Spiethoff, Arthur
Spiethoff, Arthur
Arthur Spiethoff (1873-1957), German economist, made his most lasting contribution in business-cycle research. He began to work in this field at an early age, and it is here that he did pioneer work. To work on the problem of the business cycle he had to transcend his intellectual origins in the German historical school and develop a new general theory of economics. His “historical-realistic,” or “intuitive,” theory, in combination with a theory of economic style and with new methods of generalizing and patterning the results of extremely detailed investigation of essential elements, created the framework for a comprehensive explanation of business cycles—an “analytical description.”
Spiethoff saw himself as the heir and executor of Gustav Schmoller. He appreciated Schmoller’s grasp of the living, historical reality of economics accessible by observation and intuition. He considered theoretical speculation for its own sake to be fruitless, but approved of, and himself mastered, purely theoretical analysis as a necessary preliminary or an auxiliary to other analysis.
Business cycles. In his research on the business cycle, SpiethofFs point of departure was the work of Clement Juglar, who had been the first to establish the cyclical nature of business booms and depressions, basing his findings on historical and statistical research. Juglar distinguished between boom, crisis, and stagnation and regarded the boom as the “sole cause” of stagnation. A generation later, Spiethoff (together with a group of researchers, including Mikhail I. Tugan-Baranovskii and Albert Aftalion) renewed the systematic empirical and analytical study of specific problems related to business cycles.
Spiethoff delivered his first lecture outlining a theory of the business cycle in Berlin in 1901 (see 1902). The lecture gave evidence of years of historical and statistical research and of a high degree of methodological rigor. Numerous specialized studies on the problem of the business cycle followed. In the celebrated article “Krisen,” published in 1923, he gave a comprehensive exposition of what he called economic Wechsellagen (states of alternation), but he considered even this exposition to be merely a preliminary survey. It appeared in English as “Business Cycles” in 1953 and was reprinted in 1955 as Die wirtschaftlichen Wechsellagen: Aufschwung, Krise, Stockung, supplemented by the statistical material on which the article was based and which was published for the first time in Volume 2 of the 1955 work. This statistical material, going back a century, is essential to Spiethoff’s theory of the business cycle. Another article, “Overproduction,” in the Encyclopaedia of the Social Sciences (1933), is a concise treatment of a related important problem.
Spiethoff’s over-all treatment of business cycles conforms to the methods of the historical-realistic theory. An initial conceptual clarification of the basic characteristics of business cycles is followed by a close analysis of the significance for cyclical developments of capital investment, production, consumption, and prices. This analysis yields a “model cycle,” which specifies the decisive characteristics of particular stages. The model, derived from the careful study of more than a century of economic evolution, claims to present only typical and essential elements, rather than any regular sequence, such as decline, ascent, boom, and capital scarcity.
As early as 1902, Spiethoff made a major advance in business-cycle theory by attempting to explain systematically the origin, development, and cessation of the business boom. The cessation of the boom is equivalent to the genesis of overproduction, as distinct from the continuation of overproduction, which is the essential ingredient of business stagnation. The crisis is not part of the regular cycle, inasmuch as it may, but need not, occur. Describing and explaining the crisis raises new problems. Spiethoff always saw business cycles in terms of increasing or decreasing capital investment: capital goods and means of production are more central to them than are consumers’ goods. Spiethoff asserted that this observation made possible a causal explanation of cycles and created the basis of all modern theories.
Although Spiethoff did attribute great importance to capital investment, his theory interrelates so many causes, conditions, and characteristic factors that it cannot really be called an “overinvestment theory,” as, for instance, Gottfried Haberler and Alvin Hansen have stated. Spiethoff also took into account psychological circumstances, crop fluctuations, the “accelerator” phenomenon, and monetary and credit factors. His Schichtenlehre (doctrine of levels), to use a term coined by Adolf Lowe (Der Stand . . . 1933, p. 157), is the first attempt to provide an organic synthesis of empiricism and theory, as well as an effective combination of elements that are essential from the standpoint of realistic (intuitive) theory. Hence, it is not a classical formulation of the descriptive-empirical approach, as W. A. Johr (1957) has asserted.
According to Schumpeter (1954, p. 1127), Spiethoff was the first economist after Marx to recognize that business cycles are not simply insignificant attendant phenomena of capitalist development but constitute, instead, the essential form of this development.
Spiethoff was also one of the first to observe that the business cycle is only part of a larger rhythm, each phase of which spans several decades, and that economic developments in the period studied by him—the period from 1822 to 1913—were governed by this rhythm. Spiethoff coined the term Wechselspannen to designate the alternation of periods predominantly characterized by prosperity with those predominantly characterized by stagnation. Much research was later done on these Wechselspannen, or Kondratieff cycles, as they came to be called. Spiethoff himself was not able to provide a systematic analysis of the “riddle of the long waves,” but occasionally he attempted speculative explanations.
The much-discussed question of the necessity, or the inevitability (according to Haberler), of the business cycle was answered positively by Spiethoff, who considered the cycle to be based on fundamental traits of the economic style of fully developed capitalism. The consistent application of the historical theory permits this positive answer to what is often called the problem of the periodicity, or regular recurrence, of business cycles.
A second frequently discussed problem is that of the compatibility of the theory of the business cycle with the theory of an economic “system,” for example, a dynamic system. In terms of pure historical—realistic theory, it is the economic style which represents what the system does. Thus, the central issue is the relation of cycles to a given economic style, rather than the course of these cycles within the framework of a system. Spiethoff rejected the notion advanced by Irving Fisher, Friedrich Lutz, and Walter Eucken that the phenomenon of the business cycle is not a “general problem to be solved by means of pure dynamic theory” (Lutz in Der Stand . . . 1933, p. 163). Spiethoffs factual research demonstrated the untenability of that viewpoint. Indeed, hardly any significant theory of the business cycle has adopted the “nihilistic” thesis that “the” cycle does not exist. Schumpeter, Haberler, and Jöhr, for example, assume a general cycle phenomenon.
Thus, with regard to Spiethoff’s business-cycle theory, it has been said that the “modern researcher will look in vain for a rigorously ’pure’ model of the business cycle or for the effects of ’deficit spending’ or for his familiar tools, such as the multiplier, the principle of acceleration, preference for liquidity, and marginal inclination toward consumption and investment. Rudiments of these, however, as well of Keynesian and post-Keynesian thinking are to be found in Spiethoff’s writings . . .” (Nicol 1957, p. 21*). Spiethoff would have considered many of the present “oscillation models,” which explain, for example, the course of business cycles as a purely mechanical process involving a combination of the multiplier and accelerator principles and which eliminate all psychic components, as interesting intellectual exercises, but remote from reality.
Since Spiethoff’s theory of the business cycle is a “historical” one, its validity is limited to the advanced capitalist economic style of the so-called free market. Consequently, the business cycle is related, for example, to particular psychological premises, a given historical environment, and especially to the possibility of technological innovation and the opening up of new markets.
Theory of economic styles. Spiethoff’s research on the business cycle was the focal point of his work, but it was also part of his wider effort to evolve a new theory of economics. His contributions to the Sombart Festgabe (1932), to the Schmoller Festgabe (1938), and to the Alfred Weber Festgabe (1948), are milestones along this road. We might add Spiethoff’s publications in English: “The ’Historical’ Character of Economic Theories” (1952) and “Pure Theory and Economic Gestalt Theory: Ideal and Real Types” (1953).
As in the case of business cycles, Spiethoff approached his general theory with new methods, in the tradition of Schmoller, Max Weber, and Sombart, working toward a historical-realistic theory of economic styles. All of Spiethoff’s scientific life-work, built up quite systematically, reflects the fruitful employment of these methods. This is true not only of his business-cycle research but also of his highly important theory of the capital and money market or his extensive investigations of land utilization and housing. His heuristic tools are most fully developed in his advanced conception of a general science of political economy, which he did not live to elaborate in full but for which the theoretical concept of economic style is crucial.
The economic style is an open-ended set of phenomena that is continuously complemented and modified by new experiential research rather than exclusively by “system-compatible” data. Spiethoff believed that this concept would permit the resolution of the perennial dilemma of economics: the quest for general knowledge, in the face of the historical variability of most economic phenomena. In the strictest sense, an absolute theory can be formulated only for fundamental economic phenomena, but a certain “general validity” at least may be claimed within the scope of an economic style, such as the style of the era of the free market.
The concept of economic style is designed to deal with the fact that “economy and society” constitute a complex of economic phenomena that are internally related in many ways with one another as well as with extraeconomic factors, such as political ones. They must be comprehended and explained as a meaningful whole.
Going beyond the theories of economic stages, which stress general patterns of economic evolution, the concept of economic style deals in theoretical terms with the typical variations in economic life. These variations determine the number of economic styles as well as of “historical theories.” Together, these constitute the general science of political economy, which is complemented by the absolute theory of basic patterns and is supported by the methods and perceptions of the theory of logic. The validity of historical theories is limited to the particular economic styles on which they are founded, but they may be considered generally valid for those styles.
The definition of economic styles is, therefore, an important problem. They are defined by those characteristics whose regular appearance, interplay, and change from one epoch to another bring about the style changes of the economy. These characteristics include, for example, Sombart’s “economic spirit” (Wirtschaftsgeist), variable natural and technological foundations, the social structure, the economic structure, and the course of economic events.
Spiethoff’s scholarly contributions included considerable editorial activity. For many years he was the editor of Schmollers Jahrbuch, of the political science division of the Enzyklopadie der Rechts-und Staatswissenschaft, of the Bonner staatswis-senschaftliche Untersuchungen (together with Herbert von Beckerath and Joseph Schumpeter), and of many volumes of a series on business cycles. He also edited the 1932 Sombart Festgabe, a Schmoller Festgabe in 1938, and (after World War II) the Hand- und Lehrbucher aus dem Gebiet der Sozialwissenschaften (with Edgar Salin), and two volumes of a collection of articles by Joseph Schumpeter (with Erich Schneider).
Gustav Clausing
See alsoBusiness Cyclesand the biographies ofKondratieff; Juglar; Schmoller; Schumpeter
WORKS BY SPIETHOFF
1902 Vorbemerkungen zu einer Theorie der Überproduktion: Vortrag, gehalten am 17. Dezember 1901 in der Staatswissenschaftlichen Vereinigung zu Berlin. Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirt-schaft im Deutschen Reich 26:721-759. → Now called Schmollers Jahrbuch.
1909a Die aussere Ordnung des Kapital- und Geld-marktes. Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reich 33:445-467.
1909b Der Kapitalmangel in seinem Verháltnisse zur Guterwelt. Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reich 33:1417-1437.
1909c Das Verháltnis von Kapital, Geld und Guterwelt. Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reich 33:927-951.
1918a Die Kreditkrise. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche 42:571-614.
1918b Die Krisenarten. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche 42:223-266.
1920 Der Begriff des Kapital- und Geldmarktes. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche 44:981-1000.
(1923) 1953 Business Cycles. International Economic Papers 3:75-171. → First published as “Krisen” in Volume 6 of the Handworterbuch der Staatswissen-schaften.
1932 Die allgemeine Volkswirtschaftslehre als geschichtliche Theorie: Die Wirtschaftsstile. Pages 51-84 in Festgabe fur Werner Sombart. Schmollers Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche, Vol. 56, No. 6. Munich: Duncker & Humblot.
1933 Overproduction. Volume 11, pages 513-517 in Encyclopaedia of the Social Sciences. New York: Macmillan.
1934 Boden und Wohnung in der Marktwirtschaft, insbe-sondere im Rheinland. Bonner staatswissenschaftliche Untersuchungen, Vol. 20. Jena: Fischer.
1938 Spiethoff, Arthur (editor) Gustav von Schmoller und die deutsche geschichtliche Volkswirtschaftslehre: Festgabe zur hundertsten Wiederkehr seines Geburtstages 24. Juni 1938. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche, Vol. 62, No. 4-6. Berlin: Duncker & Humblot.
1948 Anschauliche und reine volkswirtschaftliche Theorie und ihr Verháltnis zu Einander. Pages 567-664 in Synopsis: [Festgabe fur] Alfred Weber, 30.V1I. 1868-30.VII. 1948. Edited by Edgar Salin. Heidelberg: Schneider.
1952 The “Historical” Character of Economic Theories. Journal of Economic History 12:131-139.
1953 Pure Theory and Economic Gestalt Theory: Ideal and Real Types. Pages 444-463 in Frederic C. Lane and Jelle C. Riemersma (editors), Enterprise and Secular Change: Readings in Economic History. Home-wood, Ill.: Irwin.
1955 Die wirtschaftlichen Wechsellagen: Aufschwung, Krise, Stockung. 2 vols. Zurich: Polygraphischer Ver-lag; Tubingen: Mohr. → Volume 1: Erklarende Be-schreibung. Volume 2: Lange statistische Reihen ilber die Merkmale der wirtschaftlichen Wechsellagen.
SUPPLEMENTARY BIBLIOGRAPHY
Ackley, Gardner 1954 Spiethoff’s Views on the Business Cycle. Kyklos 7:283-285. → A review of Spiet-hoff (1923).
Arthur Spiethoff zum 70. Geburtstag. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche, Vol. 67, No. 4-5. 1943 Berlin: Duncker & Humblot.
Clausing, Gustav 1958 Arthur SpiethofFs wissenschaft-liches Lebenswerk. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche 78:257-290.
Der Stand und die nachste Zukunft der Konjunkturfor-schung: Festschrift fur Arthur Spiethoff. 1933 Berlin: Duncker & Humblot. → See especially pages 154-160 by Adolf Löowe and pages 161-165 by Fried-rich Lutz.
Eucken, Walter (1940) 1951 The Foundations of Economics: History and Theory in the Analysis of Economic Reality. Univ. of Chicago Press. → First published as Die Grundlagen der Nationalokonomie.
Habehler, Gottfried (1937)1958 Prosperity and Depression: A Theoretical Analysis of Cyclical Movements. 4th ed., rev. & enl. Harvard Economic Studies, Vol. 105. Cambridge, Mass.: Harvard Univ. Press; London: Allen & Unwin.
JÖhr, Walter Adolf 1957 Konjunktur. Volume 6, pages 97-132 in Handwörterbuch der Sozialwissenschaften. Stuttgart: Fischer.
Kamp, Mathias Ernst 1958 Gedenkrede auf Arthur Spiethoff. Bonn: Hanstein. → Includes a bibliography of works by and about Spiethoff.
Lane, Frederic C. 1956 Some Heirs of Gustav von Schmoller. Pages 9-39 in Architects and Craftsmen inHistory: Festschrift fur Abbott Patson Usher. Tübingen: Mohr.
Lane, Frederic C.; and Riemebsma, Jelle C. (editors) 1953 Enterprise and Secular Change: Readings in Economic History. Homewood, Ill.: Irwin. → See pages 431-443, “Introduction to Arthur Spiethoff,” and some important remarks in the “Conclusion” by F. C. Lane.
Nicol, Helen O. 1957 [A Book Review of] Arthur Spiethoff, Die wirtschaftlichen Wechsellagen. Weltwirt-schaftliches Archiv, Schrifttum 78:19*-22*.
Schumpeter, Joseph A. (1954) 1960 History of Economic Analysis. Edited by E. B. Schumpeter. New York: Oxford Univ. Press.
Schweitzeb, Arthur 1941 Spiethoff’s Theory of the Business Cycle. University of Wyoming Publications 8:1-30. → Contains a bibliography.
Weippeht, Georg 1941-1942 Walter Euckens Grund-lagen der Nationalokonomie. Zeitschrift fur die ge-samte Staatswissenschaft 102:1-58; 271-337.
Weippert, Georg 1943 Zum Begriff des Wirtschafts-stils. Schmollers Jahrbuch fur Gesetzgebung, Verwalt-ung und Volkswirtschaft im Deutschen Reiche 67: 417-478.