Academic journal article Economic Inquiry

The Political Economy of Heinrich Von Stackelberg

Academic journal article Economic Inquiry

The Political Economy of Heinrich Von Stackelberg

Article excerpt

I. INTRODUCTION The early twentieth century economist Baron Heinrich von Stackelberg occupies a prominent place in the history of economics due to such innovations as "Stackelberg indifference curves," "Stackelberg leadership" and "Stackelberg disequilibrium." He was the prolific and eclectic writer of sixty publications (including four books)(1) which spanned a professional life of just sixteen years, interrupted twice by military service and cut short by death at age forty. Nevertheless, until recently scant attention has been paid to the life, complete theoretical work and political thinking of this economist.(2) One goal of this paper is to examine the events surrounding the life of Heinrich von Stackelberg which affected his identity as a political economist. Among the relevant facts of his life were his participation in various right-wing organizations and membership in the National Socialist (Nazi) party and the Schutzstaffel (SS). It is also significant that he later was a founding member of the oppositional Freiburg School which had ties to conspirators in the attempted coup against Hitler and that he left Germany. A second goal of this paper is to analyze Stackelberg's political economy itself. I think of political economy as interdisciplinary, in particular by its comprising economic and political factors, and as non-neoclassical, but not necessarily anti-neoclassical, since it may make use of neoclassical concepts but also includes dynamic and institutional considerations.(3) Thus, figures who have contributed to political economy include Keynes, Marx, Myrdal, Schumpeter, Veblen and, as argued here, Stackelberg. Although long recognized as an accomplished economic theorist, Stackelberg also occupies a unique, and until now mostly neglected, place among political economists. Stackelberg's political economy is noteworthy for two reasons. First, while most political convictions may be associated (to differing degrees) with either the Classical liberal or Marxist economic traditions, Stackelberg bears the dubious distinction of having filled the gap between mainstream economic theory and fascist economic policy. Employing tools of neoclassical economics, he concluded on theoretical grounds that the laissez-faire (unregulated capitalist) economy was fundamentally unstable and required extensive state intervention. Following his original and ingenious defense of fascist economic policy, however, he later distanced himself from fascism and from the association of his theories with fascism. Stackelberg's political allegiance shifted gradually but dramatically over time as he aligned himself with German social market economics while his approach to economic theory and policy retained the same basic elements and exhibited a relatively subtle change in emphasis. Second, he may be credited with having constructed a novel theoretical framework to address the evolution of markets, market instability and stabilizing forces, lines of inquiry which remain only partially completed today. II. EARLY INFLUENCES Heinrich von Stackelberg's identity as a political economist may be seen as the result of familial, cultural, economic, political, personal and intellectual forces which acted in symbioses. In this section some of these influences are scrutinized which, starting from his childhood to the 1930s, pushed him in the direction of fascism. After considering Stackelberg's market theory and policy in sections III, IV and V, I return to a discussion of his life in section VI where I examine the forces which later pulled him away from his youthful inclination.(4) Stackelberg hailed from the Estonian branch of a wanderlustig and aristocratic Baltic German family with a lineage traceable to the early fourteenth century. Heinrich von Stackelberg, the first of four boys, was born 31 October 1905 near Moskow where his father had moved to become the director of a Russo-German enterprise. His upbringing appears to have been an uncommon mixture of nationalistic and cosmopolitan influences. …

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