OF ALCOHOL, APES, AND TAXES: GÜNTER SCHMÖLDERS AND THE REINVENTION OF ECONOMICS IN BEHAVIORAL TERMS

The article examines an early and idiosyncratic version of behavioral economics or “empirical socio-economics,” which the German economist and taxation expert Günter Schmölders developed in the postwar decades. Relying on both his published papers and his lecture notes and correspondence, it scrutinizes Schmölders’s intellectual upbringing in the tradition of the Historical School of Economics (Historische Schule der Nationalökonomie) and his relation to the emerging ordoliberalism, demonstrating that the roads that led to dissatisfaction with the emerging neoclassical mainstream and the unrealistic behavioral assumptions of macroeconomic models were manifold. Accordingly, it shows that behavioral economics is compatible with various intellectual and political backgrounds and convictions. Yet, it still forms a distinct entity: comparing Schmölders with contemporary and later behavioral economists, I will show that they shared essential methodological assumptions as well as an understanding of human beings as decision-making organisms.

Bernhard Harms as Founder of the German National Library of Economics

In 2019, the German National Library of Economics — Leibniz Information Centre for Economics celebrated the 100th anniversary of its foundation. Despite such a long period of existence, there is little information about it in the Russian literature. In the works devoted to German librarianship, there is not enough attention paid to the specialized libraries. Currently, the collection of the German National Library of Economics holds 4,42 million items. In the professional community of economists, it is known for the EconStor repository, which provides open access to 200 thousand documents on economics and related sciences. The library owes its creation to the German economist, world economy specialist Bernhard Harms (1876—1939), who founded the Kiel Institute for Maritime Transport and World Economics in 1914.The purpose of the article is to present the professional activity of B. Harms, his role in the foundation of the institute and the library. The sources for studying the scientist’s activities on organization of the library were the publications of B. Harms and his followers (A. Predel and V. Gulich), articles and books by German researchers dedicated to the institute and the library, as well as Internet resources.The article highlights the main periods of B. Harms’ life path. The author analyzes the “Kiel” period of the economist’s life (1908—1933), when he managed to apply his organizational and leadership abilities to found, in addition to the Kiel Institute for Maritime Transport and World Economics, the subject fields library, the scientific archive, the periodical and the scientific club. The article reveals the activities of B. Harms, little known to Russian readers, as well as to the library specialists, on the transformation of reference library, created at the Seminary of Public Sciences of the Christian-Albrecht University in Kiel, into the independent specialized library for economic sciences, which over the years has become one of the largest in the world.

ANALYSIS OF ECONOMIC THOUGHT IN THE CONTEXT OF PREREQUISITES FOR THE DEVELOPMENT OF CLUSTER FORMATIONS IN THE WORKS OF FOREIGN SCIENTISTS

The process of forming the concept of “cluster” included a centuries-old history. Theoretical and methodological aspects of this definition were presented in the works of a big number of foreign scientists, such as M. Porter, M. Enright, R. Nelson, A. Lesh, W. Rostow, W. Isard, N. Rosenberg, A. Phillips, J. Tyunen, J. Van Dein, I. Fezer, S. Sweeney, M. Janikas, S. Ray, P. Stout, A. Weber et al. The formation of the modern understanding of clusters was influenced by the theories of agglomeration, industrial complex and industrial areas. Analyzing the history of economic thought, we can say that the approach to cluster economic development was formed gradually, but ideas about the advantages of economic clusters as forms of business organization arose quite a long time ago. In the middle of the XVII century, the «theory of pure agglomeration» was wrote by J. Tyunen, V. Launhardt and A. Marshall. The formation of localization theory is usually associated with the name of the German economist J. Tyunen. The beginning of the “industrial cluster” theory was laid by A. Marshall, who saw the following pattern: enterprises will be able to achieve savings due to internal resources and a system of interaction with suppliers of raw materials and in the presence of highly specialized specialists. A. Lesh studied the agglomeration effect and the scale effect, as a result of which production has properties relative to geographical concentration. In addition, he said that each industry has its own maximum level of production concentration. The theory of the information society was associated with the concept of social networks, which was formed at the end of the twentieth century in the works of certain scientists: S. Berkowitz, S. Wasserman, B. Wellman, D. Nook, P. Marsden, K. Faust, L. Freeman and others. The formation of the modern understanding of clusters was influenced by the theories of agglomeration, industrial complex and industrial areas. In addition, technological and innovative approaches were identified, which were based on the analysis of the competitiveness of the regions. The network approach to economic development has had a significant impact on the modern understanding of clusters. The above-mentioned aspects are formed on the basis of the approaches of a number of foreign scientists, whose main research results are presented in this article. The authors present the evolution of the formation and development of the cluster approach in Economics in Western Economic Thought, give the author’s definition of the concept of “cluster” and describe the common features characteristic of clusters, provide reasoned conclusions.

METHODOLOGY OF RESEARCH OF SOCIO-ECONOMIC PROCESSES: HISTORICAL ASPECT

The paper highlights the approaches of scientists, whose works are now considered classic, to the study of socio-economic processes in society, their functioning, and regulation. To solve modern problems of socio-economic development, bypass them, or form a mechanism for managing them, it is necessary to know the history of economic thought in this regard. It is necessary to refer to the experience preserved mainly in the research and conclusions of scientists, scientific schools, and their followers. Modern scientists analyze the effects of socio-economic processes and their role in society's development but ignore the directions and methods of their knowledge. The study made it possible to compare the methodology of studying socio-economic processes by representatives of many fields and schools, including the ancient Greek writer and historian Xenophon, the ancient Greek scientist-encyclopedist, philosopher and founder of classical logic Aristotle, mercantilists, economists, political scientists, and physiocrats. D. Ricardo, the representative of the neoclassical trend A. Marshall, the founder of institutionalism T. Veblen, American economist, representative of the old institutional and Keynesian currents J. K. Galbraith, American economist, representative of neo-institutionalism. O. Williamson, American economists D. North, M. Friedman, English economist J. M. Keynes, German economist-theorist L.V. Erhard, Italian economist F. Modigliani. The analysis provided more information on the scientific tools used to indicate that all areas and schools study the relationships of people and groups in the production, distribution, exchange, and consumption of goods with constantly limited resources. As a result, it can be concluded that economic processes are closely related to social at all stages of society. The level of economic development affects the social processes that take place in the state and vice versa. Modern models of research of socio-economic processes were formed under the influence of relevant factors of social development and take into account the historical systemic vision of socio-economic processes and phenomena.

The validity of Wagner’s law in Egypt from 1960–2018

Purpose One of the main theories regarding the relationship between government expenditure and gross domestic product (GDP) is Wagner’s law. This law was developed in the late-19th century by Adolph Wagner (1835–1917), a prominent German economist, and depicts that an increase in government expenditure is a feature often associated with progressive states. This paper aims to examine the validity of Wagner’s law in Egypt for 1960–2018. The relationship between real government expenditure and real GDP is tested using three versions of Wagner’s law. Design/methodology/approach To test the validity of Wagner in Egypt, law time-series analysis is used. The methodology used in this paper is: unit-root tests for stationarity, Johansen cointegration approach, error-correction model and Granger causality. Findings The results provide strong evidence of long-term relationship between GDP and government expenditure. Moreover, the causal relationship is found to be bi-directional. Hence, this study provides support for Wagner’s law in the examined context. Research limitations/implications It should be noted, however, that there are some limitations to this study. For instance, in this paper, the government’s size was measured through government consumption expenditure rather than government expenditure due to data availability, which does not fully capture the government size. Moreover, the data available was limited and does not fully cover the earliest stages of industrialization and urbanization for Egypt. Furthermore, although time-series analysis provides a more contextualized results and conclusions, the obtained conclusions suffer from their limited generalizability. Originality/value This paper aims to specifically make a contribution to the empirical literature for Wagner’s law, by testing the Egyptian data using time-series econometric techniques for the longest time period examined so far, which is 1960–2018.

OF ALCOHOL, APES, AND TAXES: GÜNTER SCHMÖLDERS AND THE REINVENTION OF ECONOMICS IN BEHAVIORAL TERMS

The article examines an early and idiosyncratic version of behavioral economics or “empir-ical socio-economics,” which the German economist and taxation expert Günter Schmölders developed in the postwar decades. Relying on both his published papers and his lecture notes and correspondence, it scrutinizes Schmölders’ intellectual upbringing in the tradition of the Historical School of Economics (Historische Schule der Nationalökonomie) and his relation to the emerging ordoliberalism, demonstrating that the roads that led to dissatisfaction with the emerging neoclassical mainstream and the unrealistic behavioral assumptions of macro-economic models were manifold. Accordingly, it shows that behavioral economics is compati-ble with various intellectual and political backgrounds and convictions. Yet, it still forms a dis-tinct entity: Comparing Schmölders with contemporary and later behavioral economists, I will show that they shared essential methodological assumptions as well as an understanding of human beings as decision-making organisms.

Student Readiness Vocational High School toward Industrial Revolution 4.0

The 4.0 industrial revolution is currently underway, the Industrial Revolution 4.0 is an industry that combines automation technology with cyber-physical technology. In accordance with the objectives of the Industrial Revolution 4.0 which was coined by Professor Klaus Schwab, a German economist and founder of the World Economic Forum, that the world would be focused on increasing production by utilizing the latest technology. Technological progress is faster then humans should be able to adapt faster. The challenges and opportunities of industry 4.0 greatly impacted people's lives, one of which was the problem of unemployment. The purpose of this study was to determine the readiness of Krian 1 Vocational School Students to face the Industrial Revolution 4.0. Criteria for measuring industry readiness 4.0 A method that compares the skills possessed by vocational students and the demands of life in the 21st century that have been reviewed by several experts. The study found that: (1) improvement of the learning process in vocational schools in the context of facing the 21st century and the 4.0 revolution and (2) improving the quality of teachers related to 21st century skills demands.

The Marginal Diminishing Returns/Marginal Increasing Returns in The Pursuit of Happiness

We are dealing with a psychological aspect of our actions and behavior and, consequently, we are focused on the Psychological approach of Marginalism. Starting with the German economist of the 19th century, Hermann Heinrich Gossen, with his Law of the Marginal Diminishing Returns, in fact his first law, passing through the analyses and approaches of this theoretical products, along with practical examples from around us, from media information, to reach the point in which to affirm that either in the diminishing returns, or increasing returns, it is a threshold above or beyond which the feeling of pleasure/fullness, even a state of happiness, tends to disappear. This survey regards only the consuming/purchasing of goods in the pursuit of happiness, because this issue is largely and more complex as far as we can see at first sight.Therefore, no abnormal actions to have more and more units of the same kind lead to get pleasure and happiness.We deal with the stock of a thing/commodity, in terms of increasing or diminishing, affecting the income, the wealth of a person and,by consequence, the good mood or even happiness.

Post-Keynesian approach to budget balance with regard to the financial balances of economic sectors

In the article, the authors investigate the reasons for the fallacy of the presumption that the ‘excessive’ level of public debt is harmful to economic growth, and that austerity measures should be applied whenever public debt is too large. We also considered the approach of the advocates of “functional finance” proposed by Abba P. Lerner. Our research was based on the Balance Mechanics developed in the middle of the XXth century by the German economist Wolfgang Stützel. On this ground, the authors examined the financial balances of individual economic agents, a group of economic agents, and macroeconomic sectors of the economy. The authors make an important conclusion that follows from the macroeconomic identity: the dynamics of public sector behaviour cannot be considered in isolation from the behaviour of the private and external sectors, as changes in financial balances in these sectors are interrelated and interdependent. It follows from the macroeconomic identity that some policy objectives in one sector (for example, a constant public sector surplus) are unattainable or extremely difficult to achieve (regardless of the scale of economic adjustments used: devaluation, changes in interest rates or total income, etc.), without taking into account the wishes of other sectors. Therefore, it is extremely destructive to continue policies aimed at achieving incompatible desires for it inevitably leads to a crisis in the economy.