Friedrich August von Hayek · 1921
Hayek’s article is a congress report, condensing E. Storsteyn’s account in the Norwegian Soziale Meddelser of the Scandinavian economists’ meeting in Stockholm on 31 August–2 September 1920. Approximately 250 participants attended. Its structure follows six principal lectures, two from each participating country—Denmark, Norway, and Sweden—with responses from representatives of the other countries and general discussion. Hayek reports competing positions rather than developing an independent policy thesis. The central problem connecting the proceedings is how postwar economic reconstruction should reshape monetary institutions, public finance, property rights, and industrial organization. The report’s significance lies in its preservation of disagreements over both the causes of economic disorder and the appropriate scope of collective intervention.
The first discussion concerns housing. Jens Warming argues that wartime wage increases have not generated a corresponding demand for better accommodation: housing scarcity has encouraged workers to direct their spending elsewhere, while their limited appreciation of housing quality rewards builders who maximize room numbers rather than standards. His case for municipal intervention therefore concerns the relationship between profitability and social provision, not merely an insufficient quantity of dwellings.
Ein Fortschritt im Kleinwohnungsbau sei also nur von einer nicht auf Gewinn berechneten Bautätigkeit zu erwarten.
English translation: Progress in the construction of small dwellings could therefore be expected only from building activity not undertaken for profit.
Warming favors extensive municipal construction, while considering subsidies and municipally supported public-utility societies. Subsidies entail continuing supervision of private management, producing an awkward institutional hybrid. Municipalities also possess a decisive advantage in securing capital. Employer obligations to help provide workers’ housing offer another possibility, although they could impede industrial expansion. Hayek retains these qualifications, including the particular suitability of municipal building for urban tenements. Discussion turns toward financing through an extraordinary wealth tax and a statutory adjustment of rents between old and new buildings.
The monetary debate brings the sharpest conceptual disagreement. Oskar Jaeger attributes deteriorating monetary conditions chiefly to abandonment of the gold standard and unrestricted monetary expansion. Higher production costs alone cannot explain rising prices; currency depreciation is central. He advocates raising the discount rate and restoring gold convertibility, whose reserve discipline would compel issuing banks to adjust interest rates. Knut Wicksell counters by distinguishing exchange-rate fluctuations, European currencies’ weakness against the dollar, and the depreciation of gold itself. His objection shifts the question from restoring a monetary institution to identifying a reliable standard of purchasing power.
Das Gold hat nach seiner Meinung seine Rolle als Wertmaß ausgespielt.
English translation: In his opinion, gold has outlived its role as a measure of value.
Wicksell proposes temporary central-bank coordination to hold dollar exchange rates steady, but his more fundamental objective is price-level stabilization rather than an unconditional return to gold. Either the current or the prewar price level could serve as the target. Eli Heckscher sides with Jaeger, arguing that countries retaining the gold standard have fared better despite its defects. Hayek thus records a substantive division between confidence in an automatically constraining currency regime and a policy directed explicitly toward stable purchasing power.
The discussion of public finance is briefer. G. Lagerbjölke describes Scandinavian state finances as comparatively favorable beside those of the belligerents, yet markedly worse than before the war; Swedish worker-protection legislation has added substantial burdens. Speakers disagree sharply over direct and indirect taxation. Their common demand for economy does not resolve the distributional question of who should finance reconstruction.
The longest policy account concerns H. Waage’s proposed reform of landed property. Waage treats existing ownership relations as an impediment to productive capacity. Concentrated landholding drives people into the urban proletariat, while both wage-seeking workers and profit-seeking owners may lack an immediate interest in maximizing output. Easier access to land would create small farms, strengthen workers’ bargaining position, and encourage farmers to establish cooperative factories operating during the agricultural off-season. This envisaged integration of agriculture and industry aims to make producers more directly interested in expanding production.
Jedermann müsse ermöglicht werden, auf billige Weise in den Besitz von Boden zu gelangen.
English translation: Everyone must be enabled to acquire land inexpensively.
Waage’s institutional proposal gives citizens a personal right to acquire as much land as family labor can cultivate. A tax on land value, combined with expropriation at the assessed value, would prevent the new entitlement from simply raising prices. He nevertheless rejects abrupt, coercive changes and insists that existing owners should not bear the reform’s sacrifices alone. E. Sommarin challenges both the productivity diagnosis and expropriation on private application, emphasizing the neglected role of agricultural capital. He accepts modernized land taxation without accepting restrictions on ownership. Warming likewise disputes Waage’s reasoning but supports a limited restriction in response to proletarian growth.
The fifth session, introduced by Thr. Aarum, addresses workers’ participation in management through international experience and Norwegian works-council proposals. Discussion ranges from collective bargaining as an alternative to councils to objections concerning employers’ opposition and workers’ commercial and technical competence. Anders Örne introduces a distinct concern: joint employer–worker governance might create solidarity against consumers rather than economic peace.
Schon ohne Betriebsrat gab es genug Gegensätze, nun würden noch leicht die vereinigten Arbeitgeber und Arbeitnehmer zu den Verbrauchern in Gegensatz treten.
English translation: Even without a works council there were enough conflicts; now the united employers and employees could easily also come into conflict with consumers.
This intervention broadens industrial democracy beyond the two parties inside the enterprise. Wicksell, meanwhile, makes workers’ participation dependent on greater knowledge and cultural development. The final session concerns postwar Scandinavian trade policy, introduced by Kurt Bergendahl through wartime experience and regional production and tariff conditions. Hayek names the subsequent speakers but supplies no substantive conclusions. The report closes with the planned next congress in Norway. Its enduring relevance is the range of institutional alternatives it documents: municipal provision, monetary discipline or stabilization, reformed land access, and competing models of industrial representation, each tested against questions of incentives, capacity, and conflicting economic interests.
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