Menu Expand

Friedrich A. Lutz’ Epistemological and Methodological Messages During the German-Language Business Cycle Debate

  1. Journals
  2. Economics, Finance, Business & Management
  3. Journal of Contextual Economics – Schmollers Jahrbuch
  4. Vol. 139, Issue 1
  5. pp. 1–28

JOURNAL ARTICLE

Cite JOURNAL ARTICLE

Style
Grudev, L. Friedrich A. Lutz’ Epistemological and Methodological Messages During the German-Language Business Cycle Debate. Journal of Contextual Economics – Schmollers Jahrbuch, 139(1), 1-28. https://doi.org/10.3790/schm.139.1.1
Grudev, Lachezar "Friedrich A. Lutz’ Epistemological and Methodological Messages During the German-Language Business Cycle Debate" Journal of Contextual Economics – Schmollers Jahrbuch 139.1, , 1-28. https://doi.org/10.3790/schm.139.1.1
Grudev, Lachezar: Friedrich A. Lutz’ Epistemological and Methodological Messages During the German-Language Business Cycle Debate, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 139, iss. 1, 1-28, [online] https://doi.org/10.3790/schm.139.1.1
Format
Download

Friedrich A. Lutz’ Epistemological and Methodological Messages During the German-Language Business Cycle Debate

Grudev, Lachezar

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 139 (2019), Iss. 1 : pp. 1–28

4 Citations (CrossRef)

Read Now Download (PDF)

Additional Information

Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/schm.139.1.1
Language
English
Pages
27
Keywords

Author Details

Grudes, Lachezar, Institute for Economic Research, Chair of Economic Theory, University of Freiburg, Platz der Alten Synagoge, 79085 Freiburg, Germany.

Cited By

  1. Transatlantic Roads to Mont Pèlerin: “Old Chicago” and Freiburg in a World of Disintegrating Orders

    Kolev, Stefan | Köhler, Ekkehard A.

    History of Political Economy, Vol. 54 (2022), Iss. 4 P.745

    https://doi.org/10.1215/00182702-9895916 [Citations: 5]

  2. Emigration with a Pulled Handbrake: Friedrich A. Lutz's Internal Methodenstreit

    Grudev, Lachezar

    History of Political Economy, Vol. 56 (2024), Iss. 1 P.41

    https://doi.org/10.1215/00182702-10956557 [Citations: 0]

  3. Staatswissenschaftenand the Mathematical Policy Science of Jan Tinbergen

    Dekker, Erwin

    History of Political Economy, Vol. 56 (2024), Iss. 3 P.489

    https://doi.org/10.1215/00182702-11156240 [Citations: 0]

  4. Walter Eucken’s Concept of Economic Order and Business Cycle Analysis

    Grudev, Lachezar

    ORDO, Vol. 71 (2020), Iss. 1 P.17

    https://doi.org/10.1515/ordo-2021-0007 [Citations: 1]

References

  1. Albert, H. 2009. “Zur Wissenschaftslehre und Methodologie Walter Euckens.” In Phänomenologie und die Ordnung der Wirtschaft: Edmund Husserl – Rudolf Eucken – Walter Eucken – Michel Foucault, edited by H. Gander, N. Goldschmidt and U. Dathe, 83 – 100. Würzburg: Egon.  Google Scholar
  2. Arena, R. 1994. “Hayek and Modern Business Cycle Theory.” In Money and Business Cycles. The Economics of F. A. Hayek, vol. 1, edited by M. Colonna and H. Hagemann, 203 – 18. Aldershot: Edward Elgar.  Google Scholar
  3. Balabkins, N. 19139. Not by Theory Alone …: The Economics of Gustav von Schmoller and Its Legacy to America. Berlin: Duncker & Humblot.  Google Scholar
  4. Barkai, H. 1991. “Schmoller on Money and the Monetary Dimension of Economics.” History of Political Economy 23 (1): 13 – 39.  Google Scholar
  5. Bayer, H. 1953. “Wirtschaftsentwicklung und Konjunkturstabilisierung.” Weltwirtschaftliches Archiv 70: 31 – 78.  Google Scholar
  6. Bergmann, E. v. 1895. Die Wirtschaftskrisen: Geschichte der nationalökonomischen Krisentheorien. Stuttgart: Kohlhammer.  Google Scholar
  7. Berndt, A. and N. Goldschmidt 2005. “Leonhard Miksch (1901 – 1950): A Forgotten Member of the Freiburg School.” American Journal of Economics and Sociology 64 (4): 973 – 98.  Google Scholar
  8. 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): 42 – 56.  Google Scholar
  9. Blümle, G. and N. Goldschmidt 2006. “From Economic Stability to Social Order: The Debate about Business Cycle Theory in the 1920s and its Relevance for the Development of Theories of Social Order by Lowe, Hayek and Eucken.” European Journal of the History of Economic Thought 13 (4): 543 – 70.  Google Scholar
  10. Boettke, P. J. 2018. F. A. Hayek: Economics, Political Economy and Social Philosophy. London: Palgrave Macmillan.  Google Scholar
  11. Brintzinger, K.–R. 1996. Die Nationalökonomie an den Universitäten Freiburg, Heidelberg und Tübingen, 1918 – 1945. Frankfurt: Peter Lang.  Google Scholar
  12. Burchardt, F. 1934. “Review of ‘Das Konjunkturproblem in der Nationalökonomie.’” Weltwirtschaftliches Archiv 39: 98 – 103.  Google Scholar
  13. Caldwell, B. 2004. Hayek’s Challenge: An Intellectual Biography of F. A. Hayek. Chicago: University of Chicago Press.  Google Scholar
  14. Carell, E. 1929. Sozialökonomische Theorie und Konjunkturproblem. München: Duncker & Humblot.  Google Scholar
  15. Carell, E. 1933. “Review of ‘Das Konjunkturproblem in der Nationalökonomie.’” Jahrbücher für Nationalökonomie und Statistik 84 (139): 449 – 50.  Google Scholar
  16. Clausing, G. 1933a. “Reine und realistische Wechsellagenlehre.” Schmollers Jahrbuch 57: 27 – 40.  Google Scholar
  17. Clausing, G., ed. 1933b. Stand und die nächste Zukunft der Konjunkturforschung: Festschrift für Arthur Spiethoff. München: Duncker & Humblot.  Google Scholar
  18. Dal Pont Legrand, M. and H. Hagemann 2007. “Business Cycles in Juglar and Schumpeter.” The History of Economic Thought 49 (1): 1 – 18.  Google Scholar
  19. Dal Pont Legrand, M. and H. Hagemann 2013. “Lutz and Equilibrium Theories of the Business Cycle.” Œconomia 3 (2): 241 – 62.  Google Scholar
  20. Dal Pont Legrand, M. and H. Hagemann 2017. “Do Productive Recessions Show the Recuperative Powers of Capitalism? Schumpeter’s Analysis of the Cleansing Effect.” Journal of Economic Perspectives 31 (1): 245 – 256.  Google Scholar
  21. Dal Pont Legrand, M. and H. Hagemann 2019. “Impulses and Propagation Mechanisms in Equilibrium Business Cycles Theories: From Interwar Debates to DSGE ‘Consensus.’” GREDEG Working Paper No. 2019 – 01. URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2019-01.pdf.  Google Scholar
  22. Dathe, U. and U. Hedtke 2018. “Habent sua fata professors: Joseph A. Schumpeter an Walter Eucken.” ORDO Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft 69 (1): 1 – 34.  Google Scholar
  23. Eucken, W. 1932. “Unpublished Report of Friedrich A. Lutz’ Habilitation Thesis.” Archive of University of Freiburg (B 110/373), 8 pages.  Google Scholar
  24. Eucken, W. 1933. “Contribution.” In Stand und die nächste Zukunft der Konjunkturforschung: Festschrift für Arthur Spiethoff, edited by G. Clausing, 74 – 78. München: Duncker & Humblot.  Google Scholar
  25. Eucken, W. 1954 [1934]. Kapitaltheoretische Untersuchungen. Tübingen: J.C.B. Mohr [Paul Siebeck].  Google Scholar
  26. Eucken, W. 1940. “Wissenschaft im Stile Schmollers.” Weltwirtschaftliches Archiv 52 (3): 468 – 506.  Google Scholar
  27. Eucken, W. 1950. The Foundations of Economics: History and Theory in the Analysis of Economic Reality. London: William Hodge.  Google Scholar
  28. Financial Crisis Inquiry Commission. 2011. The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Washington: Government Printing Office.  Google Scholar
  29. Gehrke, C. 1997. “Introduction to Adolf Löwe’s ‘How is Business Cycle Theory Possible at All?’” Structural Change and Economic Dynamics 8 (2): 233 – 44.  Google Scholar
  30. Goldschmidt, N. 2013. “Walter Eucken’s Place in the History of Ideas.” Review of Austrian Economics 26 (2): 127 – 47.  Google Scholar
  31. Hagemann, H. 1994. “Hayek and the Kiel School: Some Reflections on the German Debate on Business Cycles in the Late 1920s and Early 1930s.” In Money and Business Cycles: The Economics of F. A. Hayek, vol. 1, edited by M. Colonna and H. Hagemann, 101 – 20. Aldershot: Edward Elgar.  Google Scholar
  32. Hagemann, H. 1997. “Lowe, Adolph (1893 – 1995)”. In Business Cycles and Depressions. An Encyclopedia, edited D. Glasner, 406 – 09. New York: Garland.  Google Scholar
  33. Hagemann, H. 2002. “Editor’s Introduction.” In Business Cycle Theory Selected Texts, 1860 – 1939: Equilibrium and the Business Cycle, vol. 4, edited by H. Hagemann, vii – xxvii. London: Pickering & Chatto.  Google Scholar
  34. Haley, B. F. 1933. “Das Konjunkturproblem in der Nationalökonomie by Friedrich Lutz.” American Economic Review 23 (4): 725 – 27.  Google Scholar
  35. Hayek, F. A. 1966 [1933]. Monetary Theory and the Trade Cycle. New York: Augustus Kelley.  Google Scholar
  36. Hayek, F. A. 1939 [1935]. “Price Expectations, Monetary Disturbances and Malinvestments.” In Profit, Interest and Investment, 135 – 56. New York: Augustus Kelley.  Google Scholar
  37. Hayek, F. A. 1967 [1935]. Prices and Production. New York: Augustus Kelley.  Google Scholar
  38. Hayek, F. A. 1937. “Economics and Knowledge.” Economica 4 (13): 35 – 54.  Google Scholar
  39. Hayek, F. A. 1938. “Statement to ‘Is the Trade Cycle a Myth?’” Journal of the Royal Statistical Society 101 (3): 565 – 91.  Google Scholar
  40. Hayek., F. A. 1950 [1941]. The Pure Theory of Capital. Norwich: Jarrold and Sons.  Google Scholar
  41. Hayek, F. A. 1984. “Introduction.” In Money, Capital and Fluctuations: Early Essays, edited by R. McCloughry, 1 – 5. London: Routledge & Kegan Paul.  Google Scholar
  42. Hawtrey, R. 1913. Good and Bad Trade: An Inquiry into the Causes of Trade Fluctuations. London: Constable & Company Limited.  Google Scholar
  43. Hellwig, M. 2009. “Systemic Risk in the Financial Sector: An Analysis of the Subprime-Mortgage Financial Crisis.” De Economist 157 (2): 129 – 207.  Google Scholar
  44. Hoover, K. 19139. The New Classical Macroeconomics. Oxford: Basil Blackwell.  Google Scholar
  45. Janssen, H. 1998. Nationalökonomie und Nationalsozialismus: Die deutsche Volkswirtschaftslehre in den dreißiger Jahren des 20. Jahrhunderts. Marburg: Metropolis.  Google Scholar
  46. Juglar, C. 11399. Des crises commerciales et de leur retour périodique en France, en Angleterre et aux États-Unis. Paris: Libraire Guillaumin.  Google Scholar
  47. Klausinger, H. 1990. “Equilibrium Methodology as Seen from Hayekian Perspective.” Journal for the History of Economic Thought 12 (1): 61 – 75.  Google Scholar
  48. Klausinger, H. 2013. “Editor’s Introduction.” In The Collected Works of F. A. Hayek: Business Cycles Part I, vol. 7, edited by H. Klausinger, 1 – 45. London: Routledge.  Google Scholar
  49. Köhler, E. A. 2019. “Die Geldordnungstheorie der Freiburger Schule.” ORDO Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft 70: 21 – 49.  Google Scholar
  50. Köster, R. 2011. Die Wissenschaft der Außenseiter: Die Krise der Nationalökonomie in der Weimarer Republik. Göttingen: Vandenhoeck & Ruprecht.  Google Scholar
  51. Kuznets, S. 1930a. “Monetary Business Cycle Theory in Germany.” Journal of Political Economy 38 (2): 125 – 63.  Google Scholar
  52. Kuznets, S. 1930b. “Equilibrium Economics and Business-Cycle Theory.” Quarterly Journal of Economics 44 (3): 381 – 415.  Google Scholar
  53. Lachmann, L. 1937. “Preiserwartungen und Intertemporales Gleichgewicht.” Zeitschrift für Nationalökonomie 8 (1): 33 – 46.  Google Scholar
  54. Lange, O. 1934. “Friedrich Lutz: Das Konjunkturproblem in der Nationalökonomie.” Zeitschrift für Nationalökonomie 5 (3): 384 – 87.  Google Scholar
  55. Lange, O. 1935. “Marxian Economics and Modern Economic Theory.” Review of Economic Studies 2 (3): 189 – 201.  Google Scholar
  56. Lenel, H. O. 2008 [1989]. “Walter Eucken (1891 – 1950).” In Klassiker des Ökonomischen Denkens von Platon bis John Maynard Keynes, edited by J. Starbatty, 292 – 311. Hamburg: Nikol Verlag.  Google Scholar
  57. Leonard, R. 2010. Von Neumann, Morgenstern and the Creation of Game Theory: From Chess to Social Science, 1900 – 1960. Cambridge: Cambridge University Press.  Google Scholar
  58. Löwe, A. 1925. “Der gegenwärtige Stand der Konjunkturforschung in Deutschland.” In Die Wirtschaftswissenschaft nach dem Kriege. Festgabe für Lujo Brentano zum 80. Geburtstag, edited by M. Palyi and M. J. Bonn, 329 – 77. München: Duncker & Humblot.  Google Scholar
  59. Löwe, A. 1926. “Wie ist Konjunkturtheorie überhaupt möglich?” Weltwirtschaftliches Archiv 24: 165 – 197.  Google Scholar
  60. Löwe, A. 1997. “How is Business Cycle Possible at All?”, translated by C. Gehrke. Structural Change and Economic Dynamics 8 (2): 245 – 70.  Google Scholar
  61. Lucas, R. E. 1977. “Understanding Business Cycles.” Carnegie-Rochester Series on Public Policy 5 (1): 7 – 29.  Google Scholar
  62. Lucas, R. E. 2003. “Macroeconomic Priorities.” American Economic Review 93 (1): 1 – 14.  Google Scholar
  63. Lutz, F. A. 1927. Der Kampf um den Kapitalbegriff in der neuesten Zeit. Tübingen: Eugen Göbel.  Google Scholar
  64. Lutz, F. A. 1932. Das Konjunkturproblem in der Nationalökonomie. Jena: Gustav Fischer.  Google Scholar
  65. Lutz, F. A. 1933a. “Realistische Konjunkturerklärung: Eine Entgegnung auf Gustav Clausings ‘Reine oder realistische Wechsellagenlehre.’” Schmollers Jahrbuch 57: 731 – 40.  Google Scholar
  66. Lutz, F. A. 1933b. “Contribution.” In Stand und die nächste Zukunft der Konjunkturforschung: Festschrift für Arthur Spiethoff, edited by C. Clausing, 161 – 65. München: Duncker & Humblot.  Google Scholar
  67. Lutz, F. A. 1944. “History and Theory in Economics.” Economica 11 (44): 210 – 14.  Google Scholar
  68. Lutz, F. A. 2002. “Extracts from The Problem of Business Cycles in Economics.” In Business Cycle Theory Selected Texts 1860 – 1939, Equilibrium and the Business Cycle, vol. 4, edited by H. Hagemann, 175 – 238. London: Pickering & Chatto.  Google Scholar
  69. Menger, C. 1985 [11393]. Investigations into the Method of the Social Sciences with Special Reference to Economics. New York: New York University Press.  Google Scholar
  70. Meyer, W. 2002. Grundlagen des ökonomischen Denkens. Tübingen: Mohr Siebeck.  Google Scholar
  71. Miksch, L. 1929. Gibt es eine allgemeine Überproduktion? Jena: Gustav Fischer.  Google Scholar
  72. Mises, L. v. 1924 [1912]. Theorie des Geldes und der Umlaufsmittel. München: Duncker & Humblot.  Google Scholar
  73. Mises, L. v. 1978 [1960]. Epistemological Problems of Economics. Translated by G. Reisman. New York: New York University Press.  Google Scholar
  74. Röpke, W. 1936. Crises and Cycles. London: William Hodge.  Google Scholar
  75. Rühl, C. 1994. “The Transformation of the Business Cycle Theory: Hayek, Lucas and a Change in the Notion of Equilibrium.” In Money and Business Cycles. The Economics of F. A. Hayek, vol. 1, edited by M. Colonna and H. Hagemann, 168 – 202. Aldershot: Edward Elgar.  Google Scholar
  76. Rühl, C. 1997a. “Der Beitrag deutschsprachiger Ökonomen zur konjunkturtheoretischen Debatte der Zwischenkriegszeit.” In Zur deutschsprachigen wirtschaftswissenschaftlichen Emigration nach 1933, edited by H. Hagemann, 243 – 292. Marburg: Metropolis.  Google Scholar
  77. Rühl, C. 1997b. “Lutz, Friedrich August.” In Business Cycles and Depressions. An Encyclopedia, edited D. Glasner, 415 – 16. New York: Garland.  Google Scholar
  78. Schneider, E. 1951. “Schumpeter’s Early German Work, 1906 – 17.” Review of Economics and Statistics 33 (2): 104 – 08.  Google Scholar
  79. Schumpeter, J. A. 1908. Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie. Leipzig: Duncker & Humblot.  Google Scholar
  80. Schumpeter, J. A. 1911. Theorie der wirtschaftlichen Entwicklung. Leipzig: Duncker & Humblot.  Google Scholar
  81. Schumpeter, J. A. 2018 [1926]. “Gustav von Schmoller and the Problems of Today.” Journal of Contextual Economics – Schmollers Jahrbuch – Schmollers Jahrbuch 138 (3 – 4): 261 – 303.  Google Scholar
  82. Schumpeter, J. A. 1949 [1934]. The Theory of Economic Development. Cambridge: Harvard University Press.  Google Scholar
  83. Schumpeter, J. A. 1954. History of Economic Analysis. New York: Oxford University Press.  Google Scholar
  84. Schumpeter, J. A. 2010. The Nature and Essence of Economic Theory. New Brunswick: Transaction Publishers.  Google Scholar
  85. Stiglitz, J. 2016. Towards a General Theory of Deep Downturns: Presidential Address from the 17th World Congress of the International Economic Association in 2014. London: Palgrave Macmillan.  Google Scholar
  86. Stiglitz, J. 2018. “Where Modern Macroeconomics Went Wrong?” Oxford Review of Economic Policy 34 (1 – 2): 70 – 106.  Google Scholar
  87. Tinbergen, J. 1933. “L’utilisation des équations fonctionnelles et des nombres complexes dans les recherches économiques.” Econometrica 1 (1): 36 – 51.  Google Scholar
  88. Tinbergen, J. and J. J. Polak 1949. The Dynamics of Business Cycles. Chicago: University of Chicago Press.  Google Scholar
  89. Veit-Bachmann, V. 2003. “Friedrich A. Lutz: Leben und Werk.” In Währungsordnung und Inflation: Zum Gedenken an Friedrich A. Lutz (1901 – 1975), edited by V. J. Vanberg, 9 – 43. Tübingen: Mohr Siebeck.  Google Scholar
  90. Watkins, J. W. N. 1953. “Walter Eucken, Philosopher-Economist.” Ethics 63 (2): 131 – 36.  Google Scholar

Abstract

Friedrich A. Lutz’ 1932 habilitation thesis is considered the last highlight in a German-language business cycle debate that took place during the interwar period. This debate, initiated by Adolf Löwe, concentrated on the necessary conditions in defining a dynamic theory that should explain the business cycle understood as a dynamic disequilibrium phenomenon in a deductive way. This article contributes to Lutz scholarship by focusing on Lutz’ criticism of Clément Juglar’s “unconditional” observations. This constituted the basis for the problematic concept of wave-like fluctuation subsequently adopted by the Historical School and Joseph Schumpeter. I establish a relationship between Lutz’ criticism and his statement that this perspective does not find support in economic history. Lutz asserted that each crisis represents a unique historical phenomenon caused by specific factors whose impact on the economy depends on its institutional framework. From this, I derive an epistemological claim, namely that the equilibrium tendencies within the market order should be the subject of inquiry, and a methodological call, namely the development of models showing hypothetically what factors can disturb these tendencies. The paper contextualizes Lutz’ criticism and messages into the formation of the Freiburg School’s research program.

Table of Contents

Section Title Page Action Price
Lachezar Grudev: Friedrich A. Lutz’ Epistemological and Methodological Messages During the German-Language Business Cycle Debate 1
Abstract 1
1. Introduction 1
2. Aspects of the German-Language Business Cycle Debate 3
2.1 Joseph Schumpeter’s Relevancefor German-Speaking Economists 3
2.2 Adolf Löwe – Friedrich A. HayekMethodological Discussions 5
3. Friedrich A. Lutz’ Contribution to the Debate 7
3.1 Friedrich A. Lutz and the Formationof the Freiburg School of Economics 7
3.2 Friedrich A. Lutz’ Response to the Debate 9
3.2.1 The Subject of Inquiry Itself is Problematicin Business Cycle Research 1
3.2.2 The Problematic Subject of Inquiry –the Basis for Problematic Theories 1
4. Friedrich A. Lutz’ Epistemologicaland Methodological Messages 1
4.1 The Epistemological Message – On the Subject of Inquiry 1
4.2 The Methodological Message 1
4.2.1 The Pure Theoretical Approach –The Construction of Models 1
4.2.2 The Statistical Approach –A Concrete Explanation of Historical Events 1
5. Did Friedrich A. Lutz Win the Day? 1
6. Conclusion 2
References 2

Contact

Duncker & Humblot GmbH Carl-Heinrich-Becker-Weg 9 12165 Berlin, Deutschland T: +49 30 790006-0

Quick Navigation

2024 Duncker & Humblot GmbH

Powered by CloudPublish

We use cookies to ensure that you get the best experience on our website. Learn more about how we use cookies.