Eli Heckscher | |
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| Born | (1879-11-24)24 November 1879 |
| Died | 23 December 1952(1952-12-23) (aged 73) Stockholm |
| Academic background | |
| Influences | David Davidson (economist),Gustav Cassel,Alfred Marshall,Knut Wicksell |
| Part ofa series on |
| Conservatism in Sweden |
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Commentators |
Eli Filip Heckscher (24 November 1879 – 23 December 1952) was a Swedishpolitical economist andeconomic historian who was a professor at theStockholm School of Economics.
He is known for theHeckscher–Ohlin theorem, an influential model ofinternational trade that predicts that capital-abundant countries export capital-intensive goods, while labor-abundant countries export the labor-intensive goods.[1]
Heckscher was born in Stockholm, son of the JewishDanish-born businessman Isidor Heckscher and his spouse Rosa Meyer. He completed his secondary education there in 1896.
He conducted higher studies atUppsala University (from 1897) and atGothenburg University College[2] (in 1898) before completing his PhD in Uppsala in 1907. At Uppsala, he studied history underHarold Hjarne and economics underDavid Davidson.[3] After completing his PhD, he lectured at Uppsala.[3]
He was professor of Political economy and Statistics at theStockholm School of Economics from 1909 until 1919, when he exchanged that chair for a research professorship ineconomic history, 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.[4]
Prior to World War I, Heckscher was a social conservative who advocated for an interventionist state.[1] During World War I, his attitudes shifted, as he became a proponent of economic liberalism and a staunch opponent of state interventionism.[1]
Heckscher is well known for his 1935 bookMercantilism, which was translated into several languages.[5] He is also known for multi-volumeAn Economic History of Sweden.[5][6][7]
Heckscher's most important work, though, is his1919 article “The Effect of Foreign Trade on the Distribution of Income."[8] In this article, Heckscher provided a model explaining patterns ininternational trade 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 journalEkonomisk Tidskrift inSwedish, 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 aJew which was a factor because, just as the significance of the article became apparent beyond Sweden, the rise ofanti-Semitism globally andNazism bans on Jewish authors arguably delayed its greater recognition until afterWorld War II. Heckscher's famous former studentBertil Ohlin at theStockholm School of Economics (who himself succeeded Heckscher as professor there), significantly expanded on Hecksher's theory, giving it more support and a wider audience. Ohlin won theNobel Memorial Prize in Economic Sciences in 1977 long after Heckscher's death.
Heckscher was a member of theAmerican Philosophical Society.[9]
The Heckscher–Ohlin Theorem, which is concluded from theHeckscher–Ohlin model 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 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.
Eli Heckscher's son wasGunnar Heckscher (1909–1987), a political scientist and the leader of what would later become theSwedish Moderate Party 1961–1965. His grandson is theSocial Democratic politicianSten Heckscher.
