Eugen von Böhm-Bawerk on Bergmann’s History of Crisis Theories (1898)

Eugen von Böhm-Bawerk’s review of Eugen von Bergmann’s Die Wirtschaftskrisen. Geschichte der nationalökonomischen Krisentheorien (1895) combines an appreciative account of historical scholarship with a methodological argument about economic explanation. It begins by placing Bergmann within a growing international literature on the history of economic doctrines, extending from major subjects such as value and income to specialized questions. Such histories, Böhm-Bawerk observes, are valuable even when their authors receive little reward:

Dogmengeschichten zu schreiben, gehört im Allgemeinen gewiss nicht zu den dankbarsten, wohl aber zu den dankenswertesten wissenschaftlichen Unternehmungen.

English translation: To write histories of doctrine belongs in general certainly not among the most gratifying, but indeed among the most deserving of gratitude, of scientific undertakings.

The review’s central conceptual move is to deny that crises can be adequately explained in isolation. Their urgency has generated abundant competing explanations, but their difficulty arises from their position within economic theory: an account of crises presupposes an understanding of the economy’s interacting processes.

Eine Krisentheorie kann nie die Untersuchung eines abgesonderten Theiles der socialwirtschaftlichen Phänomene sein, sondern sie ist, wenn sie nicht ein dilettantisches Unding sein soll, immer das letzte oder vorletzte Capitel eines geschriebenen oder ungeschriebenen socialwirtschaftlichen Systems, die reife Frucht der Erkenntnis sämmtlicher socialwirtschaftlichen Vorgänge und ihres wechselwirkenden Zusammenhanges.

English translation: A theory of crises can never be the investigation of a separate part of social-economic phenomena, but rather it is, if it is not to be a dilettantish monstrosity, always the last or next-to-last chapter of a written or unwritten social-economic system, the ripe fruit of the knowledge of all social-economic processes and of their reciprocally acting interconnection.

Consequently, different economic systems yield different crisis theories, while immature systems produce conjectural or extravagant explanations. Böhm-Bawerk compares these to popular accounts of disease unsupported by anatomy and physiology. This establishes his criterion for judging crisis theory: explanatory strength depends on the coherence and maturity of its underlying economic framework.

Bergmann earns praise for making this heterogeneous material intelligible through groups of related explanations. Böhm-Bawerk traces the book’s opening progression from simple overproduction theories, which assume excessive output without examining its conditions, to liberal objections that aggregate production and demand must ultimately correspond. Say’s theory of markets is the most prominent example, although Bergmann locates its core ideas in earlier writers, especially the Physiocrats. These objections, in turn, forced overproduction arguments toward greater sophistication, represented chiefly by Malthus and Sismondi.

The review then follows Bergmann’s classification of later theories by the principal location of the causes they identify. One group emphasizes production, particularly reductions in circulating capital; another combines production with distribution and consumption. A third concentrates on the distribution-induced imbalance between production and society’s purchasing power, including arguments by Proudhon and Rodbertus. A fourth attributes crises to the prevailing organization of the economy, especially capitalist production, bringing together Marx and Engels, other socialist writers, and social reformers. Böhm-Bawerk singles out Schäffle’s account for its systematic depth and coherence. A separate chapter treats explanations of periodicity, notably Jevons’s attempt to connect recurrent crises with the sunspot cycle.

The closing discussion distinguishes Bergmann’s historical achievement from the theory he intends to develop subsequently:

Im vorliegenden Bande tritt unser Autor lediglich als Historiker und Kritiker auf. Die Darlegung seiner eigenen Krisentheorie behält derselbe einer besonderen Arbeit vor.

English translation: In the present volume our author appears merely as historian and critic. The exposition of his own theory of crises he reserves for a special work.

Böhm-Bawerk therefore treats the direction of Bergmann’s future argument as conjectural. He finds clues in the book’s concluding identification of two increasingly prominent lines of inquiry: the relationship between private profitability and the growth of social productive capacity, and that between income distribution and effective purchasing power. His favorable anticipation stops short of endorsing a theory not yet presented. The review’s significance lies in joining a compact map of crisis doctrines to a demanding methodological claim: explaining economic disruption requires an account of the economic system as a whole.