Extending William Baumol’s theory on entrepreneurship and institutions: lessons from post-Second World War Greece

This article examines William Baumol’s theory about the interaction between taxation and entrepreneurship and proposes an extension to it. The analysis shows that the traditional form of Baumol’s model, focusing mainly on the level of taxes, cannot be used in order to explain what happened in the Greek case. Utilising historical evidence from the mid 1950s to the late 1980s, this article confirms that problematic tax rules create difficulties for entrepreneurship and can lead to unproductive forms of it, as Baumol suggests. However, the focus here is on aspects of the system of taxation that Baumol’s model, examining solely tax rates and levels of taxation, neglected. It is shown that, as far as Greek entrepreneurship is concerned, the adverse effects of the system of taxation came not from the level of taxes, but mostly from a series of issues that increased its perceived unfairness and illegitimacy. Some of such issues were the complexity and frequent change of legislation, the insufficient organisation of the tax bureaus as well as the lack of adequate training and arbitrariness of the members of tax services. The evidence presented here suggests that Baumol’s model can be enriched by taking into consideration these aspects of taxation too

The german historical school and european economic thought

The financial crisis of 2008 has revived interest in economic scholarship from a historical perspective. The most in depth studies of the relationship between economics and history can be found in the work of the so-called German Historical School (GHS). The influence of the GHS in the USA and Britain has been well documented, but far less has been written on the rest of Europe. This volume studies the interconnection between economic thought and economic policy from the mid-nineteenth century to the interwar period. It examines how the School’s ideas spread and was interpreted in different European countries between 1850 and 1930, analysing its legacies in these countries. In doing so, the book is able to trace the interconnection between economic thought and economic policy, adding new voices to the debate on the diffusion of ideas and flow of knowledge. This book identifies issues related to topics such as nationalism and cosmopolitanism in the history of ideas and clarifies themes in policy making that are still currently debated. These include monetary policy and benefits of free trade for all parties involved in international exchanges. This book will be of a great interest to those who study history of economic thought, economic theory and political economy