Erik Reinert

Tallinn University of Technology | TTU · Ragnar Nurkse School of Innovation and Governance

In contrast to neo-classical mainstream approaches to economics, this innovative Modern Guide addresses the complex reality of economic development as an inherently uneven process, exploring the ways of theorizing and empirically exploring the mechanisms with which the unevenness manifests itself. It covers a wide array of issues influencing wealth...

Three decades after the fall of the Berlin wall and one and a half decades after the Big Bang enlargement of the European Union (2004-2007), we revisit contrasting narratives about the benefit of both free trade and the EU enlargement for Central and Eastern European (CEE) countries. We distinguish old, pre-2004 EU countries from CEE countries that...

Piketty´s best-seller book has brought distributional issues to the fore of economic debate. This is perhaps its main contribution. Piketty centers his analysis on inequality, which, under capitalism, goes hand in hand with economic growth, according to his analysis. In my critical review of the book (Beker, 2014) I asked whether reduction of inequ...

Pandemic politics highlight how predictions need to be transparent and humble to invite insight, not blame. Pandemic politics highlight how predictions need to be transparent and humble to invite insight, not blame.

How to tackle uncertainties and ensure quality in integrated assessment for sustainability? To what extent does the choice of the methodology condition the narrative produced by the analysis? The present work argues that the two questions are tightly coupled. The technique is never neutral. If we are the tools of our tools, as suggested by Thoreau,...

This article looks at 33 economics books that were published before 1750 and appeared in ten editions or more before 1850. This is a period – before Physiocracy and before the works of Adam Smith – which has been largely neglected in the history of economic thought. The article sheds new light on the early bestselling contributions of German and It...

These are times of crisis. Almost daily, newspapers inform us of human misery and human migrations caused not only by wars and terrorism, but also by sheer economic necessity. Why do around 1 billion people — as the United Nations has calculated — experience hunger in a world of plenty? Why do so many people every day risk their lives fleeing Afric...

The idea of economic decline has been with us for a very long time. The notion that human societies are bound to follow the cyclical patterns of nature—birth, life, decline, and death—is found from the Greek philosophy of Plato to the Arab philosophy of Ibn-Khaldun. Only late Renaissance and Enlightenment Entzauberung—demystification—of the world p...

In The Great Transformation, Karl Polanyi (1886–1964) argued that ‘for a century the dynamics of modern society was governed by a double movement: the market expanded continuously, but this movement was met by a countermovement checking the expansion in definite directions. Vital though such a countermovement was for the protection of society, in t...

The starting point of this paper is the proposition that there is a strong relationship between a particular type of national economic production structure and the propensity of a nation-state to fail. The failed states have common economic factors that distinguish them from, e.g. Finland, Canada or Singapore. The assertion is that any policy aimin...

At the end of 2005 the process of European integration seems to have reached a serious crisis. The aim of the paper is a preliminary exploration of factors that have lead to the situation. The main emphasis is given to the European Union’s Lisbon Strategy. Although the strategy represents a healthy theoretical shift towards a dual emphasis on innov...

This paper provides a historical and theoretical overview of the mechanisms leading up to financial crises and financial bubbles. It suggests that the potentially explosive growth of the financial sector at the expense of the real economy fed by compound interest has . since before Ancient Mesopotamia under the rule of Hammurabi . represented a rea...

This paper identifies four different periods (1848, 1890s - partly also 1930s - and neoliberalism today) where the same tendencies recur: a Rise of Academic Monoculture (of esoteric knowledge), Refeudalization (tendencies towards a plutocracy), Crisis and Renewal. These sequences and their recurrence define the changing relationship between economi...

The bottom billion: why the poorest countries are failing and what can be done about it - By CollierPaul. Oxford: Oxford University Press, 2008. Pp. 224. Paperback £9.99, ISBN: 978-0-19-537338-7. - Volume 6 Issue 1 - Erik S. Reinert

This article is a forward to French translation of How rich countries got rich and why poor countries stay poor.

This working paper presents a note and an extensive bibliography on the relationship between production capitalism and financial capitalism. The document was produced for a conference held at Leangkollen outside Oslo on September 3-4, 1998. The background for the conference was the Asian financial crisis that started in July 1997. The massive Russi...

One element explaining the financial crisis is what Hyman Minsky called 'destabilizing stability': long periods of stability lead to increasing vulnerability. This paper argues that similar mechanisms are at work inside economics: long periods of economic progress in the core countries lead to in-creasingly abstract and irrelevant economic theories...

The Scandinavian Sámi are one of more than twenty circumpolar ethnic groups that traditionally practice reindeer herding. Climate change will likely affect the practice of pastoralism in Sámi areas severely. Winter temperatures may increase significantly, while changes in precipitation and wind will affect snow patterns. Traditional Sámi pastoralis...

After Ireland, Norway is the country that lost the largest part of its population through migration to America, and one of the Norwegian areas that lost the most was Veblen's Valdres. Most Norwegians have some family or relation who left for America, and I am no exception. I grew up with stories about the United States and what to me seemed like an...

In Competitiveness and Development, the author explains the confusion surrounding the concept of competitiveness in the context of developing countries; proposes policies for achieving competitiveness at a high level of development; examines its possibilities and constraints; and suggests policy changes necessary at the national and international l...

After his death Thorstein Veblen was hailed as America's Darwin and Marx and is normally portrayed as the perennial iconoclast. He severely criticised traditional economics and attempted to create an alternative approach based on a much more complex view of human beings. He is one of the most celebrated economists of our age and has been the inspir...

The term 'BRIC countries' - Brazil, Russia, India, and China - traces its roots to investment banking, Goldman Sachs coined the term in 2001. The idea of large emerging economies catching up with, and challenging, the West has captured social scientists and policy-makers alike. However, the sheer size and different historical legacies dictate that...

Power and plenty: trade, war, and the world economy in the second millennium - By FindlayRonald and O’RourkeKevin H.. Princeton, NJ: Princeton University Press, 2007. Pp. xxvi + 619. Hardback £28.95, ISBN 978-0-691-11854-3; paperback £20.95, ISBN 978-0-691-14327-9. - Volume 4 Issue 3 - Erik S. Reinert

The objective of this chapter is to show how economic policies based on completely different principles - one described as 'emulation' and the other as 'comparative advantage' - have been strategically employed in order to achieve economic development when nations have made the transition from poor to wealthy. It also briefly describes key aspects...

“Is there some action a government of India could take that would lead the Indian economy to growlike Indonesia’s or Egypt’s? If so, what, exactly? If not, what is it about the “nature of India” that makes it so? The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is har...

‘In every inquiry concerning the operations of men when united together in society, the first object of attention should be their mode of subsistence. Accordingly as that varies, their laws and policies must be different.’ William Robertson (1721–1793), The History of America, 1777. The Idea of Stages History – it has been said – was created to pre...

Any reader of Carlota Perez' work who has been following the global financial meltdown beginning to unfold in the Fall of 2008 must pinch herself as ‘it’ is indeed happening again. ‘It’ is not only a financial crisis of enormous proportions, but in fact, what Perez calls a turning point in the middle of the diffusion of a techno-economic paradigm....

Carlota Perez was born in Caracas, Venezuela, on 20 September 1939, the oldest of five children. Her father, Jose Henrique Perez Perez (1913-1978), was a very successful civil engineer as well as an international chess player who enjoyed playing up to twenty simultaneous games, including one in which he wasn't even allowed to look at the board. He...

Lawrence R. Klein pioneered the work on aggregation, in particular in production functions, in the 1940s. He paved the way for researchers to establish the conditions under which a series of micro production functions can be aggregated so as to yield an aggregate production function. This work is fundamental in order to establish the legitimacy of...

Techno-Economic Paradigms? presents a series of essays discussing one of the most interesting and talked-about socio-economic theories of our times: techno-economic paradigm shifts. © 2009 Wolfgang Drechsler, Rainer Kattel and Erik S. Reinert editorial matter and selection.

Adapting to climate change is a critical problem facing humanity. This involves reconsidering our lifestyles, and is linked to our actions as individuals, societies and governments. This book presents top science and social science research on whether the world can adapt to climate change. Written by experts, both academics and practitioners, it ex...

Ragnar Nurkse, Trade and Development reprints Nukse’s most important works, making them widely available for an audience of economists, policy makers, researchers and students. © 2009 Rainer Kattel, Jan A. Kregel and Erik S. Reinert editorial matter and selection.

Ragnar Nurkse (1907-2007): Classical Development Economics and its Relevance for Today? presents a selection of papers that casts new insight on Nurkse?s thought, and discusses his relevance for today. © 2009 Rainer Kattel, Jan A. Kregel and Erik S. Reinert editorial matter and selection.

Carl Menger, the founder of the Austrian School of Economics, had the ambition that economics should be a .map of the forces at work�. Standard textbook economics (.neo-classical economics�) takes as its starting point a metaphor of .equilibrium� based on the state of the physics profession in the 1880s. This force towards equilibrium is, however,...

Lawrence R. Klein pioneered the work on aggregation, in particular in production functions, in the 1940s. He paved the way for researchers to establish the conditions under which a series of micro production functions can be aggregated so as to yield an aggregate production function. This work is fundamental in order to establish the legitimacy of...

A key common element in persistent world poverty and in the financial and (real) economic crisis is the .terrible simplification� . a theoretical overshooting into irrelevant abstractions . that has taken place in economic theory after World War II. As unlikely as it may initially sound, I shall endeavour to explain in this paper how . in spite of...

This paper discusses the role of nation-states and their systems of governance as sources of barriers and solutions to adaptation to climate change from the point of view of Saami reindeer herders. The Saami, inhabiting the northernmost areas of Fennoscandia, is one of more than twenty ethnic groups in the circumpolar Arctic that base their traditi...

This paper discusses the role of nation-states and their systems of gover- nance as sources of barriers and solutions to adaptation to climate change from the point of view of Saami reindeer herders. The Saami, inhabiting the northernmost areas of Fennoscandia, is one of more than twenty ethnic groups in the circumpolar Arctic that base their tradi...

We argue that the process of European economic integration has made a qualitative shift: from a Listian symmetrical economic integration to an integrative and asymmetrical integration. This shift started in the early 1990s with the integration of the former Soviet economies into the economies of Europe and the world as a whole, reached its climax w...

Based on Meir Kohn’s distinction between research programmes based on ‘value’ and ‘exchange’ (2004), this paper argues for a ‘production’ paradigm based on the tradition of Menger and Schumpeter. It is suggested that this production-based programme could use, as its starting point, Schumpeter’s (Wesen und Hauptinhalt der theoretischen Nationalökono...

A generalized vulnerability framework was used to structure an interdisciplinary and intercultural examination of factors that influence the ways in which reindeer pastoralism in Finnmark (northern Norway) may be affected by climate change. Regional and local (downscaled) climate projections included scenarios that can potentially influence foragin...

This paper argues that the idea of ‘creative destruction’ enters the social sciences by way of Friedrich Nietzsche. The term itself is first used by German economist Werner Sombart, who openly acknowledges the influence of Nietzsche on his own economic theory. The roots of creative destruction are traced back to Indian philosophy, from where the id...

In the first section of the paper, we point to Marx and Schumpeter as being the only well known economists from a long and distinguished tradition in economics. In section two we outline a potentially significant ‘blind spot’ in Schumpeter’s History of Economic Analysis (1954). In part three we discuss Schumpeter’s apparently different approach to...

Although Friedrich Nietzsche seldom is considered for his economic thought, he in fact addressed many of the same problems as the German Historical School in the period, and at times discussed them explicitly. By studying Nietzsche’s political writings in the context of the ongoing debates about Marxism, laissez-faire, and the ‘Social Question’ in...

Purpose – This paper attempts to explain the drastic fall in income experienced by Saami reindeer herders in Northern Norway between 1976 and 2000, in spite of increasing government subsidies. Saami herders maintain a legal monopoly as suppliers of reindeer meat, a traditional luxury product in Norway. Design/methodology/approach – This paper show...

This paper argues for an 'ancient' institutional school, predating Thorstein Veblen's 'old' institutionalism. In this view, going back as far as the thirteenth century, institutions tended to be seen as specific to a mode of production. Here both institutions and development itself are context-specific and activity-specific. Much clearer than today...

The current development policy focus on poverty reduction is erroneous. Historically, successful development policy—from the late fifteenth century until the beginning of the twenty-first—has achieved structural change away from dependence on raw materials and agriculture, adding specialized manufacturing and services subject to increasing returns...

The author argues that in order to create a qualitative understanding of the factors polarizing the world in growing wealth and growing poverty there is a need to create economics by inclusion, a system where all relevant factors, some of which have been part of the economic discourse for centuries, but also elements (like the different effects of...

In the paper the author tries to explain why the Millennium Goals, with which the world community is approaching the social problems in the poor countries, cannot be considered as good social policy in the long run. The key insight of the author is that having an inefficient manufacturing sector produces a higher standard of living than having no m...

Veit Ludwig von Seckendorff is widely regarded as the ‘founder’ of early economics in Germany, of Cameralism. Having survived the horrors of the Thirty Years’ War and the resulting economic, political, and moral breakdown of society, Seckendorff conceived of a holistic science of public administration fit to reconstruct the more than 300 independen...

In economic theory there are three main developments which we find are of potential importance to development geography: First of all, the mainstream neo-classical paradigm is being challenged from a growing school under the heading of 'Evolutionary' or 'Schumpeterian' economics, with roots in the German Historical School. This group is gaining pro...

Evolutionary economics gained acceptance for the study of industrialized countries during the 1990s but has, as yet, contributed little to the study of world income inequality. The expert contributors gathered here approach underdevelopment and inequality from different evolutionary perspectives. It is argued that the Schumpeterian processes of 'cr...