Research in the History of Economic Thought and Methodology: Including a Symposium on Economists and Authoritarian Regimes in the 20th Century: Volume 38B

This symposium analyses the mutually constitutive relationship between economic knowledge and political order. Through a wide range of case studies from Europe, Africa, and Latin America, the essays collected shed new light on the choices and constraints faced by economists under authoritarian rule in the twentieth century. The contribution of the symposium is twofold. Firstly, it expands the geographical and chronological scope of the conversation on the politics of economics. Secondly, it encourages a more nuanced understanding of economists’ agency in their different guises as educators, party propagandists, policy-makers, model-builders, and dissidents.

This chapter seeks to describe the successive stages in the training and recruitment of economists at the service of the political regime that ruled over Portugal between 1926 and 1974. This chapter presents the main institutional settings for the education and practices of those who served the government in economic functions throughout this period. Its main aim is to show the changes that occurred in the understanding of the problems related with the development of the Portuguese economy, seeking to elucidate the processes of legitimation of an authoritarian regime, but also to show the signs of a critical break with a model of economic and social organization and a political regime that had reached the point of exhaustion.

When Stalin, in 1936, declared socialism achieved in the Soviet Union, he opened the door for the codification of the political economy of socialism beyond Marx’s political economy of capitalism. Indeed, at the same time as he executed the tyrannical policies he is known for, he led a series of private conversations with economists about a textbook on the political economy of socialism that spanned nearly 20 years. In these conversations, Stalin repeatedly argued for an open debate and against dogmatism. Most notably, he accepted the existence of the so-called law of value in socialism, which appears to subject the state to scientific authority. Reconstructing these conversations, we show that his claim to a pluralist scientific debate helped paper over his tyranny, first by diverting attention from the real issues, second by establishing his personal authority as an intellectual, and third by creating conflicts that would exclude his opponents.

This chapter focuses on the international development plans implemented in Colombia during the regime of Gustavo Rojas Pinilla (1953–1957). It argues that foreign economists and international agencies, such as the World Bank, played a significant role in supporting and strengthening local leaders opposing the regime. By analyzing the creation of the Cauca Valley Corporation in 1955, through the intervention of the former chair of the Tennessee Valley Authority (TVA) David Lilienthal, this study provides two main contributions to the literature on economists and political economy under authoritarian rule. Firstly, it illuminates how local groups mobilized international economists to contrast Rojas. Secondly, it analyses the evolving relationship between World Bank advisors, David Lilienthal, and the regime. After describing the consolidation of political and economic interest groups and their global connections before Rojas coup d’état, it focuses on Rojas’ regime and on how it affected the implementation of the World Bank development started with the General Survey Mission in 1949. In the Cauca Department, local leaders invoked the World Bank and Lilienthal to implement a TVA model in opposition with the central government.

This chapter investigates the political and economic contexts of the controversy about the causes of the increase of income concentration in Brazil during the 1960s. That was the most important economic debate that took place under the military dictatorship that ran the country from 1964 to 1985. The perceived sharp increase in income inequality posed a challenge to the economic legitimation of the military regime, which had by the early 1970s achieved high rates of economic growth. This chapter discusses the apparent paradox of relatively open economic debate during a period of political repression, as well as its international dimension as reflected in the role played by institutions such as the World Bank.

Focusing on Johannes L. Sadie, a South African economist hired to investigate the economic options of Southern Rhodesia at the time of the Unilateral Declaration of Independence (UDI), this chapter examines the historical, ideological, pedagogical, and international influences of the intersection between economic discourse and racial ideology. Using the example of the Sadie recommendations, this chapter examines how the changing political context informed the state’s approach to the economy. A reading of the context in which Sadie was hired to justify Rhodesia’s UDI and provide legitimacy to its economic policies sheds light onto the Ian Smith regime’s approach to an alternative post-imperial (but not post-settler) state and economy, but it also speaks of the ways in which economic discourse can be deployed for political purposes by authoritarian regimes.

Under the authoritarian rule of Enver Hoxha, Albania pursued one of the more unusual variants of a planned economy, increasingly isolated from the rest of the socialist world. In this chapter, the authors consider the interplay between the Hoxha’s policy of economic isolationism and the economics produced in isolation. Several conclusions can be drawn. First, much like in other authoritarian regimes, economic theory did not drive economic policy; rather political ideology determined policy; economic theories were retroactively constructed and used as justification. Second, authoritarian-decreed economic theory (dogma) meant that the job of Albanian economists was distinctly different from what we observe elsewhere. Albanian economists played two roles – propaganda for regime positions and technical support for regime policies. Third, and most uniquely Albanian, economic and political isolation created an echo-chamber where theory was functionally irrelevant to policy-making or practice. Decreed economic theory was substantively empty, and new ideas were shut out. This had profound implications for Albania’s eventual transition to a market economy.

The chapter analyzes François Perroux’s institutional and intellectual activities under the Vichy regime (1940–1944) mainly by drawing on archival insights from Perroux’s papers. The authors argue that Perroux used his strategic position as general secretary of the Carrel Foundation (created by Marshal Pétain) to reshape French economics along a twofold trend: unifying economics with other social sciences, on the one hand; and developing its most analytical aspects, on the other hand. Thus, Perroux seized the opportunity to push for the introduction and dissemination of foreign theoretical studies within French economics, quite counter-intuitively to the expected nationalistic fallback accompanying authoritarian rule. In the end, the Vichy regime proved a suitable vehicle for the advancement of Perroux’s ideas and career: he managed in fact to make the best of a highly uncertain situation in 1940 and especially in 1944, with the impending Liberation of France. The authors show that Perroux used different strategies to neutralize those aspects of his work associated to Vichy’s ideology.

During the last years of his life, the mathematician Karl Menger worked on a biography of his father, the economist and founder of the Austrian School of Economics, Carl Menger. The younger Menger never finished the work. While working in the Menger collections at Duke University’s David M. Rubenstein Rare Book and Manuscript Library, we discovered draft chapters of the biography, a valuable source of information given that relatively little is known about Carl Menger’s life nearly a hundred years after his death. The unfinished biography covers Carl Menger’s family background and his life through early 1889. In this chapter, the authors discuss the biography and the most valuable new insights it provides into Carl Menger’s life, including Carl Menger’s family, his childhood, his student years, his time working as a journalist and newspaper editor, his early scientific career, and his relationship with Crown Prince Rudolf.