Eli Filip Heckscher (24 November 1879 – 23 December 1952) was a Swedish
political economist
Political economy is the study of how economic systems (e.g. markets and national economies) and political systems (e.g. law, institutions, government) are linked. Widely studied phenomena within the discipline are systems such as labour mar ...
and
economic historian
Economic history is the academic learning of economies or economic events of the past. Research is conducted using a combination of historical methods, statistical methods and the application of economic theory to historical situations and inst ...
.
Biography
Heckscher was born in Stockholm, son of the Jewish Danish-born businessman Isidor Heckscher and his spouse Rosa Meyer, and completed his secondary education there in 1896. He conducted higher studies at
Uppsala University
Uppsala University ( sv, Uppsala universitet) is a public university, public research university in Uppsala, Sweden. Founded in 1477, it is the List of universities in Sweden, oldest university in Sweden and the Nordic countries still in opera ...
(from 1897) and
Gothenburg University College
The University of Gothenburg ( sv, Göteborgs universitet) is a List of universities in Sweden, university in Sweden's second largest city, Gothenburg. Founded in 1891, the university is the third-oldest of the current List of universities in Sw ...
(in 1898), completing his PhD in Uppsala in 1907. He was professor of Political economy and Statistics at the
Stockholm School of Economics
The Stockholm School of Economics (SSE; sv, Handelshögskolan i Stockholm, HHS) is a private business school located in city district Vasastaden in the central part of Stockholm, Sweden. SSE offers BSc, MSc and MBA programs, along with ...
from 1909 until 1919, when he exchanged that chair for a research professorship in
economic history
Economic history is the academic learning of economies or economic events of the past. Research is conducted using a combination of historical methods, statistical methods and the application of economic theory to historical situations and ins ...
, finally retiring as emeritus professor in 1945. In 1929 Heckscher founded the Institute for Economic and Business History Research as a key step in his effort to create the field of economic history in Sweden, and make it a policy-oriented science. He advanced his agenda by recruiting two other scholars, historian Bertil Boëthius (1885–1974) and economist Arthur Montgomery. Thereby the "Stockholm School" emerged and achieved a voice in government planning.
Eli Heckscher's son was
Gunnar Heckscher
Gunnar Edvard Heckscher (8 July 190924 November 1987) was a Swedish political scientist and leader of the Rightist Party (), which later became the Moderate Party.
Biography
Heckscher was born in Djursholm, son of economist Eli Heckscher and wr ...
(1909–1987), a political scientist and the leader of what would later become the
Swedish Moderate Party 1961–1965. His grandson is the
Social Democratic
Social democracy is a political, social, and economic philosophy within socialism that supports political and economic democracy. As a policy regime, it is described by academics as advocating economic and social interventions to promote soci ...
politician
Sten Heckscher
Sten Heckscher (born 29 July 1942) is a Swedish lawyer and Social Democratic politician.
He graduated with a degree in law from Uppsala University. Even though his father was leader of what later became the Moderate Party, Heckscher himself enga ...
.
By 1950 Heckscher had published 1148 books and articles. Well known were his study of
Mercantilism
Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce a ...
, which was translated into several languages, and a monumental Economic history of Sweden in several volumes.
Heckscher's most important work, though, is his
1919
Events
January
* January 1
** The Czechoslovak Legions occupy much of the self-proclaimed "free city" of Pressburg (now Bratislava), enforcing its incorporation into the new republic of Czechoslovakia.
** HMY ''Iolaire'' sinks off the c ...
article “The Effect of Foreign Trade on the Distribution of Income."
[Heckscher, E. (1919). The Effect of Foreign Trade on the Distribution of Income. Ekonomisk Tidskrift, 497-512. Reprinted as Chapter 13 in A.E.A. (1949). Readings in the Theory of International Trade, 272-300 (Philadelphia: Blakiston) with a Translation in H. Flam and M. J. Flanders (Eds.). 1991. Heckscher-Ohlin Trade Theory, 43-69. Cambridge: MIT Press.] In this article, Heckscher provided a model explaining patterns in
international trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy)
In most countries, such trade represents a significant ...
now known as the (
Heckscher-Ohlin model). Heckscher's “The Effect of Foreign Trade on the Distribution of Income" was groundbreaking but originally gained little attention for several reasons. First, Hecksher published the article in the Swedish journal ''Ekonomisk Tidskrift'' in
Swedish
Swedish or ' may refer to:
Anything from or related to Sweden, a country in Northern Europe. Or, specifically:
* Swedish language, a North Germanic language spoken primarily in Sweden and Finland
** Swedish alphabet, the official alphabet used by ...
, a language with comparatively less international access. Second, even those reading Swedish and following Hecksher may have overlooked this particular article at first since Heckscher was so prolific (he published 1148 articles and books). Finally, Heckscher was a
Jew
Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""Th ...
which was a factor because, just as the significance of the article became apparent beyond Sweden, the rise of
anti-Semitism
Antisemitism (also spelled anti-semitism or anti-Semitism) is hostility to, prejudice towards, or discrimination against Jews. A person who holds such positions is called an antisemite. Antisemitism is considered to be a form of racism.
Antis ...
globally and
Nazi
Nazism ( ; german: Nazismus), the common name in English for National Socialism (german: Nationalsozialismus, ), is the far-right totalitarian political ideology and practices associated with Adolf Hitler and the Nazi Party (NSDAP) in ...
sm bans on Jewish authors arguably delayed its greater recognition until after
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
. Heckscher's famous former student
Bertil Ohlin
Bertil Gotthard Ohlin () (23 April 1899 – 3 August 1979) was a Swedish economist and politician. He was a professor of economics at the Stockholm School of Economics from 1929 to 1965. He was also leader of the People's Party, a social-liberal ...
at the
Stockholm School of Economics
The Stockholm School of Economics (SSE; sv, Handelshögskolan i Stockholm, HHS) is a private business school located in city district Vasastaden in the central part of Stockholm, Sweden. SSE offers BSc, MSc and MBA programs, along with ...
(who himself succeeded Heckscher as professor there), significantly expanded on Hecksher's theory, giving it more support and a wider audience. Ohlin won the
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
in 1977 long after Heckscher's death.
Heckscher–Ohlin theorem
The Heckscher–Ohlin Theorem, which is concluded from the
Heckscher–Ohlin model
The Heckscher–Ohlin model (, H–O model) is a general equilibrium mathematical model of international trade, developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics. It builds on David Ricardo's theory of comparative ad ...
of international trade, states: trade between countries is in proportion to their relative amounts of capital and labor. In countries with an abundance of capital, wage rates tend to be high; therefore, labor-intensive products, e.g. textiles, simple electronics, etc., are more costly to produce internally. In contrast, capital-intensive products, e.g. automobiles, chemicals, etc., are less costly to produce internally. Countries with large amounts of capital will export capital-intensive products and import labor-intensive products with the proceeds. Countries with high amounts of labor will do the reverse.
The following conditions must be true:
* The major factors of production, namely labor and capital, are not available in the same proportion in both countries.
* The two goods produced either require more capital or more labor.
* Labor and capital do not move between the two countries.
* There are no costs associated with transporting the goods between countries.
* The citizens of the two trading countries have the same needs.
The theory does not depend on total amounts of capital or labor, but on the amounts per worker. This allows small countries to trade with large countries by specializing in production of products that use the factors which are more available than its trading partner. The key assumption is that capital and labor are not available in the same proportions in the two countries. That leads to specialization, which in turn benefits the country's economic welfare. The greater the difference between the two countries, the greater the gain from specialization.
References
Sources
*Bertil Ohlin, "Heckscher, Eli Filip", ''
Svenskt biografiskt lexikon
''Svenskt biografiskt lexikon'' () is a Swedish biographical dictionary, started in 1917. The first volume, covering names ''Abelin'' to ''Anjou'', was published in 1918. As of 2017, names from A to S are covered.
Volumes
# ABELIN – ANJOU (1 ...
'', vol. 18, pp. 376–381.
Further reading
* Carlson, Benny, and Lars Jonung. "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 (2006): 511
online
* Coleman, Donald Cuthbert, "Eli Heckscher and the idea of mercantilism." ''Scandinavian Economic History Review'' 5.1 (1957): 3–2
online
* Hasselberg, Ylva. "Networks and Scientific Integrity: Eli Heckscher and the Construction of Economic History in Sweden, 1920–1950." ''Scandinavian Economic History Review'' 54.3 (2006): 273–290.
*''Eli Heckscher, International Trade, and Economic History'', Findlay, Ronald, Rolf G. H. Henriksson, Håkan Lindgren and Mats Lundahl, eds., The MIT Press, 2007.
*
External links
*
{{DEFAULTSORT:Heckscher, Eli
1879 births
1952 deaths
Writers from Stockholm
Swedish economists
20th-century Swedish historians
Swedish Jews
Jewish historians
Economic historians
Trade economists
Uppsala University alumni
University of Gothenburg alumni
Academic staff of the Stockholm School of Economics
Member of the Mont Pelerin Society