Swedish economist and politician (1899?1979)
Bertil Gotthard Ohlin
(
Swedish:
[?bæ??ː?l
??liːn]
) (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
party which at the time was the largest party in opposition to the governing
Social Democratic Party
, from 1944 to 1967. He served briefly as
Minister of Commerce and Industry
from 1944 to 1945 in the Swedish
coalition government during World War II
. He was President of the
Nordic Council
in 1959 and 1964.
Ohlin's name lives on in one of the standard
mathematical models
of international
free trade
, the
Heckscher?Ohlin model
, which he developed together with
Eli Heckscher
. He was jointly awarded the
Nobel Memorial Prize in Economic Sciences
in 1977 together with the British economist
James Meade
"for their pathbreaking contribution to the theory of
international trade
and international
capital movements
".
Biography
[
edit
]
Bertil Ohlin was raised in
Klippan, Scania
with seven siblings, where his father Elis was a civil servant and bailiff. His mother Ingeborg influenced him with her left-liberal views on the society, with Nordic partnership and
Karl Staaff
as her role model. He received his B.A. from
Lund University
1917 at the age of 18 and his MSc. from
Stockholm School of Economics
in 1919.
[1]
He obtained an M.A. from
Harvard University
in 1923 and his doctorate from
Stockholm University
a year after in 1924 at the age of 25.
[1]
In 1925, he became a professor at the
University of Copenhagen
. In 1929, he debated with
John Maynard Keynes
and contradicted the latter's view on the consequences of the heavy war
reparations
payments imposed on
Germany
. (Keynes predicted a war caused by the burden of
debt
, but Ohlin thought that
Germany
could afford the reparations.) The debate was important in the modern theory of
unilateral
international payments
. In 1930, Ohlin succeeded
Eli Heckscher
, his teacher, as a professor of
economics
, at the
Stockholm School of Economics
.
[
citation needed
]
In 1937, Ohlin spent half a year at the
University of California, Berkeley
, as a visiting professor.
[2]
[3]
[4]
He also worked as an outside expert for the
Economic and Financial Organization
of the
League of Nations
, together with
Oskar Morgenstern
and
Jacques Rueff
, supporting the EFO's work on economic depressions in the late 1930s.
[5]
: 29
Ohlin was party leader of the
liberal
Liberal People's Party
from 1944 to 1967, the main opposition party to the
Social Democrat
Governments of the era, and from 1944 to 1945 was
Minister of Commerce and Industry
in the wartime government. His daughter
Anne Wibble
, representing the same party, served as
Minister for Finance
from 1991 to 1994.
[
citation needed
]
Heckscher?Ohlin theorem
[
edit
]
In 1933, Ohlin published a work that made him world-renowned,
Interregional and International Trade
. Ohlin built in it an economic theory of international trade from earlier work by Heckscher and his own doctoral thesis.
[1]
It is now known as the
Heckscher?Ohlin model
, one of the standard model economists use to debate
trade theory
.
The model was a breakthrough because it showed how
comparative advantage
might relate to general features of a country's
capital
and labor, and how those features might change through time. The model provided a basis for later work on the effects of protection on
real
wages, and has been fruitful in producing predictions and analysis; Ohlin himself used the model to derive the
Heckscher?Ohlin theorem
, which predicts that capital-abundant countries export capital-intensive goods, while labor-abundant countries export the labor-intensive goods.
The Heckscher?Ohlin Theorem, which is concluded from the
Heckscher?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 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.
Wassily Leontief
made a study of the theory that seemed to invalidate it. He noted that the United States had a lot of capital; therefore, it should export capital-intensive products and import labor-intensive products. Instead, he found that it exported products that used more labor than the products it imported. This finding is known as the
Leontief paradox
.
Awards and decorations
[
edit
]
See also
[
edit
]
Significant publications
[
edit
]
Sources
[
edit
]
References
[
edit
]
- ^
a
b
c
Carlson, Benny (2018).
"Swedish Economists in the 1930s Debate on Economic Planning"
.
Springer
: 38?39.
doi
:
10.1007/978-3-030-03700-0
.
ISBN
978-3-030-03699-7
.
- ^
"Berth Ohlin's Contributions to Economic Theory"
(PDF)
. Archived from
the original
(PDF)
on 14 December 2017
. Retrieved
14 December
2017
.
- ^
Findlay, Ronald; Jonung, Lars; Lundahl, Mats (2002).
Bertil Ohlin: A Centennial Celebration, 1899?1999
. MIT Press.
ISBN
978-0262062282
.
- ^
Toporowski, J. (2013).
Michał Kalecki: An Intellectual Biography: Volume I Rendezvous in Cambridge 1899?1939
. Springer.
ISBN
978-1137315397
.
- ^
Louis W. Pauly (December 1996),
"The League of Nations and the Foreshadowing of the International Monetary Fund"
,
Essays in International Finance
,
201
, Princeton University,
SSRN
2173443
- ^
Skoldenberg, Bengt, ed. (1969).
Sveriges statskalender. 1969
(PDF)
(in Swedish). Stockholm: Fritzes offentliga publikationer. p. 152.
SELIBR
3682754
.
Further reading
[
edit
]
External links
[
edit
]
|
---|
1969?1975
| |
---|
1976?2000
| |
---|
2001?present
| |
---|
|
---|
International
| |
---|
National
| |
---|
Academics
| |
---|
People
| |
---|
Other
| |
---|