13
a way of channelling Man’s energy away from warfare and destruction and into
[196] wealth
creation.
38
Created in the image of God, it was Man’s pleasurable duty to invent, to continue the
creation that the Lord had initiated.
39
Today’s Africa reminds us of the possibility of retrogres-
sion: we observe genocides of shattering cruelty, the collapse of nation-states and ‘Somalisation’
of nations into fiefdoms run by warlords. In a way we are reinventing ‘private colonialism’, with
today’s mining companies operating in ways similarly to Sir Walter Raleigh during the times of
Elizabeth I.
Underlying all stage theories is a more or less well-expressed tendency towards an ever-
increasing division of labour. Within this framework, the stage theories focus on different as-
pects, which we shall discuss in detail later. Friedrich List focused on the type of production,
Karl Bücher on the geographical dimension, Karl Marx on the social conflicts, Bruno
Hildebrand on a trend towards a more abstract system of payments, and Carlota Perez and
Christopher Freeman today focus on the technological aspects. As Richard Ely
40
(1903) and
Franz Oppenheimer
41
(1927) points out, these approaches are highly complementary and corre-
lated; they focus on different aspects of the same process of development or ‘modernisation’.
Stage theories, then, are theories chartering the degree of division of labour over time. Until
the fall of Fordism it is probably fair to say that this degree of division of labour was accompa-
nied by ever-increasing scale of production in ever-larger units of production. Post-Fordism
opens up a potential for increasing returns in very small niches, thereby simultaneously reducing
the scale of operations and increasing variety through flexible specialisation. However, if our
unit of analysis is division of labour – not scale – post-Fordism
[197] continues the trend from
the ancient household economy until today.
By tracing the degree of division of labour as human knowledge advances, stage theories also
trace the minimum efficient size of human societies, from the household economy, via town
economies and national economies, to the global economies. The division of labour – although it
is probably the most celebrated of all Adam Smith’s concepts – find no place whether in classi-
cal nor neo-classical economics. As we shall discuss later, we have today no theory of the divi-
sion of labour. In our view, this is because the division of labour is essentially a tool of produc-
tion-based economics, of mercantilism. As early as in 1613 Antonio Serra
42
used the division of
labour in order to divide activities into those subject to increasing returns -which caused wealth –
and other activities, which kept states in poverty. To Serra increasing returns and a high degree
of division of labour were both at the basis of the synergy which mercantilist economists called
The Common Weal (Das Gemeinwohl, il bene comune).
The division of labour is fundamentally based on the existence of fixed costs – either in tools
or in human knowledge – which create synergies. Mercantilists would all the time refer to eco-
nomic policies, e.g. the establishment of factories, which was done to ‘promote the common
38
This is excellently argued by Hirschman, Albert O. The passions and the Interests. Political Arguments for Capi-
talism before Its Triumph, Princeton N. J., Princeton University Press, 1977.
39
Reinert, Erik S. & Arno Daastøl (1997) ‘Exploring the Genesis of Economic Innovations: The Religious Gestalt-
Switch and the Duty to Invent as Preconditions for Economic Growth’, in
European Journal of Law and Economics,
Vol. 4, Nr. 2/3, s. 233-283.
40
Ely, op. cit.
41
Oppenheimer, Franz, System der Soziologie, Vol. 3, Tome 1, 5
th
edition, Jena, Gustav Fischer, 1923.
42
Serra, Antonio, Breve trattato delle cause che possono far abbondare li regni d’oro e argento dove non sono
miniere, Napoli, Lazzaro Scoriggio, 1613.
14
weal’. The increase in the common weal was, in our view, caused by increasing returns from an
ever-larger division of labour driven to a large extent by mechanisation. The assumption of con-
stant returns to scale – which in practice denies the existence of fixed costs – is at the core of the
individualist Anglo-Saxon approach to economics. The inclusion of the division of labour and
also its consequences causes German economics to naturally include society as well as the indi-
vidual in economic theory.
To Bücher, stage theories are ‘the only way that economic theory may make use of the re-
search of economic history’. But, these stages of development must not be confused with the pe-
riods in which the historian divides his material. The historian must not in any period
[198] for-
get any important aspects of the period he studies, whereas the stages of the theoretician only has
to cover what was normal, and confidently leave out what was confidential.’ In these aspects it
seems to me that Bücher’s stages have a lot in common with Perez’ and Freeman’s techno-
economic paradigms. Bücher also mentions what Perez and Freeman calls paradigm shifts as
‘the so called periods of transition (Übergangsperioden) when everything is in flux (wenn alle
Erscheinungen sich im Flusse befinden).’
4.2 Friedrich List and Bruno Hildebrand – the First Modern Stage Theories (
1840’s)
Bücher himself lists two alternative stage theories, those of List and Hildebrand.
43
The first
stage theory in German economics was that of Friedrich List, who, as already mentioned in the
introduction, divides history in the following stages 1. The hunting period, 2. The pastoral pe-
riod, 3. The farming period, 4. The agricultural-manufacturing period and 5. The agricultural-
manufacturing-trading period. Another similar early stage theory was that of Carl Rodbertus-
Jagetow.
44
Bruno Hildebrand – an economist held in high esteem by Bücher
45
– in his theory uses the
mode of exchange as his criterion for the establishment of stages. His stages are: natural econ-
omy, money economy, and credit economy.
46
The theory as such was published in
[199] 1864,
but the fundamental ideas are already in Hildebrand’s 1848 book ‘Die Nationalökonomie der
Gegenwart und Zukunft’. The date 1848 puts his theory into the right perspective; it was a con-
tribution to address the social problems of the day. Whereas Engels tries to destroy the bourgeoi-
sie, Hildebrand wants to make Bürger out of the workers. In this sense his agenda is very similar
to that of Dühring some years later, who also sees the de-proletarisation (Entprole-tarisierung)
of the workers as the only solution to the social problems of the day.
Hildebrand sees the natural economy as a system that keeps Man to the cultivation of the soil.
The creation of a money economy was a necessary condition for a division of labour, and conse-
43
Entstehung, p. 88.
44
For a discussion of early 19
th
Century German stage theories, see Sommer, Artur: ‘Über Inhalt, Rahmen und Sinn
älterer Stufentheorien (List und Hildebrand), in Salin, Edgar (Editor),
Synopsis. Festgabe für Alfred Weber, Heidel-
berg, Lambert Schneider, (1948), pp. 534-565.
45
He makes this clear in the Erinnerungen.
46
Hildebrand’s two articles on stage theory – ‘Natural-, Geld- und Kreditwirtschaft’ and ‘Die Entwicklungsstufen
der Geldwirtschaft’ – appeared in Jahrbücher für Nationalökonomie und Statistik, Vol. II, 1864, pages 1-24 and in
Vol. XXVI, 1876, p. 15-26, respectively. Both articles are reprinted in Gehrig, Hans (Ed.), Die Nationalökonomie
der Gegenwart und Zukunft und andere gesammelte Schriften von Bruno Hildebrand, Jena, Gustav Fischer, 1922.