Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-745bb68f8f-s22k5 Total loading time: 0 Render date: 2025-01-08T03:56:08.305Z Has data issue: false hasContentIssue false

4 - “Too Bad to Be True”: Swedish Economists on Keynes’s The Economic Consequences of the Peace and German Reparations, 1919–29

Published online by Cambridge University Press:  14 December 2023

By
Benny Carlson  and
Lars Jonung
Edited by
Patricia Clavin ,
Giancarlo Corsetti ,
Maurice Obstfeld  and
Adam Tooze
Patricia Clavin
Affiliation:
University of Oxford
Giancarlo Corsetti
Affiliation:
University of Cambridge
Maurice Obstfeld
Affiliation:
Peterson Institute for International Economics, Washington DC
Adam Tooze
Affiliation:
Columbia University, New York
Get access

Summary

This chapter examines the response of five prominent Swedish economists, David Davidson, Gustav Cassel, Eli Heckscher, Knut Wicksell and Bertil Ohlin, to John Maynard Keynes’s The Economic Consequences of the Peace and to the German reparations in the 1920s. When Keynes’s book appeared, Davidson and Cassel strongly endorsed it. Heckscher also agreed with Keynes in a long review entitled “Too Bad to Be True”. Inspired by his Malthusian view, Wicksell found the reparations feasible if only German population growth was arrested. The contacts between the Swedes and Keynes became close after Keynes’s book, in particular between Cassel and Keynes. The exchange of views took a new turn when Bertil Ohlin responded to an article by Keynes in The Economic Journal in 1929 on the transfer problem. The famous Keynes–Ohlin discussion laid the foundation for the analysis of the transfer problem, bringing Ohlin international recognition. We also trace how Davidson, Cassel and Heckscher changed their appreciation of Keynes in the 1930s with the publication of the General Theory while Ohlin viewed the message of Keynes in the 1930s as consistent with the policy views of the Stockholm school of economics.

Keywords

John Maynard KeynesDavid DavidsonGustav CasselEli HeckscherKnut WicksellBertil OhlinTreaty of Versaillesreparationsthe transfer problemMalthusianismWorld War I
Type
Chapter
Information
Keynes's Economic Consequences of the Peace after 100 Years
Polemics and Policy
 , pp. 99 - 129
Publisher: Cambridge University Press
Print publication year: 2024

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arthmar, Rogério and McLure, Michael. (2018). “John Maynard Keynes and the Royal Swedish Academy.” History of European Ideas, 44(5), 605–622.CrossRefGoogle Scholar
Brulin, Herman. (1953). “Eli Heckscher och Svensk Tidskrift.” Svensk Tidskrift, 40(8), 407–425.Google Scholar
Carlson, Benny. (1994). The State as a Monster: Gustav Cassel and Eli Heckscher on the Role and Growth of the State. Lanham, New York & London: University Press of America.Google Scholar
Carlson, Benny. (2006). “When Heckscher Changed Direction: from Social Conservatism to Economic Liberalism.” In Findlay, Ronald, Henriksson, Rolf G. H., Lindgren, Håkan and Lundahl, Mats eds., Eli Heckscher, International Trade, and Economic History. Cambridge, MA & London: MIT Press.Google Scholar
Carlson, Benny. (2009). “Who Was Most World-Famous – Cassel or Keynes? The Economist as Yardstick.” Journal of the History of Economic Thought, 31(4), 519–530.Google Scholar
Carlson, Benny. (2016). “Eli Heckscher as a Portrait Maker.” Essays in Economic & Business History, 34, 341–364.Google Scholar
Carlson, Benny and Jonung, Lars. (1989). “Gustav Cassels artiklar i Svenska Dagbladet 1903–1944.” Lund: Meddelande från Ekonomisk-historiska institutionen, 62.Google Scholar
Carlson, Benny and Jonung, Lars. (2006). “Knut Wicksell, Gustav Cassel, Eli Heckscher, Bertil Ohlin and Gunnar Myrdal on the Role of the Economist in Public Debate.” Econ Journal Watch, 3(3), 511–550.Google Scholar
Carlson, Benny, Orrje, Helena and Wadensjö, Eskil. (2000). Ohlins artiklar: Register över Bertil Ohlins artiklar i skandinaviska tidningar och tidskrifter 1919–1979. Stockholm: Institutet för social forskning.Google Scholar
Cassel, Gustav. (1916a). Tysklands ekonomiska motståndskraft. Stockholm: Norstedt.Google Scholar
Cassel, Gustav. (1916b). Germany’s Economic Powers of Resistance. Stockholm: Norstedt.Google Scholar
Cassel, Gustav. (1916c). Deutschlands wirtschaftliche Wiederstandskraft. Berlin: Ullstein.Google Scholar
Cassel, Gustav. (1918). “Krigsskadeersättning och slaveri.” Svenska Dagbladet, 20 December.Google Scholar
Cassel, Gustav. (1919). “Ekonomi och militarism.” Svenska Dagbladet, 20 October.Google Scholar
Cassel, Gustav. (1920a). “Krigsskadestånd och världsekonomi.” Svenska Dagbladet, 14 February.Google Scholar
Cassel, Gustav. (1920b). “Europas ekonomiska återuppbyggande.” Svenska Dagbladet, 12 March.Google Scholar
Cassel, Gustav. (1920c). “Krigsskadeersättningen.” Svenska Dagbladet, 13 August.Google Scholar
Cassel, Gustav. (1920d). “Krigsskadeersättningen.” Svenska Dagbladet, 14 August.Google Scholar
Cassel, Gustav. (1920e). “Tysklands ekonomiska läge.” Svenska Dagbladet, 8 September.Google Scholar
Cassel, Gustav. (1922a). “The Scandinavian Exchanges.” The Manchester Guardian Commercial, 20 April.Google Scholar
Cassel, Gustav. (1922b). “The Economic and Financial Decisions of the Genoa Conference.” The Manchester Guardian Commercial, 15 June.Google Scholar
Cassel, Gustav. (1924). “Keynes i Vetenskapsakademien.” Svenska Dagbladet, 9 October.Google Scholar
Cassel, Gustav. (1937). “En förvänd samhällsbild.” Sunt Förnuft, May.Google Scholar
Cassel, Gustav. (1940). I förnuftets tjänst: En ekonomisk självbiografi. Stockholm: Bokförlaget Natur och kultur.Google Scholar
“Dagens frågor.” (1922). Svensk Tidskrift, 12, 145–147.Google Scholar
Davidson, David. (1920). “Keynes, J.M., The Economic Consequences of the Peace.” Ekonomisk Tidskrift, 22(1), 15–21.Google Scholar
Davidson, David. (1921). “Ententens skadeståndsanspråk mot Tyskland.” Ekonomisk Tidskrift, 23(1), 24–25.Google Scholar
Davidson, David. (1929). “Problemet om det tyska skadeståndets transferering.” Ekonomisk Tidskrift, 31(2), 82–86.Google Scholar
Davidson, David. (1936a). “Nationalekonomien i stöpsleven.” Ekonomisk Tidskrift, 38(4), 87–102.Google Scholar
Davidson, David. (1936b). “Nationalekonomien i stöpsleven.” Ekonomisk Tidskrift, 38(5–6), 103–124.Google Scholar
Eli, F. Heckschers bibliografi 1897–1949. (1950). Stockholm: Ekonomisk-historiska institutet.Google Scholar
Flam, Harry and Flanders, June eds. (1991). Heckscher-Ohlin Trade Theory. Cambridge and London: The MIT Press.Google Scholar
Fregert, Klas. (2016). “The Costs and Finances of World War I According to Eli F. Heckscher.” Oeconomia, 6(4), 515–524.Google Scholar
Gomes, Leonard. (2010). German Reparations, 1919–1932: A Historical Survey. Basingstoke: Palgrave Macmillan.Google Scholar
Gårdlund, Torsten. (1958). The Life of Knut Wicksell. Stockholm: Almqvist & Wiksell.Google Scholar
Heckscher, Eli F. (1915). Världskrigets ekonomi: En studie af nutidens näringslif under världskrigets inverkan. Stockholm: Norstedt.Google Scholar
Heckscher, Eli F. (1920). “För illa att vara sannt.” Svensk Tidskrift, 10(2), 138–146.Google Scholar
Heckscher, Eli F. (1921a). “Ententekraven och Tysklands tvångsbetalning.” Svensk Tidskrift, 11(2), 85–92.Google Scholar
Heckscher, Eli F. (1921b). “Skadeståndspolitikens fortsättning.” Svensk Tidskrift, 11(3), 143–148.Google Scholar
Heckscher, Eli F. (1924). “Keynes, John Maynard.” Nordisk Familjebok (supplement) column 993–995.Google Scholar
Heckscher, Eli F. (1929). “A Plea for Theory in Economic History.” The Economic Journal, 39 (Supplement 1), 525–534.Google Scholar
Heckscher, Eli F. (1934). Mercantilism, Vol. 1. London: George Allen & Unwin Ltd.Google Scholar
Heckscher, Eli F. (1936). “Keynes, J.M.” Nordisk Familjebok (supplement) column 968–969.Google Scholar
Heckscher, Eli F. (1946a). “Lord Keynes Avliden.” Dagens Nyheter, 23 April.Google Scholar
Heckscher, Eli F. (1946b). “Något om Keynes’ ‘General Theory’ ur ekonomisk-historisk synpunkt.” Ekonomisk Tidskrift, 48(3), 161–183.Google Scholar
Heckscher, Eli F. (1953). “David Davidson 1854–1942.” In Schumpeter, Joseph ed., Stora nationalekonomer. Stockholm: Natur och Kultur.Google Scholar
Henriksson, Rolf. (1991). “The Political Economy Club and the Stockholm School, 1917–1951.” In Jonung, Lars ed., The Stockholm School of Economics Revisited. Cambridge: Cambridge University Press.Google Scholar
“How Much Can the Allies Induce Germany to Pay with Advantage to Themselves? A Symposium by Six Professors.” (1922). The Manchester Guardian Commercial, 28 September.Google Scholar
Jacobsson, Per. (1939). “David Davidson.” Ekonomisk Tidskrift, 41(1), 1–10.Google Scholar
Johnson, Elizabeth ed. (1977). The Collected Writings of John Maynard Keynes, Vol. XVII. Activities 1920–1922: Treaty Revision and Reconstruction. Cambridge: Cambridge University Press.Google Scholar
Johnson, Elizabeth ed. (1978). The Collected Writings of John Maynard Keynes, Vol. XVIII, Activities 1922–1932. The End of Reparations. Cambridge: Cambridge University Press.Google Scholar
Jonung, Lars. (1992). “Economics the Swedish Way 1889–1989.” In Engwall, Lars ed., Economics in Sweden: An Evaluation of Swedish Research in Economics. London: Routledge.Google Scholar
Jonung, Lars. (1981). “Ricardo on Machinery and the Present Unemployment: An Unpublished Manuscript by Knut Wicksell.” The Economic Journal, 91(361), 195–198.Google Scholar
Jonung, Lars, Hedlund-Nyström, Torun and Jonung, Christina. (2001). Att uppfostra det svenska folket: Knut Wicksells opublicerade manuskript. Stockholm: SNS Förlag.Google Scholar
Keynes, John Maynard. (1919). The Economic Consequences of the Peace. London: Macmillan.Google Scholar
Keynes, John Maynard. (1920). Fredens ekonomiska följder. Stockholm: Bonnier (translated by Evert Berggren).Google Scholar
Keynes, John Maynard. (1921a). “Den nya skadeståndsuppgörelsen.” Dagens Nyheter, 18 August.Google Scholar
Keynes, John Maynard. (1921b). “Skadeståndsuppgörelsen och världshandeln.” Dagens Nyheter, 28 August.Google Scholar
Keynes, John Maynard. (1922a). A Revision of the Treaty: Being a Sequel to The Economic Consequences of the Peace. London: Macmillan.Google Scholar
Keynes, John Maynard. (1922b). En revision av freden. Stockholm: Bonnier (translated by Evert Berggren).Google Scholar
Keynes, John Maynard. (1929a). “The German Transfer Problem.” The Economic Journal, 39(153), 1–7.Google Scholar
Keynes, John Maynard. (1929b). “A Rejoinder.” The Economic Journal, 39(154), 179–182.Google Scholar
Keynes, John Maynard. (1929c). “Mr Keynes’ Views on the Transfer Problem.” The Economic Journal, 39(155), 388–408.Google Scholar
Knudtzon, Erik J. (1976). Knut Wicksells tryckta skrifter 1868–1950. Lund: Liber/Gleerup.Google Scholar
Larsson, Sven-Erik. (1998). Bertil Ohlin. Ekonom och politiker. Stockholm: Atlantis.Google Scholar
Marshall, T. H. (1935). “Mercantilism.” The Economic Journal, 45(180), 716–719.Google Scholar
Moggridge, Donald ed. (1983). The Collected Writings of John Maynard Keynes, Vol. XI. Economic Articles and Correspondence. Cambridge: Cambridge University Press.Google Scholar
Mundell, Robert. (2002). “Keynes and Ohlin on the Transfer Problem.” In Findlay, Ronald, Jonung, Lars and Lundahl, Mats eds., Bertil Ohlin. A Centennial Celebration (1899–1999). Cambridge: MIT Press.Google Scholar
Ohlin, Bertil. (1928a). “The Reparations Problem. I. The Economic Development in Germany since the Stabilization and the Dawes Plan.” Index, 27, 2–13.Google Scholar
Ohlin, Bertil. (1928b). “The Reparations Problem. II. General Views of International Movements of Capital.” Index, 28, 2–33.Google Scholar
Ohlin, Bertil. (1929). “The Reparation Problem: A Discussion.” The Economic Journal, 39(154), 172–178.Google Scholar
Ohlin, Bertil. (1933). Interregional and International Trade. Cambridge: Harvard University Press.Google Scholar
Ohlin, Bertil. (1937a). “Some Notes on the Stockholm Theory of Savings and Investment I.” The Economic Journal, 47(185), 53–69.Google Scholar
Ohlin, Bertil. (1937b). “Some Notes on the Stockholm Theory of Savings and Investment II.” The Economic Journal, 47(186), 221–240.Google Scholar
Ohlin, Bertil. (1972). Bertil Ohlins memoarer: Ung man blir politiker. Stockholm: Bonniers.Google Scholar
Ohlin, Bertil. (1975). Socialistisk skördetid kom bort. Stockholm: Bonniers.Google Scholar
Patinkin, Don. (1979). “On the Relation between Keynesian Economics and the ‘Stockholm School’.” In Ström, Steinar and Thalberg, Björn eds., The Theoretical Contributions of Knut Wicksell. London: Macmillan.Google Scholar
Samuelson, Paul A. (1981). “Bertil Ohlin (1899–1979).” The Scandinavian Journal of Economics, 83(3), 355–371.Google Scholar
Skidelsky, Robert. (1992). John Maynard Keynes: The Economist as Savior 1920–1937. London: Macmillan.Google Scholar
Trautwein, Hans-Michael. (2019). “Bertil Ohlin.” In Dimand, Robert W. and Hagemann, Harald eds., The Elgar Companion to John Maynard Keynes. Cheltenham and Northampton: Edward Elgar.Google Scholar
Tre tal hållna vid den middag som ett antal kolleger och lärjungar gav för Eli F. Heckscher och hans anhöriga den 13 december 1944 på restaurangen Tre Kronor i Stockholm. (1945). Stockholm.Google Scholar
Wicksell, Knut. (1921). “Det tyska skadeståndet.” Dagens Nyheter, 27 August.Google Scholar
Wicksell, Knut. (1978). “The World War: An Economist’s View.” Scandinavian Journal of Economics, 80(2), 233–235.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×