Rationalization and the "Engineer-Economists" in the Netherlands, 1920-1940

During the interwar period the Netherlands experienced a phase of rapid industrialisation and mechanisation and saw the introduction of many new labour-saving techniques on the work floor. This process, which went under the name ‘rationalisation of production’, caused great concern in the labour movement and sparked an intensive debate over the existence and extent of technological (or permanent) unemployment. Although the problem of technological unemployment was denied by the mainstream economists of the day, the problem was addressed by left-wing, mathematically trained economists, such as Theo van der Waerden and Jan Tinbergen. They sought for rigorous, ‘scientific’ arguments that would convince policy makers, colleagues and the public of socialist employment policies. This paper shows that Van der Waerden and Tinbergen used ever-increasing formal methods to face an issue, rationalisation, which became politically relevant and controversial in the specific context of the interwar period. Their new scientific tools gave them esteem and influence. In their role as advisers to the government they gained influence and were able to recommend policies that were in accordance with their political beliefs

Evaluating the historiography of the Great Depression: explanation or single-theory driven?

Following James Rule and Colin Clark, a single-theory-driven approach to scientific inquiry which focuses on testing particular theories can be distinguished from an explanation-driven approach which is open to all observations and whose results do not cease to have value with the passing of a particular theory. Several 'decision points' in the historiography of the Great Depression are examined and it is shown that the decisions made at each point reflect a single-theory-driven orientation. It is argued that the single-theory-driven approach likely characterizes other fields of Economics, and also that this paper's method of applying a 'test' to various decision points in the evolution of economic thought is of widespread utility. The likely cost of a single-theory-driven bias in terms of our collective understanding is discussed.Great Depression, historiography, methodology, macroeconomics, structuralism, technology,

Schumpeter on unemployment

Schumpeter, Unemployment, Frictions, Creative destruction, B22, B31, E24,