial CRISE as ‘a more or less complete stoppage of business, that is, of buying and selling and, as a consequence, of production’ (in →Dictionnaire des sciences politiques et sociales, 1854, p. 1388). The absence of a reference to disturbances is meaningful, as Ott finds the general cause of crises in a persistent rather than intermittent factor (see Chapter 10). In →Wagener’s Staats- und Gesellschafts-Lexikon (1862), KRISEN are generally qualified as political or economic diseases, while commercial crises are defined as ‘sudden disturbances of the circulation of goods and paper money, which block the regularity of the business routine and bring it to a virtual standstill’ (p. 585). Juglar defined a commercial crisis as ‘a disruption to the course of business, [a failure of mercantile paper to clear across the various world markets – which require the intervention of metallic specie] followed by the downgrading and the depreciation of commodities, and by the suspension, the bankruptcies, and the collapse of imprudently engaged commercial firms’.26 He pointed that it is the sudden interruption of the course of business that causes a general disruption of the economic system, rather than the other way around (CRISES COMMERCIALES, in →Block, Dictionnaire général de la politique, 1863, p. 615; see Chapter 12). Others focused on another feature associated with crises, namely, the suspension of payments. A certain Michel reported that the term CRISE COMMERCIALE designates ‘those times of general discredit which suspend for some time the regular course of business’ (→Encyclopédie du commerçant, 1839, p. 757). Although the causes of crises were presented as disruptions or perturbations (whether of external origin or pertaining to the commercial and industrial organization), the reference to ‘discredit’ (discrédit) indicates a state of widespread lack of confidence, implying the suspension of credit and the breaking down of the chain of payments, so that one merchant’s ruin affects all his creditors and their creditors in turn. CourcelleSeneuil observed that the term CRISE in general indicates a state of uncertainty, and in this sense it was much used in the periodical press; as to the crises affecting commerce and industry, he specified that they are states ‘in which business is suspended and a large number of traders and entrepreneurs do not face their

84 Daniele Besomi engagements’ (→Duclerc and Pagnerre, Dictionnaire politique, 1842). Wagner stressed that the term KRISEN carries multiple meanings in economics, and does not easily lend itself to a precise definition. Nevertheless, he singled out as its main feature the diffuse and overwhelming incapacity of entrepreneurs to pay their debts, and suggests that the term ‘credit crisis’ should be preferred to Roscher’s ‘sales crises’ (‘Absatzkrisen’, a term which substituted the earlier ‘production crises’, used by Roscher in the dictionary entry cited above: see Hagemann, 1995, p. 178 and Chapter 7) (→Rentzch, Handwörterbuch der Volkswirthschaftslehre, 1866; see Chapter 14). Finally, a special definition of crises was given by Juglar and Des Essars in →Say’s Dictionnaire des finances, as ‘the stoppage in the rise of prices’ (CRISES FINANCIÈRES ET COMMERCIALES, 1889, p. 1348), to which Juglar added that CRISES COMMERCIALES are the ‘stoppage of all business (→Say’s Nouveau dictionnaire d’économie politique, 1891, p. 642; see Chapter 12). The weak point of most of the definitions in the second group is that they boil down the crisis to one of its features, elevating the subjectively perceived, most prominent appearance to the status of the essence of the phenomenon. Crises as ‘hard times’ is open to the charge of being too general, and indeed some writers soon pointed out that it is necessary to distinguish violent from sluggish kinds of hard times (see Section 3.2.8.4). The notion of crises as suspension of payments is in turn open to the charge of mistaking the cause for the effect.27 Juglar is running in circles, as on the one hand he defined crises in terms of the stoppage in the rise of prices and on the other hand made the cessation of price rises the cause of crises (Tugan-Baranovsky, 1913, pp. 241–244, and Minnie England, 1913, p. 346). There is instead some merit in the idea that a crisis is the stoppage of production and trade, because it highlights that the crisis is a breaking point, a neat and violent rupture between what precedes and what follows it. The characterization of the adjacent phases, the causal nexuses, and the role of such a break in the capitalistic process of production are, of course, to be discussed separately, and need further interpretation; but for the time being, this view goes back to the etymon of the term, as the crisis is again understood as a time of decision at which something relevant happens, and the outcome of which is not inscribed in the definition itself. 3.2.8.4 Dictionary definitions at the turn of the twentieth century: crises vs. depressions In spite of having started with a panic in Austria and in the US, the crisis that began in 1873 eventually proved to differ from the preceding ones. Instead of proceeding quickly and violently, it was sluggish and prolonged. Recovery only began in 1879, but was followed by another slowdown between 1882 and 1885. Overall, the last quarter of the nineteenth century showed a marked increase of bad years with respect to the previous decades. The vocabulary associated with this phenomenon changed accordingly. Contemporary writers preferred the word ‘depression’ to the word ‘crisis’ to describe it (see Section 3.2.7). Dictionaries, however, were slow to pick up the change. The first suggestion that a distinction

Naming crises 85 would be pertinent is found in Laveleye’s entry in the →Grande encyclopédie, where it was pointed out that some crises are acute while others, such as those of 1874 and 1888 in France, are prolonged, the former being more similar to an inflammation and the latter to anaemia (Vol. 13, p. 380; see Chapter 15). Herkner also resorted, although with some reticence, to the medical analogy. He maintained that the quick crises of the first half of the nineteenth century could be seen as a turning point, at which it becomes apparent which entrepreneurs will survive and which will not, while the new crises (1873–1879, 1881–1887) have more the appearance of creeping, long and chronic disturbances, and therefore better deserve the expression ‘depression’ (English in original) (KRISEN, in →Conrad, Handwörterbuch de Staatswissenschaften, 1892, p. 891; see Chapter 18). Raffalovich maintained that the analogy implied by the medical notion of ‘crisis’ is only suitable if one conceives of crises as the outbreak and acute point of a previously existing disease, as distinct from a state of prolonged languor and slump (marasme) or of chronic disease, for which the word ‘depression’ is better used in English; in that language, the word ‘crisis’ is employed with reference to a sudden occurrence, often having the character of a panic (CRISE, in →Guyot and Raffalovich, Dictionnaire du commerce, de l’industrie et de la banque, 1898, p. 1127). Lexis also stressed that the economic disturbance of the latest decades of the century had a chronic character, and should therefore be named ‘depressions’ rather than ‘crises’ (KRISEN, in →Elster’s Wörterbuch, 1898, p. 120; see Chapter 19). 3.2.8.5 Dictionary definitions in the inter-war years While in the general literature cycles had already supplanted crises by the eve of the First World War (see Section 3.2.9), dictionaries again had been slow to catch up. Throughout the 1920s most dictionaries carried entries on both ‘crises’ and ‘cycles’, but the former were clearly written with the latter in mind.28 There was an early start in this direction at the end of the nineteenth century. The unsigned entry on CRISES (COMMERCIAL AND MONETARY) for →Bliss’s Encyclopedia of social reform takes up the distinction between acute and prolonged events, and inserts the word ‘cycle’ in the definitional part of the article: ‘A time of general difficulty and pressure in commercial and monetary circles, if acute, is called a crisis. [. . .] Crises, whatever be their cause, usually follow a certain course, which it is asserted by some writers, Jevons prominently among them, follow a certain cycle’ (1897, p. 430). Similarly, but without using the word ‘cycle’, Hadley had already discussed COMMERCIAL CRISES in terms of the ‘recurring seasons of general prosperity and general adversity’. After speculation drives prices up, prices increase, employment is steady and wages are high, a shock shakes credit; ‘confidence is destroyed, prices begin to fall, business men contract their operations, wages are reduced, and working time reduced still more. General adversity for merchants, capitalists, and laborers alike succeeds the general prosperity of the former period. To this condition of things the name commercial crisis is applied’ (→Johnson’s new universal cyclopædia, 1893, vol. 2, p. 423).

86 Daniele Besomi The first full-blown entry on ‘crises’ really dedicated to the cycle29 was Spiethoff ’s KRISEN for the fourth edition of →Elster’s Handwörterbuch der Staatswissenschaften (in the previous edition of the same dictionary, however, Herkner – probably under the influence of Spiethoff – had adapted the terminology he used in the first and second editions of his KRISEN article and updated the title of a crucial section from ‘the causes of crises’ to ‘theory of conjunctural changes’: see Chapter 18, section 18.3). Although Spiethoff describes crises in connection with the overall cyclical development of the economy (‘the evolutionary forms of the highly developed capitalist economy’: 1925, English translation, p. 78), their definition still emphasizes some intrinsic features of these events, thereby justifying the separate heading. ‘The crisis is that period during which an unhealthy economic state of affairs is suddenly and violently transformed. This unhealthy state is overspeculation linked with overexpansion of credit; the violence manifests itself in the collapse of credit and in the multiplication of bankruptcies. Complete lack of credit does not usually last longer than one or two weeks, while bankruptcies may often continue to pile up for months’ (p. 80). Spiethoff indeed stressed that there is no indissoluble bond between crises and cycles, as crises used to occur independently of cycles before they started to accompany them in the 1820s, and on the contrary have been increasingly avoided since the end of the nineteenth century (p. 104; see Chapter 20). Arndt, who authored the entries on both KONJUNKTUR (business cycle) and KRISEN (crises) for the →Handwörterbuch des Kaufmanns (1925–1926), introduced the first germs of a distinction that was to acquire some popularity in later dictionary entries. KRISEN are still seen as serious disturbances of economic life (mild disturbances are called depressions); no longer, however, with respect to equilibrium, but with respect to the cycle. Arndt saw them as a specially unfavourable phase of the cycle, not originating from the ‘organic’ nature of the economic system but arising from external circumstances. Although they presuppose a preliminary expansion, they do not necessarily follow each expansion, depending on whether or not the unfortunate circumstances are present. Their explanation is, at any rate, to be sought in the theory of the cycle (1926, pp. 527–528). A similar position is held in the entry KONJUNKTUR UND KRISE in →Thalheim’s ABC der Volkswirtschaft. Crises, namely, ‘the direct endangering and destruction of numerous undertakings’, take place within the wave-like behaviour of economic life. As such, they do not require a specific explanation (although some are caused by specific, exogenous events, such as wars etc.); they simply are a consequence of the previous upswing, and are not a necessary phase of the cycle (1934, p. 166). Opposite to this view and more in line with Spiethoff, Felden placed crises within the cycle but at the same time vindicated an autonomous role for them. His entry titled KONJUNKTUR UND KRISEN began with the assertion that the regular alternation of upwards and downwards movement, of prosperity and depression, is the ‘normal’ state of our economy (in →Nicklisch, Handwörterbuch der Betriebswirtschaft, Vol. 3, 1927, p. 694). The upswing phase ends through a crisis, which is a sudden and massive panic outbreak which paralyses all economic forces.

Naming crises 87 It lasts only a few days or weeks (pp. 694–695). Felden specifies, by means of a quotation from Lexis, that ‘by “crisis” we do not simply understand the transition from economic prosperity to a depression, but an acute disturbance of the economic process’. Lexis continues (but Felden does not take him up) by explaining that although the turning point often takes the form of a crisis, this is not a necessary outcome (Lexis, 1913, p. 189). Diehl also stressed, and more forcefully than the writers just examined, the autonomy of the notion of crisis. In the entry on KONJUNKTUR, KONJUNKTURTHEORIE he acknowledged that the newest theory of the cycle claims to have encompassed the old theory of crises as a partial appearance of the overall general movement, but argued that the two phenomena must be investigated separately, as crises arise from recurring special causes (→Elster, Wörterbuch der Volkswirtschaft, Vol. 2, 1932, p. 600). In the entry on KRISEN in the same dictionary he defined economic crises in the strict sense as ‘profound and lasting general disturbances of the economy, which shake in all directions the foundations of the economic life’, and argued that such phenomena must be distinguished from other disturbances of economic life, in particular those affecting only some branches of the economy; those affecting money, credit, speculation and the stock exchange; and depressions, which are the other side of the coin of the prosperous times (‘Hochkonjunktur’) that precede them (pp. 685–687). The distinction between old and new theoretical approaches to the problem had already been drawn by Weinberger.30 Traditionally, ‘Konjunktur’ used to designate the conditions independent of the economy itself (such as harvest fluctuations, changes in technology, etc.) affecting the general economic situation, while ‘crises’ indicated a persistent unbalanced relationship between supply and demand. The new approach interprets crises in the light of the rhythmical changes of the economy, so that the theory of crises has evolved into a theory of the cycle. The latter tries to identify the certain laws underlying the cyclical course of economic dynamics, as opposed to the subjective perception of the market conditions. In this context ‘the terms “business cycle” (Konjunktur) and “crisis” are used for economic transitions and accompanying structural adjustments towards new equilibria, thereby employing the term crisis as a special case of a disequilibrium, i.e. a serious and permanent shock to a prior equilibrium’ (KONJUNKTUR UND KRISEN, in →Sacher’s Staatslexikon, Vol. 3, 1929, p. 512). A similar position was held by Müller-Armack. He stressed that in the old approach, the theory of crises was essentially a residual area for economic theory, while the dynamic theory of the cycle tackles fundamental issues in economic theory, both as matter of fact and methodologically. Crises, in so far as they result from purely exogenous circumstances, appear theoretically irrelevant. They only make theoretical sense as a turning point of a general overall movement. In the old approach, crises eclipsed the overall movement; now the research on cycles enables us to bring to light further movements of the markets: expansions and contractions (KONJUNKTURFORSCHUNG UND KONJUNKTURPOLITIK, in →Elster’s Handwörterbuch der Staatswissenschaften, Vol. 4, 1929, p. 646). The reference to a ‘dynamic’ understanding of crises is also briefly taken up by Uhl in an entry explicitly titled KRISE UND ARBEIT (DYNAMISCH DARGESTELLT) (Crisis and labour (dynamically depicted)), who

88 Daniele Besomi defined crises as ‘the most obvious manifestation of the complex phenomenon known as cyclical change’ (Konjunkturwechsel) (→Giese, Handwörterbuch der Arbeitswissenschaft, 1930, p. 2972). Although most major economic dictionaries in the inter-war years were written in German, a few dedicated entries on crises can also be found in other languages. In →Munn’s Encyclopedia of banking and finance, CRISIS was defined as ‘the collapse of a period of prosperity, i.e., the termination of a rising price trend, general optimism, inflation and speculation. It is a turning point or decisive moment at the crest of the business cycle when it becomes clear that the price structure has become top heavy and that the next movement must be downward’ (1924, p. 141). Crisis, then, is reduced to a phase of the cycle, more precisely the upper turning point, a view that gained support in particular in the second half of the twentieth century. The Frenchman Lescure, contributing to →Seligman’s Encyclopaedia of the social sciences, defined CRISES as grave and sudden disturbances of economic equilibrium. He pointed out that ‘in a dynamic society the equilibrium between supply and demand of capital is necessarily unstable, and hence price movements occur’ (the word ‘unstable’ here is not used in the technical sense developed by dynamics, but simply to indicate that equilibrium is not given once and for all). We have crises when disturbances are grave and sudden. Lescure added that ‘Scientific research at the end of the nineteenth and the beginning of the twentieth century established the fact that the crisis occurs at the point of transition from expansion to contraction.’31 This has induced some to speak of cycles; this term, however, exaggerates the regularity of the phenomenon. It would thus be ‘more correct to speak of fluctuations, or of alternation of expansion and contraction’ (1931, p. 595). In Italy, Bachi wrote of CRISI ECONOMICHE as a sudden transition from euphoria to lack of business. They are a transition from a position of equilibrium to a completely different one. They have some specific features, but they are only one of the parts of a cyclical wave; their causes are thus part of the causal system determining the cycle (→Enciclopedia italiana, 1931, p. 913). Momigliano took a different approach. He maintained that production is subject to laws that tend to adapt it to the needs of consumption. Yet the dynamics of capitalistic production is constantly subject to small oscillations. Crises occur when such oscillations, in one direction or another, happen to be particularly intense and of long duration. They are thus nothing else than particularly acute manifestations of a normal, physiological phenomenon, rather than a pathology (CRISI ECONOMICHE, →Grande dizionario enciclopedico UTET, Vol. 3, 1934, pp. 830–831). Meanwhile, however, Wesley Mitchell set the ground for the elimination of ‘crises’ from business cycle terminology. He argued that the term carries the implication that some organic difficulty affects the economic system, and suggested substituting it with the more neutral ‘recession’ to indicate the turning point (see Section 3.2.11), retaining ‘crises’ only to indicate the degree of intensity of the phenomenon: ‘Every business cycle includes a phase of recession; this recession may or may not be marked by a crisis’ (Mitchell, 1926, p. 37; 1927, p. 381).

Naming crises 89 3.2.8.6 Dictionary definitions in the late twentieth century The contrast that emerged in the inter-war definitions of crises, between those who saw them as a phase of the cycle and those who tried to recognize some autonomy to the concept while admitting that crises take place with a cyclical rhythm, also characterizes the relatively small share of dedicated entries in post-war dictionaries, most of which have fully embraced the ‘cycle’ perspective and do not carry entries on ‘crises’. Chapter 28 specifically surveys the treatment of crises in recent dictionaries; here a quick overview will suffice. Some writers dispensed with the notion of crisis altogether. This applies to German language dictionaries in particular, where ‘crises’ are seldom given specific entries. The few exceptions attribute the notion of crisis, and the corresponding theory of crises, to Marxist approaches, as distinct from the mainstream emphasis on ‘cycles’. Other writers accepted, without much ado, the view that crises are a phase of the cycle. For linguistic reasons – the term ‘crise’ having a more general and flexible meaning in French than in English – French dictionaries often espouse this perspective. While there seems to have been a perception that crises are, in some way, ‘special’ and cannot be simply subsumed within the cycle, authors of dictionary entries could not easily pinpoint the specificity of cycles with respect to crises. Some writers reconnected to the nineteenth-century view that crises are pathological conditions. But rather than considering them as an anomaly with respect to a path of growth, they saw them as abnormally violent downturns within a normally cyclical pattern. The authors of entries for dictionaries in the history of ideas, or at any rate not strictly economic lexica, stressed that crises imply some qualitative change between what preceded them and what followed, and as a concept they have an historiographical connotation. Such views, however, do not seem to have had any echo among economic dictionary writers. There are, however, two original attempts at placing crises on truly different grounds than cycles. Ciocca argues that the instability characterizing crises is logically independent from other forms of instability, including those giving rise to cyclical movements (CRISI ECONOMICA E FINANZIARIA, in →Bedeschi, Enciclopedia delle scienze sociali, 1991). De Vecchi argues instead that crises and cycle theories differ on epistemic grounds: while the notion of ‘cycle’ implies some regularity, which economists expressed by making their laws mechanistic and subject to calculability and predictability, economists stressing the role and importance of crises in the capitalistic process have incorporated in an essential way the action of social classes (Marx), or uncertainty (Keynes), or some other ingredient that escaped the constraints of formal economics in a traditional sense (CRISI, in →Lunghini, Dizionario di economia politica, 1983).

3.2.9 Cycle 3.2.9.1 Etymology and early uses of the term The term ‘cycle’ (deriving from the Latin ‘cyclus’, in turn deriving from the Greek word meaning ‘circle’ and ‘wheel’) carries different meanings in various

90 Daniele Besomi disciplines, in particular in astronomy, physics, chronology,32 medicine, botany, zoology, geology, literature. Three of these usages recur in the economic literature on the issues we are discussing here. The most common usage in the last eight decades of the nineteenth centuryt with some occasional occurrences also in the twentieth century, is that of ‘cycle’ as ‘an interval of time during which a characteristic, often regularly repeated event or sequence of events occurs’ (American Heritage 1), or ‘A period in which a certain round of events or phenomena is completed, recurring in the same order in succeeding periods of the same length’ (OED, 2b). For example, Petty referred to the average duration of the ‘Cycle, within which Dearths and Plenties make their revolution’ as the time unit to evaluate ‘the ordinary rent of land in corn’ (Petty, 1662, pp. 24–25), and to the ‘Cycle of time, as within which all contingencies of Land revolve’ as a time unit for assessing taxation on land (p. 31). Similarly, Burke wrote that the Government ought ‘seriously to consider that years of scarcity or plenty, do not come alternately or at short intervals, but in pretty long cycles and irregularly’ (1800, p. 32), and Cooke referred to ‘cycles of favourable and unfavourable seasons for the production of grain’ (1842, p. 8). More commonly, however, the word was loosely used to indicate an interval in time in expressions such as ‘cycle of prosperity’ or ‘cycle of depression’, as, for instance, in this passage: ‘cycles of abundance which are supposed to alternate with cycles of dearth every five years’ (Anonymous 1, 1849, p. 573). An interesting example of this usage is found in an article in the Morning Chronicle: ‘after another cycle of prosperity, renewed speculation springs up, a fresh revulsion occurs, a drain of gold follows, to curtail their issues, a commercial epidemic ensues, which, after a repetition of the calamities which happened in 1825, were repeated in 1836–37, were seriously threatened in 1838–9, broke out with more intense mischief in 1847–48’ (Anonymous, 1855). Although the passage refers to a repeating pattern of events, the word ‘cycle’ is only used to refer to an unspecified period of time during which business was prosperous. The other two notions of ‘cycle’ both refer to recurring events following the same pattern. One of them, however, focuses on what happens within a single cycle, while the other refers to the succession of cycles. The former of these is defined as follows: ‘A single complete execution of a periodically repeated phenomenon’ (American Heritage: 2a; see also OED: 4 or Grand Robert: 2). This usage of the term ‘cycle’ stresses the order in which events occur within each cycle; as an example, one may consider the cycle of a washing machine which goes through a number of phases, from pre-washing to spinning, following a constant order, but which stops after the last one, and only resumes when the button is pushed again. The other notion focuses more on the repetition of the sequence than on the sequence itself within a single course; this is somehow taken for granted. It is defined as follows: ‘A recurrent round or course (of successive events, phenomena, etc.); a regular order or succession in which things recur; a round or series which returns upon itself ’ (Oxford English dictionary: 3a; see also American Heritage: 2b or Grand Robert: 2). An example is the working of a piston in a combustion engine.

Naming crises 91 A clear example of the usage of ‘cycle’ in the sense of one single course of events is found in a pamphlet by Cargill, describing how the British economy between 1822 and 1825 ran through ‘a cycle of enterprise, prosperity, speculation, madness, and ruin’ (Cargill, 1845, p. 27). The most famous instance of this usage of the world ‘cycle’ is surely Overstone’s characterization of the ten phases through which the general state of trade runs: The history of what we are in the habit of calling the ‘state of trade’ is an instructive lesson. We find it subject to various conditions which are periodically returning; it revolves apparently in an established cycle. First, we find it in a state of quiescence, – next improvement, – growing confidence, – prosperity, – excitement, – overtrading, – convulsion, – pressure, – stagnation, – distress, – ending again in quiescence. (Loyd, 1837, p. 31) This passage was often cited by Overstone’s contemporaries, and is still referred to nowadays as an early example of a cyclical description of the economy. It should be noted, however, that this is the only reference in the entire pamphlet to such a circular course of events. The description has a definite starting and arriving point, quiescence, and there is nothing to suggest how and why after reaching quiescence the cycle should resume its course. Thus, three of such cycles later, the Liverpool Mercury could note that ‘Overstone has described accurately the cycle which we, to our sorrow, see has made another turn’ (Harvey, 1867). This is no accident, but reflects the prevalent state of the theory of crises prevalent throughout most of the nineteenth century, based on the credit–speculation–overtrading–collapse mechanism. These writers clearly understood how a state of prosperity could easily tempt traders into new and hazardous speculations, and that bankers could in turn be tempted to finance such speculations, which would at some point become excessive, until the entire cumulative mechanism suddenly broke down. But they considered in some way that prosperity was the ‘normal’ state of trade, which would establish itself as a matter of course, and accordingly felt no need to explain how and why after the liquidation improvement would take place and the cycle resume – except perhaps noting that the ‘liquidation’ of bad debts set the conditions for the resumption of credit. On the other hand, these writers had the analytical problem of characterizing the common features of these events, and the naming of a number of phases was an important step in the description of their morphology. The usage of the term ‘cycle’ as a succession of stages in one round of the phenomenon simply reflected its theoretical understanding and the analytical necessities of the time. Most of the writers using ‘cycle’ with reference to a single course of events were aware of their periodical recurring; when they wanted to stress this fact, they added a specific remark, e.g. stressing the beginning of one of those cycles (‘. . . a new glut and a new panic shall come to complete the now regularly recurring commercial cycle’: Anonymous 2, 1850, p. 113; ‘many of the [American] States [. . .] have gone through all the vicissitudes attending the creation, culmination, and

92 Daniele Besomi final liquidation of an immense amount of bank capital. They have now commenced a new commercial cycle, with the experience of the past for their guide and caution: Anonymous 1, 1843, p. 659; ‘the new commercial cycle which we may consider as now beginning [after the recent shock]’: Anonymous 1, 1857) or by stressing their periodical character (‘From the time of the South Sea Bubble, or even earlier, the public have passed through Periodical cycles, very similar in their characters’: Anonymous 2, 1857). The following extract is illustrative of the usage of ‘cycle’ in the sense of a single course of events but also of the repetition of such cycles: those periods . . . called commercial cycles [appear] at nearly regularly recurring periods when lassitude succeeds to excitement and reaction to speculation. . . . There have been four periods in English history since the peace of 1788 that may be said to form commercial cycles, namely, from 1792 to 1816, at the close of the general war in Europe, from 1825 to 1837; from 1847 to 1857. At each of these periods there had been a large accumulation of capital, a restlessness of the public mind under a fall of general profits, an increase of speculation and its invariabley attendant, reaction. It is rather a remarkable fact, that between each of these periods what is denominated a crisis, has occurred with intervals of about ten years between them. (Anonymous, 1866) As a last example of this usage let us consider this definition offered by Baker: Explanation of terms. – The periods of about ten years each which have been so constantly marked by undue extension of Trade beyond the natural growth of the means to sustain them, resulting in an inflation and relative collapse of Credit, are repeatedly referred to by the use of the words cycle and credit cycle. (Baker, 1876, p. 203) The sense in which the word ‘cycle’ was used by most writers in the first half of the twentieth century, and by some schools of thought in the later part of the century, in expressions such as ‘business cycle’ or ‘trade cycle’, implies not only the idea that each complete course of events follows a path similar to the others, but also that such paths are chained to each other, chronologically and causally. This idea goes beyond the awareness of the fairly regular recurrence of crises through similar steps. Reflections on periodicity date back to the end of the eighteenth century, were fairly common by the 1830s, and by the 1850s most writers were convinced that crises returned with decennial regularity – so much that soon some felt the need to deny that this was the case (Besomi, 2010a); the recognition of specific phases is as old as the attempts at explaining the phenomenon by means of endogenous mechanisms.33 The notion that all the various phases of the cycle are chained to each other required that one renounced the idea that prosperity is the normal state of the economy and as such does not require an explicit explanation, and identify instead a turning point actively engendering a reversal of the movement. This step was theorized by Juglar in 1889 (implicitly recognizing that it was lacking

Naming crises 93 in his previous work: pp. xvi, 4, 21), but there are earlier – albeit occasional – instances of writers incorporating complete cyclical mechanisms. The first seems to be due to Wade, who produced two cobweb-like models in 1826 and 1833;34 Corbet also explained how ‘one excess, like the high and low or hot and cold fits of a fever, always [gives] birth to and [generates] another’ (1841, pp. 105–106). The associated use of the term ‘cycle’ is illustrated by this passage, where the concept, remarkably is likened to a ‘natural law’: From past experience, we may learn, that the commercial world has its cycle of events, so fixed and invariable as to seem almost like a natural law. When trade is bad, and has reached a certain point of depression, it takes a turn for the better: little by little it improves: it becomes good – very good – madly good, and then a change, often an abrupt one, takes place, and it again becomes bad – again to run the same appointed course. This uniform cycle, I am sorry to say, has just brought to us the melancholy vicissitude of a paralyzed trade, and, along with it, its usual incidents of extravagant theories, bold promises, thoughtless credulity, discontent with the present condition of things, and an angry impatience for some change. (Anonymous, 1848, p. 3) Several other examples are available. The following passage closes the circle of Overstone’s description cited above by stating explicitly that the cycle recommences from where it ended: We find Lord John [Overstone] likewise laying down a dreary theory of trade cycles – first, the growth of trade – then the prosperity of trade – then the inflation of trade – then distress and distrust – then the bursting of the trade bubble – and then the beginning of the cycle anew again. In fact his Lordship seems to hold this periodicity of fortune and misfortune, of extravagance and ruin, necessary to the maintenance of circulation in a healthy state, and to preserve its convertibility and par. . . . Mr Disraeli holds Lord John’s cycle theory in as little respect as he does his ancient instances of commercial distress. (Anonymous 3, 1857) Bagehot, in an anonymous leader in The Economist, also observed that ‘There is unquestionably a tendency of commercial periods to recur in cycles. Periods of high price are followed by periods of low price; periods of inflation by periods of collapse’ ([Bagehot] 1873, p. 1). Another writer emphasized the regularity of the recurrence of panics: There is a general impression that panics recur at regular intervals of about ten years each; nor can this be wondered at, seeing that the years 1825, 1837, 1847, 1857, and 1866 have, from various causes, been marked by the catastrophes so named. Judging by this recurrence of disasters at an apparently fixed period, it certainly seems as if there were a cycle, and this of but short

94 Daniele Besomi duration, fated to bring in its train ruin to the monetary world and to millions outside of it. ([Gilbart] 1873, p 937) This aspect is probably what irritated the critics of the emerging notion, who found the term ‘cycle’ convenient for summarizing the target of their attacks. Laveleye, for instance, disputing the ‘received theory, more or less clearly devised and very firmly held, that periods of commercial prosperity and adversity recur as regularly as the tides’, used the expressions ‘economic cycles’ (cycles économiques) and ‘theory of cycles’ (1865, pp. 293 and 297). Cardoza also denied the existence of cycles, maintaining that the course of events leading to the seemingly periodic crises is not uniform; yet he uses the word ‘cycles’ as the title of the corresponding section of his article (1869, pp. 693–694). Particularly important for this usage of the word ‘cycle’ is a seminal paper by John Mills, where he depicted the periodical ‘waves’ through which commerce fluctuates, described the typical phases of a ‘normal’ cycle of credit, their ‘successional order’ and causal chaining, represented them graphically (with Jevons’s help), and characterized the whole phenomenon as ‘facts of a new order’. So far as he described the ‘type-cycle of credit’, the term ‘cycle’ was used in the singular (so to speak). The title of the paper, however, uses the term with references to the succession of cycles: ‘On credit cycles, and the origin of commercial panics’ (1868). The terminology was approved by Jevons (1878, 1884 reprint, p. 224), who obviously had in mind the astronomical meaning of cycle. So did Jevons’s commentators, both approving and critical towards the sunspots theory or towards Jevons’s rigid notion of periodicity, and this use of the term definitely won acceptance in the profession. 3.2.9.2 Compounds: trade cycle and business cycle In its first appearances in the literature, the word ‘cycle’ was often accompanied by the qualifier ‘commercial’.35 A number of instances have already been cited in the previous section; perhaps we can add that it was used by Fullarton (1844, p. 96). It appeared with some frequency in The Economist in the early 1870s (perhaps on Bagehot’s instigation or inspiration), and also in the daily press. An alternative expression was ‘cycle of trade’, which later evolved into ‘trade cycle’. An early, interesting instance is an article initialled J. H., taking up Overstone’s description of the ten phases, graphically representing them as a closed circuit called ‘the cycle of trade’, in which he positioned the current situation ([Harvey] 1849). The same diagram under the same name, but with a repositioning of the current situation, was taken up by the Liverpool Currency Reform Association (1849). The expression reappears in an article for the Red Republican (‘the cycle of trade recommences’: Anonymous 3, 1850), and as the title of an article for the Independent, again starting from Overstone’s cycle (Anonymous, 1874). The expression ‘trade cycle’ seems to have first occurred in an anonymous report of parliamentary opinions on currency and credit, again taking up Overstone,

Naming crises 95 already cited in the previous section (Anonymous 3, 1857). Later, it was used by The Economist (‘the turn towards depression in the last trade cycle’: Anonymous 1, 1877, p. 154), in two unsigned pieces in the Journal of the Statistical Society of London (‘the prosperous half of a trade cycle’, Anonymous 2, 1879, p. 735; ‘because of the position of the trade cycle’, Anonymous 1, 1879, p. 291), by Ellis in the subtitle (but not in the text) of a chapter where he described the phenomenon – only, however, starting with the 4th edition of the book (1879, p. 159) – and by several newspapers and magazines beginning from the late 1870s, including a piece on ‘Cycles of trade’, explaining that ‘trades cycles fall about once in eleven years, corresponding to the time of Jupiter’s revolution in his orbit, and the reappearance of the spots on the sun’ – with explicit reference to Jevons (Anonymous, 1884). In a more academic setting, it figures in the title of an article in the Quarterly Journal of Economics (Selden, 1902), and especially as the title of Lavington’s The trade cycle (1922). This book established the expression as standard British terminology; soon after publication, it appeared in the titles of writings by Pigou and Hawtrey, then by Robbins, Harrod, Hicks, Robertson, Henderson, Beveridge, Kaldor, and the translation of various writings, including Hayek’s, to name only a few. Meanwhile, on the other side of the ocean, the favoured expression was ‘business cycle’. The origin is late: it seems to have been used first by Johnson, who argued parenthetically that in order to evaluate the results of a business ‘a period long enough to include a business cycle must be covered’ (1887, p. 474). A few years later The Bristol Mercury wondered ‘how can this apparently inevitable sequence of business cycles be avoided?’ (Anonymous, 1892). Vanderlip addressed the Bankers’ Association of the State of Illinois, noting that ‘We have grown used to cycles in business; to regular periods of expansion followed by years of depression. These cycles have been of varying length, but, generally speaking, a decade would measure the time from one upturn to the next’, and wondered whether the present depression would ‘be of shorter duration than in former business cycles’ (1904, p. 818). The expression quickly gained acceptance in the US following its adoption by Mitchell, first in an article for the Quarterly Journal of Economics (1909), then as the title of his 1913 book. Nowadays, it is the most widely used expression to designate economic fluctuations; some dispute, but retain for convenience, the use of the term ‘cycle’, arguing that fluctuations do not have the features of rhythmic regularity implied by this term (e.g. Romer, BUSINESS CYCLES, in →Fortune encyclopedia of economics, 1993; see below, Section 3.2.10, for further discussion). There is something ironic in the continuous use of the qualifier ‘business’, as it incorporates Mitchell’s institutionalist belief that the oscillations in prices and economic activity are intrinsically and inextricably tied to our present business organization, rather than being accidental or primarily deriving from external shocks. The compound expression ‘economic cycle’ has gained less support in English, yet it was used by writers such as Moore (in particular in the title of his 1914 and 1923 books) and J. M. Clark in the title of his accelerator article (1917). Later, it was used among others by Goodwin (1946), Åkerman (1947) and Samuelson (1991), and in articles in English summarizing the views of Aftalion (1927) and

96 Daniele Besomi Bouniatian (1928). In French, ‘cycle économique’ is an expression still in use (in the singular and in the plural), as is ‘ciclo economico’ in Italy and Spain. 3.2.9.3 ‘Konjunktur’ and ‘Conjuncture’ The German expression ‘Konjunktur’, used for ‘trade cycle’, has instead a completely different origin. It derives from the Latin verb conjungere, indicating the action of joining together. In this sense, the English word is obsolete, and even the only current meaning is not very much in use: ‘A meeting of circumstances or events; a particular state of affairs, esp. of a critical nature; a juncture, crisis’ (OED). In its original economic use in German, the word means essentially ‘state of affairs’. In itself, it does not incorporate any reference to cyclical events; on the contrary, it refers to a specific moment of time. While it was noted that the state of affairs changes continuously, the idea of a rhythmical change has to be superimposed, by means of some qualifier or additional specification, on the term indicating the circumstances at one point of time. So, on the one hand we have the expressions ‘good conjuncture’ and ‘bad conjuncture’ as generic locutions roughly equivalent to prosperity36 and depression, or to the ascending and descending phase of the cycle.37 On the other hand, to indicate the overall movement writers added specific qualifiers to that effect. Felden thus specified: ‘the succeeding change between prosperity and depression is denoted oscillation in the conjuncture’ (KONJUNKTUR UND KRISEN, in →Nicklisch’s Handwörterbuch der Betriebswirtschaft, 1927, p. 693); others compounded the term with expressions indicating oscillations, such as ‘Konjunkturschwankungen’ (conjunctural fluctuations),38 ‘Konjunkturwellen’ (conjunctural waves),39 ‘Konjunkturzyklus’ (conjuncture cycle)40 or, more generally, ‘Konjunkturbewegung’ (conjunctural movement).41 Later, the term ‘Konjunktur’ was taken to incorporate the entire wavelike movement: ‘KONJUNKTUR: Oscillations in modern economic life, caused by disturbances in the equilibrium of economic progress’ (Müller and Löffelholz, →Bank-Lexikon, 1953, p. 840); the change in the meaning is specifically recorded in the entry KONJUNKTUR for the 1988 edition of the →Bank-Lexikon: ‘The term does not refer to a specific economic situation (for example, Konjunktur = economic growth, in contrast to a crisis), but more generally to the cyclical process’ (p. 1267). In an interesting entry on CONJUNCTURE for →Seligman’s Encyclopaedia of the social sciences, Kuznets explains that the term ‘Konjunktur’ as introduced by Lassalle and adopted by Schäffle and Wagner was meant to emphasize the independence of the totality of market conditions from the actions and aspirations of the economic agents. The assertion of the dependence of business men upon conditions not of their making involved a criticism of the atomism of classical economics, for the latter ignored the organic interdependence of economic processes and maintained that all profits are earned gains. (p. 204) Later,

Naming crises 97 With the spread of the historical descriptive method of economic study and an increase in the number of monographic studies of the various aspects of conjuncture in Germany, the concept suffered a slight but significant change in meaning. The emphasis now was not on the independence of the market from the individual but on the incalculable variability of market conditions, which in the simultaneous oscillations of supply and demand presented a puzzling problem from the point of view of equilibrium economics. (ibid., p. 204) More empirically and less historically oriented was the discussion of ECONOMIC written by Konyus for the Russian →Granat Encyclopedic dictionary (1933), on which see Chapter 21, Section 21.3. The term also has equivalents in French and Italian. In →Romeuf’s Dictionnaire des sciences économiques (1956), Sauvy wrote of CONJONCTURE that ‘the term is still used with a flavour relating to its origin, medieval astrology. It was used in the 18th century [presumably in France] in the sense of “movement of business, of the economic situation” (in a non-static meaning of “situation”); then it disappeared, to return from the Russian and German languages’, where the term designates both the science and its object. The author of the entry on CONJONCTURE in →Suavet’s Dictionnaire économique et social (1962) explains that up to a few decades earlier the word was used to designate ‘a combination of circumstances’ (Larousse) while ‘Recently it has acquired a new meaning in economics: it designates on the one hand the economic situation at a given time; on the other, it designates the science studying this situation and its evolution’ (p. 103). Similarly, in Italian, Cipolletta reports that CONGIUNTURA ECONOMICA is the combination of socio-economic factors determining, at different times, a specific evolution of economic systems. But while the previous entry referred the term to ‘a given time’, here it is stressed that it does not give a picture, but a ‘movie’ which indicates shorttime tendencies (12 to 18 months) (in →Bedeschi, Enciclopedia delle scienze sociali, Vol. 2, 1991). CONJUNCTURE

3.2.9.4 Cycles in dictionaries The first dictionary entry specifically dedicated to the BUSINESS CYCLE appeared in →Munn’s Encyclopedia of banking and finance in 1924. Crises and cycles happily cohabited in most dictionaries throughout the inter-war years, while entries on crises became more and more rare after the war (see Section 3.2.8.2), when most dictionaries carried instead entries on cycles. Such entries are thus very numerous, but can be categorized in a limited number of types. A few dictionaries referred to the chronological notion of cycle, and defined it as the interval necessary for covering a whole round of events. The contribution in →Munn’s Encyclopedia of banking and finance, cited above, for instance, defined it ‘an interval which embraces alternating periods of business prosperity and depression’ (1924, p. 76). Guitton also defined the cycle as ‘a continuous period, lasting a number of years, during which certain phenomena

98 Daniele Besomi reproduce themselves in a certain order’ (CYCLES, in →Romeuf, Dictionnaire des sciences économiques, 1956, Vol. 1, p. 365). An interesting variant, the implications of which are unfortunately not pursued by its authors, conceives the cycle as ‘the time-unit for economic time’ (Portier, CYCLES ÉCONOMIQUES, in →Jessua et al., Dictionnaire des sciences économiques, 2001, p. 248) or ‘a unit of time in American history’ (B. Kte’pi, BUSINESS CYCLES, in →Wankel, Encyclopedia of business in today’s world, 2009, p. 197). A second (rather miscellaneous) type of entry relies on some specific features or causes of the cycle. During the inter-war years, some economists in Germany stressed that the cycle consists in the unbalanced relationship of supply and demand; this view relates to those who understood crises as a disturbance to equilibrium (see Section 3.2.8.3). Bülow described KONJUNKTURBEWEGUNGEN as ‘the fluctuations of the economy derived from an unsatisfactory counterbalancing of demand and supply’ (→Wörterbuch der Wirtschaft, 1936, p. 214), and Maier wrote that ‘by “Konjunktur” in the economic sense one understands the continually changing relationship between supply and demand on a market’ (KONJUNKTUR UND KONJUNKTURFORSCHUNG, in →Giese, Handwörterbuch der Arbeitswissenschaft, 1930, p. 2864). On a different line, another writer incorporated a causal relationship in the definition: ‘The instability of the economic system finds an expression in its wavelike behaviour. The ups and downs in demand for investment and consumption goods are denoted with the term Konjunkturschwankungen’ (Weber, KONJUNKTUR UND KRISE, in →Klose, Katholisches Soziallexikon, 1964, p. 553). Finally, some writers defined the cycle in terms of fluctuations in the degree of utilization of productive capacity. The first instance in a dictionary seems to be due to Besters: The term ‘Konjunktur’ indicates fluctuations of national income around the level required to maintain the full employment of the national productive capacity. If national income exceeds that level, there results a surplus of aggregate demand that leads to prosperity; if it falls below that level, there results a deficit of demand that leads to a depression. There is equilibrium, in the sense of a non-fluctuating economy, when the national income corresponds to the full employment income, that is, when there is neither excess or deficit of capacity. (WIRTSCHAFTLICHE KONJUNKTUREN, in Görres-Gesellschaft’s Staatslexikon, 1963, p. 738) The issue was taken up in the following edition (the 7th) of the same dictionary, specifying that the new growth theory understands that there is an equilibrium growth rate at which there is normal utilization of capacity, so that the cycle can be defined in terms of deviations from such level (Mälich, KONJUNKTUREN, 1987, p. 614). More recently, a short entry in →Hohlstein et al., Lexikon der Volkswirtschaft, defined KONJUNKTUR as ‘cyclical fluctuations in the degree of utilization of the overall production potential. The whole oscillation process of economic development through certain economic phases is called Konjunkturzyklus’ (2003, p. 418). The only non-German entry carrying this notion is found in Bullock

Naming crises 99 and Stallybrass’s Fontana dictionary of modern thought: TRADE OR BUSINESS consists in ‘cyclical fluctuations in the level of economic activity, where activity is defined with reference to the degree of utilization of productive resources’ (1988, p. 867). By far the most crowded group of definitions offered in specialized dictionaries are purely descriptive in character. They list the most remarkable features of the phenomenon, with some difference of emphasis, the simplest ones only referring to the alternation of good and bad times, the most complex ones adding remarks on their regularity, duration, amplitude, co-existence with other kinds of fluctuations, and so on. The archetype of such definitions was offered by Mitchell – both chronologically and in terms of explicit reference:42

CYCLE

BUSINESS CYCLES are a type of fluctuation characteristic of economic activities organized in the form of ‘business economy’ or ‘high capitalism,’ to use the German term. They have a wavelike pattern – each cycle includes a phase of revival, expansion, recession and contraction. These successive changes in activity spread more or less promptly over a large part, seldom over all, of the economic processes of a country. The cycles are recurrent, but not periodic. Their average duration varies in communities at different stages of economic development from about three to about six or seven years. (In →Seligman, Encyclopaedia of the social sciences, 1933, p. 92; see Chapter 22, Section 22.2 of this book) As Mitchell stressed, this definition was operational. It is – as Mitchell later explained – ‘a working definition that tells where to look or for what to look. It must list observable characteristics, particularly such as differentiate business cycles from other movements with which they may be confused’ (Burns and Mitchell, 1946, pp. 4–5). This definition thus responded to Mitchell’s specific epistemological approach, primarily based on induction. Not that he rejected theoretical assumptions. But upon examination of the existing, widely diverging theories of the cycle, he came to the conclusion that none of them was fully adequate or, on the contrary, demonstrably wrong (1913, pp. 19 and 579). He refused, however, to organize the investigation in terms of testing these theories; he believed such an approach would distort the inquiry, which should instead begin by observing, analysing and systematizing the phenomenon directly rather than by reference to the theories. The results of previous workers in the field, nevertheless, suggested facts to be examined and connections to be studied, so that Mitchell’s attitude brought him to a syncretistic approach towards rival theories (p. 20). Most dictionary writers who took up Mitchell’s definition or produced similar ones43 did not, of course, start off from the same epistemological stance. Yet such descriptive definitions, uncommitted as they are so far as the interpretation of the phenomenon is concerned, enable writers to satisfy the need for uncontroversial statements suitable for dictionaries, whether aimed at laypeople or at specialists. The latter, of course, would realize that such definitions do not go to the core of the problem of the nature of the cycle but only capture its appearance. The interpretative part is thus offered at a later

100 Daniele Besomi stage, often – when space permits – in the form of a survey of business cycle theories (as did also Mitchell, BUSINESS CYCLES, pp. 98–100).44 These descriptive definitions omit, in particular, to express any opinion as to the role of these fluctuations in the working of an economic system. Yet this is a problem on which economists can hardly abstain from taking a precise stand: either one believes that the economic system is in some sense self-adjusting, and accordingly maintains that fluctuations are due to frictions or miscalculations, or result from the system’s response to exogenous accidents; or, on the contrary, one does not rely on the existence of automatic self-correcting mechanisms and sees the cause of fluctuations in some destabilizing factor working within the economic system itself. These views are mutually exclusive, and cannot be recomposed in empirical ways; one can determine whether or not a model is stable, but not whether the real world is stable.45 An element of interpretation here is unavoidable, as data are consistent both with the view that fluctuations are irregular because they are entirely random, and with the view that they are accidental deviations from a systematic underlying oscillation in the system’s proper dynamics. While the descriptive definitions of the cycle largely eschew the issue, some dictionary writers took a precise stand, on one side or the other of the gulf. Among the supporters of the first view, the clearest formulation is due to Dotsey and King, who define BUSINESS CYCLES as the stochastic components of macroeconomic time series (in →Eatwell et al., The new Palgrave, 1987). Slightly more relaxed, but still within the tradition of the Real Business Cycle, are the definitions in terms of percentage deviation from the trend line, as, for instance, in the following: ‘BUSINESS CYCLE: Periodic, but irregular, fluctuations in the pattern of aggregate economic activity. Usually defined as deviations of output (real GDP) from its secular or long-term trend’ (in →Snowdon and Vane, An encyclopedia of macroeconomics, 2002, p. 64; see also Mälich’s 1987 definition cited above, and Portier, CYCLES ÉCONOMIQUES, in Dictionnaire des sciences économiques, 2001, p. 250. On the Real Business Cycle approach in dictionaries, see Chapter 27). Such definitions are incompatible with Mitchell’s on two counts. First, Mitchell’s emphasis on the cycle being a characteristic phenomenon of capitalist economies (hence his use of the qualifier ‘business’) excludes statistically similar phenomena taking place in different economic systems; but there is hardly a reason to suppose these are free of stochastic disturbances. Second, Mitchell stressed the similarity in the morphology of the successive ‘waves’, which he summarized in the succession of phases. Stochastic shocks may have any shape, and accordingly writers belonging to this tradition only distinguish the ups and downs, and explicitly neglect the turning points (Cooley, BUSINESS CYCLES, in →Kuper and Kuper, Social science encyclopedia, 2004, p. 79), thus going back to the eighteenth- and early nineteenth-century distinction of good and bad times only (see note 33). Other entries, on the contrary, particularly stress the rhythmic character of the economic process46 and emphasize that the use of the term ‘cycle’ implies the repetition of the same process in its stages, and a new beginning of the sequence at the end of the preceding one. Guitton, for instance, after having defined the cycle as the period during which certain phenomena reproduce in a certain order, specified

Naming crises 101 that the term expresses the idea of a return to the starting point, in a circle. Once the starting point is reached, it starts all over again. It thus involves the idea of repetition (CYCLES, in →Romeuf’s Dictionnaire, 1956, Vol. 1, p. 365); or Gallarotti defined BUSINESS CYCLES as ‘the systematic path that the overall economic activity of a nation takes over a certain time-period’. The systematic aspect consists not in regularity, steadiness or uniformity, but in the recurrence of phases of expansion and contraction, via a peak and a trough (in →Jones, Routledge encyclopedia of international political economy, 2001, p. 112). Some entries go further, and stress that the cycle is the form taken by the economic process in the capitalist era. Cozzi indeed opens his article with a quotation from Schumpeter’s Business cycles to this effect (1939, p. v), and specifies that this implies not only acknowledging that historically the development of capitalism has proceeded in an oscillatory way, but affirming that ‘the cyclic pattern is the very essence of the capitalistic development process, it is one of its characteristic and non-removable constitutive parts’ (CICLI ECONOMICI, in →Bedeschi, Enciclopedia delle scienze sociali, 1991, vol. 1, p. 720). Giannetti also stressed the need to push the analysis beyond the mere chronological recording of the facts, and espouses the view of the cycle as the norm of the general evolution of capitalism. He explains that it was born at the end of the nineteenth century, after the prolonged depression of 1873–1896. It captured both the delusion of the optimism of classical economists, and the delusion of the Marxist belief in crises as leading towards the breakdown of capitalism (CRISI ECONOMICHE: L’OTTOCENTO, in →Carmagnani and Vercelli, Economia e storia, 1978, Vol. 1, pp. 111–112). Whether one views the role of cycles in the working of capitalistic economies as essential or purely stochastic, everybody acknowledges that the oscillations are far from regular in their timing and amplitude. Mitchell, in the passage cited above, suggested that they are recurrent rather than periodic;47 Guitton pointed out that while there are physical cycles that are strictly periodical, economic ones are almost periodical. Strictly speaking, then, one should not speak of ‘cycles’; yet the term dominates in English, while in French the more general word ‘fluctuation’ is preferred (Guitton’s already cited 1956 entry is nevertheless titled CYCLES). Birou, after defining cycles in general as ‘evolution through periodical repetition’, stressed that, as opposed to the fairly periodic natue of past crises, ‘nowadays fluctuations much less regular than before are observed’ (CYCLES ÉCONOMIQUES, in →Birou, Vocabulaire pratique des sciences sociales, 1966, p. 68). Brandis, in an entry aptly titled BUSINESS CYCLES AND BUSINESS FLUCTUATIONS, pointed out that ‘Cycle implies significant regularity of the movement but neither periodicity with respect to calendar time nor equal amplitude of successive movements. Fluctuation does not imply periodicity, equal amplitude, or regularity in movement’ (in →Gould and Kolb, Dictionary of the social sciences, 1964, p. 62). Medio explained that ‘the term “cycle” suggests, beside the alternation of high and low, the idea of regularity. In physics, one distinguishes between oscillations (cycles) and fluctuations, the former implying regularity, the latter not. Yet economic cycles do not require absolute regularity, as they depend on many mechanisms and are subject to several erratic shocks’ (CICLO, in →Lunghini, Dizionario di economia politica, Vol. 10, 1985, p. 11).

102 Daniele Besomi

3.2.10 Fluctuations According to the Oxford English dictionary, although the noun ‘fluctuation’ and the corresponding verb originate from the Latin fluctus, ‘wave’, fluctuation is only rarely used in the sense of ‘wavelike motion’ and normally means ‘2. The action or condition of passing more or less rapidly and suddenly from one state to another; an instance of this; repeated variation, vicissitude. In pl. ‘ups and downs’. b. An alternate rise and fall in amount or degree, price or value, temperature, etc.’ The verb indicates ‘2. fig. (Now chiefly without allusion to the literal sense.) a. Of things, conditions, etc.: To vary irregularly, undergo alternating changes in level, position, form, constituent elements, etc.: to be unstable or unsettled’. The term featured with reference to economic data in several writings beginning from the third decade of the eighteenth century. An anonymous author wrote of silver as ‘continually fluctuating in its Price according to the Quantity of Demand of it’, like any other goods (1728, p. 18); another writer discussed those who had fallen into poverty ‘owing to the fluctuation of Trade from one Species to another, and from one Place to another’ (Anonymous 1, 1729, p. 16); and Madden associated fluctuations and stagnation of trade when he maintained that the want of ‘Coin Money’ ‘produces many Grievances here, and stagnates our Affairs and Business to a great Degree; and is the great source that occasions the Perpetual Fluctuation of the Value of the little Money we have’ (1738, p. 180). The term was used in the title of a pamphlet by Lawn published in 1800, The corn trade investigated, and the shocking system exposed which principally causes the amazing fluctuations in the prices of corn and flour; and a proposition . . . which will effectually remedy the alarming fluctuating price of bread corn. Thereafter it featured with some regularity in the title of writings. Occurrences were intermittent but not infrequent and evenly spread throughout the nineteenth century; during the inter-war years the frequency of occurrence oscillated around 10 per cent of the titles (data from my own database); between 1945 and 1974 they accounted for 30–40 per cent of the titles recorded in JSTOR; in the two following decades the frequency recorded in Econlit titles diminished to around 20 per cent, to fall further to about 15 per cent between 1998 and 2008 (see Figures 3.1–3.5 in the Appendix).48 The word ‘fluctuation’ is rather flexible in meaning and allows for a wide range of usages. The early occurrences seem to use the term as more or less equivalent to ‘non-unidirectional change’ and as opposite to ‘stationary’ or ‘stable’ (the latter in a non-technical sense, of course), as in the following example: Wilson argued that if gold ‘can be shewn to have remained itself stationary in value, it will, in consequence, for the time, have been a perfect criterion by which to measure the fluctuations of other things. Though gold should really be the least fluctuating of articles, yet if it is not, absolutely, in strictness, stationary, no act of Parliament can make its fixture rank otherwise than as a relative and temporary assumption of our own’ (1811, p. 12). This is how the term was used in most dictionaries of the nineteenth century. McCulloch, for instance, in the entry CORN LAWS AND CORN TRADE in his own →Dictionary of . . . commerce and commercial navigation wrote as follows: ‘A free corn trade is the only system that can give them [agriculturalists] that security

Naming crises 103 against fluctuations that is so indispensable’ (412, 1834). In the unsigned entry on CRISE COMMERCIALE ET INDUSTRIELLE in →Monbrion’s Dictionnaire universel du commerce, de la banque, et des manufactures it is explained that ‘it is obvious that the movement of commerce and industry of a country cannot be uniform, and that some fluctuations at shorter or longer intervals are almost inevitable in consequence of causes difficult to foresee’ (1838, p. 637). The entry on MONEY in →[Long]’s Political dictionary clarifies the opposition with constant values on the one hand, and permanent alterations on the other: gold and silver are liable to fluctuations in their value by reason of variations in the demand for them in particular countries. Though fashioned into coins, they retain all their properties as articles of commerce: they are readily fused into other forms, and rendered available for all purposes of use and ornament; and the occasions of commerce often withdraw them from one country and attract them elsewhere. From these causes their value, instead of being always the same, is liable to permanent alterations, and also to occasional fluctuation. (1846, p. 349) This usage of the term is rather loose and neutral, and so far free of an ‘ideological’ commitment to affirm or reject a thesis, as it only involves alternating ups and downs. The relationship of ‘fluctuations’ and crises during the nineteenth century was thus rather varied. Fluctuations were sometimes seen as the cause or as the consequence of crises or panics, or simply accompanying them, or sometimes (in the case of ample fluctuations) as being the essence of crises, or on the contrary they were denied to constitute panics. Perhaps the most common position was that fluctuations are one of the causes of distress – in particular fluctuations in the value of money. Huskisson, for instance, noted: ‘Nor is the distress occasioned by a fluctuating value of the currency limited to the proprietors of land. Much of the commercial distress, which at frequent intervals has prevailed in this country since the period of the French revolution, must be ascribed to the same cause’ ([Huskisson], 1830, p. 144); similarly, the chairman of the Bank of Liverpool stated that ‘rapid change and fluctuations are always productive of distress somewhere’ (Brown, 1834, p. 289); and W. Anderson maintained that ‘every great fluctuation in the distribution of property is necessarily productive of great calamity, and nothing has evidently a greater tendency to produce such fluctuations, than alterations in the amount of the currency’ (1821, pp. 48–49). ‘Fluctuations’ were rarely conceived as the prime mover: they normally reflected some other phenomenon, and contributed to the generation of crises by transmitting further its consequences. Speculation and over-trading, in particular, were often indicated as the culprit: the ‘excess of speculation . . . produces violent fluctuations, bringing to crises and disaster’ (Bartholony, 1839, p. 91). Macleod, in the entry on CREDIT in his own →Dictionary of political economy, expounds in detail the causation chain: In times of great speculation and great fluctuations of prices, there is an exceeding danger of over production by means of Credit, especially by that

104 Daniele Besomi abuse of it called Accommodation Paper, which we have described. A new channel of trade is opened, perhaps, and the first to take advantage of it make great profits. Multitudes of others, hearing of these great profits, rush in, all dealing on credit. The market is overstocked, and prices tumble down, and the credit created to carry on these operations cannot be redeemed. Not only are the speculators in many cases ruined, but also frequently the banks which created credit by discounting these bills. (1863, p. 604) With regard to over-trading, the argument is expounded in the following passage from the evidence of John Irving before the Parliamentary Committee inquiring on the resumption of convertibility: Does not over-trading tend to produce corresponding stagnation in trade? – I think over-trading does, and the remedy is a fall of price. Does not such over-trading and corresponding stagnation tend to produce fluctuation in prices? – There can be no doubt of that. Does not frequent fluctuation in prices tend to produce distress in the commercial, manufacturing, agricultural, and labouring classes of the community? – I think a fluctuation of prices certainly does create distress, and consequently that level and equal prices would be more desirable. (House of Commons, 1819, p. 144) Some writers insisted that panics are phenomena intrinsically different from the normal fluctuations of trade. In James Mill’s entry on BANKING in the Supplement to the 4th, 5th and 6th editions of the →Encyclopædia Britannica, it is stated that The drain of specie to which a great national bank may be subjected from the prevalence of a general alarm, is in all respects different from that which may be produced by a great foreign expenditure, or by the fluctuations of trade. The impulse given by panic is, in its very nature, sudden and instantaneous. It generally terminates also, and that speedily, in some violent crisis. (1824, p. 86) Other writers, on the contrary, interpreted crises and panics as the summation of fluctuations of different kinds. Jevons, for instance, is cited as follows in the entry on CRISES (COMMERCIAL AND MONETARY) in →Bliss’s Encyclopedia of social reform: Jevons explained crises in part by bad crops, and these by sun-spot periods. He says, in a communication to the British Association (1862): ‘There is a periodic tendency to commercial distress and difficulty during these months (October and November). It is when great irregular fluctuations aggravate this distress, as in the years 1836–39, 1847, 1857, that disastrous breaches of commercial credit occur.’ (1897, p. 431)

Naming crises 105 Another writer maintained that crises are nothing but very bad and concentrated fluctuations: To some such system we must come before we can hope for the permanent prevention of such crises as the present. The unavoidable fluctuations of commerce, which would break harmlessly upon a wide surface, tear down every thing in their course when they come to be concentrated, as they are at present, upon a single point, of strength and stability wholly unequal to resist them! These fluctuations, on the present extended scale of our transactions, actually exceed the narrow limits of the Bank’s solvency, or, which is practically the same thing, of the public belief in it. (Knowles, 1837, p. 77) The latter passage provides an early instance of an interpretation that has often been contrasted with the view that crises first, and cycles later, are a specific phenomenon that should be inquired into for its own merits, and as such deserve a proper name. By 1837 a number of writers had already devoted specific inquiries to the occurrence and the recurrence of crises,49 but this approach was still adopted by a small minority of writers, although it was gaining ground. Sceptical comments, however, were formulated as soon as the proposition that the conditions for crises are rooted in the previous prosperity was expounded. One of the lines of counterargument that recur throughout the entire history of crises and cycle theories is based precisely on Knowles’s argument that the ‘normal’ fluctuations accompanying trade, and actually constituting its essence, occasionally cumulate into major and sudden disruptions of trade and industry. Knowles was only contributing his own interpretation and was not confrontational with the ‘crisis’ theory. Towards the end of the twentieth century, however, this argument was couched into an analytically more refined form, and the term ‘fluctuation’ – with emphasis on its feature of irregularity – was used in direct contraposition to ‘cycle’, not only to stress the lack of regularity of economic fluctuations, but also to reject the very idea that capitalist economies are subject to a cyclical dynamics. The quasi-regularity of the cycle, then, is disputed not so much as an empirical feature, but rather for its implication that the phenomenon is subject to some more or less strict economic law implying the recurrence of bad times. Some recent dictionary entries accordingly place the terminological choice between ‘cycles’ and ‘fluctuations’ right on the line separating two incongruent views on the nature of capitalistic dynamics, one which sees a rhythmical course of economic development admitting the possibility of the occurrence of deep depressions and crises, as the product of the lack of a mechanism of adjustment capable of bringing the system back to equilibrium once it is disturbed; and the other believing instead in the existence of powerful equilibrating forces, interpreting fluctuations precisely as the result of the system’s response to external shocks. The following example, extracted from C. Romer’s entry on BUSINESS CYCLES in →Henderson’s Concise encyclopedia of economics, makes this clear:

106 Daniele Besomi In many ways, the term ‘business cycle’ is misleading. ‘Cycle’ seems to imply that there is some regularity in the timing and duration of upswings and downswings in economic activity. Most economists, however, do not think there is. [. . .] [E]xpansions and recessions occur at irregular intervals and last for varying lengths of time. For example, there were three recessions between 1973 and 1982, but, then the 1982 trough was followed by eight years of uninterrupted expansion. The 1980 recession lasted just six months, while the 1981 recession lasted sixteen months. For describing the swings in economic activity, therefore, many modern economists prefer the term ‘short-run economic fluctuations’ to ‘business cycle.’ [. . .] Just as there is no regularity in the timing of business cycles, there is no reason why cycles have to occur at all. The prevailing view among economists is that there is a level of economic activity, often referred to as full employment, at which the economy could stay forever. (2007) (See also the same entry in the previous edition, 1993, where the expression ‘economic fluctuations’ was used in place of ‘short-run economic fluctuations’.) On the other side of the gulf we have Mullineux’s entry on BUSINESS CYCLES for →Deane and Kuper’s Lexikon of economics: There has been some debate about whether business cycles are systematic economic fluctuations, or whether they are instead purely random fluctuations in economic activity. It is certainly true that business cycles are not regular, in the sense of a sine wave with constant period and amplitude. But the weight of evidence, largely due to the accumulated studies produced through the National Bureau of Economic Research, indicates that business cycles are sufficiently uniform to warrant serious study. (1988, p. 31) Before the advent of the theories of business fluctuations associated with rational expectations, the word ‘fluctuations’ had been used for decades as more or less equivalent to ‘cycles’,50 as witnessed by Burns and Mitchell’s definition of business cycle as ‘a type of fluctuation found in the aggregate economic activity of nations’ (Burns and Mitchell, 1946; a similar passage is cited in full in Section 3.2.9.4), and by the use of the term ‘fluctuation’ in the title of a number of landmarks in the literature on cycles written throughout the twentieth century, such as Hawtrey’s Good and bad trade. An inquiry into the causes of trade fluctuations (1913), Robertson’s Study of industrial fluctuations (1915), Pigou’s Industrial fluctuations (1927; the expressions ‘wave movements’ and ‘cyclical fluctuations’ are treated as equivalent to ‘industrial fluctuations’: pp. 3–4), Kalecki’s Essays in the theory of economic fluctuations (1939), and Tinbergen and Polak’s The dynamics of business cycles. A study in economic fluctuations (1950). Accordingly, most of the recent dictionary entries are content with associating the usage of ‘cycles’ and ‘fluctuations’ with the more or less regular character of the alternation between

Naming crises 107 prosperity and depression. There are several examples besides those already cited in the last paragraph of Section 3.2.9.4. French dictionaries often stress that ‘cycles’ implies relatively constant periodicity and amplitude, which is not the case for ‘fluctuations’ (Géhanne, CRISES ET FLUCTUATIONS ÉCONOMIQUES, in his own →Dictionnaire thématique des sciences économiques et sociales, 1995, Vol. 2, p. 84; FLUCTUATION, in →Lakehal, Dictionnaire d’économie contemporaine, 2001; Portier, CYCLES ÉCONOMIQUES, in →Jessua et al., Dictionnaire des sciences économiques, 2001, p. 248; and CRISES ÉCONOMIQUES ET SOCIALES, in →Bremond and Gélédan, Dictionnaire économique et social, 1992, p. 109. Similarly, Guitton, in the entry on BUSINESS CYCLE for the Encyclopædia Britannica, online edition, 6 May 2010). Among entries in English, we find similar observations to this effect in the →Fontana dictionary of modern thought (‘TRADE OR BUSINESS CYCLE. . . . The term applied to fluctuations in growth that have some uniformity in the cyclical pattern, as distinct from more random changes in the economy’: [Matthews] 1988, p. 867) and in →O’Hara’s Encyclopedia of political economy (‘Business cycles are recurrent, relatively periodic fluctuations in the level of economic activity. The word “cycle” implies persistent patterns, but because the periodicity or timing of oscillations in the economy is often irregular, many economists prefer the term “economic fluctuations.” The term “trade cycle” has also been used. For our purposes, the three terms are synonyms’: C. J. Niggle, BUSINESS CYCLE THEORIES, 1999, p. 50). Other dictionaries do not even inquire on any difference in meaning, and use ‘fluctuations’ in a way roughly interchangeable with ‘cycle’, as in the following examples: ‘The limit cycle can thus be thought of as fluctuation around a steadystate growth path’ (E. A. Thompson, GOODWIN, RICHARD MURPHEY (1913–), in →Glasner’s Business cycles and depressions: an encyclopedia, 1997). In Dimand’s entry on MACROECONOMICS, ORIGINS AND HISTORY OF for the 2nd edition of →The new Palgrave dictionary of economics (2008), the term ‘fluctuations’ is used (but not defined) as equivalent to ‘cycles’. And in P. Skott’s entry on BUSINESS CYCLES in King’s →Elgar companion to post Keynesian economics (2003), the term is used as follows: The time path of aggregate output and its main components exhibits significant fluctuations around trend values, as do other important variables, including employment, productivity, prices, wages, interest rates and stock prices. These fluctuations are recurrent but not regular. The pattern of comovements between the different variables, the amplitudes of the fluctuations and the length of the cycle vary over time. In fact, the delineation of cycle from trend raises many problems, and cycles of different length may coexist in the data; short-run fluctuations may take place with reference to a long-run cycle, rather than around a constant exponential trend. The term ‘business cycles’ usually refers to relatively short cycles. (2003, p. 38)

108 Daniele Besomi

3.2.11 Recession The term ‘recession’ originally applied to medical conditions: ‘2. a. Chiefly Med. The relief or remission of (a disease, symptoms, etc.); the diminution or decline of (a faculty, function, etc.). Also: an instance of this. Later occas. in extended use’, with the first instances dating from the early seventeenth century (Oxford English dictionary). The meanings in which we are interested originated much later: ‘5. a. orig. and chiefly Econ. A reduction or decrease in value or amount. b. Econ. A period of economic decline during which trade and industrial activity are reduced. According to one commonly used economic indicator, identified by a fall in a country’s gross domestic product for two consecutive quarters’. To these connotations identified by the OED, we should add a third one: ‘recession’ as the upper turning point of the business cycle. Chronologically, the earliest occurrences of the term are in the sense 5.a. of the OED. Several instances are found from 1826 throughout the entire nineteenth century, usually accompanied by a qualification of the magnitude being reduced in value – e.g. ‘recession in value’, ‘in price(s)’, or ‘in rates’. The earliest instances seem to be these: ‘Veal was dull of sale at a recession of 4d. to 6d. per stone from Friday’s quotations’ (Anonymous 1 (Bristol Mercury), 1826); and ‘Prime small beasts, owing to their increase in numbers, . . . sold heavily at a recession of about 4d. per stone from Friday’s quotation’ (Anonymous 2 (Morning Chronicle), 1826); they were followed by other occurrences in the Bristol Mercury, also taken up by other papers. Later examples further illustrate this usage of the word: ‘. . . we endeavoured to prepare the mind of the Era readers, on the first recession of the market from the price to which the stock had been forced’ (Anonymous 2 (The Era), 1843); ‘Churnet valley Railway – A great sensation has been created by the recession in the prices of these shares . . .’ (Anonymous (Liverpool Mercury), 1845). The term was used in this sense also by J. S. Mill: ‘In addition, therefore, to the original diminution of one-tenth in the cost of production, there will be a further diminution, corresponding with the recession of the “margin” of agriculture to land of greater fertility. There will thus be a twofold fall of price’ (1848, book 4.III.20). With the beginning of the new century, rather than referring to a single price, ‘recession’ became associated with the condition of the entire economy. The earliest example quoted by the OED is dated 1905: ‘The year of 1903 was one of recession in the business world. The bottom was knocked out of the speculative craze which had seized the country’ (from the Iowa Recorder, 18 January). Next we find it used by the president of the Commercial National Bank in Chicago: ‘no recession in business was observable up to the date of the panic’ (Roberts, 1908, p. 345). Its usage by Irving Fisher may have helped to make it acceptable to the profession: ‘in spite of the apparently impending recession, we are still in a period of incubation for a future crisis’ (1911, p. 304). Mitchell also used it in this sense in 1916: ‘To the depressing influence of these non-business factors there was added the recession of business activity in Europe’ (p. 127). To Mitchell we owe the elevation of ‘recession’ to a phase of the cycle, in substitution of the old ‘crisis’. As we have seen in Section 3.2.8.5, in the first two

Naming crises 109 decades of the twentieth century ‘crisis’ had turned from the central concept in the theories of crises dominating in the nineteenth century to a phase of the cycle – the upper turning point, marking the transition from prosperity to depression. Mitchell was still not satisfied, as the notion of ‘crisis’ carries the implication that there is some ‘organic disturbance’ of business life, and possibly also some grave financial strain or panic. He thus found the term inappropriate to describe the downturns, as sometimes these are rather mild, and accordingly suggested that it be substituted in the naming of the phases of the cycle by ‘recession’ (‘business cycles are treated as having four phases – depression, revival, prosperity and recession’), and that the word ‘crisis’ as well as ‘panic’ be used to indicate the degree of intensity (1926, p. 37; 1927, p. 381). Mitchell’s suggestion was immediately taken up by Persons (1926, p. 94), who a few years later specified that ‘“crisis” and “depression” are descriptive of a state of business, while we need terms descriptive of the direction of business: “business expansion” and “business recession”’ (as reported by King, 1930, p. 208). The first dictionary entry to take up the term, with explicit reference to Mitchell and Persons, was an Italian one: ‘In the United States from 1790 to date cycles have an average length of 40 months. The most recent inductive inquiries on economic dynamics give much emphasis to the cycles we can call “minor”, which culminate not in major and very apparent crises but in a slowdown of economic activity. This is denominated “recession” by English-American writers’ (Bachi, CRISI ECONOMICHE, in →Enciclopedia italiana, 1931, p. 917). Mitchell himself, of course, used the term in this sense in the entry for →Seligman’s Encyclopedia of the social sciences: ‘BUSINESS CYCLES [. . .] have a wavelike pattern – each cycle includes a phase of revival, expansion, recession and contraction’ (p. 92; note the substitution of ‘depression’ by ‘contraction’ and of ‘prosperity’ by ‘expansion’, tacitly following Persons’s suggestion). Further terminological specifications along this line are given by Burns, in the entry on BUSINESS CYCLES. I. GENERAL for →Sills’s International encyclopedia of the social sciences: The terms used by economists to describe the phases of business cycles are rich in diversity but are gradually becoming standardized. The ‘peak’ of a business cycle marks the end of ‘expansion’ and the beginning of ‘contraction.’ The ‘trough’ marks the end of contraction and the beginning of expansion. Frequently, ‘prosperity’ is used interchangeably with ‘expansion,’ although it is better practice to restrict terms such as ‘prosperity’ or ‘boom’ to the higher reaches of particular expansions when full employment is closely approximated. The term ‘recession’ does double duty. It is widely used to refer to the transition from expansion to contraction, just as ‘recovery’ or ‘revival’ is used to refer to the transition from contraction to expansion. Contractions of varying intensity are also commonly distinguished by the terms ‘recession’ and ‘depression’; the former refers to a moderate contraction of aggregate activity that lasts in the neighborhood of a year, while the latter refers to a severe contraction or to one which, while moderate, lasts distinctly longer than a year. The term ‘crisis’ originally was used to denote the financial disturbances

110 Daniele Besomi that frequently occurred during the transition from expansion to contraction, but later it came to be applied to any transition from expansion to contraction. Nowadays, the term ‘crisis’ is usually reserved for a violent disruption of financial markets without regard to the stage of the business cycle in which such a disturbance occurs. (1968, p. 229) As Mitchell himself had noted (1926, pp. 34–37; 1927, pp. 378–381), this terminological shift was not devoid of consequences as to the establishment of a chronology of cycles, and ultimately as to the notion of ‘cycle’ itself. The business rhythm is cadenced not by major and significant crises, nor even by severe depressions,51 but by any downturn bringing a decrease of significant duration.52 While writers of the early twentieth century still emphasized the violence of crises, and therefore only discussed those events having that feature (Lescure including less than Aftalion, Bouniatian less than Lescure, and Tugan-Baranovsky restricting the field even more), in the hand of Mitchell cycles thus became more frequent and, on average, less severe. Crises and depressions returned to be exceptions to the norm, as they were in the view of most commentators of the nineteenth century, after having been, in the hands of the pioneers of business cycle research, an essential component of the ‘normal’ business cycle.53 After Mitchell, the difference between one of the frequent setbacks and an extraordinary crisis is only one of degree, while it used to be a difference between a minor adjustment and the true rhythmical nature of the explosion of the instability of capitalistic productive relationships. Mitchell’s notion of ‘recession’ is taken up, without further discussion on the meaning of the term, in most dictionary entries on business cycles. There seem to be only two dedicated entries. The first, brief one is in →Carson’s Gale encyclopedia of U.S. economic history. RECESSION is defined as a downturn in the business cycle that occurs when the real gross national product (GNP) – the total output of goods and services produced by the U.S. population – declines for two consecutive quarters, or six months. Recessions are usually characterized by a general decrease in output, income, employment, and trade lasting from six months to a year. A more severe and long-lasting economic crisis is known as a depression. (2000, p. 866) The second entry, by T. Mayer for the second edition of the →International encyclopedia of the social sciences, is far more precise. The definition runs as follows: A recession is the declining phase of a business cycle, when seasonally adjusted output falls significantly and unemployment increases, though by no means in every industry. A recession should not be confused with periods of low output and high unemployment. Early in a recession output, though falling, is still above its trend value. Similarly, shortly after the recession ends, output

Naming crises 111 is still below its prerecession level. Recessions should not be confused with depressions. While economic historians sometimes use this term to refer to conditions in the early 1890s, most American economists use it only in connection with the Great Depression, which started in August 1929 and encompassed one catastrophic recession until March 1933. This was followed by a recovery that was succeeded by another sharp recession from May 1937 to June 1938. The idea that recessions are characterized by two consecutive quarters of GDP decrease is thought to be naive; two alternative procedures are better. One is based on the following definition of ‘recession’ produced by the National Bureau of Economic Research (NBER): ‘a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale–retail sales’; it thus rests on different series of data, monthly GDP being the most important. This method, however, has been criticized for containing subjective or arbitrary elements, and the determination of turning points can only be done with some delay. Other procedures (not dealt with in detail) have thus been developed, based on the growth rate of GDP in successive quarters, that overcome these limits (Mayer, RECESSION, 2008, pp. 103–105).

3.3 CONCLUDING NOTE ON THE CHOICE OF TERMS The decision to use one term instead of another is never free of consequences. Some of the implications of the choice of words are purely technical. Yet most of them also carry a vision of the working of the economic system and, as such, the terminology becomes an ideological battleground. In a world where crises are seen as disconnected accidents temporarily and unsystematically disturbing an otherwise serenely fluid state of affairs, the phenomenon can either be ignored (thus dismissed as irrelevant) or discussed under the heading ‘crisis’ in the singular. This view was prevalent in the first half of the nineteenth century. Dictionaries accordingly opted for titling their entries ‘crisis’, when they carried one. When the recurring character of crises was recognized, in view of their periodical returning and thanks to a conceptual switch, making it possible to understand their role in the working of the economic system, the use of the word in the singular was no longer appropriate to account for the phenomenon. Dictionaries thus switched, as they did in the second half of the nineteenth century and up to the interwar years, to entries titled ‘crises’ in the plural. Early in the nineteenth century cycles supplanted crises not only by subsuming them as a phase of the overall movement, but also by substituting the view of a movement periodically broken by a violent discontinuity with an understanding of a rhythmical and much smoother form of development. Dictionaries thus started carrying entries on ‘cycles’ (prefixed by the adjective ‘business’, ‘trade’ or ‘economic’), fostering the tranquillizing view that after ‘bad times’ better times would

112 Daniele Besomi mechanically follow. The soothing effect of the transition was again completed on terminological grounds, with the substitution of ‘crises’ with the much tamer ‘recessions’. The dissent from such a view once more relied on terminological change, eventually recorded in dictionaries. On one side, those who reject the idea of an in-built mechanism periodically bringing downturns and revive instead the idea that these are caused by disconnected external events to which the economic system reacts, prefer to speak of ‘fluctuations’, a term that expurgates the oscillations from the inevitability implicit in the term ‘cycle’. On the other side, those who reject the idea that the system operates smoothly and emphasize instead the violent and sudden character of the downturn – thus disputing another implication of the mechanistic character of ‘cycles’ – resurrect instead the term ‘crisis’, which indeed re-emerges in the literature, both popular and academic, on the occasion of a major disruption of economic life. Dictionaries are the linguistic repository and propagators of the tradition of thought to which they belong and which they represent, and their editors are therefore very careful in the choice of their word-list, as they are in the choice of their contributors. Dictionaries are, therefore, a privileged place for logomachy, and crises and cycles are no exception – indeed, they are probably one of the main loci of doctrinal clashes. It is precisely in this respect that the following chapters of this book will look not only at the contents of the entries on crises and cycles, but also at the general purpose and choices of dictionaries themselves.

APPENDIX: DIAGRAMS DEPICTING THE FREQUENCY OF OCCURRENCES OF TERMS RELATING TO CRISES AND RELATED PHENOMENA

Naming crises 113

1859 1857 1855 1853 1851 1849 1847 1845 1843 1841 1839 1837 1835 1833 1831 1829 1828 1825 1823 1821 1819 1817 1815 0

5

10

15

20

Depression

Crisis

Fluctuation

Other

25

30

35

Distress

40

45

Panic

50

55

60

Cycle

Figure 3.1 Frequency of occurrences of specific terms in titles of writings on crises and cycles, taken from Besomi’s database, 1815–1860 (see Section 3.1 for details). ‘Other’ consists of ‘convulsion’, ‘revulsion’, ‘stagnation’, ‘embarrassment’, ‘pressure’, ‘bubble’.

114 Daniele Besomi 1905 1903 1901 1899 1897 1895 1893 1891 1889 1887 1885 1883 1881 1879 1877 1875 1873 1871 1869 1867 1865 1863 1861 0

10

20

Depression

Crisis

Fluctuation

Other

30 Distress

40 Panic

50 Cycle

Figure 3.2 Frequency of occurrences of specific terms in titles of writings on crises and cycles, taken from Besomi’s database, 1861–1905 (see Section 3.1 for details). ‘Other’ consists of ‘convulsion’, ‘revulsion’, ‘stagnation’, ‘embarrassment’, ‘pressure’, ‘bubble’.

Naming crises 115

1944 1942 1940 1938 1944 1934 1932 1930 1928 1926 1924 1922 1920 1918 1916 1914 1912 1910 1908 1906 0

10

20

30

40

Depression

Crisis

Fluctuation

Other

50

60

Distress

70

80 Panic

90

100

110

Cycle

Figure 3.3 Frequency of occurrences of specific terms in titles of writings on crises and cycles, taken from Besomi’s database, 1906–1945 (see Section 3.1 for details). ‘Other’ consists of ‘convulsion’, ‘revulsion’, ‘stagnation’, ‘embarrassment’, ‘pressure’, ‘bubble’.

116 Daniele Besomi

1974 1972 1970 1968 1966 1964 1962 1960 1958 1956 1954 1952 1950 1948 1946 1944 1942 1940 1938 1936 1934 1932 1930 1928 0

10

20

30

40

50

60

70

80

Business, trade or economic cycle Depression and recession Crisis (economic, financial, monetary, currency) and panics Fluctuations

Figure 3.4 Frequency of occurrences of specific terms in titles of writing on crises and cycles, taken from the JSTOR database, 1928–1975 (see Section 3.1 for details).

Naming crises 117 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970 1969 0

100

200

300

400

500

600

700

800

Business, trade or economic cycle Depression and recession Crisis (economic, financial, monetary, currency) and panics Fluctuations Bubble

Figure 3.5 Frequency of occurrences of specific terms in titles of writings on crises and cycles, taken from the Econlit database, 1969–2009 (see Section 3.1 for details).

118 Daniele Besomi NOTES 1 For instance, the term ‘depression’ appears with unusually high frequency in 1937–1939. This finding is due to my work in progress on Haberler’s Prosperity and depression (1937), which induced me to list in the database all the reviews and commentaries I have been able to find. 2 Occasionally, some titles are counted more than once, when they include more than one of the terms under examination. 3 Reviews do naturally repeat the title of the reviewed book; its multiple occurrences are in a way a reflection of its perceived importance. 4 These diagrams are not meant to substitute for serious statistical analysis. Their only purpose is to illustrate when the terms examined in this chapter made their appearance in such a prominent position as the title of published writings, and the fluctuations of such appearances over time. Different kinds of writings are grouped together, notwithstanding the obvious differences in their relevance and influence, the discussion of which would require an analysis of the diffusion and reception of each different contribution. 5 It is expedient, however, to discuss ‘fluctuations’ after ‘cycle’, in spite of the much longer history of the former. 6 The expression ‘glut debate’ is of much later invention. JSTOR first records it in a 1946 article by Hla Myint (p. 126); the second appearance is in a review of a book by this author (Smith, 1949). 7 The earliest instance of the reference to the ‘stagnation of blood’ cited in the OED is dated 1707. The reference to prosperity as ‘health’, also a frequent medical metaphor, is illustrative of the difficulties in making precise the degree at which trade is dead. In most medical dictionaries up to the middle of the nineteenth century, the definitions of ‘health’ and ‘disease’ referred to each other in a circular way. For a discussion, see Besomi, 2011, Section 4.1. 8 In the →Spanish translation of the dictionary, the term is rendered as ‘estagnacion’ (1827, p. 250). 9 The legend of the echo is also reported in a discussion of the panics of 1857 and 1866 (Anonymous, 1873, p. 938). 10 Without using the term ‘panic’, Juglar had already denied in 1863 that ‘monetary crises’ are, in most cases, independent phenomena, but are nothing but one of the possible manifestations of commercial crises (Crises commerciales, in →Block’s Dictionnaire général de la politique). 11 Nicholson’s entry BUBBLES (HISTORY OF) in →Palgrave’s Dictionary of political economy also states that ‘the term bubble has been commonly applied since the 17th century’ without, however, supplying any examples (1894, p. 182). 12 ‘An Act to Restrain the Extravagant and Unwarrantable Practice of Raising Money by Voluntary Subscription for Carrying on Projects Dangerous to the Trade and Subjects of the Kingdom’. The name ‘Bubble Act’ seems to originate in the second half of the eighteenth century; the earliest occurrence may be due to Richard Price, who wrote of the ‘act against Bubbles’ (1772). 13 An accompanying verb for bubbles is, indeed, ‘to inflate’. 14 A number of dictionary entries discuss in some detail the debate between ‘believers’ and ‘sceptics’, from both the theoretical and the empirical viewpoint – e.g. Spotton Visano, SPECULATION, in →Darity’s International encyclopedia of the social sciences (2008); Brunnermeier, BUBBLES, in →The new Palgrave, 2008; and Leightner, BUBBLES, in →Darity’s International encyclopedia of the social sciences (2008). 15 Although this occurrence may suggest that ‘depression’ is borrowed from meteorology, this does not seem to be the case, as the first instance of such usage listed by the OED dates from 1881.

Naming crises 119 16 Frewen, writing in 1885, maintained that the current depression responded to the same ‘laws of Nature’ as the regular periodic crises of the previous two centuries. ‘The present depression is only peculiar because of its unusual accessories: because it is accompanied by a very low range of prices and an abundance of the necessaries of life; because of its extreme protraction; and because it has antedated by several years the normal period of its return’ (p. 593). Jamieson wrote that ‘in two very notable respects the present depression is distinguishable from most of those similarly unhappy periods which have preceded it; the depression which commenced in 1875 has been more protracted, and it has been more universal, than any of its predecessors’ (1885, pp. 3–4). Similarly, Wallace (the biologist, who submitted a paper for the Pears prize for the best essay on the depression of trade) noted that the ‘present Depression of Trade is remarkable, not so much for its intensity or for its extent in both of which respects it has been equalled or surpassed on previous occasions, but for its persistence during the long period of eleven years . . . its remarkable persistence has been commented on by politicians and public writers. Usually a period of depression is quickly followed by one of comparative prosperity. Such a reaction has been again and again predicted in this case; but up to the present time there are no satisfactory indications that the evil days are passing away’ (1885, pp. 1–2). Giffen also found that the depression he was witnessing was not substantially different from previous occurrences, and actually was fairly mild on most standards except for an abnormal fall in prices, which he saw as the only cause of the deep gloom of which the country suffered (1885, pp. 800–807). 17 The passage is cited in full in Section 3.2.11, where it is placed in the context of Mitchell’s redefinition of terms leading to the elimination of ‘crises’ and ‘depressions’ from business cycle terminology to incorporate milder downturns, and reduce them as an indication of the degree of intensity of the phenomenon. 18 1911, p. 284; references are to Guyot, 1909 and Taylor, 1904. Much earlier instances in various languages are an anonymous reporter of a French debate on ‘economic crises’, 1861, p. 593 and, among others, Ferrara’s ‘delle crisi economiche’, 1864; Pierna y Hurtado’s entry on CRÍSIS ECONÓMICAS in the →Vocabulario de la economía, 1877; Öchelhäuser, Die wirtschaftliche Krisis, 1876; Della Bona, Delle crisi economiche, 1888, followed by several other Italian writings; Frewen, The economic crisis, 1888; Issaïev, ‘Les principales causes des crises économiques’, 1893; and of course Jones’s Economic crises, 1900. 19 Blanqui, CRISE COMMERCIALE, in →Encyclopédie des gens du monde (1836), Michel, CRISE COMMERCIALE, in Guillaumin’s →Encyclopédie du commerçant (1839), Monbrion, CRISE COMMERCIALE ET INDUSTRIELLE in his →Dictionnaire universel du commerce, de la banque et des manufactures (1838), Dupin, CRISE COMMERCIALE, in the →Encyclopédie du dix-neuvième siècle (1846), Courcelle-Seneuil, CRISE, in the →Dictionnaire politique (1842; on all these see Chapters 5 and 6), Coquelin, CRISES COMMERCIALES, in the →Dictionnaire de l’économie politique (1852; see Chapter 8), Ott, CRISE, in his own →Dictionnaire des sciences politiques et sociales (1854; see Chapter 10), Garnier, CRISES COMMERCIALES, in the →Dictionnaire universel théorique et pratique du commerce et de la navigation (1859; see Chapter 6). 20 Monbrion’s, in →Antonelli’s Enciclopedia del negoziante, 1841; Blanqui’s, in six editions of the →Nuova enciclopedia popolare italiana, 1841 to 1875, and also in the general purpose →Enciclopedia economica, 1860. 21 Roscher, DIE PRODUKTIONKRISEN MIT BESONDERER RÜCKSICHT AUF DIE LETZTEN JAHRZEHNTE, in →Die Gegenwart, 1849 (see Chapter 7); the other two entries on HANDELSKRISIS appeared in Meyers Konversations-lexikon, 1849, and in →Pierers Universal-Lexikon, 1857. 22 The American Economic Review was also slow in adapting: from Vol. 1, 1911, to Vol. 31, 1941, it carried a review section titled ‘Trade, commerce, and commercial crises’. 23 Medical dictionaries of the time suffered of the same problem. For a discussion of the medical metaphor for crises in the early nineteenth century, see Besomi (2011).

120 Daniele Besomi 24 The terminology associated to Say’s law, ‘loi des débouchés’ in the French original, deserves a comment. This expression, used by Say, his supporters and his critics, is often translated as ‘the law of markets’, but this is not fully satisfactory. The etymon includes ‘bouche’, mouth, and indicates a passage from a closed or narrow space or channel into a larger space, such as a river’s mouth. It thus conveys the idea of a flux and of a release, both particularly important for the critics of Say’s law who stressed the pressure on the supply side and pointed out that continuity is essential to the smooth working of the system. This meaning is well caught by the Italian ‘sbocco’, also based on the root ‘bocca’, mouth (Say’s law is translated as ‘legge degli sbocchi’). In English the sense of escape or release seems to be better caught by the word ‘outlet’, which is instead absent in the word ‘market’; it was used in this sense in the entry OUTLET in →Lalor’s Cyclopædia of political science (1881–1884), which translated the entry DÉBOUCHÉS in →Coquelin and Guillaumin, Dictionnaire de l’économie politique, 1852, in turn consisting of the transcription of large excerpts from Say’s own discussion. Higgs, in the entry DÉBOUCHÉS, THÉORIE DES for →Palgrave’s Dictionary of political economy (1894), translated the expression as ‘theory of outlets or of vents’. Unfortunately, ‘outlet’ is also associated with a specific market point, in particular a store or a shop. The verbal phrase ‘find a vent’ can indeed be a valid alternative. 25 There are echoes of this notion of crisis also in the early twentieth century. For instance, the →Encyclopédie pratique du commerce, 1907, stressed that all CRISES are characterized by a break of equilibrium, a stoppage in all current operations and of exchanges (p. 457); the →Vocabulaire économique et social defined CRISE as the tremor that arises when the relationships which should equilibrate production and consumption, or the various elements of production with respect to each other, are disturbed (1909, p. 52); Jahn defined WIRTSCHAFTSKRISEN (economic crises) as disturbances of the equilibrium between demand and supply, noting that these can go out of gear for different reasons (→Politisches Handwörterbuch, 1923, p. 986). 26 Translation by Cécile Dangel-Hagnauer, in Juglar, 2010, p. 116; the passage in brackets was added to the second edition, 1873. 27 Schäffle criticised J. S. Mill for not being capable of going further than characterizing crises by the incapacity of a large share of traders to fulfill their obligations (reference is to Mill, 1848: ‘There is said to be a commercial crisis, when a great number of merchants and traders at once, either have, or apprehend that they shall have, a difficulty in meeting their engagements’: III.12.12); on the same ground, he also rejected Coquelin’s remark that ‘crises are generally nothing else than a temporary disappearance of credit’ (p. 527). This view, however, is not part of Coquelin’s definition, but is an implication he drew; Coquelin’s emphasis in this passage is not on the disappearance of credit, but on its temporariness: as the existence of a credit system is a necessary condition for crises, Coquelin set out to dispute the view that crises undo all the advantages brought by credit in terms of the possibility of progress, arguing that the consequences of the stoppage actually serve to measure the benefits of the presence of credit). Schäffle’s view was taken up by Jones (1900, p. 4n), who sarcastically reported John Stuart Mills’s similitude of the man who died for ‘want of breath’. 28 There naturally remained a few entries offering a typical nineteenth-century treatment of crises. The 3rd edition of →Pitman’s business man’s encyclopaedia, for instance, characterized a COMMERCIAL CRISIS as ‘the glut or slump succeeding a boom’. Most of the discussion is based on the cumulative process of advance and its breaking down, while it almost parenthetically observes that ‘just as a period of industrial activity leads to a period of depression and sooner or later to a commercial crisis, so a period of depression leads up to another spell at industrial activity’ (1927, pp. 414–415). 29 The partial translation of Spiethoff’s entry – approved by the author – is titled ‘Business cycles’ (Spiethoff, 1953). 30 The writers who stressed the distinction between ‘old’ and ‘new’ approaches to the

Naming crises 121

31

32

33

34

35

36

37

problem of crises also offered a classification of crises theories along this line: see for a discussion Chapter 4, Section 4.5. This interpretation of the position of the crisis at the intersection point as a fact is at odds with Lescure’s definitional approach in his treatise on crises: ‘The general overproduction crisis is the intersection point of a period of expansion lasting three to five years, and of a period of depression of similar duration. Moreover, the crisis is periodical’ (Lescure, 1907, pp. 9 and 19; 1932 edition, pp. 2–3). This definition had at the time provided the terminological basis for the interpretation of crises as a phase of the cycle, soon taken up by Aftalion, 1913 (Vol. 1, p. vi; the passage is cited in Chapter 28, Section 28.1) and eventually largely accepted in the literature (see Chapter 28). The sense of ‘A recurrent period of a definite number of years adopted for purposes of chronology’ (OED 2a) is the one referred to in →Chomel’s Dictionnaire oeconomique, citing in particular the solar, lunar and Roman indiction cycles (2nd edition, 1718, p. 776) and →Félice’s Encyclopédie oeconomique (1770, Vol. VI, p. 226); more extensively, also →Chambers’s Cyclopædia (1728, Vol. 1, p. 364), Diderot’s Encyclopédie (1754, Vol. IV, pp. 586–590), and the New and complete dictionary of arts and sciences (1763, Vol. 1, pp. 833–834) all under the heading of CYCLE. Besides the trivial denoting based on the alternation of ‘prosperity’ and ‘distress’, which goes back at least to 1722 (Anonymous, p. 1) and itself carries no more meaning than observing that tossing a coin gives rise to an alternation of heads and tails, we have more precise division into periods beginning from the 1830s. Among the early writers we have Huskisson, who supplied a fairly clear-cut description of the various phases of the cycle, beginning from a state where ‘supply and demand would continue in the same relation to each other’, followed by ‘speculative purchases’ causing an advance of prices at an accelerated rate, after which demand becomes languid and a pause ensues while goods continue to be offered for sale; in such conditions, ‘a glut or superabundance of goods is said to exist’. This begins a time of distress, during which prices fall and the bills of exchange are reduced in amount, until the goods in excess of demand are eventually sold (Huskisson, 1830, pp. 446–452). Briaune suggested a three-phases division: crisis, recovery, commercial development (1840, p. 13); Longfield suggested, like the already cited Overstone, a cycle of ten phases, which he described in much detail and graphically represented as a circle (1840, pp. 222–223); Corbet noted that overproduction (or overtrading) ‘is necessarily followed by exhaustion, relaxation, depression, and distress – which again, after a time, are succeeded by a period of unusual briskness and activity’ (1841, p. 105). For a discussion, see Besomi, 2008. Wade still used the word ‘cycle’ in the sense of a singular round course of events: ‘The commercial cycle is ordinarily completed in five or seven years, within which terms it will be found, by reference to our commercial history during the last seventy years, alternate periods of prosperity and depression been experienced’ (1833, p. 211). We shall not be concerned with the usage of this and similar expressions for purposes of chronology (‘A year is but a portion of time consisting of 365 days; it is no fixed commercial cycle into which, bodies wandering in eccentric and anomalous orbits periodically return. The revolution of the earth does not affect the tide of pecuniary traffic’: Gilmer, 1820, p. 65) or to indicate the series of successive operations involved by the trading process (e.g. as in the following: ‘the circuit of the world is carried on, and the commercial cycle kept in continual gyration’, Thompson, 1832, p. 44 of the 1842 reprint). Some writers report that in popular parlance, the term ‘Konjunktur’ used to refer to prosperity alone (e.g. Diehl, KONJUNKTUR, KONJUNKTURTHEORIE, in →Elster’s Wörterbuch der Volkswirtschaft, 1932, p. 600; KONJUNKTUR, in →Sellien and Sellien’s Gablers Wirtschafts-Lexikon, 1956, p. 1600; Besters, WIRTSCHAFTLICHE KONJUNKTUREN, in →Görres Staatslexikon, 1963, p. 737; KONJUNKTUR, in →Stein’s ABC der modernen Wirtschaft, 1972, p. 210). The term can be interpreted in a dynamic sense: the state of the system at one point of

122 Daniele Besomi

38

39 40

41 42

43

44

45

46

47

time is defined not only by its position at that point, but also by its rate of change (and higher order differentials). If the laws determining the state of the system at one instant are known, its rates of change determine its state at the following instant. The study of conjuncture and its determinants thus embraces the overall movement of the system. When some authors emphasized the dynamic character of Konjunkturtheorie as opposed to the punctual character of the theories of crises (see Section 3.2.15.5), they probably had in mind some such interpretation. Arndt, KONJUNKTUR, in →Handwörterbuch des Kaufmanns, 1926, p. 395; Weinberger, KONJUNKTUR UND KRISEN, in →Sacher’s Staatslexikon, Vol. 3, 1929, p. 512; Diehl, KONJUNKTUR, KONJUNKTURTHEORIE, in →Elster, Wörterbuch der Volkswirtschaft, Vol. 2, 1932, p. 601; Ruberg, WIRTSCHAFTSSCHWANKUNGEN, in →Nicklisch, Handwörterbuch der Betriebswirtschaft, 1939, p. 2417; Weber, KONJUNKTUR UND KRISE, in →Klose, Katholisches Soziallexikon, 1964, p. 553. KONJUNKTURWELLEN, in Sellien and Sellien’s Gablers Wirtschafts-Lexikon, 1956. The entry on KONJUNKTURZYKLUS in →Palyi and Quittner, Handwörterbuch des Bankwesens, 1933, cross-referring to KONJUNKTURTHEORIE. →Geigant’s Lexikon der Volkswirtschaft defines KONJUNKTURZYKLUS as ‘wave-like oscillating movement of economic activity’ of various frequency, from Kitchin to Kondratiev cycles (1975, p. 275). →Sellien and Sellien’s Gablers Wirtschaftslexikon defined the KONJUNKTURZYKLUS as the period between the beginning of the first and the end of the last phases of the cycle (1956, p. 1611). Diehl, KONJUNKTUR, KONJUNKTURTHEORIE, p. 600; KONJUNKTURBEWEGUNG, in →Bülow’s Wörterbuch der Wirtschaft, 1936. Several dictionaries later cited Mitchell’s definition in the modified form incorporated in Burns and Mitchell, 1946, p. 3. The difference with the dictionary entry lies in the estimate of the duration (in the later version, one to 10 or 12 years), and in the addition that cycles so defined are not divisible into shorter cycles of similar character and amplitude. An example will suffice. ‘TRADE CYCLE (or business cycle) is a general fluctuation in the economic activity of a society where the means of production are mainly privately owned. The fluctuation is from a period of prosperity, or boom, down through a recession, to depression, or slump, then a recovery to prosperity through a period known as revival’ (→Taylor, A new dictionary of economics, 1966, pp. 288–289). The necessity of complementing the descriptive definition with an historical-theoretical part in order to fill the empty box with an interpretation (or interpretations) is only acknowledged in one of the dictionary entries I have seen: Drahokupil, BUSINESS CYCLE, in →Encyclopedia of governance, 2007, p. 63). In this paragraph I have summarized the issue more or less as stated by Keynes in 1934, who ranged himself among the ‘heretics’ who did not believe in the stability of the system. That this is the fundamental problem in business cycle theory, and also the key point for classifying the theories on the subject, was nevertheless also agreed by a representative writer taking the opposite side, Hayek. For references and a detailed discussion, see Besomi, 2006, and for a discussion of the dictionary treatment, see Chapter 4, Section 4.9.4. An unsigned entry in →Thalheim’s ABC der Volkswirtschaft, for instance, stressed that in the capitalistic era favourable and unfavourable times ‘have taken a rhythmical form, so that one can speak of “wave-like behaviour of economic life”’ (KONJUNKTUR UND KRISE, 1934, p. 166); similarly, Horton defined BUSINESS CYCLES as ‘rhythmic fluctuations in general business activities, characterized by a tendency of prices, profits, production wages and employment to move more or less together in a complete cycle from peak to peak over several years’ (in →Dictionary of modern economics, 1948). In the first three-quarters of the nineteenth century, writers often characterized crises as ‘periodic’, but they had in mind the meaning of ‘recurring, or appearing intermittently’ (OED) rather than stressing the regularity of the interval (Besomi, 2010a). The intro-

Naming crises 123

48

49 50

51 52

53

duction of the ‘astronomical’ sense of the term is due to Jevons; the debates towards the turn of the century were polarized between the few who espoused Jevons’s view, and those who argued instead against an absolute regularity of occurrence. Among dictionary entries, I am aware of only one defining theoretically cycles as ‘Regular fluctuation of economic activity, of fixed periodicity and amplitude; theoretically they can be represented by sinusoidal waves’; the author admits, however, that ‘the observed cycles do not always correspond to the theoretical definition’ (CYCLE, in →Albertini et al., Lexique d’économie, 1992, pp. 182–183). The heading of the review section of the American Economic Review (not included in the counting mentioned in the text) is consistent with the prevalent usage. From the first volume (1911) to December 1941 the section was titled ‘Trade, commerce and commercial crises’; then it became ‘Business cycles and fluctuations’; and from March 1949 to December 1968 it dropped the ‘cycles’ and reduced to ‘Business fluctuations’. From the first issue in 1969 to 1990, the Journal of Economic Literature reviews were classified under the heading ‘Economic growth; development; planning; fluctuations’; reference to fluctuations disappeared from the main headings in 1991, and articles on the subject are now classified under ‘Macroeconomics and monetary economics’, subheading on ‘Prices, business fluctuations, and cycles’. The earliest formulation of a complete theory of crises of which I am aware, explaining their premises and the necessity of their outburst, is due to William Huskisson and was published in 1810: see Besomi, 2010b. Persons used the expression ‘business fluctuations’ as a wider concept than ‘business cycles’, as it covered: ‘A. Irregular movements (non-recurrent): 1. Plus and minus deviations from some chosen basis of measurement which do not reveal definite characteristic phases and do not recur. 2. A series of plus and minus deviations which pass through definite phases but do not recur. B. Business cycles (recurrent): 1. Non-periodic cycles of which the wave lengths and amplitudes are variable. 2. Periodic cycles of which the wave lengths are approximately uniform’. He explicitly excluded, however, monthly variations (1926, pp. 95–96). Burns and Mitchell commented that Mitchell’s previous emphasis on ‘depressions’ led to overlook milder, but nonetheless important, recessions: 1946, p. vii. Fluctuations within a cycle are admittedly a problem for Mitchell’s definition, and the presence of multiple peaks required that additional criteria be set for deciding which downturns are significant. One requires that business cycles cover more than one year, the other that the amplitude of minor fluctuations is not of the same order of amplitude as the cycle itself (Burns and Mitchell, 1946, pp. 7–8). These conditions, however, do not seem to warrant an unambiguous breaking down of intervals within major crises: if the intermediate fluctuations had the same order of amplitude of major crises, they would indeed be major crises themselves. For a discussion of ‘normality’ of the cycle, see Besomi 2006 and 2010c.

REFERENCES Aftalion, A., 1913, Les crises périodiques de surproduction. Tome I: Les variations périodiques des prix et des revenus. Les théories dominantes. Tome II. Les mouvements périodiques de la production. Essai d’une théorie (Paris: Marcel Rivière). Aftalion, A., 1927, The theory of economic cycles based on the capitalistic technique of production, Review of Economic Statistics, 9: 4, October, pp. 165–170. Åkerman, J. H., 1947, Political economic cycles, Kyklos, 1, pp. 107–117. Anderson, W., 1797, The iniquity of banking: or, bank notes proved to be injurious to the public, and the real cause of the present exorbitant price of provisions (London: Jordan).

124 Daniele Besomi Anderson, W., 1821, Notices on political economy: or, An inquiry concerning the effects of debts and taxes, of the state of the currency and exchange, and of the balance of trade, as they operate on the community considered as a whole (London: Richardson). Anonymous (E. H.), 1692, Reasons for the abatement of interest to four in the hundred. And the objections against it fairly stated, and briefly and fully answer’d. By E. H. (London: D. Brown & M. Gillyflower). Anonymous, [1713], A Letter to the Mercator; proving that to offer a scheme of the French trade from the custom-house books, is an errant piece of knavery to cheat and amuse the nation (London: Tooke and Barber, n.d.). Anonymous, 1722, The nature and weight of the taxes of the nation: shewing, that, by the continuance of heavy taxes and impositions, . . . (London: Peele). Anonymous, 1724, A defence of the conduct of the people of Ireland in their unanimous refusal of Mr. Wood’s copper-money (Dublin: Ewing). Anonymous, 1728, Some considerations on the nature and importance of the East-India trade (London: John Clarke). Anonymous 1 (Philantropos), 1729, A Letter to my Lord S—-, concerning the prisons for debts. With an hint or two of a method for securing the creditor’s property, without touching the person of the debtor (London: W. Meadows). Anonymous 2, 1729, The advantages of peace and commerce; with some remarks on the East-India trade (London: Brotherton). Anonymous 1, 1742, A Letter to the author of An enquiry into the revenue, credit, and commerce of France. Wherein the former and present state of the power and commerce of that kingdom are fully consider’d, and deduced from authentic accounts. By a member of Parliament (London: Roberts). Anonymous 2, 1742, Remarks upon letter to the author of the Inquiry into the revenue, credit, and commerce of France. Address’d to the letter-writer by C. P. Esq; F.R.S. (London: Roberts). Anonymous, 1743, Britons awake, and look about you; or, ruin the inevitable consequence of a land-war, whether successful, or not. . . . By a lover of his country (London: Lion). Anonymous, 1778, The precipitation and fall of Mess. Douglas, Heron, and Company, late bankers in Air, with the causes of their distress and ruin, investigated and considered, by a committee of inquiry appointed by the proprietors (Edinburgh: s.n.). Anonymous, 1810, Politique, Mercure de France, 45, December, pp. 383–389. Anonymous, 1811, Considerations on the causes which have produced our present commercial embarrassments (London: Rutt). Anonymous, 1817, Exposition of one principal cause of the national distress, particularly in manufacturing districts: with some suggestions for its removal (London: printed for the author). Anonymous 1, 1819, An enquiry into the causes of the present commercial embarrassments in the United States with a plan of reform of the circulating medium (n.p.). Anonymous 2, 1819, A friendly address to the manufacturers in those districts which are now suffering from the stagnation of trade (London: Rivington). Anonymous 1, 1826, The markets, The Bristol Mercury, issue 1846, 5 June. Anonymous 2, 1826, The markets, The Morning Chronicle, issue 17830, 7 November (also in The Bristol Mercury, issue 1909, 13 November). Anonymous 1, 1843, Monthly financial and commercial article, The United States Magazine, and Democratic Review, 12: 60, June, pp. 653–660. Anonymous 2 (The Era), 1843, Latest intelligence, The Era, 17 September. Anonymous, 1845, Railway intelligence, Liverpool Mercury, issue 1765, 7 March.

Naming crises 125 Anonymous, 1848, Mr. Muntz & the currency: an address to the people of Birmingham on Mr. Muntz and the currency, by no friend to the new way of paying old debts (Birmingham: [s.n.]) Anonymous 1, 1849, Marriages and abundance, The Economist, 7: 300, 26 May, pp. 573–574. Anonymous 1, 1850, The causes of commercial crises. Causes of commercial embarrassments; speculations; California trade; money market, &c., The Bankers’ Magazine and Statistical Register, 5: 1, July, pp. 1–4. Anonymous 2, 1850, The rich and the poor, The Red Republican, 20 September. Anonymous 3, 1850, The alleged ‘prosperity’ and ‘immorality’ of the working classes, The Red Republican, 5 October. Anonymous, 1855, The morning chronicle, The Morning Chronicle, 27704, 11 October. Anonymous 1, 1857, The currency. – Causes of mercantile distress, The Leeds Mercury, 6728, 12 December. Anonymous 2, 1857, High dividends inconsistent with security, The Economist, 15: 733, 12 September, pp. 1–2. Anonymous 3, 1857, Parliamentary opinions on currency and credit, The Aberdeen Journal, 5735, 9 December. Anonymous, 1861, Bank of France, October, 1861, its position and policy, Journal of the Statistical Society of London, 24: 4, December, pp. 593–615. Anonymous, 1866, Commercial cycles, Savannah Daily Herald, 28, 10 February. Anonymous, 1873, The history and principles of banking. Chapter fifteenth: The panics of 1857 and of 1866, The Bankers’ Magazine and Statistical Register, 7: 12, June, pp. 937–967. Anonymous, 1874, The cycle of trade, The Independent . . . Devoted to the Consideration of Politics, Social and Economic Tendencies, History, Literature, and the Arts, 26: 1321, 26 March, p. 26. Anonymous 1, 1877, Board of Trade tables for January, The Economist, XXXV: 1746, 10 February, pp. 154–155. Anonymous 2, 1877, Why the commercial depression is so protracted, The Economist, XXXV: 1758, 5 May 1877, pp. 505–506. Anonymous 1, 1879, Financial and commercial history of 1878, Journal of the Statistical Society of London, 42: 1, March, pp. 276–305. Anonymous 2, 1879, Notes on economical and statistical works, Journal of the Statistical Society of London, 42: 3, September, pp. 727–736. Anonymous, 1882, Occasional notes, Pall Mall Gazette, issue 5557, 21 December. Anonymous, 1884, Cycles of trade, Frank Leslie’s Illustrated Newspaper, 1516, 11 October, p. 114. Anonymous, 1892, The commercial congress, The Bristol Mercury and Daily Post, 13841, 21 September. [Bagehot, W.], 1873, The very peculiar position of the year 1873, The Economist, XXXI: 1532, 4 January, pp. 1–2. Baker, H., 1876, Observations on a continuation table and Chart, shewing the ‘Balance of accounts between the mercantile public and the bank of England, 1844–75, with special reference to its course in the years 1866–75’, Transactions of the Manchester Statistical Society, session 1875–76, pp. 203–221. Baring, F., 1801, Observations on the publication of Walter Boyd, Esq. M.P. (London: J. Sewell and J. Debrett). Bartholony, F., 1839, Du meilleur système à adopter pour l’exécution des travaux publics en France, et notamment des grandes lignes de chemins de fer. 2nd ed. (Paris : A. Blondeau).

126 Daniele Besomi Bath, W. P., (1734), An enquiry into the conduct of our domestick affairs, from the year 1721, to the present time. In which the case of our national debts, the Sinking fund, and all extraordinary grants of money are particularly consider’d. Being a sequel to Politicks on both sides (London: H. Haines). Besomi, D., 2006, Tendency to equilibrium, the possibility of crisis, and the history of business cycle theories, History of Economic Ideas, XIV: 2, pp. 53–104. Besomi, D., 2008, John Wade’s early endogenous dynamic model: ‘Commercial cycle’ and theories of crises, European Journal of the History of Economic Thought, 15: 4, December, pp. 611–639. Besomi, D., 2010a, The periodicity of crises. A survey of the literature, Journal of the History of Economic Thought, 32: 1, March, pp. 85–132. Besomi, D., 2010b, Paper money and national distress. William Huskisson and the early theories of credit, speculation and crises, European Journal of the History of Economic Thought, 17: 1, March, pp. 1–37. Besomi, D., 2010c, ‘Periodic crises’: Clément Juglar between theories of crises and theories of business cycles, Research in the History of Economic Thought and Methodology, 28A, pp. 169–238. Besomi, D., 2011, Crises as a disease of the body politick. A metaphor in the history of nineteenth century economics, Journal of the History of Economic Thought, 33: 1, March, pp. 67–118. Blackstone, W., 1822, Commentaries on the Laws of England (New York: Duyckinck, ong, Collins & Co.). Boislandry, F. L. L. de, 1790, Observations sur les dangers du papier-monnoie & sur l’insuffisance de cette ressource: pour remédier à la détresse actuelle des finances (Paris: Imprimerie nationale). Boswell, J., 1772, Reflections on the late alarming bankruptcies in Scotland. Addressed to all ranks: But particularly to the different classes of men from whom payments may soon be demanded. With advice to such, how to conduct themselves at this crisis (Edinburgh: s.n.). Bouniatian, M., 1928, The theory of economic cycles based on the tendency toward excessive capitalization, Review of Economic Statistics, 10: 2, May, pp. 67–79. Boyd, W., 1801, A letter to the Right Honourable William Pitt: on the influence of the stoppage of issues in specie at the Bank of England, on the prices of provisions, and other commodities. The second edition, with additional notes; and a Preface, containing remarks on the publication of Sir Francis Baring, Bart. (London: Wright). Brand, F. J., 1800, A determination of the average depression of the price of wheat in war, below that of the preceding peace and of its readvance in the following; according to its yearly rates from the Revolution to the end of the last peace: with remarks on their greater variations in that period (London: F. & C. Rivington). Briaune, J.-E., 1840, Des crises commerciales, de leur causes et de leur remèdes (Paris: Bouchard-Huzard; reprinted New York: Burt Franklin, 1971). Bristol Mercury, 1819, Causes of commercial embarrassment, The Bristol Mercury (Bristol, England), November 1, issue 1544. Brooke, W., 1800, The true causes of our present distress for provisions; with a natural, easy, and effectual plan for the future prevention of so great a calamity. With some hints respecting the absolute necessity of an encreased population (London: H. D. Symonds). Brown, W., 1834, To our subscribers, Bankers’ Circular and Monetary Times, 297, 28 March, pp. 289–291. Burke, E., 1800, Thoughts and details on scarcity: originally presented to the Right Hon. William Pitt, in the month of November, 1795 (London: Rivington).

Naming crises 127 Burns, A. F. and Mitchell, W. C., 1946, Measuring business cycles, New York: National Bureau of Economic Research. Cardoza, J. N., 1869, Essays on banking and currency, The Bankers’ Magazine and Statistical Register, 3: 9, March, pp. 673–697. Carey, M., 1823, The crisis: A solemn appeal . . . on the destructive effects of the present policy of this country, on its agriculture, manufacturers, commerce, and finances. With a comparison between the extraordinary prosperity of Great Britain, and the general depression in the United States (Philadelphia: Carey and Lee). Cargill, W., 1845, The currency, showing how a fixed gold standard places England in permanent disadvantage and produces periodical domestic convulsion (London: Ollivier). Carpenter, T., 1796, The American senator, or A copious and impartial report of the debates in the Congress of the United States: including all treaties, addresses, . . ., Vol. 1 (Philadelphia: Page). Chitty, J., 1824, A treatise on the laws of commerce and manufactures and the contracts relating thereto: with an appendix of treaties, statutes, and precedents (London: Butterworth). Clark, J. M., 1917, Business acceleration and the law of demand: A technical factor in economic cycles, Journal of Political Economy, 25, March, pp. 217–235. Clavière, É., 1790, Réponse au mémoire de M. Necker, concernant les assignats, et à d’autres objections contre une création qui les porte à deux milliards . . . Première partie (Paris: Imprimérie du Patriote françois). Clegg, S. R. and Bailey, J. R., 2008, International encyclopedia of organizational studies (Thousand Oaks, CA: Sage Publications), 4 vols. Colquhoun, P., 1793, Reflections on the causes which have produced the present distress in commercial credit: with suggestions relative to the means of remedying the evil in future and of granting immediate and effectual relief to the merchants and manufacturers (London: J. Sewell, J. Debrett, J. Downes). Cooke, L., 1842, Observations upon the construction and operation of duties on the importation of foreign corn, and suggestions for lessening fluctuations in the price of wheat: addressed to the Right Honourable Sir Robert Peel, Bart. (London: Ollivier). Corbet, T., 1841, An inquiry into the causes and modes of the wealth of individuals: or, The principles of trade and speculation explained (London: Smith, Elder & Co.). Currie, J., 1793, A letter, commercial and political, addressed to the Rt. Hon. William Pitt: in which the real interests of Britain in the present crisis are considered and some observations are offered on the general state of Europe, by Jasper Wilson (Dublin: P. Byrne and J. Moore). Defoe, D., 1728, A plan of the English commerce. Being a compleat prospect of the trade of this nation, as well the home trade as the foreign. . . . (London: Rivington). Della Bona, G., 1888, Delle crisi economiche (Turin: Bocca). [Duncan, W. B.], 1842, Mercantile embarrassments, and the present state of the banking system (Edinburgh: John Johnstone). Durbin, E. F. M., 1933, Purchasing power and trade depression. A critique of underconsumption theories (London: Cape). Economist, 1846, Commercial embarrassment – Railway liabilities and railway schemes, The Economist, 4: 135, 28 March 1846, pp. 1–4. Ellis, A., 1876, The rationale of market fluctuations (London: E. Wilson; 4th edition, 1879). England, M. T., 1913, Economic crises, Journal of Political Economy, 21: 4, April, pp. 345–354. Fabian, A., 1989, Speculation on distress: the popular discourse of the panics of 1837 and 1857, Yale Journal of Criticism, 3 (Fall), pp. 127–142.

128 Daniele Besomi Ferguson, R., [1695], A brief account of some of the late incroachments and depredations of the D[utch]. upon the English, and of a few of those many advantages which by fraud and violence they have made of the British Nations since the Revolution, etc. (n.p.) Ferrara, F., 1864, Delle crisi economiche. Preface to Biblioteca dell’Economista, Vol. IV (Turin: UTET). Fisher, I., 1911, ‘The equations of exchange’, 1896–1910, American Economic Review, 1: 2, June, pp. 296–305. Frewen, M., 1885, Gold scarcity and the depression of trade, Nineteenth Century, 18: 104, October, pp. 593–613. Frewen, M., 1888, The economic crisis (London: Kegan Paul). Fullarton, J., 1844, On the regulation of currencies, being an examination of the principles, on wich it is proposed to restrict, within certain fixed limits, the future issues on credit of the Bank of England, and of the other banking establishments throughout the country (London: Murray). Giffen, R., 1885, Trade depression and low prices, Contemporary Review, XLVII, June, pp. 800–822. [Gilbart, J. W.], 1873, The history and principles of banking, Chapter 15, The panics of 1857 and 1866, The Bankers’ Magazine and Statistical Register, 12 June, pp. 937–967. Gilmer, F. W., 1820, Vindication of the laws, limiting the rate of interest on loans; from the objections of Jeremy Bentham, and the Edinburgh Reviewers (Richmond: N. Pollard). Goodwin, R. M., 1946, Innovations and the irregularity of economic cycles, Review of Economic Statistics, 28: 2, May, pp. 95–104. Great Britain, Parliament, 1793, Jordan’s Parliamentary Journal for the year MDCCXCIII being an accurate and impartial history of the debates and proceedings of both Houses of Parliament, Vol. III (London: J. S. Jordan). Guyot, Y., 1909, Le commerce et les commerçants (Paris: O. Doin). Haberler, G. von, 1937, Prosperity and depression (Geneva: League of Nations). Hagemann, H., 1995, Roscher and the theory of crisis, Journal of Economic Studies, 22: 3–5, pp. 171–186. Hampshire Telegraph, 1825, Commercial embarrassments, Hampshire Telegraph and Sussex Chronicle etc. (Portsmouth, England), 19 December 1825, issue 1367. Hansen, A. H., 1938, Full recovery or stagnation? (New York: Norton). Harris, J., 1757, An essay upon money and coins (2 volumes in one) (London: G. Hawkins). [Hart, G.], 1825, A brief sketch of the causes and consequences of the present panic, and the system and conduct of the Bank and bankers vindicated. By Publicola (London: Wilson). [Harvey, J.], 1849, The great question for discussion – The currency. Jones Loyd’s cycle of trade, or the effect of gold money, Liverpool Mercury, 2055, 9 January. Harvey, J., 1867, The Bank of England [letter to the editors], Liverpool Mercury, 5934, 4 February. Hawtrey, R. G., 1913, Good and bad trade. An inquiry into the causes of trade fluctuations (London: Constable). House of Commons. Secret Committee on the Expediency of the Bank Resuming Cash Payments, 1819, Report from the Secret committee on the expediency of the Bank resuming cash payments, with the minutes of evidence (London: C. Clement). [Huskisson, W.], 1830, Essays in political economy: in which are illustrated the principal causes of the present national distress; with appropriate remedies (London: Longman, Rees, Orme, Brown, & Green).

Naming crises 129 Huart, A., 1911, Le mouvement de la population depuis 1800 en Europe dans ses rapports avec les crises économiques, Revue économique internationale, III: 2, August, pp. 283–305. Hustler, J., 1767, The occasion of the dearness of provisions, and the distress of the poor, with proposals for remedying the calamity . . . wherein the policy of the bounty given upon the exportation of corn . . . and enlarging of farms, are impartially considered: with some remarks on a late pamphlet, intituled, A letter to a member of Parliament, on the present distresses of the poor, by a manufacturer (London: Owen). Issaïev, A., 1893, Les principales causes des crises économiques, Revue d’Économie Politique, 7, pp. 654–692 and 98–1011. Jamieson, G. A., 1885, The present agricultural and financial depression: some of its causes, influences and effects (Edinburgh: Blackwood & Sons). Jevons, W. S., 1878, Commercial crises and sun-spots, Pt. 1, Nature, XIX, 14 November, pp. 33–37. Reprinted in Jevons, Investigations in currency and finance (London: Macmillan, 1984), pp. 221–235. Johnson, D. N., 1887, Can wages be raised by vote?, The Universalist Quarterly and General Review, 24, October, pp. 472–477. Jones, E. D., 1900, Economic crises (New York: Macmillan). Joplin, T., 1841, The cause and cure of our commercial embarrassments (London: Ridgway). Joplin, T., 1844, Currency reform: Improvement not depreciation (London: Richardson). Juglar, C., 1889, Des crises commerciales et de leur retour périodique en France, en Angleterre et aux États-Unis, 2nd edition (Paris: Alcan). Juglar, C., 2010, Commercial crises (1863/1973). Translation by C. Dangel-Hagnauer of CRISES COMMERCIALES, in →Block, Dictionnaire Général de la Politique (1863, 1873), Research in the History of Economic Thought and Methodology, 28A, pp. 115–147. Kalecki, M., 1939, Essays in the theory of economic fluctuations (London: Allen & Unwin). King, W. I., 1930, Is there a business cycle?, Journal of the American Statistical Association, 25: 170, June, pp. 207–209. Knowles, F. C., 1837, The monetary crisis considered: being incidentally a reply to Mr. Horsley Palmer’s pamphlet ‘On the action of the Bank of England, &c.’ and a defence of the joint-stock banks against his accusations (London: Richardson). Laveleye, E. de, 1865, Le marché monetaire et ses crises depuis cinquante ans (Paris: Guillaumin). Lavington, F., 1922, The trade cycle. An account of the causes producing rhythmical changes in the activity of business (London: King). Lawn, B., 1800, The corn trade investigated, and the shocking system exposed which principally causes the amazing fluctuations in the prices of corn and flour; and a proposition . . . which will effectually remedy the alarming fluctuating price of bread corn; with an investigation of the Rev. J. Malham’s attacks on the landed interest and agriculture of this kingdom . . . (Bath: Meyler). Lescure, J., 1907, Des crises génerales et périodiques de surproduction (Paris: DomatMontchrestien; 4th ed., 1932). Lexis, W. H. R. A., 1913, Allgemeine Volkswirtschaftslehre (2nd edition) (Leipzig: Teubner). [Liverpool Currency Reform Association], 1849, Suggestions for a new system of currency by which monetary panics will be rendered impossible: submitted to the trading community of Liverpool, by a committee of gentlemen who believe that the permanent prosperity of the country depends upon a proper settlement of the money question (Liverpool: Lace and Addison). Longfield, S. M., 1840, Banking and currency, Dublin University Magazine, 15, pp. 1–15, 218–233; 16, pp. 371–389, 611–620. Loyd, S. J. (later Lord Overstone), 1837, Reflections suggested by a perusal of Mr. J. Horsley

130 Daniele Besomi Palmer’s pamphlet on the causes and consequences of the pressure on the money market (London: Richardson). Madden, S., 1738, Reflections and resolutions proper for the gentlemen of Ireland, as to their conduct for the service of their country, as landlords, as masters of families, as Protestants, as descended from British ancestors, as country gentlemen and farmers, as justices of the peace, as merchants, as members of Parliament (Dublin: G. Ewing). [Magens, N.], 1756, Farther explanations of some particular subjects, relating to trade, coin, and exchanges, contained in the universal merchant (London: J. Haberkorn). Malthus, T. R., 1827, Definitions in political economy: preceded by an inquiry into the rules which ought to guide political economists in the definition and use of their terms: with remarks on the deviation from these rules in their writings (London: Murray). Martin, M.-J.-D., 1789, Étrennes financières; ou, Recueil des matières les plus importantes en finance, banque, commerce . . . etc., première année (Paris: s.n.). Marx, K. and Engels, F., 1967, Werke, Vol. 29, Berlin: Dietz. Maynwaring, A., 1711, An Excellent new song, called, Credit restored, in the year of our Lord God, 1711. To the tune of, Come prithee, Horace, hold up thy head (n.p.). [McCulloch, J. R.], 1816, Commercial distress of the country, Edinburgh Review, XXVII, December, pp. 373–391. [McCulloch, J. R.], 1819, Commercial embarrassments and trade with France, Edinburgh Review, LXIII, July, pp. 48–74. Mill, J. S., 1848, Principles of political economy (London: John W. Parker). Millington, T. T., [1885], Our trade depression explained, and showing how far it is affected by our land laws (London: Watts). Mills, J. 1868. On credit cycles and the origin of commercial panics, Transactions of the Manchester Statistical Society, Session 1867–1868, pp. 5–40. Mitchell, W. C., 1909, The decline in the ratio of banking capital to liabilities, Quarterly Journal of Economics, 23: 4, August, pp. 697–713. Mitchell, W. C., 1913, The business cycle (Berkeley, CA: University of California Press). Mitchell, W. C., 1916, American security prices and interest rates, Journal of Political Economy, 24: 2, February, pp. 126–157. Mitchell, W. C., 1926, Business cycles as revealed by business annals. Introduction to W. L. Thorp, Business annals (New York: NBER), pp. 15–100. Mitchell, W. C., 1927, Business cycles. The problem and its settings (New York: NBER). Moore, H. L., 1914, Economic cycles: Their law and cause (New York: Macmillan). Moore, H. L., 1923, Generating economic cycles (New York: Macmillan). Myint, H., 1946, The classical view of the economic problem, Economica, NS, 13: 50, May, pp. 119–130. New-York Spectator, 1837, Reflections on the causes of commercial embarrassments in the United States, New-York Spectator, 13 April, col. A. Öchelhäuser, W., 1876, Die wirtschaftliche Krisis (Berlin: Springer). Orleans Gazette, 1819, Commercial fluctuations and embarrassments, Orleans Gazette and Commercial Advertiser (New Orleans, LA), 27 July, col E. [Page, R.], 1842, Banks and bankers by Daniel Hardcastle (London: Whittaker). Paxton, P., (1704), A discourse concerning the nature, advantage, and improvement of trade with some considerations why the charges of the poor do and will increase (London: R. Wilkin). Persons, W. M., 1926, Theories of business fluctuations, Quarterly Journal of Economics, 41: 1, November, pp. 94–128. Petty, W., 1662, Treatise of taxes & contributions. Shewing the nature and measures of

Naming crises 131 crown-lands, assessements, customs, pollmoneys, lotteries, benevolence, penalties, monopolies, offices, tythes, raising of coins, harth-money, excise, &c. (London: Brooke). Phillips, M., 1816, Suggestions for producing public improvements, and affording employment for the distressed manufacturers and the labouring poor (Stroud: F. Vigurs). Pigou, A. C., 1927, Industrial fluctuations (London: Macmillan). Pinsent, J., 1820, Letters addressed to the Earl of Liverpool . . . on the distress of the mercantile, shipping, agricultural, and manufacturing interests: with the several remedies proposed: the whole earnestly addressed to the Ministry and both Houses of Legislation, at this momentous crisis (London: Evans & Ruffy). Plat, H., 1594, The jewell house of art and nature. Conteining divers rare and profitable inventions, together with sundry new experimentes in the art of husbandry, distillation, and moulding (London: Peter Short). Price, B., 1879, Commercial depression and reciprocity, Contemporary Review, XXXV, May, pp. 269–288. Price, R., 1772, To the Society of London Annuitants, Morning Chronicle and London Advertiser, 1055, 9 October. Providence Patriot, 1822, The commercial pressure and failures in Boston, for some time past, have been unprecedented in former periods of commercial embarrassment, Providence Patriot, Columbian Phenix, (Providence, RI), 31 July, issue 61, col. B. Raleigh Register, 1819, Commercial embarrassment, Raleigh Register and North-Carolina Gazette (Raleigh, NC), 12 February, issue 1012, col. a. Randolph, F. (1808) A few observations on the present state of the nation; in a letter to His Grace the Duke of Bedford (Bath: R. Cruttwell). Ricardo, D., 1816, Proposals for an economical and secure currency; with observations on the profits of the Bank of England, as they regard the public and the proprietors of Bank stock (London: Murray). Richter, F. L., 1923, Recent books on business cycles, Quarterly Journal of Economics, 38: 1, November, pp. 153–168. Roberts, G. E., 1908, The need of a central bank, Annals of the American Academy of Political and Social Science, 31, March, pp. 45–54. Robertson, D. H., 1915, A study of industrial fluctuation. An enquiry into the character and causes of the so-called cyclical movement of trade (London: King). Salt, S., 1850, Railway and commercial information (London: W. H. Smith). Samuelson, P. A., 1991, A personal view on crises and economic cycles. In M. Feldstein, editor, The risk of economic crisis. A National Bureau of Economic Research Conference Report (Chicago and London: University of Chicago Press). Say, J.-B., 1820, Lettres à M. Malthus sur différens sujets d’économie politique, notamment sur les causes de la stagnation générale du commerce (Paris: Bossange; English translation as Letters to Mr. Malthus on several Subjects of Political Economy, and on the Cause of the Stagnation of Commerce, in The Pamphleteer, 1820; reprinted: London: Sherwood, 1821). Schumpeter, J. A., 1939, Business cycles: a theoretical, historical, and statistical analysis of the capitalistic process (New York: McGraw-Hill). Selden, G. C., 1902, Trade cycles and the effort to anticipate, Quarterly Journal of Economics, 16: 2, February, pp. 293–310. Sinclair, J., 1797, Letters written to the governor and directors of the Bank of England, in September, 1796, on the pecuniary distresses of the country, and the means of preventing them; with some additional observations . . . and the means of speedily reestablishing the public and commercial credit of the country (London: W. Bulmer and Co.).

132 Daniele Besomi Sismondi, J.-C. S. de, 1819, Nouveaux principes d’économie politique; ou, De la richesse dans ses rapports avec la population (Paris: Delaunay). Smith, A., 1776, An inquiry into the nature and causes of the wealth of nations (London: Strahan and Cadell; cited from R. H. Campbell, A. S. Skinner and W. B. Todd, The Glasgow edition of the works and correspondence of Adam Smith, Oxford: Clarendon Press, 1979). Smith, J., 1624, The generall historie of Virginia, New England and the Summer Isles ([S.l.]: [s.n.]; reprinted Glasgow: James MacLehose and Sons, 1907). Smith, V. E., 1949, [Review of] Theories of welfare economics, by Hla Myint, Journal of Farm Economics, 31: 4 (Part 1), November, pp. 753–754. Sowell, T., 1963, The general glut controversy reconsidered, Oxford Economic Papers, 15: 3, November, pp. 193–203. Spiethoff, A., 1953, Business cycles, International Economic Papers, 3, pp. 75–171. Partial translation of KRISEN, →Handwörterbuch der Staatswissenschaften, 4th edn., Jena, 1925. Swift, J., 1721, The bubble: a poem (London: Tooke). Taylor, W. G. L., 1904, The kinetic theory of economic crises, University Studies of the University of Nebraska, 4: 1, pp. 1–77. [Thompson, T. P.], 1826, An exposition of fallacies on rent, tithes, &c., containing an examination of Mr. Ricardo’s theory of rent and of the arguments brought against the conclusion that tithes and taxes on the land are paid by landlords, the doctrine of the impossibility of a general glut, and other propositions of the modern school: with an inquiry into the comparative consequences of taxes on agriculture and manufactured produced: being in the form of a review of the 3d. ed. of Mr. Mill’s Elements of political economy, by a member of the University of Cambridge (London: Hatchard). Thompson, T. P., 1832, Programme, Westminster Review, 1 April 1832; reprinted in Thompson, Exercises, political and others: consisting of matter previously published with and without the author’s name, and of some not published before (London: E. Wilson, 1842). Times, The, 1826a, Commercial embarrassments, The Times, 26 January, p. 3, col C. Times, The, 1826b, We have always asserted, that the present commercial embarrassments, severe as they may be, will have . . ., The Times, 20 February, p. 2, col E. Tinbergen, J. and Polak, J. J., 1950, The dynamics of business cycles. A study in economic fluctuations (London: Routledge & Kegan Paul). Torrens, R., 1816, A letter to the Right Honourable The Earl of Liverpool, on the state of the agriculture of the United Kingdom, and on the means of relieving the present distress of the farmer, and of securing him against the recurrence of similar embarrassment (London: J. Hatchard). Tugan-Baranovsky, M. I., 1913, Les crises industrielles en Angleterre (Paris: Giard & Brière). Vanderlip, F. A., 1904, Bankers’ Association of the State of Illinois, Bankers’ Magazine, 69: 5, November, pp. 816–828. Wade, J., 1826, Digest of facts and principles, on banking and commerce: with a plan for preventing future re-actions (London: Thomas Ward). Wade, J., 1833, History of the middle and working classes (London: Effingham Wilson). Wallace, A. R., 1885, Bad times. An essay on the present depression of trade, tracing it to its sources in enormous foreign loans, excessive war expenditure, the increase of speculation and of milionaires, and the depopulation of rural districts; with suggested remedies (London: Macmillan). Wilson, G., 1811, Defence of abstract currencies: in reply to the Bullion report and Mr. Huskisson (London: Murray).

4

Dictionary reconstructions of the history of the theories of crises and cycles A meta-taxonomy Daniele Besomi

4.1 CATEGORIZING BUSINESS CYCLE THEORIES If there is one proposition on which all students of business cycle may agree, it is that classifying business cycle theories is an awkward task. The number of different theories and models,1 the variety of causal factors influencing one aspect or another of the cyclical development, the different views on the working of a capitalist economy held by those who have written on crises and cycles, the variety of analytical approaches with the implications of each specific tool, the prevailing problems (practical and theoretical) and outlooks at the time of writing, as well as a number of other variables, all contribute to ensure that whatever classificatory scheme is adopted, it is bound to be too rigid to accommodate some of the opinions on the subject. In spite of this difficulty, there are a number of attempted categorizations. Not only did the few existing fully fledged histories of cycles and crises theories endeavour to classify business cycle theories, but so did numerous writers as an introductory chapter to their business cycle treatises. Dictionaries also house a number of such attempts, which are completely suited to the educational purpose of dictionaries and scarcely avoidable in entries of suitable length. Although the entries are naturally inhomogeneous as to the level of detail, they all share the need to compress the argument into a very limited number of pages. When a categorization is offered at all – more often than not without justifying the criteria followed in constructing the taxonomy – the dividing lines are thus often sharply defined, offering the reader a clear viewpoint. This chapter surveys such taxonomic endeavours by dictionaries. If we except a small number of oddballs, such classifications turn out to be of a surprisingly small number of kinds. At first, dictionary writers only referred to a handful of theories of particular interest to them – mostly with a critical purpose in mind. Then, especially in Germany in the third quarter of the nineteenth century but later also in the US, the discriminating factor was Say’s law vs. overproduction. Towards the end of the nineteenth century, when there finally was a reasonable number and variety of theories to be classified, we have first a classification in political terms (1880–1910), then a number of entries broadly separating the ‘old’ theories of crises

134 Daniele Besomi from the ‘new’ theories of the cycle (during the inter-war years). There followed some categorizations based on the kind of causal factors involved in the explanation, in particular between the 1920s and the 1960s. Such an approach was later abandoned in favour of a search for a deeper and more fundamental line of division, which was sought in the premises characterizing various schools of thought, in the adherence to or rejection of Say’s law, in the adoption of an exogenous or an endogenous approach, or in the belief (or lack thereof) in the self-adjusting capacity of the economic system.

4.2 EARLY SURVEYS OF THE LITERATURE The entries on crises in most early dictionaries were not so much compilations of theoretical knowledge, but mostly reports of the author’s own reflections on the subject. Two of them, however, already identified the main issues at stake at the time. The first such entry – MONEY, in →[Long]’s Political dictionary, 1846 – referred to the opposition between the Banking and Currency schools on the causes of crises, and adopted Overstone’s moderate currency position: There are some political reasoners who have ascribed every commercial convulsion to an ill-regulated currency; while others deny its influence upon prices and upon the general arrangements of commerce. The opinions of both these parties are probably extreme, and their facts somewhat exaggerated; but the temperate view taken by Mr. S. Jones Loyd may be adopted with less hesitation. He says, ‘The currency in which all transactions are adjusted has the same reference to the healthy state of trade, which the atmosphere in which we all live has to the physical constitution of our bodies; irregularities and disorders may arise from a variety of causes, but the duration and virulence of them will materially depend upon the pure, healthy, and well-regulated condition of the medium in which they exist. A well-managed currency cannot prevent the occurrence of periods of excitement and overtrading, nor of their necessary consequences, commercial pressure and distress; but it may tend very powerfully to diminish the frequency of their return, to restrain the suddenness of their outbreak, and to limit the extent of their mischief.’ (MONEY, p. 359; reference is to Loyd, 1940, pp. 90–91) Charles Coquelin also offered a schematization of the current views on crises, if only to criticize them. He noted that there have been frequent attempts at explaining these ‘singular catastrophes . . . often occurring in the midst of the most significant symptoms of prosperity’. Having observed that crises are related to the development of industry and to the establishment of large credit institutes, previous writers had ‘summarized as follows the ordinary causes of proper commercial crises: excessive development or misdirection of the productive forces in manufactures; and abuse of credit, favoured by banking institutes. To these two causes, often related to each other, a third is added: the excess of commercial speculation.

Dictionary histories of crises theories 135 The latter, however, is so strictly linked to the abuse of credit – even in the supporters of this theory – that it is difficult to interpret it as a special and distinct cause’ (CRISES COMMERCIALES, in →Coquelin and Guillaumin, Dictionnaire de l’économie politique, 1852, p. 528). As to the first cause, it is notable that Coquelin did not even consider the possibility of a general glut, and implicitly dismissed (by not discussing it further) the partial overproduction case. The second and third causes are discussed by means of a critical discussion of two writers considering them, J.-B. Say and J. Wilson, as a means for launching Coquelin’s own explanation of crises as a consequence of the monopoly of the bank of issue (see Chapter 8). A few entries in those years carried extensive, albeit unsystematic, references to the literature. The first bibliography of writings on crises was offered by Juglar in 1863. His entry on CRISES COMMERCIALES for →Block’s Dictionnaire général de la politique had a section on ‘the opinion of the main economists’ critically examining (in no particular order) the views of Say, Senior, Wilson, Tooke, Coquelin and Puynode (he decided not to ‘mention the rasher and more unscientific opinions’: p. 625), showing that they were not adherent to the facts, and added a list of a dozen other writings on the subject (see Chapter 12, also for a reference to the translation used). Macleod also produced an unsystematic discussion of the literature, with a passing reference to the debate between the Currency and the Banking schools (CRISIS, COMMERCIAL, in →Macleod’s Dictionary of political economy, 1863 (see Chapter 13).

4.3 SAY’S LAW AND OVERPRODUCTION In France and Britain, Say’s law was largely accepted as a matter of course (or at least not disputed) by most writers (among dictionary writers, Auguste Ott’s entries on CRISE and DÉBOUCHÉS for his own →Dictionnaire des sciences politiques et sociales (1854) is a relevant exception; see Chapter 10). In spite of the various possible interpretations of the law of markets, there was general agreement that it ruled out general overproductions, or general gluts, as logically impossible. Accordingly, most theories of crises either sought for external causes (for example, Blanqui, CRISE COMMERCIALE, in →Encyclopédie des gens du monde, 1836), institutional impediments (Coquelin, CRISES COMMERCIALES, in →Coquelin and Guillaumin, Dictionnaire de l’économie politique, 1852) or miscalculations on the part of entrepreneurs (Raffalovich, CRISE, in →Guyot’s Dictionnaire du commerce, de l’industrie et de la banque, 1898), or only considered partial overproductions (Guyot, SURPRODUCTION, in →Guyot’s Dictionnaire du commerce, de l’industrie et de la banque, 19012), or circumvented Say’s law by explaining crises as difficulties arising in the monetary domain, in particular in the issue of paper money (this was debated by the Currency and Banking schools) or in overtrading and speculation fostered by easy credit (Juglar, CRISES COMMERCIALES, in →Block’s Dictionnaire général de la politique, 1863; Macleod, CRISIS, COMMERCIAL, in his own →Dictionary of political economy, 1863; see respectively Chapters 12 and 13). In these entries, there could be hardly any references to the

136 Daniele Besomi gluts debate: Sismondi’s name, for instance, is only cited by Garnier when commenting that ‘Say had proved against Sismondi that there can be no general overproduction’ (CRISES COMMERCIALES, in →Guillaumin’s Dictionnaire universel théorique et pratique du commerce et de la navigation, 1859, p. 923). In Germany, on the contrary, Say’s law was not treated with deferential respect and was instead an openly debated matter (see Chapters 7 on Roscher, 14 on Wagner, 18 on Herkner, 19 on Lexis and 20 on Spiethoff). Referring to the gluts debate and relating it to the credit and overtrading strain of theories was not, therefore, taboo.3 Schäffle introduced the problem by way of a survey of the notion itself of ‘commercial crisis’. He thought of crises as periodically returning disturbances to the equilibrium of production and use. He argued that these phenomena had not yet been given an exhaustive scientific treatment, and that they were mostly described on the basis of their symptoms rather than accounted for. In Schäffle’s view, J. S. Mill did not go further than defining them as taking place when a large share of traders cannot fulfil their obligations; Coquelin argued that crises are nothing else but the sudden disappearance of credit; Juglar, as well as Max Wirth, followed the development of crises in the banking statistics, but did not attempt a theorization. In Schäffle’s view, only Roscher started instead from the right point of view, by considering the organic regularity in the development of production and consumption. The cause of the crisis can then be sought among the factors disturbing either production or consumption (HANDEL, HANDELSPOLITIK, in →Bluntschli’s Deutsches Staats-Wörterbuch, Vol. 4, 1859, p. 638). More explicitly, Wagner examined the gluts debate, comparing the positions of Say, Ricardo, James Mill and John Stuart Mill on one side and Malthus and Sismondi on the other, espousing the view of the former, treating the idea of general overproduction as a contradiction in terms, while admitting the possibility of partial overproduction, with the purpose of rejecting the view of Roscher. He compared this approach with the writings emphasizing instead the excesses of speculation and credit – Juglar’s, Gilbart’s, Schäffle’s and his own (KRISEN, in →Rentzsch’s Handwörterbuch der Volkswirthschaftslehre, 1866, pp. 131–133; see Chapter 14). Similarly, Adolf Held, in the entry on HANDELSKRISEN for →Löning’s Bluntschli’s Staatswörterbuch, divided the field between those writers who see the nature of the crisis as a disequilibrium between supply and demand, and accordingly see credit and money as subordinate, and the writers who, on the contrary, deny that a general overproduction is possible, and thus see money and credit as the main villain of the piece (1871, p. 173). Even if, apart from in Germany, overproduction lived only furtively in the underworld of heretics,4 it never died out. Indeed, by the end of the century the argument that overproduction is a feature of crises had gained enough weight (for example, by its being recognized as a partial explanation of the depression by the Royal Commission on the Depression of Trade and Industry (Northcote, 1886, p. xvii) and by the US Commissioner of Labor in his first Report (Wright, 1886, pp. 88–89)) that some dictionaries carried entries on ‘overproduction’ to disprove the case. The first is due to Hadley, who argued that Sismondi, Chalmers and to some extent

Dictionary histories of crises theories 137 Malthus confused three issues: (1) overproduction as disproportionate production of one particular article; (2) overproduction as a hindrance, preventing placement of goods in the most advantageous market; and (3) a general fall of prices. From the first argument, they inferred that overproduction is general, but failed to realize that this is the result, not the cause, of the crisis (OVER-PRODUCTION, in →Lalor’s Cyclopædia of political science, 1882). Hadley was followed by Edgeworth, who rejected OVERPRODUCTION theories for →Palgrave’s Dictionary of economics. He opened by quoting J. S. Mill’s dictum that ‘The theory of general overproduction implies an absurdity’, and continued by reporting that ‘the impossibility of a “general glut” has been demonstrated by almost all authoritative writers of last century’, while ‘on the other side are the weighty names of Malthus, T. Chalmers, and Sismondi; followed by a crowd of inferior writers’ (Vol. 3, 1899, p. 45; see Chapter 16). Other entries took the opposite side. The anonymous entry on OVERPRODUCTION in →Bliss’s Encyclopedia of social reform (1897) sympathetically surveys the overproduction argument of A. D. Wells and especially of Hobson, and criticizes the views of the socialist writers who deny the idea of overproduction based on the existence of the unsatisfied needs of the workers. Lexis, who also held an overproduction thesis (see Chapter 19), discussed the views maintaining (against Say’s and Mill’s view that general overproductions are impossible) that overproduction and production crises (Produktionskrisen) are necessary and periodical occurrences even in the absence of excessive speculation. The earlier literature (Owen, Malthus, Chalmers, Sismondi) pointed at the increased productivity of machinery, eventually generating unemployment and insufficiency of purchasing power. Later, Rodbertus and Proudhon too argued that workers cannot buy back their product. Marx and Engels in their Manifesto argued that the development of the productive forces that is a condition for the orderly progress of society at the same time menaces bourgeois property relationships and has to be restrained, thereby upsetting the entire social order. J. S. Mill emphasized instead the fall in the profit rate (KRISEN, in →Elster’s Wörterbuch der Volkswirtschaft, 1911, Vol. 2, p. 209). Spiethoff, in the entry on OVERPRODUCTION for →Seligman’s Encyclopaedia of the social sciences, classified the approaches to overproduction under two headings, contrasting ‘old’ and ‘new’ theories (see Section 4.5). Classical economists (that is, Say and the followers of his law of markets) were concerned with the issues of the possibility of overproduction and with the distinction between partial and general overproduction; curiously, Spiethoff does not mention any contemporary critics of Say. Modern overproduction theory could only arise with a fully developed capitalistic system, where a particular kind of overproduction is present with a clearly defined pattern through all periodically recurring depressions, and is an integral part of the explanation of the transition from prosperity to depression (1933, pp. 515–516; see Chapter 20).

138 Daniele Besomi 4.4 OPTIMIST LIBERALS AND PESSIMIST SOCIALISTS The first dictionary entry (and probably the first writing in absolute terms) with a full and articulated section surveying the history of the doctrines on crises and attempting a classification within a taxonomic scheme is due to Heinrich Herkner. Titled KRISEN and included in the first edition of Conrad et al.’s →Handwörterbuch der Staatswissenschaften (1890), the entry also contains a rich bibliography – though biased towards the German literature – to which several later dictionary entries referred (see Chapter 18). Herkner found that the easiest grouping of the theories of crises is between optimistic free traders and pessimistic socialists. The former see crises as an evil, but an evil also bringing some advantages that could not be eliminated without worsening the situation. As an illustration, Herkner quotes Wirth writing of crises being as destructive as storms but eventually bringing the feverish system back to health,5 Roscher noting that those who climb higher fall harder than those staying on the ground, and Brentano stating that crises are inseparable from the individuality of consumption, without which, however, life is not worth living. The pessimists see instead in the crisis the striking proof that capitalism is rotten to its core and that it is ripe for its demise (1882, p. 902). The list of optimists begins with Say and Ricardo, who denied the possibility of a general overproduction; they are followed by J. S. Mill, who emphasized the tendency of the profit rate to fall; the Currency school related crises to the issuing policy of the Central Bank; Bagehot and Jevons emphasized the failure of crops; Morier Evans, Wirth and others wrote on fluctuations in the stock exchange; the German and French literature emphasized the role of world markets; and Juglar wrote on monetary crises. Lexis is the link between these writers and the socialists; he recognizes the ‘blatant economic contradictions’ of overproduction coupled with underconsumption by the masses, but believes that the resulting oscillations are intrinsically part of the nature of capitalistic production without implying that capitalism should be replaced by another system. Under the heading of ‘pessimist socialists’, who have the merit of having initiated a deeper inquiry into the specific fundamental conditions under which the capitalistic system shows signs of decline or economic disorder, Herkner has assembled a motley body. Their father is Robert Owen, with his emphasis on machinery increasing productivity and thus reducing purchasing power for consumption. A similar argument is found in Malthus, Lauderdale, Chalmers and Sismondi, who had to challenge Say’s law. This diatribe on the equilibrium between production and consumption was later taken up by Rodbertus and Kirchmann. The position of Marx and Engels is represented with a long quotation from their Manifesto, and among later Marxists Kautsky and Lassalle are cited. In France we have Fourier and Proudhon, in the US Henry George. The positions of Michael Flürscheim and Otto Wittelshöfer are represented by means of long quotations. In the second and third editions of the dictionary (1900 and 1910), Herkner modified his approach. The categorization was tripartite. First he described the debate on crises between Malthus, Sismondi and Say, concluding that today it is

Dictionary histories of crises theories 139 difficult to understand how a theory, recognized as a tautology by its own author, could survive so long and have such an echo in economics, and even find adherents among Marxists such as Tugan-Baranovsky. The second group included, as before, the socialists. The list is updated to include Hobson and J. M. Robertson. Notably, from the second edition Marx’s Capital is cited instead of the Manifesto, for the first time in dictionaries. The third subsection is devoted to recent German economics, occupying a middle stance between liberals and socialists.6 The second edition discusses the ‘classical’ Wagner, Schäffle and Roscher and refers to Brentano, Neuraths and Philippovich, and the Marxists E. Bernstein and C. Schmidt, while the third updates the discussion (and the bibliography) to H. Cohn, Spiethoff, and the new theorists: Eulenburg, Pohle, Sombart, Bouniatian. The implication of the recognition of this middle stance is worth noting. The contradictions of capitalism take the form of oscillations (in the words of Lexis cited in the first edition) – i.e. the cycle; this is an idea expressed more explicitly a few years later by Kalecki, when the notion of ‘cycle’ had acquired a solidity which was totally lacking at the time of Herkner’s writing of this entry in 1882, but which began to be apparent in the German-speaking countries by the second and especially the third edition of the Handwörterbuch. This form is describing a new kind of ‘normality’, which is not as smooth as the steady progress the optimistic free-traders took to be the normal state of the economy, but neither is destructive like the violent crises and the breakdown envisaged by socialists.7 A new theoretical approach was superseding the old one, which seemed to be making obsolete the old ideological division between socialists and liberals, between pessimists and optimists.8 And it is precisely the old being subsumed by the new that provided the guidance for a new schematization of the theories of crises and cycles.

4.5 OLD VS. NEW THEORIES During the inter-war years, when dictionaries (especially in the German-speaking area) started recording the encompassing of the notion on ‘crisis’ under the heading of the notion of ‘cycle’, the Dogmengeschichte accordingly saw the distinction between an ‘old’ and a ‘new’ approach to the problem of crises as a convenient thread for dividing the narration into two parts – each of which was naturally suited to further systematization. Needless to say, the objective was that of emphasizing the generality of the ‘cycle’ approach, of which the crisis has become a phase after having been for a century the main focus of the analysis.9 The first and most detailed dictionary discussion along these lines is due to Spiethoff. He argues that the doctrine of economic fluctuations (wirtschaftlichen Wechsellagen) must explain the various phases of the cycle in their sequential chaining, a task that had been undertaken only in the last few decades. Most of the older theories of crises focused on the recurring stoppage of trade. The economic literature on the subject failed to provide a satisfactory theoretical outlook, still less a practical solution, as the factual evidence on which they were based bore the mark of not having been collected in response to the correct question. On the other hand,

140 Daniele Besomi there was a host of inquiry in the history of trade, banking and stock exchanges, which had recognized both the factual data and the causal relationships. The lines of research of the theorists and of these practical people remained severed, however, and a unifying understanding of the problem was lacking. However, no inquiry needs a unifying approach more than the theory of crises, as aptly expressed by Böhm-Bawerk’s dictum that the theory of crises must always be reserved for the last, or next-to-last, chapter in a system of economic theory. Spiethoff accordingly considers separately the ‘old’ and ‘new’ theories of crises. He classified the ‘old’ theories roughly following von Bergmann’s (1895) categorization10 (theories based on money supply, on crops and weather fluctuations, on the tendency of the yield of capital to fall to a minimum, on the law of markets or, on the contrary, on the possibility of general overactivity (Übererzeugung) beginning from the classical overproduction theories of Malthus etc., to the disproportionality type and as due to the unequal distribution of income), while a separate category is reserved for the ‘new’ doctrine of endogenous cycles (inkräftige Wechsellagenlehre) where the writings of Juglar, Tugan, Pohle, Sombart, Bouniatian, Aftalion and Schumpeter are discussed (Spiethoff, KRISEN, in →Elster et al., Handwörterbuch der Staatswissenschaften, 1925, Section 5; see Chapter 20). The same line of approach was adopted (in much less detail) in the entry on KRISE in the →Größe Brockhaus (→Brockhaus-Konversationslexicon, 15th edn, Vol. 10, 1931, p. 632). The author noted that while the regular return of crises induced even early writers to explain their original cause by means of laws of the economic system, these initial attempts – whether based on underconsumption or falling profit rates – failed to produce a satisfactory explanation of crises as part of the general cyclical movement. The modern theory of crises, beginning with Tugan-Baranovsky, Aftalion and Spiethoff, sees crises as part of the cycle, and rebuilds the theory of crises upon the theory of the cycle. K. Diehl, in the section on ‘the most important theories of crises’ of his entry on KRISEN for →Elster’s Wörterbuch der Volkswirtschaft, divided the field into two categories: the theorists belonging to the old generation, who focused on crises and tried to explain them in themselves by finding their causal factors; and the newest generation of theorists, who considered crises as part of the general movement of business (1932, p. 687). Within each group, the classification is strictly parallel to Spiethoff’s. Thalheim’s dictionary started from the premise that crises are a phase of the cycle, and as such do not need a specific cause but are rooted in the previous upswing (KONJUNKTUR UND KRISE, in →Das ABC der Volkswirtschaft, 1934, p. 166). Before this was recognized, the theories of crises were classified in terms of the causes of crises; the newest approach focuses instead on the cycle in its entirety. Old and new theories, however, fall into three main categories: (1) monetary theories: from the debate between the Currency and Banking schools to Hawtrey, Mises and Hahn; (2) overproduction (or, more precisely, overcapitalization) theories: from the gluts debate to Tugan, Spiethoff, Cassel, Sombart; (3) underconsumption: Malthus, Sismondi, Rodbertus, Marx (pp. 168–169).

Dictionary histories of crises theories 141 4.6 THE AETIOLOGICAL APPROACH The classificatory approach used by the vast majority of dictionary writers is based on the cataloguing of the dominant factors invoked in the explanation of the cycle. Even a number of entries using different criteria as the main approach (e.g. old vs. new theories, exogenous vs. endogenous, etc.) further subdivide their primary categories into classes based on the leading causal factor involved in the explanation of the phenomenon. This approach (if not the classificatory schemes themselves) was borrowed (sometimes explicitly, sometimes tacitly) and adapted from illustrious predecessors, in particular von Bergmann’s still unsurpassed history of the theories of crises, Jones’s alternative classification of the same materials, and the classifications of business cycle theories offered by Patterson, Persons, Mitchell, Hansen and Haberler.

4.6.1 The origins of the causal taxonomy Eugen von Bergmann produced at the end of the nineteenth century the first (and still one of the very few) book-sized dedicated history of the theories of crises. He explicitly excluded from his survey the theories primarily based on money and credit factors – not because they are unimportant, but because they can be examined at a later stage of the inquiry on the processes at work in the real economy (1895, p. vi) – but what remains is still so abundant that the exposition requires some grouping. Bergmann discards the classification propounded by Herkner in terms of the political premises of the theories of crises (see Section 4.4), arguing that the differences between various explanations go far beyond that, to the very essence of the theories – namely, their aetiological views. Yet, also by trying to systematize the opinions on crises on the basis of their purely theoretical content, one cannot reach a rigorous descriptive or genetic classification without doing violence to the theories themselves or resorting to artificial and very ample – therefore useless – categories. He thus concluded that the best method of classification is to class theories in large groups based on their general affinities and taking into account their stages of development (pp. 431–432). Accordingly, he examines first the oldest and simplest overproduction theories, still having a foot in pre-Smithian economics. There follows the counterposing of those who believe in the necessary equalization of production and demand on one side, with their partial over-production theories, and the supporters of a more elaborate overproduction theory on the other. The advances produced by the latter were ignored by a host of writers who focused instead on the process of circulation of capital. At the same time, however, a number of powerful critics of the existing economic order started focusing on the mismatch between the purchasing power and the productivity of the population, while still others demonstrated that the difficulties can arise because of the capitalistic method of production. Bergman concludes from his survey that two main lines of thought have emerged. One focuses on the relationship between the profitability of private enterprises and the growth of social productive forces; the other is concerned instead with the relationship between income distribution and effective

142 Daniele Besomi demand. These two issues, however, are intimately linked to each other, as stressed by writers such as Rodbertus, Marx and Lexis, and point at the problem of the conditions of the development of the social productive forces within our economic order and of the further effects this development will have on the processes and structure of the economic system (pp. 432–434). While Bergmann identified the core of the theories with their aetiological view (p. 432) and accordingly suggested that a categorization should focus on the causal mechanisms (p. 431), he nonetheless concentrated more on the problems concerning the relationship of production and demand. His successors, however, focused precisely and explicitly on the causal relationships. Edward Jones, writing shortly after Bergmann, divided the theories of crises into two classes: ‘First are those which assign some specific, immediate, and actuating cause, of such a character that no law can be formulated as to its recurrence. Second, we may group together all those explanations of crises pointing out an inherent tendency of industry which, when not counteracted, leads to recurring periods of distress’ (1900, p. 22). The writers belonging to the first class (Roscher is among the most prominent of them) believe that ‘the present industrial system tends to preserve a stable equilibrium, and that there are no persistent or recurrent tendencies operating to break down the adjustment which normally prevails between demand and supply’ (ibid.). However, due to the expansion of the use of credit the situation can be upset: ‘Under some circumstances the industrial system may be said to be in unstable equilibrium, as when a country possesses a system of unsound banks or an unregulated paper currency. The course of foreign commerce is usually recognized as less stable and reliable than that of home trade’ (p. 24). Unpredictable changes, superimposed onto this instability, may thus produce crises. Although Jones presents these causes in some order (those affecting production, exchange, consumption, and miscellaneous), they are innumerable, and therefore ‘no important classification can be made among them’, as ‘all true causes are equally important’ (p. 35). The second class of writings considers instead steadily operating causes, intermittently (or even periodically) erupting into crises when their cumulated effects disturbs the equilibrium between supply and demand. These can be classified depending on whether they pertain to (a) lack of organs of industrial control; (b) capital: unused capital, or improperly used capital; (c) distribution of wealth; (d) money, banks, corporation laws; (e) credit and speculation; (f) psychology. An alternative classification, based on whether the causes disrupting the equilibrium between supply and demand affect one side or the other, is considered as ‘helpful, if not . . . very penetrating’ (p. 219). Patterson’s starting point is similar to Jones’s (upon which he probably elaborates). But while Jones stressed the distinction between intermittent and persistent causes, Patterson distinguishes between the old theories of crises (somehow caricatured) based on some unpredictable cause, and the theories of periodical cycles. Explanations of crises may be divided conveniently into two general groups. The first includes those which find that each disturbance is due to some special

Dictionary histories of crises theories 143 cause. Modern industry is viewed as in a state of stable equilibrium. This condition is ‘normal’ and tends to continue, but numerous influences, which are for the most part unpredictable, are apt to disturb it and bring about an ‘abnormal’ situation. Crises thus have little or nothing in common except their abnormality. They are pathological phenomena and each has its special, unpredictable cause. [. . .] To others, and in fact to most writers in recent years, there seems to be a distinct uniformity in the intervals between crises and in certain of the accompanying phenomena. This has led to the suggestion that there may perhaps be formulated a law of their periodicity. It is said that crises tend to recur and that prosperity, crisis, and depression succeed each other with such regularity as to warrant the use of the word ‘cycle’. Explanations of this second sort may be called cycle theories and may be divided into three classes. These classes are by no means mutually exclusive but represent differences of emphasis rather than entirely distinct opinions. First are those that find the explanation in the human mind. The ebb and flow of business is due to psychological causes. Second are the theories that find a regularity of recurrence in the operation of some of the forces of nature which determine the crop yield and thus affect values. Third and last in our classification are the theories that place their emphasis upon the structure of our modern economic life. (Patterson, 1915, pp. 136–138) Patterson’s classification was adopted and refined by Wesley Mitchell, who ignored altogether the old theories of crises and further divided Patterson’s third class of theories of the cycle into theories tracing the cycle to changes of institutions (change in pace of social progress, waves of innovations) and theories focusing on the functioning of existing institutions (technical exigencies of money-making; lack of equilibrium in the process of disbursing and spending incomes and producing values, or in the process of producing and consuming goods; from lack of equilibrium in consumption, saving and investment; from the process of banking) (Mitchell, 1927, pp. 49–53). Meanwhile, Persons (1926) also produced a classification based on causal mechanisms. He described his attempts as follows: Helpful classifications of theories of business fluctuations might be made on the basis of various criteria; such as the nature of the fluctuation, periodic or nonperiodic, the origin (that is, the beginning) of the fluctuation, the cause assigned to the lapse from prosperity to depression, the remedies offered, or the element in the author’s explanation which he emphasizes most in his discussion of the causes. It has been found by the present writer, after various criteria were tried, that the most workable one was the last one mentioned; and hence the classification has been made according to the elements in each explanation most emphasized by the author himself. These elements may be specific events from which arise a train of sequences, or economic institutions which condition a train of sequences, or inherent human qualities which are

144 Daniele Besomi held to be real origins, or the inevitable development of society which, given our economic institutions, causes fluctuations; but in any case the ‘elements emphasized’ was the basis used for the present classification. (p. 99) As Mitchell stressed, his classification and Persons’s are similar. But while Persons is primarily concerned with a survey of theories, Mitchell is classifying theories with a view to singling out the working hypotheses he could use for his own constructive study of the cycle. Some writers are thus pigeon-holed in different categories (Mitchell, 1927, p. 49n). Alvin Hansen (1927), citing Mitchell (1927) but none of the other classifications mentioned above, also starts with the observation that most explanations are multicausal and are in most cases not mutually exclusive, so that authors could contribute to more than one category. He distinguishes three broad types of categories. The first is concerned with the features of a capitalist economy: some believe that the problem resides with the distribution of income, others with some technical features of production (inventions disturbing equilibrium, or fluctuations in demand affecting investment). The second group comprises the theories focusing on the competitive exchange economy. The theories in the third group attribute the cycle to the monetary economy (‘the interrelations of the rate of interest, the prospective rate of profits, and the price level’ and ‘the interrelations of costs and prices, profit margins, and capitalization’). The most celebrated (and cited and imitated) survey of business cycle theories is due to Haberler. He aimed at proving that in most cases different theories of the cycle are not incompatible after all, so that they can be synthesized into a comprehensive explanation of the phenomenon. The discrepancies between the various theories, in spite of being often overemphasized by their authors, can sometimes be accounted for by differences in their terminology, or they can result from differences in emphasis. The phenomenon of the cycle, in fact, is so complex that hardly any inquirer believes it can be ascribable to a single cause. But each writer tends to emphasize one or a few of these causes, taking the others as data or as conditions defining the institutional setting of the problem. Conflicts between writers, then, are more apparent than real, and can often be ascribed to different choices as to what is a cause and what is a condition.11 It could thus be helpful to distinguish between causes and conditions, between controllable and uncontrollable factors, between exogenous and endogenous causes, but the dividing lines are blurred. Having observed that cycles have shown a remarkable persistence even in the absence of external causes, Haberler thus starts from the assumption that the system is intrinsically unstable. This allows him to focus on the economic factors and relegate external disturbances to the role of the originators or disturbers of the endogenous process (Haberler, 1937, pp. 5–12). There results the following taxonomy (from the less complicated to the more complicated): purely monetary theories; overinvestment theories (monetary, non-monetary and resulting from changes in the demand for finished goods); changes in costs, maladjustments, and over-indebtedness; under-consumption theories; psychological theories; harvest theories.

Dictionary histories of crises theories 145

4.6.2 The aetiological approach in dictionaries The common feature of the aetiological approaches is the mechanical principle that causes can be taken apart and analysed in isolation (and, if necessary, recombined into a new explanation). In principle, none of the causes is privileged: they all contribute to the comprehensive picture, in one role or another, and can be recombined into ‘new’ comprehensive explanations as deemed suitable. As the archetypes summarized above illustrate, there is no unique way of dismantling and pigeonholing the resulting pieces. The recognition of the places where something can go wrong (e.g. by disrupting equilibrium) essentially depends on the classifier’s theoretical approach and view of the working of the capitalist system, which therefore also guides the construction of the taxonomy of the causes of the cyclical movement. The same condition is found in the classifications attempted in dictionary entries – the most recent of which also had to deal with additional theories to be placed. The aetiological classificatory approach in dictionary entries was particularly popular between the late 1920s (in correspondence with the similar attempts in the general literature on cycles) and the 1960s, with some later instances. Tugan-Baranovsky has already distinguished three groups of theories of crises according to whether the cause of the phenomenon belonged to the domains of production, exchange or distribution (ECONOMIC CRISES, in the →Brockhaus– Efron Encyclopedic dictionary, 1895: see Chapter 17). Bergmann inspired Spiethoff’s 1925 categorizations of the ‘old’ theories of crises (see Section 4.5) as well as W. Heller’s cursory list, including general overproduction, underconsumption, socialist explanation of underconsumption due to income distribution, and disproportions, to which – like Spiethoff – he added the theories focusing on the entire cycle (KRISENTHEORIE, in →Nationalökonomie (Theorie und Geschichte), 1926, pp. 100–101). Within the main division of ‘old’ vs. ‘new’ theories, Diehl similarly constructed a causal taxonomy in six categories for the old theories of crises (KRISEN, in →Elster’s Wörterbuch der Volkswirtschaft, 1932, Vol. 2, pp. 687–689), while Thalheim’s dictionary – also as a subdivision of the ‘old’ vs. ‘new’ approaches – divides the theories of crises into only three categories: monetary, overproduction and underconsumption (KONJUNKTUR UND KRISE, in →Das ABC der Volkswirtschaft, 1934). Mitchell, in the entry on BUSINESS CYCLES for →Seligman’s Encyclopaedia of the social sciences (1933), naturally takes up his own 1927 classification scheme (see Chapter 22, Section 22.2 for further discussion). Bachi, in the entry on CRISI ECONOMICHE for →Treccani’s Enciclopedia italiana (1931), discusses the difficulty of logically isolating and separating the various causes at work (p. 913), maintains that the eclecticism of all discussions of crises defies any attempt at classification, although Mitchell’s and Persons’s attempts are noteworthy, and produces his own list of remarkable causal families of theories (pp. 917–918). Another Italian, Masci, a few years later also remarked that none of the classificatory schemes is completely satisfactory. Yet he sketched a categorization similar to Mitchell’s, to which he added the group focusing on the saving–investment

146 Daniele Besomi relationship – an explanation to which he himself adhered (CICLO ECONOMICO, in →Confederazione Fascista delle Aziende del Credito e della Assicurazione, Enciclopedia bancaria, 1942). The first dictionary to introduce a category representing Keynesian economics was →Horton’s Dictionary of modern economics: in the entry BUSINESS CYCLES, THEORY OF, next to overinvestment theories there appears the class of underinvestment theories. The proposed classification is admittedly ‘somewhat artificial, depending more on a matter of emphasis than upon unique explanations’ (1948, pp. 40–41). The entry on KONJUNKTURTHEORIEN in →Sellien et al., Gablers Wirtschafts-Lexikon (1956) takes up (without giving explicit reference to) Haberler’s scheme and preliminary reflections on causation. Haberler’s categories are instead expressly cited, but only briefly, in the entry on BUSINESS CYCLE in →Munn’s encyclopedia of banking and finance (Garcia, 1962 and later editions). Taylor also offers a very cursory causal schematization, nevertheless inserting a class for ‘Keynesian economics’ (TRADE CYCLE, in →A new dictionary of economics, 1966). Much later, M. F. Foss took up Haberler’s classification, to which he added a summary of the monetarist, equilibrium and real business cycle theories, and of the empirical approach of Mitchell and the NBER (BUSINESS CYCLES, in →Outhwaite’s Blackwell dictionary of modern social thought, 2006).

4.7 ABANDONING THE CAUSAL REPRESENTATION Even at the acme of its success, the causal scheme of classification was not universally adopted. Before it was substituted by other preferred approaches, a few alternatives had been articulated. Müller-Armack explained in 1929 that he would classify theories according to the models of thought (Denkmodelles) used to explain the development of economic conditions rather than according to the concrete descriptions of their cyclical evolution. These descriptions, in fact, lack an unambiguous ascription to a certain basic model, be it the equilibrium theorem or a specific view of economic dynamics. The explanatory value of causal descriptions can only be ascertained by connecting the concrete phenomena to the general theoretical scheme; to different schemes, different explanatory values are associated. Accordingly, he produced a threefold classification of business cycle theories. First, those relating to the equilibrium theorem. If the production and exchange processes bring about an optimal economic condition, no genuine crises or cycles can really exist. Any fluctuations must therefore be attributed to chance movements, such as fluctuations in crops, speculation etc., which spread to the entire system due to the solidarity between its parts. To this family belong theories emphasizing maladjustments on the goods side, such as changes in fashion on the side of demand or changes in productivity on the side of supply, and the explanations in terms of monetary or credit phenomena. A second category of theories is made up of those accounting for economic development in terms of the accumulation of capital. Socialist theories see the impetus to capitalist expansion in the circulation process. Because of the continuity of technological progress, entrepreneurs, instead of

Dictionary histories of crises theories 147 consuming their surplus, accumulate it. From this, two disproportions follow in Marx’s theory, namely, the tendency of profit rates to fall and underconsumption by the workers. Some – e.g. Rosa Luxemburg – here link theory of crisis and theory of imperialism. To this category also belong the old underconsumption theories, such as Sismondi’s, or the new ones, such as the liberal-socialist Oppenheimer’s (based on the pressure on wages due to the monopoly of land), or Lederer’s (based on the rigidity of consumers’ incomes). Finally, the third category includes the theories maintaining that the capitalistic process itself generates the forms of its growth and the means of sustaining the demand for its products; this is nothing else than a new formulation of Say’s law. To this group belong writers such as Schumpeter, Hahn, Pigou, Hayek, Mises, Lavington (KONJUNKTURFORSCHUNG UND KONJUNKTURPOLITIK, in →Elster’s Handwörterbuch der Staatswissenschaften, Vol. 4, 1929, pp. 649–655). H. Besters, in the entry on WIRTSCHAFTLICHE KONJUNKTUREN for the →Staatslexikon of the Görres-Gesellschaft (Vol. 8, 1963), described the theories of the cycle according to some general views concerning the working of the economic system. Besides the old purely exogenous theories, which he thought to be unsatisfactory as they failed to give a clear account of how the external causes exerted their effects on the economic processes, Besters considers the explanations assuming a barter economy (the naive overproduction and underconsumption theories of the mercantilists, and the classics and Say’s law); those assuming instead a monetary economy and focusing on the mismatch between circulations of goods and of money (the disproportionality theories, those focusing on overinvestment); the mechanistic explanations (the multiplier–acceleration mechanism); those focusing on the mechanisms giving rise to cycles when disturbances of equilibrium are corrected; and the theories considering the interrelation of cycles and growth (the pre-war theories interpreting the cycle as part of the growth process, and pessimistic post-war theories considering instead the hypothesis of a tendency to stagnation) (pp. 740–747). It should be noted that while this choice of perspective enabled Besters to tidy up the field somewhat, it is rather arbitrary and omits a number of approaches.

4.8 THE FORMAL PROPERTIES OF MODELS When mathematical modelling of the cycle became ripe enough to make it to dictionaries, the possibility of classifying models according to the principles involved by certain mathematical properties offered itself to entry writers. The first to take advantage of it was Haavelmo (see Chapter 22, Section 22.5): First, we consider whether the principal active forces responsible for motion are assumed to come from the outside or are assumed to be endogenous parts of the economic system itself. The first type of model is sometimes called an open model, and the second type is called closed. Second, for each of these two types of models, we consider whether the cycles are produced because

148 Daniele Besomi the driving force is itself cyclical (‘forced oscillations’) or because of the particular way in which the economic system responds to the stimulating forces (‘free oscillations’). (BUSINESS CYCLES: MATHEMATICAL MODELS, in →Sills, International encyclopedia of the social sciences, 1968, p. 247) Haavelmo was aware that a model could fall into more than one of his four categories, and that therefore this taxonomy does not offer a unique categorization. Both the exogenous/endogenous and the free/forced oscillations distinctions were also considered, or at least implied, by some of the aetiological taxonomists – indeed, in Haavelmo’s mechanistic framework, ‘forces’ are nothing but ‘causes’. The advances in mathematical modelling, however, made it possible to conceive of the possibility (which would have seemed at least very unlikely to Jones in 1900) of exogenous models giving rise to periodical free oscillations. The latter point is further discussed by Medio, who pointed out that between the purely exogenous interpretation of cycles sustained by periodical external shocks, or the purely endogenous interpretations of persistence based on non-linear models, it is also possible to adopt a middle way consisting in fairly regular fluctuations resulting from exogenous a-periodic shocks superimposed upon a system predisposed to oscillate (CICLO, in →Lunghini’s Dizionario di economia politica, 1983, pp. 11–12). The presentation of the theories (in line with the Dizionario’s approach; see Chapter 1, note 11) is chronological, but with an eye on the state of modelling: classical economists did not have a proper theory of the cycle, but had discussed the equilibrium conditions of the economic system and whether or not it was inclined to crises; crises, however, were not yet seen as a part of a general phenomenon. Towards the end of the nineteenth century there began the modern phase of business cycle research: the cycle became the focus of analysis, and writers sought to identify the causes of the phenomenon and frame them into theories. No models, however, were produced at this stage. During the ‘contemporary’ phase of the history of business cycle analysis we witness instead attempts to give a rigorous couching in mathematical terms to the previous intuitively formulated theories (pp. 17–18). The survey, examining a number of representative writers for each epoch, concludes by taking up the issue of the persistence of fluctuations in terms of the properties of linear vs. non-linear modelling (pp. 53–55; see Chapter 26, Section 26.2). Some of these themes are taken up by Mullineux, although more as a list of contrasting approaches than as a proper classification of theories. Besides the issues of systematic vs. random fluctuations, shocks vs. non-linear models and the in/stability of equilibrium, he also mentions the issue of the separation of cycles and trends (BUSINESS CYCLES, in →Kuper and Kuper, The social science encyclopedia, 1985).

Dictionary histories of crises theories 149 4.9 DIGGING RATHER THAN SKATING: THE QUEST FOR A FUNDAMENTAL LINE OF DIVISION Upon reading the first draft of Haberler’s classification of business cycle theories, Keynes commented as follows in a letter to Felkin: [Haberler] is attempting something which is not worth while. Working within such narrow limits of space he is condemned to producing an account which is very far from clear of theories which are themselves confused. On a plane so near the surface as that which he is deliberately occupying there is obviously nothing useful to be said. Obviously the truth must lie somewhere much deeper down and the source of so much confusion could only be found by clearing up the terms and concepts involved right from the beginning. There is hardly a phrase of which the meaning is unambiguously clear. Moreover, in order to get his authors into his schematism he has had to make some of them appear sillier, others less silly, than they really are. I doubt if many of them would recognise themselves as they are here presented, with their bodies cut up into small cubes which are then made up into lb packages and put into pigeonholes. Two trunk murders were bad enough, but here are dozens with an assorted collection of limbs in each trunk. (Keynes, 1934a) A few months later, he returned to the point in a letter to Haberler: My essential point is that the method you have adopted forces you to a high degree of superficiality. As I said before, I cannot believe that the solution can be reached by bringing together in selected packets excerpts from the views of a large number of writers, each differing from the other more or less in fundamentals. The answer must lie somewhere much deeper down; yet your method tempts you to skating rather than digging. (Keynes, 1934b)12 Although Haberler’s approach was widely acclaimed at the time (Keynes himself later admitted that the final result ‘is all very skilful and clever’ (Keynes, 1939)), and was adopted by several writers in the following three decades, the artificial character of the classification in terms of causes at some point became apparent, and the need for a taxonomy focusing on more fundamental features of business cycle theories made itself felt. Several solutions have been explored, which share the idea that the theories of crises and cycles should be grouped according to the general perspective on the working of the economic system. An interesting implication of this shift of approach is that the distinction between the old theory of crises and the new theories of the cycle becomes secondary with respect to the emphasis on the significance of crises and cycles for the working of the economic system. Accordingly, the theories advanced in the nineteenth century are treated on an equal footing with the more recent contributions, after having been treated for almost half a century (if not ignored altogether) as rather ‘primitive’.

150 Daniele Besomi

4.9.1 Say’s law (again) In 1956, →Napoleoni’s Dizionario di economia politica included a long entry (38 pages) on FLUTTUAZIONI ECONOMICHE by Thomas Balogh. Although Balogh does not seem to have written anything else on the subject, the result is an able essay (some inaccuracies notwithstanding) reconstructing the history of the theories of crises and cycles as seen from a precise (though far from unbiased) perspective, namely, how Say’s law had hindered the development both of theoretical advances in the field and of appropriate economic policies, until this ‘colossal deception’ (p. 645) was eventually dismantled and several strains of theories could flourish in a heterogeneous yet consistent way. Equivocally as it was formulated, it is difficult to pin down Say’s law to a precise proposition. Balogh sees its roots not so much in a sociological desire to give a rational foundation and justification to the liberal principles of individual freedom in economic matters, but in the economists’ objective of founding an ‘objective’ science modelled on Newtonian physics. The law of markets has been one of the most tenacious cornerstones of economics as a static science of equilibrium, as it postulated that any divergence between supply and demand (whether it be of goods, as in early classical economics, or of capital, as in post-Ricardian classical and neoclassical economics) is automatically corrected thanks to the elasticity of both demand and supply with respect to prices and interest (pp. 645–648). Crises and cycles were accordingly treated as secondary and residual phenomena, rather than as facts that required a reconceptualization of the entire theoretical approach in order to be incorporated within the general theory (p. 649). Balogh’s survey of pre-Keynesian theories of crises and cycles thus examines how Say’s law either constrained crises theories or, on the contrary, how writers challenged it. On the latter point, however, his conclusion is rather drastic:13 ‘after Malthus no academic economist, up to after Keynes, has attempted to insert the recurrent and insistent phenomenon of economic crises within a general and accepted theoretical scheme. The body of economic theory – whether based on the theory of labour-value or on the system developed by the various marginalist and mathematical schools – was more or less based on the doctrine of continuous full employment of available resources, since any deviation from this condition was quickly and automatically corrected, unless there were frictions due to an imperfect working of the price mechanism’ (p. 647). Balogh’s emphasis is on the place of equilibrium and of its stability (an issue he seems to consider as more or less equivalent to Say’s law, or at any rate implied by it) in the theoretical construction. I will not follow the details of Balogh’s reconstruction from the overtrading theories of the early nineteenth century14 to the empirical researches of the inter-war years, via the theories based on crop fluctuations, credit, monetary theories of underconsumption, the monetary theories (pure, and of overinvestment), those based on the character of capitalistic production. The point to note, for the purpose of this chapter, is that Balogh identifies the mechanisms deployed by each of these strains of theory to explain how the action of Say’s law is counteracted or temporarily suspended, thereby permitting the occurrence of crises (pp. 651–663).

Dictionary histories of crises theories 151 An article by Löwe published in 1926 radically questioned the compatibility of the kind of movement observed during business cycles with the existing static theoretical system, and postulated that a dynamic system should be erected in its place. Balogh argues that although Löwe was not able to propound such a system, he laid the ingredients for the solution of the problem (FLUTTUAZIONI ECONOMICHE, pp. 650–651). This was eventually built upon two foundations. The first was Sraffa’s 1926 criticism of neoclassical theory, questioning the ceteris paribus assumption and the postulate of independence of variations and thereby opening up the possibility that small changes in one sector feed back further changes, and accordingly cannot be relegated to the realm of the second order of magnitude. The second, due to Kahn (1931), was the economics of production as a whole, so that income could be treated as the result of the interaction of aggregate demand and supply rather than being given by some long-term factors. This ‘broke the incredible and unintelligible spell’ of Say’s law, and opened the door to the formulation of an entirely new and consistent system – Keynes’s General theory. Here comes the notable historiographical point of Balogh’s entry. He argues that, after Keynes, a true and complete synthesis of business cycle theories has become possible. Löwe had shown that previous theories were contradicting each other and failed to give a consistent explanation of the cycle (p. 650). He could thus distinguish between various schools of thought, and associate the ‘monetary’ theories mainly with an Anglo-Saxon approach, while the ‘real’ theories were mainly of Continental origin (pp. 665–666). The same method of presentation was followed by Haberler (1937), who was not aware that Keynes made uniforming possible (p. 666).15 This lies in the proposition that saving and investment decisions are independent of each other, and that there is no automatic adjustment mechanism ensuring that they balance each other at the level of full employment. Combining saving and investment functions, various models are possible and, especially if no assumption as to the rigidity of parameters is made, they can accommodate all the most important elements of the old theories, which can then be synthesized in a consistent and satisfactory way. The differences between various theories and schools have become a matter of detail, often concerning the mathematical method rather than the essence of the theory (pp. 667–669).

4.9.2 Schools of thought and chronological narrations From the late 1970s, a different approach to classification emerged and gained some popularity. Rather than taking theories apart, a number of surveys offered by dictionaries grouped them by schools of thought. The unstated but rather obvious premise is that if schools of thought can be recognized as sharing some strong and fundamental principles, this also holds for their interpretation of crises and cycles. The first such typologies were presented by Paolo Guerrieri and Pierluigi Ciocca in Italy, and by Hans-Jürgen Vosgerau in Germany, all in 1978. Focusing on the cycle (in a long and detailed entry titled FLUTTUAZIONI ECONOMICHE, devoted to the history of the theories of the cycle; see Chapter 3, Section 3.2.10 on the implications of the usage of the terms ‘cycles’ and ‘fluctuations’), Guerrieri considers

152 Daniele Besomi the analysis of the classics (where an analysis of the cycle was lacking, for crises were considered as episodic) and Marx (the first real scholar of the cycle: Guerrieri interprets Marx’s crises as turning points of the cycle), of neoclassical economics (which, having accepted Say’s law, describes a system capable of growing uninterruptedly, where cycles are a theoretical anomaly requiring special explanations based on non-economic or monetary factors), of Schumpeter (who thought of capitalistic growth as a discontinuous phenomenon), and of Keynes (who rejected Say’s law and focused on the fluctuations of investment decisions, opening the way to a new stream of inquiries on the endogenous determinants of the cycle). Post-war theories are grouped in families (probably as the strict identification with specific schools of thought was not that easy): the multiplier–accelerator models, those examining the interrelations of cycles and growth, Kalecki, monetary theory (from Hawtrey and Hayek to Friedman), the theories based on inventories and econometric models (in →Carmagnani and Vercelli, Il mondo contemporaneo, 1978). Ciocca, focusing on the problem of the persistence of the cycle, considers four typologies of business cycle theories, stressing that one of the few points of agreement between them is that cyclical fluctuations are a feature of capitalist economies that will be difficult to eradicate. Marxist theories attribute the resilience of the recurrence of crises to the tendency of the profit rate to fall, to the necessity of keeping under control the number of workers, to the difficulty in keeping the correct balance (qualitatively and quantitatively) between supply and demand, and to the anarchy of production. Monetary theories blame instead mistaken policies by the monetary authority and the instability of credit supply, without which the system would be stable and tend towards a position of full employment. The theories focusing on phenomena taking place on the supply side emphasize the delays with which costs adapt to prices, determining undue fluctuations in the profit rates. Finally, the composite family of Keynesian theories stress the instability of investment decisions (CRISI ECONOMICHE: IL NOVECENTO, in →Carmagnani and Vercelli, Il mondo contemporaneo, 1978, pp. 139–142). Vosgerau devotes a section of his entry on KONJUNKTURTHEORIE for →Albers and Zottmann’s Handwörterbuch der Wirtschaftswissenschaft to the epochs of business cycle research. This is more a chronological approach, complementing the Haberler classification scheme (applicable to neoclassical and pre-Keynesian approaches) with an account of the classical approach and with developments subsequent to Keynes. In the classical world there was no room for business cycle theories, which were ruled out by Say’s law. There was some reaction in the first part of the century – Malthus and Sismondi – while later the phenomenon was increasingly recognized, as witnessed by Overstone’s description of the cycle, and some suggestions that we now recognize as anticipations of monetary, crops and investment theories of the cycle were formulated, but they really were not integrated within the theoretical scheme of the classics. An exception was Marx, who probably formulated the first account of the cycle as being intrinsic to a growing economy. After Keynes, business cycle research has mainly elaborated upon Frisch’s distinction of impulse and propagation problems, in particular within his notion of ‘dynamics’. There are four main lines of inquiry. First, the cycle is subsumed under

Dictionary histories of crises theories 153 the more general heading of the movement of output and employment, mostly in macroeconomic terms but also within microeconomic disequilibrium analysis. The second approach consists in formal mathematical modelling, starting from Samuelson’s multiplier–accelerator model up to the recent formulation in cybernetic and system theoretical languages. Third, the development of national accounting and statistics after the war has given new scope to econometric modelling. And finally, following the increased economic control, political business cycle theories have received a new boost (1978, pp. 486–489). This systematization is followed by an account of some business cycle models, including the first dictionary report of non-linear modelling (for a discussion, see Chapter 26, Section 26.2). Brémond and Gélédan survey the theories of growth and cycles in classical economics (also stressing Say’s law and its critics), neoclassical economics (believing in the spontaneous regulation of markets and accordingly interpreting crises as the violation of the laws of competition), Keynesian analysis (disputing that there exists an automatic tendency to adjustment to equilibrium, with some post-Keynesians emphasizing the role of income distribution), and the Marxist regulations approach (according to which crises break out when the determinants of the reproduction of the general law of society are seriously challenged in their working) (CROISSANCE ET CRISES, in →Dictionnaire des théories et mécanismes économiques, 1984, pp. 81–95). De Luca also offers a (very sketchy) catalogue of views on the cycle divided by schools of thought. As periodic fluctuations are incompatible with Say’s law, classical and neoclassical economists do not have an explanation of this phenomenon and therefore rely on exogenous factors; the first theory of cyclical fluctuation is due to Schumpeter, while after him the assumption of a rigid regularity in the cycle was substituted by an analysis of the phases of expansion and contraction. Post-Keynesian explanations are based on endogenous forces, in particular by way of the multiplier–accelerator mechanism; monetarists, on the contrary, explain the phenomenon by focusing on changes in the supply of money; finally, the theories of the electoral cycle and those based on sunspot equilibria are also listed (CICLO ECONOMICO, in →Nuovo dizionario di economia, 2000, pp. 112–113). →Snowdon and Vane’s Encyclopedia of macroeconomics (2002) also offers an overview of business cycle theories in terms of schools of thought, but rather than having a unified entry discussing and comparing these schools, it carries separate entries for each approach: BUSINESS CYCLES: AUSTRIAN APPROACH, by R. W. Garrison; BUSINESS CYCLES: KEYNESIAN APPROACH, by A. B. Trigg; BUSINESS CYCLES: MARXIAN APPROACH, by G. Reuteen; BUSINESS CYCLES: MONETARIST APPROACH, by J. D. Hammond; BUSINESS CYCLES: NEW CLASSICAL APPROACH, by B. Snowdon and H. R. Vane; BUSINESS CYCLES: POLITICAL BUSINESS CYCLE APPROACH, by B. S. Frey and M. Benz; and BUSINESS CYCLES: REAL BUSINESS CYCLE APPROACH, by C. Ryan. Much more briefly, the →Encyclopedia of governance distinguishes between the neoclassical approaches and the proper business cycle approach. The former ‘conceive of recessions as the result of external interventions or disturbances leading an economy to deviate from a normal path of steady growth, continuous optimization of economic actors, and adjustment of

154 Daniele Besomi prices to supply and demand’. The theories of business cycles – propounded in particular by (post-)Keynesians and (post-)Marxists – claim instead that ‘the succession of economic expansion and downturn is an intrinsic feature of the capitalist economy’ (J. Drahokoupil, BUSINESS CYCLE, p. 63). Alquier, in the entry on CRISE in his own →Dictionnaire encyclopédique économique et social (1985, 1990) argues that the reflections on crises lie at the very heart of economic theory, at the point where it is made clear how the economic system is geared with the working of the entire society. The key to the understanding of the theories of crises is the theory of growth, which on the one hand examines the conditions of ‘normality’ of development – that is, the internal logic of the economic system – and, conversely, reveals the conditions of its pathology; the crisis is then the test for the ‘truth’ of a theory. There is a main division line between approaches: most schools of thought discuss crises in terms of their possibility, whether to admit or to deny it; on the other side, there are the Marxists, who focus instead on the necessity of crises. From this interesting premise, no actual survey of theories follows, except a very cursory overview of the position of the main schools. Classical and neoclassical writers postulate that equilibrium is a real configuration, an actual state of things, and deny – on the basis of Say’s law – the possibility of persistent and deep disequilibria. The classical dissidents, Malthus and Sismondi, argued that general crises of underconsumption are a concrete possibility, as did Keynes in his confrontation with the ‘classics’ on Say’s law. None of them, however, envisaged that capitalism itself is in danger. Marx’s theory of crises starts from a discussion of its possibility (but only the most general determination is considered, namely, the fact that the use of money, which is not only an intermediary of exchanges but also a reserve of value, opens the possibility that sales are not immediately followed by a purchase), followed by a discussion of its nature consisting in the contradiction by the development of productive forces and the valorization of capital, and finally of its necessity, due to the need to resolve the contradiction (pp. 113–116).

4.9.3 Exogenous vs. endogenous approaches The recognition (implicit at least) that there is a deep difference between explaining crises by means of exogenous and endogenous causes dates back at least to Blanqui in 1836, Michel in 1839 (on both, see Chapter 6, Section 6.2), Coquelin (see Chapter 8) and Boccardo (see Chapter 11) in the 1850s. Naturally, the taxonomies of cycles and crises theories have taken the distinction into due account; the aetiological approach, for instance, placed the ‘astronomical’ theories in a different category from the other (directly economic) causes. Beginning from the 1990s, some dictionary writers centred their taxonomies precisely along the line separating exogenous and endogenous theories. Wilfried Fuhrmann, in the entry KONJUNKTURTHEORIEN for →Dichtl and Issing’s Vahlens grosses Wirtschaftslexikon (1993), divides the theories of the cycle into two groups: the explanations in terms of non-economic factors, and the economic theories. The theories relying on exogenous causes include the cosmic

Dictionary histories of crises theories 155 theories of Jevons and Moore, Slutsky on random processes, the modern stochastic theories of Frisch and Lucas, but also the political business cycle approaches. Among proper economic theories, the following categories are cited: first, the historic–economic ones, emphasizing the role of the specific economic order and constitution. This includes the Marxists, but also the theories emphasizing overinvestment (Schumpeter, Wicksell), income distribution (Lederer, Preiser), money and credit (Friedman, Hawtrey), or psychology (Jöhr, Keynes). Second, the theories emphasizing the adjustment processes following monetary shocks (equilibrium business cycles), real shocks (real business cycles), overlapping generations and sunspot theories. Third, the theories of Keynesian descent, including the multiplier–acceleration models and the models emphasizing the distribution of income and wealth (Goodwin, Kalecki, Kaldor). These are particularly interesting for the explanation of the persistence of fluctuations and of hysteresis. R. Boyer’s long entry on FLUCTUATIONS ET CROISSANCE (fluctuations and growth) in →Greffe et al.’s Encyclopédie économique (1990) surveys and schematizes a dozen models of business cycles (crises theories are not considered). The starting point is the observation that there are two dilemmas recurring in the entire literature on fluctuations: the first is whether the alternation of expansions and contractions is an endogenous phenomenon – that is, the result of the system’s intrinsic dynamics – or whether it is instead the result of external impulses superimposed on a propagation mechanism sustaining them and turning them into a cyclical behaviour. The second dilemma is whether fluctuations are due to monetary mismanagement, or whether real phenomena are involved in an essential way (pp. 624–626). A scheme in tabular form is offered based on the characterization of their impulse factors and propagation mechanisms (pp. 648–649). Two observations are in order concerning this scheme. The first is that although the (mainly) exogenous and (mainly) endogenous theories are separated in distinct groups, the real/monetary distinction does not play a part in the schematism but is confined to the list of impulse factors or (more rarely) propagation mechanisms. This reveals that the two above-mentioned dilemmas are not on the same footing in terms of the construction of a taxonomy. The second remark concerns the adoption throughout the table of the impulse/propagation distinction. As Boyer himself observed, this concept is based on Frisch’s methodology for incorporating external shocks into the basic economic mechanism. It is doubtful that it is sensible to transfer it to endogenous approaches. In fact, if the cycle is self-sustained, in the sense that there are forces dragging the system’s dynamics along a cyclical trajectory, whether and how the trajectory is disturbed is highly irrelevant for the persistence of the cycle. The statute of the ‘impulse’ is completely different in endogenous and exogenous models. In exogenous models, external shocks are the necessary source of energy, keeping fluctuations alive against the system’s tendency to return to an equilibrium state; in endogenous models, where fluctuations are persistent, exogenous shocks can determine shifts in the system’s initial conditions or alterations in the system’s parameters, implying quantitative or even qualitative changes in the system’s dynamics (e.g. temporary deviations from the ‘normal’ cyclical behaviour, in the simplest case of the system’s dynamics being described by a stable limit cycle).

156 Daniele Besomi Franck Portier also traces the history of the subject along the endogenous/ exogenous distinction. He correctly applies the impulse/propagation approach only to the exogenous models, but argues that there is no discontinuity between exogenous and endogenous theories. The history of the impulse–propagation models begins with Frisch and Slutsky, and includes the modern approaches à la Lucas and the real business cycle. They share the assumption that the economy tends towards a stable equilibrium and that oscillations are kept alive by random shocks, with the propagation mechanism transforming a white noise into a quasicyclical movement. Endogenous theories assume instead that equilibrium is unstable, but nonetheless the system’s dynamics is constrained and does not explode. Their history begins with Hicks and Goodwin, and is given microeconomic foundations by Benhabib and Day, and Grandmont. In Portier’s view, the discontinuity is bridged by the theories of sunspot equilibria (following Azariadis), where at the origin of the cycle there is the uncertainty linked to the observation of exogenous signals, not related to the fundamentals of the economy (‘sunspots’). This obviously differs from the endogenous approaches, as the persistence of the cycle in a stable system with rational expectations needs these exogenous signals; but it also differs from the impulse–propagation models, where the shocks are intrinsic as they affect the fundamentals (CYCLES ÉCONOMIQUES, in →Jessua et al., Dictionnaire des sciences économiques, 2001).

4.9.4 Stability vs. instability An issue related to, but not identical with, that of the exogeneity or endogeneity of the causes of the cycle concerns the stability of equilibrium. As the previous subsection has made clear, there is general agreement in the literature that exogenous shocks have been relied on to supply energy to sustain oscillations in stable systems, while endogenous oscillators presuppose an unstable equilibrium, so that the system will not settle there. The two notions, however, do not fully overlap. Some believers in the stability of equilibrium did not rely on exogenous shocks but on other mechanisms to sustain oscillations. Aftalion, for instance, was a firm believer in Say’s law and in the idea that the system tends towards a position of equilibrium, but maintained that the existence of reaction lags prevents it from settling there and condemns it to perpetual oscillations around it; or the sunspots equilibria models, with their ambiguous statute as to endogeneity and exogeneity, are nevertheless firmly planted in a stable world. While these approaches, like those underlying other cobweb-like mechanisms based on lags, errors or calculation and frictions, produce technically endogenous (or semi-endogenous) mechanisms, they differ from other endogenous models such as Goodwin’s, Hicks’s and Harrod’s on a very fundamental level, concerning the general view of the working of the economic system. Keynes characterized the positions as follows: On the one side are those who believe that the existing economic system is, in the long-run, a self-adjusting system, though with creaks and groans and jerks, and interrupted by time lags, outside interference and mistakes [. . .].

Dictionary histories of crises theories 157 These authorities do not, of course, believe that the system is automatically or immediately self-adjusting. But they do believe that it has an inherent tendency towards self-adjustment, if it is not interfered with and if the action of change is not too rapid. On the other side of the gulf are those who reject the idea that the existing economic system is, in any significant sense, self-adjusting. They believe that the failure of effective demand to reach the full potentialities of supply, in spite of human psychological demand being immensely far from satisfied for the vast majority of individuals, is due to much more fundamental causes. (Keynes, 1934c, pp. 486–487)16 If there is a relationship between the distinction of stability/instability and exogenous/endogenous, it is not on the ontological level of the origin of causes, but on the epistemic level. Stable systems do not incorporate in themselves the possibility of persistent oscillations, unless they are caused by external influences or malfunctioning of some part of the system; those who refer to such systems therefore have to explain the cycle in terms of something extraneous to their inner nature. On the contrary, incorporating the possibility of motion requires postulating at the outset that the system is not attracted towards a stable stationary point; explaining the cycle from within the logic of the system thus requires the insertion of some destabilizing factor among its premises.17 One early and two recent dictionary entries focus on the stability issue in working out a taxonomy of the theories of crises. In 1933, Eugen Altschul expounded the problem of the business cycle as follows. A disturbance in the equilibrium between supply and demand should be compensated by price changes, inducing a movement in the opposite direction. Why is it that an initial deviation from equilibrium breaks this powerful barrier and amplifies instead of becoming smaller? The classical economists faced the contradiction between their belief that a disturbance should self-correct and the fact that crises actually happened in the real world by interpreting them (this was Say’s contribution) as partial overproduction crises. This argument presupposed a barter economy. When it is admitted that money is used as a means of exchange, there result two main groups of monetary theories: one focuses on the general price level, which may vary, depending on changes in the value of money (Fisher); the other relies on the separation of natural and market interest rates (Wicksell). Their argument aims at showing how monetary causes can temporarily prevent market forces from bringing the system back to equilibrium. Another approach considers that the dynamics of goods production may itself cause changes in the state of the economy, thereby effecting further changes. If the system were in equilibrium, there it would remain; but as there is an underlying expansion, equilibrium is continually upset (Schumpeter). Finally, underconsumption and overproduction (overaccumulation) theories deal with goods rather than focusing on money. The former maintains that purchasing power cannot keep pace with production, the latter that investment is pushed to a degree beyond what can be maintained (KONJUNKTURTHEORIE, in →Palyi and Quittner, Handwörterbuch des Bankswesens, 1933).

158 Daniele Besomi In 1999, C. J. Niggle presented three historical phases of BUSINESS

CYCLE

THEORIES; he discussed the position of various theorists with respect to the stability

issue: All business cycle theories are based upon one of two sharply distinct Schumpeterian ‘pre-analytic visions.’ One approach sees the economy as being essentially stable, with its normal state being one of relatively full utilization of resources, and growth in the level of output resulting from supply-side factors. Expansions or contractions in economic activity are due to exogenous shocks to the system such as technological change, fluctuations in the prices of imported goods, changes in the quantity of money in circulation, or war. If disturbed, powerful equilibriating forces, coordinated through changing price levels in competitive markets, quickly return the economy to its normal, highemployment growth path. Most of the classical economists appear to have held this vision, and it reappears in contemporary orthodox economics as part of the new classical economics. In sharp contrast is the vision shared by dissenting heterodox economists, including Marx, Kalecki, Mitchell and Keynes. They saw the economy as being potentially unstable, with growth and full utilization of resources a possible but no more likely state than recession, depression or boom. Fluctuations in economic activity are seen as being due to inherent endogenous processes that take place during expansions. Furthermore, the equilibriating, stabilizing power of markets is weak and the processes slow. Although the various theories sharing this vision differ with respect to the specific disturbance variables seen as the most important proximate cause of fluctuations, most of them emphasize aggregate demand factors. In addition, many heterodox theories treat demand-side fluctuations as dialectically connected with the process of supply-side economic growth. (In →O’Hara’s Encyclopedia of political economy, 1999, p. 51) In the first epoch of business cycle theorizing – classical economists and Marx – the watershed is Say’s law’s condemnation of general gluts as absurd, against the opposition of Malthus’s underconsumptionism and the early cycle theories of Tooke, J. S. Mill and Marx. In the second phase, covering the time between Marx and Keynes, business cycle theories flourished as a separate line of inquiry, accompanied by the spreading of the perception that the instability of capitalism was increasing. The theories of Tugan-Baranovsky, Hawtrey and Robertson are mentioned, Schumpeter and Keynes summarized at some length. The third phase of the development of business cycle theories sees the opposition of the investigations of Mitchell, the multiplier–accelerator models, and the post-Keynesian theories of Minsky and modern Marxists on one side, and the monetarist approach and of real business cycle theories on the other. Besomi’s entry on BUSINESS CYCLES, THEORIES for →Darity’s International encyclopedia of the social sciences (2008) reports how the epistemic implications of the stability issue became apparent in the reflections on the nature of the business cycle in the inter-war years (in particular due to Löwe, Hayek and Harrod) and how

Dictionary histories of crises theories 159 the subsequent theoretical developments dealt with the issue, on one side or the other of the divide between the ‘orthodox’ who believed that the system eventually tends towards a state of equilibrium, and the ‘heretics’ who disputed such assumption. The development of ‘formal dynamics’ was particularly affected by this issue: it was explicitly discussed in the debate between Frisch and Kalecki, and taken up by Kaldor and then Goodwin when they introduced non-linear modelling precisely to account for the persistence of the cycle, while the equilibrium and real business cycle theories revived instead the orthodox approach.

4.10 MISCELLANEOUS APPROACHES The taxonomy of taxonomies offered in these pages unavoidably suffers the same limit as the original attempts at classifying business cycle theories: due to the richness and complexity of the materials at hand, any categorization is bound to be unable to fit all contributions into one and only one pigeon-hole. Indeed, some dictionary entries could also fit into sections other than those used here, while some do not fit at all. Among these, some are of scant interest (e.g. Dietzel’s distinction between crises of agricultural and non-agricultural origin in the entry on ERNTEN (ERNTZYKLUS UND WIRTSCHAFTSZYKLUS) (Harvests (harvest cycle and economic cycle)), in →Conrad et al., Handwörterbuch der Staatswissenschaften, 1909), but others are more intriguing.18 Jöhr offers an articulated, mixed-approach survey of business cycle theories. He categorizes the various contributions in the field by the direction of research. The first, ‘theoretical business cycle research before Keynes’, is a mixed bag referring to the classical debate between Say and Ricardo on one side, and Malthus and Sismondi on the other; Marx; and business cycle theory before the First World War, from which Haberler’s schematism is explicitly borrowed. Jöhr’s second category is ‘Empirical business cycle research’, including the descriptive approach of the German historical school and the statistical approach pioneered by Juglar and later pursued by Mitchell and the various business barometers institutes. The next categories include the writers linking theoretical and empirical research, in particular Tugan-Baranovsky, Aftalion, Lescure and Schumpeter. There follow Keynes and the Keynesian dynamic models; the econometric business cycle research, ‘the second stage of the synthesis between theory and empiricism’; and finally the research into psychological and political business cycles. Jöhr also discusses, with reference to a number of authors, the main problems of business cycle research, namely, the relationship of causal explanations and empirical research, of statics and dynamics, and of exogenous and endogenous explanatory factors (KONJUNKTUR. I. THEORIE, in →Beckerath, Handwörterbuch der Sozialwissenschaften, Vol. VI, 1959, pp. 97–105). Manfred Neumann, starting from the principle that the problem of business cycle theory is to explain the disequilibrium between production and aggregate demand, and taking for granted that no such thing can take place in a barter economy, lists the following kinds of explanation: first, endogenous theories, of which he discusses

160 Daniele Besomi the multiplier–accelerator models, the insertion of ceilings and floors, and the approaches stressing the intrinsic instability of growth. Second, the theories focusing on distributive conflicts, in particular Marx and Goodwin (on Neumann’s account of Goodwin’s non-linear model, see Chapter 26, Section 26.2). Third, the theories relying on accidental causes: econometric models and models incorporating exogenous shocks (KONJUNKTURTHEORIE, in →Glastetter, Handwörterbuch der Volkswirtschaft, 1978). Weinberger briefly lists the categories suggested by Heinrich’s taxonomy (1928), namely, the disproportionality theories that try to explain crises from the side of goods; the monetary theories, focusing instead on the monetary side; and the natural and psychological theories, relying on crop fluctuations, weather cycles, demographic changes, and on shifts of moods (KONJUNKTUR UND KRISEN, in →Sacher’s Staatslexikon, 1929, p. 514). Eric Streissler classifies business cycle theories according to their position with respect to three opposing viewpoints. The first contrasts monetary and real theories, with Wicksell, Hayek and later Lucas on one side, and the multiplier–accelerator theories on the other. The second opposes psychological theories (Pigou and Jöhr) to physical theories (for instance, those based on disproportionalities). The last contrasts underconsumption and overinvestment approaches, represented respectively by Keynes, and by Hayek and Spiethoff (KONJUNKTURTHEORIE, in →Herzog et al., 1987, Evangelisches Staatslexikon). The latter opposition is also found in Ricossa’s otherwise unsystematic survey, which lists a number of important theories, but especially pauses on underconsumption and overinvestment theories, which he, like Streissler, considers as the complementary side of the same issue. Emphasis on lack of consumption is qualified as ‘leftwing’, while emphasis on excess of accumulation is qualified as ‘rightwing’ (CICLO, in →Ricossa, Dizionario di economia, 1982, p. 65). Guerrien suggests (without, however, elaborating further) that ‘practically all theories of the cycle can be grouped into two broad categories: those attributing a decisive role to monetary and financial phenomena, and those looking for the causes of crises at the level of production and exchange’ (CYCLE (THÉORIES DU), in →Guerrien, Dictionnaire d’analyse économique, 2002, p. 136) De Vecchi’s very long entry on CRISI for →Lunghini’s Dizionario di economia politica (Vol. 7, 1983) is entirely devoted to the history of the subject. The presentation is chronological and by schools of thought (as required by the dictionary’s layout; see note 11, Chapter 1). The author, however, is particularly interested in the epistemic distinction between mechanistic approaches and approaches incorporating instead into their core non-predictable and non-calculable elements, which he follows through the history he reconstructs (for a more detailed description, see Chapter 28, Section 28.7). In his brief reconstruction of the usage of the term CONJUNCTURE, Kuznets also focuses on an epistemic issue, namely, the shift from the atomistic approach of the classical economists towards the emphasis on organic interdependence by the first German users of the term (Lassalle, Schäffle and Wagner) and finally towards the emphasis on the incalculability of market conditions by the later German users (in →Seligman’s Encyclopaedia of the social sciences, 1931).

Dictionary histories of crises theories 161

4.10.1 A chronosophical approach One of the most intriguing schematizations of crises and cycle theories is offered by Krzysztof Pomian in the entry on CICLO for the →Enciclopedia Einaudi (Vol. 2, 1977). The author is interested in the notion of time in relation to history, and in the relationship between past, present and future, which he calls ‘chronosophy’. The entry is concerned with the philosophical and historical aspects of these issues, but several pages (1164–1174) are dedicated to the idea of progress and cyclical recourse in economics. During the first half of the nineteenth century, most economists shared the view that the development of capitalism is of a linear and cumulative kind. They had no theoretical interest in crises, and were assisted in their belief by Say’s law, which guaranteed that disruptions of the harmony between supply and demand could only be caused by desultory accidents. As a consequence of the work of Clément Juglar, who supplied statistical evidence of the periodicity of crises,19 the general perspective started to change and new questions were asked – in particular, whether the development of the economy must necessarily follow a cyclical course. The cycle, however, was no substitute for progress: the new chronosophy combined the traditional faith in progress with the new oscillatory behaviour. This, however, in the view of Juglar and his contemporaries during the second half of the nineteenth century, was still due to causes essentially alien to the ‘normal’ working of the economy: the speculative ‘human nature’ for Juglar, Jevons’s sunspots, the oscillations of crops or in the value of gold for other economists. ‘All these attempts are based on the conviction that linear growth is the normal evolution of capitalist economy. The mechanisms governing it cannot be deemed responsible for the recurrence of crises. Their causes must therefore be sought outside it. Thanks to this duality between internal perturbations and external factors it was possible to reconcile economic cycles and linear time. The latter characterizes history, the former depend on nature.’ Only Marx was an exception. He thought that the disequilibria of capitalist economies – disequilibria not between supply and demand, but in the relationship between capital and work, both taken as a totality – would grow in size as production progressed, so that deeper and deeper crises would succeed each other at shorter intervals. Up to the world crisis in 1929, the study of cycles focused on the endogenous causes of their periodical return. At first – in Pomian’s reconstruction – writers tried to recognize the common elements in all cycles and to identify their common cause. Soon, however, explanations combined several causes, also because meanwhile cycles of different lengths were described, and the nature itself of ‘the’ cycle became much less clear-cut than it was in Juglar’s time. Yet this line of research remained anchored to a static approach until the early 1930s, when the new ‘dynamic’ theories emerged emphasizing the role of time. The lag between cause and effect was called upon to explain the chaining of events, capable of determining cumulative consequences. While these theories were well suited to explaining the causes of oscillations, they left out the long-term development. Schumpeter tried instead to account for both cycles and growth, and for cycles of different length. In Pomian’s view, only the theories of Marx and Schumpeter are open to chronosophical problems. They incorporate reflections on issues that are not strictly

162 Daniele Besomi economic; they focus on the relationships between the present and future of capitalism, and of the present and the past modes of production. The ‘time’ incorporated in their analys not only is linear and cyclical at the same time, but also is a global time, the time of the history of capitalism, rather than the local time of its economic domain only.

NOTES 1 Duncan’s observation in 1842 that to almost every writer discussing crises there corresponds a different explanation is still largely applicable nowadays (‘According to Hudibras, and other learned authorities, “every why has a wherefore”; and so various are the theories which have been formed on this subject, that it might almost be added, that “every man has a wherefore”’ ([Duncan] 1842, p. 5). 2 In the German-speaking area this view was held by Wagner, KRISEN, in →Rentzsch, Handwörterbuch der Volkswirthschaftslehre, 1866 (see Chapter 14). 3 This is reflected in the definition of ‘crisis’: while mid-nineteenth-century dictionaries in other languages defined crises in terms of ‘disturbances’, German dictionaries could specify that the disturbances referred to the equilibrium between supply and demand (see Chapter 3.3.8.3). 4 I use Keynes’s convenient expression, but I must point out that these writers were far more numerous than the three listed by Keynes: Marx, Gesell and Douglas. Keynes’s modern critics and supporters of Say’s law (see e.g. Kates, 2003) also underestimate the number and variety of criticisms of the law of markets. 5 These – especially the medical one – were frequently used metaphors at the time. For a discussion, see Besomi, 2011. 6 This intermediate category may have been introduced as a partial response to von Bergmann’s criticism, who pointed out that writers such as Wagner, Schäffle and Lexis occupied a middle ground, which he described as ‘social’. Bergmann also observed that Herkner found particularly easy the classification in terms of the economic consequences as these normally show sharper contours than the real theories, and that he was led to include – rather oddly – Malthus with the socialists (Bergmann, 1895, p. 432). More on Bergmann on the taxonomy of crises theories below, Section 4.6.1. 7 A political taxonomy based on the opposition between liberals (classical and neoliberals) and Marxists was also offered much later by Bernard and Colli. Classical liberals saw crises as abnormal incidents resulting from interferences (whether individual or political) with the self-regulatory action of the market; this intention of such a view is more apologetic than explanatory. While the classical liberals based their interpretation on a static view of equilibrium, the new-liberal approach moves from a dynamic analysis seeing crises as the result of some objective friction or delay of reaction; this analysis has been progressively integrated within the study of cycles. Marxist analysis, based on causal dialectics, sees the origin of overproduction crises in the discordant development of production means and demand, the latter depending on income distributon and the tendency of profit rates to fall (CRISE (ÉCONOMIQUE), in →Dictionnaire économique et financier, 1996, pp. 494–495). 8 In 1978, Giannetti also stressed that the cycle was a form that could substitute for both the optimism of classical economists and the Marxist faith in the final breakdown of capitalism, equally shattered by the prolonged depression of the last quarter of the nineteenth century (CRISI ECONOMICHE: L’OTTOCENTO, in →Carmagnani and Vercelli, Il mondo contemporaneo, pp. 111–112). 9 For a detailed discussion of the terminological issues implied by this change, see Chapter 3, Section 3.2.9.

Dictionary histories of crises theories 163 10 On which more below, in Section 4.6.1. 11 Haberler’s successor at the League of Nations, Tinbergen, also believed in the necessity of unifying conflicting theories: see Chapter 23, Section 23.4. 12 I am grateful to the Provost and Fellows of King’s College, Cambridge, copyright owners, for permission to cite these passages from unpublished manuscripts by Keynes. 13 This conclusion is consistent both with Keynes’s own and, ironically, with that maintained by the modern supporters (against Keynes) of Say’s law; see Section 4.3.4 above. 14 It is worth emphasizing that Balogh was the first and only contributor to dictionaries in the twentieth century to mention these theories, by far the richest class of explanations throughout most of the nineteenth century. 15 It is only fair to say here that Haberler’s aim was precisely that of synthesizing the elements of truth of various theories once freed of the seeming differences between them generated by their peculiar languages. 16 This is the transcript of a radio conversation, which explains Keynes’s loose language. That this problem was fundamental, however, was an opinion shared by other authorities, such as Hayek and Löwe. For a detailed discussion, see Besomi, 2006a. 17 Although this epistemic distinction was already clear to some writers in the inter-war years (in particular Löwe, 1926 and Harrod, 1934; see Besomi, 2002, and Besomi, HARROD’S INSTABILITY PRINCIPLE AND TRADE CYCLES, in →O’Hara’s Encyclopedia of political economy, 1999), the mathematical formalism available at the time did not permit the early ‘econometricians’ to explore the requirements for endogenous models of the cycle. Linear functional equations, in fact, admit persistent oscillations only with a specific set of parameters, at which the system becomes structurally unstable (strictly speaking, this is not true of lagged differential equations, but these properties were discovered only later). Writers could thus find themselves in the odd situation of wanting to express a system the nature of which was intrinsically oscillatory by means of an instrument that did not allow them to do so. A case in point is Kalecki: see Besomi, 2006b. 18 The recognition of three theoretical scenarios offered by Pierluigi Ciocca in the entry on CRISI ECONOMICA E FINANZIARIA for →Bedeschi’s Enciclopedia delle scienze sociali (1991) – a Thornton–Bagehot line, the explanations based on the theories of credit and speculation, and the approaches falling in the Marx–Keynes–Schumpeter line – also does not fit in any of the above typologies. It is summarized in Chapter 28, Section 28.6. 19 Pomian stresses that this was itself a novelty, as previous chronosophies were based on projections into the future of evaluations of the present and past conditions mostly on ideological grounds. After Juglar, the presence of the repetitiveness of the cycle becomes an observable fact (pending the judgement on the pertinence of the chosen indexes).

REFERENCES Bergmann, E. von, 1895, Die Wirtschaftskrisen. Geschichte der nationalökonomischen Krisentheorien (Stuttgart: W. Kohlhammer). Besomi, D., 2002, Löwe’s and Hayek’s influence on Harrod’s trade cycle theory, European Journal of the History of Economic Thought, 9: 1, Spring, pp. 42–56. Besomi, D., 2006a, Tendency to equilibrium, the possibility of crisis, and the history of business cycle theories, History of Economic Ideas, XIV: 2, pp. 53–104. Besomi, D., 2006b, Formal modelling vs. insight in Kalecki’s theory of the business cycle, Research in the History of Economic Thought and Methodology, 24A, pp. 1–48. Besomi, D., 2011, Crises as a disease of the body politick. A metaphor in the history of nineteenth century economics, Journal of the History of Economic Thought, 33: 1, March, pp. 67–118.

164 Daniele Besomi [Duncan, W. B.], 1842, Mercantile embarrassments, and the present state of the banking system (Edinburgh: John Johnstone). Haberler, G. von, 1937, Prosperity and depression. A theoretical analysis of cyclical movements (Geneva: League of Nations). Hansen, A. H., 1927, Business-cycle theory. Its development and present status (Boston: Ginn). Harrod, R. F., 1934, Doctrines of imperfect competition, Quarterly Journal of Economics, 48, May, pp. 442–470. Heinrich, W., 1928, Grundlagen einer universalistischen Krisenlehre (Jena: Gustav Fisher). Jones, E. D., 1900, Economic crises (New York and London: Macmillan). Kates, S., (ed.), 2003, Two hundred years of Say’s Law. Essays on economic theory’s most controversial principle (Cheltenham and Northampton: Edward Elgar). Keynes, J. M., 1934a, typed letter to Elliott Felkin at the League of Nations, Geneva, 30 August 1934 (carbon copies in Keynes papers, King’s College, Cambridge, CO/3/33; and in Haberler Papers, Hoover Institution, Stanford, Box 66: Correspondence/Memoranda, 1934–1935). Keynes, J. M., 1934b, typed letter to Gottfried Haberler, Geneva (in Haberler Papers, Hoover Institution, Stanford, Box 66 (Correspondence/Memoranda, 1934–1935); carbon copies in Keynes papers, King’s College, Cambridge, CO/3/37). Keynes, J. M., 1934c, Poverty in plenty: is the economic system self-adjusting?, The Listener, 21 November. Reprinted in The collected writings of John Maynard Keynes, D. Moggridge (ed.) (London, Macmillan, 1973), pp. 485–492. Keynes, J. M., 1939, Letter to E. A. G. Robinson, 28 August. In The collected writings of John Maynard Keynes, D. Moggridge (ed.) (London: Macmillan, 1979), XXIX, pp. 273–274. Löwe, A., 1926, Wie ist Konjunkturtheorie überhaupt möglich?, Weltwirtschaftliches Archiv, 24. English translation: How is business cycle theory possible at all?, Structural Change and Economic Dynamics, 8, 1997, pp. 245–270. Loyd, S. J., 1840, Remarks on the management of the circulation and on the condition and conduct of the Bank of England and of the country issuers, during the year 1839 (London: P. Richardson). Mitchell, W. C., 1927, Business cycles: the problem and its settings (New York: NBER). Northcote, S. E., 1886, Depression of trade and industry. Final report of the Royal Commission appointed to inquire into the depression of trade and industry; with minutes of evidence and appendices (Great Britain, Parliament. Command paper C. 4893, Session 1886). Patterson, E. M., 1915, The theories advanced in explanation of economic crises, Annals of the American Academy of Political and Social Science, LIX, May, pp. 133–147. Persons, W. M., 1926, Theories of business fluctuations, Quarterly Journal of Economics, 41: 1, November, pp. 94–128. Wright, C. D., 1886, Industrial depressions: the first annual report of the Commissioner of Labor (Washington, DC: Government Printing Office).

Part II

The classic dictionaries

5

Between progress and decline Crises in early French dictionaries and encyclopaedias (1830–1840) Ludovic Frobert

5.1 FRENCH DICTIONARIES c. 1830 If we envisage the nineteenth century in France, from the →Encyclopédie méthodique (1782–1832) by Charles-Joseph Panckoucke to the →Grande encyclopédie (1886–1902) by Marcelin Berthelot, as the century of dictionaries and encyclopaedias, then the 1830s constitute a crucial moment. The decisive technological and commercial innovations of the 1800–1830 period enabled the blossoming of the book and printing industry, and the real birth of the modern press. In 1832, →William Duckett’s Dictionnaire de la conversation et de la lecture capitalized on these various innovations, revitalizing the dictionary and encyclopaedia sector. In the following years, Duckett’s initiative was rapidly imitated, giving rise to a multiplication of publications of this sort. The years following the 1830 Revolution were both a period of technological upheaval in printing and a period of radical political, moral and religious change, while, at the same time, the first effects of the Industrial Revolution were being felt in France. During the 1830s several dictionaries specializing in commercial, industrial and financial subjects were published. In 1837–1839 the publishing house Guillaumin published the →Encyclopédie du commerçant. Dictionnaire du commerce et des marchandises, an adaptation (and not simply the French translation) of →John Ramsey McCulloch’s A dictionary, practical, theoretical and historical, of commerce and commercial navigation (1832, 2nd edn 1841). In the same epoch Joseph Monbrion published his Dictionnaire universel du commerce, de la banque et des manufactures (1838–1841). In the 1830s there also appeared general dictionaries and encyclopaedias. The dictionaries published at the time were of two sorts: on the one hand, there were the general, neutral dictionaries, which, for economic and strategic reasons, each publishing house had to have in its catalogue: such was the case for →L’encyclopédie moderne (1824–1832) or for →L’encyclopédie des gens du monde (1833–1844); on the other hand, there were the more militant dictionaries or encyclopaedias which were ‘more directly concerned with the propagation of knowledge considered as the privileged means to [effect] political, social or moral change’ (Mollier, 2000, p. 95). The period, which was characterized by the assertion of positivism, witnessed the reaction expressed in the rise of

168 Ludovic Frobert Catholic encyclopaedias, the →Encyclopédie catholique (1839–1849) or the →Encyclopédie du dix-neuvième siècle (1839–1848) published shortly before Abbé Migne’s Encyclopédie théologique (see Chapter 10). Yet these very same 1830s were marked by the rebirth of the republican movement and the first steps of socialism. They thus witnessed the first appearance of ‘democratic’ encyclopaedias; at the end of 1833, Pierre Leroux and Jean Reynaud published the first instalments of the Encyclopédie pittoresque à deux sous, which quickly became the →Encyclopédie nouvelle, quickly considered as the general survey of the new socialist doctrines. And several years later, the French Republican editor LaurentAntoine Pagnerre (1805–1854) published his →Dictionnaire politique: encyclopédie du langage et de la science politiques (1842). These new dictionaries and encyclopaedias of the 1830s could not avoid the theme of economic crises. Indeed, shortly after 1815 there was a series of economic crises in France. The crises of 1825–1826, 1828–1832 and 1836–1839 drew attention to the regular repetition of these phenomena within nascent industrial societies: contemporaries talked of ‘commercial crises’ or ‘industrial crises’. Two famous texts, both published in 1840, bear witness to the acclimatization to this notion of crisis. In his pamphlet Qu’est ce que la propriété? Pierre-Joseph Proudhon noted the ‘frequency and intensity of commercial crises’ in industry and linked the phenomenon to competition and the property regime (Proudhon, 1840). On the other hand, Alexis de Tocqueville wrote of the American situation, ‘I believe that the return of industrial crises is an endemic illness in the democratic nations of our time’ (Tocqueville, 1840). We thus find ourselves at the dawning of precise analysis and observation of the phenomenon and, as R. Koselleck (1997) so brilliantly demonstrated, in a period in which political and social concepts incessantly changed meaning and acquired a normative dimension, relinquishing claims to merely describe social phenomena and assuming the vocation of influencing them. This structuring power enabled them to look not only towards the past, but also towards the future. In this context, four different conceptions of the crises and their links with progress emerged. These will be presented here, while a more specific examination of the analytical contents of the corresponding entries will be found in Chapter 6.

5.2 FRENCH LIBERALS BEFORE 1848: PROGRESS PUNCTUATED BY CRISES Before its definite conservative turn following the events of 1848 (Le Van-Lemesle, 2004), the French Liberal School put forward an original neo-Smithian economic analysis, which was embedded in a doctrinal programme which, in more or less radical versions, dominated liberal industrialism (Béraud et al., 2004). Although a part of the Liberal School with Charles Dunoyer had already developed an intransigent economic liberalism, other movements within the School had more balanced views. One such case is represented by Adolphe Blanqui, who succeeded JeanBaptiste Say at the Conservatoire National des Arts et Métiers, while remaining

Crises in early French dictionaries 169 both an attentive and a critical reader of the Saint-Simonians, Fourierists and their related dissident movements (Arena, 1991). In 1848, his report on the working classes banished him from the Liberal School (Des classes ouvrières en France pendant l’année 1848, 1849). Towards 1840, a moderate liberal such as Blanqui opposed, first and foremost, the rebirth of an economic nationalism supported by the Orleanist power and perfectly expressed in the speeches of Baron Charles Dupin (Todd, 2008). In 1839, the Baron observed ‘the alternation of convulsive progress and sudden convulsion’ suffered ‘by national industry’ (Dupin, 1839, p. 5), linked the phenomenon to the excess of individualism and competition, and took up the defence of a capitalism of large units in constant relationship to the state, the only system capable of ensuring the coordinated development of national industry (Charles Dupin, CRISE COMMERCIALE, in →Encyclopédie du dix-neuvième siècle, 1846, Vol. 9, pp. 308–311). In contrast, Blanqui developed a conception which relativized the gravity and periodicity of the crises, a conception in which the linearity of progress depends upon the healthy cohabitation of industry and liberty, a liberty controlled by the Saint-Simonian imperative of attending to the improvement ‘of the most numerous and poorest class’. Progress globally represents a growing trend; industrial growth, however, constitutes a complex process and it is thus not surprising that it can be troubled from time to time by accidents and crises.1 Confronted with this dynamic, complex process, the error lies in the constant temptation of an ‘excess of protection’; the control of industry by the state is possible, the regulation or organization of competition in certain areas such as credit is necessary, but these interventions must not become excessive. In this context, crises are thus ‘disruptions which commerce or industry undergo from time to time under the influence of often very diverse causes, internal or external . . . they are temporary accidents, storms which momentarily trouble the serenity of the industrial horizon and after which, apart from a little damage, business returns to its usual course’ (A. Blanqui, CRISE COMMERCIALE, →Encyclopédie des gens du monde, 1836, Vol. 7, pp. 257–259). With a few variations, the ‘commercial crisis’ entries of the later liberal dictionaries used this general outline (Charles Coquelin, CRISES COMMERCIALES, →Dictionnaire de l’économie politique, 1852–1853, Joseph Garnier, CRISES COMMERCIALES, →Dictionnaire universel théorique et pratique du commerce et de la navigation, 1859). During the years 1830–1848, the French Liberal view on crises and progress consisted of three propositions: regular growth is a characteristic feature of industrial society; this growth may be temporarily and irregularly disturbed by crises of mainly exogenous origins; and social progress is the natural destiny of industry.

5.3 THE FRENCH REPUBLICANS: THE POSSIBILITY OF PROGRESS WITHOUT CRISIS Under the July monarchy, the Republican party remained mainly prohibited and clandestine. However, during the 1830s, clubs and associations broadly developed and diffused the republican ideas and doctrines (Tchernoff, 1901; Weill, 1928;

170 Ludovic Frobert Gilmore, 1997). In the autumn of 1833, Jean Reynaud and Pierre Leroux were entrusted with the publication of a manifesto, a synthetic text for the republicans gathered together in the Société des Droits de l’Homme, of which they were to write, ‘this party unanimously conceives liberty to be its goal, the assistance of the proletariat to be its first duty, the republican to be its agent and the sovereignty of the people to be its principle; finally it considers the right to [free] association to be the consequence of this principle and the means to bring about its execution’ (Leroux and Reynaud, 1833, p. 6). After several defeats (most notably in June 1832 and April 1834), the republican movement recomposed its moderate branch under the direction of men such as Armand Marrast, Étienne Garnier-Pagès and younger zealots who wrote in their paper Le National. One of the main problems confronting these authors was to study the parallel and paradoxical growth of industry and exchange, on the one hand, and of pauperism, on the other, and to show how the Republic could solve this problem, which had appeared even more complex since the recent investigations carried out by Louis-René Villermé (Tableau de l’état physique et moral des ouvriers des manufactures de coton, de laine et de soie, 1840) and Étienne Buret (De la misère des classes laborieuses en Angleterre et en France, 1840). In his study, Buret explained that ‘destitution is morally felt poverty’ (Buret, 1840), an expression which bears witness to the fact that the evils of the nascent industrial system were not only material, but also moral and political, since the workers were constantly threatened by domination. In 1842 this republican movement published its own general survey, →Duclerc and Pagnerre’s Dictionnaire politique. Within the group writing the Dictionnaire, tensions already existed between, on the one hand, those who believed that suffrage reform and the advent of republican power would suffice to resolve the social issue through strictly political means and, on the other hand, those who already thought that, as well as the political dimension, reform should also lead to profound modification of the workings of the economy. The main contributor for the economic entries of the Dictionnaire politique was Jean-Gustave Courcelle-Seneuil. Courcelle-Seneuil explained that the crisis manifests itself in industry and commerce as a suspension of business. Thus, ‘the principal character of these crises is the weakening of credit’ (CRISES, Dictionnaire politique, pp. 298–299). The origins of such a phenomenon are numerous: ‘disturbances’, ‘surplus of commerce or unfortunate speculations’, ‘sudden variations in the prices of merchandise’; in his 1840 work, Le crédit et la banque, Courcelle-Seneuil noted that ‘these alternatives of rise or fall are generally caused by the vicissitudes of war, the alternatives of war or peace, and, above all, production surpluses’ (1840, p. 17). What must be seen in this list of disparate causes is, above all, the extreme vulnerability of the present economic system, which spontaneously and without doubt produces wealth, but which also creates cumulated disorder and disturbances (here Courcelle-Seneuil is insisting on the propagation of crises) and thus requires regulation. So the author does not condemn the economic or financial system but, rather, the absence of adequate political regulation of this system. Thus, in 1840–1842 these reasons led him to ultimately place at the origin of crises a sum of individual errors, erroneous economic choices made without any element of

Crises in early French dictionaries 171 collective guidance: ‘commercial crises are but the multiplication of particular disasters that the lack of foresight or unexpected accidents inflict daily on commerce’ (CRISES, p. 299). Significantly, the entry on CRISES ends in an examination of the possibility of preventing crises by balancing production and consumption, and curbing the excessive anticipations of agents. However, Courcelle-Seneuil notes that, at present, this prevention is as yet impossible, given the ‘powerlessness’ of ‘political economy’. But at this time, Courcelle-Seneuil and the other authors (such as, for example, Louis Blanc, who wrote the entry BANQUE in the Dictionnaire politique) were confident concerning the progress of a republican political economy. They thought that democratic regulation of a market economy was possible and they favoured state intervention and the development of a property-owning democracy (Frobert, 2010). In consequence, around 1840 the Republicans presented their own vision of crisis and progress. They favoured the development of commercial societies, but they were also aware of their new pathologies and, notably, the crisis. Commercial crises were not of exogenous causes but a consequence of growth and thus they must be regulated, even if this regulation seemed complex. Finally, this regulation could only be conducted by a future democratic regime with the power and the will to conduct welfare politics.

5.4 THE SAINT-SIMONIANS AND THEIR DISSIDENT MOVEMENTS: PROGRESS THROUGH THE ALTERNATION OF PERIODS Shortly after the publication of Nouveau christianisme and the death of the Comte de Saint-Simon (1825), the Saint-Simonian School was founded around such figures as Barthélémy-Prosper Enfantin, Saint-Amand Bazard, the Pereire brothers, Philippe-Joseph Buchez and Pierre Leroux. The school was soon shaken by schisms, with, among others, Buchez and Leroux becoming dissidents and each creating their own school around 1830. Although they differed on numerous points concerning the doctrine which should prevail for the new world of industry, orthodox Saint-Simonians and the dissident Saint-Simonians who followed Buchez or Leroux had a relatively similar common vision of the relationships between crisis and progress. The notion of progress through alternating ‘critical’ and ‘organic’ periods is central to the original vision of the Saint-Simonians (see [Barrault], Doctrine de Saint-Simon. Exposition, 1829, Vol. 1), whose intention was to construct a mathematical science of history (Picon, 2002). The critical periods constitute the phases of dissolution and dispersion, whereas the organic periods are dominated by unity and a single direction in industry, science and religion. In this alternation which punctuates the evolution of humanity, good dominates over evil and leads to progress. The 1830s should therefore close the critical period dominated by the Enlightenment, 1789 and the French Revolution, and inaugurate a new organic period dominated by industrialism. Moreover, this industrial society, in which the

172 Ludovic Frobert major obstacle that individual property constitutes would have been removed, undoubtedly represents for the Saint-Simonians a sort of end to history: once industry and association have established themselves, and the ‘administration of things’ has replaced the ‘government of men’, there will be progress but ‘without interruption, without crises, continuously, regularly and at every instant’ ([Barrault], Doctrine de Saint-Simon. Exposition, 1829). The Saint-Simonian point of view on the articulation of crisis and progress is perfectly expressed by Charles Lemonnier in the entry on CRISES COMMERCIALES (commercial crises) for the →Dictionnaire de la conversation et de la lecture (1835, Vol. 18, pp. 216–218). The crisis is an alteration of the commercial movement leading to a ‘momentary’ paralysis of the economy. Wars and revolutions and the bellicose past of Europe constitute one of the principal causes of economic disruptions. Innovation or technological change which produces creative imbalance constitutes the other cause since it is organically linked to the future blossoming of the world of industry. Given this, if ‘a commercial crisis is nothing more than a pause in the industrial development of a people’, it is often the condition of ‘future progress’ (CRISES COMMERCIALES, p. 216). Lemonnier continued to affirm that in a state in which all the industrialists are associated, it would be necessary to attenuate the crises, to control their impact on the most vulnerable working populations, and to equitably distribute their transitory negative consequences while still preserving the role they play as a stimulus to industrial progress. The link between alternation and progress can be found in the principal dissident Saint-Simonian movements. Pierre Leroux, however, is more inclined to insist on the notion of ‘continuous progress’ and to relativize the theme of alternation. Significantly, in the →Encyclopédie nouvelle (the work by Jean Reynaud and Pierre Leroux, the first fascicles of which were published in 1833–1834), no ‘commercial crisis’ entry is to be found, even if Jules Leroux (Pierre’s younger brother and author of the principal economic articles of the Encyclopédie) evoked the ‘alternation of progress and collapse’ experienced by commerce (COMMERCE, in Encyclopédie nouvelle, Vol. 2, p. 708). In this Saint-Simonian dissident movement, the alternation of periods of rise and fall is not truly a condition of progress. From this perspective, Pierre Leroux would later write, ‘A crisis which bears all its fruit is not followed by other crises’ (Lettre au Docteur Deville, 1859). Pierre-Joseph Buchez represents another major Saint-Simonian dissident movement which is interesting in that it extends the Saint-Simonian philosophy of history accentuating the link between progress and alternation: ‘Until now, the development of humanity has occurred through a succession of alternating movements which sometimes presents an organic character and sometimes a critical character’ (Introduction aux questions sur les sciences et les savants, 1828, MS quoted in Isambert, 1967). In the work of Buchez, even more than in that of the orthodox Saint-Simonians, one finds a complex cyclical theory of social evolution in which progress is again the consequence of alternation. It is thus no surprise to see the Buchez School taking an interest in commercial crises and their periodicity: the example provided by Auguste Ott is undoubtedly revealing (A. Ott, CRISE, →Dictionnaire des sciences politiques et sociales, 1854; see Chapter 10).

Crises in early French dictionaries 173 In brief, despite obvious differences, the vision of the Saint-Simonians, be they orthodox or dissident, presents three characteristics: the modern history of humanity, that of the new world of industry, achieves progress and this progress operates in the present through the alternation of critical and organic phases; the alternation of major phases has, in part, an equivalence at the level of crises and economic fluctuations (these fluctuations constitute an important element of the explanation of general alternations); and in a future state to be achieved by humanity, that is, the global association of all the industrialists, alternation will disappear and progress, driven by technological innovation, will be linear.

5.5 THE FOURIERISTS: CRISES AS INDICATORS OF THE CORRUPTION AND DECOMPOSITION OF ‘CIVILIZATION’ Charles Fourier and his school provided a radical demystification of the idea of progress. Fourier ceaselessly denounced the ‘vices of civilized industry’ (‘industrialism is the collection of all the vices, falsification, monopoly, bankruptcy, speculation, cornering [of markets] and usury’ (Fourier, 1829). Moreover, he found it frankly obscene to talk of progress when one observed the misery and precariousness that affected nine out of ten people at the time. Thus, he put forward the idea that, in its contemporary form, industrial civilization was heading straight for disaster. In this conception we cannot find the idea of a naturally ascending series whether it be with or without rhythm. Capitalism and the continuation of its destructive logic lead not to progress but to catastrophe. This vision integrates a reflection on crises and even if the Fourierists did not publish any dictionaries, their singular view on crisis/progress must be mentioned here. For Fourier and his disciples the crisis and its repetitions are vectors of decline. This reflection can be found in Fourier’s work, which uses the 1826 crisis as an example. Here, as elsewhere, he creates his own vocabulary, coining the expressions of ‘plethoric reversal’ (refoulement pléthorique) and ‘repercussions of abortive failure’ (contre-coup d’avortement) to designate two harmful commercial phenomena: poor anticipation of outcomes and attempted monopolization, the only aim of which is to cause a rise in prices. He wrote, ‘reversal is a periodic effect of the blind cupidity of merchants’, while ceaselessly denouncing the ‘anarchic commerce called free competition’ (Fourier, 1829). In 1833–1834, in La Réforme industrielle ou Le Phalanstère, the first journal of the Fourierist School led by Victor Considérant, Jules Lechevalier and Abel Transon, this articulation between crisis/decline or progress was taken up: Leroux’s idea of ‘continuous progress’ is rejected and the writers consider that social movement, in whichever direction, occurs through what Lechevalier calls ‘alternation’ of contrary movements (‘this alternation [. . .] constitutes the movement and life’ (Lechevalier, 1832, p. 131). Yet, in ‘civilization’ (French society of the 1830s, in Fourierist vocabulary) these alternations work for the decline and fall of this social system, with Abel Transon observing ‘descending vibrations’ in contemporary economic crises (Transon, 1833, p 16).

174 Ludovic Frobert Finally, when Fourier analysed the entire ‘social movement’ and drew a ladder representing the ages of humanity, he took great care to distinguish between the ‘false state’ and the ‘true state’. After a veritable overthrow or reversal, the three stages of the false state – patriarchy, barbarism and civilization (civilization being the contemporary period of liberal industrialism) – are followed by the stages of the true state – guarantism, socialism and harmonism. Thus, there is revolution and a change of system between the false and true states of humanity. The Fourierist vision is therefore structured by three themes: industrial civilization is fundamentally rotten and the idea of progress associated with this economic system is a fraud; in the present system, crises and their recurrence constitute an indicator of decomposition; and the appearance and repetition of these crises will constitute vectors for a change of system and for the transition towards an economic and social regime which is radically different from liberal industrialism (‘guarantism’).

5.6 CONCLUSION In this short survey, we have tried to make a rough sketch of the main different visions of the relationship between crisis and progress presented in dictionaries and encyclopaedias in France in the 1830s. A table can serve to summarize this intellectual hilly landscape: Liberals

Saint-Simonians Republicans

Fourierists

Progress or decay

Progress

Progress

Progress

Decay

Crisis or cycles

Crisis (exogenous)

Cycles

Crisis (endogenous)

Crisis/cycles

Capitalism or socialism

Market capitalism

Big corporation capitalism

Welfare-state capitalism

Socialism

In this essay it was possible merely to outline these different movements of thought – Saint-Simonians, republicans, Fourierists, Liberals – and to stress their differences. A more complete study would now have to balance these rough interpretations, but also to study them in detail and to understand whether and how these different positions communicated with each other during this period (approximatively the times of the constitutional monarchies in France, 1815–1848) in order to provide a better understanding of the complex past of the theory of economic crisis and business cycles in France in the first half of the nineteenth century.

Crises in early French dictionaries 175 NOTES 1 In the specialized dictionaries of the time, one also finds a general interpretation underlining the view that the period is one of political, economic and technological transition and that the institutions responsible for credit, especially financial and banking institutions, are not adapted to the ongoing evolutions and cannot cope with these impacts and changes. This interpretation, nevertheless, leads to the diagnosis of the subsiding of the crises based on, first, a more peaceful economic development and, second, a maturing of financial regulation (Monbrion, CRISE COMMERCIALE ET INDUSTRIELLE, →Dictionnaire universel du commerce, de la banque et des manufactures (1838), Vol. 1, pp. 636–637; Michel, CRISE COMMERCIALE, in →Guillaumin’s Dictionnaire du commerce et des marchandises (1839), Vol. 1, pp. 757– 758).

REFERENCES Arena, R., 1991, Adolphe-Jérôme Blanqui, un historien de l’économie aux préoccupations sociales. In Y. Breton and M. Lutfalla, L’économie politique en France au 19e siècle (Paris: Economica). [Barrault, E.], 1830, Doctrine de Saint-Simon: première année: exposition 1829 (Paris: Au bureau de l’Organisateur: chaz A. Mesmer). Béraud, A., Gislain, J. J. and Steiner, P., 2004, L’économie politique néo-smithienne en France (1803–1848), Oeconomia, Économie et Sociétés, 38 (2), pp. 325–418. Blanqui, A., 1849, Des classes ouvrières en France pendant l’année 1848 (Paris: Pagnerre). Buret, E., 1840, De la misère des classes laborieuses en Angleterre et en France, 2 vols (Paris: Paulin). Courcelle-Seneuil, J. G., 1840, Le crédit et la banque. Études sur les réformes à introduire dans l’organisation de la Banque de France et des banques départementales (Paris: Pagnerre). Dupin, C., 1839, Crise commerciale de 1839, examinée dans ses causes, son étendue et les moyens d’y mettre un terme (Paris: Aux bureaux du mémorial du commerce), Fourier, C., 1829, Le nouveau monde industriel et sociétaire (Paris: Bossange). Frobert, L., 2010. Republicanism and political economy in Pagnerre’s Dictionnaire politique (1842), Working-Paper Triangle. Gilmore, J., 1997, La république clandestine 1818–1848 (Paris: Aubier). Isambert, F. A., 1967, Buchez ou l’âge théologique de la sociologie (Paris: Cujas). Koselleck, R., 1997, L’expérience de l’histoire (Paris: Gallimard). Lechevalier, J., 1832, École de M. Charles Fourier, La réforme industrielle ou Le phalanstère, Journal des intérêts généraux, de l’industrie et de la propriété, 30 August. Leroux, P. 1859, Lettre au Docteur Deville, reprinted in Abensour, M., 2000, Le procès des maîtres rêveurs (Arles: Sulliver). Leroux, P. and Reynaud, J., 1833, Exposé des principes républicains de la Société des Droits de l’Homme et du Citoyen (Paris: Herhnan). Le Van-Lemesle, L., 2004, Le juste ou le riche. L’enseignement de l’économie politique en France 1815–1850 (Paris: Comité pour l’histoire économique et financière de la France). Mollier, J. Y., 2000, Diffuser les connaissances au XIXe siècle, un exercice délicat, Romantisme, 30: 108, pp. 91–101. Picon, A., 2002, Les saint-simoniens. Raison, imaginaire et utopie (Paris: Belin). Proudhon, P. J., 1840, Qu’est-ce que la propriété? ou Recherche sur le principe du droit et du gouvernement (Paris: J.-F. Brocard).

176 Ludovic Frobert Saint-Simon, C.-H., 1825, Nouveau christianisme: dialogues entre un conservateur et un novateur (Paris: Bossange père). Tchernoff, I., 1901, Le parti républicain sous la Monarchie de Juillet (Paris: A. Pedone). Tocqueville, A., 1840, De la démocratie en Amérique (Paris: Charles Gosselin). Todd, D., 2008, L’identité économique de la France (1814–1851) (Paris: Grasset). Transon, A. de, 1833, Politique industrielle. Formule de civilisation, La réforme industrielle ou Le phalanstère, journal des intérêts généraux, de l’industrie et de la propriété, 11 January. Villermé, L. R., 1840, Tableau de l’état physique et moral des ouvriers des manufactures de coton, de laine et de soie, 2 vols (Paris: J. Renouard). Weill, G., 1928, Histoire du parti républicain en France 1814–1870 (Paris: Alcan).

6

The analysis of crises in early French dictionaries and encyclopaedias Daniele Besomi

6.1 ENTRIES ON CRISES IN EARLY FRENCH DICTIONARIES French encyclopaedias and specialized dictionaries in the early part of the nineteenth century are remarkable not only for their number, but also for the fact that they started to carry dedicated entries on crises well before dictionaries in other languages. By the time the first German entry was published (Roscher’s DIE PRODUKTIONKRISEN MIT BESONDERER RÜCKSICHT AUF DIE LETZTEN JAHRZEHNTE in [Brockhaus’s] Die Gegenwart, 1849; see Chapter 7), France had already seen six such articles, the first being published in 1835; two of these were also translated into Italian before the first original entry in that language was published (Boccardo’s CRISI, in his own →Dizionario della economia politica e del commercio, 1857; see Chapter 11); meanwhile, two more French entries were included in dictionaries. By the time English-speaking countries saw their first entry on crises in 1863 (Macleod’s CRISIS, COMMERCIAL, in his own →Dictionary of political economy, 1863; see Chapter 13), France had two more, and a number of reprints and re-editions. As the previous chapter has demonstrated, this quantitative abundance reflects different perspectives on the role of crises in economic and social development. In spite of this variety of interpretations, however, the explanations of the phenomenon offered by the entries published in the first half of the century were rather similar to each other and fairly poor if compared to the best contemporary writings on the subject – a situation that only changed with the contributions by Coquelin, Ott and Juglar in the 1850s and early 1860s (see respectively Chapters 8, 10 and 12). As a whole, however, these entries fairly reflect the state of the understanding of crises just before the middle of the nineteenth century. This chapter aims at presenting the entries published in the 1830s and 1840s in the light of the overall development of the theories of crises; it relies on Chapter 5 for the political an ideological context in which they were written. The entries are, in chronological order: Lemonnier, CRISES COMMERCIALES, in →Dictionnaire de la conversation et de la lecture, 1835, Vol. XVIII (reprinted unchanged in the 2nd edition, Vol. XVI, 1859); Blanqui, CRISE COMMERCIALE, in →Encyclopédie des gens du monde, Vol. 7, 1836;1 [Monbrion], CRISE COMMERCIALE ET INDUSTRIELLE, in Monbrion’s

178 Daniele Besomi →Dictionnaire universel du commerce, 1838;2 Michel, CRISE COMMERCIALE, in Guillaumin’s →Encyclopédie du commerçant, 1839;3 Courcelle-Seneuil, CRISE, in →Duclerc and Pagnerre’s Dictionnaire politique, editions from 1842 to 1860; and Dupin, CRISE COMMERCIALE, in →Encyclopédie du dix-neuvième siècle, 1846.4 Hereafter, they will be cited in an abbreviated form.

6.2 THE DEFINITION OF CRISES A first common feature of these entries is a definition of ‘crisis’ as a disruption of the orderly course of trade. Lemonnier reported that ‘whenever the regularity of the exchange movements of which trade consists is broken, suspended or inhibited, there is a commercial crisis’ (1835, p. 216); according to Blanqui, ‘the term CRISE COMMERCIALE applies to the disturbances which, from time to time, affect trade and industry, under the influence of different causes, internal or external’ (1836, p. 257); Monbrion was the only one not to give an explicit definition of the term, while Michel defined ‘crises’ as ‘those times of general discredit which for some time suspend the regular course of trade’; Courcelle-Seneuil wrote that ‘Commerce and industry are in a state of crisis when business is interrupted and a large number of merchants and industries fail to meet their commitments’; a little off this line, Dupin defined commercial crises as ‘the difficult and transitory situations into which the trade of a nation is sometimes thrown’.5 Such a notion of crisis refers, explicitly or implicitly, to a ‘normal’ state of trade, during which payments, reimbursements of debts, and exchanges of goods take place smoothly and with continuity. The crisis is thus seen as an anomaly, a deviation from a norm the features of which, however, are rarely specified. Only Lemonnier describes the avoiding of crises as the challenge of ‘organizing industry, creating constant means for a relationship, equilibrium and harmony between consumption and production’ (p. 218), and Courcelle-Seneuil writes – also with reference to prevention – of ‘establishing a correct equilibrium between production and consumption, and of eliminating the errors from commercial speculations’. Surely the regularity of exchanges, the regular course of trade, the uninterrupted flow of business which are disrupted by some specific cause, refer to a prosperous condition, a state of more or less steady economic progress. The specific features of such a state, however, were not spelt out, nor were its conditions explicitly stated. The definition is indeed circular, and prosperity was implicitly conceived as the condition of trade in the absence of disturbances (none of the specialized dictionaries considered here includes entries on ‘progress’, ‘prosperity’ or ‘equilibrium’6). The ‘normal’ does not need to be characterized. It is just taken for granted, and it is the state towards which the system would tend if left undisturbed. This kind of definition thus immediately calls for, and cannot be dissociated from, a list of the possible causes of disruption, which indeed duly takes most of the space in all the entries under consideration.7 Before we examine these causes in Section 6.3, another feature associated with this notion of crisis should be mentioned. A crisis must be temporary. It can only

Analysis of crises in early French dictionaries 179 last while the disturbance lasts; even if the disturbance arises from a persistent change (e.g. the opening of a new market), the system eventually adjusts and finds a new viable balance. Some of the writers cited above incorporated the transitoriness in their definitions (Michel and Dupin). Lemonnier maintained that ‘the commercial movement restarts with new momentum when the perturbing cause ceases to exist’ (1835, p. 216), and trade returns to its ‘natural conditions of equilibrium’ (p. 217) when the disturbance is removed; crises are thus a momentary paralysis of the economic life of nations. Similarly, Blanqui characterizes crises as ‘transitory incidents, storms that temporarily trouble the good weather of the industrial horizon; after they have passed, notwithstanding some devastation trade resumes its usual course’ (1836, p. 257). Crises are short-lived, but they keep affecting trading and industrialized countries (as distinct from the pre-industrial crises cited by Monbrion, 1838, p. 636). Lemonnier – the only one of these writers to head his entry using the word ‘crises’ in the plural – and Blanqui seemed to believe that crises can recur at very short intervals. Lemonnier writes of the industrial crises that affected France between 1827 and 1830 (1835, p. 217); Blanqui described commercial crises as a ‘true periodical disease’ in all civilized nations – in the sense that ‘each day we see the outbreak of some [crises] or the petering out of some other’ (p. 258). Monbrion reported that ‘it has been remarked that in all the countries with a very lively industrial activity, commercial crises are roughly periodical’; he cites the English crises of 1819, 1823, 1826 and 1836, and the French ones of 1819, 1823, 1826 and 1831–1832 (Monbrion, 1838, p. 637). Michel similarly noted that ‘commercial crises . . . seem to recur periodically: 1811, 1819, 1825, 1830 mark times of fatality’ (1839, p. 758). Dupin did not comment on periodicity, but also noted that crises ‘only feature distinct characteristics and have considerable effects in countries where routine trade is well developed’ (1846, p. 308), and listed (while discussing their causes) the French crises of the nineteenth century: 1803, 1815, 1827, 183 and 1847. One can hardly fail to notice that there is scant agreement on the dating of crises.

6.3 THE PHENOMENOLOGY AND THE CAUSES OF CRISES Having defined crises as a perturbation of the regular course of business, our writers moved on to examine their causes and sometimes describe the train of events bringing to the crisis. Lemonnier’s entry (1835) is interesting for his effort at abstraction. He first described the ‘ordinary’ course of events beginning from the early symptoms of crises, namely, a depreciation of certain products, a rise in interest rates and difficulties in discounting, a stagnation or even a drop in consumption. At this point a number of firms are unable to continue their business, and failures ensue until a liquidation takes place, during which the losses of the largest numbers (and sometimes the appalling enrichment of a few) are consolidated. After that, business restarts with new impetus, if the perturbing cause is no longer present.

180 Daniele Besomi The ‘universal and general’ outcome of all crises is that both consumption and production are temporarily restrained. As to the sources of perturbation, Lemonnier noted that they can be of two kinds. Either they originate from a sudden and unforeseen change in the conditions of production or in the needs of consumption; or they are related to the general perturbations following political or social revolutions. Under the first heading there are technological changes in production. Although these cause misery to some people in the short term (for instance, the invention of the spinning jenny caused unemployment among hand spinners), such suspensions of industry in the long term are a form of progress and development. The perturbations arising from political or social revolutions act by displacing people and wealth, by creating hostility between neighbouring countries and between social classes within each country, and by channelling capitals towards unproductive usages. While Lemonnier stopped short of qualifying his two classes of causes as ‘internal’ and ‘external’, Blanqui (1836) placed such a distinction in his very definition (cited in Section 6.2). Among the external causes of crises, Blanqui considers political events. The internal ones, however, are far more important. They include the state of economic legislation, merchants’ mistakes and the lively competition among producers. Blanqui also refers to the difficulties generated by the internationalization of trade, as failures in one market may bring failures elsewhere; to the unreasonable speculation frenzies that sometimes capture a whole nation, as was the case in England in 1825; and to the difficulties caused by changes in the monetary system – with reference to the suspension and the subsequent resumption of convertibility in England. Moreover, with the introduction of more and more machines and the improvement of the division of labour, entrepreneurs have sometimes neglected to proportion their supply to demand. Blanqui concludes his entry by pointing out that the periodical return of crises has an ‘identical source’: protectionism, which turns some slight perturbations into major crises. ‘The excess of protection leads to a congestion [of the markets], which is followed by the disposal of goods at a low price. The bait of high returns available in the privileged industries attracts capitals, which are depreciated by the very competition they create, thus contributing to the falling of entrepreneurs’ (p. 259). The only possible remedy is the return to the liberty of industry and trade, for whenever governments tamper with the principles ruling the production and distribution of wealth, they multiply the already too numerous chances of commercial crises. Monbrion (1838) distinguishes between the causes of commercial and industrial crises. Among the former he lists wars, in particular those at sea, political events and the abuse of credit, with the corresponding bad use of capital. Monbrion does not explain how and why there is abuse of credit in the first place, but describes its breakdown as follows: at some point distrust replaces credit, circulation of wealth stops or slows down, prices fall because of the artificial scarcity of money, manufacturers can no longer employ the same number of workers, failures begin to spread. If central banks do not have sufficient reserves, they cannot contain the bankruptcies. As to the causes of industrial crises, Monbrion cited inventions giving strong impulses to the development of some branches of production which result

Analysis of crises in early French dictionaries 181 in overproduction, and the competition of foreign industries, unless the government protects the national manufacturers with tariffs. Similarly to Blanqui, Michel also explicitly distinguishes between the causes of crises external to the industrial economy and those pertaining to the very nature of commercial and industrial organization. The external causes include the calamities occasionally affecting mankind and political events. In spite of their exogenous origin, they propagate via an economic mechanism. As all commercial interests are interrelated, and traders are involved in a web of mutual indebtedness, an incident such as a war disrupting the chain of payments may cause the collapse of the entire system. Michel maintains that the importance of endogenous causes is generally underestimated. They consist in the abuse of credit and in the misdirection of productive forces – the latter being often caused by the former, as credit encourages excesses of production, although excessive credit is alone sufficient to cause a disruption of trade. The issue of a large number of notes enables entrepreneurs to purchase larger amounts of raw materials, raising their prices (often generating speculative enterprises) and thereby depreciating paper money. Gold will therefore leave the country and the banks will lack the specie necessary to convert paper money. When doubts arise as to their solvency, a run on the banks ensues. Banknotes are withdrawn from circulation, the price level drops, causing losses and the interruption of credit, and eventually a general crisis occurs. It is indeed observed that in France, crises had always been preceded by an exaggerated circulation of commercial bills. Michel supplies figures relating to the crises of 1811, 1819, 1825–1826 and 1830, in the first attempt in a dictionary entry to provide a quantitative argument. Courcelle-Seneuil explained that the catastrophic interruptions of business and breaks in the chain of payments in which crises consist ‘are ordinarily caused by turmoil, excesses of trade or unfortunate speculations, and finally by sudden changes in the price of goods’ (1842, p. 208). He does not elaborate (the entry occupies just over one column), except to examine as an example the effects of the tariff change in 1814. Dupin (1846) lists a number of possible causes of crises.8 Although there is no explicit hierarchy, he seems to give pride of place to overspeculation. Occasionally, trading peoples are driven by speculation fever,9 which at first accelerates trade, giving a false sense of prosperity – public and private stocks rise, everybody sees prosperous times and feels like spending and being generous. But as soon as it becomes necessary to face one’s debts, the results are disillusionment and bankruptcies, dragging into their vortex also those who have refrained from foolish speculation as their debtors are forced to default; also the trading houses that are financially sound but are just above the threshold of rentability are swept away. Overspeculation can also generate crises beginning abroad, when the prospects generated by the opening of new markets induce excess supply, with subsequent price falls and losses. Crises can also be caused by political and social troubles, by a transition from peace to war, or from war to peace, or by a period of bad crops following a series of years of abundant harvests. The latter is all the more damaging if the good years have been accompanied by intense speculation, as was the case in 1826 and 1847.

182 Daniele Besomi 6.4 THE FUNCTION OF CRISES The next issue tackled by the authors of these entries concerns the nature of crises and the function they perform in the working of the economic system. Lemonnier maintains that crises will inevitably be tied for a long time to our system of production, which will thus undergo every now and again interruptions in industrial development. These interruptions, however, are often favourable. ‘Considered as a whole and seen from a distance’, in fact, some crises are caused by technological progress, which temporarily disrupt the productive relations but in the long run accelerate production (1835, pp. 216–217). Contrary to Lemonnier, Blanqui does not seem to be seeing any silver lining in the recurrence of crises. As they originate in entrepreneurial mistakes, foolish speculations or wrong legislation, they cannot bring any good. Also, the increased competition between producers at home and abroad is not seen as a cause of possible progress overall but only of ruin. The only consolation is that they are of a temporary nature and, as storms do, can only momentarily trouble the clarity of the industrial horizon (1836, p. 257). Monbrion is surely more optimistic, as he feels that crises have a positive function to perform: they restart the economy at a quicker pace and are going to disappear in the near future. He believes that although crises have been subject to periodical recurrence in the past, this is no longer the case. The commercial and industrial movement of a country is naturally subject to fluctuations, due to the development of industry and commerce abroad, to changes in fashion and preferences, to tariffs, and to the overabundance of some products, which causes a reduction in their prices and therefore a complete stagnation of production and trade. In this case, this stoppage in production is necessary to give time to absorb the excess of production via normal consumption or exportation, and after the crisis economic activity restarts ‘by natural reaction’ at a faster pace, for it is necessary to satisfy the consumer demand that has remained unfulfilled during the stagnation. Well-directed speculations may take advantage of such fluctuations in the prices of products by calculating in advance the effect of the moderating laws governing industry and trade, always keeping them within the bounds of the true needs of consumption (1838, p. 637). Monbrion failed to observe, contrary to Lemonnier, that the industrial crises resulting from the introduction of new technologies will bring progress in the long run; this is all the more strange as he explicitly remarked that such inventions bring quick development to some branches of production, increase output at lower prices and improve quality (p. 637). In Michel’s account there is no explicit statement as to the function fulfilled by crises. Nevertheless, his description of the consequences of the excess of credit – that is, the main cause of crises – implicitly depicts crises as the outcome of the self-adjusting mechanism eliminating the excess of notes issued by banks (1839, pp. 757–758). Michel believes that the causes of perturbation are becoming weaker. With peace, public credit has strengthened its foundations, the intensity of innovation has diminished after the early era of the Industrial Revolution, so that changes in working conditions are not so dramatic; and the experience of the past

Analysis of crises in early French dictionaries 183 has induced the Bank of England to try to prevent a recurrence of circumstances similar to those of 1825 by increasing the discount rates; at the time of writing (November 1836), it seemed to Michel that the Bank was going to avert the crisis that had been menacing Britain for several months. Courcelle-Seneuil (1842) thought of crises as the cumulation of the fluctuations of individual businesses: Commercial crises are but the multiplication of the private disasters which trade experiences daily due to lack of foresight or unexpected events. Is there a way to prevent them, to establish an exact equilibrium between production and consumption, of expunging error from commercial speculations? To this serious problem, political economy has not yet been able to find a solution. (p. 209) Dupin (1846) does not express any opinions as to the nature and function of crises. With the sole exception of Monbrion, who mentioned the ‘moderating laws of industry’ (1838, p. 637), the other five authors considered here referred to the diffusion mechanisms propagating the disastrous effects of crises to the entire economy or internationally, or transmitting and amplifying the ‘fever of speculation’. Lemonnier explained how commercial crises first affect some industries and crush them, and how their immediate and total ruin gives rise to a series of falls and calamities, the extension of which depends on the forces and numbers of those swept away by this sort of avalanche (1835, p. 216). Blanqui (1836) stressed that failures in one market bring distress elsewhere, and that the frenzy of speculation sometimes captures entire nations. Michel discussed how exogenous shocks propagate to the entire economic system by means of an endogenous mechanism based on the interrelation of credit relationships (1839). Courcelle-Seneuil similarly noted how ‘Commercial crises spread from one country to another: when one trader goes bankrupt, his failure often affects his correspondents abroad. All commercial nations are interdependent: reciprocal needs and credit have created indissoluble links between them, and none of them can undergo notable losses without the others being hit as well’ (1842, p. 208). Dupin refers to the ‘speculation fever propagating between capitalists’ (1846, p. 310). These views of the working of capitalist economies, then, admitted at least some islands of instability capable of holding in check the system’s capacity to absorb shocks.

6.5 DICTIONARIES AND THE LITERATURE ON CRISES IN THE FIRST HALF OF THE NINETEENTH CENTURY Although the literature on various aspects of economic difficulties was already fairly abundant, before the 1837 crisis the term ‘crisis’ itself was only rarely used, both in English and in French (see Chapter 3, Section 3.2.8.2). It was, however, chosen (accompanied by the attribute ‘commercial’ or, on one occasion, ‘industrial’) as the best epithet for these phenomena by a number of French dictionary compilers

184 Daniele Besomi from 1835 on. The only serious competitor, in terms of frequency of usage, could have been the word détresse (the French equivalent of ‘distress’), which is, however, not appropriate as it describes the consequences of the phenomenon rather than the phenomenon itself.

6.5.1 The definitions The entries examined in this chapter offer the very first definitions of ‘crises’ available in the literature. While this is surely what readers expected to find in a dictionary or encyclopaedia, the reluctance of previous writers to provide precise definitions of their subject deserves a brief comment. Explicit definitions of crises are, in fact, rare in the early literature. The first example I have found dates from 1839, when Luigi Chitti defined as follows the crises that severely affect the national economy (indifferently qualified as industrial, commercial or financial, although Chitti himself preferred the latter attribute as better representing the intimate relationship between the fact the word represents and the cause that brings it about): The financial crisis is for a nation what bankruptcy is to an individual: it is the incapacity to meet contractual commitments. As a nation is only indebted to itself (abstracting from the relationship with other countries), the financial crisis is, in other words, a nation’s declaration of incapacity to complete the undertakings that have been initiated. (pp. 6–7) This is essentially the core of the definition later adopted by CourcelleSeneuil in his entry (1842). Other examples from the same epoch as our dictionary entries are worth citing. The best known of them is probably the one offered by John Stuart Mill, very much on the same lines as Chitti’s and Courcelle’s. Having qualified the crisis as a ‘great derangement’ (Mill, 1848, Book 2, Ch. 15, § 4), he defined the phenomenon as follows: ‘There is said to be a commercial crisis, when a great number of merchants and traders at once, either have, or apprehend that they shall have, a difficulty in meeting their engagements’ (Book 3, Ch. 12, § 3); he also spoke of ‘the collapse of credit called a commercial crisis’ (Book 3, Ch. 21). Eugène Buret stressed a completely different aspect. He noted that trade is a cause of perturbation of the most essential functions of society, as it disturbs production by introducing the uncertainty of speculation, price fluctuations and sometimes overall suspension of industry. The value of credit titles, including paper money, is at times unduly inflated. Crises are then ‘the times at which commercial values are brought to the test’ (Buret, 1840, Vol. 2, pp. 212–213). Richard Hilderth’s suggested definition resembles those advanced by the entries considered in this chapter: In addition to the ordinary, or what may be called the annual fluctuations of trade, there are fluctuations of a more serious and permanent kind, which grow

Analysis of crises in early French dictionaries 185 out of some great change in the relations of commerce and industry, and which are apt to produce what is called a commercial crisis. Changes from general peace to war, and from war again to peace, must necessarily be followed by a derangement of the previously existing state of business, by great fluctuations in commerce, and great changes in the value of property. The same effect is produced by civil disturbances; and sometimes even by revolutions taking place in foreign and distant countries. (Hilderth, 1840, pp. 160–161) Mary Hennell wrote in similar terms that ‘the balance of production and consumption is every moment disturbed; hence commercial catastrophes and crises’ (1844, p. 105). James Wilson also struck the same chord, but introduced the distinction between monetary and commercial crisis: ‘the panic of 1836–37 . . . was most strikingly a money crisis, and a money crisis only, a disturbance of the channels of connexion between producer and consumer, and not a disturbance in any general relative ability of consumption and production’ (Wilson, 1840, pp. 68–69). ‘[T]his crisis was a mere reaction to the unnatural abundance of money and excitement of commercial enterprise’ (p. 70). A descriptive definition is given by de La Farelle in 1842: ‘at almost periodical times, and more and more frequently, all the home markets become glutted, all the markets abroad close down at once, and shortly after that, all the workshops also go out of business. This is what is called a commercial crisis’ (pp. 93–94). The blockage of production is also taken up by Tooke (1848), who adds the stoppage of payments and insists that the terms ‘crisis’ should be applied only to cases of some severity: The course of commercial events, from the beginning of August to the week ending the 23d of October [1847], thus proceeded in an uninterrupted progression of disaster, discredit, and dismay. At the close of that week, all circumstances tended to what is termed a crisis; not such a crisis as, by profanation of the term, has been applied to comparatively slight cases, but to so critical a state of things as threatened to involve a total suspension of all business and of all payments. (p. 317) How can this scarcity of explicit definitions of ‘crisis’ be explained? A first reason may lie in the fact that crises are rather complex phenomena and are not easy to characterize in terms of a few essential features. A second reason is that most of the literature of the time was highly topical: it was stimulated by the occurrence of each crisis (see Chapter 3, Section 3.1.2), and was directly aimed at suggesting a remedy. Each crisis was then considered as an event in itself, with its own cause(s) and specific features, and to most writers at the time the abstract category of ‘crisis’ would not have made much sense. What different crises had in common, in the general perception, was their effects on individual and social well-being, as is witnessed by the prevalence up to that point of the term ‘distress’ to describe them.

186 Daniele Besomi There were naturally some exceptions, as some writers perceived and tentatively described the systematic aspects of the recurrence of crises. These dictionary entries are part of this still small minority of contributions. Their very existence, with their shift of emphasis from the consequences of crises to the phenomenon itself and with their attempts to convey the fundamental character of crises into an explicit definition, witnesses that the attitude towards crises was beginning to change. The inclusion of this topic in dictionaries not only reflects such a change in attitude, but contributed to strengthening it, in particular by institutionalizing the adoption (in French at least, for the time being) of the term ‘crisis’ as appropriate to characterize the phenomenon and by making crises a suitable topic of learned discussion. Having acknowledged the novelty of these early dictionary definitions, it is necessary to point out that the actual theoretical content of these entries was not particularly innovative. The definitions given, expressing the understanding of crises in terms of disturbances to the regular progress of trade, translate in clear words the widespread, but often implicit, viewpoint that crises are an anomaly with respect to the normal condition of prosperous times. There are also explicit statements to this effect; one dates back to 1810, when Erick Bollmann stated that ‘this regular course of business becomes interrupted by the approaching crisis of the closing bank’ (1810, p. 29). Also, the implication of this definition, that a disturbance must have a cause that can be recognized in order for a remedy to be suggested, was explicitly stated years before these dictionary entries were written. Mathew Carey, for instance, explained he was to ‘cast a retrospective glance on the course of affairs, which gradually led to and finally produced the present crisis’, because in order ‘to prescribe efficiently for any disorder, it is incumbent on us to investigate the predisposing causes’ (Carey, 1816, p. 17). Besides these unequivocal statements, this view of crises is apparent also in the analogies used by a large number of writers in substitution of proper definitions. The most frequent similes evoked for crises were storms and tempests, and especially diseases (Blanqui, in his 1836 entry, used them both). The former convey the idea of a fatality which one has to expect after a period of good summer weather, while the medical metaphor contrasts the normal, healthy state of the system to the disease, and suggests that the cause of the disturbance needs to be sought out and removed in order to restore health (for a detailed discussion of the medical metaphor in this context, see Besomi, 2011).

6.5.2 On causality A common feature of all these entries is their openness to multiple causal explanations of crises. They produced fairly similar lists of possible disturbances: wars and social or political unrest among the external perturbations, and changes in consumers’ preferences or in the technical conditions of production, competition and overspeculation among the internal causes. This approach was almost universal in the first half of the nineteenth century, and still very common in the following decades: if crises are seen as (the result of) a perturbation, any disturbance that is sufficiently intense can give rise to a crisis. Crises are then understood as individual events, disconnected from each other.

Analysis of crises in early French dictionaries 187 Shortly after the first entries on crises in French dictionaries were published, this approach was subject to attacks on epistemological grounds. Some writers in England, Ireland and France espoused the opposite interpretation of crises, rejecting the view that they are individual events and affirming instead that they are connected to each other within a broader pattern. These arguments were based on some form of the causal principle. Starting from the observation that crises tend to recur with some regularity and that they share common features, the critics of the ‘individualistic’ approach concluded that they must have a common cause. Naturally, they did not deny that external events and internal maladjustments or frictions played some part in the development of crises, but reinterpreted their causal role. While in the individualistic approach, these events were understood as the primary cause of each individual crisis, these same events or impediments were interpreted by the critics as subordinate causes or triggering events, possibly anticipating or amplifying or otherwise altering the actual course of each crisis, the primary and necessary cause of which, however, was common to the entire series of events. The kind of causal reasoning as applied to crises was thus turned on its head. Not only were the critics aware of their radical departure from the earlier tradition, but they attacked with some violence the alternative approach, charging its authors with ignoring the basic tenets of scientific reasoning. The first such assaults date from 1840. Robert Cockburn criticized the various explanations offered by other writers, observing that whatever the proximate cause evoked, it could only operate provided that the system was predisposed to suffering a crisis: ‘A very slight reflection must convince us that the causes enumerated could not produce the effect upon a sound system of trade. Infection is not easily communicated, where the body is not pre-disposed by weakness or ill-health’ ([Cockburn], 1840, pp. 1–2). In France, also in 1840 (some of our dictionary writers could thus have been aware of this contribution), Briaune rejected the predominant individual explanation of crises by mocking the adversaries and bringing home an epistemological point at once. He attacked the ‘popular preconceptions’ (préjugés populaires – shared, in reality, by renowned economists, including our dictionary writers) ascribing crises to ‘political causes’ by arguing that the political and institutional setting can only be a secondary cause, making things worse or better, while the fundamental cause must be sought elsewhere, on the ground of the ‘general principle that seeks the same cause for a series of similar effects’. The destructive part of Briaune’s argument consists of a long list of political causes that should have produced precisely the opposite effect to the one actually observed: for instance, one should profess that the prosperity from 1820 to 1827 was due to the changed electoral law, to the suspension of the freedom of the press and of individual freedom; to the riots in the schools, to the Paris, Saumur, Bedford and La Rochelle conspiracies that were its consequences; to the Spanish war, to the compensation laws, to the primogeniture rights, and to sacrilege, which were its continuation and complement. (Briaune, 1840, p. 3)

188 Daniele Besomi The constructive part states the positive principle that should guide the reflection on the causes of crises: If these were the true causes, they would have had impact on the crises of 1811, 1817 and 1827, for the periodical return of the same affliction necessarily implies the existence of identical and permanent causes. However, nobody would assign to past crises the supposed origin of the present crisis; it is indeed rather illogical that similar effects, obviously linked to each other, are always attributed to different accidents. Against the general principle that for a series of like effects the same cause must be sought, one should bring irrefutable evidence; but such a proof is still missing. (ibid., pp. 3–4) A third contribution along similar lines is due to Isaac Preston Cory (1842): A variety of causes has been assigned to account for this depression, and as many remedies have been proposed to obviate it. The national debt, taxation, the currency, the unlimited power of the Bank of England over its issue, the excess of population, the corn laws, the oppressions of the millowners, have each their advocates, who would fain persuade us, that an alteration of some one or more of these would give relief and restore prosperity. It is not my intention to deny, that each and every one of them have their effect, and may, in some degree, influence the state of trade: but in the following pages I propose to avoid, as much as possible, the discussion of any of these subjects which have been worn threadbare, and upon which every one has made up his mind; while I would direct attention to what I humbly conceive to be a preliminary evil, much more extensive than all of them put together – a canker in the very heart of our trading prosperity, which is ever and anon producing the same recurrences of distress – temporary they may seem, but which, I fear, are rather of a periodical nature, like the returns of the shivering fits which precede the dissolution of the body by an internal ulcer. (p. 3) A few years later similar arguments made their way into dictionary entries, in particular thanks to Coquelin (CRISES COMMERCIALES, in →Coquelin and Guillaumin’s Dictionnaire de l’économie politique, 1852; see Chapter 8) and Juglar (CRISES COMMERCIALES, in →Block’s Dictionnaire général de la politique, 1863; see Chapter 12). Notable contributions along these lines also came from James Anthony Lawson, John Mills and Stanley Jevons.10 Among the factual premises for the reversal of the causal interpretation, one was fully incorporated into our dictionary entries, the other less so. As noted above (Section 6.2), the entries under consideration acknowledged that crises tend to recur with some frequency, and most of them explicitly use the attribute ‘periodical’ to describe this fact. This was not exceptional, as by the mid-1830s the observation that crises are ‘periodical’ – that is, recurring, with little or no implication

Analysis of crises in early French dictionaries 189 as to a strict regularity in the timing – was already fairly frequent (see Besomi, 2010a). The second premise, that the shared features of crises are recognized and emphasized over their differences, was instead rather less common. Of our writers, only Lemonnier attempted a general (i.e. abstract) description of the phenomenon, while the other contributors emphasized instead the differences among individual crises. In the literature, by contrast, there are a number of detailed descriptions of the development of a crisis from its preparation during the previous prosperity to its outbreak and successive liquidation. William Huskisson, for instance, discussed how ‘the expansion of . . . paper circulation, combined with an unfavourable foreign Exchange, leads to overtrading, till overtrading again forces a contraction of the currency: thus, producing those alternations of extravagant excitement and of fearful depression, which this country has so often experienced of late years’ (Huskisson, 1826, p. 28); in 1830, he described the various phases of the cycle, beginning from a state where ‘supply and demand would continue in the same relation to each other’, followed by ‘speculative purchases’ causing an advance of prices at an accelerated rate, after which demand becomes languid and a pause ensues while goods continue to be offered for sale: in such conditions, ‘a glut or superabundance of goods is said to exist’. This begins a time of distress, during which prices fall and the bills of exchange are reduced in amount, until the goods in excess of demand are eventually sold ([Huskisson], 1830, pp. 446–452). A few years later, Overstone formulated a description of the cycle in ten phases, which was immediately and repeatedly cited in the literature (Loyd, 1837), echoed by another, much more detailed description by Longfield (also in ten phases, represented graphically as a circle) and by a characterization in only three phases by Briaune: crisis, recovery, commercial development (Longfield, 1840, p. 13). Of these developments, there is absolutely no trace in the entries under examination. Their views remain anchored to an understanding of crises as disconnected events, rather than as instances of the same phenomenon and thus subject to a common law, so that the periodical return of crises remained a matter of observation rather than being incorporated into a theory of crises. This is also revealed by the fact that most of the causes of crises suggested by our writers are of an unsystematic and avoidable nature – this surely applies to the external causes, but also to changes in fashion and entrepreneurial miscalculations. The relevant exceptions are Lemonnier’s technological progress, and Dupin’s and Michel’s excesses of credit and overspeculation. The explanation based on the idea of credit permitting overtrading which eventually degenerates into open overspeculation was surely the most popular at the time; but while some writers had already stressed the economic mechanisms that induced both traders and bankers to indulge in overtrading,11 in Dupin’s and Michel’s entries this is ascribed to a temporary and not clearly motivated insanity. More interesting is instead Lemonnier’s argument; he caught at once not only the perturbing role of innovations, but also the necessity of their occurrence as a key to progress. Coupled with his attempt to give an abstract description of the phenomenology of crises, this makes his entry the most intriguing one among the early contributions on the subject.

190 Daniele Besomi 6.6 SUMMING UP: GARNIER’S ENTRY ON COMMERCIAL CRISES The six early entries we have discussed above were all short and rather sketchy, but this was about to change. The general literature on crises was becoming more abundant and refined, and some book-sized discussions were being published. Dictionaries correspondingly started to carry more extensive entries, some of which also dedicated attention to the publications on the subject. In 1859, →Guillaumin’s Dictionnaire universel théorique et pratique du commerce et de la navigation carried an entry on CRISES COMMERCIALES by Joseph Garnier, which showed a remarkable immunity to the theoretical advances that were taking place in the literature and in other dictionaries (in particular in Coquelin’s entry on CRISES COMMERCIALES, 1852, and Ott’s entry on CRISE in his own →Dictionnaire des sciences politiques et sociales, 1854) and recast, in a much better articulated way, the essence of the argument we find in the early French dictionary entries. This entry is worth expounding in some detail not only because it is clear and very detailed, but also because it explicitly links to the theoretical scheme that lies behind the understanding of crises as disconnected events – namely, Say’s law of markets.12 Garnier opens his entry (1859) by defining a crisis in general terms as ‘a perturbation of the natural state, an anomalous condition during which the nature of things struggles against a morbid cause to return to a better condition’. With reference to our subject, commercial crises are a sudden disturbance of the natural economic state; specifically, they are perturbations in the general function of exchange, which is as necessary to social life as the circulation of blood is to the life of animals and individuals. The latter is compromised if the blood circulation is hindered, interrupted or simply slowed down; morbid symptoms then affect the living body. Similarly, social life is endangered and morbid symptoms appear in various branches of social production if the exchange is hindered, interrupted or simply slowed down. (p. 920) As all productive activities are interconnected, each of them being the market for another one, any obstruction or derangement has a chain effect, which eventually leads to the impossibility of selling at a price that covers the cost of production, with disastrous effects on producers and workers. Crises can be general or partial (affecting only certain industries) or local (affecting only certain regions), but they are all preceded, followed or accompanied by perturbations in the means of exchange, of circulation or of credit (specie, banknotes or commercial bills). Here, therefore, lies the key to the explanation of the general disorder in business. During generally prosperous times, when business grows and multiplies, the needs for transactions means increase accordingly, while the available amount of them, sufficient for ordinary circulation, proves to be too scarce. This causes an increase

Analysis of crises in early French dictionaries 191 in the rates of interest and of discount, and generally a monetary crisis. Conversely, during times of sluggish business and low confidence, if for any reason (e.g. a political event) people seek to hoard specie and the circulation of credit bills is slowed down, the opposite kind of monetary crisis ensues. Ultimately, the causes of this scarcity of money and of crises generally are numerous and varied in nature. They can all be classified under the following headings: Political and social agitations, causing worries about the future and lack of safety. Wars, and the consequent re-establishment of peace. Famines; the scarcity of crops of important raw materials; any catastrophe; abundance. A slowing down of consumption, with its consequences for exchange and production. A rapid increase in production due to excitement in the spirit of enterprise and to speculation fevers, which incite the undertaking of badly conceived operations. The diversion of capital due to the development of public works or to new large enterprises. The development of credit and the monopoly of credit institutions. A rapid increase in the quantity of precious metals, gold or silver. A sudden increase in tariffs, national or foreign. The backlash of foreign crises. (ibid. p. 921) Most of these causes affect consumption, but an over-excited productive activity due, for instance, to feverish commercial speculation leading to unsound enterprises can have a similar effect: an excess of goods on the market cannot be absorbed by a circulation system suited to a normal flux of goods, and markets become glutted. This causes a fall in prices, which eventually brings production to a halt. Say (as opposed to Sismondi) has demonstrated that general overproduction is impossible, as products provide an outlet for each other and consumption is susceptible to growing without limits. Special and temporary overproduction, however, is possible, if the spirit of enterprise or speculation is misdirected and does not take into account the needs of consumption. The creation of new enterprises, while being the driving force of a country’s progress, can also be a cause of crises. New enterprises need capital. Part of it is supplied by private savings, but some draw on the mobile capital of industry and turn it into fixed capital. A certain proportion of circulating and fixed capital, however, should be preserved as it is necessary for the smooth working of the entire system. When a large number of large enterprises are created at once, this proportion is disturbed and a crisis can ensue – as in the case of the simultaneous construction of numerous railway lines in England, France and Belgium in 1845 and 1846. Such enterprises also misplace large masses of workers, concentrating riotous

192 Daniele Besomi people and causing a fall in their wages, and have worse effects when these works are not productive. The development of credit and the proliferation of banks and other credit institutes are another alleged cause of crises. The question is much debated and not yet decided, as some attribute the derangements of circulation to the excess of the regulation of banks, others to the lack of it. Garnier argues that banks’ monopoly over issues may be responsible for crises. In the absence of control over their actions by the forces of competition, they can sometimes fuel excesses of speculation and, on realizing their mistake, try to remedy it by suppressing credit altogether.13 The abundance of gold can also be a source of perceptible disturbance to circulation, as well as an increase in tariffs and protection, which deprive the national industry of the foreign supplies it needs and later also of their markets. In Garnier’s view, the belief that it is possible to remedy crises is mistaken. Intervention by means of prescriptions and regulations can only increase the effects of crises. Once the disturbance has taken place, its consequences must be deployed in full, as they eliminate unsound businesses and, by depressing prices, facilitate consumption and decongest the glutted markets; indeed, trade recommences with renovated vigour soon after the crisis. One can say that probably the consequences are less painful and lasting in countries where there is freedom of trade and industry. One can only remove the cause of the disturbance, if doing so is in any way possible. Some of these causes pertain to the nature of things, some are the result of climatic accidents, others seem to be intrinsic to the development of society. Only those occasioned by the latter are proper commercial crises – namely, those due to the overexcitement of the spirit of industry, to the development of new large enterprises, or to the development of credit. These crises are inevitable but short-lived and at any rate their consequences cannot match the immense advantages that people as a whole gain from economic progress, in spite of the losses by individuals. Garnier concludes that such crises are inherent in growth: it is better to be rich and active than poor and idle, and while rich countries undergo occasional crises, poor countries are in a state of permanent crisis.

NOTES 1 There is a partial translation and adaptation of this entry under the title CRISI COMMERCIALE in the Nuova enciclopedia popolare italiana (without mentioning the source or the author). The first edition (1841–1849) translated it almost in full; only the last paragraph is slightly emended and abridged – in particular, it omits the remark that each day witnesses the outbreak of a new crisis or the end of an old one (Blanqui’s passage is cited in Section 6.2 below). The 4th edition (1858) adds, among the causes of crises, the extensive works of public utility, such as roads or railways, which absorb huge sums of capital not always proportionate to the nation’s savings (Vol. 6, p. 60); this cause is given pride of place. This edition omits entirely Blanqui’s concluding remarks on protectionism (see Section 6.3), and adds a reference to the crises of 1846–1847 and 1857. The 6th edition, titled Nuova enciclopedia italiana, is practically identical to the 4th, but adds at the end a reference to the crises of 1866, 1872 and

Analysis of crises in early French dictionaries 193

2 3

4 5

6 7

8 9

10 11 12

1876–1877, and cross-refers to the entries on BANCO (Bank) and CREDITO (Credit) for a discussion of the banking crises, which have become the most formidable and frequent crises in recent times (1878, Vol. 6, p. 847). This entry is translated into Italian as CRISI COMMERCIALI E INDUSTRIALI in →Antonelli’s Enciclopedia del negoziante, Vol. 3, 1841, without reference to the source or author. Michel (his complete name is nowhere indicated and nothing is known about him) dated the writing of his entry as November 1836 (p. 758), while the dictionary’s frontispiece indicates 1839. The volume’s date probably refers to the appearance of the last fascicle that composed it. Michel’s entry was taken up by Mora for his article on CRISIS COMERCIAL in the →Enciclopedia moderna (1851–1855); see Chapter 9. The Encyclopédie du commerçant. Dictionnaire du commerce et des marchandises, the success of which launched the Guillaumin editions, was originally meant to adapt →McCulloch’s Dictionary, practical, theoretical, and historical, of commerce and commercial navigation (1832). Guillaumin, however, soon found many shortcomings and decided to have it completely rewritten with the collaboration of Blanqui, Garnier and others (Garnier, 1865, p. 114). McCulloch’s Dictionary does not carry entries on crises. Here as well, the dating of the volume is not consistent with the time of writing of the entry on crises. As Dupin refers to the 1847 crisis, 1846 may refer to the publication date of the first fascicle of the volume. Although in his entry Dupin does not explicitly stress the role of disturbances to the regular course of business, except perhaps by implication of the passive tense of the verb in the expression ‘being thrown into a difficult situation’, he opened his book on the 1839 crisis with the following words: ‘If national industry only received, from people and from things, regular and constant impulsions, and if the same constancy and regularity governed the needs, the taste and the desires of consumers, then and only then could we hope that this industry would no longer be subject to the alternations of convulsive progress and sudden regression which characterize nowadays the phases of its existence’ (Dupin, 1839, p. 5). Only later did →Coquelin’s and Guillaumin’s Dictionnaire de l’économie politique (1852– 1853) carry a defence of PROGRÈS INDUSTRIEL and an entry on DÉBOUCHÉS (outlets), the latter being nothing else than a long quotation from J.-B. Say. The logical connection between the notion of crisis as disturbance and the quest for the cause of perturbation is clearly explained in Dupin’s book on the 1839 crisis: ‘As it is impossible to rely on an unshakeable continuity in the favourable circumstances perpetuating our commercial prosperity, without regrettable alternations, it is important to study with deep care the perturbing cause or causes which, from time to time, have exerted a disastrous influence on the useful arts and thus on the destiny of people’ (1839, p. 5; this passage immediately follows the one quoted in note 5). For a detailed account of Dupin’s view on crises, see Simonin, 2009. The image of the fever (as well as that of madness, also used by Dupin, p. 310) was widespread at the time to indicate the paroxysmal character of speculation, implying that the ‘diseased’ state of the economy was not the crisis but the ‘excesses’ of the previous prosperity, or, rather, ‘apparent prosperity’. See Besomi, 2011. Lawson, 1848; Mills, 1868; Jevons, 1878. For a discussion, see Besomi, 2008 and 2010b, pp. 208–217. A first instance is William Huskisson’s account of commercial delusions in 1810. For a discussion and context, see Besomi, 2010c. Say’s law is never cited in the other entries examined here. It was explicitly discussed only in →Ganilh’s Dictionnaire analytique d’économie politique, 1826. Although it does not carry a dedicated entry on crises, the entries on CONSOMMATION (Consumption) and PRODUCTION are of interest on the subject for their explicit rejection

194 Daniele Besomi of the thesis, recently advanced by ‘some writers’, that ‘production creates consumption, and that if consumption does not fully absorb production it is because too little is produced’ (PRODUCTION, p. 351). Ganilh dismissed this ‘revolting . . . paradox’ (p. 352), pointing out that while production increases the means for consumption, it does not at the same time increase the number of consumers and their desire to consume. Historically, the richest countries are not those producing more, but those having more markets. Beyond sophisms, the principle regulating production is that ‘the markets [débouchés] guarantee consumption, as consumption stimulates production’ (ibid.). In the entry on CONSOMMATION, Ganilh attacks Say’s law as ‘impossible and contrary to the law of exchange of products, or of their sale and purchase’. It is based, in fact, on the assumption that each producer can sell his products because with the proceeds he buys other products of the same value. Yet this requires that producers can find buyers who need their products and have the means to pay them. Producers as a whole do indeed consume the largest part of production. The rest must be sold to consumers, who do not give other products in exchange for them, but can only offer their services. But as soon as consumers have spent their income in buying the consumption goods they want to acquire, they have neither the will nor the means to buy any more. ‘The claim that the very fact of the creation of a product instantly opens a market (débouché) to other products is therefore incorrect; on the contrary, it is evident that consumption necessarily rules production’ (pp. 158–161). Ganilh does not directly relate this argument to crises, except for noting that overabundance of products ‘is a grave misfortune for a country’ (p. 351). It may be interesting to note that the law of markets found a formulation in a dictionary well before Say’s or Mill’s times. In the entry on COMMERCE in →Robinet’s Dictionnaire universel des sciences morale, économique, politique et diplomatique (Vol. 12, 1780) we find the following statement: ‘nobody can be a buyer unless he is also a seller; since buying implies paying, nobody can buy unless he sells, because only by selling can he procure the money to buy what he buys. From the fact that every buyer must be a seller and that he can buy only if he sells, a second axiom results, namely, that every seller must also be a buyer, and he cannot sell unless he buys. Therefore every vendor must, by way of the purchases he performs in turn, provide everybody else with the money for buying the goods the vendor wants to sell them.’ There may not be perfect matching between individual sales and purchases, but if someone becomes richer by selling more than he buys, someone else is ruined by buying more than he sells, so that ‘by the opposition between these two sorts of disorder, equilibrium is re-established in the general mass of sales and purchases (pp. 444–445). 13 It should be noted that Garnier’s view was different from Coquelin’s (on whom, see Chapter 8). The banks’ monopoly is not a constant and systematic cause of strain, but induces the monopoly bankers to make mistakes in their calculations.

REFERENCES Besomi, D., 2008, James Anthony Lawson on commercial panics and their recurrence, Structural Change and Economic Dynamics, 19: 4, December, pp. 330–341. Besomi, D., 2010a, The periodicity of crises. A survey of the literature before 1850, Journal of the History of Economic Thought, 32: 1, March, pp. 85–132. Besomi, D., 2010b, ‘Periodic crises’: Clément Juglar between theories of crises and theories of business cycles, Research in the History of Economic Thought and Methodology, 28A, pp. 169–283. Besomi, D., 2010c, Paper money and national distress. William Huskisson and the early theories of credit, speculation and crises, European Journal of the History of Economic Thought, 17: 1, March, pp. 1–37.

Analysis of crises in early French dictionaries 195 Besomi, D., 2011, Crises as a disease of the body politick. A metaphor in the history of nineteenth century economics, Journal of the History of Economic Thought, 33: 1, March, pp. 67–118. Bollmann, E., 1810, Paragraphs on banks (Philadelphia: C. & A. Conrad & Co.). Briaune, J.-E., 1840, Des crises commerciales. De leur causes et de leur remèdes (Paris: Bouchard-Huzard; reprinted New York: Burt Franklin, 1971). Buret, E., 1840, De la misère des classes laborieuses en Angleterre et en France: de la nature de la misère, de son existence, de ses effets, de ses causes, et de l’insuffisance des remèdes qu’on lui a opposés jusqu’ici: avec l’indication des moyens propres à en affranchir les sociétés (Paris: Paulin). Carey, M., 1816, Essays on banking (Philadelphia: Carey. Reprinted New York: Kelley, 1972). Chitti, L., 1839, Des crises financières et de le réforme du système monétaire (Brussels: Meline). [Cockburn, R.], 1840, Remarks suggested by the present state of trade and credit (London: E. Wilson). Cory, I. P., 1842, Competition: its abuse one of the chief causes of the present distress among the trading, manufacturing, and commercial classes: with suggestions for remedying it (London: Painter). Garnier, J., 1865, Guillaumin, ses funérailles, et ses oeuvres, Journal des Économistes, 45 (3rd series, 12th year): 133, January, pp. 108–121. [Hennell, M.], 1844, An outline of the various social systems & communities which have been founded on the principle of co-operation: with an introductory essay (London: Longman, Brown, Green and Longmans). Hilderth, R., 1840, Banks, banking, and paper currencies: in three parts: history of banking and paper money: argument for open competition in banking: apology for one-dollar notes (Boston, MA: Whipple & Damrell). Huskisson, W., 1810, The question concerning the depreciation of our currency stated and examined (London: John Murray). Huskisson, W., 1826, Free trade: speech of the Right Hon. W. Huskisson in the House of Commons, Thursday, the 23d of February, 1826, on Mr. Ellice’s motion for a select committee, to inquire into and examine the statements contained in the various petitions from persons engaged in the silk manufacture (London: J. Hatchard & Son). [Huskisson, W.], 1830, Essays in political economy: in which are illustrated the principal causes of the present national distress; with appropriate remedies. By George Robertson (London: Longman, Rees, Orme, Brown, & Green). Jevons, W. S., 1878, Commercial crises and sun-spots, Pt 1, Nature, XIX, 14 November, pp. 33–37. Reprinted in Jevons, Investigations in currency and finance, edited by H. S. Foxwell (London: Macmillan, 1884), pp. 221–235. La Farelle, F. F. de, 1842, Plan d’une réorganisation disciplinaire des classes industrielles en France: précédé et suivi d’études historiques sur les formes anciennes et modernes du travail humain (Paris: Guillaumin). Lawson, J. A., 1848, On commercial panics: a paper read before the Dublin Statistical Society (Dublin: Dublin Statistical Society). Longfield, S. M., 1840, Banking and currency, Dublin University Magazine, 15, pp. 1–15, 218–233; 16, pp. 371–389, 611–620. Loyd, S. J. (later Lord Overstone), 1837, Reflections suggested by a perusal of Mr. J. Horsley Palmer’s pamphlet on the causes and consequences of the pressure on the money market (London: Richardson).

196 Daniele Besomi Mill, J. S., 1848, Principles of political economy with some of their applications to social philosophy (London: John W. Parker). Mills, J., 1868, On credit cycles and the origin of commercial panics, Transactions of the Manchester Statistical Society, Session 1867–1868, pp. 5–40. Simonin, J.-P., 2009, L’analyse de la crise commerciale de 1839 par Charles Dupin. In C. Christen and F. Vatin (eds), Charles Dupin (1784–1873): ingénieur, savant, économiste, pédagogue et parlementaire du Premier au Second Empire (Rennes: Presses universitaires de Rennes). Tooke, T., 1848, A history of prices and of the state of the circulation, from 1839 to 1847 inclusive: with a general review of the currency question, and remarks on the operation of the act 7 & 8 Vict., c. 32 (London: Longman, Brown, Green and Longmans). Wilson, J., 1840, Fluctuations of currency, commerce, and manufactures; referable to the Corn Laws (London: Longman, Orme, Brown, Green and Longmans).

7

Wilhelm Roscher’s crises theory From production crises to sales crises Harald Hagemann

Die Gegenwart. Eine encyklopädische Darstellung der neuesten Zeitgeschichte für alle Stände (Leipzig: Brockhaus, 1848–1856), 12 volumes.

7.1 THE BROCKHAUS ENCYCLOPAEDIA Wilhelm Roscher’s essay DIE PRODUCTIONSKRISEN MIT BESONDERER RÜCKSICHT AUF DIE LETZTEN JAHRZEHNTE (‘Production crises with particular consideration

of recent decades’) was first published in 1849 by Brockhaus in Leipzig in Volume 3 (pp. 721–758) of a widely available encyclopaedia, Die Gegenwart. Eine encyklopädische Darstellung der neuesten Zeitgeschichte für alle Stände (The present time: an encyclopaedic presentation of the most recent contemporary history for all estates). It was republished fairly unchanged as Chapter VI, ‘On the theory of sales crises’ (Zur Lehre von den Absatzkrisen), in Roscher’s 1861 Ansichten der Volkswirtschaft aus dem geschichtlichen Standpunkte (Views of the economy from an historical perspective). This book is a collection of seven essays which had all been published before Die Grundlagen der Nationaloekonomie (Principles of political economy), Volume 1 of Roscher’s five-volume set System der Volkswirthschaft, first appeared in 1854. With a rearrangement of the material, several modifications and additions of references and historical details, but the core theoretical arguments unchanged, Roscher discusses the problem of sales crises also in the paragraphs on the proportional development of production and consumption in Chapter 1 of Book V of his Principles, and in § 169–177 of his Nationalökonomik des Handels- und Gewerbefleisses, Volume 3 of his System der Volkswirthschaft, which was first published in 1881. When the publication of the 20th revised and updated edition of Brockhaus. Die Enzyklopädie in 24 volumes started in 1996, it was exactly two centuries after R. G. Löbel had founded the Conversationslexicon mit vorzüglicher Rücksicht auf die gegenwärtigen Zeiten (Conversation-lexicon with special consideration of the present times), which in 1808 was taken over by F. A. Brockhaus. Although the

198 Harald Hagemann exact name changed over time, such as Die Gegenwart when Roscher’s essay was published in 1849, for a wider public it always was the →‘Brockhaus’, the leading encyclopaedia in the German language area. After the First World War, the Brockhaus encyclopaedia was published by the Biographical Institute in Mannheim, which also published the →‘Duden’, the leading work for German orthography, and was publishing another important encyclopaedia, →Meyers enzyklopädisches Lexikon. After German reunification, the headquarters of Brockhaus was transferred to Leipzig in 1991, and with the 20th edition of the Brockhaus encyclopaedia the ‘Meyer’ was integrated. Emphasis is placed here on the original Brockhaus essay and the slightly polished version of 1861. Whereas Roscher disliked the commonly used term ‘commercial crises’ because the malady in general is not limited to the circulation sphere and therefore in his 1849 essay preferred to speak of ‘production crises’ (Roscher, 1849, p. 724), from his 1854 Principles onwards he found it necessary to replace the term ‘production crises’ by the term ‘sales crises’ to characterize the essence of the disease – namely, a lack of effective demand. However, he kept ‘crises’ in the plural.

7.2 WILHELM ROSCHER Wilhelm Roscher was born in Hanover on 21 October 1817 and died in Leipzig on 4 June 1894. He was the youngest of five children of Conrad August Albrecht Roscher and his wife Wilhelmine von Rudloff, who both came from families of higher public servants and officers. After the early death of his father he developed even stronger ties to his mother, with whom he lived until her death in 1857. He finished secondary school in Hanover, where his teacher Ludwig Adolf Petri deepened Roscher’s religiousness. From 1836 Roscher studied history and political science at the universities of Göttingen, where he received his doctorate in September 1838, and Berlin, where he studied with Ranke. He started his academic career in Göttingen, where he made his habilitation and became Privatdozent in 1840 and extraordinary professor in 1843. In 1842 he published his book on Thucydides and in the following year his Outline to lectures on the state economy in accordance with the historical method (Roscher, 1843), in which he transferred the historical approach of the lawyer Savigny and his followers in a programmatic way. With this book Roscher established himself as the main founder of the ‘Older Historical School’, together with Bruno Hildebrand (1812–1878) and Carl (Karl) Knies (1821–1898). In January 1844 he was promoted to full professor of political economy at the University of Göttingen. Three months later he married. In 1848 Roscher moved to the University of Leipzig, where he taught until his death in 1894. Roscher felt at home in Leipzig and, also at the request of the King of Saxony, declined offers from the prestigious universities of Vienna, Munich and Berlin. While at Leipzig, Roscher wrote the five volumes of his textbook System der Volkswirthschaft, which were published between 1854 and 1894. The first volume,

Wilhelm Roscher’s crises theory 199 Grundlagen der Nationalökonomie, analysed mainly the same topics as classical economics: production, circulation, distribution and consumption. In contrast to classical authors, Roscher supplemented his theoretical analysis with long historical treatises, such as on the development of prices, rent, interest and wages. However, Roscher was much closer to the ideas of the classical economists than were Schmoller and other members of the younger Historical School, to whom Roscher was ‘too theoretical’. Like his admired ‘teacher’ Rau,1 with whom German economics started to specialize in a stronger subjective value mood or ‘protoneoclassical tradition’, making substantial contributions to the development of utility theory,2 Roscher had a stronger influence on Alfred Marshall, and particularly on Carl Menger, who dedicated his Grundsätze (1871) to Roscher (see Streissler, 1990). Roscher’s enormously successful textbook succeeded Rau’s Lehrbuch der politischen Ökonomie (Principles of political economy), which had been published between 1826 and 1837 and established the tripartite division of economics into economic theory, economic policy and public finance, as the bestselling textbook in Germany. The first volume of Roscher’s System der Volkswirthschaft went into 26 editions, the last five published posthumously. It was translated into many foreign languages. The English edition was a translation of the 13th German edition by J. J. Lalor and published in two volumes as Principles of political economy in 1878. The other four volumes dealt with issues of applied economics and were even more historically oriented. Roscher basically kept Rau’s tripartite division, with economic policy comprising three volumes: Volume 2 on the economics of agriculture (1859), Volume 3 on the economics of commerce (1881) and Volume 5 on social policy and poor relief (1894), which also reflected Roscher’s own practical experiences in Leipzig poorhouses. That Roscher found it necessary to add a special volume on social policy shows the growing importance of this problem in the second half of the nineteenth century. Social policy issues were also at the centre of many debates within the Verein für Sozialpolitik, which had been founded by a group of conservative social reformers, the ‘Kathedersozialisten’ (socialists of the chair), in 1872 (see Hagemann, 2001). Perhaps Roscher’s most valuable work is his Geschichte der NationalOekonomik in Deutschland (1874), which gives the first systematic treatment on the history of political economy in Germany. It is a remarkable achievement of professional learning. At the initiative of King Maximilian II of Bavaria, a great research project on the history of sciences in Germany had been started. It was directed by the Historical Commission of the Munich Academy. Roscher contributed his most outstanding work, which established him as the most eminent historian of early political economy in Germany. A closer look into the book reveals that Roscher’s historical viewpoint does not prevent him from engaging in theoretical considerations. His fairness and sense of judgement, for example, are illustrated in his examination of the importance of Thünen’s work (Roscher, 1874: pp. 879–902), although the latter’s exact mathematical method is distant from Roscher.

200 Harald Hagemann 7.3 ROSCHER ON CRISES Roscher bases his theoretical reflections primarily on the doctrines of the British classical economists, to whose ideas he was closer than were Hildebrand and Knies (the most eminent theorist of the three main representatives of the older historical school), albeit in an eclectic way and with emphasis on historical relativism. That Roscher’s historical viewpoint is not anti-theoretical comes out best in his important essay on crises. The controversy that had developed in the early nineteenth century around Say’s law, and the question of general gluts had also been taken up intensively by German economists before Roscher (Hagemann, 1995, pp. 176–178). The great majority joined company with the classical doctrine of savings and investment, as developed by Smith, Ricardo and Say. This comes out best in the careful investigation of the macroeconomic role of saving by Hermann, who emphasized the beneficial role of savings and came to the conclusion that ‘on no account is it to be feared that the application of savings will have a negative impact on the economy’ (1832, p. 372). In contrast to Hermann, Roscher’s admired teacher Rau had first attempted to mediate between the adherents to Say’s law and the dissenters in the general glut controversy. In his long postscript to the German edition of letters between Malthus and Say on the causes of the current sales stoppage, Rau (1821) agreed with Malthus that an increase in production does not necessarily lead to an equivalent increase in consumption. Five years later, however, in his Principles of political economy (Rau, 1826), the influence of Malthusian and Sismondian ideas had disappeared and Rau now considered equilibrium between production and consumption as a necessary condition of the wealth of nations and viewed a general overproduction as ‘unthinkable’ (ibid., p. 380). Like his role model Rau, Roscher in his analysis of the theory of crises first points to the necessity of an equilibrium between production and consumption. However, he soon continues to criticize Adam Smith and classical political economists for putting too much weight on production while neglecting consumption. On the other hand, the dissenters such as Lord Lauderdale, Malthus and Sismondi made the reverse error in one-sidedly emphasizing the role of consumption and demand. One should therefore take a balanced approach and pay equal attention to the problems caused by excess production and excess consumption.3 ‘The proportional development of production and consumption, of supply and demand, is one of the most important conditions for the prospering of the economy. All disturbances of this equilibrium belong to the most dangerous shocks, just like diseases of the great economic body, and it can hardly be said whether a temporary predominance of consumption or of production will have worse consequences’ (PRODUCTIONSKRISEN, p. 723; Roscher, 1861, pp. 288–289). Production only increases where there are growing wants. Entrepreneurs will only invest when they expect that demand for their products will increase. ‘Every expert will wish to increase productive capital only in so far as he expects also an increase in sales with the consequential increase of production’ (Roscher, 1861, p. 287).

Wilhelm Roscher’s crises theory 201 Roscher then distinguishes between partial overproduction and a general glut of commodities. He first discusses a partial crisis and points out that the commodity which happens to be in superabundance falls in price, which leads to a diminution of profits in that particular branch of production. The possibility of a glut of particular commodities did not seriously worry the classical economists because they believed that if any commodity is in greater quantity than the demand, some other commodity must be in less demand, and that there can be no glut of commodities in the aggregate. Moreover, the classical economists believed that the price level was highly flexible, so that an excess supply (excess demand) under the pressure of competition would quickly bring about an appropriate fall (rise) in the price level to restore equilibrium between the demand and supply of goods. The mobility of capital via gross investment plays an important role in the adjustment process. The lowness (highness) of the price in the good which is superabundant (scarce) invites a quantity of capital away from (into) that branch of production until the demand and supply are synchronized and the profit rates are equalized. Under conditions of competition there is always a tendency towards a uniform rate of profits at work. Ricardo, for example, had emphasized that it is ‘always a matter of choice in what way a capital shall be employed, and therefore there can never, for any length of time, be a surplus of any commodity; for if there were, it would fall below its natural price, and capital would be removed to some more profitable employment’ (Ricardo, 1951, p. 291). Roscher, on the other hand, regards perfect competition as a rather unrealistic case, but he does not rely on fixed prices.4 Instead, he points to the limited malleability of the fixed capital stock, which requires time and costs for the adjustment process, and he sketches a negative multiplier process without being able to work it out in greater detail (Roscher, 1861, pp. 289–290). He comes to the conclusion that ‘Without doubt most sales crises are special ones, i.e. supply exceeds demand only in single branches of commerce. However, there are also general crises where, with the exception of money, there is a lack of sales for all commodities at the same time’ (ibid, p. 293; PRODUCTIONSKRISEN, p. 724). The consequence of this statement is that Roscher has to get down to the general glut controversy or Say’s law debate in which the dominant side precisely denied the possibility of a general glut. Roscher therefore comes to grips with the argument of those ‘excellent economists’, like Ricardo, Say and the two Mills, who emphasized that demand is only limited by production, money is only the medium of exchange and that all sellers are ex definitione buyers. In particular, Roscher criticizes the limited view of reducing the role of money to its ‘means of exchange’ function and points out a decisive difference between a monetary economy and a barter economy. So, among other things, Say’s rigorous theory as it were is thwarted by the mere introduction of monetary transactions. When the original raw barter still dominated, supply and demand were directly confronted. But the mediation of money enables the seller to buy only after some time, i.e. to delay the second half of the exchange as much as he likes. Herewith in reality on

202 Harald Hagemann the markets, the supply will not always carry along an equivalent demand with it. (PRODUCTIONSKRISEN, p. 726; 1861, p. 297) Roscher here makes a very strong and important argument. The consequence of the role of money as a store of value is the separation of the act of purchase and the act of sale. Sellers now are not automatically buyers any more, as in the barter economy or in Ricardo’s monetary economy, where money only functions as a medium of exchange. This argument is in the centre of all later critique of Say’s law, as, for example, in Marx and Keynes. According to Roscher (1861, pp. 298–300), sales crises (Absatzkrisen) are generated because of commercial overspeculation. If traders expect a rise in prices they start to increase their stocks, thereby causing prices to rise. The whole process is promoted by the availability of credit and sooner or later will be corrected when circumstances occur which impair the ‘general hopefulness’.5 As a consequence, the following development will take place: ‘Everybody collects his claims and seeks to convert his stores into cash as soon as possible, i.e. everybody wants to sell, nobody wants to buy. How is this different from a general sales crisis?’ (Roscher, 1861, pp. 299–300). Roscher (PRODUCTIONSKRISEN, p. 726; 1861, pp. 300–301) also discusses the case of a sales crisis caused by the bankruptcy of the state which leads to a redistribution of national income. In Roscher’s example there are 300,000 families as creditors who lose the same amount of money per year as five million taxpayers will save. Every creditor family will lose £100 sterling per year, whereas the taxpayer families will gain only £6 per year. Roscher draws the following conclusion: ‘Whoever wins in such a case will not enlarge his consumption as quickly as the loser must reduce it, for the simple reason that the former generally cannot estimate his gain as precisely as the latter his loss’ (PRODUCTIONSKRISEN, p. 726; 1861, p. 301). It therefore could be concluded ‘with certainty’ that those creditors who have a high level of consumption will decrease their consumption strongly, whereas many taxpayers will not react at all or will increase their consumption only a little. Clearly, Roscher’s argument suffers from not taking into account that the many taxpayers with their lower income level will have a higher marginal propensity to consume than the creditors (who normally have a lower propensity to spend, which has made them creditors and which is the very essence of Fisher’s debt-deflation effect6), so that the impact on aggregate consumption demand in the short term might be exactly the opposite. The possibility of a sales crisis increases with the state of the development of an economy. The higher the degree of the division of labour, the more difficult it will become to keep supply in balance with future demand. According to Roscher, sales crises are a seamy side of the higher culture, which is inevitable (1861, p. 308). The more advanced economy is also characterized by more mechanized methods of production and the introduction of new types of machinery. Roscher discusses

Wilhelm Roscher’s crises theory 203 the economic importance of the machine industry in another chapter (see essay 5, Ueber die volkswirthschaftliche Bedeutung der Maschinenindustrie in Roscher, 1861, pp. 173–277) in which he also addresses the issue of technological unemployment and the conditions for compensation of those workers who have been displaced by the introduction of new machinery. Roscher makes it clear that the possibility of a temporary technological unemployment is the consequence of the sudden introduction of new technology on a large scale. He takes up this issue again in his Absatzkrisen essay in the section where he discusses various factors (such as fashion changes) which lead to a sudden and large discrepancy between production and consumption and thus cause a sales crisis. Here Roscher points to an important distinction between the long-run advantages and the short-run inconveniences of the sudden and large-scale introduction of new machinery (p. 315). He clearly identifies an aggregate demand condition for the advantages dominating in the longer run. Technical progress leads to cost and price reductions, thereby stimulating the demand for goods. In flourishing economies, consumption demand would increase more than production costs have been reduced, thus leading to an overall increase in employment. Roscher not only reproduces the classical compensation principle, i.e. the theory that technological unemployment is at best a ‘transient evil’, because innovations bring about price reductions and the expansion of output, as had been clearly stated for the first time by Say (1821, Ch. VII), but also struggles to grasp the notion of the elasticity of demand without elaborating on it.7 In a world with an uncertain future, information problems exist. In particular, producers have the problem of distinguishing transitory from permanent increases in demand. Temporary increases, although welcome in the short term, can turn out to be fatal in the long term if they are misinterpreted as permanent increases and stimulate producers to invest and enlarge productive capacities far beyond what is necessary (PRODUCTIONSKRISEN, p. 732; 1861, p. 328). This implies a misallocation of resources which will often lead to crises and thus painful corrections in the future. An allocation of resources not in line with the long-run comparative advantages of the economy and thus crisis-prone can also be the consequence of the outbreak of wars necessitating a structural change. A crisis can also arise with the restoration of the old production structure in the wake of subsequent peace settlements. Roscher’s essay is full of historical examples, especially from the Napoleonic wars. But sales crises do not only play a negative role, as Roscher added in his later version. An interesting element in Roscher’s view of the function of the economic crisis is that, seen from an evolutionary perspective of capitalist development, the downturn of the economy also has some positive aspects (Roscher, 1861, pp. 360–361). Superfluous luxury consumption will be eliminated and replaced by parsimony and new capital formation. The crisis teaches entrepreneurs a severe lesson which is beneficial for society as only the fittest entrepreneurs will survive, and will invest again and rationalize the production process. Quoting Marx and skilfully turning round Marx’s argument, Roscher perceives sales crises as great Weltmarktgewitter (‘world market thunderstorms’), in which the contradictions

204 Harald Hagemann between all the elements of the bourgeois production process burst, thus clearing the air and fertilizing the ground for further economic development (ibid., p. 361). Furthermore, he refers to Wagner’s excellent discussion on the three stages that follow in the process of overspeculation,8 and to Juglar’s empirical analysis, and emphasizes the cyclical character of economic crises, i.e. the quasi-rhythmical variations of upturns and downturns (ibid, p. 362). Finally, in a section called therapy, Roscher draws some policy conclusions. Using physicians’ language, Roscher distinguishes between preventive and mitigating means. There are three remedies which Roscher ascribes to the first category: a far more elaborated statistics to improve the information available to economic actors, liberating the economy from the fetters of guild regulations and all other kinds of trade barriers (including Rechtsunsicherheit – legal uncertainty – which he regarded as the worst fetter), and, most important, the reliability of economic policy. Roscher rightly diagnoses that a confidence problem is a major element of a sales crisis. Time and again he emphasizes trust and confidence as decisive preventive means. This becomes clear when he discusses the role of banks and the double-sided nature of credit, which in normal times will stimulate production and sales but can also lead to and worsen economic crises. As a representative of a theory of effective demand, Roscher naturally is in favour of the positions of the banking school emphasizing a certain amount of monetary control, not by discretionary measures of the government, but by a system of checks and balances with the decisive categories being discipline and confidence.9 Confidence is enhanced by an economic policy based on clear rules, including the growth of public debt. Roscher is very much concerned with the destabilizing tendencies caused by the burden of a high public debt, which gives an incentive to the government as well as to private actors to make risky and precarious speculations (PRODUCTIONSKRISEN, p. 743; 1861, p. 373). But what to do when the crisis has already occurred? Since the essence of a sales crisis consists in the preponderance of production over consumption, any therapy must bring into line the levels of supply and demand. The natural lapse of the disease would work in that direction although in a very painful manner (1861, p. 363). Any economic policy should not contradict this natural remedy. Roscher points to the limited possibilities of state interventions in open economies. But despite his plea against costly quackeries (PRODUCTIONSKRISEN, p. 740; 1861, p. 365) he proposes some anti-cyclical public investment programmes to fight unemployment, which may be called mildly Keynesian. Because of the cyclical character of sales crises the government should plan and preferably save such public works programmes for the next crisis. The impetus behind Roscher’s Keynesian recipes clearly was more of a conservative nature. Bearing in mind the revolutionary events in France and Germany in 1848, the year before his essay had originally been written, Roscher pointed out the political and moral dangers of mass unemployment, which therefore should be avoided.

Wilhelm Roscher’s crises theory 205 7.4 ASSESSMENT Wilhelm Roscher was the most influential German economist in the third quarter of the nineteenth century. Even for Schumpeter, who in general was very critical of the German literature of the time, ‘Roscher was the incarnation of professorial learning, mainly of a philosophico-historical nature, although ‘he conscientiously retailed, in ponderous tomes and in lifeless lectures, the orthodox – mainly English – doctrine of his time, simply illustrated by historical fact’ (Schumpeter, 1954, p. 809). He attested to the ‘honest scholarship and sound common sense’ of Roscher’s works, which ‘helped to make them perhaps more useful to many generations of students than would have been more original productions’ (ibid., p. 508). Schumpeter pointed this ambivalent assessment not only at Roscher in general, but also at his essay on the theory of sales crises in particular. He perceived Roscher as a leading representative of the view ‘that crises will occur when anything of sufficient importance goes wrong’, and stated that ‘Roscher presented what can only be described as a fricassee of most of the ideas that were current at the time he wrote’ (ibid., p. 741). A completely opposite assessment is given in Erich Streissler’s modern interpretation of Roscher’s essay. Streissler recognizes Roscher’s splendid article ‘Zur Lehre von den Absatzkrisen’ as ‘a climax of German economics in the nineteenth century’ (Streissler, 1995, p. 112) and goes so far as to say that ‘if Keynes had only read and borne in mind Roscher, it would have left little that was new for his General Theory’ (Streissler, 1994, p. 121). Once excited, Streissler perceives in the author of the most successful contemporary textbook, System der Volkswirthschaft, a ‘world-class economic theoretician’ (Streissler, 1994, p. 37): ‘the German Samuelson of his time’ (Streissler, 1995, p. 112). Which of these contradictory views is justified? It can be agreed with Streissler that Roscher’s historical view is not anti-theoretical, and that this can best be seen by looking at his crises essay from a modern perspective. We also agree with Streissler (1994, p. 46) and with Schumpeter (1954, p. 540) about the great similarity between Roscher and John Stuart Mill in their way of thinking, procedure and method, as comes out in a comparison of Roscher’s Grundlagen with Mill’s Principles (1848). Interestingly, it is Mill who, in his essay ‘Of the influence of consumption on production’, written in 1829 in reaction to the crisis in Britain of 1825–1826 but published only in 1844, was the first economist to clearly state that money not only is a medium of exchange, as pointed out by his teacher Ricardo, but enables the one act of interchange in a barter economy ‘to be divided into two separate acts or operations; one of which may be performed now, and the other a year hence, or whenever it shall be most convenient’ (Mill, 1844, p. 70).10 So it is clear that it was John Stuart Mill and not Roscher who was the first economist to emphasize the consequences of the store of value-function of money to allow the separation of sale and purchase. Roscher, who normally is reliable in his quotations and does not claim unwarranted originality, already in his 1849 crises essay is referring to Mill’s Principles (where Mill does not repeat his argument but adheres to the long-term implications of the quantity theory of money) but

206 Harald Hagemann nowhere to Mill’s 1844 essay. There remains a margin of doubt whether Mill’s essay ‘Of the influence of consumption on production’ was known to Roscher when he wrote the PRODUCTIONSKRISEN article in 1849. If it was, then Roscher was less innovative than believed by Streissler, but it once more clearly shows his pragmatic intelligence. A good cook has to buy the best and freshest ingredients available on the market to produce a tasty fricassee. This was certainly the case with Roscher, who then would have based his crises theory on ‘the freshest of Mill’s economic writings’ (Hicks, 1983, p. 61). Furthermore, Roscher put much more emphasis on the role of money as a store of value and the consequent separation of purchases from sales in a monetary economy than the later Mill, who nowhere made this argument in his early essay the regression line of his thought. However, neither Roscher nor Mill developed an assets or speculative motive regarding money demand. The potential separation of purchases and sales is not sufficient to refute Say’s law. Adam Smith had already pointed out that annual savings could be consumed productively by a different set of people, and later on orthodox economics relied on the interest rate mechanism to keep in line savings and investments for the economy as a whole. So a speculative-demand motive for holding money has to be added. Keynes therefore used the liquidity preference theory to score a debating point against the classical case of an equilibrium solution. Streissler (1994, p. 115) perceives in Roscher’s explanations an anticipation of Keynes’s speculative motive, albeit in an inverse and real rather than monetary form. In our view, Streissler’s excessively modernistic interpretation of Roscher goes too far. However, it cannot be denied that Roscher’s crises essay is an important one. The key argument has entered all later critiques of Say’s law as a necessary, albeit insufficient, element. This also holds for Marx, who was hostile to Roscher because of the latter’s refusal to acknowledge the labour theory of value and criticism of socialism. Marx called Roscher a ‘puny German plagiarist’ emitting ‘eclectic professorial twaddle (Marx, 1867, pp. 251, 295) His contemptuous remarks, however, cannot conceal that he had studied Roscher’s writings carefully and that some of his statements on economic crises, especially in Volume III of Capital, were influenced by Roscher (and Mill). This is a good indicator for the lasting importance of Roscher’s crises article.

NOTES 1 Roscher repeatedly called Rau his ‘teacher’, although in a formal sense Roscher never was a student of Rau, who taught at the University of Heidelberg from 1822 until 1870. 2 For greater detail, see Chipman, 2005. 3 Roscher (PRODUCTIONSKRISEN, p. 723, note 2) refers to Canard, who had compared the relationship between production and consumption in the economy with the relationship between arteries and veins. 4 Modern macroeconomic theory has shown that deficient price flexibility is not a necessary condition for the existence of underemployment equilibria. For a deeper analysis of this argument with regard to Roscher’s theory of crises, see the discussion in Streissler, 1994, pp. 110–11).

Wilhelm Roscher’s crises theory 207 5 Roscher did not work out all the consequences of a credit economy as, for example, Wicksell did later. For a critical evaluation of Roscher’s monetary theory, see Barkai, 1989. 6 See Fisher, 1933 and Tobin, 1980, Ch. 1. 7 On this point, see also Schefold, 1994, p. 18. 8 See Wagner, 1857 and the contribution by Gioia on Wagner in this volume, Chapter 14. 9 Roscher’s argument very much resembles the one made by Hicks in his last book, A Market Theory of Money, where Hicks (1989) emphasized the discipline and confidence requirements of the central country’s currency in a polycentric model of the international economy. 10 For a detailed assessment of Mill’s crises theory, see Hagemann, 2002.

REFERENCES Barkai, H., 1989, The old historical school: Roscher on money and monetary issues, History of Political Economy, 21: 2, pp. 179–199. Bergmann, E. von, 1895, Die Wirtschaftskrisen. Geschichte der Nationalökonomischen Krisentheorieen (Stuttgart: Kohlhammer). Chipman, J., 2005, Contributions of the older German schools to the development of utility theory. In C. Scheer (ed.), Studien zur Entwicklung der ökonomischen Theorie, Vol. XX: Die Ältere Historische Schule: Wirtschaftstheoretische Beiträge und wirtschaftspolitische Vorstellungen (Berlin: Duncker & Humblot), pp. 157–259. Fisher, I., 1933, The debt-deflation theory of great depressions, Econometrica, 1: 4, pp. 337–357. Hagemann, H., 1995, Roscher and the theory of crises, Journal of Economic Studies, 22: 3–5, pp. 171–186. Hagemann, H., 2001, The Verein für Sozialpolitik from its foundation (1872) until World War I. In M. M. Augello and M. E. L. Guidi (eds), The spread of political economy and the professionalisation of economists. Economic societies in Europe, America and Japan in the nineteenth century (London and New York: Routledge), pp. 152–175. Hagemann, H., 2002, Zur Debatte um das Saysche Gesetz: Mill als Krisentheoretiker. In E. W. Streissler (ed.), Studien zur Entwicklung der ökonomischen Theorie. Vol. XIX. John Stuart Mill (Berlin: Duncker & Humblot), pp. 191–214. Hermann, F. B. W., 1832, Staatswirthschaftliche Untersuchungen über Vermögen, Wirthschaft, Productivität der Arbeiten, Kapital, Preis, Gewinn, Einkommen und Verbrauch (Munich: Anton Weber’sche Buchhandlung). Hicks, J., 1983, From classical to post-classical: the work of J. S. Mill. In J. Hicks (ed.), Classics and moderns: collected essays on economic theory, Vol. III (Oxford: Basil Blackwell), pp. 60–70. Hicks, J., 1989, A market theory of money (Oxford: Clarendon Press). Marx, K., 1867, Capital: a critique of political economy, Vol. 1 (London: Lawrence & Wishart). Menger, C., 1871, Grundsätze der Volkswirthschaftslehre (Vienna: Wilhelm Braumüller). English translation as Principles of economics, with an Introduction by F. A. Hayek (New York and London: New York University Press, 1981). Mill, J. S., 1844, Essays on some unsettled questions of political economy, 2nd edn, 1874, reprint, Clifton, 1974 (New York: Augustus M. Kelley).

208 Harald Hagemann Mill, J. S., 1848, Principles of political economy, reprint, Fairfield, 1976 (New York: Augustus M. Kelley). Rau, K. H., 1821, Malthus und Say über die Ursachen der jetzigen Handelsstockung (Hamburg: Perthes und Besser). Rau, K. H., 1826–1837, Lehrbuch der politischen Ökonomie (Heidelberg: C. F. Winter): Vol. I: Grundsätze der Volkswirthschaftslehre (1826); Vol. II: Grundsätze der Volkswirthschaftspflege (1828); Vol. III: Grundsätze der Finanzwissenschaft (1832–1837). Ricardo, D., 1821, On the principles of political economy and taxation, 3rd edn, The works and correspondence of David Ricardo, Vol. I, Sraffa, P. (ed.), with the collaboration of M. H. Dobb (Cambridge, 1951: Cambridge University Press). Roscher, W., 1842, Leben, Werk und Zeitalter des Thukydides (Göttingen: Vandenhoeck & Ruprecht). Roscher, W., 1843, Grundriß zu Vorlesungen über die Staatswirthschaft. Nach geschichtlicher Methode (Göttingen: Dieterich). Roscher, W., 1854–1894, System der Volkswirthschaft (Stuttgart: Cotta). Vol. 1: Die Grundlagen der Nationalökonomie (1854, 26th edn, published in 1922; English translation from the 13th edn by J. J. Lalor as Principles of political economy, 2 vols., Chicago: Callaghan and Company, 1878); Vol. 2: Nationalökonomik des Ackerbaues und der verwandten Urproduktionen (1859; 14th edn, 1912); Vol. 3: Nationalökonomik des Handels und Gewerbefleißes (1881; 8th edn, 1912–1917); Vol. 4: System der Finanzwissenschaft (1886; 5th edn, 1901); Vol. 5: System der Armenpflege und der Armenpolitik (1894; 3rd edn, 1906). Roscher, W., 1861, Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte (Leipzig and Heidelberg: C. F. Winter’sche Verlagshandlung). 3rd enlarged and corrected edn, 1878. Roscher, W., 1874, Geschichte der National-Oekonomik in Deutschland (Munich: R. Oldenbourg). Say, J.-B., 1803, Traité d’économie politique ou simple exposition de la manière dont se forment, se distribuent et se consomment les richesses (Paris: Rapilly); English translation from the 4th French edn, 1821: A treatise on political economy (reprint, New York, 1971: Augustus M. Kelley). Schefold, B. (ed.), 1994, Wilhelm Roscher’s Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte (Düsseldorf: Verlag Wirtschaft und Finanzen). Schumpeter, J. A., 1954, A history of economic analysis (London: George Allen & Unwin). Streissler, E. W., 1990, The influence of German economics on the work of Menger and Marshall. In B. Caldwell (ed.), Carl Menger and his legacy in economics. Annual supplement to Vol. 22, History of political economy, pp. 31–68. Streissler, E. W., 1994, Wilhelm Roscher als führender Wirtschaftstheoretiker. In B. Schefold, (ed.), Wilhelm Roscher’s Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte (Düsseldorf: Verlag Wirtschaft und Finanzen), pp. 37–121. Streissler, E. W., 1995, Wilhelm Roscher. Zur Lehre von den Absatzkrisen. Oder: Gibt es in der relevanten Konjunkturtheorie und -politik in den letzten 140 Jahren etwas Neues?. In E. Matzner and E. Nowotny (eds), Was ist relevante Ökonomie heute. Festschrift für Kurt W. Rothschild (Marburg: Metropolis), pp. 111–121. Tobin, J., 1980, Asset accumulation and economic activity (Oxford: Basil Blackwell). Wagner, A., 1857, Beitraege zur Lehre von den Banken, Leipzig: Voss.

8

Charles Coquelin Banking monopoly and commercial crises Daniele Besomi

C. Coquelin and G.-U. Guillaumin, Dictionnaire de l’économie politique, contenant l’exposition des principes de la science, l’opinion des écrivains qui ont le plus contribué à sa fondation et à ses progrès, la bibliographie générale de l’économie politique par noms d’auteurs et par ordre de matières avec des notices biographiques et une appréciation raisonnée des principaux ouvrages, Paris: Guillaumin, 1852–1853.1

8.1 THE DICTIONNAIRE DE L’ÉCONOMIE POLITIQUE The Dictionnaire de l’économie politique (Dictionary of political economy, containing the exposition of the principles of the science, the opinion of the writers who have significantly contributed to its foundation and its progress, the general bibliography of political economy organized by author’s names and by subjects, and a critical appreciation of the main writings) was published in Paris in two volumes (with a total of almost 1,900 pages) in 1852 and 1853 under the direction of Gilbert-Urbain Guillaumin (who was also the publisher), jointly with Ambroise Clément at first (he had to resign due to supervening duties after the letter B, but wrote the INTRODUCTION), then with Charles Coquelin, and finally alone after the death of Coquelin in 1852. Guillaumin was the publisher of a number of important economic writings, including the Journal des Économistes, the Annuaire de l’économie politique et de la statistique, and the Collection des principaux économistes, plus two other specialized dictionaries, the →Dictionnaire du commerce et des marchandises (1837–1839) and the →Dictionnaire universel théorique et pratique du commerce et de la navigation (1859–1861).2 He felt that while economic treatises covered their ground well, a dictionary enabling access to economic knowledge to people unaccustomed to technical writings or unable to devote a long time to the study of the subject was needed. →Ganilh’s Dictionnaire analytique d’économie politique (1826) and →Sandelin’s Répertoire général d’économie politique ancienne et moderne (1846–1848), in fact, were not up to the task, the former being incomplete

210 Daniele Besomi and the latter consisting of a collection of articles that had already appeared in periodical publications. Guillaumin started this project with a very ambitious purpose in mind: to systematize the ultimate truths that emerged from the ‘ocean of contradictory doctrines’, taking care that in spite of the shades of opinion ‘the same general doctrine prevailed’ so that the dictionary ‘could serve as a guide to the reader’. For this reason, the title Dictionnaire de l’économie politique was chosen, in contrast to Ganilh’s Dictionnaire d’économie politique, with the article indicating uniqueness. Particular care was devoted to the biographical and bibliographical parts, which had the explicit aim of providing a complete bibliography of the subject3 (Guillaumin, PRÉFACE DE L’ÉDITEUR to the Dictionnaire, 18534). The writing of the dictionary admittedly fitted in with the propaganda work of the economists belonging to the French liberal school, grouped together within the Société d’économie politique (of which Guillaumin was the president) and regularly writing in the Journal des Économistes (the oldest professional periodical devoted to political economy, founded in 1841) but without access to official teaching outlets in French universities.5 Most of the authors of the entries were indeed part of this group, more precisely of the second generation, engaged in consolidating the theoretical tradition stemming from Jean-Baptiste Say, but also in reinforcing its social and academic predominance (see e.g. Arena, 2001). The targets are made clear in Clément’s INTRODUCTION to the Dictionnaire. Ignorance of political economy has had pernicious effects, resulting in the adoption of ‘disastrous or absurd measures’ (such as protectionism and the issuing of the assignats) and encouraging governments to take over responsibilities and privileges which ought to pertain only to citizens, thereby themselves becoming the main cause of instability and insecurity and leading towards universal communism (pp. xi–xii). The educational system after the 1848 revolution attempted to have political economy taught from the viewpoint of the (false) organization of labour, while in 1850 teaching focused on French commercial legislation, that is, it incorporated the protectionist viewpoint. However, the only proper way of teaching political economy was to reflect the understanding of the nature of things as observed (p. xiii). The dictionary was seen as ‘the best means for the rapid propagation of the main notions’ and ‘the clearest truths’ of political economy (pp. xii–xii). Although the discipline was recognizably still a work in progress, it was deemed to be at a sufficiently advanced stage that ‘there could be no legitimate doubt on its essential principles, and that the truths based on these principles will not be disproved by further research or discoveries’. Dissidence existed, but its extent and importance were vastly exaggerated; most writers fully agreed on a vast number of propositions, while some dissenters did not really have the qualifications to be called economists6 (p. xiv). Economics still drew hostility deriving from particular and illegitimate interests it threatened. The diffusion of the doctrine would prove that legitimate interests are much vaster, and political economy would acquire an irresistible force, as had already happened in England and in the United States (p. xv). The dictionary was thus prepared in the hope that ‘those who know the truths of the science and are devoted to their diffusion will not be powerless for

Coquelin on bank monopoly and crises 211 much longer in their efforts and be relieved from having to repeat the dolorous protestation, E pur si muove’ (p. xxvii).

8.1.1 History and revisions The dictionary went through three further editions (1854, 1864 and 1873), but remained practically unaltered throughout; the entry on commercial crises, in particular, was not updated, not even by completing the list of crises with those that occurred in the intervening years – 1857 and 1866. The spirit of the Dictionnaire was partly retained in the entirely revised version edited by Léon Say and Joseph Chailley in 1891–1892, titled →Nouveau dictionnaire d’économie politique, when it was judged that the practical part of the dictionary7 had shown evident signs of ageing. The doctrinal part, however, was also revised, including the entry on crises, written by Juglar (1891; for a discussion, see Chapter 12).

8.1.2 Influence Yet almost 40 entries of the original dictionary had recently been translated and incorporated in →Lalor’s Cyclopædia of political science (19 of which were written by Coquelin, not including, however, his entry on crises 8), which went through a second edition (again incorporating those entries) at the same time as Chailley revised the Nouveau dictionnaire. Other articles had previously been translated into Italian by Francesco Ferrara for his Biblioteca dell’economista. Eight of these were written by Coquelin (again, neither BANQUE nor CRISES COMMERCIALES). The importance of the Dictionnaire was widely acknowledged abroad. Macleod, for instance, thought it ‘excellent’ (COQUELIN, CHARLES, in →Macleod’s Dictionary of political economy, 1863, p. 557). Jevons described ‘Guillaumin’s excellent Dictionnaire de l’Économie Politique’ as ‘on the whole the best work of reference in the literature of the science’ (but criticized it for not mentioning Cournot) (Jevons, 1879). The judgement was taken up and qualified as ‘just’ by Ingram (1888, p. xiv). De Vivo, in a quick list of economic dictionaries, describes it as ‘still useful today’ (2006, p. 121). Indeed, a cursory search on the internet shows several hundred citations of entries from the Dictionnaire.

8.2 CHARLES COQUELIN Charles Coquelin was born in Dunkirk on 25 November 1802. The son of a family of merchants, he had an inside knowledge of trade. However, he studied law in Paris, where he became acquainted with political economy. He practised law in Dunkirk until 1830, but his main interest seems to have been directed towards economics. In 1827 he founded a periodical titled Les Annales du Commerce, which lasted only one year. In a series of articles published in it, he already advocated freer banking, arguing that such a system would reduce commercial fluctuations

212 Daniele Besomi and increase prosperity (later, he radicalized this position and maintained that free banking would eliminate fluctuations altogether). He moved to Paris in 1832 and started writing economic articles for Le Monde, Le Droit and Le Temps (a journal linked to the liberal left). In the latter periodical, he published some articles on banking in the United States, where he lauded the freer banking practice but admitted that some regulations might be necessary and useful. There followed pieces on banking in England, where he opposed the views of both the Currency and the Banking schools, and argued that the privileges of the Bank of England had a destabilizing effect. Before deepening and radicalizing his views on banking, Coquelin acted as an adviser to the linen industry. He wrote some articles on the subject and a Nouveau traité complet de la filature du lin et du chanvre (1846), and meanwhile started collaborating with the prestigious periodical Revue des Deux Mondes, to which he contributed some articles on money and banking. In 1844 Coquelin took part in Bastiat’s movement for free trade, and in 1848 he took over from Bastiat the editorship of Le Libre-Échange. In 1848 he started writing for the Journal des Économistes. His eclecticism and erudition induced Guillaumin to choose him as editor of the Dictionnaire de l’économie politique. He died at the age of 50 on 12 August 1852.9 Coquelin’s main writings on crises are an article titled ‘Les crises commerciales et la liberté des banques’, published in the 1 November issue of the Revue des Deux Mondes (1848a, pp. 445–70), translated as ‘The causes of commercial crises’ in Hunt’s Merchants’ Magazine and Commercial Review (October, 1849, pp. 371–389) and abridged as ‘Restrictions on banking the cause of commercial crises’, Bankers’ Magazine (London) (1850); and the book Le crédit et les banques, published in 1848 by Guillaumin (2nd edition, 1859; 3rd edition, 1876) – the chapter on commercial crises takes up in its entirety the Revue des Deux Mondes article, with the addition of a supplementary section on the 1837 crisis in the United States. Coquelin’s entry for the Dictionnaire on CRISES COMMERCIALES takes up by and large the specific explanation of the phenomenon advanced in the Revue des Deux Mondes article, adding, however, special emphasis on the epistemic aspects of the causal interpretation of the phenomenon.

8.3 CRISES IN THE DICTIONNAIRE DE L’ÉCONOMIE POLITIQUE

8.3.1 The entries relating to crises Besides Coquelin’s CRISES COMMERCIALES, a few other entries of the Dictionnaire are relevant for this subject. BANQUE and CRÉDIT, also written by Coquelin, complement each other and the entry on crises. Each entry is, as one would expect, self-contained, but discusses some details useful for a full understanding of the others. BANQUE – a lengthy article, pp. 107–145 – thus examines in detail the role of banks in some of the past crises (1826, in particular). While in CRISES

Coquelin on bank monopoly and crises 213 COMMERCIALES the destabilizing role of credit is stressed, in CRÉDIT Coquelin emphasizes its function in the expansion of production. The alternative approach to crises, focusing on the gap between production and consumption rather than on credit, is barely mentioned. There is a brief reference to it in the entry on CONSOMMATION by Garnier (p. 469), cross-referring to the entries on production, outlets and Sismondi. PRODUCTION, by Dunoyer, does not, however, take up the problem; SISMONDI’s discussion of crises is described by M. Monjean as the product of a momentary lapse of reason (‘he lost the orthodoxy of his principles as well as the solidity of his reason . . . and became the incoherent adversary of economic freedom’, p. 619); the entry on outlets, DÉBOUCHÉS, entirely consists of long quotations from Say’s Cours d’économie politique (1832, Part III, Ch. 2, first half) – the entry is attributed to Say himself – stating the well-known law of markets, which denied that overproduction could happen at all except for temporary mismatches.

8.3.2 Summary of Coquelin’s entry on commercial crises Coquelin’s entry CRISES COMMERCIALES begins with a definition of a commercial crisis as ‘a sudden disturbance of business, which perturbs its progress and to a certain extent suspends its course’, and with a description of the typical phenomena occurring during a crisis, namely, general discredit and depreciation of commercial values, slowdown or interruption of discounts, glutted markets, followed by failures and bankruptcies, troubles on the stock exchange, cessation of production and unemployment.10 Although crises also occurred in the past as a consequence of wars, famines or other similar troubles, their suddenness, generality and frequency are a new phenomenon, related to the development and extension of credit. As most transactions are done on credit and require mutual confidence between traders, it is sufficient that at some point any derangement undermines this confidence, and induces doubt that contractual obligations will be fulfilled, to bring an immediate halt to transactions. In such a situation, it is not surprising that the disease spreads rapidly, like fire along a line of gunpowder, encompassing in little time the entire commercial system. Even though crises are related to credit, one should not conclude that credit is itself negative. During crises, there is indeed a temporary disappearance of credit. This can offset some of the advantages brought by credit, while all the relationships based on monetary exchanges remain unaffected. Crises, therefore, by recreating the conditions that characterize a credit-less economy, enable one to appreciate the former advantages of credit. Crises can thus occur without an obvious, external reason. This (so to speak) spontaneous character of crises is one of the most curious phenomena at the present time. The origin of such events must lie within the commercial system itself. ‘Spontaneous’ crises recurred frequently and ‘almost periodically’ (pp. 526, 528, 530, 533) during the nineteenth century: for France these occurred in 1811, 1819,

214 Daniele Besomi 1825, 1830–1831, 1837 and 1846, and more or less the same dates applied for England, the solidarity being due to the common interests shared by traders, who were subject to the same influences, good or bad. Only the intensity of crises varies, depending on the degree of the extension of credit. Such catastrophes are all the more surprising as they often happen in the midst of the most prosperous times. As the emergence of crises is contemporary to both the development of industry and the extension of credit, two kinds of explanations have been offered for the phenomenon. Some stressed the excessive or misdirected development of productive forces in manufacture,11 others stressed instead the abuse of credit, favoured by banking institutions. Excess of commercial speculation is also often mentioned, but this is normally so strictly associated with the abuse of credit that it can hardly be considered a distinct cause. J.-B. Say explained the English crisis of 1825 as a consequence of the banks’ capacity to issue money. He claimed that banks had over-issued banknotes, which they had used to discount an excessive amount of commercial papers. Correspondingly, traders and entrepreneurs could expand their firms well beyond their capital. At the same time, however, the over-issue of paper money had determined a fall in its value as compared to gold sterling, so that holders of paper currency ran to the banks to have their money converted into gold. The banks, being obliged to convert, thus had to buy gold at any price and coin money with it, at considerable expense. To avoid this, they started withdrawing banknotes from circulation, thereby ceasing to discount commercial papers and depriving traders of the resources on which they counted for creating and expanding their firms. To find the necessary cash to fulfil their obligations, merchants were forced to sell their goods at a loss; prices dropped, unemployment rose, and business failures and bankruptcies spread throughout the country (Say, 1832, p. 474 of the 1852 edition). According to Coquelin, there is some truth in this account, in particular regarding the excessive discounts given by the banks. These were much larger just before the crisis than in previous years, and these discounts undoubtedly fuelled speculation. Yet this explanation is not sufficient, as the primum mobile, namely, the first cause of this abuse and of the wild speculations, remains unaccounted for. Say ascribes the crisis to the run on the banks. However, if this were the case, the number of notes in circulation should have dropped at the critical time, while the opposite happened, with the number of notes being higher at the peak of the crisis early in 1826 than at its outbreak in 1825. What really caused the crisis was not requests for the conversion of notes, but the withdrawal of deposits on current accounts. The result is the same, but the principle is different. The other explanation of the 1825 crisis reported by Coquelin, which was as unsatisfactory as Say’s, was offered by J. Wilson, who attributed it to a speculation mania caused by the tempting appeal of some operations. According to him, in 1824 speculation was stimulated by the success of almost all the foreign lending undertaken in the previous five years, and by the high price of such foreign funds; mining abroad was also profitable. Moreover, and most importantly, imports of goods were quite small, barely covering demand, so that prices rose significantly. Fostered by these conditions, speculation became feverish in the early months of 1825 (Wilson, 1847, p. 172). Yet, as described by Wilson himself, speculation

Coquelin on bank monopoly and crises 215 affected many different kinds of enterprises and goods of all kinds, and it is hardly conceivable that ‘the same mood emerged at once in so many different directions, unless it was determined by a common cause. One must seek to identify this prime cause.’ However, Wilson does not offer any. Undoubtedly, admitted Coquelin, the abuse of credit was a common condition of all commercial crises since the beginning of the century, and is one of their determining causes. It is also beyond doubt that excessive speculation characterized all these events. But the origin of the abuse of credit and of speculation mania still has to be explained: ‘affirming that fevers are breaking out is purely playing with words. There is nothing natural in similar diseases breaking out without being induced by something. The almost periodical recurrence of these calamities proves instead that they have a hidden cause, steadily acting’ (p. 530). This cause lies in the existence of privileged banks (banques privilégiées) and in their way of operating. The facts of the crises are as follows. At the time of crises, a large number of individuals withdraw their deposits in current accounts. Accordingly, the total amount of deposits shrinks considerably. At the same time, the number of discounts increases. Both factors combine to reduce the banks’ balances in specie. Figures for both England (1825 and 1837 crises) and France (1846–1847 crisis) show that the circulation of banknotes does not diminish at the time of crises and even rises slightly, while deposits by both the public and the government decrease by a sizeable amount and the banks’ discounts visibly escalate. How can these facts be ascribed to their prime cause, the monopoly of the privileged banks? If no public banks were authorized to issue paper money, the placement of savings would be somewhat difficult: either they would be retained by the saver until enough were accumulated to be put to use, or they would be temporarily deposited in commercial banks that could in turn lend them out, or they would be lent directly to manufacturers or merchants. The interest rate associated with such operations would be fairly high, as it would have to compensate for the risk involved and enable the lender to retain his position. Such a situation is very inefficient, but the risk of gluts of savings is remote. Where instead there is a privileged bank entitled to issue banknotes, the situation is completely different. Apart from its own deposits, such a bank can lend out the paper currency it creates. A much lower interest rate can thus be charged to obtain the same yield on the bank’s capital. Issuing banks can therefore increase their profit rates and compete on an unequal footing with the commercial banks and private lenders. The latter tend to disappear, while commercial banks are reduced to the role of intermediaries between the public and the issuing bank. (The matter is discussed in more detail in Coquelin’s entry on BANQUE in the same Dictionnaire.) The savings previously managed by private lenders and commercial banks can no longer be placed on the capital market. They accumulate without being able to find a placement apart from the estate market, some Treasury bonds and a limited number of direct investments, and therefore are eventually temporarily deposited in commercial banks or even directly at the issuing bank for a very small interest rate. The issuing bank, in turn, can use these deposits to further expand its discounts. Such a situation, however, is rather dangerous, as the issuing bank is lending money

216 Daniele Besomi which it only has in temporary custody and which can be withdrawn at any time, and thus placing itself at risk of becoming overdrawn. The speculative frenzy described by Wilson originates precisely in the large amount of unused capital looking for an outlet. Any project, even the most risky, is more interesting than receiving a ridiculously low interest rate. Bank directors are also keen to engage in such business deals, as well as manufacturers and merchants, so that extended plans for absorbing the funds seeking placement are set up and quickly attract the floating capital. This is then withdrawn from the bank where it was temporarily deposited. The commercial banks, whose reserves quickly diminish, attempt to replenish them by withdrawing their own funds from the central bank or trying to convert more banknotes. As a consequence, the specie reserves of the central bank diminish very rapidly, accelerated by the Treasury also withdrawing its deposits to deal with the scarcity of specie prevailing everywhere.12 To avoid bankruptcy, the issuing bank is forced to tighten credit at once, thus bringing about the situation described by Say. This is the typical progression of the ‘unfortunate perturbations called commercial crises’, those occurring ‘spontaneously’. They all have the same features and the same origin, and are necessarily followed by a period of inactivity and lifelessness. The spirit of speculation lies dormant for a while, frightened by the recent disasters; capital remains somewhat distrustful, and at any rate the general state of depletion makes it easy to find alternative placements. However, as the same cause – the issuing bank’s monopoly – is constantly operating, sums of capital seeking placement slowly start to accumulate and become overabundant, and after some time produce the same effects. ‘This is how crises become almost periodical’ (p. 533). Excess and speculation are their determining cause, and are systematically accompanied by the abuse of credit. However, the first cause is the exclusive privilege of the issuing bank. Before such institutions existed, commercial crises were unknown, and they will disappear when banks are free to compete under the same conditions. In fact, if the central bank started to cause, as a consequence of its issuing of paper money, an excess of capital, the owners of these savings would reunite and start discounting commercial paper just as the central bank would normally do; if this second bank were not enough, a third or more would be founded. Not only would a glut of capital be impossible, but as banks would operate on their own deposits rather than on third-party capital, the risk of being overdrawn would be considerably reduced. The spirit of speculation would have far less reason to arise, and even if it did, its consequences would be far less dramatic.

8.4 ASSESSMENT Coquelin’s explanation of crises belongs to the family of theories which see them as the result of some systematic institutional friction or impediment preventing the correct working of economic laws. Like most of his contemporaries, Coquelin saw the culprit as being in the monetary field; he was, however, more radical than

Coquelin on bank monopoly and crises 217 most of them, as rather than blaming some special operation of the banking system, he pointed the finger at the very existence of a privileged bank.13 This view had a precedent, which Coquelin himself quoted in the 1848 article for the Revue des Deux Mondes (but not in the entry, disgracefully one of the few lacking a bibliography), namely, Carey’s The credit system in France, Great Britain and the United States (1838).14 His view on crises, however, failed to break through,15 although he is occasionally quoted for his views on free banking. Historically, the range of crises he considered is rather limited, as it only starts with the 1811 crisis (the same applies to the 1848 article), while some of his contemporaries were examining a longer series of events, going back to 1797 and occasionally also to the 1763 crisis. This is a natural consequence of the point he wanted to argue, as the Bank of France was only founded in 1800, and its privilege of issuing banknotes extended nationwide only in 1848. The Bank of England had indeed been privileged since the Bank Acts of 1708 and 1709, but only had a partial monopoly, within 65 miles of London, which became nationwide with the Bank Charter Act of 1844; notes above £5 were only made legal tender in 1833. Nevertheless, some parts of Coquelin’s argument are noteworthy. Although he certainly wasn’t the first writer to claim that crises recur almost periodically, he was among the first who actually attempted to explain periodicity. This phenomenon (more in the sense of the recurrence of crises, rather than as regularity in their rhythm) had been noted for a long time before Coquelin; there are observations dating from the end of the eighteenth century, growing in frequency as crisis succeeded crisis and becoming widespread enough to be quoted, by the time of Coquelin’s article in the Revue des Deux Mondes, in official documents such as the 1839 Report of the Secretary of the Treasury (Woodbury, 1840) and the House of Commons Secret Committee on Commercial Distress (1848), and to be recorded in Mill’s Principles (1848).16 Yet most of these writers were content to record the fact. Some took it as indicating that crises are not disconnected phenomena, but are related to each other, and are endogenously generated by the working of the economic system, possibly favoured or caused by the specific institutional setting. Coquelin reports that ‘As the establishment of [privileged] banks has so far almost everywhere been followed by commercial perturbations more or less serious, which have become in certain countries more or less periodical, it has generally been thought that these fatal accidents are the inevitable results of these institutions’ (1848a, p. 372). He went further than most of his contemporaries, however, and tried to explain the recurrence of crises. In the 1848 article, after reconstructing the ‘rigorous chain of consequences’ of privileged banks ending ‘in an inevitable crisis’, he argued that after the ‘explosion of the mine’ and the general break-up, the surviving capitalists – not trusting anyone else – deposit the money they have been able to save from the wreckage in the privileged bank: ‘the accumulation of deposits recommences, to end again, some years later, in the same results’ (ibid.; 1849 translation, pp. 377–379). The explanation is incomplete, but the attempt is interesting. Like most of his contemporaries, Coquelin implicitly takes for granted that after the crisis the productive system will automatically restart along a path of advance. While his thought as to what happens to the savings is clear, the origin of the growth out of

218 Daniele Besomi which these savings are coming from remains unexplained. The result is an account of the recurrence of crises, but not of a cyclical mechanism describing a proper alternation and mutual causation of periods of advance and depression. Nevertheless, the epistemic reflection leading to his statement, as recast in the dictionary entry, is interesting and – jointly with similar attempts – proved to be momentous in the transition from crises to cycle theories. Already in the 1848 article, Coquelin lamented that the existing literature on crises (the list of which he boiled down to Tooke, Torrens, Overstone and Wilson) focused on the difference between the various crises rather than on ‘their traits of resemblance’, dwelling ‘upon the particular circumstances of commercial crises, without studying sufficiently their general and dominating character’, ‘stopping almost always at the immediate or secondary causes by which they are determined, instead of going up to the primordial cause which engenders them’ (Coquelin, 1848a, 1849 translation, p. 384). This distinction between a primary and secondary cause was also not new in the literature, but it only had four antecedents. Two, due to Robert Cockburn (1840) and to Isaac Preston Cory (1842), were rather vague. The French agricultural economist Jean-Edmond Briaune had argued that similar effects must have similar causes, so that the proper approach for the explanation of crises is to focus on the common, primary cause while considering the specific determinants of each occurrence as secondary causes (Briaune, 1840; for a more detailed discussion of these three contributions, see Chapter 6, Section 6.5.2). A few months before Coquelin’s article was published, James Anthony Lawson referred to the causal principle, according to which similar causes must be followed by similar effects, and argued that the mechanism based on credit–overtrading– speculation destabilizing the system must be the primary cause, while the actual shocks toppling it are only secondary causes of the crises (Lawson, 1848; for a discussion, see Besomi, 2008). Several years later, the distinction was taken up, and placed at the very foundation of his argument, by Juglar (1862, Chapter 1), and later also by Mills (1868) and Jevons (1878). The common trait of these approaches is that they turned crises from individual, disconnected events into instances of the same class of events, thereby paving the way for their discussion in terms of a general law (for a discussion, see Besomi, 2010b, pp. 208–217). Accordingly, Coquelin’s entry is dedicated to ‘commercial crises’ in the plural; only Lemonnier (CRISES COMMERCIALES, in →Dictionnaire de la conversation et de la lecture, 1835; see Chapters 5 and 6) and Roscher (PRODUKTIONSKRISEN, in [Brockhaus’s] →Die Gegenwart, 1849; see Chapter 7) put it in the plural before him, while earlier entries had the title in the singular: Blanqui’s CRISE COMMERCIALE, in →Encyclopédie des gens du monde, Vol. 7, 1836; [Monbrion]’s CRISE COMMERCIALE ET INDUSTRIELLE, in Monbrion’s →Dictionnaire universel du commerce, 1838; Michel’s CRISE COMMERCIALE, in Guillaumin’s →Encyclopédie du commerçant, 1839; Courcelle-Seneuil’s CRISE, in →Duclerc and Pagnerre’s Dictionnaire politique, editions from 1842 to 1860; Dupin’s CRISE COMMERCIALE, in →Encyclopédie du dix-neuvième siècle, 1846 (see Chapters 5 and 6); and the anonymous HANDELSKRISE, in →Das große ConversationsLexikon für die gebildeten Stände (Meyers Konversationslexikon), 1849.17

Coquelin on bank monopoly and crises 219 The interesting addition introduced in the dictionary entry concerns the specific mode of operation of the causal factor. Having identified a common primary cause, Coquelin explained that it is its constant operation that determines the periodical recurrence of crises (p. 533). The system continuously accumulates tension, until after a time it explodes and relaxes. There were a number of explanations of crises relying on this principle, in particular those based on credit leading to overtrading, speculation and eventually abuse of credit until the system collapses. But there were also explanations relying instead on periodically operating causes: Briaune, for instance, attributed crises to the fluctuations in crops (1840), as later did Jevons (who attributed the cause of the latter to fluctuations in solar activity). Although Coquelin’s remark was not meant to be polemical with the alternative view, it is nonetheless interesting that he explicitly stressed this feature.18 Another aspect better emphasized in the dictionary entry than in the Revue article is that the outbreak of the crisis can be determined by any occasion, when the operation of the mechanism has been building up enough tension. The primary cause of the crisis is the factor generating this tension, while the occasioning event plays a subordinate part and is a secondary cause. Coquelin stopped short of reaching the conclusion to which similar arguments brought Lawson before him (1848) and Juglar later (1862) to argue that the system becomes unstable, and that it is precisely this instability that makes for the endogenity of crises. The expression used by Coquelin, a ‘débordement quelconque’ (p. 532), that is, ‘any overflow’, anticipates the metaphor later used by Juglar, who compared the accumulation of tension to the overfilling of a glass of water, when a single drop of water (the secondary cause) would determine the spillage (on Juglar, see Chapter 12).

NOTES 1 The entire dictionary is available on Gallica at http://gallica.bnf.fr. 2 On Guillaumin’s important role in organizing, via his publishing house, the rank of the liberal économistes, see Le Van-Lemesle, 2004, pp. 102–125. On the Dictionnaire de l’économie politique, see in particular pp. 123–125. 3 In his PRÉFACE DE L’ÉDITEUR, Guillaumin lists the bibliographical sources, screened line by line: Quérard’s France Littéraire, including the subsequent Littérature contemporaine; the Bibliographie générale de la France; Michaud’s Biographie universelle; the Biographie des contemporaines; Custodi’s Scrittori classici italiani di economia politica; de Bona y Ureta’s bibliography of Spanish economists; de la Sagra’s Catálogo de escritores económicos españoles (1848); the German biographical dictionaries by Ersch, Kaiser and Hinrichs; →Brockhaus-Konversationslexikon, →Rotteck’s Staatslexikon, the journals Archiv der politischen Oekonomie und Polizeiwissenschaft (1835–1853) and Zeitschrift für die gesamte Staatswissenschaft (1844–); and McCulloch’s Literature of political economy (1845). 4 Guillaumin’s PRÉFACE and Clément’s INTRODUCTION are both dated 1853, yet included in the first volume dated 1852. This probably reflects the fact that the Dictionaire, like many analogous works at the time, was first published in fascicles and only later as bound volumes. 5 De Molinari, 1853, p. 425 (de Molinari was himself an eminent member of this group, and wrote a number of entries for the Dictionnaire. He also wrote a biographical note

220 Daniele Besomi

6

7 8 9 10

11 12 13 14

on Coquelin; de Molinari, 1852). The point is also stressed in Garnier’s obituary of Guillaumin, where it is stressed that the Dictionnaire became the true encyclopaedia of the school of economists at a time when political economy was being heavily battered by all sorts of adversaries (Garnier, 1865, p. 14). The attitude of defining the holders of opposite views as non-economists, or even ‘enemies of political economy’, seems to have been widespread within the circle of writers for the Dictionnaire, as de Molinari qualified as such a friend of Coquelin who defended protectionism (1852, p. 168). Accordingly, Charles Gide denied the school the qualification of ‘liberal’: while admitting that its members adopted the motto laisser faire, laisser passer, the school showed itself to be most illiberal in the sense of its narrowness of ideas and intolerance of contrary opinion (1890, p. 612). The ‘art’ of political economy, as opposed to the ‘science’. On the origin of the distinction and its centrality for the liberal school, see Fontaine, 1996. A new entry on COMMERCIAL CRISES was written by White (1882). Notably, among the other entries there is J.-B. Say’s DÉBOUCHÉS, translated as OUTLET (on which see more below in the text). This section borrows from the biographical notices in de Molinari, 1852, de Nouvion, 1908 and especially Nataf, 2006, from which the assessment on the development and radicalization of Coquelin’s views on banking is drawn. Coquelin repeatedly insisted on the temporary character of crises: ‘this disturbance of business must be impermanent, otherwise it would not be a crisis but a chronic disease that would imply a rapid ruin or at least a decline of the country’ (p. 526). He also qualified crises as ‘brief’. Of this explanation there is no further mention in the entry, revealing that the case was deemed to be totally uninteresting and/or unlikely. Coquelin cited large excerpts from his own Le crédit et les banques, 1848b, pp. 221–224, which had already appeared in the 1848a article and is reproduced in Coquelin, 1849, pp. 377–378. This view was taken up by Gerolamo Boccardo in the entries on BANCA and CRISI in his →Dizionario dell’economia politica (1857–1853), which relied very much on Coquelin’s ideas and even on his wording; see Chapter 11. On Coquelin’s view and the debate on free banking in France, see Nouvion, 1908, pp. 48–63. De Molinari believed that Coquelin was the first writer in Europe to advocate free banking (1852, pp. 170–171). For a discussion of Carey and Coquelin’s views, see Nataf, 1993; Nataf, 2006 argues that Coquelin’s early writings published in 1832 in Le Temps anticipated Carey. Several writers, however, preceded both Carey and Coquelin, and blamed the monopoly of the issuing bank as the cause of panics and crises. The anonymous author of a pamphlet on Commerce in consternation: or, The banking bubble burst! cited a passage from the Leeds Intelligencer which argued that ‘we are satisfied that until the monopoly of the Bank of England is destroyed, as a check thus imposed on their arbitrary eductions of the circulating medium, periodical embarrassments like the present one are inevitable’ (Anonymous, 1826, p. 22). In a debate with Thomas Attwood on the respective merits of the English and the Scottish banking systems, John Sinclair argued in favour of the latter and against the privilege of the Bank of England; he maintained that ‘It is quite practicable, by placing the circulation of the country on a proper footing, to prevent the recurrence of those melancholy scenes of distress, which are so frequently experienced in England. In Scotland, where a judicious system of banking is established, and where any number of persons can associate for banking purposes, they are scarcely known’ (1826, p. 48). Mushet also argued that ‘When the monopoly of the Bank [of England] expires, and the trade in money is perfectly free, a better order of things may arise, and more paper and less coin may be employed, with perfect security to the public’, which would be protected from fluctuations in the rate of interest (1826, p. 206). The matter was also discussed by an anonymous contributor

Coquelin on bank monopoly and crises 221

15

16 17

18

to the Edinburgh Review under the heading ‘Monopoly, or free trade, in Banking’ (1833). Robert Bell (1838) also maintained that ‘so long as the monopoly of the Bank of England cannot be efficiently counteracted, we shall be exposed to periodical returns of monetary panics and convulsions’ (p. 22). More examples are surely likely to be found. Coquelin is barely mentioned in Bergmann’s monumental history of crises theories in the nineteenth century, and only in connection with his reference to their almost periodical recurrence (Bergmann, 1895, p. 235). John Mills, in his seminal paper on the credit cycle, also cited Coquelin only in connection with his observation that crises are ‘almost periodical’ – commenting that two decades later one could drop the adverb (Mills, 1868, p. 14n). Coquelin is not referred to by Hutchison (1953), nor – in connection with cycles of free banking – by Schumpeter (1954). There were entries on COQUELIN, CHARLES in →Palgrave’s Dictionary of political economy and in Seligman’s →Encyclopaedia of the social sciences (referring, however, to banking rather than to crises), but not in the →New Palgrave or in →Blaug’s Who’s who in economics. Nevertheless, Nataf claims that Coquelin’s writings on crises (misnamed ‘business cycles’) ‘were considered a crucial contribution until the end of the nineteenth century’; this view is not supported by any evidence (Nataf, 1993, p. 103; similarly, Nataf ’s entry on COQUELIN, CHARLES in →Glasner’s Business cycles and depressions: an encyclopedia, 1997); more modestly, elsewhere the same writer refers to the fact that two of Coquelin’s contemporaries and fellow members of the liberal group, de Molinari and Paul Coq, adopted his book as the best on the subject (Nataf, 2006, p. 525). A search through JSTOR and other bibliographic sources does not reveal any references to his specific explanation of crises. For a survey of the literature, see Besomi, 2010a. There were, of course, a number of books and articles titled in the plural: in the French language, the term ‘crises’ was used by Guéroult, 1831; Millot, 1837; Chitti, 1839; Briaune, 1840; in English the term ‘crisis’ was less used at the time, but terms such as ‘embarrassments’, ‘revulsions’ and ‘panics’ were used in the plural (e.g., McCulloch, 1819 and 1826; Joplin, 1841; Duncan, 1842; Lawson, 1848). The distinction was eventually explicitly discussed by E. D. Jones, who in 1900 suggested that explanations of the cycle could be divided into two categories: those ascribing the movement to a continuous cause, and those relying on intermittent pulses. The analogy he used to illustrate the former case is interesting: ‘To grant that a phenomenon is of periodic occurrence does not necessarily imply that the force which causes it is spasmodic or lacking in continuity. A regularly operating force, when at a certain point its cumulated effects disturb the equilibrium under which the force has up to that time operated, may manifest itself only periodically in certain of its aspects. The simplest illustrations of this are the intermittent spring and the geyser’ (Jones, 1900, pp. 131–132).

REFERENCES Anonymous, 1826, Commerce in consternation: or, The banking bubble burst! being a sketch of the rise, progress, and decline, of the late paper panic (London: Cock). Anonymous, 1833, Monopoly, or free trade, in banking, Tait’s Edinburgh Magazine, III, pp. 84–90. Arena, R., 2001, J-B. Say and the French liberal school of the nineteenth century. Outside the canon? In E. L. Forget and S. Peart (eds), Reflections on the classical canon in economics: essays in honor of Samuel Hollander (London: Routledge), pp. 205–223. Bell, R., 1838, Letter to James William Gilbart . . . manager of the London and Westminster Bank, on the relative merits of the English and Scotch banking systems: with practical

222 Daniele Besomi suggestions for the consolidation of the English joint-stock banking interest (Edinburgh: Bell & Bradfute). Bergmann, E. von, 1895, Die Wirtschaftskrisen: Geschichte der nationalökonomischen Krisentheorien (Stuttgart: W. Kohlhammer). Besomi, D., 2008, James Anthony Lawson on commercial crises and their periodical recurrence, Structural Change and Economic Dynamics, 19: 4, December, pp. 330–341. Besomi, D., 2010a, The periodicity of crises: a survey of the early literature. Journal of the History of Economic Thought, 32: 1, March, pp. 85–132. Besomi, D., 2010b, ‘Periodic crises’: Clément Juglar between theories of crises and theories of business cycles, Research in the History of Economic Thought and Methodology, 28A, pp. 169–283. Briaune, M., 1840, Des crises commerciales. De leur causes et de leur remèdes (Paris: Bouchard-Huzard; reprinted New York: Burt Franklin, 1971). Carey, H. C., 1838, The credit system in France, Great Britain and the United States (Philadelphia: Carey). Chitti, L., 1839, Des crises financières et de le réforme du système monétaire (Brussels: Meline). [Cockburn, R.], 1840, Reworks suggested by the present state of trade and credit (London: E. Wilson). Coquelin, C., 1848a, Les crises commerciales et la liberté des banques, Revue des Deux Mondes, XXVI, 1 November, pp. 445–470. Translated as Coquelin, 1849; translated and abridged as Coquelin, 1850. Coquelin, C., 1848b, Du crédit et des banques (Paris: Guillaumin. 2nd edn as Le crédit et les banques, 1859; 3rd edn, with an introduction by Courcelle-Seneuil and a biographical and bibliographical note by de Molinari, 1876). Coquelin, C., 1849, The causes of commercial crises, Hunt’s Merchants’ Magazine, XXI, October, pp. 371–388 (translation of Coquelin, 1848a). Coquelin, C., 1850, Restrictions on banking the cause of commercial crises, Bankers’ Magazine, X, pp. 219–227 and 308–313 (translates and abridges Coquelin, 1848a). Cory, I. P., 1842, Competition: its abuse one of the chief causes of the present distress among the trading, manufacturing, and commercial classes: with suggestions for remedying it (London: Painter). De Vivo, G., 2006. [Review of] The biographical dictionary of British economists. Contributions to Political Economy, 25: 1, pp. 121–126. Duncan, W. B., 1842, Mercantile embarrassments, and the present state of the banking system (Edinburgh: John Johnstone). Fontaine, P., 1996, The French economists and politics, 1750–1850: The science and art of political economy. Canadian Journal of Economics, 29: 2, May, pp. 379–393. Garnier, J., 1865, Notice sur M. Guillaumin, fondateur du Journal des Économistes (Paris: Parent). Gide, C., 1890, The economic schools and the teaching of political economy in France. Political Science Quarterly, 5: 4, December, pp. 603–635. Guéroult, 1831, De la Banque de France et du crédit considéré comme moyen de soustraire le pays aux crises commerciales (Paris: Les Marchands de nouveautés). House of Commons Secret Committee on Commercial Distress, 1848, First report from the Secret Committee on Commercial Distress, with the minutes of evidence (London: House of Commons). Hutchison, T. W., 1953, A review of economic doctrines 1870–1929 (Oxford: Clarendon Press). Ingram, J. K., 1888, A history of political economy (New York: Macmillan).

Coquelin on bank monopoly and crises 223 Jevons, W. S., 1878, Commercial crises and sun-spots, Pt. 1, Nature, XIX, 14 November, pp. 33–37 (reprinted in Investigations in currency and finance, edited by H. S. Foxwell, London: Macmillan, 1884, pp. 221–235). Jevons, W. S., 1879. Preface to the second edition, The theory of political economy (London: Macmillan). Jones, E. D., 1900, Economic crises (New York and London: Macmillan). Joplin, T., 1841, The cause and cure of our commercial embarrassments (London: James Ridgway). Juglar, C., 1862, Des crises commerciales et de leur retour périodique en France, en Angleterre et aux États-Unis (Paris: Guillaumin). Lawson, J. A., 1848, On commercial panics: a paper read before the Dublin Statistical Society (Dublin: Dublin Statistical Society). Le Van-Lemesle, L., 2004, Le juste ou le riche: l’einseignement de l’économie politique 1815–1950 (Paris: Comité pour l’histoire économique et financière de la France). [McCulloch, J. R.], 1819, Commercial embarrassments and trade with France, Edinburgh Review, LXIII, July, pp. 48–74. [McCulloch, J. R.], 1826, Commercial revulsions [review of The late crisis in the money market impartially considered, London, 1826], Edinburgh Review, XLIV, June, pp. 70–93. Mill, J. S., 1848, Principles of political economy with some of their applications to social philosophy, London. In J. S. Mill, Collected works, Vols II and III (Toronto: University of Toronto Press, and London: Routledge, 1965). Millot, L., 1837, Études sur les principales causes des crises commerciales et périodiques (Paris: E. Legrand et Descauriet). Mills, J., 1868, On credit cycles and the origin of commercial panics. Transactions of the Manchester Statistical Society, Session 1867–1868, pp. 5–40. Molinari, G. de, 1852, Charles Coquelin, Journal des Économistes, XXXI: 137–138, September–October, pp. 167–176 (reprinted in the 3rd edn of Coquelin, 1848). Molinari, G. de, 1853, [Review of] Dictionnaire de l’économie politique. Journal des Économistes, XXXVII, October–December, pp. 420–432. Mushet, R., 1826, An attempt to explain from facts the effect of the issues of the Bank of England upon its own interests, public credit, and Country Banks (London: Baldwin, Cradock & Joy). Nataf, P., 1993, New England’s depression-proof free banking system: the viewpoints of Henry Charles Carey and Charles Coquelin. In R F. Hébert (ed.) Perspectives on the history of economic thought, vol. IX: Themes on economic discourse, method, money and trade (Cheltenham: Elgar, pp. 97–106). Nataf, P., 2006, La vie et l’oeuvre de Charles Coquelin (1802–1852). In P. Nemo and J. Petitot (eds) Histoire du libéralisme en Europe (Paris: PUF), pp. 511–530. Nouvion, G. de, 1908, Liberté du commerce et des banques: Charles Coquelin: sa vie et ses travaux (Paris: Félix Alcan). Say, J.-B., 1832, Cours complet d’économie politique pratique: ouvrage destiné à mettre sous les yeux des hommes d’état, des propriétaires fonciers et des capitalistes, des savans, des agriculteurs, des manufacturiers, des négocians, et en général de tous les citoyens, l’économie des sociétés (Brussels: Meline. 3rd edn, annotated and augmented by H. Say, Paris: Guillaumin, 1852). Schumpeter, J. A., 1954, History of economic analysis (London: Allen & Unwin). Sinclair, J., 1826, On the means of relieving the present pecuniary embarrassments of the country, and preventing their recurrence; together with the plan of a chartered company

224 Daniele Besomi for promoting the security of the country banks. In J. Sinclair and T. Attwood, The late prosperity and the present adversity of the country explained; the proper remedies considered, and the comparative merits of the English and Scottish systems of banking discussed, in a correspondence between Sir John Sinclair and Mr. Thomas Atwood (London: Ridgeway & Hatchard). Wilson, J., 1847, Capital, currency and banking, being a collection of a series of articles published in The Economist in 1845 . . . and in 1847. . . Concluding with a plan for a secure and economical currency (London: The Economist). Woodbury, L., 1840, Report of the Secretary of the Treasury. On the finances. Public debt and Treasury notes. Exports and imports within the commercial year 1839. Estimate of the receipts and expenditure for 1840. Explanations of the estimates as to the expenditures and of some further reductions in them. On some permanent safeguard under fluctuations in receipts and expenditures. The manner of keeping the public money, with the proper guards against losses. Condition of banking institutions generally, and the kind of money receivable for public dues. Miscellaneous. Niles’ Weekly Register, 7: 19, 4 January, pp. 293–298.

9

Commercial crisis and credit in the first Spanish general encyclopaedia (1851–1855) Jesús Astigarraga and Juan Zabalza

Enciclopedia moderna, Diccionario universal de literatura, ciencias y artes, agricultura, industria y comercio, Madrid, Establecimiento de Francisco de Paula Mellado, 1851–1855.

9.1 INTRODUCTION After the publication of the first edition of →J. Canga-Argüelles’s Diccionario de hacienda (Dictionary of public finance, 1826–1827), Spanish encyclopaedic literature containing economic entries began to grow significantly.1 Spanish economists, however, did not complete any specialized dictionary for the rest of the nineteenth century. Therefore, economic entries were embedded within the large Spanish general encyclopaedias such as Enciclopedia moderna and Diccionario enciclopédico hispanoamericano (Hispanic-American encyclopaedic dictionary), and, later on, during the first third of the twentieth century, within the famous Espasa Calpe, the greatest of the Spanish general encyclopaedias. These entries were written by economists who were closely connected to different ideological groups. They tried to influence economic policy by spreading their own economic doctrine and proposals for economic policy through this kind of literature. Such entries show, however, that the Spanish economists paid little attention to the notions of economic crisis and business cycles. For example, the economic entries in Diccionario enciclopédico hispanoamericano, but also those in Enciclopedia Espasa Calpe, particularly leaned towards the so-called ‘social question’, namely, the social consequences suffered by capitalist economies caused by industrialization. Therefore, the entries related to economic crisis were basically focused on the social consequences of depression such as unemployment, impoverishment and the mitigation of these phenomena through the establishment of the first institutions of the welfare state or the promotion of certain ideologies. There are not, however, any economic entries focusing either on the causes, symptoms or nature of economic crises, or the existence of business cycles.2 Nevertheless, there was an exception: the entries for CRÉDITO (credit) and CRISIS COMERCIAL (commercial crisis) in Enciclopedia moderna (1851–1855), the first Spanish general encyclopaedia.

226 Jesús Astigarraga and Juan Zabalza 9.2 THE ENCICLOPEDIA MODERNA (1851–1855) Enciclopedia moderna, diccionario universal de literatura, ciencias y, artes, agricultura, industria y comercio (Modern encyclopaedia: universal dictionary of literature, sciences, arts, agriculture, industry and commerce, 1851–1855) is a major work of Spanish culture of the nineteenth century. The large number of economic entries contained in the encyclopaedia represented the culmination of the surge of economic literature that took place in the second quarter of the nineteenth century, aimed at popularizing political economy in Spain (Astigarraga et al., 2001). Such literature, however, seems even more significant since in Spain there was no clear distinction between academic and more ideological discourse, designed to be spread over wide circles (Almenar, 2000). The 33 original volumes of the Enciclopedia moderna, together with two supplementary tomes, were published between 1851 and 1855. In the following decade, between 1865 and 1867, the encyclopaedia was extended by the addition of four new volumes, although their entries on political economy were actually of no interest. The large number of volumes finally published, the wide range of topics contemplated by the entries (around 50), and the contribution of prestigious Spanish intellectuals and scholars of the mid-nineteenth century reveal the magnitude of this project. Undoubtedly, profound changes at the heart of Spanish society during the first half of the nineteenth century, such as the growing literacy of the population due to the gradual generalization of education and the reinforcement of a stable and vigorous middle class that had reached high levels of purchasing power, were underlying factors for the publication of the encyclopaedia, as they significantly helped to create a favourable economic environment for the market of general encyclopaedias.3 F. de P. Mellado, who was the publisher and promoter of Enciclopedia moderna, seems to have been an archetypal member of the intellectual Spanish bourgeoisie, which grew significantly from the beginning of the 1830s. This section of society held an interest in, and attached great importance to, the production and diffusion of culture as a means for consolidating liberal society. In fact, this period was characterized by the emergence of liberal publishers as significant historical figures, whose aim was to swing public opinion towards the acceptance of the principles of liberalism (Villacorta, 1980). In particular, F. de P. Mellado promoted the translations of French books and encyclopaedias that dealt mainly with geography, history, the arts and crafts. Enciclopedia moderna, however, was undoubtedly his most outstanding contribution, as it had a considerable print run by Spanish standards in the mid-nineteenth century. Therefore, the success of the encyclopaedia indicates the existence of a strong desire to spread technical and ideological knowledge in order to strengthen the liberal order. In particular, Enciclopedia moderna preceded the creation, a few years later, of great institutions and publishing projects inspired by the doctrine of free trade. Therefore, its economic entries seem to be a useful source for improving our understanding of the intellectual influence of Spanish liberalism in the midnineteenth century.

Crises in the first Spanish general encyclopaedia 227 Enciclopedia moderna is set out in a modern format compared to other similar Spanish contemporary works. In fact, the anonymous entries included complete bibliographies. Entries were listed alphabetically and covered 50 topics, which can be grouped into history and geography, moral philosophy and religion, law and jurisprudence, logic and mathematics and, finally, political economy. Its modernity seems to be influenced by Encyclopédie moderne: dictionnaire abregé des sciences, des lettres, des arts, de l’industrie, de l’agriculture et du commerce (1847–1852) by Didot Publishers. There are more than a hundred anonymous economic entries which altogether account for approximately 900 pages. Many other entries that are classified in Enciclopedia moderna under topics such as ‘moral philosophy’, ‘moral economics’ or ‘rural economics’ included certain economic concepts that are largely uninteresting. The economic entries in Enciclopedia moderna were written in three phases. The first stage is certainly brief, as it only covers the first volume, and embraces several economic entries that were mostly translated from Didot’s Encyclopédie moderne (1847–1852) (Enciclopedia moderna, 1851–1855, Vol. IX). The second phase, from Vol. II to Vol. XXVII, is the main part of the encyclopaedia in terms of political economy as its economic entries possess a certain analytical quality. In fact, the entries herein analysed belong to this phase of the encyclopaedia. As described below, the journalist, poet and economist José Joaquín de Mora compiled and wrote this part of the encyclopaedia. Finally, between 1865 and 1867, Enciclopedia moderna was expanded by the addition of four new volumes, although their entries on political economy were of no interest.

9.3 JOSÉ JOAQUÍN MORA AS AUTHOR OF THE ENTRIES FOR CREDIT AND COMMERCIAL CRISIS IN ENCICLOPEDIA MODERNA Mora’s life might be the canonical example of the committed liberal in the first half of the nineteenth century in Spain. He was born in Cádiz in 1783 and was brought up according to Jansenist, rationalist and naturalist principles. He became a Professor of Logic at the San Miguel College of Granada, where he taught Condillac and Bentham between 1802 and 1808, which was unusual at that time in Spain (Monguió, 1967). During this early period, Mora read the works of the so-called Scottish philosophers of common sense, T. Reid and D. Stewart, who greatly influenced his life, and his literary style and ideas. In fact, Mora learned from Reid that axioms and definitions are not to be ‘proven’ and are the foundation of all reasoning and science – from mathematics to rhetoric; this approach should substitute the scholastic philosophy that prevailed in Spain at the time (Mora, 1845). In fact, Curso de lógica y ética según la escuela de Edimburgo (Course of logic and ethics based on the Edinburgh School), which was published six times in Latin America and in Spain between 1832 and 1853, symbolizes the role played by Mora in spreading the ideas that he considered crucial for bringing up young people according to the principles of liberal society. Mora explicitly recognized that he

228 Jesús Astigarraga and Juan Zabalza was a mere translator trying to spread the philosophical system of the Scottish philosophers. Nevertheless, the philosophy of common sense was also a protest against the exclusive systems of thought and this seems to be Mora’s statement regarding literary, economic and religious issues. Such an approach was exemplified by his admiration for romanticism or his rational approach to religion. This eclecticism that so characterizes Mora’s way of thinking also extended to his economic thought (Smith, 1968). Mora’s patriotic convictions saw him fighting against the Napoleonic troops that invaded Spain in 1808 and he became a prisoner in France. After returning to Spain in 1817, he began his career as one of the country’s main propagators of science and literature. Later, during the brief Liberal period (1820–1823), he expanded his activities by becoming a founder and promoter of newspapers, a translator into Spanish of philosophical and political books, a professor in the Ateneo Español (Spanish Athenaeum) and a member of a number of political societies. By then, together with other economists such as J. M. Vadillo or M. Marliani, he formed part of the first generation of the Spanish advocates of free trade, led by his friend the outstanding economist A. Flórez-Estrada. Mora’s exile in Britain was crucial to explaining the evolution of his thought and his commitment to spreading liberalism.4 First, he reinforced his connections with British culture and became an anglophile writer. Second, he read the works of the main British economists and he had a personal relationship with Bentham and J. R. McCulloch. In fact, he translated the pamphlet Consejos que dirige á las Córtes y al pueblo español Jeremías Bentham (Jeremy Bentham’s advice to the Spanish parliament and people) into Spanish (Schwartz, 1999), and he is said to have met J. R. McCulloch on several occasions, whom he considered to be the most important economist at that time (Mora, 1843). Third, and most importantly, he met the German publisher R. Ackermann, who appointed him director of two newspapers and as a contributor to Forget-me-not, which was the British version of the popular German literary annuals. It seems that Ackermann recruited Mora for his skill as a journalist, but also for his profound intellectual background (Llorens, 1979). Furthermore, Ackermann found in Mora, together with other Spanish liberals exiled in London, the perfect propagator for his publishing plans in the recently founded republics of Latin America, which included the translations of some successful English educational works written mainly by William Pinnock (Roldán, 2003). In fact, the catechisms of Geography, Grammar and particularly of Political Economy were probably written by Mora himself. This frenetic activity created the opinion that Mora was a superficial and vacuous intellectual. However, as R. S. Smith pointed out, ‘Mora was not a professional economist; however, he was capable of understanding the trends in economic science at that time. Furthermore, he was sufficiently skilled to set them out in such a way that they could be popularized’ (Smith, 1967). Undoubtedly, the main interest of Spanish liberals was to promote the establishment of liberal institutions and, in the case of Mora, to endorse free trade in Latin American republics (Monguió, 1967). When Mora moved to Argentina – invited by the then Prime Minister Rivadavia, whom he had met in England – and

Crises in the first Spanish general encyclopaedia 229 afterwards to Chile, Peru and Bolivia, he practised what he had preached in London. First, he continued spreading liberal ideas through countless articles. With regard to political economy, he included some articles in Crónica Literaria y Política of Buenos Aires and later in El Mercurio Chileno, which, retrospectively, suggests that Mora intended to publish them as a dictionary. He also advised the reformist leaders B. Rivadavia, A. de Santa Cruz and S. B. P. Pinto to promote the introduction of free trade in South American countries. Mora was also involved in setting up liberal institutions, such as the Chilean Liberal Constitution in 1828, and promoted the creation of some educational institutions. In fact, he published several textbooks specifically devoted to instruction.5 Mora’s educational goals may be symbolized by the interpretation of Destutt’s literary ideas, as he admitted that the French thinker helped to purify the Spanish language in such a way that scientific principles could be more clearly explained in the Spanish republics (Amunátegui, 1888). In the 1840s, when Mora returned from exile, he published De la libertad de comercio (On the freedom of commerce, 1843), which was based on a wide range of sources but mainly inspired by J. R. McCulloch, the Italian F. Mengotti or the Spaniard P. Pebrer, and other significant writings such as Memoria sobre los puertos francos (Memorandum on free ports, 1844) which were of his own creation. A large number of excerpts from these works were finally inserted in Enciclopedia moderna. He continued his activities as a lecturer at the Colegio San Felipe Neri (Cadiz), contributed to journals, and finally he achieved public acknowledgement in his own country when he was appointed as a member of the Royal Academy of the Spanish Language and as General Consul of Spain in London in 1856. He died in Madrid in 1864. Mora seems to have nurtured the idea of writing some entries to be included in a dictionary or encyclopaedia for a long time. In particular, a quarter of a century earlier, Mora had published a series of articles in El Mercurio Chileno that had similar titles to some entries in Enciclopedia moderna. Furthermore, Mora inserted some of his previous publications in the encyclopaedia without making any significant changes to them. For instance, the manuscript ‘España (industria y comercio)’ (Spain, industry and commerce), dating back to 1850 and discovered in the Argentinian National Library, was finally published in Enciclopedia moderna under the entry ESPAÑA (Siegrist de Gentile, 1992). Similarly, the above-mentioned work Memoria sobre los puertos francos, first published in 1844, was included in the entry PUERTOS FRANCOS (Free ports) in Enciclopedia moderna, as well as a large number of excerpts from De la libertad de comercio (1843).

9.4 CREDIT AND COMMERCIAL CRISES IN ENCICLOPEDIA MODERNA Two economic entries in Enciclopedia moderna are of importance for the notions of economic crisis and cycles: CRÉDITO and CRISIS COMERCIAL. There is also a minor reference made to financial crises in the entry BANCOS EXTRANJEROS (Foreign banks) that is not worth commenting on in this article (Enciclopedia

230 Jesús Astigarraga and Juan Zabalza moderna, 1851–1855; Vol. III). The entries CRÉDITO and CRISIS COMERCIAL in Enciclopedia moderna are contained in Vol. XI, which means that they were probably drafted before the publication of →Coquelin and Guillaumin’s Dictionnaire de l’économie politique (1852), which turned out to be one of the most profusely quoted intellectual sources in the subsequent economic entries written by Mora in Enciclopedia moderna. As previously mentioned, Mora first considered writing economic entries for inclusion in an encyclopaedia during his Chilean exile. By this time he had drafted several entries that were published as articles in different issues of the journal El Mercurio Chileno. There was not, however, anything in these articles that might be connected to what would be the entries for CRÉDITO and CRISIS COMERCIAL in Enciclopedia moderna. The articles BANCOS DE DESCUENTO (Banks of discount), CIRCULACIÓN (Circulation) and BANCOS (Banks) described a kind of credit crisis that Mora blamed on the bad management of public credit – which he exemplified with the famous crisis of the so-called System of Law – and therefore he put crisis down to specific and exceptional circumstances that obviously were not linked to any periodical or oscillating phenomenon (Mora, 1828). Conversely, as we will demonstrate below, a large part of both entries were taken from a French mid-nineteenth century dictionary: →Guillaumin’s Encyclopédie du commerçant. Dictionnaire du commerce et des marchandises (1837–1839).

9.4.1 CRISIS

COMERCIAL

in Enciclopedia moderna

Mora started defining commercial crisis as ‘Epochs of general discredit in markets and commercial towns that lead to the stagnation of commerce and business’. Subsequently, he defined the symptoms, which, in his words, were basically scarcity of credit, rising interest rates, falling prices, falling-off expenditure, and consequently bankruptcy and lockouts (Enciclopedia moderna, 1851–1855, Vol. XI). As mentioned, this formulation, as well as most of the entry, was taken, almost word for word, from the article CRISE COMMERCIALE in Guillaumin’s Encyclopédie du commerçant, which had been drafted by Michel6 (see Chapter 6). However, at this point, Mora points out that the psychological mood of social classes in such a situation is called ‘panic’ in England. This idea, given his profound knowledge of English economic literature, might have been taken from some of the contemporary works that adopted such a term at the time he was writing Enciclopedia moderna’s economic entries (Besomi, 2010a). Commercial crises are also classified in Encyclopédie du commerçant into two groups according to the causes that bring them into being, namely, those that have nothing to do with economic conditions, such as political events or wars, and those connected to business or industrial organization, to which the article pays particular attention (Mora, CRISIS COMERCIAL; Michel, CRISE COMMERCIALE). At the same time, Mora took up Michel’s classification of economic causes into those connected to credit and, in particular, to what Mora calls the ‘misuse of credit’, and those referring to the ‘distortions’ of factors of production. Nevertheless, he pointed out that the latter seems to be a consequence of the former. Credit is ‘by no means a

Crises in the first Spanish general encyclopaedia 231 mighty part of wealth, as we have demonstrated in the entry CRÉDITO, inasmuch as it aims at transferring capital towards the economic agents which are able to allocate it in the most efficient way’ (Mora, CRISIS COMERCIAL). Once Mora had explained the crucial role played by credit in capitalist societies, he described what he deemed to be the mechanism of commercial crises. Commercial crises, in his words, start with an overabundance of money as a consequence of the flow of credit provided by financial institutions, which provokes growing prices of cotton – it seems that cotton represented industry as a whole, as in Michel’s example – and eventually give rise to the outflow of capital abroad. Subsequently, the circulation of banknotes decreases and, despite falling commodity prices, goods are not sold out. Finally, unemployment becomes widespread. Such a sequence may have been taken by Michel from Cours complet d’économie politique pratique in which J.-B. Say describes a similar pattern (Say, 1828). Mora provides two examples of such a series of events, which are also taken from Michel: the English commercial crisis of 1825 and the French financial crisis in the early nineteenth century caused by the mass circulation of bills of commerce. Nevertheless, we have not found any mention of the periodicity of commercial crises as indicated by Michel in CRISE COMMERCIALE, which means that Mora had not observed the significance of this aspect of crises.7 At this point, the transcription of the entry for CRISE COMMERCIALE from Guillaumin’s Encyclopédie du commerçant ends, and the rest of the article, as far as we know, seems to be original. However, Mora’s original contributions are by no means analytically significant, as he suggested that economic crises might be caused by ethical misbehaviour on the part of individuals, which he called ‘the wrong management of private and public financial institutions’. In particular, he referred to the immorality of bank managers and the specific problem of public debt that Spain was experiencing around the time when the encyclopaedia was published. Regarding the latter, Mora does not support the policy of introducing public debt into the stock market: ‘this practice confers a certain negative character to public wealth since it paves the way for falling into fraud through the dissemination of false information in order to influence the prices of public securities’, and thus it creates a general economic disorder (Mora, CRISIS COMERCIAL). The policies suggested by Mora for resolving commercial crises pursued clearcut political goals: the adoption by the Spanish government of the principles of economic freedom, such as the liberalization of foreign trade, the abolition of prohibitively high custom duties or the protectionist practices of the Custom Duties Administration. Such policies, according to Mora, will drive capital towards ‘nobler’ and more lucrative activities, which, at the same time, will be in keeping with the ‘path of civilization’.

9.4.2 CRÉDITO in Enciclopedia moderna The economic entries in Enciclopedia moderna are, on the whole, self-contained. Nevertheless, the crucial role given by Mora to the entry for CRÉDITO meant that a large number of economic articles in the encyclopaedia were linked to this entry

232 Jesús Astigarraga and Juan Zabalza through an extensive number of cross-references. Mora defines credit as the ‘reliance of one person on another to whom the former has lent money, or when somebody sells commodities to another person postponing their payment’, which is exactly the definition provided by Michel in the entry for CRÉDIT in Guillaumin’s Encyclopédie (Mora, CRÉDITO, p. 560). Mora, as did Michel, distinguished between commercial and public credit. The former defined the role of credit as a ‘moral’ means by which deals between economic agents are made possible, and therefore the absence of credit implies a shortage in the demand for labour and insufficient production. That is to say, Mora once again made the connection between credit and production. Once Mora had defined and mapped out the meaning of credit, he highlighted two ideas that were also taken from Michel’s entry on CRÉDIT. First, he emphasized the advantages of using banknotes, since this physical instrument had proven to be the cheapest and most efficient backing for credit. Mora refers to McCulloch – and indeed quotes the Scottish economist in the entry – for endorsing this idea. However, as was common practice in economic entries in Enciclopedia moderna, he did not offer ideas from an original intellectual source but quoted from Michel’s entry. Second, Mora explains, drawing upon a ‘certain French economist’, who was in fact Michel again, that whatever were the influence of credit and agents of credit on industrial wealth, it does not follow that they are factors of production or that they create capital. Credit and ‘credit agents’, however, are useful since they boost the circulation of the existing capital. Hence, capital finally flows towards the hands of those who employ it in the most efficient way for society, and thus, bank notes are not able to produce wealth directly, as wealth is the result of man’s labour. (p. 560) (Mora, CRÉDITO) Nevertheless, he stressed that labour cannot be set into motion without the support of capital. The second part of the entry, which focused on public credit, is far less interesting from the point of view of this article. Nevertheless, there are a number of interesting suggestions that were taken from Michel’s entry on CRÉDIT, and others that seem to be original contributions made by Mora. Indeed, Mora clearly defends the role of public credit in facing certain unusual circumstances like the reduction of money, financing wars and infrastructure, or the bankruptcy of the Exchequer. The idea that credit plays a more prominent role in constitutional countries in which freedom and property are guaranteed by law than in monarchies is presented in a more understated way than it is in Guillaumin’s Encyclopédie, in spite of Mora’s political commitment to economic freedom. In fact, he merely mentions that the policy of public credit is more desirable than selling territories of the Crown in order to obtain public revenues. Finally, Mora, as in the entry for CRISIS COMERCIAL, recommended the implementation of certain economic policy measures such as amortizing public debt through funds from the public national budget – which he thought to

Crises in the first Spanish general encyclopaedia 233 have been successful in Britain and France – and the adoption of certain general rules (máximas generales) in order to ‘satisfy the needs of some and foster the interests of others’ (Mora, CRÉDITO). On the other hand, according to Mora, policies and behaviours such as immoderation in public expenditure, the improvidence and imprudence of officials, a perturbation in the social economy caused by the ‘passion for politics’, senseless wars and, of course, trade barriers impeded the fulfilment of such economic goals.

9.5 CONCLUDING ASSESSMENT OF THE ENTRIES ON CREDIT AND CRISIS IN ENCICLOPEDIA MODERNA The entries for CRÉDITO and CRISIS COMERCIAL in Enciclopedia moderna portray the secondary role that Spain played in the development of the political economy in Europe during the nineteenth century, as it was a country that did not make any relevant contribution to economics during this period. Spanish economists, however, were committed to spreading and successfully adapting imported ideas from other European countries. During certain periods of time, the adaptations to the Spanish economic context were so skilfully carried out that they have been considered by historians as actual contributions to the history of economic thought (Llombart, 2000). In fact, the authors of the economic entries in Enciclopedia moderna used a wide variety of foreign economic sources such as the main British and French classical works and journals or the main encyclopaedic works – specialized in political economy or otherwise – of the eighteenth and nineteenth centuries (Astigarraga and Zabalza, 2007). However, as we have seen, this is not the case for the entries for CRISIS COMERCIAL and CRÉDITO in Enciclopedia moderna, as Mora translated a large part of them from Guillaumin’s Encyclopédie. It seems, therefore, that Mora, at the time of writing these entries, did not use, and was therefore probably unfamiliar with →Coquelin and Guillaumin’s Dictionnaire de l’économie politique (1852– 1853), which was published almost at the same time as the first economic entries in Enciclopedia moderna. Nonetheless, Guillaumin and Coquelin’s Dictionnaire influenced the subsequent economic entries of the encyclopaedia, such as the crucial entry for ECONOMÍA POLÍTICA (political economy), which was published some time after CRÉDITO and CRISIS COMERCIAL (Astigarraga and Zabalza, 2007). Both entries in Guillaumin’s Encyclopédie du commerçant (1837–1839) were compiled by a certain Michel, about whom we have no further information. As mentioned earlier, there are almost no references in Mora’s previous works to the analysis of commercial crisis. Therefore, it seems that Mora, once he was involved in compiling the entries for Enciclopedia moderna, had to draw upon secondary sources and, in this particular case, upon the entries drafted by Michel almost half a decade before. Such transcription explains why the entries are, to some extent, anachronistic in comparison with similar entries in Guillaumin and Coquelin’s Dictionnaire (1852–1853). Nevertheless, the crucial idea of relating crises to credit, which was almost universally accepted at the time, is shared by Michel, Coquelin

234 Jesús Astigarraga and Juan Zabalza and Mora. In particular, the abuse of credit as the main cause of commercial crisis, the insignificance attributed to the misuse of factors of production in causing a commercial crisis, the acknowledgement that credit is an essential means to achieve the wealth of a nation or the irrelevance of the mismanagement of productive forces of manufacture in provoking a commercial crisis are features that are self-evident in the economic entries drafted by Michel, Coquelin and Mora. Nevertheless, Michel, as well as Mora, entitled the entry ‘Commercial crisis’ in the singular, as did most other contributors on crises in early encyclopedic writings (see Chapter 6), in strong contrast with the plural formula used by Coquelin, who assumed that crises were a periodical phenomenon that should be explained. Therefore, Mora’s interpretation belongs to the group of theories that explain crises as the result of some institutional conflict that impedes the correct performance of the economic system, and, like Coquelin – and obviously Michel – he assumed that the problem should be placed within the context of monetary issues (see Chapter 8 on Coquelin). However, there is no mention of the existence of privileged banks as the main cause of the abuse of credit, as Coquelin pointed out in the entry on CRISES COMMERCIALES in Guillaumin and Coquelin’s Dictionnaire (1852–1853). Mora only refers to the ‘immorality’ of bankers who merely seek profit for themselves and, consequently, there is insufficient evidence in Mora’s contributions to make any reliable comparison with Coquelin’s advocacy of free banking. In this respect, we can only infer that Mora did not consult Guillaumin and Coquelin’s Dictionnaire. Nevertheless, it should be mentioned that he makes reference to Jackson’s criticism of the monopoly of the American central bank in the entry for BANCOS (Enciclopedia moderna, Vol. II). Mora’s transcription from Guillaumin’s Encyclopédie du commerçant, however, was not complete and some characteristics of commercial crisis that were highlighted by Michel were dismissed. For example, Mora did not discuss the periodical recurrence of commercial crises despite the description of the mechanism of crises in Guillaumin’s Encyclopédie, which implicitly refers to periodicity when crisis is related to credit. In other respects, Mora’s approach to commercial crisis is actually of no interest, as he did not take into account aspects such as the timing of crises, their regularity or lifespan, and, even less, obviously, the causes of their cyclical recurrence. Mora’s disregard towards such questions is significant since both entries were copied from Guillaumin’s Encyclopédie du commerçant. It seems, however, that Mora was not actually concerned with theoretically analysing commercial crisis. Conversely, his interest in economic crises resided in their connections to economic growth, and, naturally, to the adoption of free trade by Spanish policy makers as the best way to promote the prosperity and welfare of Spain, which was the main statement defended in the rest of the economic entries in Enciclopedia moderna (Astigarraga and Zabalza, 2007). Consequently, we believe that Mora was, in fact, fleshing out the entry with information about the phenomenon of commercial crisis and its connections to credit – or abuse of credit – which did not generate any real interest in the rest of the Spanish economists at the time, or at least historians have not noticed such interest towards crises. A pamphlet presenting some Reflections on the present

Crises in the first Spanish general encyclopaedia 235 mercantile distress experienced in Great Britain: and more or less affecting other nations on the continent of Europe, &c. &c., originally written in English, was published in 1826 by the outstanding Spanish economist A. Flórez-Estrada during his exile in Britain (Flórez-Estrada, 1826). According to Flórez-Estrada, the fall in money supply caused by the independence of Latin American republics lay behind the British economic distress of 1825. Flórez-Estrada’s work seems to have had a certain impact among British and French economists – in particular, Jean-Baptiste Say – who criticized his theories regarding the contemporary British economic crisis. However, we have found no indication of any possible influence of FlórezEstrada’s approach on the Spanish economists at the time, not even on those like Mora who were living in England at the time when this work was published. In fact, the work was published for a second time in English and only the third edition was finally published in Spanish (Llorens, 1979). Furthermore, historiography has largely ignored Flórez-Estrada’s contribution. In this regard, the few indications that suggest a level of interest in this area, such as the diffusion of Sismondi’s approach to crises or the strong influence in Spain of Cours complet by Jean-Baptiste Say, in which Chapter XIX, entitled ‘Abus des banques de circulation’, approaches this issue, require further research to gain a better understanding of the attention paid by Spanish economists to the phenomenon of economic crises (Say, 1828; Lluch and Almenar, 2000). Nevertheless, it should be pointed out that, in contrast with France and Great Britain, Spain did not experience economic crises until 1848. Even in this case, historians have debated animatedly about the capitalistic nature of this crisis but they have not reached a consensus on it. Whatever the interpretation of economic historians, Mora did not mention the economic problems of the Spanish economy at the end of the 1840s, which would lead us to believe that he did not interpret this phenomenon as being analogous to the British and French economic experiences. On the other hand, it seems that Mora prevalently intended to place the analysis of commercial crisis and credit within the context of the debate on economic policy, and more specifically the discussion on economic freedom and free trade that took place in Spain in the mid-nineteenth century, as his proposals for facing economic crisis seem to suggest (Bru, 1980; Astigarraga and Zabalza, 2007). We conclude by referring to the significance of these entries in the context of the international flow of economic ideas. Mora’s entries in Enciclopedia moderna demonstrate how differently economic ideas are transferred across nations. In this case, diffusion, obviously, should be classified as popularization as it was addressed towards an assorted and non-specialized public. Such a broadly based audience probably thought that the economic entries in the encyclopaedia were drafted by using the works of outstanding economists such as Smith or McCulloch as intellectual sources. The article, however, demonstrates how economic ideas are spread through secondary means, in this particular case through the economic entries in Guillaumin’s Encyclopédie du commerçant. Therefore, their influence was channelled through intermediaries who, to some extent, tinged original concepts with some nuances according to the author’s intellectual background, and economic and political interests, the limitations imposed by the publisher or the indispensable

236 Jesús Astigarraga and Juan Zabalza simplifications required for their popularization. Such circumstances contribute strongly to explaining the changes experienced by original ideas once they have embarked on an international itinerary.

NOTES 1 Canga-Argüelles, a liberal economist and Minister of Public Finances, drafted two outstanding compilations based on British and French classical political economy that were intended to be used in training senior civil servants in the Spanish Department of Public Finance. Nevertheless, there are no entries relating to any aspect of economic crises (→Canga-Argüelles, 1826–1827; 1833–1834). 2 References made to crises are actually of no interest in Vocabulario de la economía by J. M. Piernas y Hurtado, which was published three times in 1877, 1882 and about 1900, as they basically dealt with the social consequences of economic slumps. A number of articles in the dictionary such as PAUPERISMO (pauperism), MISERIA (squalor) or POBREZA (poverty) are indicative of this (→Piernas y Hurtado, 1877). 3 The first volume of the Enciclopedia española del siglo XIX (1842–1845) inserted some entries on political economy which were basically translations into Spanish from the Dictionnaire encyclopédique’s first edition by Le Bas (1840–1845). 4 Nineteenth-century Spain was characterized by political turbulence. Briefly, the Napoleonic invasion led to the promulgation of the first Spanish Constitution in 1812. However, the absolutists regained the government from 1814 until 1820. There was a brief period of three years during which the liberals held power, but this was cut short by the invasion of the absolutist European powers in Spain. The liberals did not return to Spain until 1832 when the absolutist Spanish king Fernando VII died. 5 In the Foreword to Curso de lógica y ética según la escuela de Edimburgo (1832), Mora explained that his intellectual influences on logic and ethics at that time were, in fact, the same as those he had had 25 years earlier: the philosophers of common sense together with F. Bacon, D. Hume, A. L. C. Destutt de Tracy and T. S. Jouffroy. However, he also acknowledged the influence of elementary treatises such as Systematic education (1815) by L. Carpenter, W. Shepherd and J. Joyce, which was one of the main compendiums specifically written to educate the British middle class in the eighteenth and nineteenth centuries (Monguió, 1967). 6 We have not found any personal or intellectual details about the unknown author of some entries in →Guillaumin’s Encyclopédie du commerçant (1837–1839). 7 By then, several writers in France and Great Britain had observed the periodicity of commercial crises (Besomi, 2010b).

REFERENCES Almenar, S., 2000, El desarrollo del pensamiento económico clásico en España. In E. Fuentes-Quintana (ed.), Economía y economistas españoles. Tomo IV. La economía clásica (Barcelona: Círculo de Lectores Galaxia Gutenberg), pp. 7–92. Amunátegui, M. L., 1888, D. José Joaquín Mora: apuntes biográficos (Santiago de Chile: Imprenta Nacional). Astigarraga, J. and Zabalza, J., 2007, Political economy in the first Spanish general encyclopaedia. Mora’s economic entries in the Enciclopedia moderna (1851–1855), History of Economic Ideas, XV: 2, pp. 79–108. Astigarraga, J., Zabalza, J. and Almodovar, A., 2001, Dictionaries and encyclopaedias on

Crises in the first Spanish general encyclopaedia 237 political economy in the Iberian Peninsula (18th, 19th and 20th centuries), Storia del Pensiero Economico, 41, pp. 25–63. Besomi, D., 2010a, ‘Periodic crises’: Clément Juglar between theories of crises and theories of business cycles, Research in the History of Economic Thought and Methodology, 28A, pp. 169–283. Besomi, D., 2010b, The periodicity of crises: a survey of the literature before 1850, Journal of the History of Economic Thought, 32: 1, March, pp. 85–132. Bru, S., 1980, La difusió a Espanya de les idees econòmiques de Sismondi, Recerques, X, pp. 33–50. Enciclopedia española del siglo diez y nueve, o biblioteca completa de ciencias, literatura, artes y oficios, etc. por una sociedad de literatos españoles y de hombres especiales en diversas ciencias y profesiones, 1842–1845 (Madrid: Imprenta y librería de Ignacio Boix). Enciclopedia moderna: diccionario universal de literatura, ciencias, artes, agricultura, industria y comercio, 1851–1855 (Madrid: Establecimiento Tipográfico de Mellado). Flórez-Estrada, A., 1826, Reflections on the present mercantile distress experienced in Great Britain: and more or less affecting other nations on the continent of Europe, &c. &c (London: Ridgway). Le Bas, M. Ph., 1840–1845, Dictionnaire encyclopédique (Paris: Didot Frères). Llombart, V., 2000, El pensamiento económico de la ilustración en España. In E. FuentesQuintana (ed.), Economía y economistas españoles. Tomo III. La ilustración (Barcelona: Círculo de Lectores-Galaxia Gutenberg), pp. 7–81. Llorens, V., 1979, Liberales y románticos: una emigración española en Inglaterra (1823–1834) (Madrid: Castalia). Lluch, E. and Almenar, S., 2000, Difusión e influencia de los economistas clásicos en España (1776–1870). In E. Fuentes-Quintana (ed.), Economía y economistas españoles. Tomo IV. La economía clásica (Barcelona: Circulo de Lectores Galaxia Gutenberg), pp. 93–170. Monguió, J., 1967, José Joaquín de Mora y el Perú del Ochocientos (Madrid: Castalia). Mora, J. J., 1828, De los bancos de descuento y circulación, El Mercurio Chileno, July, pp. 149–171. Mora, J. J., 1843, De la libertad de comercio (Seville: Establecimiento tipográfico del silencio). Mora, J. J., 1845, Curso de lógica y ética según la escuela de Edimburgo (Madrid: Mellado). Roldán, E., 2003, The British book trade and Spanish American independence: education and knowledge transmission in transcontinental perspective (Aldershot: Ashgate). Say, J.-B., 1828, Cours complet d’économie politique pratique (Paris: Rapilly). Schwartz, P., 1999, Estudio preliminar. In J. J. Mora, 1999, De la libertad de comercio (Madrid: IEF), pp. viii–xlix. Siegrist de Gentile, N. L., 1992, José Joaquín de Mora y su manuscrito sobre la industria y el comercio de España hacia 1850 (Cádiz: Universidad de Cádiz). Smith, R. S., 1967, Aspectos del libre comercio y proteccionismo en la economía española, 1800–1850, Humanitas, VIII, pp. 635–650. Smith, R. S., 1968, El pensamiento económico de José Joaquín de Mora, Humanitas, IX, pp. 595–607. Villacorta, F., 1980, Burguesía y cultura. Los intelectuales españoles en la sociedad liberal 1808–1931 (Madrid: Siglo XXI).

10 Expectations and crises in Auguste Ott’s Dictionnaire des sciences politiques et sociales Daniele Besomi

Ott, A., 1854–1855, Dictionnaire des sciences politiques et sociales comprenant la politique, la diplomatie, le droit naturel, le droit des gens, les rapports de l’Église et de l’État, l’administration, les finances, la police, la force armée, l’économie politique et la statistique: avec le texte ou le résumé des traités les plus importants, des constitutions et lois fondamentales des peuples anciens et modernes, et l’analyse des principaux ouvrages sur la politique et les autres sciences sociales (Paris: Migne), 3 vols, 2,000 pp.

10.1 OTT’S DICTIONARY AND THE ENCYCLOPÉDIE THÉOLOGIQUE Auguste Ott’s Dictionary of political and social sciences, including politics, diplomacy, natural law, national laws, the relationship of church and state, administration, finance, police, army, political economy and statistics. With the text or abstract of the most important treatises, constitutions, the fundamental laws of modern and ancient civilizations, and an analysis of the main writings on politics and other social sciences was the sixtieth dictionary of the series forming the →Encyclopédie théologique (theological encyclopaedia) published by the Abbé Migne. This was in turn part of a colossal editorial project of a Bibliothèque universelle du clergé (universal library of the clergy), more than a thousand volumes in quarto. The Encyclopédie théologique consisted of 100 separate specialized dictionaries, for a total of 171 volumes. The first series, 1845–1849, was mostly concerned with religious matters, but already included dictionaries of astronomy, chemistry and geology. Almost half of the titles in the second series, 1851–1855, were devoted to secular themes, while the third series, 1854–1866, was again more religion-oriented. More than one-tenth of the entire collection was devoted to scientific disciplines; eight dictionaries dealt with natural sciences and five with social sciences (for a list of titles, see Langlois and Laplanche, 1992, pp. 245–252). The Encyclopédie théologique was one of the three enterprises in France aiming at harmonizing traditional religious thinking, which was badly battered during the

Auguste Ott on expectations and crises 239 Revolution, with the recent growth of scientific knowledge; the other two were the 25-volume →Encyclopédie du dix-neuvième siècle (1836–1843) and the 18-volume →Encyclopédie catholique, both initiated in 1836 (Bénichou, 1992, pp. 99–103). Migne’s was by far the vastest of the three and was organized on a different basis. While its competitors were alphabetically ordered, the Encyclopédie théologique was organized methodically, on the model of Panckoucke’s →Encyclopédie méthodique, with the entries within each dictionary alphabetically ordered. Migne offered subscriptions to the entire series, or to individual dictionaries. The selected readership of these Catholic encyclopaedias was the new generation of priests, recruited en masse between 1820 and 1840 and hastily educated (Langlois, 1992). Their objective was to make various disciplines accessible to this literate but not specialized audience, and of making such disciplines compatible with Catholic doctrine;1 they thus fulfilled at once a popularizing and an apologetic role, if not a strictly militant one (Bénichou, 1992, pp. 108–109, 121). Ott’s dictionary was the first of the third and last series of Migne’s Encyclopédie. It was meant to fill an obvious lacuna in Migne’s project, as political science and economic issues had recently become of overwhelming importance and wide concern, so that any conscientious person would find it necessary to be acquainted with all the subjects that were being discussed daily. This was especially true for Migne’s selected readership, as most of these issues were of interest for religion and had been discussed by theologians, and as the Church always had to exert some influence on political and economic matters (→Ott, Dictionnaire, Vol. 1, PRÉFACE, p. 11). The dictionary, entirely written by Ott, is mostly devoted to politics, in particular to the institutions, the administration, the law systems and the constitution of various countries. In Ott’s plan, political economy is of interest as the special and autonomous science of the means of physically preserving society and improving its well-being: ‘The subject of this science is human labour and its organization within society, as well as the production and distribution of the objects necessary to the material subsistence of the people’, both socially and individually, and as such it must be incorporated in the dictionary almost in its entirety (p. 15). Most of the customary headings are indeed discussed, although with a special emphasis on labour: labour in general, division of labour, its organization – both historically, and with much attention to producers’ co-operative associations. There are entries devoted to economics in general, including the various approaches and schools; to production and circulation (in particular the banking system); to international trade; to the problem of markets; and to the distribution of income. This panoramic view is offered by Ott himself. Interestingly, he provided at the end of the dictionary a methodical index, reassembling thematically the knowledge broken down under alphabetically arranged headings. This is a remarkable innovation, effectively complementing the usual system of cross-references. Ott’s general approach is expounded as follows: In a work like this the reader wants to find a large number of facts and documents, rather than an elaboration of the author’s views. So far as theory is

240 Daniele Besomi concerned, the reader requests to be introduced to the different writings, researches and opinions expounded in each of the social sciences, and wants to become acquainted with the issues raised by each of them. As to practical matters, he wants to know about the institutions that existed and about the real facts as depicted by history and by the legislation of various countries. The following plan will therefore be followed: Under the heading of each scientific discipline, of each social institution, and of each problem under discussion, we have presented the general state of each discipline, the definitions that are related to it, the history of each institution and its current features, and the opinions concerning each particular problem. (PRÉFACE, p. 15) If this explains the full dictionary title, it does not, however, represent how Ott proceeded in the entry on CRISE. While the history of the subject is lacking from the entry, this is nonetheless fortunate as Ott’s own view is rather original and well worth having.

10.2 AUGUSTE OTT Auguste Ott was born in Strasbourg on 20 January 1814 and died at the age of 89 on 6 August 1903.2 Little is known about his schooling, except that he took humanités, that is, Latin and Greek literature. He was trained as a lawyer, was called to the Bar in 1836 and obtained a doctorate in Law in 1839. Very soon his interests in philosophical and moral issues prevailed. In 1840–1842 he published a Handbook of universal history, followed in 1844 by a critical account of the Hegelian and Kantian systems, Hegel et la philosophie allemande. He became a follower of the doctrines of the Catholic associationist Philippe Buchez, with whom he collaborated in revising the Histoire parlementaire de la Révolution Française for the 2nd edition (5 volumes, 1845–1847). He was one of the founders, with Buchez, of the Revue Nationale, which he edited from 1847 to its demise in 1851. When Buchez died, he wrote his obituary and an account of his doctrines (Ott, 1865 and 1866). Ott’s main work, a Traité d’économie sociale ou l’économie politique coordonée au point de vue du progrès (Treatise on social economics, or, political economy restated from the perspective of progress, 1851),3 is a systematization of Buchez’s views, placed in the context of the developments of economic ideas.4 Interestingly, Ott does not focus exclusively on the orthodox approach – English political economy, represented in France by the doctrines of Say and his followers – but also considers the views of the critics, in particular, the numerous writings aimed at suggesting social reform, with special attention to the doctrines of Proudhon, Owen and the Saint-Simonians (on the latter, see Chapter 5). None are necessarily consistent or free of errors, and accordingly Ott attempts to expound all views and understand them in a unified methodological setting in order to prepare the ground

Auguste Ott on expectations and crises 241 for channelling the evolution of political economy into a truly social economy, guided by the ‘supreme principle of social progress, that is, the realization of justice in economic relationships, the emancipation of the working classes and the improving of their physical and moral condition’ (Ott, 1851, p. ix). Ott’s casting of the problem is of interest for us, as it builds the foundations of his approach to crises. The ‘English’ view focuses on wealth and material production. For political economy, as a ‘physical’ science, man is nothing but the producer of wealth, and eventually its consumer. Accordingly, the problem of the distribution of wealth is approached in terms of the conditions under which it takes place easily and without interruption, but ignoring the issue of its justice. On the other hand, consumption is seen as a destruction of wealth; the problem of the preservation of both society and individuals is therefore also disregarded. Ott, on the contrary, thought that social economy, being a moral science, should incorporate an inquiry into the means of achieving the reproduction of society via a just retribution of work. He thus redefined the object of economics as ‘labour considered from the social point of view, or, alternatively, as society from the point of view of labour’ (p. 14). The objective and result of work is not only the physical preservation of the individual, but also the preservation of society. Ott’s syncretistic approach, consisting in the identification of the elements of truth in each doctrine, led him to critically examine the foundations of Say’s law, on which the orthodox doctrine of production and demand was based. Ott eventually turned Say on his head, and it is on the reversal of the causal relationship between markets and production that he built the interpretation of crises he eventually advanced in the Dictionnaire.5

10.3 CRISES IN OTT’S DICTIONNAIRE Crises are discussed almost exclusively in two entries of the Dictionnaire: CRISE and DÉBOUCHÉS. The issue of the law of markets was dealt with at length in the Traité, and the entry in the Dictionnaire consists almost entirely of passages taken from the earlier discussion. A part we retrospectively recognize as being of the utmost interest, namely, the determination of the conditions of reproduction of the system, was instead omitted. The entry on crises, on the contrary, is mostly new and supplies a rather original explanation of the phenomenon. In the entry on DÉBOUCHÉS, Ott at first approves of Say’s way of couching the problem of whether and how production finds its vent on the market. He agrees with the principle that products in the end exchange against products, regardless of the value of money. But he rejected Say’s inference that each product will necessarily eventually find a buyer. True, Say had admitted that this only happens on condition that the exchange value of the product covers its cost, and that partial maladjustments are always possible. Yet this is not sufficient. As Sismondi had already argued, and ‘the commercial crises regularly recurring at fixed times, so to speak’ prove, conditions of general overproduction may occasionally occur. On the one hand, producers may supply goods that are not needed by consumers;

242 Daniele Besomi on the other hand, consumers may lack the purchasing power to buy those goods, even if they would like to buy them. As to the first aspect, Ott points out that the individual demand for goods depends on their utility. While needs may well be unlimited, people have priorities, and at any rate one cannot consume more than a certain amount of a specific commodity, such as bread. Anything produced in excess of that is bound to be unsaleable. As to purchasing power, Ott maintains that as incomes are a share of what society produces, the way in which production is distributed is of the utmost importance for its market. Most people (he estimates about 5 million out of the 6.5 million families living in France) have an income lower than 1,000 francs and can only afford to buy basic wage goods. Another 1.3 million families have an income of between 1,000 and 5,000 francs; they can thus afford some better-quality goods and even some luxury goods. The production of most luxury goods, however, is mostly addressed to the remaining 200,000 families. The country’s production must therefore satisfy the demand of specific goods arising from the different income classes. Ott concludes that production must conform to its market, which in turn depends on demand. He thus turns Say’s conclusion on its head: The market [débouchés] therefore depends on the buyer’s interest, on his willingness to buy, on demand, not on production, on the willingness to sell. Demand and market are, so to say, synonymous. Instead of saying, following Say, that the extent of markets is proportionate to the extent of production, one must affirm that the extent of production is proportionate to the extent of the markets. The society’s total production must be equal to the aggregate of individual demands. This is the first law of markets. (DÉBOUCHÉS, Vol. 2, p. 50) The expenditure of the richest class is subject to wide fluctuations. Some of it consists in necessary consumption goods and is probably quite stable. However, the part expended on luxury goods is liable to waver considerably in times of, for example, social unrest or war. Such events can also disturb the flow of savings to the capital market, thereby affecting the capitalists’ possibility of acquiring production goods. Speculation on the stock market can also have a similar effect. If the production of luxury goods or instruments of production is considerably reduced, the consequences are felt throughout. The workers producing them, in fact, lose their jobs, can no longer buy basic goods and transmit the trouble to the other branches of production. This introduces the theme of crises. In Ott’s Traité they are discussed mainly under the heading of ‘Concurrence’ (competition). In an unregulated system driven by competition, industrial production is intrinsically anarchic and disordered. The individual interest is completely detached from the interests of society, and the unequal distribution of income makes things worse. The competition between capitalists drives down prices, often by means of diminished quality of goods, leads to the concentration of capital in a small number of hands, and induces capital

Auguste Ott on expectations and crises 243 holders to engage in speculation and stock-jobbing. The competition between workers in turn drives wages down. Without explicitly drawing the connection, Ott adds to this description that ‘the commercial crises periodically afflicting industry are a necessary effect of the causes described above, and must infallibly return under such regime at shorter and shorter intervals’ (Ott, 1851, p. 180; similarly, pp. 331 and 610). This argument is taken up verbatim in the Dictionnaire under the heading CONCURRENCE and further developed in CRISE.6 The phenomenon is described as ‘consisting in the more or less complete freezing of business, that is, of sales and purchases and eventually of production. Its immediate cause is ordinarily an overabundance of products on the market, and a general reduction of their prices. Its consequences are numerous failures, difficulties in all transactions, a tightening of credit (reserrement des capitaux), and the stoppage of production until the market is clear and an active demand sparks off activity again’ (CRISE, Vol. 1, col. 1388). Crises deserve to be carefully studied because they tend to recur ‘at fixed times, so to speak, and at intervals that seem to become shorter rather than longer’. There have been six in France between 1810 and 1848, and similar events simultaneously took place in the United States and all over Europe, in particular in England. ‘This is obviously a general phenomenon, congenital to the very organization of modern industry’ (ibid.). Ott observed – without, however, further elaborating – that economists have formulated various explanations of crises. Most of the alleged particular causes are indeed capable of generating such events, in particular political crises or revolutions, sudden and unfounded speculations, or bad crops. Some economists blame crises on the excess of paper money issued and circulated by banks, but this is unlikely. As paper money is convertible, it would be difficult for banks to circulate currency in excess to the needs of trade. Crises are not ordinarily due to fluctuations in credit given by banks; it is always in their interest to expand credit, and they only restrict if they are forced by the crisis itself to withdraw it. Ott recognized, however, that this surely makes the crisis more intense. Besides these particular causes of crises, there is a general one – not noted by economists – that explains their regular recurrence. Ott takes up the issue of competition and the anarchy of production as discussed in the Traité, but gives it a new twist. Entrepreneurs decide how much to produce on the basis of their judgement as to the state of business. However, they cannot know in advance what the state of demand will be when their goods are ready to be sold, as there is no generally available information concerning what their competitors are doing. All entrepreneurs are acting on the same, limited information, and a number of them will be induced to expand production on the same grounds, all together eventually producing in excess. Each [entrepreneur] must rely on his own appreciation, on his own guess as to the future state of the market. On what is such an estimate based? On the high price of commodities, on their temporary scarceness on the market, on the high profits that can be gained by producing them. On these grounds, he

244 Daniele Besomi will seize the occasion and start producing. But others will do the same, and soon the goods that used to be scarce become overabundant. Prices will decrease, and at some point fall below production cost. Eventually the market will be glutted, and only a small fraction of the products will be able to be sold, and sold at a considerable loss. Sales, purchases and production then come to a halt. If this happens to some important kind of goods – those involving large amounts of capital, employing a large number of workers or requiring for their production several kinds of other goods –, the stagnation in these branches will affect all the others. This is a full commercial crisis. (CRISE, Vol. 1, col. 1389) In support of this view, Ott cites (ibid.) a passage from the testimony of Koechlin before the commercial enquiry of 1834, in which he stressed that ‘the profits related to high prices [of calicoes] have induced the creation of new factories. These new factories have contributed to an increase of production at a time when internal consumption was diminishing and when external markets were being lost. This led to an overproduction crisis’.7 Ott also cited the passage in the Traité (Ott, 1851, p. 86n), without, however, explicitly connecting it to a general interpretation of commercial crises and especially without interpreting it in terms of expectations. Ott concluded that such a chain of events can only be prevented by means of forecasting institutes that could supply some approximate estimate of what the market’s need will be. Ott’s discussion, however, stops here and there is no further elaboration.

10.4 ASSESSMENT Despite its brevity, Ott’s entry on CRISIS is extremely innovative. His explanation of how expectations are bound to be systematically disappointed is, to the best of my knowledge, the first of its kind. True, Ott relies on a cobweb-like mechanism, of which there were some earlier instances. In particular, John Wade presented a model of the cycle based on the delayed response of quantities produced to price fluctuations, while demand reacts faster (Wade, 1826, 1833; for a discussion, see Besomi, 2008). The passage by Koechlin cited by Ott is indeed rather similar to Wade’s approach. But in Ott the lag between production decisions and the delivery of output plays quite a different role. In Wade’s cobweb model the delay is responsible for the mismatch between production and demand by means of simple inertia. Ott’s emphasis on the formation and disappointment of expectations in conditions of genuine ignorance of the future, and the awareness that this very future is affected by the decisions made today by independent competitors all trying to guess how the future will be, is well ahead of its time. It involves two thorny issues: the role of uncertainty in disrupting equilibrium, and the mismatch of individual decisions and their collective outcome. His discussion is sketchy, but the problem is expounded fairly precisely; nobody, however, seems to have taken it up before the Swedes in the inter-war years.

Auguste Ott on expectations and crises 245 Ott emphasized the periodical character of crises, and claimed that the explanation of crises he advanced was capable of accounting for the regularity of their recurrence. Yet he failed to see that his mechanism was easily reversible and suited to explaining not only the upper turning point of a cycle, but also the trough.8 He only thought of it almost four decades later; in the second edition of his Treatise he depicted as follows the ‘true relationship’ between production and demand: Demand induces production, but this production systematically overshoots that demand. There follows a glut, the goods produced cannot be sold, and production halts, as producers are ruined. This interruption of production again excites demand, which induces more production, so that the movement recommences afresh. Gluts succeed scarcity and scarcity gluts; this is the fatal circle in which production necessarily revolves when it has no other guide than individual demand. These phenomena generate what are called commercial crises. (1892, Vol. 1, p. 139) Ott’s discussion of the problem of markets is also remarkable. In mid-nineteenth century France it was quite exceptional for Say’s law to be openly challenged. The économistes, of strong liberal faith and orthodox descent from Say’s ideas, had a firm grip on doctrine and on publication outlets (see also Chapters 8 and 12). In England as well, the Ricardian success in the debate with Malthus on the issue of general gluts moved the reflections on crises on a different terrain. Crises were thus blamed on one or another external event, or on speculative excesses (possibly favoured by laxity in credit policy), on mismanagement of the currency or some other inappropriate banking policy, on monopoly, tariffs or other impediments to the smooth working of competition. By invoking such frictions and exogenous causes, the constraint of Say’s law, sanctioning the impossibility of general gluts, was dodged in one way or another. Ott was one of the few who explicitly recognized that the law of markets was incompatible with the recurrence of crises, and accordingly turned it upside down. This was all the more rare in a dictionary: if we do not count Ganilh, who contested Say’s law without explicitly discussing crises (see Chapter 6, note 12 to Section 6.6), the only earlier exception was Roscher (see Chapter 7), and after Ott the issue was explicitly taken up only at the turn of the century, in particular by Herkner (Chapter 18) and Lexis (Chapter 19). Ott (quite appropriately) omitted from the dictionary some interesting elaborations on the issue of the markets for products he offered in the Traité. They nevertheless deserve to be briefly mentioned. While Ott maintained that in a capitalist system crises are inevitable, this was not necessarily the case in a society where a considerable part of production was managed by workers’ co-operative associations. He devised a scheme for partitioning social production between three sections: those producing basic consumption goods, those producing luxury goods and those producing means of production. Production being organized as shown by the scheme would satisfy at once the needs of the workers of each sector (in terms of their private consumption goods, both basic and luxury, and of the means

246 Daniele Besomi of production), and guarantee an equitable distribution of social production between all those participating in production.9 Such a model can legitimately be called a ‘reproduction scheme’, as it defines the requisites necessary for the reproduction of the conditions for production (Ott does not consider enlarged production, except for mentioning that this is possible, provided proportions are preserved throughout). Ott’s formulation, moreover, is presented in the form of an input–output scheme, making it interesting also as one of the steps in the prehistory of such an analytical tool (Besomi and Colacchio, 2010). Similarly to Marx, Ott had couched the crisis problem in terms of the conditions that may, or may not, be satisfied in order to ensure an outlet to the entire production, depending on both its use value and on the purchasing power of all those involved in production. Ott developed his argument having in mind a society of cooperatively organized workers; he insisted, however, that the scheme would also apply to a capitalist society if profits were spent on luxury goods, although nothing guarantees that production would follow the scheme. The anarchy of production and competition suggests that it does not, except by accident, while Ott’s reflections on crises in the Dictionnaire indicate the systematic reasons why it does not.

NOTES 1 Migne’s strategy consisted in integrating scientific knowledge into his Encyclopédie only after having moralized the corresponding disciplines: the advances of science were first interpreted as philosophical problems, and subsequently subsumed under theology (Bénichou, 1992, p. 121). 2 Short biographical notes on Ott can be found in Dantès, 1875; Lermina, 1885; Glaeser, 1878; Sitzman, 1909–1910; Vapereau, 1893; the richest biographical entry is Anonymous, 1966. None of these indicates Ott’s death year, while Timmermans, 1977 suggests that he died around 1890. Yet Ott’s death date was announced shortly after his passing away by de Molinari in the Journal des Économistes (1903). 3 Besides the Dictionnaire and a second edition of this treatise, published in two volumes in 1892, Ott published little else on economics. After the mid-1850s, he only published historical and philosophical writings, and edited and translated German books. Nor did his contributions to other dictionaries touch upon economic themes; one was on the Catholic Church (ÉGLISE CATHOLIQUE, for →Block’s Dictionnaire général de la politique, 1863), the other on MALTHUS (for Vol. 15 of the →Encyclopédie du dixneuvième siècle, 1851), where only the theory of population was discussed. 4 Ott’s historical approach may have played some part in Migne’s entrusting him with the writing of the Dictionnaire. The idea – originally developed by the Abbé de Lamennais and Olympe Philippe Gerbet in the early 1830s – of a ‘Catholic science’ on which Migne’s Encyclopédie théologique was based in fact relied on a historical method consisting in the extraction of the true and universal character of Catholic religion from the historical development of religious ideas. By extension, the histories of sciences prove their universal character, revealing their deep Catholic nature (for a full discussion, see Laplanche, 1992, in particular pp. 21–27). In the economic entries of the Dictionnaire, however, Ott did not pursue the historical method to the same extent. 5 On Ott’s views on co-operation and his position in the Catholic associationist movement, see Demoustier and Rousselière, 2005a, 2005b; Duroselle, 1951; Desroche, 1991; Gaumont, 1924; Gueslin, 1998.

Auguste Ott on expectations and crises 247 6 The entry is titled in the singular, but after briefly supplying a definition of ‘crisis’ in political language and of ‘commercial crisis’, Ott switches to the plural and devotes the bulk of the entry to the discussion of ‘commercial crises’. 7 Full citation not given. It may refer to Koechlin, 1835. 8 In contrast, other early propounders of cobweb-like mechanisms immediately caught the symmetry of their construction and used them to explain the reversals of the movement in both directions. 9 While Buchez was content with claiming that workers should co-operatively organize production, Ott went much further in specifying how production should be organized (see Duroselle, 1951, p. 107).

REFERENCES Anonymous, 1966, Ott, Auguste. In J. Maitron (ed.), Dictionnaire biographique du mouvement ouvrier français (Paris: Les editions ouvrières, 1964–1997), Vol. 3, pp. 166–167. Bénichou, C., 1992, L’ignorance des savoirs. In C. Langlois and F. Laplanch (1992), La science catholique. L’‘Encyclopédie théologique’ de Migne (1844–1873) entre apologétique et vulgarisation (Paris: Éditions du Cerf), pp. 93–122. Besomi, D., 2008, John Wade’s early endogenous dynamic model: ‘commercial cycle’ and theories of crises, European Journal of the History of Economic Thought, 15: 4, December 2008, pp. 611–639. Besomi, D. and Colacchio, G., 2010, Auguste Ott on commercial crises and distributive justice: an early input–output scheme, Review of Political Economy, 22: 1, January, pp. 76–96. Dantès, A., 1875, Dictionnaire biographique et bibliographique, alphabétique et méthodique, des hommes les plus remarquables dans les lettres, les sciences et les arts, chez tous les peuples, à toutes les époques (Paris: A. Boyer). Demoustier, D. and Rousselière, D., 2005a, L’économie sociale et coopérative des associationnistes: de la critique des fondements de l’économie politique à la régulation sociale du marché, Annals of Public and Cooperative Economics, 76, pp. 517–543. Demoustier, D. and Rousselière, D., 2005b, Social economy as social science and practice: historical perspectives on France. In J. Clary, W. Dolfsma and D. M. Figart (eds) Ethics and the market: insights from social economics (London and New York: Routledge). Desroche, H., 1991, Histoires d’économie sociales. D’un tiers état aux tiers secteurs, 1791–1991 (Paris: Syros/Alternatives). Duroselle, J.-B., 1951, Les débuts du catholicisme social en France, 1822–1870 (Paris: Presses Universitaires de France). Gaumont, J., 1924, Histoire générale de la coopération en France. Les idées et les faits. Les hommes et les oeuvres. Vol. 1: Précurseurs et prémices (Paris: Fédération nationale des coopératives de consommation). Glaeser, E., 1878, Biographie nationale des contemporains, rédigée par une société de gens de lettres, sous la direction de M. Ernest Glaeser (Paris: Glaeser). Gueslin, A., 1998, Invention de l’économie sociale: idées, pratiques et imaginaires coopératifs et mutualistes dans la France du XIXe siècle, 2nd edn (Paris: Economica). Koechlin, N., 1835, Enquête commerciale. Interrogatoire de M. Nicolas Kœchlin, fabricant et président de la Chambre de commerce de Mulhouse (Strasbourg: n.p.). Langlois, C., 1992, Migne, L’‘Encyclopédie théologique’ et ses auteurs. In C. Langlois and F. Laplanche, 1992, La science catholique. L’‘Encyclopédie théologique’ de Migne (1844–1873) entre apologétique et vulgarisation (Paris: Éditions du Cerf), pp. 39–61.

248 Daniele Besomi Langlois, C., and Laplanche, F., 1992, La science catholique. L’‘Encyclopédie théologique’ de Migne (1844–1873) entre apologétique et vulgarisation (Paris: Éditions du Cerf). Laplanche, F., 1992, Une entreprise de la ‘science catholique’: l’‘Encyclopédie théologique’ de Migne. In C. Langlois and F. Laplanche, 1992, La science catholique. L’‘Encyclopédie théologique’ de Migne (1844–1873) entre apologétique et vulgarisation (Paris: Éditions du Cerf), pp. 17–37. Lermina, J., 1885, Dictionnaire universel illustré, biographique et bibliographique, de la France contemporaine: comprenant par ordre alphabétique la biographie de tous les français et alsaciens-lorrains marquants de l’époque actuelle, l’analyse des oeuvres les plus célèbres . . ., par une société de gens de lettres et de savants (Paris: L. Boulanger). Molinari, G. de, 1903, Chronique [Announcement of Ott’s death], Journal des Économistes, series 5, LIII, August, p. 318. Ott, A., 1851, Traité d’économie sociale ou l’économie politique coordonnée au point de vue du progrès (Paris: Renou). 2nd edn in 2 volumes, 1892 (Paris: Fischbacher). Ott, A., 1865, Nécrologie. P.-B.-J. Buchez, Journal des Économistes, Series III, XXIV, September, pp. 443–447. Ott, A., 1866, Du système d’association ouvrière proposé par Buchez, Journal des Économistes, Series III, XXV, July, pp. 61–75. Sitzmann, É., 1909–1910, Dictionnaire de biographie des hommes célèbres de l’Alsace: depuis les temps les plus reculés jusqu’à nos jours (Rixheim: impr. de F. Mutter). Timmermans, C., 1997, Ott, Auguste, in F. Laplanche (ed.) Dictionnaire du monde religieux dans la France contemporaine. Vol. 9, Les sciences religieuses: le XIXe siècle, 1800–1914 (Paris: Beauchesne), p. 508. Vapereau, G., 1893, Dictionnaire universel des contemporains contenant toutes les personnes notables de la France et des pays étrangers (Paris: L. Hachette), 6th edn. Wade, J., 1826, Digest of facts and principles, on banking and commerce: with a plan for preventing future re-actions (London: Thomas Ward). Wade, J., 1833, History of the middle and working classes; with a popular exposition of the economical and political principles which have influenced the past and present condition of the industrious orders. Also an Appendix of prices, rates of wages, population, poorrates, mortality, marriages, crimes, schools, education, occupations, and other statistical information, illustrative of the former and present state of society and of the agricultural, commercial, and manufacturing classes (London: Effingham Wilson. Reprinted New York: Kelley, 1966).

11 Gerolamo Boccardo on internally generated commercial crises Daniele Besomi

G. Boccardo, Dizionario della economia politica e del commercio così teorico come pratico: utile non solo allo scienziato ed al pubblico amministratore ma eziandio al commerciante, al banchiere, all’agricoltore ed al capitalista. Turin: Sebastiano Franco e figli. 4 vols, 1857–1863.1

11.1 THE DIZIONARIO DELLA ECONOMIA POLITICA The first edition of Gerolamo Boccardo’s Dictionary of political economy and commerce, practical and theoretical, useful to the scientist and the civil servant, but also to the merchant, the banker, the agriculturalist and the capitalist was published in Turin in fascicles later bound in four 28-centimetre volumes (totalling about 2,800 pages) between 1857 and 1863. Its purpose was twofold. First, Boccardo aimed at covering Italian doctrines and a number of aspects specifically concerning Italian conditions, which were not adequately discussed in foreign dictionaries of economics (PREFAZIONE, Vol. 1, p. vii). Second, he aimed at filling a gap in the Italian literature, which lacked specialized dictionaries in economics. A recently published Dizionario di geografia universale (Dictionary of universal geography: Marmocchi, 1854–1862) enabled Boccardo to reduce the corresponding part of his treatment. But →da Portula’s Dizionario analitico di diritto e di economia industriale e commerciale (Analytical dictionary of law, trade and industrial economics, 1843), Azuni’s Dizionario universale ragionato della giurisprudenza mercantile (Universal dictionary of commercial law: Azuni 1786–1788) and →Antonelli’s Enciclopedia del negoziante (Trader’s encyclopedia: 1839–1843, 1850) were judged as superficial and lacking a treatment of theoretical and practical economics (DIZIONARI ECONOMICI E COMMERCIALI, Vol. 2, p. 46). Boccardo saw the publication of such a dictionary as a necessity. Although this kind of work was criticized for presenting a parcelled (and by its nature disordered) view of the knowledge of the subject, dictionaries offer to practical people an easy way of finding solutions to specific problems and give scholars the benefit of neat surveys of opinion on specific topics (PREFAZIONE, Vol. 1, p. vii). In Boccardo’s view,

250 Daniele Besomi the dictionary is therefore ‘the most efficacious means propagating knowledge’ to practical, busy people who need guidance for their business and at the same time want to learn about some aspects of the subject without being forced to read entire treatises. It has the advantages of both the newspapers and the book, with none of their drawbacks: ‘it is as easy to read as a newspaper, but not as light and superficial; it can dig as deep as a book, and take a very broad perspective, but enables the reader to focus on his specific points of interest’ (ibid., p. xix). This propaganda of the true doctrines of social sciences also serves the cause of combating the sophisms and errors of the socialists. Malthus, followed by Sismondi, has inquired on the laws governing pauperism, laying the foundations of the pathology of society to accompany its physiology as founded by Smith. It became clear that crises and suffering of the working classes require action to be taken. The socialists, however, have been alone in advocating reform and progress, and have therefore received the involuntary sympathy of those who wanted these problems to be solved. But the socialists had distorted the principles of the science as well as rejecting the existing social order, while these complex problems require a scientific approach. The only means for winning back consensus is by introducing all possible improvements in human welfare, and in divulging the true and beneficial notion of the economics of social living (ibid., pp. xiv and xvi–xvii).2 Before undertaking his task, Boccardo seems to have explored the existing economics and commercial dictionaries. He briefly surveyed a number of them in the entry DIZIONARI ECONOMICI E COMMERCIALI, in particular →Savary’s Dictionnaire universel de commerce, 1723 (‘precious when it was written, yet full of mistakes and omissions while containing many useless pages’), →Postlethwayt’s Universal dictionary of trade and commerce, 1751 (‘largely a translation of Savary, it is in many ways fallacious, in particular for a tendency to stray from his chosen topics), →Mortimer’s New and complete dictionary of trade and commerce, 1766–1767 (‘better than its predecessors, yet too largely dedicated to geographical and technological issues’), →Ganilh’s Dictionnaire analytique d’économie politique, 1826 (‘often superficial, and too narrow’ in the choice of entries), and especially →McCulloch’s Dictionary . . . of commerce and commercial navigation, 1832 and → Coquelin and Guillaumin’s Dictionnaire de l’économie politique, 1852. Of McCulloch’s ‘classical Dictionary of commerce’, Boccardo appreciated ‘the immense collection of documents and the many articles it contains that could be considered special essays and tracts’. But although the various issues ‘are discussed with good and practical sense’, the work ‘lacks theoretical notions and doctrinal principles’. Guillaumin’s dictionary suffers the opposite drawback: it focuses on theoretical principles (yet overlooks Italian contributions) but neglects practical issues. Moreover, having been written by numerous competent writers whose views are not fully consistent, it may be found very useful by scholars but somewhat confusing to the occasional reader, and may even generate some scepticism in those who notice ‘the diverging opinions that are unfortunately still dividing the students in social sciences’ (Vol. 2, pp. 44–46). Yet Boccardo borrowed heavily from it, by quoting and paraphrasing relevant parts of several important entries; this also applies to his discussion of crises.

Boccardo on internally generated economic crises 251 Boccardo’s Dictionary is, then, a one-man enterprise, the product of many years of work, addressed to the scholar (some entries have extensive bibliographies) as well as to the paterfamilias, the capitalist and the trader, supplying them with the theories concerning commerce, banking and manufacture, but also the corresponding factual evidence with the most updated statistics concerning population, trade and wealth in different countries (PREFAZIONE, Vol. 1, pp. xix–xx). Boccardo stressed that the purpose of his work was not only theoretical but also to some extent philological.3 The Dictionary thus aims at carefully and univocally defining the terms in use in the discipline. Boccardo pointed out that while the origin of political economy owes a considerable debt to Italian writers, the recent advances had mainly taken place in Britain and France. Accordingly, while the earlier terminology borrowed much from the Italian language, the recent words originated from other countries. Unless a suitable term already existed in Italian, Boccardo decided to use the foreign word: ‘I prefer the Accademia della Crusca to dislike me, than scientists to laugh at me’.4 French neologisms are particularly abundant – Boccardo, whose mother was Alsatian, had a good understanding of the French language, and French writers are well represented among his biographical entries; moreover, Italy became acquainted with political economy via France, rather than Britain.5 Boccardo claimed that his organization of the materials was new, not only for Italy but perhaps in the whole world. He maintained that to each specific doctrine a corresponding individual entry must correspond, which, however, crossrefers to all subordinated topics deserving a special discussion (PREFAZIONE, pp. vi and xx). The cross-references were indicated in the form ‘(see ENTRY)’. Yet cross-referencing was scarcely a new idea, as it had been explicitly used by →Chambers’s Cyclopædia in 1728, and it was used by McCulloch, although not by Coquelin and Guillaumin. A useful innovation by Boccardo was the indication, right after the title of the entry, of the branch of the discipline to which the terms refers – e.g. ‘political economy’, ‘social economics’, ‘biography’, ‘commercial history’, etc.

11.1.1 Editorial history Boccardo’s Dictionary went through three editions. From the second edition he added the attribute ‘universal’ to its title, dropped the list of professionals to whom the work was addressed, and specified that the dictionary included ‘1. A complete exposition of all doctrines and theories of the economic science, by means of articles as ample as specific treatises; 2. A full repertory of entries concerning commercial practice, where the businessman will find notices concerning the consuetude, the accounting methods and the effects of his operations; 3. everything concerning commercial law; 4. theoretical and practical statistics, in all its branches; 5. the relationship of economic and trading sciences with natural sciences and technology; 6. the geography and history of trade’. The second edition was published in two volumes in 1875–1877; the third, also in two volumes, was published in 1881–1882. In spite of indicating that the later editions were considerably revised and enlarged,

252 Daniele Besomi only the second edition introduced a few substantial revisions (Gioli, 2001, pp. 232–233), in particular by dropping the biographical entries and updating the theoretical part by referring to marginalism and the German historical school (Bianchi and Faucci, 2005).

11.1.2 Reception Boccardo’s Dictionary was well received in Italy and abroad.6 When the publication of the fascicles of the first volume was still under way, the Giornale dell’Ingegnere, Architetto ed Agronomo appreciated that an Italian dictionary of political economy was seeing the light, stressed that the experience of the previously published foreign dictionaries enabled its author to avoid their mistakes, and praised the style and organization of the materials (Pareto, 1857). A few years later, upon the publication of the 51st fascicle (of the 80 planned), the same journal confirmed that the Dictionary was fulfilling its promises and was receiving good press in Italy and abroad (Pareto, 1860). The Annali Universali di Statistica systematically reported in long articles the progress of Boccardo’s work, all written by the journal’s editor, Giuseppe Sacchi, citing large excerpts of some relevant entries. The first article praised the filling of the gap in the literature and lauded the author as one of the most conscientious Italian economists, before reproducing Boccardo’s declaration of intentions (Sacchi, 1857a); the second reproduced in full the first two parts of Boccardo’s PREFAZIONE, briefly referred to a few articles (ABBONDANZA, ACQUE, ACCATTONAGGIO, AFRICANO COMMERCIO, AMERICA, AGGIOTAGGIO, that is, respectively, ‘Abundance’, ‘Waters’, ‘Begging’, ‘African trade’, ‘America’, ‘Stock-jobbing’) and reported large extracts of ANARCHIA (‘Anarchy’) (Sacchi, 1857b). By July 1858 the fascicles up to letter F (well into the second volume) had been published, and the reviewer could report that the work was receiving unanimous praise from the Italian periodical press (Sacchi, 1858a). In October and November, Sacchi reproduced in full the entry ECONOMIA POLITICA, to which he appended a critical note disputing Boccardo’s definition of the discipline (an improved version of the one propounded by Say) and arguing that true economists should become consultants for the government (Sacchi, 1858b). By mid-1859, the third fascicle of Vol. III was published, and in the issues of July and August Sacchi reproduced most of the article on LIBERTÀ NELLE MATERIE ECONOMICHE (‘on economic freedom’), for ‘it expounds the act of faith shared by all Italian economists’ (1859, p. 265). The Accademia dei Georgofili, announcing that the publication of the dictionary was proceeding speedily in spite of the difficult times, commented that the high hopes raised by the project were being fulfilled (Tabarrini, 1859, p. xciv). The Archivio Storico Italiano announced the publication in 1857, when eight fascicles had already been printed, noting that the important topics were discussed with a fair amount of economic doctrine and historical erudition, and expecting that the finalized work would give to Italy a book of undoubted utility and would be one of the most important publications in economics (Anonymous, 1857). A proper

Boccardo on internally generated economic crises 253 review by G. Rosa was published later in the year. It began with an apologia concerning dictionaries as a genre and a rebuttal of the criticisms of popularizing literature, which itself indicates that such a tool was much more controversial in Italy than elsewhere in Europe (Rosa, 1857, pp. 114–116, 119–120). Rosa praised the broad scope of the dictionary, in particular the outlining of the links between economics and statistics, law, history and geography, and saw in Boccardo’s wide knowledge, in particular of history, and intimate understanding of the discipline the best person for the task. Of the specific articles in the fascicles published by then, the reviewer noted that the major entries such as BANCA and AGRICOLTURA were very extensive treatises in themselves, characterized by original research rather than resulting from an assembly of the views of others (p. 122). Finally, the reviewer recommends the dictionary not only to scholars but also to administrators of public and private businesses and to shopkeepers, for laying out a host of useful notions in an accessible way, without, however, renouncing scientific precision (pp. 131–132). Interestingly, like Rosa, a number of Italian notices on the Dizionario discussed the merits and limits of dictionaries as opposed to treatises. In the collection of reviews compiled by the publishers at an early stage of publication ([Franco], 1858], this is one of the most common themes – surely brought to the fore by the fact that Boccardo himself begins his PREFAZIONE by discussing it. Most commentators stressed the usefulness of dictionaries in popularizing individual concepts or entire disciplines, and in supplying a handy tool to the learned to find quickly the information they need; in doing so, some explicitly rejected the arguments of the detractors of such tools,7 witnessing that in Italy there was some resistance to the usage of such reference works. I could not find many reviews in the foreign periodical press – not even in the Journal des Économistes, where Boccardo’s work had often been reviewed, or at least mentioned. The publication of the Dizionario, however, was announced by the Zeitschrift für die gesamte Staatswissenschaft and by the Bibliothèque Universelle de Genève (the latter’s article is reproduced in [Franco], 1858). The work is not mentioned in Loria’s obituary (1904) of Boccardo for the Economic Journal, but it was reviewed (together with →Macleod’s Dictionary of political economy8) in the Jahrbücher für Nationalökonomie und Statistik. The reviewer focused on the lexicographical aspects (promising a further article on the substantive aspects, which, however, does not seem to have been published), stressing Boccardo’s elegant style and reporting his scope and selected readership (Kircheisen, 1864).

11.2 GEROLAMO BOCCARDO Gerolamo Boccardo (1829–1904) graduated in Law in 1849. He worked for a short time as a lawyer, but soon switched to teaching in a Genoa college. In 1850 he was a founding member and the Secretary of the Accademia di Filosofia Italica, the proceedings of which he edited. He started teaching various subjects at the University of Genoa in 1861: political economy, geography, statistics, and public

254 Daniele Besomi finance and accounting; meanwhile, he was called to co-ordinate the reform of schooling programmes. Boccardo’s main contribution to economics was to popularize and diffuse the subject by means of textbooks. The most remarkable one, especially considering his young age, was a Tract of political economy, theoretical and practical, in three volumes (the first theoretical, the other two practical9), in the Preface of which he admitted that he was not contributing anything substantially new but was attempting to systematize and make accessible to ‘Italian youth the body of knowledge of the masters of the discipline’ (Boccardo, 1853, p. 3). The Trattato went through eight editions (the last of which was published in 1894), without, however, being substantially updated with the new approaches as they became available.10 This is at odds with Boccardo’s important role in making known in Italy, via the Biblioteca dell’economista (a series of translations of economic works of importance, the editorship of which Boccardo took over from Francesco Ferrara and for which he was and still is greatly praised), the writings of mathematical economists such as Cournot, Jevons and Walras. The Dizionario incorporated instead, in the second edition, an entry on mathematics applied to political economy (MATEMATICA APPLICATA ALL’ECONOMIA POLITICA; for a discussion, see Giocoli, 2001). The Dizionario is one of the products of this popularizing activity and of Boccardo’s encyclopaedic spirit – an attitude designed to encompass and represent social phenomena in their multiple aspects and complexity (Bianchi and Faucci, 2007, § 1.2). While its fascicles went to press, Boccardo also published a textbook of history of commerce, industry and political economy (1858). He also edited the 31 volumes of the 6th edition of the →Nuova enciclopedia italiana (1875–1888), which inherited from the 4th edition the translation of Blanqui’s 1836 entry on CRISE COMMERCIALE for the →Encyclopédie des gens du monde (see Chapters 5 and 6). Boccardo also had an active political life. In 1858, he was elected to the Genoa city council, of which he remained a member for three decades, and had administrative duties between 1860 and 1864. He became a Senator of the Italian kingdom in 1877 and State Councillor in 1888.11 Boccardo wrote some passages on crises preliminary to the Dizionario. A chapter of the Trattato is devoted to industrial crises. Producers face continuously changeable demand and supply conditions, and have to struggle endlessly to find a balance between production and consumers’ needs. If a country’s production is mainly addressed to domestic demand, capitalists can cope fairly easily, unless forecasts are upset by political disturbances. However, if industry competes with the whole world, crises become more frequent and can have catastrophic proportions. Boccardo agrees with some economists of the French school, in particular Blanqui and Sismondi, that crises can be even more serious in economies where industries are large and rely heavily on machinery. But if constraining the size of industry and introducing protection would make those economic storms less ruinous, it would also limit economic growth (Boccardo, 1853, Vol. 2, Ch. 2). This argument does not explain much. More convincing are the passages on banking monopoly vs. free banking in which Boccardo explicitly takes up Coquelin’s argument (pp. 234–251). Large extracts of this were later reproduced in the dictionary.

Boccardo on internally generated economic crises 255 Boccardo also drafted a report for the Genoa Chamber of Commerce on the crisis Italy was undergoing in 1854. Boccardo argued that crises are characterized by a temporary distrust and paralysis of credit. Although Italian entrepreneurs had recently become more expert and active, and therefore susceptible to falling prey to those fevers of speculation that marked the virulent crises of the past decades in France and England, in Boccardo’s view the main reasons for the Italy-specific difficulties were political. He concluded that government intervention could not remedy the lack of trust, but argued that political action could prevent a crisis by promoting banking freedom and the issue of banknotes of smaller value, and by eliminating restrictions on interest rates – in other words, to make crises ‘less frequent and less calamitous’ the government should eliminate the artificial obstacles it had previously set to the development of credit (Boccardo, 1854).

11.3 CRISES IN BOCCARDO’S DICTIONARY The subject of crises is discussed in a dedicated entry titled CRISI (in Italian, the word crisi is unchanged in the plural; it is clear from context, however, that Boccardo meant the plural) and in the entry on BANCA, with scattered observations elsewhere.

11.3.1 The first edition Having recalled the etymology of the term ‘crisis’ (from the Greek word meaning ‘decision’), Boccardo suggests that economists have been borrowing the term from pathology, where it indicates sudden turns for the better or for the worse in the course of a disease. In economics, it indicates ‘any perturbation of the social interests, intense or not so deep; it must be temporary and ephemeral, otherwise it would not be a crisis but a chronic disease that would lead to the ruin of society’ (p. 731). Boccardo begins his discussion by distinguishing three major kinds of crises: agricultural, industrial and commercial. Each can have different causes, which it is useful to analyse separately; it must be remembered, however, that because of the interconnectedness of the economic system, crises in one branch often have spillover effects and expand to the entire economy. Bad crops, for instance, mean scarcity of raw materials for manufactures, increases in the price of food to which wages adapt slowly and partially, with the consequence that producers’ costs rise while workers are worse off. Trade also suffers, and the reserves of specie deplete as corn is imported from abroad, causing a monetary crisis. Finally, public finances are drained by the increased number of poor and fail to replenish due to the general impoverishment of society (pp. 731–732; this is also discussed under the heading MONETA (currency), Vol. 3, p. 431). Agricultural crises, however, were more important in the past, and are diminished in intensity by the improvement in cultivation methods and transportation. Industrial crises, on the contrary, gain importance with the spread of manufacture. Among their multiple possible causes, the most frequent one is failed speculation. This

256 Daniele Besomi can be due to overproduction, when a profitable business attracts too many producers; this is especially favoured by the ‘Colbertistic system’ of protectionism, which encourages the growth of fragile enterprises protected by monopolies, which collapses as soon as competition appears. Were it not for protectionism, the fall in prices would fairly quickly warn entrepreneurs that production is excessive, thus avoiding the worst excesses. Another, and far more serious, cause of failed speculation is the overestimation of profitability due to wrong data or miscalculations; this was the case in 1825, when the illusion that much gold could be extracted from South American mines attracted far too many expeditions, equipped with the wrong kind of machinery, all destined to be disappointed. Additional possible causes of industrial crises are strikes (which, in truth, are more often the effect of crises) or sudden changes in demand, due to changes of fashion. The most common kind of crises are the commercial ones, also because trade is necessarily troubled by agricultural and industrial crises. Their causes can be divided into internal and external. The latter are ‘all the facts that, without originating from trade, inevitably affect its course’, such as wars, political commotions, safety of transportation, etc. (p. 739). While the commercial troubles arising from such causes negatively affect most people, some can draw important benefits (for instance, the weapons industry). Among the internal causes there are in the first place the openings of new commercial ways or improvements in old ones. A second possible internal cause is perturbation in the means of exchange, following the discovery of new mines or the inappropriate fixing of parity between metals (Boccardo further elaborated on this in the entry on MONETA, Vol. 3, p. 402). This is sometimes called a ‘monetary crisis’ – ‘a legitimate and appropriate name to describe a variety of commercial crisis; it would, however, be wrong and false if it were intended to designate a special category, distinct from commercial crises’ (p. 733). By far the most common among the internal causes of commercial crises are imbalances in credit. Citing Coquelin’s entry on CRISES COMMERCIALES (in →Coquelin and Guillaumin’s Dictionnaire de l’économie politique, 1852–1853; see Chapter 8), Boccardo stresses that in advanced countries most commercial transactions are based on credit; credit is in turn based on trust, and if for any reason confidence fails, all credit transactions are suddenly interrupted and the inconvenience very quickly expands to the entire trading world. The problem is not intrinsic to credit itself; on the contrary, credit is an instrument of progress: during times of confidence, trade advances more than it subsequently declines during the following crisis. Troubles arise when there is abuse or bad use of credit, which leads to a fever of speculation or overtrading. Such phenomena are further encouraged by the banking practice linked to the banking monopoly. This aspect is only mentioned in the entry on crises, but is fully discussed in the entry BANCA, more precisely in the section ‘Della libertà bancaria’ (‘On banking freedom’, Vol. 1, pp. 296–306). Boccardo openly supports free banking; his argument on the restriction on banking as ‘almost inevitably’ dragging the system into commercial crises explicitly refers to Carey and especially Coquelin.12 A privileged bank issues some banknotes, which substitute an equal amount of metal coins, the

Boccardo on internally generated economic crises 257 value of which is now free to search out a different kind of use. But alternative uses are limited, so that this money will be deposited at the bank, waiting for more remunerative employment. The central bank’s reserve (now consisting partly of its own capital, partly of deposits) thus grows, and further issues become possible. While this process continues, the mass of capital seeking employment grows, and the interest paid by the Bank (following the usage of the time, ‘Bank’ with a capital means the central bank) diminishes. Speculative enterprises become comparatively more and more attractive, including the less solidly founded ones. At this point, depositors want to withdraw their deposits. Soon the Bank has to drain its reserves and risks failure unless it is saved by some external intervention. The crisis becomes general as the difficulties of the Bank are passed on to its creditors (for a more detailed summary of Coquelin’s argument, see Chapter 8). Having discussed the causes of crises, in his entry CRISI Boccardo turns to the remedies. Many naive writers believe that government action can directly affect the course of the crisis. Yet what is really needed – namely, the return of confidence that, alone, guarantees that credit will be resumed – is not in the reach of the government or of individual citizens. Any other intervention, far from constituting a panacea, may instead generate further problems. Some, for instance, advocate the issue of paper money, which, however, would create additional discredit. The only true prevention of crises can be summarized in the word freedom. Make free the industry and trade, and whenever one branch of production suffers, capital will either move to other branches or flow in in help of the diseased one, depending on the case. Abolish protection and monopoly, and those weak trees growing under their shade and protection and liable to fall at the first blow of free air will no longer sprout. Make banks free, and the most terrible crises, those spontaneously arising from the privileges of these powerful institutions, will become impossible. Make interest rates free, and capital will move wherever it is needed. The public will then enjoy the invaluable advantages of competition. (p. 736) The body of the entry on crises ends here. Boccardo, however, added an Appendix on the crisis of autumn 1857 (‘when the article was already in press’, p. 736). He concluded that its main cause was overtrading in the United States (where the crisis originated), with speculation being particularly rampant in the undercapitalized railway companies. Banks incautiously financed many such ventures, at first enabling the entire speculative system to take off and later, in turn, to fail. This was coupled with an increase in the consumption of luxury goods imported from Europe, far above what the country itself was capable of producing. The death blow was delivered when capital was recalled to Europe to finance the Crimean War. Boccardo warned that some banks’ reckless behaviour should not be taken to be the main cause of the crisis, for after all the ratio of reserves to issues (about 35 per cent) was overall higher than at the time of the 1837 crisis (28 per cent); he

258 Daniele Besomi stressed that it should not be inferred that the fault was intrinsic in the liberal banking system adopted in the United States (p. 736). He submitted that better communications on the two sides of the Atlantic would have eased the crisis, for in Europe people panicked at the first, delayed news from America before knowing that the productive system was quickly recovering, and their alarmed reaction fed back into the American crisis (p. 737). With regard to remedies, Boccardo insisted that no direct and immediate national cure can exist, because the disease originates from a complexity of causes of a much wider scope. It would be possible, however, to prevent the recurrence of similar events (or at least diminish their nefarious effects) by appropriate legislation pinning central banks down to their core business of helping trade, relieving their portfolios of the public funds obstructing them, eliminating all constraints on the ratio of issues to reserves (in the article on BANCA Boccardo argued that unfettered Banks would find the appropriate ratio, depending on the needs of the market: Vol. 1, pp. 294–295), and making the use of paper money more popular by lowering the minimum face value of banknotes. But so long as this advice from men of science will appear paradoxical to practical people; so long as banking law is governed by the principles of monopoly; so long as questionable institutions such as the Crediti mobiliari13 favour and encourage gambling on the stock exchange; so long as, in prosperous times, speculators will blindly trust overtrading companies but will panic at the first signals of impending danger; so long as, in other words, economic science will be mastered by a few privileged people rather than becoming familiar to the public, crises will recur periodically, as well as the errors and prejudices in the speeches of those who suggest their supposed remedies. (CRISI, p. 738) The periodicity of crises was further discussed in the entry PERIODICITÀ (Vol. 4, pp. 31–32). Boccardo argues, with reference to Vico’s doctrine of recurring cycles of history, that the law of periodicity is one of the fundamental laws of order and harmony of the universe, which surprisingly no economist has so far perceived, and placed it among the general principles of economics. The satisfaction of economic needs induces people to become more and more audacious in their activities, and the credit system and financial operations give them the means of further multiplying the means for doing so. This, however, makes such ventures more and more risky; speculation and stock gambling take over, until crises break out, ruin most people, and bring the system to rest. Everybody is discouraged and economic activity goes back to basics. After some time, new capital is formed, confidence returns and the ascending cycle recommences, resulting in the same outcome. ‘Only this series of facts can explain the remarkable phenomenon of the periodical return of those economic diseases of society we call crises, which several economists have perceived but so far failed to explain.’14

Boccardo on internally generated economic crises 259

11.3.2 The later editions The entries on CRISI in the second and third editions of the dictionary are practically identical to each other, including their pagination, but differ from the first. The most relevant emendation consists in the elimination of the Appendix on the 1857 crisis, which was not substituted with discussion of later events. The other differences are mostly matters of detail. Boccardo dropped the quotation marks around citations, so that one no longer knows which passages are quoted verbatim; and he shortened the citations from his 1854 Report on the crisis, substituting the remainder with an expanded discussion of speculation (p. 643). He dropped the explicit reference to banking freedom,15 but he incorporated an explanation of the ‘law of remarkable periodicity’16 which commercial and banking crises seem to obey – a discussion that again owes much to Coquelin (who is not named in this connection). Interestingly, while most contemporary explanations of the return of crises emphasize the instability of the overtrading and speculative processes but take for granted (and therefore do not think necessary to explain) that a new phase of prosperity will follow naturally the crisis and its aftermath, Boccardo explicitly stresses instead the instability of the depressed state created by the cumulation of unused loanable capital (an explanation that had recently been advanced by Walter Bagehot, 1873, from whom Boccardo may have borrowed). The ruins of which the markets are scattered [after a crisis] induce a state of gloom and discredit, during which capitalists not only refrain from gaming and hazardous speculations, but also abstain from the routine and safe trading operations. Capital either cumulates in the banks’ coffers at a very low interest, or is invested in real estate. But such a state of things is necessarily precarious. Those who know that their capital could yield an 8 or 10 per cent, cannot be content with a 3 or 4 per cent. The temptation to go back into more profitable business soon turns into a craving. This change in the mood is awaited by the adventurers, the project-makers, and the founders of new companies promising a 100 per cent gain. At this point (sooner where the national temper makes people bold, as in America; later elsewhere; but inevitably everywhere) the tide of speculation, gaming and pumping and dumping – in a word, of the crisis – rises again. (CRISI, p. 643) Besides the alterations that Boccardo introduced in the later editions, one he did not insert should be mentioned. Boccardo was an early (yet not uncritical) supporter of Jevons’s sunspot theory (1875, 1878). He had already suggested in 1872 (p. 310) that sunspots are related to meteorological phenomena that affect the abundance of crops and in turn influence human affairs, and thus welcomed Jevons’s more articulated and explicit statements. In 1879, Boccardo wrote an article ‘The laws of periodicity of crises. Economic perturbations and sunspots’, where he stated the problem, cited large excerpts of Jevons’s 1878 article for Nature, discussed further literature and expounded additional data he was himself gathering, suggesting that there is high probability, if not certainty, that the regularity of crises

260 Daniele Besomi reflects the existence of some law, as opposed to the reign of chaos (1879a, pp. 410–411).17 Most of these considerations were incorporated in the 6th edition of Boccardo’s Trattato (1879b), but not in the last edition of the Dizionario (1881).

11.4 ASSESSMENT Boccardo’s treatment of crises is far from original. The core of his argument is explicitly borrowed from Coquelin, and does not need further discussion, except perhaps to point out that Boccardo also took up Coquelin’s distinction between the occasional, immediate cause of crises and their deep causes – the banking monopoly (BANCA, p. 301). Notwithstanding this lack of originality, Boccardo’s entry on CRISES introduced two interesting novelties. The first is the categorization of different kinds of crises18 and the discussion of their relationship. Strictly speaking, this is not the first such distinction. In the entry CRISE COMMERCIALE ET INDUSTRIELLE of →Monbrion’s Dictionnaire universel du commerce, 1838 (translated into →Antonelli’s Enciclopedia del commerciante, 1841), these two kinds of crises are assigned different causes, but the distinction is introduced more as a matter of course than by methodological necessity (see Chapter 6). Boccardo is adamant that he was instead thinking of a more cogent criterion, which, however, he failed to specify; regrettably, his explanation for its introduction is limited to the statement ‘for love of methodological exactness’ (p. 739).19 Nevertheless, something more specific can be inferred from Boccardo’s discussion of monetary crises. At an early stage of writing, he had planned to have an entry specifically for them, as is indicated by a cross-reference in the entry AMERICA (p. 124). He must have soon realized, however, that this would have given to his reader the impression that monetary crises are a kind of event distinct from the other categories he listed, while they should be classified instead as a subspecies of commercial crises (p. 733). The wrong classification would reflect a bad understanding of the phenomenon, as was the case for the writers who interpreted the 1857 crisis as being caused by the scarcity of money. Boccardo insisted instead that the real cause of the crisis was a lack of trust, while the scarcity of money was a consequence of the credit crisis (Appendix to the entry on CRISI, p. 737). In the entry on MONETA (currency), Boccardo took up the matter again and explained that most monetary crises are not an isolated phenomenon, but are the consequence of other perturbations affecting the economic and financial world. Misinterpreting the monetary aspect of the crisis as its essence is a consequence of mistaking the effects for the causes of the phenomenon and results in turn in proposing as panaceas remedies that are likely to make the disease worse and perhaps even chronic (Vol. 3, p. 419).20 The second novelty consists of the distinction between internal and external causes of crises. This is normally attributed to Mentor Bouniatian (see e.g. Vogel, 1917, p. 16, and Hayek, 1933, p. 143), but Boccardo had already outlined it in his 1854 ‘Report on the commercial crisis’, where he suggested that two groups of crises should be distinguished: ‘those deriving from corrupted intrinsic conditions

Boccardo on internally generated economic crises 261 of a country’s trade, and those arising as a consequence of causes alien to the system of commerce’. He added that the former are ‘more simple and spontaneous’ (p. 4). The wording echoes Coquelin’s, who dubbed as ‘(so to speak) spontaneous’ the crises originating from within the commercial system itself (see Chapter 8, Section 8.3.2). If, also on this, Boccardo’s starting point was almost surely Coquelin, he pushed the distinction one step beyond the French writer, and beyond the similar distinction introduced by Blanqui in his entry CRISE COMMERCIALE for the →Encyclopédie des gens du monde, 1836, and by Michel in CRISE COMMERCIALE for Guillaumin’s →Encyclopédie du commerçant, 1839 (see Chapter 6, Section 6.3). While Coquelin was merely interested in stressing the endogenous character of crises and his predecessors only aimed at differentiating the causes of crises, Boccardo not only appreciated the importance of Coquelin’s point but added that the crises whose causes are internal are ‘more important and more susceptible of scientific enquiry’ (CRISI, p. 733). Such a distinction leads very far, for it tends to restrict the theoretical field to crises born from the inner logic of commercial relationships within a given institutional setting. Boccardo even came close to reversing the logical implication and denying a scientific status to the propositions ascribing crises to external facts. After outlining the facts of the 1857 crisis, in fact, he stated: ‘it is almost incredible that many of our fellow citizens insist in considering the crisis [. . .] as an isolated fact and as depending on subordinate causes’ (p. 737). Also interesting is Boccardo’s interpretation of the periodical return of crises in terms of a general cyclical view of history, a perspective that encompasses also other economic, social and physical phenomena. Boccardo offers one of the few explicitly cyclical interpretation of crises at a time when the phenomenon was indeed widely recognized but understood in terms of recurring crises, with the explanatory emphasis on crises more than on their recurrence. Yet some ambiguity remains, as this view is not directly incorporated in the CRISIS entry (in the first edition) but confined to a subordinate entry (not even cross-referenced from CRISI). Crises are an example of Boccardo’s law of periodicity, rather than periodicity being at the core of the nature of crises. Such a transition, however, required another half a century to be completed.

NOTES 1 The covers indicate as publication years 1858–1863, while the corresponding first pages report 1857–1861; the difference originates in the fact that the work was published in separate fascicles, bound together only at a later stage. 2 We shall see below, however, that Boccardo denied that the government could possibly remedy commercial crises. 3 Thus he had, for instance, a purely philological entry on BANCO, from which the word ‘bank’ derived in several languages, including the Italian ‘banca’. 4 PREFAZIONE, Vol. 1, pp. xix–xx. The Accademia della Crusca, founded in 1583, is one of the leading Italian institutions devoted to research in the field of the Italian language. 5 Comuzzi Pighin, 1978–1979, p. 127. This essay is dedicated to the borrowing of French

262 Daniele Besomi

6

7 8 9 10 11 12

13

14

15 16 17 18 19 20

economic and commercial terminology in Boccardo’s Dizionario. A number of these terms are still in use. An early collection of notices and reviews of the Dizionario in the Italian and foreign press is given by the publisher ([Franco], 1858. I am grateful to Riccardo Faucci for giving me a photocopy of this compilation). Most of these articles, to judge by perusing of a limited number of fascicles, were rather favourable, as regards both the general spirit of the work and the treatment of specific issues. See in particular a reviewer initialled N.R., writing in the Gazzetta del Popolo, 15–16 September 1857, cited in [Franco], 1858, p. 27. Macleod’s Dictionary (on which, see Chapter 13) carries an entry on BOCCARDO, GEROLAMO; it deals mostly with the Trattato, but refers to the ‘comprehensive and very excellent’ Dizionario as Boccardo’s best work (1863, p. 276). Courcelle-Seneuil praised this separation as the first attempt to set in practice an idea suggested by Pellegrino Rossi, but regretted it was not pushed far enough (1854, p. 152; 1859, p. 458). For a characterization and an editorial history of this work, see Bianchi and Faucci, 2005 and 2008. For additional details on Boccardo’s life and writings and further assessments, see the essays included in Augello and Pavanelli, 2005. In the entry on BANCA, Boccardo uses several pages of his Trattato; there, he explicitly acknowledges that he has strictly followed Coquelin’s argument and numerical example. The precise source is not indicated, but is easily identified as Coquelin, 1848, pp. 212–219. The banks or societies of Credito mobiliare were institutions specializing in giving financial assistance to start-up companies or companies in financial difficulties by buying their shares, and taking care of the issuing of new shares or launch on the stock exchange. Boccardo was extremely critical of such institutions, as they used their vast capitals to influence share prices only in order to raise the value of their own stocks (see entries CREDITO MOBILIARE and PEREIRE). A reference to the ‘remarkable periodicity of crises’ is already found in Boccardo, 1854, p. 3. This kind of explanation was far more common at the time than Boccardo seemed to believe, although the emphasis was more on the recurrence of crises than on their regular timing (Besomi, 2010). Bianchi and Faucci (2005) point out that Boccardo’s early support of a plurality of issuing banks turned into a support of a unique issuing bank in 1863. This duplicates in substance the argument, and also the terminology, of the entry on PERIODICITÀ (unchanged in the various editions of the dictionary). Boccardo supported the sunspots theory to the end of his life, as illustrated by a popularizing article on ‘Sunspots and economic crises’ in the monthly supplement to the daily Corriere della Sera (Boccardo, 1904). Besides the kinds of crises listed in the text, in the entries on BANCA (Vol. 1, p. 288) and on CINA (‘China’) (Vol. 1, p. 519) Boccardo used the expression crisi finanziaria to indicate a crisis in public finances. The following distinction between different kinds of crises, limited to the differences between monetary and commercial ones, is due to Juglar’s 1863 entry on CRISES COMMERCIALES in →Block’s Dictionnaire général de la politique; see Chapter 12. A similar argument, without a general classification of the different kinds of crises but with a denunciation of the confusion between ‘pecuniary crisis and credit crisis’, was already expounded in Boccardo, 1854, p. 8.

Boccardo on internally generated economic crises 263 REFERENCES Anonymous, 1857, [Notice on] Dizionario della economia politica e del commercio, Archivio Storico Italiano, 5: 1, pp. 170–171. Augello, M. M. and Pavanelli, G., 2005, Tra economia politica e impegno civile: Gerolamo Boccardo e il suo tempo (Genoa: Brigati). Azuni, D. A., 1786–1788, Dizionario universale ragionato della giurisprudenza mercantile (Nice: Società Tipografica), 4 volumes. 2nd enlarged and corrected edition, Livorno: dai torchj di Glauco Masi, 1822–1823, 4 volumes. 3rd edn, nella quale si è fusa la nuova giurisprudenza dall’avvocato Giuliano Ricci, in 2 volumes (Livorno: Fratelli Vignozzi), 1834. 4th edn, in 2 volumes (Livorno: Fratelli Vignozzi), 1837. 5th edn (and 1st edn in Sardinia) (Sassari: L. Azzati), 1844, in one volume. Bagehot, W., 1873, Lombard Street (London: King). Besomi, D., 2010, The periodicity of crises: a survey of the early literature, Journal of the History of Economic Thought, 32: 1, March, pp. 85–132. Bianchi, G. and Faucci, R., 2005, Genesi e struttura del ‘Trattato’ e del ‘Dizionario della economia politica e del commercio’. In M. M. Augello and G. Pavanelli, 2005, Tra economia politica e impegno civile: Gerolamo Boccardo e il suo tempo (Genoa: Brigati), pp. 111–138. Bianchi, G. and Faucci, R., 2007, Il Trattato di Gerolamo Boccardo e le sue edizioni. In M. M. Augello and M. E. L. Guidi (eds), L’economia divulgata. Stili e percorsi italiani (1840–1922). Vol. I: Manuali e trattati (Milan: Franco Angeli), pp. 79–101. Boccardo, G., 1853, Trattato teorico-pratico di economia politica (Turin: Società editrice della biblioteca dei comuni italiani), 3 volumes. Boccardo, G., 1854, Rapporto sulla crisi commerciale (Genoa: Camera di commercio). Boccardo, G. 1858, Manuale di storia del commercio delle industrie e dell’economia politica ad uso delle Scuole Speciali Secondarie (Turin: Franco). Boccardo, G., 1872, Il sole operajo e la economia industriale. In G. Boccardo, Prediche di un laico (Forlì: F. Gherardi). Boccardo, G., 1879a, La legge di periodicità delle crisi. Perturbazioni economiche e macchie solari. Archivio di statistica, III: 3, pp. 385–412. Boccardo, G., 1879b, Trattato teoretico-pratico di economia politica, 6th edn (Turin: Roux e Favale). Boccardo, G., 1904, Macchie solari e crisi economiche. La lettura – Rivista mensile del Corriere della Sera, 1904: 1 January, pp. 26–30. Comuzzi Pighin, P., 1978–1979, Francesismi e neologismi nel Dizionario della economia politica e del commercio di Gerolamo Boccardo, Studi mediolatini e volgari, 26, pp. 125–141. Coquelin, C., 1848, Du crédit et des banques (Paris: Guillaumin). Courcelle-Seneuil, J. G., 1854, Traité théorique et pratique d’économie politique. Journal des Économistes, 13 (2nd series, 1st year), 7 July, pp. 151–155. Courcelle-Seneuil, J. G., 1859, Trois publications nouvelles de M. Boccardo. Journal des Économistes, 23 (2nd series, 6th year), 9 September, pp. 457–464. [Franco, S.], 1858, Giudizi dei pubblicisti si esteri che nazionali sul dizionario della economia politica e del commercio cosi teorico come pratico utile non solo allo scienziato . . . (Turin: Sebastiano Franco e figli). Giocoli, N., 2001, La voce ‘Economia matematica’ da Boccardo a Debreu, Storia del Pensiero Economico, 42, pp. 123–143.

264 Daniele Besomi Gioli, G., 2001, Dizionari economici ed enciclopedie in Italia nella seconda metà dell’Ottocento, Storia del Pensiero Economico, 41, pp. 231–256. Hayek, F. A., 1933, Monetary theory and the trade cycle (London: Cape). Jevons, W. S. [1875], The solar period and the price of corn. In W. S. Jevons, Investigations in currency and finance, edited by H. S. Foxwell (London: Macmillan, 1884), pp. 194–205. Jevons, W. S., 1878, Commercial crises and sun-spots, Nature, 14 November. Reprinted in W. S. Jevons, Investigations in currency and finance, edited by H. S. Foxwell (London: Macmillan, 1884), pp. 221–243. Kircheisen, J., 1864, Ein englisches und ein italienisches Wörterbuch der Volkswirtschaft, Jahrbücher für Nationalökonomie und Statistik, 2, pp. 456–461. Marmocchi, F. C., 1854–1862, Dizionario di geografia universale: contenente gli articoli piu necessari della geografia fisica secondo le idee nuove ed i lavori piu insigni de’ geologi e de’ naturalisti (Turin: Società Editrice Italiana). Pareto, R., 1857, [Review of] Dizionario della economia politica e del commercio. Giornale dell’ingegnere, architetto ed agronomo, 5, November, pp. 275–276. Pareto, R., 1860, [Notice on] Dizionario della economia politica e del commercio. Giornale dell’ingegnere, architetto ed agronomo, 8, April, p. 206. Rosa, G., 1857, [Review of] Dizionario della economia politica e del commercio. Archivio Storico Italiano, 5: 2, pp. 114–132. Sacchi, G., 1857a, [Review of] Dizionario della economia politica e del commercio. Annali universali di statistica, 13 (3rd series), February, pp. 115–116. Sacchi, G., 1857b, [Review of] Dizionario della economia politica e del commercio. Annali universali di statistica, 13 (3rd series), March, pp. 280–288. Sacchi, G., 1858a, [Review of] Dizionario della economia politica e del commercio. Annali universali di statistica, 19 (3rd series), July, pp. 3–4. Sacchi, G., 1858b, [Review of] Dizionario della economia politica e del commercio. Annali universali di statistica, 20 (3rd series), October, pp. 42–62, and November, pp. 119–131. Sacchi, G., 1859, [Review of] Dizionario della economia politica e del commercio. Annali universali di statistica, 22 (3rd series), June, pp. 265–286; 23, July, pp. 7–32. Tabarrini, M., 1859, Rapporto del ff. di Segretario delle Corrisp. Avv. Marco Tabarrini, letto nell’Adunanza ordinaria del dì 10 luglio 1859. Atti della R. Accademia EconomicoAgraria di Georgofili di Firenze, NS 6, pp. xc–xciv. Vogel, E. H., 1917, Die Theorie des volkswirtschaftlichen Entwicklungsprozesses und das Krisenproblem (Vienna: Hölder).

12 Clément Juglar (1863–1891) Tracking and interpreting the periodic return of crises Cécile Dangel-Hagnauer

Dictionnaire général de la politique, avec la collaboration d’hommes d’État, de publicistes et d’écrivains de tous les pays, edited by Maurice Block, Paris: O. Lorenz. 1st edn, 1863–1864; 2nd edn, 1873. Nouveau dictionnaire d’économie politique, published under the editorship of Léon Say and Joseph Chailley, Paris: Guillaumin. 1st edn, 1891–1892; supplement, 1897; reprinted 1900.

12.1 THE DICTIONARIES The French economist Clément Juglar (1819–1905) is still widely considered as one of the pioneers of the theory of business cycles. His contribution in this area achieved recognition in the second half of the nineteenth century both in France and abroad, and, as shown by Besomi (forthcoming), it attracted the attention of some of the major theorists of the business cycle in the first half of the twentieth century. However, from the 1950s until recently1 his works had sunk into oblivion, save for an article by Niehans, 1992. So whereas the name of Juglar is rather familiar to the general public, his works have been overlooked. One reason for this neglect is the relative lack of interest raised by Juglar’s major work, Des crises commerciales et de leur retour périodique en France, en Angleterre et aux États-Unis (On commercial crises and on their periodic return in France, in England and in the United States), a book which comes in the form of a muddled and bulky volume, especially in its second edition. Fortunately, Juglar contributed two dictionary entries on CRISES COMMERCIALES (commercial crises) shortly after the publication of the two editions (1862 and 1889) of Des crises commerciales. Both provide the reader pressed for time with a clear and concise account of Juglar’s main line of argument, which did not vary over the nearly three decades that separated the two editions. Actually, Juglar spent almost 50 years (his first article on crises was published in 1856) endeavouring to provide evidence that commercial crises were not individual episodes caused

266 Cécile Dangel-Hagnauer by external events but instead recurrent phenomena that shared the same nature. Crises were also one of the three ‘periods’ that characterized the course of business. However, although Juglar insisted on their build-up during the period of ‘prosperity’ and on the return to normal conditions after the period of ‘liquidation’, crises remained his main focus of attention. So, whereas examining these two entries shows that Juglar’s conception of crises did evolve over these three decades, it also reveals that Juglar fell short of producing a fully fledged theory of business cycles, as underscored by Besomi, 2010. The first entry appeared in 1863 in the Dictionnaire général de la politique (General dictionary of politics, with the collaboration of statesmen, public law specialists and writers from all countries), edited by Maurice Block. Juglar was also requested by Léon Say and Joseph Chailley (also known as Chailley-Bert2) to write a similar entry for the Nouveau dictionnaire d’économie politique (New dictionary of political economy), the first volume of which was published in 1891. It is noteworthy that Juglar also contributed two entries to →Léon Say’s Dictionnaire des finances (1889), one on BANQUES and another on CRISES FINANCIÈRES ET COMMERCIALES, co-authored by P. des Essars. Juglar, Block, Chailley-Bert and Léon Say were members of the French liberal school, which dominated political economy in France in the nineteenth century. Jean-Baptiste Say was beyond doubt the school’s founder. Whereas he presented himself in his first works as the propagator in France of the ideas of Adam Smith, he gradually developed his own brand of political economy in strong opposition to the British classical school and to Ricardo in particular. As emphasized by Arena (2001), Say rejected Ricardo’s conception based exclusively on abstract reasoning and favoured instead a more balanced approach that relied on both abstraction and observation. This approach was shared by many of his followers within the French liberal school. Following Arena, it is possible to distinguish three generations of French liberal economists and three main periods in which the school’s history can be divided. The first period, 1800–1848, was marked by the personality of J.B. Say. In this period, the message disseminated by the school was progressive and even revolutionary, as it consisted in fighting the legacies of the ancien régime that still permeated French society. The influence of the French liberal school reached its peak in the second period, 1848–1870, during which the French liberals defended both the existing social order and free trade, thereby opposing socialists and protectionists. Starting in 1870, the influence of the school slowly faded. Interestingly, the school developed a threefold strategy of penetration of French society. The liberal economists taught political economy, occupying the four chairs in the discipline that existed in France and lecturing within the private sector, in particular within the École libre des sciences politiques, inaugurated in 1872. They also established learned institutions, among which the most influential was the Société d’économie politique, founded in 1842. Liberal economists also dominated the Académie des sciences morales et politiques. Finally, the school controlled several journals, notably Le Journal des Économistes, created in 1841, while the French publisher Gilbert-Urbain Guillaumin played a leading role in spreading the school’s ideas. However, the French liberals lost part of their educational

Clément Juglar and the periodic return of crises 267 influence when, in 1877, chairs of political economy were created in the law faculties to which were initially appointed professors who had not been trained in political economy but gradually developed their own expertise, founding a new journal in 1887, the Revue d’Économie Politique, which made no secret of its hostility towards the liberal school’s monopoly in the teaching of political economy.3 Thus, when Block’s Dictionnaire de la politique was published, the French liberal school was at the height of its influence, whereas it had begun its decline when Say and Chailley’s Nouveau dictionnaire d’économie politique appeared.4

12.1.1 The Dictionnaire général de la politique Maurice Block (1816–1901) was a statistician and economist, born in Berlin. His family moved to Paris in 1818, so Block began school in France, before being sent to Germany, where he studied in Bonn, Heidelberg and Tübingen, after which he returned to Paris, where he acquired French citizenship in 1848. He was fluent in French, English and, of course, German. In 1844 he entered the French Ministry of Agriculture and Commerce, where he became the assistant director of the Statistique de France in 1853. His early involvement in research, which led to the publication of the Statistique de la France (1860), apparently displeased his superiors, driving him to retire in 1862 and devote the rest of his life to scholarly work. He was elected a member of the Académie des sciences morales et politiques in 1880. His numerous publications include Les progrès de l’économie politique depuis Adam Smith (1890) and the Traité théorique et pratique de statistiques (1886). His most important contributions were probably in editing the Annuaire de l’économie politique et de la statistique and two dictionaries, the Dictionnaire de l’administration française (1856) and the Dictionnaire général de la politique. He also published a →Petit dictionnaire politique et social in 1896.5 Block was wedded to the French liberal school, as evidenced by Émile Cheysson in his obituary of Block, quoting him as having written in 1890, at a time when the school’s influence was on the wane: The sound economic doctrines whose banner France has always held so high, and that scholars like Jean-Baptiste Say, Bastiat, Michel Chevalier and others defended so brilliantly, are strongly attacked today. I am almost alone in defending them against our foreign learned adversaries, and I dare to say that I am constantly beavering away at it. (1907, p. 13) The Dictionnaire général de la politique went through two editions. The first edition came out in 1863–1864 and was reprinted in 1867; 144 scholars contributed to its two volumes, representing 1,180 and 1,140 pages. In the PRÉFACE, Block writes that this dictionary on politics has brought together ‘elite intelligences’ in order to present, on the one hand, ‘the political and social notions that have supported the proof of criticism and facts’ and, on the other hand, ‘the discussion of the ideas that an in-depth examination will still have to classify among truths or

268 Cécile Dangel-Hagnauer errors’ (p. v). In line with Block’s adherence to the views of the French liberal school, the principles underlying this collective work embrace the recognition of ‘the effectiveness of freedom, the need to enlarge the scope of individual initiative, the beneficial action of moral and material progress, the obvious error of extreme opinions’ (ibid.). Published in 1873 and reprinted in 1884, the 2nd edition also included entries by 144 contributors (with few changes from the list of those who contributed to the first edition). In the new PRÉFACE, among the dictionary’s objectives Block states that of offering a neutral ground for contributors of different opinions. He also specifies that the term ‘politics’ has been taken in its broadest sense, that is, that of ‘science of government’. As such, it encompasses many topics, from forms of power to different sorts of constitutions, but also doctrines and facts. Because it seeks to be comprehensive, the dictionary deals with topics such as taxation, as well as with subjects pertaining to political economy or concerning public services in so far as they touch upon the science of government. This explains how Juglar’s entry on CRISES COMMERCIALES found its way into this dictionary. Finally, whereas only ten years separate the two editions, new articles appear in the second one, in which almost all the entries have been revised. This is the case for Juglar’s own entry. As attested by the review authored by Jules Simon (1865), the Dictionnaire général de la politique was well received. This dictionary, Simon writes, bridges a gap in a country where there are only ‘inaccessible libraries or insignificant pamphlets’ (p. 155). While Simon questions whether political science is actually a science, he considers that Block’s dictionary provides the knowledge that is necessary for those seeking to enter a political career. It includes historical, financial, economic as well as legal knowledge. Simon stresses that, however impartial the authors have tried to remain, the doctrine underlying the dictionary is that of the ‘great and noble school that aspires to liberty . . . [and] strives at . . . bringing on progress’ (ibid.). The success of the dictionary, both in France and abroad, is also emphasized by Henri Baudrillart (1874) in his review of the second edition of the dictionary. He pays tribute to the work, stressing its ‘capital importance and indisputable utility’ (p. 476), the great abundance of facts and documents it contains and the clarity and reliability of the exposition of doctrines and theories. Among the features underlined by Baudrillart, there is its ‘judicious and grand liberalism’, founded firmly upon ‘certain essential and fundamental principles’, although it is ‘a book of principles without being partisan’ (ibid.). Like Simon, Baudrillart commends the dictionary’s broadness of scope – ranging from the analysis of different constitutions to the study of education and of agricultural, industrial and demographic resources – but more especially he approves of the space assigned to political economy and law, thereby providing evidence that ‘politics does not separate itself from the elements of civil life’, all the more so as ‘alongside the role of the state extends the even vaster role of individual activity’ (ibid.).

Clément Juglar and the periodic return of crises 269

12.1.2 The Nouveau dictionnaire d’économie politique The Nouveau dictionnaire d’économie politique also went through two editions, but with the second one being merely a reprint of the first. It comprises three volumes that appeared in 1891 (1,168 pages), 1892 (1,345 pages) and 1897 (277 pages). Actually, the third volume is a supplement to the first two. As the first edition sold well, the editors, Léon Say and Joseph Chailley-Bert, began preparing a second edition, but decided instead to issue this Supplément, which appeared one year after the death of L. Say. Whereas the Introduction to the Nouveau dictionnaire was written by ChailleyBert, as the latter writes in the PRÉFACE of the third volume: ‘The Supplément, like the Dictionnaire, was entirely written under the high inspiration of M. Léon Say. It is he, in concert with me, who decided upon the list of topics, chose the authors, read the manuscripts, revised the proofs’ (PRÉFACE, p. v).6 The politician and economist Léon Say was born in Paris in 1826. Like his grandfather, Jean-Baptiste Say, he was a strong advocate of free trade. Having completed his studies at the Law Faculty in Paris, he worked for the Eichtal Bank (1850–1852) and sat on the board of numerous companies. From 1869 to his death in 1896 he held several political positions (as member of parliament, prefect, finance minister, very briefly ambassador of France in London and president of the senate). He was also a professor at the École libre des sciences politiques and was elected to the Académie des sciences morales et politiques in 1874 and to the Académie française in 1886. In his article devoted to SAY (LÉON, JEAN-BAPTISTE) in the supplement of the Nouveau dictionnaire, Chailley-Bert insists on the important role Say played within the ministry of public finances, of which he was the minister for six years. Chailley-Bert describes Say as driven by a single motive: ‘the defence of liberty . . . in all its forms and in all circumstance’ (p. 263). In particular, he was an adversary of the protectionists as well as of the socialists, going so far as to assert that socialism proceeded from protectionism (ibid., p. 264). Joseph Chailley-Bert was born in 1854 in Saint-Florentin and died in Paris in 1928. He was an essayist and served as a politician, holding several positions between 1906 and 1919. With a doctorate in law, he became a professor at the École libre des sciences politiques and contributed articles to the Revue des Deux Mondes and the Journal des Débats, a journal controlled by the French liberals. His main interest was in colonization and he founded the Institut colonial international in 1893. In its first edition, the Nouveau dictionnaire was published in the form of fascicules. The first volume of the Nouveau dictionnaire begins with a 16-page introduction by Chailley-Bert, written when the last article of the second volume had just appeared. The INTRODUCTION, common to the two editions, is divided into five sections. In the first section, Chailley-Bert presents the Nouveau dictionnaire as an entirely revised edition of →Coquelin and Guillaumin’s Dictionnaire de l’économie politique, whose two volumes were first published in 1852 and 1853.7 A new edition was indeed necessary, Chailley-Bert writes, in the wake of the ‘veritable economic revolutions that occurred very soon after its publication’ (INTRODUCTION, p. v).

270 Cécile Dangel-Hagnauer The goal that Say and Chailley-Bert had pursued in preparing their dictionary was to ‘enhance [its] doctrinal value and [its] practical usefulness’ (p. vii), as stated in the second section. To that effect, they had called upon a limited number of contributors, ‘united within a common doctrine’ (p. vi), who were asked to write all the articles that were related to the same subject. Chailley-Bert adds that ‘none of our collaborators wrote a word without seeking agreement with us with regard to the fundamentals of doctrine’ (p. vii). As to the contents of the Nouveau dictionnaire, it covers the ‘theories of pure political economy’ but also more applied issues related to ‘commerce, agriculture, banking, money, public finances and, in another connection, the issues of contingency, co-operation, participation in profits, association, and finally what is referred to as the doctrine of the socialists’ (ibid.). Finally, Chailley-Bert draws the reader’s attention to the three tables included at the end of the second volume. Altogether, the three tables add up to 133 pages. A ‘bibliographic table’ comprises the names of the authors and the titles of the books cited in the dictionary. Interestingly, a ‘methodical table’ indicates in what order the articles of the dictionary should be read for it to be used as a ‘Treatise on political economy.’8 An ‘analytical table’ brings together all the scattered material related to a given subject. The second section closes with Chailley-Bert indicating that L. Say and he are thinking about preparing a second edition.9 The third section of the INTRODUCTION is entirely devoted to the doctrine of the liberal school, which Chailley-Bert describes as a ‘school of progress’, as attested by the names of its leaders: ‘Turgot and Adam Smith, J.-B. Say and Stuart Mill, Cobden and Bastiat, Herbert Spencer, and to a certain extent the French positivists’ (ibid.). This statement is followed by a genuine profession of faith: Political economy, as it had been conceived by Turgot, Adam Smith, and J.-B. Say, stems from a single word: freedom. Freedom of trade, freedom of the individual; free exchange and free initiative. D’Argenson had already said: ‘Not too much governing’. After him, enlarging his thought, economists had repeated: ‘laissez faire, laissez passer’. They estimated that all goes as well as one might wish when nothing is regulated. The wealth of nations is made up of the wealth of individuals. You want a prosperous nation; let individuals act as they please. Their interest is a guarantee of their activity; in their pursuance of happiness and well-being, they will find the easiest path and the shortest one. Provide them with security; secure their tools, their fields, their workshops, in a word their property, from violence. For the rest, allow them to be free to work when and how they want, free to sell the fruit of their labour where and how it pleases them; no fetters, no control. (p. viii) This said, Chailley-Bert notes the evolution of political economy and emphasizes the need to add to the principle of freedom the principle of solidarity, affirming that the liberal school has become the ‘school of individual activity and collective responsibility’. Accordingly, he argues that the teachings of evolutionism, and the

Clément Juglar and the periodic return of crises 271 idea of the ‘survival of the fittest’, do not apply to society so long as all people behave as active participants, so that co-operation breeds progress. Moreover, the author points to the change visible in the liberal school, indicating that its adherents have become less hostile to government interference than J.-B. Say and display more indulgence towards association. Finally, Chailley-Bert indicates that subjects such as the theory of value or the theory of the ‘appropriation of wealth’ are not dealt with in the Nouveau dictionnaire, whose purpose is that of being ‘a work of popularization’ (p. x). It is important to note that Chailley-Bert does not believe in the contribution of historical facts and statistics to scientific advance, prompting the lengthy and virulent attack on the German historical school contained in the fourth section. However, Chailley-Bert is also critical of the state of the ‘French school’. In the fifth and final section, he shows that the latter’s decline is due to three factors: the way political economy is taught in France, the lack of consideration it enjoys and the distinctive character of the turn of mind of the French. Almost two pages are devoted to deploring the fact that political economy is taught in law faculties and to advocating the establishment of ‘faculties of economic and political sciences’.10 He also laments the lack of political influence of (liberal) ‘economists’ and the small number of those who have occupied political positions, hence their lack of influence in matters regarding political economy, the sole exception being the ‘intermittent victories of free trade’ to which they contributed (p. xix). However, even here, Chailley-Bert considers that the economists’ involvement in the defence of this ‘menaced liberty’ has damaged their reputation among the French public, who were generally hostile to the opening of the country’s borders to international trade. Another consequence of their quasi-exclusive focus on free trade, also emphasized by Chailley-Bert in his review of →Palgrave’s Dictionary of political economy for the Economic Journal, is that it has distracted them ‘from the study of the whole of economics . . . [and] taken away all leisure for attacking, following and solving other problems’ (1897, p. 262).11 The Nouveau dictionnaire was reasonably well received. It was, in any case, sufficiently well circulated for Juglar’s entry to attract enough attraction and deserve a translation in Rhodes Journal of Banking (Juglar, 1894). Commenting earlier on the first three instalments, Seligman (1890) indicates that 15 more instalments were expected for the completion of this entirely different edition of the dictionary, which had been previously edited by Coquelin and Guillaumin. Interestingly, he deplores the lack of contributions by the ‘adherents of the newer school, represented by the Revue d’Economie Politique’ and the too rare contributions by non-French writers, his overall assessment being that the dictionary will be of value to those wishing to keep ‘abreast of French development’. In his review of 1893, André Liesse points out the favourable reception with which the Nouveau dictionnaire was met, also presenting it as the new edition of →Coquelin and Guillaumin’s Dictionnaire de l’économie politique, which had become outdated. Comparing the two editions, Liesse regrets that ‘the combative spirit that ran through the columns of the old Dictionnaire’ was no longer there, whereas ‘A word, an article, at the time when Guillaumin published the first

272 Cécile Dangel-Hagnauer economic encyclopaedia was a cartridge fired at the protectionist or socialist enemy’ (p. 283). A puzzling comment is made by Liesse, who notes that ‘the doctrines of Darwin and Spencer, of the evolutionists in a word’ (p. 281) had left on the Nouveau dictionnaire their powerful mark, which contradicts Chailley-Bert’s own assertion. More to the point, among the subjects dealt with in the new edition, Liesse welcomes the inclusion in particular of topics relating to public finances and to private finance, in accordance with the recent development of commercial banking in France. He ends his review by describing the dictionary as not only a useful reference but also a work for study, drawing the reader’s attention to the three tables that complete the dictionary.

12.2 JOSEPH CLÉMENT JUGLAR Following in the footsteps of his father, Juglar studied medicine and became a physician at the age of 27. However, he quickly abandoned the medical profession as a result, it seems, of the events of 1848 and of his travels, which both aroused his interest in social and economic matters. Juglar travelled enormously, to England, Spain, Italy, Greece, Turkey and Algeria. Visiting Spain in 1850, he returned with a statistical inquiry on Spanish hospitals. In 1851, he began writing a series of articles, published in the Journal des Économistes and the Annuaire de l’Économie Politique, on the demographic evolution of France between 1772 and 1849, and on the colonization of Algeria. His training as a physician had developed his skills of observation, which he applied first to the statistical study of the French population and that he would soon apply to the study of commercial crises. Between 1856 and 1861, he published several articles on commercial crises and on banking statistics. However, his first important contribution was the memorandum for which he was awarded the prize of the Académie des sciences morales et politiques in 1860. This memorandum was published as the first edition in 1862 of Des crises commerciales et de leur retour périodique en France, en Angleterre et aux EtatsUnis. Juglar also submitted a memorandum to the Académie in 1865 on the conditions of the circulation of credit and on the differences between banknotes and other forms of credit. It would later be published in 1868 as Du change et de la liberté d’émission (On foreign exchange and the freedom of issuing). In the meantime, Juglar had been entrusted, along with Paul-Jacques Coullet of the Bank of France, with the work of translating and publishing in 1865 the Extraits des enquêtes anglaises sur les questions de banque, de circulation monétaire et de credit (Extracts from the English parliamentary enquiries on the issues of banking, circulation of money and credit). Juglar was then to spend the next 40 years writing and publishing (predominantly in the Journal des Économistes) on commercial crises, money, credit, banking and other financial matters (such as foreign exchange and bimetallism), as well as on demographics and social policy. His most important contribution in that period was the publication of the second edition in 1889 of Des crises commerciales, a third edition of which he was preparing, according to Paul Beauregard (1908), just before his death.

Clément Juglar and the periodic return of crises 273 In his obituary, Beauregard provides a summary of Juglar’s method: A profound observer, a meticulous analyst, he searched relentlessly for the exact and precise facts. His knowledge of languages enabled him to consult the statistics of different countries, to bring them together, to compare them; his scientific conscientiousness saved him from all error as well as from all exaggeration; his hard work allowed him to accumulate materials in the midst of which he moved about easily. He put into practice, in the strictest fashion, the rigour of the method of observation. But he was not enslaved to it. From analysis, he rose to synthesis; a statistician, he was also philosopher. He had not . . . condemned . . . the taste for generalization. He did not fall for the error of those schools that, in political economy, want to compel us to collect information indefinitely, leaving to the future the task of formulating laws. While giving the facts time to speak, as soon as they did speak, he was quick to hear them, that is, to interpret them, and to draw all the teachings they contained. Then, according to the true scientific method, he subjected so to say the theory he had just constructed to observation and never ceased checking it. (Beauregard, 1908, pp. 4–5) Eager to spread the use of statistics as a method of enquiry, Juglar contributed to the creation of societies of statistics. Thus, after entering the Société d’économie politique at the very beginning of his career, in 1852, he participated in founding the French Société de statistique, of which he became the president. He was also an honorary member of the Royal Statistical Society of London and was one of the founding members of the International Statistical Institute. A devout Catholic, Juglar was known for showing ‘feelings of benevolence and charity’, but he was also a ‘rigorous economist and a vigorous liberal’, and relied only on ‘the mutual respect of the rights of all people and on the normal working of the economic laws to improve the lot of mankind’ (ibid. p. 32).

12.3 THE ENTRIES As their title indicates, the entries on CRISES COMMERCIALES written by Juglar for the Dictionnaire général de la politique and for the Nouveau dictionnaire d’économie politique deal with ‘commercial’ crises. In both articles, Juglar notes a tendency to commonly refer to such crises as ‘monetary’ crises, whereas he clearly asserts that there is no such thing as a ‘monetary’ crisis per se. Two reasons explain this: on the one hand, commercial crises are all monetary crises as they are accompanied by the depletion of metallic reserves; on the other hand, there can be reductions in reserves that end spontaneously without affecting the course of business. These are not ‘crises’. Another characteristic of Juglar’s commercial crises is that they ‘return periodically’, as expressed by the title of his book, Des crises commerciales et de leur

274 Cécile Dangel-Hagnauer retour périodique en France, en Angleterre et aux États-Unis. Juglar strongly insists on this feature in the entry written for Block’s Dictionnaire, where he refers repeatedly to the ‘periodic return of crises’. To track the periodicity of crises, Juglar relies extensively on banking statistics, mainly on the variations in the amount of discounts and the level of metallic reserves of issuing banks, pointing to the ‘regularity’ of these movements. This raises the question of what Juglar really means by ‘periodic’. A cursory reading might lead one to believe that what Juglar has in mind is ‘strict’ periodicity, as he writes: ‘Every six or seven years, a general liquidation seems to be necessary for trade to start expanding once again’ (CRISES COMMERCIALES, 1863–1873, English translation as Juglar, 2010a, p. 120). However, Juglar also draws up a table (ibid., p. 131) showing that, over the period covered by banking statistics, crises occurred in the same year (or in the immediately preceding or following year) in France, England and the United States. In the case of France, crises broke out in 1804, 1810, 1813, 1818, . . ., 1847, 1857, 1864. So, quite clearly, not only is there a simultaneity in the outbreak of crises in the three countries, which points to the interdependence of their markets, but in addition, the time intervals separating crises are, in fact, ‘irregular’. So what Juglar really means is that crises are ‘recurrent’.12 A modified and completed version of the same table is inserted in the entry prepared for Say and Chailley’s Nouveau dictionnaire (CRISES COMMERCIALES, 1891, English translation as Juglar, 2010b, p. 151), with the same goal, that of proving the simultaneity of the crises affecting different countries. In this entry, however, Juglar refers more sparingly to what he now calls ‘periodicity’, specifying that ‘Since the beginning of the century we see crises recurring at rather close, although by no means regular, intervals (ibid. p. 162). Actually, Juglar is more explicit in the second edition of Des crises commerciales (1889), in which Chapter XV is devoted to the ‘Periodicity of crises’. In this chapter Juglar clearly states his disagreement with Jevons (and Cobden) with regard to the decennial character of commercial fluctuations (p. 163).13 It is noteworthy that Juglar does not use the words ‘cycles’ or ‘cyclical’. The expression he uses is ‘oscillations’, in a very general sense, with no reference to the notion of equilibrium, which is also a term used very loosely by Juglar.

12.3.1 CRISES COMMERCIALES in the Dictionnaire général de la politique Juglar’s entry in →Block’s Dictionaire général de la politique begins with a onepage introduction, is then divided into two main sections, and ends with a short conclusion. In the 1863 edition, only the second section bears a title: ‘Influence of political causes. Opinion of the main economists. Means of preventing crises, proposed remedies’, shortened in the 1873 edition to ‘Former opinions on crises’. The first section is partitioned into seven subsections: ‘Causes of crises’; ‘On discounts’; ‘On the metallic reserves’; ‘Circulation of banknotes’; ‘Deposits and various current accounts’; ‘On advances by banks on government securities, railroad stocks and bonds’; ‘Duration and liquidation of crises’. The second section is

Clément Juglar and the periodic return of crises 275 subdivided into three subsections: ‘Political causes of crises’; ‘Monetary crises’; ‘Opinions of the main economists’. These subtitles point to Juglar’s methodology, namely, the use of banking statistics as a means of providing the factual evidence of the periodic recurrence of crises and an estimate of the duration of the three ‘periods’ that succeed each other: ‘prosperity’, the ‘crisis’ and the ‘liquidation’. Juglar also presents, in this entry, his position with regard to the debates on crises, in particular on their causes. Although not numerous, the changes that Juglar introduced in the second edition of Block’s dictionary are important, as they bear witness to the work he accomplished on banking and foreign exchanges in the decade separating the two publications. 12.3.1.1 The crisis: its threefold definition The readers of this sort of entry would normally be entitled to a definition of the word ‘crisis’. Actually, they are provided not with one but with three definitions. First, ‘A commercial crisis is a disruption to the course of business’; second, ‘crises are the natural reaction that occurs as a consequence of efforts made to raise even further production that has already been carried to excess proportions’; third, ‘a crisis is . . . a general liquidation’. So, although Juglar underscores the periodicity of crises, thereby making an important step towards producing a theory of cycles, by distinguishing three phases within the oscillations that succeed each other periodically, we see him confusing the liquidation with the crisis itself. This state of confusion permeates the entire entry. The introduction of the article is, however, reasonably clear and provides a description of the main ingredients that make up the crisis. Accordingly, the three phases of the oscillation embrace: a) six or seven years of prosperity characterized by increasing prices; b) the crisis per se, marked by an abrupt surge in the demands for discounts and for withdrawals of metallic specie, and associated with an increase of the discount rate; c) the liquidation, its price cuts and diminished discounts, accompanied by the replenishment of bank reserves and the return of the discount rate to its ‘ordinary’ level. Juglar also succinctly depicts what happens in the short time-interval during which the crisis is causing devastation: disrupted business impedes the clearing of credit instruments, inducing agents to call upon banks for additional discounts. The increase in the interest rate and more stringent financial conditions induce businesses, faced with no other choice, to cut prices, which slows down activity, which in turn affects people’s lives, their consumption and their demographic behaviour. A sharp rise in discounts is thus a sure sign that the crisis has begun. Because merchants are left with unsold inventories, they fail to pay off their debts and anxiously ask banks for ready cash. Credit is thus at the heart of the process that causes crises. Consequently, crises are more acute in countries where trade and industry are highly developed, as business in such countries relies extensively on credit. Moreover, cross-border business is accompanied by cross-border credit, causing crises to spread internationally.

276 Cécile Dangel-Hagnauer 12.3.1.2 Banking statistics More than three and a half pages, out of the thirteen that the entry occupies, are devoted to analysing the balance sheets of the Bank of France and the Bank of England, with additional references to these items at the end of the article. These statistics are the raw materials on which Juglar works to bring to light the three phases of prosperity, crisis and liquidation. Discounts, metallic reserves, banknotes in circulation, deposits and current accounts, and advances on securities are presented in nine out of the eleven tables the article contains and are closely inspected. However, Juglar concentrates on the movements of discounts and metallic reserves, as they are the indicators he uses to demonstrate the existence of the three phases. Indeed, discounts rise during prosperity, reach a peak at the time of the crisis, and diminish during the liquidation. This sequence is observed ten times between 1799 and 1864, thereby providing the evidence that crises return periodically. Juglar also includes a table depicting the price of wheat in an attempt to show the evolution of the prices of commodities over the three periods. Of interest is the method used by Juglar to show the movement of discounts. Focusing on three periods – 1844–1849, 1850–1857 and 1858–1861 (1864 in the 2nd edition) – he notes the minimum and maximum level reached each year by discounts, and also by reserves and banknotes in circulation. Then, in a huge table he sets out in parallel the evolution of the minima and maxima reached by these items for the Bank of France and the Bank of England. The examination of these figures confirms that in France and in England discounts diminish during prosperity, exhibit a sharp increase when the crisis breaks out and drop markedly during the liquidation. Reserves move in the opposite direction, hence the drain of specie observed when the crisis breaks out and its return during the liquidation. In contrast, there is no relationship between, on the one hand, either the circulation of banknotes or deposits and current accounts and, on the other hand, the unfolding of the three phases. 12.3.1.3 Causation Having identified the movements in banking statistics that accompany prosperities, crises and liquidations, Juglar goes on to explain the phenomena at hand. Actually, half of the article is about the causes of crises: the long introduction is followed by a lengthy subsection titled ‘Causes of crises’; the entire second section discusses other economists’ opinions on the subject. In ‘Causes of crises’, Juglar rejects the usual explanations such as wars and food shortages. His goal is to prove that crises occur repeatedly and in very different contexts. To do so, he uses a distinction borrowed from medicine, the opposition between ‘predisposition’ and ‘determining cause’. A patient will contract pneumonia if he has a predisposition to catching it. If not, he can stay out in the cold and remain in good health. In an analogous fashion, crops can be bad, but the ensuing food shortage will produce no effect unless there is some ‘social predisposition’ that will cause a crisis to occur. So it is this social predisposition that Juglar seeks to bring out.

Clément Juglar and the periodic return of crises 277 As it is typical of human nature, speculation is a plausible candidate. Yet, although Juglar does underline the role that speculation plays during business upswings and the role played by the return of confidence at the end of the liquidation, he also insists on the role played by credit. Whereas speculation plays the leading part, the supporting role is filled by credit. Where there is little reliance on credit, speculation has little impact. In contrast, the development of credit during the nineteenth century, in particular between agents located in different countries, caused crises to have sweeping effects, in particular by building interdependence (solidarité) among nations, causing crises to spread across borders from market to market. In other words, Juglar’s objective is not only ‘to determine the circumstances in which crises develop and specify the causes that lead to their outbreak’, but also to discover ‘the conditions that are indispensable for them to exist, . . . the phenomena that are then constantly observed regardless of the so numerous and so diverse causes that are mentioned depending on the need of the moment’ (emphasis added) (CRISES COMMERCIALES, 1863–1873, English translation as Juglar, 2010a, p. 118). These conditions are the division of labour, the expansion of industry, commerce and foreign trade, and the widespread use of credit. Although speculation is a decisive ingredient – indeed, the adverse effects of credit would be small in its absence – on the other hand, speculation could not develop if it were not fed by credit. In his eulogy of Juglar’s contribution to the theory of cycles, Schumpeter goes so far as to quote Juglar apocryphally, writing, ‘the only cause of depression is prosperity’ (Schumpeter, 1954, p. 1124). The closest Juglar gets to writing something of the sort is: ‘The determining cause is elsewhere. It is the consequence of a previous state that must be studied carefully’ (Juglar, 2010a, p. 118). In the second section of the entry, Juglar goes to great length to show that crises do not have political causes and that they do not coincide with wars or other political events: they occur outside uprisings and revolutions and break out in periods of political calm. In the final subsection on the ‘Opinions of the main economists’, Juglar seeks to show that crises are caused neither by the excess issue of banknotes nor by sudden withdrawals of banknotes, citing the opinions of J.-B. Say, Senior, Wilson, Tooke, Coquelin and du Puynode. In particular, he challenges Coquelin and his position in favour of free banking (see Chapter 8). Almost an entire page is devoted to showing that granting banks issuing freedom would not prevent speculation and crises. In particular, Juglar examines the minima and maxima of deposits and shows that their erratic oscillations are disconnected from those of reserves and are thus unrelated to crises. He also points to the fact that the countries where free banking prevails are not better protected from speculation than others. More generally, he discusses central banking and the conduct of monetary policy. Alluding to the critiques of the Peel Act of 1844, he examines the restrictions imposed upon the Bank of France (in the employment of its equity), its monopoly in the issuance of banknotes, and its discount rate policy. Before closing the entry, Juglar mentions that other indicators (economic, demographic, financial) are synchronized with banking statistics (discounts and

278 Cécile Dangel-Hagnauer reserves), referring the reader to Des crises commerciales. The article actually ends with Juglar’s statement that there is no way to prevent crises other than perhaps through a better governance of banks. On the contrary, Juglar emphasizes that crises are the price to be paid for economic progress: the business sluggishness caused by the crisis is actually a ‘prelude to more beautiful destinies’. 12.3.1.4 The differences between the two editions Among the changes introduced by Juglar in the second edition of this entry, some merely involve wording and their main purpose is to provide greater clarity. For similar reasons, in his discussion on the opinions of other economists, Juglar added a paragraph in order to comment on J.-B. Say’s opinion. Naturally, the tables of statistics are updated. Probably to limit the overall length of the article, an entire passage (on the Crimean War) is omitted in the subsection on ‘political causes’. A similar reason probably explains why the bibliography that featured at the end of the 1863 edition was omitted in that of 1873. There are other additions to the text. Numerous sentences are completed with references to foreign exchange markets.14 These additions are easy to explain. In the meantime, Juglar had published with Coullet, in 1865, the Extraits des enquêtes anglaises and, in 1868, his second book, Du change et de la liberté d’émission. In Du change, Juglar discusses whether it is right to set a limit to the amount of banknotes issued by banks, and by the Bank of France in particular. Juglar argues that before answering this question it is necessary to examine the role played by foreign exchanges. To begin with, imposing restrictions on banknote issues is ineffective, because business transactions rely on credit, essentially trade credit, whereas banknotes are only used in retail trade and for the balancing of credit operations. Furthermore, issuing banks play an essential role in the clearing of commercial bills, namely in countries such as France which are not equipped with clearing houses. So, as long as credit instruments clear easily, transactions can unfold smoothly. However, because prices tend to rise when credit is relied upon extensively, sooner or later the clearing system is disrupted and a crisis breaks out. Actually, Juglar provides a detailed account of the different events that succeed each other in times of crises. The commercial crisis per se is accordingly one of the series of twelve ‘accidents’, nine of which build up to the commercial crisis itself and three enable its liquidation. At the centre of the process stands the foreign exchange market, where foreign debts issued by residents are cleared against claims on foreign countries. As long as the foreign exchange market is operating well, business can continue its usual course. However, should the clearing process be disturbed by an immoderate price increase, the trade deficit causes a fall in the foreign exchange rate and an outflow of specie. The reduction of metallic reserves is thus the result of trade imbalances, both at home and with foreign countries. So, to preserve their reserves, issuing banks are compelled to increase the discount rate. So, quite understandably, in the 1873 entry, foreign exchanges become an essential link in the process that leads to the outbreak of the crisis. It was to remain

Clément Juglar and the periodic return of crises 279 so in Juglar’s following writings, in particular in the entry he contributed for the Nouveau dictionnaire.

12.3.2 CRISES COMMERCIALES in the Nouveau dictionnaire d’économie politique Compared to the previous entry, the one Juglar wrote for Nouveau dictionnaire is only ten pages long and is better structured, organized tidily in five sections. 12.3.2.1 The crisis and prices The first question to be raised is whether, here, in this entry, Juglar provides a clear definition of crisis. From this standpoint, the title of the first section, ‘Outline of a crisis: three periods’, is somewhat disconcerting. However, the three ‘periods’ are each ascribed a separate denomination, a clear improvement over the 1863–1873 entry. Juglar thus distinguishes ‘the explosion of the crisis’, ‘the liquidation of the crisis’ and ‘prosperity’. The crisis per se, its ‘explosion’, is very brief (ten or fifteen days); the ‘liquidation’ lasts between two and four years, followed by seven to ten years of ‘prosperity’, characterized by great business activity fuelled by easily available credit. This induces prices to rise, gradually creating the conditions for a new crisis to break out. Among these conditions, Juglar points to the rise of the interest rate, a consequence of the growing scarcity of funds available for investment. Thus, by now, Juglar’s explanation includes the workings of the capital market. Furthermore, the increase in prices creates a situation of instability, wherein the slightest incident will trigger the ‘explosion’. The first section ends with the only table the entry contains. As indicated earlier, its purpose is to show that, between 1804 and 1882, in France, England and the United States, crises recurred 12 times, breaking out in the same year, or one or two years before or after. It is in the second section, titled ‘Definition of a crisis; causes of crises’, that Juglar seeks to provide a single unequivocal definition of the crisis. It is the ‘stoppage’ in the increase of prices – in other words, it occurs at the precise moment when the rise in prices, which is associated with prosperity – stops. The other events that accompany the crisis are mere consequences. The clearing of commercial bills is disrupted, so agents try to obtain cash from banks through greater amounts of discounts. Imbalances of payments occur not only within the country’s borders but also vis-à-vis foreign creditors, who thus demand payment in specie, so that banks soon face ‘unfavourable foreign exchanges’ and the depletion of their reserves. To protect them, the banks must then increase the discount rate. Why banks take this measure is explained by Juglar as follows. Actually, by doing so, the banks deter the holders of unsaleable commodities, who need to meet their financial commitments, from buying precious metals. The latter are indeed attractive, as their value is inherently more stable, so during prosperity their market value rises to a lesser extent than other prices. By increasing the discount rate, the banks bring up the price of precious metals to the price level of the other goods

280 Cécile Dangel-Hagnauer and assets. As a result, the agents are compelled to cut prices, which is what causes the general fall of prices observed at the start of the liquidation. All in all, the increase in the discount rate is an effect, not a cause, of the crisis. Having discarded the increase in the discount rate as the cause of crises, Juglar goes on to examine other possible causes, in particular those stated by other economists: Robert Peel, Tooke, US President Jackson, Ch. Coquelin, John Stuart Mill, de Laveleye, Bonamy Price, Leroy-Beaulieu, Max Wirth and Yves Guyot. Juglar criticizes all these authors for exclusively focusing on the liquidation, thereby neglecting the other two periods, whereas, in Juglar’s opinion, crises are caused by the increase in prices that develops during prosperity. Armed with his single definition of the crisis for which he has identified a single cause, Juglar sets out to account for the way the periods are linked to one another. At the outset, he eliminates existing explanations. He emphasizes his disagreement with the ‘old doctrine’ for which prices increase along with the quantity of money: as business is chiefly conducted on credit, the relevant concept is the ‘rapidity’ of the circulation of money, not its quantity. Juglar also reaffirms that crises are not caused by ‘accidents’; on the contrary, the mere variety of causes invoked by different authors simply provides evidence that such explanations are wrong. Juglar provides his own tentative explanation in the third lengthy (two-page) section of the entry, titled ‘Mechanism of crises’. He begins by examining an economy on the verge of revival. The liquidation having been successfully completed, everything is ready for recovery: interest rates are low and capital seeking employment is plentiful. With the awakening of the entrepreneurial spirit, project makers and, soon, speculators enter the picture. Prices begin to rise from the very start of prosperity due to the abundance of capital. They continue to increase throughout prosperity under the effect of a cumulative process fuelled by credit: loans stimulate demand, so prices and profits increase, which further facilitates the access to credit, and so on. Then, at some point, prices stop rising. Why? Juglar’s explanation is unfortunately disappointing. Facing supply, he says, suddenly, there is a lack of demand, which he fails to account for. He contemplates overproduction as a possible explanation, but leaves it unexplored, which is unsurprising, as Juglar provides no theoretical analysis of the production process. There remains the possibilities that wants may be lacking or prices may be too high. Discarding the first possibility, Juglar falls back on the argument that prices are too high, thereby embarking on a circular line of reasoning. To be fair, Juglar does attempt to explain the behaviour of prices at the height of the crisis, by distinguishing what happens in the retail market and in the wholesale market. In the retail market, prices remain too high. This is because price cuts are postponed thanks to the continued reliance on credit. As long as the banks accommodate the demand for credit, the holders of commodities can finance an increasing amount of inventories. Thus, in the wholesale market, an escalating quantity of unsold commodities faces a growing amount of discounts. In other words, the existence of credit is what creates price rigidity. However, when the banks increase the discount rate, agents are forced to cut their prices. As they pay back their loans,

Clément Juglar and the periodic return of crises 281 equilibrium is gradually restored. In the process the two stocks disappear. However, why prices continue to decline throughout the liquidation remains unexplained. In conclusion, clearly missing here is a theory of the determination of prices. An offshoot of this lack of a theory of prices is that Juglar considers that prosperity, albeit a period of rising prices, is ‘the normal state of the market’. 12.3.2.2 Crises, wealth and society For Juglar, crises will be more serious and more devastating in countries that enjoy greater and quicker progress, as he reaffirms in the short (one-page) fourth section, which bears the title ‘The relationship of crises with the wealth of countries’. In contrast, countries that are protected from crises and the damage they inflict are also those that benefit less (or not at all) from progress. He also adds that crises are more acute in areas that are closer to the foreign exchange markets, an observation he has already made in Des changes. In the final one-and-a-half-page section, titled ‘The influence of crises on the economic condition of societies: How to observe and measure it’, Juglar takes the opportunity to refer to the work he accomplished in Des crises commerciales, where he shows that the evolution of business activity is accompanied by demographic movements (marriages, births and deaths). More generally, this section bears witness to Juglar’s interest in statistics and in the measurement of the ‘social and moral condition of human societies at a determined period of time in the various countries’. Pointing to the difficulties raised by international comparisons, he suggests that the best method for overcoming them is to focus on the intensity of exchanges, notably through the examination of banking statistics, although other statistics can be used for completing the investigation, such as the issues of securities, imports and exports, government revenue, and so on. An additional advantage of this method is Juglar’s naive belief that the periodicity of crises and the ability to track their occurrence in the balance sheets of banks could be used as a means of predicting crises, as the author affirms in the entry’s final footnote. A short bibliography completes the entry. It includes works by Juglar, but also books by other authors such as Tooke, Lord Overstone, Briaune, Macleod and Wirth.

12.4 CONCLUDING REMARKS Juglar’s contribution marks an important stage in the transition from the theory of crises to the theory of cycles. However, its novelty has probably been exaggerated, as Besomi (forthcoming) demonstrates. Juglar owes his celebrity, as is well known, essentially to Schumpeter, who adopted in Business cycles a ‘convenient descriptive device’ in the form of a ‘three-cycle schema’ formed by three classes of cycles – ‘Kondratieffs’, ‘Juglars’ and ‘Kitchins’ (1939, p. 170). Schumpeter also wrote that Juglar was the ‘great outsider who . . . created modern business-cycle analysis’ (1950, p. 149) and that he was also ‘the first to have a clear perception of how

282 Cécile Dangel-Hagnauer theory, statistics and history ought to cooperate in our field’ (1939, pp. 162–163), the method advocated by Schumpeter himself (1954). Yet Juglar’s writings themselves have not stirred great interest, even in France, with the exception of the reference to Juglar by early-twentieth-century French economists writing on the business cycle, Aftalion (1913), in particular. Outside France, Juglar’s contribution very often remained ignored, barring Thom’s (1893) ‘Englished’ translation of Des crises commerciales, which is anything but a translation, however ‘very freely’ a translation may be ‘rendered’ in order to be considered as such (p. 1). Why, then, have Juglar’s writings suffered this neglect? The first reason that comes to mind is that they were scattered among numerous articles, as attested by the bibliography drawn up by F. Allisson et al. (2009). On the other hand, his writings on crises were brought together in the two editions of Des crises commerciales. However, in addition to having never been (properly) translated, the book is repetitious, its organization lacks rigour – especially in its bulky second edition – it is inelegantly written and Juglar’s sentence structure is frequently ambiguous. In the end, attempting to make sense out of it can be at times quite a trying experience. In sharp contrast, these two dictionary entries are easy to read and reasonably well written. They are concise and they bring forward Juglar’s main line of reasoning. Comparing the entries shows how Juglar’s analysis evolved over the period between the two editions of Des crises commerciales. In addition, these entries reveal the method he used to track the recurrence of crises, based on the analysis of the balance sheets of the issuing banks, this being especially visible in →Block’s Dictionnaire. These entries are thus quite valuable for forming an idea of Juglar’s contribution to the emergence of business cycle theory. From this viewpoint, Juglar’s main contribution was probably that of being (one of) the first economist(s), along with Jevons, to have systematically used statistics in his analysis of economic fluctuations. In the 1863–1873 entry, Juglar painstakingly scrutinizes the movement of economic activity through the evolution of central banks’ discount portfolios and metallic reserves. These indicators provide evidence that crises recur periodically and enable the author to bring to light several contiguous series of ‘prosperities’, ‘crises’, and ‘liquidations’. In contrast, banking statistics are not reproduced in the 1891 entry, although they remain instrumental to Juglar’s exposition of the movement of business activity. The main shortcoming that these two entries bring out is that while Juglar succeeds in establishing an empirical relationship between banking statistics and the course of business activity, he does not provide a theoretical explanation of what he observes. Yet these entries also portray Juglar striving over the years to reach this goal. Indeed, whereas we see Juglar placing great emphasis on causation in the 1863 entry and laying the blame on speculation for the recurrent outbreaks of crises, by 1873, in the entry’s second edition, foreign exchanges are also ascribed a role in triggering the crisis. By 1891, greater stress is placed on the causal role played by credit, and the workings of the capital market are introduced as an

Clément Juglar and the periodic return of crises 283 additional major factor. In particular, there is an attempt, albeit unsuccessful and incomplete, in the second entry to show how the three phases are connected to one another and to explain why prices grow during prosperity, why they stop increasing at the outbreak of the crisis, and why they start rising again at the end of the liquidation. However, Juglar makes no attempt to build a theory of the determination of prices, which it would have provided the proper basis for the definition of the crisis – the ‘stoppage’ in the increase in prices – that he suggests in his last writings. In addition to bearing witness to the maturation of Juglar’s conception of the ‘oscillations’, these two dictionary entries exhibit some formal differences. The entry in →Say and Chailley’s Nouveau dictionnaire is more carefully constructed than the one written for →Block’s Dictionnaire. More strikingly, the discussion in the 1863–1873 dictionary relies heavily on analysing the entry’s numerous tables of statistics, whereas only one table is contained in the 1891 entry. This contrasts with the improved quality of the statistics that Juglar relied upon in the 2nd edition of his book, which includes a list of prices of commodities and presents a refined utilization of the maxima/minima methodology. Undoubtedly, this contrast reflects the preferences of the editors of the two dictionaries. Whereas Maurice Block was a statistician, Joseph Chailley-Bert clearly expressed his dislike of statistics and inductive reasoning.

NOTES 1 In France, two articles on Juglar were published, in 1991 (Gilman) and 2000 (Pellissier). More recently, a special issue of the Swiss Revue Européenne des Sciences Sociales (Bridel and Dal-Pont Legrand, 2009) was dedicated to Juglar, following the conference organized by Jean de Mathan, Juglar’s great-grandson. It was held in Paris at the Institut de France, the seat of the Académie des sciences morales et politiques (to which Juglar was elected in 1892), in celebration of the centennial of Juglar’s death in December 1905. 2 He was the son-in-law of Paul Bert, a French physiologist and politician. 3 See Le Van-Lemesle, 2004, pp. 311–316. 4 For additional details on the French liberal school, in particular on the role played by G.-U. Guillaumin, see Chapter 8, Section 8.1 of this volume. 5 In the PRÉFACE of the Petit dictionnaire, Block explains that he had felt that a more affordable version of the Dictionnaire general de la politique should be made available to meet the needs of a wider public. He argues that universal suffrage assigns serious duties to citizens, who need to be able to assess the acts of the people they elect. Whereas some of the articles are mere reprints of the initial authors’ contributions, more than three-quarters of the Petit dictionnaire is made up of articles written by Block himself. It includes an entry on CRISES COMMERCIALES – in fact, a shortened version of Juglar’s entry, in the form of a selection of passages, from the 1873 edition. 6 By some strange stroke of fate, the text was modified in the 1900 edition to ‘in concert with him’. 7 For a presentation of →Coquelin and Guillaumin’s Dictionnaire de l’économie politique, see Chapter 8 on Charles Coquelin’s CRISES COMMERCIALES. 8 The table distinguishes eight headings: Pure political economy, Finances, Agriculture, Industry, Commerce and navigation, Colonization, Contingency, and Sociology. Crises are not considered as part of pure political economy; Juglar’s entry on CRISES COMMERCIALES is included instead under the heading Commerce and navigation.

284 Cécile Dangel-Hagnauer 9 As the 2nd edition was merely a reprint of the 1st, this statement remained unchanged when the latter actually came out. 10 Actually, Chailley-Bert’s plea remained unheard until 1957, which was when law faculties in France were transformed into faculties of law and economics, and 1968, when specific economics university departments were created (see Le Van-Lemesle, 2004, pp. 641–645). However, in the meantime, in 1896, a special competitive examination had been established for the recruitment of professors of economics (ibid., pp. 321–326). The author would like to thank Annie L. Cot for her valuable help in seeking this information. 11 In this review, Chailley-Bert points to the differences, opposing the conceptions underlying the Dictionary of political economy and the Nouveau dictionnaire d’économie politique. For further details, see Chapter 2, Section 2.4.1 of this volume. 12 This issue is carefully analysed by Besomi, 2010, pp. 225–239. Examining the transition from the theory of crises to the theory of cycles, he introduces a fourfold distinction among four approaches: ‘crises’, ‘alternations’, ‘recurring crises’ and ‘cycles’. This typology allows him to characterize Juglar’s contribution as belonging to the third approach. 13 For a more detailed presentation of this aspect, see Besomi, 2010, pp. 195–197. 14 This is the case, for example, for the following sentence, where the emphasized passage (italicized by C. D.-H.) was added to the original 1863 version: ‘At the same time, the banknotes issued in exchange for discounted mercantile paper are instantly presented for reimbursement, and under the influence of unfavourable foreign exchanges the metallic reserves diminish as swiftly as portfolios build up.’ The text continues and the paragraph ends with: ‘the exchange rate returns to par, and the reflux of specie begins’, also an addition (italicized by C. D.-H.) to the 1863 entry.

REFERENCES Aftalion, A., 1913, Les crises périodiques de surproduction (Paris: Editions M. Rivière). Allisson, F., Breban, L. and Bridel, P., 2009, Bibliographie des écrits de Clément Juglar (1846–1904), Revue Européenne des Sciences Sociales, XLVII: 143, pp. 107–124. Arena, R., 2001, J-B. Say and the French liberal school of the nineteenth century: outside the canon? In E. L. Forget and S. Peart (eds), Reflections on the classical canon in economics: essays in honor of Samuel Hollander (London: Routledge), pp. 205–223. Baudrillart, H., 1874, Dictionnaire général de la politique, par M. Maurice Block, avec la collaboration d’hommes d’État, de publicistes et d’écrivains de tous les pays; nouvelle édition, Journal des Économistes. 33, March, pp. 475–477. Beauregard, P. 1908, Notice sur la vie et les travaux de M. Clément Juglar (Paris: Institut de France). Besomi, D., 2010, ‘Periodic crises’: Clément Juglar between theories of crises and theories of business cycles, Research in the History of Economic Thought and Methodology, 28A, pp. 169–287. Besomi, D., forthcoming, The fabrication of a myth: Clément Juglar’s commercial crises in the secondary literature, History of Economic Ideas. Bridel, P. and Dal-Pont Legrand, M., eds, 2009, Clément Juglar (1819–1905): Les origines de la théorie des cycles, Revue Européenne des Sciences Sociales, XLVII: 143. Chailley-Bert, J., 1897, Dictionary of political economy. Edited by R. H. Inglis Palgrave, F.R.S., Vol. II. F.–M. (London: Macmillan. 1896, pp. xvi, 848, large 8vo). The Economic Journal, 7: 26, pp. 260–264.

Clément Juglar and the periodic return of crises 285 Cheysson, E., 1907, Notice sur la vie et les travaux de Maurice Block, Publications of the Institut de France, no. 9. Coullet, P.-J. and Juglar, C., 1865, Extraits des enquêtes anglaises sur les questions de banque, circulation monétaire et de crédit, traduits et publiés par ordre du Gouverneur et du Conseil de régence de la Banque de France et sous la direction de MM. Coullet et Juglar, Vols 1–8 (Paris: Furne et Ce and Guillaurium et Ce). Gilman, M.-H., 1991, Clément Juglar 1819–1905 – Analyste des crises. In Y. Breton and M. Lutfalla (eds), L’économie politique en France au XIXème siècle (Paris: Economica). Juglar, C., 1862, Des crises commerciales et de leur retour périodique en France, en Angleterre et aux États-Unis, 1st edn (Paris: Guillaumin). Juglar, C., 1868, Du change et de la liberté d’émission (Paris: Guillaumin). Juglar, C., 1889, Des crises commerciales et de leur retour périodique en France, en Angleterre et aux États-Unis, 2nd edn (Paris: Guillaumin). Juglar, C., 1894, Commercial crises, translated from the French of M. Clément Juglar in the Nouveau dictionnaire d’économie politique (Paris), Rhodes Journal of Banking, pp. 437–449. Juglar, C., 2010a, Commercial crises (1863–1973). Translation by C. Dangel-Hagnauer of CRISES COMMERCIALES, in →Block, Dictionnaire général de la politique (1863, 1873), Research in the History of Economic Thought and Methodology, 28A, pp. 115–147. Juglar, C., 2010b, Commercial crises (1891). Translation by C. Dangel-Hagnauer of CRISES COMMERCIALES, in →Say and Chailley, Nouveau dictionnaire de l’économie politique (1891), Research in the History of Economic Thought and Methodology, 28A, pp. 149–167. Le Van-Lemesle, L., 2004, Le juste ou le riche – L’enseignement de l’économie politique 1815–1950 (Paris: Comité pour l’Histoire Économique et Financière de la France, Ministère de l’Économie, des Finances et de l’Industrie). Levasseur, E., 1901, Nécrologie – M. Maurice Block, Journal des Économistes, 60, March, pp. 268–269. Liesse, A., 1893, Nouveau dictionnaire d’économie politique, publié sous la direction de M. Léon Say et de M. Joseph Chailley-Bert, Journal des Économistes, 52, March, pp. 281–285. Niehans, J., 1992, Juglar’s credit cycles, History of Political Economy, 24: 3, pp. 545–569. Pellissier, D., 2000, Clément Juglar: Héritage et actualité de sa théorie des crises. In P. Dockès, L. Frobert, G. Klotz, J.-P. Potier and A. Tiran (eds), Les traditions économiques françaises – 1848–1939 (Paris: CNRS Editions). Schumpeter, J. A., 1939, Business cycles: a theoretical, historical and statistical analysis of the capitalist process (New York: McGraw-Hill). Schumpeter, J. A., 1950, Wesley Clair Mitchell (1874–1948), Quarterly Journal of Economics, LXIV: I, pp. 139–155. Schumpeter, J. A., [1954] 1994, History of economic analysis, reprinted (London: Routledge). Seligman, E. R. A., 1890, Nouveau dictionnaire d’économie politique, Political Science Quarterly, 5: 2, June, pp. 334–336. Simon, J., 1865, Dictionnaire général de la politique, par M. Maurice Block, 2 vol. gr. in8. Paris, O. Lorenz, 1864, Report to the Académie des sciences morales et politiques. Journal des Économistes, 23, January, pp. 154–155. Thom, DeCourcey W., 1893, A brief history of panics and their periodical occurrence in the United States (New York: G. P. Putnam’s Sons).

13 Henry D. Macleod’s Dictionary of political economy Britain’s first, aborted attempt Cécile Dangel-Hagnauer

A dictionary of political economy: biographical, bibliographical, historical, and practical by Henry D. Macleod, London: Longman, Brown, Longmans and Robert, 1863.

13.1 A BIOGRAPHICAL, BIBLIOGRAPHICAL, HISTORICAL AND PRACTICAL DICTIONARY OF POLITICAL ECONOMY Published more than 30 years before →Palgrave’s Dictionary of political economy (see Chapter 16), Macleod’s Dictionary of political economy: biographical, bibliographical, historical, and practical represents the first attempt at producing a dictionary of this kind in the English language. Unlike R. H. Inglis Palgrave, however, Henry D. Macleod (1821–1902) failed to bring his dictionary to completion. Moreover, although he was not the only author to have written a dictionary singlehandedly – another contemporary example being Boccardo, who published his Dizionario della economia politica between 1857 and 1862 (see Chapter 11) – Macleod only managed to publish a single 683-page volume, covering letters A to C, which allowed him nonetheless to include an entry on CRISIS, COMMERCIAL. Many of the Dictionary’s entries are ‘biographical’ and/or ‘bibliographical’ in that they either bear the name of a particular author with a (list of) reference(s) or indicate the title of a particular work published anonymously. Only a small number of the entries, around 30, belong to neither of these two categories, as several notices are quite lengthy. The longest is BANK, whose 152 pages account for more than 20 per cent of the volume. Four other articles cover between 30 and nearly 70 pages: CAPITAL, COINAGE, CREDIT and CURRENCY. In comparison, the article on CRISIS, COMMERCIAL is of ‘average’ size, as it comprises only 22 pages, which is nevertheless considerably more than the six and three pages devoted respectively to COST OF PRODUCTION and to CONSUMPTION. All in all, if one were to go by

Henry Macleod’s Dictionary of political economy 287 the size of the different articles, the dictionary hardly deserves the title ‘A dictionary of political economy, inasmuch as the vast majority of the entries relate exclusively to the subjects of credit and banking, with considerable emphasis laid on historical (and legal) aspects.1 In particular, the article titled BANK includes subentries devoted to a ‘Historical sketch of the rise and fall of banking in several countries’ – England, Scotland, Ireland, America, France – and to ‘Historical notes on the rise of banking in various countries – Rome, China, Italy, Venice, Genoa, Sweden, Holland. An indication of the kinds of entries found throughout the volume is provided in the advertisement that appeared in The Saturday Review on 24 December 1859: On Wednesday next, Part III, price 4s. A DICTIONARY OF POLITICAL ECONOMY: Biographical, Bibliographical, Historical, and Practical. By Henry Dunning Macleod, Esq. Principal contents— Banking in France, Mississippi Scheme—Bank Note—Baring—Bastiat— Baudrillart—Beccaria—Bentham—Bill of Exchange—Boccardo—Bodin— Bullion Report. Part III advertised here represents around 120 pages in the final volume. Four more years were necessary for the production and publication of the remaining half of the dictionary’s single volume. Part I was issued in 1858 and was reviewed in The Literary Examiner, where it was extremely well received. The anonymous reviewer hails the dictionary as the first English dictionary of political economy, underlining that whereas ‘the best literature’ in this ‘science’ was ‘written in the English language’, the dictionary would meet the needs of many students. Accordingly, he pays particular tribute to the ‘bibliographical knowledge’ amply supplied by many notices. More generally, he notes that Macleod was perfectly qualified for writing such a dictionary, on account of his interest and acquaintance both with the subject itself and with the works of others, owing to his ‘indefatigable zeal as a reader’ and ‘energy of independent thought’. The review contains a long passage from the Dictionary that provides some insights into Macleod’s conception of political economy. It is taken from the entry on AESCHINES, whose Eryxias Macleod commends as the first surviving treatise on political economy, and from which he quotes a long extract, thereby endorsing the opinions of the author, notably that value is rooted in exchangeability and that ‘intellectual wealth . . . is part of national capital’. For Macleod, ‘one of the chief defects of Adam Smith and Ricardo’ lies in their failure to have recognized this truth, whereas it was well apprehended by ‘the modern French school of Political Economy at the head of which stands J. B. Say’. The reviewer also provides some rapid observations on several other entries, but makes no comment on Macleod’s ‘articles Bank and Banking’, for lack of space and more especially as ‘Mr Macleod [had] already written an able book on the Theory and Practice of Banking’. The reviewer ends by alluding to Macleod as ‘a man sturdy in reading, thought, and

288 Cécile Dangel-Hagnauer speech’, with whom he was not always in agreement, while entirely perceiving the value of the book. This review also indicates that Macleod projected to produce the dictionary in 15 instalments of 96 pages each, which altogether would have represented some 1,440 pages. Was it the 683 pages needed to handle the first three letters of the alphabet that made ‘the publishers . . . put typographical considerations first, thus turning Macleod into a kind of unlyrical economic Schubert’ (Maloney, 1985, p. 123)? As testified by J. Kircheisen’s review article in the Jahrbücher für Nationalökonomie und Statistik, published the same year as the Dictionary, the first volume had actually required seven parts (Kircheisen, 1864). Hence Kircheisen expresses his doubts as to whether the eight remaining parts would suffice to complete the entire dictionary. Nevertheless, he points out the quality of the article on banking, comparing it to Lawson’s History of banking, and underscores the excellence of several articles, in particular the ones on the BULLION REPORT and on CRISIS, COMMERCIAL. He also states that the articles on CAPITAL, on CREDIT and on CURRENCY had already gained attention, in particular in the Jahrbücher. Finally, the German reviewer praises Macleod’s writing, its ‘French elegance and clarity’. In France, the publication of the first instalments of the Dictionary and of Macleod’s Elements of political economy provided Michel Chevalier with the opportunity to write, in 1862, an article for the Journal des Économistes, in which he discusses the author’s definition of political economy as well as his conception of currency, credit and capital. Whereas the discussion of the first point is rather a pretext for Chevalier to present his own conception, in contrast the article shows he is visibly convinced by Macleod’s approach of the latter subject. Kircheisen and Chevalier’s articles bear witness to the good reception of Macleod’s Dictionary in Germany and in France, on which Macleod prided himself: The first volume of my Dictionary was published in 1863; it was received with the warmest approval by the most distinguished foreign Economists, but, of course, the devotees of John Stuart Mill utterly ignored it. I wrote every word of it myself, and published it at my own expense, but it scarcely paid its expenses, and I did not think it advisable to continue such thankless work. (1896b, p. 149) This passage also indicates that it was Macleod’s own decision to interrupt the production of the Dictionary, as it did not sell well.

13.2 HENRY DUNNING MACLEOD That the Dictionary was a financial failure was perhaps due to the strong grip of →McCulloch’s Dictionary, practical, theoretical, and historical, of commerce and commercial navigation,2 which was not, however, a proper dictionary of political economy. Another explanation is that Macleod failed to achieve recognition with

Henry Macleod’s Dictionary of political economy 289 respect to his contribution to economics on the part of his British contemporaries, more particularly those he depicts as ‘the devotees of John Stuart Mill’.3 A reversal of opinion began in the 1930s. In his notice on MACLEOD, HENRY DUNNING, published in →Edwin R. A. Seligman’s Encyclopaedia of the social sciences (1933), Hayek provided a balanced assessment, describing Macleod as ‘one of the more remarkable of that great number of self-made economists who, discovering certain problems neglected by orthodox economists, believed it was their task to rebuild the science from its foundations’. Macleod was also, Hayek writes, ‘one of the first to obtain a clear grasp of the role of discount theory’. Schumpeter, in History of economic analysis, also praises Macleod for having ‘laid the foundations of the modern theory of banking’ and for having made ‘the first – though not wholly successful – attempt at working out a systematic theory that fits the facts of bank credit adequately’ (1954, p. 1115). However, both authors point out that Macleod ‘failed to secure recognition’, to quote Hayek’s words, or ‘even to be taken quite seriously’, as Schumpeter writes.

13.2.1 Presumptuousness and innovativeness Several reasons explain why Macleod was ignored so by his contemporaries. One reason was his overriding tendency to quibble, as emphasized by Maloney: It is, however, Macleod the polemicist who makes the first impact. A barrage of uninterrupted invective beats down upon the reader, page after page; all sensations being relative, we feel the sweetness of respite when, occasionally, overbearing rudeness is throttled back to mere stridency. The hectoring, at first entertaining, soon becomes as wearisome as the hair-splitting. Macleod, taken more than a few pages at a time, is not a very readable writer. (1985, p. 120) Like Maloney, Chevalier had already reproached ‘the harshness of [Macleod’s] criticisms towards some of his predecessors who are not the least renowned’ (1862, p. 191). Maloney also disparages Macleod’s style, in a somewhat exaggerated way, although it has been noted by others that ‘reading Macleod’s books [is] a chore’ (Skaggs, 1997, p. 121). However, the main difficulty with Macleod’s economics is related to the fact that he was a self-trained economist who remained an outsider to the profession. He learnt economics through his reading of the extant literature, in particular the works of Smith, Ricardo and J. S. Mill. Among other things, this enabled him to publish his imposing 690-page History of economics (1896b). Nonetheless, his isolation explains his ‘inability to put his many good ideas in a professionally acceptable form’, as Schumpeter (1954) notes. As a result, his work ‘attracted little attention, still less favorable attention’ (ibid.). On the other hand, in the area of money, credit and banking, Macleod was certainly an original writer ahead of his time. As a result, he was often misunderstood by his contemporaries, although he gained recognition abroad, notably in France, where Richelot (1863) devoted a book to the ‘revolution in economics brought about by Macleod.4

290 Cécile Dangel-Hagnauer Actually, Macleod’s interest in economics was sparked by problems he faced professionally. The son of a Scottish landowner, he was born in Edinburgh in 1821. He studied at Eton and at Trinity College, Cambridge, from which he graduated in 1843 with a degree in mathematics. His professional career began in Scotland, where he managed the family property and participated in the reorganization of pauper relief, while studying to become a barrister. In 1854, he joined the directorate of a joint-stock bank, which was engaged in a conflict with the Board of Trade. Macleod was asked to defend the case and won. ‘It was this case which was’, Macleod writes, ‘the origin of the modern Science of Economics’ (1896b, p. 142). Actually, in the process of looking for arguments in defending the case, Macleod thought he would find them in books on economics. Extremely disappointed, he came up with the idea that he would revolutionize the discipline, writing in 1896 that ‘the greatest opportunity that had come to any man since the days of Galileo had come to [him]’. Despite his claims, fellow economists considered him as a crank writer, which led him to endure many vexations, in particular in relation to his inability to secure an academic position. Macleod wrote 13 books. Some of them were, Hayek notes, basically reprints of books formerly published under a different title. Most dealt with credit and banking, and this is indeed the area where Macleod’s contribution is the most compelling. As emphasized by Skaggs (1997, 2003, 2004), Macleod made important contributions to the credit theory of money, to the theory of finance in economic development, and to the theory of capital.5 To begin with, Macleod was a pioneer in the building of a credit theory of money, and his approach to money and credit is strikingly modern. For Macleod, the value of money does not derive from the value of the commodity in which it may be embodied. Instead, the idea of commodity money is an offshoot of the notion of credit. Money, contrary to debt, is a general claim on all the goods and services produced within the economy. As more particularly noted by Schumpeter, Macleod’s analysis of money and credit led him to put forward a modern theory of banking wherein banks are not mere intermediaries between savers and borrowers. In BANK, Macleod writes: ‘it is almost universally considered that bankers are merely agents between persons who want to lend and those who want to borrow. Of all the fallacies that beset Political Economy at the present day this in one of the most mischievous and pestilent’ (p. 75). Instead, for Macleod, ‘banking consists in creating liabilities’ (p. 72). Banks create and exchange instruments of credit, whether in the form of notes or in the form of ‘entries and cheques [which] perform exactly the same functions as notes’ (p. 75). More remarkable, perhaps, is Macleod’s contribution to the theory of finance in economic development. As underscored by Skaggs (1997, 2003), it is unique, in so far as it has no roots in classical theory, and it remained an isolated attempt until the approach was developed in the 1950s by John Gurley and Edward Shaw (1960). Macleod based his conception of the role of finance as a means of mobilizing unused resources on his observation of the development of Scotland, but also on the idea that it is not because debits and credits cancel out when the balance sheets of banks are consolidated that these quantities should be disregarded. Quite the

Henry Macleod’s Dictionary of political economy 291 opposite: the structure of credit and debt plays a determining role. In brief, credit is a means of mobilizing capital, which leads Macleod to go so far as to assert that credit is capital, a far-embracing notion in Macleod’s conception as it also includes human capital, as noted earlier.

13.2.2 Macleod’s particular brand of political economy Examining the relationship between ‘capital’ and ‘credit’ provides the opportunity to sample Macleod’s style of writing and savour the twists and turns of his reasoning. Accordingly, let us begin with what Macleod considers as the subject matter of political economy, namely, ‘wealth’, which is composed of ‘economical elements’, that is, things that are ‘exchangeable. ‘Capital’ is then a particular form of wealth: ‘Capital is any Economical Element appropriated to the purpose of profit, or increase’ (CAPITAL, p. 331). Its value is the present value of the future profits that will be reaped at different future time intervals. There are different forms or ‘species’ of capital, each of which falls under this general conception. In particular, Macleod shows that ‘stock, or funds, or public debts’ are wealth, or, more precisely, ‘independent property’ (p. 342), an assertion that calls for the definition of ‘property’, which ‘is that “Right” to use a thing, and not the thing used’ or, put slightly differently, ‘property is not the thing itself, but the right to it’ (pp. 343 and 351). As this ‘right’ can be bought and sold, it is an ‘economical element’ and, as shares in companies are capital, their value consists in ‘the Right to receive and participate in the future profits of business’ (p. 347).6 The discussion of the concept of property leads Macleod to ‘the great subject of CREDIT (p. 351). Credit involves trust, but it is also a ‘right’. To begin with, credit is based on trust, in so far as ‘Every man engaged in business may be considered as a source producing profit . . . [T]hough a man’s future productivity may be profitable to himself, in order to make it marketable, or saleable, it is absolutely necessary that it should be believed in by others. – It is therefore called his credit’ (pp. 351–352). Credit in the form of trust is, then, what enables a merchant to sell his products to a trader who does not have the money to pay for them and receive instead the right to collect payment at a future date. As Macleod writes, ‘this operation is called credit’ (ibid.). In this instance: ‘The entire property in the goods passes from the merchant to the trader, in as complete a manner as if he had received money for them’ (p. 352). In exchange, the merchant receives ‘the right to demand payment [which] is itself an independent Economic Entity’ (i.e. ‘economical element’) (ibid.). From this it appears that credit is a particular form of capital: [T]raders . . . buy goods in exchange for the right of demanding a future payment. The quantity of credit brought into commerce, by these means is enormous in this country. . . . What we have said is, we hope, sufficient to shew that the quantity of credit which is in the market is a gigantic mass of exchangeable property, separate and distinct from, and over and above commodities and money, and that it is Capital. (ibid., pp. 352–355)

292 Cécile Dangel-Hagnauer Returning to Chevalier’s assessment of Macleod’s contribution, it is worth noting that, with regard to the assertion that ‘credit is capital’, Chevalier writes: ‘The impression I am left with upon reading Mr Macleod is, I do not hesitate to say, that he is more in the right than his adversaries, however eminent they may be’ (1862, p. 184).

13.2.3 Wasting opportunities and leaving one’s mark Interestingly, Macleod came very close to participating in the building of the utility theory, by defending a subjective theory of value. As Maloney observes, he failed, however, to understand the marginal principle. To make matters worse, he never acknowledged Jevons’s important contribution, rejecting the latter’s work as that of a writer who lacked practical knowledge in banking and law.7 So, whereas he could have climbed on the bandwagon of the marginal revolution and finally achieved recognition, he remained until the end an outsider to the economics profession, most probably because he seems to have made it a point of honour to criticize all ‘established’ economists. As Maloney (1985, p. 140) writes, Macleod ‘picked the right time for being out of touch’, whereas he was a strong opponent of protectionism and socialism and could have, on this account, found his place within Britain’s rising neoclassical orthodoxy. Nonetheless, when he died, in 1902, his ‘name and personality’ had achieved sufficient renown for him to deserve an obituary in The Economic Journal, where he is credited with having coined the phrase ‘Gresham’s Law of the Currency’ and ‘revived the use of Economics for Political Economy’ (Anonymous, 1902).

13.3 CRISIS, COMMERCIAL Macleod’s 22-page article on CRISIS, COMMERCIAL begins with an introductory section whose purpose is to state briefly the causes of crises. As to the bulk of the article, it is a description of the events surrounding the seven crises that occurred in 1763, 1783, 1793, 1797, 1825, 1847 and 1857, the author’s main purpose being to provide an account of the policy implemented by the Bank of England during each episode. Finally, in the last six pages, Macleod considers ‘the opinions of various persons, who are regarded as authorities on the subject’ (p. 627), before providing a more personal assessment of these views. As we shall see, Macleod’s chief objective here is to assert his agreement with the authors of the Bullion Report and, on the contrary, to lambast the framers of the Bank Act of 1844. Accordingly, he approvingly states the doctrine of the directors in charge of managing the Bank of England at the end of the eighteenth century, namely, that the demand for banknotes should be accommodated in the event of a crisis, the situation of the foreign exchanges permitting. Otherwise, the correct course of action would be to increase the discount rate, preferably at the incipiency of speculative excesses, which would stimulate the return of specie to the country, and would thence provide the backing for the Bank to increase the

Henry Macleod’s Dictionary of political economy 293 issue of banknotes. In sharp contrast, he firmly condemns the arbitrary limit placed upon the banknote issues of the Bank of England by the Act of 1844.

13.3.1 The origin and the causes of crises The article’s introductory paragraphs (pp. 626–627) provide a few insights into what is Macleod’s conception of crises, which remains nevertheless mainly implicit. One characteristic that is, however, stated explicitly is their ‘periodical recurrence’, this being mentioned three times in the article, almost incidentally, though, as Macleod considers this as something recognized by everyone. For the rest, after having described the underlying context in which crises are likely to occur, he goes on to list the causes that make them happen. In other words, he distinguishes ‘the sources whence commercial crises originate’ and their actual ‘causes’ or, to put it differently, the conditions that are conducive to crises and the events that might trigger one.8 Accordingly, whereas crises originate in the abuse of credit, which provides the fuel for the development of speculation, they may have four different causes. With regard to its role in bringing forth crises, Macleod emphasizes the twofold nature of credit. Thus, the opening sentence of the entry alludes to the ‘grand system of Credit’, its tremendous power of stimulating economic activity, hence, its ‘marvellous effects . . . on the prosperity of nations’. Conversely: ‘Like every other great power, like gunpowder, like steam, it is attended with commensurate dangers. Misused Credit is the cause of those terrible mercantile catastrophes which periodically sweep over the world’ (p. 626). As the Dictionary is strewn with numerous cross-references, Macleod quite naturally directs the reader to his long article on CREDIT, where he touches on crises only very briefly, to say the least. Finding where he does requires examining the end of the entry to which is appended an ‘Analysis of the article’ that features a reference to a paragraph indicated as dealing with ‘Unextinguished Credit [as] the cause of all commercial crises’ (p. 617). In the corresponding paragraph, Macleod assimilates crises to ‘monetary cataclysms’ and to bank failures. It is ‘Unextinguished Credit’ which produces those terrible monetary cataclysms, which shake nations to their foundations, scattering ruin and misery among societies. The inability of credit shops to extinguish the credit they have created, commonly called the failures of banks, are [sic], perhaps, among the most terrible social calamities of modern times. (p. 602) Now, as to whether crises could occur in the absence of credit, on this matter readers are left to their own devices and have to be content with Macleod’s assertions that ‘Commercial Crises originating in Credit have . . . a comparatively modern origin’; and ‘They increase in magnitude and danger with the gigantic development of Credit (p. 626). The author does provide some explanation nonetheless as to why crises originate in the abuse of credit. A crisis results from ‘over-production’, of which Macleod

294 Cécile Dangel-Hagnauer provides his own definition. Credit, he argues, is ‘productive by being purchasing power, – purchasing power, however, which has always to be redeemed. As a result, if people ‘produce, or bring forward for sale in any way whatever, or buy so much on credit, so that the price of the goods, &c, when sold cannot redeem the credit, . . . they have brought forward or produced too much’. For Macleod, ‘this is the true meaning of that often used but ill-defined expression Over-Production’, and ‘Every mercantile operation, therefore, attended with a loss, is over-production’. As the author observes, the frequent occurrence of crises raises two main issues, namely, whether they can be prevented through proper regulation, and how they are to be dealt with, in particular through the guidance of ‘the conduct of great Banks . . . during the tempest’. A related issue is whether assistance should be provided to borrowers who have been affected by the crisis but still remain solvent. Indeed, because crises generate widespread discredit, they harm not only those ‘who speculate injudiciously’ but even ‘persons . . . of the highest standing’. However, to address these issues, one needs to be able to ‘discern the symptoms that betoken the approach of those terrible convulsions’, which requires knowing what their causes may be. Although Macleod distinguishes four different causes, speculation is the driving force that always causes the trouble. Crises can be produced by prolonged low interest rates; the opening of new markets; bad harvests; or ‘the sudden commencement, or the sudden termination of a war’, as Macleod briefly indicates. First, a protracted period marked by low interest rates is likely to give rise to a crisis, as it creates the conditions for ‘wild speculators’ to breed schemes so as to take advantage of the credulity of those seeking ‘more profitable investments’. Macleod describes speculation as the purchase of shares with the intent of reselling them, thereby comparing it to gambling nourished by ‘speculative fever’ and manias. At some point, however, either because of calls or because ‘the circle of dupes has been exhausted, prices begin to waver’, which causes everyone to sell and prices to fall, thereby generating a ‘crash’. So, it is the decline in prices that leads borrowers to failure, a fact that is merely stated, as Macleod offers no analysis of the formation of prices, let alone of their variations. Second, the large gains provided by new markets attract the most enterprising adventurers, soon joined, though, by a herd of less capable imitators, causing ‘overproduction’. Third, the failure of a subsistence crop can create a sharp price increase that will attract speculators before ending in disaster. Finally, a ‘great general cause’ like the outbreak of war or the signing of peace will disrupt the normal course of business by increasing the demand for certain goods to the detriment of others, such disturbances being, of course, conducive to speculation. Having provided these initial indications, Macleod goes on to state the ‘object’ of the article, that is, ‘to examine the history of these catastrophes, and to explain what has been the action of the Bank of England, to consider the opinions of various persons, who are regarded as authorities on the subject, and to investigate the principles and the policy of the Bank Act of 1844’.

Henry Macleod’s Dictionary of political economy 295

13.3.2 The history of commercial catastrophes The greater part of CRISIS, COMMERCIAL is an historical account of the crises that occurred in the later half of the eighteenth century, on the one hand, and between 1825 and 1857, on the other hand. With regard to the series of events that led to the Bullion Report, the ‘fearful monetary disasters’ that occurred between 1815 and 1817, the crisis of 1819, ‘followed by the total suspension of cash payments by the Bank and the circumstances preceding the great crisis of 1825’, Macleod refers the reader to his section on ‘Banking in England’ and to the entry on the BULLION REPORT. 13.3.2.1 Late-eighteenth-century crises Between 1763 and 1797, Macleod distinguishes (pp. 627–632) five crises, which are not all granted the same amount of attention: less than one page to the first three, including no separate section for the crisis of 1772–1773. Macleod begins with the crisis of 1763, which occurred in the wake of the Peace of Paris. For the author, this crisis, which originated in Amsterdam, provides evidence that applying the precepts of the ‘Currency Principle’ – typographically indicated as a fully fledged entry but in fact only a section within CURRENCY – would not prevent crises. He describes the circumstances that led the crisis to spread to Hamburg and England, citing Smith, who bears witness to the support provided to merchants by the Bank of England. Ten years later, in 1773, another crisis broke out, to which the author allots seven lines where he stresses the ‘judicious liberality’ of the Bank of England that prevented a general destruction of credit. With the crisis of 1783, Macleod is provided with the opportunity to approvingly cite the doctrine endorsed in those days by the Bank of England ‘that while a drain on specie is going on, their issues should be contracted as much as possible; but that as soon as the tide had given signs of ceasing, and turning the other way, it was then safe to extend them freely’ (p. 628). This is precisely how the Bank of England handled this particular crisis, which was also an effect of the termination of a war, this time with the United States. Greater space is granted to the crisis of 1793, which Macleod analyses as a consequence of the signing of the Treaty of Commerce and Navigation in 1786, viewing the ensuing rise of foreign trade as both a blessing and a curse, and arguing that ‘Subsequent experience enables us to perceive that an increase of commerce proceeding at such a pace was sure to end in a catastrophe’. A table documents the sharp expansion in both exports and imports, which is accompanied by greater issues both by the Bank of England and by the so-called country banks. Because such banks did not enjoy sufficient credit, they were not immune from trouble in the event of a decline of confidence, hence Macleod’s criticism of the monopoly granted to the Bank of England. War was again the triggering factor, this time its declaration in 1793, as it ‘gave a shock to credit’. As the number of bankruptcies began to mount and actually started to soar following the declaration of war, the situation turned into a panic, which first affected only commercial houses, but soon

296 Cécile Dangel-Hagnauer spread to banks in England, but also in Scotland. In spite of the appeals to the Bank of England, the latter denied any assistance. Instead it ‘resolved to contract its issues’, causing ‘an electric shock’, as evidenced by Sir Francis Baring, cited twice in this passage. Relief came from a committee of the House of Commons that propounded a special issue of Exchequer bills in order to supplement the insufficient amount of currency. The bill was passed, spurring an immediate return of confidence. The decision was approved by the authors of the Bullion Report, as Macleod points out. Macleod evokes rather briefly the crisis of 1797 and the ensuing ‘Suspension of Cash Payments by the Bank of England’. He points, nevertheless, to the Bank of England’s inappropriate conduct at the time, that is, first the enlargement of its issues when foreign exchanges were adverse, and second their restriction when they became favourable. Macleod considers this contraction as a ‘disaster’, hence his explicit disapproval of the monopoly of the Bank of England: This disaster was the second notable penalty which the county paid within four years for the unjustifiable monopoly of the Bank. Never was there a more unfortunate example of monopolizing selfishness; it would neither establish branches of its own in the country, nor would it permit any other private company of power and solidity to do so, whose credit might have interposed and aided in sustaining its own. Moreover, when failure in confidence was felt in the country notes, it refused to supply notes of its own to supply in their place. The power of issuing what plays so important a part in commerce was absolutely forbidden to wealthy companies, and left in an unbounded freedom to private persons, many of whom had no capital or property to support their issues, and whose credit vanished like a puff of smoke in any public danger. The Bank consequently was left to bear the whole brunt of the crisis, solitary and unsupported, and finally succumbed. (p. 631) Ironically, though, Macleod also asserts that the war with France would have necessitated the suspension sooner or later, hence arguing that it was probably advantageous for the country that it did occur so early in the conflict. 13.3.2.2 The crisis of 1825 Macleod then jumps forward 28 years and broaches the crisis of 1825. The circumstances leading to the crisis having been described in the section on ‘Banking in England’, Macleod focuses here (pp. 632–635) exclusively on the handling of the crisis by the Bank of England. The crisis began with the fall of the exchange on Paris, which was the moment, to Macleod’s dismay, that the Bank of England chose to increase its issues, thereby nourishing the ‘speculative fever’ that was developing and adding ‘fuel to the flames’. As evidence of the actions taken by the Bank, Macleod inserts a table presenting the evolution of the quantities of coin and bullion, on the one hand, and of notes issued, on the other hand, adding that the country

Henry Macleod’s Dictionary of political economy 297 banks followed the example of the Bank of England and raised their issues substantially as well. Macleod then goes on to describe the rise of speculation in the first four months of 1825, soon followed by the reversal in the ‘tide of price’, which triggered calls for the payment of subscriptions, forced sales and ‘universal discredit’, aggravated by the limit set on interest rates at 5 per cent under usury law. Again, the Bank of England did the opposite of what was expected of it – at least by Macleod – this time in the reverse direction, and decided to contract its issues, making matters much worse by causing the failure of several houses, followed by a bank run. Macleod then recounts the circumstances that led the Bank to unleash its credit in December and issue an extra £5 million worth of notes (to be compared to the £17 million of the banknote circulation in November), which put an end to the panic in London. However, discredit had also spread throughout the country, which was only overcome by the distribution to the country banks of an opportunely rediscovered reserve of £1 notes. This immediately restored the credit of the whole banking system. Having completed his narration, Macleod comments on the ‘infatuated obstinacy’ of the Bank of England, which failed to recognize that the ‘circumstances of this famous crisis [were] the most complete and triumphant example of the unquestionable truth of the principles of the Bullion Report’. During the first months of the year, instead of diminishing issues when specie was being exported and speculation was spreading, it raised them. In the autumn, whereas the external drain had ceased, instead of augmenting its issues to meet the drain due to the difficulties of the country banks, it contracted them. Macleod also emphasizes that ‘the whole of the terrific crisis would have been saved’ had the bank resorted to its huge issue earlier. To support his argument he quotes several bankers heard in 1832 who had approved of the issue of the £1 notes, considering it helped to restore confidence in the country banks. The subentry ends with Macleod allowing himself the indulgence of quoting Lord Overstone – whose opinions, he reminds the reader, he has examined under CURRENCY – and noting the latter’s approval of the course of action taken by the Bank of England. 13.3.2.3 On the crisis of 1847 A lengthy section (pp. 635–638) is then devoted to the crisis of 1847. Macleod begins by underlining that the ‘great crisis of 1825’ had provided the proof that it was inappropriate to set a limit to the issues of the Bank of England. Nonetheless, he is also forced to recognize that ‘mismanagement’ on the part of the Bank’s directors had led to ‘difficulties in 1837 and 1839’. While these troubles were not serious enough to merit being dealt with in ‘a separate notice’, they nourished the arguments of the advocates of the currency principle – ‘Colonel Torrens, Mr. Samuel Jones Loyd (Lord Overstone)’ – and provided support for the passing of the Act of 1844 by Robert Peel. In addition to stressing the ‘complete delusion’ there was in supposing the Act could actually carry out the currency principle, Macleod insists that the ‘numerical limit’ set on the issues of the Bank of England was in complete contradiction to the opinion of bankers before 1840.

298 Cécile Dangel-Hagnauer Macleod then recounts the circumstances that led to the crisis. He begins by presenting a table depicting, along with the amount of banknotes in circulation, the bank’s reserves of banknotes and bullion, as well as the discount rate. It shows the regular decline of the reserves of banknotes between August 1846 and the outbreak of turbulence in April 1847, at which date it fell to £21⁄2 million. This drove the Bank of England (no longer restrained by usury law) to increase the discount rate, thereby inducing an inflow of bullion, soon followed, however, by a drain at the end of June, which prompted the Bank to raise the discount rate, this time more vigorously. The ‘real’ crisis of 1847 began in August. There had been a speculation on wheat, which had produced a sharp price increase, soon trailed by a price fall that caused numerous failures. In the meantime, foreign exchanges improved and bullion began to re-enter the country. Because its reserves of banknotes had fallen considerably, in October the Bank announced it would grant no further advances. This sparked massive sales of securities at prices that showed implicit interest rates of up to 50 per cent. At the height of the crisis, between 18 and 23 October, there were numerous bank failures and a complete cessation of lending. Appeals were made to the government to suspend the Act. After five days of refusal, the government issued a letter authorizing the Bank of England to raise its advances on condition that it maintained the discount rate at a minimum of 8 per cent. The publication of the letter had the immediate effect of restoring confidence and ending the crisis: the mere knowledge that banknotes were available eliminated the need for them. Macleod then refers to a meeting at Parliament where the Chancellor of the Exchequer proposed appointing a parliamentary committee to inquire into the events. The Chancellor’s words, which Macleod quotes extensively, mirror his own description of the events. Interestingly, Macleod also cites Overstone as having affirmed that the conduct of the Bank of England had been in compliance with the Act and was in no way responsible for the ensuing events, while, in the same breath, approving the publication of the government letter. Actually, two committees were appointed. The Committee of the Commons merely concluded that it was not necessary to amend the Act. Much more to Macleod’s liking was the report of the Committee of the Lords. Macleod writes of the ‘superior capacity of the Lords as men of business to the Commons’. He cites the report as having ‘refused to recognize the doctrine of Mr. Loyd that “the [government] letter . . . was not a departure from the principle of the Act”’. The report also criticized ‘the framers of the Act, and the supporters of the theory upon which it is founded’ for not having taken into consideration the opinion of ‘the most eminent authorities of former times’. The section ends with a quote from the report, which asserted that ‘the inflexibility of the rule prescribed by the restrictive clauses of the Act of 1844 is indefensible’, thereby acknowledging the wisdom that presided over the suspension of the Act in October 1847, and affirming that a ‘discretionary relaxing power’ should be granted to the Bank, though it should be exercised only in a situation of favourable foreign exchanges.

Henry Macleod’s Dictionary of political economy 299 13.3.2.3 The crisis of 1857 In contrast to the crisis of 1847, which was merely ‘the inevitable termination of the multiplicity of derangements of the proper course of business’, the crisis of 1857 (recounted in pp. 638–641) ‘revealed a depth of rottenness in the commercial world which appalled every one’. In addition, it was more intense than the previous crisis and broke out unexpectedly. Difficulties began in 1855, causing a drain on the resources of the Bank of England, which reacted by increasing the discount rate, a measure approved by Macleod, praising the directors for having ‘learnt from experience’ and noting that ‘these very variations . . . preserved the security of the Bank’. The crisis actually broke out in the autumn of 1857 when it became known that railway companies in the United States had been paying dividends out of unearned profits. This led to the failure of several American banks, before producing within a few weeks an out-and-out run on New York banks that soon spread to banks in Great Britain. Macleod gives an almost day-to-day account of the events between September and December with the names of banks that were closed, and the increase in the discount rate by the Bank of England, the Bank of France and the Bank of Hamburg. This time the Bank of England behaved as if it were expecting a suspension of the Act and, sure enough, the government soon informed the directors that it would propose a ‘Bill of Indemnity’ and support them in the event that the bank was obliged to issue more notes than authorized by the Act. On this occasion the mere publication of the government letter was ineffective and, in November, ‘an Act was passed permitting a temporary suspension of the Bank Act till February 1st, 1858, provided that Directors did not reduce their discount below 10 per cent. On 24th December they reduced it to 8 per cent., thereby reviving the operation of the Act’. These events are retraced in three tables provided in the subentry, which otherwise has little more to offer than historical interest. The first table highlights the alarming state of the Bank of England’s reserves on 11 and 12 November, which was the day the government issued its letter. In contrast to what happened in 1847, the government’s letter in itself achieved no miracle, as evidenced by the table depicting the issues of the Bank in excess of their statuary limit, between 13 and 30 November. Finally, the weekly statement of the Bank’s Issue and Banking Departments, such as they had been distinguished by the Act of 1844, is presented for the last quarter of 1857.

13.3.3 The opinions of ‘authorities’ on the subject of crises The next four pages of the entry (pp. 641–645) relate the debates on the policy of the Bank of England throughout the century preceding the publication of the Dictionary. They contain many quotations, mainly Thornton’s deposition before the Committee of the Lords of 1797, a page-long excerpt from Thornton’s Enquiry into the nature and effects of the paper credit of Great Britain (1802), passages from the Bullion Report, and several quotations of Robert Peel.

300 Cécile Dangel-Hagnauer Although the length of the passages quoted from Thornton is rather excessive, the choices made by Macleod point to his clear understanding of the problems at stake, namely, the part played by the Bank of England in performing its role of lender of last resort. In particular, he notes that, for Thornton, increasing/decreasing the quantity of banknotes will tend to prevent/promote a run on the Bank. Macleod also notes Thornton’s discussion of the ‘rapidity of the circulation of bank notes’ and its relation to the propensity to hoard. Accordingly, Thornton considers it is impossible to estimate in advance the demand for banknotes, because it depends on several factors, in particular on the state of confidence, which influences instruments to circulate more or less rapidly, depending on whether they are spent or hoarded. Commenting on the special issue of Exchequer Bills in 1797, Thornton stresses the role it played in restoring confidence, and the fact that it was a profitable operation for the government. Macleod also quotes the testimonies of the Governor and Deputy Governor of the Bank of England before the Bullion Committee and an excerpt from the Bullion Report, stating that any limitation of the issues of the Bank of England would have damaging effects, especially during a commercial crisis. This opinion was also supported by the authors of the Resumption Act of 1819 (which officially reinstated the gold standard), in particular Robert Peel, who introduced the bill into Parliament, and for whom setting a definite limit to the amount of issues was unwise, as the quantity of circulation that was required depended on the price of gold and on the situation of the foreign exchanges, as well as on the state of confidence. All these references to ‘authorities’ enable Macleod to establish a contrast between the lessons that had been learnt from the crises that occurred before 1840 and the doctrine that presided over the framing of the Bank Act of 1844. In particular, Macleod points to Peel’s volte-face and his adherence to the currency principle after having previously rejected the idea of establishing a limit on the Bank of England’s issues. In the end, the judgement of the authorities of the former times proved to be superior, according to Macleod, as the Bank of England was granted permission to increase its issues beyond what the Act authorized in 1847 and was actually driven to do so in 1857, thereby violating the law.

13.3.4 On the course of action to pursue in the event of commercial crises In the final two pages of the article (pp. 645–647), Macleod states his own views on these issues. First, he reaffirms his disagreement with the currency principle: The arbitrary limitation of the word Currency to bank notes payable to bearer on demand exclusively, is . . . quite erroneous and contrary to all sound philosophy. The Currency Principle itself is a pure delusion; and . . . it is the greatest delusion of all to suppose that Bank Act of 1844 carries it out. (p. 645) For Macleod, the main source of this ‘delusion’ lies in a ‘mistaken view of the nature of credit’ and money:

Henry Macleod’s Dictionary of political economy 301 Nothing is more common than to say that money has intrinsic value, and that paper is only the representation of value. The very contradiction of the ideas involved in this language is shewn under CREDIT, CURRENCY, VALUE. It is totally forgotten that money has no value except what it will exchange for, and that whatever will exchange for gold is the value of gold. Paper that is always exchanged for gold . . . is equal in value to gold. The true problem then, is to discover how paper may best be kept at the value of gold. (ibid.) Second, Macleod emphasizes what he considers as both the merits and the drawbacks of the Act of 1844. Accordingly, Macleod considers that the Act ‘compelled the Directors to pay a strict attention to the rate of discount’, by inducing them to raise it to avert a foreign drain of reserves. He also welcomes the fact that the public had begun to understand the need to do so. On the other hand, Macleod underlines that the Act had the effect of transforming a crisis, which the Bank of England had no power to prevent, into an outright panic. To make matters worse, the Act created an anomalous state of affairs by obliging the Bank to commit a breach of law, a ‘pernicious [situation] in a constitutional country’. Third, Macleod argues that in times of crisis, raising the discount rate is insufficient. Quite the contrary, since the expectation that it will be raised induces agents to borrow more and to increase their hoards, as it ‘is then not a question of profit, but of existence’, a statement that is reminiscent of the view developed by Thornton. In contrast, the decision to increase the issue of banknotes has the effect of causing hoarded ones to come ‘out of their hiding places’. A fourth issue to which Macleod returns is whether insolvent borrowers should be bailed out. Whereas, in principle, ‘insolvent houses should be swept away’, the author also points to the fact that insolvent borrowers have creditors, who do not all deserve to fail, all the more so as ‘the modern system of credit’ causes ‘the mischief’ to extend even to the ‘paper of the greatest houses’, which itself becomes ‘unmarketable’. The climate of uncertainly thereby created by the ‘general distrust’ that characterizes crises requires that the Bank provide large-scale assistance, simply because ‘The Bank only has the means of judging which houses are solvent and ought to be supported, and which are insolvent and ought to fail’. The article ends with some reflections on the constitution of the Bank of England. While Macleod believes that the Act of 1844 should be repealed, he is also quite certain that the directors would now manage the bank on ‘sound principles’. Reaffirming his disapproval of the monopoly of the Bank of England – considering it is ‘utterly opposed to all sound principles of political economy’ – he argues that it had created an abnormal situation where the directors could claim simultaneously that they exercised ‘a great function of State’ and that they ought ‘to be exempt of all interference as a private body’, whereas, on the other hand, ‘their interests as merchants were opposed to their duty as bankers’. Nevertheless, Macleod seems confident that the risk no longer existed that the ‘latter gave way to the former’. In other words, like Bagehot (1873), he accepts the situation created by historical tradition, despite regretting that the Bank of England had become ‘an engine of the State’.

302 Cécile Dangel-Hagnauer 13.4 CONCLUDING REMARKS The dictionary format has the advantage of imposing constraints on its contributors. Accordingly, several of Macleod’s deficiencies raised by commentators such as Maloney do not appear here. The tone is moderate, the language is rarely excessive and the piece is clear, well-written and does not go into overly technical legal details, while remaining well documented, in particular thanks to the insertion of several tables containing trade and banking statistics. More specifically, the Dictionary’s entry on CRISIS, COMMERCIAL provides an interesting historical account of the events that unfolded at the time of the crises that occurred throughout the century preceding the publication of the Dictionary. The scope of the article is, however, quite narrow, as it concerns central bank policy only and deals, almost exclusively, with the evolution of the doctrine that underpinned the action taken by the Bank of England when faced with the various crises. As a result, apart from a few short incursions into difficulties met by Scottish banks, the mention of the events that took place in the United States at the onset of the crisis of 1857, and some cursory allusions to the Banks of France, Amsterdam and Hamburg, notably the application of the currency principle to the management of the latter two, the focus is chiefly on crises in England. Consequently, the reader whose curiosity may have been aroused by the title of the entry, CRISIS, COMMERCIAL, is more than likely to be disappointed. Eager to understand what crises are, why the disruptions that affect credit recur periodically, and how they relate to the disturbances affecting production and trade that accompany them, he or she is left unsatisfied. Admittedly, the introduction does provide a few indications as to the role played by credit in both stimulating economic activity and causing overproduction, and it clearly appears that this ambiguous outcome is the work of speculation. Yet no proper analysis of speculative behaviour enables us to understand its intimate relationship with credit and its effect on prices. Whereas Macleod is prolix when it comes to expounding his views on subjects related to credit and banking, here it is quite clear that he has little to say. The reader would have also appreciated, in the course of the exposition of the historical events that accompanied the various crises, some analysis of the ‘causes’ that triggered each crisis, at least as an illustration of the four causes the author lists in his introductory section. For example, while noting that the Bank of England maintained low interest rates in the spring of 1847, whereas speculation was on the rise, Macleod does not seize the opportunity to analyse and illustrate the actual effect of such conduct. Whereas he states the discovery of new markets as one of the causes conducive to crises, he only mentions in passing the losses related to the Mexican mining schemes and to the South American 1822–1825 episode. Conversely, whereas Macleod refers to the ‘rottenness’ of the commercial world, embezzlement is not listed among his causes of crises. Moreover, although Macleod often cites John Stuart Mill throughout his works, his attention was seemingly not drawn to Mill’s analysis of the role of speculation in bringing about crises, whereas the latter’s first writings on the subject date back

Henry Macleod’s Dictionary of political economy 303 to as early as 1826 (Forget, 1990).9 Indeed, the following flat statement is the closest Macleod comes to depicting the unfolding of the crisis: The speculative fever was at its height in the first four months of 1825, when it had spent its force, and came to an end in the natural course of things. . . . In the meantime that slack water, which Mr. Tooke observes always precedes a great turn of prices, took place. The increased prices of commodities which speculation had caused, could no longer be kept from being realized, and prices fell as rapidly as they had risen. (p. 632) In other words, the crisis is thus the ‘natural’ outcome of speculation. At some point, the rise in prices stops and is followed by their decline. Besides, sooner or later the crisis comes to an end, thanks to the intervention of the Bank of England, but Macleod makes no explicit mention of the recovery and the return of prosperity. In addition, whereas Mill advanced an explanation of the periodic recurrence of crises (Besomi, 2010, p. 97), Macleod is content with just asserting that ‘Every one knows that commercial crises will recur periodically’ (p. 647). An issue that would be worth addressing more thoroughly concerns the place of Macleod’s contribution within the nineteenth-century English debates on money and banking. Whereas he repeatedly states his hostility with regard to the currency principle, he shows no clear adherence to the banking school. On the contrary, he underscores his disagreement with Tooke as to the effect of the Act of 1844 on the variations of the discount rate (too frequent, according to the latter). On the other hand, he expresses his disapproval of the monopoly of the Bank of England, but it is more for doctrinal – considering it is contrary to the principles of sound laissezfaire economics – and practical – arguing it has led to the development of weakly capitalized country banks – reasons, than on analytical grounds. Accordingly, Charles Coquelin is granted a short entry in the Dictionary, but Macleod makes no mention of his position in favour of free banking (on which, see Chapter 8). Yet Macleod developed both an interesting conception of money and an advanced view of banking, and clearly understood the need for a lender of last resort, but he did not combine these elements together within a comprehensive theoretical framework. In other words, he produced the necessary building blocks, but he did not endeavour to construct a coherent theory of money, credit and banking. More specifically, a question that comes to mind is to what extent Macleod can be considered as having participated in the process that led to the widespread acceptance, within what Fetter (1965) labels ‘British monetary orthodoxy’, of the role of the central bank as lender of last resort. In the historical process that led to Walter Bagehot’s specification of the functions of the lender of last resort, Macleod appears to be more a witness than a real participant. In effect, he clearly shows his approval of Thornton’s assessment of the events of 1797, and successfully picks up the main ingredients that make up Thornton’s conception. He also cites Sir Francis Baring, but does not pick up his terminological usage of ‘dernier resort’. Like Bagehot, he considers that it is the central bank’s role to increase the issue of

304 Cécile Dangel-Hagnauer banknotes in the advent of a panic. In particular, that the central bank will behave in this fashion is something that must be publicly stated and known to everyone. He also believes that the central bank should only bail out solvent borrowers. On the other hand, although he is in favour of raising the discount rate in times of panic, he does not go so far as to explain, like Bagehot, the rationale behind imposing a penalty rate, in particular that doing so would encourage greater efficiency in bank management.10 Furthermore, he does not explicitly defend the principle that the central bank should hold large reserves. Overall, the greatest shortcoming of this entry lies perhaps in its general lack of originality. A large proportion of the entry is made up of quotations from ‘authorities’ heard by the parliamentary committees that were appointed in the wake of the different ‘commercial catastrophes’. More disappointing still is the fact that, although Sir Francis Baring is cited twice and Henry Thornton is generously quoted, the notion of lender of last resort does not stand at the centre of his argument, whereas Macleod clearly understood that this was the function of the Bank of England that was at work each time it intervened to put an end to bank runs and panics. Unlike Thomas Joplin and Vincent Stuckey, who were important actors during the 1825 crisis and the 1832 hearings (O’Brien, 2003), Macleod did not take part in developing the concept of lender of last resort. Nor did he participate, alongside Bagehot,11 in disseminating the idea of lender of last resort and helping both the economics profession and the public to understand its importance. This is precisely what could have been expected from a dictionary article – another missed opportunity, another instance of his ‘being out of touch’ (Maloney, 1985, 140)?

NOTES 1 Several entries refer to articles that never came into being. For instance, ACCUMULATION refers to COMPANY, and COMPANY refers to PARTNERSHIP. The dictionary ends with an entry devoted to CZÖRNIG, C.F. VON, followed by an additional one on COOPERATION, apparently forgotten along the way, which also refers to PARTNERSHIP. 2 For details, see Chapter 2, Section 2.3 of the present volume. 3 A notable exception is Jevons; see White, 2004. 4 Interestingly, the bibliography that Juglar appends to his dictionary article of 1891 (see Chapter 12 of the present volume) refers to Macleod’s entry on crises in his Dictionary of political economy. However, the designation of the entry (‘Banks crisis’) is erroneous. 5 Macleod’s contribution to the theory of credit was the subject, early in 1866, of N. G. Koopmans’s Ph.D. dissertation in Belgium. Also noteworthy is M. Lindner’s (1929) Ph.D. dissertation on the same subject and defended in Germany. Both references are cited by Hayek in 1933. 6 Macleod makes extensive use of capital letters, emphasizing words by writing them in upper-case. These words have been emphasized here with the use of italics. 7 For an in-depth analysis of the relation between Jevons and Macleod, see White, 2004. 8 This distinction is reminiscent of Juglar’s division between the ‘determining cause’ of all crises and the ‘occasional causes’ or particular circumstances in which crises burst out; see Chapter 12 of this volume.

Henry Macleod’s Dictionary of political economy 305 9 This is, in fact, unsurprising, considering Macleod’s general assessment of J. S. Mill, stated in his History of Economics and cited by White, 2004: ‘Every page of [J. S. Mill’s] work is full of the most glaring ignorance and blunders; and there is scarcely a single point in which he does not contradict himself. Now, in sober seriousness, we must ask how is this more consistent with scientific morality than cheating at cards, or forgery, or issuing base coin’ (Macleod, 1896b, p. 123). 10 As noted by Laidler, 2003, p. 70, fn. 16), Goodhart takes issue with T. M. Humphrey’s (1987) interpretation of the ‘very high’ rate, which Bagehot advocates the central bank should apply to protect reserves, as a ‘penalty’ rate (Humphrey, LENDER OF LAST RESORT, in →The new Palgrave dictionary of money and finance, 1987); see also p. 71, fn. 18. 11 As Fetter (1965, pp. 269–271) writes: ‘In 1860, . . . [Bagehot] became the editor of the Economist . . . Bagehot, despite his devotion to the principle of free trade, . . . brought in the idea of the Bank as a lender of last resort in a way that ran counter to much of James Wilson’s thought expressed earlier in the Economist’.

REFERENCES Anonymous, 1858, A dictionary of political economy: biographical, bibliographical, historical, and practical. By Henry Dunning Macleod, Esq., of the Inner Temple, barristerat-law. Part I. Longman and Co. The Literary Examiner, Issue 2655, Saturday, 18 December. Anonymous, 1902, Obituary. The Economic Journal, 12: 48, December, pp. 583–584. Bagehot, W., 1873, Lombard Street – A description of the money market (London: John Murray). Baring, Sir F., 1797, Observations on the establishment of the Bank of England and on the paper currency of the country (New York: Augustus M. Kelly, 1967). Besomi, D., 2010, The periodicity of crises. A survey of literature before 1850, Journal of the History of Economic Thought, 32: 1, pp. 85–132. Chevalier, M., 1862, Des définitions et de la nature du numéraire et du crédit – A l’occasion de deux ouvrages de M. H. D. Macleod, Éléments d’économie politique et Dictionnaire d’économie politique, Journal des Économistes, 2: 35, August, pp. 173–191. Fetter, F.W., 1965, Development of British monetary orthodoxy – 1797–1875, Cambridge, MA: Harvard University Press, reprinted (Fairfield: Augustus M. Kelly, 1978). Forget, E. L., 1990, John Stuart Mill’s business cycle, History of Political Economy, 22: 4, pp. 629–642. Fryer, S.E., rev. Maloney, J., 2004, Macleod, Henry Dunning (1821–1902). In Oxford dictionary of national biography (Oxford University Press) [www.oxforddnb.com/view/ article/34787, accessed 9 August 2009]. Gurley, J. G. and Shaw, E. S., 1960, Money in a theory of finance (Washington, DC: Brookings Institution). Kircheisen, J., 1864, Ein englisches und ein italienisches Wörterbuch der Volkswirtschaft – A dictionary of political economy: biographical, bibliographical, historical, and practical. By Henry Dunning Macleod, Esq. of the Inner Temple, barrister-at-law, etc. London 1862 u. 63. Vol. I, part 1–7 à 4 sh., Jahrbücher für Nationalökonomie und Statistik, 2, pp. 456–461. Koopmans, N. G. Cnoop, 1866, Macleods Krediettheorie, Ph.D. dissertation (Leuven). Laidler, D., 2003, Two views of the lender of last resort: Thornton and Bagehot, Cahiers d’Économie Politique, 45, pp. 61–78.

306 Cécile Dangel-Hagnauer Lindner, M. 1929, Die Kredittheorie von Henry Dunning Macleod, Ph.D. dissertation (Görlitz). Macleod, H. D., 1851, The results of the operation of the poorhouse system in Ross (Inverness: Courier Office). Macleod, H. D., 1855–1856, The theory and practice of banking: with the elementary principles of currency; credit; and exchanges, Vols 1 and 2 (London: Longman, Brown, Green and Longmans). Macleod, H. D., 1858, The elements of political economy (London: Longman, Brown, Green, Longmans and Roberts). Macleod, H. D., 1862, On the definition and nature of the science of political economy (Cambridge and London: Macmillan). Macleod, H. D., 1872–1875, The principles of economical philosophy, Vols 1 and 2 (London: Longmans, Brown, Green, Reader and Dyer). Macleod, H. D., 1875, What is political economy? Contemporary Review, 25 May, pp. 871–893. Macleod, H. D., 1882, Lectures on credit and banking (London: Longmans, Brown, Green, Reader and Dyer). Macleod, H. D., 1887, On the modern science of economics (London: John Heywood). Macleod, H. D., 1889, The theory of credit, Vols I and II (London: Longmans, Green & Co). Macleod, H. D., 1894, Bimetallism (London: Longmans, Green & Co.). Macleod, H. D., 1896a, Great Britain. In A. E. Horn, H. D. Macleod and J. P. Townsend (eds), A history of banking in all the leading nations, Vol. 2 (New York: Editor of the Journal of Commerce and Commercial Bulletin), pp. 1–337. Macleod, H. D., 1896b, The history of economics (London: Bliss Sands & Co.). Macleod, H. D., 1898, Indian currency (London: Longmans, Green & Co.). Maloney, J., 1985, Marshall, orthodoxy and the professionalisation of economics (Cambridge: Cambridge University Press). O’Brien, D. P., 2003, The lender-of-last-resort concept in Britain, History of Political Economy, 35: 1, pp. 1–19. Richelot, H., 1863, Une révolution en économie politique – Un exposé des doctrines de M. Macleod (Paris: Capelle). Schumpeter, J. A., 1954, History of economic analysis, reprinted (London: Routledge, 1994). Skaggs, N. T., 1997, Henry Dunning Macleod and the credit theory of money. In A. J. Cohen, H. Hagemann and J. Smith (eds), Money, financial institutions and macroeconomics (Boston: Kluwer Academic Publishers). Skaggs, N. T., 2003, H. D. Macleod and the origins of the theory of finance in economic development, History of Political Economy, 35: 3, pp. 361–384. Skaggs, N. T., 2004, Macleod, Henry Dunning (1821–1902). In D. Rutherford (ed.), The biographical dictionary of British economists (Bristol: Thoemmes Continuum). Thornton, H., 1802, An enquiry into the nature and effects of the paper credit of Great Britain, edited and with an Introduction by F. A. Hayek (London: George Allen & Unwin, 1939). White, M. V., 2004, Sympathy for the devil: H. D. Macleod and W. S. Jevons’s theory of political economy, Journal of the History of Economic Thought, 26: 3, September, pp. 311–329.

14 Adolf Wagner Economic crises, capitalism and human nature Vitantonio Gioia

Handwörterbuch der Volkswirthschaftslehre (1866, 1870), edited by H. Rentzsch, Leipzig: Mayer, 1866, and Julius Klinkhardt, 1870.

14.1 THE HANDWÖRTERBUCH DER VOLKSWIRTHSCHAFTSLEHRE The Handwörterbuch der Volkswirthschaftslehre (1866, 1870) is a significant work published during an extraordinary phase of the development of German social sciences, which was committed to the making of the ‘bürgerliche Gesellschaft’. A fundamental element of this process was given by the progressive emancipation of the individuals from the oppressive control ‘of the old Ständestaat (corporative state)’ (Schiera, 1989, p. 12). The rising autonomy of the social sciences, as an essential aspect of the process of ‘requalification of German liberalism’, led to a general reconsideration of the role of the state, defining new institutional models, original political ends and new kinds of relationships between political and economic space. In that context, the Handwörterbuch was explicitly conceived as a useful initiative to spread those liberal ideas that were able to bridge the gap between the old economic culture and the new models of economic behaviour. In Wagner’s opinion, the Handwörterbuch represented that radical kind of liberalism in Germany defined as Manchesterism (Manchester-Richtung) (Wagner, 1907–1908, Vol. 1, pp. 13, 23). In the Handwörterbuch, political economy was generally conceived as a part of the sciences of the state according to the cameralistic tradition and perceived as an autonomous science, able to develop a significant role in the process of cultural changes of German society (Höhmann, 2001, p. 189). In the Introduction to the Handwörterbuch der Volkswirthschaftslehre, Rentzsch defined its tasks as follows: 1

to build a comparative analysis between economic theories, taking into due consideration ‘the questions of the present’;

308 Vitantonio Gioia 2 3

to emphasize the relationship between the theoretical and the practical dimensions of the economic issues; to insert economic theorizing within the context of ‘different legislations’, in order to be able to evaluate ‘their influence’ on the necessary political reforms. (Rentzsch, VORWORT, p. i).

The Handwörterbuch wanted to represent ‘economic progress in an effective way’, placing in the foreground authors who have had a significant role ‘in the scientific making of the political economy’, but not neglecting the voices of their opponents, when their reasons were worthy of consideration (VORWORT, p. i). The dictionary was addressed to people who could play a significant role in the modernization process of Germany: the ‘scholars’, who aimed to grasp economic theories with a comprehensive view in the perspective of the solution of contemporary problems; the ‘economic corporations’ (chambers of commerce and other associations), which promoted the diffusion of new views among the economic agents; and, finally, the social scientists, who could use the Handwörterbuch as a ‘reference book’. In Rentzsch’s opinion, the Handwörterbuch, given its structure, ‘generally would not have left researchers without the expected answers’ (VORWORT, p. iv). In this way it will contribute to the increase and diffusion of economic culture and it will be able ‘to pave the way for economic reforms sustained by the strength of public opinion’ (VORWORT, p. iv).

14.2 ADOLF HEINRICH GOTTHILF WAGNER Adolf Heinrich Gotthilf Wagner was born at Erlangen on 25 March 1835. He studied jurisprudence and political science at the universities of Heidelberg and Göttingen. He was professor of political science at the universities of Dorpat and Freiburg. In 1870 he held the chair of Staatswissenschaften at the University of Berlin, becoming its Chancellor in 1895. He was considered to be one of the most important economists of the Bismarck period and was appreciated for his contributions on monetary theory and banking. Roscher regards him ‘as a master in those fields of inquiry’ (Roscher, 1874, p. 1004), and Schmoller, briefly highlighting Wagner’s scientific contribution, emphasizes the significant role of ‘his monographic works on banking and on monetary theory’. Only afterwards, Schmoller adds, ‘does he undertake new pathways under the influence of Schäffle, Rodbertus and of socialistic ideas’, writing a systematic and valuable treaty on public finance. As a consequence, he turned his interests towards the ‘basic concepts’ of economics, reflecting on the fundamental aspects of the juridical system, socialism and the theory of population (Schmoller, 1923, p. 189; Schumpeter, 1925, p. 116). Wagner was acutely aware of the implication of the ‘social question’ and acknowledged the need for social reforms. For this reason, he took part with G. Schmoller, Lujo Brentano, Ernst Engel, B. Hildebrand, W. Roscher and others

Adolf Wagner on crises, capitalism and human nature 309 in the foundation of the Verein für Sozialpolitik (1872). Very soon, however, he had reservations, particularly with regard to the political perspectives that began to be prepared in that laboratory. As a consequence, he distanced himself from the Verein, and at the end of the 1870s he joined the Social Christian Party, founded by Adolf Stöcker in 1878 (Schumpeter, 1925, p. 169). He represented the German Conservative Party in the Prussian Lower House from 1882 to 1885. Wagner had a strong influence on German scholars in the field of social sciences. It suffices to recall the reflections of F. Tönnies, who explicitly stated that he considered A. Wagner as a model. ‘I followed – he maintained – and follow with passion the strong efforts of Albert Schäffle and Adolf Wagner and their works’ (Tönnies, 1979, p. 11). In his opinion, Wagner in the Grundlegung der politischen Ökonomie (1892) became, ‘under the influence of a genuine socialist [Rodbertus], a supporter of the extension of State intervention and of legal regulation of every private activity’ (Tönnies, 1979, p. 19; Álvarez-Uría and Varela, 2004, pp. 193–194). The outcome of this approach was Wagner’s law, which promoted the essential role of the state in determining the social condition for the balanced growth of a capitalistic economy. Wagner enunciated a first version of his law when he was a professor at the Commercial Academy in Vienna (1858–1863) and was working on the theory of public finance. In this respect, Wagner disagreed, like many German economists, with the Manchester School about the role of the state as a nightwatchman. He insisted on the necessary ‘expansion of state functions’ in relation to the progressive complication of economic organizations and considering the increasing harshness of the class struggle (Wagner, 1892; French translation, 1912, pp. 379 ff.). In Wagner’s opinion, the state has an essential subsidiary role by creating ‘a legal infrastructure in order to enhance cultural and economic development’. Besides, such an intervention ‘might lead to a more equitable distribution’ (Backhaus, 2003, p. 131). With strong vis polemica, Wagner criticized many colleagues, from L. Brentano to Dühring and the representatives of the German historical school. Particularly relevant was the antagonism between ‘the two major representatives of German economics’: Wagner and Schmoller (Tönnies, 1979, p. 26). Nevertheless, in Tönnies’s opinion, beyond their methodological and political disputes, their common end was clear: to overcome the old approach of English classical economics and to open economic theorizing to historical and sociological motivations. Wagner, ‘aware as any of the historicists of the infinite complexity of economic reality’, rejected – as did Schmoller – ‘the notion of natural rights as conceived by the classicists, on the ground that rights were societal creations’ (Seligman, 1962, p. 33; Gide and Rist, 1909, p. 480). In his review of Marshall’s Principles, Wagner criticized as follows Schmoller and ‘the extreme German representatives of the historical school’: Not only the younger Austrian school, Menger, Böhm-Bawerk, Sax, but many German writers who stand apart from that movement, even the founders and most uncompromising representatives of the older German historical school, Roscher and Knies, with scholars like the late Professor Nasse, and many

310 Vitantonio Gioia among the living – none would wish be judged abroad by the narrow opinions of the younger historical school, more particularly not by the opinions of the scientific head of that school, Professor Schmoller. (1891, p. 319) Wagner then added: it is true that most of us in Germany are ‘so far members of the historical school that we point to the need for induction side by side with deduction; that we warn against hasty generalization, against exclusive reasoning on the basis of economic self-interest; that in practical problems we have no faith in any absolute solution, and insist upon the principle of relativity’ (Wagner, 1891, p. 319). These approaches, as is well known, are not only shared by Gustav Schmoller (Schmoller, 1923, Vol. I, pp. 100 ff.; 1898), but are explicitly recalled by Marshall in his Principles with reference to Schmoller and his methodological orientation (Marshall, 1920, p. 29). Schmoller saw two inconsistencies in Wagner’s position. First, notwithstanding his liberal views in economic matters, Wagner’s ethical approach to the analysis of economic phenomena assigned ‘to the law and to the state’ ‘a more significant role than that imagined by the scholars of the classical school’. Second, while Wagner advocated the integration of theory and history, in his defence of the Ricardian approach he clearly underestimated – in Schmoller’s view – its implications in the method of long-term analysis, which severs theory from history. Nevertheless, in his address (5 March 1905) for Wagner’s seventieth birthday, Schmoller acknowledged that he not only founded (with Schäffle and Rodbertus) ‘so-called state socialism’, but worked also in the making of ‘an intermediate path between the old and the new in economics’ (Schmoller, 1913, p. 282; see also Salin, 1944, p. 158). In the future, he added, Wagner will be considered (with Rodbertus and Schäffle) as an influential representative of a ‘predominant orientation of German economics of the last century’, because ‘state socialism is an indispensable component in the development of our political and economic ideal world in the crucial struggle between individualism and socialism’ (Schmoller, 1913, p. 283). In conclusion, the theoretical distances between them were less relevant than the harshness of their reciprocal criticisms in some periods would lead us to believe. It is not by chance that Jonas defined their contrast as like a skirmish (Vorgefecht), which only superficially seemed to anticipate the Methodenstreit (Brinkmann, 1937, pp. 126–127; Jonas, 1964, pp. 122–123). It suffices here to recall what Wagner wrote in 1895: The entire historical school, the younger ones in a livelier way . . . , reacts against the inquiry method of later English and continental economics, against the overestimation of speculative deduction, addressing itself mainly to the inductive method, history, statistics and the use of direct observation. The German historical school considers the economy as an historical product, which could not be sufficiently explained through abstract speculation. It

Adolf Wagner on crises, capitalism and human nature 311 begins, then, the correction of the unilateral and narrow economic psychology of the British doctrine . . . (p. 18) Adolf Wagner died on 8 November 1917, the same year as his great opponent, Gustav von Schmoller. This death marked the end of an epoch, which saw German economics become an international point of reference not only for economists, but also for sociologists and other social analysts.

14.3 THE GERMAN DEBATE ON CRISES AND WAGNER’S CONTRIBUTION As Mitchell noted, for a century or more Western Europe experienced ‘at intervals, speculative manias, glutted markets, and epidemics of bankruptcy’, but the real ‘discovery of the problem’, concerning the necessary relationship between capitalistic dynamics and fluctuations of economic affairs, arises only in the course of the nineteenth century. The structural change in the capitalistic economy, and rapid technological transformation, forced, from 1815, ‘the problem to the fore’ (Mitchell, 1927, p. 3). Contrary to what happened in other countries, German economists immediately manifested a peculiar sensitivity towards this issue. They ‘contributed some notable surveys . . . , when comparatively very little work was being attempted on it by English theoretical economists’ (Hutchison, 1953, p. 132). Roscher, Nasse, Wagner, ‘and finally Spiethoff, not to mention the followers of Marx and Rodbertus, all contributed to build a “body of doctrines” which was significant and largely influential on the development of the analyses of economic crises and business cycles’ (ibid.). The reasons for this strong interest probably stem from the approach of the German economists, aiming to create a fruitful bridge between theories and history, in order to overcome what they perceived as the limits of the ‘speculative deduction’ of the English school. Of course, they generally criticized not the use of deductive procedures in economic analysis, but the fact that they were used ‘too unilaterally’ and ‘with little caution’, demonstrating their incapability of explaining economic and social changes (Wagner, 1895, p. 14). Wagner’s contribution must be seen in the light of the many serious reflections on economic crises that took place in Germany after K. H. Rau’s Malthus und Say über die Ursachen der jetzigen Handelsstockung, published in 1821. In it Rau reconstructed the debate between Malthus and Say by means of abstracts from Malthus’s Principles and through the correspondence of J.-B. Say with the English economist. What struck German economists was the fact that Rau considered seriously the objections that Malthus addressed to J.-B. Say. So, while he considers the Malthusian idea concerning the possibility of a general glut unacceptable, at the same time he calls for an adequate evaluation of the relationship between the increase of commodities and the dynamics of income distribution (Rau, 1821, p. 262). It is necessary, he points out, to avoid the temptation to consider commodities as an end

312 Vitantonio Gioia in themselves without relating them to human needs and people’s capability to buy them (ibid., pp. 263 ff.). From this point of view, Rau’s attention to the theories of Malthus and Sismondi does not diminish his trust in free competition and in the capability of market mechanisms to produce satisfactory balances. It emphasizes, if anything, the necessity of a more careful analysis of the conditions that can assure market balances, given the rapidity of economic changes, the demographic dynamics and the transformation of consumption patterns (Rau, 1855, paragraphs 327–331; Italian translation, pp. 468 ff.; Hagemann, 1995, pp. 177 ff.) Wagner’s critical target was Roscher’s view on crises (DIE PRODUCTIONSKRISEN MIT BESONDERER RÜCKSICHT AUF DIE LETZTEN JAHRZEHNTE, in →Die Gegenwart, 1849; for a full discussion, see Chapter 7). Roscher’s position is in many aspects similar to that of Rau. He unrolls his reflections in the context of a classical approach (Schumpeter, 1986, p. 802; Ikeda, 1995; Streissler, 1995; Gioia, 2000, pp. 33 ff.), maintaining that in a progressive and dynamic economy it is difficult to take for granted the balance between the supply and demand of commodities. Of course, a ‘proportional increase of production and consumption, supply and demand is the essential condition for the prosperity of every economy’. The problem is that in capitalism, ‘troubles’ (Störungen) periodically occur; they manifest themselves as imbalances between the supply and demand of commodities, often assuming the features of a general disease of the economic system. For this reason we cannot consider – as J.-B. Say does – these phenomena as marginal in the analysis of today’s economy (PRODUCTIONSKRISEN, p. 724). Roscher addressed two kinds of objections to Say: one was epistemological in nature; the other concerned the content of his theory. As far as the first aspect is concerned, Roscher points out that in a monetary economy characterized by an extraordinary dynamism and by strong pressure on individuals, who are required to take advantage of every favourable economic occasion in the search for increased personal earnings, it is difficult to balance in an optimal way the level of individual plans and the level of macroeconomic movements. Perturbations normally occur as phenomena produced by the intense dynamism of economic systems (PRODUCTIONSKRISEN, p. 723). Anyway, to represent the capitalistic economy as a stationary economy, basically grounded on barter (exchanges of commodities with commodities), is simply a mistake. In fact, the introduction of money in the economic circuit determines phenomena that affect consumers’ and producers’ behaviour in a significant way (Hagemann, 1995, p. 180; Gioia, 2001): Say’s theory strictu sensu is brought into question by the simple introduction of monetary exchange. As long as primitive and rough barter predominated, the goods supplied and demanded were immediately comparable. But with monetary mediation the buyer is in a condition to buy only after a while or to postpone, according to his will, the other half of the exchange. As a consequence, supply will not imply a corresponding demand on the market. Then the sudden reduction of the medium in the circulation process can generate a general crisis. (PRODUCTIONSKRISEN, p. 726)

Adolf Wagner on crises, capitalism and human nature 313 As for the second aspect, the empirical evidence, referring to today’s economy, shows that ‘not every production implies the guarantee of a corresponding demand’. As a matter of fact, such an eventuality could occur ‘only if production harmonically develops in all the sectors of the economy’ (PRODUCTIONSKRISEN, p. 727). The problem is that only when the products are on the market will we be able to ascertain the effects of changes and the relevance of imbalances. These are inevitable if we consider the following features of capitalism: 1

2

3

4

the increasing division of labour: ‘the more the division of labour is developed, the more it is difficult to maintain the supply of a good always in equilibrium with future demand’ (PRODUCTIONSKRISEN, p. 728); the fact that every change involves significant effects in the income distribution and in consumption level, producing further imbalances between supply and demand (PRODUCTIONSKRISEN, p. 726); uncertainty affects the psychological attitude of entrepreneurs, changing their expectations from optimism to pessimism and leading to relevant reductions of investment levels (PRODUCTIONSKRISEN, p. 723); the adjustment mechanisms are not so instantaneous as Say asserts: the time factor plays a significant role during economic dynamics, amplifying the fluctuations: the one who ‘takes advantages . . . [from the new economic situation] does not increase his consumption so rapidly as someone else is forced to reduce it because of his losses: this is partially due to the simple fact that the first one cannot so precisely calculate the level of his earnings as one who evaluates his losses’ (PRODUCTIONSKRISEN, p. 726).

In conclusion, in Roscher’s opinion, even if Say’s law can have an explicative function with regard to a ‘stationary economy’ with slow demographic dynamics, with a low level of the division of labour and technical progress, it does not apply to an economy characterized by high levels of changes in all its aspects. When Adolf Wagner wrote KRISEN for the Handwörterbuch der Volkswirtschaftslehre (1866), his aim was to respond to Roscher’s objections and to verify whether the new morphology of the capitalistic economy could invalidate the explicative capability of Say’s law. Of course, he did not ignore the rapidity of the economic changes taking place during the second half of nineteenth century, but he was convinced that, with reference to the crises, the explanation of the classical school (newly proposed by John Stuart Mill) was always effective. As far as the first aspect is concerned, Wagner shows deep understanding of the economic changes in his time. He emphasizes the ‘increasing globalization of capital (die wachsende Kosmopolitisirung des Kapitals), the enormous changes in communication forms by land and by sea, the new liberal tendencies in the economic policies of advanced countries, the convergence of national economies on an economic system on a worldwide scale, the rise of credit institutions in Europe . . . lead to great quantities of capital having an extraordinary range of uses’ (KRISEN, p. 537). Ever since 1862 (Die Geld- und Credittheorie) Wagner had been examining this aspect because he was struck by the surprising expansion of the

314 Vitantonio Gioia credit crisis in the US and in Europe: from the beginning to the end of August, the crisis, which started in New York, involved all the financial activities of the US with ‘strong rapidity and intensity’ (Wagner, 1862, p. 266). In a few weeks, the American crisis became a worldwide crisis (ibid., p. 279 ff.). So, ‘the crisis of 1857’ rapidly became ‘the first universal crisis’ (KRISEN, p. 537; see also Herkner, KRISEN, in →Conrad et al., Handwörterbuch der Staatswissenschaften, Vol. 5, 1900, p. 429, further discussed in Chapter 18). Nevertheless, Wagner maintains, if it is true that the first ‘universal crisis’ demands the adoption of new scientific approaches and theoretical innovations in order to grasp the nature and the effects of economic changes, it is doubtful whether such changes have modified the economic mechanisms in such a crucial way as to render Say’s law ineffective. From this point of view, Wagner’s intentions are clear: he wants to show the limits of the Malthusian theory; to demonstrate the inadequacy of Roscher’s criticism of Say’s law; to reaffirm the explicative effectiveness of Say’s law in the version formulated by John Stuart Mill (Herkner, KRISEN, p. 427); and to suggest a pathway by which to mitigate the effects of crises by means of a better control of credit.

14.4 THE MECHANICS OF CRISES AND THEIR EXPLANATION Wagner’s starting point is the traditional distinction between partial or special crises (speciale Krisen) and general crises (allgemeine Krisen). In his opinion, careful analytical work is needed in order to distinguish between recurring or occasional causes in the development of crises. Such work has to be particularly devoted to an adequate evaluation of historical features of every crisis. For this reason, Wagner adds, it is difficult to comprise ex ante and ‘in a precise definition all the determining factors of a crisis’ (Wagner, KRISEN, p. 526). In Wagner’s opinion, at the empirical level every crisis seems to be characterized by the same phenomenology: a great quantity of commodities remain unsold. The following market turmoil brings significant economic losses for the producer and a decrease in investments. Production and credit collapse because money holders do not want to part with money (die zeitweilige Unlust der Geldbesitzer, sich ihre Geldes zu entäu‚ern), by reason of their pessimistic attitude. This makes ‘special crises’ and a ‘general crisis’ comparable. These recurring phenomena could prima facie be compatible with an explanation grounded on an underconsumption theory à la Malthus (KRISEN, p. 532), but this approach has two relevant limits: first, it is based on the analysis of the circulation process and it has only a descriptive function; second, it is unable to distinguish between the several types of crises and is incapable of explaining the factors that change a special crisis into a general one (ibid., p. 529; see also Mill, 2006, pp. 574–576). Wagner criticizes the overproduction view and the Malthusian idea of a ‘general glut’, reminding us that these hypotheses have been successfully demonstrated as unfounded by Say, Ricardo, James Mill and John Stuart Mill: ‘a real general

Adolf Wagner on crises, capitalism and human nature 315 overproduction of all goods and, as a consequence, a lack of market outlets cannot exist, because also in a monetary economy, in the last resort goods are exchanged with goods’ (KRISEN, p. 532). If a particular commodity is overproduced and supplied in excess, a partial glut might occur. However, this means that another commodity has been produced in insufficient quantity, and, as a consequence, competition in a free market will correct such disequilibria. Say’s law shows that the economic system has self-regulatory mechanisms able to determine, under conditions of competition, a dynamic equilibrium between supply and demand. By contrast, the economists who seek to refute it are convinced that these balances are impossible, and try to demonstrate the presence of a kind of structural defect (organischen Fehler) in the economic system. As a consequence, they evaluate as a ‘defect’ what is simply a peculiarity of capitalism (KRISEN, p. 532). In Wagner’s opinion, an adequate explanation of general crises and of their peculiar features implies not only a knowledge of the circulation processes (John Stuart Mill’s ‘mercantile . . . facts’), but especially a deep understanding of the radical changes typical of contemporary capitalism in all the productive sectors. We need, Wagner continues, a theoretical framework able to fix the peculiar character of the economic system (KRISEN, p. 532) and the endogenous reasons that determine the phenomenon of the tendency of profits to a minimum rate. The periodicity of general crises can be understood because the extraordinary increase of wealth in the capitalistic system is deeply intertwined with two significant phenomena: recurring overspeculation and the tendency of profits to fall to a minimum. The latter changes the speculation as a physiological aspect linked to market dynamics into a large pathological phenomenon (overspeculation), preparing the context of the general crisis. Speculation represents a useful phenomenon, given the peculiar features of a capitalistic economy: it makes possible the rapid adjustment mechanisms of prices and quantities of commodities necessary for the optimal working of the economic system, determining sound balances between supply and demand (KRISEN, p. 527). Besides, by means of speculation, capital is channelled towards the sectors where it can be used in an optimal way. So, speculation unrolls a decisive regulatory function with reference to production and commerce by exploiting the effects of price differentials in space and time (KRISEN, p. 527). In Wagner’s opinion, there is another important effect determined by speculative tendencies which should not be underestimated: the low level of discount rate favours credit expansion and the rise of investments also in the presence of a high level of risk. In a phase of growth, characterized by optimistic expectations, entrepreneurs tend to invest in high-risk enterprises, creating or consolidating firms that are useful not only for that specific phase of growth but also for a renewal process of the entire economy. As a consequence, ‘investments in firms with high density of capital, certainly not realizable without this speculative tendency, are promoted’ (KRISEN, p. 530). Moreover, an extensive economic application of new discoveries occurs thanks to the disappearance of the previous constraints, favoured by the optimistic climate determined by the spread of speculative tendencies (KRISEN, p. 531).

316 Vitantonio Gioia Unfortunately, speculation is not ruled by self-regulatory mechanisms and tends to overcome the phase of positive conjuncture. Entrepreneurs, seeking easy profits, increasingly invest in risky activities, encouraged by the possibility of easy access to credit. The speculative circuit enlarges, involving all economic activities and the capital market (KRISEN, p. 531). Overspeculation (Überspeculation) occurs, leading to progressive imbalances between the supply and demand of capital. Credit becomes more costly, the phase of growth ends and panic breaks out (KRISEN, p. 534). At this point, any small and otherwise insignificant event, or a single failure, suffices to widen the credit abuse and generate a negative effect on prices. Nobody grants credit, nobody buys; the crisis breaks out and rapidly spreads to the capital market and to the commodities market (KRISEN, pp. 534–535). In Wagner’s opinion, the complex phenomenology of the crisis is compatible with Say’s law and can be conveniently explicated only thanks to it. He does not take Roscher’s objections into due consideration and even though he acknowledges, as we have suggested before, the features of the new phase of the capitalistic economy, he is convinced that the changes it has undergone do not modify the explicative effectiveness of Say’s law. In Wagner’s opinion, Roscher ‘during his polemic against the view of Say and James Mill . . . did not produce any fact which could render necessary a fundamental modification of it’. On the other hand, neither the introduction of money, nor the emergence of a peculiar mercantile rank, nor the extensive use of credit justifies the refusal to accept Say’s law or to consider the ‘Millian explanation as inadequate’ (KRISEN, p. 532). Probably, Wagner insists, we can accept the ‘practical indications’ of Roscher’s criticisms. They consist in the emphasis he attributes to the distance existing between the over-abstractly conceived formulas and the complexity of the concrete reality of the crisis (ibid.). Nevertheless, if that is true, we can solve the problem not by modifying Say’s law, but by using new analytical devices (especially, deeper statistical researches) in order to increase our knowledge of the economic phenomena. From this larger knowledge, more correct empirical laws are likely to derive (bereits einige empirische Gesetze ableiten können), bridging the gap between theory and history. As a consequence, within the theoretical framework assured by Say’s law, the theory of economic crises becomes simply a problem of more rigorous inductive inquiry (ibid., p. 533). Besides, a better knowledge of the crisis phenomenon could possibly prevent its more negative aspects or, when a crisis occurs, could point the way to the adoption of more adequate measures able to mitigate the intensity of fluctuations. In Wagner’s opinion, also considering this side of the problem, the pathway seems clearly traced: a prudent intervention by the banking system is certainly required, while the serious mistake of direct state intervention (considered as unacceptable and deplorable) should be avoided (ibid., p. 535).

Adolf Wagner on crises, capitalism and human nature 317 14.5 CAPITALISM, CRISES AND ECONOMIC MOTIVES As for the criticism against features of capitalism, which, in Roscher’s opinion, is characterized by recurring disturbances that often turn into general diseases, Wagner moves the attention from the ‘nature’ of the economic system to human nature. As is well known, Wagner criticizes Rau, Roscher, Hermann and others, who define commodities as the starting point of economics; in so doing, they indicate too narrow an object of enquiry. On the contrary, he shares the opinion of Schäffle, ‘who considers man himself as the starting point of economics’ (Wagner, 1892; French translation, 1904, p. 105). This implies that, when we consider man’s activities aimed at satisfying his needs through commodities, we cannot neglect that ‘the existence and the development of every individual derives especially from his social relationships, from that which renders the man a social being’ (Wagner, 1892; French translation, 1904, p. 106; Schönberg, 1882, pp. 40 ff.; Schefold, 2004, pp. 439–440). In particular, the analysis of the evolution of rich and advanced societies enables one to grasp the extraordinary multiplication of human needs as a sort of ‘natural law’. In this respect, however, we have to consider that human beings do not simply represent passive subjects and are able ‘to evaluate their own needs, their extension and the way to satisfy them’, through an adequate moral judgement deriving from an appropriate extension of their moral sphere. On the other hand, only the adoption of this moral view can make compatible the expansion of consumption and the increase of individual earnings with a more equitable mechanism concerning income distribution. The point is to understand that ‘the needs and their development belong . . . to the domain of Ethics, which economic and social science should always reaffirm’ (Wagner, 1892; French translation 1904, p. 109). This being the case, in the context of a free market economy, and also with reference to economic crises, a recurring problem is to individuate not in a kind of pathology or a structural defect of capitalism, but in the consequences of human behaviour. In fact, people tend to expect continuously larger incomes, letting themselves be tempted by speculation and overspeculation. This creates the economic and psychological conditions in which economic crises occur. As a consequence, crises are rooted in a defect of mankind (ein organischer Fehler unseres Geschlechts, wenn man so will) and not in the pathology of the economic system (KRISEN, p. 532). The shift of emphasis from the peculiarity of capitalism towards the limits of human nature leads, in Wagner’s opinion, to a ‘great philosophical problem’ unsolvable in the context of an economic discussion: the relationship between freedom and necessity in a free-market economy (ibid., p. 533; Schönberg, 1882, pp. 42 ff.). In this respect, Tönnies observed, Wagner was strongly influenced by Rodbertus, but, contrary to Rodbertus, he did not acknowledge the roots of the ‘pathological evolution of modern society’. In Rodbertus’s opinion, there is not ‘a single cause’ or a ‘single error’ determining pauperism and glutted markets. As a consequence, we have to inquire into their origin in those ‘social grounds of a general nature’ which are typical of present economic organization. The underestimation of this

318 Vitantonio Gioia aspect will hinder an appropriate economic analysis and a correct judgement on the effects of economic laws (Rodbertus, 1898). On this basis, Tönnies attributed to Wagner the same objections he had attributed to Roscher: the theory of Wagner ‘does not appear satisfactory in several aspects’ (especially as regards the theoretical plan) (Tönnies, 1979, p. 24). Wagner’s reflection is appreciable only for ‘practical applications’ he proposed and for his attempt to insert ‘ethical orientations’ into the social sciences (Tönnies, 1979, p. 18). Besides, it is clear that the Wagnerian difficulty in fixing the pathogenic nature of the capitalistic dynamics shows the limit of classical liberalism as a whole: the incapability of acknowledging the social character of man. For these reasons, the shifting of the analysis from the features of the social system (and its peculiar working mechanisms) to human nature (basically conceived as pre-social in character) is simply inevitable.

REFERENCES Álvarez-Uría, F. and Varela, J., 2004, Sociología, capitalismo y democracia (Madrid: Ediciones Morata). Backhaus, J., 2003, Adolf Wagner’s contribution to public health. In J. Backhaus (ed.), Evolutionary economic thought (Cheltenham: Edward Elgar), pp. 125–135. Brinkmann, C., 1937, Gustav von Schmoller und die Volkswirtschaftslehre (Stuttgart: Verlag W. Kohlhammer). Gide, Ch. and Rist, Ch., 1909, Histoire des doctrines économiques (Paris: La Rose & Forcel). Gioia, V., 2001, Crisi e ciclo nei dizionari economici tedeschi (1849–1925), Storia del Pensiero Economico, 42, pp. 5–29. Hagemann, H., 1995, Roscher and the theory of crisis, Journal of Economic Studies, 22: 3–5, pp. 171–186. Höhmann, D., 2001, Opere enciclopediche o dizionari specialistici in campo economic nell’area di lingua e cultura tedesca (dal Settecento a oggi), Storia del Pensiero Economico, 41, pp. 181–212. Hutchison, T. W., 1953, A review of economic doctrines 1870–1929 (Oxford: Clarendon Press). Ikeda, Y., 1995, Roscher’s Grundlagen in the history of economic thought, Journal of Economic Studies, 22: 3–5, pp. 209–219. Jonas, F., 1964, Das Selbverständnis der ökonomischen Theorie (Berlin: Duncker und Humblot). Marshall, A., 1920, Principles of economics (London: Macmillan). Mill, J. S., 2006, Principles of political economy, Collected works, Vols 2–3, edited by V. W. Bladen and G. M. Robso (Toronto: University of Toronto Press). Mitchell, W. C., 1927, Business cycles. The problem and its setting, Vol. I (New York: National Bureau of Economic Research). Rau, K. H., 1821, Malthus und Say über die Ursachen der jetzigen Handelsstockung (Hamburg: Werthes und Besser). Rau, K. H., 1826, Grundsätze der Volkswirtschaftslehre, Vol. 1 of Lehrbuch der politischen Ökonomie (Heidelberg: C. F. Winter). Rau, K. H., 1855, Corso di economia politica (Genoa: Enrico Monni).

Adolf Wagner on crises, capitalism and human nature 319 Rodbertus, K., 1898, Overproduction and crises (London: Swan, Sonnerschein & Co.). Roscher, W., 1874, Geschichte der National-Ökonomik in Deutschland (Munich: R. Oldenbourgh). Salin, E., 1944, Geschichte der Volkswirtschaftslehre (Berne: Verlag A. Francke). Schefold, B., 2004, Beiträge zur ökonomischen Dogmengeschichte (Düsseldorf: Verlag Wirtschaft und Finanzen). Schiera, P., 1989, Introduzione, Gustav Schmoller e il suo tempo: la nascita delle scienze sociali in Germania e in Italia, edited by P. Schiera and F. Tenbruck (Bologna: Il Mulino; Berlin: Duncker und Humblot), pp. 9–16. Schmoller, G., 1898, Die Volkswirtschaft, Volkswirtschaftslehre und ihre Methode, in Ueber eine Grundfragen der Socialpolitik und der Volkswirtschaftslehre (Leipzig: Duncken und Humblot). Schmoller, G., 1913, Charakterbilder (Munich and Leipzig: Duncker und Humblot). Schmoller, G., 1923, Grundriss der allgemeinen Volkswirtschaftslehre (Berlin: Duncker und Humblot; reprinted in 1978 by the same publisher). Schönberg, G. (ed.), 1882, Die Volkswirtschaft, Handbuch der politischen Ökonomie, Erster Band, edited by G. Schönberg (Tübingen: Verlag der H. Laupp’schen Buchhandlung), pp. 1–56. Schumpeter, J. A., 1925, Epochen der Dogmen- und Methodengeschichte, in Grundriss der Sozialökonomik (Tübingen: Verlag von J. C. B. Mohr and Paul Siebeck), pp. 30–124. Schumpeter, J. A., 1986, History of economic analysis (London: Allen & Unwin). Seligman, B. B., 1962, Main currents in modern economics (New York: The Free Press of Glencoe). Streissler, E., 1995, Wilhelm Roscher. Zur Lehre von den Abstatzkrisen. In Was ist relevante Ökonomie heute. Festschrift für Kurt W. Rothschild, edited by E. Matzer and F. Nowotn (Marburg: Metropolis), pp. 17–25. Tönnies, F., 1979, Comunità e società (Milan: Edizioni di Comunità). Wagner, A., 1857, Beitraege zur Lehre von den Banken (Leipzig: Voss. Reprinted Vaduz, Liechtenstein: Topos Verlag, 1977). Wagner, A., 1862, Die Geld- und Credittheorie (Vienna: Wilhelm Braumüller). Wagner, A., 1891, Marshall’s principles of economics, Quarterly Journal of Economics, 5: 3, April, pp. 319–338. Wagner, A., 1892, Die Grundlegung der politischen Ökonomie (Leipzig: Winter). French translation as Les fondements de l’économie politique, 5 vols (Paris: Giard & Brière, 1904, 1909, 1912, 1913, 1914). Wagner, A., 1895, Die akademische Nationalökonomie und der Socialismus (Berlin: Julius Becker). Wagner, A., 1907–1908, Theoretische Sozialökonomik, 2 vols (Leipzig: Winter).

15 Émile de Laveleye Economic crises, Christianity and socialism Ludovic Frobert

La Grande encyclopédie, inventaire raisonné des sciences, des lettres et des arts par une société de savants et de gens de lettre, Paris: H. Lamirault, 1885–1902.

15.1 LA GRANDE ENCYCLOPÉDIE

15.1.1 A positivist encyclopaedia The 31 volumes of the Grande encyclopédie were published between 1885 and 1902. As Claude Nicolet put it, this was the period in French history when, following a ‘dramatic and improbable evolution . . . the Republic [moved] from utopia to reality’ (Nicolet, 1982, p. 196). Although the chemist and radical politician Marcelin Berthelot may not have actively directed it, L’Encyclopédie was cautioned by his moral authority. Berthelot was an archetypal ‘scholar of the Republic’ who adhered to the contemporary positivist and solidarist credo which was being formulated in the works of Léon Bourgeois and which celebrated ‘the close agreement of scientific method and the moral idea’ and explained that ‘reason, guided by science, determines the inevitable laws of action; the will, driven by the moral sentiment, undertakes this action’ (Bourgeois, 1902, p. 106). Produced with the support of a financial network, the Grande encyclopédie was representative of an advanced stage of the book and publishing industry (Mollier, 2001). It was a collective undertaking managed by men such as Ferdinand-Camille Dreyfus and André Berthelot occupying the position of general secretary (Jacquet-Pfau, 2006, 2007). The principal ideological and methodological choices are set out in the Preface and Foreword, written by the journalist and radical politician F.-C. Dreyfus (who was also responsible for the economic and political sections of the Encyclopédie). Proceeding from the paradox that, despite the eighteenth-century example of Diderot and d’Alembert, France was lagging behind in encyclopaedic undertakings, Dreyfus thought that the education of the citizens of the Republic1 required a new comprehensive survey, an objective and positive general inquiry.2 The objective

Émile de Laveleye on crises, Christianity and socialism 321 advances of science and its applications in every area (notably in the area of industry) should shape this new work. L’Encyclopédie should also be well informed about these matters. An encyclopaedia is not just an inventory or a mere dictionary; it is based on a classification of subjects, and especially the sciences. It requires the gathering of a mass of facts and subjects, and above all, its authors have ‘to coordinate it into a well-proportioned whole’ (PRÉFACE, p. v). One should follow in the footsteps of Bacon, d’Alembert and Comte, and adopt, for convenience, the latter’s historical classification of the sciences, with mathematics and sociology as its first and last terms. Dreyfus maintained that there is nothing arbitrary or illusory in this projected classification. Expressing faithfully the positivist and rationalist culture of this Republican period, he wrote: Is there really, [derived] from the very nature of the facts, a classification of the sciences amongst themselves? . . . In a word, are there scientific laws or not? That is the question to be asked on the threshold of the general classification of the sciences. The encyclopaedia should answer in the affirmative or renounce the pursuit of its work. (PRÉFACE, p. vi) Dreyfus argued that the inventory and subsequent classification of subjects and sciences had become essential since societies of the late nineteenth century were living through a period of transition and brutal acceleration of the progress of the sciences, a period in which actions and interventions should be tempered. In the 18th century, an epoch which was destructive on the one hand and constructive on the other, the encyclopaedia had to be at one and the same time both a weapon of combat for destruction and a pulpit of doctrine for building; in our intermediate epoch in transition, the encyclopaedia must be a work of exposition . . . our times are characterized by the full awareness of such a transformation, we are aware of this unceasing movement of things and beings. (PRÉFACE, p. ix) The encyclopaedia is thus conceived to be a rigorous instrument of moral and political reform which, through the positive and scientific education of the citizen, enables the reasonable accompaniment of progress, and the avoidance of the symmetrical pitfalls of reaction and revolution: Is it not the peculiarity of our modern society to seek to rid itself little by little of the political forms of the past, which hinder the development of democracy, [and] to passionately engage in the search for a new distribution of social forces and economic elements, without, however, having given democracy its definitive form [nor] society this stable equilibrium between two feuding brothers who must be reconciled, Capital and Work? (PRÉFACE, p. ix)

322 Ludovic Frobert

15.1.2 Laveleye and the Grande Encyclopédie Émile de Laveleye died in 1892 and could only participate in the first volumes of the Grande encyclopédie. His participation was very minimal and seems (at first glance) to be limited to the writing of the entry CRISE. When the first volumes appeared in the late 1880s, he did not write the important entries linked to B ANQUE, CRÉDIT or even ÉCONOMIE POLITIQUE. This sporadic collaboration could have had different causes and it would be unwise to attribute this situation to any particular one. Nevertheless, it should be remembered that his point of view, which was highly historicist and ultimately very sympathetic to German reformist socialism, went beyond the limits of the positivist and notably solidarist credo of the Grande encyclopédie. Whereas Ferdinand-Camille Dreyfus, who was responsible for the ‘political economy’ section, defended the idea that ‘the physical world and the social world evolve unceasingly following identical laws, the infinitely slow and hardly perceptible effects of which are irresistible by their persistence in eternity’ (DREYFUS, Grande encyclopédie, Vol. 14, p. 1087), Laveleye advanced, as we shall see, a very different proposition in the field of economics. The LAVELEYE entry in the Grande encyclopédie thus puts him ‘at the extreme left of the socialism of the professorial chair’3 (Vol. 21, pp. 1056–1057). And in the entry on ÉCONOMIE POLITIQUE (political economy), André Berthelot’s judgement of Laveleye is far from positive: In short, the principal French economist of the historical school is a Belgian, Laveleye. He developed its ideas in his work De la propriété et de ses formes primitives (1874). But, since, in Les lois naturelles et l’objet de l’économie politique (1883), he has split [from this school] through original yet highly contested and retrograde assertions. He denies the existence of the real economic laws, that is, [those which are] independent of the individual will; he thus refutes the scientific character of political economics, it is an art. (ÉCONOMIE POLITIQUE, Vol. 15, p. 495)

15.2 ÉMILE DE LAVELEYE Émile de Laveleye was born in Bruges in 1822 and trained in philosophy and law at the universities of Louvain and Ghent. His participation in the discussions of the Société Huet between 1846 and 1851 marked the beginning of his intellectual training. Under the guidance of the philosopher François Huet (1814–1869), this intellectual circle was the Belgian birthplace of an original tradition of liberal socialism. Huet was a professor of philosophy at the University of Ghent who considered that the ‘new social dogma’, inaugurated by the 1789 Revolution and gropingly prolonged by socialist doctrines and experiments until 1848, did nothing but express the true demands and directions of Christianity. In Le règne social du christianisme (1853), Huet attempted to define the relevant directions of this socialism, situated halfway between individual egoism and communism. He underlined

Émile de Laveleye on crises, Christianity and socialism 323 the need for a radical redefinition of the property law which would guarantee a minimum of resources for everybody, and thus liberties and autonomy for all. Moreover, this reform should also equitably regulate the distribution of resources and the retribution of every agent engaged in economic transactions (Bertrand, 1907; Cunliffe and Erreygers, 1999). When Émile de Laveleye explained later that ‘democratized property must save democracy’ (Laveleye, 1878, p. 23), he was clearly asserting the Huet inheritance. He enriched this intellectual inheritance with the ideas of authors such as John Stuart Mill or Charles Dupont-White. From his earliest writings, particularly Études historiques et critiques sur le principe et les conséquences de la liberté du commerce international (1857), he criticized unconditional laissez-faire, writing that ‘the doctrine of free trade in its absolute terms is, in theory, only true [given] two conditions: 1st that all men are owners; 2nd that all the Nations are united’ (quoted in Mahaim, 1892, p. 94). Laveleye was appointed professor of political economics at the University of Liège in 1864. As an essayist attracted to the most varied subjects,4 he wrote for a large number of periodicals and published three major works on economics.5 The first edition of De la propriété et de ses formes primitives was published in 1874. Laveleye employed historical methodology in order to criticize judicial and economic apriorism which leads to the turning of individual and hereditary property into a natural right. He noted that land ownership had been collective or semicollective for a long period. Property is therefore an institution which is variable depending on time and place, and these collective choices, which enable different societies to guarantee a certain amount of usefulness and equity, constitute its true foundations. Rejecting approaches that consider that occupancy, work, contracts, convention or the law constitute the foundations of property, Laveleye contends that over time a ‘rational’ rather than a natural property right emerges: ‘the personal right of man in relation to nature is to possess a sphere of action sufficient [for him] to draw from it his means of living,’ he wrote, adding: the right consists in the set of conditions necessary for the physical and spiritual development of man, in so far as these conditions depend on the will of man. Property is the realization of the set of means and conditions necessary for either the physical or spiritual development of each individual in quality and quantity in keeping with his individual needs. (Laveleye, 1891, p. 557) However, nineteenth-century European societies abusively favoured an individual form of property leading to a radical and iniquitous increase in inequalities. As a consequence of the political revolutions, these societies simultaneously enabled the development of civil and political citizenships. Therefore, according to Laveleye, modern democracies run the risk of following the disastrous path which led the ancient democracies to their ruin: ‘liberty and democracy cannot subsist without the equality of conditions’ (ibid., p. xv). In a controversy with Herbert Spencer (Laveleye, 1885b), Émile de Laveleye embarked on a frontal assault on

324 Ludovic Frobert the tenets of a Darwinian programme favoured by economists of the period, reminding them of the rights and duties of an intentional regulation of the economy and society. He argued against the exclusive advantage granted, for ideological reasons, to the individual right to property and in favour of discovery, within an environment marked by the growth of industrial capitalism, of a wiser dosing of the individual and social dimensions of this right in order to encourage the development of a society that would be both efficient and equitable: To my mind, modern democracies will only escape the destiny of Ancient democracies by adopting laws which have the effect of distributing property into a large number of hands, and establishing a great equality of conditions. This superior maxim of justice must be realized: To each according to his works, in such a way that property is truly the result of work, and that the well-being of each [person] should be in proportion to the contribution he brings to the work of production. (Laveleye, 1891, p. xxi) In Le socialisme contemporain (1881), Laveleye demonstrated that this reformist direction constituted the true aim of modern socialism. After underlining the soundness of the grievances of socialism against capitalism concerning such issues as competition, the alienation of workers, inequalities and other dominations, machines and working conditions in industry, he remarked that the socialist agenda could be resumed in two expectations: ‘firstly, any socialist doctrine aims to introduce more equality into social conditions, and, secondly, to realize those reforms through the action of laws or the State’ (Laveleye, 1885a, p. iv). Recalling the unstable equation arising from the current co-existence of democratic institutions and extreme social inequality, he pointed out that socialism and its ambition probably constitute the last hope of capitalism. Therefore, socialism is a necessity, as indicated by its history. For Laveleye, the source of socialism is to be found in original Christianity perpetuated in the present by Protestantism, not Catholicism (Laveleye, 1875). It was from the religious socialism of the origins that the American and French Revolutions originated, and this movement of emancipation cannot stop at the gates of the economic and social world: ‘The equality of political rights inevitably leads to the call for the equality of conditions, that is to say wellbeing distributed proportionally to the work performed. Universal suffrage requires universal well-being as its complement’ (ibid., p. xi). Laveleye argues that his historical movement and this necessity have been noted by ‘scientific socialism’ and that the German Historical School is its most modern expression. He evokes the birth and development since 1872 of the Verein für Sozialpolitik, underlining the numerous contributions of Gustav Schmoller, Adolf Wagner and their colleagues and pupils, as well as highlighting the precursory work of Dupont-White, before going on to indicate their rejection of economic orthodoxy: on the contrary, they think that in the economic domain as amongst animals, in the fight for existence and the struggle of egoisms, the strongest crushes

Émile de Laveleye on crises, Christianity and socialism 325 or exploits the weakest, unless the State, the organ of justice, intervenes to attribute to each what is legitimately his. They add that the State must contribute to the progress of civilization and accept as its principal mission the improvement of the moral, intellectual and material condition of the working classes. Finally, instead of professing, with the orthodox economists, that unlimited liberty is sufficient to put an end to social struggles, they claim that a series of reforms and improvements, inspired by sentiments of equity, is indispensable if one wishes to escape civil dissensions and the despotism which they bring in their wake. They admit that socialism has been truly useful in drawing attention to the evils and inequalities of the present social order, and in penetrating the souls of decent men with the desire to remedy them. (ibid., p. 320) In Éléments d’économie politique (1883), Laveleye insists first and foremost on the moral and political dimension of economics. In France around 1880, the monopoly of the Liberal School in the teaching of economics was still absolute and the teachings of the Katheder-Sozialisten, which were being discussed throughout Europe, were still unknown. Against this background, Laveleye would present an extreme interpretation, which remained inspired by the initial direction of the teachings of Huet and the Historical School. He stated that this economic discipline has as its objective ‘the law or laws which should preside over the administration of goods in the city, that is to say society. . . . The political economy is the affair of legislation. It pursues an ideal, as do morals, law and politics’ (Laveleye, 1884, p. 2). Thus, the economy is not a separate science set apart from the other sciences of society; it is in unceasing communication with history, statistics and geography. More fundamentally, however, it is subordinated to religion (or philosophy) and law. Concerning itself with the efficient administration of the city, it labours under the authority of philosophy and religion, both of which enquire into Good and Truth. If one blows the cobwebs off the teachings of these disciplines, one is told that ‘man must seek to entirely develop all his faculties’, moral and intellectual as well as physical (ibid., p. 7). It follows that the economy also works in subordination to the law, which must sanction the teachings of religion (philosophy). Referring to the teachings of Bordas-Demoulin and Huet, and to their credo relating to the complementary nature of the Just and the Useful, Laveleye adds: ‘every act of economic life is carried out under the authority of civil institutions, and every civil institution has economic interests as its ultimate reason’ (ibid., p. 11). In opposition to the credo of orthodox economists, linked to the inheritance of thinkers from Malthus to Darwin (whom Laveleye differentiates from Adam Smith and John Stuart Mill), Laveleye notes: ‘the laws with which political economics especially concerns itself are not the laws of nature; they are those enacted by the legislator’ (ibid., p. 17). Economics is thus a normative science that can only be equipped to accomplish its mission by historical enquiry and rigorous observation. From Laveleye’s perspective, the historical method is not, however, a mere process of induction but a preliminary to the transformation of social situations. He explains that in economics it is necessary to ‘observe the facts, not to merely note them, after

326 Ludovic Frobert the fashion of naturalists, but to deduce [from this observation] which ideas and laws must be adopted so that men reach well-being, and, from there, perfection’ (ibid., p. 32).

15.3 CRISES Laveleye began his reflection on economic crises around 1860, associating the ‘regular and almost periodical return of these disastrous disruptions’ (Laveleye, 1865, p. 9), these ‘storms of the world of business’, with an alteration of circulation: crises are first manifested in a ‘profound disorder of the mechanism of exchange’ (ibid., p. 107), the origin of which must be determined. In a period marked by the French lagging behind in innovative banking and financial matters, and during which, among the majority of liberal economists, a metallist conception of money was predominant, as was widespread agreement concerning the Banking principle (Breton and Lutfalla, 1997), Laveleye presented a flexible and pragmatic line of argument. He challenges the principle, which is specific to the Currency principle, of a strict relationship between metal reserves and the emission of paper money, while symmetrically rejecting the arguments of the partisans of free banking. He finally comes down in favour of a flexible regulation of the monetary supply, adapted to growth and its fluctuations. This direction guides him in the analysis of crises, the different climates of the money market, its doldrums and hurricanes, which affect the economy. Yet, in agreement with his general conception of economics, moral and political science and historical science, Laveleye explicitly refutes the approach of Clément Juglar in which intangible economic laws are used to explain crises. For the Belgian economist, crises are events that are dependent on historical circumstances and institutions. It is therefore possible and necessary to regulate the rhythms of the money market in order to smooth the growth of the modern economy. Laveleye advances the idea that modern economies show three characteristics: they are economies of growth; this growth is more often than not based on credit (the metal base becoming progressively weaker); and they are open economies. This situation makes each economy vulnerable to the slightest contraction of its circulation, and, at present, the major risk for each economy resides in its participation in international trade and in its balance of payments. Thus, in 1865, Laveleye principally relates the onset of crises to a disorder in the balance of external trade, acting on a market in which credit is widespread while little cash is used. Any country which does great business with little money, and which has a vast movement of importations and exportations, will be exposed to these economic disturbances. . . . The more a country expels precious metals from the channels of circulation, replacing them with the instruments of credit, warrants, transfers and clearing-houses, the more it develops, at the same time, its relations with foreign nations, the more it will also be exposed to the periodical return of financial disturbances, since it will be easier for unfavourable balances and exchange rates to shake the whole

Émile de Laveleye on crises, Christianity and socialism 327 mechanism of exchange unless, in order to foil this, one directs redoubled caution, prudence and skill towards credit establishments. (pp. 128–129) The appearance of these three remarkable historical circumstances is thus at the origin of crises: 1st The use of credit in all its forms; 2nd a market heavy with forward transactions and commitments of all sorts: subscriptions to public loans [emitted by] the State or towns, to bonds or shares in large companies, works of improvement and construction undertaken by private individuals, etc.; 3rd disorder in the balance of payments which requires the exportation of a notable quantity of cash to be taken from a circulation which only just possesses the necessary [amount]. (ibid., p. 149) Since the crisis is the consequence not of natural economic laws but of historical circumstances and the institutional milieu, regulation is possible. As early as 1865, Laveleye mentions several means of ‘prevention’, highlighting the important role of the central bank: the maintenance of a comfortable metallic base, the modulation of the official discount rate and the increase of interest rates. In the late 1880s, when Laveleye wrote the political economy section of the entry on CRISE for →La grande encyclopédie (there were also a general section and one referring to pathology), the basis of his explanation remained the same: ‘economic crises are serious disturbances of a system of exchange based on credit’ (CRISE, Vol. 13, p. 380). However, the historical context had evolved. During the early 1870s a long depression had begun, seemingly invalidating Clément Juglar’s analysis in terms of the short cycle and its reassuring periodicity. French economists discussed Juglar’s thesis and demanded a complement that would analyse these longer and more profound depressions of a new type (Breton and Lutfalla, 1997). Diagnoses diverged, with certain economists highlighting structural non-monetary factors, such as innovation in the area of transport; other economists explained the depression using monetary factors – an insufficient availability of currency resulting, in particular, from the demonetization of silver since the beginning of the 1870s and the decrease in the production of gold. Laveleye adopted this last point of view, which was also defended by his colleague Alphonse Allard, Director of the Mint at Brussels (La crise, la baisse des prix, la monnaie, 1885). Laveleye enriched several elements of his analyses. In the first instance, he presents a typology of crises, distinguishing ‘commercial and monetary crises’ from ‘industrial crises’ (which only strike a limited number of industrial sectors) and from ‘stock market crises or crashes’ (speculative crises limited to a single product such as the tulip in Holland in the seventeenth century, for example). The ‘commercial and monetary crises’ are, however, the largest, and Laveleye seems to introduce a distinction between commercial crises and monetary crises. According to Laveleye, the commercial crisis, which is regular and almost conforms to a ten-year interval,

328 Ludovic Frobert presents a quite typical morphology within which he distinguishes three principal phases. The ‘preparation’ phase sees investment opportunities materialize. Innovations are numerous, new outlets open and savings are available; then ‘economic progress is accomplished calmly and without jolts’ (ibid., p. 380). During this growth, however, credit facilities rapidly encourage speculative phenomena: when one obtains money cheaply, a large number of enterprises become possible which were not before. Thus, capital solicits the spirit of enterprise which sets itself in motion with growing activity which sometimes becomes feverish. . . . What singularly encourages this expansion and overexcitement is the use of credit. (CRISE, p. 381) However, this ‘period of expansion’ gives way quite rapidly to the ‘period of contraction or revulsion’. The speculative process reaches its limits, confidence crumbles and the system becomes vulnerable to the slightest shock; finally, credit diminishes, triggering the crisis: credit was the means of exchange and payment used by everyone, but in these moments of crisis mistrust is communicative, and rightly so, for one can never know who will weather the storm and remain standing. It ensues that credit tightens, shies away or even absolutely refuses [to be given]. . . . Economic life is, so to speak, suspended because exchange, which is its essential cog, has stopped. (ibid., p. 381) To these ‘commercial crises’ Laveleye adds ‘monetary contraction crises’ which enable the explanation of larger depressions, such as the one that began about 1870. Contrasting the two crises, he notes: ‘if one wishes to compare the illnesses of circulation to those of the human body, one can say that the former have the characteristic of an inflammation and the latter that of anaemia’. Monetary crises are thus of longer duration. The ‘languidness’ of business might spread over ten years or more, as happened between 1820 and 1830 and between 1874 and 1889. These crises are not due to a partial or generalized excess of production, but to an insufficient supply of currency in relation to potential economic activity. Laveleye thus attributes these periods of languidness ‘principally to the insufficiency of cash relative to the prodigious growth of economic activity’ (ibid., p. 384). Ultimately, for Laveleye, commercial and monetary crises arise from the same cause: the difficult regulation by existing institutions of credit and currency in a growing economy. Laveleye terminates his reflection on crises with a ‘technical’ chapter devoted to ‘remedies to prevent crises’, remedies inspired by science, for states and individuals. 1st Do not excessively reduce the metallic basis of circulation. [. . .] 2nd In moments of expansion, do not join forces with the movement by buying a lot

Émile de Laveleye on crises, Christianity and socialism 329 of securities and goods on credit. This remedy depends on the prudence of private individuals. 3rd Raise the discount rate in time. . . . Science, by studying the causes of phenomena, and wisdom, by applying the remedies which it indicates, can do much to prevent or attenuate the economic evils from which nations suffer. (ibid., p. 384) When it came to giving his verdict on the monetary and commercial crisis experienced by the Belgian economy in the mid-1880s, Laveleye was even more precise and ambitious: in this instance, his reflections on crises, their causes and their remedies were at one with his general conception of the political economy. The general cause of crisis resides in a deficit of monetary resources mainly resulting from the abandonment of money and bimetallism: the crisis is thus ‘the product of ill-inspired human legislations’ (Laveleye, 1897, p. 207). Considering that a different political management of currency was needed, Laveleye would remain a fierce partisan of bimetallism. Thus, the reflection on crises offered by Laveleye is also linked to his reflection on the articulations between economics and politics, growth and democracy. The crisis shines even more light on the problem encountered by modern societies that support democracy while their economic liberalism and the wish for non-regulation lead to the widening of inequalities and the vulnerability of the populations of workers. The crisis should therefore become an urgent opportunity to revisit this democracy–inequality hiatus. One must prepare or reinforce democracy (this is the present-day mission of the bourgeois elite, according to Laveleye): ‘I assume the most radical democracy’ (ibid., p. 193). This democracy requires free, compulsory, generalized instruction as well as other laws: ‘this is not almsgiving, but the creation of institutions destined for the intellectual and moral development of the working class’ (ibid., p. 198). Among these institutions, ‘generalized insurance, an application of the principle of human solidarity’ (ibid., p. 201), should be favoured. By means of a policy of great works, the state must also come to the aid of the populations made the most vulnerable by the crisis. Finally, these combined advances in democracy and a more humane and fraternal economy must eventually enable the development of a more participative economy with broader foundations in dialogue and negotiation. Laveleye explains that to achieve these aims, the expansion of boards of arbitration and conciliation must be favoured in order to enable the emergence of negotiated regulations of work and to encourage the experimentation of co-operative societies.

15.4 A SOWER OF IDEAS Laveleye was ‘a sower of ideas’ who provided an overall vision of the evolution of late nineteenth-century capitalism in his numerous essays, articles, brochures and books. He was a distinguished representative of liberal socialism and a partisan of the market economy who also demanded vigilant regulation and control of its growth. His theory of crises is an integral part of this overall vision. In Laveleye’s

330 Ludovic Frobert work the crisis is definitely not a normal phenomenon or a natural and periodical rhythm of growth (progress in contemporary terms). He held that the crisis is an evil that can and must be prevented and permanently cured. His analysis of crises tracks this evil in its different forms in the economic system of his time, forms that he distinguishes, classifies and differentiates. This typology put him on the trail of numerous innovations – Laveleye is the first dictionary contributor to clearly differentiate between crisis and depression (see Chapter 3, Section 3.2.8.4). For Laveleye, the crisis is an evil for two reasons. The first reason is economic and social, for the crisis is of absolutely no material benefit to anyone – it is not, for instance, a salutary purge periodically giving new vigour to the economic organism but is characterized by a large amount of waste, material losses and social suffering. The second reason is political and moral, for if crises occur it is by error, because of political immaturity and bankruptcy. In Laveleye’s vision all types of crisis are accidental and avoidable. Yet the regulation of the crises that punctuate the development of the market economy can only stem from a strong political power, that is, in Laveleye’s terms, a democratic one. Laveleye’s conception of economic crises is an integral part of his more general reflections on the affinities to be cultivated between growth and democracy.

NOTES 1 ‘La Grande encyclopédie is a work of noble popularization. It intends to account for the present state of modern science, and to draw up the inventory of human knowledge in our epoch. A stranger to present-day quarrels and resolved not to be an implement of battle, La Grande encyclopédie is governed and can only be governed by the present state of science’ (PRÉFACE, p. i). 2 This was an implicit critique of →Pierre Larousse’s Grand dictionnaire universel du XIXe siècle. The GDU was judged by the GE team to be too ideological and subjective. 3 Socialists referred to as Katheder-Sozialisten in German. 4 Several works by Laveleye touch on the field of public law and political science (Essai sur les formes de gouvernement dans les sociétés modernes (1872); Le gouvernement dans la démocratie (1891)) as well as international relations and nascent nationalities (La Russie et l’Autriche depuis Sadowa (1870); La péninsule des Balkans (1886); Lettres d’Italie (1879); Nouvelles lettres d’Italie (1884)). He also wrote several major texts on the problem of religion: Le protestantisme et le catholicisme dans leurs rapports avec la liberté et la prospérité des peuples (1875); De l’avenir des peuples catholiques (1876). 5 We should also mention his works in rural economics (Études d’économie rurale, 1865, 1869) and the monetary field (La monnaie et le bimétallisme international, 1891).

REFERENCES Allard, A., 1885, La crise, la baisse des prix, la monnaie (Paris: Guillaumin; Brussels: C. Muquardt). Bertrand, L., 1906–1907, Histoire de la démocratie et du socialisme en Belgique depuis 1830, 2 vols (Brussels: Dechêne et Cie; Paris: Cornely). Bourgeois, L., 1902, Solidarité, 3rd edn (Paris: A. Colin). Breton, Y. and Lutfalla, M., 1997, Les économistes français et la longue stagnation. In

Émile de Laveleye on crises, Christianity and socialism 331 Y. Breton, A. Broder and M. Lutfalla (eds), La longue stagnation en France (1873–1897) (Paris: Economica). Cunliffe, J. and Erreygers, G., 1999, Moral philosophy and economics: the formation of François Huet’s doctrine of property rights, European Journal of the History of Economic Thought, 6: 4, pp. 585–605. Frobert, L., 2011, Republicanism and political economy in Pagnerre’s Dictionnaire politique, History of European Ideas, forthcoming. Jacquet-Pfau, C., 2006, Naissance d’un projet lexicographique à la fin du 19e siècle: La Grande encyclopédie, Cahiers de lexicologie, no. 88, pp. 97–111. Jacquet-Pfau, C., 2007, Lexicographie et terminologie au détour du 19e siècle: La Grande encyclopédie, Langages, no. 168. Laveleye, É. de, 1857, Études historiques et critique sur la principe et les conséquences de la liberté du commerce international (Paris and Brussels: [s.n.]). Laveleye, É. de, 1865, Le marché monétaire et ses crises depuis cinquante ans (Paris: Guillaumin). Laveleye, É. de, 1875, Le protestantisme et le catholicisme dans leurs rapports avec la liberté et la prospérité des peuples (Brussels: Muquardt). Laveleye, É. de, 1878, La démocratie et l’économie politique (Brussels: Hayez). Laveleye, É. de, 1884, Éléments d’économie politique, 2nd edn (Paris: Hachette). Laveleye, É. de, 1885a, Le socialisme contemporain, 3rd edn (Paris: Alcan). Laveleye, É. de, 1885b, Laveleye et Spencer: L’État et l’individu ou darwinisme social et christianisme (Florence: Pellas). Laveleye, É. de, 1891, De la propriété et de ses formes primitives, 4th edn (Paris: Alcan). Laveleye, É. de, 1897, Essais et études (Paris: Alcan; Ghant: Vuylsteke). Laveleye, É. de, 1898, Un précurseur. Charles Dupont-White (Paris: Imprimerie Nationale). Mahaim, E., 1892, Émile de Laveleye, Revue d’économie politique, 6, pp. 93–101. Mollier, J. Y., 2001, La lecture et ses publics à l’époque contemporaine (Paris: Puf). Nicolet, C., 1982, L’idée républicaine en France (Paris: Gallimard).

16 Of the ‘old’ Palgrave entries on crises Pascal Bridel

Dictionary of political economy (edited by R. H. Inglis Palgrave), London, Macmillan, 3 volumes, 1894, 1896, 1899, with an Appendix in 1908. Reprinted 1899–1901; the three volumes were reprinted separately and repeatedly with corrections, 1906–1915; reprinted 1976 (Detroit: Gale Research Co.). The 2nd edition was compiled by H. Higgs as Palgrave’s dictionary of political economy, 1925–1926.

16.1 THE ‘OLD’ PALGRAVE Published between 1894 and 1899, the three-volume ‘old’ Palgrave was meant to reflect state-of-the-art economics at the end of the nineteenth century. In the Preface to the first volume of his Dictionary of political economy, R. H. Inglis Palgrave made clear that ‘its primary object . . . is to provide the student with such assistance as may enable him to understand the position of economic thought at the present time’ (INTRODUCTION, 1894, p. v). However, when put together, and despite exhaustive bibliographies in all European languages, the four entries devoted to CRISIS, PERIODICITY OF CRISES, COMMERCIAL AND FINANCIAL CRISES and OVER-PRODUCTION are theoretically rather disappointing. Mainly descriptive and historical in nature, and in clear opposition to some much more exciting work on the Continent (by e.g. Juglar (1889) or Bergmann (1895)), these entries do not seem to give an appropriate account of the complexity and richness of trade cycle theory in England at the time. Half apologetically, while discussing very briefly the problem of periodicity and the decisive theoretical move from crisis to cycle, Pownall goes so far as to assert rather ingenuously that ‘cyclical regularity . . . is easier to record than to explain’ (CRISES, PERIODICITY OF, Vol. I, p. 466). Even if Jevons’s sunspot theory, Langton’s subtle argument and Mills’s ‘credit cycle’ are casually mentioned, no theoretical use of these attempts at finding an endogenous explanation of the periodicity/regularity of cycles is properly reported in any of these entries. One of the authors seems in fact to display very clearly the dominant ‘old’ Palgrave approach as to the unimportance of crises and hence of a proper theory of crisis,

The ‘old’ Palgrave entries on crises 333 ‘which is not of great permanent importance’ (Fowler, CRISES, 1857– 1866–1890, Vol. I, p. 465). Moreover, as ‘spasmodic symptoms, and not symptoms of any serious and continuous disease’, crises should not be brought ‘under some legislative remedy (ibid.). And the logical impossibility of overproduction still reported by Edgeworth adds to the idea that a systematic theoretical explanation of crises in terms of regular and recurrent cycles is not possible, or indeed necessary: ‘events so exceptional defy regulation’ and hence theoretical explanations. Besomi (2010) recently suggested an extremely useful typology structuring systematically the different ways that successive writers understood and explained the crisis phenomenon. The use of his fourfold distinction between ‘crisis’, ‘alternations’, ‘recurring crises’ and ‘cycles’ allows us to make some sense of the progressive move away from the straightforward and classical distinction between (pathological) crises and (normal) cycles, between one-off temporary anomalies and intrinsic and rhythmical tendencies fully co-ordinated with the equilibrium/ normal state of the economic system. Even if the ‘old’ Palgrave authors did introduce the concept of ‘periodicity of crises’, they seldom, if ever, moved theoretically away from crisis as a ‘pathological’ event: nowhere can one find an attempt to explain the recurrence of such crises and, of course, to endogenize them within a fully developed cycle theory. Hence, heir to the standpoint initiated by the general glut controversy, the dominant nineteenth-century tradition based on the ‘logical impossibility . . . of a general overproduction (Edgeworth, OVER-PRODUCTION, Vol. II, p. 45) still largely prevails in the ‘old’ Palgrave entries. Crises are seen as one-off disconnected phenomena,1 which are pathological events with regard to the normal state of the economic system. The causal origins of crises are always exogenous. These external causes can vary from one crisis to the next. Even if monetary elements seem often to play a key role as a causal factor, they never interfere in a predictable way with the normal working of the economic system. As one of the authors of the ‘old’ Palgrave ‘crises’ entry keeps repeating, ‘the causes varying, the results also vary much’ (Fowler, CRISES 1857–1866–1890, Vol. I, p. 462). Like Ricardo and Say (as opposed to Malthus and Sismondi), ‘crises’ writers would not have deemed it coherent to think in terms of cycles: the apparent periodicity of crises throughout the nineteenth century was the result of accidental (and always different) circumstances and, above all, had no theoretical significance: ‘they illustrate the results of a temporary suspension of the laws which regulate the ordinary currency of a nation’ (ibid., p. 465). However, these authors do not focus exclusively on the normal state of the system, but accept the idea that, along the old ‘gravitational’ Smithian lines, prices and production might be sometimes above, sometimes below their ‘natural’ level. Not interested in describing precisely the building of such high or low prices/ production periods, the ‘old’ Palgrave contributors are nevertheless ready to admit the wave-like ‘alternations’ of crises and good times, without, however, linking up their ups and downs in terms of cycles. Concentrating on the ‘alternations’ of crises, they were not to be dragged into an explanation of their repetition beyond arguments like panics, or various extraneous frictions and maladjustments. The

334 Pascal Bridel recurrence of crises is clearly acknowledged but neither theorized nor connected with the normal state of the economy. In particular, no analytical attempt is made to explore the repetition of such events in terms of equilibrium and cycles. In particular, these authors are only very marginally interested in examining the similarities and regularities in the ways crises started, developed, burst out and ultimately were liquidated. The careful denomination of the various stages of the crises from prosperity to crisis and liquidation is not yet instrumental in explaining their occurrence, their uniformity or their recurrence: crises are still instances of the same type of events.

16.2 THE AUTHORS Before we examine in greater details the content the entries linked to crises, some remarks on their (sometimes forgotten) authors might not be out of place here. The entries are: CRISES, COMMERCIAL 455–461);

AND FINANCIAL,

by William Fowler (Vol. I, pp.

CRISES 1857–1866–1890, by William Fowler (Vol. I, pp. 462–466); CRISES, PERIODICITY OF, by G. H. Pownall (Vol. I, pp. 466–467); GLUT, by Edwin Cannan (Vol. II, p. 216); OVER-PRODUCTION, by F. Y. Edgeworth (Vol. III, p. 45). The reader is immediately struck by the fact that most of the (then few) leading British economists of the time are not involved in writing crises entries proper. In the spirit of the Ricardo–Mill tradition of the general glut controversy, Edgeworth and Cannan each contribute 25-line entries concentrating on the logical impossibility of general overproduction. Despite the modest size of both entries, it appears clearly that both writers view crises as partial and temporary events resulting from ‘a derangement’ of some sort in the ‘channels of trade’ (Edgeworth, p. 45). Nowhere in these briefest of entries is there any mention of any other but pathological (or institutional) causes of partial (and not general) failure of the economic system. Once again, Keynes’s old dichotomy between fundamental principles (Vol. I) and money and crises (Vol. II) is clearly present. Moreover, principles are the sanctuary of the few ‘proper theorists’ teaching in leading universities, while crises are left to junior staff or ‘practical men’ outside academia (Fowler and Pownall). All in all, out of the 15 pages devoted directly or indirectly to crises, 12 are by Fowler, 2 each by Pownall, and half a page by Edgeworth and Cannan. Crisis or trade cycle theory was not yet a fashionable topic in English universities during the second half of the nineteenth century. A serious study on the sociological background of the ‘old’ Palgrave’s contributors would probably be of great help in understanding the allocation of entries between the then small new breed of professional academic economists and various

The ‘old’ Palgrave entries on crises 335 brands of practitioners such as bankers, lawyers or civil servants.2 Palgrave was a lifelong banker with no formal training in economics, and later editor of The Economist, and his technique of recruiting his contributors single-handedly3 must have relied on his professional network more than anything else. If, in his INTRODUCTION, Palgrave readily acknowledges for the help of ‘many minds’, including the crème de la crème of the economics profession (among which, Marshall, Price, Sidgwick, Bonar, Walker, Higgs, Sanger and Edgeworth, to name but a few), the bulk of the contributors come from outside the groves of academe.4 Little can be found in terms of solid biographical material on either William Fowler (1828–1905) or G. H. Pownall.5 Fowler’s central entry on crises is written by someone whose academic and professional life is the epitome of Victorian England. Son of a Quaker minister, he obtained a BA with honours in classics and mathematics at the age of 20, graduated LLB in 1850, was called to the Bar in 1852 and joined Alexander & Co., one of the big three bill brokers in the City. He contributed a Cobden Club essay on the concentration of landownership (1872), became interested in prison reform, was an MP for various constituencies between 1870 and 1892, and always remained a keen supporter of free trade. The great crash of 11 May 1866, known as ‘Black Friday’, found him as a partner in his credit bank, which bore the brunt of the run on the banks. He was thus at the centre of this disaster, which left him financially embarrassed for many years. Besides a description of the events leading to the 1866 crash, his slim and hard-to-find pamphlet on the 1866 crisis (Fowler, 1866) has clearly a self-justifying tone. Together with an arch-bullionist pamphlet on the appreciation of gold (1886), his 1866 essay is probably the best index explaining Palgrave’s choice of Fowler for the discussion of the 1857, 1866 and 1890 crises. The tenor of his explanation of the 1866 crisis is plainly that of a banker worried by ‘the abuse of credit’ by . . . other bankers: The abuse of credit is the great cause of commercial disaster, and will certainly give rise to it under any system of currency; and if those who have the conduct of banking do not learn by experience how to regulate their investments so as to be prepared for times of difficulty, it is in vain to seek for any teacher. No legislation can prevent imprudent and careless men from reaping the consequences of their want of judgement; and any attempt by legislation to enforce measures of precaution would seriously cripple the freedom of trade, and thus inflict on the community an injury far greater even than that which is sought to be avoided. (1866, pp. 50–51) Not the economic system, but the bankers’ recklessness is responsible for the crisis, and any corrective piece of legislation – however sophisticated – would simply make matters worse. Fowler’s Palgrave entry is a straightforward systematization of his 1866 credit cycle approach extended to a discussion of the 1857 and 1890 crises. As could be expected from the author of the periodicity crisis entry, again nearly exclusively devoted to credit cycles, G. H. Pownall (1849–1916) is yet another banker; he managed the William Deacon Bank and the Institute of Bankers.6

336 Pascal Bridel A member of the Manchester Statistical Society,7 he was close to the circles of some of the London School of Economics (LSE) founding fathers and, in particular, to one of its first professors, Edwin Cannan. Apart from a couple of articles in early issues of the Economic Journal (1892, 1899), Pownall produced in 1914 a rather elusive book entitled English banking. The contents of this book were initially delivered in three lectures at the LSE. The third lecture finalizes the author’s lifelong message already present in his previous publications: the inadequacy of the metallic basis of each bank and how best to avoid a credit crisis linked to a lack of cash reserves to unite and maintain in one central reserve the many smaller reserves of the individual banks. This plea for a centralization of reserves is strongly supported by H. S. Foxwell in his Preface to Pownall’s book. F. Y. Edgeworth (1845–1926) had written next to nothing on the Classical School, and was not really a crisis specialist, and so the reason why he was commissioned to write the entry on OVERPRODUCTION is probably linked to his position as an adviser to Palgrave (1894, I, p. vi). As is customary in such large ventures as nineteenth-century dictionaries and encyclopaedias, members of the editorial board would allocate between themselves the small and orphan entries. Finally, even if the entry on GLUT is too short not to sound somewhat hollow, E. Cannan (1861–1935) was probably the best scholar in the field, having published in 1893 his path-breaking History of the theories of production and distribution, in which he criticized past economics from the standpoint of modern marginalist (i.e. Marshallian) economics.

16.3 THE ENTRIES It is possible to be very brief on the Edgeworth and Cannan entries, which are peripheral to the crisis/cycle debate and, furthermore, very short. As mentioned earlier, Edgeworth’s interpretation of the overproduction debate is completely orthodox and place him squarely in a pathological crisis category. His outright rejection of the possibility of ‘general overproduction’ (OVERPRODUCTION, Vol. III, p. 45) brings him to consider ‘commercial crisis’ as concomitant with ‘a deficiency of ready money’ squarely linked to bankers’ incompetence. Nowhere is there a mention of ‘alternations’ or ‘recurring crises’, let alone of cycles. Interestingly enough, this short entry is built around a series of quotations from J. S. Mill, Ricardo and Sidgwick. Apart from a very complete bibliography on the various contributions to the general glut controversy (starting with Commerce defended and finishing in 1824 with Sismondi), the then recent literature is almost entirely made up of various publications by Hobson, which are, however, never used in the main argument. Clearly, for Edgeworth, the nature of crises had very little to do with Say’s law! As far as Cannan’s entry on GLUT8 is concerned, comments can be even briefer (concerning a text of 25 lines, including the bibliography). Equally convinced that ‘universal glut’ is logically impossible, Cannan builds his contribution around lengthy quotations from Ricardo, Say, Mill, Malthus and Sismondi. The word

The ‘old’ Palgrave entries on crises 337 ‘crisis’ does not even appear in the entry. The closer he gets to a definition of a (partial) crisis is when he asserts that the prices of ‘a considerable mass of commodities falls below the elementary costs of production’ (Vol. II, p. 216) – hardly a demonstration of any articulate crisis theory. William Fowler’s twin contributions make up the bulk of the discussion on crises in the ‘old’ Palgrave. Awkwardly split between a first entry on CRISES, COMMERCIAL AND FINANCIAL and a second on CRISES, 1857–1866–1890, largely descriptive and using unnecessarily lengthy quotations from various ‘authorities’, these two consecutive contributions are hardly constructed around any theoretical argument. The reader is forced to chase for the few analytical remarks thinly spread among these 12 pages. Basically, the first very descriptive entry tries to classify the various causes of the crises that occurred after the 1790s. The author insists clearly that each of them displays particular features, which ‘have little in common’ (p. 445) given that ‘the methods of conducting financial and commercial businesses’ (p. 455) have been changing rapidly throughout the nineteenth century. In particular, the progressive sophistication of the English financial system throughout the century makes each financial crisis ‘of a far different character’ (p. 459) than the previous one, but the basic synopsis is always the same. From the very beginning, Fowler adopts a descriptive approach, ironing out as much as possible the similarities between what remain for him unique events, largely dependent on institutional characteristics of the banking system. Monetary elements seem often to play a key role as a causal factor, but they never interfere in a predictable way with the normal working of the economic system. As Fowler keeps repeating, ‘the causes varying, the results also vary much’ (p. 462). However, Fowler attempts to uncover regularities in the succession of phases (usually starting with overinvestment made possible by banks being overgenerous with their credit, followed by a dramatic fall in prices, a wave of bankruptcies and bankers calling the government and the Bank of England to the rescue). Paraphrasing and quoting extensively (and shamelessly) from Tooke’s History of prices, and from a paper read by Danson (which he misspells Dawson) before the Statistical Society in London (Danson, 1847), Fowler describes in the same way and successively the 1796, 1810, 1825, 1836–1837 and 1847 crises. Referring to sometimes obscure initial causes for each of these events (continental war, failure of the potato crop, foreign exchange, speculation at home and abroad, etc.), Fowler concentrates on the inevitable return and on the regularity of the financial aspects of each of these crises: Many and heavy banking failures, and a state of commercial discredit, preceded and formed the earlier stage of the panic. The tendency to speculation, and the undue extension of credit, was preceded, probably caused, and certainly favoured and promoted, by the low rate of interest which had existed for some time previously; and this low rate of interest was apparently prolonged by the operations of the Bank of England. Facility of banking accommodation which had existed for some time previously, favoured undue extension of credit,. . . This led gradually on to great difficulties . . . (p. 457)

338 Pascal Bridel Financial data are generously plundered from various sources to support detailed analyses of the working of the financial system throughout these successive crises; with the exception of the banks’ responsibilities for ‘keeping a low rate for money’ before most crises, nowhere can one find a proper expression of the connection between different one-off initial causes and the somewhat similar unfolding of the ensuing financial crisis. Sentences like ‘so great was the rage for speculation’ or ‘the recoil from these speculations was inevitable’ (p. 458) keep cropping up but can hardly be considered as more than pathological causes of crises. In the concluding part of his first entry, while repeatedly stating that ‘crises were brought on, or increased in severity, by the issues of notes made by the country bankers’ (p. 461), Fowler hastens to add (again) that ‘the lessons to be drawn from [these crises] are, comparatively speaking, inapplicable to the business circumstances of the present time’ (p. 461). Despite the similarities, each crisis is a pathological case from which no generalization can be drawn. Once again, Fowler’s first entry falls squarely into a ‘crisis’ category, even if some passing comments refer indirectly to the ‘alternation’ category of crises. As a matter of fact, even if he seems to admit an ‘alternations’ of crises, Fowler is not to be dragged into an explanation of their repetition beyond arguments such as panics, bankers’ incompetence or various other extraneous frictions and maladjustments. The recurrence of crises is clearly acknowledged but neither theorized nor connected with the normal state of the economy. In particular, no analytical attempt is made to explore fully the repetition of such events. However, and very surprisingly, the bibliography offered by Fowler starts with the unexpected sentence ‘the periodicity of crises has frequently been noticed’. This statement is followed by comments and references to the literature9 showing Fowler’s apparent knowledge not only of the periodicity issue but also of a good part of the then recent literature on this crucial issue. Would such casual remarks make him an early theorist of the endogenous periodicity of crises? The answer seems to be negative. Given the balance between the various entries, and the fact that Pownall’s entry is specifically devoted to the periodicity of crises, the brief given to Fowler was probably to concentrate on the financial aspects of crises. This feeling is reinforced by Fowler’s strong methodological statement (appearing also in his bibliography): The frequent recurrence of periods of excitement and depression in monetary and commercial matters . . . must not [make us] yield to the belief that post hoc is identical with propter hoc in these matters. (p. 461) Clearly, for Fowler, the characteristics and unfolding of each individual crisis are more important than the possible and untested common features they might display. This impression is strengthened by Fowler’s second entry. Using the same methodological approach, he examines in turn the 1857, 1866 and 1890 crises. Once again the overall priority is given to the financial aspects of crisis and, in particular and as expected, to the vagaries of individual banks’ cash reserves.

The ‘old’ Palgrave entries on crises 339 However, some methodological statements made en passant bolster the interpretation of Fowler’s contribution as being in between the plain ‘crises’ and the more sophisticated ‘alternations’ categories. A few quotations will suffice to convey this argument. On the one hand, Fowler refers to authors who, in the past, had expressed themselves approvingly about the periodicity of crises: It was formerly regarded as almost a law of nature that a crisis should arise every ten years or thereabouts, and the years 1825, ’37, ’47, ’57 and ’66 confirmed this impression. (p. 462) Similarly, 30 lines later, and after a lengthy discussion of the peculiarity of the Baring crisis, Fowler seems to strengthen his initial argument: In some respects all crises are alike, inasmuch as all such events arise from what is called an ‘abuse of credit’. (ibid.) However, the argument is brutally turned completely upside down by the end of the same paragraph: But that abuse may take various forms. . . . The causes varying, the results also vary much. (ibid.) If there is to be periodicity (and not simply ‘alternations’), there should be some sort of regular causes behind each new crisis. Clearly, here, Fowler insists much more on the differences than on the similarities between successive crises. Crises are undoubtedly a recurrent characteristic of the economic system; but, all being different, these events do not belong to the same class and thereby cannot benefit from a common explanation. Fowler seems to hesitate and then to step backward from the dominant recurring crisis to a more traditional ‘alternations’ approach. Fowler’s general conclusion to his two entries is crystal clear: The general result seems to be that, however remarkable the phenomena of crises may be, they are not of great permanent importance, nor are they to be regarded as inevitable consequences of an active and enterprising conduct of business. They are really spasmodic symptom, and not symptoms of any serious and continuous disease, which has to be brought under some legislative remedy. They illustrate the results of a temporary suspension of the laws which regulate the ordinary currency of a nation . . . but events so exceptional defy regulation, and the cure for such evils will probably be found rather in the practical good sense of men of business than in any expedients invented by ingenious law makers. (p. 465)

340 Pascal Bridel The economic system is stable; crises are only temporary, and follow no regular pattern even if they are the expression of the natural ‘alternations’ between good and bad trade; and, finally, no attempt should be made to regulate crises for fear of disrupting the fact that ‘depressions in trade, often very difficult to account for . . . are generally followed by improvement and even speculation’ (p. 465). In the end, and half-expected from a banker, Fowler’s punchline is addressed to the theorists, who are strongly advised to keep away from a topic too serious to be left to economists: Panic is . . . avoided [if it] is not dependent in the worst of times on the caprice of a Chancellor of the Exchequer, who may be a man ignorant of the dangers and difficulties of commerce, or who only knows them vaguely, as set forth in the books of mere theorists. (p. 466; italics added) The remaining entry by Pownall on CRISES, PERIODICITY OF does not alter the overall understanding of crisis contained in the ‘old’ Palgrave and reached so far. In his brief essay, Pownall is, in fact, reviewing, and with a good deal of scepticism, five leading English writers who have extolled at various stages the idea of the periodicity of crises – i.e. in the sense of a ‘recurring crises’ category. In other words, these writers should be viewed as characterizing crises by their uniformity and their recurrence, and by the connection between these two elements. Hence, thus defined, crises should be viewed as instances of the ‘same class of events’. Intimately linked, the regularity of their return as well as the recurring succession of various stages in their development should go together further into the elaboration of a genuine theory. However, it is a long way from the cup to the lips. On the one hand, and in full agreement with Fowler, Pownall is visibly unsympathetic to this thesis and to the main theorists presenting it. On the other hand, marred by too heavy a recourse to quotations, his argument is not very convincing. It is hard to understand how Thornton (1802) could be considered as a ‘periodicity-of-crisis’ theorist when Pownall offers a brief discussion of the 1793 crisis only. Tooke is quoted at length to demonstrate that he is the precursor of Langton, Jevons and Mill in the long line of ‘credit cycle’ theorists:10 ‘immediately preceding a crisis, a great revulsion and derangement of commercial credit had occurred’ (p. 466). This is fair enough, but no analytical progress is offered when compared to Fowler’s entries. In particular, despite the regularity that Tooke had allegedly discovered, the recurring succession of events does not go further than this basic link between a credit crunch and the ensuing crisis. Moreover, Pownall adds immediately that ‘a variety of causes brought about the serious crash of 1847’. The five lines devoted to William Langton shows plainly Pownall’s confusion between a proper explanation of the periodicity of crises lining regularity with stages and the much simpler idea of trying to devise a calendar time repetition of crises based on a ‘decennial period’ (p. 467). Theoretical periodicity is not the same notion as trying to forecast the next crisis on the basis of the frequency of previous downturns historically recorded.

The ‘old’ Palgrave entries on crises 341 Jevons’s sunspot theory is given a longer (and more respectful) treatment, even if this link with ‘the world of physics . . . suited to the exact and scientific mind of Jevons’ (p. 467) is considered somewhat peculiar by Pownall. In particular, Jevons’s eccentric sunspot argument is carefully presented in order to show that it is only a very unusual attempt at explaining the cause of a traditional credit crunch. Credited with the invention of the term ‘credit cycle’, Mills is cleverly quoted by Pownall to show that ‘the periodicity of commercial crises is at any rate a fact’ (p. 467). However, when connected with Pownall’s methodological introduction on the ‘cyclical regularity of fatal years’ (p. 466), nothing much is left of ‘Mills’ minute examination of the life-history of a credit cycle’ (p. 467). Periodicity remaining a fact ‘which is easier to record than to explain’ (p. 466), Pownall’s entry, described by its author as a mere ‘statement of some of the more important crises’ – not of the more important theories about crises – can hardly be seen as a step forward away from ‘alternations’ into ‘periodicity’. One final remark is called for, and it is as modest as the entries themselves. In comparison to research conducted sometimes 25 years earlier (e.g. Jevons’s or even some of Juglar’s pieces), these ‘old’ Palgrave entries do not reflect in any way the much more sophisticated theoretical level reached at the turn of the century by crisis theory both on the Continent and in Britain. The historical and descriptive methods used by Fowler and Pownall are not defective per se but lack singularly in generality. The discussion of crises by bankers reflects not so much the rather banal theoretical framework behind Fowler’s and Pownall’s entries but rather, above all, the lack of interest in the topic by the economic profession. Serious and more systematic thinking would eventually start in the early 1900s in England with Hawtrey and Robertson. The lack of a proper intellectual framework for discussion, of a base camp for analytical expedition into difficult and confusing territories, is at the heart of the relative weakness of the ‘old’ Palgrave entries on crises and cycles. Methodologically, this discussion brings also, and again, to the forefront the point that dictionary entries are sometimes backward-looking and rarely at the scientific cutting edge unless the contributions to the ‘old’ Palgrave on cycles are yet another idiosyncrasy of British latecomers to the field of economic dictionaries.

NOTES 1 ‘. . . sudden catastrophes which interrupt the ‘normal’ course of business’ (Mitchell, 1913, p. 5). 2 This bias is already duly noted in a review published in the Glasgow Herald (dated 8 February 1900, issue no. 34): ‘Given the number of articles drawn from Whitehall and Lincoln’s Inn, it would seem that the civil service and the Bar afford peculiar leisure and facilities for the study of social science’. In his entry on PALGRAVE, ROBERT HARRY INGLIS (1827–1919), Milgate, one of the 1987 New Palgrave’s editors, also remarks that the presence of some entries and the selection of contributors ‘probably reflected in substantial measure the tastes of Palgrave himself, a commercial banker’ (→Durlauf and Blume, New Palgrave dictionary of economics, online edition, 10 February 2010). 3 Despite his heavy involvement in this venture, in his early review of Parts II and III of the Dictionary, Edgeworth did not fail to notice that ‘the advantages proposed [for the

342 Pascal Bridel

4 5 6 7

8 9 10

Dictionary] would have been more fully realised if the direction of the work had been in the hands of a committee rather than an individual’ (1892, p. 525). See the list of contributors in Volume III, pp. 759–762. They are both absent from the standard Dictionary of national biography and from the Encyclopædia Britannica. He was president during part of the First World War (see his 1916 presidential address in the year of his death). Pownall started his banking career in his home town of Manchester and always kept a close connection with the Manchester Statistical Society. His entry on periodicity quotes and relies substantially on papers by Langton, Mills and Jevons – all members of this Society. Langton’s and Mills’s papers were even published in the Transactions of the Manchester Statistical Society. For an extensive discussion of the context in and around the Manchester Statistical Society at the time, see Ashton, 1934 (1977 reprint), pp. 69–98. The Cannan archives at the LSE contain some proofs and 29 letters from Palgrave, 1890–1897 about his contribution to the ‘old’ Palgrave (Cannan/908). At the time, Cannan was in his early thirties and had been with the LSE since 1895. Langton on the balance of payments, Mills on ‘personal feelings’, Jevons on sunspots, Wilson on monetary variables and even Juglar are mentioned in connection with periodicity. ‘The invention of the term “credit cycle” may be traced to Mr John Mills of Manchester’ (p. 467).

REFERENCES Ashton, T. S., 1934 [1977], Economic and social investigations in Manchester, 1833–1933 (London: King. Reprinted Hassocks: Harvester Press, 1977). Bergmann, E. von, 1895, Die Wirtschaftskrisen: Geschichte der nationalökonomischen Krisentheorie (Stuttgart: W. Kohlhammer). Besomi, D., 2010, ‘Periodic crises’: Clément Juglar between theories of crises and theories of business cycles, Research in the History of Economic Thought and Methodology, 28A, pp. 169–283. Cannan, E., 1893, History of the theories of production and distribution in English political economy from 1776 to 1848 (London: Rivington). Danson, J. T., 1847, On the Accounts of the Bank of England under the Operation of the Act 7 & 8 Vict., c. 32, Journal of the Statistical Society of London, 10: 2, May, pp. 132–153. Edgeworth, F. Y. E., 1892, Review of Dictionary of political economy. Edited by R. H. Inglis Palgrave, FRS, Parts II and III, Economic Journal, 2, pp. 524–525. Fowler, W., 1866, The crisis of 1866: a financial essay (London: Longmans & Green). Fowler, W., 1886, Appreciation of gold: an essay (London: Cobden Club). Juglar, C., 1889, Des crises commerciales et de leur retour périodique en France, en Angleterre et aux États-Unis, 2nd edn (Paris: Alcan). Mitchell, W. C., 1913, Business cycles (Berkeley, CA: University of California Press). Pownall, G. H., 1892, The insufficiency of our cash reserves and of our central stock of gold, Economic Journal, 2, pp. 530–543. Pownall, G. H., 1899, Bank reserves, Economic Journal, 9, pp. 394–410. Pownall, G. H., 1914, English banking: its development and some practical problems it has to solve. Three lectures delivered at the London School of Economics, with a Preface by H. S. Foxwell (London: Blades, East & Blades). Thornton, H., 1802 [1939], An inquiry into the nature and effects of paper credit of Great Britain, with an Introduction by F. A. von Hayek (ed.) (London: George Allen & Unwin).

17 From crises to cycles Tugan-Baranovsky and the Brockhaus–Efron (1895–1915) François Allisson

F. A. Brockhaus and I. A. Efron (publishers), Enciklopedicheskij slovar’ (Encyclopaedic dictionary), St Petersburg: Efron, 1890–1907. Popular edition, 1907–1909. New edition, 1911–1916. In Russian.

17.1 THE BROCKHAUS–EFRON ENCYCLOPAEDIC DICTIONARY The first volume of the most ambitious universal encyclopaedia in Tsarist Russia was printed in 1890. It was published by a German–Russian company and compiled by Brockhaus from Leipzig and Efron from St Petersburg. In his Foreword, the editor, I. E. Andreevsky (1831–1891), rejoiced at the opportunity to produce a universal encyclopaedia, which was sadly lacking in the Russian language. He aimed ‘to give [. . .] a perfectly objective representation of universal culture, as well as the specific conditions of Russia’ (PREFACE, Brockhaus–Efron Encyclopaedic dictionary (henceforth BE), 1890, Vol. 1, p. i). The way he wanted to accomplish this goal was mainly to translate the whole of Brockhaus’s German Konversations-Lexikon. Andreevsky also planned certain necessary additions, such as the inclusion of some recent articles from French, English and German dictionaries, as well as some original articles, especially concerning Russia. The initial plan was to publish about 30 volumes, over a five- to six- year period. However, Andreevsky died in 1891, having completed only three letters of the alphabet in eight volumes, and his underpaid students produced poor translations. The subsequent editors, K. K. Arsen’ev (1837–1919) and F. F. Petrushevsky (1828–1904), pushed the encyclopaedia in a new direction. In their prefactory note FROM THE EDITORS (BE, 1891, 9, pp. i–iv), they criticize the former editor’s choices and clearly define their own vision. Brockhaus’s encyclopaedia should still be used as a reference book, but its structure was too old, intended only for conversation and, worse still, for the German public.1 Russians’ educational needs were different from those of Germans. Although there were many specialized dictionaries in Germany, there were few in Russia. Therefore, their encyclopaedia

344 François Allisson should be as general as possible to embrace the wide variety of readers’ interests, but its content must be detailed, like that in specialized dictionaries, in order to explain every concept ‘that plays or played a role in religion, science, literature, arts, legislation, public and social life, agriculture, industry, trade, and all other branches of national activity – materialist and spiritual’ (FROM THE EDITORS, 1891, 9, p. iii). In order to carry out this task, the number of original articles grew enormously, and the editors collaborated with more than a hundred of the most eminent Russian academics and scientists. For instance, the famous chemist Mendeleev was editor of all the articles relating to chemistry, technical subjects and industry, and Solov’ev was the editor for all philosophical entries. Prior to the completion of their encyclopaedia, the editors congratulated themselves on the correctness of their approach (FROM THE EDITORS, BE, 1905, 83, p. i). Of course, in order to include many more original entries – often long and innovative monographs – they considerably widened their initial project, from 30 to 86 volumes and from 5 to 18 years. However, they definitely met their public, and their BE became one of the key reference works, together with the →Entsiklopedicheskii slovar’ Russkogo Bibliograficheskogo Instituta Granat (see Chapter 21) and, later on, the Great Soviet encyclopedia. Physically, the main Brockhaus–Efron (1890–1907) – also called the Great Brockhaus–Efron in the literature – contains 82 main and 4 supplementary volumes.2 The whole set totals about 42,000 pages, 120,000 articles and 8,000 illustrations and maps. More than 30,000 sets were sold, giving the impetus for further editions to be produced. The Small Brockhaus–Efron (1899–1902; 1907– 1909) was issued twice, the first edition in three volumes, the second in four volumes. Their low price allowed for a wide circulation. The encyclopaedia’s information was obviously less comprehensive: it contained a selection of 35 per cent of the full version’s entries, and the average size of each article was reduced to 40 per cent of the original, thus making it possible to reduce the encyclopaedia’s entire content by about 85 per cent. Eventually, Arsen’ev edited a New Brockhaus– Efron (1911–1916). Due to its comprehensive content, the latter can be called the second edition. The death of Efron, the Civil War and the Revolution precipitated its end. Only 29 of the 48 planned volumes were released.3 The various reprints of this encyclopaedia demonstrate that it represents an enduring and widely used scientific and historical source in today’s Russian studies.4 Political economy was well represented in BE. The exclusive function of economic editor is not attributed in each volume, but when it is, three wellestablished and respected names are encountered: Manuilov, Posnikov and Janzhul. A. A. Manuilov (1861–1929), economist, professor and rector at the University of Moscow, was a specialist in agricultural economics and the classical theory of value. A. S. Posnikov (1846–1921) was an economist, statesman and publicist. As a Populist, he was very favourable to the institution of obshchina – Russian communal land ownership. I. I. Janzhul (1846–1914), economist, statistician and professor at the University of Moscow, is famous for his investigations into the role of the state in the economy, labour legislation, public finance and the economics of industrial and agricultural development. The economists who wrote in BE were

Tugan-Baranovsky: from crises to cycles 345 all in some respect under the influence of the younger German historical school and were impressed by Marx. They almost all studied for one or two years in German universities, and some even spent a few months at the British Library to conduct in-depth studies using English records.5 But this unifying picture should not hide what differentiates them. Among the authors – i.e. Tugan-Baranovsky, P. B. Struve, V. P. Vorontsov, A. I. Chuprov, L. V. Khodsky, L. Z. Slonimsky, P. Miljukov, etc. – we find Legal Marxists and Populists, Socialists and supporters of free trade.6 Biographical entries on foreign and Russian economists, as well as entries on economic categories, are present in BE. Those on some representatives of the older and younger German historical schools, some French Utopian Socialists, Marx, or Russian statesmen are allocated a few pages, while many others are restricted to between half a page and two pages. All fundamental economic categories, such as VALUE, PROFIT, WAGE, COMPETITION, INTEREST, ECONOMIC GOOD, and CARTEL are adequately covered (from 1 to 5 pages). Some articles giving a full set of historical data (BANKS, PRICES), and all articles relating to agricultural economics (COMMUNAL LAND OWNERSHIP, RURAL CREDIT SYSTEM, RENT, . . .), take up a tremendous amount of space (up to a hundred pages). A notable feature is that each entry comes with bibliographical details (selected primary and secondary literature in the case of individuals). In the entry on POLITICAL ECONOMY, the names of Wagner, Sombart, Schmoller, Knies, J. N. Keynes, J. S. Mill and Menger (for the Methodenstreit) give the overall tone of BE’s economic content. The entry RUSSIA represents an entire encyclopaedia within the overall encyclopaedia, and deserves attention (BE, 1899, 54–55). Interesting for the economist is its subsection ‘State and finance’, which contains a complete history of public finance in Russia, as well as the subsection ‘Science’, which describes the development in Russia of ECONOMIC SCIENCE (Tugan-Baranovsky), FINANCIAL SCIENCE, by Janzhul, AGRICULTURAL SCIENCE and STATISTICS. An entry on ECONOMIC CRISES appeared in successive editions of BE. The following section briefly introduces its author.

17.2 MIKHAIL IVANOVICH TUGAN-BARANOVSKY Mikhail Ivanovich Tugan-Baranovsky (henceforth Tugan) was born in 1865 near Kharkov in the Ukraine. After completing undergraduate studies in both natural sciences and economics at the University of Kharkov, he obtained his master’s degree with his Industrial crises in contemporary England (1894) followed by his doctoral degree with The Russian factory in the nineteenth century (1898), both at the University of Moscow. He was a lecturer in economics (from 1895 onwards) and professor in various institutions in St Petersburg, including the University, and participated in many contemporary debates on the fate of Russia’s economy – for example, in his speeches within the Russian Free Economic Society. He published theoretical and critical works on Marxism, historical and positive investigations on socialism, books on the ethical foundations of economics, on

346 François Allisson co-operation, on money, on the history of economic thought, and many other articles.7 The diversity of his interests is best embodied in his Foundations of political economy (1909), which played a stimulating role for a generation of Russian economists. He left Russia for the Ukraine in 1917, where he acted as Minister of Finance and for the establishment of the Ukrainian Academy of Science. He died in 1919 near Odessa. Tugan was pejoratively labelled a Legal Marxist on account of his revisionism. According to Schumpeter, he was ‘the most eminent of these [Russian] semiMarxist Marx critics’ (Schumpeter, 1954, p. 879). He had a habit of synthesizing, which others found intolerable. The dedication of his textbook to Quesney, Marx and Gossen gives a good illustration of his often-misunderstood eclecticism. His pupil Kondratiev explained this characteristic as the result of Tugan’s curious mind, keener on reacting in actual and contemporary debates (against Populists) than on the construction of a single, internally consistent economic system (Kondratiev, 1923). Tugan’s main writing on crises is his Industrial crises in contemporary England (1894; see bibliography for subsequent editions). In addition, he devoted a whole chapter on crises in his Foundations of political economy (1909),8 wrote the entries in BE and wrote some articles, which were eventually incorporated into successive editions of his Industrial crises in contemporary England. This is not the right place to speak of his numerous articles and speeches on the industrialization of Russia, nor of his essays in biography on several economists, including some critical views of the theory of markets of Sismondi, Malthus, Rodbertus, etc. It is therefore useful to remember Tugan’s long-forgotten Paper money and metal (1917), with developments of a monetary theory of cycles.9 Before writing his entry on economic crises (1895), Tugan had already published ‘Study on marginal utility [. . .]’ (1890) and two booklets on the life and achievements of Proudhon (1891) and J. S. Mill (1892). He spent six months in 1892 in England, collecting material for his master’s thesis, Industrial crises in contemporary England [. . .], published in 1894. This book gave him a reputation within Russian academic circles, which opened some doors to him, among others the positions of lecturer at the University of St Petersburg, redactor at BE and member of the Free Economic Society. It is interesting to note that he published the entry ECONOMIC CRISES in BE (1895) only one year after his book (1894) on the same subject, and the entry in New BE (1915) only one year after the third Russian edition of the same book (1914).10 Tugan’s other contributions to BE, and its subsequent editions, include entries on ADAM SMITH, JOHN STUART MILL, CARL MENGER, THOMAS MALTHUS, JEAN-FRANÇOIS MELON, LE MERCIER DE LA RIVIÈRE, COMPETITION and, within the entry on Russia, ECONOMIC SCIENCE.

17.3 SUMMARY OF TUGAN’S ECONOMIC CRISES This section gives summaries of the entries ECONOMIC CRISES – published successively in BE (1895), in Small BE (1909) and in New BE (1915) – in order to assess them (Section 17.4). The summaries are very detailed and contain extensive

Tugan-Baranovsky: from crises to cycles 347 quotations to allow non-Russian speakers to become acquainted with them. The three editions are not of the same length: the 1895 edition contains 30,000 characters, the 1909 edition only 1,000 and the 1915 edition about 15,000.

17.3.1 Brockhaus–Efron (1895) The entry begins with a broad definition: ‘Economic crises are different types of economic shocks, related to a disruption of the balance between demand and supply on the market of goods or capital’ (ECONOMIC CRISES, 1895, p. 743; see Chapter 3, Section 3.2.8.3 for similar definitions). It contains a typology of crises, a bird’seye view of the theoretical literature on crises, and a historical account of recent industrial crises. The bibliography is given at the end of this chapter (Section 17.5.1). 17.3.1.1 Types of crises A classification of the types of crises is given: they are monetary, credit or trade/ industrial, depending on the sector in which the equilibrium is broken. Monetary crises – ‘characterized by a shortage of cash in relation to the needs of circulation’ (p. 743) – are most often encountered as a manifestation during industrial crises. They are extremely scarce stricto sensu. Two rare examples of ‘non-periodical crises’ (p. 743) of this kind are the 1839 crisis in England, caused by the drought, and the 1864 crises in England and France, caused by a severe increase in the price of cotton. Jevons’s investigations concerning seasonal variations on the money market give results similar to those found for Russia: ‘according to Nikolay-on, currency reserves of the State Bank are subject to similar fluctuations. In spring, money is needed for field work; in fall for the harvest’ (p. 743). Credit crises are characterized by a ‘rapid contraction of credit, subsequent to an excessive expansion of it’ (p. 743). As for monetary crises, credit crises are closely tied to industrial crises. Stock market crises are the most important kind of credit crises, and they are likely to happen, since the price of securities is based on more or less random future profits and can thus fluctuate within very broad limits. Eventually their price is determined by actual yields. Therefore, a speculative rise of their exchange rate, without actual foundations always ends in a stock market crash. (p. 743) The misfortunes of John Law and Bontoux’s Union Générale are typical examples of credit crises that do not propagate to industry and trade. Industrial crises refer to a ‘general trouble in industry and in trade due to a fall in prices, resulting from an excess of the supply over the demand of goods’ (p. 743). The detailed description of the stages leading to crisis deserves quotation: Under the influence of favourable circumstances, industry is dynamic and commodity prices are high. Monetary capital, which then idly rested in banks

348 François Allisson during the years of stagnation, is entering circulation and is rapidly absorbed in trade and industry. Credit increases with the supply of capital. Everybody gets good earnings, leading the market to a state of agitation: expansion of production and a quick increase in commodity prices. Speculation on the stock market increases at the same time. Gradually, the general agitation becomes feverish. The foundations of craziness are laid. Credit is stretched to its ultimate limits; speculation stimulates the creation of a lot of new businesses. For a few months or even years, currency reserves in banks fall: the currency is spreading abroad, as rising domestic prices render exports more difficult and stimulate the import of foreign products. Finally, reserves in banks fall so low that the following decline will be unsafe for credit. To save their bets, banks raise their discount rates and reduce their lending activities. This is the signal of disaster. Since prices of goods and securities have been maintained at such abnormal levels only thanks to the banks, their refusal to lend forces speculators to sell their goods to fulfil their obligations. Prices of goods and securities rapidly fall; a general panic is triggered. Bank deposits are removed, and banknotes are exchanged against metal. Metal leaves banks as before, but less abroad (external drain[11]) than within the country (internal drain[12]), to meet the demand. Crisis especially hurts banks with minimal currency reserves, when demand for the latter is particularly strong. One after the other, banks stop their payments. Some retailers and manufacturers go bankrupt. The whole country feels this deep tremor. The panic does not usually last more than a few weeks, but its consequences are frequently felt for years. Trade and industry remain depressed, prices of goods don’t rise, and colossal amounts of capital accumulate in banks, finding no investment. Despite the low interest rates, money is flowing into the safes of banks, both from outside [the country], due to the decrease in imports of foreign goods, and from inside [the country], as a result of the weakening of trade. Finally trade and industry come alive again, another period of unrest arises, ending with a new crisis. (pp. 743–744) As for the frequency of crises in England, there is a ‘remarkable regularity, a real periodicity’ (p. 744) of a decade. This was the case only until 1873. Since then, the pattern of crises has been greatly modified: a chronic stagnation,13 with short interruptions, has replaced crises. This phenomenon is bad for world industry. Industrial crises in the past were ‘compared with favourable thunderstorms, which break a few trees, but at the same time purify the atmosphere and invigorate the ground’ (p. 744). With this new type of crisis, i.e. stagnation, it is not only reckless speculators who are in danger, but society as a whole. The economic consequences of crises for the working class are not forgotten: during a crisis, the death rate in industrial districts in England often exceeds that from cholera and other epidemics (p. 744). 17.3.1.2 Theories of crises ‘Economic science knows no generally accepted theory of crises’ (p. 744). Various theories should, then, be examined. These theories are grouped into three families,

Tugan-Baranovsky: from crises to cycles 349 according to the factor that has the preponderant importance: production, exchange and distribution. Production. Say and Ricardo do not allow for general overproduction. Socialists provided more in-depth studies. Fourier spoke about the ‘vicious circle’ of the modern industrial system. The ‘Marx–Engels school’ found the main causes of the crisis in the two fundamental contradictions of the capitalist system: first in the contrast between social production and individual appropriation of the product of labour; second in the opposition between the organization of production within factories and anarchy at the level of social production seen as a whole. Jevons’s original sunspot explanation of the periodicity of crises is described and criticized on the basis of – not given – empirical arguments (p. 744). Exchange. Many economists see the inadequate organization of credit and monetary circulation as the most important cause of industrial crises. The ‘School of Tooke’ opposes itself to the ‘School of Torrens, Loyd and others’ on the role of the quantity of banknotes in circulation at the onset of crises. Others (Coquelin, Carey and Macleod) see the break in the monopolistic organization of credit. On the contrary, Moritz Mohl and others blame the banks’ absolute freedom to create fictitious money. However, both of these theories are unilateral, since the crises usually take place in countries with a high degree of freedom (the USA) and in countries where credit is highly centralized and monopolistic (France). (p. 745) Giffen explains the actual stagnation by the lowering of gold extraction. Finally, governments that proceeded from a silver or from a mixed monetary system to a gold monetary system are completely guilty, according to the bimetallists. Distribution. The underconsumption theory of Sismondi – ‘the most notable advocate of this view’ (p. 745) – even if ‘hitherto supported by some leading economists’, proves to be incompatible with the facts. First, according to his view, stagnation in industry should be chronic, but up to the present, ‘production has quickly increased in capitalist economies’ (p. 745). Second, if the present stagnation is to be considered, ‘it coincided with an improvement, not a deterioration, of the situation of the workers’ (p. 745). Rodbertus’s theory – ‘the actual causes of crises [. . .] is not in the absolute low level of wages, but in their relative decline in national income’ (p. 745) – is worse still. The choice of a preventing policy against crises largely, if not entirely, depends on the causes one attributes to them. For instance: if it is admitted that the main cause of crises lies in the anarchic state of modern industry, then the natural tool to struggle against them consists in the organization of production. Some precisely see here the social importance of cartels. (p. 745)

350 François Allisson 17.3.1.3 History of recent industrial crises The crises of 1825, 1836, 1847, 1857, 1866, 1873 and the industrial stagnation of the 1870s–1880s are detailed. An account of the sequences of each specific crisis is given, together with their causes and factual elements, such as the number of bankruptcies. The history focuses on English and international crises. The crisis of 1825, for instance, is due to excessive speculation on mining industries in South America, which, as long as it lasted, promoted English exports of manufactured products on this new market, because European markets were devastated at the end of the Napoleonic Wars. Causes that are frequently cited are wars (the Napoleonic Wars, 1825; the US Civil War, 1866; the Franco-Prussian War, 1873) and harvests (1835, 1847, 1866). These particular and almost exclusively exogenous causes often affected the price of certain crucial products (cotton and corn) or certain activities (mining, railways and banks), giving birth to speculation. We will not give here more details on the history of these crises, as what is included is mainly a sketchy summary of what is detailed in Tugan’s books on crises (1894 and later editions). We have chosen instead to compare (in section 17.3.3) the handling of the history of crises in this edition (1895) and in the 1915 edition (since the 1909 entry has no room for history).

17.3.2 Small Brockhaus–Efron (1909) Since Tugan’s contribution to ECONOMIC CRISES for the Small BE is a very short entry, it can be reproduced in extenso, except for the two references (reproduced below, in Section 17.5.2): Economic crises are economic shocks, related to a disruption of the correspondent balance between demand and supply: excess supply of goods causes industrial crises; reduction of credit causes credit crises (especially crises on stock exchanges, caused by the fall of security prices, previously raised by speculation); shortage of money supply causes monetary crises. Credit and monetary crises commonly accompany industrial crises. Crises seriously affect national life, causing disorder in trade and industry, ruining many people. The causes of crises lie in the disorganization of modern industry, which knows nothing about the dimension of the needs for manufactured products; in the disproportion of production between the alternative sectors; and in the disorganization of credit and monetary circulation. The most important crises in recent times are: in the world (1857), in Europe and North America (1836 and 1873), in England (1825, 1847 and 1866), in France (1882), in North America (1893 and 1906), in Western Europe and Russia (1900–02). (ECONOMIC CRISES, 1909) This very small entry tells a similar story, except for the causes attributed to crises: the disorganization of modern industry, the disproportion of production between sectors, and the disorganization of credit/monetary circulation. The following entry (1915) goes deeper in this direction.

Tugan-Baranovsky: from crises to cycles 351

17.3.3 New Brockhaus–Efron (1915) Tugan’s entry for the New Brockhaus–Efron (1915) underwent some rewriting after 1895 and is half as long. It begins with exactly the same definition (see above, Section 17.3.1). The proportion of space devoted to each topic in the entry has been changed.14 The bibliography is considerably shortened,15 but contains some new entries. The following paragraphs do not give a summary, but rather point out the major changes between the 1895 and 1915 entries. 17.3.3.1 Types of crises The descriptions of monetary and credit crises are word for word the same. The description of industrial crises, apart from the fact that it has been shortened by about 80 per cent, is very different: Industrial crises are the most important form of crises. In developed capitalist countries they repeated themselves with a great regularity, alternating with periods of industrial expansion. Consequently, a capitalistic cycle arises, composed of three phases: 1) industrial expansion, 2) crisis and 3) industrial stagnation. The phase of acute crisis can fall out and, in this case, the capitalist cycle is composed of two phases: industrial expansion and stagnation. The capitalistic cycle in its most eloquent and unequivocal form was expressed during the development of England’s industry. (Tugan, ECONOMIC CRISES, 1915, p. 350) 17.3.3.2 Theory of crises This section was dramatically reduced in size and its content was subjected to many changes. ‘Economic science [still] knows no generally accepted theory of crises’, but now only ‘two main theories are competing’, that is, Sismondi’s and Tugan’s. Sismondi’s theory is given very succinctly: ‘[it] explains crises by the inability of society to consume the manufactured goods, because of the poverty of the masses’ (p. 353). Tugan’s own theory is given more space: Crises are inherent in the very nature of capitalist economies. Their necessary nature results from three characteristics of the capitalist economic system: (1) it is antagonistic, in that the worker is a simple means of production for the capitalist firm; (2) unlike other antagonistic economic systems, it tends to unlimited expansion of production (as a means of capital accumulation); and (3) as a whole, it is a disorganized economy, in which a planned distribution of social production between the different industrial sectors is lacking. On the basis of these three characteristics of the economic system, capitalism inevitably provokes economic crises. The frequency of crises is due to the fact that free capital accumulates in capitalist economies not at once in industry,

352 François Allisson but is first delayed in banks. During industrial recovery, banks have enough of it. When capital runs out, a crisis follows. (p. 353) 17.3.3.3 History of crises Apart from the fact that it goes further (up to the US crisis of 1907), this part is factually very similar to that written in 1895, but there are quantitatively small changes that introduce substantial modifications of meaning. Two main modifications were introduced in 1915. First, the recurrence of crises is emphasized. An introductory paragraph appeared, stressing the regularity of periods of ‘crises or stagnation’ of about a ‘decade’. Linkages between the crises are brought out in the text. For instance, speaking of the 1836 crisis: ‘Panic took hold in November (in 1825, it was in October)’ and ‘the collapse of commodity prices began, as in 1825, some months before the panic’ (p. 351). Finally, two expressions make their first appearance in this section: ‘capitalistic cycle’ and ‘ordinary periodical industrial crises’, while some words related to cycle appear more frequently: ‘expansion’ and ‘stagnation’. Second, new causes are attributed to crises, not replacing but completing previously given ones: the role for the price of iron is added for the crises of 1825 and 1847; and the adjective ‘disproportional’ appears once, in the description of the 1836 crisis, giving more weight to endogenous explanations. 17.3.3.4 Agricultural crises Aside from monetary, credit and trade/industrial crises, Tugan mentioned agricultural crises, as a subcase of the latter. In 1895, he referred the reader to the entry ‘Agricultural crises’ (Tugan, 1895, p. 742), which, however, does not exist. This is certainly why he introduced a paragraph on that topic in this new edition. Agricultural crises are depressed periods caused by the low price for agricultural products. During the last quarter of the nineteenth century, the European agricultural sector underwent a severe crisis, due to the reduction in cost of maritime and land transport, allowing for very cheap corn from India, Argentina, Canada and the US to enter European markets. However, the sector was touched in different ways: small farmers, producing mainly their own subsistence goods, were less affected than capitalist farms, producing mainly for the markets.

17.4 ASSESSMENT This section does not intend to evaluate Tugan’s theory of crises,16 nor its influence on future economists.17 Its purpose is to comment on the opportunity to present a theory of crises in an encyclopaedia. The transcription of a theory contained in a book to an entry is first addressed, stressing the constraints of writing for an encyclopaedia. The evolution of the entry through the various editions of the

Tugan-Baranovsky: from crises to cycles 353 encyclopaedia is then commented on, emphasizing the choice of terminology related to crises, as well as the problematic question of rewriting history. Eventually, an entry’s relevance for an intended national audience is discussed.

17.4.1 From the book to the entry: writing for an encyclopaedia Tugan’s popularity did not originate from his writing of the entries on ECONOMIC CRISES. The opposite is probably the case: Tugan’s book on crises gained him the

recognition that eventually led to the invitation to contribute an entry on the subject. The reduction of a whole book to some pages of an encyclopaedia inevitably forces its author to make some choices, often to emphasize particular elements. Tugan’s book is roughly composed of three parts: a history of crises, a theoretical part and the description of the social consequences of crises. In his entry, Tugan gives a detailed description of the history of crises,18 but there is no space to explain the social consequences of crises (with the exception of a single sentence). The typology of crises is a notable new feature, compared to Tugan’s book. This inclusion can be seen as the result of the desire to fill the gap between his theory of industrial crises and a systematic exposition of all types of crises (monetary, credit and industrial), which is very desirable in an encyclopaedic entry on economic crises. The treatment of Tugan’s theory in his entry is also interesting. Tugan’s theoretical argument, as developed in his books, is articulated in two steps. First, he expounds his theory of the markets, based on his ‘revisionist’ version of Marx’s reproduction schemes, in order to dispose of both Say’s law and Sismondi’s theory of underconsumption. His argument that production takes place in a disorganized way, giving rise to disproportions, aims at explaining that industrial crises can occur. Second, he expounds his theory of the recurrence of industrial crises, explained by the fluctuations of free loanable capital.19 In the entry, this two-step sequence is not apparent, his theory of the markets being at best incorporated, at worse shrugged off. It is difficult to explain this omission.20 We tested whether the transposition of an author’s theory to a dictionary necessarily involves some modifications. Tugan’s theory was, in fact, hardly affected in substance by this transposition, although the scope of the investigation was affected. The latter was restricted, by omitting his theory of the markets, in order to observe the editors’ requirement that he should only write about economic crises. At the same time, and for the same reason, the scope of the investigation was enlarged with the inclusion of a typology of crises and a bibliography.21

17.4.2 The terminology: from crises to cycles Tugan’s terminology relating to the possibility and recurrence of crises becomes clearer with the successive editions of his entry. In 1895, he spoke of an ‘excess of supply of over the demand for goods’, implying an overproduction argument. He refers to others’ theories, not specifying whether he was or was not favourably

354 François Allisson disposed to them, as the ‘contradictions of the capitalist system’ of the Marx–Engels school, and the ‘inadequate organization of credit and monetary circulation’, supported by many economists. He already introduced his idea of ‘monetary capital’ (free loanable capital), for an implicit explanation of periodicity. In 1909, Tugan introduced explicitly three circumstances: the ‘disorganization of modern industry’, ‘the disproportion of production’ and the ‘disorganization of credit and monetary circulation’, but said nothing about the periodicity of crises. In 1915, he inserted industrial crises in a ‘capitalistic cycle’, crises being the result of the ‘antagonistic’ character of the economy, the tendency ‘to unlimited expansion of production’ and the ‘lack of a planned distribution of social production’. The recurrence of crises is explained by the fluctuations in the accumulation of ‘free capital’ (free loanable capital). Tugan’s definition of crises (‘disruption of balance’), unchanged from 1895 to 1915, indicates that he considered crises as a deviation from the normal state of the economy, i.e. there is equilibrium between supply and demand on the markets. Crises were considered as merely accidental, as the various exogenous causes attributed to them indicate.22 However, this view is not consistent with the development of the terminology used when transferring from BE to New BE. The periodical recurrence of crises required an emphasis on more endogenous causes.23 Indeed, in 1915, Tugan considered that ‘crises are inherent in the very nature of capitalist economies’ and that ‘capitalism inevitably provokes economic crises’ (Tugan, 1915, p. 353). Crises are finally encapsulated as a ‘phase’ of the ‘capitalistic cycle’ (albeit not mandatory; see Section 17.3.3), thus becoming part of the normal state of the economy. Ideas concerning the nature and causes of crises, as well as the notion of the normal state of the economy, obviously moved on between 1895 and 1915, and this opens the question of the status of encyclopaedic knowledge, which will be addressed in the following subsection.

17.4.3 Rewriting history: the status of encyclopaedic knowledge A comparison of the 1895 and 1915 entries shows that its historical part underwent a partial rewriting. New crises have obviously been added. What is more relevant is the way in which old crises have been rewritten. There were only a few modifications, but all of them in the direction of rendering crises more endogenous and emphasizing their recurrence. Tugan certainly wanted to emphasize new points and not to hide certain facts. However, the relationship between his historical and theoretical parts is not clearly defined and this certainly worked against him.24 Therefore, one can conclude that he rewrote history to match the evolution of his theory. A naive positivist may hold the view that only new facts (i.e. history) can alter theories and not vice versa. This could have been less embarrassing in a working paper than in an encyclopaedia, where the entry should be used as a reference work for a long time and where the status of knowledge is often considered superior.

Tugan-Baranovsky: from crises to cycles 355 Should an encyclopaedia contain an objective representation of universal knowledge, as Andreevsky, the first editor of BE, maintained? Arsen’ev and Petrushevsky partially agreed with their predecessor, as for them ‘objectivity will not mean without colour and without variety’ (BE, 1891, 9, p. iii). In order to enrich their encyclopaedia, they decided not to exclude but to incorporate authors’ personalities. Tugan’s 1895 entry presents a review of various available theories. This conforms more closely with an ‘objective’ encyclopaedic entry. Tugan’s 1915 entry presents a vindication of his own theory as opposed to Sismondi’s, and is similar to a partisan monograph. Between 1895 and 1915, the status of the entry changed (together with the popularity of its author), altering accordingly the status of encyclopaedic knowledge.

17.4.4 A Western theory in a Russian encyclopaedia? What is the intended audience for Tugan’s theory of crises? The entry itself is for Russian-speaking readers, but the theory developed by Tugan aims at understanding English crises, and his theory of crises had a far-reaching influence outside Russia. The question whether capitalist crises apply only to Western Europe or also to ‘backwards’ nineteenth-century Russia was a matter of considerable debate at the time the entry on ECONOMIC CRISES was written. In the early 1890s, there was no consensus that industrialization would ever take place in Russia: the vision that industry was artificial and could not develop was widely accepted. In his book The Russian factory (1898), Tugan aimed at persuading his readers that industrialization was actually taking place in Russia, that cyclical fluctuations due to industry were already discernible, so that English crises were at best a metaphor for the near future of Russia. In this sense, The Russian factory (1898) is the essential companion to the Industrial crises in England (1894): the latter is not intelligible, for a Russian audience, without the former.25 The 1st edition of the entry ECONOMIC CRISES (1895) was certainly seen as Western knowledge, while in 1915 the entry E CONOMIC CRISES (1915) could already be considered as part of Russian knowledge, perfectly in place in a Russian encyclopaedia.

17.5 TUGAN’S ORIGINAL REFERENCES The following references and categories are Tugan’s. Additional information added by us are is square brackets. For works cited in this article, see the References section below.

17.5.1 Tugan’s bibliography (1895) Theory of crises (apart from general works of political economy) Stanley Jevons. Investigations in currency and finance [(London, 1884)]. Guthrie. Monetary and commercial crisis (L[ondon], 1859).

356 François Allisson Carey. The past, the present, the future (L[ondon], 1856). Macleod. Theory and practice of banking (L[ondon], 1857). E. Laveleye. Le marché monétaire et ses crises (P[aris], 1865). Cl. Juglar. Des crises commerciales (P[aris], 1889).

History of crises Th. Tooke. A history of prices (L[ondon], 1829–1857). Francis. History of the Bank of England [(London)]. Max Wirth. Geschichte der Handelskrisen (new edn Frankf. am. M., 1890; transl. in Russian, SPb, 1875). [Hyndman]. Commercial crises of the nineteenth century (L[ondon], 1892). Th. Tooke. Considerations on the state of the currency (L[ondon], 1825). Horsley Palmer. Causes and consequences of the pressure on the money market (L[ondon], 1837). [McCulloch]. ‘The crisis in American trade’ (Edinburgh Review, 1837). Morier Evans. The commercial crisis of 1847 (L[ondon], 1848). Idem. The history of the commercial crisis 1857–1858 (Lond[on], 1858). A. Schäffle. Gesammelte Aufsätze. Die Handelskrisis von 1857 [Tübingen, 1886]. Michaelis. Volkswirthschaftliche Schriften (B[erlin], 1873). W. Fowler. The crisis of 1866 (L[ondon], 1867). R. Baxter. The panic of 1866 (L[ondon], 1866). R. H. Patterson. ‘On our home monetary drains’ (Journal of the Stat[istical] Society, L[ondon], 1870). [Glagau]. Der Börsen- und Gründungs-schwindel in Berlin [(Leipzig, 1877)]. Neuwirth. Die Speculationskrisis v. 1873 (L[ei]pz[ig], 1874). [Oechelhäuser]. Die wirtschaftliche Krisis (B[erlin], 1874).

Contemporary stagnation in trade Giffen. Essays in finance (L[ondon], 1890). Sauerbeck. ‘Prices of commodities and the precious metals’ (Journal of the St[atistical] Society, L[ondon], 1886). Fowler. The appreciation of gold (L[ondon], 1886). Leone Levi. The depression in trade (L[ondon], 1885). Wells. Recent economic changes [(New York and London, 1890)]. Russel Wallace. Bad times (L[ondon], 1885). [Wasserrab]. Preise und Krisen (Stuttg[art], 1889). Wolf. Die gegenwärtige [Wirtschaftskrisis] (Tübingen, 1888). Lexis. ‘Die Währungsfrage’ (Jahrbücher für N. Oek. N. F., XVI [, 1888]). Soetbeer. Materials for the illustration and criticism of the economic relations of the precious metals (L[ondon], 1887). Reports of the Royal Commission on the Depression [of] Trade and Industry (L[ondon], 1886). [D. C. Wright]. Industrial depressions; the first annual Report of the Commissioner of [Labor] (Washington, 1886).

Tugan-Baranovsky: from crises to cycles 357 Russian literature on crises V. Bezobrazov. O nekotorykh yavleniyakh denezhnogo obrashcheniya v Rossii [On some phenomena of monetary circulation in Russia] (M[oscow], 1863). K. Gattenberger. Venskiy Krizis 1873 g. [The crisis of 1873 in Vienna] (S[t ]P[eters]b[urg], 1877). A. [I.] Chuprov. O kharaktere i prichinakh sovremennogo promyshlennogo krizisa v Zapadnoy Evrope [On the nature and causes of the recent industrial crisis in Western Europe] (M[oscow], 1889). A. Skvortsov. O vliyanii parovogo transporta na sel’skoe khozyaystvo [On the influence of steam transport on agriculture] (Warsaw, 1890). V. V. [pseudonym of V. P. Vorontsov] Ocherki teoreticheskoy ekonomii [Essays on economic theory] (S[t ]P[eters]b[urg], 1895). M. [I.] Tugan-Baranovskij. Promyshlennye krizisy v sovremennoy Anglii [Industrial crises in contemporary England] (S[t ]P[eters]b[urg], 1894).

17.5.2 Tugan’s bibliography (1909) [M. I.] Tugan-Baranovskij. Promyshchlennye krizisi v sovremenn. Anglii [Industrial crises in contemporary England] ([2nd edn, St Petersburg] 1900). Brandt. Torgovo-promyshchl. krizis [Trade and industrial crisis] ([St Petersburg] 1902– 1904).

17.5.3 Tugan’s bibliography (1915) Monetary, credit and trade/industrial crises Th. Tooke. A history of prices (L[ondon], 1829–1857). Max Wirth. Istoriya torgovykh krizisov (transl. from German [Geschichte der Handelskrisen], S[t ]P[eters]b[urg], 1875). M. [I.] Tugan-Baranovskiy. Periodicheskie promyshlennye krizisy [Periodical industrial crises] (3rd edn, S[t ]P[eters]b[urg], 1914). Lescure. Obshchie i periodicheskie promyshlennye krizisi (transl. from French [Des crises générales et périodiques de surproduction], S[t ]P[eters]b[urg], 1908).

Agricultural crises Levitskiy. Sel’skokhozyaystvennyi krizis vo Francii [The agricultural crisis in France] (Kharkov, 1899). Bulgakov. Kapitalizm i zemledelie [Capitalism and agriculture] ([St Petersburg], 1900). H. Levy. Entstehung und Rückgang des landw. Grossbetriebes in England ([Berlin], 1904). Zotov. Ocherki zemlevladeniya i zemledeliya v sovremennoy Anglii [Land ownership and agriculture in contemporary England] (M[oscow], 1909).

NOTES 1 The new editors gave an example of what should be done, contrary to the previous pattern: small foreign towns’ entries should be translated only when their population

358 François Allisson

2 3 4

5

6 7 8 9

10

11 12 13

14

15 16

17

reached a given level, or when the town in question meant something special for Russian readers. Conversely, all Russian towns should be included, as well as small villages with significance for Russian culture, and not only those meaningful for a German audience (BE, 1891, 9, p. ii). Each volume, numerated from 1 to 82 and then from D1 to D4, represents a half-tome. Therefore, in the literature, one can find the following equivalent quotations: tome XVIa = volume 31; tome XVIb = volume 32; tome XVIIa = volume 33, etc. The last published entry concerns the family name ‘Otto’. The National Library of Russia in St Petersburg owns the proofs of Volumes 30 and 31, the last entry describing the Grand Duchy of Posen, in today’s Poland. BE (1890–1907) was reprinted in 2001 (Terra, Moscow) and an electronic version was issued (IDDK, 2002 and 2005). The Small Brockhaus–Efron (Small BE, 1907–1909) was reprinted in 1994 (Terra, Moscow). As far as we know, the New Brockhaus–Efron (New BE) was never reissued. Some classical examples of these – often highly historical – studies the British economy by Russian scholars done within the British Library include Tugan-Baranovsky on industrial crises in England, Manuilov on the rent of land in Scotland and Janzhul on free trade in England. Slightly off this line, but within the same tradition, Mentor Bouniatian could be added. But this variety does not include radical authors who did not make good bedfellows with Tsarist censorship – at least as it was perceived. For the most comprehensive bibliography of and on Tugan, see Amato, 1980. Section V, Chapter 2: (1) Capitalist cycle; (2) Capitalist cycle in England; (3) Theory of crises; (4) Explanations of capitalist cycle and of the periodicity of crises. Unsatisfied by both Fisher’s quantitative theory and Tooke’s commodity theory of the value of money, he outlined the foundations of a cyclical theory of the value of money and, concerned by the need to find a solution to monetary problems at the end of the First World War, addressed the possibility of an international paper money system. The same occurred to Juglar (see Chapter 12). It may be argued, from Tugan’s and Juglar’s cases, that an author’s availability to write an entry in a dictionary is higher soon after the publication of a book on the same subject, while, at the same time, it renders him more attractive for an editor. In English in the text. In English in the text. The Russian word zastoy refers to something that does not move and is usually translated as ‘stagnation’, although curiously it was also used to mean ‘depression’. Tugan himself used zastoy to refer to the English (and French) ‘depression’. Depression and stagnation were perhaps mixed up in Russian, but stagnation could also refer to an alternative concept to depression (see Chapter 3, Sections 3.3.4 and 3.3.7). We have chosen to translate zastoy as ‘stagnation’ in order to preserve this ambiguity. The section on the types of crises was 31 per cent of the 1895 entry and this was reduced to 27 per cent in 1915. The section on the theories of crises fell from 32 per cent to 9 per cent, the part on the history of crises increased from 37 per cent to 57 per cent, while a section on agricultural crises, absent in 1895, make up 7 per cent of the 1915 entry. From 41 items to 8 (reproduced below, in Section 17.5.3). For a recent exposition of Tugan’s theory of crises, see Hagemann, 1999, pp. 91–97. The forgotten and controversial question of the nature of the link between Tugan’s theory of markets and his theory of the periodicity of crises has been recently reconsidered by Barnett, 2001, Colacchio, 2005 and Besomi, 2006. This influence is based on Tugan’s books; that on Western economists is based only on the German (Tugan, [1894], 1901) and French (Tugan, [1894], 1913) editions of Industrial crises (1894). Amato (1984) offers an historiographic study on Tugan’s theory of crises. For an account of Tugan’s influence on individual economists, see Hansen,

Tugan-Baranovsky: from crises to cycles 359

18 19 20

21

22

23 24

25

1964 for Spiethoff, Cassel, Aftalion and Schumpeter; see Barnett, 2001, pp. 458–462, on Mitchell, Robertson, Keynes and Kalecki. Tugan is also known to have influenced in various respects Sombart, Pohle, Haberler, Lescure, Sweezy and the Russian Kondratiev (on the latter, see Reijnders, 1993, and in this volume Chapter 24). It represented 37 per cent of the 1895 entry and 57 per cent of the 1915 entry. Tugan used in his book the metaphor of the steam engine, the position of the piston indicating the phase of the cycle while steam represents free loanable capital. This mechanistic analogy was not used in the BE’s entries. We may conjecture that expounding Marx’s reproduction scheme in a two-column encyclopaedia in the 1890s could raise some technical difficulty, or that there could have been ideological problems, or again that an entry on the theory of markets was planned, to be written by Tugan or someone else, but was eventually discarded. Wary of annoying his readers with a whole set of quotations, Tugan warned in his book that this absence of scientific apparatus should not hide the fact that he knew the literature on the subject (Tugan, 1913, p. vi). This is why the explicit bibliographies included in BE’s entries (Section 17.5) are very valuable information for the sources of Tugan’s investigations. The following expressions, taken from 1895, confirm the abnormal nature of crises: ‘state of agitation’, ‘the general agitation becomes feverish’, ‘the foundations of craziness are laid’, ‘this is the signal of disaster’, ‘the whole country feels this deep tremor’ and ‘panic’ (see Section 17.3.1). Albeit not using this word, Tugan even made the explicit statement that exogenous causes cannot alone provoke crises (1913, p. 242). This is what we could call Robertson’s sketchiness argument. D. H. Robertson, in his review of Tugan’s Crises industrielles en Angleterre, complained: ‘there is a certain sketchiness about each of the three parts into which the work is divided, as well as a certain lack of cohesion between them’ (Robertson, 1914, p. 82). For a detailed analysis of the Russian factory and its links to the Industrial crises in England, see Barnett, 2005.

REFERENCES Amato, S., 1980, Ricerca bibliographica su M. I. Tugan-Baranovskij (1865–1919), Argomenti Storici, III–IV (Florence: University of Florence). Amato, S., 1984, Tuhan-Baranovsky’s theories of markets, accumulation and industrialization: their influence on the development of economic thought and modern historiographic research. In I. S. Koropeckyj (ed.), Selected contributions of Ukrainian scholars to economics (Cambridge, MA: Harvard University Press), pp. 1–59. Barnett, V., 2001, Tugan-Baranovsky as a pioneer of trade cycle analysis, Journal of the History of Economic Thought, 23, pp. 443–466. Barnett, V., 2005, Tugan-Baranovsky and ‘The Russian factory’. In R. B. McKean and I. D. Thatcher (eds), Late imperial Russia: problems and prospects. Essays in honour of R. B. McKean (Manchester: Manchester University Press), pp. 84–100. Besomi, D., 2006, ‘Marxism gone mad’: Tugan-Baranowsky on crises, their possibility and their periodicity, Review of Political Economy, 18, pp. 147–171. Colacchio, G., 2005, On the origins of non-proportional economic dynamics: a note on Tugan-Baranowsky’s traverse analysis, Structural Change and Economic Dynamics, 16, pp. 503–521. Hagemann, H., 1999, The development of business-cycle theory in the German language area 1900–1930, Storia del pensiero economico, 37, pp. 87–122.

360 François Allisson Hansen, A. H., 1964, Business cycles and national income (New York: Norton). Kondratiev, N. D., 1923, Mikhail Ivanovich Tugan-Baranovskij (Petrograd: Kolos). English translation in N. Makaseva, W. Samuels and V. Barnett (eds), The works of Nikolai D. Kondratiev, Vol. 4, 1998 (London: Pickering and Chatto), pp. 317–338. Reijnders, J., 1993, Pioneers of long wave analysis: Van Gelderen, Kondratieff and the intellectual heritage of Tugan-Baranowsky. Les Cahiers de l’Association Charles Gide pour l’étude de la pensée économique, 5, pp. 55–78. Robertson, D. H., 1914, Review of ‘Les crises industrielles en Angleterre’ by Michel TouganBaranowsky, Economic Journal, 24, pp. 81–85. Schumpeter, J. A., 1954, History of economic analysis (London: George Allen & Unwin). Tugan-Baranovsky, M. I., 1890, Uchenie o predel’noj poleznosti khozjajstvennykh blag kak prichina ikh cennosti [Study on marginal utility of economic goods as the source of their value], Juridicheskij Vestnik, XXII, pp. 192–230. Tugan-Baranovsky, M. I., 1891, P. Zh. Prudon, ego zhizn’ i obshchestvennaya dejatel’nost’. Biograficheskiy ocherk [P. J. Proudhon, his life and social activity. Biographical essay], (St Petersburg: Obshchestvennaja Pol’za). Tugan-Baranovsky, M. I., 1892, D. S. Mill. Ego zhizn’ i ucheno-literaturnaya deyatel’nost’. Biograficheskiy ocherk [J. S. Mill. His life and his scientific and literary activity. Biographical essay], (St Petersburg: Pavlenkov). Tugan-Baranovsky, M. I., 1894, Promyshlennye krizisy v sovremennoy Angliy, ikh prichiny i vliyanie na narodnuyu zhizn’ [Industrial crises in contemporary England, their causes and influence on national life], (St Petersburg: Skorokhodov). 2nd edn, 1900. 3rd edn, 1914. Posthumous editions, identical to the 3rd edn: 1923, 1997. German translation (1901, from 2nd edn) as Studien zur Theorie und Geschichte der Handelskrisen in England, French trans. (1913, from a revised 2nd edn) as Les crises industrielles en Angleterre, partial English trans. (1954, from 3rd edn) as Periodic industrial crises: a history of British crises (Annals of the Ukrainian Academy of Arts and Sciences in the United States, III: 3, pp. 745–802). The title underwent some modifications, from Industrial crises in England to Periodical industrial crises. Tugan-Baranovsky, M. I., 1898, Russkaya fabrika v proshlom i nastoyashchem [The Russian factory in the past and in the present], (St Petersburg: Pantaleev). English translation, from the 3rd Russian edn of 1907, The Russian factory in the nineteenth century (Homewood and Georgetown: Irwin), 1970. Tugan-Baranovsky, M. I., 1909, Osnovy politicheskoy ekonomii [Foundations of political economy], (St Petersburg: Slovo). Tugan-Baranovsky, M. I., 1917, Bumazhnye den’gi i metall [Paper money and metal], (Petrograd: Pravo). Italian translation, 1987, Carta moneta e metallo, edited by A. Graziani and A. Graziozi (Rome and Naples).

18 Heinrich Herkner Inequality of income distribution, overcapitalization and underconsumption Harald Hagemann

Handwörterbuch der Staatswissenschaften (1890–1894, 6 vols, with two supplements, 1895 and 1897; 2nd edn 1898–1901, 7 vols; 3rd edn 1909–1911, 7 vols).

18.1 CONRAD’S HANDWÖRTERBUCH DER STAATSWISSENSCHAFTEN Heinrich Herkner contributed the main article on KRISEN to the first three editions of the Handwörterbuch der Staatswissenschaften, which had been edited by Johannes Conrad in co-operation with Wilhelm Lexis, Ludwig Elster and Edgar Loening, and soon became widely known as ‘Conrad’s Handbook’. As Herkner has pointed out in his autobiographical reflections, it had been the co-editor Lexis who had approached him to write the crises entry (Herkner, 1924, p. 17). Lexis himself had widely published on crises, overproduction and consumption, and contributed the essay on overproduction to the Handwörterbuch der Staatswissenschaften (see Chapter 19). He became aware of Herkner as a potential contributor of the crises entry due to Herkner’s 1890 inaugural lecture ‘Social reform as a commandment of economic progress’ as an extraordinary professor at the University of Freiburg, which in the subsequent year was expanded and published as a book (Herkner, 1891). There Herkner outlined his programme of social reforms and emphasized the impairments of the domestic market which result from the low purchasing power of the increasing numbers of industrial workers. In that context Herkner also dealt with the crises problem. It is likely that Lexis approached Herkner to write the entry to the Handwörterbuch der Staatswissenschaften because he found the latter’s explanation of the crises problem compatible with his own. Herkner became directly aware of economic fluctuations as a young child in his family’s cotton factory. He saw the enormous boom that followed the ending of the Franco-Prussian War and the subsequent major crisis that soon followed in 1873 when he was ten years old. He recognized the increasing poverty of many

362 Harald Hagemann working-class families and started to reflect on the strange situation in business which made goods unsaleable that only shortly before had been in strong demand. These empirical experiences of his childhood strongly determined the later research programme of his studies (Herkner, 1924, p. 79). Herkner contributed the entry on KRISEN to the first three editions of the Handwörterbuch der Staatswissenschaften (1st edn, 1892, Vol. IV, pp. 891–912; 2nd edn, 1900, Vol. V, pp. 413–433; 3rd edn, 1910, Vol. VI, pp. 253–276). It is only in the completely revised 4th edition of the Handwörterbuch der Staatswissenschaften, which was published after the First World War, that Spiethoff (1925) replaced Herkner as the author of the important entry on KRISEN (see Chapter 20).

18.2 HEINRICH HERKNER Heinrich Herkner was born in Reichenberg in Bohemia, today’s Liberec in the Czeck Republic, close to Saxony and Silesia, on 27 June 1863 and died in Berlin on 27 May 1932. The family had been engaged in the working of cotton for several generations. His grandfather developed the business from one of handicraft to manufacture, and his father developed it further into a modern factory. Herkner was only two years old when his father died and his uncle took over the factory in Reichenberg. After finishing high school in his home town in 1882, Herkner engaged in a practical course in agriculture for several months before beginning to study economics.1 After the death of his mother, who had been educated in a monastery and raised her son as a strong Catholic and an Austrian patriot, Herkner abandoned the Catholic faith but kept his enthusiasm for social policy and the social ethics of Catholicism. The ideas of Rodbertus, who himself had been strongly influenced by the writings of Sismondi, had a great impact on the young Herkner, who worried about the grievances and misery of working-class families. Herkner began to study economics in the academic year 1882–1883 at the University of Vienna, where, however, he was annoyed that his favourite subject was embedded in law. He therefore left Vienna to continue his studies in 1883–1884 at the University of Leipzig, where an economic seminar did not yet exist and the lectures of Wilhelm Roscher did not attract him. He therefore went to study in Berlin in the winter semester of 1884–1885, where he missed Schmoller’s courses but attended the lectures of Wagner, whose dubious combination of conservativereactionary political views with a pretended social radicalism annoyed him.2 After one semester in Berlin in summer 1885, Herkner moved to the University of Freiburg in the liberal south-west of Germany, whose ideas attracted him. However, Alphons Thun, who had interested Herkner because of his empirical realism and abstention from ideology and his view that workers are more than just a factor in industry, did not lecture because of health problems. It was in Freiburg that Herkner was informed by Walther Lotz, whom he already knew from Leipzig, about the attractiveness of the University of Straßburg, where a new German university had been founded in 1872. With Lujo Brentano and Georg Friedrich Knapp, Herkner

Heinrich Herkner on overcapitalization and underconsumption 363 finally found his admired teachers in Straßburg. Whereas Brentano’s richness of material, his flashes of genius and brilliance of presentation overshadowed all university teachers he had experienced before and impressed Herkner very much, with regard to their personal character he felt himself closer to Knapp than to the ardent zeal of Brentano. Herkner was full of sympathy for the versatility, the democratic convictions and the political engagement of the more balanced Knapp, who, like Brentano, was also strongly interested in social and labour questions. He only later became aware of certain deficiencies and bias in Knapp’s teachings. Herkner nevertheless chose Brentano to be the supervisor of his PhD thesis Die oberelsässische Baumwollindustrie und ihre Arbeiter (‘The upper Alsatian cotton industry and its workers’). After only 15 months in Straßburg, Herkner received his doctorate in February 1887. He was only the third candidate to receive the best mark, summa cum laude, for his dissertation. Herkner’s study of the working conditions of the cotton industry in Alsace confirmed the suspicions that his teacher Lujo Brentano had had ever since he succeeded Gustav Schmoller on his chair in Straßburg. During his ten years in Straßburg from 1872 to 1882, Schmoller had developed good relations with several patricians and the regional German government. In Schmoller’s view, the introduction of the German industrial code would have enhanced the French prefecture and weakened the German government. Brentano, on the other hand, was doubtful about the privileges of the local industrialists at the expense of the workers and perceived them as a continuation of the patronage policy of the French prefecture. In Herkner he found the expert who could view and assess the situation in the factories from both perspectives, and also compare the situation in Alsace with that in other parts of Germany and Austria (see Brentano, 1917, pp. 92–93). Herkner’s research results showed that, as a consequence of the non-application of the German Gewerbeordnung (industrial code), workers in Alsace were paid lower wages and suffered worse working conditions than those in other German regions. Like Brentano, he regarded this as an unjustified privilege for the industrialists, targeted at increasing their sympathies for the new German government. Herkner’s study caused an uproar among the patricians in Alsace and led to political turbulence. However, it also led to the abolition of the old patriarchal industrial code and the introduction of the German Gewerbeordnung in Alsace on 27 February 1888. It is very rare that a PhD thesis has such an enormous political and economic impact. Furthermore, it caused a three-year interruption in the lifelong friendship between Brentano and Schmoller, which can be regarded as the key stabilizing axis of the Verein für Sozialpolitik from its foundation in 1872 until the First World War.3 Schmoller, who had recommended Brentano as his successor at Straßburg when he left for Berlin, was deeply annoyed by Herkner’s study and held Brentano responsible for it. Herkner soon made an eminent academic career despite the fact that the dissertation of this young economist raised the hopes of leading socialists. August Bebel wrote a positive review and, on the recommendation of Karl Kautsky, Friedrich Engels hosted the young scholar in his home in London. Heinrich Braun invited

364 Harald Hagemann Herkner to co-edit the newly founded journal Archiv für soziale Gesetzgebung und Statistik, which focused on the labour question and, after its start in 1888, soon became a recognized scholarly journal, with articles by Sombart, TuganBaranovsky, Sidney and Beatrice Webb et al. (see Hagemann, 1991, pp. 44–45). However, after some reflection, Herkner declined the offer in order to concentrate first on his own scientific work. In 1889 Herkner started his academic career at the University of Freiburg, where he was appointed permanent extraordinary professor after only two semesters. In Freiburg he co-operated intensively with Eugen von Philippovich, who could be regarded as the leading Austrian Fabian and was trying to bridge the gap between the German Kathedersozialisten (socialists of the chair) and the ideas of marginal analysis and the Austrian School founded by Menger. It was in Freiburg that Herkner wrote the entry on crises to the first edition of Conrad’s handbook. In 1892, at the age of only 29, Herkner became professor at the University of Karlsruhe, where he succeeded Karl Bücher, who had moved to the University of Leipzig as the successor to Brentano on Roscher’s former chair. While at Karlsruhe, Herkner wrote his magnum opus on the labour question, Die Arbeiterfrage, which was first published in 1894 and comprised 298 pages. It dealt with the social history of France, England and Germany in Part I, ethical considerations of the labour question, liberalism and communism in Part II, and finally with social reform. In the following three decades the book was constantly revised and expanded, and became a standard textbook, and not just in Germany. The last, 8th edition was published in two volumes in 1922 and comprised 1,312 plus xxxiv pages. Herkner’s book on the labour question was also well received internationally. It was translated into Russian (1899), Finnish (1902), Polish (1905), Spanish (1915) and Greek (1919/1920). In winter 1897 there was a major dockers’ strike in Hamburg. Herkner, who recognized that the strike was justified due to the workers’ severe grievances, signed a declaration by the progressive social reformers led by Ferdinand Tönnies in support of the striking dockers. Herkner’s engagement caused him increasing problems with the Court of Baden, leading bureaucrats and important industrialists, who threatened that they would no longer let their sons study in Karlsruhe with one of the wildest socialists of the chair, even if not a social democrat. The Badische Landeszeitung, the influential local newspaper, published a polemic against Herkner and asked for a ‘competent fireman’ to be placed at his side with respect for ‘freedom of science’ (see vom Bruch, 1980, p. 149). Herkner felt very uneasy in Karlsruhe and was glad when an offer from Zurich to become professor reached him. Herkner spent nine years at Zurich University from 1898 to 1907 and regarded the first years as the happiest and most fruitful of his life. Whereas in 1897 he was seriously considering standing for the regional parliament in Baden for the alliance of the liberal left, including the social democrats, during his Swiss years Herkner became increasingly conservative. Zurich is ‘the best place to give up any social democratic sentiments’, he wrote to Brentano on 2 June 1907 (Lindenlaub, 1967, p. 166). As had been predicted earlier by Max Weber, Herkner gradually gave up all radical-democratic ambitions and sentiments. He finally

Heinrich Herkner on overcapitalization and underconsumption 365 reached a conservative turning point in his career, which nobody could have expected when he finished his doctoral thesis in Straßburg in 1887. In 1907 Herkner became Professor of Economics at the Technical University in Berlin-Charlottenburg, with the support of Brentano and Schmoller. He had already seriously considered leaving Zurich when an offer from Charles University in Prague reached him in 1904 since, as the only full-time professor in economics, Herkner suffered an enormous increase in the number of students and a growing teaching and exam burden. Soon after his arrival in Berlin, Herkner entered into an intensive working relationship with Gustav von Schmoller, which developed into a close friendship. In his autobiography Herkner points out that originally he had formed a completely wrong view of Schmoller, which he had started to revise after the publication of the first volume of Schmoller’s Grundriss (‘Foundation’) in 1900. The personal meetings in Berlin gave him the ‘certainty that we two were much closer than we thought before. Neither was he so conservative and one-sidedly historically oriented as I assumed, nor was I so “red” as I may have appeared to him temporarily’ (Herkner, 1924, p. 106). Like Schmoller, Herkner praised the integrity and efficiency of the civil service, and the ethical and moral values of the state, views that crept into later editions of the Arbeiterfrage, which now received positive reviews by Schmoller. The way was paved for Herkner to succeed Schmoller in two out of three influential positions. In 1911 Herkner was installed as Vice-Chairman of the Verein für Sozialpolitik by Schmoller, whose health was in decline. He thereby became the designated successor, a post to which he was officially elected shortly after the death of Schmoller. From 1917 to 1930, i.e. most of the Weimar Republic years, Herkner was the Chairman of the Verein für Sozialpolitik. The fact that not only Herkner but also other former socialists of the chair and leading members of the Verein gave up their fight for social policies and an improvement in the living conditions of the working class by further increases in real wages and reductions in working hours after the First World War led to a deep conflict with his former mentor, Lujo Brentano, who finally left the Verein. Herkner had not participated in the first Methodenstreit, the dispute about method between Schmoller and Menger. However, he contributed an article ‘Der Kampf um das sittliche Werturteil der Nationalökonomie’ (Herkner, 1912) to the second famous controversy, the Werturteilsstreit, a fundamental debate about normative judgements, which had escalated at the Vienna conference of the Verein für Sozialpolitik in 1909 when the historical-ethical approach of Schmoller and other socialists of the chair became the target of heavy attacks by Werner Sombart and Max Weber in particular. In his article the new Vice-Chairman fully shared Schmoller’s conservative approach and the belief in ‘the unsurpassable integrity and efficiency of our civil servants, the “moral energy” of our state which naturally constitutes the most distinguished precondition of the whole Kathedersozialismus’ (Herkner, 1912, p. 550). It was not surprising that Max Weber was highly sceptical about Herkner and that Brentano became increasingly alienated from his former student. Schmoller, on the other hand, was instrumental in choosing Herkner as his successor on the central chair at the University of Berlin in November 1912. He

366 Harald Hagemann finally preferred Brentano’s former student to his own former student Werner Sombart, who, although more brilliant, was also more ardent, too controversial, too occupied with his struggle with Marxian ideas and less balanced than Herkner, who was closer to Schmoller’s own character. The only position in which Herkner did not succeed Schmoller was as editor of the leading journal of the younger Historical School, the Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reich (since 1913 Schmollers Jahrbuch), a post held by Schmoller from 1881 until his death. The journal, in which Herkner published regularly, was edited by Hermann Schumacher from 1918 to 1923, and thereafter by Schmoller’s former student, Arthur Spiethoff, one of the leading business cycle theorists and was responsible for bringing Schumpeter back to academia as a professor at the University of Bonn in 1925. Herkner taught at the University of Berlin until his death in 1932. During this period he increasingly turned to public finance, issues and problems that occupied the German debates after the First World War and to which, under Herkner’s guidance, the Verein für Sozialpolitik turned his attention. A major constitutional reform was implemented in 1921, when in addition to the central committee two subcommittees on Economic Theory (and Sociology) and Public Finance were founded. Herkner now criticized ‘state socialist’ tendencies in the Weimar Republic, which led to controversial debates and open conflicts with Brentano and increasing tensions with the trade unions to which he once was so close. Herkner had attached himself to the left wing of the National-Liberal party after his return from Switzerland to Germany and to the liberal Deutsche Demokratische Partei in the Weimar years. However, with regard to the power of the masses, whose leaders are incapable of articulating unpopular truths, he now found it necessary to fight against socialist tendencies, much as the socialists of the chair in pre-war times had confronted the omnipotence of Manchester capitalism (Herkner, 1924, pp. 114–115).

18.3 HERKNER ON CRISES Herkner starts his discussion of crises with reflections on the notion of the crisis. He points out that in medicine the crisis marks the decisive turning point in the course of a disease. In economics the key issue are disturbances of the equilibrium between production and demand capable of purchasing. Whereas in the past crises were short-lived and could be regarded as turning points in which the best entrepreneurs were selected for, the analogy with medicine has waned as newer crises have occurred. These newer crises, such as those of 1873–1879 and 1882–1887, have developed a more chronic nature and might better be termed ‘depressions’. Herkner distinguishes between general and particular crises according to the extension of the disturbances, and attributes the notions of trade crises, stock exchange crises, speculation crises, production crises, foundation crises and monetary crises to the areas where the disturbances manifest themselves at the time. Concerning the symptoms and the sequel of crises, Herkner quotes

Heinrich Herkner on overcapitalization and underconsumption 367 from Friedrich Engels, whose pertinent analysis has been formulated by Lord Overstone in a more pregnant way: ‘State of quiescence, improvement, growing confidence, prosperity, excitement, overtrading, convulsions, pressure, stagnation, distress, ending again in quiescence’ (KRISEN, in Handwörterbuch der Staatswissenschaften, 1890, p. 891). After these introductory remarks, the following sections of Herkner’s essay deal with the causes of economic crises (II), the appropriate therapy (III), crises theories (IV) and a more detailed historical discussion of the development of crises in the nineteenth century (V). Herkner is convinced that general crises cannot be explained by a single cause, but are the result of a combination of several causes. In his survey of explanations of crises he presents what can only be described as a pot-pourri of most of the ideas that were available in the literature at the time he was writing. Thus, the crisis could originate in production, commerce and traffic, distribution or consumption, or it could be caused by non-economic factors such as weather influences on the harvest, wars or critical effects from pests (phylloxera, bark bugs, locusts, etc.). The adjustment of production to the needs of the people has become more difficult with the growing division of labour, even more so with the growing international division of labour and the resulting greater distance between producers and consumers. The co-ordination problem has been enhanced by the fact that the number of entrepreneurs who produce consumer goods has declined significantly compared to those who produce goods of higher order in the sense of Carl Menger. On the other hand, recent technical progress in communication may have contributed to a better organization of the markets by improving the information of producers on prices, production and demand, and thereby their estimation of future demand. However, the only decisive regulator – price formation and the resulting entrepreneurial profits – may fail too easily since price and profit increases may make entrepreneurs become irrational. If too many of them take these signals as an incentive to expand production, this may result in general overproduction. In the second edition of his crises essay, Herkner (1900, p. 415) refers to the behaviour of the cotton producers in North America in 1892 as a case study where rational behaviour at the micro level led to an irrational outcome at the macro level. Herkner points out an important technological development that had contributed to the transformation of crises from short-term turning points of economic development to long-term events, which are more like chronic depressions.4 The substantial increase in fixed capital in modern technology – which Herkner illustrates using the example of the cotton industry, on which he was an expert – makes it hardly possible to reduce production and supply immediately after a decline in prices indicates a slowdown in the market. The high amount of fixed capital forces entrepreneurs to continue production since they must realize the amortization of the invested capital. One can therefore observe that, with the expansion of the mechanized system of modern capitalism, in contrast to the earlier manufacturing period, in times of crises the operation is much more rarely completely interrupted. This makes crises more pertinacious and long-lasting, because a quick restoration

368 Harald Hagemann of the equilibrium between production and consumption is no longer possible. Sometimes production is even expanded in times of crises because large enterprises, with their cost advantages, can thereby reduce their production costs per unit of output, and, with lower prices, may increase their market share at the expense of small and medium-sized firms, which may be completely eliminated from the market. Crises then contribute to the transformation to large-scale enterprises. As Lexis (see Chapter 19) has done in his contribution on ‘overproduction’ to Conrad’s handbook (ÜBERPRODUKTION, Handwörterbuch der Staatswissenschaften), Herkner also points to increases in the productivity of labour, which are linked to technological change. As a consequence of the new, more efficient techniques, the price of commodities declines, which leads to their greater saleability. However, expansion of the market very often cannot keep abreast of an increase in production because price decreases come into force only incompletely and with delay. Finally, Herkner also lists misguided economic policies such as excessive protective tariffs or export premiums as causes of production crises, an argument that reveals the free trade attitude of his teacher Brentano. Crises can also have their source in traffic and circulation. Under the German term ‘Verkehr’ Herkner first discusses changes in transportation before he deals more extensively with the currency and credit system. He points out that revolutionary technological changes in transport and communication can lead to economic disturbances similar to those caused by changes in production techniques. An intensification of competition may cause a change of location or a transition to another system of operation. Thus, the enormous productivity increases in transport due to the development of steam navigation and the American railway system led to the supply of cheap corn by American producers, with whom Western and Central European farmers were unable to compete. This has caused spillover effects in terms of crises since the farmers’ reduced purchasing power could not be fully compensated by an increase in workers’ purchasing power due to a fall in the price of bread. Herkner’s lengthy considerations of crises that originate from the monetary, credit, stock exchange or currency system do not contain important innovative theoretical insights. His principal position is the emphasis on the role of a strong state to regulate the banking system to keep the purchasing power of money stable. Herkner here emerges as a typical socialist of the chair, sharing Schmoller’s beliefs in the efficiency and competence of the Prussian civil service in particular. Thus, Herkner points out that the old dictum ‘free trade in banking is free trade in swindling’ has not lost its importance. ‘As much as banks which are managed solidly can contribute to the avoidance and curing of economic crises, as great is unfortunately also the damage which is caused by careless granting of credit and dishonest issuing of banknotes’ (p. 896). Rather surprising in this context are some positive comments on the role of speculation on the stock exchange, which contributes to the temporal and regional adjustment of prices. Bergmann (1895, p. 425) already recognized that Herkner attributed the greatest importance to the unevenness of income distribution, which causes one of the most dangerous and deepest disturbances in modern economic life, ‘a pathological

Heinrich Herkner on overcapitalization and underconsumption 369 disposition of our economic body’ (Herkner, 1900, p. 419). Each period, the receivers of high income withhold large parts of their income from the consumer market because they want to increase their wealth and future income by saving and earning interest. However, their capital formation only rarely corresponds to the capital formation necessary for the whole economy. In most cases it is higher, i.e. overcapitalization occurs. Although capital accumulation increases the demand for labour, the growing purchasing power of workers lags behind the additional production of commodities. ‘If the purchasing power of the newly employed workers were to coincide with the net returns of the new firms in the economy, then neither interest nor a corresponding profit would result for the entrepreneurs and capitalists’ (p. 896). The disproportionality between production and consumption, which originates from the simultaneous overcapitalization and underconsumption, could be obscured in many ways. Modern large-scale enterprises might blossom and give the apparent impression of an upturn in the economy. However, the downside consists of a chronic depression in handicraft and its workers. The excess production might also be exported without a corresponding import, so that the savings are lent to foreign countries. These exports then result from social grievances in the domestic economy. Another ‘solution’ of the disproportionalities between production and consumption due to overcapitalization as a consequence of inequality, which Herkner observes in many European countries, is the enormous unproductive expenditure on the military. This type of public consumption covers the gap between production and private consumption. The associated permanent increase in public debt increases the interest rate or prevents its fall. However, the ‘true evil’ – the great unevenness of income distribution – is not eliminated; on the contrary, a payment of interest on public debt via an increase in indirect taxes would further reduce the purchasing power of the masses and thereby aggravate the problem (see p. 897). In the 2nd edition, written in Zurich and with his Swiss experiences, Herkner points to the fact that the introduction of a high wealth tax to finance public consumption could mitigate the problem (KRISEN, 1900, p. 421). Herkner identifies the underconsumption of the great masses, resulting from the inequality of income and wealth, and overcapitalization as two sides of the same coin. The resulting overproduction puts modern economies into a critical state with the consequence that minor disturbances can lead to major crises and that the recovery from a crisis has become more difficult. Not only does the great unevenness of distribution contribute to the development of crises, but also the crises produce a surplus working population and thereby influence income distribution in a very negative way. The distribution of income determines not only the size but also the structure of consumption. Workers who receive a minimum wage have little disposable income. The result is a certain uniformity in most workers’ consumption patterns. On the other hand, the wealthy are free to choose how they spend their money and very often are subject to the rule of capricious fashions. This leads to greater uncertainty in the estimation of future demand on the part of producers. A great fluctuation in fashions can cause local crises. On the other hand, it may stimulate wealthy people

370 Harald Hagemann to spend more on consumer goods and thereby contribute to restore the equilibrium between production and consumption. The latter argument shows that Herkner has a permanent tendency to reach a balanced view, congenial to his character. His discussion of the various causes of crises sometimes also gives the impression that they will occur when anything of sufficient importance goes wrong, because hardly any argument available at the time is missing. Herkner might have felt this himself because in retrospect not only does he speak of an immense list of causes such that one may be surprised that crises do not happen even more often, but also he stresses the interdependencies of various causes and the task of determining the ‘coefficients of importance’ of the various causes. Thus, whereas at the beginning of his essay he denies that crises can be explained as the result of a unifying cause, he now feels the need for exactly that. There can be no doubt that for Herkner the decisive cause consists of the great unevenness of income and wealth, which leads to overcapitalization and underconsumption. This is also indicated by the fact that in his section on Therapy, Herkner fully agrees with Lexis’s position that only by improving the ability of the working population to consume more could an appropriate remedy be found for a chronic crisis based on overproduction. In his discussion of crises theories Herkner distinguishes between the optimistic free trade theories of Say, Ricardo and the two Mills, and the pessimistic socialist crises theories of Owen, Malthus, Sismondi, Rodbertus, Marx and Engels, Kautsky, Lassalle, Fourier, Proudhon, Henry George et al.5 The members of the Currency School are attributed with a special position in the former group due to their emphasis on the credit system. However, their views did not impress Herkner very much due to the suspension of Peel’s Bank Charter Act (1844) in times of crises to avoid greater maladies. Lexis is given a special position in marking the traverse from the former to the latter group, which emphasized the contradiction between overproduction in the privately organized capitalist economy and objective underconsumption, which is strongly linked to the distributional factor. In the second and third version of his Crises essay, Herkner (1900, pp. 423–427; 1910, pp. 265–269) subdivides his Section III on crises theories into three subsections where he discusses the controversy between Malthus, Sismondi and Say, the socialist crises theorists and the newer German economics, which takes a middle position between liberal and socialist economics. With regard to the general glut controversy, Herkner cannot understand why Say’s théorie des débouchés, ‘which was reduced by its originator himself to the most insignificant of tautologies, nevertheless has been able to maintain such a highly respectable reputation among economists’ (p. 423). On the other hand, Herkner keeps some distance from Malthus’s emphasis on luxury consumption, whereas he fully approves of Sismondi’s view that the equilibrium between production and effective demand is more disturbed the more uneven the income distribution becomes. In the first version of his crises essay, Herkner (pp. 896–897, 904) refers to Rau’s German edition of the letters between Say and Malthus on the causes of the stagnation of commerce and points out that Rau (1821) basically agreed with Malthus that an increase in production does not necessarily lead to an equivalent

Heinrich Herkner on overcapitalization and underconsumption 371 increase in consumption. However, Herkner fails to refer to the fact that five years later in his Lehrbuch der politischen Ökonomie (Principles of political economy) the influence of Malthusian and Sismondian ideas had wasted away, and Rau (1826) not only considered equilibrium between production and consumption as a necessary condition for the wealth of nations, but also pointed out that overall supply equals overall demand and that a general overproduction is unthinkable. With regard to the German authors, Herkner is full of praise for Adolf Wagner’s contribution on KRISEN (in →Rentzsch’s Handwörterbuch der Volkswirthschaftslehre, 1866; see Chapter 14), where Wagner had taken up the best ideas of the liberal school, in particular John Stuart Mill’s emphasis on the tendency of profit to fall to a minimum as one of the most important causes of crises. The study of crises and economic fluctuations was a major issue in German economic analysis from the mid-nineteenth century. The debate intensified at the turn of the century when Tugan-Baranovsky’s studies on the theory and history of commercial crises in England were published in German (1901) and a new generation of younger economists, such as Arthur Spiethoff and Werner Sombart, made major contributions (see Hagemann, 1999). In particular, the writings of Spiethoff, who had been a student of Wagner and research assistant to Schmoller, had a strong influence on Herkner, who wrote the third version of his KRISEN entry while in Berlin. Herkner completely rewrote the second section of his essay, which he now termed Theorie des Konjunkturwechsels (Theory of business fluctuations) instead of Ursachen der Wirtschaftskrisen (Causes of economic crises). The title as well as the structure of this section – the ‘normal’ state, upturn, reversal and decline, external causes of business fluctuations – show not only the stronger influences of Spiethoff but also the beginning of the traverse from putting almost all the emphasis on the crisis to placing the problem of the cycle as the focus of attention instead. The way was paved for Spiethoff to substitute Herkner as the contributor on KRISEN in the fourth and final edition (1925), seemingly with the consent of Herkner, who had not followed up the modern developments in business cycle theory and whose energies in the mid-1920s were absorbed by his chairmanship of the Verein für Sozialpolitik and his membership of the Reichswirtschaftsrat, the consulting committee of the German government on economic and financial issues.

18.4 ASSESSMENT In his well-known survey on the history of crises theories, Bergmann (1895, p. 428) attested to Herkner (1890) ‘a meritorious summary and interpretation of the different explanations of crises’, in which grouping the disturbing causes is the most useful. Bergmann’s critique that Herkner’s presentation suffers from an insufficient knowledge of the doctrines of Malthus and Sismondi probably caused Herkner to add a special section on the controversy between Malthus, Sismondi and Say in the second version (Herkner, 1900), in which he explicitly refers to Bergmann.

372 Harald Hagemann It may be a surprise that Heinrich Herkner, who had succeeded Schmoller on his influential chair at the University of Berlin and ran the business of the Verein für Sozialpolitik for almost two decades from 1911 to 1930, is not known internationally and is hardly known to young economists even in Germany today. Herkner’s Arbeiterfrage for several decades was the leading textbook on the labour question. His article on value judgements (Herkner, 1912) has been recognized by a modern expert as ‘the presumably most brilliant defense of Schmoller’s ethical economics’ (vom Bruch, 1980, p. 311, n. 77). Referring explicitly to Herkner’s quoted critical statement on Say, even an important international historian of economic thought has praised Herkner’s ‘authoritative article on crises’ (Hutchison, 1953, pp. 357 f.). However, these positive statements are the exception rather than the rule and there are few negative comments either. The reason may be that Herkner, in his crises essay too, did good groundwork but was not an outstanding theoretician making innovative contributions. He did not even understand some of the most important theoretical arguments of his time. He never addressed properly the full consequences of the role of money as a store of value. Perhaps Herkner’s limitations with regard to theory can best be illustrated by his treatment of Ricardo: in the first version he still attested that Ricardo’s analysis is ‘more profound’ (Herkner, 1890, p. 902), but in his later discussion of the controversy between Say, Malthus and Sismondi did not even mention him. A deeper understanding of Ricardo’s arguments would have been helpful for Herkner. This holds true in particular of his negative assessment of the role of capital accumulation which, in Ricardo’s view, could not lead to a deficiency in effective demand.

NOTES 1 For details of Herkner’s life and work, see his autobiography (Herkner, 1924), L. Heyde’s entry on HERKNER, HEINRICH in →Beckerath’s Handwörterbuch der Sozialwissenschaften (Vol. 5, 1956), and the biography by Backhaus and Hanel (1994). 2 On Roscher and Wagner, see Chapters 7 and 14 of this volume. 3 See Lindenlaub, 1967, pp. 162–168 and Hagemann, 2001. For the history of the Verein für Sozialpolitik, see also Boese, 1939. 4 On the terminological shift from ‘crises’ to ‘depressions’, see Chapter 3, Sections 3.3.7 and 3.3.8.4; the topic was discussed a few years earlier by Laveleye in completely different terms; see Chapter 15, Section 15.3. 5 For a full list and a more detailed discussion, see Chapter 4, Section 4.4.

REFERENCES Backhaus, J. and Hanel, J., 1994, Die Nachfolge – Ein Versuch über Heinrich Herkner, den Volkswirt (Marburg: Metropolis). Bergmann, E. von, 1895, Die Wirtschaftskrisen. Geschichte der Nationalökonomischen Krisentheorieen (Stuttgart: Kohlhammer). Boese, F., 1939, Geschichte des Vereins für Sozialpolitik 1872–1932 (Berlin: Duncker & Humblot).

Heinrich Herkner on overcapitalization and underconsumption 373 Brentano, L., 1917, Elsässer Erinnerungen (Berlin: Erich Reiß). Bruch, R. vom, 1980, Wissenschaft, Politik und öffentliche Meinung. Gelehrtenpolitik im Wilhelminischen Deutschland (1890–1914) (Husum: Matthiesen Verlag). Hagemann, H., 1991, Learned journals and the professionalization of economics: the German language area, Economic Notes, 20, pp. 33–57. Hagemann, H., 1999, The development of business-cycle theory in the German language area 1900–1930, Storia del Pensiero Economico, 37, pp. 87–122. Hagemann, H., 2001, The Verein für Sozialpolitik from its foundation (1872) until World War I. In M. M. Augello and M. E. L. Guidi (eds), The spread of political economy and the professionalisation of economists. Economic societies in Europe, America and Japan in the nineteenth century (London and New York: Routledge), pp. 152–175. Herkner, H., 1887, Die oberelsässische Baumwollindustrie und ihre Arbeiter (Straßburg: Trübner). Herkner, H., 1891, Die sociale Reform als Gebot des wirthschaftlichen Fortschrittes (Leipzig: Duncker & Humblot). Herkner, H., 1894, Die Arbeiterfrage (Berlin: J. Guttentag), 2nd edn, 1897, 3rd edn, 1902, 4th edn, 1905, 5th edn, 1908, 6th revised and extended edn, 2 vols, 1916, 7th edn, Vol. 1: Arbeiterfrage und Sozialreform, Vol. 2: Soziale Theorien und Parteien (Berlin and Leipzig: Vereinigung wissenschaftlicher Verleger Walter de Gruyter – vormals G. J. Göschen’sche Verlagshandlung, J. Guttentag, Georg Reimer, Karl J. Trübner, Veit & Comp), 8th edn, 2 vols, 1922. Herkner, H., 1912, Der Kampf um das sittliche Werturteil der Nationalökonomie, Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche, 36, pp. 515–555. Herkner, H., 1924, Der Lebenslauf eines ‘Kathedersozialisten’. In F. Meiner (ed.), Die Volkswirtschaftslehre der Gegenwart in Selbstdarstellungen (Leipzig: Verlag von Felix Meiner), pp. 77–116. Hutchison, T. W., 1953, A review of economic doctrines 1870–1929 (Oxford: Clarendon Press). Lindenlaub, D., 1967, Richtungskämpfe im Verein für Sozialpolitik. Wissenschaft und Sozialpolitik im Kaiserreich vornehmlich vom Beginn des ‘neuen Kurses’ bis zum Ausbruch des Ersten Weltkrieges (1890–1914). Part I. (Wiesbaden: Franz Steiner Verlag). Rau, K. H., 1821, Malthus und Say über die Ursachen der jetzigen Handelsstockung (Hamburg: Perthes and Besser). Rau, K. H., 1826, Lehrbuch der politischen Ökonomie (Heidelberg: C. F. Winter). Schmoller, G. von, 1900–1904, Grundriss der allgemeinen Volkswirtschaftslehre, 2 vols (Munich and Leipzig: Duncker & Humblot). Tugan-Baranowsky, M., 1901, Studien zur Theorie und Geschichte der Handelskrisen in England (Jena: Gustav Fischer).

19 Wilhelm Lexis Crises and overproduction Harald Hagemann

Wörterbuch der Volkswirtschaft (1898, 1907, 1911), edited by Ludwig Elster (Jena: Gustav Fischer); 2 volumes.

19.1 ELSTER’S WÖRTERBUCH DER VOLKSWIRTSCHAFT During the nineteenth century, handbooks became an important medium in the German language area to summarize the state of knowledge in various areas and to inform educated people. This holds true in particular for the ‘state sciences’ and, by the end of the century, increasingly for economics. The first handbook comprising the complete subject of political economy was the Handbuch der politischen Ökonomie, first edited by Gustav Schönberg in two volumes in 1882, and then in three volumes in the subsequent three editions, which were published in 1885–1886, 1890–1891 and 1896–1898. Schönberg, who was professor of economics at the University of Tübingen from 1872 to 1908, focused on the tripartite division of economics into economic theory, economic policy and public finance, which had been established by Karl Heinrich Rau (1792–1870), as well as on statistics, which had become much more important since the publication of Rau’s Principles. Wilhelm Lexis, who was among Schönberg’s many co-editors, himself contributed a long essay entitled Die volkswirthschaftliche Consumtion (Lexis, 1882). Shortly afterwards, Lexis became one of the four main editors of the →Handwörterbuch der Staatswissenschaften, an even more comprehensive project, which was first published in six volumes between 1890 and 1894, with two supplements published in 1895 and 1897, and 2nd and 3rd editions in seven volumes soon to follow in 1898–1901 and 1909–11 respectively. The main driving force of this work, which in a short time became an ‘indispensable tool of study for any economist of German tongue’ (Bortkiewicz, 1915, p. 330), was the publisher Gustav Fischer in Jena, who had first contacted Elster.1 Ludwig Elster (1856–1935) completed his PhD with Bruno Hildebrand at the University of Jena in 1878 and his habilitation in economics with Johannes Conrad at the University of Halle in

Wilhelm Lexis on crises and overproduction 375 1880. After holding academic positions in Aachen and Königsberg, Elster became full professor of economics at the University of Breslau in Silesia, today’s Wrocław in Poland, in 1887, a position he relinquished ten years later to succeed Althoff in the Prussian Ministry of Education, where he was responsible for the university system. In 1916 he resigned from that position and became an honorary professor at the University of Jena. Elster had always been a main organizer of research. As a former co-editor, he succeeded Conrad from 1915 to 1933 as the editor of the Jahrbücher für Nationalökonomie und Statistik, which had been founded by Bruno Hildebrand in 1863 and was one of the most important scholarly journals in the German language area (Hagemann, 1991). When the publisher Fischer asked Elster to edit the Handwörterbuch der Staatswissenschaften, he invited Conrad, ‘the kindly mentor of many American visitors’ (Schumpeter, 1954, p. 851), with his high reputation and excellent international contacts, to join forces. At Conrad’s insistence, Lexis and Edgar Loening, Conrad’s colleague in Halle who was responsible for all juridical entries, became co-editors. Nevertheless, emphasis was clearly on the economic and social state sciences, and the Handwörterbuch der Staatswissenschaften soon became known as either ‘Conrad’s’ or ‘Elster’s’ handbook. The long entry on KRISEN to this work was contributed by Heinrich Herkner, who later succeeded Gustav Schmoller on his chair at the University of Berlin in 1912 and as the Chairman of the Verein für Sozialpolitik in 1917 (see Chapter 18; for more on the Handwörterbuch der Staatswissenschaften, see also Chapter 20). Following the deaths of Lexis (1914), Conrad (1915) and Loening (1919), Elster was the only remaining editor when the fourth and completely revised edition of the Handwörterbuch der Staatswissenschaften was published starting in 1923 in nine volumes, in co-operation with the two new editors, Adolf Weber (Munich) and Friedrich Wieser (Vienna). Volume 6, published in 1925 (pp. 8–91), now contained the famous article KRISEN by Arthur Spiethoff, Schumpeter’s colleague in Bonn, who had replaced Herkner as the author and whose article was published in an English version three decades later (Spiethoff, 1953; see Chapter 20). After the Second World War, →Handwörterbuch der Sozialwissenschaften, edited by Erwin von Beckerath together with 11 other colleagues, including Gottfried Haberler, in 12 volumes between 1956 and 1965, became the official successor of the Handwörterbuch der Staatswissenschaften, and as its predecessor the leading handbook for decades. Ludwig Elster was also the only editor of the shorter and handier →Wörterbuch der Volkswirtschaftslehre, which first came out in two volumes in 1898 and was soon republished in 2nd and 3rd editions in 1906–1907 and 1909–1911 respectively. In his Foreword to the 1st edition, Elster emphasized the independence of the Wörterbuch from the Handwörterbuch der Staatswissenschaften, both published by Gustav Fischer in Jena. Elster’s Wörterbuch der Volkswirtschaftslehre, with its much cheaper price, was particularly directed to students and their needs in exercising the function of a hitherto non-existent compendium of economics. Lexis was responsible for sub-editing the contributions to Section IIa, namely

376 Harald Hagemann the history of economics. He himself wrote the entries on KRISEN (crises) and UEBERPRODUKTION (overproduction) to the first three editions. Twenty years after the publication of his Wörterbuch, Ludwig Elster edited a fourth, completely new version, which came out in three volumes in 1931–1933. Elster himself now took responsibility for the contributions in Section IV on the history of economics, and Karl Diehl from the University of Freiburg was responsible for editing the contributions in Section II on economic theory and methodology. Diehl, who had been responsible, together with his colleague Paul Mombert, for the editing and publication of a very valuable series, Ausgewählte Lesestücke zum Studium der politischen Ökonomie (Selected readings on the study of political economy), first published by Braun in Karlsruhe and then by Gustav Fischer in Jena in 20 volumes between 1910 and 1926, now also replaced Lexis as the author of the entry on KRISEN (and added an entry on the business cycle and another on business cycle theory: KONJUNKTUR, KONJUNKTURTHEORIE, both in Vol. 2, 1932).

19.2 WILHELM LEXIS Wilhelm Lexis was born in Eschweiler, near Aachen, the son of Dr Ernst Joseph Lexis and his wife Gertrud Stassen, on 17 July 1837 and died in Göttingen on 24 August 1914 (Koch, 1985).2 Lexis attended the Friedrich-Wilhelm-Gymnasium in Cologne. After his final exam he studied at the University of Bonn, first law, then mathematics and physics. He achieved his doctoral degree with a thesis on analytical mechanics with August Beer in 1859. After a short period as a teacher at a secondary school in Bonn, he worked with the famous chemist Robert Wilhelm Bunsen (1811–1899) at the University of Heidelberg from 1860 to 1861. Thereafter, he went to Paris for economic studies and earned his living as the economic correspondent for a German newspaper. At the end of the Franco-Prussian War of 1870–1871 Lexis worked as a journalist for the Amtliche Nachrichten für ElsaßLothringen, first in Haguenau, then in Straßburg. In 1872 Lexis became extraordinary professor of economics at the newly founded German-language Imperial University of Straßburg, where Gustav Schmoller was among his colleagues and where he became closely affiliated with Friedrich Althoff, who later became famous as an academic policy maker in Prussia. In 1874 Lexis became full professor of geography, ethnology and statistics at the University of Dorpat, today’s Tartu in Estonia. From there he moved in 1876 to Freiburg, where he held a chair in economics and taught until 1884. In that year he left for a professorship in economics at the University of Breslau in Silesia, to achieve his final appointment three years later at the Georgia Augusta. Lexis taught at the University of Göttingen from 1887 until his death. There he founded in 1895 the first German university institute for the interdisciplinary study of insurance problems, a field in which later some of his students, such as Alfred Manes and Paul Moldenhauer, continued to work. Despite his studies and many essays on consumption, trade and crises, Lexis became best known as a demog-

Wilhelm Lexis on crises and overproduction 377 rapher and statistician (Lexis, 1875, 1877, 1903). His foremost contribution to demography was the famous Lexis diagram, in which the abscissa represents the time of birth and the ordinate represents age. Lexis must be credited as the refounder of mathematical statistics (Klein, 1914). In that field, he received his highest acclaim for his dispersion theory, where he investigated how far different statistical ratios with temporary oscillations remain within the scope, which is decisive for the effect of random causes, according to Laplace and Poisson. Francis Ysidro Edgeworth dealt intensively with Lexis’s two methods of precision determination. Lexis’s dispersion theory was also well perceived by the Swedish astronomer Chalier and the Russian mathematician Markov. His research in mathematical statistics was continued by his outstanding student Ladislaus von Bortkiewicz (1868–1931), who wrote his PhD thesis with Lexis in Göttingen in 1893, as well as by Alexander Tschuprow, Oskar Anderson and others. Lexis, who was a founding member of the International Statistical Institute, was elected Vice President in 1889 and remained in that position for more than 20 years. While at Göttingen, Lexis became a close long-time adviser to Friedrich Althoff and the Prussian Ministry of Education, which resulted in his being awarded many distinguished honours, including in 1904 the title of a Geheimer Oberregierungsrat, which, according to Prussian tradition, was only given to a professor in exceptional circumstances. Among the many important publications in this field were two volumes on German universities on the occasion of the world exhibition in Chicago (Lexis, 1893), a work on the reform of the higher school system in Prussia (Lexis, 1902) and a four-volume collection on the German education system, which came out at the world exhibition in St Louis (Lexis, 1904). Lexis organized and edited all these collective works, to which he himself made several contributions. Unlike in many similar projects at the time, mathematics and the sciences played a substantive role in the collections for which Lexis was responsible. In 1891 Lexis also became co-editor of the Jahrbücher für Nationalökonomie und Statistik. From 1879 to 1915 the Jahrbücher were edited by Johannes Conrad, with whom Lexis also closely co-operated in the edition of the Handwörterbuch der Staatswissenschaften. As an economist, Lexis strongly favoured the application of statistical methods as a necessary complement to abstract deductions, which otherwise could be in danger of leading pure economic theory away from the complexities of real economic life. Lexis (1881) was also the first economist to perceive that Walras had not introduced conditions into his general equilibrium system that guaranteed real and non-negative solutions of the price equations. As a co-founder of the Verein für Sozialpolitik, Lexis was close to the socialists of the chair on issues of economic policy and in favour of the admissibility of value judgements. He was an opponent of the marginalist school and advocated an objective theory of value. Lexis was also among the very few German professors who immediately took note of the publication of the third volume of Marx’s Capital. In his long and knowledgeable contribution to the Quarterly Journal of Economics, Lexis was quite critical about some of Marx’s theoretical concepts, in particular the abstract value category, but nevertheless came to the conclusion that Marx ‘is to be assigned a foremost

378 Harald Hagemann place among the theorists of economic science. In method and in cast of mind he most resembles Ricardo’ (Lexis, 1895, p. 25). Thus, it is no surprise that his most brilliant student, Ladislaus von Bortkiewicz, whom Schumpeter (1932, p. 338) appreciated as ‘by far the most eminent German statistician since Lexis’, made important contributions not only to mathematical statistics, such as the ‘law of small numbers’, but also in the critical analysis of value and price in the Marxian system. At the end of his life Lexis (1910) published a textbook, Allgemeine Volkswirtschaftslehre, which is also characterized by his ‘theoretical sharpness’ (Bortkiewicz, 1915, p. 331).

19.3 LEXIS ON CRISES AND OVERPRODUCTION Lexis’s two contributions on KRISEN and UEBERPRODUCTION to Elster’s Handwörterbuch der Volkswirtschaft form a unity. In his article on crises, as well as in his long entry on trade (‘Handel’) in Schönberg’s handbook, Lexis gives a synopsis on different types of crises. Thus he distinguishes between: •

•

• •

speculation crises, with the two subcategories of trade crises and stock exchange crises depending on whether speculation refers to goods or to stocks; credit crises, which are always associated with speculation crises and are characterized by credit rationing and a rapid and strong increase in the interest rates charged by the banks; money crises as the highest form of credit crises; and production crises, which Lexis recognizes as the most important and most fatal type of crisis, marking the end of a period of excessive production combined with too great a fixing of capital for the maintainence of production.

Lexis identifies the crisis as a turning point in which the preceding boom, which in general has a real basis but due to speculation is exaggerated, requires some correction. Lexis’s argument has much in common with the overtrading tradition scattered throughout the nineteenth century, as is reflected also in Juglar’s explanation of cyclical fluctuations as the consequence of excessive speculative behaviour which makes crises the necessary corrections to the excesses of the former boom in the economy (see Chapter 12). It is only in his long contribution on ‘Consumption’ to Schönberg’s handbook that Lexis (1882, p. 537) uses the term Absatzkrise (sales crisis) as equivalent to overproduction. Whereas Roscher found it necessary to substitute the term production crises with the term sales crises to characterize the essence of the problem, namely, a shortage of effective demand (see Chapter 7), Lexis gave up the term sales crisis in his later writings. For Lexis, the relation between production and consumption in the economy is a decisive issue. This comes out very clearly, for example, in his initial and final arguments in his contribution on consumption to Schönberg’s handbook. There

Wilhelm Lexis on crises and overproduction 379 he points out that classical political economy in general had focused on production and neglected consumption, with the exception of Say, who paid equal attention to consumption. On the other hand, overemphasis on the consumption side led to one-sided views on the importance of luxury consumption, as in the works of Malthus and Sismondi. Lexis (1882, p. 505) also refers to a passage in The wealth of nations (Book IV, p. viii), in which Adam Smith in his disputing of mercantilism stresses: ‘Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer’ (Smith, 1976, p. 660). After a longer discussion of temporary sacrifices of consumption in times of crises or wars, Lexis emphasizes that, unless necessaries are concerned, these sacrifices have only a transitory, momentary importance, which leads him to the final conclusion ‘that if consumption is the end of production, it nevertheless is not the end of human being’ (Lexis, 1882, p. 540). According to Lexis, uncertainty in the adjustment of production to consumption is not an exclusive characteristic of the capitalist mode of production, but also appears in other systems. During the period of the upward movement as well as in the subsequent crisis, structural changes in the ratio between production and consumption take place. Whereas in the former phase production increases and finally develops into overproduction, this is corrected in the latter phase. In the final Section IV on the ‘relation between consumption and production’ of his 1882 essay, in which Lexis first discusses the problems of crises and overproduction, he emphasizes that ‘the interaction of consumption and production has the tendency to put these two factors into equilibrium . . . This equilibrium, however, is never achieved in reality’ (Lexis, 1882, p. 535). In Lexis’s many writings on consumption, crises and overproduction we find a constant arguing and disputing with the crises theory of Karl Rodbertus-Jagetzow (1805–1875), whom Schumpeter considered to be the leading representative of the underconsumption theory of ‘the mass poverty type that attributes gluts to the inability of labour, owing to low wages, to “buy its own product”’ (Schumpeter, 1954, p. 740, n. 4). The posthumous publication of Rodbertus’s fourth social letter to von Kirchmann, Das Kapital (Rodbertus, 1884), even animated Lexis to write a long review essay criticizing Rodbertus’s theories, in particular on rent, value and crises (Lexis, 1884). Lexis took Rodbertus’s income distribution argument seriously. He first accepted the latter’s view that a declining share of wages in national income with a constantly growing productivity due to the invention of more efficient machinery raises sales problems for a growing number of products, an overproduction that could be avoided by giving wages (as well as profits and rents) a constant share in national income.3 However, more and more critical comments entered into Lexis’s analysis of Rodbertus’s theories. Thus, he soon cannot identify as a specific cause of acute crises a long-term decline in the wage share. In fact, we can see that a period of economic upward movement combined with a bold initiative of capital has preceded all newer crises, in which the

380 Harald Hagemann real share of the working class in output increased due to the exceptionally lively demand for labour, partly via wage increases, partly due to the fact that previously unemployed workers found a new job. (Lexis, 1884, p. 474) Wage decreases and displacements only took place after the crisis set in. A wrong assessment on the part of the producers on the saleability of their commodities, however, is always a main cause of overproduction. Lexis rightly states that nobody doubts the occurrence of partial crises, but then he goes on to dispute the view of many economists, in particular Jean-Baptiste Say and John Stuart Mill, who deny the possibility of a general glut. He develops his argument first in § 29 of his ‘Consumption’ essay, and then makes it the regression line of his entry on UEBERPRODUKTION to Elster’s Wörterbuch. The core argument of Lexis focuses on the decline in prices as a consequence of excess supply. In fact, production of most commodities very often moves along the edge of overproduction since the adaptation of supply to demand mostly is characterized by the rise of new producers and the elimination of older and weaker ones in the process of competition. ‘Real overproduction’, however, originates when even the better entrepreneurs are facing profit reductions and have difficulties surviving in times of crises, which may last quite some time. The decline in profits (and wages) in one or more important sectors of production generates spillover effects to other sectors, which leads to capital losses and finally to a temporary general overproduction. According to Lexis, it is only a theoretical question of minor practical importance whether a real overproduction takes place with all commodities. Overproduction is characterized by a fall in the rate of profits below the normal level. In the extreme, profits might erode completely. In periods of crises, prices decline; however, normally not in a proportional way for all commodities. Producers of goods the prices of which decrease less than average might even benefit from the lowering of wages and prices of raw materials in a way that could overcompensate for the price decline. Recovery then starts from these sectors, which makes general overproduction a temporary phenomenon. Lexis had developed his core arguments already very clearly in his contribution on UEBERPRODUKTION (Overproduction) to Conrad’s Handwörterbuch der Staatswissenschaften. There he criticized the arguments of the defenders of Say’s law, including von Mangoldt in Germany, as ‘suffering from an excess of bloodless abstractions and a complete neglect of the consideration of the factual relations under monetary and capitalist production regulations’ (Vol. 6, 1894, p. 296). On the other hand, Lexis regarded as erroneous the view that overproduction could be combated by higher consumption of luxury goods by the wealthy since this would impose further negative consequences on real capital formation. Thus, the overall economic damage would be greater than the usefulness of the increased sales of luxury goods. Nevertheless, Lexis came to the conclusion that, in contrast to the optimistic views of Say, Ricardo and Mill, general overproduction can occur temporarily in a capitalist economy, which he saw realized in the years 1886 and 1887 (ibid., pp. 297–298).

Wilhelm Lexis on crises and overproduction 381 According to the explanation given by Lexis, general overproduction is mainly the consequence of increasing productive power, i.e. technological progress which leads to a new equilibrium system of prices. He clearly distinguished between the old and the new equilibrium price system and the transition process in which overproduction phenomena can arise since the reduction in prices will not immediately lead to the reactions expected by abstract theory. Overproduction therefore is merely the mediation process by which, given that independently producing individual firms are engaging in planless competition, the prices of goods are reduced from a level which is no longer adequate to sustain current production and trade levels in the national and world economy, there being a tendency for the appropriate level to be exceeded in most cases. However, finally a new price system develops which is adapted to the new conditions. (ibid., p. 299) Overproduction in this sense does not necessarily imply an acute crisis. The latter in general only appears if trade speculation causes excessive price increases which lead to an expansion of production. Whereas the consequential overproduction normally is of a short-term nature and will quickly be corrected, overproduction as the consequence of a change in the overall production and competition conditions could assume a more chronic character. It could be associated with crises, which then, however, would only be secondary phenomena.

19.4 ASSESSMENT Schumpeter, who had a high regard for the work of Lexis in the theory of statistics, also attested that ‘Lexis did work of a high grade in many fields, especially on questions of monetary policy and foreign trade. . . . But all these writings show weaknesses on the theoretical side that are surprising in a man of no doubt remarkably keen intellect’ (Schumpeter, 1954, p. 852). Schumpeter identified the cause of these weaknesses in that Lexis ‘took no interest whatever in the work of improving the apparatus of analysis; . . . he did not even bother to use mathematics . . . in the service of his economics’ (ibid., pp. 852–853). In a certain sense this is also reflected in the numerous writings of Lexis on consumption, crises and overproduction, which contain many insights made by a sharp intellectual mind. Lexis’s detailed empirical discussions of the crises since 1815 at the end of his KRISEN essays show his own interest as a statistician and that the outlook of the historical school also interfered with his more theoretical papers. Nevertheless, we find important theoretical aspects in Lexis. When he recognized general overproduction as a temporary phenomenon, many passages reveal thinking in terms of a general equilibrium system. This is reflected very well when Lexis is discussing what today we would call spillover and feedback effects. When

382 Harald Hagemann he explains how a general overproduction is generated, Lexis puts much emphasis on the fact that excess supply on some goods markets reduces the demand for labour, which lowers the purchasing power of workers and thereby indirectly enhances excess supply for consumption goods. This is an important point already well recognized by Eugen von Bergmann (1895, pp. 409–410) in his discussion of Lexis’s crises theory. As we have already discussed, Lexis identifies the crisis as the turning point in which the excesses of the former boom are corrected. Although this is not yet a proper and well-developed theory of the business cycle, Lexis’s introduction of the idea that the crisis marks a turning point between a phase of upward movement and the subsequent collapse, which seems to be influenced by Juglar, anticipates later explanations by Lescure, Aftalion and Mitchell, which are elaborated in greater detail. It paved the way for the ‘euthanasia of crises’, which first became just the turning point, then could be dispensed with altogether and became the ‘recession’ or ‘depression’ phase in a full business cycle.4 It was Schumpeter who credited Juglar with the discovery that what former generations had called ‘crises’, were no disconnected events, but merely elements in a more deep-seated wave-like movement. The crises are nothing but turning points from prosperity into depression, and it is the alternation between prosperity and depression which is the really interesting phenomenon (Schumpeter, 1931, p. 6) However, Lexis’s writings on crises and overproduction also reveal a theoretical weakness. Although he clearly argues against the denial of a general glut, a view held by John Stuart Mill in his Principles, he also explicitly refers to Roscher’s textbook Principles of political economy in which Roscher summarizes his core argument on production or sales crises (see the contribution on Roscher in this volume, Chapter 7). From the beginning of his 1882 Consumption essay, Lexis made the relationship between production and consumption the regression line of his argument. However, Lexis misses one decisive point, developed first by Mill and then by Roscher. In his Overproduction essay he discusses extensively how no problem exists in barter trade between two persons but many problems of co-ordination would arise in the case of three or more trading partners. These problems, however, could be overcome with the introduction of money as a medium of exchange. Lexis does not recognize the consequences of the store-of-value function of money, which enables the separation of one act of interchange into two separate acts of selling and buying, and the performance of one act now and the deferment of the other for an indefinite time in the future. This argument, which became a central one in all later critiques of Say’s law, as, for example, by Marx and Keynes, was first developed by Mill (1844, p. 70) and then by Roscher in his 1849 essay on production crises. Lexis seemingly was unaware of John Stuart Mill’s second essay in Some unsettled questions of political economy, ‘Of the influence of consumption on production’ (which Mill later did not develop to a regression

Wilhelm Lexis on crises and overproduction 383 line of his argument), but he certainly knew Roscher and he failed to grasp the importance of this argument.

NOTES 1 See the Foreword IN MEMORIAM by Ludwig Elster on the history of the Handwörterbuch der Staatswissenschaften to the first volume of the completely revised 4th edition published in 1923. 2 For details on Lexis’s life and work, see also Bortkiewicz, 1915, Esenwein-Rothe, 1992, K.-P. Heiss’s entry on LEXIS, WILHELM in the →International encyclopedia of the social sciences (1968), F. Burkhardt’s LEXIS, WILHELM in the →Handwörterbuch der Sozialwissenschaften (1959), Klein, 1914, K. Oldenberg’s LEXIS, WILHELM in the →Encyclopaedia of the social sciences (1933), and S. L. Zabell’s LEXIS, WILHELM in →The new Palgrave (1987). 3 See Lexis, 1882, p. 539, n. 58, but also his KRISEN entries. 4 On the distinction between cycles and recurring crises, see Besomi, 2010, pp. 225–239.

REFERENCES Bergmann, E. von, 1895, Die Wirtschaftskrisen. Geschichte der nationalökonomischen Krisentheorieen (Stuttgart: Kohlhammer). Besomi, D., 2010, ‘Periodic crises’: Clément Juglar between theories of crises and theories of business cycles, Research in the History of Economic Thought and Methodology, 28A, pp. 169–283. Bortkiewicz, L. von, 1915, Wilhelm Lexis, Bulletin de l’Institut International de Statistique, 20: 1, pp. 328–332. Elster, L., 1898, Wörterbuch der Volkswirtschaftslehre, 2 vols; 2nd edn 1906–1907; 3rd edn, 1909–11; 4th completely revised edn in 3 vols, 1931–1933 (Jena: Gustav Fischer). Esenwein-Rothe, I., 1992, Wilhelm Lexis. Demograph und Nationalökonom (1837–1914) (Frankfurt am Main: Haag und Herchen). Hagemann, H., 1991, Learned journals and the professionalization of economics: the German language area, Economic Notes, 20: 1, pp. 33–57. Klein, F., 1914, Wilhelm Lexis, Jahresbericht der Deutschen Mathematiker-Vereinigung, 23, pp. 314–317. Koch, P., 1985, Lexis, Wilhelm, Neue deutsche Biographie (NDB), 14, pp. 421–422 (Berlin: Duncker & Humblot). Lexis, W., 1875, Einleitung in die Theorie der Bevölkerungsstatistik (Straßburg: Karl Trübner). Lexis, W., 1877, Zur Theorie der Massenerscheinungen in der menschlichen Gesellschaft (Freiburg: F. Wagner). Lexis, W., 1881, Zur mathematisch-ökonomischen Literatur, Jahrbücher für Nationalökonomie und Statistik, 3, pp. 427–434. Lexis, W., 1882, Die volkswirthschaftliche Consumtion. In G. Schönberg (ed.), Handbuch der politischen Ökonomie. Vol. I (Tübingen: Verlag der H. Lauppschen Buchhandlung), pp. 505–540. Lexis, W., 1884, Zur Kritik der Rodbertus’schen Theorien, Jahrbücher für Nationalökonomie und Statistik, 9, pp. 462–476.

384 Harald Hagemann Lexis, W., 1893, Die deutschen Universitäten, 2 vols (Berlin: A. Asher). Lexis, W., 1894, Ueberproduktion, in J. Conrad et al. (eds), Handwörtenbuch der Staatswissenschaften (Jena: Gustav Fischer), vol. 6, pp. 295–301. Lexis, W., 1895, The concluding volume of Marx’s Capital, Quarterly Journal of Economics, 10: 1, pp. 1–33. Lexis, W., 1898, Handel, in G. Schönberg (ed.), Handbuch der politischen Ökonomie (Tübingen: Verlag der H. Lauppschen Buchhandlung), 4th edn, Vol. II/2, pp. 223–354. Lexis, W., 1902, Die Reform des höheren Schulwesens in Preußen (Halle: Verlag der Buchhandlung des Waisenhauses). Lexis, W., 1903, Abhandlungen zur Theorie der Bevölkerungs- und Moralstatistik (Jena: Gustav Fischer). Lexis, W., 1904, Das Unterrichtswesen im Deutschen Reich, 4 vols (Berlin: A. Asher). Lexis, W., 1910, Allgemeine Volkswirtschaftslehre (Berlin and Leipzig: B. G. Teubner). Mill, J. S., [1844] 1874, Essays on some unsettled questions of political economy, 2nd edn (London: Longmans, Green, Reader & Dyer). Rodbertus(-Jagetzow), C., 1884, Das Kapital. Vierter socialer Brief an von Kirchmann, T. Kozak (ed.) (Berlin: Puttkammer & Mühlbrecht). Schönberg, G., 1882, Handbuch der politischen Oekonomie, 2 vols; 2nd edn, 3 vols, 1885–1886; 3rd edn, 3 vols, 1890–1891; 4th edn, 3 vols, 1896–1898 (Tübingen: Verlag der H. Laupp’schen Buchhandlung). Schumpeter, J. A., 1931, The theory of the business cycle, Keizaigaku Ronshu – The Journal of Economics, 4, pp. 1–18. Schumpeter, J. A., 1932, Obituary: Ladislaus von Bortkiewicz, Economic Journal, 42 (June), pp. 338–340. Schumpeter, J. A., 1954, History of economic analysis (London: George Allen & Unwin). Smith, A., [1776] 1976, An inquiry into the nature and causes of the wealth of nations. The Glasgow edition of the works and correspondence of Adam Smith. R. H. Campbell and A. S. Skinner (eds), Vol. II (Oxford: Oxford University Press). Spiethoff, A., 1953, Business cycles, International Economic Papers, 3, pp. 75–171.

20 Arthur Spiethoff From economic crises to business cycle theory Vitantonio Gioia

Handwörterbuch der Staatswissenschaften (1923–1928), 4th edition, by Ludwig Elster, Adolf Weber and Friedrich Wieser (Jena: Gustav Fischer).

20.1 THE HANDWÖRTERBUCH DER STAATSWISSENSCHAFTEN In Schmoller’s opinion the Handwörterbuch der Staatswissenschaften represented a higher level of the expansion of German economic studies in the nineteenth century. It gave German economists ‘completely new ground’ (Schmoller, 1923, I, p. 121), emphasizing scientific progress in the fields of economic history and economics as well as in the relationship between politics and economics. It documented the impressive development of monographic inquiries in manifold aspects of economic activities, the significant quantity of general studies in economics and the proposals of methodological innovations in the analyses of economic phenomena. In Schmoller’s opinion, this impressive scientific progress allowed the limits of both classical and Marxian economics to be demonstrated: ‘Smith, Ricardo and Marx started from a too little and limited field of historical experiences’ (Schmoller, 1923, I, p. 118). Moreover, the Handwörterbuch helped to overcome the limits of the first phase of German studies in the economic field, which saw an exaggerated production of empirical inquiries and collection of descriptive materials. More recent studies have, in fact, produced adequate theoretical investigations, favouring a substantial advance for economics (Schmoller, 1923, I, pp. 120 ff.). The Handwörterbuch der Staatswissenschaften could thus really be considered the mark of a new epoch in German economic studies. It had successfully led to ‘a complete, and previously non-existent, elaboration and co-ordination’ of all the scientific materials elaborated in the field of economics (Schmoller, 1923, I, p. 123) The Handwörterbuch was conceived by the publisher Gustav Fischer. On 25 March 1888 he proposed the project to Ludwig Elster, who involved Johannes Conrad (Professor at the Halle University and well known as editor of Conrad’s

386 Vitantonio Gioia Jahrbücher) because of their well-established academic connections (Elster had lectured as ‘Hallenser Privatdozent’). In the following months, Wilhelm Lexis and Edgar Löning were also involved. The complexity of the work and the careful estimation of its high costs entailed a serious commitment on the part of the publisher and the editors. At last, on 25 September 1888, the publishing contract was signed and work started on collecting the scientific material for the publication of the Handwörterbuch, with Lexis and Elster as main editors, in co-operation with Conrad and Löning. The definitive project of the work was presented in Frankfurt at the General Assembly of the Verein für Sozialpolitik. The editors were aware of the fact that the Handwörterbuch was intended to contribute to the process of modernization of German society and that such a task necessarily implied innovative proposals regarding the role of the social sciences. In particular, the social sciences had to be set completely free of the scientific and cultural overload typical of the old Staatswissenschaften. The very word Staatswissenschaften is used with a new and more specific meaning compared to the old one, as used, for instance, in the →Encyklopädie der Staatswissenschaften, edited by R. v. Mohl (1859, 1872). In this work, economics and other social sciences were considered to be part of a broad disciplinary context (public law, civil law, politics, philosophy of law, history of the state, ethics and moral philosophy, statistics, etc.), basically conceived as a grounding for the education and training of a broad bureaucratic class involved in state administration (Tribe, 1988, pp. 149 ff.; Häuser, 1989, pp. 36 ff.). The Handwörterbuch revises this meaning of Staatswissenschaften, setting up the new disciplinary architecture for economics and social sciences, and giving a secondary role to those disciplines (juridical, philosophical and historical in character) which had a central role in the Enzyklopädie der Staatswissenschaften by Mohl. As a result, ‘economics and social sciences constituted the content of the Handwörterbuch’, while, when appropriate, the other disciplines were used with a merely auxiliary function (Conrad et al., VORWORT, 1st edition of the Handwörterbuch, p. iv). In the editors’ opinion, the Handwörterbuch belonged to the context of classical liberalism, without supporting any party, but designed to emphasize all the new directions in the field of economics and the social sciences. In the same perspective, works such as →Rentzsch’s Handwörterbuch der Volkswirthschaftslehre and the →Dictionnaire de l’économie politique by Coquelin and Guillaumin (1852–1853) were considered significant, even though their scope was more limited. They also emphasized some innovative aspects of →Say’s Dictionnaire des finances (1889–1894) (VORWORT to the 1st edition, p. vi). The Handwörterbuch had four editions. The first one was published in five volumes between 1890 and 1894, to which two supplementary volumes were added in 1895 and 1897. Other editions were published between 1898 and 1901, between 1909 and 1911, and finally between 1923 and 1928. The work continued as →Handwörterbuch der Sozialwissenschaften, edited by Beckerath (1956–1968), and subsequently as →Handwörterbuch der Wirtschaftswissenschaften, edited by Albers et al. (1977–1983) (Höhmann, 2001, pp. 203–204). Introducing the 4th edition of the Handwörterbuch in 1923, Elster wrote that the first three editions had been the outcome of the ‘tireless care’ of Johannes

Arthur Spiethoff: from crises to cycles 387 Conrad, Wilhelm Lexis, Edgar Löning (Elster, IN MEMORIAM, Handwörterbuch, Vol. 1, p. v) and of the continuous stimulus of its originator, Gustav Fischer. Elster was the sole survivor. On 22 June 1910, during the publication of the 3rd edition, G. Fischer died (he was succeeded by his adopted son, also called Gustav) and, a few years later, Wilhelm Lexis and Johannes Conrad also died, on 24 August 1914 and 25 April 1915, respectively. Elster and Löning, with Gustav Fischer’s aid, prepared the 4th edition, which was presented in Jena (June 1917) during a public conference. However, after a short illness, Löning died on 19 February 1919. Obviously, maintained Elster, even though it relied on a new and broader spectrum of authors and had original entries rewritten, the 4th edition (on which Adolf Weber and Friedrich Wieser collaborated) was built on the foundations of the old ones. In the Preface the editors thus emphasized the continuity with the methodological approach of the 1st edition (VORWORT to the 4th edition, 1923, p. xi), insisting that they had taken into account the way the social and economic changes following the First World War had influenced economic theories. But, they argued, the very scrutinizing of the significant events that had taken place in the economic field was made difficult by the rapidity of the current changes (ibid., p. ix).

20.2 ARTHUR SPIETHOFF Arthur Spiethoff was born in Düsseldorf in 1873. He studied economics and politics at the University of Berlin. A student of Gustav Schmoller, he was deeply influenced by the scientific approach professed by the leader of the younger historical school of economics. He was Schmoller’s assistant from 1899 to 1908. After his doctoral work on economic crises (1905), he was appointed a full professor at the German University of Prague (1908). From 1917, after Schmoller’s death, he succeeded him as editor of the Schmollers Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft in Deutschen Reiche (afterwards, Zeitschrift für Wirtschafts- und Sozialwissenschaften). From 1918 to 1939 he was a professor at the University of Bonn. In 1953 he was elected honorary President of the International Economic Association. As is well known, Spiethoff ’s main subject of inquiry was business cycles. As a theoretician of business cycles, he had a profound impact on the scientific community. Spiethoff developed his research in a peculiar way. On the one hand, he created devices, categories and approaches that could be used to systematically analyse the large series of phenomena occurring in economic fluctuations.1 On the other hand, he inserted these studies in a theoretical framework that fostered fruitful co-operation between theoretical and historical views. His aim was to link business cycle analysis to ‘a synthetic representation of the development of the market economy through historical Real-Types’ (Kamp, 1958, p. 8).2 His inquiry was explicitly devoted to overcoming the sterile contrapositions of the Methodenstreit, giving an example of a theoretical approach that was constructively open to history. In Spiethoff’s opinion, only the emphasis on the relationship between theory and history can render the explanation of business cycles effective,

388 Vitantonio Gioia opening new explicative dimensions: ‘economics by means of historical experiences and theoretical devices should contribute to the highlighting of a new lifestyle and economic style in fieri’ (Kamp, 1958, p. 22). The epistemic relevance of this view was already clear in the lecture he gave at the Association for Political Sciences at the University of Berlin on 17 December 1901: I believe that all truly ‘general economic crises’ are essentially uniform phenomena, but this is quite compatible with the other view, that in individual historical crises sometimes one feature and sometimes another is especially prominent, thus lending the phenomenon a distinctive character. Regarding this latter point, it seems to me that we can now distinguish particular forms which constitute a historical progression, not in the strict sense of economic history, but in that of economic theory. (Spiethoff, 1902, English translation, pp. 68–69) Schumpeter emphasized this twofold aspect of Spiethoff’s work: having opened up important pathways in the field of methodological research, ‘Spiethoff’s name means more than a peak in the field of Konjunkturforschung’ (Schumpeter, 1933, p. v). Schumpeter writes that Spiethoff worked at the possibility of a rigorous integration between ‘historic and theoretical spirit’ on behalf of the creation of a ‘positive economic science, in the best meaning of the term’ (ibid.). Reflections on epistemic issues occupied the late scientific activity of Spiethoff: ‘Die Allgemeine Volkswirtschaftslehre als geschichtliche Theorie. Die Wirtschaftsstile’ (1932); ‘Gustav Schmoller und die anschauliche Theorie der Volkswirtschaft’ (1938); and, especially, ‘Anschauliche und reine Theorie und ihr Verhältnis zueinander’ (1948). Spiethoff died in 1957 in Tübingen.

20.3 KRISEN The entry on KRISEN was published in 1925 in Vol. VI of the 4th edition of the Handwörterbuch der Staatswissenschaften (pp. 8–91). It was the outcome of a long inquiry on the subject of business cycles that commenced in 1901 with an engaging confrontation with the theoretical contribution of Tugan-Baranovsky. KRISEN replaces the entries with the same title written by H. Herkner (see Chapter 18), republished with no significant changes in the other editions of the Handwörterbuch (except in the section on the history of the discipline: see Chapter 4, Section 4.4). In many respects, Spiethoff ’s work preserves the formal structure of Herkner’s contributions: after a short introduction, the second part is devoted to theoretical reflections on crises, the third part to the evolution of crises theories in the history of economic thought and the fourth part to short analyses of the crises that occurred in the nineteenth century (Herkner, KRISEN, in Conrad et al.’s →Handwörterbuch der Staatswissenschaften, 1st edn, Vol. 4, 1892; 2nd edn, Vol. 4, 1900; 3rd edn, Vol. 3, 1910). And yet, apart from this formal structure, it is not possible to compare Herkner’s contributions with Spiethoff’s work, as the former

Arthur Spiethoff: from crises to cycles 389 are prevalently descriptive in character, while the latter is more theoretically oriented. Spiethoff’s KRISEN is a synthetic and unifying study in which all the outcomes of his previous works meet and contribute to the building of a picture rich in empirical content, theoretical constructs and methodological directions, aimed at formulating business cycles theory. As a matter of fact, KRISEN was published in 1925, when, as Mitchell and Lederer noted, the transition from crises theory to business cycles theory was already completed (Mitchell, 1927, pp. 3 ff.; Lederer, 1925, p. 361). Spiethoff certainly played an important role in overcoming the old approaches. For this reason, the title KRISEN does not do justice to its content. Indeed, in the following editions Spiethoff modified it. KRISEN was translated into English in 1953, under the title ‘Business cycles’ (in International Economic Papers, no. 3). This differs from the 1925 edition by the addition of a short Preface by Spiethoff, and the omission of the first part of Sections IV (devoted to the history of business cycles before 1822) and V (devoted to ‘Other business cycle theories’). A later re-edition in Germany by Edgar Salin, was titled Die wirtschaftlichen Wechsellagen (1955). This was completed by a second volume containing the materials of the ‘long statistical series on the features of economic upswings and downswings’ (Spiethoff, 1955, 2, p. 1). Spiethoff’s starting point had been clearly enunciated since 1925: The cyclical upswings and downswings are the evolutionary forms of the highly developed capitalistic economy and their antithetic stimuli condition its progress. Medieval economies were stationary over considerable periods; the capitalistic economy is in continuous movement and can be regarded as stationary only in abstraction. (Spiethoff, 1953, p. 78; [KRISEN, p. 8]) This view implies a radical criticism against the two opposing approaches to business cycles in economics: ‘the classical and neo-classical view versus its opponents’ (Gioia, 2001). The former identifies the ‘normal state’ of economic affairs with equilibrium or, more precisely, with a ‘natural’ tendency towards equilibrium (Jonas, 1954, pp. 527 ff.). In this theoretical perspective, economic crises are marginal phenomena from the theoretical point of view. By contrast, in the analyses of the opponents (Malthus, Sismondi, Lauderdale, etc.), economic crises are the symptoms of a pathology of the capitalistic system (Salin, 1944, pp. 130 ff.). Against the orthodox theories embedded in Say’s Law, Spiethoff points out that Great as are the errors of detail perpetrated by J. B. Say and James Mill in arguing for their doctrine that the total volume of production and that of demand necessarily coincide, it is certainly true that on the whole the two do in fact tally. As a rule, they largely correspond, while disharmony on any great scale is the exception. (Spiethoff, 1902, English translation, p. 52)

390 Vitantonio Gioia The fact is that ‘the production of a commodity does not necessarily correspond to its consumption’. Production can exceed consumption, in which case ‘the excess is exported or stored’. If, on the other hand, it is exceeded by consumption, ‘it must be supplemented by imports or out of the surpluses of previous years’. As a result, ‘foreign trade can render production and consumption independent of each other’ (Spiethoff, 1953, p. 96; [KRISEN, p. 19]). Critical remarks are made regarding to the ‘old theories’ of economic crises (Malthus, Sismondi, etc.), which are based on the inadequate assumption that a lasting equilibrium between production and consumption is impossible in a capitalistic system. These authors do not consider the overproduction phenomenon as an aspect of business cycle theory, because they are incapable of distinguishing between direct and indirect consumption (Spiethoff, 1955, 1, p. 159) and accordingly interpret economic crises as the ‘memento mori’ of capitalism (to use the famous Kautskian expression) (Spiethoff, 1955, 1, pp. 159–160; see also Röpke, 1936, p. 98). Considering the historical features of an advanced capitalistic economy (Hochkapitalismus), Spiethoff argued that disequilibrium (Ungleichgewicht) is not an accidental and casual aspect, but is the ‘normal state’ (Normalform) of the system (Spiethoff, 1948, p. 614 ff.). ‘The “normal state” is neither the upswing, nor the downswing, nor, least of all, the crisis. What is normal in a free, highly capitalistic market system based on money, is the business cycle’ (der Kreislauf der Wechsellagen) (Spiethoff, 1953, p. 167; [KRISEN, p. 82]). Moreover, the business cycle cannot be considered in a simplistic or mechanical way, by means of the structural and institutional changes determined by economic dynamics: For some hundred years now, the economic life of the most advanced countries has gone through cycles of upward and downward swings, the upswings often ending in sudden collapse: the crisis. In earlier periods, too, there were good and bad times, but they had other causes and the alternation was neither general nor regular, and not a short-term one. It has been said that a cycle completes itself in a ten-year span. It is not really possible to give definite figures of absolute regularity; but a series of good years is always followed by a series of bad years, and vice versa, and each decade witnesses at least one change of fortunes. (Spiethoff, 1953, p. 78; [KRISEN, p. 8]) In Spiethoff’s opinion, business cycles, if appropriately analysed, can help to explain not only economic fluctuations, but also historical changes. Economists trying to focus on the ‘normal state’ of economic activities and on the ‘long-term’ features of the economic system tend to exclude historical changes from their analytical horizon. This procedure is acceptable as a first-approximation analysis, but only provided that the historicity of economic phenomena is afterwards reintroduced in it (Spiethoff, 1932, p. 52 ff.); otherwise, the resulting theoretical framework, built with features typical of the economy of the present, will be

Arthur Spiethoff: from crises to cycles 391 considered a model of general validity regardless of any historical change in the object of inquiry. In this context the business cycle becomes merely an aspect of an a-historical world studied with the analytical procedures typical of statics in conformity with the logic of elementary mechanics and disregarding the historical evolution of an economic system (Perroux, 1965, pp. 55–56; De Vecchi, CRISI, in →Lunghini’s Dizionario di economia politica, 1983, pp. 263 ff.). To explain the business cycle, as Spiethoff points out, we can adopt a twofold theoretical approach: first, according to the methodological canons of pure theory, the explicative mechanism is defined through the building of an analytical context grounded in the use of arbitrary and axiomatic assumptions. According to this procedure, theories are built ‘showing invariable uniformities . . . not subject to change over time’.3 In the second approach, according to the ‘historical and concrete theory’ (anschauliche Theorie), the explanatory hypotheses are built through systematic observations of the reality so as to grasp the effects produced by the capitalistic system’s structural changes on the ‘causal chain’ of business cycles (see Eucken, 1934, pp. 107 ff.; Gioia, 1997, p. 174 ff.; Salin, 1955, pp. 3 ff.; Gottschalk and Broyer, 2004, pp. 31 ff.). In such a perspective, the initial assumptions of the theoretical construct are ‘taken from the real world’, isolating its typical and recurring aspects, and neglecting only those phenomena characterized by ‘historical uniqueness’ (Spiethoff, 1953, p. 75; 1952, pp. 133 ff.). This is a theoretical approach that allows for an escape from both the sterile descriptivism of the historians and the abstract and a-historical modelling of pure theory: the keystone, the essence of the historical-concrete theory lies in the fact that the working hypothesis is based on the observation of reality. This allows for the simultaneous evaluation of initial queries, working hypotheses and empirical research. One of the greatest difficulties in working with the historical-concrete theory is that of really letting empirical research fight it out with theoretical reasoning. (Spiethoff, 1948, p. 602) Of course, in this context we can build a ‘kind of ideal cycle’ (Musterkreislauf) as a heuristic device to use for the analysis of business cycles of advanced capitalism, provided that we do not attribute an immediate explicative character to it (see the third section of KRISEN, ‘the phase and stages of the business cycles’; on this, see Schweitzer, 1938, pp. 21 ff.; Schumpeter, 2008, p. 215; and Röpke, 1936, p. 19). In fact, further inquiries are needed in order to explain the real movements of business cycles, and they have to be inserted in a logical structure determined by the typical features of every phase of the capitalistic economy. My starting point, recollected Spiethoff, was given ‘by the rebellion against those absolute solutions equally valid for all economic conditions’ (Spiethoff, 1932, p. 54). The explanatory structure must always be open to progressive enhancements because ‘on the basis of new observations the number of [its] characteristic features may be increased; but it may also be decreased through improved analysis’ (Spiethoff, 1948, p. 455; see Gioia, 1997, pp. 174 ff.). According to Spiethoff,

392 Vitantonio Gioia only this accurate and ongoing work can allow the ‘completeness of the causal elements’, which is necessary to explain business cycles as recurring phenomena of an economic system in continuous transformation. For this reason, as emphasized by Hagemann, Spiethoff differs from other business cycle theorists in that he does not attempt to derive business fluctuations predominantly from a single cause or even from a tightly knit analytical structure, but rather aims to synthesize the features of most of the prevalent business cycle theories of his time in order to arrive at a comprehensive picture of industrial fluctuations. (Hagemann, 2000, p. 429) And, for the same reason, he can escape from the myth of the search for a single cause of business cycles without falling into a naive causal pluralism (naive Ursachpluralismus) (Clausing, 1958, p. 282).

20.4 OVERPRODUCTION AND BUSINESS CYCLES The endogenous factors of business cycles are rooted in three underlying elements of the capitalistic economy. ‘The first element is economic man and his instinct.’ The impressive increase in the ‘profit motive’ and its diffusion to the larger ‘strata of society’ foster favourable expectations towards the chances of getting rich, leading economic activities into excesses, with growing risks of economic losses: ‘the profit motive and the spirit of enterprise, both highly stimulated, have assumed a wave-like movement’ (Spiethoff, 1953, p. 167; [KRISEN, p. 82]) The second element ‘is the nature of capitalistic production’. In capitalism, production becomes ‘independent of the slow organic processes of growth’, by means of the promotion of technical and economic conditions capable of determining an impressive expansion of production ‘prompted by the new spirit of enterprise’. This leads to overproduction ‘after a certain number of prosperous years’ (Spiethoff, 1953, p. 167; [KRISEN, p. 82]). ‘The third element is the free-market system based on money.’ Such a system showed great flexibility and a propensity to rapid economic expansion, but, at the same time, ‘suffered from the difficulty of controlling it’. The inequality of income distribution, favourable to the increase of investments during upswings, becomes a crucial weak point, leading to the depression phases (Spiethoff, 1953, p. 167; [KRISEN, p. 82]). Given such features of the capitalistic economy, it is ‘practically impossible to keep the production of investment goods in exact step with the formation of capital and the growth of needs’ (Spiethoff, 1953, p. 122; [KRISEN, p. 38]). The ‘fundamental question is overproduction’ (Spiethoff, 1953, p. 122; [KRISEN, p. 38]), which starts at the end of an upswing and flows into the downswing. Overproduction is decisive for the explanation of business cycle, as it ‘invariably sets an end to all

Arthur Spiethoff: from crises to cycles 393 upswings’ (Spiethoff, 1953, p. 155; [KRISEN, p. 75]). It is clear, then, that one must inquire into the features of upswings and the way that overproduction occurs. In this respect, what is in question is the nature of overproduction. Overproduction has assumed different meanings in the history of economics and has often been misinterpreted, leading to false conclusions (Spiethoff, 1902, and Spiethoff’s entry on OVERPRODUCTION in →Seligman’s Encyclopaedia of the social sciences, 1933). In order to highlight this aspect, Spiethoff, with reference to the analyses of Marx and Tugan-Baranovsky (Spiethoff, 1903), starts from the distinction between ‘direct consumption’ and ‘indirect consumption’. By ‘direct consumption’, Spiethoff means ‘consumer goods as well as the raw materials entering into them’. These kinds of goods are ‘acquired out of income for the owner’s personal consumption or use’ (Spiethoff, 1953, p. 156; [KRISEN, p. 75]). In this category of goods a special place is reserved for durable consumer goods, whose use is spread over a longer period and ‘for their purchase income generally has to be accumulated for some time’. In any case, notwithstanding the fact that their purchase implies individual savings, they must be included in the category of consumer goods because they are bought for personal use and not ‘for the purpose of yielding an income’ (Spiethoff, 1953, p. 156; [KRISEN, p. 75]). By contrast, ‘indirect consumption’ comprises a category of goods that can ‘satisfy needs only by way of other goods’. Industrial plants and constructions ‘designed to render long-lasting services, cannot be consumed directly, but serve to satisfy wants by means of intermediary goods (machines, dwelling-houses) which furnish goods or long-lasting services. Investment goods thus comprise industrial plant and durable service equipments. The former is usually classed with capital goods, the latter with consumer goods’ (Spiethoff, 1953, p. 156; [KRISEN, p. 75]). The feature of investment goods in capitalist society lies in the fact that they are ‘bought not directly with income, but with capitalized income, i.e. with savings’ and ‘serve the production of fresh goods or for long-lasting services’ (Spiethoff, 1953, p. 156; [KRISEN, p. 75]). Having defined the two aggregates of goods that compose the total amount of production, Spiethoff can discuss the meaning of overproduction. The ‘word overproduction is used as a common denominator for widely differing conditions and has both a general economic and a business meaning. In economics, overproduction means that output or productive capacity exceed consumption’ (Spiethoff, 1953, p. 79; [KRISEN, p. 8]). The production of consumer goods for which there is no corresponding demand may be a sign of a temporary excess due to speculation or a temporary imbalance in the allocation of factors of production. This can, of course, affect the profits and the use of labour forces (unemployment might occur), but if it represents a phenomenon limited in space and time, the adjustment mechanisms of the market easily lead to a new balance between demand and supply. The situation seems to be more difficult when the imbalance between demand and supply is determined by changes in consumer tastes. In this case, the market’s adjustment mechanisms are more complex because of the importance of the variations involved, such as the production of new commodities, use of new raw materials, major changes in the productive systems, etc.

394 Vitantonio Gioia Nevertheless, according to Spiethoff, it is difficult ‘to arrive at uniform judgement regarding the real effect on business cycles of direct consumption dynamics’. In fact, in comparing different upswing cases,4 he asserts that ‘an increase in direct consumption is not characteristic of an upswing, since the latter may occur without any accompanying and improvement in direct consumption’ (Spiethoff, 1953, p. 95; [KRISEN, p. 19]). On this basis Spiethoff rules out the relevance to the business cycle of the kind of overproduction that is typical of the ‘old theories’, which generally considered the ‘commodity world as a single entity’, attributing an explicative function to direct consumption alone (Spiethoff, 1953, p. 93; [KRISEN, p. 18]; on this, see Haberler, 1968, pp. 75–76). In Spiethoff ’s opinion, to explain the upswings and cyclical movements we have to adopt a more specific meaning of overproduction, abandoning the idea of ‘absolute overproduction’ and paying attention to an overproduction ‘of a special kind’: ‘the starting and central points are formed by indirect consumption goods and by investment goods’ (Spiethoff, 1953, p. 155; [KRISEN, p. 75]). The ‘decisive observation’ is that ‘as far as commodities are concerned, the essential difference between the cyclical phase of the upswing and downswing consists of changes in indirect consumption goods and in investment goods’ (Spiethoff, 1953, p. 93; [KRISEN, p. 18]). The ‘most important form’ of overproduction in highly developed capitalism is caused by ‘an excess of investment for the construction of industrial plant and long-term public utilities (investment goods) over both demand and disposable savings’ (Spiethoff, 1953, pp. 79–80; [KRISEN, p. 9]). The upswing, characterized by rising profits and increasing investment, rapidly leads to the full employment of those economic resources that were not completely used in the previous phase. Spiethoff writes that the phenomena typical of the economic boom do ‘not all occur simultaneously, nor are they born fully developed’ (Spiethoff, 1953, p. 78; [KRISEN, p. 8]). Normally, this phase starts through the expansion of investments in old fields of activity, favoured by a propitious climate and by increasingly optimistic expectations among entrepreneurs. Further stimuli for new investments are generated. The opening of ‘fresh markets’, the spread of innovations and the expansion of exports foster investment in industrial plant and public utilities, providing the ‘impetus and the hard core for the upswing’ (Spiethoff, 1953, p. 149; [KRISEN, p. 70]; see Hagemann, 2002, p. xi). The rapid increase in investments in ‘indirect consumption goods’ (iron, coal, building materials, etc.) accelerates the production of new goods for the market: ‘From here, the movement extends to consumer goods’ (Spiethoff, 1953, p. 149; [KRISEN, p. 70]). An economic boom occurs, leading to the full use of all material resources of production. Rapid growth leads to an increase in wages, to the expansion of consumption accompanied by rising prices, to rising profits and to a general enhancement of people’s living conditions. It fosters, at the same time, a feverish quest for new opportunities and new profits. Spiethoff points out: ‘as with a rolling snowball, each turn expands the sphere: increased investment, increased consumption, rising prices and profits, together with the expansion of consumption and of capital formation and then again increased investment etc.’ (Spiethoff, 1953,

Arthur Spiethoff: from crises to cycles 395 p. 154; [KRISEN, pp. 74–75]). The result, he adds, ‘is a constant spiral-like selfraising movement’. Credit and banking institutions play a crucial role in this phase because ‘only with the help of credit is it possible to utilize capital in the way in which it is actually done and which is necessary. In the absence of credit, the owners of capital would be unable to use a large part of it and the very formation of capital would be on a smaller scale’ (Spiethoff, 1953, p. 153; [KRISEN, p. 74]). Given the working of capitalistic economies, the investment level can only be maintained if investment opportunities are sustained by fresh capital. However, as demand for capital increases, interest rates rise. Speculation and overspeculation fuel a continuously overheated market for commodities and securities. The overexpansion of credit sustains the building of new industrial plants or the completion of old ones, favouring a further expansion of indirect consumption. The ‘necessary consequence of the rising investment’ and the expansion of indirect consumption determine the ‘rise in prices . . . only for indirect consumption goods’ (Spiethoff, 1953, p. 154; [KRISEN, p. 74]), while an ‘expansion in direct consumption and the rise in the prices of consumer goods are neither necessary nor general’ (Spiethoff, 1953, pp. 154–155; [KRISEN, pp. 74–75]): ‘The upswing meets its natural end in overproduction’ (Spiethoff, 1953, p. 78; [KRISEN, p. 8]. This unhealthy state of affairs affects the expectations of economic players. The expansion in the production of indirect goods appears incompatible with the existing level of capital. ‘A capital scarcity occurs towards the end of every upswing’, leading to a credit shortage when the investments needed in order to ‘carry out new undertakings or to enlarge existing ones’ surpass the capacity of the capital market (Spiethoff, 1918a, 1920; Haberler, 1937, pp. 68–79). So, the collapse of firms suffering from incomplete financing affects ‘the whole market and induce[s] the crisis’ (Spiethoff, 1953, p. 108; [KRISEN, p. 26]). As a result, this ‘special kind of overproduction’, typical of highly capitalistic production, ‘in a system based on money . . . must lead to a downswing’ (Spiethoff, 1953, p. 167; [KRISEN, p. 82]). ‘Overproduction and crises are both rooted in the upswing, but they are independent of each other. Crises have generally come earlier than definite overproduction, but a crisis may also set in only when overproduction has already been reached, or when the economy has entered into a downswing. Or else, there may be no crisis at all’ (Spiethoff, 1953, p. 104; [KRISEN, pp. 25–26]). ‘Every upswing ends in a state of capital scarcity, but a crisis presupposes an unusual growth of credit during the time of overspeculation’ (Spiethoff, 1953, p. 109; [KRISEN, p. 29]). When a ‘sudden credit collapse’ occurs, determining ‘numerous suspension of payments’, the crisis becomes inevitable: ‘every crisis . . . is a credit crisis’ (Spiethoff, 1953, pp. 104–105; [KRISEN, p. 26]). Outbreaks of panic and a general loss of confidence are the peculiar aspects of this phase in which the behaviour of the banks has a decisive impact, because also the entrepreneurs ‘who, at the moment, need no aid, are seized by fear when the banks refuse to grant credits’ (Spiethoff, 1953, p. 111; [KRISEN, p. 29]; see also Spiethoff, 1918b, p. 517). Suddenly, the quantitative disharmonies (between productive sectors, between goods that are ‘complementary to each other and that are mutually dependent for

396 Vitantonio Gioia their use’, between supply and demand of capital, between supply and demand of labour, between supply and demand of commodities, etc.) erupt with violence. ‘The paralysis of money and credit, the inactivity of a large part of the banks and bankers, the daily bankruptcies and the fall in prices must extend their effects over the whole economy’ (Spiethoff, 1953, p. 114; [KRISEN, p. 32]). In his conclusions, Spiethoff insists on the following aspect: ‘The ultimate cause of the upward movement is of a psychological rather than of an economic nature’ (Spiethoff, 1953, p. 147; [KRISEN, p. 82]; see Eucken, 1934, pp. 99–101). Given the economic environment and the features of economic activity in the capitalist system, business cycles are inevitable, because ‘the normal stimuli of daily life’ are not enough to produce conditions that can sustain the feverish aspiration of profit and the upswing at the same level. This ‘feverish aspiration’ has to be sustained by strong psychological motivations. As a consequence, if during the upswing the economic conditions that promoted growth cannot last (because of increasing scarcity of capital), then a new psychological context will quickly transform optimism into panic and pessimism. Spiethoff suggests that a better and more efficient institutional structure might reduce some negative effects of downswings and crises by contrasting the rapid deterioration of the psychological environment. He does not rule out the possibility that the stage of advanced capitalism will be succeeded by a new economic age characterized by more balanced and harmonious growth and ruled by different spiritual stimuli and a new cultural environment. In this case, he adds, we probably have to give up the possibilities of growth typical of the capitalistic economy: ‘let us harbour no illusions on this point: the growth of economic power and the vast increase in wealth will then be a matter of the past’ (Spiethoff, 1953, p. 171; [KRISEN, p. 85]). In Spiethoff’s opinion, the strong relationship between ‘the rule of acquisitive economic instinct over the soul of man’ and ‘the rule of business cycle over the course of a nation’s economy’ (Spiethoff, 1953, p. 171; [KRISEN, p. 85]) is the secret of the extraordinary increase in wealth produced by the capitalistic system: ‘the cyclical course of economic life is appropriate for an age which increasingly finds its centre of gravity in economic relations, in the growth of personal wealth, an age which takes credit for the greatest successes in increasing economic strength. The increase in wealth can find no more efficient form of development’ (Spiethoff, 1953, p. 170; [KRISEN, p. 85]).

20.5 CONCLUDING REMARKS Spiethoff’s analysis is part of a series of efforts produced by contemporary economists in order to emphasize real overproduction, assigning a significant role to the construction of additional equipment. The importance of Spiethoff’s analysis was clearly recognized and stressed by Schumpeter, Keynes and Hayek (Schumpeter, 2008, pp. 212 ff.; Schumpeter, 1939, pp. 222 and 254; Hayek, 1933, p. 41, pp. 80 ff.; Keynes, 1930, pp. 336 ff.).

Arthur Spiethoff: from crises to cycles 397 However, while Spiethoff ’s business cycle theory has been generally appreciated, his methodological approach did not receive the attention it deserved. The reasons for this lack of attention can be attributed on the one hand to Spiethoff himself, and on the other to his interpreters and to the inadequate international diffusion of his methodological view.5 With regard to the first aspect, it is worth remembering that in his numerous essays on economic crises, written from 1902 to 1925, his methodological remarks were too concise and, I would say, too implicit to have a positive impact on the methodological approach to business cycles analysis. This is also witnessed by the fact that the entry on KRISEN (1925) lacks that methodological Preface that we find in ‘Business cycles’ (1953) and Die wirtschaftlichen Wechsellagen (1955). This attitude was probably due to the effect of the broad and unfruitful Methodenstreit. Spiethoff only returned to methodological reflections when the echoes of that debate and its paralysing consequences were over. He then undertook a reinterpretation and reappraisal of Schmoller’s heritage, which led him to revise his own epistemic approach in a series of essays published between 1932 and 1948, namely, ‘Die allgemeine Volkswirtschaftslehre als geschichtliche Theorie. Die Wirtschaftsstile’ (1932); ‘Gustav Schmoller und die anschauliche Theorie der Volkswirtschaft’ (1938) and, especially, ‘Anschauliche und reine Theorie und ihr Verhältnis zueinander’ (1948) (see Spiethoff, 1932, especially pp. 65 ff.). With regard to the second aspect, the understanding and diffusion of Spiethoff’s methodological view was substantially hindered by the difficulty of translating his peculiar terminology into the English language (Lane and Riemersma, 1953, pp. 442 ff.). Spiethoff himself was aware of the consequences that this aspect would have for the understanding of his epistemic view. Not by chance in the 1953 Preface to Business cycles did he write: Unfortunately there is no generally accepted name for this method. Some call it ‘empirical-realistic’, others ‘concrete’, yet others ‘observational’ (anschaulich). Among English names which have been proposed are ‘essential (intrinsic) theory’ (Salin), ‘Theory of economic Gestalt’ (Redlich), ‘all-round sociological theory’ (H. W. Singer), ‘realistic theory’ (Hero Möller). (Spiethoff, 1953, p. 75) In my opinion, this interpretative work remains to be done. It might not only enable a better understanding of Spiethoff ’s business cycle, but also make a deeper comparison possible with the approaches of Marx, Schumpeter and, for some methodological aspects, with Weber, Sombart and Veblen (see Lane, 1956, pp. 9–39; Salin, 1944, pp. 177 ff.; Salin, 1956, pp. 41–51; Schumpeter, 1954, pp. 816 ff.).

NOTES 1 As Schumpeter, for instance, noted, ‘the figure for the consumption of iron is the best index of business conditions; that is, this index which Spiethoff discovered and worked out’ (Schumpeter, 2008, p. 215).

398 Vitantonio Gioia 2 Real-type analysis was Spiethoff’s challenge to the ideal-type approach. In his opinion, ‘Social scientists build ideal types in order to obtain fixed points of reference in the perpetual flow of history’, whereas real-type aims at focusing on the historical features of an economic system in its evolution from a theoretical point of view. Real-type is an attempt to create an explicative contexts in which ‘recurrent regularities of a historical object, stripped of its historical uniqueness’ can be represented (Spiethoff, 1953, p. 74; on this, see also Lane, 1956, p. 21). Schumpeter emphasized the innovative aspect of this approach as ‘realistic theories of a certain type’, that is, theories that were not descriptive in character but endowed with analytical content (Schumpeter, 1986, p. 817). 3 On this aspect Spiethoff writes: ‘Attempts have been made to draw a distinction according to the degree of abstraction, but no matter how small the degree of abstraction, pure theory can never become observational theory, nor can the highest degree of abstraction transform observational theory into a pure theory’ (Spiethoff, 1953, p. 75). The pure theories can have universal validity and can be fruitfully used as a heuristic device in order to explain reality, but ‘they do not have the relevance to an actually existing reality – past, present and future – that is possessed by historical theory’ (Spiethoff, 1952, p. 135). 4 For example, the German upswing of the 1940s, the upswing preceding the First World War and a series of figures concerning direct consumption trends in Hamburg, 1850–1900) (Spiethoff, 1953, p. 95; [KRISEN, p. 19]). 5 In 1957 Osterrieth Nicol wrote in Weltwirtschaftliche Archiv: ‘Yet, to English-speaking readers Spiethoff has until recently been more of a name than a concept, partly because his writings have appeared in relatively inaccessibile publications and partly because translations were not, until lately, available’ (Osterrieth Nicol, 1957, p. 19).

REFERENCES Clausing, G., 1958, Arthur Spiethoffs wissenschaftliches Lebenswerk, Schmollers Jahrbuch, 78 Jahrg. (Leipzig: Duncker & Humblot), pp. 257–290. Eucken, W., 1934, Kapitaltheoretische Untersuchungen (Jena: Verlag Gustav Fischer). Gioia, V., 1997, Historical changes and economics in Arthur Spiethoff ’s theory of Wirtschaftsstil. In P. Koslowski (ed.), Methodology of the social sciences, ethics, and economics in the Newer Historical School (Heidelberg: Springer Verlag), pp. 168–190. Gioia, V., 2001, Crisi e ciclo nei dizionari economici tedeschi (1849–1925), Storia del Pensiero Economico, 42, pp. 5–29. Gottschalk, M. and Broyer, S., 2004, Einleitung. In B. Schefold (ed.) Wirtschaftssysteme im historischen Vergleich (Stuttgart: Streiner), pp. 15–67. Haberler, G., 1937, Prosperity and depression: a theoretical analysis of cyclical movement (Geneva: League of Nations). Haberler, G., 1968, Prosperity and depression (Cambridge, MA: Harvard University Press; 1st edn: Geneva: League of Nations). Hagemann, H., 2000, The development of business-cycle theory in the German language area 1900–1930. In V. Gioia and H. Kurz (eds), Science, institutions and economic development (Milan: Giuffré Editore), pp. 417–456. Hagemann, H., 2002, Introduction. In H. Hagemann (ed.), Business cycles theory: selected texts 1860–1939 (London: Pickering & Chatto), Vol. II, pp. vii–xxv. Häuser, K., 1989, Gründe des Niedergangs, Überlebendes und Überlebendeswertes. In M. Bock, H. Homann and P. Schiera (eds), Gustav Schmoller heute: die Entwicklung der Sozialwissenschaften in Deutschland und Italien (Berlin: Duncker & Humblot). Hayek, F. A., 1933 (1966), Monetary theory and the trade cycle (London: Cape). English translation of Geld Theorie und Konjunkturtheorie (Vienna, 1929).

Arthur Spiethoff: from crises to cycles 399 Höhmann, D., 2001, Opere enciclopediche o dizionari specialistici in campo economico nell’area di lingua e cultura tedesca (dal Settecento a oggi), Storia del Pensiero Economico, 41, pp. 181–212. Jonas, F., 1954, Das allgemeine Stabilitätspostulat in der nationalökonomischen Klassik, insbesondere bei Ricardo, Schmollers Jahrbuch, 74, pp. 527–559. Kamp, M. E., 1958, Gedenkrede auf Arthur Spiethoff (Bonn: Peter Hanstein Verlag). Keynes, J. M., 1930, A treatise on money, Vol. II (London: Macmillan). Lane, F. C., 1956, Some heirs of Gustav von Schmoller. In F. C. Lane et al., Architects and craftsmen in history (Tübingen: J. C. B. Mohr (Paul Siebeck)), pp. 9–39. Lane, F. C. and Riemersma, J. C., 1953, Introduction to Arthur Spiethoff. In F. C. Lane and J. C. Riemersma (eds), Enterprise and secular change (London: George Allen & Unwin), pp. 431–463. Lederer, E., 1925, Konjunktur und Krisen. In Grundriss der Sozialökonomik (Tübingen: J. C. B. Mohr (Paul Siebeck)), pp. 355–413. Mitchell, W. C, 1927, Business cycles: the problems and its setting (New York: National Bureau of Economic Research). Osterrieth Nicol, H., 1957, Allgemeine Wirtschaftslehre, Weltwirtschaftliches Archiv, 78: 1, pp. 19–22. Perroux, F., 1965, Strutture economiche. In R. Bastide (ed.), Usi e significati del termine struttura (Milan: Bompiani), pp. 51–61. Röpke, W., 1936, Crises and cycles (London: William Hodges & Company). Salin, E., 1944, Geschichte der Volkswirtschaftslehre (Berne: A. Francke). Salin, E., 1955, Stand und Aufgaben der Konjunkturforschung. In A. Spiethoff, Die wirtschaftlichen Wechsellagen. Aufschwung, Krise, Stockung (Tübingen: J. C. B. Mohr (Paul Siebeck)), pp. 1–10. Salin, E., 1956, Sombart and the German approach. In F. C. Lane et al., Architects and craftsmen in history (Tübingen: J. C. B. Mohr (Paul Siebeck)), pp. 41–51. Schmoller, G., 1923, Grundriss der allgemeinen Volkswirtschaftslehre (Berlin: Duncker & Humblot; reprinted in 1978 by the same publisher). Schumpeter, J. A., 1933, Vorwort. In J. A. Schumpeter (ed.), Der Stand und die nächste Zukunft der Konjunkturforschung (Munich: Duncker & Humblot), pp. v–vi. Schumpeter, J. A., 1939, Business cycles: a theoretical, historical, and statistical analysis of the capitalist process (New York and London: McGraw-Hill. Cited from the 2002 reprint: Chevy Chase, MD and Mansfield Centre, CT: Bartleby’s Books and Martino Publishing). Schumpeter, J. A., 1954, History of economic analysis (London: Allen & Unwin). Schumpeter, J. A., 1986 (1954), History of economic analysis (London): Allen & Unwin. Schumpeter, J. A., 2008, The theory of economic development (New Brunswick and London: Transaction Publishers; translation of the 6th edn, 1946, Theorie der wirtschaftlichen Entwicklung, Berlin: Duncker & Humblot). Schweitzer, A., 1938, Spiethoffs Konjunkturlehre. Darstellung und Wurdigung (Basel: Helbing & Lichtenhahm). Spiethoff, A., 1902, Vorbemerkungen zu einer Theorie der Überproduktion, in Schmollers Jahrbuch, 26, pp. 721–759. English translation as Preliminary remarks to a theory of overproduction. In H. Hagemann (ed.), 2002, Business cycle theory: selected texts 1860–1939 (London: Pickering & Chatto), Vol. 2, pp. 45–76. Spiethoff, A., 1903, Die Krisentheorien von M. Tugan-Baranowsky and L. Pohle, Schmollers Jahrbuch, 27, pp. 331–360. Spiethoff, A., 1918a, Die Kreditkrise, Schmollers Jahrbuch, 42, pp. 149–191.

400 Vitantonio Gioia Spiethoff, A., 1918b, Die Krisenarten, Schmollers Jahrbuch, 42, pp. 223–265. Spiethoff, A., 1920, Der Begriff des Kapital- und Geldmarktes, Schmollers Jahrbuch, 44, pp. 33–51. Spiethoff, A., 1932, Die Allgemeine Volkswirtschaftslehre als geschichtliche Theorie. Die Wirtschaftsstil, Schmollers Jahrbuch, 56, pp. 51–83. Spiethoff, A., 1938, Gustav Schmoller und die anschauliche Theorie der Volkswirtschaft, Schmollers Jahrbuch, 62, pp. 16–35. Spiethoff, A., 1948, Anschauliche und reine Theorie und ihr Verhältnis zueinander. In E. Salin (ed.), Synopsis. Festgabe für Alfred Weber 30. VII. 1868–30. VII. 1948 (Heidelberg: Verlag Lambert Schneider), pp. 569–664. Spiethoff, A., 1952, The ‘historical’ character of economic theories, Journal of Economic History, XII, Spring, pp. 131–139. Spiethoff, A., 1953, Business cycles, International Economic Papers, 3, pp. 75–171. Reprinted in H. Hagemann (ed.), 2002, Business cycle theory: selected texts 1860–1939 (London: Pickering & Chatto), Vol. II, pp. 107–205. Citations are from the IEP version. Spiethoff, A., 1955, Die wirtschaftlichen Wechsellagen. Aufschwung, Krise, Stockung (Tübingen: J. C. B. Mohr (Paul Siebeck)). Tribe, K., 1988, Governing economy: the reformation of German economic discourse 1750–1840 (Cambridge: Cambridge University Press).

21 Konyus’s ‘Economic conjuncture’ in the Granat encyclopaedia Vincent Barnett

Entsiklopedicheskii slovar’ Russkogo Bibliograficheskogo Instituta Granat (The encyclopaedic dictionary of the Granat Russian Bibliographical Institute), published by the Granat Institute, Moscow, Vol. 51, 1933.*

The strong and varied interest of a number of Russian economists in business cycle analysis in the period from 1890 to 1930 has been previously explored in a significant way (see Barnett, 1996, 2001, 2006; Owen, 2009). The three bestknown names that spring to mind in this regard are N. D. Kondratiev, M. I. TuganBaranovsky and E. E. Slutsky. However, many other Russian theorists were also actively involved in research in this field, and one such less recognized individual was A. A. Konyus. Konyus is known in the West today for his work on index number theory and measuring consumer purchasing power, but for most of the 1920s he was an active member of Kondratiev’s Conjuncture Institute in Moscow, which was a centre devoted to the theoretical and empirical study of business cycles and economic forecasting (see Barnett, 1998). The Conjuncture Institute brought together intellectual talent from various related fields, most notably economics, statistics and mathematics, and it is very likely that Konyus’s previous experiences in this regard led to him being selected to write the Granat encyclopaedia entry on ECONOMIC CONJUNCTURE that is the subject of this chapter.

21.1 THE ENCYCLOPAEDIA The Granat encyclopaedia, a general encyclopaedic dictionary that contained entries on a wide variety of topics, was unusual in various ways. First, it was published in 58 volumes (plus one supplement) over a long period of time that encompassed both the Tsarist and the Soviet eras. It first began to be issued in 1910, and was

*

Thanks are due to Professor Leonid Shirokorad for assistance in obtaining a copy of Konyus’s entry.

402 Vincent Barnett only completed nearly 40 years later in 1948. Since some volumes consisted of multiple physical volumes, in total it occupied 74 printed volumes. The first 33 volumes appeared from 1910 to 1917, the remaining volumes from 1922 onwards. Famous authors who contributed entries included the founder of Bolshevik Russia, V. I. Lenin, who wrote characteristically on Karl Marx (Cannon, 2008, p. 154). The entry by Konyus discussed here was published in the Soviet period, and is especially interesting because it was written in a very turbulent period in Soviet history (the early 1930s), when economists were subject to special repressive measures from government bodies. That Konyus was even allowed to write such an entry is a little surprising, given that (at the same time) other Soviet economists who had come to prominence in the 1920s were being tried and incarcerated for their work on closely related themes. In 1938 some economists were even executed for their supposedly traitorous ideological crimes. The fact that it was reprinted in a 2010 edition of what was called the selected works of the Conjuncture Institute, where it was described as ‘an attempt to give an objective evaluation of the scientific achievements of the Conjuncture Institute’, suggests that it was one of the very last publications to emanate indirectly from Kondratiev’s group in this period (Klyukin, 2010, p. 664). Second, the Granat encyclopaedia was unusual also because it contained some special subsections devoted to surveying certain themes viewed more generally, which were included in addition to the more usual alphabetically arranged single entries on specific topics. Its very large size allowed individual entries sufficient space to present relatively full accounts of the topics at hand, and some crossreferencing was found in certain entries. It also included long bibliographies and some illustrations. It was produced by the Granat Russian Bibliographical Institute and published in Moscow, and its full title was Entsiklopedicheskii slovar’ Russkogo Bibliograficheskogo Instituta Granat (The encyclopaedic dictionary of the Granat Russian Bibliographical Institute). However, as an historical source it seems less well known in the West than the Brockhaus–Efron encyclopaedic dictionary, which contained an entry on ECONOMIC CRISES by Tugan-Baranovsky (as discussed in Chapter 17 of this volume), and the Granat encyclopaedia is certainly more difficult to locate within major UK libraries. The British Library, for example, has only an incomplete set, which is unusual because of this library’s particularly strong holding of Russian materials, and also because of the known affinity of many Russian intellectuals with this particular institution. It seems reasonable to assume that (in parallel) the accounts of the subjects that it contained were less widely disseminated in the West, at least in comparison to those on similar topics found in the Brockhaus–Efron encyclopaedic dictionary.

21.2 THE AUTHOR Aleksandr Aleksandrovich Konyus was born in 1895 in Moscow and died in the same city in 1990. Accordingly, his very long life encompassed Tsarism, Bolshevism,

‘Economic conjuncture’ in the Granat encyclopaedia 403 Stalinism, de-Stalinization, Brezhnevite stagnation, perestroika and finally Soviet collapse. Few Russian scholars who worked on both economics and statistics survived virtually the entire twentieth century. Early in his career he developed a reading knowledge of French and probably also of German (RGAE (Russian State Archive of the Economy), f. 7733, op. 18, del. 4201, p. 16). After military service in the First World War, during which he was wounded twice, he enrolled at Moscow University in 1917, where he first studied physics and mathematics. Konyus was active against Soviet power in its early days. During the October Revolution he participated in the struggle to defend the Provisional Government, and for a short period after the Bolshevik success he campaigned against the new government (ibid., p. 18). Between 1918 and 1920 he studied statistics at the Moscow Cooperative Institute, where his tutors included A. V. Chayanov and N. D. Kondratiev. Konyus subsequently joined Kondratiev’s Conjuncture Institute in December 1922 as deputy head of the section devoted to studying indices and prices (ibid., p. 4). However, despite such politically dangerous early activities and his direct association with a pro-market agrarian heretic, Konyus outlived all the other members of the Conjuncture Institute, and he even participated in the reprinting of many of Kondratiev’s works at the end of the 1980s. With the closure of the Conjuncture Institute in 1929, Konyus then pursued various jobs in statistics. For example, during the Second World War he worked on applying advanced statistical methods to improving metal production techniques. After the war ended, he was employed at various Soviet research centres for economics and statistics, and continued working on similar topics such as price indices and correlation analysis. In 1968 he became a member of the editorial council of the international statistical journal Metron, and in 1970 he received an honorary doctorate from Munich University (P. P. Maslov, KONYUS, A. A., in →Rumyantsev, Ekonomicheskaya enciklopediya, 1975, p. 232). Between 1960 and 1982 he worked at the Institute of Economic Research in Moscow. Perhaps the main reason for the relative ‘ease’ of his survival during the Stalinist purges of the 1930s was that the vast majority of his work in economics was purely statistical and abstract in nature, and had no obvious political or policy orientations. Konyus’s early reputation was built upon two well-known contributions that received some early Western dissemination. His 1924 paper ‘The problem of the true index of the cost of living’ was first published in Ekonomicheskii byulleten’ Kon”yunkturnogo instituta. An English translation appeared in Econometrica in 1939, together with some introductory remarks by Henry Schultz (Schultz, 1939). The basic problem was to construct an index that measured the true cost of living over time. Konyus asked the following question: ‘what quantities of goods should be consumed to guarantee a constant standard of living, despite a given change in prices?’ (Konyus, 1939, p. 24). Konyus showed how previous attempts gave incorrect results: both an index calculated on the basis of consumption at the base period and one calculated on the basis of consumption at the current period would be inaccurate. One would be greater than the true cost of living index, one smaller; the true index fell between the two (Konyus, 1939, p. 20). To calculate a true index, consumer budgets at the base and current periods were used to find the ratio of the

404 Vincent Barnett cost of living functions at identical utility standards. Konyus gave conditions in which the two standards of living at the base and current period were approximately equal, thus allowing the true index of the cost of living to be given as the ratio of the two expenditures (Schultz, 1939, p. 6). In 1926 Konyus published ‘On the problem of the purchasing power of money’ (Konyus, 1926), together with S. S. Byushgens (and with the help of M. V. Ignatiev and N. S. Chetverikov). The →New Palgrave dictionary of economics entry on Konyus described this article as a ‘truly remarkable paper which was well ahead of its time’ (Diewert, KONYUS, A. A., 1987, p. 62). In the 1926 article Konyus and Byushgens analysed the structure of the various formulae used to describe the purchasing power of money, and discussed Irving Fisher’s analysis of index numbers that were designed to measure this purchasing power. Later contributions by Konyus were devoted to topics such as the labour theory of value (Konyus, 1964), Marxist economics (Konyus, 1967), aspects of optimal planning and the development of various statistical techniques, but none of them were as important as the two articles discussed previously.

21.3 THE ENTRY Konyus’s entry entitled EKONOMICHESKAYA KON”YUNTURA (ECONOMIC CONJUNCTURE) was divided into six basic sections as follows: (1) Basic conceptions of economic conjuncture; (2) Methods of study of economic conjuncture; (3) Constructing indices; 4) Analysis of dynamic time-series; (5) The study of economic conjuncture in capitalist countries; (6) Problems of studying economic conjuncture in the USSR. It contained a substantial bibliography of the literature on cycles, of both Western and Russian/Soviet authors, and five diagrams illustrating various techniques of conjunctural analysis. The entry itself occupied 45 pages of the volume, although, as the encyclopaedia was printed in double columns and paginated as two pages per physical page, this corresponded to around half the number of standard printed pages. Even so, it was a substantial entry worthy of detailed analysis. The following summary picks out only some of the discussion, as the assessment in the following section will provide an evaluation in the context of a broader comparison of the content. In the first section of the entry Konyus presented a discussion of the origins of conjunctural analysis, various definitions of the topic, and a brief sketch of the development of conjunctural understanding in various countries such as the USA, France and Germany. He began by explaining that the word ‘conjuncture’ originated in the Middle Ages as an astrological term for plotting the relative positions of the sun, the planets and the stars. At the end of the seventeenth century (when trade crises first arose), this conception of relational dependence of physical bodies was transferred to economic phenomena, for example in Germany, where it came to connote the combination of elements in relation to market phenomena, and the direction and results of business activity. In →Seligman’s Encyclopaedia of the social sciences, Simon Kuznets had in 1931 provided a very similar (if much

‘Economic conjuncture’ in the Granat encyclopaedia 405 shorter) account of the origins of the term CONJUNCTURE (p. 203), a confluence explained at least in part by Kuznets’s Russian origins (Barnett, 2008). In his much more substantial entry, Konyus then developed a distinction between three different senses of the term ‘conjuncture’: a wider definition, a narrower understanding and then an intermediate position. The first, ‘wide’ conception involved understanding factors such as fluctuations in the harvest, changing production techniques, developing transport facilities, the course of government policies, changing social differentiation, population migration, and so on, in relation to the overall position of the national economy. The second, ‘narrow’ understanding involved only specific market-based factors such as the relation between the supply and demand for individual commodities, the level of prices, and the position of interest rates. There was also a distinction between the conjuncture of the national economy as a whole, and the conjuncture of specific branches of it. Finally, Konyus noted a third sense of the term ‘conjuncture’ that was often used in the literature on capitalist economies in relation to studying crises and the various phases of the business cycle. In summary, Konyus’s three senses of economic conjuncture were: the combination of the elements of national economy (the widest meaning); the variable position of the markets (the narrowest sense); and the fluctuations of economic conditions (an intermediate meaning). At this point certain ideological terms commonly employed in Soviet literature such as ‘bourgeois economist’ made an appearance. In discussing various Western authorities on these topics, Konyus expounded the German understanding of the word ‘conjuncture’ (as exemplified within E. Wagemann’s own Conjuncture Institute) as being the cyclical movements remaining after eliminating the underlying trend, and also seasonal and random fluctuations. He suggested that this conception was prevalent in several continental European countries (Germany, Austria, the USSR and Scandinavia), but that in France and the UK, the word had another meaning. In the latter regions it meant simply ‘the confluence of circumstances’, and did not have a specific economics connotation. In the USA the term ‘conjuncture’ was considered inexact, and the phrase ‘business cycles’ was usually preferred (ECONOMIC CONJUNCTURE, pp. 220–24). In the second section, on methods of study, which was the shortest of the six sections, Konyus noted Kondratiev’s conception of ‘relative conjuncture’, or relative changes in the elements that constituted economic processes. He also distinguished between conjuncture as analysed in capitalist economies, and that which was relevant to the Soviet economy. The latter involved analysing processes of fulfilment of economic plans, and hence was very different in nature from what was applicable to capitalism. However, Konyus emphasized that both systems were based primarily on the use of statistical materials, or on ‘conjunctural statistics’. Here he defined three basic types of statistical information. The first was specific indicators of economic conjuncture, for example data in relation to production, trade turnover, monetary circulation, prices, wages, and so on. The second was indexes, or methods of combining specific indicators into aggregate measures. The third was the analysis of dynamic series, or methods of plotting specific conjunctural

406 Vincent Barnett movements in terms of dynamic indicators. The latter two types employed (in part) the methods of mathematical statistics, which was where Konyus’s own expertise came into its own (ECONOMIC CONJUNCTURE, pp. 224–26). In the third section, on index construction, Konyus discussed various forms of index numbers, such as those constructed by Irving Fisher, and also his own earlier contributions on this topic, for example on constructing an index of the cost of living. Konyus noted a special difficulty in constructing an index designed to measure ‘general economic conjuncture’, which might attempt to include such diverse indicators as prices, production and unemployment. Konyus quoted a passage from Fisher’s article ‘The unstable dollar and the so-called business cycle’ to this effect, an article that had been translated into Russian and published in a Russian journal in 1926. The Fisher passage suggested that a general index of business conditions obtained by combining various individual indicators made as much sense as a general index of weather that combined the individual elements of temperature, humidity and pressure. Konyus described two basic approaches to the method of constructing indexes. The first conceived indexes as relations of the totality of elements, and the second saw them as the totality of the relations of elements. For example, in the first method, a comparison of the price level in two periods was made by summing the price series for the period in question. In the second method, arithmetic averages were used in relation to evaluating price changes over two periods. Expressed mathematically, the first type of index was presented as follows: IN = (p1´ + p1´´ + p1´´´ …)/(p0´ + p0´´ + p0´´´ …) = Sp1/Sp0 In this example, Sp0 was the sum of the prices of goods in a base period, and Sp1 was the sum of the prices of goods in later periods. The second type of index was expressed mathematically as follows, where n was the number of different commodities being included in the comparison: IK = [(p1´/p0´) + (p1´´/p0´´) + (p1´´´/p0´´´) + …] 1/n = 1/n S(p1/p0) The first method produced an aggregate unweighted index, and the second produced an unweighted arithmetic average. With the inclusion of quantities of goods into the calculation (q), the aggregate index was expressed mathematically as follows: IAG = (p1´q´ + p1´´q´´ + …)/(p0´q´ + p0´´q´´ + …) = Sp1q/Sp0q Various further developments of these basic ideas were then discussed. In this regard Konyus discussed A. Bowley’s article on index numbers from the Economic Journal in 1928, W. S. Jevons’s Investigations in currency and finance of 1884, W. Persons’s work on correlation analysis, and also some noted Russian authors such as N. S. Chetverikov and D. I. Oparin (ECONOMIC CONJUNCTURE, pp. 226–236). In the fourth section, on the analysis of dynamic time-series, Konyus explained that the methods of statistical decomposition were used to study and eliminate two

‘Economic conjuncture’ in the Granat encyclopaedia 407 types of additional elements that were commonly encountered: various kinds of trend (e.g. secular trend) and seasonal fluctuations. Here Konyus sketched some of the statistical techniques used in these procedures. For example, moving averages could be obtained using (in the majority of cases) the arithmetic average, but occasionally other types such as the geometrical average (in the case of accelerating price inflation) might be appropriate. Konyus then distinguished between ‘flexible trend’, i.e. fluctuations of less than one year, and ‘stable trend’, which remained when flexible trend had been removed. He noted Wesley Mitchell’s conception of secular trend, which related to causes that acted on the economy only over the long term, i.e. over a longer period of time than that related to conjunctural fluctuations (or business cycles) of around 11 years in length. Konyus outlined that some authors had suggested that the progression of particular economic variables could conform to strict mathematical laws, and hence that extrapolating their level theoretically might be possible, if such laws could be pinpointed. For example, it had been suggested that population growth increased in geometrical progression. Taking this idea one step further, D. I. Oparin had suggested that connecting such regularities together could produce ‘schemes of movement’ of economic variables, in which the relations between particular elements were plotted as theoretical curves. Other examples specified in this regard were the progression of sales of particular goods, or the process of decreasing grain supplies being held at any one time. However, Konyus warned that the creation of such economic ‘schemes’ based on mathematical laws was a task that presented insurmountable difficulties. In relation to determining the periodicity of cyclical fluctuations, Konyus suggested that they might initially be detected by reviewing the graphical plot of the data. Other methods of statistical decomposition in this respect included harmonic analysis, as developed by Fourier and applied to economic series by Henry Moore, and correlation analysis, as discussed, for example, by Mitchell in relation to measuring coefficients of connection between individual economic series. In relation to excluding seasonal factors, Konyus outlined two basic methods. The first simply used yearly data, while the second employed monthly averages that were then linked to all the months of the year through arithmetic or geometric progression. He noted that it was not only the degree of connection between variables that was of interest, but also the specific form of this connection, i.e. exactly how one particular element (the grain harvest) influenced another (grain prices). Konyus also warned that some had suggested that it was impossible to mechanically divide the progressive movement of the capitalist economy from the cyclical forms in which this movement was inevitably expressed. Konyus himself believed that this was correct in the sense that it was impossible to guarantee that the fluctuations observed in one period of time would necessarily be repeated in another. In this regard he warned about the appropriate use of mathematical methods for analysing economic data, in that the correct theoretical understanding of the economic phenomena under review was still a necessity (ECONOMIC CONJUNCTURE, pp. 236–250).

408 Vincent Barnett In the fifth section, Konyus discussed the history of conjunctural analysis in the West, including Babson’s business barometer, the work of the Harvard economic bureau, the German Institut für Konjunkturforschung, the London and Cambridge Economic Service, the French Institut de Statistique de l’Université de Paris, various Italian statistical efforts, and conjunctural institutes in Austria and Poland. He also noted various differences in approach between these various bodies, for example that the Harvard bureau rejected Babson’s work as not having any scientific value, and outlined the US-based conception of a ‘barometer’ of business conditions (ECONOMIC CONJUNCTURE, pp. 250–257). In the sixth section, on the USSR, Konyus outlined the creation of the Moscow Conjuncture Institute in 1920, but then noted that some aspects of its work had come under the influence of ‘bourgeois theory and practice’. He consequently defined the correct method of studying economic conjuncture in the Soviet context as being that which was commensurate with the techniques of economic planning. He quoted a definition that declared that the methodology of the prognosis of conjunctural movements was identical to that of constructing national economic plans. Since cyclical fluctuations (and economic crises) had been eliminated from the Soviet system, conjunctural analysis was employed only when it was necessary to explain movements in the level of development and the relational dependence of particular elements, and also seasonal factors (ECONOMIC CONJUNCTURE, pp. 257–263).

21.4 ASSESSMENT From this summary of much of the entry, it is apparent that Konyus’s conception of conjuncture in this context was predominantly empirical and statistical in nature, being concerned with accurately describing the observable features of business cycles, rather than explaining their underlying causes or in positing any fundamental mechanisms of cycle propagation. Indeed, Kondratiev had in the mid-1920s personally arranged for the translation of Mitchell’s 1927 book Business cycles: the problem and its setting into Russian, this volume being published in Moscow in 1930. Konyus referred to this translation in his entry, noting that Mitchell had identified 39 separate theories of economic cycles and crises, but refraining from commenting upon them in any detail (ECONOMIC CONJUNCTURE, p. 255). In fact, the part of Mitchell’s book that Konyus’s entry most resembled was the long and substantial Chapter 3 on ‘The contribution of statistics’, which was (like Konyus’s entry) divided into six main sections (Mitchell, 1927, pp. 189–357), with a short seventh part on combining theory, history and statistics. In his Chapter 3, Mitchell discussed statistical techniques, time-series analysis and indexes of business conditions in a very similar fashion to Konyus. Mitchell did not mention Konyus by name in his 1927 book, but he did discuss the work of the Moscow Conjuncture Institute as represented by members like Kondratiev (whom he had met in person), A. L. Vainshtein and Slutsky. One especially notable feature of Konyus’s entry was that it made detailed reference to both Western and Russian/Soviet authorities in the fields of economics

‘Economic conjuncture’ in the Granat encyclopaedia 409 and statistics in a relatively non-discriminatory manner; that is Western and Russian understanding was integrated in a manner that was quite unusual for this period. Apart from Irving Fisher and Henry Moore, other Western economists mentioned included Alfred Marshall, Gustav Cassel, Clément Juglar and Werner Sombart. Given that the entry was published in a politically very sensitive period in the USSR, it is remarkable how many references to ‘bourgeois’ economists there were. Another Russian business cycle analyst of the time, Sergei Pervushin, was being criticized by Soviet writers as a ‘bourgeois eclectic’ as early as 1928 (Owen, 2009, p. 234), and was forced to leave the subject area of economic conjuncture completely after 1930. By 1933 Kondratiev had already been incarcerated for three years, unknowingly awaiting his final execution in 1938. This makes Konyus’s direct reference to Kondratiev’s 1928 article on long cycles and Kondratiev’s favoured terminology of ‘relative conjuncture’ quite remarkable, even though (later in the entry) Konyus went on to condemn some of the methods of the Conjuncture Institute. That Konyus was asked to write the entry on conjuncture meant that he was judged as a safe pair of hands by the authorities, and could be guaranteed not to raise any awkward issues with respect to Soviet economic doctrine. However, this also partly explains why there was so little discussion of business cycle theory in Konyus’s entry, as this aspect of the topic was where most of the politically sensitive questions about the nature of capitalism as an economic system could be found. Technical questions on methods of statistical decomposition were relatively safe to pursue, as Slutsky’s survival and the (adapted) continuance of his research after 1930 also confirmed. At the end of the 1980s, Konyus’s work was again celebrated in Russia, and his links with Kondratiev’s Conjuncture Institute were reaffirmed and finally rehabilitated. However, in an article from 1996 in the prestigious Russian journal Economics and Mathematical Methods celebrating the centenary of Konyus’s birth, the Granat encyclopaedia entry was not mentioned at all (Makebonskaya, 1996). Thus, it cannot stake a claim to have exerted any great influence on economists. Rather, its wider significance lay in its applied technical approach, which mirrored both the developing Soviet view of economic planning as a predominantly empirical activity related to plotting future growth trends, and also the parallel development in Western economics that sought to replace written discussion of abstract economic concepts with a more empirically focused concern with the statistical modelling of economic trends. In the USSR the political motivation underlying this shift was very apparent, whereas in the West the political components of this development were much more difficult to detect.

REFERENCES Barnett, V., 1996, Trading cycles for change: S. A. Pervushin as an economist of the business cycle, Europe–Asia Studies, 48: 6, September, pp. 1006–1024. Barnett, V., 1998, Kondratiev and the dynamics of economic development: long cycles and industrial growth in historical context (London: Macmillan).

410 Vincent Barnett Barnett, V., 2001, Tugan-Baranovsky as a pioneer of trade cycle analysis, Journal of the History of Economic Thought, 23: 4, December, pp. 443–466. Barnett, V., 2006, Chancing an interpretation: Slutsky’s random cycles revisited, European Journal of the History of Economic Thought, 13: 3, September, pp. 411–432. Barnett, V., 2008, Russian émigré economists in the USA. In V. Barnett and J. Zweynert (eds), Economics in Russia: studies in intellectual history (Aldershot: Ashgate). Cannon, A., 2008, Encyclopedias in Russia. In B. Adams (ed.), The supplement to the modern encyclopedia of Russian, Soviet and Eurasian history (Gulf Breeze, FL: AIP). 9. Klyukin, P. N. (ed.), 2010, Izbrannye trudy Kondrat’evskogo Kon”yunkturnogo Instituta (Moscow: Ekonomika). Konyus, A. A., 1926, K probleme pokupatel’noi sily deneg, Voprosy Kon”yunktury, 2. With S. S. Byushgens. Konyus, A. A., 1939, The problem of the true index of the cost of living. Econometrica, 7: 1, pp. 10–29. Konyus, A. A., 1964, Notes to article by L. Johansen ‘Labour theory of value and marginal utilities’, Economics of Planning, 3. Konyus, A. A., 1967, On the tendency for the rate of profit to fall. In C. H. Feinstein (ed.), Socialism, capitalism and economic growth (Cambridge: Cambridge University Press). Makebonskaya, E. I., 1996, K 100-letnyu A. A. Konyusa, Ekonomika i matematicheskie metody, 32: 2. Mitchell, W. C., 1927, Business cycles: the problem and its setting (New York: NBER). Owen, T., 2009, The death of a Soviet science: Sergei Pervushin and economic cycles in Russia, 1850–1930, The Russian Review, 68: 2. Schultz, H., 1939, A misunderstanding in index-number theory: the true Konyus condition on cost of living index numbers and its limitations, Econometrica, 7: 1, pp. 1–9.

22 Wesley Mitchell, Arthur Burns and Trygve Haavelmo on business cycles The two Encyclopaedia of the social sciences (1930–1935 and 1968) Pier Francesco Asso and Luca Fiorito

Encyclopaedia of the social sciences, edited by E. R. A. Seligman and Alvin Johnson, Macmillan, 1930–1935, 15 vols. International encyclopaedia of the social sciences, edited by David Sills (London and New York: Macmillan Free Press), 1968, 17 vols, over 9,000 pp.

22.1 THE ENCYCLOPAEDIA OF THE SOCIAL SCIENCES, 1930–1935 The publication of a 15-volume, comprehensive and monumental Encyclopaedia of the social sciences (ESS) between 1930 and 1935 was a major editorial enterprise which marked the rise and strengthening of American leadership in the social sciences (Gemelli, 1999; Lentini, 1999; Asso and Fiorito, 2002). There were several reasons why, a few years after the end of the First World War, the seven leading American professional associations (the American Economic Association, the American Historical Association, the American Political Science Association, the American Sociological Association, the American Statistical Association, the American Anthropological Association and the American Psychological Association) decided to launch a project for a new Encyclopaedia of the social sciences. First, scientific interest in the growth and possible interactions among the social sciences had increased substantially, in terms of research projects, opportunities for higher education, as well as general implications for the labour market. After the war, newly founded universities, research institutes and public or private foundations had placed a firm commitment for the sponsoring of scientific activities or curricula in the social sciences. Just to name the most important ones, the New

412 Pier Francesco Asso and Luca Fiorito School for Social Research (1919), the National Bureau for Economic Research (1920), the Institute of Economics (later incorporated into the Brookings Institution) (1922) and the Social Sciences Research Council (1924) had boosted postgraduate research projects in the fields of the social sciences and strengthened the case for major reference works. Second, public policy and awareness increased the general demand for the social sciences. In fact, appeal for a more systematic approach to the leading social sciences grew significantly also as a consequence of their successful association with wartime activities when governmental organizations made increasing use of social scientists for their advice and implementation. In the post-war environment, it was widely felt that the rational control of economic and social problems needed neutral techniques of intervention, reliance on a wide range of statistical sources and a usable form of objective knowledge. All these rendered indispensable a thorough systematization of the social sciences in the expectation that important applications and cross-fertilization should follow. A major reference work was also useful for a growing breed of non-academic scholars who began to populate governmental departments or corporate offices, showing an increasing desire for more widespread and systematic knowledge in the social sciences. Many recognized the importance of strengthening the connections between empirical research and social reform. Third, a temporary systematization of all social sciences was also meant to support America’s struggle to detach itself from British intellectual hegemony and fight just another campaign for a stronger national identity. ESS promoters felt that America’s culture needed a new symbol of academic emancipation and ascendancy that would serve to unshackle US professional elites from European traditions. Inspired by the values of democratic pragmatism, an Encyclopaedia of the social sciences would increase the final utility of knowledge and promote a real interdisciplinary approach with the inclusion of human sciences, such as history or art. In particular, the challenge to established European orthodoxy in economics inevitably required stronger forms of contamination within and between the specialized disciplines. Beneficial influence from pragmatist philosophy, behaviourist psychology or the new anthropological school of Franz Boas had often been claimed by the leading American economists since the turn of the century and a comprehensive Encyclopaedia could provide much help in this direction. This design soon received widespread support, both intellectual and financial. A committee of the seven professional associations was organized at the New School for Social Research and, in 1924, selected Columbia economist Edwin R. A. Seligman as the general editor in chief of the Encyclopaedia. Another economist, a former student of John Bates Clark and the New School Director, Alvin Johnson, was appointed as Seligman’s assistant editor. The two economists – ‘Mr Outside’ and ‘Mr Inside’ – took responsibilities for all matters and successfully managed the whole organization. Record financial contributions were raised by Seligman in a very short time and offered by private foundations (Rockefeller Foundation, Carnegie, and the Russell Sage Foundation), by merchant banks and credit institutions (J. P. Morgan, Warburg) but also came from individual philanthropists.

Mitchell, Burns and Haavelmo on business cycles 413 The 1929 economic crash caused merely a temporary slowdown in the schedule of publication, which was tightly respected by Macmillan. Seligman and Johnson carefully designed and supervised the main features of the Encyclopaedia of the social sciences. First, ESS had to preserve a deeply universal vocation, both in the selection of the entries and in the association of authors. Thematically, the Encyclopaedia had a strong international bent, and a lot of space was devoted to issues related to processes of integration, inclusion and cross-contamination. Moreover, most entries followed a comparative approach and analysed the influence of national contexts on different social phenomena, making considerable use of history and historical sources. Finally, in terms of authors, the Encyclopaedia involved a vast number of non-American authors, with, at the forefront, the leading figures of European emigration; in particular, the German economists (Emil Lederer, Gerhard Colm, Hans Neisser, Moritz Bonn and many others) had a prominent part in this accomplishment and were responsible for relevant entries in economic theory and policy. Second, ESS followed a distinctive pluralistic approach, giving emphasis to different schools of thought and promoting the search for a constructive dialogue among the social sciences, stressing comparisons and the need for creating networks among social scientists and policy makers. Pluralism also meant that innovative categories or social phenomena that had only recently risen to the attention of social scientists were given pride of place. In this light, long entries were devoted to ABSENTEE OWNERSHIP, OVERHEAD COSTS, INSTITUTION and ECONOMIC INCENTIVES. Third, according to Seligman and Johnson, most entries had to maintain a descriptive nature and were meant to fully cover the historical background of social phenomena rather than their definite theoretical systematization. As a matter of fact, most comprehensive essays abstained from providing a thorough theoretical survey of different phenomena, instead favouring a more policy-oriented approach, with particular reference to their social implications and impact. Fourth, ESS gave prominent space to biographical essays, which included not only the leading figures in the different social sciences, but also minor or relatively unknown characters. In fact, ESS published more than 5,000 biographical essays grouped around countries and thematically. Again, also from this standpoint, it seems clear that one of the purposes was to limit the prominence of British culture: if one looks at economics, for example, the number of biographies devoted to British economists was exactly equal to that of German economists (87) and just slightly greater than that of French (68) or even Italian (50) economists. If in the 1920s, as Joseph Dorfman put it, social sciences had become ‘a veritable slogan’ within the American university system, Seligman’s Encyclopaedia soon became the standard reference source in the different fields of the social sciences at all levels (Dorfman, 1947–1959, IV, p. 194). The list of contributors represented the widest possible variations in outlook and comprised the world’s leading minds in the social sciences.

414 Pier Francesco Asso and Luca Fiorito 22.2 WESLEY C. MITCHELL ON BUSINESS CYCLES Wesley Clair Mitchell is the author of the entry on BUSINESS CYCLES for the ESS. He had close personal connections with the two editors of the Encyclopaedia. He had been a personal friend and colleague of Seligman at Columbia University since 1912, while in 1918, together with Johnson, he took an active part in the foundation of the New School for Social Research, where he taught for two years before returning to Columbia until the end of his career. In 1927, when Seligman first set out the ESS project, Mitchell was among the most influential and representative economists in the US. His seminal 1913 volume Business cycles had helped him to gain renown in the profession as a specialist in economic fluctuations, but the range of Mitchell’s original contributions included monetary history and theory, the construction of statistical indicators, economic psychology, methodology and the history of economic thought. In 1924 Mitchell had served as president of the American Economic Association, and in his famous (and controversial) address on the ‘Quantitative analysis in economic theory’ he had claimed that empirical investigations should not be viewed as subordinate to theoretical work, nor even as complementary. Instead, he argued, [i]n collecting and analyzing such experimental data as they can obtain, the quantitative workers will find their finest, but most exacting opportunities for developing statistical techniques—opportunities even finer than are offered by the recurrent phenomena of business cycles. It is conceivable that the tentative experimenting of the present may develop into the most absorbing activity of economists in the future. (Mitchell, 1925, p. 9) Mitchell’s own philosophy and research activities since the early 1920s were closely associated with the National Bureau of Economic Research (NBER) – the research institute he contributed to founding in 1920 in order ‘to encourage, in the broadest and most liberal manner, investigation, research and discovery, and the application of knowledge to the well-being of mankind; and in particular to conduct, or assist in the making of, exact and impartial investigations in the field of economic, social, and industrial science’.1 From 1920 until 1946 Mitchell served as research director of the NBER. It was his work on business cycles, in its broad conception of a pattern of change in the whole economy, that provided the central theme for all the NBER’s activities at least until the late 1940s, as it was Mitchell’s inspiration that attracted to it a group of young scholars who combined an inclination for theoretical analysis with a zeal for testable evidence. It was under the auspices of the NBER that Mitchell had published in 1927 – the same year he was invited by Seligman and Johnson to participate in the ESS project (Cadmore, 1935) – Business cycles: the problem and its setting, the book that established him as the American authority in the field. Apart from the main entry on BUSINESS CYCLES by Mitchell – which constitutes the primary focus of this section – the ESS deals with the general topic of business

Mitchell, Burns and Haavelmo on business cycles 415 fluctuations in a cluster of more or less directly related entries which included BOOM by Max S. Handman, BUBBLES, SPECULATIVE by Willard L. Thorp, CONJUNCTURE by Simon Kuznets, and CRISES by Jean Lescure. Lescure was a French economist who had gained repute in the US and who corresponded regularly with both Mitchell and Seligman; Handman was an institutionalist like Mitchell, while both Kuznets and Thorp were affiliated to the National Bureau of Economic Research and had worked under Mitchell’s supervision during the late 1920s. As far as the content and style of these ‘minor’ entries are concerned, they were all rather concise and mainly descriptive in character. Theoretical analysis is quite superficial and limited to passing references to underconsumptionists or to the psychological explanations of crises. Following the general philosophy of the whole Encyclopaedia, Lescure offers a brief historical reconstruction of the succession of crises and observes that whereas in antiquity and even as late as the eighteenth century the type of crisis most prevalent and most dreaded was that due to a shortage of goods brought about by natural and extra-economic factors, such as crop failure and political disturbances, for the last century and a half crises have been fundamentally due to superabundance or overproduction caused by forces which seem to inhere in modern economic organization. (CRISES, p. 596) For Thorp, the bubble remains fundamentally a psychological phenomenon. It is based on the principle of projection. The speculator is aware of past advances in prices. He purchases with no intent other than resale at a higher price, seldom considering the economic forces in the situation. He sees only the anticipated profit. The character of his position, emotional rather than rational, makes him extremely susceptible to rumour, and assures a severe crisis when the reaction sets in. (BUBBLES, SPECULATIVE, p. 27) It is worth pointing out that Mitchell, Thorp and Kuznets all emphasized that the two opening decades of the twentieth century had made it evident that a relentless campaign of cycle measurements was in preparation. The NBER, to which these authors were affiliated, was certainly part of this movement. The new amount of statistical material available to researchers, however, made the task of defining a business cycle even more complicated. The investigator, Mitchell argued, had to develop a sharper and more operational concept of the cyclical components for each time series under examination, but also to devise the general synthesis resulting from these single cyclical movements. ‘These are problems’, as Mitchell put it, ‘on which investigators are actively working, spurred on by critics who hold that “the so-called business cycle is a myth”’ (BUSINESS CYCLES, p. 93). Mitchell’s words emblematically reveal that at the beginning of the 1930s business cycle research was still a contended epistemological terrain. Interestingly, this is confirmed by the space devoted in several entries to the discussion and definition

416 Pier Francesco Asso and Luca Fiorito of the various terms indicating economic instability. Handman observed that ‘booms are a part, not always indispensable, of the cyclical ebb and flow of economic activity’ (BOOM, p. 638); Thorp distinguished between booms and cycles, arguing that there is ‘some tendency to exaggerate the part played by the speculative element in the business cycle’ (BUBBLES, SPECULATIVE, p. 27); Kuznets noted that while the term ‘conjuncture’ is commonly used in German-speaking countries, Scandinavia and Russia, ‘in American and English literature the term cycle is uniformly preferred with the result that the emphasis is placed not on the congeries of conditions displaying variability but on the character of the external manifestations of this variability’ (CONJUNCTURE, p. 204). Finally, Lescure, revealing his own preference for the term ‘crises’, affirmed: ‘certain economists have thereby thought themselves justified in speaking of cycles. But this term labors under the disadvantage of exaggerating the regularity of the phenomenon under consideration’ (CRISES, p. 595). Therefore, not surprisingly, Mitchell himself began his entry with a working definition of business cycles. According to the Columbia economist, Business cycles are a type of fluctuation characteristic of economic activities organized in the form of ‘business economy’ or ‘high capitalism,’ to use the German term. They have a wavelike pattern—each cycle includes a phase of revival, expansion, recession, and contraction. These successive changes in activity spread more or less promptly over a large part, seldom over all, of the economic processes of a country. The cycles are recurrent, but not periodic. Their average duration varies in communities at different stages of economic development from about three to about six or seven years (p. 92) This working definition suggests, among other things, that each cycle can be divided into four distinct stages: revival, expansion, recession and contraction. Turning points are called peaks – the period immediately preceding a decline in real activity, or recessions – and troughs – the period immediately preceding an upturn, or expansion. Accordingly, reference dates can be appointed, preferably to the month, to bound ‘reference cycles’, which become business cycles upon further confirmation of their boundaries. Only troughs and peaks can be dated, inasmuch as ‘the most important practical and the most difficult theoretical problems’ lie in the reversals of cyclical swings. Thus, the identification of ‘specific cycles’ becomes entirely a matter of detecting waves in each seasonally adjusted series and of setting dates to the troughs and peaks. Some series, Mitchell observed, lack satisfactory waves, but in most there are clear-cut fluctuations of approximately the same length as business cycles and of adequately similar amplitude. For some series, however, the number of specific cycles may deviate from the number of reference cycles: series may skip a reference cycle or may run through extra specific cycles. And, more importantly, the conformity of specific cycles to reference cycles is uneven, with leads and lags at reference dates recording considerable dispersion.

Mitchell, Burns and Haavelmo on business cycles 417 Mitchell’s definition of business cycles was deliberately ‘objective’ and mostly methodological in character, in line with the scientific empiricism professed at the National Bureau of Economic Research. The intent, as it appears from the section of the entry on ‘Leading explanations of business cycles’, was to observe strict neutrality towards competing doctrines about the cycle mechanism. Mitchell’s explicit caveat leaves no doubt in this connection: ‘The various explanations sketchily presented here, and the numerous other explanations which might be cited, are not to be thought of as contradicting each other’ (p. 100). In fact, This inclusive use of what were originally offered as independent explanations is especially congenial to statistical workers. The task of a theory of business cycles, seen from their angle, consists in finding out what cyclical fluctuations are characteristic of different processes, searching for explanations of the idiosyncrasies revealed and tracing the connections among different processes. In seeking to trace these various connections they need and can consistently make use of working hypotheses concerning the numerous processes which are parts of the whole. So far as their effort succeeds it weaves the elements into a common pattern. The end result aimed at is not eclectic patchwork but a systematic account of all the relevant phenomena. (p. 100) Mitchell divided business cycles theories into three classes. In the first class Mitchell included those ‘physical’ explanations that emphasize exogenous factors, such as William S. Jevons’s ‘sunspot theory’ or Henry L. Moore’s thesis based on the planet Venus’s movements. The second class refers to the so-called ‘psychological’ explanations of the cycle, and includes those authors who have felt that fluctuations in business are due to abnormal alternations between optimism and pessimism. In this connection, Mitchell mentions John Mills’s essay ‘On credit cycles and the origins of commercial crises’, and briefly discusses Pigou’s theory in which irrational waves of optimism and pessimism among entrepreneurs are conceived as playing a crucial role in the intensification of the rise and fall of business conditions. The third class – to which Mitchell devotes the longest discussion – refers to those ‘institutional explanations’ that ‘trace business cycles to the workings of various economic processes: banking, saving and investing, producing and consuming, disbursing and using incomes; profit seeking and economic innovations’ (p. 98). The list of theories mentioned and briefly assessed in this class is long and heterogeneous and includes Hawtrey’s credit cycle theory, John A. Hobson’s ‘savings theory’, Aftalion’s version of the accelerator principle, Spiethoff’s theory of over-investment, the ‘income theory’ of Catchings and Foster, Veblen and Lescure’s explanations ‘organized around the theme of profit’, and Schumpeter’s ‘innovation theory’.2 Mitchell dedicated the final four sections of the entry – each dealing with a specific phase of the cycle (expansion, recession, contraction, revival) – to expose his theoretical approach, which is in its essence the same as he had presented in his 1913 monograph. Mitchell linked the major changes in business activity to the

418 Pier Francesco Asso and Luca Fiorito potential outlook for profits: ‘profits are the focus of economic activity in a business economy’ (p. 102). Prospective profits depend on sales experience and expectations and on the price–cost relation, which is itself a function of the rate of employment and capacity utilization. In the late stages of expansions, costs tend to rise faster than product prices, provoking a squeeze of profit margins and depressing expectations. As a consequence, new investment commitments are curtailed well before sales begin to flatten. At the same time, income receipts and consumption expenditures decline (falling C/Y and falling W/Y), inventories pile up, and production cuts take place all over the economy, particularly in capital and durablegoods industries. Pessimistic expectations spread and are confirmed and worsened when output and employment suffer a decline. In the contraction that follows, similarly, price–cost margins and profits first deteriorate and then improve, excess stocks and other imbalances are gradually liquidated, and new investment orders, sales and output eventually revive. Thus, crises are an intrinsic phase of the business cycle and are generally determined by important shocks to economic fundamentals. From a theoretical point of view, Mitchell viewed the cycle as an endogenous process that involves the interaction – intuitively sketched – of the multiplier and accelerator mechanisms (Sherman, 2001). Mitchell’s description of the expansion and contraction phases indicates that the American economist had in mind some form of cumulative process generated by a functional relation between production, purchasing power and consumption. In addition, as Mitchell insisted, for these causal relations to produce cyclical movements in real variables, it is also necessary that wages and prices adjust with some sufficient lags rather than being highly flexible. However, apart from these theoretical insights, the actual working of the process is not described in analytical terms, while the multiplier mechanism is only adumbrated. In this connection, Arthur Burns observed in 1952: I venture the prophecy that if Mitchell’s homey work [. . .] were translated into the picturesque vocabulary of ‘propensities,’ ‘multipliers,’ ‘acceleration coefficients’ and the like, it would create a sensation in the theoretical world, especially if the translator were mindful enough to shift passages here and there from the indicative to the conditional mood. (Burns, 1952, p. 26)

22.3 THE INTERNATIONAL ENCYCLOPAEDIA OF THE SOCIAL SCIENCES Published in 1968 in a 17-volume set, the International encyclopaedia of the social sciences (IESS) was a completely new reference work designed to supplant, rather than revise or update, its predecessor, the ESS. In fact, after a decade-long gestation and discussion, the IESS was conceived not as a variant of a successful model which needed to be widened and revived but as a completely different enterprise: a distinctive product of the current generation of social scientists not only from an

Mitchell, Burns and Haavelmo on business cycles 419 organizational point of view, but also from a pedagogical and epistemological viewpoint. While this new project started in the early 1950s, no article was reprinted from the earlier encyclopaedia and very few names contributed to both enterprises, the most outstanding being Talcott Parsons, Selig Perlman, Oskar Morgenstern and Lewis Mumford. Unlike ESS, the International encyclopaedia received no financial backing from patrons or private sponsors, and was conceived as a purely commercial enterprise, managed by a consortium of leading publishers: Crowell-Collier, Macmillan and the Free Press. With regard to its organization, IESS followed a more decentralized approach with one general editor, the Columbia sociologist David Lawrence Sills, seven associate editors and several special editors. From an academic viewpoint, IESS had the strongest connections with Chicago and Columbia. The work of almost 2,000 contributors, the scope of IESS was outlined by the recommendations of a study group at the University of Chicago, sponsored by the Ford Foundation. Headed by former Chicago economist Jacob Viner, in 1955 the study group prepared a long report recommending that the new ESS be both narrower and broader in scope than the old ESS. On the one hand, all entries should be shorter and consider purely descriptive or comparative matters. On the other, it was urged that it should include significantly more materials on methods, empirical regularities and theoretical achievements. The Ford Foundation proposal was left dormant until 1960, when the well-known press magnate Jeremiah Kaplan arranged to merge his publishing firm, the Free Press of Glencoe, with the Crower-Collier Publishing Company and the Macmillan Company, and provided essential financial support. The main difference between EES and IESS was the weight attributed to the single disciplinary areas and the general methodology followed by the authors. From the first perspective, Sills restricted the hard core of the social sciences to psychology, economics, sociology, politics and anthropology, while minor importance was attached to such areas as history, geography, philosophy of science, demography and archaeology. In terms of new subjects, studies in human biology, linguistics and those devoted to the interrelations between the social sciences and various other disciplines received greater attention. Conversely, Seligman’s relativistic approach was completely abandoned, and the role of history and fact relevance was heavily downgraded. In terms of method, contributors were advised that the major emphasis of their articles should be put on the analytical aspects of their topics, and that historical, descriptive and institutional materials should be included primarily to illustrate concepts, theories or methodological innovations. Therefore, scientific formalism and the search for the true paradigms prevailed, with a widespread shift towards mathematical methods and the methodological unification of all social sciences. Also, biographical essays lost much of the space assigned to them in ESS and were limited in number to a few hundred. Business considerations prevailed in the final choice: biographies were considered of low scientific value and were mostly devoted to the great figures of the really important areas (psychology, economics, sociology). Moreover, it seemed likely that the readership of many of these biographies would be very small and it seemed unlikely

420 Pier Francesco Asso and Luca Fiorito that contributors could write interesting and useful articles about many minor figures. It should be noted, however, that in 1979 a biographical supplement was published, with 215 articles in 820 pages on social scientists either born before 1908 or deceased by the time of printing. Consequently, IESS showed a strong bent towards specialization, scientific rigour and the identification of the prevailing scientific consensus within each field or topic. Formalism and quantification were the inspiring values underlying IESS and an effort was made to achieve a greater consolidation of the scientific paradigm under the name of American universalism. Codification of knowledge also hadpractical implications since policy strategies should be a derivation of its technical soundness and quantitative basis. IESS was thus characterized by a strong anti-historical perspective and a marked preference for the behavioural sciences and psychology.

22.4 ARTHUR BURNS ON BUSINESS CYCLES Compared to the ESS, the IESS treatment of business cycles presents aspects of both novelty and continuity. The entry is divided into two parts. One, BUSINESS CYCLES – MATHEMATICAL MODELS, written by the Norwegian econometrician Trygve Haavelmo, introduces the most significant element of novelty; this will be discussed in more detail in Section 22.5 below. By contrast, the most significant element of continuity is represented by the part written by Arthur Burns, author of the section on BUSINESS CYCLES – GENERAL. Like Mitchell, Burns was closely affiliated to the NBER, where he remained for more than two decades, first serving as director of research from 1945 until 1953, when he was appointed to the Council of Economic Advisers by President Eisenhower, and then returning as president from 1957 to 1967.3 In 1946, together with Mitchell, Burns had co-authored the controversial NBER monograph Measuring business cycles. Also in terms of its content, Burns’s entry presents striking similarities to Mitchell’s BUSINESS CYCLES. Burns begins with a general discussion of the peculiar nature of cycles. Business cycles, he argued, can be clearly distinguished from other fluctuations in that they are as a rule larger, longer and more widely diffused. They determine changes in the economy over spans of several years, in contrast to seasonal or other variations, which generally take place over spans of less than a year. Equally importantly, cycles reflect, and interact with, long-term growth trends which dominate development and growth across decades. Moreover, and again similar to Mitchell’s general structure of the entry, Burns’s methodological discussion centres around two key features of business cycles. The first is the subdivision of cycles into distinct phases. Observed fluctuations vary greatly in amplitude and scope as well as in duration, yet they show a common pattern of recurring stages: ‘the recurring sequence of changes that constitutes a business cycle – expansion, downturn, contraction and upturn – is not periodic. In other words, the phases of business cycles repeat themselves, but their duration varies considerably and so too does their intensity and scope’ (p. 227).

Mitchell, Burns and Haavelmo on business cycles 421 The second prominent element is the emphasis on the co-movement among individual economic variables: business expansions and contractions consist of patterns of recurrent, serially correlated and cross-correlated movements in many economic (but also social and institutional) features. Indeed, the co-movement among series, taking into account possible leads and lags in timing, was one of the distinguishing marks of the NBER method. In their volume Measuring business cycles, Burns and Mitchell had considered the historical concordance of hundreds of series, including those measuring commodities, incomes, prices, interest rates, banking transactions and transportation services. The clusters of turning points in these individual series were then used to determine the monthly dates of the turning points in the overall business cycle. Also in the IESS entry, Burns emphasized the importance of this method. Compared to Mitchell’s, Burns’s survey of business cycles theories is more succinct, with scant references to the history of the subject. Burns offers no taxonomy of the existing approaches, limiting himself to passing comments on the contributions of Clément Juglar, Mikhail Tugan-Baranovsky, Knut Wicksell, Albert Aftalion, Joseph A. Schumpeter, Wesley C. Mitchell and John Maynard Keynes. Not surprisingly, he stresses the recent contributions of ‘economic statisticians’, with specific mention given to the work of Warren M. Persons, Simon Kuznets and Jan Tinbergen. They had made ‘significant advances [. . .] in describing with some precision the major features of business cycles and also in understanding the processes whereby they are generated’ (p. 230). In referring to these alternative approaches, Burns acknowledged the existence of notable disagreements among theories, particularly with regard to the relative importance of monetary and real factors. Most of these writers, however, considered business cycles to be caused and conditioned by a number of factors and circumstances, and this led Burns to observe that ‘more frequently than not, the various theories differed mainly in their point of emphasis and therefore served to supplement one another’ (p. 229). On similar grounds, Burns promptly dismissed the intellectual relevance of any modern revision of the old Methodenstreit on the primacy of theoretical over empirical investigations and vice versa: ‘The variety of approaches sometimes leads to methodological controversies. But no serious student of business cycles any longer questions that empirical research must be guided by an analytical framework or that speculative theorizing must be tested by an appeal to experience’ (p. 230). This sentence may be read as a late response to the famous ‘Measurement without theory’ controversy triggered by Tjalling Koopmans, who in his 1947 review of Measuring business cycles had accused Burns and Mitchell of trying to analyse business cycles without having any sound theoretical background which explained how the several variables involved in the cycle actually behaved.4 The final sections of Burns’s entry are dedicated to the discussion of each single phase of the business cycle – another interesting parallel with the ESS entry. The overall description of the cycle runs along Mitchellian lines. Unit costs of labour and production tend to rise relative to output prices before and after the downturn, and they tend to fall before and after the upturn, reflecting changes in capacity

422 Pier Francesco Asso and Luca Fiorito utilization and productivity; as a result, profits show large fluctuations which explain the cyclical movements in investment, output and employment. Compared to Mitchell’s explanation, however, Burns places more emphasis on the role of interest rates in determining the pace of investments, stressing that interest rates rise faster than finished commodity prices in expansion while falling faster during depressions. Accordingly, he concluded that rapidly rising financial costs are a factor, lowering profits in the final stages of the expansion and even in the earliest stages of contraction, especially in those sectors, such as the building industry, where interest charges represent a large fraction of total costs. With regard to the influence of interest rates on investment, Burns conceded – in a Keynesian fashion – that ‘in deciding to invest in a particular project, a business firm may have given heed to recent increases in costs’. However, investment decisions must be followed by another kind of decision, namely, ‘whether to get the project under way now or later’ (p. 238). Therefore, increases in financial costs can cause a delay in the actual implementation of investment and therefore contribute to the starting of a recession. Burns concluded his entry with a detailed analysis of those factors which, in his view, had recently contributed to a substantial increase in economic and financial stability. As in his previous description of the stages, Burns gave relevance to the role of monetary factors and, most particularly, of monetary policy. Perhaps under the influence of the post-war records of financial stability and of the 1951 agreement between the Treasury and the Fed, Burns noticed that the practice of central banking had advanced significantly in smoothing cycles and speculation on asset prices. It was a fact that ‘fluctuations of short-term interest rates in the United States became narrower’ (p. 243). This accomplishment was now deeply entrenched in market expectations and was reflected in a drastic (and valuable) reduction in the spread between the federal funds rate and long-term interest rates. He also observed that, in the booming post-war years, decisions of monetary authorities were swiftly transmitted to financial markets, and the lag of long-term interest rates ‘during recoveries and recession became shorter and of late has virtually vanished’ (p. 243). Second, cyclical stability was increased by the anti-cyclical mix of Keynesian policies and the building up of modern safeguarding schemes on behalf of the general welfare of workers and their families. Increased state intervention and the widespread resort to programmes of social security were powerful built-in stabilizers and an important legacy of the post-1930s institutional reforms. Also, the world of big private corporations seemed to have learnt past lessons in some way, acting anti-cyclically rather than ‘pro-cyclically’ as they did in the 1920s. One key factor of this changing behaviour – as Burns put it – was their increasing pursuit of stable dividend policies, setting aside in good years and rewarding capital in bad years: ‘As a result of these and related developments, the movement of personal income is no longer closely linked to the fluctuations of production’ (p. 243). The stability of the financial markets was also enhanced by structural reforms which greatly increased the guarantees on behalf of savings, positively influencing expectations. Among them Burns cited the new regulations of domestic stock exchanges, the development of the long-term amortized mortgages and, ‘most important of all, the insurance of bank deposits’ (p. 244).

Mitchell, Burns and Haavelmo on business cycles 423 The third stabilizing factor occurred in the labour market, which in the post-war boom gradually saw a general increase of occupations in the new industries and, most significantly, in the tertiary sector. These structural changes significantly increased the fraction of stable activities with regard to the more irregular occupations. While the first two factors were related to crisis-induced policy reforms, Burns recognized the importance of the structural and irreversible nature of these changes in the US labour market: ‘Manufacturing, mining, construction, and freight transportation are the cyclically volatile industries, but their relative importance as providers of jobs has been gradually declining in recent decades’ (p. 243). However, all these institutional reforms, together with the deeper theoretical and factual understanding of the requirements of business cycle policy, would not mark the end of business cycles nor of unexpected shocks. Here, Burns implicitly disagreed with some leading contemporary theorists who, by the mid-1960s, had foreseen the inevitable decline of business cycle research.5 Quite to the contrary, according to Burns, a lot of effort ought now to be put into ex ante prevention rather than ex post moderation. Moreover, as he anticipated, future cyclical movements would not necessarily coincide with recessions but merely with fluctuations in aggregate economic activity: business cycles would be supplanted by ‘growth cycles’, which involved a general reduction of the rate of growth and bring about the alternation of high-rate phases and low-rate phases. However, it would be overly optimistic to believe that the forces that tend to generate cyclical movements have vanished in western Europe or Japan any more than in the Unites States. . . . Hence, the wise course for economists is to continue basic research on the nature and cause of business cycles, to remain watchful of developments that seem likely to bring on a slump in activity, and to extend the search for acceptable pathways to prosperity without inflation. (p. 144).

22.5 HAAVELMO’S ENTRY ON BUSINESS CYCLES Trygve Haavelmo’s entry on BUSINESS CYCLES – MATHEMATICAL MODELS represents the ideal counter to Burns’s approach, in terms of both style and content. In his famous ‘The probability approach in econometrics’ (1944), Haavelmo had provided the probabilistic framework required to justify the application of inferential procedures due to Ronald Fisher, Jerzy Neyman, Egon Pearson and Abraham Wald in econometric models. In sketching an account of Haavelmo’s fundamental contributions and their impact on quantitative economic research, Mary Morgan points to the ‘probabilistic revolution’ he brought about in the discipline, one that had a great impact on the activities of the Cowles Commission at the University of Chicago in the 1940s.6 Morgan portrays the research programme of the Cowles Commission as one that involved the ‘aim [. . .] to continue in the tradition of Tinbergen’s pioneering work on business cycles but to improve on

424 Pier Francesco Asso and Luca Fiorito his work by implementing the working practices of the “Probability Approach” [of Haavelmo]’ (Morgan, 1990, p. 251). More importantly for our discussion, Haavelmo’s ‘probabilistic approach’ was also among the main inspiring sources of the already mentioned debate sparked by the appearance of Tjalling Koopmans’s 1947 ‘measurement without theory’ review of Arthur Burns and Wesley Mitchell’s 1946 volume Measuring business cycles for the National Bureau of Economic Research. The controversy brought new vigour to the apparently endless tension between theorists and empiricists. It is not a coincidence, therefore, that many scattered passages of Haavelmo’s entry were devoted to the primacy of mathematical theorizing and econometric testing over other alternative, and allegedly less rigorous, approaches. Two examples will illustrate the case: A mathematical model of business cycles is not necessarily a special kind of business cycle theory as far as economic content is concerned. The mathematical formulation is an instrument for organizing our factual knowledge and our hypotheses. For this purpose, mathematical tools may be not only useful, but indispensable. Use of these tools may produce fruitful theories that could not have been discovered by verbal reasoning, and a precise mathematical formulation may serve to verify or reject previous theories set forth in a loose, verbal form and to clear the way for more systematic empirical studies. (BUSINESS CYCLES – MATHEMATICAL MODELS, p. 245) And again: The reason why the mathematical approach is superior to verbal analysis is obvious. By verbal reasoning it is simple enough to enumerate the various economic forces involved in a process of development, but it is often difficult, if not impossible, to determine the direction of the motion resulting from the relative strengths of the various forces. (pp. 246–247) Apart from this epistemological discussion, which roughly corresponds to half of his entry, Haavelmo presents a succinct taxonomy of mathematical theories of business cycles. First, he distinguished between those models that treat the cycle as a consequence of endogenous (closed models) as against exogenous disturbances (open models). Second, he considered whether the cyclical behaviour is produced because ‘the driving force is itself cyclical’ (‘forced oscillation’) or because ‘of the particular way in which the economic system responds to the stimulating forces’ (‘free oscillations’). On the grounds of these qualifications Haavelmo discusses at some length two specific examples of mathematical models of business fluctuations. The first is the typical cobweb theorem in which the ‘disturbing’ impulse consists of random exogenous shocks and the propagation takes place through the reactions of agents with imperfect foresight. Haavelmo considered not only the case in which the cobweb converges towards an equilibrium, but also the case in which it diverges,

Mitchell, Burns and Haavelmo on business cycles 425 and the case in which there is a tendency for continuous oscillation of the same magnitude. The second model has an endogenous character describing ‘investment cycles’. The closing of a model, based on the traditional Keynesian consumption function, is warranted by the acceleration principle and by some ad hoc assumptions concerning the rate of capital depreciation (supposed constant) and the relationship between the desired stock of capital and total net output. This model adopts distributed lags in consumption and investment functions, and suspends the accelerator during a steep downswing, the ensuing result being that the slump is both cushioned and prolonged as the capital in excess of the desired stock depreciates, but slowly down to the levels required by the low production at the floor. As a final note, it is worth pointing out that in Havvelmo’s entry the monetary, financial and psychological aspects of the cycle appear to be largely neglected. Accordingly, Haavelmo makes no mention of models where fluctuations in monetary growth attributed to erratic or misguided policies were made primarily responsible for disturbing the basically stable working of a market economy and creating ‘business cycles’.7 Almost all references date back to the 1930s and to the post-war years and are mostly related to the classic contributions of figures such as Allen, Frisch, Goodwin, Hicks, Kalecki, Klein, Metzler, Samuelson and Tinbergen. There is no trace of reference to works from the 1960s and to the most recent literature on general equilibrium.

NOTES 1 National Bureau, Charter and By-Laws, 29 December 1919. Quoted in Burns, 1952, p. 31. 2 The lengthy discussion of Veblen’s business cycles theory is revealing both of the latter’s influence on Mitchell and of the general institutionalist tone of the entry as well as of the encyclopaedia as a whole. Mitchell interprets Veblen’s business cycle as resulting from decreasing profit margins. When purchases increase in some particular industry, prices will increase, inducing firms to launch new investments, which lead, in turn, to increased demand and higher prices. Increased capacity and the higher value of collaterals serve as justifications for enhanced capitalization and further extension of credit. Since prices of finished goods rise faster than costs of production, profit margins increase markedly. Ultimately, however, even though public utilities prices and raw material prices may not increase and a cheapening of the process of production may occur, the total expenses of production overtake the prospective selling price of output. This implies a general reduction of profit margins. When this happens, real rates of return no longer sustain anticipated rates of return on which asset capitalization was based, provoking a financial crisis: ‘Credit ratings are revised downwards; financial obligations are gradually cleared off or readjusted; unit costs are reduced faster than selling prices; and a bulk of enterprises gradually get into a position where their prospects of profits begin to grow brighter – thus laying the basis for a new revival and period of expansion’ (pp. 99–100). 3 See Rutherford, 2005 for a full biographic account of Burns. 4 See Morgan, 1990 for an excellent reconstruction of the ‘Measurement without theory controversy’. 5 See, among others, Haberler, 1962 ; McKinley et al., 1964; Bronfenbrenner, 1969. Burns himself (1960) took part in this debate. 6 According to Morgan, ‘the more important practical result of Haavelmo’s paper was that probability theory provided a framework for testing economic theories’ (1990,

426 Pier Francesco Asso and Luca Fiorito p. 256), and ‘by laying out a framework in which decisions could be made about which theories are supported by data and which are not, Haavelmo provided an adequate experimental method for economics’ (p. 258). 7 The classic reference is Friedman and Schwartz, 1963.

REFERENCES Asso, P. F. and Fiorito, L., 2002, Manifestazioni di pluralismo nel pensiero economico americano: l’Encyclopaedia of the social sciences, Storia del pensiero economico, 41, pp. 131–163. Bronfenbrenner, M., 1969, Is the business cycle obsolete? (New York: Wiley). Burns, A. F., 1952, Wesley Clair Mitchell: the economic scientist (New York: National Bureau of Economic Research). Burns, A. F., 1960, Progress towards economic stability, American Economic Review, 50: 1, March, pp. 1–19. Cadmore, S. A., 1935, The Encyclopaedia of the social sciences, Journal of the American Statistical Association, 30: 190, June, pp. 449–450. Dorfman, J., 1947–1959, The economic mind in the American civilization 5 vols (New York: Viking). Friedman, M. and Schwartz, A. J., 1963, Money and business cycles, Review of Economic Statistics, 45, pp. 32–64. Gemelli, G., 1999, Enciclopedie ed enciclopedisti d’oltre Oceano tra l’età di Hoover e la guerra fredda. In G. Gemelli (ed.), Enciclopedie e scienze sociali nel XX secolo (Milan: Franco Angeli), pp. 135–186. Haavelmo, T., 1944, The probability approach in econometrics, Econometrica, 12, Supplement, July, pp. iii–115. Haberler, G., 1962, Why depressions are extinct, Think, April, pp. 3–6. Lentini, O., 1999, L’Encyclopaedia of the social sciences e il Dizionario di politica. In G. Gemelli (ed.), Enciclopedie e scienze sociali nel XX secolo (Milan: Franco Angeli), pp. 253–287. McKinley, D. H., Lee, M. G. and Duffy, H., 1964, Is the business cycle dead? Banking, 57: 6, December, p. 35. Mitchell, W. C., 1913, Business cycles (Berkeley: University of California Press). Mitchell, W. C., 1925, Quantitative analysis in economic theory, American Economic Review, 15: 1, pp. 1–12. Mitchell, W. C., 1927, Business cycles, the problem and its setting (New York: National Bureau of Economic Research). Morgan, M., 1990, The history of econometric ideas (Cambridge and New York: Cambridge University Press). Rutherford, M., 2005, ‘Who’s afraid of Arthur Burns?’ The NBER and the foundations. Journal of the History of Economic Thought, 27: 2, pp. 109–139. Sherman, H., 2001, The business cycle theory of Wesley Mitchell, Journal of Economic Issues, 35: 1 (March), pp. 85–97.

23 Tinbergen on dynamics and conjuncture in Stridiron’s Bedrijfseconomische encyclopedie Peter Rodenburg

Stridiron, J. G. (ed.), Bedrijfseconomische encyclopedie (Encyclopaedia of business economics), published by Uitgeversmaatschappij W. de Haan N.V., Utrecht, Vol. 1 (out of 5), 1947–1952. Popular edition. In Dutch.

23.1 THE ENCYCLOPAEDIA The Bedrijfseconomische encyclopedie (Encyclopaedia of business economics) was published by Uitgeversmaatschappij W. de Haan N.V. in Utrecht. The encyclopaedia consists of five volumes (with a total of 1,924 pages) in 27centimetre format and was released between 1947 and 1952. The encyclopaedia was the second in line of a series of dictionaries and encyclopaedias in the Netherlands on business economics. The publication of this series of business economic dictionaries and encyclopaedias was the work of one particular publishing house, Uitgeversmaatschappij W. de Haan N.V. (hereafter UWH) in Utrecht. Starting in 1896 as a publisher of children’s and picture books, the company turned to the publication of (a series of) popular-science handbooks and dictionaries in the 1930s, after the recruitment of a new business partner (Woude, 1946). UWH’s series of business economic dictionaries consisted of the Handboek der bedrijfseconomische statistiek (Handbook of business statistics) from 1941 (Stridiron, 1941), →Bedrijfseconomische encyclopedie from 1947 (Stridiron, 1947), →Encyclopedie voor de zakenman (Encyclopaedia for the businessman) from 1956 (Stridiron, 1956), and →Encyclopedie van de bedrijfseconomie (Encyclopaedia for business economics) from 1969 (Mey, 1969).1, 2 These handbooks and encyclopaedias were all (except the 1969 →Encyclopedie van de bedrijfseconomie) compiled and edited by Dr Joseph Gilbert Stridiron, an accountant and independent organization adviser with a background in statistics. He was a former head of the statistical department of the Philips electronics corporation and also published on business economics and statistical market research. The handbooks were primarily marketed as popular business dictionaries

428 Peter Rodenburg for the modern business manager. In the PREFACE, Stridiron stated that the purpose of the encyclopaedia was to provide businessmen with both knowledge of theory, and an understanding of ‘tools of observation’ for business, such as bookkeeping, cost price calculation, budgeting and statistics (Stridiron, 1947, p. v). An understanding of economics in general was, however, deemed necessary in order to avoid ‘hanging in idle air’, and the first volume of the dictionary, which ran to 518 pages, therefore dealt exclusively with economics. Jan Tinbergen, who was at the time of publication already the most renowned economist in the Netherlands and director of the influential Centraal Plan Bureau (CPB, Central Planning Bureau3), contributed to both the Handboek der bedrijfseconomische Statistiek (1941) and the Bedrijfseconomische encyclopedie (1947) as editor of the economics volumes and as author of several entries on business cycle theory, econometrics, statistics and dynamic behaviour. Of UWH’s handbooks, the Bedrijfseconomische encyclopedie from 1947 is the most interesting and most complete encyclopaedia for economists, although modern historians of statistics mark the Stridiron–Tinbergen entries on statistics in the Handboek der bedrijfseconomische statistiek as a sign of the advance of statistical thinking in the Netherlands (Bethlehem et al., 2008).4 Other leading Dutch economists who contributed to the Bedrijfseconomische encyclopedie were J. Goudriaan, P. J. Verdoorn, who would establish ‘Verdoorn’s law’ two years later, and W. Drees Jr, the founding father of the Dutch welfare state.

23.1.1 History and revisions The encyclopaedia was not revised or merely reprinted, but rather was continued as an entirely new series in 1956, the Encyclopedie voor de zakenman (Encyclopaedia for the businessman). The spirit of the encyclopaedia remained the same throughout the rest of the series as the entries discussed in the new series were rather similar in nature, but later encyclopaedias were more concise. They continued to be directed towards the practical businessman.

23.1.2 Influence The Bedrijfseconomische encyclopedie was not reviewed in the two leading Dutch journals on economics, De Economist and the Economisch Statistische Berichten, most likely because of the popular nature of the encyclopaedia and its focus on business economics. There are few references to and citations from the encyclopaedia. Its intended user was, however, the small and practical businessman; it was intended to help in ‘observing’ different facets of the practice of doing business, such as cost calculating, budgeting and administration. It is hard to assess how influential the encyclopaedia was in the circles of practical businessman. For economics it can be argued that, despite its considerable size of five volumes and almost 2,000 pages, the fact that big names in economics in the Netherlands contributed to it, and the fact that it was the only economic dictionary or encyclopaedia until the 1950s, its influence seems rather small.

Jan Tinbergen on dynamics and conjuncture 429 23.2 THE AUTHOR5 Jan Tinbergen (12 April 1903 – 9 June 1994) was born in The Hague, the Netherlands, into an intellectually gifted family. Both his parents were teachers, and both Jan and his younger brother Niko were to be Nobel Prize winners (Niko in 1973 in Physiology or Medicine). In 1921, at the age of 18, Tinbergen went to the University of Leiden, where he studied physics and mathematics under the supervision of the physicist Paul Ehrenfest, a personal friend of Albert Einstein. During his studenthood, Tinbergen’s concern for social issues developed after meeting the poor of Leiden, and his commitment to poverty relief would last throughout his whole career. He joined the Social Democratic Labour Party in 1922. After receiving his university degree in 1925, Tinbergen was a conscientious objector to military service. Instead, he served a part of his civil duty at the Central Bureau of Statistics (the Dutch Statistical Office) in the rather insignificant Department of Business Cycle Research. The work consisted then of monitoring and measuring business cycles through the use of economic barometers (Bogaard, 1998). Since Tinbergen felt that he could serve the socialist cause better as an economist than as a physicist, he engaged in the study of economics through selfdirected learning. His PhD thesis (1929), on the similarity between minimum problems in physics and economics, marks this transition. After obtaining his PhD, Tinbergen returned to the Dutch Statistical Office in 1929, where he continued to work in the Department of Business Cycle Research on the dynamic behaviour of supply and demand of individual products. The Central Bureau of Statistics was happy to have Tinbergen back since the number of publications on business cycles had dropped sharply since Tinbergen had left the Statistical Office. In the 1930s, Tinbergen’s reputation as a scientist rose quickly. He started lecturing at the universities of Amsterdam (1930–1939) and Rotterdam (1933–1945) and became one of the most prominent members of the Econometric Society (although he was not a founding member). In 1936 Tinbergen presented at the Vereeniging voor de Staathuishoudkunde en de Statistiek (Royal Economic Association) his innovative work An economic policy for 1936 (Tinbergen, 1936) (translated into English in 1959). Tinbergen was asked by the Social Democratic Labour Party to give advice for relief of the ongoing recession. Contrary to the usual way of verbal reasoning at that time, Tinbergen used a macroeconomic model of the Dutch economy to assess the consequences of different economic policies. His quantitative approach was completely new and gave rise to a heated debate among the members of the Royal Economic Association (Knoester and Wellink, 1996). In the same year, Tinbergen was invited by the League of Nations to extend his quantitative analysis and to test business cycle theories statistically. This work was published in two volumes in 1939 as Statistical testing of business cycle theories (Tinbergen, 1939a, 1939b). The first volume was an exposition of his econometric method, multiple regression analysis. The second volume consisted of a macroeconomic model of the US economy. Again, his approach of modelling economy-wide interrelationships in quantitative form turned out to be highly controversial, and most notably John Maynard Keynes felt compelled to raise criticism against Tinbergen’s method

430 Peter Rodenburg (Keynes, 1939), resulting in a famous debate in the Economic Journal.6 After the Second World War, Tinbergen’s approach was fully accepted and institutionalized in the Netherlands by the establishment of the Central Planning Bureau (CPB), of which Tinbergen became the first director (1945–1955). Here Tinbergen continued to work on econometric models based on linear difference equations that produced Frischean, rocking-horse-like movements because of exogenous shocks and a damped inner structure. In his CPB period Tinbergen expanded his interests to economic policy. In particular, he became involved in the reconstruction of the Dutch post-war economy, planning and the co-ordination of Marshall aid. In 1955 Tinbergen retired as director of the CPB and put his experience with model building into print in the publication of the books On the theory of economic policy (1952) and Economic policy: principles and design (1956). Tinbergen’s later work involved economic order, economic integration (particularly in Europe), economics of development and income distribution (Kol and De Wolff, 1993). Tinbergen became a much requested adviser to developing countries and international organizations. From 1966 to 1974 he was chairman of the United Nations Development Planning Committee. In 1969 Tinbergen, together with Ragnar Frisch, was awarded the first Nobel Memorial Prize in Economics. In the Netherlands, Tinbergen remained the most renowned and influential economist in the country. Even after his death in 1994, Tinbergen’s influence on the practice of economic policy making in the Netherlands remained very great (Graafland and Zalm, 1994; Klamer and Van Dalen, 1996).

23.3 BUSINESS CYCLES IN THE BEDRIJFSECONOMISCHE ENCYCLOPEDIE

23.3.1 The entries relating to business cycles In the Bedrijfseconomische encyclopedie the topic of the business cycle is discussed in a group of distinct entries. Besides contributing an entry on CONJUNCTUURTHEORIE (discussed in full below), Tinbergen also discusses related issues in the entries CONJUNTUURSTATISTIEK (business cycle statistics) (pp. 100–106), BEWEGINGSTYPEN (types of motion) (pp. 84–86) and DYNAMICA (dynamics) (pp. 139–143). The entry on the types of motion of business cycles is very useful for understanding Tinbergen’s entry on business cycles theory, and is very illustrative of his approach to business cycles in general and the role of econometrics therein. In this entry Tinbergen develops a taxonomy of hypothetical, mathematical types of motion of economic variables, with very little reference to real-world economic variables, countries or industries. The taxonomy Tinbergen sets out here follows the opening of his 1943 book Economische bewegingsleer (one of the only two references in the entry), written for educational purposes. The entry starts by distinguishing between single and joint movements of economic variables. Single movements can in turn be separated into accidental and systematic motions. Systematic movement can further be disentangled into monotonic motions

Jan Tinbergen on dynamics and conjuncture 431 and rocking or fluctuating motions, the cycles. Again, a further decomposition is possible, into asymptotic motions, purely periodic or quasi-periodic motions, damped and undamped motions, sinusoid movements, and cycles with lags or phase differences. Tinbergen’s other entry concerns CONJUNCTUURSTATISTIEK, statistical measurement of business cycles. Tinbergen draws directly on the work done on business cycles at the Central Bureau for Statistics (CBS). In essence, the entry is about the use of business cycle barometers, which in Holland were developed in the 1920s at the CBS and were heavily influenced by Ernst Wagemann in Germany and the Harvard barometer in the US. In the entry on dynamics Tinbergen makes the (now familiar and taken from Ragnar Frisch (1933)) distinction between static theories, which compare static equilibria, and dynamic theories, which are characterized by relations ‘where variables appear bearing on various time periods’. In static theories, changes in economic data are the consequences of exogenous movements. Movements that occur without changes in economic data are endogenous movements, such as non-simultaneous adjustment processes. For Tinbergen, dynamics is the science of endogenous movements.

23.3.2 Tinbergen’s entry on business cycle theory Tinbergen does not provide the reader with a formal definition of what a business cycle might constitute, but clearly starts the entry on business cycles by stating that the task of business cycle theory is ‘to explain the phenomenon that economic development occurs in cycles’. The causes of the cycles are complex, but rather than emphasize one theory or one cause over another, Tinbergen argues that it is best to combine different business cycle theories and treat their commonality.7 Although business cycles do have different causes – for example, monetary or real causes – they may have in common the way it can be proved that a wave movement occurs (CONJUNCTUURTHEORIE, p. 106) – that is, ‘the connection of economic variables that for that purpose are assumed to exist’. So, although two different theories may stress different causes of cycles, the cycles themselves may propagate in the same way because of the underlying structural connection of economic variables. To explain this, Tinbergen introduces here the physical analogy of the pendulum. Cyclical motion can then be explained by distinguishing between: a) the impulse, necessary to set the pendulum in motion, and b) the reaction of the pendulum to the impulse, a distinction based on Ragnar Frisch’s 1933 paper ‘Propagation problems and impulse problems in dynamic economics’. Without the impulse the pendulum would remain in equilibrium, but once set in motion, counteracting forces inherent to the system itself (gravity) will come into play, which will reverse the motion of the pendulum. The counteracting forces, however, will cause overshooting of the static equilibrium position and so cause a back-and-forth motion of the pendulum. This explanation by Tinbergen is remarkable since he omits the role of friction in explaining the damping of the cycle, a role so important in the Frisch–Tinbergen account of pendulums. It is friction that causes the damping of the cycles, not gravity. After all, in a frictionless space a pendulum in motion would

432 Peter Rodenburg move ad infinitum. Of course, Tinbergen was aware of this, but apparently he didn’t care to elaborate further. He instead continued his argument by pointing out that the sorts of cycles generated by the impulse are idiosyncratic to the construction of the pendulum. To explain economic fluctuations one has to make the same distinction between external shock or impulse and its propagation. As is also explained in the entry on dynamics, in static theory (comparative statics analysis) a cycle can only occur when the impulse itself has cyclical behaviour. In dynamic theories a cycle can occur also because of ‘the reaction of economic life itself’ – that is, when there is a timely adjustment process of the economic structure. More important than the cause of a business cycle is the endogenous fluctuation of the cycle, i.e. the way the cycle propagates, and Tinbergen proceeds by giving some examples of dynamics of cycles. The simplest case is the levensduurgolf (‘lifespan cycle’) which causes echoverschijnselen (‘echo symptoms’) determined by the life cycle of the means of production. If, for example, machines last for seven years and for some reason (an external shock like a new invention) many machines have been taken into service in 1900, then there will be a surge (‘echo’) in demand for replacement machines in 1907 and again in 1914, 1921, and so on. This phenomenon will happen even when firms use machines with different lifespans, although the peaks will then flatten out. A second example of this sort of self-oscillation is the existence of lags due to, for example, time to build or time to grow. When demand is determined by current prices but supply, for example, is determined by last year’s prices, a dynamic adjustment process will occur, known as the cobweb theorem (explained in more detail in the entry on dynamics). A special case of lags is the acceleration principle, although the acceleration principle by itself is not sufficient to explain cycles. According to J. M. Clark, the acceleration principle is the demand for means of production determined by the increase in demand (rather than total demand). In this way, investment decisions depend on past acceleration of demand. Propagation of cycles is also influenced by bottlenecks, i.e. limits to production or credit lending. A further expansion of production or credit lending is then no longer possible and existing excess demand will result in a sharp increase of prices. A floor in the downward phase exists because of a minimum demand to maintain a subsistence lifestyle. The pendulum cannot swing beyond this point. Shocks may be of different kinds, due, for example, to a) wars, b) fluctuations in harvests, c) technical inventions, and d) important geographical discoveries, although of these causes only b) occurs regularly. Although harvest yields are typically contingent or accidental, Tinbergen takes them to have a quasi-period of three years, and as such they might be useful for the explanation of Kitchin-type short-wave cycles. Cosmic influence on harvests – like Jevons’s sunspot theory – is rather dubious. In general, however, the essence of crisis and business cycles is the difference between income and expenditure: in a downturn, income is not fully spent, while in the expansion phase more than available income is spent. This is possible due to the saving or spending of income. Households save money when they are unsure about the future and so form funds for unforeseen events. In the upswing they give rise to credit creation when they overspend by speculating on the stock markets. Firms, on the other hand, do not reinvest depreciated capital in

Jan Tinbergen on dynamics and conjuncture 433 a downturn to save money. In the upswing they overinvest to replace the depreciated capital and so give rise to credit creation. The causes of a crisis are therefore either monetary, i.e. the banks provide too much credit to the public, or real, i.e. the public (both firms and households) over- or underspend their income. Whatever the causes are, they can be interpreted as external shocks that put the pendulum in motion and affect other economic variables to which they are systematically connected in a dynamic way because of the existence of lags, echo principles and acceleration principles. Total expenditure, for example, can be divided into consumer goods and investments, but these are related to each other via the acceleration principle. For reinvestment in machinery the echo principle holds, although they also depend on the interest rate, as the Swedish–Austrian school (Wicksell, Mises, Hayek) argues. The difference between the natural rate of interest and the actual interest rate then determines investment. Expenditure on consumer goods is determined by income some months previously, and so lags form. Economic fluctuation, caused by disequilibrium between income and expenditure on the demand side, will affect the goods and labour markets on the production side as well. First, for example, labour productivity may be related to the phase of the business cycle. In many industries it is observed that labour productivity rises in the downturn when firms incur losses and job security is low, while high profits in economic booms relax labour productivity. This increase in labour productivity is one of the counteracting forces of economic life that eventually will restore equilibrium but behaves (anti) cyclically. A second example concerns real wages, which react with a lag to economic developments. As a consequence, real wages will typically fall behind in an upswing as firms’ profits rise, while in a slowdown the real wages remain too high because of their timely adjustment. However, not all business cycles are alike; in some cycles real wages were highest in the upswing, while in others they were highest in the downturn. Finally, Tinbergen puts all the previous points together in a description of the different phases and relations at work. In a downturn, production, prices and income will fall. Replacement of capital will be postponed and rising labour productivity and profit rates will restore profitability. Restoration will further improve by a socalled cumulative process, the tendency of favourable factors to cumulate and so reinforce the restoration process. More expenditure will lead to higher income, more profits, more demand and higher prices. Investment will increase, leading to higher production, more stocks and extra demand. In some industries, production frontiers will be reached, causing substantial increases in prices, although bottlenecks are by themselves not sufficient conditions for the downturn. Counteracting forces will develop: investments will diminish after large (replacement) investments have been made. The increase of total capital has a negative effect on the profit rates, and labour productivity will diminish or drop. The extra demand for restoring stocks will diminish too. The economy will reach the Kaldorian ‘mixed equilibrium’ – stable with respect to positive shocks and unstable to negative shocks. In the downturn the economy will behave in the opposite way. For a small country like the Netherlands an important ‘source’ of economic fluctuations is its dependency on export and so on international business cycles. Through the balance of payments,

434 Peter Rodenburg international business cycles affect government spending, which again amplifies fluctuations. Lastly, Tinbergen remarks that better understanding of business cycles provides better means for fighting business cycles, although we do not have an exact explanation of the periodicity of the cycles.

23.4 ASSESSMENT In spite of the perhaps slight influence of the Bedrijfseconomische encyclopedie in the Netherlands, it is illuminating to analyse Tinbergen’s contributions since they very much exemplify his thoughts on business cycles. By 1947, when the Bedrijfseconomische encyclopedie was published, Tinbergen’s ideas on business cycle theory, which started in the late 1920s, had fully taken shape and were well established. In fact, most of the ideas Tinbergen presents in the encyclopaedia were laid down in his 1935 survey article in Econometrica: ‘Annual survey: Suggestions on quantitative business cycle theory’. Tinbergen’s entries in the Bedrijfseconomische Encyclopedie therefore bring no new or innovative ideas to the fore but rather summarize well his ideas on business cycles and business cycle research, and without the use of mathematics. Many of his key ideas can be found in the entries on business cycle theory, dynamics and statistics. We will discuss three aspects of his typical approach to business cycles which are also dominant in his entries of the encyclopaedia. A first characteristic of Tinbergen’s work that is evident in the entry on business cycle theory is his explicit distinction between impulse and propagation of an external shock. In this respect Tinbergen was, as is well known, strongly influenced by Ragnar Frisch’s 1933 work on business cycle theory. However, whereas Frisch uses the metaphor of a rocking horse, Tinbergen uses here the metaphor of a pendulum for business cycles, a metaphor also used by other economists working on business cycles, such as George Udny Yule (Morgan, 1990) and by Frisch elsewhere (Louçã, 2001).8 In the impulse–propagation distinction, the propagation was for Tinbergen clearly the more important. Shocks can be either monetary or real, but the nature or cause of the shocks that started the oscillation is not really important, as Tinbergen’s entry shows. More important is how the shock propagates through the economic system, and this is determined by the underlying causal connection of economic variables. The best economic policy against business cycles is therefore to change the reaction to shocks in such a way that only heavily damped reactions are possible, combined with shortening the period of the shocks as much as possible (Wolff, 1970, p. 123). For Tinbergen this was best done through a programme of public expenditure. In order to capture the dynamics of cycles it was very important for Tinbergen that a theory on business cycles was couched in a mathematical form and expressed dynamically. We will call this here a second feature of his work. Earlier, in his 1939 report for the League of Nations, Tinbergen had argued that To be useful, therefore, for business cycle research, economic theory needs to be made ‘dynamic’. A ‘dynamic’ theory, in the sense which is here attached

Jan Tinbergen on dynamics and conjuncture 435 to that ambiguous word, is one which deals with the short-term reactions of one variate upon others, but without neglecting the lapse of time between cause and effect. The equations in which it is expressed thus relate to nonsimultaneous events, and take a form which Swedish economists have described as ‘sequence analysis’. (Tinbergen, 1939a, p. 13) In the development of Tinbergen’s thought on business cycles, Hanau’s treatment of the cobweb theorem for pig meat (Hanau, 1928, published in German) was very important (Wolff, 1970; Tinbergen, 1984). It introduced to Tinbergen the idea of lags and disequilibrium even though buyers and sellers were reacting rationally to prices. In his early work, Tinbergen applies Hanau’s cobweb dynamics to the markets for coffee and rubber, and to the shipbuilding industry. In the Bedrijfseconomische encyclopedie, Tinbergen therefore covers the cobweb and lags both in his entry on business cycle theory and, at greater length and in more detail, in the entry on dynamics. Tinbergen’s emphasis on dynamics can also explain an odd feature of the dictionary. Although the Bedrijfseconomische encyclopedie appeared at a time when Keynesian economic thinking was prospering and about to become the dominant paradigm in economics, Tinbergen does not mention Keynes or the Keynesian revolution in his entries, nor in the Introduction. In the INTRODUCTION (p. ix), Tinbergen does, however, mark out another transition in economics, as he argues that the old, neoclassical (Marshall and Pigou) and Austrian (Böhm, von Wieser) economic doctrines are no longer obvious or to be taken for granted. These doctrines, he notes, represent static and mechanical nineteenthcentury economic thought and are not sufficient to explain the ‘dynamic events of reality’. It is clear that, for Tinbergen, the real revolution in economic thought is the change from static theories to dynamic theories, and Keynes’s theory had little to add on dynamics. A third typical Tinbergenean characteristic that can be recognized in the entries is Tinbergen’s typical way of solving scientific disputes, which Boumans (2001) refers to as the ‘Ehrenfest-principle’. For Tinbergen, one theory should not be rejected for another theory since most often they both have an element of truth in them. Instead, one should seek a ‘unified’ theory. Tinbergen’s attitude towards different theories was not entirely unique and was shared in some circles. In particular, the League of Nations, where Haberler’s book (detailing the theories Tinbergen was later asked to test statistically) aims at finding out what the various theories have in common despite appearances (Haberler, 1937). Also, Mitchell in his work on business cycles maintained that there is some good in most theories of the cycle, as each of the various factors they emphasize plays some role at one point or another of the cycle (see Chapter 4, Section 4.6.1). Typical of Tinbergen’s approach, however, is his way of unifying opposing or conflicting theories: by building a full (macro)economic model of the economy:9 The essence of scientific work is to derive from a thesis (for example Keynes’ thesis) and one or more antitheses (for example Friedman or one of the other

436 Peter Rodenburg modern schools) a synthesis. [. . .] Criterion for a synthesis is a better explanation for what happened in the (recent) past. Each of the aforementioned schools made contributions to that but none of them has a monopoly on wisdom. Testing to the criterion can start with submodels, but the final word is to a full model. (Tinbergen, 1982) Tinbergen applied this approach in his work for the League of Nations, where he built a complete model of the US economy rather than testing (and rejecting) each business cycle theory separately. Tinbergen used this approach throughout his whole career. The debate on whether business cycles are caused by monetary causes or real causes is therefore not fruitful, as can be seen in Tinbergen’s entry. For Tinbergen, business cycle theories can be unified in a complete model of the economy that involves all explanatory variables and the (causal) relations between them, and so is able to mimic the way shocks propagate through the economic system. These views on business cycles are, as explained above, typical of Tinbergen. His views on business cycles were, however, very influential in Holland. By 1947 Tinbergen was already the most renowned and influential economist in the Netherlands, and the newly established Central Planning Bureau, which he led as director, worked entirely along these lines in its modelling approach (Magnus and Morgan, 1987; Jong et al., 1988). However, not everyone in Holland agreed with Tinbergen’s view on business cycles. Tinbergen’s biggest critic in the Netherlands was Jan Goudriaan,10 and the debate in the Netherlands on the economic crisis of the 1930s, and economic equilibrium and dynamics in general, can very much be characterized as an ongoing debate between Tinbergen and Goudriaan (Dullaart, 1984; Rodenburg, 2010).11 Like Tinbergen, Goudriaan was a convinced socialist and had a background in exact science, but Tinbergen and Goudriaan held totally different ideas about the crisis of the 1930s, its causes and, more generally, about the nature of equilibria and dynamics in economics. According to Goudriaan (1931), the depression of the 1930s was rooted in the malfunctioning of the commodity market: when commodity prices are falling, holders of stocks will supply bigger quantities onto the market in order to pre-empt further losses due to a further expected fall in prices. This idea about the working of the commodity market led Goudriaan to conclude that the economic equilibrium is unstable due to ‘undetermined prices’. Goudriaan’s solution to the crisis is to stabilize commodity prices, which can be done, according to Goudriaan, by linking currencies not to gold, as in the gold standard, but to a basket of important commodities and so instead introducing a commodity reserve currency. The government should stabilize commodity prices by means of complementary intervention policies by central banks, just as in the gold standard. He works out this idea on the commodity reserve currency in a large number of papers and summarizes them in his entry GRONDSTOFFSTANDAARD for the Bedrijfseconomische encyclopedie (pp. 208–210). Goudriaan’s idea on dynamics, however, conflicts sharply with Tinbergen’s and Frisch’s ideas about equilibria in economic systems, and the

Jan Tinbergen on dynamics and conjuncture 437 ensuing debate between Goudriaan and Tinbergen can, in fact, be seen as a debate on different metaphors for the economy and the business cycle: Jan Goudriaan’s metaphor of the ‘collapsing of a bridge’ (Wolff, 1970, p. 124) versus Jan Tinbergen’s metaphor of the ‘pendulum with friction’. For Goudriaan, a business cycle was not a movement around a position of equilibrium, but a movement between two consecutive positions of equilibrium – i.e. the economy is either in equilibrium on a high income level (on top of the bridge) or, when the bridge collapses, on a low income level (down in the river). The dynamic adjustment path between these extreme positions Goudriaan considered irrelevant.12 Of course, Tinbergen heavily opposed these views and set out to write three articles (Tinbergen, 1941, 1943a, 1944) in which he defines ‘Keynes points’ and ‘Goudriaan points’ of equilibrium to refute Goudriaan’s claims. Fortunately for Tinbergen, Goudriaan was a controversial figure in Holland and his unorthodox ideas never gained much ground.13 Through the Central Planning Bureau Tinbergen’s ideas on business cycles and modelling became the received view and approach in the Netherlands. Goudriaan’s provocative claims, however, kept stimulating Tinbergen to consider, reconsider and formulate his own views on business cycles and equilibria.

NOTES 1 Year of publication of the first volumes. 2 The only Dutch dictionary not published by UWH was →Encylopedie van de economie, a Dutch–Flemish co-operation from 1979, edited by F. Hartog and A. Devreker. 3 The CPB currently prefers the translation Netherlands Bureau for Economic Policy Analysis. 4 Bethlehem et al. show that statistical thinking and data collection at the Dutch Statistical Office before the Second World War were dominated by people trained in law. They take explicitly the contributions of Stridiron and Tinbergen in the Handboek der bedrijfseconomische statistiek as being representative of the viewpoints of outsiders from law school with a formal, non-law background who favour modern sampling techniques rather than complete enumerations for data collection. 5 This section draws mostly on Jolink, 2003 and Boumans, 1990, 2001. 6 See, for example, Theil, 1963; Hendry and Morgan, 1995; Jolink, 2000; Louçã, 2007. 7 This approach is very typical of Tinbergen’s work and will be discussed in more detail in Section 23.4. 8 Yule used the metaphor of a pendulum pelted with peas (Morgan, 1990, p. 78). In Yule’s work the peas (external shocks) were, however, also the cause of the turning point of the pendulum, while in Tinbergen and Frisch this was determined by internal forces of the economic system itself. 9 In fact, Tinbergen considered it to be a moral duty for scientists to reconcile opposing views (Tinbergen, 1982). 10 Jan Goudriaan (1893–1974) was a Dutch engineer and (business) economist. He was a member of the Dutch socialist party, the SDAP, from 1913. After obtaining his PhD in 1922 at the Delft Polytechnic University he became chief engineer or managing director in several Dutch firms. He made several groundbreaking contributions to business economics (with, among others, J. G. Stridiron) and was Professor of Business Economics at Rotterdam (from 1926) and Delft (from 1936). His main interest remained, however, general economics, in which field he published a number of books and articles in Dutch (Klein, 1989).

438 Peter Rodenburg 11 The debate started with Goudriaan, 1931, followed by debates at the Royal Economic Association in 1936 (address Tinbergen) and 1937 (address Goudriaan), and the debate would last for 20 years, even after Goudriaan had left the Netherlands in 1949 for a professorship in South Africa. See Goudriaan, 1931, 1934, 1937, 1952; Tinbergen, 1936, 1941, 1943, 1944, 1952. For secondary literature, see Wolff, 1970, pp. 123–124 and Dullaart, 1984, pp. 246–277. 12 In his 1937 address to the Royal Economic Association Goudriaan asked rhetorically (when talking about business cycles): ‘Who cares about the dynamics equations of a collapsing bridge?’ (Goudriaan, 1937, p. 14). 13 Dullaart (1984, p. 262) characterizes him as ‘one of the rashest economists of the interbellum period’.

REFERENCES Bethlehem, J., Stamhuis, I. H. and Van Maarseveen, J. G. S. J., 2008, Complete enumerations or sampling? The historical debate about sampling for surveys. In I. H. Stamhuis, P. M. M. Klep and J. G. S. J. Van Maarseveen (eds), The statistical mind in modern society. The Netherlands 1850–1940, Vol. II, Statistics and scientific work (Amsterdam: Aksant). Bogaard, A. van den, 1998, ‘Configuring the economy: the emergence of a modelling practice in the Netherlands, 1920–1955’ (PhD dissertation, University of Amsterdam). Boumans, M.J., 1990, De slinger van Tinbergen, Tijdschrift voor Politieke Ekonomie, 13, pp. 50–65. Boumans, M., 2001, Jan Tinbergen, Biografisch woordenboek van het socialisme en de arbeidersbeweging in Nederland, 8, pp. 296–301. Dullaart, M.H., 1984, ‘Regeling of vrijheid: Nederlands economisch denken tussen de wereldoorlogen’ (PhD dissertation, Erasmus University, Rotterdam). Frisch, R. A. K., 1933, Propagation problems and impulse problems in dynamic economics. In G. Cassel (eds) Economic essays in honour of Gustav Cassel (London: Allen & Unwin), pp. 171–205. Graafland, J. J. and Zalm, G., 1994, De voetsporen van Tinbergen in het CPB, Economisch Statistische Berichten, 79: 3968, 29 June, pp. 609–611. Goudriaan, J., 1931, De labilisatie van het economische leven en de middelen ter bestrijding; de noodzaak van een wereldgrondstoffenvaluta, Economisch Statistische Berichten, 16: 825, pp. 922–926 (Part I), and 16: 826, pp. 944–948 (Part II). Goudriaan, J., 1934, De berekening van den omvang der werkloosheid als gevolg de prijsdaling in een gesloten economisch milieu, De Economist, 83: 1, pp. 849–872. Goudriaan, J., 1937, Valt hier te lande, ook na verbetering der conjunctuur, een blijvend verhoogd peil der werkloosheid te verwachten? Preadvies voor de Vereeniging voor de Staathuishoudkunde en de Statistiek (The Hague: Mart. Nijhoff). Goudriaan, J., 1952, Economie in zestien bladzijden; Een inleiding tot de analytische economie (Amsterdam: J. H. de Bussy). Haberler, G., 1937, Prosperity and depression: a theoretical analysis of cyclical movements (Geneva: League of Nations). Hanau, A, 1928, Die Prognose der Schweinepreise, Vierteljahreshefte zur Konjunkturforschung, Sonderheft, 7 (second enlarged edition of Sonderheft, 2). Hendry, D. F. and Morgan, M. S. (eds), 1995, The foundations of econometric analysis (Cambridge: Cambridge University Press).

Jan Tinbergen on dynamics and conjuncture 439 Jolink, A., 2000, In search of verae causae: the Keynes–Tinbergen debate revisited, De Economist, 148: 1, March, pp. 1–17. Jolink, A. J., 2003, Jan Tinbergen: The statistical turn in economics: 1903–1955 (Rotterdam: Chimes). Jong, A. H. M. de, Paridon, C. W. A. M. van and Passenier, J., 1988, Jan Tinbergen over zijn jaren op het CPB, Economisch Statistische Berichten, 73: 3664, pp. 652–657, 662. Keynes, J. M., 1939, Professor Tinbergen’s method, Economic Journal, 49, pp. 558–568. Klamer, A. and Dalen, H. van, 1996, Telgen van Tinbergen: Het verhaal van de Nederlandse economen (Amsterdam: Balans). Klein, P. W., 1989, Goudriaan, Jan [jr.] (1893–1974), Biografisch woordenboek van Nederland, 3, (The Hague: Instituut voor Nederlandse Geschiedenis). Knoester, A. and Wellink, A. H. E. M., 1996, Tinbergen and the Royal Netherlands Association. In K. Puttaswamaiah (ed.), Tinbergen and modern economics: the noble economist saint (New Delhi: Indus Publishing Company). Kol, J. and Wolff, P. de, 1993, Tinbergen’s work: change and continuity, De Economist, 141: 1, March, pp. 1–28. Louçã, F., 2001, Intriguing pendula: founding metaphors in the analysis of economic fluctuations, Cambridge Journal of Economics, 25, pp. 25–55. Louçã, F., 2007, The years of high econometrics: a short history of the generation that reinvented economics (London: Routledge). Magnus, J. R. and Morgan, M. S., 1987, The ET interview: Professor J. Tinbergen, Econometric Theory, 3: 1, pp. 117–142. Mey, A., 1969, Encyclopedie van de bedrijfseconomie (Utrecht: Uitgeversmaatschappij W. de Haan N.V.). Morgan, M. S., 1990, The history of econometric ideas (Cambridge: Cambridge University Press). Rodenburg, P., 2010, The Goudriaan–Tinbergen debate on dynamics and equilibrium: 1931–1952 (28 April 2010). Available at SSRN: http://ssrn.com/abstract=1615458. Stridiron, J. G. (ed.), 1941, Handboek der bedrijfseconomische statistiek (Utrecht: Uitgeversmaatschappij W. de Haan N.V.). Theil, H., 1963, A reconsideration of the Keynes–Tinbergen discussion on econometric techniques, De Economist, 111: 4, pp. 241–262. Tinbergen, J., 1935, Annual survey: Suggestions on quantitative business cycle theory, Econometrica, 3: 3, pp. 241–308. Tinbergen, J., 1936, Kan hier te lande, al dan niet na overheidsingrijpen, een verbetering van de binnenlandse conjunctuur intreden, ook zonder verbetering van onze exportpositie? In Prae-adviezen van de Vereeniging voor de Staathuishoudkunde en de Statistiek (The Hague: Martinus Nijhoff), pp. 62–108. Tinbergen, J., 1939a, Statistical testing of business cycles. I. A method and its application to investment activity (Geneva: League of Nations). Tinbergen, J., 1939b, Statistical testing of business cycles. II. Business cycles in the United States of America, 1919–1932 (Geneva: League of Nations). Tinbergen, J., 1941, Indifferente en labiele evenwichten in economische stelsels, De Economist, 90: 1, pp. 561–584. Tinbergen, J., 1943a, Over verschillende soorten evenwichten en de conjunctuurbeweging, De Economist, 92: 1, pp. 129–147. Tinbergen, J., 1943b, Economische bewegingsleer (Amsterdam: N.V. Noord-Hollandsche Uitgeversmaatschappij).

440 Peter Rodenburg Tinbergen, J., 1944, Types of equilibrium and business cycles movements, Nordisk Tidskrift for Teknisk Økonomi, 10, pp. 15–36. Tinbergen, J., 1952, On the theory of economic policy (Amsterdam: North-Holland). Tinbergen, J., 1956, Economic policy: principles and design (Amsterdam: North-Holland). Tinbergen, J., 1982, De noodzaak van een synthese, Economisch Statistische Berichten, 67: 3383, 1 December, pp. 1284–1285. Tinbergen, J., 1984, My life philosophy, The American Economist, 28: 2, pp. 5–8. Wolff, P. de, 1970, Tinbergen’s contribution to business-cycle theory and policy, De Economist, 118: 2, pp. 113–125. Woude, G. J. van der, 1946, Een halve eeuw uitgeversactiviteit 1896–1946, Jubileum catalogue of publisher (Utrecht: W. de Haan N.V.).

Part III

The recent dictionaries

24 Nikolai Kondratiev and long waves in recent dictionaries and encyclopaedias Francisco Louçã

24.1 INTRODUCTION Time, and specifically the emergence of crises and bursts of change, has always been a major puzzle for economics. The entry on CRISES COMMERCIALES (commercial crises) by Clément Juglar in →Say’s Nouveau dictionnaire d’économie politique highlights this perplexity: ‘The stoppage is abrupt, seems to break out like a peal of thunder, as if it were caused by some unexpected accident, always a new one in each crisis’ (p. 641; English translation as Juglar, 2010, p. 149; see Chapter 12). The interpretation of such a ‘peal of thunder’ was therefore an early theme for the founders of economics. This chapter examines the recent dictionary entries on long waves or Kondratiev waves et similia in the light of the history of the subject and, in particular, the presentation in such dictionaries of the social, economic and technical configurations of the modes of development emerging through successive periods of the history of modern capitalism. These modes of development, or ‘long cycles’ or ‘curves of the conjuncture’, as they were first dubbed, were discussed by several authors, but the first to receive widespread recognition on this matter was Nikolai Kondratiev. His decisive contribution was the hypothesis of long waves in capitalist development, named by Schumpeter and known thereafter as ‘Kondratiev waves’. The evidence shows that, at least for a few decades, there was widespread agreement about the relevance of the ‘Kondratiev problem’, since the existence of long periods with impressively distinctive patterns of development was widely recognized. Such consensus among economists and historians did not, however, extend to the explanation of these long phases or cycles and was sanguinely attacked by the official Soviet authorities, who were responsible for Kondratiev’s execution and for condemning of his research: ‘This theory is wrong and reactionary’ (Malaia sovetskaya entsiklopediya, cited in Garvy, 1943). Moreover, different researchers suggested other interpretations of long periods of political or military hegemony, as several dictionaries witness (see, inter alia, FLUCTUATION, in →Cotta’s Dictionnaire de science économique, 1968; Modelski’s entry on KONDRATIEFF WAVES in →Jones’s Routledge encyclopedia of international political economy, 2001; and Andre Gunder Frank’s LONG CYCLES in the Berkshire encyclopedia of world history (McNeill et al., 2005)). These

444 Francisco Louçã alternative views will not be considered in the following, since this chapter concentrates on the line of research initiated by Kondratiev.

24.2 PREDECESSORS AND LONG WAVES OF DEBATES As Juglar’s entry exemplifies, several nineteenth-century authors discussed the ‘commercial’ cycles, an oscillation of economic activity and trade which has been considered the essential pulsation of modern capitalism: each seven to ten years, a crisis, or an episode of illness according to the apt metaphor by Juglar the physician, would interrupt prosperity. However, some economists suspected that deeper processes of longer structural change were also in action. Although many dictionaries include entries on cycles and crises, and a number of them treat the ideas of Kondratiev in some detail, a glimpse of the cohort of predecessors to Kondratiev is only to be found in Solomou’s entries on KONDRATIEFF CYCLE and KONDRATIEFF CYCLES for the two editions of the The new Palgrave (1987 and 2008, respectively), and in Ducos and Van Duijn’s entry on KONDRATIEFF, NIKOLAI DMITRIYEVICH (1892–1938) for →Glasner’s Business cycles and depressions: an encyclopedia (1997). As these entries note, that was the case for Hyde Clarke, who in 1847 published a paper in a journal, The British Railway Register, and a short pamphlet (included in Reijnders and Louçã, 1999), arguing that he had detected a semi-secular cycle. As Clarke was not widely read, he owed his fame mostly to the fact that Jevons pointed to him as the creator of the hypothesis of a long cycle in economic activity (Jevons, 1884, p. 129). Indeed, Clarke argued that the crisis of scarcity in 1847 was part of a repetitive phenomenon, and that the approximately ten-year cycles were part of a 54-year movement of the whole economy, mostly motivated by harvest conditions and eventually by the impact of weather conditions. He was inspired by the previous research on time series carried out by Mackenzie (Klein, 1997, pp. 113–115), and Jevons accepted and promoted these ideas. Instead, the dictionaries under scrutiny ignore the role of Marx and Engels, although Schumpeter famously attributed to both of them the invention of the notion of the long cycle. Yet Marx and Engels did not discuss cycles in much detail, and essentially referred to business cycles, although in the second volume of Das Kapital Marx quoted Scrope on longer cycles of investment (Marx, 1885, Vol. 2, p. 163). Indeed, Clarke, Jevons, and Marx and Engels all emphasize the same point: they witnessed frequent periods of unrest, economic turbulence and great famines after overproduction and plenty. They also noticed the regularity of these ups and downs, as well as the great structural changes that accompanied capitalist development. Other authors, writing in the following years and also ignored by most of the dictionaries here considered, repeatedly arrived at the same conclusion: John Bates Clark detected a period of 45 years in the maturation of new methods of production (Clark, 1899, p. 429). His contribution is also ignored by the dictionaries and

Nikolai Kondratiev and long waves 445 encyclopaedias under scrutiny, in spite of its importance and originality: here we find the founder of American neoclassical economics arguing for a long-term movement anticipating a heterogeneous group of European researchers. Indeed, shortly afterwards Parvus, Tugan-Baranovsky, Wicksell and Pareto, from the other side of the Atlantic, used the same calendar for describing the long periods. Thus, even before Kondratiev there was a general coinciding view of the dating of major changes in the development of nineteenth-century capitalism. The recurrence of long periods marked by expansion, as well as long periods marked by depression, was indisputable for these authors, although their explanation was not commonly shared. Parvus (a pseudonym for Alexander Helphand) discussed in a 1901 paper the turning point of the 1896 crisis. Considering the years of prosperity marked by the development or expansion of cities, the increased capital accumulation and the spread of new inventions (he referred specifically to electricity, the typewriter and the bicycle), Parvus argued that there are periods when there are ‘jumps’ in capitalist production, long periods of Sturm und Drang, i.e. of capital expansion (Parvus, 1901, pp. 12–26), followed by contractions. The same year, Tugan-Baranovsky argued for the same periodization (1901, pp. 52–53). The next authors to deal with this matter – identified by Garvy’s entry for the International encyclopedia of the social sciences (KONDRATIEFF, N. D., 1968), by Freeman in LONG SWINGS IN ECONOMIC GROWTH (→The new Palgrave dictionary of economics, 1987) and by the quoted contributions by Solomou for The new Palgrave (1987 and 2008) – were much more concerned with rigorous proof and the statistical identification of the long movements. Van Gelderen’s 1913 article was certainly the single most important contribution to the research before Kondratiev’s work. Van Gelderen analysed price movements as symptoms of the division of productive forces between sectors of production and detected a longer movement than the industrial cycle (Van Gelderen, 1913, p. 14).1 At the same time as Van Gelderen, yet ignoring his contribution, some other authors investigating the relationship between economic movements and political and institutional conditions produced valuable arguments in support of the long wave hypothesis. Alfonso Pietri-Tonelli, claiming to apply the ‘scientific procedures’ of physics (Pietri-Tonelli, 1911, p. 220), described the economic system as a pendulum. Its dynamics were consequently studied as a form of energy propagation accounting for the waves, which were generated by exogenous factors (ibid., p. 222). Bresciani-Turroni considered the fluctuations of profits to be the central cause of the detected long fluctuations (Bresciani-Turroni, 1917, p. 9). As Di Matteo emphasizes in his entry on LONG-WAVE THEORIES for →Glasner’s Business cycles and depressions encyclopedia (1997), Pareto explained the long waves in the economy by the social conflict inside the elite, i.e. the ruling class, between entrepreneurs (speculators) and rentiers (traditional capitalists): the alternating domination explained the successive periods of daring expansion, and spending, and timid contraction, stimulating savings (Pareto, 1916). At the same time, Lescure (1912, pp. 452–490), Aftalion (1913, pp. 1–7) and Lenoir (1913, pp. 148–149) detected and discussed these long movements. Aftalion followed

446 Francisco Louçã the Marxian tradition in his 1913 book, and then developed this explanation, arguing that the cyclical fluctuations could be understood as a function of the long periods required for the reproduction of fixed capital, creating ‘wave movements of wide amplitude’ and the ‘fairly long cyclical variations’ (Aftalion, 1927, p. 165).2 These authors are important predecessors: they indicate a broad consensus on the calendar of the long waves, showing that price oscillations and (at least for some authors) the impact of new industrial branches were so noticeable that they accounted for them all reaching the same conclusions independently of each other. This calendar of crises and crashes is discussed in great detail by Renato Giannetti in his entry on CRISI ECONOMICHE: L’OTTOCENTO for →Economia e storia (Carmagnani and Vercelli, 1978), evidencing why a widespread consensus was formed on the dating of major turning points. Such consensus established the agenda for future research, which included topics such as the place of social and political factors, particularly for the explanation of the turning points (as the Italians showed), the historical role of innovation and structural change (Van Gelderen), the relationship between price and production series, and single (Cassel’s monetary theory) or multi-causal explanations.

24.3 NIKOLAI KONDRATIEV This section summarizes some of Kondratiev’s ideas,3 as discussed by the different entries under consideration.

24.3.1 The reception of Kondratiev’s ideas The different dictionaries, until the 1990s, could not detail the ideas of Kondratiev, since they were either unknown or inaccessible, except for a partial translation of one of his papers. One exception was Garvy, who had studied the debate between Kondratiev and his contemporaries. Yet his reference to the debate in his 1943 survey and later in the 1968 dictionary (KONDRATIEFF, N. D., International encyclopedia of the social sciences) is much summarized, and his peers had to wait for the first translation of the debate to understand the depth of the confrontation: only in 1992 was a collection of the main papers of the 1926 debate at the Institute of Conjuncture published in French (edited by Louis Fontvieille) and in 1998 in English (edited by Warren Samuels et al.). In spite of the limited diffusion of most of his other work, the only paper by Kondratiev which was translated had a major impact, this helping to explain his election as one of the first Fellows of the Econometric Society. In any case, his hypothesis was tuned with the available knowledge of the economic disturbances and cycles and, consequently, some of the most influential economists, statisticians and mathematicians of his time wholeheartedly sympathized with this type of explanation, or at least considered it to be a pertinent hypothesis – this was the case with Frisch, Tinbergen, Spiethoff, Kuznets, Mitchell, Schumpeter, Lange, Hansen, and many others. What they knew, however, was not the whole text and

Nikolai Kondratiev and long waves 447 in some cases was indeed a misrepresentation of Kondratiev’s ideas. With the single exceptions of Kuznets and Garvy, who could read Russian and who knew some of the original contributions, the others read just the German or the American translation of parts of the 1925 paper and missed out on both the 1926 paper and the debate which took place in the same year. There was not even agreement on the translation: Garvy (see his 1968 entry on KONDRATIEFF, N. D. for →Sills’s International encyclopedia of the social sciences) suggests that Kondratiev preferred the term ‘long waves’ instead of ‘long cycles’, since these would be merely hypothetical. On the contrary, Escudier has shown that the concept of ‘long cycles’ was wrongly translated into German as ‘long waves’, whereas Kondratiev preferred to reserve the use of the concept of waves for the analysis of variables and to use the concept of long cycles for his interpretation of global movement (Escudier, 1992, p. 244). Moreover, these terminological and conceptual mistakes were later reproduced in the derived translations, such as the American one. This version of Kondratiev’s paper appeared in 1935 in a major journal, the Review of Economic Statistics, but was itself translated from the second-hand German translation, did not include the theoretical part and was limited to the presentation of the statistical method and empirical laws (Kondratiev, 1935; Stolper, 1984, p. 1647). Last but not least, not only were the essential texts not translated at the time, but they were ignored until the 1980s or 1990s, not to mention those written by Kondratiev while in jail and only made available in Russian by the end of the century. As a consequence, Kondratiev waves have long since been discussed by authors who did not know the most important of Kondratiev’s texts. In fact, a complete English edition of his 1922 paper was only published in 1979 and the complete version of his 1925 paper was published only in 1984. The consequence of this ignorance of the original texts was that each interpreter could attribute to Kondratiev his own interpretation of the historical processes. In spite of this, what may be considered surprising is the resilience of the research programme on long waves. Not only did this research attract various scientists in the 1930s and 1940s, despite their different approaches to economics, but also it was also reactivated later on, namely, just before and just after the 30 golden years of post-war expansion in the industrial economies. More recently, in the entirely new framework of complexity theory, some authors suggested that the long wave could be thought of as the representation of specific modes of entrainment of oscillations, emerging from the complex nature of economic processes (Mandelbrot, 1987, p. 126; Lo, 1991, p. 1308). Considering such impact, the next sections explore Kondratiev’s ideas and their impact, and how they were interpreted by the dictionaries and encyclopaedias.

24.3.2 Kondratiev’s analysis of long waves Kondratiev’s ideas had a greater impact than those of any of the previous researchers on long waves, since they were discussed in broader scientific circles. However, the Russian debate was almost completely ignored and for a long time Garvy’s

448 Francisco Louçã 1943 paper was the most complete source of reference to it, but it is a somewhat biased summary of the arguments. The following pages provide a short review of that work, briefly outlining its main theses (see also Day, 1981; Kleinknecht, 1987; Solomou, 1987; Reijnders, 1990; Barnett, 1998; Louçã, 1999), and commenting on how the different dictionaries discuss this work. Again, Solomou’s entry on KONDRATIEFF CYCLES (The new Palgrave, 2008) gives the only detailed reference among the dictionaries which have been perused. 24.3.2.1 The first debates Most of the dictionaries ignore the first contribution by Kondratiev on the notion of long waves, namely, his 1922 book on the subject. Consequently, they eschew the following debate, which will be briefly summarized in this section. Garvy’s entry for the International encyclopedia of the social sciences (KONDRATIEFF, N. D., 1968) notes the existence of this book, but says nothing on its content, whereas Solomou’s entry for the The new Palgrave (2008) quotes from the 1998 English translation of the book. In this book Kondratiev for the first time formulated, although in passing, the long cycle hypothesis, based on his inspection of some statistical series. His conclusion was very tentative and amounted to his claim that there were long periods of upswing and downswing in historical data. Yet this ignited a debate and, in the paper prepared as an answer to his critics (1923), Kondratiev reiterated that the ‘major cycles of the conjuncture were only considered as probable’ (1923, p. 524, as he had considered in 1922, p. 255). On the basis of his previous work on the epistemology of history, Kondratiev argued that irreversible and reversible processes co-existed,4 although ‘The evolution of the economy as a whole is an irreversible process’ (1923, p. 496). Although declaring himself not to be a Marxist, Kondratiev insisted that he was precisely following Marx’s understanding of the genetic process of capitalism, in keeping with the analysis of major cycles by Lescure, Aftalion, Trotsky and Kautsky. Apparently, Kondratiev just wanted to claim to be part of much wider research into reversible processes (such as those encapsulated in the concepts of the transformation of the commodity, the reproduction of fixed capital and the crises) and irreversible processes (such as those accounting for technological and social change). Furthermore, he argued that the major cycles could be organically explained by the action of internal factors of change further affected by secondary environmental circumstances. Trotsky reacted in June 1923 and published an article criticizing Kondratiev’s hypothesis (see also Klein, 1997 on this same issue). Trotsky referred to two concepts of equilibrium: 1) the ‘secular equilibrium’, i.e. the general trend of development encapsulated in the ‘curve of capitalist development’; and 2) the ‘cyclical equilibrium’, imposed after the restoration of the system following the elimination of the crises of disproportion (Trotsky, 1923, pp. 7 ff.). For Trotsky, long fluctuations were trend variations and not cycles, as they were exogenously generated. The essential difference is that cycles were supposed to be driven by the internal contradictions of the economic system – i.e. determined by the

Nikolai Kondratiev and long waves 449 mechanical clock of capital reproduction and accumulation – whereas the shifts in the curve of capitalist development were supposed to be brought about by major external events. These major changes were dated according to the general consensus of the time: 1781–1851, 1851–1873, 1873–1894, 1894–1913, 1913– . . . (ibid.). Kondratiev did not understand the motivations or, for its political implications, chose not to pursue this debate, although it would be implicitly present in the future quarrels about the interpretation of the turning points in the long waves. 24.3.2.2 The 1926 debate Kondratiev’s 1924 paper on statics and dynamics, which is also ignored by the dictionaries, raised the debate to a new level of argument. Statics was defined as describing the ‘essence’ of phenomena and, as a consequence, equilibrium became the organizing concept: ‘The concept of equilibrium between the interdependent elements of reality is the most typical’ (Kondratiev, 1924, in 1992, p. 2). Yet these definitions were paradoxical: the Aristotelian ‘essence’ was supposed to be captured by statics, but ‘Economic reality is dynamic in its very essence’ (ibid., p. 7, also p. 2).5 The ‘essence’ described by static equilibrium was supposed by Kondratiev to be the core of the identity and invariance of phenomena, while dynamics was supposed to describe change and difference, under the concept of ‘dynamic equilibrium’. However, according to Kondratiev, change presupposes the ontological identity of the object and that is why dynamics was considered to include statics. In that sense, he argued that dynamic processes comprise two types of movements: 1) irreversible processes, which have a direction, e.g. the growth of population and the volume of production, the models of enlarged reproduction (ibid., p. 17); and 2) reversible processes, which may change direction, e.g. interest rate, prices, employment (ibid., p. 12). The long cycle, or the ‘curve of the conjuncture’, belongs naturally to the second type, if one disregards certain irreversible processes. As Kondratiev acknowledged, he was using a metaphor drawn from physics, the concept of substratum, although he recognized that this did not have a convenient analogue in economics (ibid., pp. 14–15). This paper is important since it provides a clear statement of Kondratiev’s views on epistemology, which were relevant for the implicit debate on the statistical methods applicable to economic processes in historical time. In 1925 and 1926, Kondratiev used this approach to present his empirical studies and results, which are discussed in Solomou’s entries for the The new Palgrave (1987, 2008). The essays develop four main conclusions. First, Kondratiev argued that crises are ‘organically’ a part of the capitalist mode of production, as Marx and Juglar considered (1926a, p. 111). This was an important argument in favour of rejecting simple exogenous causality (implicitly against Trotsky), but it also had a precise consequence: the organic concept of ‘totality’ implies that there is something more than the simple sum of the components, there is ‘something new’ in the whole (1926b, p. 63), and Kondratiev was fully aware of this implication. Consequently, all cycles are part of the same economic process, as he stressed in a debate with Pervushin (Barnett, 1996, p. 1021).

450 Francisco Louçã Second, Kondratiev considered that this organic and non-atomistic epistemology was the necessary counterpart of the reality of social processes, in which the rationality of ‘human interventions’ implies the creation of a greater diversity than in natural sciences (1926b, in 1992, p. 83), in contradiction with neoclassical economics. Third, for Kondratiev the system always tends towards a moving equilibrium: So the long cycles of the conjuncture represent a deviation in the real level of the elements of the capitalist system in relation to this same system’s equilibrium [. . .] a process in which the level of equilibrium itself changes. (ibid., p. 159) So, impulses were conceived of as disequilibrium processes, caused by ‘radical changes in the conditions of production’ through infrastructural investment in essential capital goods (ibid., pp. 158 and 160). Kondratiev did not discuss in any detail this equilibrium around which the reversible processes were supposed to be organized. He just implied that equilibrium represented the most probable state of the system, and the changes in the system itself were not dealt with.6 As Solomou emphasizes (KONDRATIEFF CYCLE and KONDRATIEFF CYCLES, in The new Palgrave 1987 and 2008), the papers offer an overview of the statistical investigations on price and production trends in Britain, the United States, Germany and France for several decades, which Garvy describes in some detail (International encyclopedia of the social sciences: KONDRATIEFF, N. D.). The author accepted that the available statistical evidence was not sufficient for a precise conclusion, given the fact that only a couple of cycles were detectable, but he insisted on the adequacy of his hypothesis. In spite of this note of caution, many authors centred their criticism of Kondratiev on the imprecision and vagueness of his causal explanation for the long cycle, which was based on two essential factors that could account for the revival: TuganBaranovsky’s theory of ‘free loanable funds’ and Marx’s theory of the echo-cycle of fixed capital reproduction: ‘The long cycles may be considered as a rupture and then as the re-establishment of long-term economic equilibrium. Their main cause is the mechanism of accumulating and dispersing of a sufficient capital for the new productive forces’ (Kondratiev, 1926b, p. 167). The necessary conditions for the upswing are, in this account, a large volume of capital accumulation, obtained by a process of accumulation taking place faster than investment; the concentration of capital; and its availability for strategic decisions (ibid., p. 159). In this study, just as Van Gelderen had done 15 years before, Kondratiev identified some major transformations in production,7 such as the new industrial revolution that was driving the transition from long wave II to long wave III, based on the chemical, electrical and motor industries (ibid., p. 140). He established the first rigorous dating scheme for the long wave: the upswing of the first long wave from the end of the 1780s or the beginning of the 1790s until 1810–1817, and the downswing from 1810–1817 until 1844–1851; the upswing of the next wave from 1844–1851 until 1870–1875 and the downswing from then until 1890–1895; the

Nikolai Kondratiev and long waves 451 upswing of the third wave from 1891–1896 until 1914–1920 and the downswing from 1914–1920 onwards. Furthermore, Kondratiev made a valuable contribution to the research when he decided to include in his explanatory model different technological, economic, social and political factors: as in the case of the previous authors, from Van Gelderen to Pareto, this interconnection became a crucial part of the research. The crucial discussion of these ideas was centred on the paper presented on 6 February 1926 at a seminar of the Institute of Economics of the Association of Social Science Research Institutes. One week later, assisted by a large staff, Oparin presented his own counter-report, and in 1928 a pamphlet was published, including Kondratiev’s and Oparin’s contributions and the minutes of the seminars. The confrontation with Oparin was mainly about statistical methodology, since Oparin supported an alternative theory – Cassel’s monetary theory – and Kondratiev very easily showed that such a theory of equilibrium produced the same type of statistical problems, if not worse. Yet Oparin had a point with his criticism of the arbitrariness of the choice of the detrending functions. Eventov and Bogdanov, who, unlike Oparin, did not have to formulate alternatives, presented interesting arguments against detrending, namely, that the trend (the growth of the economy) and the cycles (the acceleration and deceleration of growth) are quite simply the same phenomenon (Kondratiev, 1992, p. 246 ff.; Garvy, 1943, p. 210), therefore implying that decomposition was not justified. Sukhanov endorsed Kondratiev’s argument about the organic nature of social systems in order to argue, on the basis of a life-cycle concept, that no further explanation of the long-term changes was necessary: ‘The physiology of an organism in evolution is different in the successive stages of its evolution. Capitalist evolution is an organic process with definite different stages: youth, maturity, decline [. . .] and even death’ (quoted in Garvy, 1943, p. 214). In his 1968 entry on KONDRATIEFF, N. D. (International encyclopedia of the social sciences), Garvy reassesses this debate, claiming that Oparin was Kondratiev’s ‘most able opponent’, and Buyst in his entry on KONDRATIEV, NIKOLAI (1892–1938) in Europe since 1914: encyclopedia of the age of war and reconstruction (Merriman and Winter, 2006, Vol. 3) refers to this debate, although they write no more on the matter.

24.4 ASSESSMENT OF THE CONTEMPORARY POLEMIC ON KONDRATIEV’S CONTRIBUTION TO THE DICTIONARIES The entries to the dictionaries dealing in some detail with Kondratiev’s works evoke discussions on two main points. The first was raised by Oparin in the 1926 debate at the Institute and then, in Western publications, by George Garvy: Kondratiev was short on the explanation of the cause for the turning points. His endogeneity dogma prevented any exogenous explanation, and indeed he tried to endogenize even political processes such as wars for domination. Therefore, his explanation would stand or fall on the ability to present a causal mechanism generating both

452 Francisco Louçã the transition from an expansionary long swing to a recessionary one, as well as the contrary; however, Kondratiev did not deliver this. This is rightly noted in Garvy’s 1968 entry for the International encyclopedia of social sciences, in Solomou’s entry for the first edition of the The new Palgrave (1987) and in Freeman’s entry on LONG SWINGS IN ECONOMIC GROWTH for the same dictionary, who all argue that this left the lower turning point unexplained. The long paper by Garvy (1943) presented Kondratiev’s main theoretical arguments, methods and statistical evidence. Garvy’s main criticism concerned the lack of theoretical basis for the claim that there is a ‘rhythmical movement of long duration of the economic system as a whole’ (Garvy, 1943, p. 208). Furthermore, he argued that there was no explanation for the trend, insisting that Kondratiev recognized his inability to show that the trend corresponded to the real economic evolution, and that the acceptance of Cournot’s distinction between supposedly independent entities as trends and cycles forced Kondratiev to look upon ‘the economic processes as a sum of the actions of independent forces’ (p. 210). Discarding the long waves hypothesis, Garvy nevertheless argued that the enigma was relevant, since successive stages with differential growth rates could be detected in economic history, and actual dynamics should account for them (pp. 219–220). As a consequence, there is a second point which was also part of the contemporary debate about Kondratiev’s methods: the statistical procedure he favoured that obtained evidence for long waves from a nine-year moving average applied to deviations of per capita variables from linear or exponential trends, in order to eliminate the business cycle evidence. This was justified by the proposed differentiation between reversible or wavelike processes, and irreversible or permanent processes. However, the justification is short, since it is based on a mechanical procedure arbitrarily imposing a linear or exponential (in the case of Kondratiev) description of the historical irreversible processes as a trend. There is neither a theoretical explanation for this nor a historical description fitting these processes, and Kondratiev was fully aware of this lack of justification. Moreover, the dating of the turning points for Kondratiev preceded the application of his detrending functions and implied the conclusion: in other words, the statistical technique used by Kondratiev contradicted his own claim of explaining a totally endogenous movement. Garvy concludes in his entry that the statistical evidence was at least partially ‘the result of the specific techniques of statistical analysis used and that the dating of the turning points is arbitrary’ (KONDRATIEFF, N. D., p. 444). Again, Schumpeter came to Kondratiev’s rescue on this point, as discussed below.

24.5 THE IMPACT OF KONDRATIEV’S WRITINGS During his short and tragic life, Kondratiev gained the respect of academics all over the world. He was a member of several international scientific associations and his papers were translated and published abroad. Political leaders commented on his work, his interpretation of the history of capitalism proved to be a powerful

Nikolai Kondratiev and long waves 453 and challenging vision, and he contributed to the early spread, application and discussion of new statistical methods and concepts. This was one of the topics of discussion among the leading economists by the 1920s and 1930s. Consequently, when the inaugural list of Fellows of the Econometric Society was due to be drawn up, his name was immediately proposed: Frisch wrote to Schumpeter on 7 October 1932 suggesting two Russians, Kondratiev and Slutsky.8 Subsequently, Kondratiev, who was already in prison, became the sole Russian among the 29 founding Fellows of the Econometric Society elected in August 1933,9 along with Frisch, Mitchell, Schumpeter, Keynes, Divisia, Bowley, Fisher, Schultz, Gini, Haberler, Hotelling and other distinguished economists. This episode, which gives the dimension of Kondratiev’s impact among his contemporaries, is not mentioned by any of the dictionaries under scrutiny (again, except Solomou’s entry for the The new Palgrave, 2008, discussing Freeman and Louçã, 2001). In spite of that, some discuss different contributions to this research agenda: e.g. Kuznets is referred to in Cohen’s piece on LONG-WAVE THEORY for the International encyclopedia of organizational studies (Clegg and Bailey, 2008, Vol. 2), Imbert and Schumpeter are cited in Giannetti’s CRISI ECONOMICHE: L’OTTOCENTO in →Carmagnani and Vercelli’s Economia e storia (1978), Schumpeter is quoted in Niggle’s BUSINESS CYCLE THEORIES in O’Hara’s →Encyclopedia of political economy (1999), in Zevin’s KONDRATIEFF CYCLES entry for →Glasner’s Business cycles and depressions (1997) and in Heertje’s SCHUMPETER, JOSEPH ALOIS (1883–1950) in the 2008 The new Palgrave. As these entries note, the most ardent promoter of Kondratiev’s cycles was certainly Schumpeter.

24.5.1 Schumpeter Schumpeter was the most paradoxical and ignored advocate for long waves, since he was a neoclassical economist, although an unorthodox one struggling with the notion of equilibrium, and he was a founder of econometrics, although also being one of the remaining economists concerned with the role of historical processes in economics. In any case, Schumpeter was soon convinced by Kondratiev and dedicated a part of his Business cycles (1939) to the long waves. He specifically added some major points to Kondratiev’s explanation: as noted by Cornwall in his entry on LONG CYCLES for the The new Palgrave (1987), by Zevin in his entry for the Business cycles and depressions and by Syll in LONG CYCLES (→Jones, Routledge encyclopedia of international political economy, 2001), two were the role of swarms of innovation and, as a consequence, the attraction of new investment – an endogenous process emerging out of ‘creative destruction’, an inner property of modern capitalism for Schumpeter. Eventually, the growth of capital stock relative to demand would imply a fall in profitability and a recession. However, there was also another important change suggested by Schumpeter to the Kondratiev hypothesis: the coupling of business cycles and long waves, generating a four-phase process of succeeding prosperity, recession, depression and recovery. This scheme, as Solomou remarks, was used by Schumpeter in order to explain the depth of the 1929 crisis.

454 Francisco Louçã As Freeman’s entry for The new Palgrave suggests, most critics of the Schumpeterian explanation do not challenge this four-phase scheme, but support Kuznets’s argument that bunches of innovations could not be so powerful as to provoke an upswing, and therefore to explain the lower turning point (LONG SWINGS IN ECONOMIC GROWTH, 1987). This was later discussed by several researchers in the continuity of Schumpeter.

24.5.2 Frisch and Tinbergen Notwithstanding the discussion above on Schumpeter, the dictionaries tend to ignore the substantial fact that other relevant economists endorsed Kondratiev’s ideas, such as some of those involved at the core of the project for developing econometrics (Frisch, Tinbergen). One telling example was that of the founder of econometrics, Ragnar Frisch. He visited the United States in the spring of 1927, and in April prepared a long manuscript, ‘The analysis of statistical time series’, which was widely circulated among American economists with the valuable help of Mitchell, although it was never published. From the first pages, Frisch subscribed to Kondratiev’s hypothesis of 30- to 50-year ‘long time movements around which the business cycle is fluctuating’, forming a ‘major cycle’ (Frisch, 1927, p. 4). The source of the reference was the 1926 German translation, but Frisch had also borrowed a manuscript by Kuznets (he discussed the long waves in Kuznets, 1930, pp. 259 ff.), which included not only an account of the Russian debate, but also statistical information giving credit to Kondratiev’s theory. It is quite obvious that Schumpeter, who also shared this idea after reading the 1926 German translation of Kondratiev’s essay, developed his approach autonomously from Frisch: the correspondence between them first began in August 1927, after the dissemination of the time series paper. It did not mention Kondratiev, whose hypothesis had already been publicly accepted by Schumpeter. Indeed, their adherence to the long wave hypothesis was simultaneous but independent. Through time, Frisch insisted again and again on his interpretation of the depression of the 1930s and the dangers of war by means of the long wave argument, and in 1932 he gave a series of radio lectures in which the question was discussed (Louçã, 2007, pp. 79–83). Frisch, the mathematician, and Schumpeter, the theoretician, found themselves in the same camp. Tinbergen very soon and also independently defended the same hypothesis for similar reasons. He had read De Wolff ’s book and surveyed it in 1929, noticing that a parallel line of investigation was being carried out in Russia: ‘Research on long waves is still in an initial stage, and it is mainly in Moscow that valuable work has been done on this subject’ (Tinbergen, 1929, p. 858). Shortly afterwards, in his famous inquiry into business cycles for the League of Nations, Tinbergen mentioned the Kondratiev waves again (Tinbergen, 1939–I: p. 42).10 Like Frisch, Tinbergen maintained the same interest all his life and continued to participate in conferences on this topic well into the 1980s.

Nikolai Kondratiev and long waves 455

24.5.3 Other contributions In his important 1927 book, Wesley Mitchell acknowledged the work by Van Gelderen, De Wolff and Kondratiev (once again based on the 1926 German translation; Mitchell, 1927, pp. 227 ff.), and commented on their contributions, although the theme of the book was business cycles. In a later work, Burns and Mitchell again discussed ‘the most celebrated of the long cycle theories’, ‘the daring hypothesis that long waves in the wholesale prices are an organic part of a long cycle characteristic of capitalism’ (Burns and Mitchell, 1946, pp. 431–440). As far as immediate reactions are concerned, Kuznets was the other important young researcher interested in Kondratiev’s works at the time. As he was able to read Russian, Kuznets was the first to study Kondratiev’s work in depth (Kuznets, 1930). Furthermore, Kuznets knew Trotsky’s, Van Gelderen’s and De Wolff ’s arguments, and included a synthesis of their contributions in his own book. In any case, Kuznets developed an alternative account of the long-term historical evolution (for a reappraisal, see Solomou, 1987). During the late 1930s, interest in Kondratiev’s work apparently began to fade and no new contributions were added to the research, with the major exception of Schumpeter’s 1939 book. At the same time, other researchers into business cycles, such as Haberler, distanced themselves from any claim about long waves. In spite of this, and basing himself on Spiethoff and Schumpeter, Haberler accepted that each long cycle had an historical physiognomy of its own and that a general theory was admissible, although he doubted if anyone could show the existence of regular factors generating the fluctuations (Haberler, 1937, p. 308). Another distinguished researcher, Alvin Hansen, quoting from the 1935 US translation of the 1926 German translation, compared Kondratiev’s arguments to those of Spiethoff, Schumpeter, Mitchell and von Ciriacy-Wantrup. He found that the regularity of the three long waves was comparable to that of the shorter business cycles: ‘as high a degree of periodicity has prevailed for these three waves as any which we find for the major business cycles’ (Hansen, 1941, p. 29). It might be added that later on Hansen took a much more ‘agnostic and even very sceptical position’ on the same issue (Hansen, 1951, p. 56). It is obvious that by that time – the end of the 1930s and the beginning of the 1940s – Schumpeter had become the main proponent of the thesis, or at least the person most involved in its defence in the US, since both Frisch and Tinbergen were isolated in Europe and did not devote their professional attention to this issue. Frederick Mills was one of the economists Schumpeter took pains to convince: in a letter dated 12 April 1940, he kindly thanked Schumpeter for an evening spent discussing the hypothesis, which he considered an intriguing and useful one (Schumpeter Archive, Harvard University), but did not seem to be convinced. In the 1940s, another researcher taught the Kondratiev thesis at the London School of Economics: W. W. Rostow (1948, pp. 9, 29, 45), based on Schumpeter and the 1935 translation. Others, such as the very young Richard Goodwin, learnt it from Schumpeter and later spread it to others. This impressive list of scientists, including some of the major figures from several decisive research traditions in

456 Francisco Louçã the first third of the century – neoclassical economics, econometrics, quantitative economics, heterodox and Marxist approaches, evolutionary economics – clearly proves that Kondratiev was not alone in recognizing major structural changes and patterns of evolution of industrial capitalism. The dating of these processes was generally agreed upon by these researchers, although they disagreed as to the explanation. And this is probably why there was such an impressive early consensus about the Kondratiev hypothesis: just as the early writers had known and acknowledged the impact of the Industrial Revolution, of the ‘hungry forties’, of the Victorian boom, and of the ‘Great Depression’ of the 1890s, the next generation had known the belle époque and the periods of war, as well as the 1929 crisis. There had been major economic and social changes, and Kondratiev provided a framework with which to date, interpret and discuss these changes.

24.6 THE ASSESSMENT OF THE MODERN DEBATE BY THE RECENT DICTIONARIES For the immediate decades after the Second World War, the discussion on long waves was at a standstill. During the 30 golden years of post-war expansion, the neoclassical notions of equilibrium and the neoclassical–Keynesian synthesis and its models of growth prevailed. The revival of research only occurred under the impact of the fading out of the expansionary wave and after the turning point of the 1970s, and it is discussed by some of the contributions to the dictionaries. Freeman, in LONG SWINGS IN ECONOMIC GROWTH (The new Palgrave, 1987), notes the influence of Ernest Mandel’s works (1975 and 1980) for this revival: reconsidering the early debates, Mandel suggested a fundamental asymmetry between the upper turning point, caused by endogenous forces (the falling rate of profit), and the lower turning point, bridging between the recession and the expansion, which could only be accounted for by exogenous forces in order to reorganize the social conditions of profitability and accumulation. This contribution and others following from it or from the Schumpeterian debate are reviewed in some of the entries under scrutiny, such as John Cornwall’s entry on LONG CYCLES for the first edition of The new Palgrave, and Lars Syll’s entry of the same title for the Routledge encyclopedia of international political economy. They investigate the case of Gerhard Mensch’s argument (1975), suggesting an extension of the concept of the life cycle of products to account for the expansion: it would be due to the swarm of technological breakthroughs during the recovery phase. Christopher Freeman challenged this notion and its empirical foundations, and demonstrated that inventions are less important than the process of diffusion of innovations, and namely of ‘clusters of interrelated innovations (new technological systems)’ (Freeman, LONG SWINGS IN ECONOMIC GROWTH, 1987), creating a technological revolution (Freeman, 1977). Furthermore, Freeman argued, the technological revolution creates a new mode of development (explaining the upswing), which later comes into contradiction with the social and institutional framework (explaining the difficulty of superseding the downswing). For Freeman,

Nikolai Kondratiev and long waves 457 and for his collaborator Carlota Perez, the mismatch between the socio-institutional framework and the techno-economic paradigm could account for a long period of decreasing profitability and accumulation, whereas a new technological revolution could eventually emerge from the mode of development based on that paradigm as soon as the mismatch is solved. This is reviewed by Syll for the Routledge encyclopedia of international political economy and by Solomou for The new Palgrave. As they note, other economists (Van Duijn, 1983; Kleinknecht, 1987; Solomou, 1987; Reijnders, 1990; Tylecote, 1992) discussed this evidence and theories in great detail. In particular, in his entry on KONDRATIEFF CYCLE for the 1987 edition of The new Palgrave, Solomou reviews different statistical attempts to prove or to refute the long wave hypothesis, including his own, in which he obtained no evidence of such long-term fluctuations. Although the author restricts his entry to a fair representation of the different statistical investigations, he concludes with a very sceptical stance: ‘the evidence for regular Kondratieff cycle discontinuities is scarce’. Indeed, the evidence is very contradictory. Using spectral analysis and an adequate filter, Reijnders confirmed the long-wave hypothesis, but other researchers using the same tools challenged his conclusion. In any case, spectral analysis requires a strictly recursive process, and if the spectrum changes, the conclusion is suspicious. In this case, as in other methods of statistical inference, a number of instances are also required in order to detect and identify a process, and that is certainly not the case for the four or five available long waves. Consequently, any statistical method suffers from severe limitations, and the conclusions by Van Duijn, Reijnders, Tylecote and Kleinknecht contradict those of Kuznets, Solomou and others, and no satisfactory conclusion seems to be possible on statistical grounds. This is why Freeman argues that ‘it is highly unlikely that those who believe that long swings in economic life are a significant phenomenon will ever satisfy their statistical critics’ (Freeman’s entry for The new Palgrave, 1987). In particular, Freeman emphatically rejects any idea of strict determinism – of a technological or other sort – in generating the social and economic processes of long waves. On the contrary, if the determination and causation are attributable to the mismatch between the economic dynamics and the social and institutional conditions, no regular cycle is to be expected as an outcome. Consequently, long waves are to be interpreted as historical processes leading to different phases of economic development (Freeman and Louçã, 2001). Solomou, in the entry on KONDRATIEFF CYCLES for the 2008 edition of The new Palgrave, suggests a solution in the same sense and a new interpretation of these debates, writing that Kondratieff cycles of a regular period probably do not exist. In reaching this conclusion it is important to stress that this is not a dismissal of the idea of long term cyclicality. In fact, it is quite clear that various forms of long-term cycles are an observed empirical phenomenon. The idea that change is an important determinant of modern economic growth is a general truth among economists. Solomou, KONDRATIEFF CYCLES

458 Francisco Louçã In particular, he accepts that general-purpose technologies can form the basis for long periods of expansion, and consequently that technological revolutions can generate different periods in economic history, as Freeman and Louçã (2001) had argued. Solomou concludes: ‘Hence, although episodic long cycles are a feasible historical outcome, we cannot assume that they will give rise to 50-year cycles. However, the concept of episodic and “stochastic” long cycles may end up being a useful tool in understanding long-term economic growth and economic cycles more broadly understood.’ This may also prove to be a wise conclusion on the current status of the debate on long waves.

24.7 CONCLUSION Kondratiev’s research was one of the first major quantified inquiries combining economic history and the theory of cycles. It established a general consensus on the dating of the long cycles, and for a while it became a paradigm of the explanation of changes in long-term development of modern capitalism. It was one of the first applied statistical investigations in economics and it endured as a reference point for future research, although the controversy surrounding this effort illuminated some of its shortcomings. Two conclusions are therefore in order. The first concerns the importance, depth and scope of Kondratiev’s endeavours. His work – in spite of its naivety and simplicity – should be reappraised by economic historians, macroeconomists and statisticians, since it clearly presents part of the conundrum of the application of mechanical statistical methods to real, concrete and live history. Indeed, Kondratiev’s paper on forecasting (1926b) is one of the masterpieces in the early literature about statistics and history. It is a powerful survey of the contemporary authors in economics, mathematics, physics and philosophy,11 and deals in detail with the problem of the relationship between reversible and irreversible processes. Kondratiev assessed economic history as part of societal evolution, used the available analytical and statistical tools, and discussed their epistemological foundations. The original consensus obtained among his contemporaries showed that long periods of distinctive characteristics were an imposing feature of industrial capitalism for so many of them. This was indeed Kondratiev’s decisive contribution, and what makes him worthy of our attention: history is part of economics and economic methods are analytical and historical.

NOTES 1 His essay was made available only in 1997 in a collection of texts edited by Freeman (1997). Van Gelderen’s ideas were accessible through the reference made by his friend Sam de Wolff (1924, translated for the first time into English in Reijnders and Louçã, 1998). De Wolff was a Dutch social democrat who published an account of Van Gelderen’s theory on long waves in a book that was widely known, since it was the Festschrift for Karl Kautsky. De Wolff adopted the same dating (1825–1849, ebb tide,

Nikolai Kondratiev and long waves 459

2

3

4 5

6

7

8

1850–1873, a spring tide, 1873–1895, ebb tide, 1895 and afterwards, a spring tide or Sturm und Drang) and used sophisticated descriptive statistical methods following Van Gelderen. The essays by Clarke and Parvus were also translated and published in Louçã and Reijnders (1998). In spite of the diversity and importance of these insights, a part of this debate, which developed in Russia, was lost, since most of these papers were not widely publicized, partly because of the language barrier. As an illustration, when the Institute of Conjuncture organized a debate about Kondratiev’s 1926 paper, Spektator referred to the fact that Parvus and Falkner criticized Kondratiev for not acknowledging the works of De Wolff, Turroni and Tonelli. In his reply, Kondratiev indicated that, after the preparation of the 1926 draft, he had read Turroni (Kondratiev, 1992, pp. 244, 250, 289), but not the others. No one yet referred to Van Gelderen. Later on, Kondratiev at least read De Wolff (and could have become acquainted with Van Gelderen’s arguments through De Wolff’s) and Pietri-Tonelli. In spite of the polemics generated by the notion of a long wave, most dictionaries covering the topic do not present a complete biography of its author. This is the case for the 1968 entry by Garvy in the International encyclopedia of the social sciences; the 1997 entry by van Duijn and Ducos in Business cycles and depressions; and the 2006 entry by Buyist in the International encyclopedia of the social sciences. This is explainable by the fact that most of the details of Kondratiev’s life were still unknown by the time of these publications. The exceptions are the later pieces by Barnett in the Encyclopedia of Russian history (2004) and essentially the one offered by Solomou in The new Palgrave (2008), which use the data available by that time. The text of the 1992 French translation of Kondratiev’s works, edited by Fontvieille, is followed here. The 1924 paper proves that Kondratiev had an impressive knowledge of the literature on macroeconomic cycles: Jevons, Walras, Pareto, Clark, Marshall, Wicksell, Juglar, Tugan-Baranovsky, Spiethoff, Lescure, Aftalion, Mitchell and Schumpeter were all quoted. While in prison, Kondratiev prepared and posted to his wife the plan for a five-volume work that would include discussions on statics, dynamics, on methods for the study of social sciences, long waves and other matters. Some of these papers by Kondratiev were published in Russian in the 1990s (part of them are included in the 1998 Samuels et al. edition). Kondratiev identified four empirical laws: (1) some years before the beginning of a new LC, important changes occur in technological innovation, monetary circulation, the role played by new countries (ibid., p. 138); these changes could occur as much as 20 years before (p. 141); (2) the class struggle, including wars and revolutions, is more intense in the upswings; (3) agricultural depressions are more intense in the downswings; and (4) the downswings of the shorter cycles are more intense in the downswings of the LC, and the reverse is also true (pp. 140 ff.). Van Gelderen had already formulated this last ‘empirical law’ (Van Gelderen, 1913, p. 49). Slutsky, who had also been involved with the Institute of Conjuncture, did not become a member of the Econometric Society, for reasons unknown. He was a friend of and a regular correspondent with Frisch, the driving force behind the new association, and his 1927 paper (later published in Econometrica, 1937, under the auspices of Frisch) was widely circulated and attracted much attention. There is no indication in their correspondence about the reason for Slutsky’s failure to participate in the Econometric Society, however, although one can speculate that his fear of the political consequences of being associated with a foreign institution eventually decided the issue. Anyway, Slutsky survived the Stalinist purges (as did Konyus). On the other hand, the inclusion of Kondratiev is also an enigma, since he was in jail at that time. Either he accepted via his wife, or the founders of the society took his participation for granted from previous contacts with Kondratiev.

460 Francisco Louçã 9 The difficulty or impossibility of corresponding with Kondratiev nevertheless implied that his name was sometimes referred to (September 1934 list of the Fellows) and sometimes omitted (October 1933 list), while sometimes there was a reference to the fact that he was a member ‘if living’ (lists included in the Schumpeter Archive, Harvard University). 10 I thank Marcel Boumans, Amsterdam University, for this reference. 11 The text included references to, and quotations from, not only Clark, Bowley, Babson, Jevons, Tugan-Baranovsky, Beveridge, Schmoller, Cournot, List, Marshall, Mill, Kautsky, Engels, Marx and Pareto, but also Strouvé, Durkheim, Mach, Poincaré, Meyerson, Comte, Laplace, Boltzmann and Planck.

REFERENCES Aftalion, A., 1913, Les crises périodiques de superproduction (Paris: Marcel Rivière). Aftalion, A., 1927, The theory of economic cycles based on the capitalistic technique of production, Review of Economic Statistics, October, pp. 165–217. Barnett, V., 1996, Trading cycle for change: S. A. Pervushin as an economist of the business cycle, Europe–Asia Studies, 48: 6, pp. 1007–1025. Barnett, V., 1998, Kondratiev and the dynamics of economic development: long cycles and industrial growth in historical context (London: Macmillan). Barnett, V., 2004, Kondratiev, Nikolai Dmitrievich. In J. R. Millar (ed.), Encyclopedia of Russian history (New York: Macmillan Reference USA), 4 vols. Bresciani-Turroni, C., 1917, Movimenti di lunga durata dello sconto e dei prezzi, Giornale degli Economisti e Revista di Statistica, 55, pp. 1–11. Burns, A. and Mitchell, W., 1946, Measuring business cycles: studies in business cycles (New York: NBER). Buyst, E., 2006, Kondratieff, Nikolai (1892–1938). In J. Merriman and J. Winter (eds), Europe since 1914: encyclopedia of the age of war and reconstruction, Vol. 3 (Detroit: Charles Scribner’s Sons), pp. 1580–1581. Clark, J. B., 1899, The distribution of wealth: a theory of wages, interest and profits (New York and London: Macmillan). Clegg, S. R. and Bailey, J. R., 2008, International encyclopedia of organizational studies (Thousand Oaks, CA: Sage Publications), 4 vols. Cohen, J. N., 2008, Long-wave theory. In S. R. Clegg and J. R. Bailey (eds), International encyclopedia of organizational studies, Vol. 2 (Thousand Oaks, CA: Sage Publications), pp. 831–833). Day, R., 1981, The crisis and the crash: Soviet studies of the West (1917–1939) (London: Macmillan). Escudier, J., 1992, Long term movements in the economy. In T. Vasko (ed.), The long wave debate (Berlin: Springer). Freeman, C., 1977, The Kondratiev long waves, technical change and unemployment. In OECD, Structural determinants of employment (Paris: OECD). Freeman, C. (ed.), 1997, The long wave in the world economy (Cheltenham: Edward Elgar). Freeman, C. and Louçã, F., 2001, As time goes by: from the industrial revolutions to the information revolution (Oxford: Oxford University Press). Frisch, R., 1927, ‘The analysis of statistical time series’ (mimeo, Oslo University). Garvy, G., 1943, Kondratieff’s theory of long cycles, Review of Economic Statistics, 25, November, pp. 203–220.

Nikolai Kondratiev and long waves 461 Haberler, G., 1937, Prosperity and depression: a theoretical analysis of cyclical movements (Geneva: League of Nations). Hansen, A., 1941, Fiscal policy and business cycles (New York: Norton). Hansen, A., 1951, Business cycles and national income (New York: Norton). Jevons, W. S., 1884, Investigations in currency and finance (London: Macmillan). Juglar, C., 2010, Commercial crises (1891). Translation by C. Dangel-Hagnauer of CRISES COMMERCIALES, in →Say and Chailley, Nouveau dictionnaire de l’économie politique. In Research in the History of Economic Thought and Methodology, 28A, pp. 149–167. Klein, J., 1997, Statistical visions in time: a history of time series analysis, 1662–1938 (Cambridge: Cambridge University Press). Kleinknecht, A., 1987, Innovation patterns in crisis and prosperity (London: Macmillan). Kondratiev, N., 1922, The world economy and its conjunctures during and after the war. In The Works of Niklai D. Kondratiev, ed. W. Samuels and N. Makasheva (London: Pickering & Chatto). Kondratiev, N., 1923, Questions controversées d’économie mondiale et de crise: réponse a ceux qui nous critiquent. In N. Kondratiev, 1992, Les grands cycles de la conjoncture, ed. L. Fontvieille (Paris: Economica), pp. 493–543. Kondratiev, N., 1924, Sur les concepts de statique, de dynamique et de conjoncture économique. In N. Kondratiev, 1992, Les grands cycles de la conjoncture, ed. L. Fontvieille (Paris: Economica), pp. 1–46. Kondratiev, N., 1925, The static and dynamic view of economics, Quarterly Journal of Economics, 39: 4, pp. 575–583. Kondratiev, N., 1926a, About the question of the major cycles of the conjuncture [in Russian], Planovoe Khozyaystvo, 8, pp. 167–181. Kondratiev, N., 1926b, Problèmes de prévision. In N. Kondratiev, 1992, Les grands cycles de la conjoncture, ed. L. Fontvieille, (Paris: Economica), pp. 47–104. Kondratiev, N., 1928a, Les grands cycles de la conjoncture économique. In N. Kondratiev (1992), Les grands cycles de la conjoncture, ed. L. Fontvieille (Paris: Economica), pp. 109–168. Kondratiev, N., 1928b, La dynamique des prix des produits industriels et agricoles: contribution à la théorie de la dynamique relative et de la conjoncture. In N. Kondratiev (1992), Les grands cycles de la conjoncture, ed. L. Fontvieille (Paris: Economica), pp. 377–473. Kondratiev, N., 1935, The major economic cycles, Review of Economic Statistics, 18, pp. 103–115. Kondratiev, N., 1979, The major economic cycles, Review, 11: 4, 579–562 (first published 1922). Kondratiev, N., 1992, Les grands cycles de la conjoncture, ed. L. Fontvieille (Paris: Economica) (includes 1923, 1924, 1926a, 1926b, 1928a, 1928b, 1935 papers). Kondratiev, N., 1998, The works of Nikolai D. Kondratiev, ed. W. Samuels and N. Makasheva (London: Pickering & Chatto). Kuznets, S., 1930, Secular movements in production and prices: their nature and their bearing upon cyclical fluctuations (Boston, MA and New York: Houghton Mifflin; reprinted Boston, MA: Riverside Press, 1967). Lenoir, M., 1913, Études sur la formation et le mouvement des prix (Paris: Giand et Brière). Lescure, J., 1912, Hausse et baisse générale des prix, Revue d’Économie Politique, 26, pp. 452–490. Lo, A., 1991, Long term memory in stock market prices, Econometrica, 59: 5, pp. 1279–1313.

462 Francisco Louçã Louçã, F., 1999, Nikolai Kondratiev and the early consensus and dissensions about history and statistics, History of Political Economy, 31: 1, pp. 169–205. Louçã, F., 2007, The years of high econometrics: a short history of the generation that reinvented economics (London: Routledge). Mandel, E., 1975, Late capitalism (London: Verso). Mandel, E., 1980, Long waves of capitalist development (Cambridge: Cambridge University Press). Mandelbrot, B., 1987, Towards a second stage indeterminism, Interdisciplinary Science Reviews, 12, pp. 117–127. Marx, K., 1885, 1894, Le capital (Paris: Editions Sociales), 1973 edn. McNeill, W. H., Bentley, J. H., Christian, D., Levinson, D. et al. (eds), 2005, Berkshire encyclopedia of world history (Great Barrington, MA: Berkshire Publishing Group), 5 vols; 2nd edn, 2010. Mensch, G., 1975, Das technologische Patt (Frankfurt: Umschau). Merriman, J. and Winter, J., 2006, Europe since 1914: encyclopedia of the age of war and reconstruction (Detroit: Charles Scribner’s Sons/Thomson Gale), 5 vols. Mitchell, W., 1927, Business cycles: the problem and its settings (New York: NBER). Pareto, V., 1916, Quelques exemples d’application des méthodes d’interpolation à la statistique, Journal de la Société de Statistique de Paris, pp. 2–21. Parvus, 1901, Die langen Wellen der Konjunktur (Berlin: Prinkipo), 1972 edn. Pietri-Tonelli, A., 1911, Le onde economiche, Rivista Italiana di Sociologia, 15, pp. 220–225. Reijnders, J., 1990, Long waves in economic development (Aldershot: Edward Elgar). Reijnders, J. and Louçã, F. (eds), 1999, The foundations of long wave theory (Cheltenham: Edward Elgar). Rostow, W., 1948, The British economy of the nineteenth century (Oxford: Clarendon). Schumpeter, J., 1939, Business cycles (New York: McGraw-Hill). Solomou, S., 1987, Phases of economic growth 1850–1973 (Cambridge: Cambridge University Press). Stolper, W., 1984, [Review of] ‘The long wave cycle’ by N. Kondratiev, Journal of Economic Literature, 22, December, pp. 1647–1649. Tinbergen, J., 1929, Review of De Wolff’s ‘Het Economisch Getij’, De Economist, pp. 2–31. Tinbergen, J., 1939, Statistical testing of business cycles theories (Geneva: League of Nations). Trotsky, L., 1923, A curva do desenvolvimento capitalista (Lisbon: Delfos), 1975 edn. Tugan-Baranovski, M., 1901, Theorie und Geschichte der Handelskrisen in England (Jena: Fisher). Tylecote, A., 1992, The long wave in the world economy (London: Routledge). Van Duijn, J., 1983, The long wave in economic life (London: Allen & Unwin). Van Gelderen, J., 1913, Springvloed baschouwigen over industrielle outwikalieg en prijsbeweging, De Nieuwe Tijd, pp. 184–185.

25 Political business cycles Jan-Peter Olters

You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time. (attributed to Abraham Lincoln in speech, 8 September 1858)

25.1 INTRODUCTION The political business cycle (PBC) theory refers to an exceptionally extensive and conceptually heterogeneous body of literature that explains economic fluctuations as a consequence of politicians’ manipulations of market outcomes, strategically engineered to rally voter support and increase the likelihood of re-election. This particular branch of non-market economics has policymakers internalize voters’ responsiveness to the state of the economy1 and design economic policies on that premise, thereby adding elements of (suboptimal) instability to the market. The PBC literature has sought to (1) reinterpret the social planner, move away from the apolitical concept of a benevolent dictator, and model representatives of the executive as democratically legitimized actors; and/or (2) determine and estimate those variables of a social-welfare function that would reflect voters’ (political) preferences as accurately as possible.2 Conceptually, an inherently economic model of politics would have an elected politician, party or government maximize a wellspecified politico-economic objective function subject to some set of budgetary and democratic constraints and credibly commit to the resultant set of policy parameters. However, it has proved excruciatingly difficult to translate the general intuition of an electorate reacting to, and insisting on, good economic management into models with a degree of formal elegance and empirical robustness that would be comparable to those employed in standard economic theory. The recognition of the need for an interdisciplinary approach to the study of ‘political’ economy goes back to Wolfe (1944), who, as President of the American Economic Association, appealed to his colleagues in 1943 to take into account politico-economic interactions when explaining economic developments; the risks of not doing so were, at the time, only too obvious. This request was later amplified by Samuelson (1954), who demonstrated formally that once public goods were included in a representative household’s consumption basket, the market alone was

464 Jan-Peter Olters unable to determine the optimal levels of collective consumption. The foundations for the development of an economic theory of politics (ETP), defined as the application of modern economic techniques to political questions (Frey, 1974),3 were laid by Downs (1957) in his uniquely influential Economic theory of democracy.4 In providing the conceptual analogy between politicians and other market participants (based on the vote-maximization axiom), he succeeded in mimicking utility- and profit-maximization assumptions underlying the economic conduct of households and firms, respectively, and in deriving the median-voter theorem, which became a pivotal building block in the ensuing ETP and PBC literature. McKelvey (1979) demonstrated that the extension of the Downsian analysis to multidimensional spaces implied that ‘political equilibria’ could only exist if voters’ policy optima were distributed perfectly symmetrically in all directions. Otherwise, the political system would be characterized by fluctuations in the parties’ ideological positions and/or in electoral outcomes – with direct effects on the state of the economy. Over the decades, the PBC literature has taken important steps towards providing social scientists with a unified approach to the study of politico-economic questions. Still, this research area continues to provide scientists with a higher degree of professional potential than (almost) any other field in economics. Notwithstanding the central role that ETP models would prove to play in policy design and advice, they have, by and large, remained outside the mainstream of economic literature.5 Blanchard and Fischer (1989), in their standard-setting textbook on graduate macroeconomics, acknowledged that by stating that economists, for the most part, ignored political incentives and constraints and analysed optimal policy starting from a social-welfare function, leaving to political scientists the job of explaining the characteristics of existing policies. It is thus not surprising that most encyclopaedic PBC entries have tended to treat related contributions as a separate field, detached from economics or neighbouring sciences. One notable exception is Weingast and Wittman’s Oxford handbook of political economy, which devoted two entire chapters to unresolved ETP challenges – one on the inability to link this field to overarching questions in development economics (North, 2006) and a second one on the difficulty ETP researchers have in stemming the trend of academic specialization (Hinich, 2006). The latter author believed that, in the short term, the development of a science of political economy would most likely be similar to what had happened in the past – i.e. ‘a stumbling in the dark’. In his entry on VOTING AND THE MACROECONOMY, Hibbs (2006) echoed this general assessment, concluding that one of the greatest challenges to future research was ‘to bring forward-looking, competency models to macroeconomic data with statistical power’. Hinich’s (2006) view that the study of politics was the ‘hardest task in the social sciences’ is likely to be echoed by anybody who has tried to close a formal model capturing the decision-making processes by more complex homines oeconomici et publici over the optimal allocation of private and public goods. The peripheral position of the still evolving PBC literature in mainstream economics thus reflects (1) the inconclusive empirical support for existing PBC models;6

Political business cycles 465 (2) the mathematical complexity inherent in (non-linear) political processes;7 and (3) the interdisciplinary nature of this field. In terms of both theoretical and empirical research, social scientists have succeeded only partially in modelling the intricate dynamics underlying multifaceted politico-economic interactions. This sobering recognition has contributed to Hinich’s proposal to increase the likelihood for breakthrough advances by undertaking ‘put-men-on-the-moon-type’ efforts and establishing a publicly funded research institute fully devoted to the development of a comprehensive, interdisciplinary approach to ETP-related questions. The present chapter on PBC entries in dictionaries and encyclopaedias suffers from the same impossible task faced by the surveyed authors of dissecting – succinctly, accurately and comprehensively – key lessons learnt from what the recent ‘explosion of contributions in the field of political economy’ (Saint-Paul, 2000) has left the discipline; the reader is herewith referred to a large number of relevant textbooks, dedicated chapters and survey articles that have assessed PBC insights in much greater depth and detail.8 Most encyclopaedic entries have followed the standard tradition of these publications and categorized related models in a 2 3 2 matrix alongside politicians’ objectives (opportunistic vs. ideological) and voters’ expectations (adaptive vs. rational). Such an organization has the advantage of reflecting the degree to which the PBC literature has absorbed key influences from mainstream economics and rearranged the theoretical building blocks in the various subcategories of the PBC literature. The subsequent discussion will follow the stylized (non-linear) development of politico-economic research as summarized in Figure 25.1. myopic

rational

Voters Politicians NeoKaleckian PBCs

Kaleckian PBCs

Political Kitchin cycles

Marxian economics

Real PBCs Standard PBCs

Downs

Classical economics

opportunistic

Class conflict

partisan

Rational partisan cycles

Partisan cycles

RE-PBCs RE-PBuCs

Phillips curve

Keynesian economics

VP functions

Welfare economics

Figure 25.1 Stylized development of the PBC literature.

New Keynesian economics

Rational expectations

Income distribution

Endogenous growth

466 Jan-Peter Olters 25.2 MODELLING POLITICAL BUSINESS CYCLES

25.2.1 Precursory studies 25.2.1.1 Kaleckian PBCs Most encyclopaedic entries, as well as handbooks, trace the PBC literature back to Kalecki (1943).9 Combining Marx’s (1867) class-conflict logic with Keynes’s (1936) policy prescription of aggregate-demand management, Kalecki argued that the business community did not regard the maintenance of full employment over prolonged periods of time as being in its politico-economic and social interest, as (the threat of) dismissals would no longer serve as an effective instrument to ensure ‘discipline in the factories’. Full employment, according to this argument, strengthened the relative (bargaining) power of workers. Their growing selfassurance and class consciousness would lead to increasing strike actions in support of wage demands exceeding productivity growth, for which reason the business community would lean on (non-fascist/non-authoritarian10) governments to reverse the trend and implement contractionary (unemployment-inducing) policies. According to Kalecki, three principal reasons – the presumed general confidence in the effectiveness of Keynesian policies, the capitalists’ recognition of political and social realities, and their short-term business interests – prevented entrepreneurs from categorically objecting to policies aimed at achieving full employment during depressed economic times. However, for the aforementioned reasons they would object to ‘unsound policies’ beyond the initial stabilization phase, trying to persuade governments ‘to return to the orthodox policy of cutting down the budget deficit. A slump would follow in which Government spending would come again into its own’, thereby generating cycles of politically induced booms and recessions. According to this strand of literature, as highlighted by Boddy and Crotty (1975), the goal of macro policy was not to eliminate the cycle but to guide it in the interest of capitalists. Van der Ploeg, in his entry on POLITICAL BUSINESS CYCLE to →Eatwell et al.’s New Palgrave dictionary of economics (1987), and Paldam (1997), contributing to Mueller’s Perspectives on public choice: a handbook, saw casual evidence of Kaleckian PBCs. During the 1960s and 1970s, many industrialized economies, after having enjoyed prolonged periods of full employment, witnessed increased political tension, rising wage levels, exploding public-sector debt and accelerating inflation rates. This, in turn, led to a gradual decline in the profitability of firms, strengthening ‘the plea of business corporations to deflate the economy and reduce the strength of the workers’ movement’ (van der Ploeg, POLITICAL BUSINESS CYCLE). In response, many governments during the late 1970s and early 1980s – most notably British Prime Minister Margaret Thatcher – tightened economic policies, typically in tandem with measures aimed at restricting unions’ bargaining power. In this context, it is interesting to note that Kalecki’s prediction of an inverse reaction has proved equally consistent with public debates following the global (financial) crisis of 2008/2009, with business leaders advocating and supporting

Political business cycles 467 crudely Keynesian policies, calling for unparalleled fiscal stimulus packages and state bailouts for banks and other industries on the verge of collapse. Thirty years earlier, Vosgerau had already foreseen this in →Albers et al.’s Handwörterbuch der Wirtschaftswissenschaft, arguing that reduced turnover and dampened profit expectations would play a key role in a crisis situation, creating ‘true interest’ in expansionary fiscal policies (KONJUNKTURTHEORIE, 1978). Even though the original article made no explicit reference to the underlying length of Kaleckian PBCs, they can be usefully thought of as long-term political waves, akin to non-political Kuznets/Kondratiev-type cycles. Åkerman (1947) drew his colleagues’ attention to the existence of shorter, Kitchin-type PBCs. 25.2.1.2 The political Kitchin cycle Analysing US data, Åkerman (1947) sought to determine whether the three- to fiveyear Kitchin (1923) cycles – which he described as having been ‘conceived as fundamental economic cycles, of a stable, permanent character and independent of connections with institutional change’ – were, in fact, politico-economic cycles that essentially spanned a government’s term in office. He interpreted the data as ‘inverse’ PBCs, arguing that election years spelt hesitancy and a shortening of perspectives, affecting investment and employment. However, once elections had settled the political question, the private sector would grow until new elections were scheduled, ‘causing less optimistic anticipations, and hence crisis and depression’. Åkerman found this politico-economic cycle to be dominant between the 1890s and the New Deal. While worth a separate name entry in →Glasner’s Business cycles and depressions: an encyclopedia (Thalberg, ÅKERMAN, JOHAN HENRIK (1896–1982), 1997), Åkerman’s contribution is, if at all, only mentioned in passing. In Mueller’s Perspectives on public choice: a handbook, Paldam (1997) saw him as the starting point of the ‘empiricist’ strand of PBC models, while Frey and Benz, in →Snowdon and Vane’s Encyclopedia of macroeconomics (2002), mentioned him as one of the forerunners of the PBC literature (BUSINESS CYCLES: POLITICAL BUSINESS CYCLE APPROACH). Åkerman’s findings are related to, and in their predictions broadly consistent with, the second-year boom. This phenomenon was first described by Paldam (1979, 1981), according to whom the first-order differences in fiscal spending were highest during the second year, as governments honoured electoral promises. These election-promise cycles would result in the acceleration of inflation in a government’s third year in office, caused by political constraints rather than generated in a strategic manner to win elections (Paldam, 1997).

25.2.2 Strategic politicians and myopic voters The first generation of ‘formal’ PBC models, published during the mid-/late 1970s, combined Downs’s (1957) theory with Phillips’s (1958) observation of an apparently stable relationship between unemployment and (wage) inflation.

468 Jan-Peter Olters Notwithstanding Stigler’s (1973) ‘strongly nihilistic conclusions with respect to the influence of general economic conditions on voting behavior’, the evolving PBC and partisan theory (PT) literature centred on unemployment and inflation as key explanatory variables. As stressed by Dickens (2001) in his entry POLITICAL BUSINESS CYCLES in →O’Hara’s Encylopedia of political economy and by Chrystal (1997) in his contribution on POLITICAL BUSINESS CYCLE to →Glasner’s Business cycles and depressions: an encyclopedia, mainstream PBC theorists implicitly warned about the inflationary bias inherent in democratic systems, as governments used expansionary macroeconomic policies as part of their re-election strategies, thereby linking the PBC research to the key economic policy challenges prevailing at that period of time. 25.2.2.1 Standard PBCs Nordhaus (1975), Lindbeck (1976) and MacRae (1977) placed opportunistic politicians and myopic voters into an economy described by a downward-sloping, expectations-augmented Phillips curve, which defined the government’s (presumed) trade-off between unemployment and (unexpected) price increases. Assuming adaptive expectations of inflation, the electorate – with an unattainable political bliss point of zero inflation and zero unemployment – would penalize an expansionary policy stance in the pre-electoral period t–1, which would worsen the government’s available policy options during the critical election period t. As voters formed their political preferences (and made voting decisions) in a backwardlooking, myopic fashion and with a short memory, they placed disproportionate weight on the government’s recent economic performance. Policymakers’ strategic game plan would thus comprise policies that depressed an economy immediately after an election (to gradually bring down inflation expectations) to be able to, once again, ‘fool’ the electorate with unsustainably expansionary policies in the period just prior to the next election. The Nordhaus-type story of pre-election booms and post-election busts was challenged on several grounds, not least because of the mixed empirical support that these models received, as highlighted by Franzese and Jusko (2006). Pointing to the lack of empirical evidence, and more in line with Åkerman’s (1947) earlier observation, Chrystal (POLITICAL BUSINESS CYCLE, 1997) suspected that the reverse pattern might dominate, indirectly referring to Paldam’s (1979, 1981) aforementioned election-promise cycle: ‘Governments recently elected have pet projects they wish to introduce and supporters who have to be paid off, so they spend early on. Later, they find that they have a big budget deficit or they have led the country into crisis, so they cut back before the next election.’ Keil and Willett focused their argument in →Rowley and Schneider’s Encyclopedia of public choice on the validity of the Phillips curve per se, not least in light of the ongoing rational expectations (RE) revolution (POLITICAL BUSINESS CYCLES, 2004). Finally, these types of PBC models, according to Chrystal (POLITICAL BUSINESS CYCLE, 1997), presupposed ‘an amazing degree of stupidity on the part of the electorate’. It required voters to expect future inflation when bargaining for wages, while ignoring

Political business cycles 469 their own expectations when voting, thereby making the models internally inconsistent. In →Durlauf and Blume’s New Palgrave dictionary of economics, Drazen took a more nuanced view. Quoting Nordhaus (1989), he argued that marking the ballot for the incumbent when times were good would be consistent with rationality if voters had imperfect information (POLITICAL BUSINESS CYCLES, 2008). Related challenges were explored in the second generation of PBCs to be discussed below. 25.2.2.2 Partisan cycles With a set of assumptions practically identical to those of standard PBC models, Hibbs (1977, 1987) generated politically induced cycles by contrasting parties with different, although exogenously determined, policy functions. As noted by Franzese and Jusko (2006), different voter groups suffered disproportionately from unemployment and inflation. Consequently, the partisan theory (PT) literature described economic fluctuations as the result of the succession of different economic policies enacted by progressive and conservative parties, respectively. Hibbs (1977) derived behavioural patterns according to which leftist parties – essentially for reasons of income distribution – revealed a preference for low-unemployment outcomes, whereas right-wing governments aimed for low-inflation results. Thus, contrary to the behavioural assumptions underlying PBC models, policymakers in a PT context would want to get elected in order to implement their party programmes. These behavioural axioms affect, of course, the inherent dynamics in PT models. Their main argument hinges on placing separate, differently sloped vote-loss functions into a Phillips curve framework, while downplaying the role of inflation expectations. In his entry BUSINESS CYCLES, POLITICAL to →Darity’s International encyclopedia of the social sciences (2008), Blomberg pointed to the fact that the empirical support for PT models was stronger than for standard PBC models. Referring to recent US economic history, he argued that since the Second World War the real US economy had grown more rapidly (slowly) after every Democratic (Republican) president had begun his term in office. However, as Paldam (1997) stressed, this implied that government policies were supposed to be ‘effective’, an assumption that stood in stark contrast to the results derived from the increasingly influential models based on rational expectations.

25.2.3 Politics in a rational world By the time that the PBC/PT models had found their way into academic journals, the RE revolution was already in full swing. Based on the path-breaking contributions by Lucas (1973) and Sargent and Wallace (1975), RE-based models predicted complete policy ineffectiveness. The far more sceptical outlook inherent in the RE framework created an environment in which interest in the study of PBC topics flagged, for obvious reasons. If economic policymaking did not matter, the study of ‘optimal’ government behaviour – beyond the maintenance of peace, property and macroeconomic stability – would become irrelevant.

470 Jan-Peter Olters Not fully convinced, Fischer (1977) and Taylor (1979, 1980) showed that, under certain collective bargaining practices that resulted in staggered wage contracts, properly timed demand policies could, temporarily, affect the real sector. On that New Keynesian foundation a second generation of PBC and PT models managed to thrive, anchored on the assumptions that economic agents (1) were surprised by unexpected nominal shocks, and (2) did not have costless access to information, which resulted in information asymmetry between sub-rational voters and fully rational governments. In essence, the second-generation PBC models of the 1980s, starting with Minford and Peel (1982), managed to demonstrate that the results of the initial 1970s models could be recreated by using a modern, RE-based framework. While not necessarily providing fundamentally new insights, they kept the PBC literature alive and renewed interest in it. Given the ‘(presumed) devastating effect of the rational expectation critique’ (Alesina, 1988), that in itself was no small accomplishment. Still, as Hibbs (2006) highlighted, rational retrospective competency models were quite ingenious, but their influence had been confined wholly to the realm of detached theory, not least because these models had received no empirical support. 25.2.3.1 Rational PBCs and budget cycles The signalling of administrative competence through the suboptimal, transitory stimulation of output by opportunistic politicians characterized the rational PBC (RE-PBC) models introduced by Cukierman and Meltzer (1986) and Persson and Tabellini (1990), as well as the closely related rational political budget cycles (REPBuCs) proposed by Rogoff and Sibert (1988) and Rogoff (1990). The RE-PBC models were based on the assumption of information asymmetry between voters and politicians regarding the latter agents’ abilities to administer public finances efficiently. As highlighted by Drazen in his entry on POLITICAL BUSINESS CYCLES in →Durlauf and Blume’s New Palgrave dictionary of economics (2008), voters had imperfect information about the causes of economic fluctuations, taking good economic performance as shorthand for the incumbent’s level of competence. Given that voters had no information about the challenger’s abilities, the representative voter, in a two-party system, preferred a competent incumbent over any opponent and any opponent over an incompetent incumbent. In a ‘separating’ equilibrium, competent politicians managed to signal their exceptional skills and, on that basis, secure their re-election. In order to convey this information, competent policymakers sought to achieve growth rates that were both unsustainable and unattainable by their ineffectual peers. In instances in which incumbents seeking re-election were sufficiently skilled, the pre-election period was characterized by distortionary expansion, with a short-lived acceleration in growth, leading to higher-than-expected inflation rates in the post-election periods. As moderately skilled officeholders could not feign competence, they would continue to pursue those optimal policies that were generally chosen in non-election years, leading to comparatively lower growth and inflation rates in t and t+1, respectively. It is, however, not immediately obvious why the electorate should

Political business cycles 471 observe output growth immediately but lack, for another period, reliable information on realized inflation rates, even more so since inflation figures tend to be published more frequently and be more up to date than those on national accounts (which are relatively more difficult to compile). The RE-PBuC models, introduced concomitantly, have a little more appeal. As Drazen put it in his entry on POLITICAL BUDGET CYCLES in →The new Palgrave (2008), ‘voters like low taxes and high government spending’. Rational and forward-looking voters should, however, be aware of the internal inconsistency of such a position and take into consideration the binding nature of the government’s current and intertemporal budget constraints. Such an understanding should make voters immune to (excessive) deficit-spending and election-year manipulations. Drazen summarized this point very succinctly: if voters punished election-year deficits or spending increases, electoral manipulation would take the form of changes in the composition of the budget, rather than its overall level (or that of the overall deficit). Rogoff (1990) assumed asymmetric information regarding the particular composition of the government’s budget. While voters could immediately take advantage of (additional) current expenditure, the benefits from public investments would only accrue with a one-period (construction) lag. Voters would thus cast their votes in ignorance of the budget’s overall composition. The model was closed in a fashion analogous to Rogoff and Sibert’s (1988) and Persson and Tabellini’s (1990) – i.e. in order to be able to signal his or her competence, the skilled incumbent would need to substitute current for capital expenditures to an extent that is impossible for an inept policymaker. As Drazen noted, the pre-electoral fiscal expansions were caused not because voters were naive but because they were sophisticated, taking into account the fact that skilled politicians were able to cut back on public investments at lower marginal costs and that they were hence able to signal in a less costly manner an increase in current expenditure (POLITICAL BUDGET CYCLES, 2008). 25.2.3.2 Rational partisan cycles With a very influential paper that produced ‘ideologically generated blips in the data’ (Paldam, 1997), Alesina (1987) revived the PT tradition by adding a decentralized process of rational wage setting to Hibbs’s (1977) original model. Chappell and Keech (1988) presented a similar model, of which the results had been summarized in Chappell and Keech (1986). Following Barro and Gordon (1983), Alesina (1987) assumed that (1) wages in t had to be agreed upon at the end of period t–1; (2) they were non-indexed; and (3) social partners attempted to keep wages constant ‘at the level compatible with the “natural” rate of growth’. Two parties with different vote-loss functions minimized those functions, subject to a traditional expectations-augmented Phillips curve. Analogous to Hibbs’s model, centre-left parties were more preoccupied with lower unemployment rates than centre-right ones as they believed ‘in higher government spending . . . and [were] willing to use money creation as a way of financing it’ (Alesina, 1987).

472 Jan-Peter Olters As wage contracts were assumed to be signed prior to polling day, voters in an election year would only know the probability with which either party was expected to win. They would thus derive election-year inflation forecasts. In off-election years, the ideological preferences of the incumbent government were known with certainty, resulting in a ‘natural’ rate of economic growth, irrespective of the party in power. In election years, however, output growth was dependent on the government. Owing to the rigidity in nominal wages, centre-left parties – when elected – would manage to stimulate the economy beyond its natural level by permitting inflation rates to increase, but they were able to sustain that amount of economic growth for only one period. Afterwards, once the wage contracts were renegotiated for the following period, growth rates would fall back to their natural level. Analogously, after an electoral win by a centre-right party, the government would cause an economic contraction as pre-agreed nominal wage increases would exceed actual inflation rates, resulting in higher unemployment. Again, in the second period, growth rates would adjust to their natural level. The RE–PT models thus forecast that inflation rates would be consistently higher with a centre-left government. In election years, inflation with progressive governments would be lower than in off-election years, and vice versa. The model also implied that post-election fluctuations in output increased with a ‘more polarized . . . political system’, a bigger election-night ‘surprise’ (i.e. with larger forecast errors) and a steeper Phillips curve relationship. While it is undisputed that Alesina (1987) pushed forward the research into PT modelling, Hibbs (1992) criticized his particular approach mainly on two theoretical points. First, he wondered why optimizing agents with rational expectations would lock themselves repeatedly into multi-period nominal wage contracts with start dates just preceding (rather than just following) elections: building a rational political theory of the business cycle on the perpetuation of suboptimal contracting arrangements was perhaps not a great deal more satisfactory on theoretical grounds than older sluggish expectations models. Second, Hibbs disliked the fact that the driving force behind the RE–PT cycles was a counter-cyclical real wage rate – i.e. a phenomenon that was largely unsubstantiated by empirical research.

25.2.4 Recent innovations 25.2.4.1 Real PBCs Real PBCs, which aim at combining politicians’ opportunistic motives with partisan objectives, have their forerunner in Frey and Lau (1968). They rejected the votemaximization objective as an adequate description of politicians’ behaviour and, subsequently, complemented it by ideological objectives. For government representatives, this created both external and internal tension points, which, if ignored, risked defeats either in general elections or at party conventions. The implication was that resulting cycles would no longer be regular. As pointed out by Frey and Benz in their entry to →Snowdon and Vane’s Encyclopedia of macroeconomics,

Political business cycles 473 there was no need to generate a PBC when the government was confident of winning the next election (BUSINESS CYCLES: POLITICAL BUSINESS CYCLE APPROACH, 2002). Recent real PBC models are not really an ‘alternative’ PBC theory, as stated by Blomberg in his entry on BUSINESS CYCLES, POLITICAL in →Darity’s International encyclopedia of the social sciences (2008), but rather an integrative approach in that they combined the key assumptions from both the RE–PBC and RE–PT models. Models like those proposed by Blomberg and Hess (2003) created politicoeconomic dynamics by distinguishing four possible policy outcomes. The first two involved centre-left politicians who sought to increase public spending. A competent progressive politician could do that by increasing the effectiveness of the public sector, thus leaving tax rates unchanged. By contrast, an incompetent left-wing politician would have to raise taxes to deliver the same amount of public goods. The other two scenarios included conservative politicians who would try to lower public expenditure. A competent conservative would do this and be able to reduce tax rates, while an incompetent right-wing politician could not. Blomberg acknowledged that, as with other variants of PBC models, there was only mixed empirical evidence supporting real PBCs (BUSINESS CYCLES, POLITICAL). 25.2.4.2 Neo-Kaleckian PBCs Insights from the endogenous growth theory provided a fresh stimulus to the research on PBCs. Persson and Tabellini (1992) showed that income inequality and land concentration retarded growth. Alesina and Rodrik (1992) derived similar conclusions. They argued that individuals who had access to the productive assets of an economy were more likely to be restrained in their desire to tax them. This made an egalitarian distribution good for growth in democracies: ‘It is easier to avoid damaging conflict over redistributive policies when the economy’s assets are shared widely.’ The focal point of this new branch, developed during the mid- and late 1990s, was the relationship between a country’s inequality measures and its growth potential, thereby reintroducing the concept of inter-household conflicts over the provision and financing of public goods to economic modelling. As a result, fiscal policies were seen, once again, as an instrument used to redistribute income. As such, this strand of PBC literature, not yet fully reflected in relevant encyclopaedic entries, has given some (preliminary) answers to the development-related questions raised by North (2006) in his chapter in Weingast and Wittman’s Oxford handbook of political economy. Especially innovative were papers by Persson and Tabellini (1994) and Alesina and Rodrik (1992, 1994) demonstrating the existence of mechanisms that could help to explain the inverse relationship between the distribution of income and the resultant growth path. According to the argument laid out in these studies, a higher degree of inequality increased the political pressure for fiscal redistribution. Once implemented, rising levels of distortionary taxes would slow down economic development and, ceteris paribus, lead to growth rates below those prevailing in more egalitarian countries.

474 Jan-Peter Olters Persson and Tabellini (1994) placed their empirically well-supported analysis into a standard overlapping-generations framework, in which individuals maximized identical utility functions over their respective streams of consumption, both when young and old, while facing a government that pursued redistributive policies. When young, a given generation’s welfare did not hinge on government behaviour; it depended solely on the capital accumulated by previous generations as well as average and personal endowments of skills. For the old, government mattered, as ‘it takes from those who have invested more than the average and gives to those who have invested less than average’. Households’ political preferences, expressed in terms of a tax on capital income, were determined by the balance between the tax burdens on their individual capital stocks and the lump-sum transfers paid out to all the old. Persson and Tabellini’s (1994) politico-economic equilibrium was derived utilizing the median-voter theorem, indicating that half of every old generation would benefit at the expense of the other half. The resulting tax level determined the economy’s growth potential, implying that both a more equal distribution of income and a higher average level of basic skills increased growth. A similar mechanism drove the otherwise very different model proposed by Alesina and Rodrik (1992, 1994). Their result had income inequalities increase the pressure for distortionary taxes because the ‘economically disenfranchised’ segments of the population were ‘more likely to be willing to “tax” growthenhancing resources such as physical or human capital’ (Alesina and Rodrik, 1992). The authors placed ‘capitalists’ and ‘workers’ in an economy described by a Cobb– Douglas production function (with capital, labour and ‘government spending on productive services’ as determining variables), and with a budget constraint that equated the government’s spending on productive services and transfers to the tax revenue derived from capital. Capitalists were assumed to be the only ones who save (i.e. their behaviour alone determined the economy’s growth rate). Given an economic structure in which capital was taxed and labour subsidized, it followed that a government supported by ‘capital’ would simply maximize the economy’s growth rate. By contrast, a pro-labour government’s optimal policy was determined by the equality of the marginal benefit of taxes (increased wages and direct lump-sum payments) and marginal costs in terms of reduced economic growth. When allowing for a continuum of agents and the determination of policies by majority vote, the median voter determined the ultimate choice of the tax rate: ‘the more capital poor the median voter . . ., the higher the resulting tax rate and the lower the equilibrium growth rate’. Alesina and Rodrik (1992) concluded that ‘in a democracy, the more unequal the distribution of wealth, the lower is the growth rate of the economy’. The appeal of these innovative papers is constrained by the implicit reliance on politico-economic transition mechanisms in which the median voter determines optimal taxation levels and, correspondingly, the optimal size of government. It therefore remained ‘not very well understood’, as Persson and Tabellini (1994) concluded, ‘how income distribution and economic growth are jointly determined in political equilibrium’. The median voter as an instrument to describe politics leads to results that abstract from (1) the political dynamics caused by the interaction

Political business cycles 475 of voters and political parties in determining government policies, and (2) the differences in underlying constitutional frameworks differentiating democracies. Olters (2000, 2002) proposed a simple model seeking to simulate political dynamics between voters, party members and governments, highlighting the crucial importance of income inequality as a determinant of a country’s politico-economic development path. Mumford (2007), in her entry in the Encyclopedia of law and society, mentioned this article, together with Backhaus’s (2002), as having attempted to revive the interdisciplinary field of fiscal sociology. By linking endogenous – and, therefore, evolving – party ideologies with voter turnout rates and electoral behaviour and those, in turn, with traditional economic decisions, Olters showed that inclusive economic growth caused an ideological conversion of party platforms, especially as less impoverished members of centre-left parties would become increasingly more tax-averse. He argued that the ‘economic value’ of a relatively low degree of inequality in income and wealth could be found in the succession of governments with relatively constant approaches to economic policies, with a correspondingly low amount of politically induced fluctuations and fewer requirements on the part of firms and households to repeatedly (re)adjust their behaviour to new political environments. Considerable progress has been made in understanding the impact of institutional designs on the government’s fiscal conduct; see especially Persson and Tabellini (2000); Persson et al. (2000); Austen-Smith (2000). All these researchers were able to show that highly taxed, egalitarian societies were more likely to occur under parliamentary regimes with proportional representation than under either presidential ones or winner-takes-all electoral systems. These neo-Kaleckian contributions – focusing on institutional mechanisms to channel political conflicts over who sacrifices how much in private consumption to provide what level of public goods to society – have released the PBC literature from the conceptual constraints imposed by the Phillips curve and vote and popularity (VP) function, focusing it instead on tax policy and traditional ‘pocket book’ issues, such as access to, and the cost and quality of, healthcare and education. This line of research has taken first steps towards deriving formal answers to North’s (2006) ‘bigger questions’ of (1) why not all countries in the world are advanced industrialized nations; and (2) why legislatures produce relatively secure property rights and the rule of law in the developed world, but not in the developing world. Preliminary answers appear to point to inclusive and sustainable growth being a function of a country’s income distribution, the quality of its public institutions, its ability to provide effectively public goods of high quality, as well as the means for citizens to express (political) preferences freely and fairly.

25.3 CONCLUDING REMARKS When Samuelson (1954) provided the theoretical basis for the need to develop an economic theory of politics, he encouraged his peers by stating that the solution ‘existed’; the problem was how to ‘find’ it. More than half a century later, this quote

476 Jan-Peter Olters has not lost any of its significance and appears to have driven the discipline to the edge of despair, especially given the fact that the PBC literature has only managed to make marginal impacts on the development of mainstream economics. Most entries in dictionaries and encyclopaedias, as well as in handbooks, have remained largely descriptive, with references only to mixed empirical support. Franzese and Jusko (2006) acknowledged the inherent deficiency and the apparent non-regular nature of political business cycles by advocating the need to develop ‘context-conditional’ politico-economic cycles. This seemed to capture succinctly the key obstacle, as it has become only too evident that PBC research covered an area that could only be captured in a multifaceted, multidimensional and multidisciplinary manner (Hinich, 2006). Representing the essence of ‘politics’ – including its interactions with the economic system and impact on a given voter’s (relative) income and wealth position within a given society – in a formally elegant and empirically robust model remains a key challenge for economists and researchers in neighbouring social sciences. Still, the literature contains a large number of relevant (even though only partial) answers, demonstrating the fact that different types of political business cycles with different origins, lengths and intensities appear to co-exist and interact. Table 25.1 summarizes this alternative view of the PBC literature. The respective focus of the encyclopaedic entries discussed above is represented in Table 25.2. Table 25.1 The PBC literature according to the cycle’s length Blips

Fluctuations

Cycles

Waves

Transitory effects, easily to be mistaken empirically as white noise

Divides legislative periods into two distinct pre- and post-electoral phases

Caused by succession of partisan governments over several legislative periods

Interaction of long-term economic waves and political interests

Typically less than a year

Typically 4 years

About 8 to 12 years

Over several decades

Partisan cycles

Kaleckian PBCs

Hibbs (1977, 1987)

Kalecki (1943) Boddy, Crotty (1975)

Rational PBCs

Political Kitchin cycles Cukierman, Meltzer Åkerman (1947) (1986) Persson, Tabellini (1990) Election promise Rational budget cycles cycles Rogoff, Sibert (1988) Paldam (1979, 1981) Rogoff (1990)

Real business cycles (irregular) Frey, Lau (1968) Blomberg, Hess (2003)

Rational partisan cycles Alesina (1987) Chappell, Keech (1988)

Standard PBCs

Neo-Kaleckian PBCs

Nordhaus (1975) Lindbeck (1976) MacRae (1977)

Alesina, Rodrick (1992, 1994) Persson, Tabellini (1994) Olters (2000, 2002)

citation

summary analysis

Chrystal (1997) Business Cycles and Depression: An Encyclopedia

Paldam (1997) Perspectives on Public Choice: A Handbook ...

citation

Dickens (2001) survey Encyclopedia of Political Economy

Frey and Benz (2002) citation Encyclopedia of Macroeconomics

...

...

survey

...

Van der Ploeg (1987) The New Palgrave Dictionary of Economics

Kaleckian PBCs

survey

Political Kitchin cycles

Vosgerau (1978) Handwörterbuch der Wirtschaftswissenschaft

Standard PBCs

analysis

...

...

...

RE-PBCs, RE-PBuCs ...

analysis

...

...

...

Rational partisan cycles ...

analysis

...

...

...

Real PBCs ...

...

...

...

...

...

...

...

...

...

Neo-Kaleckian PBCs

summary summary summary summary summary . . .

summary . . .

analysis

survey

survey

survey

Partisan cycles

Table 25.2 PBCs in economic dictionaries, encyclopaedias and handbooks

Stress of importance of institutions, incl. central banks

Institutional view, advocates independent central banks

Formal survey and analysis of PBC theory

Reference to election promise cycles, VP functions, RE

Reference to policy ineffectiveness with RE

PBC section in general survey of business cycles

Comments

Partisan cycles

Standard PBCs

analysis

survey

analysis

survey

...

...

...

...

Formal analysis of PBC models alongside 232 matrix

Advocate PBC models that are ‘context conditional”

Blomberg (2007) International Encyclopedia of the Social Sciences

summary . . .

summary citation

summary summary summary . . .

Focus on innovations in real PBC research

Stresses importance of links with development economics

analysis

survey

Comprehensive, non-technical survey

– forward-looking analysis of existing limitations of PBC research

analysis

survey

...

North (2006) The Oxford Handbook of Political Economy

...

RE-PBCs, RE-PBuCs

Advocates interdisciplinary approach to PBC research

...

Hibbs (2006) The Oxford Handbook of Political Economy

...

Rational partisan cycles

summary summary summary summary citation

Real PBCs

– forward-looking analysis of existing limitations of PBC research

...

Franzese and Jusko The Oxford Handbook of Political Economy

Political Kitchin cycles ...

Neo-Kaleckian PBCs

Hinich (2006) The Oxford Handbook of Political Economy

citation

Kaleckian PBCs

Keil and Willett (2004) The Encylopedia of Public Choices

Table 25.2 continued

Comments

...

...

Drazen (2008a) The New Palgrave Dictionary of Economics

Drazen (2008b) The New Palgrave Dictionary of Economics

...

...

...

...

analysis

citation

citation

...

analysis

summary analysis

citation

...

survey

citation

...

...

...

...

...

...

Focuses on budget cycles and results in transition economics

In-depth analysis of theoretical and empirical PBC results

Stresses impact of PBC models on central bank independence

The table distinguishes citation (without explanation or interpretation), summary (with explanation but without interpretation), survey (with explanation and interpretation) and analysis (with own research or empirical results)

...

Drahokoupil (2007) Encyclopedia of Governance

480 Jan-Peter Olters While the PBC literature has only had a relatively marginal influence on mainstream economics, its influence on Ordnungspolitik11-related questions and on the institutional design of free-market economies has been immense. The ensuing debate on depoliticizing governments’ economic decision-making processes – particularly with respect to monetary policies and policy approaches to development economics – reflected (1) the unfavourable description of politicians’ motives, and (2) the PBC models’ inherent results that political manipulations of the economy, especially those effected by ‘opportunistic’ politicians, were suboptimal from a social welfare perspective. Most of the aforementioned encyclopaedia entries refer to the (presumed) inflationary bias of democratic systems. Drahokoupil, in his entry in →Bevir’s Encyclopedia of governance, went one step further and correctly identified the depoliticization of monetary policy as a direct result from the PBC literature, leading an increasing number of countries to opt for independent central banks, frequently in tandem with constitutionally mandated inflation targets (POLITICAL BUSINESS CYCLE, 2007). This lesson also influenced the debate on the degree of independence to be given to the European Central Bank, dating as far back as the 1989 Delors Report, or the 1997 decision to grant the Bank of England full operational independence. Similarly, the fiscal limits enshrined in the Maastricht Treaty should be seen in this context. The consensus view of the economic benefits inherent in public institutions outside the direct control of elected politicians, especially with regard to monetary policy, influenced and defined the institutional design of most of the Central and Eastern European transition economies. From this perspective, the PBC literature has proved unusually influential, also because it has encouraged research efforts into the economic costs and benefits of alternative institutional designs overarching the newly developing free-market economies. At least the presumed inflationary bias of democracies, the principal concern inherent in the myopic PBC models, has been addressed and is reflected in important structural changes to the institutional set-up in many industrialized and (post)transition economies. Refusing to be fooled all the time, and reflecting PBC insights, voters got up, stood up, and demanded better, and more accountable, economic management from their politicians.

NOTES 1 With a view to providing Bill Clinton’s 1992 presidential campaign with an identifiable key message and a programmatic anchor, chief strategist and campaign manager James Carville coined a three-word summary (‘the economy, stupid’) that has helped to immortalize this link, guiding political campaigns ever since. 2 Paldam surveys vote and popularity (VP) functions in the entry ARE VOTE AND POPULARITY FUNCTIONS ECONOMICALLY CORRECT? in →Rowley and Schneider’s Encyclopedia of public choice (2004); see also Paldam, 1981; Nannestad and Paldam, 1994; Marti, 1995. Frey and Stutzer (2002) summarize insights won by the research on happiness. As noted by Paldam (1997) in Mueller’s Perspectives on public choice: a handbook, these functions have ‘an unfortunate instability’, making them ‘not the most reliable tool’. For details on the theoretical and empirical difficulties surrounding

Political business cycles 481

3

4

5 6 7 8

9

10

11

the underlying concept of a social-welfare function, see also Olters, 2000, 2004 and the literature cited therein. Given the lack of clarity on the meaning (and definition) of political economy, this chapter follows Frey’s definition of an economic theory of politics (of which political business cycles are a sub-branch). For a recent discussion on the historical origins of the term political economy (see Waterman, 2002). In Weingast and Wittman’s Oxford handbook of political economy, Hibbs (2006) referred to Downs’s (1957) Economic theory of democracy as representing ‘by a wide margin the most important work on the political economy of electoral democracies published in the twentieth century’. See, e.g., Zarnowitz, 1985, who, in his comprehensive survey on business cycles, referred to PBCs in a single footnote. See, e.g., Franzese, 2002. In response to the lack of conclusive empirical evidence, Franzese and Jusko (2006), in their entry to Weingast and Wittman’s Oxford handbook of political economy, advanced the notion of the ‘context-conditional’ political– economic cycles. Frey and Lau (1968) sought to express government behaviour in terms of both office motivation and ideology but failed to derive explicit solutions, paying tribute to the fact that the formal problem was ‘mathematically extremely complex’. For books, see, for instance, Alesina et al. (1997), Frey (1997), Persson and Tabellini (2000), and Drazen (2000). Principal textbook chapters on PBCs can be found in, e.g., Cukierman et al. (1992), Behrends (2001) and Mueller (2003). Recent survey articles include Frey (1978), Nordhaus (1989), Gärtner (2000), Drazen (2001), Franzese (2002) and Olters (2000, 2004). See, e.g., Vosgerau, KONJUNKTURTHEORIE, in →Albers et al.’s Handwörterbuch der Wirtschaftswissenschaft (1978), van der Ploeg, POLITICAL BUSINESS CYCLE, in →Eatwell et al.’s New Palgrave dictionary of economics (1987), Chrystal, POLITICAL BUSINESS CYCLE, in →Glasner’s Business cycles and depressions: an encyclopedia (1997), Mueller’s Perspectives on public choice: a handbook (Paldam, 1997), Dickens, POLITICAL BUSINESS CYCLES, in →O’Hara’s Encyclopedia of political economy (1999), Frey and Benz, BUSINESS CYCLES: POLITICAL BUSINESS CYCLE APPROACH, in →Snowdon and Vane’s Encyclopedia of political economy (2002) and Blomberg, BUSINESS CYCLES, POLITICAL, in →Darity’s International encyclopedia of the social sciences (2008). Dickens’s contribution to →O’Hara’s Encyclopedia of political economy picks up on this option, interpreting Kalecki (1943) and Boddy and Crotty (1975) the following way: ‘if fascist regimes (rather than democratic governments) implement the expansionary policies, then big business can have the higher profits and sustain the work skills and habits of workers without undermining the discipline and docility of workers’, adding that ‘[i]f workers are strong enough to prevent the establishment of fascist regimes, then big business and rentiers must limit their activities to engineering a political business cycle’ (POLITICAL BUSINESS CYCLES, 2001). There is no direct equivalent in English for this area of ‘institutional’ economics focusing on the analysis of the constitutional and legal framework and related to the structural features of an economy which affect the interaction between economic and political actors and the overall business climate.

REFERENCES Åkerman, J., 1947, Political economic cycles, Kyklos, 1: 2, 107–117. Alesina, A., 1987, Macroeconomic policy in a two-party system as a repeated game, Quarterly Journal of Economics, 102: 3, pp. 651–678. Alesina, A., 1988, Macroeconomics and politics, NBER Macroeconomics Annual 1998, 3, pp. 13–52.

482 Jan-Peter Olters Alesina, A. and Rodrik, D., 1992, Distribution, political conflict, and economic growth: a simple theory and some empirical evidence. In A. Cukierman, Z. Hercowitz and L. Leiderman (eds), Political economy, growth, and business cycles (Cambridge, MA: MIT Press), pp. 23–50. Alesina, A. and Rodrik, D., 1994, Distributive politics and economic growth, Quarterly Journal of Economics, 109: 2, pp. 465–490. Alesina, A., Roubini, N. and Cohen, G., 1997, Political cycles and the macroeconomy (Cambridge, MA: Cambridge University Press). Austen-Smith, D., 2000, Redistributing income under proportional representation, Journal of Political Economy, 108: 6, pp. 1235–1269. Backhaus, J., 2002, Fiscal sociology: what for? American Journal of Economics and Sociology, 61: 1, pp. 55–78. Barro, R. and Gordon, D., 1983, Rules, discretion, and reputation in a model of monetary policy, Journal of Monetary Economics, 12: 1, pp. 101–121. Behrends, S., 2001, Theorien politischer Konjunkturzyklen, Neue politische Ökonomie (Munich: Verlag Vahlen). Blanchard, O. and Fischer, S., 1989, Lectures on Macroeconomics (Cambridge, MA: MIT Press). Blomberg, S. B. and Hess, G., 2003, Is the political business cycle for real? Journal of Public Economics, 87: 5–6, pp. 1091–1121. Boddy, R. and Crotty, J., 1975, Class conflict and macro-policy: the political business cycle, Review of Radical Economics, 7: 1, pp. 1–19. Chappell, H. and Keech, W., 1986, Party differences in macroeconomic policies and outcomes, American Economic Review, 76: 2, pp. 71–74. Chappell, H. and Keech, W., 1988, The unemployment rate consequences of partisan monetary policies, Southern Economic Journal, 55: 1, pp. 107–122. Cukierman, A. and Meltzer, A., 1986, A theory of ambiguity, credibility and inflation under discretion and asymmetric information, Econometrica, 54: 5, pp. 1099–1128 Cukierman, A., Hercowitz, Z. and Leiderman, L. (eds), 1992, Political economy, growth, and business cycles (Cambridge, MA: MIT Press). Downs, A., 1957, An economic theory of democracy (New York: Harper & Row). Drazen, A., 2000, Political economy in macroeconomics (Princeton, NJ: Princeton University Press). Drazen, A., 2001, Political business cycle after 25 years, NBER Macroeconomics Annual 2000, pp. 75–117. Fischer, S., 1977, Long-term contracts, rational expectations, and the optimal money supply rule, Journal of Political Economy, 85: 1, pp. 191–206. Franzese, R. J., 2002, Electoral and partisan cycles in economic policies and outcomes, Annual Review of Political Science, 5: 1, pp. 369–421. Franzese, R. J. and Jusko, K.L., 2006, Political-economic cycles. In B. R. Weingast and D. A. Wittman (eds), The Oxford handbook of political economy (Oxford: Oxford University Press), pp. 545–564. Frey, B., 1974, Die Renaissance der politischen Ökonomie, Schweizerische Zeitschrift für Volkswirtschaftslehre und Statistik, 110: 3, pp. 357–406. Frey, B., 1978, Politico-economic models and cycles, Journal of Public Economics, 9: 2, pp. 203–220. Frey, B. (ed.), 1997, Political business cycles (Cheltenham: Edward Elgar). Frey, B. and Lau, L., 1968, Towards a mathematical model of government behaviour, Zeitschrift für Nationalökonomie, 28: 3, pp. 355–380.

Political business cycles 483 Frey, B. and Stutzer, A., 2002, What can economists learn from happiness research?, Journal of Economic Literature, 40: 2, pp. 402–435. Gärtner, M., 2000, Political macroeconomics: a survey of recent developments, Journal of Economic Surveys, 14: 5, pp. 511–686. Hibbs, D., 1977, Political parties and macroeconomic policies, American Political Science Review, 71: 4, pp. 1467–1487. Hibbs, D., 1987, The American political economy: macroeconomics and electoral politics (Cambridge, MA: Harvard University Press). Hibbs, D., 1992, Partisan theory after 15 years, European Journal of Political Economy, 8: 3, pp. 361–373. Hibbs, D., 2006, Voting and the macroeconomy. In B. R. Weingast and D. A. Wittman (eds), The Oxford handbook of political economy (Oxford: Oxford University Press), pp. 565–586. Hinich, M. J., 2006, The future of analytical politics. In B. R. Weingast and D. A. Wittman (eds), The Oxford handbook of political economy (Oxford: Oxford University Press), pp. 996–1002. Kalecki, M., 1943, Political aspects of full employment, Political Quarterly, 14: 3, pp. 322–331. Keynes, J. M., 1936, The general theory of employment, interest, and money (London: Macmillan). Kitchin, J., 1923, Cycles and trends in economic factors, Review of Economic Statistics, 5: 1, pp. 10–16. Lindbeck, A., 1976, Stabilization policies in open economies with endogenous politicians, American Economic Review, 66: 2, pp. 1–19. Lucas, R., 1973, Some international evidence on output-inflation tradeoffs, American Economic Review, 63: 5, pp. 326–334. MacRae, D., 1977, A political model of the business cycle, Journal of Political Economy, 85: 2, pp. 239–263. Marti, R., 1995, Révélation de la fonction de bien-être du politique et instabilité de la fonction de popularité, Revue Économique, 46: 3, pp. 879–887. Marx, K., 1867, Das Kapital: Kritik der politischen Ökonomie (Hamburg: Otto Meissner, 1883). McKelvey, R., 1979, General conditions for global intransitivities in formal voting models, Econometrica, 47: 5, pp. 1085–1112. Minford, P. and Peel, D., 1982, The political theory of the business cycle, European Economic Review, 42: 2, pp. 253–270. Mueller, D., 2003, Public choice III (Cambridge, MA: Cambridge University Press). Mumford, A. C., 2007, Taxes, sociology of. In D. S. Clark (ed.), Encyclopedia of law and society: American and global perspectives (Thousand Oaks, CA: Sage Publications). Nannestad, P. and Paldam, M., 1994, The VP-function: a survey of the literature on vote and popularity functions after 25 years, Public Choice, 79: 3–4, pp. 213–245. Nordhaus, W., 1975, The political business cycle, Review of Economic Studies, 42: 2, pp. 169–190. Nordhaus, W., 1989, Alternative approaches to the political business cycle, Brookings Papers on Economic Activity, 2, pp. 1–68. North, D. C., 2006, What is missing from political economy? In B. R. Weingast and D. A. Wittman (eds), The Oxford handbook of political economy (Oxford: Oxford University Press), pp. 1003–1009.

484 Jan-Peter Olters Olters, J.-P., 2000, ‘Endogenous ballot decisions and ‘optimal’ fluctuations: an economic model of politics’, doctoral thesis (Montreal: McGill University). Olters, J.-P., 2002, Voters, parties, and the endogenous size of government, American Journal of Economics and Sociology, 61: 1, pp. 79–102. Olters, J.-P., 2004, The political business cycle at sixty: towards a neo-Kaleckian understanding of political economy? Cahiers d’Économie Politique, 46, pp. 91–130. Paldam, M., 1979, Is there an election cycle? A comparative study of national accounts, Scandinavian Journal of Economics, 81, pp. 323–342. Paldam, M., 1981, A preliminary survey of the European theories and findings on vote and popularity functions, Journal of Political Research, 9, 181–200. Paldam, M., 1997, Political business cycles. In D. Mueller (ed.), Perspectives on public choice: a handbook (New York: Cambridge University Press), pp. 342–370. Persson, T. and Tabellini, G., 1990, Macroeconomic policy, credibility, and politics (Chur: Harwood Academic Publishers). Persson, T. and Tabellini, G.,1992, Growth, distribution, and politics. In A. Cukierman, Z. Hercowitz and L. Leiderman (eds), Political economy, growth, and business cycles (Cambridge, MA: MIT Press), pp. 3–22. Persson, T. and Tabellini, G., 1994, Is inequality harmful for growth? American Economic Review, 84: 3, pp. 600–621. Persson, T. and Tabellini, G., 2000, Political economics: explaining economic policy (Cambridge, MA: MIT Press). Persson, T., Roland, G. and Tabellini, G., 2000, Comparative politics and public finance, Journal of Political Economy, 108: 6, pp. 1121–1161. Phillips, A., 1958, The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1861–1957, Economica, 25: 100, pp. 283–299. Rogoff, K., 1990, Equilibrium political budget cycles, American Economic Review, 80: 1, pp. 21–36. Rogoff, K. and Sibert, A. 1988, Elections and macroeconomic policy cycles, Review of Economic Studies, 55: 1, pp. 1–16. Saint-Paul, G., 2000, The ‘new’ political economy: recent books by Allen Drazen and by Torsten Persson and Guido Tabellini, Journal of Economic Literature, 38: 4, pp. 915–925. Samuelson, P., 1954, The pure theory of public expenditure, Review of Economics and Statistics, 36: 4, pp. 387–389. Sargent, T. and Wallace, N., 1975, ‘Rational’ expectations, the optimal monetary instrument, and the optimal money supply rule, Journal of Political Economy, 83: 2, pp. 241–254. Stigler, G., 1973, General economic conditions and national elections, American Economic Review, Papers and Proceedings, 63: 2, pp. 160–167. Taylor, J., 1979, Staggered wage setting in a macro model, American Economic Review, Papers and Proceedings, 69: 2, pp. 108–113. Taylor, J., 1980, Aggregate dynamics and staggered contracts, Journal of Political Economy, 88: 1, pp. 1–24. Waterman, A. M. C., 2002, ‘New political economies’ then and now: economic theory and the mutation of political doctrine, American Journal of Economics and Sociology, 61: 1, pp. 13–51. Wolfe, A., 1944, Economy and democracy, American Economic Review, 34: 1, pp. 1–20. Zarnowitz, V., 1985, Recent work on business cycles in historical perspective: a review of theories and evidence, Journal of Economic Literature, 23: 2, pp. 523–580.

26 Nonlinear business cycles in recent dictionaries Giorgio Colacchio

26.1 INTRODUCTION As Kaldor (1940, pp. 79–81) argued in his ‘Model of the trade cycle’, if one regards investment and saving functions as linear, ‘as in the absence of further information one is inclined to do’, there are two possible outcomes. The model can give rise to an unstable economic equilibrium, but since ‘recorded experience does not bear out such dangerous instabilities, this possibility can be dismissed’. Alternatively, a stable equilibrium may result, implying ‘more stability than the real world appears, in fact, to possess’. Since these outcomes cannot be justified, ‘we are left with the conclusion that the I(x) and S(x) functions cannot both be linear, at any rate over the entire range. And, in fact, on closer examination, there are good reasons for supposing that neither of them is linear.’ Kaldor’s statement stands, perhaps, as one of the first clear acknowledgements of the limit involved in linear modelling of the business cycle. In fact, linear models – as exemplified by the multiplier– accelerator formulation proposed by Samuelson (1939) – may generally describe only diverging or converging oscillations away from, or tending to, the equilibrium point; only in very special cases they can guarantee steady oscillations. Kalecki faced these issues in his earlier works which were dedicated to the business cycle, and his position is of particular interest since the problem of (non)linearity dominated all his theoretical production devoted to the formal investigation of the dynamics of capitalist economies. In his 1935 contribution he presented a linear model that, although based on a first-order delayed differential equation, could guarantee sustained oscillations only for a precise configuration of parameter values (that the author, however, considered ‘to be nearest to actual conditions’: Kalecki, 1935, p. 336).1 After Frisch and Holme’s (1935, p. 239) cogent criticism that ‘there is something artificial in fixing, by convention, the values of the constants in such a way as just to obtain an undamped solution’, Kalecki initially tried to introduce nonlinear functions in his 1937 paper (in a similar way to Kaldor a few years later), then, in his subsequent works (see, for instance, Kalecki, 1954), turned back to the so-called impulse–propagation approach already suggested by Ragnar Frisch (1933), according to which the economic system would be characterized by damped oscillations revived by erratic exogenous shocks (a sort of exogenous ‘source of energy’, in Frisch’s words, pp. 27 ff.). After the

486 Giorgio Colacchio ceilings and floors model proposed by Hicks in 1950, which introduced nonlinear elements separating trend and cycle in an unconvincing way, relevant improvements in the nonlinear theory of the business cycle were offered by Goodwin in various contributions during the 1950s, first by means of models exhibiting limit cycles (1950, 1951), and later in a seminal work (Goodwin, 1967) where he presented a nonlinear model that explained at the same time, under a few ‘classical assumptions’, both growth and cycles. By the early 1970s a first stage in nonlinear economic dynamic modelling had enabled researchers to conclude (1) that linear systems can explain persisting oscillations only in very special and hence implausible cases – purely imaginary eigenvalues in continuous-time systems and with modulus equal to 1 in discrete-time; and (2) that nonlinear systems may generate persisting cyclical behaviour, taking into account at the same time both cycle and trend. While some pioneers set out along this road, neoclassical economists followed the approach suggested by Frisch, and assumed stochastic exogenous shocks affecting an economic system postulated to be (log)linear and intrinsically stable. Meanwhile, the meteorologist E. N. Lorenz (1963) found that for a large range of parameter values a three-dimensional nonlinear continuous system exhibits a very complicated and rich behaviour, displaying sensitive dependence on initial conditions, aperiodic motion and trajectories converging towards those ‘strange objects’ that Ruelle and Takens (1971) later named strange attractors. It soon became apparent that a large class of continuous models of dimension three or higher could explain this kind of amazing behaviour, so that it should be considered, in a sense, ‘generic’. Moreover, May (1976) found a similar complex behaviour in one-dimensional nonlinear discrete maps, in the form of sequences of bifurcations, sensitive dependence on initial conditions, ergodic behaviour, aperiodicity, etc. These are all hallmarks of what was later defined as chaotic motion. It soon became clear that these features are common to many one-dimensional unimodal maps. These results in the early 1980s were well understood by the community of applied mathematicians; we find them condensed in Guckenheimer and Holmes’s 1983 book, which still represents a mandatory reference for the study of nonlinear dynamical systems. The reception of these results in economics began in the early 1980s thanks to Day’s 1982 and 1983 pioneering contributions, which mark the beginning of a second phase in the history of nonlinear economic dynamics. It became clear that once nonlinearities are taken into account, a more or less regular cycle, also in the form of a limit cycle, is nothing but a trivial case of more complex and richer dynamics that nonlinear systems may exhibit. Progressively, a shift of emphasis from cycle studies to this new ‘complex’ dynamics took place (and correspondingly the interest in economic crises, as a phase of the cycle, soon disappeared). This led to a change in the main problems faced by researchers, as is documented in the historical succession of ‘classic’ economic dynamics handbooks that condensed the current state of knowledge on the subject. The first edition of Gandolfo’s (1971) Economic dynamics: methods and models ended with the analysis of Goodwin’s ‘Growth cycle’;2 in Medio’s (1978) Teoria non lineare del ciclo economico and in

Nonlinear business cycles 487 Chiarella’s (1990) Elements of a nonlinear theory of economic dynamics, the structural instability of struggle-for-life models was acknowledged and the main emphasis fell on limit cycles and bifurcations.3 With the second edition in 1993 of H. W. Lorenz’s Nonlinear dynamical economics and chaotic motion, the new paradigm of economic dynamics was fully established (as is suggested by the book’s title), and all the tools necessary for the investigation of nonlinear systems are illustrated. An unavoidably interdisciplinary approach is implied, since the new analytical requirements are scattered in various fields of research, such as measure theory for fractal dimension of strange attractors and computer science for the numerical computation of trajectories, which generally cannot be determined analytically. To sum up, we can say that while the main problem used to be the specification of models exhibiting persisting oscillations, now the task was mainly to ‘manage’ the huge complexity emerging from this new and obscure nonlinear world, with all its connected problems: the explanatory power of these models, the relation between stochastic and deterministic representation of economic systems, the intricate relation between theoretical model previsions and actual time-series data, and so on. A long road had been covered since Hicks’s definition of economic dynamics as that part of economic theory where ‘every quantity must be dated’ (Hicks, 1946, p. 115) and Frisch’s (1933, p. 1) definition of dynamic theory as that ‘theory that explains how one situation grows out of the foregoing. In this type of analysis we consider not only a set of magnitudes in a given point of time and study the interrelations between them, but we consider the magnitudes of certain variables in different points of time, and we introduce certain equations which embrace at the same time several of these magnitudes belonging to different instants’. Along this road, according to some authors (see, for instance, Rosser and Dore, 2007), a true Kuhnian paradigmatic shift occurred. In the dictionary entries we are analysing, this theoretical change – which can be conveniently labelled as the transition from the study of nonlinear cycles to that of complex dynamics – is apparent, as is the consequent shift of focus towards the new related problems we have recalled above. While in the earlier entries, as we will see, the main stress still falls on more or less regular cycles, in the latest ones the scene is almost completely dominated by the new issues and techniques involved in the study of nonlinear dynamical systems, and by the problematic relation between theoretical outcomes and actual time-series data.

26.2 NONLINEAR BUSINESS CYCLE IN BUSINESS CYCLE ENTRIES: ESCAPING FROM THE LINEAR WORLD Early references to nonlinear business cycle can be found in Hans-Jürgen Vosgerau’s long entry KONJUNKTURTHEORIE for the →Handwörterbuch der Wirtschaftwissenschaft (1978, Vol. 4). After offering a long description of the empirical aspects of the business cycle, it devotes a section to a brief historical reconstruction of its theoretical treatments. Vosgerau takes into account both classical and neoclassical schools, and pre- and post-Keynesian contributions are

488 Giorgio Colacchio also briefly sketched (in particular, Frisch’s ‘impulse–propagation’ approach). However, as the author states, given the increasing mathematical formalization of recent business cycle models, a specific section must be devoted to their analysis. Here we arrive at an intriguing argumentation (p. 489). According to Vosgerau, this increasing formalization has led the theory of the business cycle a long way from Samuelson’s original multiplier–accelerator formulation: the author particularly stresses the fact that more recent models cannot explicitly be solved and may only be analysed through computer simulations, employing a formal approach ‘borrowed from cybernetics’. This situation implies two main risks, however: the first is that, in order to get around the technical difficulties involved with these models, scholars may be induced to restrain their analysis to formally simpler (i.e. explicitly solvable) mathematical systems; the second is that the increasing complexity of business cycle models entails increasing communication difficulties between economic researchers and economic policy authorities. In the section dedicated to business cycle models, Vosgerau comes back once more on these points, restating that ‘for complex systems’4 the explicit determination of solutions is ‘very difficult if not impossible’ (p. 490): specifically, the main difficulties arise from nonlinear formulations that may only be qualitatively analysed – the main reference is to the Poincaré–Bendixon theorem – in phase space diagrams, while quantitative solutions may only be obtained, as the author had already said, by performing computer simulations, with parameter values exogenously assumed and/or obtained from econometric estimates.5 After these introductory remarks, Samuelson’s model is dealt with in great detail: the author shows how it can guarantee sustained oscillations (complex eigenvalues with modulus 1) only in a very special case, consequently concluding that it is not suitable for explaining the persistence of business cycles. After having reported Hicks’s ceiling and floor models, Vosgerau arrives at Goodwin’s ‘Growth cycle’ contribution. As the author states at the beginning, this model represents a useful example for illustrating the use of phase diagrams technique, ‘that, theoretically based on Poincaré–Bendixon mathematical theory, allows the qualitative analysis of nonlinear differential equations’ (p. 495). Then, after having described Goodwin’s model at great length, the author concludes by stating that it stands as a concise explanation of ‘the core of cyclical relation between employment, growth and income distribution, so removing the various ambiguities that have grown in the course of the theoretical debate inside underconsumption, Marxist and other theories. Moreover, its fecundity is also given by the fact that it may be modified and extended, for instance, taking into account a flexible technology and real and expected inflation’.6 It is useful to stress that no reference to the structural instability of Goodwin’s model is made. In the following sections Vosgerau reports other models of the business cycle that, taking into account further variables, like monetary and public sectors,7 international relations, etc., extend the analysis of economic fluctuations; nevertheless, no other explicit reference to nonlinearity is present. Manfred Neumann’s entry KONJUNKTURTHEORIE for →Gabler’s Handwörterbuch der Volkswirtschaft (1980) is a sort of ‘condensed’ version of Vosgerau’s entry and presents the same features we have already reported above. The limits

Nonlinear business cycles 489 of linear formulations are well highlighted with reference to Samuelson’s multiplier–accelerator model (pp. 587–590), and a special section (pp. 593–595) is devoted to Goodwin’s ‘Growth cycle’ model (dealt with in considerable detail); in this case too the author points out that, despite its starkly simplified framework, this model represents a valid formulation of the core of income distribution and economic growth relation, although, as in Vosgerau’s entry, there is no reference to its structural instability. The entry on CICLO by Alfredo Medio in →Lunghini’s Dizionario di economia politica (1985, Vol. 10) is easily one of the longest entries on cycles published in recent years.8 At the very beginning of the entry we find a definition of the business cycle as the ‘oscillation of economic activity as a whole’ (p. 11), with the clarification that while in physics there is a precise distinction between cycles and fluctuations – where only the former indicate the regular alternation of expansionary and contractionary phases – in economics cyclical behaviour does not require perfect regularity. According to Medio, there are two different theoretical insights about the causes of the recurrence (and persistence) of the business cycle. A first explanation relies on exogenous (cyclical) impulses on the economic system (which otherwise would be nearly stable). A second explanation, instead, focuses on the endogenous nature of oscillations: as the author says, it is more difficult to rigorously account for oscillations of constant amplitude that exclusively depend on the properties of the system itself: in fact, ‘only in recent times have economists been able to work out business cycle models with such peculiarity’ (p. 12). An intermediate way, which can be traced back to Wicksell’s contribution, consists of assuming converging oscillations (i.e. cycles with a decreasing amplitude) kept alive by exogenous shocks. ‘The difficulty with this theory is to show that the combination of erratic (non-cyclical) shocks with a damped system may result in steady oscillations’ (p. 12). Note that Medio will deal with this theory, ‘whose theoretical bases may be traced back to (mechanical) clock theory’, in the section dedicated to Kalecki and Frisch’s contributions (pp. 52–53). After a long historical reconstruction,9 in the section devoted to ‘contemporary theory’, and after having explained the classical Hicks–Samuelson multiplier– accelerator model, Medio dedicates a subsection to ‘the problem of nonlinearity’ (pp. 53–55). The stress falls on the fact that linear models may generate steady oscillations only in very special cases, while nonlinear models can exhibit persistent oscillations; furthermore – and this is an intriguing point that we will find also in other dictionary entries by Medio – according to the author, empirical data would confirm that structural coefficients really change over the cycle (p. 54). As is stated, this latter point ‘was not neglected by economists, and particularly from the 1950s on, a large number of models which dropped the linearity assumption appeared in the literature’ (p. 54). Medio recalls Hicks’s ‘rather rough’ ceilings and floors model (and the more satisfying Kaldor, 1940 proposal that explicitly assumed nonlinear formulation for some relevant functions), stating, however, that only Goodwin, in his various contributions during the 1950s, was able to rigorously describe an economic system characterized by endogenous persistent oscillations (generated by limit cycles). Goodwin’s 1967 contribution is mentioned as ‘an interesting

490 Giorgio Colacchio analytic formulation of the classical business cycle’ (p. 55). In the concluding remarks, we read that theoretical difficulties connected with the analysis of nonlinear business cycles arise from the huge complexity involved in the formal investigation of multidimensional nonlinear systems; a main task of economic research, consequently, would be that of tackling these problems. Medio’s other entry on TRADE CYCLE for →The new Palgrave dictionary of economics (1987, Vol. 4) is interesting since, through a comparison with his 1985 entry, one can gain a good idea of the paradigmatic shift that had by now occurred. After an historical reconstruction of the theories of business cycles, which is a condensed version of the one found in his 1985 entry, Medio focuses on a problematic point10 of the ‘contemporary phase’ of cycle theory of Keynesian inspiration: if the economic system were characterized by regular periodic fluctuations, economic agents would sooner or later notice the periodic character of the dynamics of the system and learn to calculate the amplitude and frequency of the cycles. This in turn would lead to a revision of their expectations. The behavioural hypotheses of the model – on which the cyclical motion of the system depends – would no longer be tenable and the model itself would have to be reformulated. Incidentally, this criticism of the deterministic models of the cycle is perhaps the most important element of truth in the theory of rational expectations. (p. 669) Both this theoretical criticism, along with ‘economists’ overwhelming preoccupation with equilibrium’ (p. 670), and the difficulties involved in dealing with nonlinear dynamical systems, would be at the basis of the revival of ‘what we could call the “static prejudice” in economics, of which the most explicit expression is perhaps “equilibrium business cycle theory”’ (p. 669, emphasis added).11 Nevertheless, empirical observations suggest that economies fluctuate with no rest, and consequently the study of nonlinear models constituted a first necessary step into the mysterious and hitherto inaccessible realm of nonequilibrium dynamics [. . .] equilibrium states, stable and unstable and even limit cycles have now been revealed as rather special configurations in a much more complex and morphologically rich theoretical universe. As soon as the linearity assumption has been dropped, even a simple model may exhibit a very complicated behaviour. (p. 670, emphasis added) To the objection that some of these theoretical developments may have little (or nothing) to do with economics (and with actual economic systems), Medio answers that aperiodic fluctuations – like those emerging from chaotic systems – would be more realistic than the usual assumptions of stable equilibria.12 The framework of Terenzio Cozzi’s entry on CICLI ECONOMICI for →Treccani’s Enciclopedia delle scienze sociali (Bedeschi, 1991, Vol. 1) is very similar to that

Nonlinear business cycles 491 of Medio (1985) which we have examined above, although at the beginning we find a very intriguing ‘ontological’ argumentation. Cozzi, in fact, starts identifying two different meanings in Schumpeter’s characterization of the business cycle as an immanent feature of capitalistic economies: According to the first one [. . .] the normal economic development of these systems takes an oscillating form. The second sense, which is much more meaningful, states that the cyclical behaviour represents the very essence of the capitalist development process, namely a constitutive and ineradicable element of it. (p. 721) The most relevant consequence connected to the latter meaning is that the theory of economic development and that of the business cycle should be conceived on both theoretical and conceptual grounds, since the only phenomenon under examination would be represented by the cyclical development of capitalistic economic systems.13 Furthermore, a better understanding of these complicated dynamics also requires taking into account the role played by other variables, such as social, political and institutional factors, and the intricate relationships between them. Consequently, the analysis of cyclical development thus encompasses – as was the case in Marx’s and Schumpeter’s pioneering contributions – the entire evolution of capitalism and illustrates the outcome of its process. After that, in the following sections we find an historical reconstruction of the theories of the business cycle (also in this case with a particular emphasis on crises theories), and an exhaustive discussion of the various matters we have already encountered in Medio’s entry: exogenous vs. endogenous approaches; the general limit of linear specifications (that only in ‘highly implausible cases’ (p. 727) may guarantee sustained oscillations); the various problems that characterized Hicks’s ceilings and floors model, with a particular stress on the fact that since the introduction of upper and lower bounds turned the original model into a nonlinear one, the separation between trend and cycle was not mathematically correct,14 etc. The last subsection is devoted to Goodwin’s ‘Growth cycle’ model: Cozzi recognizes that it provides an endogenous explanation of both cycle and trend, although its structural instability is particularly emphasized.15 Extensions to the model which render it structurally stable are cited (for instance, the reader is referred to Medio’s contributions), but according to Cozzi these improvements are more formal than ‘substantial’. More specifically, the explanation of the lower turning point of the cycle still takes place in an excessively mechanical way (p. 730). A point of interest is represented by Cozzi’s opinion that the outcome of prey–predator models would be in line with the views of Marx and Schumpeter of the capitalistic economy as a structurally unstable system ‘subject to continuous changes, somewhat in a very abrupt, and consequently discontinuous, manner’ (p. 731). This exposition, however, may lead to confusion since here Cozzi is clearly referring to a nonmathematical meaning of structural instability. Moreover, his further reference to the fact that ‘in order to consider these features some scholars are trying to apply

492 Giorgio Colacchio the mathematical catastrophe theory, developed by René Thom in the study of those systems which are continuously evolving but subject to sudden shift in behaviour’ (p. 731), may generate further confusion. Actually, the impression one gets is that here Cozzi is referring more to the non-specialistic reception of Thom’s theoretical contribution – which was widespread at that time well beyond the scientific community – rather than to a specific mathematical branch of bifurcation theory. The opposition between the exogenous and endogenous approaches to the theory of the business cycle (the former related to Frisch–Slutsky–Kalecki’s contributions, and the latter dating back to Marx’s and Schumpeter’s pioneering works and in modern form to nonlinear models, with a particular reference to Goodwin’s seminal 1967 paper) is present in the various entries that offer an historical reconstruction of the matter, for instance in Andy Mullineaux’s entry on BUSINESS CYCLES for →Deane and Kuper’s Lexikon of economics (1988) and in Franck Portier’s CYCLES ÉCONOMIQUES for →Jessua et al., 2001, Dictionnaire des sciences économiques. According to Mullineaux, the question of ‘whether the business cycle is something that would die out in the absence of external shocks, or whether it is endogenous to the economic system’ (p. 32) is still unresolved; furthermore, Mullineaux argues that ‘nonlinear models have also commonly treated business cycles and growth theory as separable’ (p. 32), but here – also in the light of the references given at the end of the entry – it is not clear what kind of nonlinear models the author is referring to. Anyway, at the end of the entry the stress falls on the role played by other variables in the explanation of the cyclical dynamics of capitalist economies (a point that we have already found in Cozzi’s and Vosgerau’s entries), and particularly on the role of political authorities and then on the so-called ‘electoral economic cycle’. Portier, instead, after having recalled Goodwin’s nonlinear contributions, focuses on the ‘lack of microeconomic foundations and [. . .] the relatively use of ad hoc assumptions’ (p. 253) that would characterize endogenous explanations of the business cycles. Nevertheless, Benhabib and Day’s seminal 1982 paper on chaotic dynamics in a model à la Diamond with overlapping generations, and Grandmont’s 1985 paper on cyclical behaviour in a general equilibrium framework, are cited as microeconomic-based models of endogenous business cycles. As far as we know, this is the only entry where an eclectic approach is recognized in Azariadis’s 1981 contribution; here, according to Portier, although the structural economy is characterized by converging stochastic trajectories, cycle would be kept alive by self-fulfilling agents’ expectations formed on the basis of exogenous (in the sense of not depending on the ‘economic fundamentals’) signals and information. In this case, agents’ expectations would play the role of Frisch– Slutsky’s exogenous shocks. In this sense, the model results in a hybrid view and is a cross between exogenous and endogenous approaches.

Nonlinear business cycles 493 26.3 NONLINEAR BUSINESS CYCLES IN ENTRIES RELATED TO ECONOMIC DYNAMICS: INTO THE MYSTERIOUS REALM OF NONLINEAR DYNAMICS While J. A. Kregel’s entry on ECONOMIC DYNAMICS for →Deane and Kuper’s Lexicon of economics (1988) offers a very narrow presentation, concluding – after a short historical reconstruction – that ‘economics still has no accepted definition or theory of dynamics’ (p. 107), in the entries by Benhabib, Medio and GabischLorenz in Glasner’s →Business cycles and depressions (1997) we find more technical analyses showing how the ‘new paradigm’ of this field of research – with all its related tools of investigation – was at that time fully shaped. As we will see, in these entries the (problematic) relation of theoretical model predictions with actual economic data, and then the question of the general explanatory power of nonlinear models, is particularly highlighted.16 It should be noted that the authors of these entries are also the scholars who produced the main theoretical advances in this field of research. Benhabib, in his entry on CHAOS AND BIFURCATIONS, particularly emphasizes that chaotic dynamics may also occur in standard equilibrium models, that is, in overlapping-generations models and in optimal-growth models with infinitely lived agents. Anyway, the crucial point of the empirical relevance of chaotic dynamics is well examined at the end of the entry. As the author says, ‘Determining the empirical relevance of chaotic and cyclic dynamics for business cycles remains a difficult subject’ (p. 92), particularly because long time-series are needed, and ‘this suggests that estimating theoretical models and then checking to see whether the estimated parameters fall within the range that can generate chaotic dynamics may be a more fruitful approach’ (p. 92). It is worth noting that this is an important point about the relation of theoretical (nonlinear) models and empirical data; in the light of the huge difficulties encountered in detecting chaos in actual time-series,17 it would be more fruitful, according to Benhabib, to estimate parameters of theoretical models in order to check if their values fall into the range that can generate chaotic dynamics. Medio’s entry on CONTINUOUSTIME MODELS OF CHAOS is mainly dedicated to discussing mathematical tools for studying and detecting chaotic systems (fractal dimension of the attractors, Lyapunov exponents, Poincaré maps, etc.). The discussion, which is related to the discrete-time vs. continuous-time representations, is intriguing, i.e. the issue of ‘the “true” nature of time, or the continuity of reality, whatever the latter concept may mean’ (p. 93, emphasis added). As the author states, ‘at any rate, the crucial point is not whether the system is “really” discrete or continuous, but whether its idealized representation (and its dynamic implications) lead to conclusions that accurately portray the workings of the real system’ (p. 95, emphasis added). G. Gabisch and H.-W. Lorenz’s entry on NONLINEAR BUSINESS-CYCLE THEORIES also presents a technical treatment of the subject. After having expounded a simple reformulation of Kaldor’s 1940 model (which is considered a ‘didactical model’) by means of bifurcation theory, we find some interesting considerations dedicated to ‘irregular oscillations’. The authors maintain that ‘the real domain of nonlinear cycle theory consists of dynamic models that can endogenously generate bounded and irregular

494 Giorgio Colacchio dynamic patterns resembling the motion known from stochastic models’ (p. 491). We can see here a clear demarcation of this field of research, within which a regular cycle (think, for instance, of a limit cycle, as in Kaldor’s mathematical reformulation) is of minor relevance (and may now be regarded as a trivial case of a more general complicated dynamics). After stating that if ‘for the purpose of this outline it suffices to say that a chaotic dynamical system possesses trajectories whose evolution appears to be stochastic though the system is completely deterministic’ (p. 491), the relevance of chaos theory for business cycle analysis is taken into account. The authors refer to three main features (note the intriguing ‘didactic’ use of chaos theory suggested at the end of the quotation below: (1) it avoids invoking exogenous factors to explain irregularities; (2) given the sensitive dependence on initial conditions, it has strong implications for forecasting business cycles; (3) ‘[c]haotic motion can indicate a misspecification of a business cycle model when empirical irregularities appear as a kind of noise and when the model generates highly irregular trajectories. Thus, chaotic nonlinear models can be very useful for didactical purposes, because they allow for economic explanations of irregular oscillations’ (p. 491).

26.4 NONLINEAR BUSINESS CYCLES IN DICTIONARIES OF THE SOCIAL SCIENCES: TOWARDS OTHER LANDS? References to nonlinear business cycle theory can be found in various dictionaries that are not directly devoted to economics. For instance, Steve Keen’s entry on NONLINEAR SYSTEMS for →W. Darity’s International encyclopedia of the social sciences (2nd edition, 2008, Vol. 5), refers exclusively to economic theory. The author starts by recognizing that since ‘all real world systems are nonlinear [. . .] any model that omits these nonlinearities, either by assuming linear behavioural functions or by assuming that a variable remains constant in order to avoid interactive nonlinearities, necessarily reduces its capacity to model the actual economy’ (p. 523). After that – very similarly to Medio’s argument about ‘static prejudice’ – the author states that, given the technical and formal complications involved in nonlinear modelling, ‘scientists in general therefore had a strong incentive to remain in the linear realm’ (p. 523). In this entry, too, we find a particular emphasis on the scarce empirical evidence concerning nonlinearities: ‘many econometric methods to test economic series for nonlinear data structures [. . .] exist, though their robustness at determining whether nonlinear causal structures exist in noisy linear time series is limited’ (p. 524).18 The entry concludes by raising two intriguing problems that may create obstacles for the theoretical development of nonlinear dynamical economics. The first consists of economists’ inclination to consider economic systems as being dominated by stable equilibrium configurations (this is once again the economists’ ‘static prejudice’ argument). More interestingly, the ‘second generic problem is best captured by John von Neumann’s (1903–1957) apocryphal aphorism that a general theory of nonlinear phenomena is akin to a “theory of non-elephants”: while linear analysis is well defined, the

Nonlinear business cycles 495 variety of nonlinear phenomena is so enormous that it bedevils systematic analysis’ (p. 524). While Aydin A. Cecen too, in his entry on CHAOS THEORY for →W. Darity’s International encyclopedia of the social sciences (2nd edition, 2008, Vol. 1), emphasizes the weak empirical evidence of chaotic motion, which has been demonstrated to prevail only in few economic time-series data, Mark A. Runco’s entry on the BUTTERFLY EFFECT for →W. Darity’s International encyclopedia of the social sciences (2nd edition, 2008, Vol. 1) gives an account of the dissemination of the new ideas related to nonlinear models that would lead the whole community of researchers to adopt a sort of nonlinear reasoning: To simplify, what appears to be chaotic may in fact reflect a nonlinear pattern in which seemingly negligible events have dramatic impact. This process is chaotic neither in the sense of being unpredictable, nor in the sense that the contributing factors cannot be determined. Instead, causes are related to effects in a nonlinear fashion, and although the results may appear to be chaotic, they are in fact deducible if nonlinear reasoning is applied. Physicists, biologists, epidemiologists, ecologists, and psychologists now consider the butterfly effect, chaos, and nonlinear reasoning when making certain predictions. (pp. 413–414, emphasis added) Perhaps David Mckie’s entry on CHAOS AND COMPLEXITY THEORY for R. L. Heath’s Encyclopedia of public relations (2005, Vol. 1) is an example of this nonlinear reasoning. As Mckie says, in a discussion referring to the area of public relations but which could be easily extended to economics, ‘chaos highlights conventional science’s lack of engagement with complicated systems that exhibit awkward nonlinear features and disturbingly unpredictable real-life turbulence’ (p. 121), with the main consequence that the outcomes can never be completely controlled.

26.5 CONCLUDING REMARKS In the chronological succession of the entries that we have taken into account, the change of emphasis that in the introduction we briefly labelled as the shift from (nonlinear) business cycle to ‘complex’ economic dynamics is well evident. While the earliest entries we examined focus on the main limits of linear formulations (with a particular reference to Samuelson’s multiplier–accelerator model), generally ending up with the analysis of Goodwin’s seminal 1967 paper, in the later contributions the ‘new’ paradigm of economic dynamics is by now fully established, and all the items and the related investigative tools of (nonlinear) dynamical systems theory which are applied to economics are fully investigated. In this light it is significant that the early references to nonlinear business cycles can be found in entries generally dealing with business cycles (within which a considerable share of space is still taken, as we have seen, by the analysis of crises as a distinctive

496 Giorgio Colacchio phase of the cycle), whereas for entries specifically dedicated to nonlinear economic dynamics, we have to wait for the theoretical developments of the mid-1990s to be digested. In the latter entries, crises are often not mentioned at all. What emerges from these latter entries is that this shift has involved a change in the very meaning of the business cycle itself: now the dynamics of economic systems are generally conceived as being characterized by a richer, more complex behaviour, rather than being the ‘simple’ outcome of a (more or less) regular alternation of two (or four) phases. As is evident, the oscillations generated by a chaotic system are something quite different, even on a conceptual ground, from the idea of cycle which prevailed in the history of economic analysis from the early macroeconomic models of the 1930s to those of the late 1970s. One can also say that while for some time the problem was to define a model that could generate sustained oscillations, now researchers have to tackle models that, in a sense, show too much. We conclude by underlining some problematic features that transpire only in part from these entries and that, more generally, are typical problematic issues of economic dynamics. The first one, which we have encountered in the earlier entries as well as in the most recent ones (see, for instance, the entries by Vosgerau and by Benhabib), lies in the relationship between time-series data and theoretical model outcomes. Since nonlinear models must be analysed also through computer simulations, the specification of parameter values plays a fundamental role. This fact involves a crucial relationship between actual data (obtained throughout econometric estimates), theoretical models and economic previsions, especially considering that, for most of these models, the exact value of (at least) one parameter may discriminate between dramatically different dynamic behaviours; one only has to think about the sequences of period-doubling/period-halving bifurcations, which have also been found in continuous-time models (see, for instance, Colacchio et al., 2007), to hysteresis, to periodic cycles appearing inside chaotic regions (the so-called ‘windows’), etc. These are all features that depend on precise constellations of parameter values. Goodwin’s statement that, while a mathematician may assume a parameter to be exactly zero, such an hypothesis is not permissible in applied or empirical analysis (see note 15), still stands as a fundamental warning about these aspects. On a more general epistemological ground, there is another problematic point that curiously is not present – with the partial exception of Medio’s reference to model time-specification19 – in the entries we have examined, and which relates to the general explanatory power and the robustness of (nonlinear) economic models per se. On this matter the answer by Alligood et al. (1996) to the question ‘Why study models?’ may be enlightening: Every model of a physical process is at best an idealization. The goal of a model is to capture some features of the physical process. [. . .] The question to ask about a model is whether the behavior it exhibits is because of its simplifications or if it captures the behavior despite the simplifications. Modeling reality too closely may result in an intractable model about which little can be learned. Model building is an art. (p. 3)

Nonlinear business cycles 497 The point is that in economics (and generally in social sciences), model dimension, time specification, number and value of parameters, etc. are generally decided with a large margin of arbitrariness. Consequently, there is a high risk of leaving out relevant features that once considered would lead to quite different results.20 In this light, Medio’s argumentation we have reported above (see Section 26.3), regarding the choice between discrete or continuous time specification, seems to run round in a circle, since we cannot only rest upon the correspondence between model theoretical outcomes and ‘the working of the real system’ in order to decide the better time representation for describing economic systems (also in the light of the huge problems encountered in detecting chaotic motion from actual timeseries data).21 Nevertheless, linear models are affected by these problems to an even greater degree as they represent a very special case of more general nonlinear specifications. The evidence that there is no valid reason for assuming that economic reality ‘is linear’ stands as the strongest argument in favour of nonlinear frameworks. Further theoretical developments, together with further progress in computer science, will provide tools for analysing more complex and complete models that will probably be dealt with in future entries dedicated to this subject. If we take this ‘nonlinear reasoning’ for granted, we can paraphrase Von Neumann’s dictum by saying that if the theory of nonlinear economic dynamics stands as the theory of ‘nonelephants’, the theory of linear economic systems may now be recognized as the theory of ‘non-non-elephants’.

NOTES 1 This conclusion was valid in the light of the knowledge, at that time, of the mathematical proprieties of these kinds of equations. We now know, however, that also a linear delayed differential equation of the first order can give rise to cyclical steady solutions for a large range of parameter values, because bifurcations may occur in the time-lag parameter. For a general introduction to these equations – still largely neglected in economic dynamics – see MacDonald, 1989; for an application to Kalecki’s model, see Szidłowski, 2002. 2 With the exception of a last chapter dedicated to a didactic exposition of delayed differential equations. 3 This shift is also clearly documented in the successive handbooks published by some of these authors. For instance, the reader is invited to compare the first edition of Gandolfo’s handbook we have recalled above with that of 2009 reported in the references, or Medio’s book with one of his later contributions on chaotic dynamics in economics (see, for instance, Medio, 1995). 4 The impression one gets is that here Vosgerau is using this expression in a loose sense. 5 As we will see in the following, with this reference to parameter values estimation, Vosgerau is anticipating a matter that will become of central interest in the following theoretical development of nonlinear business cycle (see Section 26.3). 6 Here the author explicitly refers to Desai’s (1973) contribution. 7 A particular emphasis is given to the endogenous role played by the public sector in the explanation of the business cycle. 8 This dictionary carries only 40 entries, all discussed at great length; see Chapter 1, note 11.

498 Giorgio Colacchio 9 It is interesting to point out that about half of the entry is dedicated to crises rather than to cycle theory. Moreover, as we have already pointed out, the link between crises and cycle will progressively disappear in the entries of successive years. 10 This issue is also known as the ‘temporal arbitrage’ problem. 11 An example of this ‘static prejudice’ is certainly represented by the Michel Dotsey and Robert G. King entry on BUSINESS CYCLES for →The new Palgrave dictionary of economics (1987, Vol. 1), which is entirely dedicated to rational expectations models of the business cycle, and particularly to the extensions of Lucas’s seminal 1972 model. Note that the contrast between the explanations of the business cycle in the form of deterministic nonlinear (chaotic) models on one side and as log-linear models subjected to stochastic exogenous shocks with agents with rational expectations on the other, is nothing but a reproposition in modern terms of the antagonist explanations advanced in the 1930s, which we have referred to in Section 26.1 above. 12 The fact that this entry stands unchanged in the second edition of →The new Palgrave dictionary of economics (2008, Vol. 8) may be explained in the light of that paradigmatic shift we have repeatedly recalled. Actually, the various theoretical advances in nonlinear economics that took place between the two editions could no longer be recorded in entries generically dealing with the ‘trade cycle’; now, instead, they must be considered in entries specifically devoted to economic dynamics (like those we are going to examine in the following section). 13 This point is clearly and concisely stated by R. M. Goodwin in his entry on GROWTH AND CYCLES for →The new Palgrave dictionary of economics (1987, Vol. 2) in the following way: ‘cycles can exist without growth and, conversely, growth can exist without cycles. The special problem posed by an economy is that they are so closely interconnected that it is quite improper to analyse one without the other’ (p. 574). 14 As the author points out, in this case the ‘principle of superposition’ is no longer valid, concluding that ‘if one thinks that nonlinearities are a distinctive features of economic systems [. . .] the trick of adding a trend to a cyclical dynamics may not be considered very convincing’ (p. 728). 15 As Goodwin frankly recognized about this kind of model, in his entry on PREDATOR– PREY MODELS for →The new Palgrave dictionary of economics (1987, Vol. 3, p. 963), ‘a mathematician may assume, as he does, a parameter to be exactly zero, but it is impermissible in an applied or empirical analysis like that of animal populations’. 16 On this point Chih Ming Tan’s entry ECONOMIC GROWTH NONLINEARITIES for →The new Palgrave dictionary of economics (2nd edition, 2008, Vol. 2) should be mentioned. Its main concern is the empirical evidence of sensitive dependence on initial conditions for the explanation of different (persistent) growth regimes among countries. Actually, according to ‘nonlinear growth models’, economic path-dependence would cause countries that start with different initial conditions to be locked into permanently multiple growth regimes. Against this view stands the so-called ‘conditional convergence’ theory, which states that different growth regimes depend solely on structural differences (and not on initial conditions). The main conclusion is that on the empirics there is still much to do, since ‘while there now is strong consensus in the literature that there exists substantial heterogeneity across countries, it should be emphasized that this finding is only suggestive of multiple-growth regimes and is not conclusive evidence of it’ (p. 693). 17 On this point, see the pioneering contribution by Frank and Stengos (1988). 18 A similar statement about the weak empirical evidence of chaotic economic motion can also be found in Aydin A. Cecen’s entry on CHAOS THEORY for →W. Darity’s International encyclopedia of the social sciences (2nd edn, 2008, Vol. 1), where the author states that chaotic dynamics has been demonstrated to prevail only for few economic time-series data. 19 See above, Section 26.3.

Nonlinear business cycles 499 20 See Lorenz, 1989; 2nd edition, 1993, pp. 85–86 for an interesting treatment of these matters, with particular reference to the specification of models dimension. 21 In other words, in order to avoid falling into a sort of naive falsificationism, it would be preferable for this choice to be made on the basis of a consistent, stringent theory, rather than on the assumed ability of models to explain (or describe) some features of reality. The same argument may obviously be generally referred to the option between nonlinear or linear specifications; actually, the former should be preferred on theoretical grounds rather than on the basis of empirical verification of their explanatory power as compared to linear models. As Kuhn, 1970, pp. 99–100 has shown in his Theory of scientific revolutions, also the ‘much-maligned phlogiston theory gave order to a large number of physical and chemical phenomena’.

REFERENCES Alligood, K. T., Sauer, T. D. and Yorke, J. A., 1996, Chaos: an introduction to dynamical systems (New York, Berlin, Heidelberg: Springer). Azariadis, C., 1981, Self-fulfilling prophecies, Journal of Economic Theory, 25, pp. 380–396. Benhabib, J. and Day, R. H., 1982, A characterization of erratic dynamics in the overlapping generations model. Journal of Economic Dynamics and Control, 4: 1, pp. 37–55. Chiarella, C., 1990, The elements of a nonlinear theory of economic dynamics (Berlin: Springer-Verlag). Colacchio, G., Sparro, M. and Tebaldi, C., 2007, Sequences of cycles and transitions to chaos in a modified Goodwin’s Growth cycle model, International Journal of Bifurcation and Chaos, 17: 6, pp. 1911–1932. Day, R. H., 1982, Irregular growth cycles, American Economic Review, 72, pp. 406–414. Day, R. H., 1983, The emergence of chaos from classical economic growth, Quarterly Journal of Economics, 98, pp. 210–213. Desai, M. J., 1973, Growth cycles and inflation in a model of the class struggle, Journal of Economic Theory, 6, pp. 527–545. Frank, Z. M. and Stengos, T., 1988, Some evidence concerning macroeconomic chaos, Journal of Monetary Economics, 22, pp. 423–438. Frisch, R., 1933, Propagation problems and impulse problems in dynamic economics. In G. Cassel, Economic essays in honour of Gustav Cassel (London: Allen & Unwin). Frisch, R. and Holme, H., 1935, The characteristic solutions of a mixed difference and differential equation occurring in economic dynamics. Econometrica, 3: 2, pp. 225–239. Gandolfo, G., 1971, Economic dynamics: methods and models (Amsterdam: North-Holland). Gandolfo, G., 2009, Economic dynamics (Berlin: Springer-Verlag). Goodwin, R. M., 1950, A nonlinear theory of the cycle, Review of Economics and Statistics, XXXII: 4, pp. 316–320. Goodwin, R. M., 1951, The non-linear accelerator and the persistence of the business cycles, Econometrica, 19: 1, pp. 1–17. Goodwin, R. M., 1967, A growth cycle. In C. H. Feinstein (ed.), Socialism, capitalism and economic growth (Cambridge: Cambridge University Press). Grandmont, J.-M., 1985, On endogenous competitive business cycles, Econometrica, 53: 5, pp. 995–1045. Guckenheimer, J. and Holmes, P., 1983, Nonlinear oscillations, dynamical systems and bifurcations of vector fields (New York: Springer-Verlag). Heath, R. L. (ed.), 2005, Encyclopedia of public relations, vol. 1 (Thousand Oaks, CA: Sage Publications).

500 Giorgio Colacchio Hicks, J. R., 1946, Value and capital: an inquiry into some fundamental principles of economic theory (Oxford: Clarendon Press). Hicks, J. R., 1950, A contribution to the theory of the trade cycle (Oxford: Clarendon Press). Kaldor, N., 1940, A model of the trade cycle, Economic Journal, 50: 197, pp. 78–92. Kalecki, M., 1935, A macrodynamic theory of business cycles, Econometrica, 3: 3, pp. 327–344. Kalecki, M., 1937, A theory of the business cycle, Review of Economic Studies, 4: 2, pp. 77–97. Kalecki, M., 1954, Theory of economic dynamics (New York: Monthly Review Press). Kuhn, T. S., 1970, The structure of scientific revolutions, 2nd edn (Chicago: The University of Chicago Press). Lorenz, E. N., 1963, Deterministic non-period flows. Journal of Atmospheric Sciences, 20, pp. 130–141. Lorenz, H. W., 1989, Nonlinear dynamical economics and chaotic motion (Berlin: SpringerVerlag); 2nd edition, 1993. Lucas, R. E. Jr, 1972, Expectations and the neutrality of money, Journal of Economic Theory, 4: pp. 103–124. MacDonald, N., 1989, Biological delay systems: linear stability theory (Cambridge: Cambridge University Press). May, R. M., 1976, Simple mathematical models with very complicated dynamics, Nature, 261, pp. 459–467. Medio, A., 1978, Teoria nonlineare del ciclo economico (Bologna: Il Mulino). Medio, A., 1995, Chaotic dynamics: theory and applications to economics (Cambridge: Cambridge University Press). Rosser, B. and Dore, M., 2007, Do nonlinear dynamics in economics amount to a Kuhnian paradigm shift? Nonlinear Dynamics, Psychology, and Life Sciences, 11: 1, pp. 119–147. Ruelle, D. and Takens, F., 1971, On the nature of turbulence, Communications in Mathematical Physics, 20, pp. 167–192. Samuelson, P. A., 1939, Interaction between the multiplier and the principle of acceleration, Review of Economics and Statistics, 21: 2, pp. 75–78. SzidÂowski, M., 2002, Time-to-build in dynamics of economic models I: Kalecki’s model, Chaos, Solitons and Fractals, 14, pp. 697–703.

27 An assessment of real business cycles in recent dictionaries Marc Pilkington

27.1 INTRODUCTORY REMARKS The equilibrium business cycle theory that emerged in the last part of the twentieth century revolves around the Walrasian conception of a decentralized market economy wherein rational economic agents continuously interact by optimizing their utility functions under constraint. Equilibrium business cycle theory has sometimes been equated to the transposition of the rational expectations hypothesis to business cycle theory. Although this categorization is useful, it fails to account for the diversity of business cycle theories that share these methodological principles. Real business cycle (RBC hereafter) theory endorses the methodological principles put forward by monetary equilibrium business cycle theorists, although it emphasizes the real nature of the impulse. In their entry on BUSINESS CYCLES in →The new Palgrave dictionary of economics (1987), Dotsey and King point out the methodological continuity between Lucas and RBC theory: Following the methodological recommendations of Lucas (1980), Kydland and Prescott restrict the number of free parameters in their model economy by a number of steady-state conditions and also by the extensive use of behavioural parameter estimates taken from applied studies in other fields. However, the differences between the two theoretical strands are manifold. If we were to single out one fundamental point of departure, it would probably be the rejection of the following statement by Lucas (1981, p. 233): ‘everything points to a monetary shock as the force triggering the real business cycle’. This evolution is apparent in the literature in spite of the contrasted stance that RBC theorists have adopted on money neutrality (see Section 27.7.3). In this chapter, we focus on the defining features of RBC theory as they are expounded in recent dictionaries. The entries we set out to analyse espouse the definitional aspects and the stylized facts related to business cycles in the academic literature. Some of these entries shed light on these central aspects. Others enable us to clarify the meaning and the scope of the qualifier ‘real’. In fact, we find that

502 Marc Pilkington the expositions are not always devoid of ambiguity as they often fail to fully disentangle the real and monetary aspects of the business cycle. In 1946, Burns and Mitchell provided a widely accepted definition of business cycles in their book Measuring business cycles: Business cycles are a type of fluctuation found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions, and revivals which merge into the expansion phase of the next cycle; in duration, business cycles vary from more than one year to ten or twelve years; they are not divisible into shorter cycles of similar characteristics with amplitudes approximating their own. (p. 3) This often cited operative definition, aiming at being as general as possible, takes for granted the cyclical nature of the development of capitalistic economies. This premise is the tacit target of criticism by proponents of the RBC approach. Other traditions emphasize instead the difference between the initial impulse and the propagation mechanism. Proponents of the RBC approach precisely aim to tackle this important issue: From the RBC point of view, the economy can be seen as a ‘filter’ which transforms the productivity shocks (the input process) into economic fluctuations (the output process). Individual productivity shocks are generally thought to be fairly small, displaying some autocorrelation but dissipating fairly rapidly. By contrast, economic fluctuations are thought to be rather persistent and rather larger than the productivity shocks. (Talmain, 2003) The distinction between the initial impulse and the propagation mechanism is the outcome of the early ‘formal’ business cycle literature. On the one hand, Ragnar Frisch (to whom this terminology is due) assumed the existence of an inbuilt oscillations mechanism upon which external shocks are superimposed and which keep oscillations alive even in the presence of dampening factors: Frisch began [. . .] with a deterministic system in which macrovariables oscillated and hypothesized that the addition of a stochastic process would work to keep the oscillations energized. These perturbed oscillations are none other than autocorrelated stochastic fluctuations [. . .] (Lines, 1990, p. 360) Another explanation renounced instead the assumption of an underlying wave mechanism and inquired instead whether and how exogenous shocks could themselves give rise to wavelike behaviour:

Real business cycles 503 What means of explanation for the wave like movement of economic (and other) phenomena would be left to us if we decided to give up the hypothesis of the superposition of regular waves complicated only by purely random components? (Slutzky, 1937, p. 107) These two interpretations of the alternation of ups and down, one stressing the rhythmic nature of the development of capitalism and the other rejecting the idea that economic dynamics is intrinsically oscillating, couch in modern language a dichotomy that goes back to the first reflections on crises in the nineteenth century and still cast a long shadow on the contemporary theoretical approaches. We shall find several echoes of this distinction in the entries we are examining. Another issue taken up by dictionary entries is the aim of RBC theory of conceptually integrating growth and economic fluctuations by renewing the methodology of empirical macroeconomic research – notably through the calibration method – without betraying the general-equilibrium legacy of new classical macroeconomics. Dictionary entries have accounted for this research methodology in various and sometimes surprising ways. However, it is useful to assess whether these entries give a faithful account of the history of business cycle theories. The entries examined in this chapter cast light on a range of concerns that are necessary to understand the ramifications, the objectives, the methodology and the modern advances in RBC theory. Some of these entries can serve as a stepping stone for a renewed framework assessment insofar as they contain implicit critical views as well as a blueprint for further theoretical perspectives of development.

27.2 THE EMERGENCE OF RBC THEORY Dictionary entries have not always been devoid of confusing statements regarding the precise origin and the epistemological foundations of RBC theory. In this section, we briefly examine the emergence of RBC theory through a short discussion of the (sometimes problematic) terminology as well as links with new classical macroeconomics.

27.2.1 The ill-suited use of ‘real business cycles’ There exists a rich tradition of theories of the business cycle ascribing their main cause to real phenomena. It is important to analyse how dictionary entries account for the epistemological differences between the (relatively recent) RBC approach and the much older real theories of the business cycle. In this respect, Glasner’s entry on REAL BUSINESS CYCLE THEORIES in →Glasner, Business cycles and depressions (1997) provides an historical overview: Historically, real theories have identified the source of disturbance as periodic fluctuations in weather conditions (e.g., the sunspot/weather theories of W. S.

504 Marc Pilkington Jevons and H. L. Moore) or waves of investment resulting from uneven technological progress (e.g., the cycle theory of J. A. Schumpeter). (p. 557) First and foremost, this entry lacks any discussion of the ontological nature of real shocks. The non-expert reader is given a few references that are far from satisfactory and the distinctive conceptual features of real shocks are left in the air. The alleged ‘source of disturbance’ fits into an exogenous ‘push’ theory emphasizing external events, which throw the economy into confusion. Furthermore, Glasner should also have been clearer about the differences between real theories of the business cycle and RBC theory. This would have avoided the following anachronism: In the 1920s and early 1930s, real business-cycle theories fell out of fashion as monetary business-cycle theories largely derived from Alfred Marshall or Knut Wicksell dominated the attention of economists. In Glasner’s defence, his chosen terms ‘periodic fluctuations’, ‘waves of investment’ and ‘technological progress’ arguably foretell the emergence of the RBC research programme in the 1980s. We will see in our critical examination of technological shocks (Section 27.7.2) that exogenous factors were combined by late RBC theorists with endogenous responses to uncertainty, thereby reviving the unresolved tension between the Frisch and Slutsky approaches evoked in Section 27.1. RBC theory has not been left untouched by these theoretical interrogations, as we will see in Section 27.5.2 with our brief discussion of random walk components following Nelson and Plosser’s seminal article in 1982.

27.2.2 Linking the RBC approach with new classical macroeconomics In spite of its emphasis on monetary disturbances, the general-equilibrium legacy of equilibrium business cycle theory is a more relevant starting point in order to account for the emergence of the RBC approach. This is, in fact, the choice made by Snowdon and Vane in their entry on BUSINESS CYCLES: NEW CLASSICAL APPROACH, in →Snowdon and Vane’s Encyclopedia of macroeconomics. These authors trace back the origin of RBC theory to the monetary equilibrium business cycle theory: ‘Lucas’s monetary equilibrium business cycle theory (MEBCT) incorporates Muth’s (1961) rational expectations hypothesis, Friedman’s (1968) natural rate hypothesis and Walrasian general equilibrium methodology’ (2002, p. 85). Notwithstanding the wide-ranging methodological principles that formed the bedrock of new classical macroeconomics in the 1970s, RBC theory did not emerge until the early 1980s. The latter framework quickly gained prominence in the United States under the impulse of freshwater economists such as Kydland and Prescott

Real business cycles 505 (1982), followed by Long and Plosser (1983). Advocates of this school include Stockman, King, Barro, Rebelo, etc., who focused on real (supply-side) shocks, viewed as the principal source of fluctuations. In his entry on CYCLES ÉCONOMIQUES (economic cycles) in →Jessua, Labrousse and Vitry, Dictionnaire de sciences économiques (2001), Frank Portier argues that the RBC framework emerged as a result of the failure of monetary equilibrium business cycle theory, propounded by Lucas, to mimic business cycles in the post-war period. In front of the failure of these models to mimic cycles in quantitative terms, ‘a real business cycle theory’ emerges in the 1980s, in the tradition of Lucas’s works. The pioneering works are those of Kydland and Prescott and Long and Plosser. The objective is to design a business cycle theory based on marketclearing mechanisms, without any monetary dimension and in which there is no role for short-run stabilizing policies. (p. 254) RBC theory is deeply rooted in neoclassical microeconomic theory (Plosser, 1989, p. 53). As such, it maintains the assumption of rational economic agents devising optimal allocation strategies in the face of fluctuating relative prices (following a real shock-induced shift in the aggregate production function). The purpose of the theory is to answer the following question: ‘how do rational maximizing individuals respond over time to changes in the economic environment and what implications do those responses have for the equilibrium outcomes of aggregate variables?’ (ibid.). The equilibrium approach to aggregate fluctuations has led RBC theorists to discard the idea that ‘recessions [are] periods of welfare-reducing disequilibrium implying market failure and the need for stabilization policy’ (Snowdon and Vane, 2005, p. 295). Therefore, RBC theorists have generally advocated a noninterventionist policy stance to the business cycle.

27.3 WHY ‘REAL’ THEORIES? Real theories of the business cycle assign a leading role to ‘real’ disturbance to the economic system in generating economic fluctuations. Accordingly, in his entry on BUSINESS CYCLE in → Encyclopedia of business and finance (2001), Bowers argues that the adjective ‘real’ refers to the nature of the shocks triggering business cycles. [T]here has in recent years arisen a school of thought emphasizing real business cycles. This school contends that nonmonetary variables in the private sector are a major source of cyclical instability. (p. 79)

506 Marc Pilkington The same idea is conveyed by Mario Crucini in his entry on INTERNATIONAL in →Durlauf and Blume, The new Palgrave (2008):

REAL BUSINESS CYCLES

The term ‘real’ indicates a sub-area of the business cycle research programme that focuses on non-monetary dimensions such as changes in productivity, taxes and government spending, rather than changes in the money supply and monetary policy. Apart from opposing ‘real’ to ‘monetary’ shocks, these statements offer little information concerning the nature of ‘real’ disturbances. More to the point, De Boissieu argues that real shocks are merely productivity shocks and that in elementary models, technological progress is best viewed as the holistic outcome of numerous small and independent factors akin to a random walk: ‘In most RBC models, and in all foundation contributions (see, for example, F. Kydland & E. Prescott (1982)), technical progress corresponds to a random walk, because it is said to result from an entity of numerous small factors with little or no correlation between them’ (CRISE ÉCONOMIQUE, in →Jessua, Labrousse and Vitry, Dictionnaire de sciences économiques, 2001, p. 229). However, RBC theory has not remained confined to the study of the effect of technology shocks, as observed by Francis and Hillstrom, as well as by Fuhrmann. In addition to ‘technology shocks (shocks that shift the production possibility frontier of a nation)’, in his entry on BUSINESS CYCLE, REAL Francis refers to other potential shocks: The literature has presented a gamut of candidate shocks responsible for business cycle movements; shocks to individual preferences and tastes (fads), oil price shocks (e.g., OPEC crises in the 1970s and the Gulf War in 1990), monetary policy shocks, government spending and tax shocks, and technology shocks (shocks that shift the production possibility frontier of a nation). (In →Darity, International encyclopedia of the social sciences, 2008, p. 407) In a similar vein, in his entry on BUSINESS CYCLES Hillstrom lists the ‘important factors in shaping the complexion of business environments’. Inter alia, he mentions the volatility of investment spending, the momentum impacting the state of confidence in the economy, technological innovations, variations in inventories, fluctuations in government spending, political conditions, monetary policy, fluctuations in imports and exports, etc. Hillstrom’s emphasis is nonetheless on technological innovations that may concern both products and processes. Technological innovations can have an acute impact on business cycles. Indeed, technological breakthroughs in communication, transportation, manufacturing, and other operational areas can have a ripple effect throughout an industry or an economy. Technological innovations may relate to production

Real business cycles 507 and use of a new product or production of an existing product using a new process. The video imaging and personal computer industries, for instance, have undergone immense technological innovations in recent years, and the latter industry in particular has had a pronounced impact on the business operations of countless organizations. (In →Hillstrom, Encyclopedia of small business, 2007, pp. 114–115) Interestingly, the entry on INTERNATIONAL REAL BUSINESS CYCLES by Mario Crucini in → The new Palgrave (2008) is more specific regarding the impact of the distinction between closed-economy and open-economy analysis on the nature of the shocks: Whereas closed-economy analysis focuses on responses to domestic shocks and policy actions, open-economy analysis adds to this international policy interaction and spillovers of foreign shocks to the domestic economy. Hence, Crucini introduces additional variables, which enable the shift from a closedeconomy framework to the open economy: Quantitative theoretical investigations of business cycles seek to account for business cycle facts using models in which consumers are thoughtful and informed, firms employ workers and utilize capital efficiently, and policymakers use a combination of rules and discretion to achieve various economic objectives. The key dimensions of study are those unique to international economics: matching the international character of the world business cycle and the business cycle properties of the current account, the real exchange rate and the terms of trade. What emerges from these entries is that their authors have often retained a long list of possible factors among the disturbances at the origin of real business cycles, including monetary factors. The main problem, however, is that these writers frequently fail to specify a hierarchy among these shocks. One important exception is Bowers, who points to a ‘direction of causation’ linking real and monetary disturbances. More precisely, in his entry on BUSINESS CYCLE in the →Encyclopedia of business and finance (2001, p. 75), he emphasizes the direction of causality running from real to monetary variables: ‘what may be called classical economists’ contend that the observed sympathetic movements between monetary variables and the level of economic activity result from a flow of causation from the latter to the former. The changes in real factors cause the monetary factors to change, not vice versa. (ibid.).

508 Marc Pilkington Direction of causality is also an aspect underlined by Wilfried Fuhrmann in his entry on KONJUNKTURTHEORIEN in →Vahlens großes Wirtschaftslexikon (Wilfried Fuhrmann, 1993): Variations of this theory underline, for instance, RBC shocks in the form of tax, spending or technological evolutions along with an endogenous adjustment of the money supply to output variations (reverse causation). New variants explain business fluctuations as induced by economic preferences in models with overlapping generations (J.-M. Grandmont) or by various psychological factors, called sunspots. (pp. 1166–1167) Another displacement of emphasis occurs in Romer’s account of the ‘Great Moderation’: Recessions in the United States have become noticeably less frequent and severe since the mid-1980s. The nearly decade-long expansions of the 1980s and 1990s were interrupted by only very mild recessions in 1990 and 2001. Economists attribute this moderation of cycles to a number of factors, including the increasing importance of services (a traditionally stable sector of the economy) and a decline in adverse shocks, such as oil price increases and fluctuations in consumer and investor sentiment. Most economists believe that improvements in monetary policy, particularly the end of overexpansion followed by deliberate contraction, have been a significant factor as well. (BUSINESS CYCLES, in →Henderson’s Concise encyclopedia of economics, 2008) However, the explicit reference to ‘improvements in monetary policy’ comes in stark contrast with the prior emphasis on real shocks. As a matter of fact, if the occurrence, the magnitude and the frequency of real shocks are subordinated to monetary policy, the money neutrality hypothesis (discussed in Section 27.7.3) is thereby completely undermined. It seems, however, that the entries examined in this section fall short of the RBC theorists’ own depiction of the type of shocks they consider within their approach. For instance, Plosser (1989) clearly states that the disturbances investigated by RBC theory are shocks to ‘fundamentals’, namely, preferences, technology and endowments: It is common to refer to these real business cycle models as models that are driven by aggregate ‘supply shocks.’ While such a description seems approximately accurate for the model driven by productivity shifts, and thus innocuous enough, it is potentially misleading. In the first place trying to think about these dynamic general equilibrium models in terms of supply and demand is slippery. In these models shocks occur to either preferences, technologies/opportunities, or resources and endowments. Unfortunately, these shocks do not easily translate into either supply or demand disturbances. Each type of shock will

Real business cycles 509 generally affect both the supply and demand schedules in a particular market. For example, shifts in technology influence both the supply of goods for a given level of inputs (work effort in particular), and the demand for goods through its effect on wealth and the labor/leisure decision. (p. 57) In this passage, the author also clearly points to the fact that the shocks considered within the RBC theory affect demand as well as supply, at variance with the commonly held view.

27.4 BUSINESS CYCLES AND STYLIZED FACTS A quick review of the definitional aspects and the stylized facts of the business cycle will help us understand how certain entries account for the results obtained by RBC theory.

27.4.1 Characterization of business cycles It is common to break down the business cycle into phases. To quote Hillstrom in his entry on BUSINESS CYCLES (→Encyclopedia of small business, 2007, p. 114): ‘A business cycle is typically characterized by four phases – recession, recovery, growth, and decline – that repeat themselves over time.’ Romer, however, offers a more basic outline in her entry on BUSINESS CYCLES in →Henderson’s Concise encyclopedia of economics: Periods of economic prosperity are typically called expansions or booms; periods of economic decline are called recessions or depressions. The combination of expansions and recessions, the ebb and flow of economic activity, is called the business cycle. Her argument is that the precise dating of business cycle components requires a dose of subjectivity: Business cycles are dated according to when the direction of economic activity changes. The peak of the cycle refers to the last month before several key economic indicators – such as employment, output, and retail sales – begin to fall. The trough of the cycle refers to the last month before the same economic indicators begin to rise. Because key economic indicators often change direction at slightly different times, the dating of peaks and troughs is necessarily somewhat subjective. (ibid.) Yet the issue at stake is not so much the division in phases, but the very notion of ‘cycle’, with its rhythmic and orderly succession of specific stages as detailed by Mitchell (as quoted in Section 27.1; see Chapter 3 for a full discussion):

510 Marc Pilkington In many ways, the term ‘business cycle’ is misleading. ‘Cycle’ seems to imply that there is some regularity in the timing and duration of upswings and downswings in economic activity. Most economists, however, do not think there is. [. . .] Expansions and recessions occur at irregular intervals and last for varying lengths of time. For example, there were three recessions between 1973 and 1982, but, then the 1982 trough was followed by eight years of uninterrupted expansion. The 1980 recession lasted just six months, while the 1981 recession lasted sixteen months.

27.4.2 Stylized facts and methodological choices The observation of empirical regularities in the business cycle opens the door to further methodological choices. The findings can then be compared against RBC results. Some dictionary entries are also worth examining, in this respect. In a paper entitled ‘Indivisible labor and the business cycle’ published in the Journal of Monetary Economics, Hansen (1985) listed the following stylized facts: 1 2 3

4

5 6

Consumption of nondurables and services is much smoother than output. Investment and consumption of durable goods are more volatile than output. Output and aggregate hours of work have a similar magnitude of fluctuation and are positively correlated, suggesting procyclical movements in the labor market. The average workweek is rigid as regards the total volume of employment, suggesting that most fluctuations in aggregate hours are due to movements into and out of the labour force, rather than adjustment of the workweek. Most macroeconomic variables are procyclical and show substantial persistency. Imports are more procyclical than exports. Consumption and investment are procyclical, productivity is slightly procyclical whereas capital stock is acyclical.

Hansen’s exposition of stylized facts is not the only reference available in the literature. However, a number of articles (e.g. Fiorino and Kollintzas, 1994) use his RBC model as a satisfactory benchmark for stylized facts in RBC theory. We compare two entries with his presentation. In their entry on BUSINESS CYCLES in →The new Palgrave (1987), Dotsey and King describe the stylized facts of the business cycle: [A]ll of the quantity series – including real balances – exhibit significant positive serial correlation at the annual or quarterly interval. They all also display positive covariation, both with output and with each other. They differ somewhat in relative volatilities, notably investment is more volatile than output, which in turn is more volatile than consumption. Evidence concerning the cyclical behavior of the real wage is inconclusive; in part, this reflects a variety of constructs used. In general, however, there does not appear to be

Real business cycles 511 a pronounced cyclical relation. Measures of financial activity – such as deposit turnover and bank clearings – are strongly procyclical. They also add a multi-sectorial perspective: When many sectors are included in this analysis, as in Mitchell (1951), there is a tendency for co-movement across sectors and considerable stability in lead–lag relations relative to aggregate output. There do appear to be different degrees of sectoral co-movement and amplitude. For example, agriculture does not covary closely with the rest of the economy. Producer and consumer durable goods manufacturing exhibit greater volatility than services. In his entry on CYCLES ÉCONOMIQUES (economic cycles) in →Jessua, Labrousse and Vitry’s Dictionnaire de sciences économiques (2001), Frank Portier argues that First of all, the consumption of non-durables and services is less volatile than output, whereas investment and consumption of durables (akin to investment made by households) is more volatile than output. This ranking of volatilities is sufficiently robust in industrialized countries to qualify for stylized facts of the business cycle along the lines of the growth stylized facts described by Kaldor. (p. 254) Portier (pp. 251–252) further elaborates upon stylized facts. His observations match Hansen’s findings, with a few exceptions. Work hours are as volatile as output and strongly procyclical. Capital stock is slightly procyclical (rather than acyclical, as in Hansen). Productivity is strongly procyclical (rather than slightly procyclical, as in Hansen). However, apparent labour productivity is what Hansen suggests for total productivity. Portier also adds some late stylized facts concerning nominal variables that are absent in Hansen. These nominal variables are prices (contracyclical), short-term interest rates (generally procyclical) and money aggregates M1 and M2 (procyclical). One is inclined to extrapolate on the reason for the introduction of nominal variables in stylized facts by RBC theorists. Our hypothesis is that the contents of entries have accompanied the evolution of the RBC framework on money neutrality (see Section 27.7.5). Without adopting the same wording or method of exposition, dictionary entries are usually consistent with Hansen’s exposition in the academic literature, and differences therewith are only a matter of emphasis. However, before a theory can be tested against (or compared with) empirical data, one must determine the preferred methodology adopted to single out empirical regularities known as stylized facts. A very powerful technique designed by Hodrick and Prescott (1980) is the HP filter aimed at removing low-frequency variations from time series statistics in order to obtain faithful representations of business cycle fluctuations. Hodrick and

512 Marc Pilkington Prescott detrended US macro time series and computed standard deviations, correlations and serial correlations of the major macroeconomic aggregates. Crucini opts for this approach in his entry on INTERNATIONAL REAL BUSINESS CYCLES in →The new Palgrave (2008): Here we employ the Hodrick–Prescott (1997) filter to achieve this decomposition since it is widely used in the literature. The Hodrick–Prescott filter provides a smooth estimate of the growth trend, yg,t, and the cycle is computed as the difference between the growth trend and the original series. This entry is particularly interesting insofar as it offers to define the cycle anew by mathematical means, thereby renewing its conceptual definition in RBC theory. However, what the entry fails to explain is how this analytical decomposition obtained by the HP filter is compatible with the necessary integration of growth and fluctuations (examined in Section 27.5). Frank Portier’s entry on CYCLES ÉCONOMIQUES in →Jessua’s Dictionnaire de sciences économiques (2001, p. 250) contains a very detailed survey of the HP filter, which is deemed a very pragmatic solution whose operational simplicity explains its very good results and fast dissemination in the academic literature. Portier (ibid.) also refers to the very interesting simulations used by Cogley and Nason (1995) that show how the HP filter can sometimes generate business cycles even when the latter are not encrypted in the initial data. Finally, Portier’s entry acknowledges the vast success obtained by the HP filter, which has been widely adopted by the academic community as well as by major international organizations such as the OECD. Snowdon and Vane, in the entry on BUSINESS CYCLES: NEW CLASSICAL APPROACH for their own →Encyclopedia of macroeconomics (2002), acknowledge the very satisfactory results obtained by Kydland and Prescott: Kydland and Prescott found that, when the computer simulation of their model was compared with actual US data, the fluctuations in the model economy looked very like those in the real data. Thus, they concluded, the new model, where fluctuations in economic variables only arise as a result of shocks to the production function, provided a good fit of the ‘stylized facts’. (p. 85) This entry resonates as an empirical acknowledgement of the RBC framework, obtained by means of computer simulation. It is noteworthy to add that these promising results are nonetheless contingent on the adoption of the calibration method that is briefly discussed in Section 27.6.

Real business cycles 513 27.5 THE INTEGRATION OF GROWTH AND FLUCTUATIONS

27.5.1 Going beyond the dichotomy between growth and business cycles In a seminal article published in the Journal of Economic Perspectives, Plosser (1989) downplays the conventional meaning of the term ‘business cycle’ that conveys the erroneous idea that there exists a true periodicity in economic activity. Further, Prescott also criticizes the use of the expression ‘business cycle’, for it impedes our understanding of the interconnectedness of economic growth and business fluctuations: one reason why the use of the expression is unfortunate ‘is that it leads people to think in terms of a time series’ business cycle component which is to be explained independently of a growth component; our research has, instead, one unifying theory of both of these’ (1986, p. 10).1 RBC theorists have attempted to integrate the two strands of phenomena within an all-encompassing framework: ‘modern business cycle theory starts with the view that growth and fluctuations are not distinct phenomena to be studied with separate data and different analytical tools’ (Cooley and Hansen, 1995, p. 4). RBC theory thus combines neoclassical growth theory with the study of economic fluctuations by putting forward dynamic general equilibrium models to determine the outcomes of aggregate macroeconomic variables. Does this macroeconomic approach entail a major semantic shift circumscribed to RBC theory or does the novelty depend on the adopted standpoint? Some authors have clearly argued against a clear-cut distinction between the two phenomena. The failure to integrate them would then preclude proper understanding of their interconnected nature. For instance, Francis points to the analytical integration of growth and economic fluctuations in his entry on BUSINESS CYCLE, REAL in the →International encyclopedia of the social sciences (2008, p. 407): Although this entry focuses exclusively on the cyclical side of the dichotomy, the business cycle and growth processes are not mutually exclusive features of macroeconomics. That is, one cannot draw any meaningful conclusion about one feature of the data without a comprehensive understanding of the other. This was also the stance adopted by Dotsey and King in their entry on BUSINESS in →The new Palgrave (1987):

CYCLES

[I]t is inappropriate to separate the study of economic fluctuations from that of economic growth. That is, the fact that economies grow tells us that temporary shocks to the economy’s production possibilities will have permanent effects on the level of output. These entries clearly differ: the passage ‘one cannot draw any meaningful conclusion’ in Francis’s entry draws an epistemological conclusion from a statement on the nature of facts, whereas Dotsey and King’s claim that ‘it is inappropriate to

514 Marc Pilkington separate [. . .]’ is a plain epistemological claim that the only suitable approach to these phenomena is the analysis of shocks. Before proceeding, it is worth reminding the reader that although taken in themselves these statements seem to claim a degree of novelty in this approach, the integration of growth and cycles is scarcely an original idea, as already beginning from the mid-nineteenth century the view that crises are the price to pay for growth was fairly common; only in the phase of modelling by means of linear functional equations (1930s to 1950s) did cycles and growth have to be separated due to the limitation of the formalism, while it was resumed when the linearity assumption was relaxed (see e.g. Goodwin’s entry on GROWTH AND CYCLES for the 1987 →The new Palgrave).

27.5.2 Random walks and the non-deterministic nature of growth One notable shortcoming of standard neoclassical growth models was the failure to provide any valid explanation for continually growing per capita values of macroeconomic variables in the absence of an exogenous disturbance to labour and capital productivity. In his seminal article ‘Technical change and the aggregate production function’ in the Review of Economics and Statistics, Robert Solow (1957) put forward the idea that long-run growth depends fundamentally on continued technical change; ‘[Solow] concluded that about 85 percent of the real per capita growth [during 1909 to 1949] was accounted for by technological change or productivity and only 15 percent by increases in capital per worker’ (Plosser, 1989 in Snowdon and Vane, 2005, p. 403). In his footsteps, growth theorists of the 1950s and 1960s developed increasingly complex growth models that were believed to be independent of economic fluctuations or business cycles, the latter phenomena being only ‘deviations from some smooth, usually deterministic, trend that proxies for growth’ (ibid.). However, a major statistical finding by Nelson and Plosser (1982) came in stark contrast with this restrictive view of economic fluctuations, merely subordinated to a pre-existing growth path. These authors singled out random walk components in per capita output time series. These groundbreaking observations would prove of utmost relevance insofar as they underlined the non-stationary as well as the stochastic nature of the growth process. Put differently, the existence of a random walk component has discarded the idea that there exists a deterministic trend line from which output regularly deviates and towards which it automatically returns. In fact, the occurrence of the latter might bring about an irreversible shift in the growth path, thereby strengthening the integrated approach to economic growth and business fluctuations that are codetermined by a set of common factors. This analytical evolution is acknowledged by Dotsey and King in their entry on BUSINESS CYCLES in →The new Palgrave (1987). The stochastic nature of the shocks is therefore a key ingredient for generating the cyclical behaviour in the Kydland–Prescott model and there has also been

Real business cycles 515 some scepticism directed toward the nature of these shocks. For example, one questions whether this construct really captures an exogenous variable. As such, it therefore reinforces the criticism directed against the strictly exogenous technological shocks hypothesis (see Section 27.7.2).

27.6 THE CALIBRATION METHOD AND THE CONSTRUCTION OF GENERAL EQUILIBRIUM MODELS As Summers (1991, p. 129) cogently points out, the bulk of empirical macroeconomic research methodology has long focused on the identification of key parameters underlying the structural apparatus of the economy, the testing of substantive hypotheses derived from economic theory and the use of sophisticated statistical techniques in order to disentangle the chain of causation between the variables of the system. Nonetheless, Summers (ibid., p. 130) remains very sceptical concerning the possibility of estimating these key parameters accurately: ‘successful empirical research has been characterized by attempts to gauge the strength of associations rather than to estimate structural parameters’. In stark contrast with the conventional econometric testing approach, and in the light of the limitations thereof, RBC theorists developed a calibration method defined as the ‘strategy for finding numerical values for the parameters of artificial economies’ (Cooley, 1997). This approach has profoundly renewed the methodology of macroeconomics research (Hoover, 1995): [W]e can go way beyond the qualitative comparison of model properties with stylized facts that dominated theoretical work on macroeconomics until 1982. We can calibrate models with parameters drawn, to the extent possible, from microeconomic studies and long-run properties of the economy, and we can use these calibrated models to generate artificial data that we can compare with actual data. (Rebelo, 2005, p. 217) RBC theory was able to thrive in the 1980s with the design of artificial economies. In this respect, Robert Lucas (1980) wrote that One of the functions of theoretical economics is to provide fully articulated, artificial economic systems that can serve as laboratories in which policies that would be prohibitively expensive to experiment with in actual economies can be tested out at much lower cost. [. . .] Our task as I see it [. . .] is to write a FORTRAN program that will accept specific economic policy rules as ‘input’ and will generate as ‘output’ statistics describing the operating characteristics of time series we care about, which are predicted to result from these policies.

516 Marc Pilkington The replication of stylized facts via the construction of ad hoc general equilibrium models became the new objective of business cycles modelling under the impulse of Kydland and Prescott (1982). These two pioneers constructed a general equilibrium business cycle model driven by exogenous technological shocks whose key parameters were determined by the long-run behaviour of the economy. Their methodology, employing a set of statistical techniques referred to as the Generalized Method of Moments, was able to generate time series data that matched the properties of the business cycles observed over the period 1950–1979. These methodological merits are emphasized by Cillian Ryan in his entry on BUSINESS CYCLES: REAL BUSINESS CYCLE APPROACH in →Snowdon and Vane’s Encyclopedia of macroeconomics (2002): An advanced econometric technique, known as the Generalized Method of Moments, allows the data to tell the researcher what the appropriate functional form and parameters of the functions should be and removes some of the subjective choices a researcher must make when setting up the model. (p. 96) Again, the need for objectivity is emphasized in the description of RBC methodology. However, from a purely epistemological point of view, the question of the subjective choices made by researchers, in the initial stages of the modelling process, does not necessarily boil down to a mere technical problem. The entry certainly fails to tackle this important issue. Prescott (1986, p. 22) has redefined the nature of progress in quantitative sciences by assigning a superior role to theory deemed ‘ahead of business cycle measurement’. In a methodological twist of roles, Prescott (ibid.) suggests that potential deviations between measurement and theory are not the landmark of theoretical insufficiencies, but rather of the need for better measurements. Francis seems to acknowledge the success of the RBC endeavour in his entry on BUSINESS CYCLE, REAL in the →International encyclopedia of the social sciences (2008): Kydland and Prescott (1982) have convincingly argued that a dynamic stochastic general equilibrium model driven by technology shocks can mimic the main statistical features of U.S. macroeconomic time series when calibrated using means and variances of macroeconomic data (using reasonable parameter values to fit the real world) from the U.S. economy. (p. 407) However, in spite of numerous attempts to assess the RBC methodology (Kydland and Prescott, 1991, 1996; Summers, 1991; Hoover, 1995; Cooley, 1995), it remains uncertain to date why calibrated models used to generate artificial data have produced such impressive results when compared with actual data. In Francis’s entry, the use of the adverb ‘convincingly’ is perhaps a little ambiguous. Does it refer to the inner logic of the models or the fact that technology shocks successfully

Real business cycles 517 mimic stylized facts? The use of the epithet ‘reasonable’ to describe the chosen parameters would also deserve further clarification.

27.7 REAL BUSINESS CYCLE THEORY UNDER CRITICISM RBC theory has been criticized on many fronts. Without being exhaustive, we review, in the light of a few dictionary entries, some of the contentious issues that have either weakened the framework or opened new doors for further research.

27.7.1 Predicting the turning points This criticism is not targeted at the RBC framework per se, but rather at business cycle theory in general. In his entry on BUSINESS CYCLE in the →Encyclopedia of business and finance (2001), Bowers singles out a daunting task for business cycle theorists, namely, the forecasting of turning points: [T]he weakest part of business cycle theory and the toughest problem in forecasting is turning points. Why does the general upward or downward movement end? Sometimes it is obvious. When, for example, a war begins or ends with a commensurate and dramatic change in military expenditures, the cause of the beginning or end of an economic boom is fairly unambiguous. Historically, however, only a small minority of the turning points are the result of specific, identifiable occurrences. (p.75) Although good forecasting is an objective of utmost importance for business cycle theory, it cannot always ensure scientific validity. As Summers (1986, p. 8) wittily notes, ‘extremely bad theories can predict remarkably well. Ptolemaic astronomy guided ships and scheduled harvests for two centuries. It provided extremely accurate predictions regarding a host of celestial phenomena’. Interestingly enough, RBC theorists also face the same intellectual challenge.

27.7.2 The role of technological shocks In RBC theory, one bone of contention concerns the ‘role played by technological shocks’ (Plosser, 1989 in Snowdon and Vane, 2005, p. 413), because the latter must simultaneously explain the growth trajectory, the magnitude and the frequency of economic fluctuations. With regard to the predominant role of technological shocks in generating economic fluctuations, in his entry on BUSINESS CYCLE, REAL in the →International encyclopedia of the social sciences Francis cites Prescott: An oft-quoted statement used in support of technology shocks attributed to Prescott (1986) can be found on page 7 of Rebelo (2005), asserting that such

518 Marc Pilkington shocks ‘account for more that half the fluctuations in the postwar period with a best point estimate near 75%’. (2008, p. 408) However, a few notable dissident voices have expressed scepticism, including among the tenets of new classical macroeconomics. In Glasner’s entry on REAL BUSINESS CYCLE THEORIES, Lucas’s position is clearly summarized: ‘Others, including Lucas (1987, pp. 71–72), find it implausible that technology shocks alone could account for cycles of the observed magnitude’ (in →Glasner’s Business cycles and depressions, 1997, p. 559). Glasner, however, counters that the a priori belief that technology shocks are or are not large enough to account for observed fluctuations is no argument against real business-cycle theories in general. Even if (in some sense) true, such a view would at most rule out one-sector real business-cycle models. But if there is an intersectoral transmission mechanism that amplifies technology shocks to one sector, the capacity of technology shocks to account for observed fluctuations does not depend solely on the magnitude of the shocks. (ibid.) It is, in fact, misleading to treat technological shocks as totally unrelated to preexisting macroeconomic conditions. In this respect, Prescott (1986, p. 22) argues that the rate of technological change coupled with the response of economic agents to uncertainty account for the magnitude of business cycles. Prescott also points to the counterproductive impact of stabilization policies that reduce the average rate of technological change, thereby leading to a suboptimal growth path. Likewise, the exogeneity hypothesis of technological shocks is not a faithful depiction of modern RBC theory. In fact, growth might be seen as the endogenous outcome of technological shocks. The treatment of technological changes as a purely exogenous variable deserves further enquiry, as argued by Dotsey and King in their entry on BUSINESS CYCLES in →The new Palgrave (1987): For example, one questions whether this construct really captures an exogenous variable (technological change). If cyclical variations in the intensity of utilization of capital and labour inputs are significant, then important biases could arise, since endogenous decisions with respect to utilization will incorrectly be attributed to changes in technology. We briefly alluded to the permanent effects of temporary shocks in Section 27.5. Indeed, temporary shocks should not be confused with reversible ones. King and Rebelo (1986, 1988) have put forward the idea that temporary productivity shifts have permanent effects on the growth path and the level of economic activity if resources are reallocated towards sectors with highly skilled labour and enhanced human capital. They might also incur shifts towards transition paths that ‘generally include complex changes in work effort, consumption an investment’ (Plosser,

Real business cycles 519 1989 in Snowdon and Vane, 2005, p. 414). This supports the views put forward by Joseph Schumpeter, summarized by Bowers in his entry on BUSINESS CYCLE in the →Encyclopedia of business and finance (2001). Joseph Schumpeter (1883–1950), noted that nothing is constant over the business cycle and nothing ever really returns to its starting place. That is what makes each business cycle unique. The economy grows and changes with each cycle – new products, new firms, new consumers. (p. 76)

27.7.3 Cyclical variations in employment In their entry on BUSINESS CYCLES, Dotsey and King in →The new Palgrave (1987) address the issue of cyclical variations in employment levels that early RBC models could hardly account for: The basic neoclassical model of Kydland and Prescott has been criticized on a number of other grounds that warrant further discussion. First, the model has no implications for any cyclical variation in employment or unemployment. That is, the model uses the representative agent paradigm and permits a smooth tradeoff between hours and output, so all adjustments in labour effort take place in terms of hours and not numbers of workers. In the light of this criticism, RBC theorists endeavoured to explain cyclical variations in unemployment by moving away from the excessively rigid representative agent paradigm that overlooks the idiosyncratic features of the labour market and circumscribes the adjustment to a smooth trade-off between output and hours, rather than the number of workers and the fact that some agents might opt out if they are not provided with a full-time job opportunity: ‘Rogerson (1988) and Hansen (1985) explore the consequences of indivisibilities in the labor supply decisions that require agents to work full-time or not at all’ (1986, p. 65).

27.7.4 New econometric challenges Neville Francis points to the recent criticism directed towards RBC in his entry on REAL BUSINESS CYCLES in the International encyclopedia of the social sciences (2008): Since 1999 a new wave of attacks on the real business cycle hypothesis appears to have delivered the biggest blow yet. These recent studies have found that positive technology shocks, identified using an econometric technique known as structural vector autoregressions, are contractionary on the part of labor input, contrary to business cycle experiences. (p. 408)

520 Marc Pilkington Francis (ibid.) goes on to quote a recent study that discards RBC theory: ‘Contemporary research conducted by Neville Francis and Valerie A. Ramey (2005) has concluded that the technology-driven real business cycle hypothesis appears dead.’ He nonetheless argues that RBC theorists have not yet conceded defeat: ‘However, proponents of the technology-driven RBC paradigm have not taken this blow lightly and have tried to save one of the hitherto cornerstones of macroeconomics’ (ibid.). This last sentence is very interesting. At stake is nothing less than the intellectual survival of RBC theory.

27.7.5 Money neutrality The idea that money is neutral is conveyed by Ryan in his entry on BUSINESS CYCLES: REAL BUSINESS CYCLE APPROACH in →Snowdon and Vane’s Encyclopedia of macroeconomics: ‘monetary policy has no role in this framework as its distortionary effects on prices and expectations can only interfere with optimal consumer choices’ (2002, p. 96). Does this mean that RBC theorists are oblivious to the overwhelming empirical evidence regarding the role of money and monetary policy on real variables? By and large, the empirical relationship between the money stock and aggregate nominal income is well documented in economics, as, for instance, by Hume (1752), Fisher (1923), Keynes (1924), and Friedman and Schwartz (1963). In spite of their long-standing claims of money neutrality, RBC theorists have taken this stylized fact into account and developed models wherein money plays an active role. Dictionary entries have sometimes adopted a clear-cut stance, generally against the super-neutrality hypothesis. Hoover’s entry on the MONETARY EQUILIBRIUM THEORIES OF THE BUSINESS CYCLE in →Glasner’s Business cycles and depressions (1997, p. 454) is a very good example thereof: Subsequent research using more general methods than those of Barro has not convincingly supported the view that only unanticipated money matters. Frederic Mishkin (1983) even found that anticipated money seems to affect output. This last result is consistent with recent research that rejects the superneutrality of money (that output is independent of the rate of inflation). In their entry on BUSINESS CYCLES, Dotsey and King in →The new Palgrave (1987) cite a few econometric works running counter to the neutrality hypothesis: Working at the quarterly interval, Mishkin (1982) and Merrick (1983) provide evidence against the neutrality hypothesis, where the hypothesized money supply process and lag lengths are altered from the Barro–Rush specification. Merrick essentially tries to replicate the Barro–Rush quarterly results on real GNP, after altering the money supply process by including lagged Treasury bill rates and stock market returns. He finds that unanticipated money no longer affects real GNP, but that anticipated money does. Mishkin also alters the money supply process by including past Treasury bill rates but finds that this

Real business cycles 521 does not affect the Barro–Rush results over a somewhat different sample period, where an eight quarter maximum lag is imposed. However, upon extending the lag lengths on unanticipated and anticipated money to twenty quarters, he is able to reject the joint hypothesis of rationality and neutrality. Some authors contend that the use of the word ‘real’ entails a semantic confusion as RBC theory cannot be equated to money neutrality. In this respect, Hoover’s entry on MONETARY EQUILIBRIUM THEORIES OF THE BUSINESS CYCLE in →Business cycles and depressions contains an interesting sub-section on Monetary vs. Real Business Cycles Theories: Some commentators therefore seek to distinguish between them by calling a model real if money cannot affect real variables in any way. This, however, defines ‘real’ too narrowly. Advocates of real business-cycle models typically find the major source of business-cycle fluctuations in shocks to technology, factor supplies or other real variables, but rarely deny [the] possibility that monetary shocks could in principle also generate cycles. (1997, p. 454) Finally, in a monthly bulletin published by the Bank of France, Avouyi-Dovi et al. (2007) downplay the argument that RBC theory can be discarded because of its supposedly money-neutrality claims. In fact, monetary shocks were thoroughly incorporated into the framework in the late 1980s, although money was eventually found to play a very minor role in economic fluctuations: One of the fundamental reasons for the rejection of the RBC approach, especially by central banks, is the absence of role of money in this theory. This criticism is partially erroneous. Indeed, in the 1980s, research seeks to find a fundamental reason for the links between the real sphere and the nominal sphere, particularly the one between the cyclical variations of the currency and the activity. The first studies evaluate the importance of the currency shocks economies where currency is held for transactional reasons (Cooley and Hansen, 1989). The results of this research reveal, in general, that these shocks produce an insignificant contribution to fluctuations in activity.

27.7.6 The evaluation of counter-cyclical fiscal policies The following entry by Ryan on BUSINESS CYCLES: REAL BUSINESS CYCLE in →Snowdon and Vane’s Encyclopedia of macroeconomics (2002) summarizes the prevailing business cycle research programme prior to the emergence of the RBC approach:

APPROACH

For many years economists have struggled to understand economic fluctuations in the hope that this would enable them to eliminate the unpalatable effects of recessions and booms, such as unemployment or house price inflation. [. . .] it was believed that governments, by undertaking economic research and

522 Marc Pilkington judicious use of fiscal or monetary policy, could control the worst excesses of the business cycle. (p. 96) From an RBC perspective, however, these recessions do not represent a phase in the rhythmic dynamics of the capitalistic economy, but simply ‘the aggregate outcome of responses to unavoidable shifts in the constraints that agents face’ (Snowdon and Vane, 2005, p. 295). The four-phase description epitomized by Mitchell’s definition (see Section 27.1), which emphasizes the systematicity in the succession of stages, is accordingly replaced by a two-phase description (expansion versus recession) only distinguishing ups and downs, thereby stressing the accidental character of the movement. This usage of the term ‘recession’ has some profound implications insofar as it determines whether downturns should not be combated by means of proactive fiscal stimulus. In this respect, Ryan discusses the impact of RBC theory on the perception of counter-cyclical fiscal theories: The result [of the RBC approach] also had another profound implication and, along with other research questioning the efficacy of short-run interventionist policy, has had a significant influence on many modern western governments. The theory suggested that the object of fiscal policy was not short-term countercyclical intervention, but rather to design tax and expenditure policies particularly as regards the provision of public goods and education which maximize the growth rate of the economy. (BUSINESS CYCLES: REAL BUSINESS CYCLE APPROACH in →Snowdon and Vane’s Encyclopedia of macroeconomics, 2002, p. 96). However, in the light of the recent global downturn – the biggest since the Great Depression – it will certainly be very interesting to examine future dictionary entries devoted to the desirability and effectiveness of fiscal policy in RBC theory.

27.8 CONCLUDING REMARKS RBC theory has certainly not left commentators indifferent. It has been the subject of criticism (see Section 27.7), albeit widely acclaimed by the economics profession, most notably by the Nobel Committee in 2004, as reported by Francis in his entry on BUSINESS CYCLE, REAL: ‘Finn Kydland and Edward Prescott received the Nobel Prize in economics in 2004 “for their contribution to dynamic macroeconomics: the time consistency of economic policy and the driving forces to business cycles”’ (International encyclopedia of the social sciences, 2008, p. 407). He further comments on the impact of RBC theory on the economics profession: They have also gone beyond static models and have begun to write models in more dynamic settings. Certainly, this is a practice that is good for the

Real business cycles 523 profession, though some researchers have taken it to the extreme by being so mathematical in their approach they have neglected the economics. (p. 409) Francis views progress achieved in business cycle modelling (increasingly written ‘in more dynamic settings’) as beneficial to the profession in spite of the increasingly blurred frontier between the fields of economics and mathematics. Furthermore, other significant evolutions are reflected by the way entries assess the epistemological dimension of real business cycles, notably in their account of the salient features of the framework. In this chapter we have precisely reviewed how the main concerns of RBC theory are taken up in recent economic dictionaries, trying to place these issues within the main dichotomy in the interpretation of the phenomenon of business fluctuations, namely, whether the underlying dynamics of capitalist economies is characterized by a recurring tendency to alternate phases of advance and of regression mutually causing each other, or whether such alternation is simply the result of external disturbances, to which the system adapts. Among these problems, we have examined how the adjective ‘real’ in RBC theory has been conducive to an unfinished list and an indeterminate hierarchy of shocks. Entries are also at variance with shocks to ‘fundamentals’, such as preferences, technology and endowments, usually emphasized in the RBC literature. Moreover, the entries we reviewed hardly reconcile the dynamic general equilibrium setting of RBC theory with other proposed forms of reasoning in terms of supply and demand. A quick review of business cycle characterization and stylized facts has shown that, on the one hand, dictionary entries on real business cycles tend to question Mitchell and Burns’s standard four-phase typology of business cycles and, on the other hand, ascertain consistency with the mainstream academic literature on stylized facts, in spite of minor differences merely due to a matter of emphasis. The ensuing discussion of the integration of cycles and growth in the RBC literature offers a few examples of misreading of history marked by the failure to situate this old debate in the history of economic thought. In spite of the pioneering econometric tools used by RBC theorists, dictionary entries have sometimes conveyed the erroneous impression that the novelty of the attempt to integrate the two strands of phenomena was circumscribed to RBC theory. The discussion of random walk components and of the non-deterministic nature of growth in RBC theory has also enriched our introductory debate. The success of the calibration method has generally been emphasized by dictionary entries, although the latter have failed to specify the criteria upon which this positive assessment was made. Dictionary entries have emphasized the advantages of the RBC methodology in terms of enhanced objectivity without ever satisfactorily addressing the epistemological foundations of the subjective choices made by the researchers in the initial stages of the modelling process. Finally, we have identified remaining contentious issues. Dictionary entries generally acknowledge the considerably weakened explanatory power of RBC

524 Marc Pilkington theory under the weight of multidimensional criticism. More recently, in spite of numerous signs of institutional recognition offered by the economics profession, dictionary entries have aimed at codifying anew the ongoing theoretical struggle whose object is nothing less than the intellectual survival of the framework.

NOTE 1 As argued above (Section 27.4.1), a more radical argument was advanced by Romer, who maintained that the very notion of ‘cycle’ should be rejected as inconsistent with the nature of the phenomenon: ‘For describing the swings in economic activity, therefore, many modern economists prefer the term “short-run economic fluctuations” to “business cycle.” [. . .] Just as there is no regularity in the timing of business cycles, there is no reason why cycles have to occur at all. The prevailing view among economists is that there is a level of economic activity, often referred to as full employment, at which the economy could stay forever’ (BUSINESS CYCLES, in →Henderson’s Concise encyclopedia of economics, 2008).

REFERENCES Avouyi-Dovi, S., Matheron, J. and Fève, P., 2007, Les modèles DSGE: Leur intérêt pour les banques centrales, Bulletin de la Banque de France, No. 149, pp. 21–32. Burns, A. F. and Mitchell, W. C., 1946, Measuring business cycles (New York: National Bureau of Economic Research). Cogley, T. and Nason, J. M., 1995. Effects of the Hodrick–Prescott filter on trend and difference stationary time series: implications for business cycle research, Journal of Economic Dynamics and Control, 19, pp. 253–278. Cooley, T. F. (ed.), 1995, Frontiers of business cycle research (Princeton, NJ: Princeton University Press). Cooley, T. F., 1997, Calibrated models, Oxford Review of Economic Policy, 13: 3, pp. 55–69. Cooley, T. F. and Hansen, G. D., 1995, Money and the business cycle. In T. F. Cooley (ed.), Frontiers of business cycle research (Princeton, NJ: Princeton University Press), pp. 1–38. Fiorito, R. and Kollintzas, T., 1994, Stylized facts of business cycles in the G7 from a real business cycles perspective, European Economic Review, 38: 2, February, pp. 235–269. Fisher, I., 1923, The business cycle largely a ‘dance of the dollar’, Journal of the American Statistical Society, 18, December, pp. 1024. Francis, N. and Ramey, V., 2005, Is the technology-driven real business cycle hypothesis dead? Shocks and aggregate fluctuations revisited, Journal of Monetary Economics, 52: 8, pp. 1379–1399. Friedman, M. and Schwartz, A. J., 1963, A monetary history of the United States, 1867–1960 (Princeton, NJ: Princeton University Press). Hansen, G. D., 1985, Indivisible labor and the business cycle, Journal of Monetary Economics, 16: 3, pp. 309–327. Hodrick, R. J. and Prescott, E. C., 1980, Post-war U.S. business cycles: an empirical investigation, Discussion Paper 451 (Pittsburgh, PA: Carnegie-Mellon University). Hoover, K. D., 1995, Is macroeconomics for real? The Monist, 78: 3, pp. 235–257.

Real business cycles 525 Hume, D., 1752, Of money. Reprinted in E. Rotwein, 1955, David Hume: writings on economics (Madison, WI: University of Wisconsin Press), pp. 33–46. Keynes, J. M., 1924, A tract on monetary reform (London: Macmillan). King, R. G. and Rebelo, S., 1986, Business cycles with endogenous growth (mimeo). King, R. G. and Rebelo, S., 1988, Public policy and economic growth: developing neoclassical implications, Working Papers 225 (Rochester, NY: University of Rochester, Center for Economic Research (RCER)). Kydland, F. E. and Prescott, E. C., 1982, Time to build and aggregate fluctuations, Econometrica, 50: 6, pp. 1345–1370. Kydland, F. E. and Prescott, E. C., 1991, The econometrics of the general equilibrium approach to business cycles, Scandinavian Journal of Economics, 93: 2, pp. 161–178. Kydland, F. E. and Prescott, E. C., 1996, The computational experiment: an econometric tool, Journal of Economic Perspectives, 10: 1, Winter, pp. 69–85. Lines, M., 1990, Slutzky and Lucas: random causes of the business cycle, Structural Change and Economic Dynamics, 1: 2, pp. 359–370. Long, J. B., Jr and Plosser, C. I., 1983, Real business cycles, Journal of Political Economy 91: 1, pp. 39–69. Lucas, R. E. Jr, 1980, Methods and problems in business cycle theory, Journal of Money, Credit and Banking, 12, November, pp. 696–717. Lucas, R. E. Jr, 1981, Studies in business-cycle theory (Cambridge, MA: MIT Press). Merrick, J. J., 1983, Financial market efficiency, the decomposition of ‘anticipated’ versus ‘unanticipated’ money growth, and further tests of the relation between money and real output, Journal of Money, Credit and Banking, 15, pp. 222–232. Mishkin, F. S., 1982, Does anticipated money matter? An econometric investigation, Journal of Political Economy, 90, February, pp. 22–51. Nelson, C. R. and Plosser, C. I., 1982, Trends and random walks, Journal of Monetary Economics, 10: 2, pp. 139–162. Plosser, C. I., 1989, Understanding real business cycles, Journal of Economic Perspectives, 3: 3, pp. 51–77. Prescott, E. C., 1986, Theory ahead of business cycle measurement, Federal Reserve Bank of Minneapolis Quarterly Review, 10: 4, pp. 9–21. Rebelo, S., 2005, Real business cycle models: past, present and future, Scandinavian Journal of Economics, 107: 2, pp. 217–238. Rogerson, R., 1988, Indivisible labor, lotteries and equilibrium, Journal of Monetary Economics, 36: 2, pp. 269–300. Slutzky, E., 1937, The summation of random causes as the source of cyclical processes, Econometrica, 5: 2, pp. 105–146. Snowdon, B. and Vane, H. R., 2005, Modern macroeconomics: its origins, development and current state (Cheltenham: Edward Elgar). Solow, R. M., 1957, Technical change and the aggregate production function, Review of Economics and Statistics, 3: 3, pp. 312–320. Summers, L. H., 1991, The scientific illusion in empirical macroeconomics, Scandinavian Journal of Economics, 93: 2, pp. 129–148. Talmain, G., 2003, Growth and business cycles. In S. Altug, J. Chadha and C. Nolan (eds), Elements of dynamic macroeconomic analysis (Cambridge: Cambridge University Press), pp. 509–568.

28 Back to crises Post-war dictionaries and the resilience of an old category Daniele Besomi and Giorgio Colacchio

28.1 INTRODUCTION In 1913, Albert Aftalion denounced as misplaced the nineteenth century’s emphasis on the theories of crises and dismissed the very notion of ‘crisis’ as an inadequate concept, to be substituted by the more general concept of ‘economic cycle’: The earlier inquirers into the phenomenon, impressed by the devastation following crises, focused only on crisis itself, on the violent break of equilibrium that is observed for a brief time only. They ignored what precedes it and what follows it. Today we know, especially thanks to Juglar, that crisis is but one of the moments – in truth, the most distressing one – of an entire cycle taking place periodically. [. . .] Crisis is the point [. . .] of intersection between prosperity and depression, the culmination of one phase and the beginning of the other. [. . .] What happens during the crisis cannot be understood or explained without examining the whole of the cycle: the prosperity preparing the crisis, and the depression which ensues from it and which prepares the return of good times. When the subject becomes better known, writers will use less the expression overproduction crises and will use instead economic cycles. In scientific writings, the latter expression will tend to substitute the former. (Aftalion 1913, Vol. I, p. vi) Aftalion’s terminological prediction proved largely correct for the decades to come. In the inter-war years most writers used the terms ‘trade cycle’ or ‘business cycle’ in English, or some equivalent in other languages. Notable exceptions are recorded in the immediate aftermath of the 1929 crisis, when the term ‘crisis’ was revived for a few years, and in Aftalion’s home country and to a lesser extent in Italy, where the word ‘crise’ remained in usage. Overall, however, usage of the term ‘crisis’ had considerably shrunk by the 1990s, but had a revival in the last few years of the twentieth century and at the beginning of the twenty-first.1 The title of dictionary entries reflects, with a lag, the terminological changes taking place in the literature. Until the mid-1920s the entries on economic difficulties were titled ‘crisis’ or ‘crises’, then ‘cycles’ began to take over; ‘crises’ almost totally disappeared (except from French dictionaries), to reappear in the late 1970s

Crises in recent dictionaries 527 and become more frequent in recent years. While up to the 1920s entries on ‘crises’ were the exclusive home of all systematic discussion on economic distress (with some remarks spilling over to entries such as ‘banks’, ‘currency’, ‘credit’ or, occasionally, ‘overproduction’), the recent revival of the use of the term ‘crises’ often sees it accompanied by a number of other entries. In particular, ‘business cycles’ is rarely missing from dictionaries. This suggests that the notion of ‘crisis’ now indicates something distinct from the cycle: possibly, as suggested by Aftalion, one of its phases, but possibly also something different. One of the main issues at stake is therefore the relationship of cycles and crises, and it will be the main concern of this chapter.

28.2 CRISES AS THE TURNING POINT OF THE CYCLE: FRENCH LANGUAGE DICTIONARIES In French, the term ‘crisis’ never fell into disuse, and accordingly several economic dictionaries carry an entry under that heading, sometimes exclusively but more often in conjunction with cycles or fluctuations. With few exceptions, the general attitude towards crises and cycles reflects Aftalion’s position cited above. The notion of ‘cycle’ (or of ‘fluctuations’, when writers feel that the regularity associated with the recurrence of crises in the nineteenth century is lacking in the post-war world) is understood as encompassing the notion of ‘crisis’, and correspondingly the more modern theories of the cycle are described as generalizing the old approach emphasizing crises. The discriminant – the reason for carrying separate entries for crises and cycles – often lies in the violence, suddenness and dramatic character of the crisis as compared to the smoothness of a recession (see Section 3.2.11). These themes are clearly expounded starting with the first post-war French dictionary, a particularly important one for our purpose due to the eminence of the author of the entries on crises and cycles. They were written by Henry Guitton, who had previously authored a number of articles and a voluminous monograph on economic fluctuations (1951). In the entry on CRISES, he characterized the modern form of the phenomenon (as distinct from the agricultural crises of the eighteenth century) as consisting of generalized and epidemic overproduction, affecting all branches of production and all industrialized countries, and stressed that they are no longer occasional and somewhat random phenomena but reappear periodically at more or less regular intervals. ‘The latter feature has led from the notion of crisis to the notion of cycle’ (CRISES, in →Romeuf, Dictionnaire des sciences économiques, 1956, p. 350). Accordingly, the theories of crises have been superseded by the theories of the cycle. The latter, however, ‘did not destroy the theories of crises; they rather rest on them, in order to improve on them and generalize them’ (p. 351). Accordingly, in the entry on CYCLES (without qualifiers), for the same dictionary, Guitton regretted that ‘the organization of a dictionary forces one to disjoin what, in the real world, is deeply united’, and defined the crisis as ‘a discontinuous and catastrophic time of interruption of a continuous cyclical evolution’. What makes crises notable, as distinct from cycles, is the fact that

528 Daniele Besomi and Giorgio Colacchio discontinuities are more easily perceived than continuous movements. The study of the latter requires a different attitude, which explains why ‘the study of the cycle is more theoretical than the study of crises’ (ibid., p. 365). Guitton is slightly hesitant as to the balance of emphasis between crises and cycles. On the one hand, he asks himself whether the traumatic experience of 1929 and of the First World War have not jeopardized the notion of cycle and whether the notion of crisis, perhaps somewhat modified, should again gain pre-eminence (p. 350). On the other hand, even these shocks have not undermined the foundations of the previous economic relationships. The economy overall tends to grow, and in this context crises have been painful but short-lived interruptions of this process; they are the price to pay for economic progress. There cannot be absolute stability in this process, but catastrophic crises have disappeared, and even their discontinuous character is undermined. Guitton therefore envisages the possibility of a protracted growth, on which gentle oscillations are superimposed (pp. 353–354). The other French dictionaries carrying entries on crises published in the last halfcentury basically take up part of Guitton’s themes, rarely adding new considerations and scarcely offering any reason but the accidents of the alphabet for the existence of separate entries on cycles and crises. In →Birou’s Vocabulaire pratique des sciences sociales (1966), a crisis is generally defined as any phenomenon failing to unfold in a regular way according to the forecasts, or as a state of distress, of perturbed order, of anomaly (entry CRISE), while a CRISE ÉCONOMIQUE is an acute state of distress and of malfunctioning of the economic system. In other words, crises ‘correspond to a phenomenon of depression of economic activity’; they ‘are the minima of the phases of depression of economic cycles’ and are dangerous times in economic life (p. 73). CYCLES ÉCONOMIQUES, in turn, are a notion resulting from the existence and periodical return of crises. However, as their occurrence has become much less regular, the notion of ‘fluctuation’ has become more appropriate. Interestingly, in contrast with Aftalion’s view (which he took up from Lescure, 1907 (1932 edn), pp. 2–3, and which has been generally accepted in the early and recent literature) that crises are the upper turning point of the cycle, Birou makes them the lowest point of the depression, more in accordance with common parlance than with technical jargon. The definition was soon modified in →Cotta’s Dictionnaire de science économique (2nd edn, 1969), where crises are characterized as ‘brutal substitution of an upwards movement by a downwards movement’ in prices, production and incomes (CRISE, p. 130). The entry traces a history of crises from 1826 to 1929, and offers an extremely brief survey of the explanations of crises. Classical economists blamed crises on accidental mistakes, the Marxists on underconsumption by the workers, others on the physical constraints of production methods, such as the length of the production process. The survey concludes that as crises became periodical, all these explanations lost interest and writers focused on theories of fluctuations. In the post-war world, ‘the era of crises and depressions seems to have ended’, and even the theory of short fluctuations (the Juglar cycle) is subsumed under the theory of growth (FLUCTUATION, p. 221; there is no entry on cycles).

Crises in recent dictionaries 529 Bernard and Colli (→Dictionnaire économique et financier, 3rd edn, 1981) explicitly interpret crises ‘in the strict sense’ as the ‘brutal turning point of conjuncture, marking the passage from a phase of expansion to one of depression of an economic cycle’ (CRISE ÉCONOMIQUE, p. 473; see also CYCLE, p. 485). They add, however, that the crisis is a break in the equilibrium between supply and demand of goods and services (p. 473). Taken together, the two definitions imply that the phase of prosperity is an equilibrium process; this would require some elaboration, which is, however, lacking from the relevant entries. Three main interpretations in history are described. The classical, liberal school interpreted crises as the result of abnormal human behaviour altering the operation of the readjustment mechanisms that would otherwise maintain equilibrium. The neoliberal school, on the grounds of a dynamic conception based on the existence of lags, has integrated crises within the study of cycles. Marxist analysis focused on overproduction crises due to the cumulative discrepancy between the development of productive forces and demand, in turn affected by the distribution of income and by the falling rate of profit. While Marx predicted a progressive deepening of crises until the final breakdown, later Marxists incorporated into the analysis the action of some counteracting forces, making it less mechanical (pp. 474–475). The theoretical content of the entries remains practically unaltered in the 6th edition (1996). →Brémond and Gélédan’s Dictionnaire économique et social (5th edn, 1992) offers an entry on economic and social crises (CRISES ÉCONOMIQUES ET SOCIALES) which discusses crises, cycles and fluctuations at once, without clarifying what the relationship between these phenomena is, except by pointing out that terms such as recession, stagnation and turbulence either designate a condition less brutal than that described by crises, or are used to mask the gravity of an actual situation (p. 108). Otherwise, the terms are used almost interchangeably. Three approaches are distinguished: the neo-classical, exemplified by a convergent cobweb model; the Keynesian, with its underemployment equilibria; and the Marxist, for which crises are the result of the contradictions of capitalism, and are an essential ingredient for restoring the profit rates negatively affected by the previous development, laying the foundations for a new growth bout (112–114). →Géhanne’s Dictionnaire thématique de sciences économiques et sociales (1995) defines crises in a strict sense as the turning point of the cycle, while recessions and depressions are the names of the descending phase of the cycle, distinguished by their intensity (CRISES ET FLUCTUATIONS ÉCONOMIQUES, p. 84). Crises therefore are explicitly denied any autonomy as a concept. An entry on ‘crises and economic theories’ offers a survey of the field, considering classical economists, Marx, neoclassical theory, and Keynesian and post-Keynesian analysis. Although schematic summaries of the respective views on the causes of crises are offered, they are scarcely integrated and often boil down to a few quotations from various and disparate writers, so that one hardly gets the overall picture (CRISES ET THÉORIES ÉCONOMIQUES). Similarly, in →Albertini’s and Silem’s Lexique d’économie (4th edition, 1992) the crisis, defined as a brutal reversal of the economic conjuncture giving rise to an excess of supply in face of a limited demand

530 Daniele Besomi and Giorgio Colacchio for goods and services (CRISE. CRISE ÉCONOMIQUE, p. 177), is listed as a phase of the cycle (CYCLE, p. 183), and correspondingly the theories of crises correspond to the theories of cycles and of fluctuations (p. 178). More interesting is de Boissieu’s entry on economic crisis in →Jessua, Labrousse and Vitry’s Dictionnaire des sciences économiques (2001), where it is mentioned that there are two lines of interpretation of the phenomenon. Some writers see crises as the turning point of the cycle, while for others the crisis is a major break due to an unforeseen shock. The latter view is treated as a qualitative jump, to be analysed by means of the mathematics of discontinuity such as catastrophe or chaos theories (CRISE ÉCONOMIQUE, p. 229). Unfortunately, the latter hint is not taken up and the entry unfolds with the discussion of the nature of shocks – whether exogenous or produced by the system itself – their amplitude and mechanisms of transmission. The entry on CRISE in →Alquier’s Dictionnaire encyclopédique économique et social (1985, 1990) is the only French one attempting to restore the theoretical autonomy of the notion of crisis from cycles and fluctuations. Not only are such terms not given the honour of an entry in the dictionary, but Alquier criticizes the definitions of crisis based on some ‘perturbation’ of equilibrium (he explicitly refers to Lescure’s entry on CRISES in →Seligman’s Encyclopaedia of the social sciences, 1930–1935; see Chapter 22) as failing to distinguish the notion of crisis from similar phenomena such as recessions, cycles and fluctuations. He points out (citing Brochier, 1976) that while the term ‘crisis’ seemed to have been definitely expelled from the economic vocabulary, following the post-war faith in governments’ power to regulate the economies, the 1973 crisis has disproved this view, so that the theory itself underwent a serious crisis (CRISE, 1990, p. 115). The entry begins with the observation that the notion of crisis is multifaced, as it is at the same time a common term but also part of a theoretical approach, and it concerns the economy while at the same time also affecting other aspects of society. The ‘morphological’ approach implied by a formal definition is therefore not suitable, and accordingly it is suggested that crises are understood in terms of a pathology (CRISE, pp. 114–115). The association of crises and pathology is not, of course, new (see Section 28.4 below for further examples); in fact, the medical metaphor offered the first conceptualizations of the phenomenon (Besomi, 2011). Alquier, however, is concerned not so much with the phenomenological aspects of the malfunctioning of the economy, but with its theoretical representation in terms of the opposition between the crisis and the normal functioning of the system. The importance of the system’s pathology lies precisely in revealing its internal logic by defining the precise conditions under which it can work ‘normally’. The understanding of crises is therefore strictly connected with the theoretical approaches of the various schools of economics; it is the benchmark for judging their ‘truth’ (CRISE, p. 115). While this premise is promising, the development offered in the entry is too scanty to be fully helpful. From the few lines dedicated to classical and neoclassical writers, one gets a hint of the implications of Alquier’s argument. Regardless of their specificities (concerning, for example, the theories of value or of prices, the emphasis on wealth or on rationality, the macro or micro approaches), these writers share the same view of equilibrium as an actual and

Crises in recent dictionaries 531 stable state of the system, and accordingly deny the possibility of deep and general crises. However, the equally short discussion of the dissenters’ view (Malthus and Sismondi first, Keynes later) only points out that they have incorporated the possibility of crises in their apparatus, but have not gone so far as to reject the capitalist system itself. Marx, on the contrary, not only discussed the possibility of crises, intrinsic in the metamorphosis of capital, but stressed their necessity,2 which the author attributes mainly to the anarchy of production and to underconsumption by the workers, with a passing reference also to the falling rate of profit and the intrinsic contradiction between the development of productive forces and profitability (pp. 115–119).3

28.3 CRISES AS A BRANCH OF MARXIAN THEORY VS. THE BUSINESS CYCLE AS BOURGEOIS ECONOMICS: THE CASE OF GERMAN DICTIONARIES In German language dictionaries, cycles (Konjunktur) have definitely supplanted crises (Krise). Accordingly, entries on crises have almost totally disappeared, with some trivial exceptions and some notable ones. The trivial exceptions boil down to the dictionaries defining crises as the turning point of the cycle, as for instance in the entries WIRTSCHAFTSKRISEN4 (by K. E. Born) in →Albers and Zottmann’s Handwörterbuch der Wirtschaftswissenschaft (Vol. 9, 1982), KRISE in →Müssig’s Bank-Lexikon (10th edition, 1988) and in →Meyers Handbuch über die Wirtschaft (3rd edition, 1974), or else dismissing the concept as an old notion, now encompassed by the notion of cycle and only cherished by Marxists (Weber, KONJUNKTUR UND KRISE, in →Klose’s Katholisches Soziallexikon, 1964). The notable exceptions fall under two headings. One approaches crises from the viewpoint of the history of ideas, and will be discussed together with other specialized dictionaries in that field (see Section 28.5). The other distinguishes cycle theory as a branch of bourgeois economics while seeing the theory of crises as typically Marxist. The distinction is nominal only in →Dichtl and Issing’s Vahlens großes Wirtschaftslexikon (1993). This dictionary carries distinct entries on KONJUNKTUR, KONJUNKTURTHEORIEN, KONJUNKTURMODELLE, etc. on one side, and MARXISTISCHE KRISENTHEORIEN on the other, but the Marxist theory of crises is presented as a theory of the cycle, without any effort being made to distinguish between the categories of cycle and crisis. The dictionaries of Marxist economics and the Marxist dictionaries of economics, on the other hand, take the distinction more seriously. The entry on KONJUNKTUR UND KRISE of →Frenzel’s Ökonomie (1973) explicitly discusses ‘business cycle theory as a part of Western economics’ (this section is written by Haberler), to which is opposed ‘the Marxist theory of crises as a part of socialist economics’ (this section is written by Vaclav Holesovsky). The definition of the cycle borrows (as many other dictionaries do) from Burns and Mitchell (1946, p. 3); a number of endogenous and exogenous causes of the cycle are briefly discussed and offered as parts of a characterization and explanation

532 Daniele Besomi and Giorgio Colacchio of the phenomenon, without attempting to discuss their origin in the history of economic thought. By contrast, the Marxian explanation of cyclical crises (‘Krisenzyklus’) is presented as being part and parcel of Marx’s general understanding of the laws of development of capitalism. Marx’s theory of crises is fragmented and scattered through his writings, but the various pieces provide, as Schumpeter (1954) remarked, practically all elements of the modern theories of the business cycle. The entry explains these ingredients mostly by relating them to the language of Western economics; this provides a piece-by-piece reconstruction which, rather than explaining where the intrinsic difference between the ‘Krisenzyklus’ and the business cycle theories lies, tends to blur the line and leave their relationship unresolved. The cycles and crises problems, both theoretical and practical, in the planned economies, as well as various strains of Marxist theories of crises, are also discussed, including the problems’ echoes in Western literature. Among these, the view of the final breakdown of capitalism is mentioned as a ‘curiosum’ in the Marxist literature, resulting from a mechanistic interpretation and extension of Marx’s reproduction schemes (KONJUNKTUR UND KRISE, p. 306). The distinction between theory of the business cycle and the Marxist theory of cyclical crises is also prominent in the East German →Ökonomisches Lexikon (1970–1971), edited by Bader and published by Die Wirtschaft in Berlin. In the entry on KONJUNKTURTHEORIE (by A. Bönisch), business cycle theory is characterized as ‘a part of bourgeois economics’; the entry lacks, however, a homogeneous perspective on the cyclical behaviour of the capitalistic reproduction process. Nevertheless, most bourgeois economists consider the crisis as a marginal issue while focusing instead on equilibrium as the normal state of the system; crises are correspondingly perceived as aberrations, and treated as the result of a disturbance of equilibrium. However, crises are not a disturbance of equilibrium; indeed, they bring, for a short time, the system back to equilibrium when the proportionality of the reproduction process of capital is disrupted by its own progress (p. 1102). The crisis must be seen as a periodically recurrent and necessary phase in the reproduction process of capital, resulting from the antagonistic tendencies always at work in the productive process. The valorization of capital, and its very preservation, presuppose an increasing pauperization of the working class, which in turn restricts the market and does not permit the realization of profits. The function of the crisis is essential in this process, as it restores for a time the necessary proportionality between the production of means of production and of consumption goods (sections I and II of the reproduction schemes) (KRISE, ZYKLISCHE; PERIODIZITÄT DER KRISEN; both by H. Wagner). The crisis is therefore ‘the crucial and constituent phase, endpoint and starting point of the cycle [of crises]. For this reason, the Marxist theory of crises is characterized as a theory of the cyclical crisis and not as a business cycle as in the bourgeois theory. The crisis is the highest point of the contradictions of production, but it is also the point where it finds its solution, by means of the extensive destruction of productive forces’ (KRISENZYKLUS).5

Crises in recent dictionaries 533 28.4 CRISES AS A PATHOLOGY The entries examined so far, in spite of being titled ‘crisis’ rather than ‘cycle’, fail to recognize an autonomous character to crises and justify the corresponding separate heading. Marx is frequently seen as an exception, but the only serious attempt to clarify the relationship of crises to cycles is due to the →Ökonomisches Lexikon (1970–1971) we have just examined. Some entries raise the issue of the relationship of crises to cycles in passing but do not attempt to resolve it. In Kindelberger’s entry in →The new Palgrave dictionary of economics (1987), for instance, a FINANCIAL CRISIS is defined as ‘a sharp, brief, ultra-cyclical deterioration of all or most of a group of financial indicators’; it is the counterpart of financial booms (or bubbles), between which a period of ‘distress’ may take place. Crises are seen in contrast to cycles in some sense, but the issue is not clear as the meaning of ‘ultra-cyclical’ remains unexplained.6 In some entries, the issue is tackled explicitly by interpreting crises as anomalies with respect to the ‘normal’, cyclical dynamics of the economic system. Crises are thus seen either as abnormally large fluctuations (either in terms of length of the depression phase, or in terms of its depth), or as exceptional dramatic downward deviations from a smooth, regular cycle. This is a new version of the idea that crises are sudden and unexpected interruptions of the normal train of economic life. While during the nineteenth century this was interpreted in terms of interruptions of a path of cumulative growth, now the reference ‘norm’ is a cyclical pattern, where good trade is followed by bad trade without excesses on either side. ‘Crises’ denote deviations from the reference pattern, and as exceptions call for an explanation. Other entries, also treating crises as a pathology, do not specify to what ‘healthy’ state of the economy crises are compared. As was the case with the first crises theories, such perturbations can either have a contingent, historical nature, or be intrinsic to the economic process itself; accordingly, they admit of exogenous and endogenous explanations, but have in common the interpretation of such facts as pathological deviations from a norm. Ciocca’s entry on CRISI ECONOMICHE: IL NOVECENTO in →Carmagnani and Vercelli’s Il mondo contemporaneo (1978) is the neatest example of this thesis. The author writes explicitly, with reference to the cyclical fluctuations of the twentieth century, that ‘it is not simple to assess whether these “normal” cycles tend to occur in more or less severe forms. The very distinction between this kind of fluctuations and proper crises [. . .] is to some extent arbitrary’ (p. 135) – also because each cycle differs from all others. The empirical evidence suggests that the amplitude of the business cycle has tended to decrease since the middle of the nineteenth century. Ciocca takes this finding as defining the ‘normal’ character of the cycle (‘normal’ is always written between inverted commas). There are, however, two striking exceptions: the crises of the early 1930s and 1970s. The exceptionality of the former lies in the dramatic depression of economic activity it caused, while the latter is anomalous for having seriously undermined the agents’ confidence in the stability of the system. This neat division between ‘normal’ cycle

534 Daniele Besomi and Giorgio Colacchio and exceptional crises is projected from the empirical to the theoretical ground, when Ciocca separately surveys the main theoretical approaches to the problems of the persistent character of cyclical fluctuations and of the particular gravity of the two above-mentioned crises. In the same vein, although less explicitly than Ciocca, Laibman contributed an entry on CYCLICAL CRISIS MODEL to →O’Hara’s Encyclopedia of political economy (1999). The expression in the header ‘joins together the concepts “cycle” and “crisis”, each of which often appears on its own’ (p. 179), as a possible way of accounting for the recurrent crises affecting capitalist economies. Cyclical crisis theory, combining a ‘determinate cyclical movement with a moment of sharp rupture and systemic disorganization’ (p. 180), would be different from both cycle theory and crisis theory, the former implying a sort of ‘smooth’ fluctuating dynamics and the latter conceiving crises as catastrophic and/or secular events. The pathological character of crises is explicitly evoked by Temin in the entry on the GREAT DEPRESSION for the 2008 edition of the The new Palgrave. He writes that ‘The world depression of the 1930s was the greatest peacetime economic catastrophe in history. There had been hard times before, but never without war, natural disaster or pestilence. The massive and long-lasting unemployment and hardship of the 1930s was a pathology of industrial society, caused by a malfunctioning of the economic system’. The same idea is expressed much more sharply by Ohanian in the entry on GREAT DEPRESSION (MECHANISMS) for the same dictionary. He begins as follows: Depressions – prolonged periods in which output and employment fall 15 per cent or more below their long-run trend levels – are pathological. These episodes are particularly bizarre in economies like that of the United States, in which aggregate variables are almost always within a couple of percentage points of their long-run trend values. [. . .] Economists have long recognized that these abnormal episodes are strongly at variance with standard economic theory. For this reason, economists have not used equilibrium models, or, for that matter, any optimizing framework to investigate these episodes. And the reason why optimizing theories have been eschewed seems straightforward – what could equilibrium models tell us about episodes that appear to defy equilibrium reasoning? Prescott . . . refers to the omission of theory from studies of depressions as a virtual ‘taboo’. The emphasis here is on the abnormal character of depressions, which obviously presupposes a reference to some ‘normal’ dynamics of the system, which, however, is not clearly specified. The author, actually, is mainly concerned with economic theory, and in a sense the ‘normal’ dynamics of the system should be identified with that described by standard economic theory. These pathological events thus acquire relevance as theoretical deviations: ‘Economists are beginning to learn about the pathology of depressions as deviations from standard economic theory, much as a physician learns about illness by assessing deviations of a patient’s vital signs from normality’ (emphasis added).

Crises in recent dictionaries 535 28.5 CRISES IN THE HISTORY OF IDEAS In the entries considered so far, the straitjacket of economic terminology and the problematic relationship of ‘crises’ and ‘cycles’ have limited the explanatory power and the theoretical autonomy of the concept of ‘crisis’. This does not always apply to some of the dictionaries mainly concerned with kindred disciplines or with the history of ideas, where emphasis is given to political and historical issues, sometimes with an eye on general systems theory. Even among these entries, however, the pertinence of the concept of ‘crisis’ is not always conceded. Robinson, in the entry CRISIS in the →International encyclopedia of the social sciences (1968), argued that ‘crisis’ is ‘a lay term in search of a scholarly meaning’ (p. 510). Its usage oscillates between indistinct synonymous terms such as ‘panic’, ‘catastrophe’ or ‘disaster’, and a more precise connotation derived from medicine as the ‘turning point between a fortunate and an unfortunate change in the state of an organism’.7 The term either is generically used with a multiplicity of non-rigorous meanings, or is associated, in some disciplines (in particular in the field of decision-making), with extremely narrow definitions. Robinson argued that, either way, the concept scarcely proves useful: ‘Definitions are either extraordinarily precise and specific, and hence not widely applicable to a variety of situations, organizations, and subjects, or they are so unrestricted in meaning that, in this case, it is difficult to distinguish crisis from noncrisis’ (p. 511). In Pasquino’s entry on CRISI in →Bobbio’s and Matteucci’s Dizionario di politica (1976), the meaning of the term ‘crisis’ is analysed in the context of systems theory. Pasquino gives particular emphasis to politics, but points out that the resulting view is equally applicable to other domains, including economics. He thinks of crises as ‘the moment of breaking down in the operation of a system’. This perspective implies that crises are associated with a qualitative change (often violent and unexpected) in the ‘normal’ functioning of the system or in the interrelation of its elements;8 such changes can be for the better or for the worse, as in the original Greek meaning of the term. The author seems to have in mind a sort of hysteretic process, according to which the system would not return, after having experienced a crisis, to the original state. The notion is intriguing, although the author does not seem to be familiar with the conceptual apparatus that would have enabled him to express this view more rigorously. He tries, for instance, to distinguish between physiological and pathological crises: the former affect the working of the system and drive it to adapt to a new situation, while the latter affect the structure of the system and cause it to change. He thus seems to have had in mind a notion of structural stability – developed by mathematicians in the preceding decades, but only brought to the attention of social scientists at a later stage – which, however, he tried to express by means of the notion of dynamic stability, arguing that if the equilibrium is stable the system will return to it after a crisis, while in the opposite case it will move to another equilibrium position. This notion of instability does not capture the kind of change envisaged by Pasquino, as the system itself remains unchanged.9

536 Daniele Besomi and Giorgio Colacchio In his entry on CRISIS IN HISTORY in Winer’s Dictionary of the history of ideas, Masur (1968) offers an historical reconstruction of the meaning of the term ‘crisis’ meant to account for its widespread use since the First World War.10 This use of the word indicates ‘an awareness of crisis as a salient feature of contemporary consciousness’, and to clear up the confusion as to its exact meaning caused by its indiscriminate use (p. 589). For the economic part the author takes as a guideline the modern notion of the business cycle, and therefore excludes at the outset that the notion of crisis can have a meaningful autonomous significance. A special place, however, is devoted to Marx’s exception to the interpretation of crises as phases of a cycle. Besides explaining the cyclical recurrence of crises, Marx stressed their becoming more and more destructive, ‘thus leading to the final breakdown of bourgeois society’. Marx thus placed crises in the framework of a universal historical process of a deterministic kind, making the final crisis the decisive step in the emancipation of mankind (pp. 590–591). This emphasis on a historical theory of crises is quite important (as we shall see below, it was later taken up more in detail by Koselleck). One of the rare writers who interpreted crises within a theory of the historical process is the Swiss historian Jakob Burckhardt, whose doctrine is described at length in the entry. We only take up two points. The first connects to Pasquino’s entry discussed above and concerns Burckhardt’s distinction between surface crises and genuine crises. The former are absorbed without touching the fundamental structure of society, while the latter lead their vital transformation by producing a sudden acceleration of the historical process. The second is related to Burckhardt’s notions of abortive and arrested crises. One can ask oneself whether and how some crises could be checked in time or avoided altogether, and whether some have been aborted. This is indeed an issue that some writers raised concerning economic crises, as we shall see in Section 28.6. Koselleck’s long and very rich entry on KRISE in →Brunner’s Geschichtliche Grundbegriffe (1982; English translation as Koselleck, 2006) is mostly focused on issues relating to semantics and the philosophy of history. Economics is concerned with both. The author shows that in the German language (but this is true also in English and French) the term ‘crisis’ was first used in politics and only later applied to economics, and more with a generic meaning than with a specialized and analytically precise intention (pp. 623–624). In the writings of the early nineteenth century, mostly as newspaper articles or as reports by various chambers of commerce, the term ‘crisis’ was normally tainted with moralistic judgements, and was largely substitutable by expressions such as ‘calamity’, ‘disturbance’ or ‘convulsion’. Only after the 1840s, when crises became more common and widespread, did the term start taking on the more precise meaning either of a diseased state or of a breach of equilibrium; Roscher’s 1849 entry on PRODUCTIONSKRISEN in →Die Gegenwart (see Chapter 7) was instrumental in this transition. ‘Crisis’ thus became a term suitable for expressing all kind of economic difficulties. After recording that the term was eventually adopted by most schools of thought, Koselleck focuses on the interpretations of the outcome and role of crises. He first notes that the economic concept of ‘crisis’ soon acquired an historiographical connotation.

Crises in recent dictionaries 537 Roscher himself, in fact, retrospectively pointed out that during the periods of repose which in the life of nations alternate with crises, the existing forms (such as the institutional setting) are consistent with the substance of things, while during crises ‘the changed substance or contents seeks to build up a new form for itself. Such crises are called reforms when they are effected in a peaceful way, and in accordance with positive law’ (Roscher, 1854, p. 36; English translation, p. 108). Moreover, the notion was suitable for both the liberal optimists and the socialist critics. The former gave a positive interpretation of crises, not simply as part of a recurring pattern of alternation between good and bad trade, but as a necessary stage on a path of progress, while the latter interpreted crises as a passage towards a final redemption of the everyday misery of the working class. Finally, Koselleck points out that Marx’s position is somehow intermediate between these two and is itself rooted in his philosophy of history. On the one hand, Marx stressed that the cyclical return of crises is essential for the working and the progress of the capitalist system, but on the other hand their recurrence temporarily solves the contradictions of capitalism only by pushing them to a more advanced stage, to become eventually the means for the dissolution of the existing productive relationships. Brunkhorst elaborates upon some of Koselleck’s themes. His entry (CRISIS, in →Outhwaite’s Blackwell dictionary of modern social thought, 2006) is very dense; some themes deserve to be further discussed, and some are so compressed that they are hardly intelligible. Nevertheless, some considerations relating to Marx’s approach to crises are of interest. The author stresses that crises carry both ‘identity’ and ‘systemic’ implications. As crises (following the etymology) are a time of decision as to whether or not something continues, each crisis affects the selfunderstanding of the concerned subject (or system); in other words, it affects its identity as a whole. On the other hand, the concept is systemic, as the conflicts giving rise to a crisis are inborn within the system itself and take place within the system. The latter is a notion to which Marx was the first to give clear expression, referring to Hegel’s concept of contradiction. Brunkhorst argues that ‘the conjuncture of identity crises and system crises produces critical thresholds’ which decide the outcome of a crisis. He points out, however, that the Marxist expectation that system and identity crises are systematically conjoined ‘has been shown to be too speculative’. While Marx’s notion of crises was immersed in his philosophy of history, which induced him to treat crises as affecting an historic totality, the scientific concept of crisis focuses instead on a partial aspect of life totality (e.g. the economic system) and is more open as to the outcome of crises (citing Koselleck, ‘Every crisis evades the planning . . . based on the belief in progress’). Yet this notion has an origin in Marx’s own work, where the concept of crisis ‘oriented to the validity claims of antagonistic social groups (classes)’ is combined with an analysis of ‘objective system crisis identifiable in steering problems and the imperatives of system maintenance’. This branch of the Marxian analysis eventually prevailed: ‘The social scientific heirs of the Hegelian and Marxist crisis model have not only dissolved its unhappy link with the philosophy of history, but also replaced the paradigm of reflection by that of language and dissolved the unified perspective into a plurality of crisis tendencies’, so that economic crises could

538 Daniele Besomi and Giorgio Colacchio be examined without implying a crisis of the entire society leading towards the transition to a different social order.

28.6 CRISES AND CYCLES AS DISTINCT LOGICAL CATEGORIES Pierluigi Ciocca (whom we have already met in Section 28.4) contributed on crises for →Bedeschi’s Enciclopedia delle scienze sociali (1991, entry CRISI ECONOMICA E FINANZIARIA). While in his previous entry ‘crises’ were generically defined as a consequence of the general instability of capitalism, here they are characterized with more precision as the times when market economies undergo ‘a deep and not short contraction of production and investment, and at the same time the values of “real” and financial assets undergo a rapid and sharp drop’ (p. 607). Such phenomena are again explicitly distinguished from other forms of instability such as cycles, depressions and related terms. The emphasis, this time, is claimed to lie on logical grounds (p. 607), rather than merely on the intensity of the events. The matter, however, is not quite so clear, not only because between the instability of the cyclical kind and the phenomena related to crises there are multiple points of contact, but also because the comparison is purposely not explicitly carried out (ibid.) and the precise meaning of ‘logical’ is not specified. Ciocca’s point is that the crisis lies on the ridge between the real and the financial sides of the economy. It is one of the possible consequences of the complex, potentially unstable, interrelations between investments (profit expectations), savings (speculative money, asset demand and hoarding), and the action of the banking system (the role of interest rates). Changes in expectations can determine falls in production and strong disturbances in financial and monetary markets, which can either amplify a preexistent disequilibrium or generate a new one. Crises can therefore burst out even if the system is not in the descending phase of the cycle (although this case is less likely than the opposite), and they are neither periodical nor inevitable (ibid.). In Ciocca’s view, crises are thus phenomena logically independent of the cycle. This assumes that the nature of cyclical instability is intrinsically different from the instability outlined above. However, the former is not discussed in the entry and we therefore lack a comparison. Moreover, the independence is taken to indicate that crises can be thought of as arising independently of the business cycle, but not necessarily that they are severed from cycles: the downturn of a cyclical fluctuation could be triggered by a financial crisis, and the outcome would be that cycles and crises proceed in parallel. Indeed, the issue of the causal relationship of the (in)stability of the financial and ‘real’ parts of the economy is not discussed in the entry, and the relationship of cycles and crises is condemned to remain in the dark. Ciocca offers a brief survey of the three main branches of theories of crisis. The Thornton–Bagehot line offers support to the view of the independence of crises from cycles. In this view, the possibility of crises is ascribed to the lack of confidence in the banking system, which may arise from both exogenous and endogenous causes, and will eventually lead to panics and a run on the banks if the public

Crises in recent dictionaries 539 suspects that banks have over-issued credit notes. In such a context, the role of the central bank as the lender of last resort is essential to restoring confidence and averting serious crises. A second theoretical interpretation links crises to cycles of speculation and credit: when new trading opportunities arise, credit allows and eventually stimulates speculation, which causes prices to increase, thereby inducing further speculation, until the confidence that the price level will keep rising vanishes and a liquidation process starts, possibly a very sudden, violent one. Also, the third line of approach considers crises within a theory of the cycle. Ciocca groups a rather heterogeneous mixture of theories, following Goodwin’s Marx–Keynes– Schumpeter synthesis and adding some of his own, stressing the various destabilizing forces at work. The links with cycles, however, is weakened by means of the following citation from Goodwin (1986, p. 21): ‘These movements are not strictly speaking cycles; they appear to be similar because the capitalist drive for profit means an eternal search for cost-reducing innovations, so that sooner or later growth is always renewed; but then it proceeds too rapidly and breaks down.’ The burden of proof of the independence between financial and ‘real’ crises is eventually shifted from the logical ground, where Ciocca originally placed it, to the empirical ground. The author claims that cases when financial tensions do not degenerate into large falls in productive activity are relatively frequent. As financial crises are caused by a loss of confidence, if confidence is restored, the consequences remain limited to the financial sector. In history a number of crises were thus contained by the appropriate banking policy, thereby limiting the transmission of excessive damage towards the real sector. One example is cited, however, of a financial crisis that ran its full course without devastating the rest of the economy, namely, the 1857 panic, which affected most European stock exchanges while production kept increasing. Ciocca’s case that the instability forces that give rise to crises are logically independent of – although in practice somewhat related to – the instability forces giving rise to cycles is not fully convincing. However, the attempt is interesting, and it is regrettable that the author did not explore it in more detail.

28.7 THE EPISTEMICS OF CRISES AND CYCLES THEORIES The entries for crises we have examined in Sections 28.2 to 28.4 distinguish crises from cycles on semantic or on ontological grounds. The entry on CRISI by Nicolò De Vecchi in →Lunghini’s Dizionario di economia politica (1982–1990, Vol. 7, 1983) approaches the subject also considering a different angle, namely, the epistemic aspects of crises and cycle theorizing. The author sees the theories of the cycle as adhering to the formal method, emphasizing calculability and bearing a mechanistic outlook, while the analysis of crises incorporates instead at its core non-calculable ingredients. The entry is by far the longest on crises published in the post-war years,11 giving it enough room to retrace in much detail the history of the subject. It begins from the classics (Say and later Ricardo and the Ricardians vs. Sismondi, Malthus and Rodbertus), Marx (to whom a considerable share of

540 Daniele Besomi and Giorgio Colacchio space is devoted) and the debate among various branches of Marxists, the various breeds of business cycle theories demoting crises to a phase of the cycle, to conclude with Keynes and the post-Keynesians. The part on business cycle theories is examined cursorily only, due to the large number of such theories and to the fact that the dictionary carries an equally long entry on the trade cycle (see Chapter 26), while the other headings mentioned above are surveyed quite thoroughly. Here we cannot report on the entire reconstruction, but we shall follow the premise laid out at the outset. De Vecchi notes that while most writers immediately perceived the contradictory phenomena becoming manifest during crises (abundance of wealth and interruption of investment, destruction of resources while resources are needed to keep the economy going, etc.), of which they gave descriptive accounts, they had difficulties in integrating these observations within the theoretical structure of economics. While trying to distil economic laws from this disorderly tangle of phenomena or to work out an analysis of the dynamics of the capitalist economy, economists have often sought to remain faithful to the rules of formal economics and accordingly modelled idealized pattern of events. In this line crises are interpreted as a recurrent and foreseeable stage of a more general oscillatory movement (crises as a phase of the business cycle), or as a distinctive incident of a mode of production eventually destined, by objective and ineluctable laws, to fall into ruin (theories of the breakdown), or again as an anomalous disturbance of an unlimited process of growth, which will be readjusted by means of some automatic and built-in mechanisms (disproportionality crises). The preliminary assumption guiding this approach to crises is that a comparison of the actual and idealized pattern of events is necessary and sufficient to supply all the information on the causes and the effects of any gap between actual and ideal, thereby enabling one to deduce an appropriate policy if deemed necessary. By contrast, there are explanations of crises which, far from simply pointing out the negative implications of such supposedly anomalous events or the ineluctable destruction of resources, understand them as the consequence of cognizant actions of the social classes and as the chance for an equally cognizant reorganization of the process of reproduction of capital. (p. 224) The first economists were hindered in the integration of crises into the theoretical structure of economics by their understanding of capitalist production as aiming uniquely to satisfy human needs in conditions of increasing productivity. Under this premise, exchange value and use value equal the production cost, and accordingly production and demand are one and the same thing. This apprehension is epitomized by Say’s law, which led to an interpretation of crises as the partial result of some temporary impediment to the working of the laws of competition, which the normal operation of the law itself will redress. The early critics (Sismondi, Malthus and Rodbertus) stressed the lack of identity between expenditure and production and thus denied Say’s law. They did not, however, reject its premise

Crises in recent dictionaries 541 that production is aimed at satisfying demand. Accordingly, they appreciated that gluts are a general and recurrent phenomenon, but failed to understand their role in the reproduction process of capital. They saw them as the consequence of a ‘natural’ law resulting from the inevitable lack of purchasing power by one or another class of society – the workers for Sismondi and Rodbertus, the rentiers for Malthus (pp. 225–230). Ricardo rejected instead Say’s theory of value, and understood that capitalist production aims not only to satisfy needs, but also to realize profits. However, he explicitly accepted Say’s law, and with it the belief in the automatism of the market adjustment mechanisms. John Stuart Mill eventually tried to reconcile the impossibility of general gluts sanctioned by Say’s law with their actual occurrence by blaming crises on speculation. The crisis arises in the capital market without glutting the goods market, as if monetary and productive capital were totally independent of each other, so that the capitalists’ financial decisions were disconnected from the production sphere and from social relationships (pp. 230–233). Marx criticized both views at once, by means of the reproduction schemes. Against Malthus and Sismondi, the schemes show the conditions under which purchases match sales, so that society’s needs are satisfied and capitalists realize their profits. Capitalistic production is therefore not impossible. However, if the material exchanges and the monetary fluxes flowing between individual capitalists do not take place as prescribed by the schemes, capital cannot be valorized and needs cannot be satisfied, and a general crisis breaks out – contrary to Ricardo’s and Say’s view – affecting both the circulation and the production processes, and both the credit and the goods markets. This is made possible by the role of money, which separates the acts of selling and purchasing, thereby enabling sellers to delay purchases, and is made necessary by the need for capital to be adequately rewarded. The author’s reconstruction of Marx’s view especially focuses on the latter aspect. As technology and the division of labour progress, there follow two consequences for the rate of profit. On the one hand, the organic composition of capital tends to grow, because less and less labour is applied to growing masses of capital, thereby tending to depress the profit rate. On the other hand, the working time to be devoted to the production of the wage goods decreases. If this extra time is fully appropriated by the capitalists and turned into surplus labour, capital would reap the entire advantage of increased productivity. However, this is not necessarily the outcome: the relations of capital and labour are not ruled by some automatically operating law, but are a social relationship. If the working class successfully resists the increased exploitation – which it can do more effectively when there is little or no unemployment – the profit rate is affected, to the dismay of capitalists who were counting on it to retain the rate of remuneration they considered customary. This has to be redressed, and the interruption of accumulation and production is the only means available to the capitalist class for doing so. The capitalists will not, of course, act as a class; but any individual producer perceives a reduction in his own profit rate when he has to pay out higher salaries, and at any rate is forced to comply with the blockage of production initiated by his colleagues by the interconnectedness of the individual capitalists, each of whom relies on the other capitalists for a market for their goods

542 Daniele Besomi and Giorgio Colacchio and is dependent on the credit loaned by other capitalists. As soon as the chain of payments and purchases is broken, the entire system collapses. Any interruption of production immediately and violently spreads its consequences and turns into a full-blown crisis. Capital, both monetary and productive, is destroyed by remaining inactive, and at the end of the process the rate of profit is brought back to an acceptable level. The crisis is therefore a resolution of the contradiction between the development of the productive forces and the productive relationships between capital and labour, which results in the impossibility of selling the product at a reasonable profit. However, it is a temporary solution only, as the contradiction is not eliminated but continuously brought to a higher level. Quoting several passages by Marx, De Vecchi stresses that the general crisis is not a necessary outcome, unless social classes intervene in the ever-changing production process by imposing constraints on the division of the working day and on the intensity of work that are incompatible with the valorization of capital. Such a way of understanding the productive relationship is rooted in the Marxian dialectical methodology. The development of productive forces does not occur following some harmonic proportionality which market laws will bring back if the movement is disturbed; competition between capitalists works not by mechanically adjusting lack of proportions, but by promoting progress in the backward branches until their development gives rise to other disproportionalities – nor does it consist of an unequivocal and automatic tendency to stagnation following the law of the falling profit rate. The increase in the organic composition of capital does indeed tend to reduce the profit rate, but this law has only a tendential character; Marx insists (followed by De Vecchi) that it should not be interpreted as if it were a natural law, independent of social relationships (pp. 234–252). This is where the debates on crises between Marx’s followers (or, at any rate, most of them) abandoned the path traced by Marx himself. His laws of movement were interpreted as deterministic, to be either rejected as inconsistent with reality or accepted as necessary and ineluctable, rather than being interpreted within his anatomy of capitalism. Accordingly, crises were interpreted as temporary and occasional disturbances of the tendency either towards unlimited economic progress, or towards the final breakdown of capitalism, and were seen as caused (especially by those who argued by means of reproduction schemes, mechanically interpreted as expressing the laws of movement of production) either by disproportions or by underconsumption. In either combination, crises were seen no longer as the prime mover of capitalist economies, but as the result of some irregularities in production or consumption. Rosa Luxemburg was the only exception to this pattern, culminating in Tugan-Baranovsky’s reading of the reproduction schemes as a theoretical norm and of crises as a deviation from this norm. She was alone in taking up the Marxian dialectical method and in stressing the role of the social classes in the process of valorization of capital (pp. 252–263). Meanwhile, the orthodox approach shifted the emphasis from the suddenness and violence of crises to the rhythmic and regular alternation of prosperity and depression, which eventually was seen as fully calculable in mechanical terms, laying the ground for the theories of the business cycle:

Crises in recent dictionaries 543 Crises became either a scary-sounding synonym for of the cycle, or one of its components, or (more often) a superimposed anomaly. The concept of crisis eventually lost any autonomy, which it did not regain even after the great crisis of the early 1930s. By then, the theoretical problem had completely changed. It was no longer a matter of explaining the causes of the sudden falls in the level of economic activity, but of identifying their symptoms, and especially of establishing the circumstances governing the alternation of phases of getting close and getting far from a position defined as ‘normal’. (pp. 264–265) This change of perspective took place while economists adopted the marginalist approach. This enabled economists, on the one hand, to dispose of Say’s law, with all its implicit confusion between the use and exchange values; on the other hand, although the notion of equilibrium was conceived in different ways, it was interpreted as defining the theoretical norm or the ideal type. Fluctuations could thus be treated as a calculable deviation from this norm and crises as abnormal deviations. Such an approach characterized, with a few exceptions only (the most notable being Wicksell, who clearly distinguished the theory of crises from the theory of the cycle, and rejected the view that crises are a phase of the cycle, whether a normal or an abnormal one), most of the theories of the cycle developed in the first three decades of the twentieth century, regardless of the causal mechanism called to explain economic fluctuations (pp. 263–281). While in the Treatise on money Keynes also emphasized the regularity, periodicity and symmetry of the cycle (pp. 281–284), in the General theory he offered, in De Vecchi’s view, a rather different account of the phenomenon. Keynes’s starting point was the observation that the economic system is not violently unstable, but oscillates around a middle position which is neither satisfactory nor desperate. This is not a logical necessity nor the inevitable consequence of some iron law; if it were so, economic theory would only have to discover the corresponding automatic mechanisms ensuring stability of equilibrium (whether or not a full employment one), and in such a case the crisis could only be interpreted as a phase of the cycle or as an anomalous event. Stability results instead from the observed behaviour of some key variables; the crisis, as a sudden and violent change in the course of events, correspondingly results from the alteration in the value of some such variables. In particular, if the propensity to consume is not much smaller than 1, then small changes in its value give rise to large fluctuations in employment. And the marginal efficiency of capital, being based on expectations built on conventional (and rather arbitrary) behaviour, is liable to sudden fluctuations. The sudden character of crises can thus be explained by the conjoint operation of these factors. The phenomenon can be given pride of place and distinguished from the smooth and regular oscillations of the cycle precisely because Keynes rejects at the outset an explanation in terms of automatic adjustments, and incorporates instead expectations, conventions and psychological principles (pp. 284–290). Keynes’s approach therefore directly contrasts the mathematical modelling of the cycle, which was arising more or less at the same time and fully bloomed in

544 Daniele Besomi and Giorgio Colacchio the post-war years. Regardless of the specific mechanisms at the heart of those models, they all relied on functions relating decisions and results at different times; their results were uniform and symmetric fluctuations, and in such a framework (with a few exceptions only) crises could only be interpreted as a phase of a regular cycle. In the post-Keynesian world, the system’s behaviour is ruled not by noncalculable conventions and expectations, but by deviations from a calculable norm.

28.7 CRISES VS. CYCLES In the economists’ vocabulary, the term ‘crisis’ has undergone in the first decade of the twenty-first century a revival that could have hardly been expected a century earlier, when the infant theories of the business cycle seemed to be founded precisely on the eradication of the emphasis on crises, and eventually of the very notion of crisis, to shift the focus onto the overall cyclical movement. Indeed, the word ‘crisis’ began to be largely substituted by the expressions ‘business’ or ‘trade cycle’ in the 1920s, and remained a minority usage until the turn of the century, when it had a rapid resurgence (see Chapter 3, Section 3.2.8.5). In the last three-quarters of the twentieth century, the term ‘crisis’ survived in linguistic niches (French and partly Italian) and in an underworld often associated with Marxist and other heterodox currents, while the mainstream theoretical environment was dominated by ‘cycles’ and ‘fluctuations’ (and, of course, ‘equilibrium’). Only on the occasion of the outburst of actual crises (the 1930s, 1970s and especially the years at the turn of the century) did the notion of ‘crises’ experience a resurgence. Its very survival despite the death sentences pronounced by Aftalion (cited at the beginning of this chapter) and others (in particular Mitchell, 1913, pp. 5–6) would suggest that the category of ‘crisis’ is autonomous from the category of ‘cycle’, although admittedly related to it. One would therefore expect to find explicit discussion of the relationship of crises to cycles in the few dictionaries carrying separate entries under the heading of ‘crisis’. Yet most of such entries written by economists are rather trivial – more often than not, crises are understood as phases of the business cycle, and only occasionally are they specifically seen as being particularly nasty and sudden downturns. Only historians of ideas stressed distinctive features characterizing crises as intrinsically different from cycles, in particular their bringing qualitative changes to the system and their theoretical usage, implying a specific philosophy of history. With regard to economists, we only have two attempts to recognize crises as an autonomous category, stressing that crises and cycle theories have a different logical and, respectively, epistemological statute. Such an attitude by economists may seem schizophrenic, yet it reflects the prevalent views on the phenomenon of crises. That they occur cannot be denied. However, accounting for them is a different matter. They are indeed deeply disturbing events. On the one hand, they cause havoc and destruction and as such deserve a name in popular parlance and in technical jargon; on the other hand, they do not have a place in most theoretical frameworks, and sometimes explicitly conflict with

Crises in recent dictionaries 545 them. The vast majority of views of the working of economic systems are based on the idea that the system’s behaviour tends towards some state of order, whether this be equilibrium or some kind of recursive pattern. The idea that economic systems undergo cycles or fluctuations can relatively easily be fitted in such a view (although, historically, a full century of repeated crises has been necessary before the first accomplished theories of the cycle could see the light of the day). Cycles are quasi-regular movements characterized by the systematic repetition of specific phases and guided by some law driving the chaining of such phases; fluctuations are oscillations around ‘a mean sun’, caused by unsystematic but fully natural changes in the conditions of production and demand, and by the agents’ trials and errors in adjusting to such changed conditions. The system pursues some kind of order; deviations from it, however, are possible due to historical circumstances. Essentially, crises are disorderly events. They are characterized by violent instability that causes seemingly small perturbations to bring disproportionately large and pervasive effects in terms of the destruction of capital (real and financial), loss of income and loss of employment. Treating such events by means of the customary theoretical instruments is a contradictio in adjecto. It is therefore far from surprising that crises are understood mostly in terms of exceptionally ample recessions, or as pathologies and abnormalities (themselves exceptional). One of the entries examined in this chapter (Section 28.6) attempted to escape this trap by stressing that the theories of crises and the theories of cycles are based on different epistemological premises. Perhaps we can conclude by elaborating on this perspective, and offer a further viewpoint enabling us to appreciate the intimate relationship between crises and cycles, but also the different role they play in cycle and crises theories. Recognizing the category of ‘crises’ as fully autonomous from ‘cycles’ or ‘fluctuations’ – that is, interpreting them not as deviations from a reference cycle but as a separate entity – implies that the economic system must be conceptualized at the outset as capable of producing such phenomena. This, however, is not sufficient. The epistemic discussion of the possibility of crises is common to several crises and cycle theorists of ‘heretic’ lineage, and was at the core of the debate on business cycle theory that took place in the 1920s (see Besomi, 2006a). What distinguishes the theories of the cycle from those of crises is that the former encompass crises in a cyclical framework, with a focus on the overall movement rather than on crises themselves. For cycle theorists, crises are but a phase of the cycle, a phase that does not require a special explanation, precisely as recovery or the boom would not need one. Each phase is the product of the preceding one and the forebearer of the following one, and no phase in particular has theoretical pre-eminence over the others. A theory of crises, instead, focuses on crises and their recurrence. It does not neglect what precedes a crisis and what follows it, nor does it ignore the fact that events are causally chained so that crises do recur in a cyclical way. The difference is not, however, a pure matter of emphasis. Crisis theorists believe that crises are the events to be explained, and crises accordingly have a privileged place in their theoretical structure. Marx, for instance, focused on crises because he thought that the main feature of capitalistic production was the intrinsic

546 Daniele Besomi and Giorgio Colacchio contradiction between the development of productive forces and the productive relationships between social classes. Crises recur because the contradiction is permanent and its resolution, via a crisis, is necessary but can only be temporary. The cyclical pattern is therefore a consequence of the main feature of crises, that of providing a partial resolution of the contradictions of capitalism. On the contrary, cycle theorists incorporate recurring crises in their theories and models, but only as a consequence of their cyclical mechanism, possibly coupled with some special historical circumstance making the downturn particularly sharp, sudden and violent.

NOTES 1 A rough measure of this phenomenon can be obtained by counting the number of items listed by Econlit and other databases carrying the words ‘crisis’ and ‘cycle’ (and related concepts) in their title. By the early 1990s, the proportion of titles containing the word ‘crises’ to those containing the word ‘cycles’ was less than 1:3. After 1998, it suddenly rose to almost 1:2. See Appendix to Chapter 3, Figure 3.5. 2 This point is of interest, as many entries on crises in recent dictionaries (as we shall see in more detail in the sequel; see Section 28.3) correctly identified Marx as one of the few writers who had stressed the theoretical autonomy of the notion of ‘crisis’, although most failed to specify why this is so. 3 The interpretation of crises as a phase of the business cycle is not, of course, an exclusive feature of French dictionary entries. Papi, for instance, explicitly defines ‘crisis’ as the upper turning point of the cycle (FLUTTUAZIONE ECONOMICA, in →Papi, Dizionario di economia, 1967, p. 523). Giannetti, notwithstanding an explicit recognition of the problematic nature of the relationship of crises and cycles, draws the line (following Schumpeter) at Juglar, suggesting that before his contribution crises were mainly intended as pathological and isolated events (entry CRISI ECONOMICHE: L’OTTOCENTO, in →Carmagnani and Vercelli, Il mondo contemporaneo, 1978). Similarly, de Luca defines ‘crisis’ as ‘a recession that becomes apparent via disequilibria caused by an excessive supply of goods and services and a limited demand. It is followed by a general contraction of economic activity’ (CRISI ECONOMICA, in →de Luca et al., Dizionario di economia politica, 2006). 4 Oddly, the meaning of turning point of the cycle is deemed to be the ‘original’ one – as opposed to the encompassing within crises of the entire descending phase of the cycle (WIRTSCHAFTSKRISEN, p. 130). The entry consists in a long (12 pages) historical account of crises fom the tulipmania of 1637 to the world crisis of 1929. 5 The reduction of the theory of crises to Marx is not unique to German dictionaries. In the entry on CRISES in →The new Palgrave dictionary of economics (Eatwell et al., 1987), Kenway points out that a number of scholars used the concept of ‘crisis’ but only Marx ‘attempted rigorously to theorize crises as they occur in capitalism’. He refers to crises both as the final breakdown of capitalism and as recurring events in capitalist economies, but the latter aspect is not examined in detail, nor there is a discussion of its relationship with business cycle theories (the entry was dropped from the 2008 edition of The new Palgrave). Of more interest is Hay’s entry on CRISIS THEORY in the →Routledge encyclopedia of international political economy (Jones, 2001). Again, the emphasis is on Marx and other Marxist approaches, but with an ingenious twist: Marx’s explanation of the recurrence of crises is attributed to the interplay of the tendency of the profit rate to fall with the counteracting tendencies, in particular the individual capitalists’ countervailing measures which cause the mechanization of production. Surprisingly, rather than giving rise to the ten-year cycle, in Hay’s view the ‘result is

Crises in recent dictionaries 547

6

7 8

9

10

11

the characteristic pattern of capitalist accumulation in successive “long waves” or “long cycles” of acceleration, deceleration, and eventual stagnation’ (p. 268). This view seems to have had an antecedent in Burns’s entry on BUSINESS CYCLES: GENERAL in →Sill’s International encyclopedia of the social sciences: ‘The term “crisis” originally was used to denote the financial disturbances that frequently occurred during the transition from expansion to contraction, but later it came to be applied to any transition from expansion to contraction. Nowadays, the term “crisis” is usually reserved for a violent disruption of financial markets without regard to the stage of the business cycle in which such a disturbance occurs’ (1968, p. 229). In a later entry under the heading FINANCIAL CRISES for Deane and Kuper’s Lexicon of economics (1988), Kindleberger dropped the reference to the ultra-cyclical character of financial crises. In truth, the original medical meaning considers a critical time when a change can be for the worse but also for the better. Taking up Debray’s notion of crisis as giving rise to situations qualitatively distinct from the pre-crisis state (Debray, 1973, p. 99), Hay points out that that such a conception implies ‘a particular theory of history in general and of the historical development of the polity, society and the economy in particular. More specifically, it implies a discontinuous or punctuated theory of social and political change’ (CRISIS THEORY, in →Routledge encyclopedia of international political economy, 2001). This theme recurs in other entries examined below in this section. The theme of the system’s capacity to resist to change at the cost of a change in its structure is sometimes discussed in the literature. Among these writers there is Tadeous Kowalik, who wrote an essay on the topic jointly with Kalecki in 1971 (for a comment, see Besomi, 2006b, pp. 27–28). Surprisingly, in his entry on CRISI for the →Enciclopedia Einaudi, 1976, where he expounded in much detail Kalecki’s theory of the cycle, Kowalik did not take up the topic. In the following edition of the same dictionary, Starn points out that the fascination with the term ‘crisis’ arises from its flexibility and the possibility of focusing on different aspects: ‘Crises, to be regarded as such, must occur in the course of specific events, but they can be characterized in organic, mechanistic, or revolutionary terms as critical episodes in a life cycle, indices of structural dysfunction, or corollaries of revolution.’ He notes, however, that crises studies had peaked by 1970, and were eventually worn out by overuse (CRISIS, in New dictionary of the history of ideas: Starn, 2005). It should be noted that this is not the case for the economic use of the term, which has had a marked revival since the end of the 1990s (see Sections 28.1 and 28.7). The Dizionario di economia politica only carries 40 entries, all discussed at great length and with ample historical breath (see note 11, Chapter 1, and Chapter 2, Section 2.4.2). De Vecchi’s takes 83 pages.

REFERENCES Aftalion, A., 1913, Les crises périodiques de surproduction. Tome I: Les variations périodiques des prix et des revenus. Les théories dominantes. Tome II: Les mouvements périodiques de la production. Essai d’une théorie (Paris: Marcel Rivière). Besomi, D., 2006a, Tendency to equilibrium, the possibility of crisis, and the history of business cycle theories, History of Economic Ideas, XIV: 2, pp. 53–104. Besomi, D., 2006b, Formal modelling vs. insight in Kalecki’s theory of the business cycle, Research in the History of Economic Thought and Methodology, 24A, pp. 1–48. Besomi, D., 2011, Crises as a disease of the body politick. A metaphor in the history of nineteenth century economics, Journal of the History of Economic Thought, 33: 1, March, pp. 67–118.

548 Daniele Besomi and Giorgio Colacchio Brochier, H., 1976, Réalités et illusions dans la régulation étatique de l’activité économique. La crise comme nécessité et comme politique, Communications, 25, pp. 73–85. Burns, A. F. and Mitchell, W. C., 1946, Measuring business cycles (New York: NBER). Debray, R., 1973, ‘Time and politics’. In Prison writings (New York: Random House). Goodwin, R. M., 1986, ‘The M-K-S system: the functioning and evolution of capitalism’. In H.-J. Wagener and J. W. Drukker, The economic law of motion of modern society: a Marx–Keynes–Schumpeter centennial (Cambridge: Cambridge University Press). Guitton, H., 1951, Les fluctuations économiques (Paris: Recueil Sirey). Kalecki, M. and Kowalik, T., 1971, Osservazioni sulla ‘riforma cruciale’, Politica ed Economia (June), pp. 189–196. English translation in Collected works of Michal Kalecki. Vol. 2: Capitalism: economic dynamics, ed. J. Osiatynsk (Oxford: Oxford University Press, 1991). Koselleck, R., 2006, ‘Crisis’, Journal of the History of Ideas, 67: 2, April, pp. 357–400. Lescure, J., 1907, Des crises génerales et périodiques de surproduction (Paris: DomatMontchrestien; 4th edn, Paris, 1932). Masur, G., 1968, Crisis in history. In P. P. Winder (ed.), Dictionary of the history of ideas (5 vols) (New York: Scribner), Vol. 1, pp. 589–596. Mitchell, W. C., 1913, Business cycles (Berkeley, CA: University of California Press). Roscher, W., 1854, Die Grundlagen der Nationalökonomie: Ein Hand- und Lesebuch für Geschäftsmänner und Studierende (Stuttgart: Cotta). English translation of the 13th edn: Principles of political economy (Chicago: Callaghan, 1882). Schumpeter, J. A., 1954, History of economic analysis (London: Allen & Unwin). Starn, R., 2005, Crisis. In M. C. Horowitz (ed.), New dictionary of the history of ideas (5 vols) (New York: Scribner), Vol. 1, pp. 589–596.

29 A bibliography of specialized dictionaries of economics and related subjects* Daniele Besomi

29.1 INTRODUCTORY REMARKS The following bibliography lists specialized dictionaries of economics and other disciplines relating to social sciences (including politics, history, sociology, law, administration, commerce, finance, statistics) that carry economic entries, biographical dictionaries of economists, and other dictionary-like writings relating to economics. While being fairly rich, this list does not claim to be exhaustive. It includes all the dictionaries examined for the present research and was complemented by means of systematic search of library catalogues, but obviously some items may have been missed. Occasionally, the editorial history of some items may be incorrect or incomplete, as not all editions have been acquired by the main libraries (not even national repository libraries), and sometimes the bibliographic data supplied by different library catalogues are inconsistent or abbreviated. The results are first presented by compiler. In Section 29.2 the bibliographic details are given in full; when the editor is not known, the publisher is indicated instead at the heading. The bibliography is then presented alphabetically by title, with a short indication of compiler and date of publication (Section 29.3). Jointly, these sections enable users to reconstruct the editorial history of dictionaries having changed title, editorial team, or both. Finally, the main general encyclopaedias referred to in the text are listed in Section 29.4 Space does not allow the presentation of the bibliography according to different criteria, such as publication date, size, language or publication country, or according the dictionary’s scope. As different arrangements supply a host of information concerning dictionaries as a genre of literature (see Chapter 2), alternative listings are available on this website: www.danielebesomi.ch/dictionaries/bibliography.

* I am grateful to François Allisson, Peter Rodenburs and Shigeki Tomo for help with Russian, Dutch and Japanese dictionaries, respectively, and to the participants in the HES discussion list for pointing out a few omissions.

550 Daniele Besomi 29.2 ECONOMIC DICTIONARIES, BY COMPILER Abraham-Frois, G., Caire, G. and Hugon, P., 1998, Economie (Paris: Dalloz), 566 pp., 17 cm. 2nd edn, 2002 (Paris: Dalloz), 443 pp., 21 cm. [Action populaire], 1909, Vocabulaire économique et social (Reims etc.: Action populaire, s.a.; Paris: Lecoffre), 175 pp. Ahijado, M., 1985, Diccionario de teoría económica (Madrid: Pirámide), 313 pp. Ahijado, M. and Aguer, M., 1988, Diccionario de economía general y empresa (Madrid: Ediciones Piramide), 446 pp. Revised edn: Diccionario de economía y empresa (Madrid: Ediciones Piramide, 1996), 678 pp., 24 cm. Albers, W., Zottmann, A. et al., 1977–1983, Handwörterbuch der Wirtschaftswissenschaft (Stuttgart and New York: Fischer; Tübingen: Mohr; Göttingen and Zürich: Vandenhoeck und Ruprecht), 10 vols, 6,971 pp., 27 cm (previous edition, compiled by Beckerath, titled Handwörterbuch der Sozialwissenschaften, 1956–1968). Albert, L., 1996, 1000 termes commerciaux et économiques: guide pratique (Paris: De Vecchi), 215 pp., 21 cm. New and updated edition: Dictionnaire des termes économiques et commerciaux (Paris: De Vecchi, 2001), 204 pp., 22 cm. Albertini, J.-M., Silem, A. and Auvolat, M. , 1987, Lexique d’économie (Paris: Dalloz), 562 pp. 18 cm. 2nd edn, 1987, 532 pp.; 3rd edn, 1989, 567 pp.; 4th edn, 1992, VIII–576 pp.; 6th edn, 1999, 626 pp., 19 cm; 7th edn, 2002, 681 pp.; 8th edn, 2004, 713 pp.; 9th edn, 2006, 773 pp.; 10th edn, 2008, 788 pp. Alisch, K., 2004, Gabler Wirtschafts-Lexikon (Wiesbaden: Gabler), 16th edn, 8 vols; reprinted 2005. Earlier editions, see Sellien et al., 1956–1988 (1st–12th edns), Wendt et al., 1993 (13th edn), Arentzen, 1997 (14th edn), Haderler, 2000 (15th edn). Next edn Roberts et al. as Gabler Wirtschaftslexikon, 2010. [Allen, G.], 1775, The Politician’s dictionary; or, A summary of political knowledge containing remarks on the interests, connections, forces, revenues, wealth, credit, debts, taxes, commerce, and manufactures of the different states of Europe. Alphabetically digested for the use of those who would wish to understand whatever occurs in the science of politics (London, printed for G. Allen), 2 vols, 847 pp. Allen, L., 1999, Encyclopedia of money (Santa Barbara, CA: ABC-CLIO), 328 pp., 26 cm. Later edition, 2001 (New York: Checkmark Books), 328 pp., 26 cm. Alquier, C., 1985, Dictionnaire encyclopédique économique et social (Paris: Economica), 601 pp., 24 cm. 2nd edn, 1990, 609 pp., 24 cm. Altamore, G., 1994, Tutte le parole dell’economia (Milan: A. Mondadori), 237 pp., 18 cm. Ammer, C., 1977, Dictionary of business and economics (New York: Free Press), 461 pp., 24 cm; 2nd edn, 1984, 507 pp., 25 cm; 3rd edn, 1986, 507 pp., 24 cm. Anderson, W., 1819, The London commercial dictionary, and sea-port gazetteer, exhibiting a clear view of the commerce and manufactures of all nations; and their several products . . . the various monies, weights, and measures, and the proportions of each to those of England; all the shipping and navigation laws. To which is added, an appendix, containing tables of all the export, import, coastwise duties and drawbacks, excise duties, bounties, &c (London: E. Wilson), 848, 72 pp., 21 cm. 2nd edn, 1826, 848, 40 pp., 23 cm. [Antonelli], 1839–1843, Enciclopedia del negoziante ossia Gran dizionario del commercio, dell’industria, del banco e delle manifatture . . . compreso un indice alfabetico generale e ragionato di tutti i manifattori e fabbricatori d’Italia in ogni genere / compilata per cura di vari negozianti e industriosi italiani (Venice: Co’ tipi dell’ed. Giuseppe Antonelli), 7 vols; 2nd edn, 1850, 6 vols.

Bibliography of specialized dictionaries 551 Arentzen, U., 1995, Gabler-Lexikon Wirtschaft: 2200 Begriffe nachschlagen, verstehen, anwenden (Wiesbaden: Gabler), 6th edn, 342 pp. Later edition [Gabler], 1998, Gabler Kompakt-Lexikon Wirtschaft: 2500 Begriffe nachschlagen, verstehen, anwenden. Earlier edition as [Gabler], 1991, Gabler kleines Lexikon Wirtschaft: 2200 Wirtschaftsbegriffe nachschlagen – verstehen – anwenden. [Arentzen, U.], 1996, Gabler Bank-Lexikon: mehr als 8000 Stichwörter aus den Bereichen Bank- und Börsenwesen (Wiesbaden: Gabler), 11th edn, 1 compact disc and instruction booklet. Previous edn: Müssig and Löffelholz, 1988, Bank-Lexikon: Handwörterbuch für das Geld-, Bank- und Börsenwesen, later edition: Krumnow, 2000, Gabler-BankLexikon: Bank – Börse – Finanzierung. Arentzen, U., 1997, Gabler Wirtschaftslexikon, 14th edn (Wiesbaden: Gabler). For other edns, see Alisch, 2004. Arentzen, U., 2006, Ebook Gabler Kompakt-Lexikon Wirtschaft: 3000 Begriffe nachschlagen, verstehen, anwenden (Wiesbaden: Betriebswirtschaftlicher Verlag Gabler), 9th edn, electronic resource. Earlier edn Gabler Kompakt-Lexikon Wirtschaft: 2.700 Begriffe nachschlagen, verstehen, anwenden, [Gabler] 1998, 2001. Arentzen, U. and Brockmann, H., 1996, Gabler Volkswirtschafts Lexikon (Wiesbaden: Gabler), 4th edn, 2 vols, 1,359 pp., 24 cm; reprinted in 3 vols in 1997. Earlier editions: Hölzel, 1981, Häfner, 1983, [Gabler] 1990. Arestis, P. and Sawyer, M., 1992, A biographical dictionary of dissenting economists (Aldershot: E. Elgar), 628 pp., 24 cm; 2nd edn, 2000 (Cheltenham and Northampton, MA: Elgar), 722 pp. [Artel], 1998, Dictionnaire d’économie (Paris: Ed. Aurora, Artel), 350 pp., 23 cm, with a CD. Auld, D. A. L., 1983, The American dictionary of economics (New York: Facts on File), 342 pp., 24 cm. Revised edn of Bannock et al., The Penguin dictionary of economics; 2nd edn, 1978. Auray, J. P., Béresniak, A., Claveranne, J.-P. et al., 1996, Dictionnaire commenté d’économie de la santé (Paris etc.: Masson), 289 pp., 21 cm. Spanish translation, 1998: Diccionario comentado de economía de la salud (Barcelona etc. Masson). Austria Bundeskammer der Gewerblichen Wirtschaft, Vienna, 1972, Wirtschaftskundliches ABC ([Vienna: Wirtschaftsföderungsinstitut], 2nd edn, 96 pp., 25 × 9 cm; 3rd edn, 1977, 144pp., 24 cm; 4th edn, 1980, 131 pp., 24 cm; 6th edn, 1983, 132 pp.; 7th edn, 1988, 108 pp.; 9th edn, 1995, 142 pp. Bader, H. et al., 1967, Ökonomisches Lexikon (Berlin: Verlag Die Wirtschaft), 2 vols, 1,190 + 1,227 pp., 25 cm; 2nd edn, 1970–1971; 3rd edn, 1978–1980, 3 vols, 2,400 pp., 25 cm. Balling, M., Nielsen, N. S. and Stærmose, B., 1974, Børsens økonomiske leksikon ([Copenhagen]: Forlaget Børsen), 249 pp.; 2nd edn compiled by Brixtofte and Reckweg, 1978. Bannock, G., Baxter, R. E. and Rees, R., 1972, The Penguin dictionary of economics (Harmondsworth: Penguin), 427 pp., 18 cm. Translated into Italian as Dizionario di economia (Rome and Bari: 1974); 2nd edn, 1978, 467 pp.; 3rd edn, 1984, 458 pp., 20 cm; 4th edn by Bannock, Baxter and Davis, E., 1987, 427 pp., 20 cm (Spanish translation: Diccionario de economia, Mexico: Trilla, 1990, 2nd edn); 5th edn, 1992, 448 pp., 20 cm; 6th edn, 1998, 439 pp., 20 cm; 7th edn, 2003, 407 pp. US editions as Dictionary of economics: 3rd US edn, 1992; 4th US edn, 2003. [Banque], 1963, Dictionnaire de la banque et de la bourse: Répertoire alphabétique de termes définis et expliqués, en usage dans la banque, en bourse, sur les marchées des changes, de la monnaie et de l’or, par une équipe de banquiers, directeurs et inspecteurs de banques,

552 Daniele Besomi fondés de pouvoir d’agents de change, professeurs au Centre d’enseignement technique de banque (Paris: Banque, Editions techniques et professionelles), 622 pp., 19 cm. Barca, L., 1974, Dizionario di politica economica (Rome: Editori Riuniti), 174 pp., 19 cm. Barraine, R., 1974, Nouveau dictionnaire de droit et de sciences économiques (Paris: Pichon et Durand-Auzias, Librairie générale de droit et de jurisprudence), 4th edn, 508 pp., 23 cm. Bartz, D., 1998, Die Wirtschaft verstehen: das Wirtschaftslexikon der Gegenwart (Frankfurt am Main: Eichborn), 490 pp.; 2nd updated edn, 1998, 489 pp., 22 cm; 3rd edn, 2002 as Wirtschaft von A bis Z: kompakt, aktuell, übersichtlich, 511 pp., 23 cm. Baudeau, N., 1783–1784, Encyclopédie méthodique: Commerce (Paris: chez Panckoucke; Liège: chez Plomteux), 3 vols (766, 798, 831 pp.). This is part of the Encyclopédie méthodique ou par ordre de matières, published by Panckoucke in 1782–1832. Baudhuin, F., 1968, Dictionnaire de l’économie contemporaine (Verviers: Editions Gérard & Co.), 301 pp., 18 cm. Later editions: 1970, 333 pp.; 1972, 343 pp.; 1973, 349 pp.; 1977, 351 pp. Bauer, W., and the Arbeitskreis Politische Ökonomie Nürnberg, 1999, Lexikon der politischen Ökonomie (Nuremberg: Libresso), 240 pp., 21 cm. Baumstark, A., 1852 [some library catalogues indicate 1846 as publication date]. Staatslexicon: in einem Bande; staatswissenschaftliches Handbuch der politischen Aufklärung für die Gebildeten aller Stände / im Vereine mit Andern hrsg. durch Hermann vom Busche (Stuttgart: Hallberger), 2,844 pp. Bazzano, C., 1988, Dizionario di economia politica, politica economica e tecnica commerciale (Naples: Edizioni Scientifiche Italiane), 408 pp., 24 cm. Beaud, M. and Dostaler, G., 1993, La pensée économique depuis Keynes: historique et dictionnaire des principaux auteurs (Paris: Éd. du Seuil), 598 pp., 23 cm. English translation: Economic thought since Keynes: a history and dictionary of major economists, 1995 (Aldershot; Brookfield, VT: Edward Elgar). Beckerath, E. von, 1956–1968, Handwörterbuch der Sozialwissenschaften (Stuttgart: G. Fischer), 12 vols, 9,060 pp., 27 cm. The previous editions were titled Handwörterbuch der Staatswissenschaften (Conrad, Elster et al., 1890, 1898–1901, 1909–1911; Elster 1923–1929); the following ones Handwörterbuch der Wirtschaftswissenschaft, Albers and Zottmann, 1977–1983. Beckmann, M. J., Menges, G. and Selten, R., 1979, Handwörterbuch der mathematischen Wirtschaftswissenschaften (Wiesbaden: Gabler, 1979), 3 vols (Vol. 1: Wirtschaftstheorie, by R. Selten, 533 pp.; Vol. 2: Ökonometrie und Statistik, by G. Menges, 318 pp.; Vol. 3: Unternehmensforschung, by M. J. Beckmann, 322 pp.), 24 cm. Bedeschi, G., 1991–2001, Enciclopedia delle scienze sociali (Rome: Istituto della Enciclopedia italiana), 9 vols, 29 cm. Behari, B. and Behari, M., 1983, Concise economic encyclopaedia (Delhi: D. K. Publications), 340 pp. Beitone, A., Dollo, C. et al., 1991, Dictionnaire des sciences économiques (Paris: A. Colin), 354 pp., 21 cm. 2nd edn 1995, 379 pp. Further edition, 2001, 445 pp., 24 cm (reprinted in 2002 and in 2008, the latter with added subtitle 1800 définitions, 22 dossiers pour maîtriser le vocabulaire et les théories économiques). Belchior, E. de Oliveira, 1987, Vocabulário de termos econômicos e financeiros (Rio de Janeiro: Civilização Brasileira), 397 pp., 21 cm. Bergrath, D., 1978, Gablers kleines Bank-Lexikon: Handwörterbuch für d. Bank- u. Sparkassenwesen, unter Mitarb. zahlr. hervorragender Praktiker u. Fachgelehrter d. Bankwesens (Wiesbaden: Gabler), 8th edn, 3 vols, 19 cm. Earlier editions, see Müller

Bibliography of specialized dictionaries 553 and Löffelholz, 1953–1976, as Bank-Lexikon: Handwörterbuch für das Bank- und Sparkassenwese; later edition titled Bank-Lexikon: Handwörterbuch für das Bank- und Sparkassenwesen mit Bankenverzeichnis, Grosjean and Loeffelholz, 1983. Belletante, B., 1996, Dictionnaire de la Bourse et des marchés (Paris: Hatier), 314 pp., 19 cm, 2nd edn by Belletante and Mahérault, 2000, 318 pp. Berardi, R., 1964, Dizionario di termini storici politici ed economici moderni (Florence: F. Le Monnier), 170 pp., 17 cm; 2nd edn, 1984 (reprinted 1992), 176 pp., 17 cm. Bernard, F. de (Groupe d’études et de recherches sur les Mondialisations, Paris), 2002, Dictionnaire critique de ‘la mondialisation’ ([Paris]: Le Pré aux Clercs), 423 pp., 24 cm. Bernard, Y., Colli, J.-C. and Lewandowski, D., 1975, Dictionnaire économique et financier (Paris: Éditions du Seuil), 1,168 pp., 23 cm; 2nd edn, 1978, 1,212 pp.; 3rd edn: 1981, 1,342 pp.; 4th edn Bernard, Colli and Walrafen, T., 1984, 1,346 pp.; (Spanish translations: Diccionario económico y financiero; Madrid: Associación para el Progreso de la Dirección, 1975, 1,274 pp., 24 cm; 2nd edn, 1979, 1,304 pp., 24 cm; 3rd edn, 1981, 1,341 pp., 25 cm; 4th edn, 1985, 1,414 pp., 25 cm). 5th edn, 1989, 1,412 pp. (Russian edition: Tolkovyi ekonomicheskiy i finansovyi slovar’, Moscow: Mezhdunarodnaya Otnosheriya; Portuguese abridged edition: Dicionário económico e financeiro, Lisbon: Dom Quixote, 1997–1998); 6th edn, 1996, 1,515 pp. Bernard, Y. and Colli, J.-C., 1976, Vocabulaire économique et financier (Paris: Éditions du Seuil), 415 pp., 18 cm (abridged version of Dictionnaire économique et financier, Bernard, Colli and Lewandowski, 1975). [Berstein, S. et al.], 1987, Dictionnaire d’histoire économique: de 1800 à nos jours: les grands thèmes, les grandes puissances (Paris: Hatier), 616 pp.; 2nd edn, 1989, 638 pp., 19 cm; 3rd edn, 1991, 683 pp. Bessa, A., 1912, Enciclopédia do comerciante e do industrial (Lisbon: Livraria Central de Gomes Carvalho), 690 pp., 19 cm. Bevir, M., 2007, Encyclopedia of governance (Thousand Oaks, CA: Sage Publications), 2 vols, 1,027 pp., 29 cm. Beynon, R., 1999, The Routledge critical dictionary of global economics (New York: Routledge; New York: Icon), 374 pp., 23 cm. Bezbakh, P. and Gherardi, S., 2000, Dictionnaire de l’économie A–Z (Paris: Larousse, Le Monde), 638 pp., 24 cm. Cover notes: 15 questions de base sur l’économie, 750 entrées, 31 dossiers, 11 grands thèmes pratiques, statistiques de tous les pays du monde. Reprinted 2001. Bialès, C., Bialès, M. and Leurion, R., 1996, Dictionnaire d’économie et des faits économiques et sociaux contemporains (Paris: Foucher), 638 pp., 20 cm; 2nd edn, 1999, 633 pp. Bidet, J. and Kouvélakis, E., 2001, Dictionnaire Marx contemporain (Paris: Presses universitaires de France), 589 pp., 23 cm. Binggeli, A., 1968, Wirtschafts-Lexikon für alle: Ein Nachschlagewerk über Wörter und Begriffe in der Volkswirtschaft, deren Bedeutung und Zusammenhang für jedermann in verständlicher Form dargestellt ist; Geld, Kapital, Währung, Wirtschaft (Schwarzenburg: GBS-Verlag), 95 pp. Alternative title: Geld, Kapital, Währung, Wirtschaft: WirtschaftsLexikon für alle; ein Nachschlagewerk über Wörter und Begriffe in der Volkswirtschaft, deren Bedeutung und Zusammenhang für jedermann in verständlicher Form dargestellt ist. Birchall, J., 2001, Dictionary of economics (Teddington: Peter Collin), 220 pp., 22 cm. Birou, A., 1966, Vocabulaire pratique des sciences sociales (Paris: Éditions Économie et Humanisme, le éditions ouvrières), 314 pp., 22 cm; 2nd edn, 1969, 382 pp., 22 cm.

554 Daniele Besomi Portuguese translation, 1975: Dicionário popular de economia (Lisbon: Assírio & Alvim). Bithell, R., 1882, A counting-house dictionary: containing an explanation of the technical terms used by merchants and bankers in the money market and on the Stock Exchange . . . (London, New York: G. Routledge), 319 pp., 19 cm; 2nd edn, revised: 1893, 326 pp., 19 cm; 3rd edn, 1903. Black, J., 1997, A dictionary of economics (Oxford, New York: Oxford University Press), 507 pp., 20 cm; 2nd edn, 2002, 507 pp., 20 cm; 3rd edn, 2009, 505 pp., 24 cm. Blaug, M., 1983, Who’s who in economics. A biographical dictionary of major economists 1700–1981 (Brighton: Wheatsheaf), 435pp., 24cm; 2nd edn, 1986, 800 pages; 3rd edn, 1999, Who’s who in economics (Cheltenham: Edward Elgar), 1,235 pp., 24 cm; 4th edn, Blaug and Vane, H. R., 2003, 971 pp., 25 cm. Blazquez Carmona, F., 1997, Diccionario de las ciencias humanas (Estella (Navarra): Editorial Verbo Divino), 528 pp., 24 cm. Bley, H., 1969–1986, Lexikon der Wirtschaft (Berlin: Verlag Die Wirtschaft), 13 vols: Bley, H., Freyer, H. and Kahle, S., Arbeit (1969); Freyer, H., Arbeit, Bildung, Soziales (1982); Feierabend, G., Berufsbildung (1978); Tannert, K., Finanzen (1986, 654 pp.); Borchert, H., Industrie (1970); Magritz, E., Organisation und Technik der Verwaltungsarbeit (1975); Ambrée, K., Engelhardt, H., Mann, H. and Pöggel, G., Preise (1972, 276 pp., 24 cm; 2nd edn, unchanged, 1973; 3rd edn, 1979, 299 pp.); Apelt, S., Rechentechnik, Datenverarbeitung (1983); Donda, A., Rechnungsfürung und Statistik (1974, 526 pp.; 2nd edn, 1987); Wagener, H. and Rehbein, G., Verkehr (1972); Bader, H., Versicherung (1976); Steeger, H., Volkswirtschaftsplannung (1980, 700 pp.); Görner, G., Altwig, K. and Such, H., Wirtschaftsrecht (1978, 441 pp.). Bliss, W. D. P., 1897, The encyclopedia of social reform: including political economy, political science, sociology and statistics (New York: Funk & Wagnalls), 1,439 pp., 26 cm. New edition, 1908, as The new encyclopedia of social reform, including all social-reform movements and activities, and the economic, industrial, and sociological facts and statistics of all countries and all social subjects, 1,321 pp., 25 cm. Republished 2002 with an introductory essay by M. Witzel (Bristol: Thoemmes Press), 3 vols. Block, M., 1863–1864, Dictionnaire général de la politique (Paris: O. Lorenz), 2 vols (1,176 pp., 1,140 pp.), 25 cm; 2nd edn. 1873–1874, 2 vols (1,168 pp., 1,151 pp.), 25 cm. Block, M., 1896, Petit dictionnaire politique et social (Paris: Perrin), 800 pp., 25 cm. Block, W. and Walker, M., 1989, Lexicon of economic thought (Vancouver: Fraser Institute), 390 pp., 22 cm. Bluntschli, J. C. and Brater, K., 1857–1870, Deutsches Staats-Wörterbuch (Stuttgart: Expedition des Staats-Wörterbuchs), 11 vols (reprinted Frankfurt/Main: Keip, 1983). Bluntschli, J. C. and Löning, E., 1869–1872, Bluntschli’s Staatswörterbuch in drei Bänden: auf Grundlage des deutschen Staatswörterbuchs von Bluntschli und Brater in elf Bänden (Zurich: Schulthess), 3 vols (based on Bluntschli and Brater, Deutsches StaatsWörterbuch, 1857–1870). Bobbio, N. and Matteucci, N., 1976, Dizionario di politica (Turin: UTET); 2nd edn, 1983, Bobbio, Matteucci and Pasquino, 1,268 pp.; Spanish translation, Diccionario de política (Mexico, DF: Siglo Veintiuno editores, 12th edn, 2000); 3rd edn, 2004, 1,041 pp., reprinted 2005, 2007. Boccardo, G., 1857–1863, Dizionario della economia politica e del commercio così teorico come pratico: utile non solo allo scienziato ed al pubblico amministratore ma eziandio al commerciante, al banchiere, all’agricoltore ed al capitalista (Turin: Sebastiano Franco

Bibliography of specialized dictionaries 555 e figli), 4 vols, 28 cm; 2nd edn, 1875–1877, titled Dizionario universale di economia politica e di commercio (Milan: Treves), 2 vols (1,136 pp., 1,126 pp.), 25 cm; 3rd edn, 1881–1882, 2 vols, 27 cm. Böing, G., 1974, Herder-Lexikon: Wirtschaft (Freiburg i.B., Basel, Vienna: Herder), 254 pp., 21 cm. Reprints: 1974, 1977, 1979, 1981. Indicates: Mit rund 3700 Stichwörtern sowie über 290 Tab. Bookbinder, S., Einleger, L. and Bell, P., 2001, The dictionary of the global economy (New York: Franklin Watts), 160 pp., 26 cm. Borchardt, W., 1983, Kleines Volkswirtschaftslehre-Lexikon (Munich: Verl. für Wirtschaftsskripten), 216 pp.; 2nd edn, 1988, 220 pp. Borisov, E. F., Libman, G. I., Makarova, M. F. et al., 1964, Politekonomicheskii slovar’, 367 pp., 21 cm. Spanish translation, 1966, as Diccionario de economía política (Montevideo: Ediciones Pueblos Unidos); 2nd edn, 1970 (Moskva: Izd-vo polit. litry), reprinted 1972. Spanish translations: 1975 (Madrid: Akal), 1977 (Bogotá: Ediciones Armadillo) and 1978 (Barcelona: Grijalbo) as Diccionario de economía política, and [1995] as Diccionario marxista de economía política (Mexico: Quinto Sol). Bormans, C., 2000, Dictionnaire de la pensée économique (Levallois-Perret: Jeunes), 308 pp., 17 cm. Bott, K., 1925–1927, Handwörterbuch des Kaufmanns: Lexikon für Handel und Industrie (Hamburg: Hanseatische Verlangsanhalt), 5 vols, 10 in. Bouckaert, B. and de Geest, G., 2000, Encyclopedia of law and economics (Cheltenham and Northampton: Edward Elgar), 5 volumes, 24 cm: 1. The history and methodology of law and economics; 2. Civil law and economics; 3. The regulation of contracts; 4. The economics of public and tax law; 5. The economics of crime and litigation. Enlarged in 2009–2010 with the addition of: 1. Tort law and economics; 2. Labor and employment law and economics; 3. Criminal law and economics; 4. Antitrust law and economics; 5. Property law and economics; 6. Contract law and economics; 7. Procedural law and economics; 8. Regulation and economics. Bourachot, H., 1992, Dictionnaire des sciences économiques et sociales (Paris: Bordas), 192 pp., 22 cm. Bouvier-Ajam, M., Ibarrola, J. and Pasquarelli, N. (Centre d’études et de recherches marxistes, France), 1975, Dictionnaire économique et social (Paris: Éditions sociales), 765 pp., 20 cm. Bower, F., [1905], A dictionary of economic terms for the use of newspaper readers and students (London: George Routledge & Sons), 166 pp., 32º. New edition, 1910. 10th edn, revised by K. A. H. Egerton, 1936, 159 pp., 11 cm. Later editions, Winton, 1951, A dictionary of economic terms. Boy, J., 1839–1840, Diccionario teórico, práctico, histórico y geográfico de comercio . . . publicado bajo los auspicios de la Junta de comercio de Barcelona (Barcelona: Imprenta de Valentín Torras), 4 vols. Braunmühl, C. von, 2005, ABC der Globalisierung: von ‘Alterssicherung’ bis ‘Zivilgesellschaft’ (Hamburg: VSA-Verl.), 218 pp., 21 cm. Brémond, J. and Gélédan, A., 1981, Dictionnaire économique et social: 100 articles thématiques, 1200 définitions (Paris: Hatier), 391 pp., 19 cm. Spanish translation, 1985: Diccionario económico-social: 100 artículos temáticos, 1200 definiciones, translated by F. J. Pérez and F. Moliner, 1985 (Barcelona: V. Vives); 2nd edn 1986, 406 pp. (Portuguese translation: Dicionário económico e social: 100 artigos temáticos, 1200 definições, Lisbon: Livros Horizonte, 1988); 3rd edn, 1989, 405 pp.; 4th edn, 1990, 419 pp.; 5th edn, 1992, 419 pp.; 5th edn, 2002, 576 pp., 22 cm.

556 Daniele Besomi Brémond, J. and Gélédan, A., 1984, Dictionnaire des théories et mécanismes économiques (Paris: Hatier), 475 pp., 19 cm. Reprinted 1989 (Portuguese translation 1988 as Dicionário das teorias e mecanismos económicos, Lisbon: Livros Horizonte); 2nd edn, 1993, 489 pp. (reprinted 1995). Brémond, J. and Salort, M. M., 1992, Dictionnaire des grands économistes (Paris: Ed. Liris), 187 pp., 21 cm; 2nd edn, 1997, 182 pp. Brémond, J., Couet, J.-F. and Salort, M. M., 1998, Dictionnaire de l’essentiel en économie (Paris: Éd. Liris), 320 pp., 21 cm; 2nd edn, 1998; reprinted 1999; 3rd edn, 2003, 320 pp.; 4th edn, 2004, 320 pp. Brixtofte, P. and Reckweg, K., 1978, Børsens økonomiske leksikon (Copenhagen: Forlaget Børsen); 2nd edn, 310 pp. (1st edn compiled by Balling, Nielsen and Stærmose, 1974). Brownstone, D. M., Franck, I. M. and Carrith, G., 1980, The VNR dictionary of business and finance (New York, London: Van Nostrand Reinhold, 288 pp., 27 cm. Bruder, A. and Bachem, J. (Görres-Gesellschaft zur Pflege der Wissenschaft im katholischen Deutschland, Bonn), 1889–1897, Staatslexikon (Freiburg i. B., St Louis, [etc.]: Herder), 5 vols, 26 cm; 2nd edn 1903–1904; 3rd edn, 1908–1911; 4th edn, Bruder, Bachem and Sacher, 1911–1912; 5th edn Sacher, 1929; 6th and 7th edns: [Görres-Gesellschaft], Staatslexikon: Recht, Wirtschaft, Gesellschaft. Brunner, O., Conze, W. and Koselleck, R., 1972–1997, Geschichtliche Grundbegriffe. Historisches Lexikon zur politisch-sozialen Sprache in Deutschland (Stuttgart: KlettCotta), 8 vols in 9, 26 cm. Student edition, 2004, 23 cm. [Buisson], 1805, Dictionnaire universel de commerce, banque, manufactures, douanes, pêche, navigation marchande; Des lois et administration du commerce: Auquel on a joint l’explication des changes, monnaies, poids et mesures . . . Terminé par une nomenclature en douze langues, des marchandises qui entrent dans le commerce. Par une société de négocians, de jurisconsultes, et de personnes employées dans l’administration. Dédié à la Banque de France (Paris: chez F. Buisson, A. Bailleul, L. Fantin, Lenorman), 1,091 pp., 4°. 2nd edn compiled by Monbrion, 1838–1841, as Dictionnaire universel du commerce, de la banque et des manufactures . . . Bülau, F., 1832, Encyklopädie der Staatswissenschaften (Leipzig: Göschen), 287 pp. Bülow, F., 1936, Wörterbuch der Wirtschaft (Leipzig: A. Kröner), 455 pp., 18 cm. 2nd edn, Bülow and H. Langen, 1954, 543 pp.; 3rd edn, 1958, 603pp.; 4th edn, 1963, 603 pp.; 5th edn, 1967, 635 pp.; 6th edn, 1970, 635 pp.; 7th and later editions compiled by Recktenwald (1975–1990), and Grüske and Recktenwald (1994). Büschgen, H. E. von, 1976, Handwörterbuch der Finanzwirtschaft (Stuttgart: Poeschel), 1,990 pp., 28 cm. Continues as Gerke’s Handwörterbuch des Bank- und Finanzwesen (1995). Bussetti, G. and Tabozzi, R., 1979, Dizionario di economia (Milan: Editoriale del Corriere della sera), 192 pp., 22 cm. Bussing-Burks, M., 2008, Money for minors: a student’s guide to economics (Westport, CT: Greenwood Press), 200 pp., 27 cm. Calhoun, C. J., 2002, Dictionary of the social sciences (New York: Oxford University Press), 563 pp., 26 cm. [Canadian Association of Labour Media], 1984, Economics demystified: a dictionary of economic terms for non-economists (Ottawa: Canadian Association of Labour Media), 64 pp., 21 cm. Canga-Argüelles J., 1826–1827, Diccionario de hacienda para el uso de los encargados de la suprema dirección de ella (London: Imprenta española de M. Calero), 5 vols, 22 cm. Canga-Argüelles, J., 1833–1834, Diccionario de hacienda, con aplicación a España, Madrid:

Bibliography of specialized dictionaries 557 Imprenta de Don Marcelino Calero y Portocarrero, 3 vols. Reprint: [Madrid]: Fábrica Nacional de Moneda y Timbre, 1968. Capul, J.-Y. and Garnier, O., 1993, Dictionnaire d’économie et de sciences sociales (Paris: Hatier), 475 pp., 19 cm. 2nd edn, 1994, 489 pp.; reprinted 1995, Portuguese translation, 1998, Dicionário de economia e de ciências sociais (Lisbon: Plátano). 3rd edn, 1999, 510 pp., 20 cm, indicating ‘Plus de 1500 définitions’, ‘Une chronologie des faits économiques et sociaux’, ‘Les théories des principaux économistes et sociologues’; reprinted 2000. 4th edn, 2002, 542 pp.; 5th edn, 2008, 575 pp.; the cover indicates ‘Plus de 1500 définitions, une chronologie des faits économiques et sociaux, les théories des principaux économistes et sociologues, des clés de lecture de l’actualité économique et sociale’. Carew, E., 1985, The language of money (Sydney: Allen & Unwin) 214 pp., 22 cm. Revised edn, 1996 as The language of money 3 (St Leonards, NSW, Australia: Allen & Unwin), 353 pp., 23 cm. Carmagnani, M. and Vercelli, A., 1978, Il mondo contemporaneo: enciclopedia di storia e scienze sociali, diretta da Nicola Tranfaglia. Vol. VIII: Economia e storia (Florence: La nuova Italia), 946 pp., 26 cm. Carricajo, J., Díaz, D., Esteban, D. and Sánchez Seseña, C. E., 2000, Diccionario de economía (Madrid: GPS-Madrid), 558 pp. Carson, T. and Bonk, M., 1999, Gale encyclopedia of U.S. economic history (Detroit: Gale Group), 2 vols, 1250 pp., 29 cm. Castro, A. de Souza and Amore, D. d’, 1951, Enciclopédia mercantil: guia prático do comerciante e industrial (São Paulo: Ed. Saraiva), 494 pp., 23 cm. Cate, T., 1997, An encyclopedia of Keynesian economics (Cheltenham: Edward Elgar), 638 pp. [Centre régional de documentation pédagogique, Nancy-Metz], 1977, Vocabulaire économique et social élémentaire (Nancy: CRDP), 37 pp., 24 cm. Cerboni, G., 1891–1905, Enciclopedia di amministrazione, industria e commercio: dizionario pratico ad uso dei commercianti, industriali, banchieri . . . (Milan: F. Vallardi), 5 vols. Chabanol, D., 1979, Dictionnaire des idées reçues en matière économique (Lyon: Presses universitaires de Lyon), 129 pp., 18 cm. Chaudhary, M. A. and Chaudhary, G., 2008, Global encyclopaedic dictionary of political economics (New Delhi: Global Vision Publishing House), 2 vols, 624 pp., 25 cm. Chiesa, D. A., 1981, Minivocabulário econômico-financeiro (e de abrangências afins): bolsa de valores, câmbio, economia, finanças internas e internacionais, moedas e bancos, mercado de capitais, mercado financeiro, mercado interno e internacional, mercado monetário: produção, indústria, comércio, serviços (Porto Alegre-RS: Editora Sulina), 175 pp., 22 cm. Chomel, N., 1709, Dictionnaire oeconomique: contenant divers moyens d’augmenter et conserver son bien, et même sa santé: avec plusieurs remèdes assurez et éprouvez, pour un très-grand nombre de maladies, et beaucoup de beaux secrets pour parvenir à une longue et heureuse vieillesse: quantité de moyens pour élever, nourrir, guérir, et faire profiter toutes sortes d’animaux domestiques, comme brebis, moutons, boeufs, chevaux, mulets, poules, abeilles et vers à soye: différents filets pour la pêche et la chasse de toutes sortes de poissons, oiseaux et animaux, etc.: une infinité de secrets découverts dans le jardinage, la botanique, l’agriculture, les terres, les vignes, les arbres, comme aussi la connoissance des plantes des païs étrangers, et leurs qualitez spécifiques, etc.: arbres les moyens de tirer tout l’avantage des fabriques de savon, d’amidon, filer le cotton, et

558 Daniele Besomi faire à peu de frais des pierreries artificielles, fort ressemblantes aux naturelles, peindre en mignature sans savoir le dessein, et travailler les bayettes ou étoffes établies nouvellement en ce royaume, pour l’usage de ce païs, et pour l’Espagne, etc.: les moyens dont se servent les marchands, pour faire de gros établissemens, ceux par lesquels les Anglois et les Hollandois se sont enrichis, en trafiquant des chevaux, des chèvres, et des brebis, etc.: tout ce que doivent faire les artisans, jardiniers, vignerons, marchands, négocians, banquiers, commissionnaires, magistrats, officiers de justice, gentils-hommes, et autres d’une qualité et d’un emploi plus relevé, pour s’enrichir, etc.: chacun se pourra convaincre de toutes ces véritez, en cherchant ce qui lui peut convenir, chaque chose étant rangée par ordre alphabétique comme les autres dictionnaires, par Mr Noel Chomel, prêtre, curé de la paroisse de saint Vincent de la ville de Lyon (Lyon: Pierre Thened, Imprimé aux dépens de l’auteur), 1,040 pp., folio (36 cm), 2 vols; 2nd edn, 1718 (Lyon: chez Louis Bruyset; Paris: E. Ganeau), 2 vols and 2 more vols supplement; English translation as Dictionaire [sic] oeconomique written by M. Chomell; done into English from the 2d ed., with considerable alterations and improvements; rev. and recommended by R. Bradley (London: D. Midwinter, 1725; Dublin: L. Flinn, [1758]). 3rd edn ‘revüe, corrigée et augmentée d’un très-grand nombre de nouvelles découvertes et secrets utiles à tout le monde, par M. P. Danjou, prêtre: enrichie d’un grand nombre de figures’, 1732, beginning of title slightly altered in Dictionnaire oeconomique: contenant divers moyens d’augmenter son bien, et de conserver sa santé . . ., 2 vols (1,656 + 1,570 pp.), 39 cm). 4th edn, ‘revûë, corrigée, & considérablement augmentée par divers curieux. Et par J. Marret, docteur en médecine. Enrichie de figures dessindes & gravées par un disciple de feu B. Picard le Romain’, 1741 (Commercy: Henry Thomas), 2 vols (424, 400 pp.); 2 additional vols (522, 460 pp.) are titled Supplément au dictionnaire économique contenant. . . . 5th edn, ‘entièrement corrigée et très considérablement augmentée. Par M. de La Marre’, 1767 (Paris: chez Ganeau, chez Bauche, chez Estienne, chez d’Houry), 3 vols, 2°. Ciment, J., 2010, Booms and busts: an encyclopedia of economic history from tulipmania of the 1630s to the global financial crisis of the 21st century (Armonk, NY: Sharpe), 3 vols, 1,000 pp. Clerc, D., 1997, Dictionnaire des questions économiques et sociales (Quétigny: Alternatives économiques; Paris: les Éd. de l’Atelier), 315 pp., 22 cm. Cohen, B., 1986, Lexique de cooccurrents: bourse, conjoncture économique (Montreal: Linguatech), 125 pp. Coles, A., 1927, Pitman’s business man’s encyclopaedia and dictionary of commerce (London, New York [etc.]: Sir I. Pitman & Sons), 3rd edn, 4 vols. Previous edn compiled by Slater, 1920; following edn by Heywood, 1930. Collin, P. H., 2003, Dictionary of economics (London: Bloomsbury), 220 pp. Reprinted London: A & C Black, 2006; electronic reproduction (Boulder, CO: NetLibrary, 2008). [Comptoir], 1836–1841, Conversations-Lexicon der kaufmännischen Wissenschaften. Eine vollständige Handlungs-Encyclopädie für Banquiers, Kaufleute, Fabrikanten, Droguisten, Sensale und Geschäftsleute jeder Art (Grimma: Verl.-Comptoir) , 8°. 2nd edn, 1846–1848. Confederazione Fascista delle Aziende del Credito e della Assicurazione, 1942, Enciclopedia bancaria: pubblicata sotto gli auspici della Confederazione Fascista delle Aziende del Credito e della Assicurazione e della Confederazione Fascista dei Lavoratori delle Aziende del Credito e della Assicurazione (Milan: [s.n.]), 2 vols, 25 cm. Congdon, T. and McWilliams, D., 1976, Basic economics: a dictionary of terms, concepts and ideas (London: Arrow Books), 224 pp., 20 cm.

Bibliography of specialized dictionaries 559 Conrad, J., Elster, L., Lexis, W. and Loening, E., 1890–1895, Handwörterbuch der Staatswissenschaften (Jena: Fischer), 6 vols + 2 supplements, 1895 and 1897. 2nd edn Conrad, Elster, Lexis, Loening and R. Albrecht, 1898–1901, 7 vols, 27 cm; 3rd edn, 1909–1911, 8 vols, 27 cm. 4th edn Elster, 1923–1929. Following edition compiled by Beckerath, 1956–1968, as Handwörterbuch der Sozialwissenschaften. Cooperativa muratori & cementisti, [1982], Piccolo dizionario economico (Ravenna: a cura della CMC), 90 pp., 21 cm. Coquelin, C. and Guillaumin, G.-U., 1852–1853, Dictionnaire de l’économie politique, contenant l’exposition des principes de la science, l’opinion des écrivains qui ont le plus contribué à sa fondation et à ses progrès, la bibliographie générale de l’Économie politique . . . avec des notices biographiques et une appréciation raisonnée des principaux ouvrages (Paris: Guillaumin), 2 vols, 970 + 896 pp., 25 cm; 2nd edn, 1854; 3rd edn, 1864; 4th edn, 1873. Succeeded by Say and Chailley, Nouveau dictionnaire d’économie politique, 1891–1892, 1900. Cotta, A., 1968, Dictionnaire de science économique ([Tours]: Mame), 437 pp., 22 cm; 2nd edn, 1969, 447 pp.; reprinted 1970 (Paris: Publi Union); Portuguese translation, 1973, as Dicionário de economia (Lisbon: Publicações Dom Quixote); 3rd edn, 1975 (Paris: J. P. Delarge; [Tours]: Mame), 461 pp., 21 cm. Couppey-Soubeyran, J., 2007, Dictionnaire de l’économie (Paris: Encyclopædia Universalis, Albin Michel), 1,530 pp., 21 cm. Cramer, J. E. and Thießen, F., 1999, Knapps Enzyklopädisches Lexikon des Geld-, Bankund Börsenwesens (Frankfurt am Main: Knapp), 4th edn, 2 vols, 28 cm. Previous edn, 1967, Enzykopädisches Lexikon für das Geld-, Bank- und Börsenwesen, Palyi and Quittner. Crane, D., 1980, A dictionary of Canadian economics (Edmonton: Hurting Publishers), 372 pp., 24 cm. Crane, D., 1993, The Canadian dictionary of business and economics (Toronto: Stoddart), 693 pp., 24 cm. Parts of this book originally appeared in A dictionary of Canadian economics. [Creditanstalt-Bankverein, Vienna], 1962, Das wirtschaftliche Stichwort ([Vienna]: Creditanstalt-Bankverein), 63 pp., 30 cm. [Crosby], 1808, Crosby’s merchant’s and tradesman’s pocket dictionary, adapted to merchants, manufacturers, and traders in all the various branches of commercial intercourse. By a London Merchant, assisted by several experienced tradesmen (London: B. Crosby & Co.), 500 pp.; 2nd edn, 1810, 622 pp. Dagut, J.-L., 2000, Dictionnaire des 500 notions économiques indispensables (LevalloisPerret: Jeunes éd.), 280 pp., 17 cm. D’Andrea, O., 1934, Piccola enciclopedia di banca e borsa: guida pratica per bancari ed uomini d’affari (Padua: Cedam), 349 pp., 8°. Darity, W. A. Jr, 2008, International encyclopedia of the social sciences (Detroit: Macmillan Reference USA), 2nd edn, 9 vols, 29 cm. 1st edn, compiled by Sills, 1968, succeeded Seligman’s Encyclopaedia of the social sciences, 1930–1935. Darnay, A. J. and Magee, M. D., 2007, Encyclopedia of small business (Detroit: Thomson Gale), 3rd edn, 2 vols, 1,216 pp., 29 cm. First two editions by Hillstrom, 1998, 2002. Darnell, A. C., 1994, A dictionary of econometrics (Aldershot: Edward Elgar), 458 pp. Davis, W., 1972, Money talks – William Davis translates: a glossary of money (London: Deutsch), 208 pp., 23 cm; 2nd edn, 1974 (London: Coronet), 256 pp., 18 cm. Davis, W., 1973, The language of money: an irreverent dictionary of business & finance (Boston, MA: Houghton Mifflin), 1st American edition, 267 pp., 22 cm.

560 Daniele Besomi [De Agostini], 1989–1991, Dizionario enciclopedico dei termini economici (Novara: De Agostini), 6 vols, 598 pp. total, 21 cm. [De Agostini], 1998, L’ enciclopedia dell’economia (Novara: De Agostini), 1,022 pp., 25 cm. de Luca, G., 2000, Nuovo dizionario di economia (Naples: Esselibri), 3rd edn, 745 pp., 22 cm, with a CD-ROM. Previous edn compiled by Verrilli, de Luca and Minieri, 1998. de Luca, G. et al., 2006, Dizionario di economia politica (Naples, Esselibri); 4th edn (possibly of de Luca, 2000), 767 pp., 21 cm. de Luca, G. and Verrilli, A., 1992, Dizionario economico, finanziario e contabile: corredato da riferimenti normativi, confronti interdisciplinari e profili delle maggiori società italiane (Naples: Simone), 1,192 pp., 22 cm. de Pablo, J. C., 1992, Incompletisimo diccionario de economía: biografías y términos (Buenos Aires: El Cronista Ediciones); 2nd edn, 1998 (Buenos Aires: Ediciones Macchi); 3rd edn, 2000 as Incompletisimo diccionario de economía: biografías y términos y relaciones. De Santo, V., 1996, Diccionario de ciencias jurídicas, políticas, sociales y de economía (Buenos Aires: Universidad), 884 pp., 23 cm; reprinted 1999; 2nd edn, 2003, 987 pp.; 3rd edn, 2005, 992 pp. Deane, P. and Kuper, J., 1988, A lexicon of economics (London, New York: Routledge), 380 pp., 20 cm. Spanish translation 1992 as Vocabulario básico de economía (Barcelona: Crítica). del Campo, S., Marsal, J. F. and Garmendia, J. A., 1975–1976, Diccionario de ciencias sociales (Madrid: Instituto de Estudios Politicos), 2 vols, 25 cm. Delladio, A., 1970, Dizionario dei termini economici (Milan: Mondadori, McGraw-Hill), 239 pp., 20 cm. Démeunier, J. N., 1784–1788, Economie politique et diplomatique: partie dédiée et présentée à Monseigneur le baron de Breteuil, ministre et secrétaire d’Etat, etc. Also titled Encyclopédie méthodique: économie politique et diplomatique (Paris: chez Panckoucke; Liège: chez Plomteux), 4 vols, 760 + 757 + 787 + 840 pp. These are volumes 83–86 of the Encyclopédie méthodique ou par ordre de matières, published by Panckoucke in 1782–1832. Dettmer, H. and Dettmer, S., 2004, Fachbegriffe Recht und Wirtschaft (Troisdorf: Bildungsverl. EINS), 208 pp., 17 cm. Deubel, P. and Montoussé, M., 2003, Dictionnaire des auteurs en sciences économiques et sociales (Rosny: Bréal), 350 pp., 19 cm. The cover indicates: ‘165 auteurs en économie, sociologie, et sciences politiques’, and ‘un index des notions’. Deubel, P., Montoussé, M. et al., 2002, Dictionnaire de sciences économiques & sociales (Rosny: Bréal), 541 pp., 19 cm. Di Tella, T. S., Gajardo, P., Gamba, S. and Chumbita, H., 1989, Diccionario de ciencias sociales y politicas (Buenos Aires: Puntosur Editores), 659 pp., 23 cm; 2nd edn, 2001 (Buenos Aires: Emecé), 776 pp., 23 cm. Díaz Doin, G., 1948, Diccionario político de nuestro tiempo, politico-biográfico-económicosociológico (Buenos Aires, Editorial Mundo Atlantico), 2nd edn, 732 pp., 23 cm. Dichtl, E. and Issing, O., 1987, Vahlens grosses Wirtschaftslexikon (Munich: Beck; Munich: Vahlen), 2 vols, 2,164 pp., 25 cm; 2nd edn, 1993 (Munich: Deutscher Taschenbuch Verlag), 2 vols, 2,471 pp., 25 cm. Re-edition in 4 vols, 1994. Dietrich, Fr., 1845, Encyclopädie der Handlungswissenschaften: oder gedrängter Unterricht für Handlungslehrlinge und Commis zur Erlernung der kaufmännischen Wissenschaften; nebst gründlicher Anleitung in kurzer Zeit eine schöne, geläufige und feste kaufmänn. Handschrift zu erlernen; durch 4 Mustervorschriften erläutert (Leipzig: Voigt u. Fernau).

Bibliography of specialized dictionaries 561 Dimand, R. W., Dimand, M. A. and Forget, E. L., 2000, A biographical dictionary of women economists (Cheltenham; Northampton, MA: Edward Elgar), 520 pp., 24 cm. Dinakar, R. K., 2009, Encyclopaedic dictionary of economics (New Delhi: Crescent Publishing Corporation), 5 vols, 1,424 pp., 23 cm. Dobson, J. M., 2007, Bulls, bears, boom, and bust: a historical encyclopedia of American business concepts (Santa Barbara, CA: ABC-CLIO), 423 pp., 26 cm. [Do¯bun-Kwan], 1910–1916, Keizai-Daijisho [Comprehensive dictionary of the economy] (Tokyo: Do¯bun-Kwan), 9 vols; 2nd edn in 5 vols, 4,510 pp., 1916. Dodd, G. and Knight, C., 1851, Knight’s cyclopædia of the industry of all nations (London: C. Knight, [1851], 1,806 cols, 22 cm. American edn published in 1851 with title Cyclopædia of the industry of all nations. By Charles Knight (New York: G. P. Putnam), 1,810 pp., 24 cm. Dohnal, H., 1996, Lexikon moderner Begriffe aus Arbeit und Wirtschaft (Vienna: ÖGBVerl.), 79 pp., 22 cm; 2nd edn, 1997, 79 pp.; 3rd edn, 2001, 84 pp. Dortier, J.-F., 2004, Le dictionnaire des sciences humaines (Auxerre: Sciences Humaines), 875 pp.; 2nd edn, 2008, 829 pp. Dowling, N., 1977, Dictionary of economic definitions for the Leaving Certificate (Dublin: Helicon), 45 pp., 21 cm. Drouin, J.-C., 1997, Dictionnaire de poche: les grandes notions de l’économie (Paris: Presses universitaires de France), 123 pp., 18 cm. Duclerc, E. and Pagnerre, 1842, Dictionnaire politique: encyclopédie du langage et de la science politiques, rédigé par une réunion de députés, de publicistes et de journalistes avec une introduction par Garnier-Pagès (Paris: Pagnerre), 944 pp., 4°; 2nd edn, 1843; 3rd edn, 1848; 4th edn, 1857; 6th edn, 1860; 7th edn, 1868. Durlauf, S. N. and Blume, L. E., 2008, The new Palgrave dictionary of economics (Basingstoke and New York: Palgrave Macmillan); 2nd edn, 8 vols, 7,356 pp, 26 cm; also electronic edition. Former edition directed by Eatwell, Milgate and Newman, 1987. Thematic excerpts, with some essays from the previous edition, have been issued separately by the same publisher, Microeconometrics (354 pp., 24 cm, 2010); Game theory (379 pp., 2010); Economic growth (276 pp., 25 cm, 2010); Behavioural and experimental economics (267 pp., 24 cm, 2010); Macroeconometrics and time-series analysis (406 pp., 24 cm, 2010). [Dushkin Publishing Group], 1973–1974, Economics: encyclopedia (Guilford, CN: Duskin Publishing Group), 279 pp., 24 cm. [Dushkin Publishing Group], 1980, The encyclopedia of economics (Guilford, CN: DPG Reference Publishing); 2nd edn, 1981, 304 pp., 25 cm. Eatwell, J., Milgate, M. and Newman, P. K., 1987, The new Palgrave: a dictionary of economics (London: Macmillan; New York: Stockton Press; Tokyo: Maruzen), 4 vols, 26 cm. Following edn Durland and Blume, 2008. Thematic excerpts, with some additional essays, have been published separately: General equilibrium, 1989; Finance, 1989; The invisible hand, 1989; Capital theory, 1990; Marxian economics, 1990; Money, 1989; Problems of the planned economy, 1990; Time series and statistics, 1990; Social economics, 1989; The world of economics, 1991. Sequel to Palgrave, Dictionary of political economy, 1894–1899, 1910, and Higgs, 1925–1926, Palgrave’s dictionary of political economy. Échaudemaison, C.-D., with Bazureau, F., Bosc, S., Cendron, J.-P. et al., 1989, Dictionnaire d’économie et de sciences sociales (Paris: Nathan), 332 pp., 24 cm; reprinted 1992; 2nd edn, 1993, 447 pp., 21 cm; the cover indicates ‘Plus de 1200 entrées, 50 oeuvres résumées’. 3rd edn, 1996, 479 pp.; 4th edn, 1998, 480 pp.; 5th edn, 2001, 541 pp.; 6th edn, 2003, 543 pp.; 7th edn, 2006, 574 pp., 22 cm.

562 Daniele Besomi [Economic almanac, The], [1962], Glossary of economic terms (National Industrial Conference Board), 43 pp. Ehlert, W., 1969, Wörterbuch der Ökonomie: Sozialismus (Berlin: Dietz), 2nd edn, 940 pp., 8°; 3rd edn, 1973, 1,082 pp., 20 cm; 4th edn, 1979, 1,079 pp.; 5th edn, 1983, 1,072 pp.; 6th edn, 1984, 1,072 pp. 1st edn compiled by Luchterhand, Joswig and Ehlert, 1967. Eifert, H. J., Flemming, G. and Preuss, G., 1974, Meyers Handbuch über die Wirtschaft (Mannheim etc.: Bibliographisches Institut), 3rd edn, 1,182 pp., 23 cm. 1st and 2nd edns compiled by Preuss and Bachert, 1966, and Preuss, 1970. Elster, L., 1923–1929, Handwörterbuch der Staatswissenschaften (Jena: Fischer); 4th edn, 9 vols. Earlier editions compiled by Conrad, Elster et. al., 1890, 1898–1901, 1909–1911; the work continued as Handwörterbuch der Sozialwissenschaften, compiled by Beckerath, 1956–1968. Elster, L. with von Below-Marburg, G. A. H., Biermer-Greifswald, M. et al., 1898, Wörterbuch der Volkswirtschaft (Jena, G. Fischer), 2 vols, 27 cm; 2nd edn, 1906–1907, 2 vols, 27 cm; 3rd edn, 1911, 3 vols, 27 com.; 4th edn, compiled with Albrecht, A., 1931–1933, 3 vols, 27 cm. Emmett, R., 2006, Biographical dictionary of American economists (Bristol: Thoemmes Press), 2 vols, 921 pp., 24 cm. Erffa, D. von, 1954, Wirtschaftslexikon (Munich: Humboldt-Taschenbuchverlag), 189 pp.; 2nd edn, 1954; 5th edn, 1958, 236 pp.; 8th edn, 1968, 256 pp.; 9th edn, 1972, 237 pp., 18 cm; 12th edn, 1976, 256 pp. Further editions, 1983, 1986, 256 pp. Erffa, D. von, 1990, Taschenlexikon der Wirtschaft (Munich: Humboldt-Taschenbuchverl. Jacobi), 253 pp., 18 cm. Later edition, 1992, 255 pp.; 20th edn, 2003, as Taschenlexikon der Wirtschaft: moderne Schlagworte von A–Z, Handelsbräuche, Betriebsformen, Geldund Börsenwesen (Baden-Baden: Humboldt), 318 pp., 18 cm; 21st edn, 2007, as Das Humboldt Taschenlexikon der Wirtschaft: Lexikon von A–Z, 320 pp. Escherle, H.-J. and Kaplaner, K., 1988, Neues Lexikon der Wirtschaft: die wichtigsten Begriffe und Zusammenhänge zum Nachschlagen (Munich: Compact Verlag), 405 pp., 23 cm. Escherle, H.-J., Kaplaner, K. and Neuburger, R., 2000, Neues Lexikon der Wirtschaft von A–Z (Munich: Compact-Verlag), 448 pp. Escherle, H.-J., Kaplaner, K. and Neuburger, R., 2004, Großes Wörterbuch Wirtschaft: Grundwissen von A–Z (Munich: Compact-Verl.), 448 pp., 18 cm; reprinted 2005. Eynern, G. von, with Böhret et al., 1973, Wörterbuch zur politischen Ökonomie (Opladen: Westdeutscher Verlag), 492 pp., 19 cm; 2nd edn, 1977, 582 pp., 19 cm. Feldmann, A., 1940, ABC der Wirtschaft: eine schweizerische Einführung in die Grundfragen moderner Wirtschaft (Berne: Francke), 149 pp.; 2nd edn, 1944, 150 pp. Félice, F.-B. de, 1770–1771, Encyclopédie oeconomique ou système général I° d’oeconomie rustique, contenant les meilleures pratiques pour fertiliser les terres et tirer parti des marais, des communes, des montagnes, des eaux, des denrées et des animaux tant sauvages que domestiques, . . . II°. d’oeconomie domestique. . . III°. d’oeconomie politique. . . ouvrage extrait des meilleurs livres qui ont paru jusqu’à ce jour sur ces matières. . .; le tout revu par quelques membres de la Société Oeconomique de Berne (Yverdon), 16 vols, 9,430 pp., 8°. Ferraù, A., 1974, Prontuario dei termini politici, economici, sociali in uso in Italia (Rome: Zingarelli), in various pagings, 457 pp., 22 cm; 151 pp. Ferréol, G., Schlacther, D., Rahmania, N. and Duverney, D., 1995, Dictionnaire des techniques quantitatives appliquées aux sciences économiques et sociales (Paris: A. Colin), 399 pp., 24 cm.

Bibliography of specialized dictionaries 563 Fink, H. with Schons, P. and Rothfritz, W., 89, Econoterms: a glossary of economic terms, mit einem Anhang Econoslang (Munich: R. Oldenbourg); 2nd edn, 243 pp.; 4th edn, 1991, 343 pp., 24 cm; 5th edn, 1994, titled EconoTerms: a glossary of economic terms; mit EconoSlang, 343 pp.; 6th edn, 1999, 372 pp. Flemming, G., 1998, Lexikon volkswirtschaftlicher Grundbegriffe (Cologne: Bank-Verl.), 257 pp., 21 cm. Flemming, G. and Keck, A., 1990, Deutsch-deutsches Wirtschaftslexikon Volkswirtschaft (Stuttgart: Deutscher Sparkassenverlag), 132 pp., 21 cm. Foldvary, F. E., 1998, Dictionary of free-market economics (Cheltenham and Northampton: Edward Elgar), 307 pp., 24 cm. German translation, 2000, as Das Lexikon der freien Marktwirtschaft (Düsseldorf: Verlag Wirtschaft und Finanzen). Fort, L., 1852, Neuestes Universal-Lexicon der gesammten kaufmännischen Wissenschaften (Leipzig, Arnoldi), 2 vols, subtitled für Kaufleute, Fabrikanten u. überhaupt jeden Geschäftsmann; 3rd edn, 1857, 4 vols, 8°; 4th edn, updated by F. Huber, 1864–1865, 2 vols. Francis, G. W., 1844, The dictionary of trade, commerce and navigation: explanatory of the objects, terms, statistics, laws and regulations of the excise . . . and the general affairs of business: corrected up to the latest period (London: Brittain, Berger), 386 pp., 21 cm. François-Marsal, F., 1928–1930, Encyclopédie de banque et de bourse (Paris: Impr. Crété), 5 vols, 27 cm. Frenzel, G., 1973, Ökonomie (Frankfurt: Herder & Herder, cop.), 4 vols. Fritsch, U., 1981, Wirtschaft auf einen Blick: Daten, Fakten u. Funktionen (Cologne: BankVerlag), 151 pp.; 2nd edn, 1981, as Wirtschaft auf einen Blick: Fachbegriffe verständlich erklärt (Bergisch Gladbach: Bastei Lübbe), 258 pp.; 3rd edn, 1983 (Cologne: BankVerlag), 157 pp.; 4th edn, 1986, 258 pp.; 5th edn, 1988, as Wirtschaft auf einen Blick: Daten, Fakten und Funktionen, compiled by Fritsch and Knappe (Cologne: Bank-Verl.), 160 pp.; 6th edn, 1992, 144 pp.; 8th edn, 1996, 202 pp.; 9th edn, 2000, 210 pp.; 10th edn, 2002, as Wirtschaft auf einen Blick, 208 pp.; 11th edn, 2006, 192 pp. Furrer, A., 1885–1891, Volkswirtschafts-Lexikon der Schweiz: Urproduktion, Handel, Industrie, Verkehr etc. (Berne: Dalp), 3 vols. [Gabler], 1998, Gabler Kompakt-Lexikon Wirtschaft: 2.700 Begriffe nachschlagen, verstehen, anwenden (Wiesbaden: Gabler); 7th edn, 343 pp.; 8th edn, 2001, Online resource (374 pp. = 2,055 kB); 9th edn, Arentezen, 2006, Ebook Gabler Kompakt-Lexikon Wirtschaft: 3000 Begriffe nachschlagen, verstehen, anwenden. Earlier edition as GablerLexikon Wirtschaft. [Gabler], 1986, Gabler kleines Lexikon Wirtschaft: 2000 Wirtschaftsbegriffe nachschlagen – verstehen – anwenden (Wiesbaden: Gabler); 3rd edn, 269 pp.; 4th edn, 1989; reprinted 1991, as Gabler kleines Lexikon Wirtschaft: 2200 Wirtschaftsbegriffe nachschlagen – verstehen – anwenden, 279 pp.; 5th edn, 1994, 323 pp.; 6th edn, Arentzen, 1995, GablerLexikon Wirtschaft; earlier edition, Kuhn, 1982, Schüler-Lexikon Wirtschaft. [Gabler], 2009, Gabler-Wirtschaftslexikon: das Wissen der Experten (Wiesbaden: Gabler). Online resource: http://wirtschaftslexikon.gabler.de/. Galimberti, F. and Paolazzi, L., 1993, Le 100 parole dell’economia (Milan: Il Sole 24 Ore), 94 pp. Ganilh, M., 1826, Dictionnaire analytique d’économie politique (Paris and Brussels: Ladvocat, libraire de S.A.R.), 437 pp., 21 cm. Spanish translations: Diccionario analítico de economía política (Paris, Libreria Americana, 1827; and Madrid: imprenta de Francisco Pascual, 1834).

564 Daniele Besomi Garofalo, G., 1981, Dizionario dei termini economici (Rome: Formez, Centro di formazione e studi per il Mezzogiorno), 62 pp., 21 cm. [Garzanti], 1985, Enciclopedia del diritto e dell’economia Garzanti (Milan: Garzanti), 1279 pp., 20 cm. 3rd edn as La nuova enciclopedia del diritto e dell’economia Garzanti, 1990, 1,440 pp. Géhanne, J.-C., 1995, Dictionnaire thématique de sciences économiques et sociales: principes et théories (Paris: Dunod), 2 vols (540, 393 pp.), 24 cm. (1) Acteurs et structures; (2) Croissance et déséquilibres. Gehrke, C. and Kurz, H. D., forthcoming, Biographical dictionary of European economists (London: Thoemmes Continuum. Publication expected in 2012). Geigant, F. et al., 1975, Lexikon der Volkswirtschaft (Munich: Verlag Moderne Industrie), 580 pp., 20 cm; 2nd edn, 1976, 580 pp.; 3rd edn, 1979, 832 pp.; 4th edn, 1983, 832 pp., 19 cm.; 5th edn, 1987, 832 pp.; 6th edn, 1994, 1,139 pp., 20 cm.; 7th edn, 2000, 1,203 pp. Gerke, W., 1995, Handwörterbuch des Bank- und Finanzwesens (Stuttgart: SchäfferPoeschel); 2nd edn, 2,122 pp.; 3rd edn, 2001, 2,444 pp. Continues from Büschgen’s Handwörterbuch der Finanzwirtschaft (1976). Germany, Bundesministerium für Wirtschaft, 1994, Wirtschaft und Europa von A bis Z (Bonn: BMWi, Referat Öffentlichkeitsarbeit), 173 pp., 18 cm. Germany, Bundesministerium für Wirtschaft und Finanzen, 1971, Wirtschaft von A bis Z (Bonn: der Pressestelle des Bundesministeriums für Wirtschaft und Finanzen), 39 pp., 23 cm. New edition, 1990 (Bonn: Referat Öffentlichkeitsarbeit d. Bundesministeriums für Wirtschaft). Gesellschaft zur Föderung der Schweizerischen Wirtschaft, 1992, Wörterbuch der Wirtschaft (Zurich: Gesellschaft zur Föderung der Schweizerischen Wirtschaft), 125 pp., 21 cm. Ghodke, N. B., 1985–1986, Encyclopaedic dictionary of economics (Delhi: Mittal), 5 vols, 1,162 pp., 25 cm. Giambelluca, A., 1960, Repertorio di diritto privato e pubblico: economia politica, scienza delle finanze (Milan: A. Vallardi), 307 pp., 21 cm. Giese, F., 1927–1930, Handwörterbuch der Arbeitswissenschaft, unter Mitwirkung von 280 Fachleuten des In- und Auslandes (Halle a. S.: Marhold), 4 vols, 25 cm. Gilis, H., 1907–1908, Encyclopédie pratique du commerce, de l’industrie et de la finance (Hasselt: M. Ceysens), 4 vols, 8°. Gilpin, A., 1966, Dictionary of economic terms (London: Butterworth), 222 pp., 21.5 cm; 2nd edn, 1970, 276 pp., 22 cm.; 3rd edn, 1973, 230 pp.; 4th edn, 1977, 249 pp. Giraudeau l’Aîné, P., 1741–1742, La banque rendue facile aux principales nations de l’Europe (Genève: chez l’auteur). 2nd edn, 1754, ‘Nouvelle edition revûe, corrigée & considérablement augmentée sur les mémoires & les avis des plus fameux banquiers, négocians, &c. A la suite de laquelle, on trouve la maniere de tenir les livres en parties doubles, & le traité de l’achat des matieres & espéces d’or & d’argent. 3 books in 1 vol., 4°. 3rd edn, ‘revue, corrigée et considérablement augmentée sur les mémoires et les avis des plus fameux banquiers, négociants, etc. A la suite de laquelle, on trouve le Traité de l’achat des matieres & espéces d’or & d’argent, & la maniere de tenir les livres en parties doubles’, 1769, (Lyon: chez Regnault), 2 vols, 478 pp. ‘Recueil en forme de dictionnaire contenant l’explication de plusieurs termes de commerce, de terre, de mer & de banque. New editions 1793, as La banque rendue facile aux principales nations de l’Europe: suivie d’un nouveau traité de l’achat et de la vente des matières d’or et d’argent: avec l’art de tenir les livres en parties doubles (Lyon: Leroy), 1798 and 1799. Reprinted 1969 (Lyon: chez Regnault, Paris: chez Saillant et Nion).

Bibliography of specialized dictionaries 565 Giraudeau l’Aîné, P., 1758, Abrégé de la nouvelle édition de La Banque rendue facile aux principales Nations de l’Europe (Paris: Duchesne). Glasner, D., 1997, Business cycles and depressions: an encyclopedia (New York and London: Garland), 779 pp., 26 cm. Glastetter, W., 1978, Handwörterbuch der Volkswirtschaft (Wiesbaden: Gabler), 1,746 cols, 25 cm; 2nd edn, 1980, 1,746 cols. Gleitze, B., 1960, Wirtschafts- und sozialstatistisches Handbuch (Cologne: Bund-Verlag), 364 pp., 22 cm. Goldschmied, L., 1957, Dizionario di nozioni bancarie ed economiche (Milan: Ceschina), 755 pp., 24 cm. Gomes, L. S., 1942, Dicionário econômico-comercial e financeiro: terminologia de economia, finanças, comércio e contabilidade (Rio de Janeiro, Irmãos Pongetti), 2nd edn; 4th edn, date not known, 334 pp., 24 cm; 5th edn, [1955] (Rio de Janeiro: Tupá); 7th edn, 1962 (Rio de Janeiro: Editora Civilização Brasileira), 272 pp., 21 cm; 8th edn, 1966, 271 pp. [Görres-Gesellschaft], 1957–1963, Staatslexikon: Recht, Wirtschaft, Gesellschaft (Freiburg i. B.: Herder), 6th edn, 8 vols, 27 cm.; 3 supplementary volumes were published later; the series ends in 1970. 7th edn, 1985–1993, Staatslexikon: Recht, Wirtschaft, Gesellschaft in 7 Bänden, 7 vols, 27 cm. Earlier editions compiled by Bruder et al. as Staatslexikon, 1889–1897 to 1929. Gottschalg, J., Just, K. and Schlegel, W., 1981, Politische Ökonomie (Leipzig: Bibliographisches Institut), 220 pp., 19 cm; 2nd edn, 1984. Gould, J. and Kolb, W. L., 1964, A dictionary of the social sciences (New York: Macmillan), 761pp. Grafton, R. Q. et al., 2001, A dictionary of environmental economics, science, and policy (Cheltenham; Northampton, MA: Edward Elgar), 362 pp., 23 cm. Granges, E. de, 1855, Encyclopédie du commerçant: dictionnaire du commerce et des marchandises: contenant tout ce qui concerne le commerce de terre et de mer (Paris: L. Hachette, Guillaumin), 3rd edn, 2 vols, 2,252 pp., 27 cm. Previous editions directed by Guillaumin, 1837–1839, 1841, under the title Encyclopédie du commerçant: dictionnaire du commerce et des marchandises. Greaves, P. L., 1974, Mises made easier: a glossary for Ludwig von Mises’ Human action (Dobbs Ferry, NY: Free Market Books) 157 pp., 24 cm. Greener, M., 1970, The Penguin dictionary of commerce (Harmondsworth: Penguin), 350 pp. Greenwald, D., 1965, The McGraw-Hill dictionary of modern economics: a handbook of terms and organizations (New York: McGraw-Hill), 697 pp., 21 cm; 2nd edn, 1973, 792 pp., 22 cm; 3rd edn, 1983, 632 pp., 21 cm. French translation: Dictionnaire économique, 1987 (Paris: Economica), 750 pp. Greenwald, D., 1982, Encyclopedia of economics (New York etc.: McGraw-Hill), 1,070 pp., 24 cm. French translation as Encyclopédie économique (Paris: Economica), 1984, 1,223 pp., 25 cm. 2nd edn 1994 as The McGraw-Hill encyclopedia of economics, 1,093 pp., 24 cm. Greenwald, D. with Arnold, H. C. F. et al., 1984, The concise McGraw-Hill dictionary of modern economics: a handbook of terms and organizations (New York: McGraw-Hill), 395 pp., 21 cm. ‘An abridged version of The McGraw-Hill dictionary of modern economics, third edition, by Douglas Greenwald & Associates’. Greffe, X., Mairesse, J., and Reiffers, J.-L., 1990, Encyclopédie économique (Paris: Economica), 2 vols, 2,188 pp., 24 cm.

566 Daniele Besomi Greffe, X., Lallement, J. and De Vroey, M., 2002, Dictionnaire des grandes oeuvres économiques (Paris: Dalloz), 642 pp., 23 cm. Reprinted 2007, 642 pp., 19 cm. Grosjean, R. K. and Loeffelholz, J., 1983, Bank-Lexikon: Handwörterbuch für das Bankund Sparkassenwesen mit Bankenverzeichnis (Wiesbaden: Gabler), 9th edn, 2,475 pp. Earlier edition Bergrath, 1978, Gablers kleines Bank-Lexikon: Handwörterbuch für d. Bank- u. Sparkassenwesen; later edition: Müssig and Löffelholz, 1988, Bank-Lexikon: Handwörterbuch für das Geld-, Bank- und Börsenwesen. Groth, O. and Bayer, H. G, 1911, Politisch-wirtschaftliches Konversations-Lexicon (Stuttgart: Levy & Miller), 559 pp., 18 cm. Grüske, K. D. and Recktenwald, H. C., 1994, Wörterbuch der Wirtschaft (Leipzig: A. Kröner), 12th edn, 730 pp.; reprinted 1995; 13th edn, compiled by Grüske and Schneider, F., 2003, 627 pp. The former editions under the same title were compiled by Bülow, 1936, Bülow and Langen, 1954–1970, and Recktenwald, 1975–1990. Gubellini, D. and di Carlo, G., 2005, Le parole dell’economia e della finanza: dizionario dei termini di tecnica, storia e concetti dell’economia, della banca e della finanza per non addetti ai lavori (Bologna: Patron), 239 pp., 24 cm. Guerrien, B., 1996, Dictionnaire d’analyse économique: microéconomie, macroéconomie, théorie des jeux, etc. (Paris: Éd. la Découverte), 540 pp., 24 cm. Reprint 1997. 2nd edn, 2000, 540 pp., 25 cm. 3rd edn, 2002, 568 pp., 24 cm. Guiho, P., Bichot, J. and Martin, M. L., 1994, Dictionnaire droit, science politique, économie, gestion, comptabilité, fiscalité (Lyon: l’Hermès), 717 pp., 20 cm. Guillaumin, G.-U., 1837–1839, Encyclopédie du commerçant. Dictionnaire du commerce et des marchandises (Paris: Guillaumin), 2 vols, 2,252 pp., 18 × 27 cm. 2nd edn, 1841, 2 vols, 2,252 in 4°; reprinted in 1852. 3rd edn as Encyclopédie du commerçant. Dictionnaire du commerce et des marchandises: contenant tout ce qui concerne le commerce de terre et de mer, Granges, 1855. Guillaumin, G.-U., 1859–1861, Dictionnaire universel théorique et pratique du commerce et de la navigation, marchandises: produits naturels et produits fabriqués. . . Géographie commerciale: état, nature et mouvement du commerce de chaque place. . . Droit commercial terrestre et maritime. . . Navigation. . . Marine marchande. . . Douanes. . . Economie politique appliquée (Paris: Guillaumin), 2 vols (1,438 pp., 1,828 pp.), 25 cm. Vol. 2 ‘contient un Supplément qui fait connaître les modifications apportées à la législation douanière’. 2nd edn, 1863, 2 vols, 25 cm. Guyot, Y. and Raffalovich, A., 1898–1901, Dictionnaire du commerce, de l’industrie et de la banque (Paris: Guillaumin), 2 vols in 8°. Gyment, M., 1979, Dictionnaire des lois, effets et principes économiques (Paris: Éditions Cujas), 171 pp., 19 cm. Hadeler, T., 2000, Gabler Wirtschafts-Lexikon (Wiesbaden: Gabler), 15th edn, 4 vols (3,642 pp.), 24 cm; reissued on CD-ROM in 2001. Previous edn compiled by Arentzen, 1997; following edn by Alisch, 2005. Haffner, F., 1974, Grundbegriffe der marxistischen politischen Ökonomie des Kapitalismus: Interpretationen und kritische Hinweise in lexikalischer Darstellung (Berlin: ColloquiumVerlag), 151 pp., 8°; 2nd edn, 1978, 160 pp., 18 cm. Häfner, V., 1983, Gabler-Volkswirtschafts-Lexikon (Wiesbaden: Gabler), 2nd edn, 709 pp. Earlier edition compiled by Hölzel, 1981; 3rd edn, [Gabler], 1990. Hanson, J. L., 1965, A dictionary of economics and commerce (Plymouth: Macdonald and Evans), 401 pp., 23 cm; 2nd edn, 1967, 432 pp.; 3rd edn, 1969, 474 pp.; 4th edn, 1974, 487 pp.; 5th edn, 1977, 472 pp., 22 cm; 6th (international student) edn, 1986 (London: Pitman), 393 pp., 22 cm.

Bibliography of specialized dictionaries 567 Harter, W. and Bredemeier, S., 1997, Fachbegriffe Volkswirtschaft (Stuttgart: Dt. Sparkassenverl.), 208 pp.; 2nd edn, 1999, compiled by Harter, Bredemeier and Laser, 214 pp.; 3rd edn, 2002, compiled by Bredemeier, Harter and Laser, 240 pp. Hartog, F. and Devreker, A., 1979, Encyclopedie van de economie (Amsterdam and Brussels: Elsevier and Winkler Prins), 602 pp., 21 cm. Hasse, R. H., 2002, Lexikon soziale Marktwirtschaft: Wirtschaftspolitik von A bis Z (Paderborn etc.: Schöningh), 527 pp.; Spanish translation 2004 as Diccionario de economía social de mercado: política económica de la A a la Z (Mexico, Berlin, etc.: Konrad-Adenauer-Stiftung). 2nd edn, 2005, 560 pp. English translation 2008 as Social market economy: history, principles and implementation; from A to Z (Paderborn: Schöningh). [Haufe], 1998, Haufe-Wirtschafts-Lexikon kompakt: alle wichtigen Begriffe aus Wirtschaft, Steuern, Recht (Freiburg i. Br. etc.: Haufe-Verl.-Gruppe); 2nd edn, 358 pp., 21 cm; 3rd edn, 2000, 358 pp. Heller, W., 1926, Nationalökonomie: (Theorie u. Geschichte). Ein Nachschlagebuch für Theorie und Praxis (Halberstadt: H. Meyer), 193 pp., 17 cm; 2nd edn, 1926; 3rd edn, 1930, 319 pp. Enlarged and updated Spanish translation as Diccionario de economía política (Barcelona: Labor), 1937 (further editions 1941, 1946, 1950, 1965, 1969 (enlarged)). 4th edn, 1933, 330 pp., 8°. Helmer, G., Lieber, H.-J. et al., 1988, Marx-Lexikon: zentrale Begriffe der politischen Philosophie von Karl Marx (Darmstadt: Wissenschaftliche Buchgesellschaft), 715 pp., 20 cm. (Supplement to Werke, Schriften, Briefe, Karl Marx. 6 v. 1960–1971). Henderson, D. R., 1993, The Fortune encyclopedia of economics (New York: Warner Books), 876 pp., 25 cm. Portuguese translation: Henderson and das Neves, J. C., 2001, Enciclopédia Fortune de economia (S. João do Estoril: Principia), 2nd edn, 985 pp., 25 cm. Spanish translation, 1998: Enciclopedia Fortune de economía (Barcelona: Folio), 838 pp., 24 cm. 2nd edn, 2008 as The concise encyclopedia of economics (Indianapolis, IN: Liberty Fund), 637 pp., 28 cm. Online edition: http://www.econlib.org/library/CEE. html. Herre, P. and Jagow, K., 1923, Politisches Handwörterbuch (Leipzig: Koehler), 2 vols. Hersant, G., 1972, Les 50 mots clés de la science économique ([Toulouse]: Privat), 152 pp., 22 cm. Herz, D., 2006, Lexikon ökonomischer Werke: 650 wegweisende Schriften von der Antike bis ins 20. Jahrhundert (Darmstadt: Wiss. Buchges.), 573 pp. Herzog, R., Kunst, H. and Grundmann, S., 1987, Evangelisches Staatslexikon (Stuttgart: Kreuz-Verl.), 3rd edn. First two editions compiled by Kunst, 1966, 1975; 4th edn by Heun, 2006. Hesse, H., 2003, Ökonomen-Lexikon: Unternehmer, Politiker und Denker der Wirtschaftsgeschichte in 600 Porträts (Düsseldorf: Verlag Wirtschaft und Finanzen), 464 pp. Heun, W., 2006, Evangelisches Staatslexikon (Stuttgart: Kohlhammer), 4th edn, 2,956 pp., 25 cm. 3rd edn compiled by Herzog et al., 1987. Heywood, F., 1930, Pitman’s business man’s encyclopaedia and dictionary of commerce (London, New York [etc.]: Pitman & Sons), 4th edn, 4 vols. Previous editions compiled by Slater, 1912–1913 and 1920, and Coles, 1927. Higgs, H., 1925–1926, Palgrave’s dictionary of political economy (London: Macmillan); 2nd edn, 3 vols, 23 cm.; reprinted 1963 (New York: Kelley). Hillstrom, K., 1998, Encyclopedia of small business (Detroit, London: Gale Group), 2 vols; 2nd edn, 2002, 2 vols, 649–1,212 pp. 30 cm; 3rd edn compiled by Darnay and Magee, 2007.

568 Daniele Besomi Hinkelman, E. G., 1994, Dictionary of international trade: 4,071 international trade, economic, banking, legal & shipping terms (San Rafael, CA: World Trade Press), 279 pp., 23 cm. Hoefer, G. and Schade, P., 1970, Kleines Wirtschaftslexikon. Für Schüler und Studierende (Bad Homburg v. d. H., Berlin, Zurich: Gehlen), 155 pp., 19 cm. 3rd edn, 1971 as Kleines Lexikon der Wirtschaft für Schüler und Studierende, 160 pp., 8°; 4th edn, 1972, 160 pp.; 5th edn, 1972, 157 pp.; 7th edn, 1975, 164 pp.; 9th edn, 1978, 164 pp.; 10th edn, 1980, 164 pp.; 11th edn, 1981, 164 pp.; 13th edn, 1987, 172 pp.; 14th edn, 1989, 172 pp.; 15th edn, 1990, 176 pp.; 16th edn, 1992, 176 pp.; 17th edn, 1995, 182 pp.; 18th edn, 1998, 189 pp.; 19th edn, 2000, 195 pp. Hofmeier, K., 1968, Ein Hearing ist kein Hering (Cologne: Deutsche IndustrieverlagsGmbH), 65 pp., 8°. 2nd edn 1972, 73 pp., 21 cm. Hohenemser, P., 1993, Grundwissen Wirtschaft: Marktwirtschaft, Konjunktur, Aktienmärkte, Weltwirtschaft, Wirtschaftspolitik, Umwelt und Wachstum, Binnenmarkt Europa (Munich: Heyne), 406 pp.; 2nd edn, 1995, 406 pp. Hohlstein, M. et al., 2000, Lexikon der Volkswirtschaft: über 2000 Begriffe für Studium und Beruf (Munich: Deutscher Taschenbuch Verlag), 674 pp; 2nd edn, 2003, 832 pp., 20 cm; 3rd edn, 2004 as Lexikon der Volkswirtschaft: über 2200 Begriffe mit wichtigen Wirtschaftsgesetzen (Munich: Vahlen), CD-ROM. Holl, T. and Röhm, R., 1968, Fachbegriffe der Wirtschaft (Stuttgart: Deutscher Sparkassenverlag), 171 pp., 8°. 3rd edn, 1970, 175 pp., 18 cm; 4th edn, 1971, 192 pp.; 5th edn, 1973, 191 pp.; 6th edn, 1974, 190 pp.; 7th edn, 1976, 210 pp. Hölzel, K., 1981, Gablers Volkswirtschaftslexikon (Wiesbaden: Gabler), 646 pp., 20 cm. 2nd edn compiled by Häfner, 1983. Homans, J. S. and Homans, J. S. Jr, 1858, A cyclopedia of commerce and commercial navigation (New York: Harper & Brothers; reprinted: Macdonald and Jane’s), 2 vols, 2,007 pp., 25 cm; 2nd edn, 1859, 2 vols. Horton, B. J., 1935, Handbook of economic terms (Chicago), 137 pp., 21 cm. Horton, B. J., Ripley, J. and Schnappen, M. B., 1948, Dictionary of modern economics (Washington, DC: Public Affairs Press), 365 pp. Howell, J. M., 1969, Dictionary of economic and statistical terms (Washington, DC: US Dept of Commerce), 73 pp., 29 cm; 2nd edn, 1972, 83 pp., 29 cm. Ibarrola, J. and Pasquarelli, N., 1981, Nouveau dictionnaire économique et social (Paris: Éditions Sociales), 715 pp., 20 cm. Ichikawa, K., 1939, Saikin keizai mondai kaisetsu [Reviews of modern economic problems] (Tokyo: Do¯bunkan), 242 pp., 20 cm. Isaacs, A. and Martin, E., 1993, The Oxford dictionary for the business world (Oxford, New York: Oxford University Press), 996 pp., 25 cm. Jain, D., 2004, Encyclopaedic dictionary of economics (Delhi: Lakshay Publication), 288 pp., 23 cm. James, S., 1981, A dictionary of economic quotations (London: Croom Helm; Totowa, NJ: Barnes & Noble), 244 pp., 23 cm; 2nd edn, 1984, 240 pp., 21 cm. Janzen, C. C., 1941, Everyday terms in economics (Chicago: Thiessen Printing Company), 88 pp., 21 cm. Jessua, C., Labrousse, C., Vitry, D. and Gaumont, D., 2001, Dictionnaire des sciences économiques (Paris: Presses universitaires de France), 1,069 pp., 24 cm. Johnson, R., 1974, Handbook of economic terms (Pisa: Editrice tecnico scientifica), 134 pp., 35 cm. [Jones, J.], 1727, Dictionnaire des finances. Contenant la définition de tous les termes de

Bibliography of specialized dictionaries 569 finance, leur usage, & leurs differentes applications dans toutes sortes d’affaires. L’explication de tous les droits & impositions qui se levent dans l’étenduë du Royaume. L’établissement des conseils du roy, des Chambres des comptes & des Cours des aides; la création des charges, & generalement tout ce qui regarde les finances & la pratique des bureaux (Paris: J. Jones [etc.]), 401 pp., 12°. Jones, R. J. B., 2001, Routledge encyclopedia of international political economy (New York: Routledge), 3 vols, 25 cm. Also in electronic reproduction (Palo Alto, CA: Ebrary, 2006). Jonkhart, M. J. L., 1979, Economiewijzer: actueel economisch woordenboek (Groningen: Wolters-Noordhoff), 91 pp., 19 3 9 cm. Jung-Stilling, J. H., compiled by Merk, G., 1987, Jung-Stilling-Lexikon Wirtschaft (Berlin: Duncker & Humblot), 188 pp., 24 cm. Jungblut, M., 1998, WISO-Lexikon: Wirtschaftswissen kompetent & umfassend . . .; immer up date in allen Wirtschaftsthemen (Freiburg: Haufe), 1 CD-ROM. Jungblut, M., 1999, WISO Wirtschaftswissen: ein Nachschlagewerk der ZDFWirtschaftsredaktion; von Abfindung bis Zahlungsbilanz (Vienna: Ueberreuter), 547 pp. Jurkat, K.-P., 2005, Kleines Wirtschaftslexikon – Fachbegriffe der Wirtschaft: Fakten und Gedanken zur wirtschaftlichen Entwicklung unseres Landes (Bergisch-Gladbach: K.-P. Jurkat), 119 pp., 30 cm; also (Norderstedt: Books on Demand GmbH, 2005), 251 pp., 22 cm. Kaliski, B. S., 2001, Encyclopedia of business and finance (New York: Macmillan Reference), 2 vols, 29 cm; 2nd edn, 2007. Kanamori, H., Ara, K. and Moriguchi, C., 1987, Yu¯hikaku keizai jiten (Tokyo: Yu¯hikaku), 872 pp., 25 cm. Katz, B. S., 1989, Nobel laureates in economic sciences: a biographical dictionary (New York: Garland), 339 pp., 24 cm. King, J., 2003, The Elgar companion to post Keynesian economics (Cheltenham: Edward Elgar), 405 pp., 24 cm. Electronic reproduction, 2004 (Boulder, CO: NetLibrary). King, J. E., 2007, A biographical dictionary of Australian and New Zealand economists (Cheltenham: Edward Elgar), 337 pp., 24 cm. Kipermana, G. J., Belika, J. A. and Borisova, E. F., 1987, Kratkiy ekonomicheskiy slovar’ (Moscow: Izdatel’stvo Politicheskoy Literatury), 397 pp.; 2nd edn, 1989. Klose, A., 1964, Katholisches Soziallexikon (Innsbruck: Tyrolia), 1,426 cols, 24 cm; 2nd edn, 1980 (Innsbruck etc.: Verlag Tyrolia; Graz etc.: Verlag Styria), 3,480 pp., 24 cm. [Knight, C.], 1845–1846, Political dictionary: forming a work of universal reference, both constitutional and legal; and embracing the terms of civil administration, of political economy and social relations, and of all the more important statistical departments of finance and commerce; see [Long], 1845–1846. Knopf, K. A., 1991, A lexikon of economics (San Diego, CA: Academic Press), 314 pp., 23 cm. Knopf, K. A. and Parker, H., 1991, Handbook of economic terms (San Diego, CA: Academic Press, 1991). [Koch, C.], 1980, Dixeco de l’économie (Paris: Dunod), 208 pp., 22 cm; 2nd edn, 1983; 3rd edn, 1985; 4th edn, 1988, 198 pp., 22 cm; 5th edn, 1991, 283 pp. (reprinted 1993); 6th edn, 1994, 287 pp.; 7th edn, 1997 (Paris: Eska), 290 pp.; 8th edn, 2002, 280 pp. Italian translation: 1993 (reprinted 1996) as Dizionario di economia: economia, impresa (Milan: Sperling & Kupfer), 169 pp., 20 cm. Kozlov, G. A., Pervushin, S. P. et al., 1958, Kratkiy ekonomicheskiy slovar’ (Moscow: Gosudarstvennoe Izdat. Politicheskoy Literatury), 391 pp.; German translation: Ökonomisches Wörterbuch (Berlin (East): Wirtschaft, 1960, 1961, 1962). There also exist

570 Daniele Besomi Latvian (1959), Czech (1959), Vietnamese, Chinese (1960), Belorussian, Uzbek and probably other translations. Krafft, D., Mittelstädt, E. and Wiepcke, C., 2005, Markt Lexikon Wirtschaft: Fachbegriffe von A–Z einfach und verständlich erklärt (Bielefeld: Bertelsmann), 381 pp. Kraus, M., 2004, Lexikon der Energiewirtschaft: liberalisierte Strom- und Gasmärkte von A bis Z; Wirtschaft, Recht, Technik (Cologne: Dt. Wirtschaftsdienst), 216 pp. Krumnow, J., 2000, Gabler Bank-Lexikon: Bank – Börse – Finanzierung (Wiesbaden: Gabler), 12th edn, 1 CD-ROM; 12 cm + 1 booklet; 13th edn, 2002, 1,485 pp. Earlier edition: [Arentzen], 1996, Gabler Bank-Lexikon: mehr als 8000 Stichwörter aus den Bereichen Bank- und Börsenwesen. Krünitz, J. G., 1773–1858, Oeconomische Encyclopädie oder allgemeines System der Land-, Haus- und Staats-Wirthschaft: in alphabetischer Ordnung (Berlin: J. Pauli), 242 vols of 600–800 pages, 19 cm. After Vol. 33 it was titled Oekonomisch-technologische Encyklopädie, oder allgemeines System der Stats- Stadt- Haus- und Land-Wirthschaft, und der Kunst-Geschichte; after Vol. 73, the title became Ökonomisch-technologische Encyklopädie, oder allgemeines System der Staats- Stadt- Haus- und Landwirthschaft, wie auch der Erdbeschreibung, Kunst- und Naturgeschichte. After Vol. 81 (1785), the title finally became Ökonomisch-technologische Encyklopädie, oder allgemeines System der Staats-, Stadt-, Haus- und Landwirthschaft, und der Kunst-Geschichte. Krünitz compiled Volumes 1–66; the remaining volumes were compiled by his followers, largely based on Krünitz’s own preliminary work: from Vol. 73, the editor was F. J. Flörken; from Vol. 78, H. G. Flörke; from Vol. 124, J. W. D. Korth; from Vol. 189, Korth was joined by C. O. Hoffmann; after Vol. 197 Korth continued with L. Koßarski. 2nd edn: Berlin: Pauli, from 1782, with marginal changes. Reprint: Vol. 1–5 (Hildesheim: Olms), 1970. Extracts edited by Schütz et al. as Auszug aus des J. G. Krünitz ökonomischtechnologischer Encyklopädie, oder allgemeinen System der Staats-, Stadt-, Haus- und Land-Wirthschaft, und der Kunst-Geschichte, 1786–1830. Kuhn, M., 1980, Gablers Schülerlexikon Wirtschaft (Wiesbaden: Gabler), 269 pp. Later edition as 1982, Schüler-Lexikon Wirtschaft (Wiesbaden: Gabler), 284 pp., 19 cm.; followed by [Gabler], 1986, Gabler kleines Lexikon Wirtschaft: 2000 Wirtschaftsbegriffe nachschlagen – verstehen – anwenden. Kunst, H., Grundmann, S. et al., 1966, Evangelisches Staatslexikon (Stuttgart, Berlin: KreuzVerl.), 2,688 pp., 8°. 2nd edn, Kunst, Herzog, R., Schneemelcher, W. et al., 1975, 3,122 pp., 8°. 3rd edn compiled by Herzog et al., 1987. Kuper, A. and Kuper, J., 1985, The social science encyclopedia (London: Routledge), 916 pp., 26 cm. 2nd edn, 1996, 923 pp.; 3rd edn, 2004, 2 vols, 1,119 pp, 26 cm (reprinted 2009). ¯ tsukiKuruma, S., [c. 1970], Marukusu-keizaigaku-rekishikon: genten-taiyaku (Tokyo: O Shoten, s.d.), 23 cm. German translation, 1973: Marx-Lexikon zur politischen Ökonomie (Vienna: Scheyer, and Glashütten im Taunus: Auvermann), 3 vols, 468 pp. Kyrer, A. 1985, Wirtschafts- und EDV-Lexikon (Munich etc.: Oldenbourg), 202 pp.; 2nd edn, 1988, 202 pp.; 3rd edn, 1997, compiled by Kyrer with Jettel, C. and Vlasits, B., as Wirtschafts-Lexikon, 314 pp.; 4th edn, 2001, Kyrer, as Wirtschaftslexikon, 660 pp. Kyrer, A., 1998, Lexikon der Wirtschaft (Vienna: Signum Verl.), 119 pp. (hrsg. von der Industriellenvereinigung Tirol nach einem Manuskript von Alfred Kyrer). Lacombe de Prézel, H., 1761, Dictionnaire du citoyen, ou Abrégé historique, théorique et pratique du commerce (Paris: Chez Grangé), 2 vols. Italian expanded translation as Dizionario del cittadino o sia Ristretto istorico, teorico e pratico del commerzio . . .

Bibliography of specialized dictionaries 571 Tradotto dal francese dal signor Francesco Alberti. Ed accresciuto dal medesimo in varie parti de’ suddetti articoli, coll’aggiunta eziandio di quattro tavole, in cui si trova ad un tratto la corrispondenza de’ pesi, misure, e reciproca valutazione delle monete fittizie e reali, ec. (Nice : Gabriele Floteront, 1763; reprinted Napoli : Benedetto Gessari, 1765), 2 vols; 2nd edition, Dizionario del cittadino, o sia Ristretto storico teorico e pratico del commercio. Contenente i suoi principj, il diritto pubblico dell’Europa relativamente al negozio, le produzioni cosi della natura, che dell’industria . . . Tradotto dal francese., indicating ‘Edizione novissima accresciuta di moltissimi articoli tralasciati nelle altre, ed oltre l’aggiunta di quattro tavole del sig. Giradeau’ (Bassano: Remondini di Venezia, 1781). Lakehal, M., 2000, Dictionnaire d’économie contemporaine et des principaux faits politiques et sociaux (Paris: Vuibert), 735 pp., 23 cm. (Cover note: ‘En appendice, choix de documents: plus de 10,000 entrées’). 2nd edn, 2001, 779 pp., 24 cm; 3rd edn, 2002, 809 pp. (indicating ‘plus de 11,500 entrées’). Lalor, J. J., 1881–1884, Cyclopaedia of political science, political economy, and of the political history of the United States, by the best American and European writers (New York: C. E. Merrill & Co.), 3 vols, 25 cm; 2nd edn, 1888–1890, 3 vols, 26 cm. [Landbrugsorganisationerne], 1971, Hundrede ord om økonomi (Copenhagen: Landbrugsrådet), 24 pp., 18 cm; 2nd edn, 1981; 3rd edn, 1993. Langer, W. and Spreitzer, S., 2003, Österreichs Wirtschaft von A–Z: das Basis-Wissen für jeden Österreicher: Begriffe kennen, Zusammenhänge verstehen (Vienna: Linde), 304 pp. Larrera de Morel, B., 1998, La tyrannie des idées reçues: nouveau dictionnaire des idées reçues économiques et sociales (Paris: Mango), 145 pp., 22 cm. Lawrence, A. J., 1945, A vocabulary of business and economic terms of popular usage (Lexington, KY: University of Kentucky), 134 pp., 23 cm. [Le Livre de poche], 1976, Le marxisme (subtitle on the cover: Origine, théorie, développement, oeuvres, critiques, influence), (Paris: Le Livre de poche), 212 pp., 17 cm. Italian translation: Il marxismo (Milan: Rizzoli), 1977. [Le Robert], 1994–1995, Le dictionnaire économique de la Martinique (Le Robert: Open soft system), 3 vols (499, 478, 387 pp.), 31 cm. Leab, D. J., 2010, The Great Depression and the New Deal: a thematic encyclopedia (Santa Barbara, CA: ABC-CLIO), 2 vols, 792, 43 pp., 27 cm. Lee, C. F. and Lee, A. C., 2006, Encyclopedia of finance (New York: Springer), 855 pp., 29 cm. Lee, S., 1987, Susan Lee’s ABZs of economics (New York: Poseidon Press), 224 pp., 22 cm. Leibacher, W., 1986, Wirtschaft von A bis Z: Begriffe aus dem Wirtschaftsleben (Berne: Schweizerische Volksbank), 40 pp., 30 cm; 3rd reprint, 1990. Lelarge, G., 1993, Dictionnaire thématique de citations économiques et sociales (Paris: Hachette éducation), 399 pp., 20 cm. Lemeunier, F., 1969, Dictionnaire juridique, économique et financier (Paris: J. Delmas et Cie), 366 pp., 24 cm. Lindmayer, K. H., 2004, Gabler Kompakt-Lexikon Finanzdienstleistungen: 2000 Begriffe zu Bank, Bausparen, Investment (Wiesbaden: Gabler), 350 pp. Livesey, F., 1993, Dictionary of economics (London: Pitman Publishing), 233 pp. [Long, G.], 1845–1846, Political dictionary: forming a work of universal reference, both constitutional and legal; and embracing the terms of civil administration, of political economy and social relations, and of all the more important statistical departments of finance and commerce (London: Charles Knight), 2 vols, 18 cm. Reprinted 1848–1849 with a new Preface as The standard library cyclopædia of political, constitutional,

572 Daniele Besomi statistical, and forensic knowledge. (London: H. G. Bohn), 4 vols. Reprinted 1853–1860, and again 1893 as The standard library cyclopaedia of political, constitutional, statistical and forensic knowledge. Forming a work of universal reference on subjects of civil administration, political economy, finance, commerce, laws and social relations (London and New York: G. Bell & Sons). Lozano Irueste, J. M., 1994, Breve diccionario de economía (Madrid: Ediciones Pirámide), 300 pp., 22 cm. Lübeck, J. C., 1812, Allgemeines ökonomisches Lexikon, oder Erklärung und Belehrung über alle Gegenstände, welche bey einer vollständigen Landwirthschaft im Allgemeinen: nämlich: beym Acker-, Garten-, Obst-, Holz-, Wein- und Wiesenbau; bey der Rindvieh-, Pferde-, Schaaf-, Schweine-, Geflügel-, Fisch- und Bienenzucht, bey der Jägerey und dem Forstwesen, bey der Bierbrauerey und der Essigsiederey, bey Küchen- und häuslichen Frauenzimmergeschäften . . . vorkommen (Pesth: Hartleben), 2 vols, 454 and 432 pp.; 2nd edn, 1814 (Erfurt: Hennings). Luchterhand, W., Joswig, H. and Ehlert, W., 1967, Wörterbuch der Ökonomie: Sozialismus (Berlin: Dietz), 539 pp., 19 cm. The following editions were compiled by Ehlert: 1969, 1973, 1978, 1983, 1984. Ludewig, W. and Dallmann, H., 1975, Wirtschaft: Daten und Fakten zum Nachschlagen (Gütersloh etc.: Bertelsmann Lexikon-Verlag), 324 pp., 23 cm. Ludovici, C. G., 1752–1756, Eröffnete Akademie der Kaufleute, oder vollständiges Kaufmanns-Lexicon: woraus sämmtliche Handlungen und Gewerbe, mit allen ihren Vortheilen, und der Art, sie zu treiben, erlernet werden können; und worinnen alle Seehäfen, die vornehmsten Städte und Handelsplätze; alle Arten der rohen und verarbeiteten Waaren; die Künstler, Fabrikanten und Handwerksleute; Commerciencollegia, Handelsgerichte, Banken, Börsen, Leihhäuser, Manufacturen, Fabriken und Werkstätte; die Rechte und Privilegien der Kaufmannschaft, u.s.w. beschrieben und erkläret werden (Leipzig: Breitkopf), 5 vols, 23 cm; 2nd edn, 1767–1768, 5 vols; 3rd edn, 1797–1801, by J. C. Schedel as Neu eröfnete Academie der Kaufleute, oder encyclopädisches Kaufmannslexicon alles Wissenswerthen und Gemeinnützigen in den weiten Gebieten der Handlungswissenschaft und Handelskunde überhaupt . . . (Leipzig: Breitkopf u. Härtel), 6 vols, 8°. Lunghini, G., with D’Antonio, M., 1982–1990, Dizionario di economia politica (Turin: Boringhieri), 16 vols, 23 cm. (1) Capitale; Lavoro; Terra; (2) Consumo; Reddito. (3) Investimento; Occupazione; (4) Economia monetaria internazionale; Finanza pubblica; (5) Interesse; Moneta; (6) Distribuzione del reddito; Rendita; Scambio; (7) Credito; Crescita; Crisi; (8) Domanda; Offerta; (9) Contabilità sociale; Redditi personali; Statistica economica; (10) Ciclo; Costo; Utilità; 11: Prezzo; Profitto; Salario; (12) Impresa; Mercato; Produzione; (13) Econometria; Matematica; (14) Equilibrio; Politica economica; (15) Concorrenza; Risparmio; Sviluppo; Tecnica; (16) Commercio internazionale; Valore. [M. & S.], 1974, Glossario di termini economici (Turin: Litografia artigiana M. & S.), 22 pp., 24 cm. Macardy, J., 1833, The commercial cyclopaedia: or, Dictionary of practical commerce. Comprehending details of trade; a succinct description of articles of produce and manufacture; an account of monies and exchanges; the situation, extent, and commercial character of countries (Manchester: printed and published by J. Macardy & Co.), 570 pp. Macedo, M. L., 1980, A economia e o economês: vocabulário ecônomico (Belo Horizonte: Editora Lemi), 219 pp., 19 cm. Macleod, H. D., 1863, A dictionary of political economy: biographical, bibliographical,

Bibliography of specialized dictionaries 573 historical, and practical (London: Longmans), 8° (incomplete: Vol. 1, A–Co-operation, 683 pp.). Magill, F. N. et al., 1997, International encyclopedia of economics (London, Chicago: Fitzroy Dearborn Publishers), 2 vols, 1,735 pp., 29 cm. Magritz, E., 1975, Lexikon der Wirtschaft: Organisation und Technik der Verwaltungsarbeit (Berlin: Verlag Die Wirtschaft), 25 cm. Mai, L. H., 1975, Men and ideas in economics: a dictionary of world economists, past and present (Totowa, NJ: Rowman & Littlefield), 270 pp., 23 cm. Reprinted 1977. Maile, R., 1983, Business economics (New York, NY: Facts on File), 127 pp., 20 cm. Malonis, J. A., 2000, Encyclopedia of business (Detroit: Gale Group), 2 vols. Mantilla, J., 1849, Diccionario de comercio, industria y navegación (Madrid: Imprenta del Colegio de Sordo-mudos), 23 cm. Markandya, A., 2001, Dictionary of environmental economics (London: Earthscan), 196 pp., 22 cm. Reprinted 2002. Marsili, C., 1923, Piccola enciclopedia bancaria: con fac-simili di moduli, conti, ecc. (Milan: Hoepli), 313 pp., 16 cm. Martin-Doisy, F., 1855–1864, Dictionnaire d’économie charitable, ou Exposé historique, théorique et pratique de l’assistance religieuse, publique et privée, ancienne et moderne (Paris: J. P. Migne), 4 vols, 28 cm. Martínez Cortina, R., 1980–1982, Economía Planeta: diccionario enciclopédico (Barcelona: Planeta), 8 vols, c. 4,000 pp., 27 cm. Mathieu, G. with Bleton, P. and Lecuir, J., 1970, Dictionnaire du capitalisme (Paris: Ed. Universitaires), 562 pp., 22 cm. May, H. and May, U., 1996, Lexikon der ökonomischen Bildung (Munich: R. Oldenbourg), 598 pp., 22 cm; 3rd edn, 2000, 598 pp.; 4th edn, 2001, 657 pp.; 5th edn, 2004, 665 pp.; 6th edn, 2006, 713 pp.; 7th edition 2008, unchanged. Mayberry, J., 2008, The ABCs of the financial crisis: a dictionary of terms (Wayne, PA: Andrews Publications), 24 pp., 22 cm. Mayer, G., 1972, Dizionario di economia (Rome: Bulzoni), 218 pp., 21 cm. Mayhew, H., 1851, London labour and the London poor: a cyclopaedia of the condition and earnings of those that will work, those that cannot work, and those that will not work (New York: Harper), 26 cm. Later edition: 1861–1862 (London: Griffin, Bohn and Company), 4 vols. 23 cm. Several later reprints, full of partial, including (London: Cass), 1967 and (New York: A. M. Kelley), 1967. McCann, C. R., 2003, The Elgar dictionary of economic quotations (Cheltenham; Northampton, MA: Edward Elgar), 315 pp., 25 cm. McCulloch, J. R., 1832, A dictionary, practical, theoretical, and historical, of commerce and commercial navigation. Illustrated with maps (London: Longman, Rees, Orme, Brown, Green & Longman), 1,143 pp. 23 cm. Supplements October 1834, October 1835. 2nd edn, corrected throughout and greatly enlarged, 1834–1835, 1,269 pp.; reprinted 1838. 3rd edition 1839, ‘with an enlarged supplement, containing many new articles, and bringing down the information contained in the work to January, 1839’, 1,269 + 136 pp. 1st American edn, 1840–1841, as A dictionary, practical, theoretical, and historical of commerce and commercial navigation. By J. R. McCulloch. . . Ed. by Henry Vethake (Philadelphia, PA: T. Wardle). 4th edn, 1840–1841, as A dictionary, practical, theoretical, and historical, of commerce and commercial navigation, 1,269 + 152 pp. German translation, 1842, as Universal-Lexikon für Kaufleute und Fabrikanten, oder, Vollständiges Handbuch des Handels-, Fabrik- und Manufakturwesens, der Münz-, Maass-, Gewicht- und Waarenkund, der Schiffahrt, Wechsel- und Bankgeschäfte,

574 Daniele Besomi und der Handelsgeographie und Statistik, mit besonderer Rücksicht auf NationalOekonomie und Finanzen (Augsburg: v. Jenisch & Stage’sche Buchh.), ‘Nach der zweiten, gänzlich umgearbeiteten Auflage aus dem Englischen frei übersetzt . . .’. New edn (?) with supplement: 1844–1845. 2nd American edn, 1845. 5th edn 1850 (London: Longman, Brown and Green, and Longmans), 1,501 pp.; reprinted 1852 (London: Longman, Brown and Green). 3rd American edn 1851, as A dictionary, practical, theoretical, and historical, of commerce and commercial navigation. By J. R. M’Culloch, esq. Ed. by Henry Vethake. With an appendix, containing the new tariff of 1846, together with the tariff of 1842 . . . also, the sub-treasury, warehousing, and the Canadian transit bills, of 1846. Likewise, the new British tariff (Philadelphia, PA: A. Hart); reprinted 1853. 6th edn, ‘corrected and improved; with a supplement’, 1854, 1,484 pp. New edition (?), 1856. Further edn, 1859, as A dictionary, practical, theoretical, and historical, of commerce and commercial navigation illustrated with maps and plans by J.R. McCulloch. 7th edn, 1869, compiled by H. G. Reid, A dictionary practical, theoretical, and historical of commerce and commercial navigation; with a biographical notice by the editor (London: Longmans, Green), 1,558 pp. Reprinted (?) 1871 (London: Green). New edn, 1875, 1,558 pp. + 123 pp. 3rd supplement ‘added to show the progress of British commercial legislation down to the present time’, 1880, 103 pp. Last edn, 1882, A dictionary, practical, theoretical and historical of commerce and commercial navigation / John Ramsay McCulloch; . . . latest edition, with a supplement containing the most recent information by A. J. Wilson, 1,558 pp. + 261 pp. McElvaine, R. S., 2004, Encyclopedia of the Great Depression (New York: Macmillan Reference), 1,194 pp., 2 vols. Melano di Portula, A., 1843, Dizionario analitico di diritto e di economia industriale e commerciale con appendice delle differenze tra il Codice di commercio de’ regii stati e quelli in vigore presso altre nazioni d’Europa (Turin: Pomba), 1,450 pp., 27 cm. Ménard, M., 1990, Dictionnaire des termes économiques (Alleur, Belgium: Marabout), 93 pp., 20 cm. Mesure, S. and Savidan, P., 2006, Dictionnaire des sciences humaines (Paris: PUF), 1,264 pp. Mey, A., with Goedhart, C., Hartog, F. et al., 1969–1971, Encyclopedie van de bedrijfseconomie [Encyclopedia of business economics] (Utrecht: Uitgeversmaatschappij W. de Haan N.V.), 6 vols (about 2,000 pages). Meyer, P. B. , 2001, Glossary of research economics (online: http://econterms.com). Mikheev, S. and Ray, R., 1986, Glossary of economic and social terminology in Eastern European socialist countries (Geneva: International Institute for Labour Studies), 52 pp., 24 cm. Miyakawa, M., 1965, Marukusu keizaigaku jiten [Dictionary of Marxist economics] (s.n.), 326 pp., 18 cm. Moffat, D. W., 1976, Economics dictionary (New York: Elsevier), 301 pp., 24 cm. 2nd edn 1983, 331 pp., 24 cm. Mohl, R. von, 1859, Encyklopädie der Staatswissenschaften (Tübingen: Laupp), 760 pp., 25 cm; 2nd edn, 1872 (reprographic reprint Dillenburg: Gruber, 1998), 775 pp. Monbrion, J., 1838–1841, Dictionnaire universel du commerce, de la banque et des manufactures, contenant l’état actuel du commerce et de l’industrie de toutes les nations commerçantes et des principales villes de commerce dans toutes les parties du monde; les importations, exportations, les produits naturels et industriels de chaque pays, les qualités des principales marchandises, les fraudes qui se commettent dans leur vente; les lois et règlemens concernant la navigation et les usages de la banque et du commerce,

Bibliography of specialized dictionaries 575 les assurances maritimes, les sociétés de commerce, les commissions, les poids, mesures et monnaies de tous les pays, les principales banques de l’Europe, les usances de chaque place, le tableau des principales foires, les nouvelles modifications des tarifs des douanes de plusieurs Etats; un extrait des articles les plus intéressans de la dernière enquête sur les manufactures de France: la jurisprudence commerciale; les faillites, les banqueroutes, etc.; le tout d’après des documens authentiques et officiels, par une Société de négocians et de manufacturiers; sous la direction de M. Monbrion (Paris: Chez Pillet ainé); 2nd edn, 2 vols, 956 and 1,000 p., 4°. Incremented Spanish translation by D. A. Perez-Domingo, 1845–1846, as Diccionario universal del comercio, de la banca, de las manufacturas y de las mercaderías (Málaga: Imprenta y librería de Martínez y de Aguilar), 2 vols. 3rd edn, Montibrion, 1848, as Dictionnaire universel du commerce, de la banque et des manufactures . . . (Paris: A. Delahays), 2 vols, 4°. The 1st edn was printed by [Buisson], 1805, as Dictionnaire universel de commerce, banque, manufactures, douanes, pêche, navigation marchande. [Mondadori], [1972], Dizionario dei termini economici (Milan: A. Mondadori), 167 pp., 22 cm. Monetti, U., 1933–1944, Enciclopedia di amministrazione, ragioneria, commercio, banca, borsa (Milan: F. Vallardi), 5 vols, 8°. Montefiore, J., 1803, A commercial dictionary: containing the present state of mercantile law, practice, and custom. Intended for the use of the cabinet, the counting-house, and the library (London: printed for the author), 697 pp. US edn, 1804, as A commercial dictionary: containing the present state of mercantile law, practice and custom (Philadelphia, PA: Humphreys), 3 vols, indicating: ‘with very considerable additions relative to the laws, usages, and practice of the United States’ (reprinted: Clark (NJ): The Lawbook Exchange, 2004). Montibrion, 1848: see under Monbrion, 1838–1841. Moreau de Balasy, F., [1973], Les 100 mots-clés de l’économie contemporaine (Paris: Éditions Lavauzelle), 286 pp., 24 cm. Morel, A.-L., 1856–1859, Encyclopédie commerciale-maritime, ou Dictionnaire universel de commerce et de géographie maritimes (Paris: l’auteur), 3 vols, 8°. Morellet, A., 1769, Prospectus d’un nouveau dictionnaire de commerce (Paris: Frères Estienne), 381 pp., 22 cm. Reprinted 1980 (Munich: Kraus Reprint). Includes the ‘Catalogue d’une bibliothèque d’économie politique formée pour le travail du nouveau dictionnaire de commerce’, 34 pp. [The dictionary itself was never published; a part of the material was used by Peuchet in his Dictionnaire universel de la géographie commerçante, 1798–1799.] Moreno Rodríguez, R., 1973, Vocabulario de derecho y ciencias sociales: economía, sociología, política, finanzas, comercio (Buenos Aires: Depalma), 538 pp., 24 cm. Mori, R., 1989, Nuovo dizionario di economia: la prima enciclopedia dei termini economici (Milan: Rizzoli), 4 vols, 606 pp., 21 cm. Morillas, J., 1993, Diccionario manual de economía (Madrid: Prensa y Ediciones Iberoamericanas), 316 pp., 21 cm. Mortier, R., and Roussel, G., 1922, Encyclopédie parlementaire des sciences politiques et sociales (Paris: Dunod). Mortimer, T., 1766–1767, A new and complete dictionary of trade and commerce: containing a distinct explanation of the general principles of commerce, an accurate definition of its terms, an ample illustration of the laws and customs of all commercial states . . . a particular description of the different productions of art and nature, which are the basis and support of commerce: particularly distinguishing the growth, product, and

576 Daniele Besomi manufactures of Great Britain and its colonies . . . also observations on the present state of our foreign commerce (London: printed for the author, and sold by S. Crowder, and J. Coote, and J. Fletcher), 2 vols, 1,006 pp. Mortimer, T., 1810, A general dictionary of commerce, trade and manufactures; exhibiting their present state in every part of the world; and carefully compiled from the latest and best authorities (London: Printed for Richard Phillips), 1,220 pp., 22 cm. 2nd edn 1819, as A general commercial dictionary: comprehending trade, manufactures, and navigation; as also agriculture, so far as it is connected with commerce; with brief abstracts of the laws relating to the regulation and protection of trade and tradesmen. By Thomas Mortimer . . . with considerable alterations and additions by William Dickinson (London: Longman, Hurst, Rees, Orme, Brown), 1,155 pp., 22 cm. 3rd edn, 1823, as A general commercial dictionary comprehending trade, manufactures, and navigation, as also agriculture, so far as it is connected with commerce: with brief abstracts of the laws relating to the regulation and protection of trade and tradesmen, exhibiting their present state, and their connection in these kingdoms with those of other parts of the world: partly from authentic sources, and partly compiled from the best authorities. By Thomas Mortimer; with considerable alterations and additions, by William Dickinson, 1,155 pp. Mühlbradt, F. W., 1989, Wirtschaftslexikon: Kompaktwissen für Schule, Ausbildung, Beruf (Frankfurt am Main: Cornelsen Scriptor), 428 pp.; 2nd updated edn, 1990, 428 pp.; 3rd updated and revised edn, 1992, 429 pp.; 4th edn, 1996, as Wirtschaftslexikon: Daten, Fakten und Zusammenhänge (Kronberg/Ts.: Scriptor-Verl.), 400 pp.; 5th edn, 1998, 400 pp.; 6th edn, 1999, 384 pp.; 7th edn, 2001 (Berlin: Cornelsen Scriptor), 384 pp.; 9th edn, 2007, 393 pp. Mukherjee, T. P. and Sachdeva, M. B., 2005, Encyclopaedic dictionary of economics, commerce and management (Jaipur, India: Sublime Publications), 3 vols, 780 pp., 23 cm. Müller, G., with Löffelholz, J., 1953, Bank-Lexikon; Handwörterbuch für das Bank- und Sparkassenwesen (Wiesbaden: Gabler), 960 cols, 22 cm. 2nd edn, 1959, 1,350 cols; 3rd edn, 1961, 1,411 cols; 4th edn, 1961, 1,412 cols; 5th edn, 1963, 1,638 cols; 6th edn, 1969, 2,004 cols; 7th edn, 1976, 2,002 cols. Continued as Gablers kleines Bank-Lexikon: Handwörterbuch für d. Bank- u. Sparkassenwesen under the editorship of Bergrath, 1978. Munn, G. G., 1924, Encyclopedia of banking and finance; a reference book comprising over 3,000 terms relating to money; credit; banking practice, history, law, accounting and organization; foreign exchange; trusts; investments; speculation; markets; and brokerage (New York: Bankers Publishing Co.), 586 pp., 27 cm. 2nd edn, 1927 as Encyclopedia of banking and finance, 788 pp., 28 cm; 4th edn, 1937, 866 pp.; 5th edn, 1949 (Boston, MA: Bankers Publishing Company), 727 pp., 11 in; supplement to 5th edn brought up to 1955, under the editorship of Garcia, F. L., 1956; 6th edn, 1962 as Glenn G. Munn’s encyclopedia of banking and finance, 788 pp., 28 cm; 7th edn, revised and enlarged by Garcia, 1973, 953 pp.; 8th edn, 1983, 1,024 pp.; 9th edn, 1991, by Munn, Garcia and Woefel, C. J., as The St. James encyclopedia of banking and finance (Chicago and London: St James Press); library edn of the 9th edn, revised and expanded, 1993 (Pasadena, CA: Salem Press), 3 vols, 1,161 pp., 29 cm. Musil, K. and Zeillinger, E., 1967, Volkswirtschaftliche Stichwöter (Vienna: [Institut für Finanzwissenschaft und Steuerrecht]), 31 pp., 24 cm. Müssig, K. and Löffelholz, J., 1988, Bank-Lexikon: Handwörterbuch für das Geld-, Bankund Börsenwesen (Wiesbaden: Gabler); 10th edn, 2,318 pp. Next edition compiled by

Bibliography of specialized dictionaries 577 [Arentzen], 1996, Gabler Bank-Lexikon: mehr als 8000 Stichwörter aus den Bereichen Bank- und Börsenwesen. Napoleoni, C. et al., 1956, Dizionario di economia politica (Milan: Edizioni di Comunità), 1,722 pp., 25 cm. Spanish translation 1962 as Diccionario de economía política (Madrid: Castilla); reprinted 1965, 1974; revised and adapted, 1992 (Valencia: Alfredo Ortells), reprinted 1986. Nelson, L. F., 1967, Pitman’s business man’s guide: a comprehensive dictionary of commercial information (London, New York: Pitman & Sons), 14th edn, 345 pp., 8°. Edns 1–8 were compiled by Slater, 1903–1924; edns 9–13, [Pitman] 1931–1957. Nemmers, E. E. and Janzen, C. C., 1959, Dictionary of economics and business (Paterson, NJ: Littlefield, Adams), 326 pp., 21 cm. 2nd edn, Nemmers, 1966, 460 pp.; 3rd edn, 1974, 485 pp.; 4th edn, 1978, 523 pp. [New Century Publications, Research wing], 2008, New century’s dictionary of economics (New Delhi, India: New Century Publications), 312 pp., 23 cm. Newman, P., 1998, The new Palgrave dictionary of economics and the law (Basingstoke: Palgrave Macmillan), 3 vols, 2,115 pp., 26 cm. Reprints 2002, 2008. Newman, P., Milgate, M. and Eatwell, J., 1992, The new Palgrave dictionary of money and finance (London: Macmillan), 3 vols, 2,559 pp.; reprinted with corrections, 1994. Nicklaus, D., 1988, Wirtschaftslehre für den Sozialversicherungsfachangestellten: ausgew. Begriffe aus d. Wirtschaftslehre in alphabet. Reihenfolge (Sankt Augustin: AsgardVerl. Hippe), 200 pp., 21 cm. 2nd edn, 1998, compiled by Zimmermann, as Kleines Wirtschaftslexikon. Nicklisch, H., 1926–1928, Handwörterbuch der Betriebswirtschaft (Stuttgart: C. E. Poeschel), 5 vols, 26 cm. 2nd edn, 1938–1939, 2 vols, 26 cm. 3rd edn, prepared by Seischab, H. and Schwantag, K., 1956, reprinted 1961, 2 vols, 6,357 and 6,676 cols. Noble, C. E., [1971], Australian economic terms ([Camberwell, Victoria]: Longman), 166 pp., 22 cm. 2nd edn, 1977 (Melbourne: Longman Cheshire), 200 pp.; 3rd edn, 1984, 212 pp. Nohlen, D., 1991, Wörterbuch Staat und Politik (Munich: Piper; Bonn: Bundeszentrale für Politische Bildung), 822 pp., 19 cm. 2nd edn, 1993, 822 pp; 3rd revised edn, 1995 (Munich and Zurich: Piper), 906 pp.; 4th edn, 1996, 906 pp.; 5th edn, 1998, 906 pp. Normann, R. von, 1999, Das kleine Wirtschafts-Lexikon (Düsseldorf: Verl. Wirtschaft und Finanzen), 496 pp., 18 cm. Oberender, P., 1985, Grundbegriffe der Mikroökonomie: mit Übungsaufgaben (Bayreuth: Verl. PCO), 187 pp., 21 cm. 2nd edn, 1987; 3rd edn, 1989; 4th edn, 1991; 5th edn, 1994; 6th edn, 1996; 7th edn, 1999; 8th edn, 2003, 299 pp. O’Hara, P. A., 1999, Encyclopedia of political economy (London: Routledge), 2 vols, 1,302 pp., 26 cm. Olsson, M. and Piekenbrock, D., 1993, Kompakt-Lexikon Umwelt- und Wirtschaftspolitik (Bonn: Bundeszentrale für politische Bildung), 396 pp. (also published as GablerKompakt-Lexikon Umwelt- und Wirtschaftspolitik: 2800 Begriffe nachschlagen – verstehen – anwenden, Wiesbaden: Gabler, 1993). 2nd edn, 1996, 418 pp.; 3rd updated edn, 1998, 418 pp. Olmi, A. and July, F., 1970, Lexique du calcul économique et de l’économétrie (Paris: Entreprise Moderne d’édition), 183 pp., 21 cm. ¯ saka Mainichi Shinbun Keizaibu [Economic section at the Osaka Mainichi Newspaper], O 1933, Shinshu¯ Keizaigo jiten [Dictionary of new economic terms] (Tokyo: Ichigensha), 500 pp., 17 cm. 2nd enlarged edn as Zo¯ho shinshu¯ keizaigo jiten, 1938, 625 pp. O¯saka Sho¯ka Daigaku Keizai Kenkyu¯jo [Economic Institute of Osaka University of

578 Daniele Besomi Commerce], 1930–1936, Keizaigaku-Jiten [Dictionary of economics] (Tokyo: Iwanami Shoten), 7 vols. 2nd edn, 1954, 1,750 pp., 21 cm; 3rd edn, 1992, 1,500 pp., 23 cm. ¯ ta, M., 1942, Shin keizai jiten [New economic dictionary] (s.n.), 1,108 + 128 pp., 22 cm. O Ott, A., 1854–1855, Dictionnaire des sciences politiques et sociales comprenant la politique, la diplomatie, le droit naturel, le droit des gens, les rapports de l’Eglise et de l’Etat, l’administration, les finances, la police, la force armée, l’économie politique et la statistique: avec le texte ou le résumé des traités les plus importants, des constitutions et lois fondamentales des peuples anciens et modernes, et l’analyse des principaux ouvrages sur la politique et les autres sciences sociales (Paris: Migne), 3 vols, 2,000 pp. Outhwaite, W. and Bottomore, T., 1993, The Blackwell dictionary of twentieth-century social thought (Oxford: Blackwell Reference), 864 pp., 26 cm; reprinted 1994. Italian translation, 1997, as Dizionario delle scienze sociali (Milan: Il Saggiatore). 2nd edn, 2003 (reprinted 2006) as The Blackwell dictionary of modern social thought, edited by W. Outhwaite (Oxford: Blackwell), 839 pp., 25 cm. Pabón Pérez, J. E., Pérez, R. and Villarreal Díaz, G., 2000, Diccionario de términos económicos, financieros y sociales: incluye palabras más usadas en Bolivia (La Paz, Bolivia: J. E. Pabón Pérez), 101 pp., 21 cm. Palgrave, Robert H. I., 1894–1899, Dictionary of political economy (London: Macmillan), 3 vols, 23.5 cm. Reprinted 1899–1901; the three volumes were reprinted separately and repeatedly with corrections, 1906–1915; reprinted 1976 (Detroit: Gale Research Co.). 2nd edn compiled by Higgs as Palgrave’s dictionary of political economy, 1923–1926. Palyi, M. and Quittner, P., 1933, Handwörterbuch des Bankwesens: unter Mitwirkung von in- und ausländischen Mitarbeitern aus Wissenschaft und Praxis (Berlin: Springer), 614 pp. 2nd edn, 1957, as Enzykopädisches Lexikon für das Geld-, Bank- und Börsenwesen (Frankfurt am Main: Fritz Knapp), 2 vols, 1,732 pp. 3rd edn, 1967, revised and enlarged by Achterberg, E., 1,894 pp.; 4th edn, 1999, compiled by Cramer and Thießen as Knapps Enzyklopädisches Lexikon des Geld-, Bank- und Börsenwesens. Pande and Mithani, 1994, Encyclopaedic dictionary of economics (Delhi: Anmol Publications), 11 vols, 3,932 pp., 23 cm. Paolazzi, L. and Bartolini, A., 1990, Dizionario pratico di economia (Milan: Il Sole 24 Ore Libri), 477 pp., 25 cm. Papadopoulos, N., 1815–1817, Ermês o Kerdôos, êtoi Emporikê Egkyklopaideia [The gainful Hermes, i.e., encyclopaedia of commerce] (Venice, Nikolaos Glykys [o ex Ioanninon]; facsimile edition with comments:1989, by Cultural Technological Foundation of ETBA the Hellenic Bank for Industrial Development in Athens), 1st vol. 1815, 22 cm, 167 pp., 2nd vol. 1815, 341 pp., 3rd vol 1815, 408 pp., 4th vol. 1816, 478 pp., 5th vol. 1817, 453 pp. Papi, F. with Borutti, S. et al., 1983, Dizionario Marx Engels (Bologna: Zanichelli), 415 pp., 25 cm. Papi, G. U., 1967, Dizionario di economia (Turin: UTET), 1,511 pp., 27 cm. Paradis, A. A., 1970, The economics reference book (Philadelphia, PA: Chilton Book Co.), 191 pp., 21 cm. Pardo Alonso, I., Rodríguez Cabañes, G. and Rodríguez, J., 1992, Diccionario de ciencias sociales (Madrid: Escuela Española), 253 pp., 24 cm. [Partito Nazionale Fascista], 1940, Dizionario di politica (Rome: Istituto della Enciclopedia italiana), 4 vols, 31 cm. Pasquarelli, G., 1987, Parole d’oggi: guida ai termini economici e d’uso corrente (Rome: Buffetti), 451 pp., 24 cm.

Bibliography of specialized dictionaries 579 Pasquarelli, G. and Palmieri, G., 1974, L’ABC dell’economista pratico: piccola enciclopedia illustrata dei termini economici (Bologna: Calderini), 346 pp., 21 cm. Pasquarelli, G. and Palmieri, G., 1985, Dentro le parole: il linguaggio economico del nostro tempo (Rome: Buffetti), 412 pp., 24 cm. Pasquarelli, G. and Palmieri, G., 1993, Le parole dell’economia: oltre 4000 termini, sigle, citazioni e curiosità per orientarsi nel labirinto del mondo economico (Milan: Pirola), 535 pp., 24 cm. Pass, C. L. and Ehrlich, E. H., 1991, The HarperCollins dictionary of economics (New York: HarperPerennial), 562 pp., 21 cm. Pass, C. L, Davies, L. and Lowes, B., 1988, Collins dictionary of economics (London: Collins), 557 pp., 20; also titled Dictionary of economics or Collins reference dictionary of economics. 2nd edn, 1993 (Glasgow: HarperCollins), 59 pp.; 3rd edn, 2000, 555 pp.; 4th edn, 2005, 560 pp.; electronic reproduction, 2007 (London: Credo Reference). Paul, O. E., and Claussen, W., 1938, Großdeutschland und die Welt; ein Wirtschafts-ABC in Zahlen (Berlin: Deutsche Verlagsgesellschaft m.b.h.), 480 pp., 25 cm. Paulet, J.-P., 1992, Dictionnaire d’économie (Paris: Eyrolles), 265 pp., 24 cm. Paxson, D. and Wood, D., 1997, The Blackwell encyclopedic dictionary of finance (Cambridge, MA: Blackwell Business), 225 pp., 26 cm. Pearce, D. W., 1981, Macmillan dictionary of modern economics (London: Macmillan), 473 pp., 25cm. 2nd edn as Dictionary of modern economics, 1983, 481 pp.; 3rd edn as Macmillan dictionary of modern economics, 1986, 540 pp.; 4th edn, 1992, 474 pp. Ukrainian translation: Slovnyk suchasnoi ekonomiky Makmillana (Kiev: ArtEk, Macmillan, 2000). American editions as The dictionary of modern economics (Cambridge, MA: MIT Press), 1981; 2nd edn, 1983 (1st MIT paperback edn); 3rd edn, 1986 as The MIT dictionary of modern economics; 4th edn, 1992 (same number of pages as Macmillan editions). Spanish translation: Diccionario Akal de economía moderna (Madrid: Akal). Pennant-Rea, R. and Emmott, B., 1983, The pocket economist (Oxford: Robertson; The Economist; Cambridge, New York: Cambridge University Press), 194 pp., 23 cm; 2nd edn, 1987 (Oxford: Blackwell). Italian translation: Tutta l’economia in 600 parole: dizionario aggiornato dei termini economici che non potete permettervi di ignorare, 1992 (Milan: Sperling & Kupfer; also supplement to Espansione, May and June 1992, 2 vols; 2nd edn, 1996, Milan: Sperling & Kupfer); Portuguese edition, 1990: Dicionário de economia (Lisbon: Silabao). Percebois, J., Aben, J. and Euzéby, A., 1995, Dictionnaire de finances publiques (Paris: A. Colin), 207 pp., 21 cm. Perdices de Blas, L. and Reeder, J., 2000, Diccionario de pensamiento económico en España (1500–1812) (Madrid: Ed. Síntesis), 415 pp. Perroux, F., 1960, L’univers économique et social. Vol. 9 of L. Febvre and G. Berger, Encyclopédie française (Paris: Société nouvelle de l’Encyclopédie française), 567 pp., 32 cm. Peuchet, J., 1798–1799, Dictionnaire universel de la géographie commerçante, contenant tout ce qui a raport à la situation et à l’étendue de chaque état commerçant; aux productions de l’agriculture, et au commerce qui s’en fait; aux manufactures, pêches, mines, et au commerce qui se fait de leurs produits; aux lois, usages, tribunaux et administrations du commerce (Paris: Blanchon), 5 vols, about 4,000 pp. Phélizon, J.-F., 1970, Lexique des termes économiques (Paris (2e): La Documentation pratique), 182 pp., 21 cm. 2nd edn, 1975 (Paris: Technique et vulgarisation), 184 pp.; 3rd edn, 1977, 287 pp.; 4th edn, 1985, as Dictionnaire de l’économie (Paris: Économica), 352 pp., 19 cm.

580 Daniele Besomi Phin, J., 1896, A pocket dictionary of monetary and coinage terms, explaining in simple language the meaning of the words used by writers on these subjects, and giving data, statistics, etc. Facts and figures for both sides (New York: Industrial Publishing Co.), 52 pp., 8º. Piekenbrock, D., 2002, Gabler-Kompakt-Lexikon Volkswirtschaft: 3500 Begriffe nachschlagen, verstehen, anwenden (Wiesbaden: Gabler), 490 pp.; 2nd updated edn, 2003, 490 pp. Piel, M., 1980, Wirtschaftssprache kurz erklärt (Bonn: Osang-Verlag), 143 pp. Piernas y Hurtado, J. M., 1877, Vocabulario de la economía, ensayo para fijar la nomenclatura y los principales conceptos de esa ciencia (Madrid: Imprenta Central a cargo de V. Saiz), 192 pp., 19 cm. 2nd edn, 1882, 253 pp. Piriou, J.-P., 1996, Lexique de sciences économiques et sociales (Paris: Éd. la Découverte), 120 pp., 18 cm; 2nd edn, 1997, 122 pp.; 4th edn, 2001, 121 pp.; 5th edn, 2002, 123 pp.; 6th edn, 2003; 7th edn, 2004; 8th edn, by Piriou and D. Clerc, 2007. [Pitman], 1931, Pitman’s business man’s guide: a comprehensive dictionary of commercial information (London, New York [etc.] Pitman & Sons); 9th edn (previous editions were compiled by Slater, 1903–1924, under the title Pitman’s business man’s guide: a handbook for all engaged in business), 539 pp., 8°; 10th edn, 1933; 11th edn, 1935; 12th edn, 1949; 13th edn, 1957; 14th edn, Nelson, 1967. Pjani, Z., 1975, Ekonomski leksikon (Belgrade: Savremena administracija), 1,531 pp. Pollert, A., Kirchner, B. and Polzin, J. M., 2001, Duden – das Lexikon der Wirtschaft: grundlegendes Wissen von A bis Z (Mannheim etc.: Dudenverl.), 512 pp. 2nd edn, 2004 as Duden – Wirtschaft von A bis Z: Grundlagenwissen für Schule und Studium, Beruf und Alltag, 512 pp., 24 cm; also as Das Lexikon der Wirtschaft: grundlegendes Wissen von A bis Z (Bonn: Bundeszentrale für politische Bildung). 3rd edn, 2008 (both titles and publishers), 499 pp. Postlethwayt, M., 1751–1755, Universal dictionary of trade and commerce, translated from the French of the celebrated Monsieur Savary, inspector general of the manufactures for the King, at the Custom-house of Paris: with large additions and improvements, incorporated throughout the whole work; which more particularly accommodate the fame to the trade and navigation of these Kingdoms, and the laws, customs, and usage, to which all traders are subject (London: J. & P. Knapton). 2 vols, 42 cm. 2nd edn, 1757; 3rd edn, 1766, 2 vols, 41 cm; 4th edn, 1774 (London: printed for W. Strahan, J. and F. Rivington, J. Hinton), 2 vols, 43 cm. Prado, J. M., with Argandoña, A. et al., 1983–1984, Enciclopedia práctica de economía (Barcelona: Orbis), 8 vols, 30 cm. Vol. 1: Economía para una época de crisis; Vol. 2: El dinero en la economía; Vol. 3: La economía real; Vol. 4: La economía internacional; Vol. 5: Microeconomía; Vol. 6: La empresa; Vol. 7: Los rectores económicos; Vol. 8: Economía, sociedad y el hombre. 2nd edn, 1987–1988, 20 vols, 30 cm. Vol. 1: La riqueza y el dinero; Vol. 2: La financiación de la economía; Vol. 3: La demanda agregada; Vol. 4: El sector público; Vol. 5: El desempleo y el estancamiento económico; Vol. 6: La inflación; Vol. 7: El sector exterior y la balanza de pagos; Vol. 8: Crisis y ciclos económicos; Vol. 9: El Estado y la política económica; Vol. 10: Los sistemas económicos; Vol. 11: Las decisiones de los consumidores; Vol. 12: La producción; Vol. 13: La empresa; Vol. 14: Los mercados; Vol. 15: La competencia; Vol. 16: Recursos naturales y fallos del mercado; Vol. 17: Nivel y calidad de vida; Vol. 18: Los grandes sectores económicos; Vol. 19: La dimensión geográfica de la actividad económica; Vol. 20: La ciencia económica. Preuss, G. and Bachert, U., 1966, Meyers Handbuch über die Wirtschaft (Mannheim:

Bibliography of specialized dictionaries 581 Bibiographisches Institut), 1,148 pp., 20 cm; 2nd edn, Preuss, 1970, 1,171 pp., 23 cm; 3rd edn, 1974, compiled by Eifert et al. Pujol, R., 1967, Petit dictionnaire de l’économie (Paris: Denoël-Gonthier), 331 pp., 21 cm; reprinted 1968; 2nd edn, 1970, 251 pp., 18 cm. Qari, M. A., 1978, Encyclopaedic dictionary of economics & commerce for accountants, businessmen, bankers, lawyers, students of economics and commerce (Lahore: Naeem Tariq Law Associates), 323 pp., 23 cm. Rachlin, H., 1984, The money encyclopedia (Cambridge, PA: Harper & Row), 669 pp., 25 cm. Recktenwald, H. C., 1975, Wörterbuch der Wirtschaft (Leipzig: A. Kröner), 7th edn, 555 pp., 18 cm (the first 6 edns were compiled by Bülow, 1936, and Bülow and Langen, 1954–1970). 8th edn 1978, 558 pp.; 9th edn, 1981, 667 pp.; 10th edn, 1987, 686 pp.; 11th edn, 1990, 707 pp. 12th edn compiled by Grüske and Recktenwald, 1994. Recktenwald, H. C., 1983, Lexikon der Staats- und Geldwirtschaft: ein Lehr- und Nachschlagewerk (Munich: Vahlen), 759 pp. Reichesberg, N., 1903–1911, Handwörterbuch der schweizerischen Volkswirtschaft, Sozialpolitik und Verwaltung (Berne: Verlag Encyklopädie), 3 vols in 6. Rentzsch, H, 1866, Handwörterbuch der Volkswirthschaftslehre: Unter Mitwirkung von namhaften deutschen Gelehrten und Fachmännern (Leipzig: G. Mayer), 1,148 pp., 25 cm; 2nd edn, 1870 (Leipzig: J. Klinkhardt), 1,148 pp., 24 cm. [Reuters, Senior staff], 1982, Reuters glossary of international economic and financial terms (London: Heinemann; New York: Coward-McCann), 215 pp., 23 cm; 2nd edn, 1988, as Reuters glossary: international economic and financial terms (Harlow: Longman), 208 pp., 22 cm; 3rd edn, 1994, compiled by Nunnay-Elam, F. and Shaw, T. (Reuters Senior staff), 138 pp., 26 cm; 4th edn, 2000, as The Reuters financial glossary (London: Pearson Education), 164 pp., 26 cm. Revol, R. with Bourdis, I., Dontaine, A., Flacher, B. et al., 2002, Dictionnaire des sciences économiques et sociales (Paris: Hachette Éducation), 508 pp., 22 cm. The cover indicates ‘Plus de 1200 entrées, 30 articles thématiques, 85 biographies commentées’. Reyes, R., 1988, Terminologia científico-social: aproximación crítica (Barcelona: Anthropos), 1,051 pp., 24 cm; supplement, 1991, 528 pp. Ribeiro, S., 1972–1978, Pequeno dicionário de economia (Lisbon: Prelo Editora (Biblioteca Popular, 6, 18, 20, 31, 33)), 5 vols, 316 pp. Ricossa, S., 1982, Dizionario di economia (Turin: UTET), 547 pp., 27 cm; 2nd edn, 1988, 553 pp., 27 cm; 3rd edn, 1998, 581 pp. Rinne, J. C., 1846, Encyklopädie der Staatswissenschaften für Deutsche (Breslau: s.l), 111 p. Riolfo Marengo, S., 1992, Enciclopedia dell’economia (Milan: Garzanti), 1,296 pp., 19 cm. Cover subtitle: In uno strumento nuovo, autorevole e completo: i soggetti, i fatti, le idee; reprinted 1996, 1999; 2nd edn, 2001, 1,393 pp., 21 cm. Rittershausen, H., 1958, Wirtschaft (Vol. 8 of Das Fischer Lexikon, 1957–) (Hamburg: Fischer Bücherei), 364 pp. Reprinted almost every year to 1980, with revisions in 1973, 1976, 1977, 1980. Italian translation, 1968 as Economia (Milan: Feltrinelli). Rittershofer, W., 1975, Das Lexikon Wirtschaft, Gesellschaft, Gewerkschaften (Cologne: Bund-Verlag), 379 pp., 17 cm; 3rd edn, revised, 1975, 379 pp.; 4th edn, 1981, 415 pp.; 5th edn, 1987, as Das Lexikon Wirtschaft, Umwelt, Gewerkschaften, 485 pp.; 6th edn, 1991, as Das Lexikon Wirtschaft, Arbeit, Umwelt: mit aktuellen Stichworten zu deutsche Einigung und Europa, 542 pp.; 7th edn, 1994, as Das Lexikon Wirtschaft, Arbeit, Umwelt, Europa: mit aktuellen Stichworten zum europäischen Binnenmarkt und zur deutschen Einigung, 624 pp.; 8th edn, 1997, as Lexikon Wirtschaft, Arbeit, Umwelt, 639 pp.

582 Daniele Besomi Rittershofer, W., 2000, Wirtschafts-Lexikon: über 4000 Stichwörter für Studium und Praxis (Munich: Dt. Taschenbuch-Verl.), 1,074 pp. 2nd edn, 2002, as Wirtschafts-Lexikon: über 4200 Stichwörter für Studium und Praxis, 1,097 pp.; 3rd edn, 2005, as WirtschaftsLexikon: über 4000 Stichwörter für Studium und Praxis, 1,149 pp.; 4th edn, 2009, 1,136 pp., 20 cm. Roberts, L., Mosena, R. G. and Winter, E., 2010, Gabler Wirtschaftslexikon (Wiesbaden: Gabler), 17th edn, 8 vols, 3,614 pp. (previous edn as Gabler Wirtschafts-Lexikon: Alish, 2004). Robinet, J. B., 1777–1783, Dictionnaire universel des sciences morales, économique, politique et diplomatique; ou bibliothèque de l’homme d’État et du citoyen (London: Chez les libraires associés), 30 vols, 4°. From Vol. 5, the title also indicates ‘par M. Robinet’. Rolt, R., 1756, A new dictionary of trade and commerce: compiled from the information of the most eminent merchants, and from the works of the best writers on commercial subjects, in all languages. Containing, among other things, I. An account of all the natural productions, which are conducive to trade, throughout the World. II. The different manufactures established in each particular Country. III. Explanations of all the terms used in commerce. IV. Explanations of the principal terms of geography, astronomy, and navigation, so far as they are connected with trade. V. An exact account of the coins, weights, and measures in use throughout the World, reduced to the English standard. VI. A description of the established banks, trading companies, and staple commodities, of different Countries. Vii. The state of the British trade, national debt, funds, customs, excise, and other taxes. Viii. The laws relative to trade and commerce. For the use of the merchants and tradesmen of Great Britain, as well as of private gentlemen. By Mr. Rolt, with the assistance of several eminent merchants (London: T. Osborne and J. Shipton), 908 nonnumbered pp., 2°. 2nd edn, 1761 as A new dictionary of trade and commerce, compiled from the information of the most eminent merchants, and from the works of the best writers on commercial subjects, in all languages, with the assistance of several eminent merchants. The second edition, with the addition of a new and accurate set of maps of the world, Europe, Asia, Africa, and North and South America, by Mr. Bowen, 2 vols. Romeuf, J. with Pasqualaggi, G. et al., 1956–1958, Dictionnaire des sciences économiques (Paris: Presse universitaires de France), 2 vols, 1,198 pp., 25 cm. Italian translation, 1963, as Dizionario delle scienze economiche e commerciali (Rome: Edizioni Paoline). Spanish translation, 1966, as Diccionario de ciencias económicas (Barcelona: Labor). Rotteck, K. W. R. V. and Welcker, K. T., 1834–1843, Das Staats-Lexikon. Encyklopädie der sämmtlichen Staatswissenschaften für alle Stände (Altona: J. F. Hammerich), 12 vols, 23 cm; 2nd edn, 1845–1848; 3rd edn 1856–1866 (Leipzig: Brockhaus), 14 vols, 25 cm (reprinted LaVergne, TN: Nabu Press, 2010). Rowley, C. K. and Schneider, F., 2004, Encyclopedia of public choice (Dordrecht: Kluwer Academic Publishers), 2 vols, 29 cm. Ruffino, E. D., 1998, Dizionario di economia & sanità (Turin: BLU editoriale), 527 pp., 25 cm. Rumyantsev, A. M., 1972–1980, Ekonomicheskaya entsiklopediya: politicheskaya ekonomiya (Moscow: Sovetskaya entsiklopediya), 4 vols (559 + 560 + 623 + 672 pp.), 27 cm. Rumyantsev, E. E., 2006, Novaya ekonomicheskaya entsiklopediya [New economic encyclopedia] (Moscow: Infra-M), 2nd edn (perhaps of Rumyantsev 1972–1980?), 806 pp. Rürup, B. with Pampel, R. and Sesselmeier, W., 1993, Fischer-Wirtschaftslexikon (Frankfurt

Bibliography of specialized dictionaries 583 am Main: Fischer-Taschenbuch-Verl.), 255 pp., 19 cm. 2nd edn, 1998, 315 pp.; 3rd edn, 2002, compiled by Rürup, B., Sesselmeier, W. and Enke, M., 313 pp.; also under the title Fischer-Wirtschaftslexikon: Zahlen, Fakten, Zusammenhänge. Revised edn under the latter title, 2003. Rutherford, D., 1992, Dictionary of economics (London, New York: Routledge), 539 pp., 24 cm. Continued in 1995 (indicated as ‘new edition’) as Routledge dictionary of economics; 2nd edn, 2002, 671 pp., 24 cm. Rutherford, D., 2004, The biographical dictionary of British economists (Bristol: Thoemmes), 2 vols, 1,330 pp., 24 cm. Salzmann, F., 1969, ABC der Volkswirtschaft (Bern: Liberalsozialistische Partei der Schweiz), 16 pp., 21 cm; later edition, 1970; 5th edn, 1973. Sandelin, A., 1846–1848, Répertoire général d’économie politique ancienne et moderne (The Hague: P. H. Noordendorp), 6 vols, 28 cm. Sandroni, P, 1989, Dicionário de economia (São Paulo: Editora Best Seller), 331 pp., 24 cm; 2nd edn, 1994, as Novo dicionário de economia, 380 pp., 25 cm; 3rd edn, 1999 as Novissimo dicionário de economia, 649 pp., 25 cm; 4th edn 2005, Dicionário de Economia do século XXI (Rio de Janeiro: Record), 905 pp. Sansalvadó, M., 1987, Diccionari d’economia (Barcelona: Universitat Politècnica de Catalunya, Institut de Ciències de l’Educació), 114 pp. Santos, M. D. dos, 1990, Dicionário comercial e administrativo: direiro, economia, metrologia, informática, comércio externo, administração pública (Porto: Porto Editora), 192 pp., 19 cm; 2nd edn, 1991, 216 pp. Sareen, T., 2001, Encyclopaedic dictionary of economics (New Delhi: Sarup & Sons), 3 vols, 748 pp., 22 cm. Savary Des Bruslons, J., 1723, Dictionnaire universel de commerce: contenant tout ce qui concerne le commerce qui se fait dans les quatre parties du monde, par terre, par mer, de proche en proche, et par des voyages de long cours, tant en gros qu’en détail. L’explication de tous les termes qui ont rapport au négoce . . . Les monnoyes reélles d’or, d’argent de billon, de cuivre, d’estain, &c . . . Le détail du commerce de la France en général . . . Les édits, déclarations, ordonnances, arrests, et reglements donnez en matiere de Commerce. Ouvrage posthume du Sieur Jacques Savary Des Bruslons, . . . Continué sur les memoires de l’auteur, et donné au public par M. Philemon Louis Savary (Paris: Chez J. Etienne), 2 vols, 2,002 + 1,955 cols, folio (39 cm). Supplement, 1930, 1,316 cols. Reprinted 1726 (the supplement in 1732): (Amsterdam: Chez les Jansons à Waesberge). German translation 1741–1743 as Allgemeine Schatz-Kammer der Kaufmannschafft: oder vollständiges Lexicon aller Handlungen und Gewerbe, so wohl in Deutschland als auswaertigen Königreichen und Laendern; darinnen . . .; Nebst einem Anhange derer jetzt florirenden Kauff- und Handels-Leute Namen, Contoirs, Fabriquen, Handlungs-Compagnien, Waaren-Lager und Haupt-Waaren . . . (Leipzig: J. S. Heinsius). 2nd edn, incorporating the supplement, 1741 (Paris: la Veuve Estienne), 3 vols. 3rd enlarged edn, 1741–1742, as Dictionnaire universel de commerce, d’histoire naturelle, & des arts & metiers: contenant tout ce qui concerne le commerce qui se fait dans des quatre parties du monde . . . l’explication de tous les termes qui ont rapport au negoce . . . les edits, declarations, ordonnances, arrets, et reglemens donnés en matiére de commerce (Geneva: chez les héritiers Cramer & Freres Philibert), 3 vols (1,236 + 1,280 + 1,588 cols), folio; reprinted 1748 and 1750 (Paris: la Veuve Estienne et fils). 4th enlarged edn, incorporating materials of Diderot’s Encyclopédie, 1759–1765 (Copenhagen: les frères C. et A. Philibert), 5 vols; ‘édition portatif ’ of the 4th edn, 1761–1762, 7 vols, Italian translation 1770 as Dizionario di commercio dei signori Fratelli Savary, che

584 Daniele Besomi comprende la cognizione delle merci d’ogni Paese; ovvero i principali, e i nuovi articoli riguardanti il commercio, l’economia rurale, le finanze, le arti, le manifatture, le fabbriche, la mineralogia, le droghe, le piante, le gemme ec. ec., accresciuto di varj importantissimi articoli, tratti dall’Enciclopedia, e dalle Memorie dell’accuratissimo Mr. Garcin, ecc. (Venice: presso Giambatista Pasquali), 1770 (4 vols in 2, 27 cm.). English translations, see Postlethwayt’s Universal dictionary of trade and commerce, 1751–1755, 1757, 1766, 1774. Say, L., 1889–1894, Dictionnaire des finances (Paris, Nancy: Berger-Levrault), 2 vols, 27 cm. Say, L. and Chailley, J., 1891–1892, Nouveau dictionnaire d’économie politique (Paris: Guillaumin), 2 vols, 1,148 + 1,345 pp., 28 cm; reprinted 1893. Supplement published in 1897, Supplément au Nouveau dictionnaire d’économie politique, 271 pp.; 2nd edn, 1900 (Paris: Alcan), 2 vols, 1,148 + 1,345 pp., + Supplément, 271 pp. Schiavetti, V., 1997, Le parole de Il Sole-24 Ore: dizionario (Milan: Il Sole 24 Ore Libri), 271 pp., 19 cm; 2nd edn, 2000, 278 pp. Schiebe, A., 1837–1839, Universal-Lexikon der Handelswissenschaften: enthaltend, die Münz-, Mass- und Gewichtskunde, das Wechsel-, Staatspapier-, Bank- und Börsenwesen, das Wichtigste der höhern Arithmetik, der Contorwissenschaft, Waarenkunde und Technologie, der Handelsgeschichte, Handelsgeographie und Statistik, des Seewesens, der Staatswirthschaft und Finanzwissenschaft, des Handelsrechts (Leipzig: F. Fleischer), 3 vols, 28 cm. Schirmer, A., 1911, Wörterbuch der deutschen Kaufmannssprache auf geschichtlichen Grundlagen (Straßburg: Trübner), 224 pp.; reprinted, 1991 (Berlin: de Gruyter). Schlepple, E., 1974, Bildung und Wirtschaft von A bis Z (Cologne: Informedia Verlags GmbH), 286 pp., 15 cm. Schlözer, A. L. von, 1793, Allgemeines StatsRecht und StatsVerfassungsLere. Voran: Einleitung in alle StatsWissenschaften. Encyklopädie derselben. Metapolitik. Anh.: Prüfung der v. Moserschen Grundsätze des Allgem. StatsRechts (Göttingen: Vandenhoek u. Ruprecht; reprinted Frankfurt am Main: Keip, 1970), 202 p., 21 cm. Schmitthenner, F., 1839–1843, Zwölf Bücher vom Staate, oder systematische Encyklopädie der Staatswissenschaften (also known as Friedrich Schmitthenner’s zwölf Bücher vom Staate, oder, Systematische Encyklopädie der Staatswissenschaften) (Gießen: Heyer), 3 vol., 1555 pp. Schreiber, U., 2000, Das Wirtschaftslexikon: aktuelles Wissen für Studium und Beruf (Munich: Heyne), 528 pp., 21 cm; 2nd and 3rd revised reprints, 2000. Schubert, K., 2005, Handwörterbuch des ökonomischen Systems der Bundesrepublik Deutschland (Wiesbaden: VS, Verl. für Sozialwiss.), 502 pp., 24 cm. Schulz, W. F., 2001, Lexikon nachhaltiges Wirtschaften (Munich, Vienna: Oldenbourg), 618 pp. [Schumann and Weber], 1836–1841, Allgemeine vollständige Handlungs-Encyclopädie oder Conversations-Lexicon aller kaufmännischen Wissenschaften: Für Banquiers, Kaufleute, Fabrikanten (Gera, Ronneburg, Grimma: Schumann u. Weber), 5 vols. Schütz, M. C. V. et al., 1786–1830, Auszug aus des J. G. Krünitz ökonomischtechnologischer Encyklopädie, oder allgemeinen System der Staats-, Stadt-, Haus- und Land-Wirthschaft, und der Kunst-Geschichte (Berlin: Pauli), 34 vols, approximately 25,000 pp. in all. Extracts of vols 1–34 of Krünitz, 1773–1858, Oeconomische Encyclopädie oder allgemeines System der Land-, Haus- und Staats-Wirthschaft: in alphabetischer Ordnung. Compiled by Schütz (parts 1–11), J. L. Graßmann (Parts 12–21) and F. J. Flörke and H. G. Flörke (Parts 22–34).

Bibliography of specialized dictionaries 585 Schwartz, R. J., 1954, The dictionary of business and industry (New York: B. C. Forbes and Sons Pub. Co.), 561 pp., 22 cm. Segura, J. and Rodríguez Braun, C., 2004, An eponymous dictionary of economics: a guide to laws and theorems named after economists (Cheltenham: Edward Elgar), 280 pp. Seldon, A. and Pennance, F. G, 1965, Everyman’s dictionary of economics; an alphabetical exposition of economic concepts and their application (London: J. M. Dent), 449 pp., 20 cm. Reprinted 1969. Spanish translation as Diccionario de economía; una exposición alfabética de conceptos económicos y su aplicación (Barcelona: Ediciones Oikos-tau), 1968, reprinted 1975. 2nd edn, 1976, 360 pp., 20 cm. Newly edited, 2005 as the 3rd vol. of Seldon’s Works (Indianapolis, IN: Liberty Fund), 685 pp., 24 cm. Italian translation as Dizionario di economia (Milan: Mondadori), 1979, reprinted 1980 (Milan: Club degli editori); 2nd edn, updated, 1983 (Milan: Mondadori); 3rd edn, enlarged and updated, 1987 (Milan: Mondadori). Seligman, E. R. A. with Johnson, A. S., 1930–1935, Encyclopaedia of the social sciences (New York: Macmillan), 15 vols, 28 cm. Succeeded by Sills, 1968, International encyclopedia of the social sciences. Sellien, R., Sellien H. et al., 1956, Dr. Gablers Wirtschafts-Lexikon (Wiesbaden: Betriebswirtschaftlicher Verlag Gabler), 2 vols, 3,476 cols, 25 cm. 2nd edn, 1958, 3,476 cols; 3rd edn, 1959, 3,620 cols; 4th edn, 1961; 5th edn, 1962; 6th edn, 1965; 7th edn, 1967; 8th edn (shortened version), 1972, 18 cm; 9th edn, 1975; 10th edn, 1980 as Gablers Wirtschaftslexikon; 11th edn, 1983, 2,623 pp.; 12th edn, 1988; following edn compiled by Wendt et al., 1993. Seplaki, L., 1992, Contemporary dictionary & handbook of economics, finance, statistics (New York: Professional Horizons Press), 170 pp., 57 pp., 23 cm. Shamchalov, F. I. and Abalkin, L. I., 1999, Ekonomicheskaya entsiklopediya (Moscow: Ekonomika), 340 pp. Shieh, F. S., 1971, Keys for economic understanding (Dubuque, IA: Kendall/Hunt Publishing Co.), 187 pp., 23 cm. Shim, J. K. and Siegel, J. G., 1995, Dictionary of economics (New York: J. Wiley & Sons), 373 pp., 24 cm. Sickler, J. V., Trommsdorff, J. B. and Weise, J. C. G., 1817–1827, Oekonomisches technologisches Wörterbuch, oder Unterricht in der Oekonomie, in der ökonomischen Technologie und in der ökonomischen Baukunst, nach alphabetischer Ordnung: Ein Handbuch für Gutsbesitzer, Landwirthe und Freunde der landwirthschaftlichen Kultur; mit Kupfern (Gotha: In der Hennings’schen Buchhandlung), 6 vols, 4,444 pp., 8°. (From Vol. 4, Weise was the only editor.) Sicot, D., 1992, Dictionnaire des idées reçues en économie (Paris: Syros Alternatives), 228 pp., 22 cm. 2nd edn, 1993, 244 pp., 21 cm; 3rd edn, 1994, 244 pp. Siebers, A. B. J. and Weigert, M. M., 1995, Börsen-Lexikon (Oldenbourg: cop.), 366 pp.; 2nd edn, 1997, 366 pp. Sills, D. L., 1968, International encyclopedia of the social sciences (New York: Free Press; London: Collier Macmillan), 17 vols. Biographical supplement published in 1979. Spanish translation Enciclopedia internacional de las ciencias sociales (Madrid: Aguilar), 1979. This continues Seligman’s encyclopedia of the social sciences, 1930–1935; following edn compiled by Darity, 2008. Simmonds, P. L., 1863, A cyclopædia of commerce, mercantile law, finance, and commercial geography (London: Bohn), 3rd edn, 672 + 328 pp., 8°. Former edns compiled by Waterson, 1843, 1847.

586 Daniele Besomi [Simone], 2005, Le parole dell’economia . . . in tasca: dizionario essenziale di economia politica, scienza delle finanze (Naples: Simone), 245 pp., 17 cm. [Sipagoh], Goungounda, C., [1996], Le lexique économique. 1220 concepts définis à travers 60 articles dans l’Observateur, du 10 mars 1994 au 27 avril 1995 (Ouagadougou, Burkina Faso: Centre d’information sur le développement), 71 leaves, 30 cm. Slater, J. A., 1903, Pitman’s business man’s guide. A handbook for all engaged in business (London: Pitman), 2nd edn, 8°; 4th edn, 1907, 406 pp., 19 cm; 5th edn, 1909; 6th edn, 1914; 7th edn, 1917; 8th edn, 1924. Later editions as [Pitman], Pitman’s business man’s guide: a comprehensive dictionary of commercial information, 1931–1967. Slater, J. A., 1912–1913, Pitman’s commercial encyclopædia and dictionary of business: a reliable and comprehensive work of reference on all commercial subjects, specially designed and written for the busy merchant, the commercial student and the modern man of affairs (London, New York: Sir I. Pitman & Sons), 4 vols, 27 cm. 2nd edn as Pitman’s business man’s encyclopaedia and dictionary of commerce, 1920, 4 vols, 1,789 pp.; 3rd edn, under the same title, compiled by Coles, 1927. Sloan, H. S. and Zurcher, A. J., 1949, Dictionary of economics (New York: Barnes & Noble), 268 pp., 22 cm; 2nd edn, 1951, 279 pp., diagrams, 22 cm; 3rd edn, 1953, 356 pp.; 4th edn, 1964, 371 pp. (also Taipei, Southeast Asia Book Co., 1963); 5th edn, 1971, 520 pp. Sluchaj, S. V., 1998, Dovidnyk bazovych terminiv ta ponjat z mikroekonomiky [Dictionary of the basic terms of microeconomics] (Kiev: Libra), 254 pp. Smelser, N. J. and Baltes, P. B., 2001, International encyclopedia of the social & behavioral sciences (Amsterdam, New York: Elsevier), 26 vols, 26 cm. Snowdon, B. and Vane, H. R., 2002, An encyclopedia of macroeconomics (Cheltenham; Northampton, MA: Edward Elgar), 720 pp., 25 cm. Sojka, M. and Konec^y´, B., 1996, Malá encyklopedie moderní ekonomie [Small encyclopedia of modern economics] (Prague: Libri), 270 pp., 21 cm; 2nd edn, 1998; 3rd edn, 1999, 271 pp.; 4th edn, 2001; 5th edn, 2004, 279 pp.; 6th edn, 2006. Sommaruga, R., 1956, Enciclopedia di scienze politiche, economiche e sociali (Bologna: C. Zuffi), 789 pp. (publication ended at Vol. 1, Aba–Ben). Spagnesi, M., 1994, Dizionario dell’economia e della finanza (Rome: Bonacci), 141 pp., 29 cm. Spamer, O., 1876, Otto Spamer’s illustriertes Handels-Lexikon: praktisches Hülfs- und Nachschlagebuch über alle Gegenstände und Verhältnisse des Handels und Weltverkehrs (Leipzig: Otto Spamer), 4 vols, 8°. Stefanelli, R., 1977, Capire l’economia: dizionario critico del capitalismo contemporaneo (Bari: De Donato) 3 vols, 1,002 pp., 21 cm. Stefanelli, R., 1984, Le parole dell’economia: i termini più in uso nel linguaggio degli economisti e dei mezzi di comunicazione di massa (Rome: Ediesse), 224 pp., 17 cm. Stein, H., 1972, ABC der modernen Wirtschaft: Begriffe, Zusammenhänge, Probleme (Tübingen: Katzmann), 251 pp., 8°. Stiegeler, S. E. and Thomas, G., 1976, A dictionary of economics and commerce (London: Pan Books), 432 pp., 20 cm. Revised edition: Stiegeler, 1985, Dictionary of economics and business (Aldershot: Gower), 462 pp., 20 cm. Stridiron, J. G. with de Graaff, A., Olthoff, T. and Tinbergen, J., 1947–1952, Bedrijfseconomische encyclopedie [Business economic encyclopedia] (Utrecht: W. de Haan), 5 vols, 27 cm. Vol. 1: Economie; Vol. 2: Algemeene bedrijfseconomie; Vol. 3: Bedrijfseconomie; Vol. 4: Administratie: boekhouding, calculatie en budgettering; Vol. 5: Statistiek.

Bibliography of specialized dictionaries 587 Stridiron, J. G., van der Meer, B. and Kalkhoven, H., 1956, Encyclopedie voor de zakenman [Encyclopedia for the business man] (Utrecht: Uitgeversmaatschappij W. de Haan N.V.), 3 vols, 2,144 pp., 29 cm. Suárez Suárez, A. S., 1992, Diccionario de economía y administración (Madrid: McGrawHill), 383 pp.; reprint 1993. Suavet, T., 1962, Dictionnaire économique et social (Paris: Écononomie et humanisme: Les editions ouvrières), 453 pp., 19 cm. 2nd edn, 1963, 453 pp.; 3rd edn, 1965, 464 pp.; 4th edn, 1967, 480 pp.; 5th edn, 1969, 480 pp.; 6th edn, 1970, 512 pp.; 7th edn, 1971, 512 pp.; 8th edn 1973, 512 pp.; 9th edn, 1975, 516 pp.; 11th edn, 1979, 582 pp. Surgy, Rousselot de, J.-P., 1784–1787, Dictionnaire encyclopédique des finances (also Encyclopédie méthodique: finances) (Paris: chez Panckoucke; Liège: chez Plomteux), 3 vols, 30 cm. Part of the Encyclopédie méthodique ou par ordre de matières, published by Panckoucke in 1782–1832. Takagaki, T., 1941, Sho¯gyo¯ keizai jiten [Dictionary on commerce and economy] (Tokyo: Nihon Hyo¯ronsha), 1,400 + 120 pp., 19 cm. Reprinted 1941. Takahashi, K., 1933, Kokumin keizai jiten [National economic dictionary] (Tokyo: Hibonkaku), 635 pp., 19 cm. Tamames, R., 1988, Diccionario de economía (Madrid: Alianza Editorial), 507 pp., 25 cm. 2nd edn, 1988, 507 pp.; 4th edn, 1989, 603 pp.; 5th edn, 1991, 675 pp.; 6th edn, 1993, 700 pp.; edition in 8 vols, 1992 (Madrid: Alianza: Cinco Días). Continued as Tamames and Gallego, 1994, as Diccionario de economía y finanzas. Tamames, R. and Gallego, S., 1994, Diccionario de economía y finanzas de la Cope (Madrid: Alianza Editorial), 711 pp., 20 cm. Reprinted 1995. Different edition, 1995, as Diccionario de economía y finanzas (Barcelona: Circulo de Lectores), 929 pp.; further edition, 1996 (Madrid: Alianza Editorial), 711 pp.; 2nd Alianza edn, 1998, 833 pp.; various reprints follow, the 12th in 2005 and 13th in 2006. This continues Tamames, Diccionario de economía, 1988. Tardif, R., 1988, The Penguin Macquarie dictionary of economics & finance (Ringwood, Victoria, Australia: Penguin Books in association with Macquarie Library Pty), 307 pp. Taylor, P. A. S., 1966, A new dictionary of economics (London: Routledge & Kegan Paul; also New York: Kelley), 304 pp., 22.5 cm; 2nd edn, 1969 (London: Routledge & Kegan Paul), 321 pp.; reprinted 1974. Abbreviated version 1968 as A dictionary of economic terms (London: Routledge & Kegan Paul), 121 pp., 18 cm; also the 4th edn of a series initiated by Bower, 1905, 1910 and 1936 as Dictionary of economic terms for the use of newspaper readers and students, and continued by Winton, 1951. Terceiro, J. B., 1970, Diccionario de economía: Teoría y aplicación a España (Algorta (Vizcaya): Zero), 208 pp., 20 cm. Reprinted 1971, 2nd edn, 1972; 4th edn, 1974, 208 pp.; 5th edn, 1975, 184 pp. Teulon, F., 1991, Vocabulaire monétaire et financier (Paris: Presses universitaires de France), 127 pp., 18 cm. 2nd updated edn, 1993, as Vocabulaire économique, 127 pp. Italian translation, 1994, as Dizionario di economia (Rome: TEN). Teulon, F., 1995, Dictionnaire: histoire, économie, finance, géographie: hommes, faits, mécanismes, entreprises, concepts (Paris: Presses universitaires de France), 683 pp., 24 cm (also titled Dictionnaire d’histoire, économie, finance, géographie). 2nd edn, 1997, 711 pp.; reprinted 1998; 3rd edn, 1999, 715 pp., 25 cm; 4th edn, 2004, 727 pp.; 5th updated edn, 2008, 727 pp. Teulon, F., 2009, Dictionnaire des grands économistes: 2500 ans d’histoire de la pensée économique (Paris: Presses universitaires de France), 416 pp. Thalheim, K. C. and Grosse, W., 1934, Das ABC der Volkswirtschaft. Ein Nachschlagewerk

588 Daniele Besomi über das Wirtschafts- und Sozialleben der Gegenwart (Leipzig: E. A. Seemann), 325 pp. [To¯kyo¯ Nichinichi Shinbunsha; Osaka: O¯saka Mainichi Shinbunsha], 1940, Shin keizai memo: shinbun keizaigo kaisetsu [New economic memo: Review of economic terms] ¯ saka Mainichi Shinbunsha), 441 pp., (Tokyo: To¯kyo¯ Nichinichi Shinbunsha; Osaka: O 15 cm. Tomasch, R., 1970, Moderne Wirtschaft von A biz Z (Vienna: Leykam), 175 pp., 18 cm. Torrents y Monner, A., 1885, La enciclopedia comercial (Barcelona: Mariano Solá Sagalés), 3 vols. [Trivium], 1998, Diccionario Trivium de derecho y economía (Madrid: Trivium), 1,032 pp., 25 cm. Tulatz, H. A. and Raspini, H., 1957, ABC des Gewerkschafters (Cologne-Deutz: BundVerlag), 209 pp., 8°. Ustinov, I. N., 2004, Mezhdunarodnye ekonomicheskie otnosheniya Rossii: entsiklopediya statisticheskaya [International economic relations of Russia: a statistical encyclopedia] (Moscow: Ekonomika), 1,175 pp. Vanoli, A. and Bisault, M., 1973, L’économie moderne: ses structures et ses problèmes (Paris: Centre d’étude et de promotion de la lecture), 510 pp., 23 cm. Venhoff, M. and Gräber-Seißinger, U., 2004, Der Brockhaus Wirtschaft: Betriebs- und Volkswirtschaft, Börse, Finanzen, Versicherungen und Steuern (Leipzig: Brockhaus) 703 pp.; 2nd edn, 2008, compiled by Gräber-Seißinger, 704 pp. Verlinde, S. with Binon, J. and van Dyck, J., 1993–1996, Dictionnaire contextuel du français économique (Louvain and Apeldoorn: Garant), 6 vols: (1) L’entreprise. (2) L’entreprise, exercisier. (3) Le commerce. (4) Le commerce, exercisier. (5) Les finances. (6) L’emploi; 24 cm. Verrilli, A., De Luca, G. and Minieri, S., 1998, Nuovo dizionario di economia (Naples: Esselibri), 2nd edn, 736 pp., 21 cm. Later edition, De Luca, 2000. Vescovi, I., 1987, Dizionario economico per una alfabetizzazione di base (Milan: McGrawHill Libri Italia), 169 pp., 24 cm. Villeneuve, J.-F. de, 1990, Le dictionnaire technique de la bourse et des marchés financiers (Paris: Soficom), 233 pp., 22 cm. Supplement: mise à jour au 15 octobre 1991, 68 pp.; 2nd edn, 1993 (‘à jour au 10 janvier 1993’), 351 pp., 21 cm; supplement: mise à jour au 20 janvier 1994, 60 pp.; 3rd edn, 1995 (‘à jour au 10 février 1995’), 448 pp.; supplement mise à jour au 11 février 1996, 48 pp.; 4th edn, 1997 (‘à jour au 12 mai 1997’), 538 pp.; 5th edn, 1999 (‘à jour au 10 mai 1999’), 576 pp.; supplement, mise à jour au 15 mai 2000, 44 pp.; 6th edn 2001 (‘à jour au 4 septembre 2001’), 622 pp.; supplement, mise à jour au 4 septembre 2002, 50 pp.; 7th edn, 2004 (‘Éd. à jour au 15 octobre 2004’), 699 pp.; supplement: mise à jour au 4 septembre 2006, 117 pp.; edition 2010–2011 (‘à jour au 2 mars 2010’), 876 pp. Villers, M.-É. de and Germain, C., 1975, Vocabulaire de l’économie (Montréal: Office de la langue française), 2nd edn, 74 pp., 28 cm; 3rd edn, 1978, 62 pp. Vivanco, A. C., 1983, Diccionario manual de economía (Buenos Aires: Hemisferio sur), 334 pp., 26 cm. Volkov, M. I., 1981, Politieskaya ekonomiya: slovar’ (Moscow: Izdat. Politicheskoy Literatury); reprinted 1982, 1983; new edition 1985. French translation, 1983, as Economie politique: dictionnaire (Moscow: Ed. du Progrès), 468 pp., 21 cm. English translation, 1985, A dictionary of political economy (Moscow: Progress Publishers), 397 pp. Voloshin, V. V., Filonenko, A. N. and Berezovenko, S. N., 1990, Spravochnik ekonomista-

Bibliography of specialized dictionaries 589 mezhdunarodnika [Dictionary of international economics] (Kiev: Izdat. Politicheskaya Literatura Ukrainy), 397 pp. [Voltmedia], 2005, Das Wirtschaftslexikon (Paderborn: Voltmedia), 368 pp., 19 cm. Vuitton, P. and Vuitton, J., 1989, Nouveau lexique d’économie (Paris: EDEC), 222 pp., 21 cm. Vvedenskiy, B. A., 1962–1965, Ekonomicheskaya entsiklopediya: promysh-lennost’ i stroitel’stvo [Economic encyclopedia: industry and construction] (Moscow: Sovetskaja entsiklopediya), 3 vols. Wagener, H., 1859–1867, Staats- und Gesellschafts-Lexikon: neues Conversations-Lexikon (Berlin: Heinicke), 22 vols + index, 18,624 pp. Wagoner, W. D., 1986, The encyclopedic dictionary of economics (Guilford, CN: Dushkin Publishing Group), 3rd edn, 267 pp., 24 cm; 4th edn, D. Cole, 1991, 270 pp., 24 cm. Wankel, C., 2009, Encyclopedia of business in today’s world (Thousand Oaks, CA: Sage), 4 vols, 2,010 pp. Waterston, W., 1843, A cyclopædia of commerce, mercantile law, finance, and commercial geography (Edinburgh: Oliver & Boyd), 684 pp.; 2nd edn, 1847, as A cyclopædia of commerce, mercantile law, finance, commercial geography and navigation . . . New edition, containing the present tariff, and an essay on commerce [by J. R. McCulloch] (London: H. G. Bohn), 684 + 128 pp.; 3rd edn compiled by Simmonds, 1863. Weigert, M. M. and Peppels, W., 1999, WiSo-Lexikon (Munich: Oldenbourg Verlag). Only Vol. 1 has appeared: Betriebswirtschaft, Statistik, Wirtschaftsrecht, 676 pp. Wendt, B., Schröpfer, J. and Finnie, L., 1993, Gabler-Wirtschaftslexikon, 13th edn (Wiesbaden: Gabler), CD-ROM. For other edns see Alisch, 2004. Weston, W. J. and Crew, A., 1913, Dictionary of economic and banking terms (London and New York: Pitman Publishing), 149 pp., 8°. Also titled Pitman’s dictionary of economic and banking terms. Later edition (not marked as 2nd), 1920, 166 pp.; 2nd edn, 1926, 185 pp.; 3rd edn, 1930, 248 pp.; 4th edn, 1937, 248 pp. Wierichs, G. and Smets, S., 2001, Gabler Kompakt-Lexikon Bank und Börse: 2000 Begriffe nachschlagen, verstehen, anwenden (Wiesbaden: Gabler), 248 pp.; reprinted 2003, 2005, 2007. Wild, K., 1974, ABC der Wirtschaft (Berne: Verlag Paul Haupt), 106 pp., 23 cm. Wilson, H., 1947, Helping yourself to understand economics (Chicago: Economic Institute), 19 pp., 22 cm. 2nd edn, 1949, as A glossary of economic terms (Chicago: Administrative Research Associates), 32 pp., 22 cm; 3rd edn, 1957, unpaged; 4th edn, 1964, unpaged. Winsor, E. and Winsor Evans, R., 1942, Land, labor, and wealth; a handbook of economic terms (Caldwell, ID: Caxton Printers), 117 pp., 22 cm. Winton, J. R., 1951, A dictionary of economic terms (London: Routledge & Kegan Paul), 3rd edn, 85 pp. 17 cm. Previous editions compiled by Bower, 1905, 1910 and 1936 as Dictionary of economic terms for the use of newspaper readers and students; following edn compiled by Taylor, 1968. Wippermann, P., 2001, Wörterbuch der New Economy (Mannheim: Dudenverlag), 288 pp., 19 cm; also titled Duden Wörterbuch der New Economy. Electronic edition, 2003. Woll, A., 1987, Wirtschaftslexikon (Munich: R. Oldenbourg), 661 pp., 20 cm; 2nd edn (reprint) 1987; 3rd edn, 1988, 805 pp.; 4th edn, 1990, improved, 805 pp.; 5th edn, unchanged, 1991; 6th edn, 1992, 770 pp., 22 cm; 7th edn, 1993, recast, 770 pp.; 8th edn, 1996, recast, 770 pp., also on CD-ROM (updated as Wirtschaftslexikon von A-Z: Betriebswirtschaft, Volkswirtschaft, Statistik, Rechtswissenschaft, Cologne: Naumann & Göbel, n.d. (1998?)); 9th edn, 2000, 836 pp.; 10th edn, 2008, entirely recast, 863 pp.

590 Daniele Besomi Z^ ák, M., 1999, Velkáa ekonomická encyklopedie (Prague: Linde), 806 pp.; 2nd edn, 2002, 888 pp., 231 3 165 mm. Zangirolami, S., 1980, Enciclopedia dell’economia politica (Milan: Teti, stampa), 263 pp., 19 cm. Zimmermann, F. P., 1998, Kleines Wirtschaftslexikon (Sankt Augustin: Asgard-Verl. Hippe), 2nd edn, 440 pp., 21 cm. 1st edn, 1988 by Nicklaus as Wirtschaftslehre für den Sozialversicherungsfachangestellten. Zincke, G. H., 1731, Allgemeines oeconomisches Lexicon: Darinnen nicht allein die Kunst-Wörter und Erklärungen derjenigen Sachen, welche in einer vollständigen Landwirthschafft und Haushaltung von Acker- Feld- Holtz- Hopfen- Obst- Wein- und Garten-Bau, . . . in möglicher Kürze zu finden ist; Sondern auch die Natur, Eigenschafften, Pflegung, Nutzung, Gebrauch und Mißbrauch der Kräuter, . . . abgehandelt und an den meisten Orten mit vielen nützlichen Realien versehen worden; Nebst einem Anhange eines Land- und Haus-Wirthschaffts-Calenders, Was nemlich das gantze Jahr hindurch in iedem Monat vor besondere Verrichtungen vor die Hand zu nehmen und wie solche behörig anzustellen. Alles aufs sorgfältigste zusammen getragen und mit nützlichen durch die Erfahrung bestätigten Anmerckungen, wie nicht weniger durch verschiedene in XX. Tabellen entworffene Abrisse erläutert und erkläret (Leipzig: Johann Friedrich Gleditsch), 2,923 cols. 2nd edn, 1744, 2 vols, 3,520 cols; 3rd edn, 1753, enlarged and improved, 3,520 cols; 4th edn, 1764, enlarged and improved; 5th edn, 1780, revised and enlarged with new articles, edited by Volkmann, J., as D. Georg Heinrich Zinkens Allgemeines oeconomisches Lexicon: Darinn nicht allein die Erklärung aller zu einer vollständigen Landwirthschaft, zum Acker-, Holz-, Wein- und Gartenbau, Wiesewachs, Fischerey, Jägerey, Bierbrauerey, Branntweinbrennerey, Viehzucht gehörigen Dinge; ingleichen was bey Anlegung wirthschaftlicher Gebäude, oder sonst bey täglichen Verrichtungen im Hause, Küche und Keller vorkommt, zu finden ist; Sondern auch die Eigenschaften, Wartung und Nutzen der Pflanzen und Bäume, Thiere, Metalle, Steine, Baumaterialien etc. beschrieben werden; Nebst einem Anhange eines Land- und Hauswirthschaftskalenders; Alles aufs sorgfältigste zusammen getragen, 2 vols, 3,594 cols; 6th edn, 1800, edited by Leich, C. A., revised and enlarged with new articles.

29.3 ECONOMIC DICTIONARIES, BY TITLE 50 mots clés de la science économique, Les, Hersant, 1972. 100 mots-clés de l’économie contemporaine, Les, Moreau de Balasy [1973]. 100 parole dell’economia, Le, Galimberti and Paolazzi, 1993. 1000 termes commerciaux et économiques: guide pratique, Albert, 1996. ABC dell’economista pratico, L’: piccola enciclopedia illustrata dei termini economici, Pasquarelli and Palmieri, 1974. ABC der Globalisierung: von ‘Alterssicherung’ bis ‘Zivilgesellschaft’, Braunmühl, 2005. ABC der modernen Wirtschaft: Begriffe, Zusammenhänge, Probleme, Stein, 1972. ABC der Volkswirtschaft, Salzmann 1969, 1970, 1973. ABC der Volkswirtschaft, Das. Ein Nachschlagewerk über das Wirtschafts- und Sozialleben der Gegenwart, Thalheim and Grosse, 1934. ABC der Wirtschaft, Wild, 1974. ABC der Wirtschaft: eine schweizerische Einführung in die Grundfragen moderner Wirtschaft, Feldmann, 1940. ABC des Gewerkschafters, Tulatz and Raspini, 1957.

Bibliography of specialized dictionaries 591 ABCs of the financial crisis, The: a dictionary of terms, Mayberry, 2008. Abrégé de la nouvelle édition de La Banque rendue facile aux principales Nations de l’Europe, Giraudeau, 1758. Allgemeines oeconomisches Lexicon: Darinnen nicht allein die Kunst-Wörter und Erklärungen derjenigen Sachen, welche in einer vollständigen Landwirthschafft und Haushaltung von Acker- Feld- Holtz- Hopfen- Obst- Wein- und Garten-Bau, . . . in möglicher Kürze zu finden ist; Sondern auch die Natur, Eigenschafften, Pflegung, Nutzung, Gebrauch und Mißbrauch der Kräuter, . . . abgehandelt und an den meisten Orten mit vielen nützlichen Realien versehen worden; Nebst einem Anhange eines Landund Haus-Wirthschaffts-Calenders, Was nemlich das gantze Jahr hindurch in iedem Monat vor besondere Verrichtungen vor die Hand zu nehmen und wie solche behörig anzustellen. Alles aufs sorgfältigste zusammen getragen und mit nützlichen durch die Erfahrung bestätigten Anmerckungen, wie nicht weniger durch verschiedene in XX. Tabellen entworffene Abrisse erläutert und erkläret, Zincke, 1731, 1744, 1753, 1764. Allgemeine Schatz-Kammer der Kaufmannschafft: oder Vollständiges Lexicon aller Handlungen und Gewerbe, so wohl in Deutschland als auswaertigen Königreichen und Laendern; darinnen . . .; Nebst einem Anhange derer jetzt florirenden Kauff- und Handels-Leute Namen, Contoirs, Fabriquen, Handlungs-Compagnien, Waaren-Lager und Haupt-Waaren . . ., German translation, 1741–1743, of Savary’s Dictionnaire universel de commerce, 1723–1730. Allgemeine vollständige Handlungs-Encyclopädie oder Conversations-Lexicon aller kaufmännischen Wissenschaften: Für Banquiers, Kaufleute, Fabrikanten, [Schumann and Weber, 1836–1841. Allgemeines ökonomisches Lexikon, oder Erklärung und Belehrung über alle Gegenstände, welche bey einer vollständigen Landwirthschaft im Allgemeinen: nämlich: beym Acker-, Garten-, Obst-, Holz-, Wein- und Wiesenbau; bey der Rindvieh-, Pferde-, Schaaf-, Schweine-, Geflügel-, Fisch- und Bienenzucht, bey der Jägerey und dem Forstwesen, bey der Bierbrauerey und der Essigsiederey, bey Küchen- und häuslichen Frauenzimmergeschäften . . . vorkommen, Lübeck, 1812, 1814. Allgemeines StatsRecht und StatsVerfassungsLere. Voran: Einleitung in alle StatsWissenschaften. Encyklopädie derselben, Schlözer, 1793. American dictionary of economics, The, Auld, 1983. Australian economic terms, Noble, [1971], 1977, 1984. Auszug aus des J. G. Krünitz ökonomisch-technologischer Encyklopädie, oder allgemeinen System der Staats-, Stadt-, Haus- und Land-Wirthschaft, und der Kunst-Geschichte, Schütz et al., 1786–1830. Bank-Lexikon; Handwörterbuch für das Bank- und Sparkassenwesen, Müller with Löffelholz, 1953, 1959, 1961, 1963, 1969, 1976. Bank-Lexikon: Handwörterbuch für das Bank- und Sparkassenwesen mit Bankenverzeichnis, Grosjean and Loeffelholz, 1983. Bank-Lexikon: Handwörterbuch für das Geld-, Bank- und Börsenwesen, Müssig and Löffelholz, 1988. Banque rendue facile aux principales Nations de l’Europe, La, Giraudeau, 1741–1742, 1754, 1769, 1793, 1798, 1799. Basic economics: a dictionary of terms, concepts and ideas, Congdon and McWilliams, 1976. Bedrijfseconomische encyclopedie, Stridiron et al., 1947–1952. Bildung und Wirtschaft von A bis Z, Schlepple, 1974. Biographical dictionary of American economists, Emmett, 2006.

592 Daniele Besomi Biographical dictionary of Australian and New Zealand economists, A, King, 2007. Biographical dictionary of British economists, The, Rutherford, D., 2004. Biographical dictionary of dissenting economists, A, Arestis and Sawyer, 1992, 2000. Biographical dictionary of European economists, Gehrke and Kurz, forthcoming. Biographical dictionary of women economists, A, Dimand et al., 2000. Blackwell dictionary of modern social thought, The, Outhwaite, 2003. Blackwell dictionary of twentieth-century social thought, The, Outhwaite and Bottomore, 1993. Blackwell encyclopedic dictionary of finance, The, Paxson and Wood, 1997. Bluntschli’s Staatswörterbuch in drei Bänden: auf Grundlage des deutschen Staatswörterbuchs von Bluntschli und Brater in elf Bänden, Bluntschli and Löning, 1869–1872. Booms and busts: an encyclopedia of economic history from tulipmania of the 1630s to the global financial crisis of the 21st century, Ciment, 2010. Börsen-Lexikon, Siebers and Weigert, 1995. Børsens økonomiske leksikon, Balling, Nielsen and Stærmose, 1974; Brixtofte and Reckweg, 1978. Breve diccionario de economía, Lonzano Irueste, 1994. Brockhaus Wirtschaft, Der: Betriebs- und Volkswirtschaft, Börse, Finanzen, Versicherungen und Steuern, Venhoff and Gräber-Seißinger, 2004; Gräber-Seißinger, 2008. Bulls, bears, boom, and bust: a historical encyclopedia of American business concepts, Dobson, 2007. Business cycles and depressions. An encyclopedia, Glasner, 1997. Business economics, Maile, 1983. Canadian dictionary of business and economics, The, Crane, 1993. Capire l’economia: dizionario critico del capitalismo contemporaneo, Stefanelli, 1977. Collins dictionary of economics, Pass, Davies and Lowes, 1988, 1993, 2000, 2005, 2007. Collins reference dictionary of economics: see Collins dictionary of economics. Commercial cyclopaedia, The: or, Dictionary of practical commerce. Comprehending details of trade; a succinct description of articles of produce and manufacture; an account of monies and exchanges; the situation, extent, and commercial character of countries, Macardy, 1833. Commercial dictionary, A: containing the present state of mercantile law, practice, and custom. Intended for the use of the cabinet, the counting-house, and the library, Montefiore, 1803, 1804. Concise economic encyclopaedia, Behari and Behari, 1983. Concise encyclopedia of economics, The, Henderson, 2008. Concise McGraw-Hill dictionary of modern economics, The: a handbook of terms and organizations, Greenwald et al., 1984. Contemporary dictionary & handbook of economics, finance, statistics, Seplaki, 1992. Conversations-Lexicon der kaufmännischen Wissenschaften. Eine vollständige HandlungsEncyclopädie für Banquiers, Kaufleute, Fabrikanten, Droguisten, Sensale und Geschäftsleute jeder Art, [Comptoir], 1836–1841, 1846–1848. Counting-house dictionary: containing an explanation of the technical terms used by merchants and bankers in the money market and on the Stock Exchange. . ., A, Bithell 1882, 1893, 1903. Crosby’s merchant’s and tradesman’s pocket dictionary, adapted to merchants, manufacturers, and traders in all the various branches of commercial intercourse, [Crosby], 1808, 1810.

Bibliography of specialized dictionaries 593 Cyclopaedia of political science, political economy, and of the political history of the United States, by the best American and European writers, Lalor, 1881–1884, 1888–1890. Cyclopædia of the industry of all nations, Dodd and Knight, 1851. Cyclopædia of commerce, mercantile law, finance, and commercial geography, A, Waterston 1843, 1847; Simmonds, 1863. Cyclopedia of commerce and commercial navigation, A, Homans and Homans, 1858, 1859. D. Georg Heinrich Zinkens Allgemeines oeconomisches Lexicon: Darinn nicht allein die Erklärung aller zu einer vollständigen Landwirthschaft, zum Acker-, Holz-, Wein- und Gartenbau, Wiesewachs, Fischerey, Jägerey, Bierbrauerey, Branntweinbrennerey, Viehzucht gehörigen Dinge; ingleichen was bey Anlegung wirthschaftlicher Gebäude, oder sonst bey täglichen Verrichtungen im Hause, Küche und Keller vorkommt, zu finden ist; Sondern auch Die Eigenschaften, Wartung und Nutzen der Pflanzen und Bäume, Thiere, Metalle, Steine, Baumaterialien etc. beschrieben werden; Nebst einem Anhange eines Land- und Hauswirthschaftskalenders; Alles aufs sorgfältigste zusammen getragen, Zincke, 1780, 1800. Dentro le parole: il linguaggio economico del nostro tempo, Pasquarelli and Palmieri, 1985. Deutsch-deutsches Wirtschaftslexikon Volkswirtschaft, Flemming and Keck, 1990. Deutsches Staats-Wörterbuch, Bluntschli, and Brater, 1857–1870. Diccionari d’economia, Sansalvadó, 1987. Diccionario Akal de economía moderna, Spanish translation, 1999, of Pearce, The MIT dictionary of modern economics, 1992. Diccionario analítico de economía política, Spanish translations, 1827 and 1834, of Ganilh, Dictionnaire analytique d’économie politique, 1826. Diccionario comentado de economía de la salud, Spanish translation, 1998, of Auray et al., Dictionnaire commenté d’économie de la santé, 1996. Diccionario de ciencias económicas, Spanish translation of Romeuf et al., Dictionnaire des sciences économiques, 1956–1958. Diccionario de ciencias jurídicas, políticas, sociales y de economía, De Santo, 1996, 2003, 2005. Diccionario de ciencias sociales, del Campo et al., 1975–1976. Diccionario de ciencias sociales, Pardo Alonso et al., 1992. Diccionario de ciencias sociales y politicas, Di Tella et al., 1989, 2001. Diccionario de comercio, industria y navegación, Mantilla, 1849. Diccionario de economía, Spanish translation of The Penguin dictionary of economics, Bannock, Baxter and Davis, 1987. Diccionario de economía, Carriacajo et al., 2000. Diccionario de economía, Tamames, 1988, 1989, 1991, 1992, 1993. Diccionario de economía general y empresa, Ahijado and Aguer, 1988. Diccionario de economía política, Spanish translations, 1966, 1975, 1977, of Borisov et al., Politekonomicheskii slovar’, 1966 and 1970. Diccionario de economia politica, Spanish translation, 1965, of Heller, Nationalökonomie: (Theorie u. Geschichte). Ein Nachschlagebuch für Theorie und Praxis, 1930. Diccionario de economía política, Spanish translation, 1962 and adaptation, 1982, of Napoleoni, Dizionario di economia politica, 1956. Diccionario de economía social de mercado: Política económica de la A a la Z, Spanish translation, 2004, of Hasse, Lexikon soziale Marktwirtschaft: Wirtschaftspolitik von A bis Z, 2002. Diccionario de economía: Teoría y aplicación a España, Terceiro, 1970, 1972, 1974, 1975.

594 Daniele Besomi Diccionario de economía; una exposición alfabética de conceptos económicos y su aplicación, Spanish translation, 1968, of Seldon and Pennance, Everyman’s dictionary of economics; an alphabetical exposition of economic concepts and their application, 1965. Diccionario de economía y administración, Suárez Suárez, 1992. Diccionario de economía y empresa, Ahijado and Aguer, 1996. Diccionario de economía y finanzas, Tamames and Gallego, 1995, 1996. Diccionario de economía y finanzas de la Cope, Tamames and Gallego, 1994. Diccionario de hacienda, con aplicación a España, Canga Argüelles, 1833–1834. Diccionario de hacienda para el uso de los encargados de la suprema dirección de ella, Canga Argüelles, 1826–1827. Diccionario de las ciencias humanas, Blazquez Carmona, 1997. Diccionario de pensamiento económico en España (1500–1812), Perdices de Blas and Reeder, 2000. Diccionario de política, Spanish translation, 2000, of Bobbio et al., Dizionario di politica, 1983. Diccionario de teoría económica, Ahijado, 1985. Diccionario de términos económicos, financieros y sociales: incluye palabras más usadas en Bolivia, Pabón Pérez et al., 2000. Diccionario económico y financiero, Spanish translation, 1981, of Bernard et al., Dictionnaire économique et financier, 1978. Diccionario económico-social: 100 artículos temáticos, 1200 definiciones, Spanish translation of Brémond and Gélédan, Dictionnaire économique et social: 100 articles thématiques, 1200 définitions, 1981. Diccionario manual de economía, Morillas, 1993. Diccionario manual de economía, Vivanco, 1983. Diccionario marxista de economía política, Spanish translation, 1995, of Borisov et al., Politekonomicheskii slovar’, 1970. Diccionario político de nuestro tiempo, político-biográfico-económico-sociológico, Díaz Doin, 1948. Diccionario teórico, práctico, histórico y geográfico de comercio, Boy, 1839–1840. Diccionario Trivium de derecho y economía, [Trivium], 1998. Diccionario universal del comercio, de la banca, de las manufacturas y de las mercaderías, Spanish translation, 1845–1846, of Monbrion, Dictionnaire universel du commerce, de la banque et des manufactures . . ., 1838–1841. Dicionário comercial e administrativo: direiro, economia, metrologia, informática, comércio externo, administração pública, dos Santos, 1990, 1991. Dicionário das teorias e mecanismos económicos, Portuguese translation, 1988, of Brémond and Gélédan, Dictionnaire des théories et mécanismes économiques, 1984. Dicionário de economia, Portuguese translation, 1973, of Cotta, 1969, Dictionnaire de science économique. Dicionário de economia, Portuguese translation, 1990, of Pennant-Rea and Emmott, The pocket economist, 1987. Dicionário econômico-comercial e financeiro: terminologia de economia, finanças, comércio e contabilidade, Gomes, 1942, 1955, 1962, 1966. Dicionário de economia, Sandroni, 1989. Dicionário de economia do século XXI, Sandroni, 2005. Dicionário de economia e de ciências sociais, Portuguese translation, 1998, of Capul and Garnier, Dictionnaire d’économie et de sciences sociales, 1993, 1994.

Bibliography of specialized dictionaries 595 Dicionário económico e financeiro, Portuguese translation, 1997–1998, of Bernard et al., Dictionnaire économique et financier, 1989. Dicionário económico e social: 100 artigos temáticos, 1200 definições, Portuguese translation of Brémond and Gélédan, Dictionnaire économique et social: 100 articles thématiques, 1200 définitions, 1986. Dicionário popular de economia, Portuguese translation of Birou, Vocabulaire pratique des sciences sociales, 1969. Dictionary of business and economics, Ammer, 1977, 1984, 1986. Dictionary of business and industry, The, Schwartz, 1954. Dictionary of Canadian economics, A, Crane 1980. Dictionary of econometrics, A, Darnell, 1994. Dictionary of economic and banking terms, Weston and Crew, 1913, 1920, 1926, 1930, 1937. Dictionary of economic and statistical terms, Howell, 1969, 1972. Dictionary of economic definitions for the Leaving Certificate, Dowling, 1977. Dictionary of economic quotations, A, James, 1981, 1984. Dictionary of economic terms, A, Winton, 1951, Taylor, 1968. Dictionary of economic terms, Gilpin, 1966, 1970, 1973, 1977. Dictionary of economic terms for the use of newspaper readers and students, Bower, 1905, 1910, 1936. Dictionary of economics, US edition of The Penguin dictionary of economics, Bannock, Baxter and Davis, 1992 and 2003. Dictionary of economics, Birchall, 2001. Dictionary of economics, A, Black, 1997, 2002, 2009. Dictionary of economics, Collin, 2003. Dictionary of economics, Livesey, 1993. Dictionary of economics, Pass et al.: see Collins dictionary of economics, 1988. Dictionary of economics, Rutherford, 1992, 2002. Dictionary of economics, Shim and Siegler, 1995. Dictionary of economics, Sloan and Zurcher, 1949, 1951, 1953, 1964, 1971. Dictionary of economics and business, Nemmers and Jansen, 1959; Nemmers 1966, 1974, 1978. Dictionary of economics and business, Stiegeler, 1985. Dictionary of economics and commerce, A, Hanson 1965, 1967, 1969, 1974, 1977, 1986. Dictionary of economics and commerce, A, Stiegeler and Thomas, 1976. Dictionary of environmental economics, Markandya, 2001. Dictionary of environmental economics, science, and policy, A, Grafton et al., 2001. Dictionary of free-market economics, Foldvary, 1998. Dictionary of international trade: 4,071 international trade, economic, banking, legal & shipping terms, Hinkelman, 1994. Dictionary of modern economics, Horton et al., 1948. Dictionary of modern economics, Pearce, 1983. Dictionary of political economy, Palgrave, 1894–1899, 1906–1915. Dictionary of political economy, A, English translation of Volkov, Politcheskaya ekonomiya: slovar’, 1981. Dictionary of political economy, A: biographical, bibliographical, historical, and practical, Macleod, 1863. Dictionary of the global economy, The, Bookbinder et al., 2001. Dictionary of the social sciences, Calhoun, 2002.

596 Daniele Besomi Dictionary of the social sciences, A., Gould and Kolb, 1964. Dictionary of trade, commerce and navigation, The: explanatory of the objects, terms, statistics, laws and regulations of the excise . . . and the general affairs of business: corrected up to the latest period, Francis, 1844. Dictionary, practical, theoretical, and historical, of commerce and commercial navigation, A, (also incorporating as part of the title: Illustrated with maps), McCulloch, 1832, 1834–1835, 1839, 1840–1841, 1850, 1854, 1856, 1859, 1882. Dictionary, practical, theoretical, and historical, of commerce and commercial navigation, A. By J. R. M’Culloch, esq. Ed. by Henry Vethake. With an appendix, containing the new tariff of 1846, together with the tariff of 1842 . . . also, the sub-treasury, warehousing, and the Canadian transit bills, of 1846. Likewise, the new British tariff, American edn, 1851, of McCulloch, 1939. Dictionary practical, theoretical, and historical of commerce and commercial navigation, A; with a biographical notice by the editor, McCulloch, 1869. Dictionnaire analytique d’économie politique, Ganilh, 1826. Dictionnaire commenté d’économie de la santé, Auray et al., 1996. Dictionnaire contextuel du français économique, Verlinde et al., 1993–1996. Dictionnaire critique de ‘la mondialisation’, de Bernard, 2002. Dictionnaire d’analyse économique: microéconomie, macroéconomie, théorie des jeux, etc., Guerrien, 1996, 2000, 2002. Dictionnaire d’économie, [Artel], 1998. Dictionnaire d’économie, Paulet, 1992. Dictionnaire d’économie charitable, ou Exposé historique, théorique et pratique de l’assistance religieuse, publique et privée, ancienne et moderne, Martin-Doisy, 1855–1864. Dictionnaire d’économie contemporaine et des principaux faits politiques et sociaux, Lakehal, 2000, 2001, 2002. Dictionnaire d’économie et de sciences sociales, Capul and Garnier, 1993, 1994, 1999, 2002, 2008. Dictionnaire d’économie et de sciences sociales, Échaudemaison et al., 1989, 1993, 1996, 1998, 2001, 2003, 2006. Dictionnaire d’économie et des faits économiques et sociaux contemporains, Bialès et al., 1996, 1999. Dictionnaire de finances publiques, Percebois et al., 1995. Dictionnaire de la banque et de la bourse: Répertoire alphabétique de termes définis et expliqués, en usage dans la banque, en bourse, sur les marchées des changes, de la monnaie et de l’or, [Banque], 1963. Dictionnaire de la bourse et des marchés, Belletante, 1996; Belletante and Mahérault, 2000. Dictionnaire de la pensée économique, Bormans, 2000. Dictionnaire de l’économie, Couppey-Soubeyran, 2007. Dictionnaire de l’économie, Phélizon, 1985. Dictionnaire de l’économie A–Z, Bezbakh and Gherardi, 2000. Dictionnaire de l’économie contemporaine, Baudhuin, 1968, 1970, 1972, 1973, 1977. Dictionnaire de l’économie politique, contenant l’exposition des principes de la science, l’opinion des écrivains qui ont le plus contribué à sa fondation et à ses progrès, la bibliographie générale de l’économie politique . . . avec des notices biographiques et une appréciation raisonnée des principaux ouvrages, Coquelin and Guillaumin, 1852–1853, 1854, 1864, 1873. Dictionnaire de l’essentiel en économie, Brémond, Couet and Salort, 1998, 2003, 2004.

Bibliography of specialized dictionaries 597 Dictionnaire de poche: les grandes notions de l’économie, Drouin, 1997. Dictionnaire de science économique, Cotta, 1968, 1969, 1975. Dictionnaire de sciences économiques & sociales, Debel, Montoussé et al., 2002. Dictionnaire des 500 notions économiques indispensables, Dagut, 2000. Dictionnaire des auteurs en sciences économiques et sociales, Deubel and Montoussé, 2003. Dictionnaire des finances, Say, 1889–1894. Dictionnaire des finances. Contenant la définition de tous les termes de finance, leur usage, & leurs differentes applications dans toutes sortes d’affaires. L’explication de tous les droits & impositions qui se levent dans l’étenduë du Royaume. L’établissement des conseils du roy, des Chambres des comptes & des Cours des aides; la création des charges, & generalement tout ce qui regarde les finances & la pratique des bureaux, [Jones], 1727. Dictionnaire des grands économistes: 2500 ans d’histoire de la pensée économique, Teulon, 2009. Dictionnaire des grandes oeuvres économiques, Greffe et al., 2002, 2007. Dictionnaire des grands économistes, Brémond and Salort, 1992. Dictionnaire des idées reçues en économie, Sicot, 1992, 1993, 1994. Dictionnaire des idées reçues en matière économique, Chabanol, 1979. Dictionnaire des lois, effets et principes économiques, Gyment, 1979. Dictionnaire des questions économiques et sociales, Cler, 1997. Dictionnaire des sciences économiques, Beitone, Dollo et al., 1991, 1995, 2001. Dictionnaire des sciences économiques, Jessua et al., 2001. Dictionnaire des sciences économiques, Romeuf et al., 1956–1958. Dictionnaire des sciences économiques et sociales, Bourachot, 1992. Dictionnaire des sciences économiques et sociales, Revol et al., 2002. Dictionnaire des sciences humaines, Mesure and Savidan, 2006. Dictionnaire des sciences humaines, Le, Dortier, 2004, 2008. Dictionnaire des sciences politiques et sociales comprenant la politique, la diplomatie, le droit naturel, le droit ds gens, les rapports de l’Eglise et de l’Etat, l’administration, les finances, la police, la force armée, l’économie politique et la statistique: avec le texte ou le résumé des traités les plus importants, des constitutions et lois fondamentales des peuples anciens et modernes, et l’analyse des principaux ouvrages sur la politique et les autres sciences sociales, Ott, 1854–1855. Dictionnaire des techniques quantitatives appliquées aux sciences économiques et sociales, Ferréol et al., 1995. Dictionnaire des termes économiques, Ménard, 1990. Dictionnaire des théories et mécanismes économiques, Brémond and Gélédan, 1984, 1993. Dictionnaire d’histoire, économie, finance, géographie, Teulon, 1995, 1997, 1999, 2004, 2008. Dictionnaire d’histoire économique: de 1800 à nos jours: les grands thèmes, les grandes puissances, [Berstein et al.], 1987, 1989, 1991. Dictionnaire droit, science politique, économie, gestion, comptabilité, fiscalité, Guiho et al., 1994. Dictionnaire du capitalisme, Mathieu et al., 1970. Dictionnaire du citoyen, ou Abrégé historique, théorique et pratique du commerce, Lacombe de Prézel, 1761. Dictionnaire du commerce, de l’industrie et de la banque, Guyot and Raffalovich, 1898–1901. Dictionnaire du commerce et des marchandises: contenant tout ce qui concerne le commerce de terre et de mer. Encyclopédie du commerçant, Guillaumin, 1837–1839 (see Guillaumin, Encyclopédie du commerçant).

598 Daniele Besomi Dictionnaire économique, French translation of Greenwald, The McGraw-Hill dictionary of modern economics: a handbook of terms and organizations, 1983. Dictionnaire économique de la Martinique, Le, [Le Robert], 1994–1995. Dictionnaire économique et financier, Bernard, Colli and Lewandowski, 1975, 1978, 1981; Bernard, Colli and Walrafen, 1984, 1989, 1996. Dictionnaire économique et social, Bouvier-Ajam et al., 1975. Dictionnaire économique et social, Suavet, 1962, 1963, 1965, 1967, 1969, 1970, 1971, 1073, 1975, 1979. Dictionnaire économique et social: 100 articles thématiques, 1200 définitions, Brémond and Gélédan, 1981, 1986, 1989, 1990, 1992, 2002. Dictionnaire encyclopédique des finances, Surgy, 1784–1787. Dictionnaire encyclopédique économique et social, Alquier 1985, 1990. Dictionnaire général de la politique, Block, 1863–1864, 1873–1874. Dictionnaire: histoire, économie, finance, géographie: hommes, faits, mécanismes, entreprises, concepts, Teulon, 1995, 1997, 1999, 2004, 2008. Dictionnaire juridique, économique et financier, Lemeunier, 1969. Dictionnaire Marx contemporain, Bidet and Kouvélakis, 2001. Dictionnaire oeconomique: contenant divers moyens d’augmenter son bien, et de conserver sa santé . . ., Chomel 1732, 1741, 1767. Dictionnaire oeconomique: contenant divers moyens d’augmenter et conserver son bien, et même sa santé: avec plusieurs remèdes assurez et éprouvez, pour un très-grand nombre de maladies, et beaucoup de beaux secrets pour parvenir à une longue et heureuse vieillesse . . . Chomel, 1709, 1718. Dictionnaire politique: Encyclopédie du langage et de la science politiques, Duclerc and Pagnerre, 1842, 1843, 1848, 1857, 1860, 1868. Dictionnaire technique de la bourse et des marchés financiers,Le, de Villeneuve, 1990, 1993, 1995, 1997, 1999, 2001 2004. Dictionnaire thématique de citations économiques et sociales, Legrange, 1993. Dictionnaire thématique de sciences économiques et sociales: principes et théories, Géhanne, 1995. Dictionnaire universel de commerce, banque, manufactures, douanes, pêche, navigation marchande; Des lois et administration du commerce: Auquel on a joint l’explication des changes, monnaies, poids et mesures. . . Terminé par une nomenclature en douze langues, des marchandises qui entrent dans le commerce, [Buisson], 1805. Dictionnaire universel de commerce: contenant tout ce qui concerne le commerce qui se fait dans les quatre parties du monde, par terre, par mer, de proche en proche, et par des voyages de long cours, tant en gros qu’en dètail. L’explication de tous les termes qui ont rapport au négoce . . . Les monnaies reels d’or, d’argent de billon, de cuivre, d’estain . . . les details du commerce de la France en général . . . les édits, déclarations, ordonnances, arrests, et reglements donnéz en matière de commerce, Savary Des Bruslons, 1723, 1741. Dictionnaire universel de commerce, d’histoire naturelle, & des arts & metiers: contenant tout ce qui concerne le commerce qui se fait dans des quatre parties du monde. . . l’explication de tous les termes qui ont rapport au negoce. . . les edits, declarations, ordonnances, arrets, et reglemens donnés en matiére de commerce, Savary Des Bruslons, 1741–1742, 1759–1765. Dictionnaire universel de commerce, banque, manufactures, douanes, pêche, navigation marchande, Montibrion (i.e. Monbrion), 1848. Dictionnaire universel de la géographie commerçante, contenant tout ce qui a raport à la

Bibliography of specialized dictionaries 599 situation et à l’étendue de chaque état commerçant; aux productions de l’agriculture, et au commerce qui s’en fait; aux manufactures, pêches, mines, et au commerce qui se fait de leurs produits; aux lois, usages, tribunaux et administrations du commerce, Peuchet, 1798–1799. Dictionnaire universel des sciences morales, économique, politique et diplomatique; ou bibliothèque de l’homme d’état et du citoyen, Robinet, 1777–1783. Dictionnaire universel du commerce, de la banque et des manufactures: contenant l’état actuel du commerce et de l’industrie de toutes les nations commerçantes et des principales villes de commerce dans toutes les parties du monde: les importations, exportations, les produits naturels et industriels de chaque pays, les qualités des principales marchandises, les fraudes qui se commettent dans leur vente: les lois et règlemens concernant la navigation et les usages de la banque et du commerce, les assurances maritimes, les sociétés de commerce, les commissions, les poids, mesures et monnaies de tous les pays, les principales banques de l’Europe, les usances de chaque place, le tableau des principales foires, les nouvelles modifications des tarifs des douanes de plusieurs Etats: un extrait des articles les plus intéressans de la dernière enquête sur les manufactures de France: la jurisprudence commerciale; les faillites, les banqueroutes, etc.: le tout d’après des documens authentiques et officiels, Monbrion, 1838–1841. Dictionnaire universel théorique et pratique du commerce et de la navigation, marchandises: produits naturels et produits fabriqués. . . Géographie commerciale: état, nature et mouvement du commerce de chaque place. . . Droit commercial terrestre et maritime . . . Navigation. . . Marine marchande. . . Douanes. . . Economie politique appliquée, Guillaumin, 1859–1861, 1863. Dixeco de l’economie, [Koch], 1980, 1983, 1985, 1988, 1991, 1994, 1997, 2002. Dizionario analitico di diritto e di economia industriale e commerciale con appendice delle differenze tra il Codice di commercio de’ regii stati e quelli in vigore presso altre nazioni d’Europa, Melano di Portula, 1843. Dizionario dei termini economici, Delladio, 1970. Dizionario dei termini economici, Garofalo, 1981. Dizionario dei termini economici, [Mondadori, 1972]. Dizionario del cittadino o sia Ristretto istorico, teorico e pratico, Italian translations (1765, 1781) of Lacombe de Prézel, Dictionnaire du citoyen (1765). Dizionario della economia politica e del commercio così teorico come pratico: utile non solo allo scienziato ed al pubblico amministratore ma eziandio al commerciante, al banchiere, all’agricoltore ed al capitalista, Boccardo, 1857–1863. Dizionario dell’economia e della finanza, Spagnesi, 1994. Dizionario delle scienze economiche e commerciali, Italian translation, 1963, of Romeuf et al., Dictionnaire des sciences économiques, 1956–1958. Dizionario delle scienze sociali, Italian translation, 1997, of Outhwaite and Bottomore, The Blackwell dictionary of twentieth-century social thought, 1993. Dizionario di commercio dei signori Fratelli Savary, che comprende la cognizione delle merci d’ogni Paese; ovvero i principali, e i nuovi articoli riguardanti il commercio, l’economia rurale, le finanze, le arti, le manifatture, le fabbriche, la mineralogia, le droghe, le piante, le gemme ec. ec., accresciuto di varj importantissimi articoli, tratti dall’Enciclopedia, e dalle Memorie dell’accuratissimo Mr. Garcin, ecc., Italian translation, 1770, of Savary’s Dictionnaire universel de commerce, d’histoire naturelle, & des arts & metiers, 1759–1765. Dizionario di economia, Italian translation of Bannock, Baxter and Rees, The Penguin dictionary of economics, 1972.

600 Daniele Besomi Dizionario di economia, Bussetti and Tabozzi, 1979. Dizionario di economia, Mayer, 1972. Dizionario di economia, Papi, 1967. Dizionario di economia, Ricossa, 1982, 1988, 1998. Dizionario di economia, Italian translation of Seldon and Pennance, 1976, Everyman’s dictionary of economics; an alphabetical exposition of economic concepts and their application. Dizionario di economia, Italian translation, 1994, of Vocabulaire économique, Teulon, 1993. Dizionario di economia: economia, impresa, Italian translation, 1993, of [Koch], Dixeco de l’economie. Dizionario di economia & sanità, Ruffino, 1998. Dizionario di economia politica, De Luca, 2006. Dizionario di economia politica, Lunghini, 1982–1990. Dizionario di economia politica, Napoleoni, 1956. Dizionario di economia politica, politica economica e tecnica commerciale, Bazzano, 1988. Dizionario di nozioni bancarie ed economiche, Goldschmied, 1957. Dizionario di politica, Bobbio and Matteucci, 1976. Dizionario di politica, [Partito Nazionale Fascista], 1940. Dizionario di politica economica, Barca, 1974. Dizionario di termini storici politici ed economici moderni, Berardi, 1964, 1984. Dizionario economico, finanziario e contabile: corredato da riferimenti normativi, confronti interdisciplinari e profili delle maggiori società italiane, De Luca and Verrilli, 1992. Dizionario economico per una alfabetizzazione di base, Vescovi, 1987. Dizionario enciclopedico dei termini economici, [De Agostini], 1989–1991. Dizionario Marx Engels, Papi, Borutti et al., 1983. Dizionario pratico di economia, Paolazzi and Bartolini, 1990. Dizionario universale di economia politica e di commercio, Boccardo, 1875–1877, 1881–1882. Dovidnyk bazovych terminiv ta ponjat z mikroekonomiky, Sluchaj, 1998. Dr. Gablers Wirtschafts-Lexikon, see Gabler Wirtschafts-Lexikon. Duden – das Lexikon der Wirtschaft: grundlegendes Wissen von A bis Z, Pollert et al., 2001. Duden – Wirtschaft von A bis Z: Grundlagenwissen für Schule und Studium, Beruf und Alltag, Pollert et al., 2004, 2008. Duden Wörterbuch der New Economy, Wippermann, 2001. Ebook Gabler Kompakt-Lexikon Wirtschaft: 3000 Begriffe nachschlagen, verstehen, anwenden, Arentezen, 2006. Economia, Italian translation, 1968, of Wirtschaft, Rittershausen, 1958. Economia e o economês: vocabulário económico, A, Macedo, 1980. Economía Planeta: diccionario enciclopédico, Martínez Cortina, 1988. Economic thought since Keynes: a history and dictionary of major economists, 1995, translation of La pensée économique depuis Keynes: historique et dictionnaire des principaux auteurs, Beaud and Dostaler 1993. Economics demystified: a dictionary of economic terms for non-economists, [Canadian Association of Labour Media], 1984. Economics dictionary, Moffat, 1976, 1983. Economics: encyclopedia, [Dushkin Publishing Group], 1973–1974. Economics reference book, The, Paradis, 1970.

Bibliography of specialized dictionaries 601 Economie, Abraham-Frois et al., 1998, 2002. Economie moderne, L’: ses structures et ses problèmes, Vanoli and Bisault, 1973. Economie politique: dictionnaire, French translation, 1983, of Volkov, Politicheskaya ekonomiya: slovar’, 1981. Economie politique et diplomatique: partie dédiée et présentée à Monseigneur le baron de Breteuil, ministre et secrétaire d’Etat, etc., Démeunier, 1784–1788. Economiewijzer: actueel economisch woordenboek, Jonkhart, 1979. EconoTerms: a glossary of economic terms; mit EconoSlang, Fink et al., 1994, 1999. Econoterms: a glossary of economic terms, mit einem Anhang Econoslang, Fink et al., 1989, 1991. Ekonomicheskaya entsiklopediya, Shamchalov and Abalkin, 1999. Ekonomicheskaya entsiklopediya: politicheskaya ekonomiya, Rumyantsev, 1972–1980. Ekonomicheskaya entsiklopediya: promyshlennost’i stroitel’stvo, Vvedenskiy, 1962–1965. Ekonomski leksikon, Pjani, 1975. Elgar companion to post Keynesian economics, The, King, 2003, 2004. Elgar dictionary of economic quotations, The, McCann, 2003. Enciclopedia bancaria: pubblicata sotto gli auspici della Confederazione Fascista delle Aziende del Credito e della Assicurazione e della Confederazione Fascista dei Lavoratori delle Aziende del Credito e della Assicurazione, Confederazione Fascista delle Aziende del Credito e della Assicurazione, 1942. Enciclopedia comercial, La, Torrents y Monner, 1885. Enciclopedia del diritto e dell’economia, [Garzanti], 1985. Enciclopedia del negoziante ossia Gran dizionario del commercio, dell’industria, del banco e delle manifatture . . . compreso un indice alfabetico generale e ragionato di tutti i manifattori e fabbricatori d’Italia in ogni genere, [Antonelli] 1839–1843, 1850. Enciclopedia dell’economia, Riolfo Marengo, 1992, 2001. Enciclopedia dell’economia, L’, [De Agostini], 1998. Enciclopedia dell’economia politica, Zangirolami, 1980. Enciclopedia delle scienze sociali, Bedeschi, 1991–2001. Enciclopedia di amministrazione, industria e commercio: dizionario pratico ad uso dei commercianti, industriali, banchieri, Cerboni, 1891–1905. Enciclopedia di amministrazione, ragioneria, commercio, banca, borsa, Monetti, 1933–1944. Enciclopedia di scienze politiche, economiche e sociali, Sommaruga, 1956. Enciclopédia do comerciante e do industrial, Bessa, 1912. Enciclopedia Fortune de economía, Spanish translation, 1998, of Henderson, The Fortune encyclopedia of economics, 1993. Enciclopédia Fortune de economia, Portuguese translation, 2001, of Henderson, The Fortune encyclopedia of economics, 1993. Enciclopedia internacional de las ciencias sociales, Spanish translation, 1979, of Sills, International encyclopedia of the social sciences, 1968. Enciclopédia mercantil: guia prático do comerciante e industrial, Castro and d’Amore, 1951. Enciclopedia práctica de economía, Prado, 1983–1984, 1987–1988. Encyclopädie der Handlungswissenschaften: oder gedrängter Unterricht für Handlungslehrlinge und Commis zur Erlernung der kaufmännischen Wissenschaften; nebst gründlicher Anleitung in kurzer Zeit eine schöne, geläufige und feste kaufmänn. Handschrift zu erlernen; durch 4 Mustervorschriften erläutert, Dietrich, 1845. Encyclopaedic dictionary of economics, Dinakar, 2009.

602 Daniele Besomi Encyclopaedic dictionary of economics, Ghodke, 1985–1986. Encyclopaedic dictionary of economics, Pande & Mithani, 1994. Encyclopaedic dictionary of economics, Jain, 2004. Encyclopaedic dictionary of economics, Sareen, 2001. Encyclopaedic dictionary of economics, commerce and management, Mukherjee and Sachdeva, 2005. Encyclopaedic dictionary of economics & commerce for accountants, businessmen, bankers, lawyers, students of economics and commerce, Qari, 1978. Encyclopedia of banking and finance, Munn, 1927, 1937 1949. Encyclopedia of banking and finance; a reference book comprising over 3,000 terms relating to money; credit; banking practice, history, law, accounting and organization; foreign exchange; trusts; investments; speculation; markets; and brokerage, Munn, 1924. Encyclopedia of business, Malonis, 2000. Encyclopedia of business and finance, Kaliski, 2001, 2006. Encyclopedia of business in today’s world, Wankel, 2009. Encyclopedia of economics, The, [Dushkin Publishing Group], 1980, 1981. Encyclopedia of economics, Greenwald, 1982, 1994. Encyclopedia of finance, Lee and Lee, 2006. Encyclopedia of governance, Bevir, 2007. Encyclopedia of Keynesian economics, An, Cate, 1997. Encyclopedia of law and economics, Bouckaert and de Geest, 2000, 2009–10. Encyclopedia of macroeconomics, An, Snowdon and Vane, 2002. Encyclopedia of money, Allen, 1999, 2001. Encyclopedia of political economy, O’Hara, 1999. Encyclopedia of public choice, Rowley and Schneider, 2004. Encyclopedia of small business, Hillstrom 1998, 2002; Darnay and Magee, 2007. Encyclopedia of social reform, The: including political economy, political science, sociology and statistics, Bliss, 1897. Encyclopedia of the Great Depression, McElvaine, 2004. Encyclopedic dictionary of economics, The, Wagoner, 1986; Cole, 1991. Encyclopédie commerciale-maritime, ou Dictionnaire universel de commerce et de géographie maritimes, Morel, 1856–1859. Encyclopédie de banque et de bourse, François-Marsal, F., 1928–1930. Encyclopédie du commerçant. Dictionnaire du commerce et des marchandises, Guillaumin, 1837–1839, 1841. Encyclopédie du commerçant. Dictionnaire du commerce et des marchandises: contenant tout ce qui concerne le commerce de terre et de mer, Granges, 1855. Encyclopédie économique, Greffe et al., 1990. Encyclopédie économique, French translation, 1984, of Greenwald, Encyclopedia of economics, 1982. Encyclopédie méthodique: Commerce, Baudeau, 1783–1784. Encyclopédie méthodique: Economie politique et diplomatique, Démeunier, 1784–1788. Encyclopédie méthodique: Finances, Surgy, 1784–1787. Encyclopédie oeconomique ou système général I° d’oeconomie rustique, contenant les meilleures pratiques pour fertiliser les terres et tirer parti des marais, des communes, des montagnes, des eaux, des denrées et des animaux tant sauvages que domestiques, . . . II° . d’oeconomie domestique. . . III° . d’oeconomie politique. . . ouvrage extrait des meilleurs livres qui ont paru jusqu’à ce jour sur ces matières; le tout revu par quelques membres de la Société Oeconomique de Berne, Félice, de, 1770–71.

Bibliography of specialized dictionaries 603 Encyclopédie parlementaire des sciences politiques et sociales, Mortier and Roussel, 1922. Encyclopédie pratique du commerce, de l’industrie et de la finance, Gilis, 1907–1908. Encyclopedie van de bedrijfseconomie, Mey et al., 1969–1971. Encyclopedie van de economie, Hartog and Devreker, 1979. Encyclopedie voor de zakenman, Stridiron, 1956. Encyklopädie der Staatswissenschaften, Bülau, 1832 Encyklopädie der Staatswissenschaften, Mohl, 1859 and 1872. Encyklopädie der Staatswissenschaften für Deutsche, Rinne, 1846 Enzykopädisches Lexikon für das Geld-, Bank- und Börsenwesen, Palyi and Quittner, 1957, 1956. Eponymous dictionary of economics, An: a guide to laws and theorems named after economists, Segura and Rodríguez Braun, 2004. Ermês o Kerdôos, êtoi Emporikê Egkyklopaideia, Papadopoulos, 1815–1817. Eröffnete Akademie der Kaufleute, oder vollständiges Kaufmanns-Lexicon: woraus sämmtliche Handlungen und Gewerbe, mit allen ihren Vortheilen, und der Art, sie zu treiben, erlernet werden können; und worinnen alle Seehäfen, die vornehmsten Städte und Handelsplätze; alle Arten der rohen und verarbeiteten Waaren; die Künstler, Fabrikanten und Handwerksleute; Commerciencollegia, Handelsgerichte, Banken, Börsen, Leihhäuser, Manufacturen, Fabriken und Werkstätte; die Rechte und Privilegien der Kaufmannschaft, u.s.w. beschrieben und erkläret werden, Ludovici, 1752–1756, 1767–1768. Evangelisches Staatslexikon, Kunst et al., 1966, 1975; Herzog et al., 1987; Heun, 2006. Everyday terms in economics, Janzen, 1941. Everyman’s dictionary of economics; an alphabetical exposition of economic concepts and their application, Seldon and Pennance, 1965, 1976, 2005. Fachbegriffe der Wirtschaft, Holl and Röhm, 1968, 1970, 1971, 1973, 1974, 1976. Fachbegriffe Recht und Wirtschaft, Dettmer and Dettmer, 2004. Fachbegriffe Volkswirtschaft, Harter et al., 1997, 1999, 2002. Fischer-Wirtschaftslexikon, Rürup et al., 1993, 1998, 2002. Fischer-Wirtschaftslexikon: Zahlen, Fakten, Zusammenhänge, Rürup et al., 2002, 2003. Fortune encyclopedia of economics, The, Henderson, 1993, 2008. Gabler-Bank-Lexikon: Bank–Börse – Finanzierung, Krumnow, 2000, 2002. Gabler Bank-Lexikon: mehr als 8000 Stichwörter aus den Bereichen Bank- und Börsenwesen, [Arentzen], 1996. Gabler kleines Lexikon Wirtschaft: 2000 Wirtschaftsbegriffe nachschlagen–verstehen – anwenden, [Gabler], 1986. Gabler kleines Lexikon Wirtschaft: 2200 Wirtschaftsbegriffe nachschlagen – verstehen – anwenden, [Gabler], 1989, 1994. Gabler Kompakt-Lexikon Bank und Börse: 2000 Begriffe nachschlagen, verstehen, anwenden, Wierichs and Smets, 2001. Gabler Kompakt-Lexikon Finanzdienstleistungen: 2000 Begriffe zu Bank, Bausparen, Investment, Lindmayer, 2004. Gabler-Kompakt-Lexikon Volkswirtschaft: 3500 Begriffe nachschlagen, verstehen, anwenden, Piekenbrock, 2002, 2003. Gabler Kompakt-Lexikon Wirtschaft: 2500 Begriffe nachschlagen, verstehen, anwenden, [Gabler], 1998. Gabler Kompakt-Lexikon Wirtschaft: 2700 Begriffe nachschlagen, verstehen, anwenden, [Gabler] 1998, 2001. Gabler-Kompakt-Lexikon Umwelt- und Wirtschaftspolitik: 2800 Begriffe nachschlagen – verstehen – anwenden, Wiesbaden, Olsson and Piekenbrock, 1993.

604 Daniele Besomi Gabler-Lexikon Wirtschaft: 2200 Begriffe nachschlagen, verstehen, anwenden, Arentzen, 1995. Gabler Volkswirtschafts Lexikon, Hölzl 1981, Häfner 1983, [Gabler] 1990, Arentzen and Brockmann, 1996. Gabler Wirtschafts-Lexikon, Sellien et al., 1956 to 1988, edns 1–12; Wendt et al., 1993 (13th edn), Arentzen 1997 (14th edn), Haderler 2000 (15th edn); Alisch, K., 2004 (16th edn); Roberts et al., 2010 (17th). Gabler-Wirtschaftslexikon: das Wissen der Experten, [Gabler], 2009. Gablers kleines Bank-Lexikon: Handwörterbuch für d. Bank- u. Sparkassenwesen, Bergrath, 1978. Gablers Schülerlexikon Wirtschaft, Kuhn, 1980. Gale encyclopedia of U.S. economic history, Carson and Bonk, 1999. Geld, Kapital, Währung, Wirtschaft: Wirtschafts-Lexikon für alle; ein Nachschlagewerk über Wörter und Begriffe in der Volkswirtschaft, deren Bedeutung und Zusammenhang für jedermann in verständlicher Form dargestellt ist, alternative title of WirtschaftsLexikon für alle . . ., Binggeli, 1968. General commercial dictionary, A: comprehending trade, manufactures, and navigation; as also agriculture, so far as it is connected with commerce; with brief abstracts of the laws relating to the regulation and protection of trade and tradesmen, Mortimer, 1819. General commercial dictionary comprehending trade, manufactures, and navigation, as also agriculture, so far as it is connected with commerce, A: with brief abstracts of the laws relating to the regulation and protection of trade and tradesmen, exhibiting their present state, and their connection in these kingdoms with those of other parts of the world: partly from authentic sources, and partly compiled from the best authorities, Mortimer, 1823. General dictionary of commerce, trade and manufactures, A; exhibiting their present state in every part of the world; and carefully compiled from the latest and best authorities, Mortimer, 1810. Geschichtliche Grundbegriffe. Historisches Lexikon zur politisch-sozialen Sprache in Deutschland, Brunner et al., 1972–1997, 2004. Glenn G. Munn’s encyclopedia of banking and finance, Munn, 1962, 1973, 1983. Global encyclopaedic dictionary of political economics, Chaudhary and Chaudhary, 2008. Glossario di termini economici, [M. & S.], 1974. Glossary of economic and social terminology in Eastern European socialist countries, Mikheev and Ray, 1986. Glossary of economic terms, [Economic almanac, The], [1962]. Glossary of economic terms, A, Wilson, 1949, 1957, 1964. Glossary of research economics, Meyer, 2001. Great Depression and the New Deal: a thematic encyclopedia, The, Leab 2010. Großdeutschland und die welt; ein wirtschafts-ABC in zahlen, Paul and Claussen, 1938. Großes Wörterbuch Wirtschaft: Grundwissen von A–Z, Escherle et al., 2004. Grundbegriffe der marxistischen politischen Ökonomie des Kapitalismus: Interpretationen und kritische Hinweise in lexikalischer Darstellung, Haffner, 1974. Grundbegriffe der Mikroökonomie: mit Übungsaufgaben, Oberender, 1985, 1987, 1989, 1991, 1994, 1996, 1999, 2003. Grundwissen Wirtschaft: Marktwirtschaft, Konjunktur, Aktienmärkte, Weltwirtschaft, Wirtschaftspolitik, Umwelt und Wachstum, Binnenmarkt Europa, Hohenemser, P., 1993, 1995. Handbook of economic terms, Horton, 1935.

Bibliography of specialized dictionaries 605 Handbook of economic terms, Johnson, 1974. Handwörterbuch der Arbeitswissenschaft, unter mitwirkung von 280 fachleuten des inund auslandes, Giese, 1927–1930. Handwörterbuch der Betriebswirtschaft, Nicklisch, 1926–1928, 1938–1939, 1956. Handwörterbuch der Finanzwirtschaft, Büschgen, 1976. Handwörterbuch der mathematischen Wirtschaftswissenschaften, Beckmann et al., 1979. Handwörterbuch des ökonomischen Systems der Bundesrepublik Deutschland, Schubert, 2005. Handwörterbuch der schweizerischen Volkswirtschaft, Sozialpolitik und Verwaltung, Reichesberg, 1903–1911. Handwörterbuch der Sozialwissenschaften, Beckerath, 1956–1968. Handwörterbuch der Staatswissenschaften, Conrad, Elster et al., 1890, 1898–1901, 1909–1911; Elster 1923–1929. Handwörterbuch der Volkswirtschaft, Glastetter, 1978, 1980. Handwörterbuch der Volkswirthschaftslehre: Unter Mitwirkung von namhaften deutschen Gelehrten und Fachmännern, Rentzsch, 1866, 1870. Handwörterbuch der Wirtschaftswissenschaft, Albers and Zottmann, 1977–1983. Handwörterbuch des Bankwesens: unter Mitwirkung von in- und ausländischen Mitarbeitern aus Wissenschaft und Praxis, Palyi and Quittner, 1933. Handwörterbuch des Bank- und Finanzwesens, Gerke, 1995, 2001. Handwörterbuch des Kaufmanns: Lexikon für Handel und Industrie, Bott, 1925–1926. HarperCollins dictionary of economics, The, Pass and Ehrlich, 1991. Haufe-Wirtschafts-Lexikon kompakt: alle wichtigen Begriffe aus Wirtschaft, Steuern, Recht, [Haufe], 1998, 2000. Hearing ist kein Hering, Ein, Hofmeier, 1968, 1972. Helping yourself to understand economics, Wilson, 1947. Herder-Lexikon: Wirtschaft, Böing, 1974. Humboldt Taschenlexikon der Wirtschaft, Das: Lexikon von A–Z, Erffa, 2007. Hundrede ord om økonomi, [Landbrugsorganisationerne], 1971, 1981, 1993. Incompletisimo diccionario de economía: biografías y términos, de Pablo, 1992, 1998. Incompletisimo diccionario de economía: biografías y términos y relaciones, de Pablo, 2000. International encyclopedia of economics, Magill, 1997. International encyclopedia of the social & behavioral sciences, Smelser and Baltes, 2001. International encyclopedia of the social sciences, Sills, 1968; Darity, 2008. Jung-Stilling-Lexikon Wirtschaft, Jung-Stilling, edited by Merk, 1987. Katholisches Soziallexikon, Klose, 1964, 1980. Keizai-Daijisho, [Do¯ bun-Kwan], 1910–16. ¯ saka Sho¯ka Daigaku Keizai Kenkyu¯jo, 1930–1936. Keizaigaku-Jiten, O Keys for economic understanding, Shieh, F. S., 1971. Kleine Wirtschafts-Lexikon, Das, Normann, 1999. Kleines Lexikon der Wirtschaft für Schueler und Studierende, Hoefer and Schade, 1971, 1972, 1975. Kleines Volkswirtschaftslehre-Lexikon, Borchardt, 1983. Kleines Wirtschaftslexikon, Zimmermann, 1998. Kleines Wirtschaftslexikon – Fachbegriffe der Wirtschaft: Fakten und Gedanken zur wirtschaftlichen Entwicklung unseres Landes, Jurkat, 2005. Kleines Wirtschaftslexikon. Für Schüler und Studierende, Hoefer and Schade, 1970, 1971, 1972, 1975, 1978, 1980, 1981, 1987, 1989, 1990, 1992, 1995, 1998, 2000.

606 Daniele Besomi Knapps Enzyklopädisches Lexikon des Geld-, Bank- und Börsenwesens, Cramer and Thießen, 1999. Knight’s cyclopædia of the industry of all nations, Dodd and Knight, 1851. Kokumin keizai jiten, Takahashi, 1933. Kompakt-Lexikon Umwelt- und Wirtschaftspolitik, Olsson and Piekenbrock, 1993, 1996, 1998. Kratkiy ekonomicheskiy slovar’→, Kipermana, Belika and Borisova, 1987, 1989. Kratkiy ekonomicheskiy slovar’→, Kozlov, Pervushin et al., 1958. Land, labor, and wealth; a handbook of economic terms, Winsor and Winsor, 1942. Language of money, The, Carew, 1985. Language of money 3, The, Carew, 1996. Language of money; an irreverent dictionary of business & finance, The, Davis, 1973. Lexicon of economic thought, Block and Walker, 1989. Lexicon of economics, A, Deane and Kuper, 1988, Lexikon of economics, A, Knopf, 1991. Lexikon der Energiewirtschaft: liberalisierte Strom- und Gasmärkte von A bis Z; Wirtschaft, Recht, Technik, Kraus, 2004. Lexikon der freien Marktwirtschaft, Das, German translation of Foldvary, Dictionary of free-market economics, 1998. Lexikon der ökonomischen Bildung, May and May, 1996, 2001. Lexikon der politischen Ökonomie, Bauer et al., 1999. Lexikon der Staats- und Geldwirtschaft: ein Lehr- und Nachschlagewerk, Recktenwald, 1983. Lexikon der Volkswirtschaft, Geigant et al., 1975, 1976, 1979, 1983, 1987, 1998, 2000. Lexikon der Volkswirtschaft: über 2000 Begriffe für Studium und Beruf, Holstein et al., 2000, 2003. Lexikon der Volkswirtschaft: über 2200 Begriffe mit wichtigen Wirtschaftsgesetzen, Holstein et al., 2004. Lexikon der Wirtschaft, Bley, 1969–1986 (Bley, Freyer, Kahle: Arbeit, 1969; Freyer, Arbeit, Bildung, Soziales, 1982; Feierabend, Berufsbildung, 1978; Tannert, Finanzen, 1986; Borchert, Industrie, 1970; Magritz, Organisation und Technik der Verwaltungsarbeit, 1975; Ambrée, Engelhardt, Mann, Pöggel, Preise, 1972, 1973, 1979; Apelt, Rechentechnik, Datenverarbeitung, 1983; Donda, Rechnungsfürung und Statistik, 1974, 1987; Wagener, and Rehbein, Verkehr, 1972; Bader, Versicherug, 1976; Steeger, Volkswirtschaftsplannung, 1980; Görner, Altwig, and Such, Wirtschaftsrecht, 1978. Lexikon der Wirtschaft, Kyrer, 1998. Lexikon der Wirtschaft, Das: grundlegendes Wissen von A bis Z, Pollert et al., 2004, 2008. Lexikon moderner Begriffe aus Arbeit und Wirtschaft, Dohnal, 1996, 1997, 2001. Lexikon Nachhaltiges Wirtschaften, Sculz, 2001. Lexikon ökonomischer Werke: 650 wegweisende Schriften von der Antike bis ins 20. Jahrhundert, Herz, 2006. Lexikon soziale Marktwirtschaft: Wirtschaftspolitik von A bis Z, Hasse, 2002, 2005. Lexikon volkswirtschaftlicher Grundbegriffe, Flemming, 1998. Lexikon Wirtschaft, Arbeit, Umwelt, Rittershofer, 1997. Lexikon Wirtschaft, Arbeit, Umwelt, Europa, Das: mit aktuellen Stichworten zum europäischen Binnenmarkt und zur deutschen Einigung, Rittershofer, 1994. Lexikon Wirtschaft, Arbeit, Umwelt, Das: mit aktuellen Stichworten zu deutsche Einigung und Europa, Rittershofer, 1991. Lexikon Wirtschaft, Gesellschaft, Gewerkschaften, Das, Rittershofer, 1975, 1981.

Bibliography of specialized dictionaries 607 Lexikon Wirtschaft, Umwelt, Gewerkschaften, Das, Rittershofer, 1987. Lexique de cooccurrents: bourse, conjoncture économique, Cohen, 1986. Lexique de sciences économiques et sociales, Piriou, 1996, 1997, 2001, 2002, 2003, 2004; Piriou and Clerc, 2007. Lexique d’économie, Albertini, Silem and Auvolat, 1984. Lexique des termes économiques, Phélizon, 1970, 1975, 1977. Lexique du calcul économique et de l’économétrie, Olmi and July, 1970. Lexique économique, Le. 1220 concepts définis à travers 60 articles dans l’Observateur, du 10 mars 1994 au 27 avril 1995, [Sipagoh], Goungounda, C. [1996]. London commercial dictionary, and sea-port gazetteer, exhibiting a clear view of the commerce and manufactures of all nations, The . . ., Anderson, 1819, 1826. London labour and the London poor: a cyclopaedia of the condition and earnings of those that will work, those that cannot work, and those that will not work, Mayhew, 1851. Macmillan dictionary of modern economics, Pearce, 1981, 1986, 1992. Malá encyklopedie moderní ekonomie, Sojka and Konec^y´, 1996, 1998, 999, 2001, 2004, 2006. Markt Lexikon Wirtschaft: Fachbegriffe von A–Z einfach und verständlich erklärt, Krafft et al., 2005. Marukusu keizaigaku jiten, Miyakawa, 1965. Marx-Lexikon: zentrale Begriffe der politischen Philosophie von Karl Marx, Helmer, Lieber et al., 1988. Marxisme, Le, [Le Livre de poche], 1976. Marxismo, Il, Italian translation, 1977, of Le marxisme, [Le Livre de poche], 1976. McGraw-Hill dictionary of modern economics. A handbook of terms and organizations, The, Greenwald, 1965, 1973, 1983. Men and ideas in economics: a dictionary of world economists, past and present, Mai, 1975. Meyers Handbuch über die Wirtschaft, Preuss and Bachert, 1966, Preuss, 1970, Eifert et al., 1974. Mezhdunarodnye ekonomicheskie otnosheniya Rossii: entsiklopediya statisticheskaya, Ustinov, 2004. Minivocabulário econômico-financeiro (e de abrangências afins): bolsa de valores, câmbio, economia, finanças internas e internacionais, moedas e bancos, mercado de capitais, mercado financeiro, mercado interno e internacional, mercado monetário: produção, indústria, comércio, serviços, Chiesa, 1981. Mises made easier: a glossary for Ludwig von Mises’ Human action, Greaves, 1974. MIT dictionary of modern economics, The, Pearce, 1986, 1992. Moderne Wirtschaft von A biz Z, Tomasch, 1970. Mondo contemporaneo, Il. Enciclopedia di storia e scienze sociali. Vol. VIII: Economia e storia, Carmagnai and Vercelli, 1978. Money encyclopedia, The, Rachlin, 1984. Money for minors: a student’s guide to economics, Bussing-Burks, 2008. Money talks – William Davis translates: a glossary of money, Davis, 1972, 1974. Nationalökonomie: (Theorie u. Geschichte). Ein Nachschlagebuch für Theorie und Praxis, Heller, 1926, 1930, 1933. Neu eröfnete Academie der Kaufleute, oder encyclopädisches Kaufmannslexicon alles Wissenswerthen und Gemeinnützigen in den weiten Gebieten der Handlungswissenschaft und Handelskunde überhaupt . . ., Schedel, 1797–1801 (3rd edn of Ludovici, Eröffnete Akademie der Kaufleute).

608 Daniele Besomi Neues Lexikon der Wirtschaft: die wichtigsten Begriffe und Zusammenhänge zum Nachschlagen, Escherle and Kaplaner, 1988. Neues Lexikon der Wirtschaft von A–Z, Escherle, Kaplaner and Neuburger, 2000. Neuestes Universal-Lexicon der gesammten kaufmännischen Wissenschaften, Fort, 1852, 1857, 1864–1865. New and complete dictionary of trade and commerce, A: containing a distinct explanation of the general principles of commerce, an accurate definition of its terms, an ample illustration of the laws and customs of all commercial states . . . a particular description of the different productions of art and nature, which are the basis and support of commerce: particularly distinguishing the growth, product, and manufactures of Great Britain and its colonies . . . also observations on the present state of our foreign commerce, Mortimer, 1766–1767. New Century’s dictionary of economics, [New Century Publications], 2008. New dictionary of economics, A, Taylor, 1966, 1969. New dictionary of trade and commerce, A: compiled from the information of the most eminent merchants, and from the works of the best writers on commercial subjects, in all languages. Containing, among other things, I. An account of all the natural productions, which are conducive to trade, throughout the World. II. The different manufactures established in each particular country. III. Explanations of all the terms used in commerce. IV. Explanations of the principal terms of geography, astronomy, and navigation, so far as they are connected with trade. V. An exact account of the coins, weights, and measures in use throughout the World, reduced to the English standard. VI. A description of the established banks, trading companies, and staple commodities, of different countries. Vii. The state of the British trade, national debt, funds, customs, excise, and other taxes. Viii. The laws relative to trade and commerce. For the use of the merchants and tradesmen of Great Britain, as well as of private gentlemen. By Mr. Rolt, with the assistance of several eminent merchants, Rolt, 1756. New Dictionary of Trade and Commerce, A, compiled from the information of the most eminent merchants, and from the works of the best writers on commercial subjects, in all languages, with the assistance of several eminent merchants. The second edition, with the addition of a new and accurate set of maps of the world, Europe, Asia, Africa, and North and South America, by Mr. Bowen, Rolt, 1761. New encyclopedia of social reform, The, including all social-reform movements and activities, and the economic, industrial, and sociological facts and statistics of all countries and all social subjects, Bliss, 1908. New Palgrave dictionary of economics, The, Eatwell, Milgate, and Newman, 1987; Durlauf and Blume, 2008. New Palgrave dictionary of economics and the law, The, Newman, 1998. New Palgrave dictionary of money and finance, The, Newman, Milgate and Eatwell, 1992. Nobel laureates in economic sciences: a biographical dictionary, Katz, 1989. Nouveau dictionnaire d’économie politique, Say and Chailley, 1891–1892, 1900. Nouveau dictionnaire de droit et de sciences économiques, Barraine, 1974. Nouveau dictionnaire économique et social, Ibarrola and Pasquarelli, 1981. Nouveau lexique d’économie, Vuitton and Vuitton, 1989. Novaya ekonomicheskaya entsiklopediya, Rumyantseva, 2006. Novo dicionário de economia, Sandroni, 1994. Novissimo dicionário de economia, Sandroni, 1999. Nuova enciclopedia del diritto e dell’economia Garzanti, [Garzanti], 1990.

Bibliography of specialized dictionaries 609 Nuovo dizionario di economia, Verrilli, De Luca and Minieri, 1998; De Luca, 2000. Nuovo dizionario di economia: la prima enciclopedia dei termini economici, Mori, 1989. Ökonomen-Lexikon: Unternehmer, Politiker und Denker der Wirtschaftsgeschichte in 600 Porträts, Hesse, 2003. Ökonomie, Frenzel, 1973. Oeconomische Encyclopädie oder allgemeines System der Land-, Haus- und StaatsWirthschaft: in alphabetischer Ordnung, Krünitz, 1753–1858 (vols 1–33). Oekonomisch-technologische Encyklopädie, oder allgemeines System der Stats- Stadt- Hausund Land-Wirthschaft, und der Kunst-Geschichte, Krünitz, 1753–1858 (vols 34–72 and 81–242). Ökonomisch-technologische Encyklopädie, oder allgemeines System der Staats- Stadt- Hausund Landwirthschaft, wie auch der Erdbeschreibung, Kunst- und Naturgeschichte, Krünitz, 1753–1858 (vols 73–80). Ökonomisches Lexikon, Bader, 1967, 1970–1971, 1978–1980. Oekonomisches technologisches Wörterbuch, oder Unterricht in der Oekonomie, in der ökonomischen Technologie und in der ökonomischen Baukunst, nach alphabetischer Ordnung: Ein Handbuch für Gutsbesitzer, Landwirthe und Freunde der landwirthschaftlichen Kultur; Mit Kupfern, Sickler, Trommsdorff and Weise, 1817–1827. Ökonomisches Wörterbuch, Kozlov, Perwuschin et al., 1958. Österreichs Wirtschaft von A–Z: das Basis-Wissen für jeden Österreicher: Begriffe kennen, Zusammenhänge verstehen, Langer and Spreitzer, 2003. Otto Spamer’s illustriertes Handels-Lexikon: praktisches Hülfs- und Nachschlagebuch über alle Gegenstände und Verhältnisse des Handels und Weltverkehrs, Spamer, 1876. Oxford dictionary for the business world, The, Isaacs and Martin, 1993. Palgrave’s dictionary of political economy, Higgs, 1925–1926. Parole dell’economia, Le: i termini più in uso nel linguaggio degli economisti e dei mezzi di comunicazione di massa, Stefanelli, 1984. Parole dell’economia, Le, . . . in tasca: dizionario essenziale di economia politica, scienza delle finanze, [Simone], 2005. Parole dell’economia, Le: oltre 4000 termini, sigle, citazioni e curiosità per orientarsi nel labirinto del mondo economico, Pasquarelli and Palmieri, 1993. Parole dell’economia e della finanza, Le: dizionario dei termini di tecnica, storia e concetti dell’economia, della banca e della finanza per non addetti ai lavori, Gubellin and di Carlo, 2005. Parole de Il Sole-24 Ore, Le: dizionario, Schiavetti, 1997, 2000. Parole d’oggi: guida ai termini economici e d’uso corrente, Pasquarelli, 1987. Penguin dictionary of commerce, The, Greener, 1970. Penguin dictionary of economics, The, Bannock, Baxter and Rees, 1972, 1978, 1984; Bannock, Baxter and Davis, 1987, 1992, 2003. Penguin Macquarie dictionary of economics & finance, The, Tardif, 1988. Pensée économique depuis Keynes: historique et dictionnaire des principaux auteurs, La, Beaud and Dostaler, 1993. Pequeno dicionário de economia, Ribeiro, 1972–1978. Petit dictionnaire de l’économie, Pujol, 1967, 1970. Petit dictionnaire politique et social, Block, 1896. Piccola enciclopedia bancaria: con fac-simili di moduli, conti, ecc., Marsili, 1923. Piccola enciclopedia di banca e borsa: Guida pratica per bancari ed uomini d’affari, D’Andrea, 1934. Piccolo dizionario economico, Cooperativa muratori & cementisti, [1982].

610 Daniele Besomi Pitman’s business man’s encyclopaedia and dictionary of commerce, Slater, 1920, Coles, 1927, Heywood, 1930. Pitman’s business man’s guide. A comprehensive dictionary of commercial information, [Pitman] 1931, 1933, 1935, 1949, 1957; Nelson, 1967. Pitman’s business man’s guide. A handbook for all engaged in business, Slater 1903, 1907, 1909, 1914, 1917, 1924. Pitman’s commercial encyclopædia and dictionary of business: a reliable and comprehensive work of reference on all commercial subjects, specially designed and written for the busy merchant, the commercial student and the modern man of affairs, Slater 1912–1913. Pitman’s dictionary of economic and banking terms, Weston and Crew, 1913, 1920, 1926, 1930, 1937. Pocket dictionary of monetary and coinage terms, A, explaining in simple language the meaning of the words used by writers on these subjects, and giving data, statistics, etc. Facts and figures for both sides, Phin, 1896. Pocket economist, The, Pennant-Rea and Emmott, 1983, 1987. Political dictionary: forming a work of universal reference, both constitutional and legal; and embracing the terms of civil administration, of political economy and social relations, and of all the more important statistical departments of finance and commerce, [Long], 1845–1846. Politician’s dictionary; or, A summary of political knowledge Containing remarks on the interests, connections, forces, revenues, wealth, credit, debts, taxes, commerce, and manufactures of the different states of Europe. Alphabetically digested for the use of those who would wish to understand whatever occurs in the science of politic, The, [Allen], 1775. Politekonomicheskiy slovar’, Borisov et al., 1964, 1970. Politicheskaya ekonomiya: slovar’, Volkov, 1981, 1985. Politisch-wirtschaftliches Konversations-Lexicon, Groth and Bayer, 1911. Politische Ökonomie, Gottschalg, Just and Schlegel, 1981, 1984. Politisches Handwörterbuch, Herre and Jagow, 1923. Prontuario dei termini politici, economici, sociali in uso in Italia, Ferraù, 1974. Prospectus d’un nouveau dictionnaire de commerce, Morellet, 1769. Répertoire général d’économie politique ancienne et moderne, Sandelin, 1846–1848. Repertorio di diritto privato e pubblico: economia politica, scienza delle finanze, Giambelluca, 1960. Reuters financial glossary, The, [Reuters, Senior staff], 2000. Reuters glossary of international economic and financial terms, [Reuters, Senior staff], 1982, 1988, Nunnay-Elam and Shaw, 1994. Routledge critical dictionary of global economics, The, Beynon, 1999. Routledge encyclopedia of international political economy, Jones, 2001. Saikin keizai mondai kaisetsu, Ichikawa, 1939. Schüler-Lexikon Wirtschaft, Kuhn, 1982. ¯ ta, M., 1942. Shin keizai jiten, O ¯ saka: O ¯ saka Shin keizai memo: shinbun keizaigo kaisetsu, [To¯kyo¯ Nichinichi Shinbunsha; O Mainichi Shinbunsha], 1940. ¯ saka Mainichi Shinbun Keizaibu, 1933. Shinshu¯ Keizaigo jiten, O Sho¯gyo¯ keizai jiten, Takagaki, 1941. Social market economy: history, principles and implementation; from A to Z, English translation, 2008, of Hasse, Lexikon soziale Marktwirtschaft: Wirtschaftspolitik von A bis Z, 2005.

Bibliography of specialized dictionaries 611 Social science encyclopedia, The, Kuper and Kuper, 1985, 1996, 2004. Spravochnik ekonomista-mezhdunarodnika, Volosin et al., 1990. St. James encyclopedia of banking and finance, The, Munn, Garcia and Woefel, 1991, 1993. Staats- und Gesellschafts-Lexikon: neues Conversations-Lexikon, Wagener, 1859–1867. Staatslexikon, Görres-gesellschaft: Bruder and Bachem, 1889–1897, 1903–1904, 1908–1911; Bruder, Bachem and Sacher, 1911–1912, 1929. Staats-lexikon, Das. Encyklopädie der sämmtlichen Staatswissenschaften für alle Stände, Rotteck and Welcker, 1834–1843, 1845–1848, 1856–1866. Staatslexicon: in einem Bande; staatswissenschaftliches Handbuch der politischen Aufklärung für die Gebildeten aller Stände, Baumstark, 1852. Staatslexikon: Recht, Wirtschaft, Gesellschaft, [Görres-Gesellschaft], 1957–1963, 1985– 1993. Standard library cyclopaedia of political, constitutional, statistical & forensic knowledge, The, [Knight], 1848–1849, 1853–1860. Standard library cyclopaedia of political, constitutional, statistical & forensic knowledge, The. Forming a work of universal reference on subjects of civil administration, political economy, finance, commerce, laws and social relations [Knight], 1893. Taschenlexikon der Wirtschaft, Erffa, 1990, 1992. Taschenlexikon der Wirtschaft: moderne Schlagworte von A–Z, Handelsbräuche, Betriebsformen, Geld- und Börsenwesen, Erffa, 2003. Terminologia cientifico-social: Aproximación crítica, Reyes, 1988, 1991. Tutta l’economia in 600 parole: dizionario aggiornato dei termini economici che non potete permettervi di ignorare, Italian translation, 1992, 1996, of Pennant-Rea and Emmott, The pocket economist, 1983. Tutte le parole dell’economia, Altamore, 1994. Tyrannie des idées reçues: nouveau dictionnaire des idées reçues économiques et sociales, La, Larrera de Morel, 1998. Univers économique et social, L’, Perroux, 1960. Universal dictionary of trade and commerce, translated from the French of the celebrated Monsieur Savary, inspector general of the manufactures for the King, at the Customhouse of Paris: with large additions and improvements, incorporated throughout the whole works; which more particularly accommodate the fame to the trade and navigation of these Kingdoms, and the laws, customs, and usage, to which all traders are subject, Postlethwayt, 1751–1755, 1757, 1766, 1774. Universal-Lexikon der Handelswissenschaften: enthaltend, die Münz-, Mass- und Gewichtskunde, das Wechsel-, Staatspapier-, Bank- und Börsenwesen, das Wichtigste der höhern Arithmetik, der Contorwissenschaft, Waarenkunde und Technologie, der Handelsgeschichte, Handelsgeographie und Statistik, des Seewesens, der Staatswirthschaft und Finanzwissenschaft, des Handelsrechts, Schiebe, 1837–1839. Universal-Lexikon für kaufleute und Fabrikanten, oder, Vollständiges Handbuch des Handels-, Fabrik- und Manufakturwesens, der Münz-, Maass-, Gewicht- und Waarenkund, der Schiffahrt, Wechsel- und Bankgeschäfte, und der Handelsgeographie und Statistik, mit besonderer Rücksicht auf National-Oekonomie und Finanzen, German translation, 1842, of McCulloch’s Dictionary, practical, theoretical, and historical, of commerce and commercial navigation, 1834–1835. Vahlens großes Wirtschaftslexikon, Dichtl and Issing, 1987, 1993, 1994. Velká ekonomická encyklopedie, Z^ ák, 1999, 2002. Vocabulaire de l’économie, de Villers and Germain, 1975, 1978. Vocabulaire économique, Teulon, 1993.

612 Daniele Besomi Vocabulaire économique et financier, Bernard and Colli, 1976. Vocabulaire économique et social [Action populaire], 1909. Vocabulaire économique et social élémentaire, [Centre régional de documentation pédagogique], 1977. Vocabulaire monetaire et financier, Teulon, 1991. Vocabulaire pratique des sciences sociales, Birou, 1966, 1969. Vocabulario básico de economía, Spanish translation, 1992, of Deane and Kuper, A lexicon of economics, 1988. Vocabulario de derecho y ciencias sociales: economía, sociología, política, finanzas, comercio, Moreno Rodríquez, 1973. Vocabulario de la economía, ensayo para fijar la nomenclatura y los principales conceptos de esa ciencia, Piernas y Hurtado, 1877, 1882. Vocabulario de termos econômicos e financeiros, Belchior, 1987. Vocabulary of business and economic terms of popular usage, A, Lawrence, 1945. Volkswirtschaftliche Stichwöter, Musil and Zeillinger, 1967. Volkswirtschafts-Lexikon der Schweiz: Urproduktion, Handel, Industrie, Verkehr etc., Furrer, 1885–91. VNR dictionary of business and finance, The, Brownstone et al., 1980. Who’s who in economics. A biographical dictionary of major economists 1700–1981, Blaug, 1983, 1986. Who’s who in economics, Blaug, 1999, Blaug and Vane, 2003. Wirtschaft, Rittershausen, 1958. Wirtschaft auf einen Blick, Fritsch and Knappe, 2002, 2006. Wirtschaft auf einen Blick: Daten, Fakten u. Funktionen, Fritsch, 1981; Fritsch and Knappe 1988, 1992, 1996, 2000. Wirtschaft auf einen Blick: Fachbegriffe verständlich erklärt, Fritsch, 1983, 1986. Wirtschaft: Daten und Fakten zum Nachschlagen, Ludewig and Dallmann, 1975. Wirtschaft und Europa von A bis Z, Germany, Bundesministerium für Wirtschaft, 1994. Wirtschaft verstehen, Die: das Wirtschaftslexikon der Gegenwart, Bartz, 1998. Wirtschaft von A bis Z, Germany, Bundesministerium für Wirtschaft und Finanzen, 1971, 1990. Wirtschaft von A bis Z: Begriffe aus dem Wirtschaftsleben, Leibacher, 1986. Wirtschaft von A bis Z: kompakt, aktuell, übersichtlich, Bartz, 2002. Wirtschaftliche Stichwort, Das, [Creditanstalt-Bankverein, Vienna], 1962. Wirtschafts- und EDV-Lexikon, Kyrer, 1985, 1988. Wirtschafts- und sozialstatistisches Handbuch, Gleitze, 1960. Wirtschaftskundliches ABC, Austria Bundeskammer etc., 1972, 1977, 1980, 1983, 1988, 1995. Wirtschaftslehre für den Sozialversicherungsfachangestellten: ausgew. Begriffe aus d. Wirtschaftslehre in alphabet. Reihenfolge, Nicklaus, 1988. Wirtschaftslexikon, Erffa, 1954, 1958, 1968, 1972, 1976, 1983, 1986. Wirtschaftslexikon, Kyrer, 2001. Wirtschaftslexikon, Das, [Voltmedia], 2005. Wirtschaftslexikon, Woll, 1987, 1988, 1990, 1991, 1992, 1993, 1996, 2000, 2008. Wirtschaftslexikon, Das: aktuelles Wissen für Studium und Beruf, Schreiber, 2000. Wirtschaftslexikon: Daten, Fakten und Zusammenhänge, Mühlbradt, 1996, 1998, 1999, 2001, 2007. Wirtschaftslexikon: Kompaktwissen für Schule, Ausbildung, Beruf, Mühlbradt, 1989, 1990, 1992. Wirtschafts-Lexikon, Kyrer et al., 1997.

Bibliography of specialized dictionaries 613 Wirtschafts-Lexikon für alle: Ein Nachschlagewerk über Wörter und Begriffe in der Volkswirtschaft, deren Bedeutung und Zusammenhang für jedermann in verständlicher Form dargestellt ist; Geld, Kapital, Währung, Wirtschaft, Binggeli, 1968. Wirtschafts-Lexikon: über 4000 Stichwörter für Studium und Praxis, Rittershofen, 2000, 2005, 2009. Wirtschafts-Lexikon: über 4200 Stichwörter für Studium und Praxis, Rittershofen, 2002. Wirtschaftslexikon von A–Z: Betriebswirtschaft, Volkswirtschaft, Statistik, Rechtswissenschaft, Woll, [1998]. Wirtschaftssprache kurz erklärt, Piel, 1980. WiSo-Lexikon, Weigert and Peppels, 1999. WISO-Lexikon: Wirtschaftswissen kompetent & umfassend . . .; immer up date in allen Wirtschaftsthemen, Jungblut, 1998. WISO Wirtschaftswissen: ein Nachschlagewerk der ZDF-Wirtschaftsredaktion; von Abfindung bis Zahlungsbilanz, Jungblut, 1999. Wörterbuch der deutschen Kaufmannssprache auf geschichtlichen Grundlagen, Schirmer, 1911. Wörterbuch der New Economy, Wippermann, 2001. Wörterbuch der Ökonomie: Sozialismus, Luchterhand, Joswig and Ehlert, 1967; Ehlert 1969, 1973, 1978, 1983, 1984. Wörterbuch der Volkswirtschaft, Elster et al., 1898, 1906–1907, 1911, 1931–1933. Wörterbuch der Wirtschaft, Bülow, 1936; Bülow and Langen, 1954, 1958, 1963, 1967, 1970; Recktenwald, 1975, 1978, 1981, 1987, 1990; Grüske and Rechtenwald, 1994; Grüske and Schneider, 2003. Wörterbuch der Wirtschaft, Gesellschaft zur Föderung der Schweizerischen Wirtschaft, 1992. Wörterbuch Staat und Politik, Nohlen, 1991, 1993, 1995, 1996, 1998. Wörterbuch zur politischen Ökonomie, Eynern et al., 1973. Yu¯hikaku keizai jiten, Kanamori, Ara and Moriguchi, 1987. Zwölf Bücher vom Staate, oder, Systematische Encyklopädie der Staatswissenschaften, Schmitthenner, 1839-1843.

29.4 GENERAL ENCYCLOPAEDIAS CITED IN THE TEXT, BY TITLE Allgemeine deutsche Realenzyklopädie für die gebildeten Stände. Conversations-Lexikon, see Brockhaus-Konversationslexikon. Bolshaya sovetskaya entsiklopediya, 1926–1947, edited by N. I. Bukharin, V. V. Kuybyshev et al. (Moscow: Sovetskaya entsiklopediya), 65 vols, 27 cm. 2nd edn, 1949–1958, edited by S. I. Vavilov et al., 51 vols, 27 cm. 3rd edn, 1970–1981, edited by A. M. Prochorov et al., 31 vols plus index, 27 cm. Brockhaus-Konversationslexikon (serial title) (Leipzig: Brockhaus). 1st edn, Conversationslexikon mit vorzüglicher Rücksicht auf die gegenwärtigen Zeiten (6 Bände), 1796–1808, 6 vols, supplement 2 vols, 1809–1811. 2nd edn, 1812–1819, ConversationsLexikon oder Hand-Wörterbuch für die gebildeten Stände, 10 vols; 3rd edn, 1814–1819, Conversations-Lexikon oder encyklopädisches Handwörterbuch für gebildete Stände, 10 vols; 4th edn, Allgemeinen Hand-Enzyklopädie für die gebildeten Stände, 1817–1819, 10 vols; 5th edn, Allgemeinen deutsche Real-Encyklopädie für die gebildeten Stände (Conversations-Lexikon), 1819–1820, 10 vols; 6th edn, 1824, 10 vols and 2 supplements;

614 Daniele Besomi 7th edn, 1827, 12 vols; 8th edn, 1833–1837, 12 vols; 9th edn, 1843–1848, 15 vols; 10th edn, 1851–1855, 15 vols; 11th edn, 1864–1868, 15 vols, supplement 1 vol., 1872; 12th edn, Conversations-Lexikon. Allgemeine deutsche Real-Enzyklopädie, 1875–1879, 15 vols; 13th edn, Brockhaus Conversations-Lexikon. Allgemeine deutsche RealEnzyklopädie, 1882–1887, 16 vols; 14th edn, Brockhaus’ Konversations-Lexikon, 1893–1895 and various further releases; 15th edn, Der große Brockhaus, 1928–1935, 20 vols, with supplements and re-editions; 16th edn, 1952–1957, 12 vols, with supplements; 17th edn, Brockhaus Enzyklopädie, 1966–1974, 20 vols, plus 5 supplements; 18th edn, 1977–1981, 12 vols, with supplements; 19th edn, 1986–94, 24 vols and supplements; 20th edn, Brockhaus Die Enzyklopädie, 1996–1999, 24 vols and supplements; 21st edn, Brockhaus Enzyklopädie, 2005–2006, 30 vols. Brockhaus and Efron Encyclopedic dictionary: see Entsiklopedicheskiy slovar’. Cyclopædia; or, an Universal dictionary of arts and sciences: Containing the definitions of the terms, and accounts of the things signify’d thereby, in the several arts, both liberal and mechanical, and the several sciences, human and divine: the figures, kinds, properties, productions, preparations, and uses, of things natural and artificial; the rise, progress, and state of things ecclesiastical, civil, military, and commercial: with the several systems, sects, opinions, etc; among philosophers, divines, mathematicians, physicians, antiquaries, criticks, etc.: the whole intended as a course of ancient and modern learning, edited by E. Chambers, 1728 (London: James & John Knapton), 2 vols, folio. 2nd edn, 1738; 3rd edn, 1740; 5th edn, 1741; 7th edn, 1751; supplements, 1753, 1784, 1786; 8th edn, incorporating the supplements, edited by A. Rees, 1788 (London: Rivington), 5 vols; 1820 edited in 39 vols in 4°. Italian translation: Dizionario universale delle arti e delle scienze . . . di Efraimo Chambers . . .; traduzione esatta ed intiera dall’inglese (Venice: Presso Giambatista Pasquali), 1748–1749, 9 vols, 27 cm. Dictionary of the English language, A: in which the words are deduced from their originals, and illustrated in their different significations by examples from the best writers: to which are prefixed, a history of the language, and an English grammar, by Samuel Johnson, 1755 (London: J. and P. Knapton), 2 vols, 43 cm., fol. 2nd edn, 1760, 1763, 1765; 6th edn, 1778 (London: Strahan); 7th edn (Harrison’s), 1786 (London: Harrison & Co.). Dictionnaire de la conversation et de la lecture: inventaire raisonné des notions générales les plus indispensables à tous, par une société de savants et de gens de lettres, edited by W. Duckett (Paris: Belin-Manda), 1832–1851, 68 tomes in 34 vols, 8°. Supplement: Dictionnaire de la conversation et de la lecture. . . sous la direction de M. W. Duckett. Supplément offrant le résumé des faits et des idées de notre temps, Vols 1–3 edited by L. Louvet; Vols 4–5 edited by P. Louisy (Paris: Firmin-Didot frères), 1864–1882, 8°. 2nd edition ‘augmentée de plusieurs milliers d’articles tout d’actualité (Paris: Firmin Didot frères), 1867–1868, 16 vols, 4° (27 cm). Dictionnaire encyclopédique, edited by Le Bas, Ph., 1840–1845, (Paris: Didot Frères), 15 vols, 22 cm. Die Gegenwart: see Gegenwart, Die. Enciclopedia (better known as Enciclopedia Einaudi). Edited by R. Ruggiero (Turin: Einaudi, 1977–1984), 16 vols, 22 cm. Enciclopedia economica accomodata all’intelligenza ed ai bisogni d’ogni ceto di persone: con incisioni in legno nel testo e in rame a parte: opera particolarmente necessaria ai pubblici stabilimenti dell’istruzione, dell’industria, ai Comuni, ai padri di famiglia ed al clero. Compilata da una societa di dotti e letterati italiani, 1860–1863, edited by Francesco Predari (Turin: Gaetano Maspero), 2 vols, 26 cm.

Bibliography of specialized dictionaries 615 Enciclopedia española del siglo diez y nueve, o Biblioteca completa de ciencias, literatura, artes y oficios, etc. por una Sociedad de literatos españoles y de hombres especiales en diversas ciencias y profesiones, 1842–1845 (Madrid: Imprenta y librería de Ignacio Boix), 11 vols, 24 cm. Enciclopedia italiana di scienze, lettere ed arti . . ., 1929–1939 (Rome: Istituto Giovanni Treccani), 36 vols and supplements. 2nd edn, 1949, 37 vols and supplements, 1961–1978 and 1979–1991; 3rd edn, 2005, 35 vols and indices. Enciclopedia moderna: diccionario universal de literatura, ciencias, artes, agricultura, industria y comercio, 1851–1855 (Madrid: Establecimiento Tipográfico de Mellado), 34 vols of text, 3 vols of atlases, 3 vols supplement (1864–1865), 24 cm. Entsiklopedicheskiy slovar’ [Encyclopaedic dictionary], also known as Brockhaus and Efron, (St Petersburg: Efron). Brockhaus Efron, 1890–1907, edited by K. K. Arsen’ev and F. F. Petrushevskiy, 82 vols and 4 supplements, 26 cm. Small Brockhaus Efron, 1907–1909, 4 vols; New Brockhaus Efron (incomplete), 1911–1916, 29 vols. Encyclopaedia Americana: a popular dictionary of arts, sciences, literature, history, politics and biography, 1829–1835, edited by F. Lieber (Philadelphia: Lea & Blanchard), 13 vols, 24 cm. Encyclopædia Britannica (serial title). 1st edn, 1768–1771, Encyclopædia Britannica; or a Dictionary of arts and sciences compiled upon a new plan . . . with one hundred and sixty copperplates. By a Society of Gentlemen in Scotland, 1768–1771 (Edinburgh: A. Bell and C. Macfarquhar), 3 vols. 2nd edn, 1774–1784, 10 vols; 3rd edn, 1788–1797, 18 vols, plus 2 vols supplement, 1801; 4th edn, 1801–1809, 20 vols; 5th edn, 1817, 20 vols, plus 6 vols supplements, 1816–1824; 6th edn, 1820–1823, 20 vols; 7th edn, 1830–1842, 21 vols; 8th edn, 1853–1860, 21 vols; 9th edn, 1875–1889, 25 vols, of which 1 vol. index; 10th edn as supplement to the 9th, 1902–1903, 24 + 11 volumes; 11th edn, 1910–1911, 29 vols (of which one index); 12th, edn, supplement to the 11th, 1921–1922, 28 + 3 vol.; 13th edn, further supplement to the 11th, 1926, 3 additional volumes; 14th edn, 1929–1933, 24 vols, revised 1933–1973; 15th edn, 1974–1984, 30 vols, revised 1985–present, 32 vols; online edition (Encyclopædia Britannica Online, accessed 2010). Encyclopædia Metropolitana; or, Universal dictionary of knowledge, on an original plan: comprising the two-fold advantage of a philosophical and an alphabetical arrangement, with appropriate engravings. Edited by the Rev. Edward Smedley . . . the Rev. Hugh James Rose . . . and the Rev. Henry John Rose, 1817–1845 (London: B. Fellowes; F. & J. Rivington, etc.), 29 vols, 4º. 2nd edn, 1848–1858 (London : J. J. Griffin), 40 vols, 8º. Encyclopédie catholique, répertoire universel et raisonné des sciences, des lettres, des arts et des métiers, formant une bibliothèque universelle, avec la biographie des hommes célèbres; . . . publiée avec la collaboration des hommes les plus éminentes dans les sciences, les lettres, les arts, etc. sous la direction . . . de M. l’abbé G., de M. le vte W., et d’un comité d’orthodoxie. (Introduction . . . par E. Alletz.), edited by J.-B. Glaire and J. A. Walsh (Paris: Desbarres), 1839–1848, 18 vol, 4°. Supplément à l’Encyclopédie catholique. Publié sous la direction de M. [J.] Chantrel . . . et de M. l’abbé [J. B.] Orse . . . Ce supplément est le complément indispensable à l’Encyclopédie catholique, publiée . . . sous la direction de M. l’abbé Glaire et M. le vicomte Walsh, 1855–1859, 3 vols. Encyclopédie des gens du monde, répertoire universel des sciences, des lettres et des arts: avec des notices sur les principales familles historiques et sur les personnages célèbres, morts et vivans, par une société de savans, de littérateurs et d’artistes, français et étrangers (Paris: Treuttel et Würtz), 1833–1844, 22 tomes in 44 vols, 23 cm. Encyclopédie du dix-neuvième siècle. Répertoire universel des sciences, des lettres et des arts, avec la biographie des hommes célèbres. Published by Bureau de l’Encyclopédie

616 Daniele Besomi du XIXe siècle under the direction of A. de Saint-Priest, Ange (Paris: Bureau de l’Encyclopédie du XIXe siècle, 1838–1853). 25 vols, plus 1 vol. supplement, 8°. Encyclopédie, ou Dictionnaire raisonné des sciences, des arts et des métiers, par une Société de gens de lettres. Mis en ordre et publié par M. Diderot, et, quant à la partie mathématique, par M. d’Alembert (Paris: Briasson, 1751–1772), 35 vols in fol. Encyclopédie moderne, ou Dictionnaire abrégé des sciences, des lettres et des arts: avec l’indication des ouvrages ou les divers sujets sont développés et approfondis (1824– 1832), edited by E. M. P. M. A. Courtin (Paris: au Bureau de l’Encyclopédie), 26 vols, 21 cm. Encyclopédie méthodique ou par ordre de matières, par une société de gens de lettres, de savants et d’artistes; précédée d’un Vocabulaire universel, servant de Table pour tout l’ouvrage, ornée des portraits de MM. Diderot et d’Alembert, premiers éditeurs de l’Encyclopédie, 1782–1832, edited by C. Panckoucke, 1782–1792, continued by H. Agasse, 1792–1813, and T.-C. Agasse, 1813–32 (Paris: chez Panckoucke), 206 vols in 4°. Encyclopédie nouvelle, ou Dictionnaire philosophique, scientifique, littéraire et industriel, offrant le tableau des connaissances humaines au XIXe siècle, par une société de savans et de littérateurs, publiée sous la direction de MM. P. Leroux et J. Reynaud (1836–1841) (Paris: Gosselin), 8 vols, 4° (the cover indicates: Encyclopédie pittoresque à deux sous, dated 1834). Entsiklopedicheskiy slovar’ Russkogo Bibliograficheskogo Instituta Granat [The encyclopedic dictionary of the Granat Russian Bibliographical Institute], 1910–1948, edited by V. Ya. Zheleznov, Yu. S. Gambarov, M. M. Kovalevskiy, S. A. Muromtsev, and K. A. Timiryazev (Moscow: Granat Russian Bibliographical Institute), 58 vols in 74 tomes, 23 cm. Fontana dictionary of modern thought, The, 1977, edited by A. Bullock and O. Stallybrass (London: Collins), 684 pp., 23 cm; 2nd edn, revised by Bullock and S. Trombley, 1988 (London: Fontana Press), 917 pp.; 3rd edn, as The new Fontana dictionary of modern thought, 1999 (London: HarperCollins), 933 pp., 24 cm. Gegenwart, Die: Eine encyklopädische Darstellung der neuesten Zeitgeschichte für alle Stände (Leipzig: F. A. Brockhaus), 1848–1856, 12 vols, 23 cm. Grand dictionnaire universel du XIXe siècle: français, historique, géographique, mythologique, bibliographique, 1866–1877, edited by P. Larousse (Paris: Administration du grand Dictionnaire universel), 17 tomes in 31 vols, 4°. Grande dizionario enciclopedico, 1933–1939 (Turin: Unione tipografico-editrice torinese), 10 vols, 27 cm; 2nd edn, 1954–1962, 12 vols; 3rd edn, 1967–1975, 20 vols, 31 cm; 4th edn, 1984–1993, 21 vols, 31 cm. Grande encyclopédie, La, inventaire raisonné des sciences, des lettres et des arts par une société de savants et de gens de lettres, 1886–1902, directed by M. Berthelot and edited by C. Dreyfus and later A. Berthelot (Paris: H. Lamirault, then Société anonyme de La grande encyclopédie), 31 vols, 31 cm. Große Brockhaus, see Brockhaus-Konversationslexikon. Große Conversations-Lexikon für die gebildeten Stände: See Meyers Konversationslexikon. Herders Conversations-Lexikon: kurze aber deutliche Erklärung von allem Wissenwerthen aus dem Gebiete der Religion, Philosophie, Geschichte, Geographie, Sprache, Literatur, Kunst, Natur- und Gewerbekunde, Handel, der Fremdwörter und ihrer Ausprache u.u., 1854–1857 (Freiburg im Breisgau: Herder’sche Verlagshandlung), 5 vols; 2nd edn, 1875–1879, 4 vols; 3rd edn, 1902–1907, 8 vols. Continued as Der Grösse Herder. Johnson’s new universal cyclopædia: a scientific and popular treasury of useful knowledge. Editors-in-chief, Frederick A. P. Barnard, Arnold Guyot; with numerous contributions

Bibliography of specialized dictionaries 617 from writers of distinguished eminence in every department of letters and science in the United States and in Europe (New York: A. J. Johnson & Son; Pittsburgh, PA, W. D. Cummings), 4 vols, 29 cm. 2nd edn, 1889–1890, 8 vols; 3rd edn, 1893–1897 (New York: D. Appleton and Company, A. J. Johnson Company), 8 vols, 28 cm. Meyers Konversationslexikon (Serial title). 0th edition (‘Wunder-Mayer’) as Das grosse Conversations-Lexikon für die gebildeten Stände, 1839–1852 (Hildburghausen: Bibliographisches Institut), 46 volumes, 6 supplementary volumes, 1853–1855, 70,000 pages. 1st edn, 1857–1860, Neues Conversations-Lexikon für alle Stände, 15 vols; 2nd edn, Neues Konversations-Lexikon, ein Wörterbuch des allgemeinen Wissens, 1861–1872, 17 vols; 3rd edn (1874–1884, 21 vols), 4th edn (1885–1892, 19 vols) and 5th edn (1893–1901, 21 vols) as Meyers Konversationslexikon; 6th edn, Meyers Großes Konversations-Lexikon, 1902–1920, 27 vols; 7th edn, Meyers kleines KonversationsLexikon, 16 vols; 8th edn, Meyers Lexikon, 1936–1942, 10 vols, incomplete; 9th edn, Meyers enzyklopädisches Lexikon, 1971–1981, 32 vols. Merged with Brockhaus in 1984. New and Complete Dictionary of Arts and Sciences, A; comprehending all the branches of useful knowledge, with accurate descriptions as well of the various machines, instruments . . . as of the . . . kinds, preparations, and uses of natural productions . . . Illustrated with above three hundred copper-plates, curiously engraved by Mr. Jefferys . . . By a Society of Gentlemen, 1754–1755 (London: Owen), 4 vols, 8°. 2nd edn, 1763–1764. Nuova enciclopedia popolare: ovvero dizionario generale di scienze, lettere, arti, storia, geografia, ecc. ecc. . . . Opera compilata sulle migliori in tal genere, inglesi, tedesche e francesi, coll’assistenza e col consiglio di scienziati e letterati italiani, corredata di molte incisioni in legno, inserite nel testo, e di tavole in rame 1841–1849 (Turin: Giuseppe Pomba e Comp.), 13 vols, of which one of plates, 30 cm. 4th edn as Nuova enciclopedia popolare italiana ovvero Dizionario generale di scienze, lettere, arti, storia, geografia, 1856–1875 (Turin: Società l’Unione Tipografico-Editrice), 24 vols + 9 supplements; 6th edn, Nuova enciclopedia italiana: ovvero Dizionario generale di scienze, lettere, industrie, ecc. 6a ed. corredata di numerose incisioni intercalate nel testo e di tavole in rame, ampliata nelle parti scientifiche e tecnologiche e accuratamente riveduta in ogni sua parte secondo i più moderni perfezionamenti, 1875–1888, edited by G. Boccardo (Turin: Unione tipografico-editrice torinese), 25 vols, plus indexes, plates and 5 vols supplements, 30 cm. Pierers Universal-conversations-lexikon (serial title). 1st edn, Universal-Lexikon oder vollständiges encyclopädisches Wörterbuch, 1835–1847, edited by H. A. Pierer (Altenburg: Pierer), 26 vol + supplement. 2nd edn, Pierer’s Universal-Lexikon, 1848. 3rd edn, 1849–1852, Universal-Lexikon der Gegenwart und Vergangenheit oder neuestes encyclopädisches Wörterbuch der Wissenschaften, Künste und Gewerbe. Bearbeitet von mehr als 300 Gelehrten, 17 vols + supplement; 4th edn, Pierer’s Universal-Lexikon der Vergangenheit und Gegenwart oder Neuestes encyclopädisches Wörterbuch der Wissenschaften, Künste und Gewerbe, 1857–1866, 19 vols, 8°; 5th edn, 1867–1873, 19 vols; 6th edn Pierers Universal-Conversations-Lexikon: neuestes encyklopädisches Wörterbuch aller Wissenschaften, Künste und Gewerbe, 1875–80 (Oberhausen: Spaarmann), 18 vols, 25 cm; 7th edn, Pierers Konversationslexikon, 1888–1893, 12 vols. Popular encyclopaedia, The: or, ‘Conversations lexicon’: being a general dictionary of arts, sciences, literature, biography, history, ethics, and political economy. With dissertations on the rise and progress of literature by Sir D. K. Sandford; on the progress of science by T. Thomson, and on the progress of the fine arts by A. Cunningham. Edited by A. Whitelaw (Glasgow: Blackie & Son, 1834–1842), 7 vols in 14 parts; 2nd revised edn, 1862; reprinted in 1872–1877.

Name and subject index

acceleration principle 417, 425 A. Aftalion 417 a special case of lagged relationship 432 J. M. Clark 95, 432 not sufficient to explain cycles (Tinbergen) 432 see also multiplier-accelerator model Ackermann, R. 228 Aftalion, A. 95, 110, 140, 159, 282, 359, 421, 448, 459, 528 and the acceleration principle 417 crises as the upper turning point of the cycle 382, 526 crises stimulate the literature on crises 56 long waves 445 on ‘crises’ vs. ‘cycles’ 526, 544 supports Say’s law 156 agriculture agricultural depressions more intense in long waves downswings (Kondratiev) 459 business cycle theories 143, 146, 161: based on weather fluctuations 140, 160, 259, 367, 444, 503 Corn laws and crops fluctuations 58, 102, 188 crops have a quasi-period of three years (Tinbergen) 432 Dietzel’s classification of agricultural vs. non agricultural theories of crises 159 failure of crops and commercial crises 138, 146, 181, 219, 255, 294, 350, 352 scarcity of wheat, inflation and riots in 1800 56 Åkerman, J. H. 95, 467, 468, 476 Albertini, J.-M. entries in Lexique d’économie (Salem and Albertini, 1992): CRISE. CRISE ÉCONOMIQUE 529; CYCLE 530 Alesina, A. 470, 471–474, 476, 481 Allard, A. 327 Allen, R. G. D. 425 Alligood, K. T. 496 Allisson, F. 282 Almenar, S. 226, 235 Almodovar, A. 15, 33, 226 Alquier, C.

CRISE, entry in Dictionnaire encyclopédique économique et social (Alquier, 1990) 154, 530–531 Althoff, F. 376, 377 Altschul, E. KONJUNKTURTHEORIE, entry in Handwörterbuch des Bankwesens (Palyi and Quittner, 1933) 157 Alvarez-Uria, F. 309 Amato, S. 358 American Economic Review headings of reviews section on cycles etc. 119, 123 amplitude of oscillations and impulse-propagation distinction 155, 424, 485 and intensity of use of machinery 254 and technology shocks 518 and uncertainty 313, 518 decreased after WW2: Burns on the stabilizing factors 422; death of the business cycle 423 early nonlinear models vs. chaotic dynamics 496 exogenous vs. endogenous explanations 144, 157, 489, 492, 498 linear vs. nonlinear models 148, 163, 485–487, 489, 491 more moderate since the 1980s 508 stability of equilibrium and the persistence of the cycle 157 tended to decrease since the middle of the19th century 533 typology of cycle theories based on the persistence of oscillations 152 Amunátegui, M. L. 229 anarchy of production 246 and the Marxist theories of crises 152, 531 Ott 242–244 Tugan-Baranovsky 350, 351, 353, 354 Anderson, O. 377 Anderson, W. 60, 103 Andreevsky, I. E. 355

Name and subject index 619 PREFACE to Enciklopedicheskii slovar’ (1890–1907) 343 Arena, R. 169, 266 Arndt, P. entries in Handwörterbuch des Kaufmanns (Bott, 1925–26): KONJUNKTUR 86, 122; KRISEN 86 Arsen’ev, K. K. 344, 355 FROM THE EDITORS, prefatory note to Enciklopedicheskii slovar’ (1890–1907) 343–344 Ashton, T. S. 342 Asso, P. F. 411 Astigarraga, J. 15, 33, 226, 233, 234, 235 Attwood, T. 220 Augello, M. M. 262 Austen-Smith, D. 475 Avouyi-Dovi, S. 521 Azariadis, C. 156, 492 Babson, R. W. 460 Bachi, R. CRISI ECONOMICHE, entry in Enciclopedia italiana di scienze, lettere ed arti (1929–39) 88, 109, 145 Backhaus, J. 309, 372, 475 Bacon, F. 12, 236, 321 Baddeley, M. SPECULATIVE BUBBLES, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 74 Bagehot, W. 93, 94, 138, 301, 304, 538 loanable funds theory of the cycle 259 on the lender of last resort 303, 305 Bailey, R. E. 13, 37 bailing out Macleod 301, 304 Baker, H. 92 Balogh, T. classification of business cycle theories 150–151 FLUTTUAZIONI ECONOMICHE, entry in Dizionario di economia politica (Napoleoni, 1956) 150–151 bank deposits deposits and lending in Coquelin’s theory of crises 215–216, 256 their oscillations are disconnected from reserves an thus unrelated to crises (Juglar) 276, 277 withdrawals as the cause of the 1825 panic (Say) 214 withdrawn during crises 348 bank discounts during crises 215, 275, 279: a sharp rise indicates the crisis has begun (Juglar) 275 Bank of England 188 and crises in later 18th century 295–296

and the 1797 panic 68 and the 1825 panic 296–297 and the 1847 crisis 297–298 and the 1857 crisis 299 as a privileged bank 217, 220 averting crises by increasing discount rates 183 balance sheets analysed by Juglar 276 its policy, in particular during crises, discussed by Macleod 292–299 policy preceding crises, first half of the 19th century 337 Bank of France and the 1857 crisis 299 and the Currency principle 302 balance sheets analysed by Juglar 276 privilege of emission 217 Bank of Hamburg 299, 302 banking credit and issues of banknotes 232 reserves: and credit crises 336; and discount rates 278, 279, 298; deplete during crises 216; metallic reserve deplete as corn is imported in consequence of bad crops 255 banking policy centralization of bank reserves (Pownhall) 336 has effectively contained a number of potential crises 539 stabilization of purchasing power of money 368 stabilization policy after WW2 by means of rate of interest adjustments 422 Banking Principle largely accepted in late 19th century France 326 Banking school 303 monetary theory of crises 140 money control policy supported by Roscher 204 vs. Currency school 134, 349 banking system 142 1844 Bank Charter Act 217, 277, 292: and the 1847 crisis 297–298, 370; Macleod’s discussion 301; suspended during the 1857 crisis 299, 370 monopoly of the bank of issues and crises 277, 295, 296, 303: Bell 221; Boccardo 254, 256; Carey 220, 349; Coquelin 194, 215–216, 220, 254, 349; England vs. Scotland 220; Garnier 192, 194; Macleod 295, 296, 301, 303, 349; Mushet 220; Sinclair 220 see also free banking Baring, F. 61, 296, 303, 304 Barkai, K. 207 Barnett, V. 358, 359, 401, 405 KONDRATIEV, NIKOLAI DMITRIEVICH, entry in Encyclopedia of Russian history (Millar, 2004) 459 Barro, R. J. 471, 505, 520

620 Name and subject index Bartholony, F. 103 Bastiat, F. 212, 267, 270 Bath, W. P. 74 Baudrillart, H. 268 Baxter, R. 356 Bazard, S.-A. 171 Beauregard, P. 272 Bebel, A. 363 Beckerath, E. von 375 Beer, A. 376 Behrends, S. 481 Béjoint, H. 16, 21, 23 Bell, R. on the monopoly of the Bank of England 221 Benhabib, J. 156, 492 CHAOS AND BIFURCATIONS, entry in Business cycles and depressions (Glasner, 1997) 493, 496 Bénichou, C. 239, 246 Bentham, J. 227, 228 Benz, M. BUSINESS CYCLES—POLITICAL BUSINESS CYCLE APPROACH, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 153, 467, 472, 477 Béraud, A. 168 Berger, G. AVANT-PROPOS to Univers économique et social (Perroux, 1960) 23 Bergmann, E. von 141, 145, 221, 332, 368, 382 etiological classification of the theories of crises 141–142; followed by Spiethoff 140 on Herkner 162, 371 Bernard, Y. entries in Dictionnaire économique et financier (Bernard and Colli, 1975): CRISE (ÉCONOMIQUE) 162, 529; CYCLE 529 Bernstein, E. 139 Bert, P. 283 Berthelot, A. 320 entries in the Grande Encyclopédie (1886–1902): ÉCONOMIE POLITIQUE 322; LAVELEYE (ÉMILE) 322 Berthelot, M. 167 and the Grande Encyclopédie (1886–1902) 320 Bertrand, L. 323 Besomi, D. 92, 119, 121, 122, 123, 163, 186, 189, 193, 218, 221, 230, 236, 244, 246, 262, 265, 266, 281, 284, 303, 358, 383, 530, 545, 547 BUSINESS CYCLES, THEORIES, entry in International encyclopedia of the social sciences (Darity, 2008) 158 HARROD’S INSTABILITY PRINCIPLE AND TRADE CYCLES, entry in Encyclopedia of political economy (O’Hara, 1999) 163 typology of understandings of crises and cycles 158, 333

Besters, H. WIRTSCHAFTLICHE KONJUNKTUREN, entry in Staatslexikon (Görres-Gesellschaft, 1957–63) 98, 121, 147 Bethlehem, J. 428, 437 Beveridge, W. 95, 460 Bezobrazov, V. 357 Bianchi, G. 252, 254, 262 bimetallism 272 and crises 329, 349 Birou, A. entries in Vocabulaire pratique des sciences sociales (Birou, 1966): CRISE 528; CRISE ÉCONOMIQUE 528; CYCLES ÉCONOMIQUES 101, 528 Blackstone, W. 72 Blanc, L. BANQUE, entry in Dictionnaire politique (Duclerc and Pagnerre, 1842) 171 Blanchard, O. 464 Blanqui, A. 81, 119, 186, 193, 254 a moderate liberal 168 CRISE COMMERCIALE, entry in Encyclopédie des gens du monde (1833–44) 80, 119, 135, 154, 169, 177–189, 218, 254, 261: translated as Crisi commerciale, in Nuova enciclopedia popolare italiana (1841–49) 192, 254; translated and abidged as CRISI COMMERCIALE, in Nuova enciclopedia popolare italiana (1856–75) 192; translated and further abridged as CRISI COMMERCIALE, in Nuova enciclopedia popolare italiana (1875–88) 192 crises as temporary disruptions of the complex process of industrial growth 169 crises do not perform any positive function 182 on the internal and external causes of crises 180 on the periodicity of crises 179 on the propagation of crises 183 Blaug, M. 13, 22, 37 Block, M. 266, 283 life and work 267 PRÉFACE to Dictionnaire général de la politique (Block, 1863–64) 267 Blomberg, S. B. 476 BUSINESS CYCLES, POLITICAL, entry in International encyclopedia of the social sciences (Darity, 2008) 469, 473, 478 Boas, F. 412 Boccardo, G. 18, 79 a popularizer 253–254 CRISI, entry in Dizionario universale di economia politica e di commercio (Boccardo, 1875–77) 259–260 CRISI, entry in Dizionario universale di economia politica e di commercio (Boccardo, 1881–82) 259–260 definition of crisis 80, 255

Name and subject index 621 economic policy is impotent to remedy crises 257, 258, 261 entries in Dizionario della economia politica e del commercio (Boccardo, 1857–63): ABBONDANZA 252; ACCATTONAGGIO 252; ACQUE 252, AFRICANO COMMERCIO 252, AGGIOTAGGIO 252; AGRICOLTURA 253; AMERICA 252, 260; ANARCHIA 252, BANCA 220, 253, 255, 256, 258, 260, 262, BANCO 261; CINA 262; CREDITO MOBILIARE 262; CRISI 80, 154, 177, 220, 255–258, 260–261; DIZIONARI ECONOMICI E COMMERCIALI 249, 250; ECONOMIA POLITICA 252; LIBERTÀ NELLE MATERIE ECONOMICHE 252; MATEMATICA APPLICATA ALL’ECONOMIA POLITICA 254; MONETA 255, 256, 260; PEREIRE 262; PERIODICITÀ 258, 262; PREFAZIONE 6, 249–253, 261 life and work 253–254 on dictionaries and the fragmentation of knowledge 6, 21, 249–251 on the 1857 crisis 257 supports Jevon’s sunspots theory 259, 262 Boddy, R. 466, 476 Boese, F. 372 Bogaard, A. van den 429 Bogdanov, V. 451 Böhm-Bawerk, E. R. von 309, 435 crises must be the last, or next-to-last, chapter in a system of economic theory 140 Boislandry, F. L. L. 59 Boissieu, C. de CRISE ÉCONOMIQUE, entry in Dictionnaire des sciences économiques (Jessua et al., 2001) 506, 530 Bollmann, E. 186 Boltzmann , L. 460 Bonar, J. 335 BUBBLE ACT, entry in Dictionary of political economy (Palgrave, 1894–99) 72 Bönisch, A. KONJUNKTURTHEORIE, entry in Ökonomisches Lexikon (Bader, 1970–71) 532 Bonn, M. 413 Bontoux, P. E. 347 boom definition (Medio) 77 Bordas-Demoulin, J.-B. 325 Bortkiewicz, L. von 374, 377, 378, 383 Boswell, J. 79 Boumans, M. 435, 437 Bouniatian, M. 96, 110, 139, 140, 260, 358 Bourgeois, L. 320 Bowers, D. A. BUSINESS CYCLE, entry in Encyclopedia of business and finance (Bowers, 2001) 505, 507, 517, 519 Bowley, A. L. 406, 453, 460

Boyd, W. 61 Boyer, R. FLUCTUATIONS ET CROISSANCE, entry in Encyclopédie économique (Greffe et al., 1990) 155 Brand, F. J. 75 Brandis, R. BUSINESS CYCLES AND BUSINESS FLUCTUATIONS, entry in Dictionary of the social science (Gould and Kolb, 1964) 101 Brandt, B. F. 357 Braun, H. 363 Breban, L. 282 Brémond, J. CRISES ÉCONOMIQUES ET SOCIALES, entry in Dictionnaire économique et social (Brémond and Gélédan, 1992) 107, 529 Dictionnaire des théories et mécanismes économiques (Brémond and Gélédan, 1984): CROISSANCE ET CRISES 153; PRÉSENTATION 23 Brentano, L. 138, 139, 308, 309, 368 and Heinrich Herkner 362–366 Bresciani-Turroni, C. 459 long waves 445 Breton, Y. 326, 327 Briaune, J.-E. 221, 281 crises caused by fluctuations of crops 219 description of three phases of the cycle 121, 189 on causation and crises 187–188, 218 Bridel, P. 282, 283 Brinkmann, C. 310 Brochier, H. 530 Bronfenbrenner, M. 425 Brooke, W. 59 Brown, W. 103 Broyer, S. 391 Bru, S. 235 Bruch, R. vom 364, 372 Brunkhorst, H. CRISIS, entry in Blackwell dictionary of modern social thought (Outhwaite, 2006) 537 Brunnermeier, M. K. BUBBLES, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 74, 118 bubble a psychological phenomenon 73, 415 and financial crises 533 and rational expectations 73–74 and speculation 72–74, 415 and stock-jobbing 71 and the fundamental value of an asset 74 as indicating the fraudulent character of schemes 71–72 as referring to the inflated value of stocks 72–74

622 Name and subject index cumulative mechanism 72–74 definition: based on the fundamental value of assets 74; Blackstone 72; Bonar 72; Brunnermeier 74; Chitty 72; Kindleberger 73; Klotz 73; Nicholson 72; Oxford English dictionary 70; rational expectations 73; Spotton and O’Hara 73; Steimetz 74; Thorp 72; VNR Dictionary of business and finance 73 first usage in satyrical writings 70 Bubble Act 72, 118 Bücher, K. 364 Buchez, P.-J. 240 a cyclical theory of social evolution 172 on co-operative societies 247 originally a Saint-Simonian 171 budget cycles see political business cycles Bulgakov, S. N. 357 Bullion Report 295, 297, 299, 300 its authors on the 1793 crisis 296 Macleod’s view 292 Bunsen, R. W. 376 Burckhardt, J. crises and historical processes 536 Buret, E. 170 definition of crises 184 Burke, E. 90 Burkhardt, F. LEXIS, WILHELM, entry in Handwörterbuch der Sozialwissenschaften (Beckerath, 1956–68) 383 Burns, A. F. 123, 418, 424, 425, 455, 523 BUSINESS CYCLES, GENERAL, entry in International encyclopedia of the social sciences (Sills, 1968) 78, 109, 420–423, 547 definition of business cycle 99, 106, 122, 502, 531 emphasizes co-movement among individual economic variables 421 his overall description of the cycle runs along Mitchellian lines 421 business barometers Babson’s business barometer 408 Dutch Central Bureau for Statistics 431 Harvard barometer 431 Wagemann’s Institut für Konjunkturforschung 408, 431 business cycle and credit 425 and Konjunktur 96 and price fluctuations 76 and the normal state of the system 19: crises as an anomaly with respect to the cycle 86; cycle vs. equilibrium as the norm 389–391; cycles as calculable deviation from the norm 543, cycles as the norm 139, 333, 371, 389, 533; TuganBaranovsky (later version) 354; see also normalcy

as a discontinuity of the growth process 152, 153 as a movement around a position of equilibrium 437 as a switching between two consecutive positions of equilibrium 437 as an unbalanced relationship of supply and demand 98 as co-movement among individual economic variables 421 as deviations of output from its secular trend 100 as expression of the instability of the economic system 98 as fluctuations in the degree of utilization of productive capacity 98–99 as the evolutionary form of capitalism: reconciles the delusions of liberal optimism and of Marxist faith in breakdown 101, 139, 162; Schumpeter 101; Spiethoff 86, 389; view denied 106; vs. notion that equilibrium is the normal state of the system 389–391 as the stochastic component of macroeconomic time series 100 characteristic phenomenon of capitalist economies 100, 154; see also rhythmic nature of the development of capitalism definitions: descriptive definitions 99–100, 122; Dotsey and King 100; Encyclopedia of banking and finance 97; Fontana dictionary of modern thought 99; Gallarotti 101; Guitton 97, 100; Matthews 107; Medio 101, 489; Mitchell and Burns 99, 100, 106, 122, 416, 502 (criticized by real business cycle theorists 502, 522, 523; taken up by several dictionaries 99, 531); national traditions 19; New dictionary of economics 122; Portier 98; Romer 77, 509; Schumpeter 491; Snowdon and Vane 100; for etimological issues see also cycle driven by the internal contradictions of the economic system: Trotsky 448–449; Tugan’s antagonistic economic system 351 early usage of ‘cycle’ in economics 91–92 etymology of cycle 89–90 forecasting: see economic forecasting form taken by the contradictions of capitalism: Kalecki 139; Lexis 138, 139 interaction with long waves (Schumpeter) 453 phases: see phases of the cycle real vs. monetary causes 433, 436, 501, 505, 521: continental vs. Anglo-Saxon approaches 151 seemed to have died out by the 1960s 528 stylized facts: Kaldor 511; real business cycles 509–512 subjectivity of dating 509 synchronicity of: see synchronicity of oscillations

Name and subject index 623 see also cycles vs. crises (theories); cycles vs. fluctuations; Konjunktur; and regularity of business cycles business cycle (terminological issues) see cycle, and cycles vs. crises (terminology) business cycle modelling and nonlinear dynamics 148, 153, 496 calibration method 515–517 construction of artificial economic systems (Lucas) 515 linear vs. nonlinear 148, 485–486 mathematical formulation of business cycle theories 148, 153, 429, 434, 488: the possible kinds of motion of economic variables 430–431; vs. verbal reasoning 424 statics vs. dynamics 162, 434, 522 Tinbergen’s econometric modelling 429 vs. more complex dynamics 486–487, 490, 495, 498 business cycles and economic theory canons of pure theory vs. Spiethoff’s approach 391 business cycles measurement Burns 421 Harvard barometer 431 measurement without theory controversy 421, 424, 425: Haavelmo 424 Mitchell 415–416, 421 see also economic forecasting; business barometers; and institutes of conjuncture business cycles models and determinism 490 cobweb 152, 156: exemplfies neoclassical approach 529; Haavelmo 424; Hanau 435; Ott 244–245; symmetry in the explanation of turning points 245, 247; Tinbergen 432, 435; Wade 93, 244 general equilibrium 516 Keynesian dynamic models 159 linear functional equations with fluctuations sustained by exogenous shocks 430, 485, 489 overlapping generations 155 predatory-prey models 491 see also multiplier-accelerator model business cycles theories agricultural 143, 144, 146, 160, 161 and stagnation thesis 147 based on bottlenecks 432 based on disproportionality 147, 160, 353 based on institutional factors 143, 417 based on inventories 152 based on maladjustments 144 based on the correction of disturbances to equilibrium 147, 155 based on the life span cycle 432 classification schemes 141–146: according to the idea of progress and cyclical recourse in economics 161–162; according to the models of

thought 146–147; according to the origin of the fluctuation 143; atomistic approach vs. organic interdependence 160; based on how the disequilibrium between production and aggregate demand is explained 159; based on impulse factors and propagation mechanisms 155; based on the economic system’s capacity of self-adjusting 100, 156–159 (Balogh 150; epistemic implications 158; Hayek 122, 163; Keynes 122, 156, 163; Löwe 163); based on the general perspective on the working of the economic system 149; based on the nature of fluctuations 143; based on the remedies 143; by direction of research 159; by schools of thought 151–154; crises vs. cycles 137, 139–140, 142 (distinction loses relevance if the focus is on the general working of the economic system 149); driven by demand or by supply-side factors 158; etiological approach (adopts the mechanical principle that causes can be taken apart and analysed in isolation or recombined 145, 163; Haberler 144, 146; Hansen 144; Mitchell 143, 145, 417; Müller-Armack’s criticism 146; Patterson 143; Persons 143–144; Spiethoff 145; Tugan-Baranovsky on whether the cause of the phenomenon belonged to the domains of production, exchange or distribution 145, 348); exogenous vs. endogenous approaches 154–156 (free vs. forced oscillations 147, 424; linear vs. nonlinear models 148); focusing on the persistence of the cycle 152; mechanistic vs. nondeterministic approaches 160, 539–544; monetary and financial vs. production and exchange 160; orthodox vs. heterodox 158, 159; psychological vs. physical 160, 417; real vs. monetary determinants 155, 160, 421; Say’s law vs. general overproduction 150–151; the formal properties of models 147–148, 424; their multiplicity 133, 143, 145, 159; underconsumption vs. overinvestment 160 econometric models 152, 153, 159, 160 equilibrium business cycle theory 146, 155, 159, 501: and general equilibrium 501, 504; its static prejudice 490 Jevons’s sunspots 94, 104, 155, 161, 219, 259, 262, 332, 341, 342, 349, 417, 432, 504 Marx’s cycle of fixed capital reproduction 450 monetarist 146, 153 monetary theories 140, 144, 152, 160: monetary factors temporarily prevent the system to reach equilibrium 157 Moore’s weather theory 155, 417, 504 NBER empirical approach 146, 159, 417 over-indebtedness 144 overinvestment 140, 144, 146, 147, 155, 157, 160, 394, 396 overproduction 140, 157, 390, 415: Spiethoff 392–396

624 Name and subject index part of bourgeois economics 531–532 progressively substituted by more complex economic dynamics, since the 1980s 486–487, 490, 495, 498 psychological 143, 144, 159, 160, 396, 415, 417 purely exogenous 147 real business cycles 100, 146, 155, 159, 501– 525: economic policy 505; vs. theories emphasizing real factors 503–504 saving-investment relationship 143, 145, 151: interest rates mechanism 206 Schumpeter on technical progress 504 sunspot equilibria 153, 155, 156 syncretistic approaches 145: Balogh 151; Burns 421; Haberler 144, 163, 435; Herkner 367, 370; Mitchell 99, 417, 435; Spiethoff 392; Tinbergen 163, 431, 435–436 (by means of the construction of macroeconomic models 435; the reconciliation of opposite view is the moral duty of the social scientist 437); the econometricians 543 their multiplicity 133, 162 Tugan-Baranovsky’s loanable funds theory 347, 351, 353, 354, 450 underconsumption 144, 147, 157, 160, 415 underinvestment 146 volume of literature fluctuates cyclically 55–57, 93, 118 see also cycles vs. crises (theories); political business cycles; and schools of thought and theories of crises or cycles Buyst, E. KONDRATIEFF, NIKOLAI (1892–1938), entry in Europe since 1914. Encyclopedia of the age of war and reconstruction (Merriman and Winter, 2006) 451, 459 Byushgens, S. S. 404 Cadmore, S. A. 414 calibration method 515–517, 523 Calomiris, C. W. BANKING CRISES, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 70 Canard, N. F. 206 Canga-Argüelles, J. 236 Cannan, E. 336, 342 GLUT, entry in Dictionary of political economy (Palgrave, 1894–99) 58, 334, 336 impossibility of general gluts 334 Cannon, A. 402 capital and credit 291–292 become scarce at the end of every upswing 395 concentration 242

destroyed during crises 542, 545 marginal efficiency of: and stagnation thesis 65; the suddenness of crises 543 misused or unused capital as cause of crises 142 mobility: and the adjustment process between supply and demand 201; the increased fixity of fixed capital 367 Spiethoff’s indirect consumption 393 capital accumulation and business cycles 449: socialist theories 146 and income distribution 392 capital reproduction and business cycles 449 Cardoza, J. N. 94 Carey, H. C. 356 on the monopoly of the bank of issue 217, 349 Carey, M. 75, 186 Carpenter, L. 236 Carpenter, T. 60 Carville, J. 480 Cassel, G. 140, 359, 409, 451 on prices and production 446 catastrophe theory non-specialist reception 492 Catchings, W. 417 causality causal principle, and quest for a common cause of crises 215, 218 crises and the distinction between primary cause and occasional causes 218, 260, 276–277, 293, 304 crises are part of the causal system governing the cycle 88 distinction between data (conditions) and causes 144 immediate, occasional and actuating causes vs. persistent factors inherent to industry erupting intermittently (Jones) 142 causation and time-lags 161 direction of causation between real and monetary disturbances 507 in the chaining of phases of the cycle 75, 76, 92, 94, 120 individual causes vs. common cause 161, 185, 186–189, 333: and the understanding of crises as disconnected events vs. a law of crises 186, 191, 276, 333, 338–340; crises theories vs. theories of recurring crises 340; crises vs. cycles 142; possibility of formulating a law of crises 143, 218, 339; syncretistic approaches (Haberler 144; Herkner 367: yet the unevenness of income distribution is the decisive cause 370; Spiethoff 392; Tinbergen 431, 435–436; see also business cycle theories, syncretistic approaches) instability and indifference among causes of crises 142, 219

Name and subject index 625 multiple causation in business cycle theories 144, 161: different authors emphasize different causes 144; possibility of synthesizing different views 144, 145, 417, 421, 431: and the impulse-propagation distinction 431, 436 notion of crisis as a perturbation and the quest for the causes of disturbance 186, 193: and their removal 192 persistent vs. intermittent factors: Coquelin 215, 219; Haavelmo’s free vs. forced oscillations 148, 424; Jones 142, 221; Ott 83 the etiological taxonomy of crises and cycles theories 141–146: adopts the mechanical principle that causes can be taken apart and analysed in isolation 145; none of the causes is privileged 145 theories of crises vs. theories of cycles 140, 142, 333 Cecen, A. A. CHAOS THEORY, entry in International encyclopedia of the social sciences (Darity, 2008) 495, 498 ceilings and floors 160, 432 Hicks 486, 488, 489 Central bank as lender of last resort 300, 303–304, 539 crises and movements of discounts and reserves (Juglar) 274 issuing policy and crises 138 prevention of crises by means of control of the metallic base and the rates of discount and interest (Laveleye) 327 ratio of reserves to issues 257 reserves 257, 299, 304: and containment of bankruptcies 180; and issues of paper money 326; and trade imbalances 278, 284; deplete during crises 216, 273; replenish during liquidation 275; seasonal fluctuations 347; taken by Juglar as indicators of the phases of the cycle 276, 282 see also Bank of England; Bank of France; and Bank of Hamburg Central Bureau of Statistics (The Netherlands), department of Business cycle research Tinbergen 429 Cernuschi, A. 24 Chailley, J. 266, 269, 283, 284 comparing the Nouveau dictionnaire d’économie politique (Say and Chailley, 1891–92) with Palgrave’s Dictionary of political economy 34 Nouveau dictionnaire d’économie politique (Say and Chailley, 1891–92): INTRODUCTION 6–7, 269, 269–271; PRÉFACE 269; SAY (LÉON, JEAN-BAPTISTE) 269 Chalier, C. 377 Chalmers, T. 138 on overproduction 136–137 chaos 486

and amplitude of fluctuations 496 early contributions in economics 486 empirical relevance 493 in standard equilibrium models 493 more realistic than stable equilibrium 490 Chappell, H. 471, 476 Chayanov, A. V. 403 Chetverikov, N. S. 404, 406 Chevalier, M. 267, 288, 289, 292 Cheysson, É. 267 Chi, E. H. 23 Chiarella, C. 487 Chipman, J. 206 Chitti, L. 221 definition of financial crises 184 Chitty, J. 72 Chomel, N. CYCLE, entry in Dictionnaire oeconomique (Chomel, 1732) 121 Chrystal, K. A. 468 POLITICAL BUSINESS CYCLE, entry in Business cycles and depressions (Glasner, 1997) 468, 477 Chuprov, A. I. 345, 357 Ciocca, P. classification of business cycle theories 152, 163 CRISI ECONOMICA E FINANZIARIA, entry in Enciclopedia delle Scienze Sociali (Bedeschi, 1991) 89, 163, 538–539 CRISI ECONOMICHE, IL NOVECENTO, entry in Mondo contemporaneo, Il. Enciclopedia di storia e scienze sociali. Vol. VIII, Economia e storia (Carmagnani and Vercelli, 1978) 65, 152, 533 on crises and cycles as distinct logical categories 538–539 Cipolletta, I. CONGIUNTURA ECONOMICA, entry in Enciclopedia delle scienze sociali (Bedeschi, 1991– 2000) 97 Ciriacy-Wantrup, S. von 455 Clark, J. B. 412, 459, 460 long waves 444 Clark, J. M. 95 Clarke, H. 459 long cycles 444 class conflict 540 and long waves: class struggle intensifies in the upswing (Kondratiev) 459; entrepreneurs vs. rentiers (Pareto) 445 and political business cycles 466 in Marx’s theory of crises 89, 161, 537, 541–542 Rosa Luxemburg’s theory of crises 542 Clausing, G. 392 Clavière, É. 59 Clément, A.

626 Name and subject index INTRODUCTION to Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 209, 210, 219 Clinton, W. J. 480 Cobden, R. 270, 274 Cockburn, R. on causation and crises 187, 218 Cogley, T. 512 Cohen, G. 481 Cohen, J. N. LONG-WAVE THEORY, entry in International encyclopedia of organizational studies (Clegg and Bailey, 2006) 66, 453 Cohn, H. 139 Colacchio, G. 246, 358, 496 Coleridge, S. T. 11, 23, 24 Colli, J.-C. Dictionnaire économique et financier (Bernard and Colli, 1975): CRISE (ÉCONOMIQUE) 162, 529; CYCLE 529 Colm, G. 413 Colquhoun, P. 59 commercial crisis expression introduced in economic literature by Sismondi 79 most common expression for crises in the middle of the 19th century 79 see also crisis competition perfect competition and Say’s law 201 complexity 486, 490 and long waves 447 Comte, A. 321, 460 Comuzzi Pighin, P. 261 Condillac, É. B. de 227 conditional convergence theory 498 confidence 207 and credit 83, 85, 395 and economic policy 204 banking system: and panics 538, 539; lender of last resort 300, 539 crises and loss of confidence 204, 213, 230, 255, 256, 258, 260, 298, 328, 395 conjuncture 96–97 as configuration of the various elements of national economy 97, 405 as detrended business cycle 405 as indicating the fluctuations of economic conditions 96, 405 as indicating the variable position of markets 97, 405 definition, usage and etymologyy: Cipolletta 97; Konyus 404; Kuznets 96, 416; Oxford English dictionary 96; Sauvy 97 in the Soviet economy 405 see also Konjunktur Conrad, J. 375

joint editor of the Handwörterbuch der Staatswissenschaften 361, 374–375, 377, 385, 387 to Handwörterbuch der VORWORT Staatswissenschaften (Conrad et al., 1890–95) 386 Considérant, V. 173 consumption and production: and Say’s law 194, 200; equilibrium and crisis 82, 120, 138, 178, 185, 367–370, 378–379 (overproduction (Spiethoff) 393); gap covered by military expenses (Herkner) 369; necessity of their proportional development 136, 197, 200, 312, 313; prevention of crises by balancing consumption and production 171, 178, 183; the gap is closed by balance of foreign trade or by stocks (Spiethoff) 390; the latter adapts to the former 88, 194, 242 and stagnation of trade 63–64 declines at the end of prosperity 418 direct and indirect consumption, and overproduction (Spiethoff) 393–395 drives the recovery after the crisis causes a drop in prices 192 fluctuates procyclically 510 of luxury goods 257: subject to wide fluctuations 242; vs. parsimony and new capital formation 203 taxation, private consumption and public goods 475 Cooke, L. 90 Cooley, T. F. 513, 515, 521 BUSINESS CYCLES, entry in Social science encyclopedia (Kuper and Kuper, 2004) 100 co-operativism 247 possibility of organizing production and distribution to avoid crises 245 Coq, P. 221 Coquelin, C. 18, 135, 136, 177, 220, 233, 277, 280, 303 life and work 211–212 co-edited the Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 209 crises recur almost periodically 213, 217 definition of crises 80, 120, 213 entries in Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53): BANQUE 211, 212, 215; CRÉDIT 212; CRISES COMMERCIALES 17, 80, 119, 134, 135, 154, 169, 188, 190, 211, 212–219, 234, 256 influence on Boccardo 220, 254, 256, 259, 260, 261, 262 on contemporary crises theories 134 on Say’s explanation of the 1825 crisis 214 on the monopoly of the bank of issue 194, 212, 215–216, 220, 234, 254, 256, 349

Name and subject index 627 overtrading theories of crises leave cause of speculation unexplained 214 quest for a common cause explaining the shared traits of all crises 215 the principle of causation and a common explanation of crises 188 Corbet, T. 93, 121 Corn laws amplified the price fluctuations due to fluctuations in crops 58, 102 Cornwall, J. LONG CYCLES, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 453, 456 Cory, I. P. causation and crises 188, 218 Cotta, A. entries in Dictionnaire des sciences économiques (Cotta, 1969): CRISE 528; FLUCTUATION 528 Coullet, P.-J. 272 Courcelle-Seneuil, J.-G. 178, 184, 262 CRISE, entry in Dictionnaire politique (Duclerc and Pagnerre, 1842) 83, 119, 170–171, 178–189, 218 crises as a suspension of business due to some disturbance 170 crises as the cumulation of the fluctuations of individual businesses 183 fragility of the economic system and necessity of regulation 170 on the causes of crises 181 propagation of crises 183 Cournot, A.-A. 32, 211, 254, 452, 460 Cozzi, T. 492 CICLI ECONOMICI, entry in Enciclopedia delle scienze sociali (Bedeschi, 1991–2000) 101, 490–492 credit abuse of credit 230, 234, 256, 335, 339: common condition of all commercial crises 215, 293–294; see also credit: crises theories based on credit-speculation-overtrading and business cycles 425 and capital 291–292 and crises 120, 134, 142, 170, 175, 191, 230, 233, 255, 275, 293–294, 314, 326, 335, 339, 340, 347, 350, 354, 378, 395–396 and speculation 142, 163, 293, 316, 328, 348, 350, 378, 395, 432, 539 and the Currency Principle 300 crises theories based on credit-speculationovertrading 85, 86, 91, 92, 103–104, 134, 135, 136, 150, 180, 181, 189, 202, 214, 218, 219, 256, 277, 280, 293–294, 303, 337, 378, 539 definitions: Macleod 291; Mora 232 financial institution not well adapted to the

changes in economic, political and technological conditions of early 19th century 175 is purchasing power that has to be redeemed 294 its instability 83, 85, 142, 152, 183, 256 necessary condition for crises 120, 134, 204, 213, 256, 277 stimulates production, but can also lead to crises 204, 213, 232, 234, 256, 293, 326 sustains the cumulative movement in the upswing 395 credit cycle 335, 340, 347, 350 definition (Baker) 92 Mills 94, 332, 340, 341, 342 crises and credit 120, 134, 142, 170, 175, 213, 230, 233, 255, 256, 275, 277, 293–294, 326, 335, 339, 340, 347, 350, 354, 378, 395–396 and depletion of metallic reserves 216, 273 and fluctuations in the stock exchange 138, 378 and gluts 120 and management of the currency 134, 214 and panics: see panic: and crises and reform 537 and the instability of capitalism 19, 89, 105, 538, 545 and uncertainty 83, 89, 184, 313, 543 are associated to growth, but not unavoidably (Laveleye) 326, 328, 330 are rooted in the previous prosperity 105, 189, 266, 277, 280, 526 as a pathology 80, 81, 89, 171, 190, 333, 336, 389, 530, 533–534, 536, 545, 546: vs. prosperity as health 63, 118, 134, 186 as a psychological phenomenon 142, 143, 313, 415 as a qualitative transformation 89, 535, 536, 544, 547: analysis requires the mathematics of chaos or catastrophe theories 530 as a traverse 88 as aberrations or abnormal phenomena 81, 110, 143, 152, 178, 186, 190, 333, 341, 359, 532, 533–534, 543, 545: no generalization can be inferred from any similarity between them 338–340; their causes are exogenous 333, 354; see also crises and economic theory, and normalcy as an indicator of decline of the social system 173–174 as break of equilibrium 350, 354, 529, 536: Aftalion 526 as consequences of human behavior 336: vs. a pathology of capitalism 317, 335 as disturbance of the economy 77, 80–81, 86–87, 169, 178, 334: can be dismissed as theoretically irrelevant 111, 389 as hard times 82, 84

628 Name and subject index as interruption of business 83, 84, 139, 170, 178, 185, 213, 230, 243, 275, 341 as interruption of prosperity 81, 86, 88, 390, 444 as malfunctioning of the economic system (Birou) 528 as paralysis of credit 255 as plethoric reversal 173 as reversible processes (Kondratiev) 448 as speculation manias 214 as suspension of payments 83, 84, 120, 136, 178, 184, 185 as the condition for the subsequent recovery 63, 91, 121, 204 as the descending phase of the cycle 546 as the point of intersection between prosperity and depression: Aftalion 121, 382, 526, 528; Burns 547; Lescure 88, 121, 382, 528; Lexis 378, 382; Mitchell 382 as the result of the contradictions of capitalism 162, 349, 529, 531, 532, 537, 542, 546: Marx and the Hegelian notion of contradiction 537 as the stoppage in the rise of prices 84, 88, 279 as the summation of fluctuations 104, 183 as the upper turning point of the cycle 87, 88, 121, 152, 382, 529, 530, 531, 546. See also crises: as the point of intersection between prosperity and and depression characterized by loss of confidence 204, 213, 230, 255, 256, 258, 260, 298, 328 correct overproduction 379, 382 deep contraction of production and investment 538 destruction of capital 542 discontinuity within the cyclical evolution 86, 89, 110: Ciocca 533; Guitton 527; Kindleberger 533 disorder of the mechanism of exchange 326, 327 essentially disorderly events 545 followed by prosperity by natural reaction 64, 182 general liquidations (Juglar) 275 intrinsic to capitalism: Juglar 449; Kondratiev 449; Marx 449, 532; Tugan-Baranovsky (late version only) 354 metaphors for: see metaphors for crises monetary: as distinct from commercial crises 185; not an autonomous category distinct from commercial crises 256, 260, 262, 273 necessary for the working of capitalism: as a correction of the excesses of prosperity 182, 190, 192, 275, 378, 382; Marx 537; Overstone 93; the optimistic liberals 138, 370 of disproportionality 134, 350, 353, 354, 540, 542 outcome of a perturbation 19, 80–81, 162, 190, 213: and the quest for the disturbing factor 186,

193, and its removal 192; perturbation of equilibrium 19, 81–82, 87, 120, 141, 142, 161, 178, 200, 312, 350, 354, 366, 530, 532, 540, 542; and the rejection of Say’s law 136, 162; more likely as the division of labur proceeds, domestically and internationally 367; to the regularity of exchanges 172, 178 overproduction crises: see Say’s law; glut controversy; and crises theories: overproduction periodicity of 243, 245, 258, 262, 273, 293, 303, 326, 332, 337, 338–341, 342: and forecasting 340; and the relationship of crises, equilibrium and cycles 334; and their prevention 294; and their remedies 294; disrupted by prolonged depression of the 1870s 327; prove the possibility of general overproduction 241, 245; see also periodicity: of crises possibility of: and stability of equilibrium 148, 150, 530–531; Keynes 531; Malthus 531; Marx 154, 531, 541–542; requires counteracting or suspending Say’s law 150; Sismondi 531; the heretic tradition 545; Thornton and Bagehot tradition 538; vs. their necessity 154 price to pay for growth 192, 278, 281, 514, 528, 537 reaction to abnormal prosperity 68, 92, 275, 378 reaction to an anomaly or an excess 182, 190, 192 regularity of their recurrence 85, 92: and the emergence of the theory of cycles 92–94, 527 re-launch the economy: by eliminating superfluous consumption and stimulating new capital formation 203; induce to rationalize the production process 203 remedies: see economic policy restore equilibrium 19, 266, 532: speed decreases with fixity of fixed capital 367–368 result of some systematic institutional friction 216–217 short lived 348 their suddenness 104, 443, 526: Juglar 275, 280; Keynes 543; Overstone 134; tempered in postwar years 528 their temporary character 81, 120, 169, 178, 179, 182, 188, 189, 191, 192, 213, 220, 255, 279, 333, 334, 340, 380, 540, 542: vs. the sluggishness of depressions 366, 367 their violence 82, 86, 110, 396, 527, 542 typologies 79, 180, 262: Boccardo on monetary vs. commercial crises 260, 262; Herkner 366; Juglar on monetary and commercial crises 273; Laveleye on commercial, monetary and industrial crises 327; Lexis on speculation, credit, money and production crises 378; need of methodological exactness 260; Roscher on production crises vs. sales crises 198, 378; Tugan-Baranovsky’s

Name and subject index 629 classification depending on the sector in which equilibrium is broken 347, 353; see also commercial crisis, economic crisis, and financial crisis vs. normal fluctuations in trade 104 see also crises and cycles; cycles vs. crises (theories); financial crisis; and recession vs. crisis crises and cycles 539–544, 546 crises as a phase of the cycle 88, 89, 139, 140, 351, 354, 486, 495–496, 526, 527–531, 540, 543, 545: characterized by violence and suddenness (in contrast to the smoothness of recessions) 527, 544, 546 crises as endpoint and starting point of the cycle of crises 532 crises can arise independently of the cycle, and in either phase of the cycle (Ciocca) 538 notion of ‘cycle’ encompasses the notion of ‘crisis’ 527, 531 see also crises, discontinuity within the cyclical evolution the periodicity and regularity of crises has led to the notion of cycles 93, 143, 527 theoretical autonomy of crises from cycles 529, 530, 535, 536, 543: dictionary entries on crises 86–87, 89, 538–544; different epistemological statute (De Vecchi) 89, 539–544; logical independence of crises from cycles (Ciocca) 89, 538–539, 544; Marx 532, 533, 536, 545, 546; Spiethoff 86; the ultra-cyclical character of crises (Kindleberger) 533, 547; theories of recurrent crises 545; Wicksell 543 crises and depressions 120 and Laveleye’s distinction between commercial and monetary crises 328 crises as the minima of the phases of depression (Birou) 528 follow the same laws 119 long depression of the 1870s seemed to invalidate the recurring nature of crises 101, 327, 348 suddenness and violence vs. sluggishness and persistence 75–76, 119: acute vs. chronic disease 85, 328, 366; due to technological change (Herkner) 367; terminological change in the late 1870s 75, 84, 330, 372 crises and economic theory 544–546 crises affect the self-understanding of the concerned subject (Marx) 537 crises are difficult or impossible to integrate within mainstream economics 540, 545: Löwe 151; the equilibrium theorem 146, 150 crises are the test for the ‘truth’ of a theory 154 crises as a major puzzle for economics 443 crises as a residual area for economic theory 87, 150 crises as result of a temporary suspension of the normal economic laws 339

crises as the main locus of doctrinal clashes 112, 154 crises as theoretical deviations 152, 534, 544 crises as uniform phenomena with historical differences between them 388 late 19th century crises theories vs. the normal working of the economy 161 Say’s law rules out crises in classical economic theory 152, 161 the recurrence of crises must be consistent with economic laws 140 the theoretical irrelevance of crises if understood as an anomaly 111, 332, 389 crises theories agricultural 140, 150, 181, 219, 255, 294, 352 and Say’s law 140, 150 Banking school 134, 243 based on abnormal human behaviour 529 based on credit-speculation-overtrading 85, 86, 91, 92, 103–104, 134, 135, 136, 150, 163, 180, 181, 189, 202, 214, 218, 256, 277, 280, 293–294, 303, 337, 378, 539: a tension-relaxation mechanism 219; Coquelin’s criticism 214 based on disproportionalities 140, 145, 540 based on misdirected development of productive forces 214 based on the tendency of the yield of capital to fall 140 based on the unequal distribution of income 140, 145 classification schemes: Banking vs. Currency schools 134, 135, 349; by schools of thought 151–152; chronological approach 152; crises vs. cycles 137, 139–140, 142 (and causation 142); etiological approach 141–146 (Bergmann 141–142; Diehl 145; Haberler 144; Hansen 144; Jones 142; Mitchell 143, 417; Patterson 142–143; reaches the very essence of the theories 141; Spiethoff 140; Tugan-Baranovsky 145, 348–349); liberals vs. socialists 138–139, 162, 370 (and the cycle as a middle way 138–139); possibility vs. necessity of crises 154; Say’s law vs. general overproduction 135–137, 150–151, 158; their multiplicity 133 crises as disconnected events vs. general laws of crises 186–189, 218–219, 265: and the causal principle 187; Say’s law 190 Currency school 134, 243 disappointment of expectations (Ott) 243–245 Goodwin’s Marx-Keynes-Schumpeter synthesis 163, 539 miscalculations and mistakes 82, 100, 135, 146, 170, 180, 256, 528 mismatch of individual decisions and their collective outcome 244 monetary theories 140, 145, 150, 280, 327 multi-causal explanations of individual crises

630 Name and subject index 185, 186–189: Garnier 191–192; Juglar’s criticism 280; the ‘old’ Palgrave approach 333, 337 overproduction 353, 415, 526, 529: general 135–137, 138, 140, 141, 145, 147, 157, 241, 244, 390, 527 (gained some weight at the end of 19th century 136; in 19th century Germany 136, 201, 367–371, 378–381; largely denied in 19th century Britain and France 135; the glut controversy 136, 138, 333, 370); partial 135–137, 138, 157, 191, 334, 380; partial vs. general 201, 315, 334 physical constraints of production methods 528 political interference 187, 368: protectionism 180, 181, 191, 245, 254, 256, 257, 368 relying on chance movements 146, 280 the Thornton-Bagehot tradition 163, 538 their multiplicity 133, 162 theories of recurrent crises 266, 333, 534: and use of the term ‘cycle’ 91; as distinct from theories of the cycle 218, 266, 284, 383, 545; crises as autonomous from cycles 545–546; Marx 532, 536, 545, 546; periodicity of crises 91, 261, 340; questioned when long depressions seemed to undermine the periodicity of crises 327 underconsumption 140, 145, 147, 150, 154, 157, 314, 349, 415, 528 volume of literature fluctuates cyclically 55–57, 93, 118 see also cycles vs. crises (theories), and schools of thought and theories of crises or cycles crises vs. fluctuations crises as the result of cumulated fluctuations 105, 183 ordinary fluctuations vs. crises 185 crisis definitions: Arndt 86; Bachi 88; Blanqui 80, 169, 178; Boccardo 81, 255; Brockhaus Conversations-Lexikon 81; Buret 184; Burns 109; Coquelin 80, 120, 213; Courcelle-Seneuil 83, 178; dictionaries preceded the general literature 16, 80, 184–186; Diehl 87; Dupin 82, 178; Encyclopedia of social reform 85; Fowler 83; Garnier 81; Hadley 85; Herkner 82, 366; Hilderth 184; J. S. Mill 120, 136, 184; Jahn 120; Juglar 83–84, 275, 279; La Farelle 185; Laveleye 83, 327; Lemonnier 172, 178; Lescure 88; Lexis 81; Meyers Konversationslexikon 83; Michel 178; Momigliano 88; Mora 230; Munn 88; national traditions 19; Ott 83; Oxford English dictionary 78; Pasquino 535; Pierers Universal-conversations-lexikon (1857) 83; Pierers Universal-conversations-lexikon (1890) 81; Piernas y Urtado 81; Raffalovich 81; Schäffle 82, 136; Spiethoff 86; Tooke 185; TuganBaranovsky 350, 354; von Halen 82; Wagener 83; Wagner 84; White 81; with reference to cycles 85 early usage of the term 79, 183, 536 etymology 78, 255, 366, 535, 537, 547, and the notion of crisis as a breaking point 84

extremely flexible term 547 revival in the usage of the term in the early 21st century 80, 112, 526, 544 term recorded in dictionaries: early appearances 18, 80–84; substituted by ‘cycles’ early in the 20th century 19, 85–88, 526; the revival of crises at the end of the 20th century 19, 89, 526, 527 the term in French and Italian has a more varied meaning than in English 80, 89 vs. Konjunktur 87 Crotty, J. 466, 476 Crucini, M. INTERNATIONAL REAL BUSINESS CYCLES, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 506, 507, 512 Cukierman, A. 470, 476, 481 cumulative mechanisms bubbles 72–74 in the upswing and downswing 418 speculation 72–74, 91, 280 the discrepancy between the development of productive forces and demand 529 the downswing 78, 183, 213, 433 the normal progress of capitalism 161, 533 the upswing 91, 120, 394, 433 Cunliffe, J. 323 currency Banking school vs. Currency school 134, 138, 349 circulation of banknotes at time of crises 215, 301 circulation of banknotes before crises 338 credit and banknotes 232 credit crises and cash reserves 336, 338, 348 debate on bimetallism in the late 19th century 349: Laveleye 329 fluctuations in its value, and panics 67 issuing policy and crises 134, 138, 181, 182, 185, 214, 243, 292, 296, 303, 326, 349 issuing policy and foreign exchange markets 278, 284 metallic reserves and issues of paper money 326 monopoly of the bank of issue 192, 194, 215–216, 220, 254, 256, 257, 277, 295, 296, 301, 303, 349 Currency Principle 326 and the 1763 crisis 295 Macleod’s disagreement 300 Currency school 370 and issuing policy 138 monetary theory of crises 140 the currency principle 303: and the 1844 Bank Act 300; Macleod’s disagreement 300 vs. Banking school 134, 349 Currie, J. 59

Name and subject index 631 Custodi, P. 219 cycle as a single complete execution of a periodically repeated phenomenon 90–92, 94, 121, and the theories of recurrent crises 91 as a succession of recurring events in a specific order returning upon themselves 90, 92–94: first appearance in dictionaries in this sense due to Tugan-Baranovsky 351 as an interval of time during which a sequence of events occurs 90, 122: in dictionary entries 97 compounds: business cycle 95 (and Mitchell’s institutionalism 95); capitalistic cycle 352; commercial cycle 94; cycle of trade 94; economic cycle 95; trade cycle 94 definitions: American heritage 90; Baker 92; Grand Robert 90; Oxford English dictionary 90; etymology 89–90 Tinbergen’s typology of cyclical movements resulting from mathematical models 431 cycle’s length 20 classification of political business cycles 476 Hyde Clarke on decennial cycles and 54-years cycles 444 in Mitchell’s and Burns’s definition 502 periodic vs. non-periodic cycles 123, 420 Schumpeter’s three-cycles scheme 281 the recognition of cycles of different length and the nature of ‘the’ cycle 161 see also frequency of oscillations; long waves; Kitchin cycles; and Juglar cycles cycles and growth see growth and cycles cycles vs. crises ( theories) 498, 529 bourgeois economics vs. Marxism 89, 531–532, 546 focus on the overall movement vs. focus on crises 545: Marx 545 mechanistic vs. non deterministic approaches 89, 112, 539–544 old and new theoretical approaches 19, 87–88, 120, 137, 139–140, 142 quest for causal factors 140, 333 the notion of order 545 theories of crises superseded and generalized by theories of the cycle 85, 87, 139–140, 389: the cycle’s dynamics encompasses crises 87, 122, 162, 529; when the notion of crisis was subsumed under the notion of cycle 139, 527 cycles vs. crises (terminology) 221, 544 Aftalion 526, 544 and autonomy of concept of crisis 530 changing preferences in the usage of terms 80, 353–354, 526–527, 544, 546, 547: and the actual occurrence of crises 80, 544; general literature and dictionaries 85; Herkner (3rd edition) 371;

Spiethoff 389; Tugan-Baranovsky (3rd edition) 353–354 cycles have supplanted crises in German language 89, 531–532 French language 527–531 mainstream vs. unorthodox approaches 544 Mitchell 88, 544 the term cycle exaggerates the regularity of the phenomenon 416 Tugan-Baranovsky 353–354 cycles vs. fluctuations 333 and growth 513 and nonlinear dynamics 148 cycles can be distinguished from the fluctuations with which they co-exist 420 determinism 112 regularity 88, 101, 105–107, 489, 510, 513, 524, 528, 545 rhythmic vs. stochastic dynamics 100, 105–107, 503, 509, 523, 545: origin of the expression ‘business cycle’ 95 the causal chanining of phases 77 cyclical crisis 532 definition (Laibman) 534 Marxist theory of crises 532 see also crises theories: theories of recurrent crises D’Alembert, J. B. Le Rond 320 D’Argenson, R. L. de Voyer de Paulmy 270 Dalen, H. van 430 Dal-Pont Legrand, M. 283 Dangel-Hagnauer, C. 120 Danielson, N. F. (Nikolay-on) 347 Danson, J. T. 337 Dantès, A. 246 Darity, W. A. Jr. INTRODUCTION to International encyclopedia of the social sciences (Darity, 2008) 23 Darwin, C. 272 Day, R. H. 156, 486, 492 de Bona y Ureta, J. E. 219 de Luca, G. CICLO ECONOMICO, entry in Nuovo dizionario di economia (de Luca, 2000) 153 CRISI ECONOMICA, entry in Dizionario di Economia Politica (de Luca et al., 2006) 546 De Vecchi, N. CRISI, entry in Dizionario di economia politica (Lunghini, 1982–90) 89, 160, 391, 539–544 De Vivo, G. 32, 211 De Wolff, P. see Wolff, P. de De Wolff, S. see Wolff, S. de Debray, R. 547 debt-deflation effect 202

632 Name and subject index Defoe, D. 57 Della Bona, G. 119 Delors Report 480 Demoustier, D. 246 depression a low or very low level of prices or production 75 and gluts 76 and stagnation, in Russian laguage 358 and unemployment 77, 225 as a particularly deep contraction of economic activity 78: vs. recession 78, 110 as a specific phase of the cycle 76, 77–78 as deviations from standard economic theory 534 as phase of long waves 78, 445 as the downswing 76 definition: Burns 78; Medio 77; Millington 76; Mullineux 78; Munn’s Encyclopedia of banking and finance 77; no accepted definition has been formulated (Keen) 78; Ohanian 534; Oxford English dictionary 74; Pollard 78; Price 76 its persistence 75–76, 119, 348 marked by financial crises 78 pathological phenomenon 534 used in contraposition to prosperity 75, 86, 96, 97, 107, 121, 542: and awareness that good and bad trade alternate 75; cyclical view 76 see also crises and depressions, and phases of the cycle Desai, M. J. 497 Descartes, R. 12 Desroches, H. 246 Destutt de Tracy, A. L. C. 229, 236 determinism and expectations 89, 543 and the Marxian theory of crises 529, 532, 536 business cycles and history 391 crises vs. cycles 89, 112, 539–544 cycles vs. fluctuations 112 deterministic chaos vs. stochastic models 494 Keynes 89, 543 Marx vs. Marxists 542 of neoclassical growth theory 514 possibility of discounting business cycles 490 regularity of the cycle resembles natural laws 93 tranquillizing effect of knowing that bad times are followed by good times 112 development of capitalism assumed to be of a linear and cumulative kind, in the fist half of 19th century 161 only Marx and Schumpeter incorporate linear and cyclical time at once, and history 161 through a cyclical course 161 Di Matteo, M.

LONG-WAVE THEORIES, entry in Business cycles and depressions (Glasner, 1997) 445 Diamond, P. A. 492 Dickens, E. POLITICAL BUSINESS CYCLES, entry in Encyclopedia of political economy (O’Hara, 1999) 468, 481 dictionaries see encyclopedias and dictionaries Diderot, D. 24, 320 Diehl, K. 376 entries in Wörterbuch der Volkswirtschaft (Elster, 1931–33): KONJUNKTUR, KONJUNKTURTHEORIE 87, 121, 122, 140, 376; KRISEN 87, 145, 376 Dietzel, H. ERNTEN (ERNTZYKLUS UND WIRTSCHAFTSZYKLUS), entry in Handwörterbuch der Staatswissenschaften (Conrad et al., 1909–11) 159 Diewert, W. E. KONYUS, A. A., entry in New Palgrave dictionary of economics (Eatwell et al., 1987). 404 Dimand, R. W. MACROECONOMICS, ORIGINS AND HISTORY OF, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 107 discount rates and crises 304: manipulation of discount rates is insufficient to prevent crises (Macleod) 301; should be raised to prevent them (Laveleye) 327, 329; the Bank of England 183, 298 and foreign drain of reserves 301 and prices of precious metals 279 and speculation 292, 315 and the expansion of credit: in normal times vs. panics 68 Bank of England and crises 301 increase as banks try to protect their reserves during crises 278, 279, 298, 348 disequilibrium dynamics and nonlinearity 490 and time-lags 435 Tinbergen on business cycles and disequilibrium between income and expenditure 432–434 Disraeli, B. 93 distress 91 a recurring state 60 definition: Grand Robert 59; Oxford English dictionary 59 in relation to banking and finance 59 the term indicates the consequences of crises rather than characterizing their nature 60, 185 usage: early 59; plural 60; referred to individuals 60; referred to the entire nation 60 used in contraposition to ‘prosperity’ 59, 121 Divisia, F. 453 Dore, M. 487

Name and subject index 633 Doren, C. van 12 Dorfman, J. 413 Dotsey, M. BUSINESS CYCLES, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 7, 100, 498, 501, 510, 513, 514, 518, 519, 520 Douglas, C. H. (Major) 162 Downs, A. 464, 467, 481 Drahokoupil, J. 479 entries in Encyclopedia of governance (Bevir, 2007): BUSINESS CYCLE 122, 154; POLITICAL BUSINESS CYCLE 480 Drazen, A. 471, 481 entries in New Palgrave dictionary of economics (Durlauf and Blume, 2008): POLITICAL BUDGET CYCLES 471, 479; POLITICAL BUSINESS CYCLES 469, 470, 478, 479 Drees, W. Jr. 428 Dreyfus, F.-C. 320 on physical laws and social laws 322 PRÉFACE to the Grande Encyclopédie (1886–1902) 320–321, 330 Duckett, W. 167 Ducos, G. KONDRATIEFF, NIKOLAI DMITRIYEVICH, entry in Business cycles and depressions (Glasner, 1997) 444, 459 Duffy, H. 425 Dühring, E. K. 309 Duijn, J. van 457 KONDRATIEFF, NIKOLAI DMITRIYEVICH, entry in Business cycles and depressions (Glasner, 1997) 444, 459 Dullaart, M. H. 436, 438 Duncan, W. B. 61, 162, 221 Dunoyer, B.-C.-P.-J. PRODUCTION, entry in Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 213 Dunoyer, C. 168 Dupin, C. 179, 183, 189, 193 alternation of convulsive progress and sudden convulsion due to excess of individualism and competition 169 CRISE COMMERCIALE, entry in Encyclopédie du dix-neuvième siècle (1838–53) 82, 119, 169, 178–189, 193, 218 crises as the result of irregularities in trade 193 on the causes of crises 181 the propagation of the speculation fever 183 Dupont-White, C. 323, 324 Durbin, E. F. M. crises stimulate the literature on crises 56 Durkheim, É. 460 Duroselle, J.-B. 246, 247 Dutt, A. K.

STAGNATION, entry in International encyclopedia of the social sciences (Darity, 2008) 62, 65 dynamics see economic dynamics Econometric Society 446, 453, 459 economic crisis and typology of crises 353 expression more general than ‘commercial crisis’ 79, 82 see also crisis economic cycle see business cycle economic dynamics 162 and non-economic variables 488, 491, 492 and sequence analysis 435 and time-lags 161, 162, 435, 529 Frisch’s definition 431, 487 Hicks’s definition 487 no accepted definition (Kregel) 493 Tinbergen’s definition 431, 434 see also statics and dynamics economic forecasting and sensitive dependence on initial conditions 494, 495, 496 and the periodicity of crises 340 Babson’s business barometer 408 estimates of market needs can prevent crises 244 Juglar and the prediction of crises 281 Kondratiev 458 turning points of the cycle 517 see also business barometers and institutes of conjuncture economic history and long waves theory 458 economic policy and complexity of business cycle models 488 and confidence 204 and political business cycle 463, 468, 480: Kalecki 466; rational expectations 469; real business cycle 473 as the removal of the causes of disturbance: and multi-causal theories of crises 188; to the freedom of trade 180, 192, 257 cannot remedy economic crises (Boccardo) 258 influence on policy as an objective of dictionaries 34, 225, 308 its ineffectiveness: Boccardo 257, 260, 261; Garnier 192; rational expectations 469, 505 monetary policy 152, 277, 328: and the idea of neutral money 520–521; as exogenous shock 506; diminished frequence and amplitude of fluctuations 508; its depoliticization and political business cycles literature 480; see also currency: issuing policy and crises

634 Name and subject index more effective after WW2 422: death of the business cycle 423 public debt 204, 231, 232, 369 public expenditure 191, 204, 233: political business cycles 473; to control propagation mechanism 434 real business cycle theory 505, 521–522 Roscher’s therapeutics of crises 204 suggestion of remedies as the drive to investigate the causes of crises 55, 185 Wagner on the control of credit 314 see also banking policy and Keynesian policies economic theory of politics 464–465 economics and politics, interaction of 463–480 Edgeworth, F. Y. 377 impossibility of general overproduction 333, 334 on Palgrave’s Dictionary of political economy 341–342 OVER-PRODUCTION, entry in Dictionary of political economy (Palgrave, 1894–99) 137, 333, 334, 336 effective demand and income distribution 141, 242 and universal gluts 58, 370, 372 determines production (Ott) 242 Roscher’s sale crises 198, 204, 378 Ehrenfest, P. 429 Einstein, A. 429 electoral cycles see political business cycles Ellis, A. 95 Elster, L. editor of the Wörterbuch der Volkswirtschaft (Elster, 1898) 375 forewords to Handwörterbuch der Staatswissenschaften (Elster, 1923–29): IN MEMORIAM 383, 387; VORWORT 387 joint editor of the Handwörterbuch der Staatswissenschaften 361, 374–375, 385 VORWORT to Wörterbuch der Volkswirtschaft (Elster, 1898) 13, 34 embarrassment definition: Grand Robert 61; Oxford English dictionary 60 etymology and usage 60–62 general embarrassmen as a state of obstructed monetary circulation (Baring) 61 shorthand for a situation of general commercial difficulty 61 empirical business cycles research 159 Burns 420–423 its relationship to causal explanations 159 Mitchell 414–418 the League of Nations 429 Tinbergen 429

see also business barometers and institutes of conjuncture empirical evidence and calibration method 515 and neutrality of money 520 and stylized facts 511 chaos 493, 495, 498 Juglar’s statistical analysis of crises 276, 282 long waves 443, 450, 457 of changes in structural coefficients 489 of nonlinearity 494 of political business cycles 464, 466, 470, 472, 473, 474, 476 of sensitive dependence on initial conditions 498 of the repetitiveness of the cycle 163 employment assumed to be full by main body of economic theory 150 cyclical variations 519 full employment: and bargaining power of workers 466; and inflation 466; and monetary theories 152; as the normal state of the system 158 of resources: full at the end of the upswing 394 encyclopedias and dictionaries 19th century as France’s century of dictionaries and encyclopedias 45, 167–168, 177 a literary genre 4–17, 302, 353 and definitions 5, 36: dictionaries offered the very first definitions of crises 16, 80, 178–179, 184–186 and national traditions of thought 9, 19, 24, 27: crises as a generic disruption, in French 19th century dictionaries 80–81; crises as a Marxist term vs. business cycles as burgeois economics in German dictionaries 531–532; crises as a perturbation of equilibrium, in German 19th century dictionaries 81–82; crises as turning point of the cycle in French 20th century dictionaries 527–530; cycles as a fluctuation in the degree of utilization of capital, in German late 20th century dictionaries 98–99; cycles as a perturbation of equilibrium, in German early 20th century dictionaries 98–99; French and British dictionaries on Say’s law 135; German dictionaries on Say’s law 136; Spanish economics in 19th century adapted analyses produced elsewhere 233 and the increasing specialization of disciplinary knowledge 7, 10, 20: hyper-specialized dictionaries 42–43 as a means for influencing public opinion 34, 210, 225, 250, 308 as a means for propagating scientific understanding 3, 12, 31, 32, 167, 209, 226, 235, 239, 250, 253, 308, 330 as a support of teaching 3 as linguistic repositories 112

Name and subject index 635 as propagators of traditions of thought 210: via choice of wordlists 112 as repositories of science 6, 20, 354 caducity of entries 354 distribution in time, across countries, and per size 44–51 editorship 10, 341: decentralized 419 entries on crises, singular vs. plural 111, 234, 247, 526 entries on cycles and crises summarize and reflect author’s own theories on the subject: Coquelin 212; Juglar 17, 265; Mitchell 414; Spiethoff 17, 388; Tinbergen 434; TuganBaranovsky 17, 353; vs. ‘objective’ presentation 355 entries on cycles substitute entries on crises 111, 353–354, 371, 389, 526 fragmentation of knowledge 6–8, 33: alphabetical arrangement 11–12, 239; and the macrostructure 8; counteracted by selecting a limited number of contributors, united within a common doctrine 33, 270; crises and cycles 7, 527; dictionaries vs. textbooks 16; dictionaries vs. treatises 6, 250, 253, 270; few thematic articles to which the other related terms refer 38; grouping of entries on similar subjects 38; inhomogeneousness of viewpoints 6, 33, 250; methodical index 239, 270, 283; mixed methodic and alphabetical arrangement 402; partly remedied by means of cross-references 7, 11, 23, 32, 251; quasi-monographic character of articles 7, 231, 253, 385 ideological commitment 12–13, 33, 34, 40, 43, 167, 210, 220, 226, 239, 246, 268, 307 informative vs. educational approaches 12, 31 instruments of self-teaching 16, 52, 272 international circulation of ideas 235 macrostructure 8–12: anonymous vs. signed entries 23; choice of contributors 9–10, 23, 334, 353, 358; online publications 38–39; the editorial strategy 8–9, 18, 419 market constraints 13 microstructure 8, 239: and epistemological projects 22, 36, 419 offer sharp categorizations of crises and cycles theories 133 one-man dictionaries 6, 31, 33, 40, 239, 251, 288 online editions 23, 24, 38–39 rearguard vs. frontiers of research 16, 341, 344, 355, 434 re-editions 52 subject to various biases 24 the systematization of knowledge 3, 14, 32, 321, 385, 412: epistemological projects 12, 24, 32, 210, 271, 321, 355, 418–420 their influence 3

their readership 13–16: academics and graduate students 15, 38, 45; conversation-lexica for the bourgeoisie 14; economic corporations 33, 308; newspaper readers 15, 35; popular reference works 14; scholars 15, 24, 33, 249, 251, 287, 308; social scientists 33, 308; statesmen and citizens 15, 39; students 15, 33, 34, 35, 36, 37, 38, 45; the clergy 239; the general public 15, 35, 36, 44, 343–344; the savants 14; traders, business people, bankers etc. 14, 32, 37, 38, 249, 428 thematic vs. alphabetical arrangements 10–12, 22, 23, 35, 38, 239, 402: dictionaries vs. textbooks 16, 38; dictionaries vs. treatises 270; online editions also lose the alphabetical order 39 endogenous causes see exogenous vs. endogenous causation endogenous explanations the spontaneous character of crises: Boccardo 261; Coquelin 213, 216, 261 see also exogenous vs. endogenous explanations Enfantin, B.-P. 171 Engel, E. 308 Engels, F. 137, 138, 349, 354, 363, 367, 370, 460 and long cycles (Schumpeter) 444 England, M. T. 84 equilibrium and business cycles: cycles as fluctuations around equilibrium 437; cycles as switching between equilibria 437 and excess capacity 98 and Konjunktur 97 and real business cycles 505, 523 and statics 449 and uncertainty 244 as an actual state of things, and the impossibility of persistent disequilibria 154 as the theoretical norm 81, 143, 266, 333, 354, 532, 543; vs. business cycles as the normal state of the system 389–391 between income and expenditure 432 between production and consumption 82, 120, 138, 152, 178, 185, 367–370 between supply and demand 120: difficulty of balancing them in a dynamic economy 312; is guaranteed in a barter economy 312 crises defined as perturbation of equilibrium 19, 81–82, 87, 120, 136, 141, 162, 366 disturbed during depressions 77 economists’ overwhelming preoccupation with 490, 494, 544 equilibrium models cannot explain depressions 534 equilibrium theorem and the impossibility of genuine crises or cycles 146 in the sense of a non-fluctuating economy 98 Kaldorian ‘mixed equilibrium’ 433

636 Name and subject index moving equilibrium and long waves 450 nonlinearity and stability 148, 485 restored by fluctuations in labour productivity 433 Say’s law and the foundations of equilibrium economics 150 secular equilibrium vs. cyclical equilibrium (Trotsky) 448 stability of equilibrium and the possibility of general crises 530–531 static interpretation, and the classical liberal school 162 the dynamic analysis of the new-liberal school 162 vs. chaos 490 see also stability and instability equilibrium business cycle theory see business cycles theories: equilibrium business cycle theory Erreygers, G. 323 Ersch, J. S. 219 Escudier, J. 447 Esenwein-Rothe, I. 383 Essars, P. des CRISES FINANCIÈRES ET COMMERCIALES, entry in Dictionnaire des finances (Say, 1889–94) 9, 19, 84, 266 Eucken, W. 391, 396 Eulenburg, F. 139 Evans, D. M. 138, 356 Eventov, L. 451 exogenous shocks 158, 160, 183 and amplitude of fluctuations 486 and amplitude of oscillations 148, 430, 489, 502, 518 and banking crises 70 and stability of equilibrim 100, 105, 155, 156 as cause of crises 530 as explanation of irregularities 494 as originators or disturbers of the endogenous cyclical process 144, 424 circumvent Say’s law 82 real business cycle models 516, 523 real shocks 504, 505–509, vs. monetary shocks 505, 508, 521 technological 158, 506–507, 517–519 Tinbergen’s typology 432 vs. nonlinearity 148 exogenous vs. endogenous causation 80, 83, 169, 178, 180, 181, 230, 256, 359, 417, 533 and the epistemology of crises theorizing 260 and the periodicity of crises 354 and the understanding of crises as pathologies 333 Mandel on long waves turning points 456 the dividing line is blurred (Haberler) 144

their combining enabled late 19th century economists to conjugate cycles and linear time 161 exogenous vs. endogenous explanations 159, 491 and impulse-propagation distinction 431 and stability of equilibrium 100, 105 and the origin of the expression ‘business cycle’ 95 as a key for classifying business cycle theories 154–156, 492 Kondratiev and long waves 451, 452 persistence of the business cycle 144, 157, 489, 492, 498 statics vs. dynamics 431 expansion as phase of long waves 445 see also phases of the cycle expectations adaptive expectations 468 and determinism 89, 543 and electoral cycle 467 and instability 538, 543 and overproduction 244 high prices lead to optimistic expectations 243, 367 Ott’s theory of crises 243 rational expectations 468: and equilibrium business cycles 501; and political business cycles 469–472; and real business cycles 501, 505 Fabian, A. 55 Falkner, S. A. 459 Faucci, R. 252, 254, 262 Felden, H. KONJUNKTUR UND KRISEN, entry in Handwörterbuch der Betriebswirtschaft (Nicklisch, 1926–28) 86, 96 Felkin, E. 149 Ferguson, R. 74 Fernando VII 236 Ferrara, F. 32, 119, 211, 254 Fetter, F. W. 303, 305 Feve, P. 521 final breakdown of capitalism 540, 546 mechanistic interpretation of Marx’s reproduction schemes 532, 536, 542 vs. business cycles 101 financial crisis 79, 547 and depressions 78 and random fluctuations of stock markets 347 as the general incapacity to meet contractual commitments 184 definition: Chitti 184; Kindleberger 533; O’Hara 70 loss of confidence 539 rapid and sharp drop in the value of financial

Name and subject index 637 assets 538 see also panic Fiorinto, R. 510 Fiorito, L. 411 fiscal sociology 475 Fischer, G. 374, 385, 387 Fischer, S. 464, 470 Fisher, I. 108, 157, 207, 358, 404, 406, 409, 453, 520 debt-deflation effect 202 Fisher, R. A. 423 Flórez-Estrada, A. 228 on the 1825 British panic 235 fluctuations as a cause of distress 103 as opposite to ‘stationary’ 102–103 as unsystematic oscillations around ‘a mean sun’ 333, 545 definition: Oxford English dictionary 102; Persons 123 frequency of recurrence of the term 102 indicating non unidirectional change 102–103 normal fluctuations vs. crises 104 term used as more or less equivalent to ‘cycles’ 106–107 see also cycles vs. fluctuations Flürscheim, M. 138 Fontaine, P. 220 Forget, E. L. 303 Foss, M. F. BUSINESS CYCLES, entry in Blackwell dictionary of modern social thought (Outhwaite, 2006) 146 Foster, W. F. 417 Fourier, C. 138, 173–174, 349, 370 Fowler, W. 334, 340, 356 entries in Dictionary of political economy (Palgrave, 1894–99): CRISES 1857–1866–1890 333, 334, 337–340; CRISES, COMMERCIAL AND FINANCIAL 83, 334, 337–340 life and work 335 on the 1866 Guernsey crisis 335 recognizes the periodicity of crises, but denies there is a common law governing them 338–340 Foxwell, H. S. 336 Francis, J. 356 Francis, N. 520 BUSINESS CYCLES, REAL, entry in International encyclopedia of the social sciences (Darity, 2008) 506, 513, 516, 517, 519, 522, 523 Franco, S. 262 Frank, A. G. LONG CYCLES, entry in Berkshire encyclopaedia of world history (McNeill, 2005) 443 Frank, Z. M. 498 Franzese, R. J. 468, 469, 476, 478, 481 Frawley, W. 21

free banking 326 and the ratio of reserves to issues 258 Bell 221 Boccardo 254, 256–258, 262 Carey 220, 256 Coquelin 212, 220, 234, 254, 256, 303, and Juglar’s criticism 277 in the United States, and the 1857 crisis 258 Mushet 220 Sinclair 220 the impossibility of crises 216 the Scottish system 220 Freeman, C. 453, 458 LONG SWINGS IN ECONOMIC GROWTH, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 445, 452, 454, 456, 457 frequency of oscillations and management of the currency 134 more moderate since the 1980s 508 varies at different stages of economic development 99 see also cycle’s lengths and periodicity Frewen, M. 119 Frey, B. 472, 476, 480, 481 BUSINESS CYCLES—POLITICAL BUSINESS CYCLE APPROACH, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 153, 467, 472, 477 Friedman, M. 70, 152, 155, 426, 435, 504, 520 Frisch, R. 155, 159, 425, 430, 436, 453, 455, 459, 485–486, 492, 504 definition of economic dynamics 431, 487 impulse-propagation distinction 152, 155–156, 431, 434, 485, 502 persistence of business cycles 489 supported Kondratiev’s ideas 446, 454 Frobert, L. 171 Fuhrmann, W. 506 classification of business cycle theories 154 entries in Vahlens Großes Wirtschaftslexikon (Dichtl and Issing, 1993): KONJUNKTUR 531; KONJUNKTURMODELLEN 531; KONJUNKTURTHEORIEN 154, 508, 531; MARXISTISCHE KRISENTHEORIEN 531 Fullarton, J. 94 fundamental value and bubbles 74 Gabisch, G. NONLINEAR BUSINESS-CYCLE THEORIES, entry in Business cycles and depressions (Glasner, 1997) 493 Gallarotti, G. M. BUSINESS CYCLES, entry in Routledge encyclopedia of international political economy (Jones, 2001) 101 Gandolfo, G. 486, 497

638 Name and subject index Ganilh, M. entries in Dictionnaire analytique d’économie politique (Ganilh, 1826): COMMERCE 63; CONSOMMATION 193; CRÉDIT 61; PRODUCTION 193 rejects the ‘revolting paradox’ of Say’s law 193, 245 Garnier, J. 193 CONSOMMATION, entry in Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 213 crises are inevitable, but short lasting 192 crises as a perturbation of the natural state and an anomalous conditions 190 crises cannot be remedied 192 CRISES COMMERCIALES, entry in Dictionnaire universel . . . du commerce et de la navigation (Guillaumin, 1859–61) 64, 81, 119, 136, 169, 190–192 monopoly of the bank of issue and crises 192, 194 on the Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 220 Garnier-Pagès, E. 170 Garrison, R. W. BUSINESS CYCLES—AUSTRIAN APPROACH, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 153 Gärtner, M. 481 Garvy, G. 447, 451, 451–452 KONDRATIEFF, N. D., entry in International encyclopedia of the social sciences (Sills, 1968) 445, 446, 447, 448, 450, 451, 452, 459 Gattenberger, K. 357 Gaumont, J. 246 Géhanne, J.-C. entries in Dictionnaire thématique de sciences économiques et sociales (Géhanne, 1995): CRISES ET FLUCTUATIONS ÉCONOMIQUES 62, 78, 107, 529; CRISES ET THÉORIES ÉCONOMIQUES 529 Gelderen, J. van 450, 455, 459 long waves 445, 458 Gélédan, A. CRISES ÉCONOMIQUES ET SOCIALES, entry in Dictionnaire économique et social (Bremond and Gélédan, 1992) 107, 529 Dictionnaire des théories et mécanismes économiques (Brémond and Gélédan, 1984): CROISSANCE ET CRISES 153; PRÉSENTATION 23 Gemelli, G. 10, 21, 411 generalized method of moments 516 George, H. 138, 370 Gerbet, O. P. 246 German historical school 159, 309, 324 historical method and reflections on crises 311 older: Roscher 198, 309 younger 366, 387: influence on the economists

who wrote in the Enciklopedicheskii slovar’ (Brockhaus-Efron, 1890–1907) 345; Schmoller 199, 310 Gesell, S. 162 Giannetti, R. CRISI ECONOMICHE, L’OTTOCENTO, entry in Mondo contemporaneo, Il. Enciclopedia di storia e scienze sociali. Vol. VIII, Economia e storia (Carmagnani and Vercelli, 1978) 101, 162, 446, 453, 546 Gide, C. 309 on the French liberal school 220 Giffen, R. 119, 349, 356 Gilbart, J. W. 94, 136 Gilman, M.-H. 283 Gilmer, F. W. 121 Gilmore, J. 170 Gini, C. 453 Giocoli, N. 254 Gioia, V. 312, 389, 391 Gioli, G. 252 Gislain, J. J. 168 Glaeser, E. 246 Glagau, O. 356 Glasner, D. REAL BUSINESS CYCLE THEORIES, entry in Business cycles and depressions (Glasner, 1997) 503–504, 518 glut 121, 213 and crises 120 and depressions 76 and overproduction 57 definition: Cannan 58; Malthus 58; Oxford English dictionary 57 early usage of the term 57 etymology 57 impossibility of universal gluts 58, 135–137, 158, 314, 315, 334, 336, 371, 380 see also overproduction glut controversy 58, 118, 138, 140, 159, 245, 333, 334, 370, 372, 540 and Marx’s reproduction schemes 353, 541 briefly reviewed by Edgeworth 336 in early 19th century Germany 200, 311 reviewed by Wagner 136 see also overproduction and Say’s law Goodhart, C. A. E. 305 Goodwin, R. M. 95, 155, 156, 425, 486, 489, 492, 495, 496, 539 and long waves 455 distributive conflicts and cycles 160 endogenous dynamics 156 entries in New Palgrave dictionary of economics (Eatwell et al., 1987): GROWTH AND CYCLES 498, 514; PREDATOR-PREY MODELS 498 growth cycle model 486, 488, 489, 491, 498: its stuctural instability 489, 491, 498

Name and subject index 639 on nonlinearity 159 Gordon, D. 471 Gossen, H. H. 346 Gottschalk, M. 391 Goudriaan, J. 428, 437, 438 debate with Tinbergen on crises, dynamics and equilibrium 436–437, 438 GRONDSTOFFSTANDAARD, entry in Bedrijfseconomische encyclopedie (Stridiron et al., 1947–52) 436 Graafland, J. J. 430 Grandmont, J. M. 156, 492, 508 Green, J. 21, 24 Groenewegen, P. POLITICAL ECONOMY, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 52 growth and pauperism 170 as a phase of the business cycle 509 as the normal condition of industrial societies 154, 161, 169, 533 crises as a consequence of growth 171 crises as the price to pay for growth 192, 278, 281, 514, 528, 537 growth and cycles 147, 152, 161, 523, 528 Burns 420, 423 Goodwin 486, 488, 489, 491, 498 in late 19th century chronosophy 161 Marx 152 Schumpeter 161, 491, 519 separated by linear functional equations models 514 Spiethoff 396 growth and fluctuations 523 Kydland–Prescott model 514 Laveleye’s approach 326 real business cycle theories 503, 513–515 growth rate and political business cycles 470–471 policy objective (real business cycle theory) 522 Guckenheimer, J. 486 Guéroult 221 Guerrien, B. CYCLE (THÉORIES DU), entry in Dictionnaire d’analyse économique (Guerrien, 2002) 160 Guerrieri, P. FLUTTUAZIONI ECONOMICHE, entry in Il mondo contemporaneo, vol. VII: Economia e storia (Carmagnani and Vercelli, 1978) 151 Gueslin, A. 246 Guillaumin, G.-U. 193, 212, 220, 271, 283 co-edited the Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 209 edited the Dictionnaire universel . . . du

commerce et de la navigation (Guillaumin, 1859–61) 209 edited the Encyclopédie du commerçant. Dictionnaire du Commerce et des marchandises (Guillaumin, 1837–39) 209 organizer of liberal economists 219 PRÉFACE DE L’EDITEUR to Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 32, 210, 219 president of the Société d’économie politique 210 publisher of important economic books, dictionaries and journals 209, 266 Guitton, H. BUSINESS CYCLE, entry in Encyclopædia Britannica (online edition, 2010) 107 entries in Dictionnaire des sciences économiques (Romeuf, 1956–58): CRISES 527–528; CYCLES 97, 100, 101 Gurley, J. G. 290 Guthrie, G. 355 Guyot, Y. 79, 119, 280 SURPRODUCTION, entry in Dictionnaire du commerce, de l’industrie et de la banque (Guyot and Raffalovich, 1898) 135 Haavelmo, T. BUSINESS CYCLE, MATHEMATICAL MODELS, entry in International encyclopedia of the social sciences (Sills, 1968) 147, 420, 423–425 classification of business cycle theories 147–148, 424 emphasis on mathematical theorizing and econometric testing 424 neglects monetary, financial, and psychological aspects of the cycle 425 probabilistic approach to econometrics, Cowles commission, and business cycle analysis 423, 425–426 Haberler, G. 118, 141, 359, 375, 394, 395, 425, 453 classification of business cycle theories 144, 146, 151, 159: extended by Vosgerau 152; Keynes’s criticism 149 KONJUNKTUR UND KRISE, entry in Ökonomie (Frenzel, 1973) 531 League of Nations business cycle inquiry 163 on long waves 455 on the intrinsic instability of the economic system 144 Hadley, A. T. COMMERCIAL CRISES, entry in Johnson’s new universal cyclopædia (1893–97) 69, 85 OVER-PRODUCTION, entry in Cyclopaedia of political science (Lalor, 1881–84) 136 Hagemann, H. 199, 200, 207, 312, 358, 364, 371, 372, 375, 392, 394

640 Name and subject index Hahn, L. A. 140 and Say’s law 147 Haimann, J. 21 Hallen, E. von HANDELSKRISIS, entry in Meyers Konversationslexikon (1885–92) 82 Hanau, A. 435 Handman, M. S. BOOM, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 415, 416 Hanel, J. 372 Hansen, A. H. 141, 358 maturity of capitalism 64–65 on Kondratiev’s ideas 446 on long waves 455 Hansen, G. D. 510–511, 513, 519, 521 Hanson, J. L. STAGNATION THESIS, entry in Dictionary of economics and commerce (Hanson 1965) 65 Harris, J. 67 Harrod, R. F. 95, 156 on the epistemics of business cycle theorizing 158, 163 Hart, G. 67 Harvard Committee for Economic Research 408 Harvey, J. 91, 94 Hawtrey, R. G. 95, 106, 140, 152, 155, 158, 341, 417 CREDIT, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 9 Hay, C. CRISIS THEORY, entry in Routledge encyclopedia of international political economy (Jones, 2001) 546, 547 Hayek, F. A. 95, 152, 160, 260, 396, 433 and Say’s law 147 MACLEOD, HENRY DUNNING, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 289 on Macleod 290, 304 on the approaches to business cycle theorizing 163 on the epistemics of business cycle theorizing 158 Heertje, A. SCHUMPETER, JOSEPH ALOIS (1883–1950), entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 453 Hegel, W. F. 537 Heinrich, W. taxonomy of crises and cycles theories 160 Heiss, K.-P. LEXIS, WILHELM, entry in International encyclopedia of the social sciences (Sills, 1968) 383 Held, A.

HANDELSKRISEN, entry in Bluntschli’s Staatswörterbuch (Bluntschli and Löning, 1869–1872) 136 Heller, W. KRISENTHEORIE, entry in Nationalökonomie (Theorie u. Geschichte) (Heller, 1926) 145 Henderson, H. D. 95 Hendry, D. F. 437 Hennell, M. 185 Hercowitz, Z. 481 Herkner, H. 18, 245 a Kathedersozialist 364–366, 368 classification of crises theories based on political views 138–139, 370, and Bergmann’s criticism 141, 162 crises cannot be explained by a single cause but are the result of a combination of several causes 367: yet the unevenness of income distribution is the decisive one 370 definition of crises 82, 366 entries on crises more descriptive than theoretical 372, 388 KRISEN, entry in Handwörterbuch der Staatswissenschaften (Conrad et al., 1890–95) 64, 76, 82, 85, 86, 138, 361–362, 366–372, 375, 388 KRISEN, entry in Handwörterbuch der Staatswissenschaften (Conrad et al., 1898–1901) 86, 138–139, 314, 361–362, 369, 370–372, 388 KRISEN, entry in Handwörterbuch der Staatswissenschaften (Conrad et al., 1909–11) 86, 138–139, 361–362, 370–372, 388 life and work 361–366, 372 on the labour question 363–364 Hermann, F. B. W. 317 on savings 200 Hess, G. 473, 476 Heyde, L. HERKNER, HEINRICH, entry in Handwörterbuch der Sozialwissenschaften (Beckerath, 1956–68) 372 Hibbs, D. 464, 469, 470, 471, 472, 476, 478, 481 Hicks, J. R. 95, 156, 207, 425 ceiling and floors 486, 488, 489, 491 definition of economic dynamics 487 endogenous dynamics 156 multiplier-accelerator model 489 on Roscher 206 Higgs, H. 335 DÉBOUCHÉS, THÉORIE DES, entry in Dictionary of political economy (Palgrave, 1894–99) 58, 120 Hildebrand, B. 198, 200, 308, 374 Hilderth, R. definition of crises 184 Hillstrom, N. L. BUSINESS CYCLES, entry in Encyclopedia of

Name and subject index 641 small business (Darnay and Magee, 2007) 506, 509 Hinich, M. J. 464, 476, 478 Hinrichs, J. C. 219 historical crises, panics and depressions 1763 crisis 217, 295 1773 crisis 295 1783 crisis 295 1793 crisis 295 1797 crisis 217, 296, 299, 337: English panic caused by the fear of a French invasion 67–68 1810 crisis 337 1816–17 post-Napoleonic crisis 56 1819 panic 56, 213 1825 panic 56, 67, 90, 168, 173, 181, 214–215, 231, 235, 256, 296–297, 303, 337, 350, 352: and the policy of the Bank of England 296 1828–32 crisis in France 168, 214 1837 panic 56, 60, 90, 168, 185, 212, 214, 257, 337, 350, 352 1839 crisis in England 347 1847 crisis 56, 60, 67, 90, 181, 193, 214, 274, 297–298, 302, 337, 350, 352 1857 crisis 56, 67, 257, 260, 274, 299, 335, 350: affected only financial sector 539 1864 crises in England and France 347 1866 Guernsey crisis 56, 67, 350: Fowler’s account 335 1873 crisis 56, 67, 84, 350, 361, 366 1873–96 great depression 56, 329, 350, 366: and the terminological switch from crises to depressions 84–85; raised doubts as to the periodicity of crises 327, 348 1890 crisis 335 1893 panic 56 1907 crisis 56, 67, 352 1914 crisis 56 1921 depression 56 1929–32 crisis 533: as a deep cyclical contraction 65; coupling of cycle trough and long wave depression (Schumpeter) 453; has perhaps jeopardized the notion of cycle and may require the return of the notion of crisis (Guitton) 528; outburst of literature on the crisis 56; the Tinbergen-Goudriaan debate 436; unemployment 534 1937 recession 56 1973 crisis 106, 530, 533 1980–82 recessions 56, 106 2000 internet bubble 57 2007–08 financial crisis 57, 522 disagreement on the dating of crises in early dictionaries 179 their history rewritten by Tugan-Baranovsky as he changed his theoretical approach 354 Hobson, J. A. 137, 139, 336, 417 Hodrick, R. J. 511–512

Hodrick–Prescott filter 512 Höhmann, D. 307, 386 Holesovsky, V. KONJUNKTUR UND KRISE, entry in Ökonomie (Frenzel, 1973) 65, 531 Holme, H. 485 Holmes, P. 486 Hoof, H. van 21 Hoover, K. D. 515 MONETARY EQUILIBRIUM THEORIES OF THE BUSINESS CYCLE, entry in Business cycles and depressions (Glasner, 1997) 520–521 Horton, T. J. Dictionary of modern economics (Horton et al., 1948): BUSINESS CYCLES, 122; BUSINESS CYCLES, THEORY OF 146 Hotelling, H. 453 House of Commons Secret Committee on Commercial Distress (1848) 217, 298 House of Lords Secret Committee on Commercial Distress (1848) 298 Huart, A. 79 Huet, F. 322, 325 Hume, D. 236, 520 Humphrey, T. M. LENDER OF LAST RESORT, entry in New Palgrave dictionary of money and finance (Newman et al., 1992) 305 Huskisson, W. 103 an overtrading explanation of crises 193 description of the phases of the cycle 121 detailed description of crises as resulting from previous prosperity (1820s) 189 first instance of a complete theory of crises (1810) 123 Hustler, J. 59 Hutchison, T. W. 221, 311, 372 Hyndman, H. M. 356 hysteresis 496 and distribution of income 155 crises and qualitative change 535 Ignatiev, M. V. 404 Ikeda, Y. 312 Imbert, G. 453 imperfect information 470 impulse-propagation distinction 152, 434, 488 and amplitude of oscillations 155, 424, 485 and possibility of synthesizing different theories of the business cycle 431 and real business cycles theory 156 exogenous shocks and endogenous cyclical dynamics 431, 434 Frisch’s approach vs. Slutsky’s, and real business cycle theories 502, 504

642 Name and subject index income distribution 142, 144, 155 affects effective demand 141, 242 affects uncertainty 369 and accumulation 392 and demand for specific goods (wage or luxury) 242 and hysteresis 155 and Marxist theories of crises 162, 529 and overcapitalization 368, 370 and political business cycles 469, 473–475 and saving and investment 368 and Say’s law 311, 313 and structure of consumption 369 and underconsumption 145, 369, 370, 379 distributive conflicts and business cycles theories 160 post-Keynesian theories of the cycle 153 industrial crisis concerns the balance of production and consumption (Boccardo) 254 definition and description: Monbrion 180; Tugan-Baranovsky 347; described in terms of cycles 351 gain importance with the progress of manufacture 255 see also crisis inflation 63, 407, 423, 480 and full employment 466 and neutrality of money 520 and political business cycles 467, 470, 471–472 and speculation 62, 88, 348, 539 characterizes the upswing 93 in Goodwin’s growth cycle model 488 Kaleckian political business cycles 466 management of 480 see also prices the Phillips curve 467–469 information asymmetry between voters and politicians, and real business cycles 470 Ingram, J. K. 211 instability and expectations 538, 543 and indifference among causes of crises 142, 219 and nonlinearity 148, 485 and Sraffa’s criticism to the assumption that small varitions are independent 151 and the persistence of oscillations 157 caused by government privileges 210 caused by high public debt 204 crises vs. cycles 89, 538–539, 545 deflation induces producers to flood markets in order to prehempt further losses in anticipation of expected price falls 436 financial instability and panics 70 finds expression in the business cycle 98

local instability postulated by endogenous theories 156 of the credit system 83, 85, 142, 152, 183, 256 persistence of the cycle in the absence of exogenous causes 144 propagation of the effects of crises, through the entire economy and internationally 183 slowness of adjustment mechanisms 313 theories of the cycle based on the intrinsic instability of growth 160 Institut für Konjunkturforschung, Berlin 405, 408 institutes of conjuncture 159 Central Bureau of Statistics (The Netherlands), department of Business cycle research 429 Harvard Committee for Economic Research 408 Institut de Statistique de l’Université de Paris 408 Institut für Konjunkturforschung, Berlin 405, 408 London and Cambridge Economic Service 408 Moscow Institute of Conjuncture 401, 403, 408–409, 459 NBER 146, 159 interest rates see rates of interest international aspects of crises and cycles 326, 434 and the foreign exchange 189, 278–279, 281, 282, 284, 296, 337 as exogenous shocks 507 competition from foreign industries 181 foreign lending 214, and borrowing 279 foreign trade less stable and reliable than home trade 142, 254, 295, 326 inflation at home and outflow of capital 231 international movements of gold 68, 90: and over-issue of currency and inflation 214 international spreading of crises 191, 214, 274, 275 synchronicity of crises 274, 279 Iraola, M. A. SPECULATIVE BUBBLES, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 74 Irving, J. 104 Issaïev, A. 119 Jackson, A. 280 Jacquet-Pfau, C. 320 Jahn, G. WIRTSCHAFTSKRISEN, entry in Politisches Handwörterbuch (Herre and Jagow, 1923) 120 Jamieson, G. A. 119 Janzhul, I. I. 344, 358 Jevons, W. S. 52, 85, 94, 95, 123, 193, 254, 292, 304, 340, 341, 342, 347, 355, 406, 444, 459, 460

Name and subject index 643 astronomical notion of ‘periodicity’ of crises 94, 123, 274 emphasizes the failure of crops 138, 219 on the Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 32, 211 pioneered the application of statistical analysis to the theory of cycles 282 sunspots theory of the business cycle 94, 104, 155, 161, 219, 332, 341, 342, 417, 504: criticized by Tugan-Baranovsky 349; supported by Boccardo 259, 262; Tinbergen’s scepticism 432 the principle of causation and a common explanation of crises 188, 218 Johnson, A. S. 414 assistant editor of the Encyclopaedia of the social sciences (Seligman, 1930–35) 10, 412 Johnson, D. N. 95 Jöhr, W. A. entries in Handwörterbuch der Sozialwissenschaften (Beckerath, 1956–68): KONJUNKTUR (I) THEORIE 159; KONJUNKTUR (II) POLITIK 64 psychological theory of the cycle 155, 160 Jolink, A. 437 Jonas, F. 310 Jonas, S. 389 Jones, E. D. 119, 120, 141 classification of crises theories 142, 221 continuous vs. intermittent causes of crises 142, 221 Jong, A. H. M. de 436 Joplin, T. 60, 61, 221, 304 Jouffroy, T. S. 236 Journal des Économistes publication outlet of the French liberal school 210, 266 published by Guillaumin 209 Journal of Economic Literature headings of reviews section on cycles etc. 123 Joyce, J. 236 Juglar cycle 281 see also business cycle Juglar, C. 18, 79, 120, 136, 140, 177, 204, 211, 283, 304, 326, 327, 332, 341, 342, 356, 358, 378, 382, 409, 421, 444, 459, 526 a vigorous liberal 273 circularity of notion of crises as stoppage of the increase of prices 84, 280 crises are intrinsic to capitalism 449 CRISES COMMERCIALES, entry in Dictionnaire général de la politique (Block, 1863–64) 9, 17, 61, 83, 118, 135, 188, 262, 268, 273–278, 282–283 CRISES COMMERCIALES, entry in Dictionnaire général de la politique (Block, 1873) 274–278 CRISES COMMERCIALES, entry in Nouveau dictionnaire d’économie politique (Say and Chailley, 1891–92) 9, 17, 84, 273–274, 279–283, 443, translated in Rhodes Journal of Banking 271

definitions of commercial crisis 83–84, 275, 279 entries in Dictionnaire des finances (Say, 1889–94): BANQUES 266; CRISES FINANCIÈRES ET COMMERCIALES 9, 19, 84, 266 initiator of the theory of cycles: probably an exaggerated claim 281; Schumpeter 281, 546; widespread perception 265 lacks a solid theory of crises 136, 282 life and work 272–273 member of the French liberal school 266 on demographic movements and crises 281 on instability and the endogeneity of crises 219 on monetary crises 138 on the closure of the causal circle 92 refers to Macleod’s entry on CRISIS, COMMERCIAL 304 reviews current opinions on crises 135, 277, 280 statistical method 273, 281, 283: banking statistics and the periodicity of crises 274, 275, 276; founder and member of several statistical societies 273; pioneered the statistical approach to the study of crises 159, 161, 163, 282 the normal working of the economic system, and speculative human nature 161 the principle of causation and a common explanation of crises 188, 218, 276–277 theory of recurrent crises rather than of cycles 284 Jusko, K. L. 468, 469, 476, 478, 481 Kahn, R. F. 151 Kaldor, N. 95, 155 nonlinear theory of the cycle (1940) 485, 489, 493 on nonlinearity 159, 485 stylized facts 511 Kalecki, M. 106, 152, 155, 158, 159, 163, 359, 425, 476, 492, 497 and secular stagnation 64–65 cycle as the form of the contradictions of capitalism 139 linear dynamics 485 persistence of business cycles 485, 489 political business cycle 466–467 structural change 547 Kamp, M. E. 387 Kant, I. 12 Kaplan, J. 419 Kates, S. 162 Kathedersozialisten (socialists of the chair) 199, 322, 325, 330, 377 Herkner 364–366, 368 Kautsky, K. 138, 363, 370, 448, 460 Keech, W. 471, 476 Keen, S. entries in International encyclopedia of the

644 Name and subject index social sciences (Darity, 2008): DEPRESSION, ECONOMIC 78; NONLINEAR SYSTEMS 494 Keil, M. POLITICAL BUSINESS CYCLES, entry in Encyclopedia of public choice (Rowley and Schneider, 2004) 468, 478 Kenway, P. CRISES, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 546 Keynes, J. M. 151, 158, 159, 162, 205, 359, 396, 421, 435, 453, 466, 520, 531, 539, 540 and Say’s law 150, 152, 154, 163: money as a store of value 202, 382 and the classics 154 as an underconsumptionist 160 criticism of Haberler’s scheme of classification of business cycle theories 149 his approach has little to add on dynamics 435 liquidity preference vs. saving-investment mechanism 206 on crises 89, 543 on cycles 89, 543 on the approaches to business cycle theorizing 122, 156, 163 on Tinbergen’s method 429 psychological theory of the cycle 155 the dichotomy between fundamental principles (vol. I) and money and crises (vol. II) 334 Keynes, J. N. 345 Keynesian policies and Kalecki’s political business cycles 466 financial crisis of 2008–09 467 Khodsky, L. V. 345 Kilcher, A. B. 12 Kindleberger, C. P. 70 autonomy of financial crises from cycles 533 BUBBLES IN HISTORY, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 73 entries in New Palgrave dictionary of economics (Eatwell et al., 1987): BUBBLES 73; FINANCIAL CRISIS 533 FINANCIAL CRISES, entry in Lexicon of economics (Deane and Cooper, 1988) 73, 547 King, J. UNDERCONSUMPTION, entry in Elgar Companion to Post Keynesian Economics (King, 2003) 65 King, R. G. 505, 518 BUSINESS CYCLES, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 7, 100, 498, 501, 510, 513, 514, 518, 519, 520 Kircheisen, J. 253, 288 Kirchmann, J. H. von 138 Kitchin cycle 122, 281 may be explained by crop fluctuations (Tinbergen) 432

political 467 Kitchin, J. 467 Kittur, A. 23 Klamer, A. 430 Klein, F. 383 Klein, J. L. 444, 448 Klein, L. R. 425 Klein, P. W. 437 Kleinknecht, A. 457 Klotz, R. J. INTERNET BUBBLE, entry in International encyclopedia of the social sciences (Darity, 2008) 73 Knapp, G. F. 362 Knies, C. 198, 200, 309 Knies, K. G. A. 345 Knoester, A. 429 Knowles, F. C. crises as concentrated fluctuations 105 Koch, P. LEXIS, WILHELM, entry in Neue Deutsche Biographie (1985) 376 Koechlin, N. 244, 247 Kol, J. 430 Kollintsas, T. 510 Kondratiev waves see long waves Kondratiev, N. D. 346, 359, 401, 403, 405, 408, 409, 454, 456, 459 and long waves 443, 447–451 crises are intrinsic to capitalism 449 his epistemology 448, 449–450, 458 on statics and dynamics 449 reception of his ideas 446–447, 452–453 Konjunktur and business cycles 96 and long waves 122 definition 96: Bank-Lexikon (1953) 96; BankLexikon (1987) 96; Besters 98; Handwörterbuch der Arbeitswissenschaft 98 dynamic interpretation 121 etymology and usage 87, 96–97, 405 vs. crisis 87 see also business cycle Konyus, A. A. 18, 401, 459 analysis of dynamic time-series 406–407 CONJUNCTURE, entry in ECONOMIC Entsiklopedicheskii slovar’ Russkogo Bibliograficheskogo Instituta Granat (1910–48) 97, 401, 404–408 index numbers theory 403, in conjunctural analysis 406 life and work 402–404 measurement of purchasing power 404 on the origin and different usages of the term conjunture 404–405 statistical methods of conjuncture analysis 405

Name and subject index 645 statistical research 403 Koopmans, N. G. 304 Koopmans, T. C. 421, 424 Koselleck, R. 168, 536, 537 KRISE, entry in Geschichtliche Grundbegriffe (Brunner 1982) 536–537 Kowalik, T. CRISI, entry in Enciclopedia Einaudi (Ruggiero, 1977–1984) 547 Kregel, J. A. ECONOMIC DYNAMICS, entry in Lexicon of economics (Deane and Cooper, 1988) 493 Krünitz, J. G. 23 Kte’pi, B. BUSINESS CYCLES, entry in Encyclopedia of business in today’s world (Wankel, 2009) 98 Kuhn, T. 499 Kuznets, S. 421, 453, 454, 455, 457 CONJUNCTURE, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 9, 96, 160, 404, 415, 416 on Kondratiev’s ideas 446 on Schumpeterian innovations 454 on the evolution of the usage of the term ‘Konjunktur’ 96, 404, 416 Kydland, F. E. 501, 504, 505, 512, 516, 522 Kydland–Prescott model 514 and unemployment 519 La Farelle, F. F. de 185 Laibman, D. CYCLICAL CRISIS MODEL, entry in Encyclopedia of political economy (O’Hara, 1999) 534 Laidler, D. 305 Lalor, J. J. 199 Lamennais, H.-F. R. de 246 Landau, S. I. 12, 21 Lane, F. C. 397, 398 Lange, O. on Kondratiev’s ideas 446 Langlois, C. 238, 239 Langton, W. 332, 340, 342 Laplace, P.-S. 460 Laplanche, F. 238, 246 Lara, L. F. 21 Lassalle, F. 55, 138, 160, 370 introduced the word ‘Konjunktur’ 96 Laswell, D. D. 7 Lau, L. 472, 476, 481 Lauderdale, J. M. (Lord) 138, 200, 389 Laveleye, É. de 18, 280, 330, 356, 372 commercial crises vs. monetary crises (i.e., depressions) 328 CRISE, entry in Grande Encyclopédie (1886–1902) 76, 83, 85, 327 crises depend on historical circumstances and institutions 326

crises perform no useful function 330 flexible regulation of the monetary supply 326 his historicism 322, 323 and economic laws 324–326; rejects the existence of laws of crises 326 life and work 322–326 rejects the theory of cycles 94 was sympathetic to German reformist socialism 322 Lavington, F. 95 and Say’s law 147 law of markets see Say’s law Law, J. 68, 347 Lawn, B. 102 Lawson, J. A. 193, 221 on instability and the endogeneity of crises 219 the principle of causation and a common explanation of crises 188, 218 Lawson, W. J. 288 Layton, D. 14 Le Van-Lemesle, L. 168, 219, 283, 284 League of Nations business cycles inquiry: Haberler 163, 435; Tinbergen 163, 429, 435–436, 454 Lechevalier, J. 173 Lederer, E. 389, 413 income distribution and business cycles 155 on underconsumption 147 Lee, M. G. 425 Leibnitz, G. W. 12 Leiderman, L. 481 Leightner, J. E. BUBBLES, entry in International encyclopedia of the social sciences (Darity, 2008) 73, 118 Lemonnier, C. 81, 178, 179, 182, 189 contributed the first dictionary entry on crises 177 crises as a condition for future progresss 172, 180, 182, 189 crises as a perturbation to the regular course of trade 178 CRISES COMMERCIALES, entry in Dictionnaire de la conversation et de la lecture (1832–55) 79, 80, 172, 177–189, 218 on the propagation of crises throughout the economy 183 recognizes the common features of crises 179, 189 lender of last resort 305 and restoration of confidence 300, 539 Bagehot 303, 305 Baring 303 Macleod 300, 303–304: on Thornton 300, 303 Lenin, V. I. 402 Lenoir, M. long waves 445

646 Name and subject index Lentini, O. 7, 13, 411 Lermina, J. 246 Leroux, J. COMMERCE, entry in Encyclopédie nouvelle (1835–42) 172 Leroux, P. 170, 171, 173 on progress and crises 172 Leroy-Beaulieu, P. 280 Lescure, J. 110, 159, 357, 359, 417, 448, 459 CRISES, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 9, 88, 415, 416, 530 defined crises as the upper turning point of the cycle 382, 528 long waves 445 Levi, L. 356 Levitskij, V. F. 357 Levy, H. 357 Lexis, E. J. 376 Lexis, W. 87, 142, 162, 245, 356, 370, 374 categorization of crises 378 definition of crisis 81 entries in Wörterbuch der Volkswirtschaft (Elster, 1898): KRISEN 81, 85, 375, 378–383; ÜBERPRODUKTION 376, 378–383 his discussion of overproduction incorporates spillover and feedback effects 381 joint editor of the Handwörterbuch der Staatswissenschaften 361, 374–375, 386, 387 KRISEN, entry in Wörterbuch der Volkswirtschaft (Elster, 1909–11) 137 life and work 376–378 middle way between socialists and liberal optimists 138, 139, 370 on Rodbertus 379 ÜBERPRODUKTION, entry in Handwörterbuch der Staatswissenschaften (Conrad et al., 1890–95) 361, 368, 380 liberalism and the social character of man 318 French Liberal school 266–267, 270–271, 283: and Say’s law 245; and the dictionaries by Coquelin and Say 13, 210, 220; its illiberalism 220; the Société d’économie politique 210, 273 interpretation of crises and cycles: classical school 138, 162, 370, 529; crises as a stage on a path of progress 537; French liberals before 1848 168–169; neo-liberalism 162, 529 Laveleye’s liberal socialism 322–324, 329 liberal dictionaries: Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 13, 210, 220; Dictionnaire général de la politique (Block, 1863–64) 268; Enciclopedia moderna (1851–55) 226; Handwörterbuch der Staatswissenschaften (Conrad et al., 1890–95) 386; Handwörterbuch der Volkswirthschaftslehre (Rentzsch, 1866) 33, 307; Nouveau dictionnaire d’économie politique (Say and Chailley, 1891–92)

13, 33, 270–271; Staats-lexikon. Encyklopädie der sämmtlichen Staatswissenschaften (Rotteck and Welcker, 1834–43) 13 Liesse, A. 271 life-cycle and swarms of innovations 456 capitalism and long waves 451 limit cycles early Goodwin models 486 Lincoln, A. 463 Lindbeck, A. 468, 476 Lindenlaub, D. 364, 372 Lindner, M. 304 linearity and amplitude of fluctuations 148, 163, 485–487, 489, 491 and classification of business cycle theories 148 see also nonlinearity Lines, M. 502 Linnaeus, C. 12 liquidity preference theory vs. saving and investment approach 206 List, F. 460 Liverpool Currency Reform Association 94 Llombart, V. 233 Llorens, V. 228, 235 Lluch, E. 235 Lo, A. 447 loanable funds and interest rates 348 Bagehot’s theory 259 fuel speculation 216 their cumulation induce the recovery 259 Tugan-Baranovsky’s theory of the cycle 347, 351, 353, 354, 450 Loening, E. joint editor of the Handwörterbuch der Staatswissenschaften 361, 375, 386, 387 London and Cambridge Economic Service 408 long cycles Kondratiev’s preferred terminology 447 see also long waves long waves 122, 281, 443–462 and complexity theory 447 and depressions 78, 445 and Marxist theory of crises 456, 547 and the problem of trend and cycle 107 and the stagnation thesis 65 as a deviation from a moving equilibrium (Kondratiev) 450 as exogenously generated trend fluctuations rather than cycles (Trotsky) 448 dating 456: general consensus 446, 458; Kondratiev 450 interaction with shorter cycles 459: Schumpeter 453 Kondratiev’s view 447–451

Name and subject index 647 mistaken translation of Kondratiev’s ‘long cycles’ 447 Schumpeter 453–454 stagnaton as their declining phase 66 statistical methodology 451, 452 their regularity 455, 457 Long, G. entries in Political dictionary (Long, 1845–46): DEMAND AND SUPPLY 58; DISTRESS 60; MONEY 103 Long, J. B. Jr. 505 Longfield, S. M. graphical representation of the phases of the cycle 121, 189 Lorenz, E. N. 486 Lorenz, H. W. 487, 499 NONLINEAR BUSINESS-CYCLE THEORIES, entry in Business cycles and depressions (Glasner, 1997) 493 Loria, A. 253 Lotz, W. 362 Louçã, F. 434, 437, 453, 454, 457 Löwe, A. on the approaches to business cycle theorizing 151, 163 on the epistemics of business cycle theorizing 158, 163 on the incompatibility of cycles and a static system 151 Loyd, S. J. see Overstone, Lord Lucas, R. E. Jr. 155, 156, 160, 469, 498, 504, 515, 518 equilibrium business cycles 501 Luft, P. ECONOMIC CYCLES, entry in Encyclopedia of Business and Finance (Kaliski, 2001) 62 Lunghini. G. PRESENTAZIONE to Dizionario di economia politica (Lunghini, 1982–90) 22 Lutfalla, M. 327 Luxemburg, R. 542 and the secular stagnarion thesis 65 crises ad imperialism 147 Maarseveen, J. G. S. J. van 428, 437 Maastricht Treaty 480 MacDonald, N. 497 Mach, E. 460 Mackenzie, G. 444 Macleod, H. D. 18, 52, 79, 281, 304, 356 entries in Dictionary of political economy (Macleod, 1863): ACCUMULATION 304; AESCHINES 287; BANK 286, 287, 290; BULLION REPORT 288, 295; CAPITAL 286, 288, 291; COINAGE 286; CONSUMPTION 286; COQUELIN, CHARLES 211, 303; COST OF PRODUCTION 286;

CREDIT 75, 103, 286, 288, 291; CRISIS, COM62, 68, 135, 177, 286, 288, 292–304; CURRENCY 286, 288, 295, 297; CZÖRNIG, C.F. VON 304 life and work 288–292 need for a lender of last resort 300, 303 not taken seriously by his contemporaries 289 on bailing out insolvent borrowers 301, 304 on credit and banking 290: laid the foundations of the modern theory of banking (Schumpeter) 289 on the monopoly of the bank of issue 301, 349 MacRae, D. 468, 476 Madden, S. 63, 102 Magens, N. 67 Magnus, J. R. 436 Mahaim, E. 323 Makebonskaya, E. I. 409 Mälich, W. KONJUNKTUREN, entry in Staatslexikon (Görres-Gesellschaft, 1985–93) 98, 100 Maloney, J. 288, 289, 292, 302, 304 Malthus, T. R. 63, 159, 162, 200, 245, 250, 311, 312, 333, 336, 346, 370, 371, 372, 379, 389, 390, 531, 539 definition of ‘glut’ 58 denied Say’s law 136, 138, 150, 152, 154, 540 on overproduction 137, 140 possibility of general gluts 58 underconsumption 140, 154, 314 Manchester Statistical Society 336 early studies on cycles (Langton, Mills and Jevons) 342 Mandel, E. long waves 456 Mandelbrot, B. 447 Manes, A. 376 Mangoldt, H. von 380 Manuilov, A. A. 344, 358 Markov, A. A. 377 Marliani, M. 228 Marrast, A. 170 Marshall, A. 52, 199, 309, 335, 409, 435, 459, 460, 504 and the German historical school 310 Marti, R. 480 Martin, M.-J.-D. 59 Marx, K. 89, 138, 139, 142, 158, 159, 161, 162, 203, 246, 311, 346, 354, 370, 377, 385, 393, 397, 450, 460, 466, 492, 539 and long cycles (Schumpeter) 444 as underconsumptionist 140, 147 crises and distributive conflicts 160, 542 crises and the contradictions of capitalism 154, 162, 349, 529, 531, 532, 537, 542, 546 crises and the philosophy of history 537 crises are intrinsic to capitalism 449 MERCIAL

648 Name and subject index crises as a notion autonomous from cycles 545, 546 crises stimulate the literature on crises 55 denies Say’s law 137, 541: money is also a store of value 202, 382 dialectical methodology 162, 542 early business cycle theory 158 influence on the economists who wrote in the Enciklopedicheskii slovar’ (Brockhaus-Efron, 1890–1907) 345 integrated cycles within the theory of a growing economy 152 on Roscher 206 on the cyclical development of capitalist economies 491–492 reproduction schemes 359, 532: and Say’s law 353, 541; the revisionist interpretation by TuganBaranovsky 353 the possibility of crises, and their necessity 154, 531, 541–542 theory of crises is fragmented but contains all ingredients of modern theories of cycles (Schumpeter) 532 Marxist theories of the business cycle and Goodwin’s growth cycle theory 488 Masci, G. CICLO ECONOMICO, entry in Enciclopedia bancaria (Confederazione Fascista delle Aziende del Credito e della Assicurazione, 1842) 145 Maslov, P. P. KONYUS, A. A., entry in Ekonomicheskaya entsiklopediya (Rumjancev, 1972–80) 403 Masur, G. CRISIS IN HISTORY, entry in Dictionary of the history of ideas (Winer, 1968) 536 Mathan, J. de 283 Matheron, J. 521 Matthews, R. C. O. TRADE OR BUSINESS CYCLE, entry in Fontana dictionary of modern thought (Bullock and Trombley, 1988) 99 May, R. M. 486 Mayer, T. RECESSION, entry in International encyclopedia of the social sciences (Darity, 2008) 110 Maynwaring, A. 70 McCulloch, J. R. 18, 60, 61, 219, 221, 228, 229, 232, 235, 356 entries in Dictionary … of commerce and commercial navigation (McCulloch, 1832): BANKS (ENGLISH PRIVATE AND PROVINCIAL) 18; CORN LAWS AND CORN TRADE 18, 30, 58, 63, 75, 102 PAPER-MONEY, BANKS, entry in Encyclopædia Britannica (1838) 18 McKelvey, R. 464 Mckie, D. CHAOS AND COMPLEXITY THEORY, entry in

Encyclopedia of public relations (Heath, 2005) 495 McKinley, D. H. 425 Medio, A. 486, 491, 494, 497 CICLO, entry in Dizionario di economia politica (Lunghini, 1982–90) 77, 101, 148, 489–490 classification of business cycle theories 148 CONTINUOUS-TIME MODELS, entry in Business cycles and depressions (Glasner, 1997) 493 TRADE CYCLE, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 66, 498 TRADE CYCLE, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 7, 490 Meltzer, A. 470, 476 Mendeleev, D. I. 344 Menger, C. 199, 309, 345, 364, 365, 367 Mengotti, F. 229 Mensch, G. 456 Merrick, J. J. Jr. 520 Meschonnic, H. 24 metaphors for crises 162 cataclysm 293 contagion 70 earthquakes 348, 359 effects spreading like an avalanche 183 electric shock 296 epidemics 90, 119, 311, 527 explosions 217, 279 gluts as suffocation with goods 57 intermittent springs and geysers 221 madness 93, 359 overfilling of a glass of water 219 pathology 82, 119, 186, 190, 198, 213, 255, 257, 258, 444, 530, 533–534: acute vs. chronic disease 85, 328; canker 188; endemic 168; fever 138, 181, 183, 191, 193, 215, 294, 359, 396; inflammation 328; internal ulcer 188; spasmodic symptom vs. continuous disease 339 spreading like fire along a line of gunpowder 213 stagnation as paralysis 63 storms 138, 169, 182, 186, 203, 254, 326, 328, 348, 443 tides 295 metaphors for depressions pathology: anaemia 85, 328; chronic disease 85 metaphors for long waves pendulum 445 substratum (Kondratiev) 449 metaphors for the cycle collapsing of a bridge 437, 438 hot and cold fits of a fever 93 pendulum 76, 431–433, 434, 437 rocking horse 430, 434 steam engine 359

Name and subject index 649 tides 64, 94, 143, 416 waves 94, 122 Metzler, L. A. 425 Meyerson, É. 460 Michaelis, O. 356 Michaud, L.-G. 219 Michel 189, 233 crises are becoming weaker and less frequent 182 crises as the outcome of the self-adjusting mechanism eliminating the excess of notes issued by banks 182 entries in Encyclopédie du commerçant. Dictionnaire du Commerce et des marchandises (Guillaumin, 1837–39): CRÉDIT 232–234; CRISE COMMERCIALE 83, 119, 154, 175, 178–189, 193, 218, 230–231, 233–234, 261 on internal and external causes of crises 181 on the periodicity of crises 179 on the propagation of exogenous shocks via an endogenous mechanism 183 microeconomic foundations and endogenous explanation of the business cycle 492 Migne, J. P. (Abbé) 238, 246 Milgate, M. 13, 37 PALGRAVE, ROBERT HARRY INGLIS (1827– 1919), entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 341 Miljukov, P. 345 Mill, J. 316, 334, 336, 370, 380, 389 BANKING, entry in Encyclopaedia Britannica (1824 supplement) 61, 104 impossibility of general gluts 58, 314 Say’s law 201, 314 Mill, J. S. 57, 108, 136, 137, 207, 270, 280, 288, 289, 302, 305, 314, 315, 323, 336, 345, 346, 370, 460 and Say’s law 136, 201, 314: and money 205–206, 382; reconciled with the recurrence of crises 541 definition of commercial crises 120, 184 early business cycle theory 158 explanation of crises endorsed by Wagner 313–314 influence on Marx 206 on the periodicity of crises 217 the tendency of the profit rate to fall 138, 371 the theory of general over-production an absurdity 137, 380, 382 Millington, T. T. 76 Millot, L. 221 Mills, F. C. 455 Mills, J. 120, 193, 221, 342 credit cycle theory 94, 332, 340, 341, 342 crises stimulate the literature on crises 56

introduced the notion of the cycle as the normal behaviour of the system 94 psychological theory of the cycle 417 the principle of causation and a common explanation of crises 188, 218 Minford, P. 470 Minsky, H. P. 158 miscalculations as a cause of crises 82, 100, 135, 146, 170, 180, 528 as a cause of unwarranted speculation 256 Mises, L. E. von 140, 433 and Say’s law 147 Mishkin, F. S. 520 Mississippi bubble 70 Mitchell, W. C. 18, 95, 119, 123, 141, 146, 158, 159, 311, 341, 359, 389, 407, 408, 421, 424, 453, 454, 455, 459, 511, 522, 523 and the National Bureau of Economic Research (NBER) 414 business cycles measurement 415–416 BUSINESS CYCLES, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 9, 62, 99–100, 109, 145, 414–418, 420 crises as the turning point of the cycle 382 definition of business cycle 99, 100, 106, 122, 416, 502, 509, 531: mostly methodological, and deliberately ‘objective’ 417; must be operational 415 etiological classification of business cycles theories 143, 145, 417 his empiricism 414 his institutionalism transpires through the entry on cycles 425 life and work 414 on ‘crises’ vs. ‘cycles’ 88, 544 on crises vs. recessions 108–110, 123 on Kondratiev’s ideas 446 on long waves 455 on Veblen’s business cycle theory 425 profits as the drive of business and of business cycles 418, 425 reference cycles 416 syncretistic approach to business cycle theorizing 99, 417 Modelski, G. KONDRATIEFF WAVES, entry in Routledge encyclopedia of international political economy (Jones, 2001) 443 Mohl, M. 349 Mohl, R. von 386 Moldenhauer, P. 376 Molinari, G. de 220, 221, 246 member of the French liberal school 219 Möller, H. 397 Mollier, J. Y. 320 Mombert, P. 376

650 Name and subject index Momigliano, F. CRISI ECONOMICHE, entry in Grande dizionario enciclopedico (1933–39) 88 Monbrion, J. CRISE COMMERCIALE ET INDUSTRIELLE, entry in Dictionnaire universel du commerce, de la banque, et des manufactures (Monbrion, 1838–41) 19, 63, 103, 119, 175, 177–189, 218, 260, translated as CRISI COMMERCIALI E INDUSTRIALI, in Enciclopedia del negoziante (Antonelli, 1841) 193, 260 crises restart the economy at a quicker pace 182 on the causes of inductrial and commercial crises 180 on the periodicity of crises 179 monetary crises rare examples of non-periodical crises (TuganBaranovsky) 347 money as a store of value: J. S. Mill 205; Marx’s and Keynes’s rejection of Say’s law 202, 382; Roscher 205, 312 cyclical variations 521 monetary shocks and equilibrium business cycles 501 neutrality of 520–521 only the medium of exchange, and Say’s law 201, 206: Roscher’s criticism 201, 312, 382 Monguió, J. 227, 229, 236 Monjean, M. Sismondi, entry in Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 213 Montefiore, J. BANK OF ENGLAND, entry in Commercial dictionary (Montefiore, 1803) 18, 61, 67 Moore, H. L. 95, 407, 409 weather theory of the business cycle 155, 417, 504 Mora, J. J. de 236 a committed liberal 227 a free trader 228, 229, 231, 234 biography and bibliography 227–229 crises discussed within the debate on free trade 231, 234, 235 definition of crisis 230 endorsed free trade in Latin–American republics 229 entries in Enciclopedia moderna (1851–55): BANCOS 230, 234; BANCOS DE DESCUENTO 230; BANCOS EXTRANJEROS 229; CIRCULACIÓN 230; CRÉDITO 229–236 (heavily relies on Michel’s entry on CRÉDIT, Encyclopédie du commerçant (Guillaumin, 1837–39) 232); CRISIS COMERCIAL 193, 229–236 (heavily borrows from Michel’s CRISE COMMERCIALE for the Encyclopédie du commerçant (Guillaumin, 1837–39) 230)

lack of references to the periodicity of crises 231, 234 mechanism of commercial crises 231 Morgan, M. S. 423, 425, 434, 436, 437 Morgenstern, O. 419 Mortimer, T. entries in New and complete dictionary of trade and commerce (Mortimer, 1766): ASSIENTO 58; BUBBLES 71 Moscow Institute of Conjuncture 401, 408–409, 459 Konyus 403 Mueller, D. 481 Müller-Armack, A. classification of business cycle theories 146–147 KONJUNKTURFORSCHUNG UND KONJUNKTURPOLITIK, entry in Handwörterbuch der Staatswissenschaften (Elster, 1923–29) 87, 146–147 Mullineux, A. BUSINESS CYCLES, entry in Lexicon of economics (Deane and Kuper, 1988) 106, 492 BUSINESS CYCLES, entry in Social science encyclopedia (Kuper and Kuper, 1985) 78, 148 multiplier-accelerator model 147, 152, 153, 155, 158, 160 at the bottom of Mitchell’s intuitive formulation 418 Hicks 489 Samuelson 153, 485, 488–489 Mumford, A. C. TAXES, SOCIOLOGY OF, entry in Encyclopedia of law and society (Clark, 2007) 475 Mumford, L. 419 Mushet, R. against the monopoly of the Bank of England 220 Müssig, K. KRISE, entry in Bank-Lexikon (Müssig, 1988) 531 Muth, J. F. 504 Myint, H. 118 Nannestad, P. 480 Nason, J. M. 512 Nasse, E. 309, 311 Nataf, P. 220, 221 COQUELIN, CHARLES, entry in Business cycles and depressions (Glasner, 1997) 221 National Bureau of Economic Research (NBER) 412, 425 and Mitchell 414 Burns 420 definition of recession 78, 111 empirical approach to business cycle research 146, 159

Name and subject index 651 Kuznets 415 stress on co-movement among series 421 Thorp 415 Neisser, H. 413 Nelson, C. R. 504, 514 Netherlands Bureau for Economic Policy Analysis 437 Tinbergen 430 Neumann, M. KONJUNKTURTHEORIE, entry in Handwörterbuch der Volkswirtschaft (Glastetter, 1980) 159, 488 Neuraths, O. 139 Neuwirth, J. 356 New Keynesianism and real political business cycles 470 Neyman, J. 423 Nicholson, J. S. BUBBLES (HISTORY OF), entry in Dictionary of political economy (Palgrave, 1894–99) 72, 118 Nicol, H. O. 398 Nicolet, C. 320 Niehans, J. 265 Niggle, C. J. BUSINESS CYCLE THEORIES, entry in Encyclopedia of political economy (O’Hara, 1999) 107, 158, 453 Nikolay-on (N. F. Danielson) 347 nonlinearity 485–500 and amplitude of fluctuations 148, 163, 485–487, 489, 491 and analytical complexity 490, 494 and non-equilibrium dynamics 490 and nonlinear reasoning 495 and realism 494, 497 invalidates the principle of superposition 498 political processes 465, 481 stability and instability as special cases 490 vs. exogenous shocks 148 see also linearity Nordhaus, W. 468, 476, 481 normalcy business cycle as a calculable deviation from the norm 543 crises as result of a temporary suspension of ordinary economic laws 339 disequilibrium as the normal state of the economy 390 equilibrium and crises or cycles as dual problems 7, 334 equilibrium as the normal state of the system 81, 143, 266, 333, 354, 532, 543, vs. business cycles as the norm 389–391 full utilization of resources 150, 158 normal vs. pathological 154, 333, 389, 530 physiological vs. pathological 88, 186: circularity 81

prosperity as the normal state of the system 91, 178, 281, 529, and lack of explanation of the trough of the cycle 92, 259 regular progress as the normal state of the system 154, 161, 169, 533 state of trade during which payments and exchanges take place smoothly and continuously 178 the cycle as the normal state of the system 86, 110, 123, 139, 333, 371, 389, 533: notion introduced by John Mills 94; Schumpeter 491; Tugan-Baranovsky (late version) 354 the features of the ‘norm’ from which crises are a deviation were rarely specified in early notion of crisis 178: circularity 178 the internal logic of the economic system 154 vs. depressions 534 see also order North, D. C. 464, 473, 475, 476, 478 Northcote, S. E. 136 Nouvion, G. de 220 O’Brien, D. P. 304 O’Hara, P. A. ECONOMIC CRISES, entry in International encyclopedia of the social sciences (Darity, 2008) 70 SPECULATIVE BUBBLES AND FUNDAMENTAL VALUES, entry in Encyclopedia of political economy (O’Hara, 1999) 73 Öchelhäuser, W. 119, 356 Ohanian, L. E. GREAT DEPRESSION (MECHANISMS), entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 534 Oldenberg, K. LEXIS, WILHELM, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 383 Olters, J.-P. 475, 476, 481 Oparin, D. I. 406, 407, 451 Oppenheimer, F. on underconsumption 147 order crises as essentially disordered events 545 cycles and the view that the economic system pursues some kind of order 545 see also normalcy oscillations equivalent to cycles, in physics 101 forced vs. free 148, 424, in statics and dynamics 432 form of the system’s proper dynamics 100 Konjunktur as oscillations 96 Ott, A. 18, 177 a Catholic associationist 246, follower of Philippe Buchez 240 cobweb-like model of the cycle 244–245

652 Name and subject index crises theory based on the systematic disappointment of expectations 243–245 editor and sole author of the Dictionnaire des sciences politiques et sociales (Ott, 1854) 238 ÉGLISE CATHOLIQUE, entry in Dictionnaire général de la politique (Block, 1863–64) 246 entries in Dictionnaire des sciences politiques et sociales (Ott, 1854): BANQUES 68; CONCURRENCE 243; CRISE 17, 64, 83, 119, 135, 172, 190, 241, 243–246; DÉBOUCHÉS 135, 241–242; PRÉFACE 239 historical method, encompassing the orthodox approach and the critics 240, 246 life and work 240–241 MALTHUS, entry in Encyclopédie du dixneuvième siècle (1838–53) 246 object of economics 241 on the existing explanations of crises 243 rejected Say’s law 135, 241–242, 245 tripartite reproduction schemes 246 outlet see Say’s law overcapitalization and income distribution 368, 370 and underconsumption, two sides of the same coin (Herkner) 369 overproduction 170, 415, 444, 526, 527 and decline of profits below the normal level 380 and expectations 244 and general price fall 63, 121, 137, 181, 182, 191, 293, 380, 436, below production cost 337 and overtrading 121 and the fixity of fixed capital 367 and the periodicity of crises 241, 245 and underconsumption 138 as the result, not the cause of crises 137 caused by increased productivity of machinery 137, 368, 379, via a change in prices 381 corrected by crises 379, 382 first theories of overproduction still had a foot in pre-Smithian economics 141 impossibility of general overproduction 135–137, 141, 311, 333, 334, 336, 349, 371: Say’s law 82, 135–137, 200, 315, 380 independent of crises (Spiethoff) 395 Lexis 137, 378–383 natural end of the upswing (Spiethoff) 395 partial 82, 334, 380 resulting from price incentives 367 Spiethoff’s theory of the business cycle 392–396 see also business cycle theories: overproduction; crises theories: overproduction; and glut oversaving and the theories of secular stagnation 65 Overstone, Lord 121, 218, 281, 297, 298, 349

description of the cycle of trade 64, 91, 93, 94, 152, 189, 367 on crises and currency management 134 the necessary function of crises 93 overtrading 189, 257 and currency management 134 and overproduction 121 and panics 258 crises theories based on credit, speculation, and trading beyond one’s capital 91, 103–104, 135, 150, 189, 202, 218, 219, 256, 293–294, 378: view rarely mentioned in 20th century dictionaries 163 Owen, R. 240, 370 on machinery and overproduction 137, 138 Owen, T. 409 Page, R. 64 Paldam, M. 467, 468, 469, 471, 476 ARE VOTE AND POPULARITY FUNCTIONS CORRECT?, entry in ECONOMICALLY Encyclopedia of public choice (Rowley and Schneider, 2004) 480 Palgrave, R. H. I. 286, 342 a commercial banker 341 INTRODUCTION to Dictionary of political economy (Palgrave, 1894–99) 332, 335 Palmer, J. H. 356 Panckoucke, C.-J. 167 panic a manifestation of rational behaviour 70 and contagion 70 and crises: and the operation of the 1844 Bank Act 301; commercial crises cause panics 68; crises are industrial, panics are financial 69; panics as one of the possible features of crises 68, 70, 118; panics as the first phase of the crisis 68, 70 and financial instability 70 and fluctuations 104 and overtrading 258 as a psychological mood 230 bank failures as first stage of a panic 337 definition: Chamber’s Cyclopaedia 67; Dictionary of English language 67; Oxford English dictionary 66 indistinct synonymous of crisis 535 ineffectiveness of raising discount rates 68 its suddenness 104 lack of confidence in the banking system 538 one of the possible sources of banking distress 70 see also financial crisis Papi, G. U. FLUTTUAZIONE ECONOMICA, entry in Dizionario di economia (Papi,1967) 546 Pareto, R. 252 Pareto, V. 451, 459, 460 long waves 445

Name and subject index 653 Paridon, C. W. A. M. van 436 Parsons, T. 419 Parvus (A. Helphand) 459 long waves 445 Pasquino, G. 536 CRISI, entry in Dizionario di Politica (Bobbio and Matteucci, 1976) 535 Passenier, J. 436 path-dependence 498 Patterson, E. M. 141 etiological classification of crises 142–143 Patterson, R. H. 356 Paula Mellado, F. de 226 Pavanelli, G. 262 Paxton, P. 74 Pearson, E. S. 423 Pebrer, P. 229 Peel, D. 470 Peel, R. 280, 297, 299, 300, 370 Pellissier, D. 283 Penrose, E. STAGNATION, entry in International encyclopedia of the social sciences (Sills, 1968) 62, 65 Pereire, E. 171 Pereire, I. 171 Perez, C. 457 periodicity and causation 142, 338: and regularity 91, 93, 99, 143, 390, 407; denied by most observers 101, 420; Jevons’s astronomical conception 94, 123, 274, 341; Juglar’s view 274; Tugan-Baranovsky 348, 352 as recurrence (before Jevons) 122, 217, 274 entrainment of oscillations 447 of business cycles remains unexplained (Tinbergen) 434 of crises 92–94, 188, 231, 243, 245, 293, 303, 326, 332, 337, 338–341, 342: and forecasting 340; and the notion of business cycle 354, 390, 527, 528; and the relationship of crises, equilibrium and cycles 334; and the theories of recurring crises 91, 261, 340; and their prevention 294; and their remedies 294; as a matter of observation 189, 217, 341; disrupted by prolonged depression of the 1870s 327; early observations 236; explanations 262 (Boccardo 258–260, 261; Coquelin 217; J. S. Mill 303); incorporated into a theory of crises 189; Juglar 273; no logical necessity 538; noted by early dictionary writers 179, 188, 213; one of the fundamental laws of order and harmony of the universe 258; proves the possibility of general overproduction 241, 245 see also cycle’s length and frequency of oscillations Perlman, S. 419 Perroux, F. 391 persistence of oscillations

see amplitude of oscillations Persons, W. M. 109, 141, 145, 406, 421 categorizes cycles and fluctuations 123 Persson, T. 470, 471, 473–475, 476, 481 Pervushin, S. 409 Petri, L. A. 198 Petrushevsky, F. F. 355 FROM THE EDITORS, prefatory note to Enciklopedicheskii slovar’ (1890–1907) 343–344 Petty, W. 90 phases of the cycle characterization in four phases 77, 453, 509: Burns 420, 421; Medio 77; Mitchell 99, 416, 509; vs. ups and downs 76–77, 100, 153, 509, 522 denomination an important step in the characterization of the morphology of the cycle 91 description in five phases: anonymous 93; Cargill 91; Corbet 121; Weinberger 77; White 76 description in seven phases: Munn’s Encyclopedia of banking and finance 77 description in ten phases: Longfield 121, 189; Overstone 64, 91, 121, 189, 367 description in three phases: Briaune 121, 189; Juglar 275, 276, 279; Laveleye 327; Patterson 143; Tugan-Baranovsky 351 description in two phases 95 merging into each other 502 orderly repetition 85, 94, 100, 420, 545: as regular as a law of nature 93 subjectivity of dating 509 their chaining 75, 120, 280, 545: and the rhythmic nature of the development of capitalism 76, 92, 94, 100, 139, 420, 509, 522, 523, 545 Philippovich, E. von 139, 364 Phillips curve 468–469, 471, 475 Phillips, A. 467 Phillips, M. 60 Picon, A. 171 Piernas y Hurtado, J. M. CRÍSIS ECONÓMICAS, entry in Vocabulario de la economia (Piernas y Hurtado, 1877) 81, 119 Pietri-Tonelli, A. 459 long waves 445 Pigou, A. C. 95, 106, 435 and Say’s law 147 psychological thory of the cycle 160, 417 Pinnock, W. 228 Pinsent, J. 60 Pinto, S. B. P. 229 Planck, M. 460 Ploeg, F. van der POLITICAL BUSINESS CYCLE, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 466, 477 Plosser, C. I. 504, 505, 508, 513, 514, 517, 518 Pohle, L. 139, 140, 359 Poincaré, J. H. 460

654 Name and subject index Poincaré-Bendixon theorem 488 Polak, J. J. 106 political business cycles 20, 153, 155, 159, 463–484, 492 and economic policy 463, 468, 480: Kalecki 466; rational expectations 469; real business cycles 473 and income distribution 469, 473–475 and inflation 467, 470, 471–472 and unemployment 466, 471, 472 classification of theories 465 difficulties in modelling 465 empirical evidence 464, 466, 470, 472, 473, 474, 476, 481 formal modelling 467 political events and state of the economy 464 politics and economics see economics and politics Pollard, S. DEPRESSIONS, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 78 Pomian, K. 163 chronosophical taxonomy of cycle theories 161–162 CICLO, entry in Enciclopedia Einaudi (Ruggiero, 1977–1984) 161–162 Portier, F. CYCLES ÉCONOMIQUES, entry in Dictionnaire des sciences économiques (Jessua et al., 2001) 98, 100, 107, 156, 492, 505, 511, 512 Posnikov, A. S. 344 Pownall, G. H. 334, 338, 342 CRISES, PERIODICITY OF, entry in Dictionary of political economy (Palgrave, 1894–99) 332, 334, 340–341 life and work 335 Preiser, E. on income distribution and business cycles 155 Prescott, E. C. 501, 504, 505, 511–512, 516, 517, 518, 522 Price, B. 76, 280, 335 Price, R. 118 prices alter with technological changes, causing temporary overproduction (Lexis) 381 and banknotes issuing policy 181 and productivity 368 and speculation 298, 303: feeding each other 214; speculation contributes to the adjustment of prices 368; the possibility of misunderstanding price signals 367 change in reaction to disturbances of equilibrium 157 cycle understood in terms of price fluctuations 93 deflation and overproduction 63, 121, 137, 181, 182, 191, 293, 380, 436

during the depression 77, 280 fall during crises 69, 81, 85, 230, 243, 244, 280, 294, 380: facilitating consumption and decongesting the glutted markets 192; inducing producers to flood the market in order to preempt further losses 436 flexibility of prices and absorption of excesses of demand or supply 201, 418: and underemploment equilibria 206 high prices lead to optimistic expectations 243, 367 in the credit-speculation-overtrading mechanism 92, 202, 280 movements in long waves 445 rise during prosperity 279 stabilization of, by means of a commodity reserve currency (Goudriaan) 436 their fall as a cause of crises 347 their fluctuations as characterizing the business cycle 76 see also inflation production and consumption: and Say’s law 194, 200; equilibrium and crisis 82, 120, 138, 178, 185, 367–370, 378–379 (overproduction (Spiethoff) 393); gap covered by military expenses (Herkner) 369; necessity of their proportional development 136, 197, 200, 312, 313; prevention of crises by balancing consumption and production 171, 178, 183; the former adapts to the latter 88, 194, 242; the gap is closed by balance of foreign trade or by stocks (Spiethoff) 390 and demand: internal trade vs. international competition 254; Say’s law 136, 541; the critics of Say’s law 136, 541 production crises 82 Lexis 378 Roscher’s Produktionskrisen 82, 84, 378 see also crisis and crises productive capacity and business cycles 98 productivity shocks real business cycle theories 502 profit rate see rate of profit prosperity 91, 178 abnormal or apparent prosperity as the generator of crises 68, 77, 181, 193 as a phase of the cycle 76, 77, 91, 93, 109, 122, 143, 275, 276, 279, 453 as the cause of distress 59 as the normal state of the system 91, 178, 281, 529, and lack of explanation of the trough of the cycle 92, 259 crises are rooted in the previous prosperity 59, 105, 134, 189, 266, 277, 280, 526 definition: Burns 109, Medio 77

Name and subject index 655 the crisis consists in its interruption 81, 86, 88, 390, 444 used in contraposition to ‘depression’ 75, 86, 96, 97, 107, 121, 542: and awareness that good and bad trade alternate 75; cyclical view 76 used in contraposition to ‘distress’ 59, 121 used in contraposition to ‘stagnation’ 63, 64, 66 protectionism 192 and crises 181, 245, 368 and stagnation of trade 63 and the periodicity of crises 180 changes in tariffs cause fluctuations of trade 182, 191 disastrous or absurd measure 210 prevents prices to fall and warn of the early signs of overproduction 256 relieves the country from overproduction due to excessive foreign competition 181 Proudhon, P.-J. 68, 138, 240, 346, 370 crises and private property 168 on underconsumption 137 public credit bad management as cause of crises 230 weakens the causes of perturbation of trade 182, 232 public debt 232 and interest rates 369 and stock-bubbles 71 its destabilizing effect (Roscher) 204 mismanagement in mid–19th century Spain, as a cause of crises 231 public goods 463, 464, 473, 475, 522 public works a cause of crises 191, 192 Roscher’s mildly proto-Keynesian anti-cyclical plan 204 purchasing power 242, 246, 368, 418 and credit 294 and income distribution 242, 369 mismatched with increasing productivity 138, 141, 368–369 overproduction theories 137, 361, 541 underconsumption theories 157, 369, 541 Puynode, G. du 135, 277 Quérard, J. M. 219 Quesney, F. 346 Raffalovich, A. 81 CRISE, entry in Dictionnaire du commerce, de l’industrie et de la banque (Guyot and Raffalovich, 1898) 68, 76, 81, 85, 135 Ramey, V. A. 520 Randolph, F. 75 Ranke, L. von 198 rate of profit affected by the volume of capital 433

and overproduction 380 falling 140: causes downturn in long waves (Mandel) 456; causes long waves 546; J. S. Mill 138, 371; Marxist theories of crises 147, 152, 162, 529, 531, 541–542, 546; Wagner 315, 371 its fluctuations as the main drive of business cycles: Burns 422; Mitchell 418, 425; Veblen 425 lag in the adaptation of supply to demand and fluctuations in profit rates 152 profitability can mismatch growth of social productive forces 141 tendency to uniformity and Say’s law 201 rates of interest and investment fluctuations 422 and loanable funds 348 and savings, and the monopoly of the bank of issue 215, 257 and stabilization policy 422 fluctuations 220 low rates fuel speculation 216, 257, 259, 294, 337 natural vs. market rates (Wicksell) 157 should be increased to prevent crises 327 suddenly rise during crises 68, 230, 275 their rising during prosperity is a condition for crises: Juglar 279; Spiethoff 395 rational expectations and bubbles 73–74 and determinism of business cycles theory 490 and political business cycles 469–472 rationality rationality at micro level bringing to irrational macroeconomic outcomes 367 speculation and bubbles 73–74, 415 Rau, K. H. 199, 206, 317, 374 conditions for stability 312 on the gluts debate 200, 311–312, 370 real business cycles see business cycles theories: real business cycles Rebelo, S. 505, 515, 517, 518 recession as a decline of the GNP for two consecutive quarters 110 as a general decrease in economic activity 108 as a phase of the cycle 108 as moderate downturn, in contrast to ‘depression’ 78 as reduction or decrease in value or amount 108 definition: Burns 109; Carson 110; Mayer 110; Medio 77; Mitchell 109; National Bureau of Economic Research 78, 111; Oxford English dictionary 108; Snowdon and Vane 522 etymology 108 see also phases of the cycle recession vs. crisis 119, 382 and the chronology of cycles 110, 123

656 Name and subject index direction of business vs. state of business 109 recession is a more neutral term 88 recession offers a more tranquillizing perspective 112 recessions allow for milder downturns 109, 110 severity of the condition 529, 545 recovery definition: Burns 109; Medio 77 see also phases of the cycle regularity in the recurrence of crises 93, 143, 352, 390 Jevons’s astronomical conception of periodicity 94, 123, 274, 341 noted in mid-nineteenth century 91, 274, 444 only until 1873 348 see also periodicity regularity of business cycles 407, 455 and complex dynamics 493 and determinism 93 and possibility of discounting them 490 denied by most observers 101, 420 vs. fluctuations 489 see also periodicity Reid, T. 227 Reijnders, J. 359, 457 Rentzsch, H. VORWORT to Handwörterbuch der Volkswirthschaftslehre (Rentzsch, 1866) 307–308 Reuteen, G. BUSINESS CYCLES—MARXIAN APPROACH, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 153 reversibility and irreversibility major cycles and long waves (Kondratiev) 448, 449, 458 Rey-Debove, J. 23 Rey, A. 10, 11, 21, 23 Reynaud, J. 170 rhythmic nature of the development of capitalism 105–107, 122, 444, 545 and the German term ‘Konjunktur’ 96 and the recursive succession of phases 85, 100, 139, 420, 509, 522, 523, 545 crises vs. recessions 110 cycles vs. fluctuations 95, 148, 509 Frisch vs. Slutsky 503 long waves 452 Mitchell 95, 100 real business cycles criticism 95, 100, 509 theories of crises vs. theories of business cycles 87, 89 Ricardo, D. 159, 200, 201, 205, 266, 287, 289, 333, 334, 336, 349, 370, 372, 378, 380, 385, 539 impossibility of general gluts 58 (see also glut debate) on panics 67 Say’s law 136, 138, 201, 314, 541

Richelot, H. 289 Richter, F. L. crises stimulate the literature on crises 56 Ricossa, S. CICLO, entry in Dizionario di economia (Ricossa, 1982) 160 Riemersma, J. C. 397 Rist, C. 309 Rivadavia, B. 229 Robbins, L. C. 95 Roberts, G. E. 108 Robertson, D. H. 95, 106, 158, 341, 359 on Tugan-Baranovsky 359 Robertson, J. M. 139 Robinson, J. A. CRISIS, entry in International encyclopedia of the social sciences (Sills, 1968) 535 Robinson, J. V. 65 Rodbertus, J. K. 140, 142, 310, 311, 346, 349, 362, 370, 539 critic of Say’s law 540 criticized by Lexis 379 influence on Wagner 308, 309, 317 on underconsumption 137, 379 the origin of pauperism and gluts are rooted in the economic organization 317 Rodenburg, P. 436 Rodrik, D. 473–474, 476 Rogerson, R. 519 Rogoff, K. 470, 471, 476 Roland, G. 475 Roldán, E. 228 Romer, C. D. BUSINESS CYCLES, entry in Concise encyclopedia of economics (Henderson, 2008) 105, 508, 509–510, 524 BUSINESS CYCLES, entry in Fortune encyclopedia of economics (Henderson, 1993) 77, 95, 106 Röpke, W. 390, 391 Rosa, G. 6, 253 Roscher, C. A. A. 198 Roscher, W. 18, 19, 136, 138, 139, 142, 206, 245, 309, 311, 317, 318, 362, 364, 372, 382, 537 among the founders of the Verein für Sozialpolitik 308 anti-cyclical public investment programmes 204 crises and credit and speculation 202, 207 crises therapeutics 204 criticized by Wagner 136, 312, 313–314, 316 denies money is only a medium of exchange 201, 312, 382 DIE PRODUCTIONSKRISEN MIT BESONDERER RÜCKSICHT AUF DIE LETZTEN JAHRZEHNTE, entry in Die Gegenwart (Brockhaus, 1848–56) 17, 79, 82, 84, 119, 177, 197, 200–206, 218, 312–313, 536

Name and subject index 657 emphasizes the quasi-rhythmical variations of upswings and downswings 204 founder of the older German historical school 198 influence on Marx 206 life and work 198–199 limited mobility of capital 201 on Say’s law and the gluts debate 200–202, 312–313 on uncertainty 203, 313 on Wagner 308 technological unemployment and sales crises 202 terminological choices (commercial crises, production crises, sales crises) 198, 378 Rosser, B. 487 Rossi, P. 262 Rostow, W. W. 455 Roubini, N. 481 Rousselière, D. 246 Royal Commission on the Depression of Trade and Industry 136, 356 Ruberg, C. WIRTSCHAFTSSCHWANKUNGEN, entry in Handwörterbuch der Betriebswirtschaft (Nicklisch, 1939) 122 Rudloff, W. von 198 Ruelle, D. strange attractors 486 Ruiz Damiel, S. 13 Runco, M. A. BUTTERFLY EFFECT, entry in International encyclopedia of the social sciences (Darity, 2008) 495 Rush, M. 520 Rutherford, M. 425 Ryan, C. BUSINESS CYCLES—REAL BUSINESS CYCLE APPROACH, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 153, 516, 520, 521, 522 Sacchi, G. 252 Sagra, R. de la 219 Saint-Paul, G. 465 Saint-Simon, H. de (Claude-Henri de Rouvroy) 171 Saint-Simonian school 169, 171–173 crises as periods of critical dissolution vs. the organic periods of progress 171 improvement of the poorest class 169 Salem, A. entries in Lexique d’économie (Salem and Albertini, 1992): CRISE. CRISE ÉCONOMIQUE 529; CYCLE 530 Salin, E. 310, 389, 391, 397 Samuelson, P. A. 95, 205, 425, 463, 475

multiplier-accelerator model 153, 485, 488–489, 495 Sanger, C. P. 335 Santa Cruz, A. de 229 Santos, M. S. SPECULATIVE BUBBLES, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 74 Sargent, T. 469 Sauer, T. D. 496 Sauerbeck, A. 356 Sauvy, A. CONJONCTURE, entry in Dictionnaire des sciences économiques (Romeuf, 1956–58) 97 Savigny, F. C. von 198 saving and investment and income distribution 368 and Say’s law 200 and the banking system 538 and the interest rate mechanism 206 business cycle theories 143, 145, 151 Spiethoff’s theory of overaccumulation 392 their independence 151 vs. liquidity preference theory 206 savings and fluctuations in the consumption of luxury goods 242 and interest: the monopoly of the bank of issues 215, 257 and speculation 242 and the stagnation thesis 65 oversaving theories 65 Sax, E. 309 Say, J.-B. 63, 120, 135, 136, 157, 159, 168, 200, 201, 216, 231, 235, 240, 266, 267, 270, 271, 277, 278, 287, 311, 314, 316, 333, 336, 349, 370, 372, 379, 380, 389, 539 DÉBOUCHÉS, entry in Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852– 53) 120, 193, 213, 220, translated as OUTLET, in Cyclopaedia of political science (Lalor, 1881–84) 120 explanation of the 1825 crisis, disputed by Coquelin 214 his influence in Spain 235 on the impossibility of general overproduction 58, 135–137, 138, 380 temporary nature of technological unemployment 203 Say, L. J.-B. 266 life and work 269 Say’s law 147, 153, 154, 336, 353 a ‘colossal deception’ 150 a ‘revolting … paradox’ 194 a tautology 139, 370 and income distribution 311, 313 and independence of small variation 151

658 Name and subject index and the classification of crises and cycles theories 135–137, 150–151 and the economics of production as a whole 151 and the foundations of equilibrium economics 150 and the interpretation of crises as disconnected events 190 and the marginalist approach 543 and the stability of equilibrium 150, 156, 194, 315 and the temporary and partial nature of crises 135, 157, 540 assumes that money is only the medium of exchange 201, 241: denied by Marx and Keynes 202, 382; J. S. Mill on money as a store of value 205; Roscher’s criticism 201, 312 crises and cycles caused by external causes 135, 153, 245 crises caused by monetary factors 135, 136, 190, 245 dynamic version 147 early formulation in the entry on COMMERCE in Robinet’s Dictionnaire universel des sciences morale, économique, politique et diplomatique (1780) 194 equivocal meanings 150 impossibility of general overproduction 82, 135–137, 152, 158, 191, 200, 245, 380, 541 (see also glut controversy) impossibility of periodic fluctuations 153 is not rendered ineffective by the changes through which the economy underwent (Wagner) 314, 316 its critics 153, 540–541: Herkner 370; Keynes 152, 154; Lexis 380; Malthus 152, 154; Ott 241–242, 245; Roscher 201, 312–313; Sismondi 152, 154; Spiethoff 389; the underworld of heretics 136, 162 largely accepted in 19th century France and Britain 135, 245 openly debated in Germany 136: and the definition of crises 136, 162; Hermann 200; Rau 200, 311; Roscher 200–202, 312–313 savings-investment relationship 200 terminological issues 120 Schäffle, A. E. F. 96, 120, 136, 139, 160, 162, 309, 310, 317, 356 HANDEL, HANDELSPOLITIK, entry in Deutsches Staats-Wörterbuch (Bluntschli and Brater, 1857) 82, 136 influence on Wagner 308 Schefold, B. 207, 317 Schiera, P. 307 Schmidt, C. 139 Schmoller, G. F. 308, 324, 345, 362, 363, 365–366, 368, 371, 372, 375, 376, 387, 397, 460 antagonism with Wagner 308, 309–311

on the Handwörterbuch der Staatswissenschaften (Conrad et al., 1890–95) 385 younger historical school 199, 310 Schönberg, G. 317, 374 schools of thought and theories of crises or cycles as a criterion for classification 151–152 classical economists 148, 150, 152, 153, 158, 528, 529, their liberal view 138, 370, 529 Keynesian approach 146, 152, 153, 529, 543 Marxists 152, 162, 528, 529, 532, 537, 541–542: modern Marxists 158; regulations approach 153 mercantilism 147 neoclassical economists 150, 152, 153, 529: neo-liberal view 529; vs. proper business cycle approach 153 new classical economics 158 post-Keynesian analysis 152, 153, 158, 529, 544 Schultz, H. 403 Schultz, T. W. 453 Schumacher, H. 366 Schumpeter, J. A. 140, 152, 153, 158, 159, 161, 308, 309, 312, 359, 366, 375, 378, 379, 391, 396, 397, 398, 421, 443, 453, 454, 455, 459, 492, 519, 539, 546 and Say’s law 147 long waves 453–454 notion of business cycle 101, 491 on equilibrium and cycles 157 on growth and cycles 161, 491, 519 on Juglar 277, 281, 382, 546 on Kondratiev’s ideas 446 on Lexis 381 on Macleod 289–290 on Marx on crises 532 on overinvestment 155 on Roscher on crises 205 on Spiethoff 388, 397 on Tugan-Baranovsky 346 technical progress theory of business cycles 417, 453, 504 Schwartz, A. J. 70, 426, 520 Schwartz, P. 228 Schweitzer, A. 391 Scrope, P. on long cycles of investment 444 Seifert, H.-U. 23 Selden, G. C. 95 Seligman, E. R. A. 271, 414, 419 editor in chief of the Encyclopaedia of the social sciences (1930–35) 10, 412 Seligmann, B. B. 309 Senior, N. 135, 277 POLITICAL ECONOMY, entry in Encyclopaedia metropolitana (1817–45) 17

Name and subject index 659 sequence analysis and dynamics 435 Shaw, E. S. 290 Shepherd, W. 236 Sheridan, R. B. 59 Sherman, H. 418 Sibert, A. 470, 471, 476 Sidgwick, H. 335, 336 Siegrist de Gentile, N. L. 229 Sills, D. L. editor of the International encyclopedia of the social sciences (1968) 419 Simon, J. 268 Simonin, J.-P. 193 Sinclair, J. 60 on the monopoly of the bank of issue 220 Singer, H. W. 397 Sismondi, J.-C. Simonde de 200, 235, 241, 250, 254, 312, 333, 336, 346, 353, 355, 362, 370, 371, 372, 379, 389, 390, 531, 539 denied Say’s law 136, 138, 152, 154, 159, 540 introduced the expression ‘crise commerciale’ in the economic literature 79 on overproduction 136–137 possibility of general gluts 58 underconsumption 140, 147, 154, 349, 351, 370 Sitzman, É. 246 Skaggs, N. T. on Macleod 289–291 Skott, P. BUSINESS CYCLES, entry in Elgar companion to Post Keynesian economics (King, 2003) 107 Skvorcov, A. 357 Slonimsky, L. Z. 345 Slutsky, E. E. 155, 401, 408, 453, 459, 492, 504 stochastic exogenous shocks and wavelike movement 156, 503 Smith, A. 75, 200, 206, 235, 250, 266, 270, 287, 289, 295, 379, 385 Smith, J. 57 Smith, R. S. 228 Smith, V. E. 118 Snowdon, B. 505, 514, 522 BUSINESS CYCLES—NEW CLASSICAL APPROACH, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 153, 504, 512 socialism interpretation of crises: as opposed to the Ricardo-Say approach 349; symptom that capitalism is rotten 138 Laveleye’s liberal socialism 322–324 the Fourierists on crises and the corruption of civilization 173–174 the Saint-Simonians on crises and progress 171–173

see also Kathedersozialisten (socialists of the chair) and Marx, K. Société d’économie politique 273 grouped economists belonging to the French Liberal school 210, 266 Soetbeer, A. 356 Solomou, S. 455, 457 KONDRATIEFF CYCLE, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 444, 445, 449, 450, 452, 457 KONDRATIEFF CYCLES, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 66, 444, 445, 448, 449, 450, 453, 457, 459 Solov’ev, V. S. 344 Solow, R. M. 514 Sombart, W. 139, 140, 345, 359, 364, 371, 397, 409 South Sea bubble 70, 72 Sowell, T. 58 speculation 191 affect the flow of savings 242 and bubbles 72–74, 415 and credit 142, 163, 293, 316, 328, 348, 350, 378, 395, 432, 539 and discount rate 292, 315 and inflation 539 and miscalculations 256 and prices 88, 298, 303, 348: feeding each other 214; speculation contributes to the adjustment of prices 368 and rates of interest 216, 257, 259, 294, 337 crises theories based on credit-speculationovertrading 85, 86, 91, 92, 103–104, 134, 135, 136, 150, 163, 180, 181, 189, 202, 214, 218, 219, 256, 277, 280, 293–294, 303, 337, 378, 539 fueled by the accumulation of unused loanable funds 216, 259, 347 its cumulative effects 72–74 its physiology and its pathology 315 its regulatory function 315 J. S. Mill 541 over-speculation and crises 81, 316 Spektator, M. I. 459 Spencer, H. 270, 272, 323 Spiethoff, A. 18, 86, 139, 140, 160, 311, 359, 366, 455, 459 business cycles as the evolutionary form of capitalism 86, 389 created his own analytical and conceptual tools for the analysis of business cycles 387 his methodological approach not sufficiently appreciated 396–397 influence on Herkner 371 KRISEN, entry in Handwörterbuch der Staatswissenschaften (Elster, 1923–29) 9, 17, 86, 120, 139–140, 362, 371, 375, 388–397: improperly titled, as it deals with business cycles 389;

660 Name and subject index synthetizes and unifies Spiethoff’s previous work on the subject 389 life and work 387–388 married theoretical and historical views, beyond the Methodenstreit 387–388, 391–392 on Kondratiev’s ideas 446 on overproduction 392–396: absolute vs. special 394; history of theories 137 overinvestment theory of the cycle 394, 396, 417 OVERPRODUCTION, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 9, 137, 393 Real-types analysis 387, 398 taxonomy of theories of crises and cycles 139–140 Spotton Visano, B. 70 entries in International encyclopedia of the social sciences (Darity, 2008): PANICS 70; SPECULATION 118 SPECULATIVE BUBBLES AND FUNDAMENTAL VALUES, entry in Encyclopedia of political economy (O’Hara, 1999) 73 Sraffa, P. rejected independence postulate 151 stability and classification of business cycle theories 100, 150, 156–159 and exogenous shocks 100, 105, 155, 156, 489 and nonlinearity 148, 485 and Say’s law 150, 156, 194, 315 and the persistence of the cycle 157 conditions for 312 considerably increased after WW2: banking policy 422; corporate policy 422; death of the business cycle 423; Keynesian policies 422; larger share of employment in the tertiary sector 423; structural reforms in the financial markets 422 dynamic stability vs. structural stability 535 of the Kitchin cycle 467 price flexibility and capital mobility 201 theories requiring specific and actuating causes of crises 142, 143 see also instability stagnation 91, 147 a condition less severe than a crisis 529 and depression, in Russian langage 358 and protectionism 63 and the maturity of capitalism 64–65 as a specific phase of the cycle 64 as absence or low rate of growth 62, 65 as one of the consequences of a crisis 64 as one of the features of crises 63–64 as the declining phase of long waves 66 definition (Oxford English dictionary) 62 necessary for reabsorbing the excesses of production (Monbrion) 63

secular stagnation and unemployment 65 state of languishing trade 62–63 used in contraposition to ‘prosperity’ 63, 64, 66 Stamhuis, I. H. 428, 437 Starn, R. CRISIS, entry in New dictionary of the history of ideas (Horowitz, 2005) 547 Stassen, G. 376 statics and equilibrium 449 statics and dynamics 159 classical liberal vs. neo-liberal interpretation of crises and equilibrium 162 cyclical impulses vs. endogenous fluctuations 431, 432 Kondratiev 449 neoclassical and Austrian doctrines are static and unsuitable to explain the dynamics of reality 435 Steimetz, S. S. C. BUBBLES, entry in Concise encyclopedia of economics (Henderson, 2008) 74 Steindl, J. and secular stagnation 64–65 on long waves 65 STAGNATION, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 65 Steiner, P. 168 Stengos, T. 498 Stewart, D. 227 Stigler, G. J. 13, 37, 468 stock exchange fluctuations as a cause of crises 138 Stöcker, A. 309 stock-jobbing 243 and bubbles 71 Stockman, A. C. 505 Stolper, W. 447 strange attractors 486 Streissler, E. W. 199, 206, 312 classification of business cycle theories 160 KONJUNKTURTHEORIE, entry in Evangelisches Staatslexikon (Herzog et al., 1987) 160 on Roscher 205–206 Stridiron, J. G. 427, 437 PREFACE to Bedrijfseconomische encyclopedie (Stridiron et al., 1947–52) 428 Strouvé, G. 460 structural change and long waves 444 Kalecki 547 structural instability 487 Marx 491 of Goodwin’s growth cycle model 489, 491, 498 of linear functional equations giving rise to constant amplitude oscillations 163

Name and subject index 661 Schumpeter 491 structural stability and qualitative change 535 vs. dynamic stability 535 structural vector autoregressions 519 Struve, P. B. 345 Stuckey, V. 304 Stutzer, A. 480 stylized facts see business cycle: stylized facts Suh, B. 23 Sukhanov, N. 451 Summers, L. H. 515, 517 Sweezy, P. M. 65, 359 Swift, J. 70 Syll, L. P. LONG CYCLES, in: Routledge encyclopedia of international political economy (Jones, 2001) 453, 456 Sylos-Labini, P. 65 synchronicity of oscillations entrainment of oscillations 447 Szidłowski, M. 497 Tabarrini, M. 252 Tabellini, G. 470, 471, 473?475, 476, 481 Takens, F. strange attractors 486 Tan, C. M. ECONOMIC GROWTH NONLINEARITIES, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 498 taxation and political business cycles 471, 473–475 Taylor, J. 470 Taylor, P. A. S. STAGNATION, THEORY OF, entry in New dictionary of economics (Taylor, 1966) 65 Taylor, W. G. L. 79, 119 Tchernoff, I. 169 technical progress 180, 182, 189, 456 and life-cycle of products 456 and long waves 445, 450, 459 and rate of profit 541 as a random walk (real business cycles theories) 506, 514–515 as exogenous real shock 506–507, 517–519 cost and price reduction stimulating demand 203 increased productivity of machinery and overproduction 137, 138, 141, 368, 379: via price changes 381 inventions vs. diffusion of innovations 456 Schumpeter 453, 504 technological change 146 and economic growth 514 and unemployment 137, 180, 203

as an institutional factor 143 in Goodwin’s growth cycle model 488 in transport and communication 368 transformation of short-lived crises into chronic depressions (Herkner) 367 technological progress see technical progress technology shocks see exogenous shocks, technological Temin, P. GREAT DEPRESSION, entry in New Palgrave dictionary of economics (Durlauf and Blume, 2008) 534 temporal arbitrage 498 Thalberg, B. ÅKERMAN, JOHAN HENRIK, entry in Business cycles and depressions (Glasner, 1997) 467 Thatcher, M. 466 Theil, H. 437 Thom, DeCourcey W. 282 Thom, R. 492 Thompson, E. A. GOODWIN, RICHARD MURPHEY, entry in Business cycles and depressions (Glasner, 1997) 107 Thompson, T. P. 58, 121 Thornton, H. 299, 301, 303, 304, 340, 538 Thorp, W. L. BUBBLES, SPECULATIVE, entry in Encyclopaedia of the social sciences (Seligman, 1930–35) 72, 415, 416 Thun, A. 362 Thünen, J. H. von 199 time discrete-time vs. continuous-time 493, 497 dynamic theories and the role of time 161 linear time and cyclical time 161–162 time-lags Aftalion 156 amplify fluctuations 313 and cobweb models 152, 156, 244, 432 and disequilibrium dynamics 435 and dynamics 161, 162, 435, 529 between real wages and economic developments 433 distributed lags 425 give rise to fluctuations in profit rates 152 overcome stabilizing effects of flexible wages and prices 418 permit cycles around a stable equilibrium 156 properties of delayed differential equations 497 Timmermans, C. 246 Tinbergen, J. 18, 106, 421, 423, 425, 455 at the Dutch Central Bureau of Statistics 429 cobweb theorem 432, 435 debate with Goudriaan on crises, dynamics and equilibrium 436–437, 438

662 Name and subject index dynamics as the science of endogenous movements 431 editor of the economic parts of the Bedrijfseconomische encyclopedie (Stridiron et al., 1947–52) and author of several entries 428 entries in Bedrijfseconomische encyclopedie (Stridiron et al., 1947–52): BEWEGINGSTYPEN 9, 430–431; CONJUNCTUURTHEORIE 9, 430, 431–434; CONJUNTUURSTATISTIEK 9, 430, 431; DYNAMICA 9, 430, 435; INTRODUCTION 435 League of Nations business cycle inquiry 163, 429, 435–436, 454 life and work 429–430 on Kondratiev’s ideas 446 on the mathematical types of motion of economic variables 430–431 on the static character of neoclassical and Austrian doctrine 435 supports long wave hypothesis 454 synthetic explanation of the cycle based on the gap between income and expenditure 432–434 vs. Keynes on the econometric method 429 Tinbergen, N. 429 Tobin, J. 207 Tocqueville, A. de recurrence of crises as an endemic illness 168 Tönnies, F. 309, 317, 364 Tooke, T. 135, 218, 277, 280, 281, 303, 337, 340, 349, 356, 357, 358 definition of crisis 185 early business cycle theory 158 Torrens, R. 60, 218, 297, 349 Transon, A. 173 crises as descending vibrations 173 traverse crises as a transition from one equilibrium to another 88 trend and cycle aspects of the same phenomenon 451 cycle definied in terms of deviations from trendline 100 fluctuations may take place around long waves 107 Hicks 486, 491 nonlinearities invalidate the principle of superposition 498 problem of the separation of cycles and trends 148 Trigg, A. B. BUSINESS CYCLES—KEYNESIAN APPROACH, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 153 Trotsky, L. 448, 455 cycles vs. long waves 448 Tschuprow, A. 377 Tugan-Baranovsky, M. I. 18, 84, 110, 140, 158,

159, 345, 357, 358, 364, 371, 388, 393, 401, 421, 459, 460, 542 accepted Say’s law 139 criticizes underconsumption theories 349 definition of crisis 350, 354 ECONOMIC CRISES, entry in Enciklopedicheskii slovar’ (New Brockhaus-Efron, 1911–16) 9, 82, 351–352 ECONOMIC CRISES, entry in Enciklopedicheskii slovar’ (Small Brockhaus-Efron, 1907–09) 9, 82, 350 entries in Enciklopedicheskii slovar’ (Brockhaus-Efron, 1890–1907): ADAM SMITH 346; CARL MENGER 346; COMPETITION 346; ECONOMIC CRISES 9, 17, 82, 145, 346, 347–350, 402; ECONOMIC SCIENCE 345, 346; JEANFRANÇOIS MELON 346; JOHN STUART MILL 346; MERCIER DE LA RIVIÈRE 346; THOMAS MALTHUS 346 etiological classification of the theories of crises 145, 348–349 his bibliograpic references 355–357, 359 life and work 345–346 loanable funds theory 347, 351, 353, 354, 450 long waves 445 on crises and the development of capitalism in Russia 355 on currency policy 358 theory of markets and theory of the periodicity of crises 358: their relationship not discussed in his dictionary entries 353 tulipmania 546 Turgot, A. R. J. 270 turning points cobweb models and symmetry of turning point explanations 245, 247 crises as the lower turning point of the cycle 528 crises as the upper turning point of the cycle 87, 88, 121, 152, 378, 382, 526, 528, 529, 530, 531, 546 crises vs. recession 88, 109, 382 determined by exogenous shocks 437 determined by the endogenous propagation mechanism 437 forecasting 517 of long waves, not accounted for by Kondratiev 451, 452 recovery 109: explanation based on loanable funds 259 their dating: the NBER method 416, 421 trough of the cycle left unexplained by most theories of crises 92, 259, 303 Tylecote, A. 457 Uhl, A.

Name and subject index 663 KRISE

ARBEIT (DYNAMISCH DARentry in Handwörterbuch der Arbeitswissenschaft (Giese, 1927–30) 87 uncertainty and amplitude of oscillations 313, 518 and crises 83, 89, 184, 543: Ott and the disappointment of expectations 243–244 and equilibrium 244 and income distribution 369 and speculation 184 and sunspots equilibria 156 and switches between optimism and pessimism 313 misallocation of resources could lead to crises 203 underconsumption 140, 147, 531 and income distribution 369, 370, 379 and overcapitalization, two sides of the same coin (Herkner) 369 and overproduction 138 and productivity increases 138, 369 and the theories of secular stagnation 65 Marxist theories of crises 542 Rodbertus 137, 379 underconsumption theory ambiguities removed by Goodwin’s growth cycle model 488 see also crises theories: underconsumption, and business cycles theories: underconsumption unemployment and distribution of income 541 and political business cycles 466, 471, 472 and price flexibility 206 and real business cycles theory 519, 521 and the secular stagnation thesis 65 during crises 69, 213, 231: the crisis of 1929–32 534 during depressions 77, 225 during recessions 110 public works programmes 204 technological unemployment 137, 180, 203 the Phillips curve 467–469 see also employment UND

GESTELLT),

Vadillo, J. M. 228 Vainshtein, A. L. 408 Van der Ploeg, F. see Ploeg, F. van der Van Doren, C. 12 Van Duijn, J. see Duijn, J. van Van Gelderen, J. 459 see Gelderen, J. van Van Hoof, H. 21 Van Maarseveen, J. G. S. J. see Maarseveen, J. G. S. J. van Vanderlip, F. A. 95

Vane, H. R. 505, 514, 522 CYCLES—NEW CLASSICAL BUSINESS APPROACH, entry in Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 153, 504, 512 Vapereau, G. 246 Varela, J. 309 Veblen, T. 397, 417, 425 Verdoorn, P. J. 428 Verein für Sozialpolitik 199, 309, 324, 363, 365, 366, 371, 372, 375, 377, 386 Vico, G. B. doctrine of the recurring cycles of history 258 Villacorta, F. 226 Villermé, L.-R. 170 Vinci, F. CRISI ECONOMICA, entry in Dizionario di politica (Partito Nazionale Fascista, 1940) 77 Viner, J. headed the study group that recommended the approach to be followed by the International encyclopedia of the social sciences (1968) 419 Vögel, E. H. 260 von Neumann, J. 494, 497 Vorontsov, V. P. 345, 357 Vosgerau, H.-J. 492, 497 KONJUNKTURTHEORIE, entry in Handwörterbuch der Wirtschaftswissenschaft (Albers et al., 1978) 64, 152, 467, 477, 481, 487–488, 496 vote and popularity functions 480 Wade, J. cobweb-like model of the cycle 93, 244 early usage of word ‘cycle’ 121 Wagemann, E. 405, 431 Wagener, H. KRISEN, entry in Staats- und GesellschaftsLexikon (Wagener, 1859–67) 83 wages and competition between workers 243 fall during crises 69, 85, 380 increse before crises 379, 541 react with a lag to economic developments 433 their rigidity necessary condition for cyclical movement 418 Wagner, A. H. G. 18, 96, 139, 160, 162, 204, 207, 311, 324, 345, 362, 371, 372 and Say’s law 162 and the Verein für Sozialpolitik 308 antagonism with Schmoller 309–311 crises are consequences of human behaviour rather than a pathology of capitalism 317 criticizes Roscher 136, 312, 313–314, 316 defends Say’s law against classical and more recent attacks 314, 314–316, arguing that the abstraction of the formula may be corrected with further empirical enquiries 316

664 Name and subject index distinction between partial and general crises 314 endorses J. S. Mill’s explanation of crises 313–314 KRISEN, entry in Handwörterbuch der Volkswirthschaftslehre (Rentzsch, 1866) 84, 136, 162, 313–318, 371 life and work 308–311 need for social reforms and the role of the State 308–310: vs. his denying role of State in managing crises 316; vs. Wagner’s liberalism 310, 362 on Manchesterism 309 on Rentzsch’s Handwörterbuch 307 on the German historical school 309–311 on the gluts debate 136 rejects Malthusian underconsumptionism 314 the periodicity of crises due to recurring overspeculation and to the tendency of profits to fall to a miimum 315 Wagner, H. entries in Ökonomisches Lexikon (Bader, 1970–71): KRISE, ZYKLISCHE 532; PERIODIZITÄT DER KRISEN 532 Wagner’s law 309 Wald, A. 423 Walker, B. E. 335 Wallace, A. R. 119, 356 Wallace, N. 469 Walras, L. 254, 459 Wasserrab, K. 356 Waterman, A. M. C. 481 Webb, B. 364 Webb, S. 364 Weber, A. 375, 387 Weber, M. 364, 397 Weber, W. KONJUNKTUR UND KRISE, entry in Katholisches Soziallexikon (Klose, 1964) 65, 98, 122, 531 Weill, G. 169 Weinberger, O. KONJUNKTUR U. KRISEN, entry in Staatslexikon (Sacher et al., 1929) 77, 87, 122, 160 Wellink, A. H. E. M. 429 Wells, A. D. 356 on overproduction 137

Wellstein, G. KRISES, entry in Staatslexikon (Bruder and Bachem, 1889–97) 76 White, H. COMMERCIAL CRISES, entry in Cyclopaedia of political science (Lalor, 1881–84) 68, 76, 81, 220 White, M. V. 304, 305 Wicksell, K. 157, 160, 207, 421, 433, 459, 504 exogenous shocks and amplitude of oscillations 489 long waves 445 on crises vs. cycles 543 on overinvestment 155 Wieser, F. F. von 375, 387, 435 Willett, T. POLITICAL BUSINESS CYCLES, entry in Encyclopedia of public choice (Rowley and Schneider, 2004) 468, 478 Wilson, G. 102 Wilson, J. 135, 216, 218, 277, 305, 342 monetary vs. commercial crises 185 on the 1825 panic 214 Wirth, M. 136, 138, 280, 281, 356, 357 on the usefulness of crises 138 Wittelshöfer, O. 138 Wolf, J. 356 Wolfe, A. 463 Wolff, P. de 430, 434, 437, 438 Wolff, S. de 454, 455, 459 long waves 458 Woodbury, L. 217 Wright, C. D. 136 Yeo, R. 11, 16, 23, 24 Yorke, J. A. 496 Yule, G. U. 434, 437 Zabalza, J. 15, 33, 226, 233, 234, 235 Zabell, S. L. LEXIS, WILHELM, entry in New Palgrave dictionary of economics (Eatwell et al., 1987) 383 Zalm, G. 430 Zarnowitz, V. 481 Zevin, R. B. KONDRATIEFF CYCLES, entry in Business cycles and depressions (Glasner, 1997) 453 Zotov, A. V. 357

Index of dictionaries and dictionary entries cited

ABC der modernen Wirtschaft (Stein, 1972) KONJUNKTUR 121 ABC der Volkswirtschaft (Thalheim and Grosse, 1934) 35 KONJUNKTUR UND KRISE 86, 122, 140, 145 ABC der Wirtschaft (Feldmann, 1940) 35 ABCs of the financial crisis (Mayberry, 2008) 43 Allgemeine Schatz-Kammer der Kaufmannschafft (Savary, 1741–43) 28 Allgemeines öconomisches Lexicon (Zincke, 1731) 28 Allgemeines ökonomisches Lexikon (Lübeck, 1812) a practical arts dictionary 28 American heritage dictionary CYCLE 90 Auszug aus des J. G. Krünitz ökonomisch-technologischer Encyklopädie (Schütz et al., 1786–1830) 28 Bank-Lexikon (Grosjean and Loeffelholz, 1988) KONJUNKTUR 96 Bank-Lexikon (Müller and Löffelholz, 1953) 5, 31 KONJUNKTUR 96 Bank-Lexikon (Müssig, 1988) KRISE 531 Banque rendue facile aux principales Nations de l’Europe (Giraudeau, 1741) 30 Bedrijfseconomische encyclopedie (Stridiron et al., 1947–52) 427–428 a popular business dictionary 427; aimed at providing businessmen with knowledge of theory and understanding of ‘tools of observation’ for business 428; BEWEGINGSTYPEN 9, 430–431; CONJUNCTUURTHEORIE 9, 430, 431–434; CONJUNTUURSTATISTIEK 9, 430, 431; DYNAMICA 9, 430, 435; entries on statistics marked the advancement of statistical

thinking in the Netherlands 428, 437; GRONDSTOFFSTANDAARD 436; INTRODUCTION 435; not very influential 428, 434; PREFACE 428 Berkshire encyclopaedia of world history (McNeill, 2005) LONG CYCLES 443 Biographical dictionary of American economists (Emmett, 2006) 44 Biographical dictionary of Australian and New Zealand economists (King, 2007) 44 Biographical dictionary of British economists (Rutherford, 2004) 44 Biographical dictionary of dissenting economists (Arestis and Sawyers, 1992) 44 Biographical dictionary of European economists (Gehrke and Kurz, 2012) 44 Biographical dictionary of women economists (Dimand, Dimand and Forget, 2000) 44 Blackwell dictionary of modern social thought (Outhwaite, 2006) BUSINESS CYCLES 146; CRISIS 537 Bluntschli’s Staatswörterbuch in drei Bänden (Bluntschli and Löning, 1869–1872) 40 HANDELSKRISEN 136 Bolshaya sovetskaya entsiklopediya (1926– 1947) 344 Booms and busts. An encyclopedia of economic history from tulipmania of the 1630s to the global financial crisis of the 21st century (Ciment, 2010) 43 Brockhaus-Efron encyclopedic dictionary see Enciklopedicheskii slovar’ Brockhaus-Konversationslexikon (1796–1808) 14, 197 explicitly Protestant 13 Brockhaus-Konversationslexikon (1843–48) 219 Brockhaus-Konversationslexikon (1882–87) 343 HANDELSKRISEN 81 Brockhaus-Konversationslexikon (Grösse Brockhaus, 1928–35)

666 Index of dictionaries and dictionary entries cited KRISE 140 Bulls, bears, boom and bust (Dobson, 2007) BUBBLE 73 Business cycles and depressions (Glasner, 1997) 43, 481 ÅKERMAN, JOHAN HENRIK 467; CHAOS AND 493; CONTINUOUS-TIME BIFURCATIONS MODELS 493; COQUELIN, CHARLES 221; GOODWIN, RICHARD MURPHEY 107; KONDRATIEFF CYCLES 453; KONDRATIEFF, NIKOLAI DMITRIYEVICH 444, 459; LONGWAVE THEORIES 445; MONETARY EQUILIBRIUM THEORIES OF THE BUSINESS CYCLE

520–521;

NONLINEAR BUSINESS-CYCLE 493; PANIC OF 1825 69; PANIC OF 1837 69; PANIC OF 1893 69; POLITICAL BUSINESS CYCLE 468, 477; REAL BUSINESS CYCLE THEORIES 503–504, 518 THEORIES

Capire l’economia, dizionario critico del capitalismo contemporaneo (Stefanelli, 1977) 36 Commercial cyclopaedia (Macardy, 1833) 4 Commercial dictionary (Montefiore, 1803) BANK OF ENGLAND 18, 61, 67 Concise encyclopedia of economics (Henderson, 2008) BUBBLES 74; BUSINESS CYCLES 105, 508, 509–510, 524 Counting-house dictionary (Bithell, 1882) 30 Crosby’s merchant’s and tradesman’s pocket dictionary (1808) 29 Cyclopaedia of political science (Lalor, 1881–84) 40 COMMERCIAL CRISES 69, 76, 81, 220; incorporates 40 entries from the Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 32, 211; OUTLET 120, 220; OVER-PRODUCTION 137 Cyclopaedia of political science (Lalor, 1888–90) 211 Cyclopædia, or, an Universal dictionary of arts and sciences (Chambers, 1728) 4, 11, 14, 57, 251 CYCLE 121; PANIC 67 Deutsches Staats-Wörterbuch (Bluntschli and Brater, 1857) HANDEL, HANDELSPOLITIK 82, 136 Diccionario analítico de economía política (Ganilh, 1827) 118 Diccionario de economia politica (Heller, 1937) 35 Diccionario de economía política (Napoleoni, 1962) 36 Diccionario de hacienda para el uso de los encargados de la suprema dirección de ella (Canga Argüelles, 1826–27) 225, 236

Diccionario de hacienda, con aplicación a España (Canga Argüelles, 1833–34) 236 Diccionario enciclopédico Hispanoamericano (1887–99) 225 entries related to economic crisis focused on the social consequences of depressions 225 Dicionário ecônomico-comercial e financeiro (Gomes, 1942) 35 Dictionary . . . of commerce and commercial navigation (McCulloch, 1832) 18, 167, 251 a reference point in mid-19th century Britain and abroad 29, 34, 288; BANKS (ENGLISH PRIVATE AND PROVINCIAL) 18; CORN LAWS AND CORN TRADE 18, 30, 58, 63, 75; fully authored by the compiler 6; lacks theoretical depth (Boccardo) 33, 250; no entry on crises 193 Dictionary of econometrics (Darnell, 1994) 42 Dictionary of economic and banking terms (Weston and Crew, 1913) 30 Dictionary of economic terms for the use of newspaper readers and students (Bowers, 1905) 15, 35 Dictionary of economics and commerce (Hanson 1965) STAGNATION THESIS 65 Dictionary of environmental economics (Markandya, 2001) 42 Dictionary of environmental economics, science, and policy (Grafton et al., 2001) 42 Dictionary of free-market economics (Foldvary, 1998) 43 Dictionary of international trade (Hinkelman, 1994) 42 Dictionary of lexicography (Hartmann and James, 1998) DICTIONARY 21; ENCYCLOPEDIA 21; GLOSSARY 21; LEXICON 21 Dictionary of modern economics (Greenwald, 1965) 52 Dictionary of modern economics (Horton et al., 1948) 52 BUSINESS CYCLES 77, 122; BUSINESS CYCLES, THEORY OF 146 Dictionary of national biography 342 Dictionary of political economy (Macleod, 1863) 43, 253, 286–288 ACCUMULATION 304; AESCHINES 287; BANK 286, 287, 290; BOCCARDO, GEROLAMO 262; BULLION REPORT 288, 295; CAPITAL 286, 288, 291; COINAGE 286; CONSUMPTION 286; COQUELIN, CHARLES 211, 303; COST OF PRODUCTION 286; CREDIT 75, 103, 286, 288, 291; CRISIS, COMMERCIAL 62, 68, 135, 177, 286, 288, 292–304; CURRENCY 286, 288, 295, 297; CZÖRNIG, C. F. VON 304; first dictionary of political economy in the English language

Index of dictionaries and dictionary entries cited 667 286; fully authored by the compiler 7, 33, 288; mostly concerned with credit and banking, in particular with historical and legal aspects 287; well received 287–288, but ignored by the devotees of John Stuart Mill 288 Dictionary of political economy (Palgrave, 1894–99) 15, 18, 271, 286, 332–334 aimed at students 33, 332; BUBBLE ACT 72; BUBBLES (HISTORY OF) 72, 118; COQUELIN, CHARLES 221; CRISES 1857–1866–1890 333, 334, 337–340; CRISES, COMMERCIAL AND FINANCIAL 83, 334, 337–340; CRISES, PERIODICITY OF 332, 334, 340–341; DÉBOUCHÉS, THÉORIE DES 58, 120; entries on crises fail to account for the richness of theory in England at the time 332; GLUT 58, 334, 336; INTRODUCTION 332, 335; OVER-PRODUCTION 58, 137, 333, 334, 336; reflects state-of-the-art economics at the end of the 19th century 332; several entries written by practitioners 335, 341 Dictionary of the English language (Johnson, 1755) 57, 67 Dictionary of the history of ideas (Winer, 1968) CRISIS IN HISTORY 536 Dictionary of the social science (Gould and Kolb, 1964) BUSINESS CYCLES AND BUSINESS FLUCTUATIONS 101 Dictionnaire analytique d’économie politique (Ganilh, 1826) 6, 32 COMMERCE 63; CONSOMMATION 193; CRÉDIT 61; fully authored by Ganilh 31; incomplete, according to Guillaumin 209; often superficial and too narrow in the choice of entries (Boccardo) 250; PRÉFACE 3; PRODUCTION 193 Dictionnaire d’analyse économique (Guerrien, 2002) CYCLE (THÉORIES DU) 160 Dictionnaire d’économie charitable (MartinDoisy, 1855–64) 42 Dictionnaire d’économie contemporaine (Lakehal, 2001) FLUCTUATION 107 Dictionnaire de l’administration française (Block, 1856) 267 Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 6, 209–211, 219, 230, 233, 283, 386 BANQUE 211, 212, 215; CONSOMMATION 213; CRÉDIT 212; CRISES COMMERCIALES 80, 119, 135, 154, 169, 188, 190, 211, 212–219, 234, 256; DÉBOUCHÉS 120, 193, 213, 220; epistemological perspective 12, 32, 210–211; excessively theoretical (Boccardo) 33, 250; first dictionary to systematically incorporate

bibliographies 22, 32, 210 (sources 219; the entry on crises is excepted 217); INTRODUCTION 15, 209, 210, 219; lacks cross-references 251; outdated, and revised into Nouveau dictionnaire d’économie politique (Say and Chailley, 1891–92) 33, 211, 269; PRÉFACE DE L’EDITEUR 32, 210, 219; PRODUCTION 213; PROGRÈS INDUSTRIEL 193; SISMONDI (JEANCHARLES-LÉONARD SIMONDE DE) 213; upheld and propagated the viewpoint of the French Liberal school 13, 210, 220; very influential 32, 211 Dictionnaire de la conversation et de la lecture (1832–55) 167 CRISES COMMERCIALES 79, 80, 172, 177–189, 218 Dictionnaire de science économique (Cotta, 1968) FLUCTUATION 443 Dictionnaire des auteurs en sciences économiques et sociales (Deubel and Montoussé, 2003) 44 Dictionnaire des finances (Jones, 1727) 30 Dictionnaire des finances (Say, 1889–94) 30, 386 BANQUES 266; CRISES FINANCIÈRES ET COMMERCIALES 9, 19, 84, 266 Dictionnaire des grands économistes (Brémond and Salort, 1992) 43 Dictionnaire des grands économistes. 2500 ans d’histoire de la pensée économique (Teulon, 2009) 44 Dictionnaire des sciences économiques (Cotta, 1969) CRISE 528; FLUCTUATION 528 Dictionnaire des sciences économiques (Jessua et al., 1991) CYCLES ÉCONOMIQUES 492, 505 Dictionnaire des sciences économiques (Jessua et al., 2001) 35 CRISE ÉCONOMIQUE 506, 530; CYCLES ÉCONOMIQUES 98, 100, 107, 156, 505, 511, 512 Dictionnaire des sciences économiques (Romeuf, 1956–58) 35 CONJONCTURE 97; CRISES 527–528; CYCLES 98, 101 Dictionnaire des sciences humaines (Mesure and Savidan, 2006) 41 Dictionnaire des sciences politiques et sociales (Ott, 1854) 11, 40, 241, 246 alphabetically organized, but with a methodical index 239; BANQUES 68; CONCURRENCE 243; CRISE 64, 83, 119, 135, 172, 190, 238, 240, 241, 243–246; DÉBOUCHÉS 135, 241–242; fully authored by the compiler 7, 40, 239; its microstructure 239; PRÉFACE 239 Dictionnaire des théories et mécanismes éco-

668 Index of dictionaries and dictionary entries cited nomiques 1984)

(Brémond

and

Gélédan,

CROISSANCE ET CRISES 11, 153; methodically arranged 11, 23; PRÉSENTATION 23 Dictionnaire du citoyen, ou Abrégé historique, théorique et pratique du commerce (Lacombe, 1761) 29 Dictionnaire du commerce, de l’industrie et de la banque (Guyot and Raffalovich, 1898) CRISE 68, 76, 81, 85, 135; SURPRODUCTION 135 Dictionnaire économique et financier (Bernard and Colli, 1975) 31 CRISE (ÉCONOMIQUE) 162, 529; CYCLE 529 Dictionnaire économique et financier (Bernard and Colli, 1996) 31 CRISE (ÉCONOMIQUE) 529 Dictionnaire économique et social (Brémond and Gélédan, 1981) 22 Dictionnaire économique et social (Brémond and Gélédan, 1992) CRISES ÉCONOMIQUES ET SOCIALES 107, 529 Dictionnaire économique et social (Suavet, 1962) CONJONCTURE 97 Dictionnaire encyclopédique (Le Bas, 1840–45) 236 Dictionnaire encyclopédique économique et social (Alquier, 1990) CRISE 154, 530–531 Dictionnaire général de la politique (Block, 1863–64) 40, 266–268 based on liberal principles, but aims at offering a neutral ground for contributors of different opinions 268; CRISES COMMERCIALES 9, 62, 83, 118, 135, 188, 262, 268, 273–278, 282–283; ÉGLISE CATHOLIQUE 246; encompasses the science of government in a broad sense 268; PRÉFACE 267 Dictionnaire général de la politique (Block, 1873) CRISES COMMERCIALES 274–278 Dictionnaire Marx contemporain (Bidet, 2001) 43 Dictionnaire oeconomique (Chomel, 1709) a practical arts dictionary 27 Dictionnaire oeconomique (Chomel, 1732) CYCLE 121 Dictionnaire politique (Duclerc and Pagnerre, 1842) 170 BANQUE 171; CRISE 84, 119, 170–171, 178–189, 218; expression of the Republican party 168, 170 Dictionnaire technique de la bourse et des marchés financiers (Villeneuve, 1990) 31 Dictionnaire thématique de sciences économiques et sociales (Géhanne, 1995)

CRISES ET FLUCTUATIONS ÉCONOMIQUES 62, 78, 107, 529; CRISES ET THÉORIES ÉCONOMIQUES 529 Dictionnaire universel … du commerce et de la navigation (Guillaumin, 1859–61) 29, 209 CRISES COMMERCIALES 64, 81, 119, 136, 169, 190–192 Dictionnaire universel de commerce (Savary, 1723) 250 very successful, translated in various languages 28 Dictionnaire universel de commerce, banque, manufactures, douanes, pêche, navigation marchande (Buisson, 1805) 29 Dictionnaire universel de la géographie commerçante (Peuchet, 1798–99) 29 Dictionnaire universel des sciences morales, économique, politique et diplomatique (Robinet, 1777–83) 15, 39 COMMERCE 39, 194 Dictionnaire universel du commerce, de la banque, et des manufactures (Monbrion, 1838–41) 29, 167 CRISE COMMERCIALE ET INDUSTRIELLE 19, 63, 103, 119, 175, 177–189, 218, 260 Dizionario analitico di diritto e di economia industriale e commerciale (da Portula, 1843) 249 Dizionario della economia politica e del commercio (Boccardo, 1857–63) 249–253, 261, 262 a mean for propagating knowledge 32; ABBONDANZA 252; ACCATTONAGGIO 252; ACQUE 252; AFRICANO COMMERCIO 252; AGGIOTAGGIO 252; AGRICOLTURA 253; aimed at covering Italian doctrines 249; AMERICA 252, 260; ANARCHIA 252; BANCA 220, 253, 255, 256, 258, 260, 262; BANCO 261; CINA 262; CREDITO MOBILIARE 262; CRISI 80, 154, 177, 220, 255–258, 260–261; DIZIONARI ECONOMICI E COMMERCIALI 249, 250; ECONOMIA POLITICA 252; fully authored by the compiler 7, 33, 251; GLI EDITORI A CHI LEGGE 15; heavily borrowed from Dictionnaire de l’économie politique (Coquelin and Guillaumin, 1852–53) 250; LIBERTÀ NELLE MATERIE ECONOMICHE 252; MATEMATICA APPLICATA ALL’ECONOMIA POLITICA 254; MONETA 255, 256, 260; PEREIRE 262; PERIODICITÀ 258, 262; philological intent 251, 261; PREFAZIONE 6, 249–253, 261; well received in Italy and abroad 252–253 Dizionario di commercio dei signori Fratelli Savary (1770) 28 Dizionario di economia (Papi, 1967) aims at highlighting the consolidated system of

Index of dictionaries and dictionary entries cited 669 knowledge 36; FLUTTUAZIONE ECONOMICA 546 Dizionario di economia (Ricossa, 1982) CICLO 160 Dizionario di economia politica (de Luca et al., 2006) CRISI ECONOMICA 546 Dizionario di economia politica (Lunghini, 1982–90) 497, 547 CICLO 77, 101, 148, 489; CRISI 89, 160, 391, 539–544; on the historical nature of economic knowledge 12 (reflected in the microstructure 22, 36); PRESENTAZIONE 22; word-list is thematically arranged 22, 36 Dizionario di economia politica (Napoleoni, 1956) 35 aimed not at defining concepts once and for all, but at delineating the main problems of contemporary economics 36; FLUTTUAZIONI ECONOMICHE 150–151, 163; uses the Marxis method of criticism of political economy 13 Dizionario di geografia universale (Marmocchi, 1854–62) 249 Dizionario di Politica (Bobbio and Matteucci, 1976) CRISI 535 Dizionario di politica (Partito Nazionale Fascista, 1940) commissioned by the Italian fascist government 13; CRISI ECONOMICA 77 Dizionario Marx Engels (Papi, 1976) 43 Dizionario universale di economia politica e di commercio (Boccardo, 1875–77) 251 CRISI 259–260 Dizionario universale di economia politica e di commercio (Boccardo, 1881–82) 251 CRISI 259–260 Dovidnyk bazovych terminiv ta ponjat z mikroekonomiky (Sluchaj, 1998) 42 Economia e storia: see Mondo contemporaneo, Il. Enciclopedia di storia e scienze sociali (Carmagnani and Vercelli, 1978) Economía Planeta. Diccionario enciclopédico (Martínez Cortina, 1988) 36 Economic thought since Keynes. A history and dictionary of major economists (Beaud and Dostaler, 1995) 44 Ekonomicheskaya entsiklopediya (Rumjancev, 1972–80) 52 KONYUS, A. A. 403 Elgar companion to post Keynesian economics (King, 2003) 43 BUSINESS CYCLES 107; UNDERCONSUMPTION 65 Enciclopedia bancaria (Confederazione

Fascista delle Aziende del Credito e della Assicurazione, 1942) 31 CICLO ECONOMICO 146 Enciclopedia del negoziante (Antonelli, 1841) 4 CRISI COMMERCIALI E INDUSTRIALI 119, 193, 260; superficial and lacking a treatment of theoretical and practical economics (Boccardo) 249 Enciclopedia delle scienze sociali (Bedeschi, 1991–2000) 41 CICLI ECONOMICI 101, 490; CONGIUNTURA ECONOMICA 97; CRISI ECONOMICA E FINANZIARIA 89, 163, 538–539 Enciclopedia di amministrazione, industria e commercio (Cerboni, 1891–1905) 29 Enciclopedia di amministrazione, ragioneria, commercio, banca, borsa (Monetti, 1933–44) 30 Enciclopedia economica (Predari, 1860) CRISI COMMERCIALE 119 Enciclopedia Einaudi (Ruggiero, 1977–1984) CICLO 161–162; CRISI 547 Enciclopedia española del siglo XIX (1842–45) 236 Enciclopedia Espasa-Calpe (1908–30) 225 entries related to economic crises focused on the social consequences of depressions 225 Enciclopedia italiana di scienze, lettere ed arti (1929–39) CRISI ECONOMICHE 88, 109, 145 Enciclopedia moderna (1851–55) 225, 226–227, 229 BANCOS 230, 234; BANCOS DE DESCUENTO 230; BANCOS EXTRANJEROS 229; carries more than 100 anonymous economic entries 226–227; CIRCULACIÓN 230; CRÉDITO 225, 229, 231–236; CRISIS COMERCIAL 193, 225, 229–236; ECONOMÍA POLÍTICA 233; ESPAÑA 229; promotes the spreading of technical and ideological knowledge in order to strengthen the liberal order 226; PUERTOS FRANCOS 229 Enciclopedia práctica de economía (Prado, 1983–84) 36 Enciklopedicheskii slovar’ (Brockhaus-Efron, 1890–1907) 343–345, 358 ADAM SMITH 346; AGRICULTURAL SCIENCe 345; an enduring and widely-used scientific and historical source 344; BANKS 345; based on Brockhaus-Konversationslexikons, but adapted to the education needs of the Russian public 343; CARL MENGER 346; CARTEL 345; COMMUNAL LAND OWNERSHIP 345; COMPETITION 345, 346; ECONOMIC CRISES 9, 82, 145, 345, 346, 346–350, 402; ECONOMIC GOOD 345; ECONOMIC SCIENCE 345, 346; FINANCIAL SCIENCE 345; FROM THE EDITORS 343–344; INTEREST 345; JEAN-FRANÇOIS

670 Index of dictionaries and dictionary entries cited MELON 346; JOHN STUART MILL 346; MERCIER DE LA RIVIÈRE 346; POLITICAL ECONOMY 345; political economy was well represented 344; PREFACE 343; PRICES 345; PROFIT 345; RENT 345; RUSSIA 345, 346; STATISTICS 345; THOMAS MALTHUS 346; VALUE 345; WAGE 345 Enciklopedicheskii slovar’ (New BrockhausEfron, 1911–16) 344 ECONOMIC CRISES 9, 82, 345, 351–352 Enciklopedicheskii slovar’ (Small BrockhausEfron, 1907–1909) 344, 358 ECONOMIC CRISES 9, 82, 345, 350 Encyclopaedia Americana (Lieber, 1829–35) 14 CREDIT 18, 64 Encyclopaedia Metropolitana (1817–45) Coleridge’s prospectus for a methodic arrangement 23; POLITICAL ECONOMY 17 ENCYCLOPAEDIA OF THE SOCIAL SCIENCES (Seligman, 1930–35) 41, 411–413 ABSENTEE OWNERSHIP 413; BOOM 415, 416; BUBBLES, SPECULATIVE 72, 415, 416; BUSINESS CYCLES 9, 62, 99–100, 109, 145, 414–418, 420; choice and supervision of contributors 10; CONJUNCTURE 9, 96, 160, 404, 415, 416; COQUELIN, CHARLES 221; CREDIT 9; CRISES 9, 88, 415, 416, 530; ECONOMIC INCENTIVES 413; entries were meant to cover the historical background of social phenomena rather than giving a definite theoretical systematization 413; has a general institutionalist tone 425; INSTITUTION 413; LEXIS, WILHELM 383; MACLEOD, HENRY DUNNING 289; offsets fragmentation of entries by means of surveys and historical articles 7; OVERHEAD COSTS 413; OVERPRODUCTION 9, 137, 393; pluralistic approach 413; project launched by seven leading American professional associations 411; prominent space to biographical essays 413; reflects the growing interest in interdisciplinary work and the increasing demand for social sciences 411; soon became the standard reference source 413; strong international bent, thematically and as to the choice of contributors 413 Encyclopaedic dictionary of economics (Dinakar, 2009) 52 Encyclopaedic dictionary of economics (Ghodke, 1985–86) 52 Encyclopaedic dictionary of economics (Pande and Mithani, 1994) 52 Encyclopædia Britannica (1768–1781) 4, 14 Encyclopædia Britannica (1824 supplement) BANKING 61, 104 Encyclopædia Britannica (1838) PAPER-MONEY, BANKS 18 Encyclopædia Britannica (1952)

separates a Propædia, a Micropædia and a Macropædia 11, 22, 23 Encyclopædia Britannica (online edition, 2010) 342 BUSINESS CYCLE 107; DICTIONARY 21; ENCYCLOPÆDIA 7, 21, 24; on the fragmentation of knowledge 7 Encyclopedia of banking and finance (Munn et al., 1962) BUSINESS CYCLE 146 Encyclopedia of banking and finance (Munn, 1924) 30 BUSINESS CYCLE 77, 97; CRISIS 88 Encyclopedia of banking and finance (Munn, 1993) BUSINESS CYCLE 97 Encyclopedia of business (Maloni, 2000) 30 Encyclopedia of business and finance (Bowers, 2001) BUSINESS CYCLE 505, 507, 517, 519 Encyclopedia of business and finance (Kaliski, 2001) 30 ECONOMIC CYCLES 62 Encyclopedia of business in today’s world (Wankel, 2009) 30 BUSINESS CYCLES 98 Encyclopedia of economics (Greenwald, 1982) 36 Encyclopedia of finance (Lee and Lee, 2006) BUBBLE THEORY (of speculative markets) 73 Encyclopedia of governance (Bevir, 2007) BUSINESS CYCLE 122, 154; POLITICAL BUSINESS CYCLE 480 Encyclopedia of Keynesian economics (Cate, 1998) 43 Encyclopedia of law and economics (Bouckaert and de Geest, 2000) 42 Encyclopedia of law and society (Clark, 2007) TAXES, SOCIOLOGY OF 475 Encyclopedia of macroeconomics (Snowdon and Vane, 2002) 42 BUSINESS CYCLE 100; BUSINESS CYCLES— AUSTRIAN APPROACH 153; BUSINESS APPROACH 153; CYCLES—KEYNESIAN BUSINESS CYCLES—MARXIAN APPROACH 153; BUSINESS CYCLES—MONETARIST APPROACH 153; BUSINESS CYCLES—NEW CLASSICAL APPROACH 153, 504, 512; BUSINESS CYCLES—POLITICAL BUSINESS CYCLE APPROACH 153, 467, 472, 477; BUSINESS CYCLES—REAL BUSINESS CYCLE APPROACH 153, 516, 520, 521, 522; SPECULATIVE BUBBLES 74 Encyclopedia of political economy (O’Hara, 1999) 481 aims at reviving the ‘political economy’ tradition 37; BUSINESS CYCLE THEORIES 107,

Index of dictionaries and dictionary entries cited 671 158, 453; CYCLICAL CRISIS MODEL 534; GOODWIN CYCLE AND PREDATOR-PREY MODELS 9; HARROD’S INSTABILITY PRINCIPLE AND TRADE CYCLES 163; NUTCRACKER THEORY OF THE BUSINESS CYCLE

9; POLITICAL BUSINESS CYCLES 468, 477, 481 Encyclopedia of public choice (Rowley and Schneider, 2004) ARE VOTE AND POPULARITY FUNCTIONS ECONOMICALLY CORRECT? 480; POLITICAL BUSINESS CYCLES 468 Encyclopedia of public relations (Heath, 2005) CHAOS AND COMPLEXITY THEORY 495 Encyclopedia of Russian history (Millar, 2004) KONDRATIEV, NIKOLAI DMITRIEVICH 459 Encyclopedia of small business (Darnay and Magee, 2007) BUSINESS CYCLES 506, 509 Encyclopedia of small business (Hillstrom, 2002) 30 Encyclopedia of small business (Hillstrom, 2007) BUSINESS CYCLES 78 Encyclopedia of social reform (Bliss, 1897) 40 CRÉDIT MOBILIER 62; CRISES (COMMERCIAL AND MONETARY) 76, 85, 104; OVERPRODUCTION 137 Encyclopedia of the Great Depression (McElvaine, 2004) 43 Encyclopédie catholique (1839–1849) 168, 239 Encyclopédie de banque et de bourse (FrançoisMarsal, 1928–30) 31 Encyclopédie des gens du monde (1833–44) 167 CRISE COMMERCIALE 80, 119, 135, 154, 169, 177–189, 218, 254, 261; DISCOURS PRÉLIMINAIRE 14 Encyclopédie du commerçant. Dictionnaire du Commerce et des marchandises (Guillaumin, 1837–39) 4, 167, 209, 230, 235, 236 CRÉDIT 232–233; CRISE COMMERCIALE 83, 119, 154, 175, 178–189, 218, 230–231, 261; originally meant to adapt McCulloch’s Dictionary 29, 193 Encyclopédie du dix-neuvième siècle (1838–53) a Catholic encyclopedia 168, 239; CRISE COMMERCIALE 83, 119, 169, 178–189, 218; MALTHUS 246 Encyclopédie économique (Greffe et al., 1990) aimed at undergraduate students, thematically arranged 35; FLUCTUATIONS ET CROISSANCE 155 Encyclopédie élémentaire du XIXe siècle (1843) 14 Encyclopédie française (Febvre and Berger, 1937–66) 11, 52

Encyclopédie méthodique ou par ordre de matières (Panckoucke, 1782–1832) 10, 29, 30, 167, 239 Encyclopédie méthodique. Commerce (Baudeau, 1783–84) 10, 29 Encyclopédie méthodique. Economie politique et diplomatique (Démeunier, 1784– 10 Encyclopédie méthodique. Finances (Surgy, 1784–87) 10, 30 Encyclopédie moderne (1824–32) 167 Encyclopédie moderne (1847–52) 227 Encyclopédie nouvelle (1835–42) COMMERCE 172; considered a socialist compendium 168 Encyclopédie oeconomique (de Félice, 1770–71) CYCLE OU CICLE 121; mainly concerned with agriculture and home economics 28 Encyclopédie pittoresque à deux sous (1834) 168 Encyclopédie pratique du commerce, de l’industrie et de la finance (Gilis, 1907–08) CRISES 120 Encyclopédie théologique (Migne, 1845–66) 11, 40, 42, 168, 238–239, 246 aimed at harmonizing traditional religious thinking with the recent growth of scientific knowledge 238; organized methodically 239 Encyclopedie van de bedrijfseconomie (Mey et al., 1969–1971) 427 Encyclopedie van de economie (Hartog and Devreker, 1979) 437 Encyclopedie voor de zakenman (Stridiron, 1956) 427 aimed at the practical businessman 428 Encyclopédie, ou Dictionnaire raisonné des sciences, des arts et des métiers (Diderot and d’Alembert, 1751–72) 4, 10, 14, 28, 29, 32 CYCLE 121; supported atheistic materialism 13 Encyklopädie der Staatswissenschaften (Bülau, 1832) 40 Encyklopädie der Staatswissenschaften (Mohl, 1859) interpreted economics and other social sciences as part of a broad disciplinary context including law, politics etc. 386 Encyklopädie der Staatswissenschaften (Mohl, 1872) 40 Encyklopädie der Staatswissenschaften für Deutsche (Rinne, 1846) 40 Entsiklopedicheskii slovar’ Russkogo Bibliograficheskogo Instituta Granat (1910–48) 344, 401–402 ECONOMIC CONJUNCTURE 97, 401, 404–408; mixed methodic and alphabetical arrangement 11, 402; publication period encompassed both the Tsarist and Soviet eras 401 Eröffnete Akademie der Kaufleute, oder

672 Index of dictionaries and dictionary entries cited vollständiges Kaufmanns-Lexicon (Ludovici, 1752–56) 28 Europe since 1914. Encyclopedia of the age of war and reconstruction (Merriman and Winter, 2006) KONDRATIEFF, NIKOLAI (1892–1938) 451, 459 Evangelisches Staatslexikon (Herzog et al., 1987) KONJUNKTURTHEORIE 160 Everyday terms in economics (Janzen, 1941) 52 Fontana dictionary of modern thought (Bullock and Trombley, 1988) TRADE OR BUSINESS CYCLE 99, 107 Fortune encyclopedia of economics (Henderson, 1993) BUSINESS CYCLES 77, 95, 106 Gablers Wirtschaftslexikon (online edition) 24 structure of cross-references depicted graphically 39 Gablers Wirtschafts-Lexikon (Sellien and Sellien, 1956) 38 KONJUNKTUR 121; KONJUNKTURTHEORIEN 146; KONJUNKTURWELLEN 122; KONJUNKTURZYKLUS 122 Gale encyclopedia of U.S. economic history (Carson and Bonk, 1999) FINANCIAL PANIC 69; PANIC OF 1837 69; PANIC OF 1907 69; PANIC OF 1919 69; PANICS OF THE LATE NINETEENTH CENTURY 69; RECESSION 110; STOCK MARKET CRASH OF 1929 69 Gegenwart. Eine encyklopädische Darstellung der neuesten Zeitgeschichte für alle Stände (Brockhaus, 1848–56) 198 DIE PRODUCTIONSKRISEN MIT BESONDERER RÜCKSICHT AUF DIE LETZTEN JAHRZEHNTE 82, 84, 119, 177, 197, 200–206, 218, 312–313, 536 General dictionary of commerce, trade and manufactures (Mortimer, 1810) 29, 250 Geschichtliche Grundbegriffe (Brunner 1982) 41 KRISE 536–537 Granat encyclopedic dictionary: see Entsiklopedicheskii slovar’ Russkogo Bibliograficheskogo Instituta Granat Grand dictionnaire universel du XIXe siècle (Larousse, 1865–90) 13 anti-clerical 13; criticized as subversive by the editors of the Grande Encyclopédie (1886–1902) 330 Grand Robert de la langue française CYCLE 90; DÉTRESSE 59; EMBARRAS 61

Grande dizionario enciclopedico (1933–39) CRISI ECONOMICHE 88 Grande Encyclopédie (1886–1902) 167, 320–321 a work of noble popularization 330; aimed at systematizing knowledge 24, 321; BANQUE 322; CRÉDIT 322; CRISE 76, 83, 85, 327; DREYFUS (FERDINAND-CAMILLE) 322; ÉCONOMIE POLITIQUE 322; LAVELEYE (EMILE) 322; positivist epistemological project 320; PRÉFACE 320–321, 330 Great depression and the New Deal, a thematic encyclopedia (Leab, 2010) 43 Great Soviet encyclopedia: see Bolshaya sovetskaya entsiklopediya Grundbegriffe der Mikroökonomie (Oberender, 1985) 42 Handbook of economic terms (Horton, 1935) 35 Handwörterbuch der Arbeitswissenschaft (Giese, 1927–30) 42 KONJUNKTUR UND KONJUNKTURFORSCHUNG 98; KRISE UND ARBEIT (DYNAMISCH DARGESTELLT) 88 Handwörterbuch der Betriebswirtschaft (Nicklisch, 1926–28) KONJUNKTUR UND KRISEN 86, 96 Handwörterbuch der Betriebswirtschaft (Nicklisch, 1939) WIRTSCHAFTSSCHWANKUNGEN 122 Handwörterbuch der Finanzwirtschaft (Büschgen, 1976) 31 Handwörterbuch der mathematischen Wirtschaftswissenschaften (Beckmann et al., 1979) 42 Handwörterbuch der Sozialwissenschaften (Beckerath, 1956–68) 38, 41, 375, 386 for decades the leading handbook in Germany 375; HERKNER, HEINRICH 372; KONJUNKTUR (I) THEORIE 159; KONJUNKTUR (II) POLITIK 64; LEXIS, WILHELM 383 Handwörterbuch der Staatswissenschaften (Conrad et al., 1890–95) 40, 374 aimed at contributing to the process of modernization of German society 386; belongs to the context of classical liberalism, without supporting any party 386; for decades the leading handbook in Germany 375; gave economics and socials sciences pride of place among Staatswissenschaften 386; KRISEN 64, 76, 82, 85, 86, 138, 361–362, 366–372, 375, 388; the highest point of economic studies in 19th century Germany (Schmoller) 385; ÜBERPRODUKTION 361, 380; VORWORT 386 Handwörterbuch der Staatswissenschaften (Conrad et al., 1898–1901) 374, 386 KRISEN 86, 138–139, 314, 361–362, 369, 370–372, 388

Index of dictionaries and dictionary entries cited 673 Handwörterbuch der Staatswissenschaften (Conrad et al., 1909–11) 374, 386 ERNTEN (ERNTZYKLUS UND WIRTSCHAFTSZYKLUS) 159; KRISEN 86, 138–139, 361–362, 370–372, 388 Handwörterbuch der Staatswissenschaften (Elster, 1923–29) 38, 41, 375, 385–387 IN MEMORIAM 383, 387; KONJUNKTURFORSCHUNG UND KONJUNKTURPOLITIK 87, 146–147; KRISEN 9, 86, 120, 140, 362, 371, 375, 388–397; VORWORT 387 Handwörterbuch der Volkswirthschaftslehre (Rentzsch, 1866) 386 committed to the making of the bourgeois society 307; its task and audience defined 33, 307; KRISEN 84, 136, 162, 313–318, 371; viewpoint of the Manchester liberalism 33, 307; VORWORT 15, 307–308 Handwörterbuch der Volkswirtschaft (Glastetter, 1978) 38 KONJUNKTURTHEORIE 38 Handwörterbuch der Volkswirtschaft (Glastetter, 1980) KONJUNKTURTHEORIE 160, 488 Handwörterbuch der Wirtschaftswissenschaft (Albers and Zottmann, 1977–1983) 41, 386 KONJUNKTURTHEORIE 64, 152, 467, 477, 481, 487; thematic arrangement within the alphabetical organization of the materials 38; WIRTSCHAFTSKRISEN 531 Handwörterbuch des Bank- und Finanzwesens (Gerke, 1995) 31 Handwörterbuch des Bankwesens (Palyi and Quittner, 1933) 31 KONJUNKTURTHEORIE 122, 157; KONJUNKTURZYKLUS 122 Handwörterbuch des Kaufmanns (Bott, 1925–26) KONJUNKTUR 86, 122; KRISEN 86 Helping yourself to understand economics (Wilson, 1947) 52 Herders Conversations-Lexikon (1854–57) a Catholic encyclopedia 13 International encyclopedia of economics (Magill, 1997) 36 International encyclopedia of organizational studies (Clegg and Bailey, 2006) LONG-WAVE THEORY 66, 453 International encyclopedia of the social & behavioral sciences (Smelser and Baltes, 2001) 41 International encyclopedia of the social sciences (Darity, 2008) 16, 41, 481 DEPRESSION, ECONOMIC 22, 78; BUBBLES 22, 73, 118; BULL AND BEAR MARKETS 22; BUSINESS CYCLES, EMPIRICAL LITERATURE

22; BUSINESS CYCLES, POLITICAL 22, 469, 473; BUSINESS CYCLES, REAL 22, 506, 513, 516, 517, 519, 522; BUSINESS CYCLES, THEORIES 22, 158; BUTTERFLY EFFECT 495; CHAOS THEORY 495, 498; COBWEB CYCLES 22; ECONOMIC CRISES 22, 70; GREAT TULIP MANIA 22; INTERNET BUBBLE 22, 73; INTRODUCTION 23; LONG WAVES 22; NONLINEAR SYSTEMS 22, 494; OVERPRODUCTION 22; PANIC 22; PANICS 22, 70; PONZI SCHEME 22; RECESSION 110; SOUTH SEA BUBBLE 22; SPECULATION 118; STAGNATION 22, 62, 65; UNDERCONSUMPTION 22 International encyclopedia of the social sciences (Sills, 1968) 24, 41, 418–420 a purely commercial enterprise 419; Biographical supplement 43, 420; BUSINESS CYCLES, GENERAL 78, 109, 420–423, 547; BUSINESS CYCLES, MATHEMATICAL MODELS 148, 420, 423–425; CRISIS 535; decentralized approach 419; emphasis on formalism, mathematical methods and the methodological unification of all social sciences 419; epistemological project 419–420; KONDRATIEFF, N. D. 445, 446, 447, 448, 450, 451, 452, 459; LEXIS, WILHELM 383; more theoretical and analytical than the Encyclopaedia of the social sciences (Seligman, 1930–35) 419; STAGNATION 62, 65 Johnson’s new universal cyclopædia (1893–97) COMMERCIAL CRISES 69, 85 Katholisches Soziallexikon (Klose, 1964) explicitly Catholic 13; KONJUNKTUR UND KRISE 65, 98, 122, 531 Keizai-Daijisho (Do¯bun-Kwan, 1910–16) 34 ¯ saka Sho¯ka Daigaku Keizai Keizaigaku-Jiten (O Kenkyu¯jo, 1930–36) 34 ¯ saka Sho¯ka Daigaku Keizai Keizaigaku-Jiten (O Kenkyu¯jo, 1954) 52 Kokumin keizai jiten (Takahashi, 1933) 35 Kompakt-Lexikon Umweltund (Olsson and Wirtschaftspolitik Piekenbrock, 1993) 42 Land, labor, and wealth, a handbook of economic terms (Winsor and Windsor Evans, 1942) 42 Le marxisme (Livre de Poche, 1976) 43 Lexicon of economics (Deane and Kuper, 1988) BUSINESS CYCLES 106, 492; ECONOMIC DYNAMICS 493; FINANCIAL CRISES 73, 547 Lexikon der Volkswirtschaft (Geigant et al., 1975) 37 KONJUNKTURZYKLUS 122 Lexikon der Volkswirtschaft, über 2000 Begriffe

674 Index of dictionaries and dictionary entries cited für Studium und Beruf (Holstein et al., 2000) 98 Lexikon soziale Marktwirtschaft (Hasse, 2002) 43 Lexique d’économie (Albertini et al., 1992) CRISE. CRISE ÉCONOMIQUE 529; CYCLE 123, 530 Lexique du calcul économique et de l’économétrie (Olmi and July, 1970) 42 Malaia Sovetskaia Enziklopedia 443 Marukusu keizaigaku jiten (Miyakawa, 1965) 43 Marx-Lexikon zur politischen Ökonomie (Kuruma, 1973) 43 McGraw-Hill dictionary of modern economics (Greenwald, 1983) 52 SECULAR-STAGNATION THESIS (MATUREECONOMY THESIS) 65 Men and ideas in economics. A dictionary of world economists, past and present (Mai, 1975) 43 Meyers Handbuch über die Wirtschaft (Eifert et al., 1974) KRISE 531 Meyers Handbuch über die Wirtschaft (Preuss and Bachert, 1966) 37 KONJUNKTURTHEORIEN 37 Meyers Konversationslexikon (1839–52) HANDELSKRISIS 83, 119, 218 Meyers Konversationslexikon (1885–92) HANDELSKRISIS 82 Mises made easier. A glossary for Ludwig von Mises Human action (Greaves, 1974) 43 Mondo contemporaneo, Il. Enciclopedia di storia e scienze sociali. Vol. VIII, Economia e storia (Carmagnani and Vercelli, 1978) CRISI ECONOMICHE, IL NOVECENTO 65, 152, 533; CRISI ECONOMICHE, L’OTTOCENTO 101, 162, 446, 453, 546; FLUTTUAZIONI ECONOMICHE 151 Nationalökonomie (Theorie u. Geschichte) (Heller, 1926) 35 KRISENTHEORIE 145 Neue deutsche Biographie (1985) LEXIS, WILHELM 383 Neuestes Universal-Lexicon der gesammten Kaufmännischen Wissenschaften (Fort 1852) 29 New and complete dictionary of arts and sciences (1763–64) CYCLE 121 New and complete dictionary of trade and commerce (Mortimer, 1766–67) 29, 52 ASSIENTO 58; BUBBLES 71 New dictionary of economics (Taylor, 1966)

STAGNATION, THEORY OF 65; TRADE CYCLE 77, 122, 146 New dictionary of the history of ideas (Horowitz, 2005) CRISIS 547 New dictionary of trade and commerce (Rolt, 1756) 29 New encyclopedia of social reform (Bliss, 1908) 40 CRISES (COMMERCIAL AND MONETARY) 69 New Palgrave dictionary of economics (Durlauf and Blume, 2008) 15, 37, 42 BANKING CRISES 22, 70; BANKRUPTCY, ECONOMICS OF 22; BUBBLES 74, 118; BUBBLES IN HISTORY 73; BUSINESS CYCLE MEASUREMENT 22; CHAOTIC DYNAMICS IN ECONOMICS 22; COBWEB THEOREM 22; CREDIT CYCLE 22; CURRENCY CRISES 22; CURRENCY CRISES MODELS 22; ECONOMIC GROWTH NONLINEARITIES 498; GREAT DEPRESSION 22, 534; GREAT DEPRESSION (MECHANISMS) 22, 534; GREAT DEPRESSION, MONETARY AND FINANCIAL FORCES IN 22; GROWTH AND CYCLES 22; houses different views on some topics, sometimes inconsistently 22; INTERNATIONAL REAL BUSINESS CYCLES 506, 507, 512; KONDRATIEFF CYCLES 22, 66, 444, 445, 448, 449, 450, 453, 457, 459; KUZNETS SWINGS 22; MACROECONOMICS, ORIGINS AND HISTORY OF 107; MONETARY BUSINESS CYCLE MODELS (STICKY PRICES AND WAGES) 22; MONETARY BUSINESS CYCLES (IMPERFECT INFORMATION) 22; MULTIPLIER-ACCELERATOR INTERACTION 22; PALGRAVE, ROBERT HARRY INGLIS 341; POLITICAL BUDGET CYCLES 22, 471; POLITICAL BUSINESS CYCLES 22, 469, 470, 479; REAL BUSINESS CYCLES 22; SCHUMPETER, JOSEPH ALOIS (1883–1950) 453; SPECULATIVE BUBBLES 74; TRADE CYCLE 22, 66, 498; UNDERCONSUMPTIONISM 22 New Palgrave dictionary of economics (Eatwell et al., 1987) 11, 15, 221, 481 DEPRESSIONS 78; broken down in 10 thematic volumes 23; BUBBLES 73; BUSINESS CYCLES 7, 100, 498, 501, 510, 513, 514, 518, 519, 520; CRISES 546; FINANCIAL CRISIS 533; GROWTH AND CYCLES 498, 514; houses different views on some topics, sometimes inconsistently 22, yet found to be biased 13, 37; KONDRATIEFF CYCLE 444, 445, 449, 450, 452; KONYUS, A. A. 404; LEXIS, WILHELM 383; LONG CYCLES 453, 456; LONG SWINGS IN ECONOMIC GROWTH 445, 452, 454, 456, 457; POLITICAL BUSINESS CYCLE 466, 477, 479; POLITICAL ECONOMY 52; PREDATOR-PREY MODELS 498;

Index of dictionaries and dictionary entries cited 675 PREFACE 22, 24; seeks an historical approach 24; STAGNATION 65; TRADE CYCLE 7, 490 New Palgrave dictionary of economics and the law (Newman, 1998) 42 New Palgrave dictionary of economics online (2011) 24, 38 lacks an organized macrostructure 39, 52; Trade cycle 52 New Palgrave dictionary of money and finance (Newman et al., 1992) 31 LENDER OF LAST RESORT 305 Nobel laureates in economic sciences. A biographical dictionary (Katz, 1989) 44 Nouveau dictionnaire d’économie politique (Say and Chailley, 1891–92) 33, 211, 266, 267, 269–272 CRISES COMMERCIALES 9, 84, 273–274, 279–283, 443; favourably received 271; INTRODUCTION 6–7, 269, 269–271; upheld and propagated the viewpoint of the French Liberal school 13, 270–271 Nouveau dictionnaire d’économie politique (Say and Chailley, 1900) 35, 211 Nouveau dictionnaire d’économie politique, Supplement (Say and Chailley, 1897) 269 PRÉFACE 269; SAY (LÉON, JEAN-BAPTISTE) 269 Nuova enciclopedia italiana (1875–88) BANCO 193; CREDITO 193; CRISI COMMERCIALE 119, 192, 254 Nuova enciclopedia popolare italiana (1841–49) CRISI COMMERCIALE 119, 192, 254 Nuova enciclopedia popolare italiana (1856–75) CRISI COMMERCIALE 192 Nuovo dizionario di economia (De Luca, 2000) CICLO ECONOMICO 153 Nuovo dizionario di economia (Mori, 1989) 5 Ökonomen-Lexikon (Hesse, 2003) 44 Ökonomie (Frenzel, 1973) KONJUNKTUR UND KRISE 65, 531 Ökonomisches Lexikon (Bader, 1967) political economy from the perspective of a socialist country 37 Ökonomisches Lexikon (Bader, 1970–71) 533 532; KRISE, KONJUNKTURTHEORIE ZYKLISCHE 532; KRISENZYKLUS 532; PERIODIZITÄT DER KRISEN 532 Ökonomisch-Technologische Enzyklopädie (Krünitz, 1773–1858) 23 incoherent macrostructure 23; the largest ever printed general purpose encyclopedia 23, 28 Oxford English dictionary 54 DEPRESSION 74, 118; BUBBLE 70; CONJUNCTURE 96; CRISIS 78; CYCLE 90, 121; DISTRESS 59; EMBARRASSMENT 60; FLUCTUATION 102; GLUT 57; PANIC 66;

PERIODIC 122; RECESSION 108; STAGNATION 62, 118 Penny cyclopaedia (1833–46) 14, 40 Pensée économique depuis Keynes. Historique et dictionnaire des principaux auteurs (Beaud and Dostaler, 1993) 43 Petit dictionnaire politique et social (Block, 1896) 40, 267 a more affordable version of the Dictionnaire général de la politique (Block, 1863–64) 283; CRISES COMMERCIALES 283; PRÉFACE 283 Piccola enciclopedia di banca e borsa (D’Andrea, 1934) 31 Pierers Universal-conversations-lexikon (1857–66) HANDELSKRISIS 83, 119 Pierers Universal-conversations-lexikon (1888–93) HANDELSKRISIS 81 Pitman’s Business Man’s Encyclopaedia and dictionary of commerce (Cole 1927) COMMERCIAL CRISIS 76, 120 Pitman’s business man’s guide (Slater, 1903) 30 Pitman’s businessman’s guide (Slater, 1907) PANICS 69 Pitman’s commercial encyclopædia and dictionary of business (Slater 1912–13) 4, 30 Political dictionary (Long, 1845–46) 14, 40 DEMAND AND SUPPLY 58; DISTRESS 60; MONEY 103, 134 Politicheskaya ekonomiya: slovar’ (Volkov, 1981) 52 Politician’s dictionary (Allen, 1775) 39 Politisches Handwörterbuch (Herre and Jagow, 1923) WIRTSCHAFTSKRISEN 120 Popular encyclopaedia (Whitelaw, 1834–1842) 4, 14 Reales Staats- und Zeitungs-Lexicon (1704) dedicated to newspapers readers 15; the first conversation-lexicon 24 Répertoire général d’économie politique ancienne et moderne (Sandelin, 1846–48) a collection of articles already appeared in periodical publications 32, 209 Routledge encyclopedia of international political economy (Jones, 2001) 37, 42 BUSINESS CYCLES 101; CRISIS THEORY 546, 547; KONDRATIEFF WAVES 443; LONG CYCLES 453, 456 Saikin keizai mondai kaisetsu (Ichikawa, 1939) 35 ¯ saka Mainichi Shinshu¯ Keizaigo jiten (O Shinbun Keizaibu, 1933) 35

676 Index of dictionaries and dictionary entries cited Social science encyclopedia (Kuper and Kuper, 1985) BUSINESS CYCLES 78, 148 Social science encyclopedia (Kuper and Kuper, 2004) BUSINESS CYCLES 100 Spravocnik ekonomista-mezdunarodnika (Volosin et al., 1990) 42 St. James Encyclopedia of Banking and Finance (Munn et al., 1993) 30 BUSINESS CYLE 77, 146 Staats- und Gesellschafts-Lexikon (Wagener, 1859–67) 40 KRISEN 83 Staatslexicon in einem Bande (Baumstark, 1852) 40 Staatslexikon (Bruder and Bachem, 1889–97) KRISEN 76; meant to cunterbalance Rotteck’s liberal Staatslexikon 13, 40 Staatslexikon (Görres-Gesellschaft, 1957–63) 41 WIRTSCHAFTLICHE KONJUNKTUREN 98, 121, 147 Staatslexikon (Görres-Gesellschaft, 1985–93) KONJUNKTUREN 98, 100 Staatslexikon (Sacher et al., 1929) KONJUNKTUR U. KRISEn 77, 87, 122, 160 Staats-lexikon. Encyklopädie der sämmtlichen (Rotteck and Staatswissenschaften Welcker, 1834–43) 4, 219 inspired by liberal ideas 13, 40 Standard library cyclopaedia of political, constitutional, statistical & forensic knowledge (Knight, 1848–49, 1853–60) 40 DISTRESS 60 Univers économique et social (Perroux, 1960) 52 AVANT-PROPOS 23; LE CYCLE DANS LE DÉVÉLOPPEMENT 11; methodically arranged 11, 23 Universal dictionary of trade and commerce (Postlethwayt, 1751–55) 28, 250 Vahlens großes Wirtschaftslexikon (Dichtl and Issing, 1993) 37 KONJUNKTUR 38, 531; KONJUNKTUR-

MODELLE 531; KONJUNKTURTHEORIEN 38, 154, 508, 531; MARXISTISCHE KRISENTHEORIEN 531 VNR dictionary of business and finance (Brownstone et al., 1980) BUBBLE 73 Vocabulaire économique et financier (Bernard and Colli, 1976) 31 Vocabulaire économique et social (Action populaire, 1909) CRISE 120 Vocabulaire pratique des sciences sociales (Birou, 1966) CRISE 528; CRISE ÉCONOMIQUE 528; CYCLES ÉCONOMIQUES 101, 528 Vocabulario de la economia (Piernas y Hurtado, 1877) attacks liberal views 15, 33; CRÍSIS ECONÓMICAS 81, 119; first dictionary addressed to students 15; MISERIA 236; PAUPERISMO 236; POBREZA 236

Who’s who in economics (Blaug, 1983) 43, 221 Wikipedia 23, 38 lacks a macrostructure 22 Wirtschaftslexikon. Über 4000 Stichwörter für Studium und Praxis (Rittershofer, 2000) 37 Wörterbuch der Ökonomie-Sozialismus (Luchterhand et al., 1967) 43 Wörterbuch der Volkswirtschaft (Elster, 1898) 15 exerted the function of a hitherto non-existing compendium of economics 375; explicitly non-partisan 13, 34; KRISEN 81, 85, 376, 378–383; primarily conceived for students 34, 375; ÜBERPRODUKTION 376, 378–383; VORWORT 13, 34 Wörterbuch der Volkswirtschaft (Elster, 1909–11) KRISEN 137 Wörterbuch der Volkswirtschaft (Elster, 1931–33) KONJUNKTUR, KONJUNKTURTHEORIE 87, 121, 122, 376; KRISEN 87, 140, 145, 376 Wörterbuch der Wirtschaft (Bülow, 1936) 35 KONJUNKTURBEWEGUNG 98, 122