Introduction

The Swedish economist Knut Wicksell (1851–1926) wrote in German and Swedish and is, at least in this regard, an exception to our mainly British story. His career was not what one would expect from someone who is perceived today as an outstanding and influential academic. Throughout his life, he was somewhat of an outsider in his contemporary academic world. He did not get a chair in economics until late in life, in Lund when he was fifty. Indeed, his name was first known in Sweden not as an economist, but as a radical pamphleteer. Wicksell’s serious interest in economics began in the mid-1880s when he was over thirty years old; he taught himself economics first in Sweden and then during visits to London and Europe, where he focused on reading both classical and modern, post-1870s economics. He started publishing in economics relatively late, in the 1890s, and his celebrated Interest and Prices appeared when he was forty-seven years old. As we shall see, Wicksell’s analysis should be read and understood against the background of the British debates, the British institutions, and the British monetary orthodoxy. Hence, Wicksell fits well into the history of monetary thought from Hume and Smith through Ricardo, Tooke, Loyd, and J. S. Mill to Bagehot and Marshall. In some important dimensions, as we shall see, he completes our journey on the ascent of the British monetary orthodoxy, especially in formulating central banking theory (to which we will return in Chapter 18).

Wicksell’s most famous monetary writings appeared in English only many years after they had been published in German. Early on, before he studied economics, he was interested primarily in population issues, on which he wrote some pamphlets and often lectured, and in Malthusian thinking on “general gluts.” His attention turned to monetary questions in the 1890s. Geldzins und Guterpreise, his treatise on monetary theory published in 1898, was written when he was supported by a private foundation, not a university; it was translated into English as Interest and Prices only in 1936. Lectures on Political Economy was his next major work on monetary theory and was written with an eye on the history of monetary thinking; it was produced in Lund, where he lectured from 1901 until his retirement.