Book contents
- Frontmatter
- Contents
- Introduction
- Chapter 1 German Economics as Development Economics: From the Thirty Years' War to World War II
- Chapter 2 The Role of the State in Economic Growth
- Chapter 3 A Brief Introduction to Veit Ludwig von Seckendorff (1626– 1692)
- Chapter 4 Exploring the Genesis of Economic Innovations: The Religious Gestalt-Switch and the Duty to Invent as Preconditions for Economic Growth (with Arno Daastøl)
- Chapter 5 Johann Heinrich Gottlob von Justi (1717– 1771): The Life and Times of an Economist Adventurer
- Chapter 6 Jacob Bielfeld's “On the Decline of States” (1760) and Its Relevance for Today
- Chapter 7 Raw Materials in the History of Economic Policy; or, Why List (the Protectionist) and Cobden (the Free Trader) Both Agreed on Free Trade in Corn
- Chapter 8 Compensation Mechanisms and Targeted Economic Growth: Lessons from the History of Economic Policy
- Chapter 9 Karl Bücher and the Geographical Dimensions of Techno-Economic Change: Production-Based Economic Theory and the Stages of Economic Development
- Chapter 10 Austrian Economics and the Other Canon: The Austrians between the Activistic-Idealistic and the Passivistic-Materialistic Traditions of Economics
- Chapter 11 Nietzsche and the German Historical School of Economics (with Sophus A. Reinert)
- Chapter 12 Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter (with Hugo Reinert)
- Chapter 13 Schumpeter in the Context of Two Canons of Economic Thought
- Chapter 14 The Role of Technology in the Creation of Rich and Poor Nations: Underdevelopment in a Schumpeterian System
- Chapter 15 Towards an Austro–German Theory of Uneven Economic Development? A Plea for Theorising by Inclusion
- Chapter 16 The Qualitative Shift in European Integration: Towards Permanent Wage Pressures and a ‘Latin-Americanization’ of Europe? (with Rainer Kattel)
- Chapter 17 Primitivization of the EU Periphery: The Loss of Relevant Knowledge
- Chapter 18 Mechanisms of Financial Crises in Growth and Collapse: Hammurabi, Schumpeter, Perez, and Minsky
- Chapter 19 Full Circle: Economics from Scholasticism through Innovation and Back into Mathematical Scholasticism: Reflections on a 1769 Price Essay: “Why Is It That Economics So Far Has Gained So Few Advantages from Physics and Mathematics?”
- Chapter 20 Werner Sombart (1863– 1941) and the Swan Song of German Economics
- Index
Chapter 2 - The Role of the State in Economic Growth
Published online by Cambridge University Press: 30 March 2019
- Frontmatter
- Contents
- Introduction
- Chapter 1 German Economics as Development Economics: From the Thirty Years' War to World War II
- Chapter 2 The Role of the State in Economic Growth
- Chapter 3 A Brief Introduction to Veit Ludwig von Seckendorff (1626– 1692)
- Chapter 4 Exploring the Genesis of Economic Innovations: The Religious Gestalt-Switch and the Duty to Invent as Preconditions for Economic Growth (with Arno Daastøl)
- Chapter 5 Johann Heinrich Gottlob von Justi (1717– 1771): The Life and Times of an Economist Adventurer
- Chapter 6 Jacob Bielfeld's “On the Decline of States” (1760) and Its Relevance for Today
- Chapter 7 Raw Materials in the History of Economic Policy; or, Why List (the Protectionist) and Cobden (the Free Trader) Both Agreed on Free Trade in Corn
- Chapter 8 Compensation Mechanisms and Targeted Economic Growth: Lessons from the History of Economic Policy
- Chapter 9 Karl Bücher and the Geographical Dimensions of Techno-Economic Change: Production-Based Economic Theory and the Stages of Economic Development
- Chapter 10 Austrian Economics and the Other Canon: The Austrians between the Activistic-Idealistic and the Passivistic-Materialistic Traditions of Economics
- Chapter 11 Nietzsche and the German Historical School of Economics (with Sophus A. Reinert)
- Chapter 12 Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter (with Hugo Reinert)
- Chapter 13 Schumpeter in the Context of Two Canons of Economic Thought
- Chapter 14 The Role of Technology in the Creation of Rich and Poor Nations: Underdevelopment in a Schumpeterian System
- Chapter 15 Towards an Austro–German Theory of Uneven Economic Development? A Plea for Theorising by Inclusion
- Chapter 16 The Qualitative Shift in European Integration: Towards Permanent Wage Pressures and a ‘Latin-Americanization’ of Europe? (with Rainer Kattel)
- Chapter 17 Primitivization of the EU Periphery: The Loss of Relevant Knowledge
- Chapter 18 Mechanisms of Financial Crises in Growth and Collapse: Hammurabi, Schumpeter, Perez, and Minsky
- Chapter 19 Full Circle: Economics from Scholasticism through Innovation and Back into Mathematical Scholasticism: Reflections on a 1769 Price Essay: “Why Is It That Economics So Far Has Gained So Few Advantages from Physics and Mathematics?”
- Chapter 20 Werner Sombart (1863– 1941) and the Swan Song of German Economics
- Index
Summary
Abstract
This paper attempts to trace and describe the role played by the government sector – the state – in promoting economic growth in Western societies since the Renaissance. One important conclusion is that the antagonism between state and market, which has characterised the twentieth century, is a relatively new phenomenon. Since the Renaissance one very important task of the state has been to create well-functioning markets by providing a legal framework, standards, credit, physical infrastructure and – if necessary – to function temporarily as an entrepreneur of last resort. Early economists were acutely aware that national markets did not occur spontaneously, and they used ‘‘modern’’ ideas like synergies, increasing returns, and innovation theory when arguing for the right kind of government policy. In fact, mercantilist economics saw it as a main task to extend the synergetic economic effects observed within cities to the territory of a nation-state. The paper argues that the classical Anglo-Saxon tradition in economics – fundamentally focused on barter and distribution, rather than on production and knowledge – systematically fails to grasp these wider issues in economic development, and it brings in and discusses the role played by the state in alternative traditions of non-equilibrium economics.
Keywords: Economic growth, Central government, Economic systems
Without the Utopians of other times, men would still live in caves, miserable and naked. It was the Utopians who traced the lines of the first city … Out of generous dreams come beneficial realities. Utopia is the principle of all progress, and the essay into a better future (Anatole France (cited in Fuz, 1952)).
Introduction: ‘‘The Renaissance State’’ vs ‘‘Natural Harmony’’
In 1338 Ambrogio Lorenzetti finished his frescoes Allegory of Good and Bad Government in the Town Hall of Siena. The fresco symbolising good government shows thriving shops, fine buildings and dancing citizens enjoying their leisure. Bad government is shown as ruin, rape, robbery and murder. The Allegory of Good and Bad Government represents the optimistic Renaissance view of Man's untapped potential to improve his own situation. Theirs was a view of history being a continuous optimisation process where ‘‘Man's wit and will’’, applied to harnessing the forces of Nature, held enormous potential for improving his lot: ‘‘the never ending frontier of knowledge.’’
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- The Visionary Realism of German EconomicsFrom the Thirty Years’ War to the Cold War, pp. 37 - 94Publisher: Anthem PressPrint publication year: 2019