Alfred Amonn: Wechselbeziehungen zwischen privatwirtschaftlichem und volkswirtschaftlichem Einkommen unter besonderer Berücksichtigung der Landwirtschaft (1925)

Alfred Amonn’s discussion article continues the debate prompted by E. Laur’s October 1924 lecture to the Swiss Statistical Society. It asks whether higher agricultural prices, production, and incomes necessarily increase national income. Moving from conceptual distinctions to resource allocation, trade, and demand, Amonn challenges the inference from agricultural prosperity to economy-wide gain.

Nun gilt aber keineswegs das, was für einen Teil gilt, ohne weiteres auch für das Ganze.

English translation: Now, what holds for a part by no means holds without further ado for the whole as well.

Amonn understands “volkswirtschaftliches Einkommen” as the income of the economy as a whole. Payments flowing from agricultural enterprises to owners, creditors, workers, and the state contribute to that total, but their increase does not establish that the total has grown. Laur acknowledges that his definition differs from Weyermann’s, yet, in Amonn’s account, fails to maintain the distinction when drawing conclusions. The question is whether increases in agriculture-related incomes outweigh losses elsewhere.

Ob das Einkommen der Gesamtheit wächst oder nicht, ist eine davon, ob jene Personen ein gesteigertes Einkommen haben, ganz unabhängige Frage, die ganz für sich zu untersuchen wäre.

English translation: Whether the income of the totality grows or not is a question entirely independent of whether those persons have an increased income, one that would have to be investigated quite on its own.

This requirement for separate investigation also governs physical output. More milk, meat, or grain produced domestically is not equivalent to a larger aggregate supply of goods. Industrial production can obtain agricultural products through foreign exchange. Comparing domestic agriculture with imports therefore requires accounting for industrial output displaced when labour and capital move into farming.

Aber das heisst nur, dass mehr «landwirtschaftliche Produkte» erzeugt werden, und nicht, dass überhaupt im ganzen «mehr Produkte» in der Volkswirtschaft erzeugt werden.

English translation: But that means only that more "agricultural products" are produced, and not that on the whole and in general "more products" are produced in the national economy.

Amonn treats agricultural expansion induced by artificially higher prices as a reallocation, not an unqualified addition. If resources would otherwise enter industry because returns there are higher, redirecting them sacrifices the agricultural goods that industrial production could have purchased. Even the most favourable case may merely reproduce domestically what exchange previously supplied. Farmers’ increased purchasing power must be assessed alongside the losses imposed on non-agricultural consumers by higher food prices.

The article considers whether more-than-proportional increases in agricultural yield could change this result. Such productivity gains might increase aggregate output, but would also make intensification profitable without an artificial price incentive. Earlier improvements do not prove that further investment will yield comparable returns. Amonn therefore rejects using historical yield increases to dismiss diminishing returns as practically irrelevant.

He distinguishes price increases resulting from expanding demand from those imposed through policy. The latter reduce the quantity that consumers with unchanged incomes can purchase and may weaken the incentive to expand production. Import substitution can nevertheless stimulate domestic output if demand does not fall correspondingly. This still does not demonstrate a national gain, since production formerly devoted to obtaining imports is displaced. The cause of a price increase and its effects elsewhere matter more than a simple association between higher prices and greater agricultural intensity.

Four concluding propositions consolidate the argument. Prices influence intensity together with demand, trade conditions, and the destination of production. Higher physical yields increase income only when the additional product exceeds the value of the additional inputs consumed. Agricultural income may rise while national income falls; conversely, cheaper imports and more productive industrial employment may raise national income while reducing agricultural income.

Amonn also challenges Laur’s proposal that science establish the price relationship needed to produce an intensity of cultivation appropriate to national conditions. Such intensity lacks an independent measure and itself depends on attainable prices. The proposal thus cannot supply the objective policy standard it promises.

His criticism leaves room for protection under particular circumstances. A concluding note considers whether temporary foreign competition could destroy agriculture that would remain productive over the longer term, using continental agriculture’s encounter with American competition as an example. This possibility must be weighed against the benefits of a more advantageous international division of labour. The article’s governing demand is comparative: neither sectoral income nor domestic physical production establishes national benefit without examining alternative uses of resources and gains and losses throughout the economy.