Alexander Gerschenkron facts for kids

Alexander Gerschenkron (Russian: Александр Гершенкрон; born October 1, 1904 – died October 26, 1978) was an American economic historian. He was a professor at Harvard University. He studied economics using the ideas of the German Historical School.

Gerschenkron was born in Odessa, a city then part of the Russian Empire (now in Ukraine). In 1920, during the Russian Civil War, he left Russia for Austria. He studied at the University of Vienna and earned his doctorate in 1928. In 1938, when Austria joined Germany, he moved to the United States.

Who Was Alexander Gerschenkron?

Gerschenkron was born in Odesa, Ukraine. His family was Jewish and well-known in Russia. When he was 16, he and his father left Russia during the Bolshevik Revolution. This was a time of big changes in the country. They settled in Vienna, Austria. There, he taught himself languages like German and Latin. In 1924, he started studying economics at the University of Vienna. He graduated in 1928.

After college, Gerschenkron got married and had a child. He worked for a motorcycle company in Vienna for three years. Later, he became interested in politics. He joined the Social Democrats, a political party in Austria. However, this party stopped existing after the Austrian Civil War in 1934.

In 1938, Gerschenkron and his family moved to the United States. This happened after Austria became part of Germany. A professor named Charles Gulick invited Gerschenkron to be his research helper. Gerschenkron spent a year helping Gulick write a book. The book was called Austria: From Habsburg to Hitler. He worked at the University of California, Berkeley, for five years. Then, in 1943, he moved to Washington, D. C.. He joined the Federal Reserve Board there.

In 1944, he worked in the Research and Statistics department at the Federal Reserve. During this time, Gerschenkron became an expert on the Soviet economy. His knowledge was very important. This was because the relationship between the Soviet Union and the United States was a big issue then. He worked at the Federal Reserve Board for four years. He was later promoted to lead the International Section.

In 1945, Gerschenkron became an American citizen. In 1948, he left the Federal Reserve Board. He became a professor at Harvard University. He taught economics at Harvard for about 25 years. He taught about economic history and the Soviet Union.

Gerschenkron was chosen to be a member of important groups. These included the American Academy of Arts and Sciences (in 1963) and the American Philosophical Society (in 1970).

What Did Gerschenkron Research?

Gerschenkron always remembered his Russian background. This showed in his work on economics and history. It also showed in his interest in Russian literature. His early studies focused on how the Soviet Union and Eastern Europe developed. In a famous article from 1947, he discovered the Gerschenkron effect. This effect shows how changing the starting year for an economic index can change how fast growth seems. His early work often looked at how Soviet planners used statistics.

Understanding the "Gerschenkron Effect"

In 1954, Gerschenkron published an important article. It was titled A Dollar Index of Soviet Machinery Output, 1927–1928 to 1937. In this article, he explained what is now called the Gerschenkron effect. This effect describes how different ways of measuring economic growth can give different results.

Gerschenkron showed that the high growth rate of Soviet industry was partly due to how it was measured. He found that if you used older prices to measure growth, it looked much higher. This "Gerschenkron effect" was a key finding. It showed that the Soviet Union's announced high growth rates were not as impressive as they seemed.

Think of it this way: Imagine you are measuring how much your toy collection grew. If you count new toys using their original cheap prices, your collection might seem to have grown a lot. But if you count them using today's higher prices, the growth might look smaller. The Gerschenkron effect is similar. It happens because prices and how much people buy are connected. When something becomes cheaper, people tend to buy more of it.

Economic Backwardness in History

In 1951, Gerschenkron wrote an important essay. It was called Economic Backwardness in Historical Perspective. This essay was very important for his career. It also greatly influenced how people understood European economic history. In it, he suggested that countries develop economically in certain steps.

The essay looked at "economic backwardness." This means how far behind a country is in its economic development. Gerschenkron argued that the more "backward" an economy is when it starts to industrialize, the more likely certain things will happen. For example, a country like Russia was far behind Britain when it began building factories. So, Russia did not go through the same steps as Britain.

His ideas about economic backwardness were different from other theories. Other theories suggested that all countries follow the same steps. Gerschenkron's theory predicted that the more "economically backward" a country is, the more you would see:

• Faster industrial growth.
• More focus on making machines and tools, not consumer goods.
• Quick bursts of growth instead of slow, steady growth.
• Larger factories and companies. They would use the newest technology. Backward countries could buy machines from countries that developed earlier. For example, Russia could import machines from Britain.
• More use of machines and less use of human labor.
• A lower standard of living for people.
• Less importance for farming.
• A bigger role for the government and large banks. They would provide money and business ideas.
• Stronger ideas about the need for growth.

Gerschenkron did not give a single definition for economic backwardness. But he talked about things like income per person, education levels, and technology. He also described a line across Europe. Britain was the least backward. Then came Belgium, the Netherlands, France, Germany, Austria, Italy, and finally Russia, which was the most backward. In his essay, he mainly discussed Britain, Germany, and Russia.

Bread and Democracy in Germany

In 1943, Gerschenkron published a book. It was titled Bread and Democracy in Germany. In this book, he looked at how democracy in Germany was connected to protecting farm products, especially grain. Gerschenkron believed that democracy in Germany depended on many things. His book focused on the role of the Junkers and farming policies.

The Junkers were powerful landowners in Prussia. They held important political jobs. In 1879, Germany started a new policy. It protected German grain production from foreign competition. This policy helped the Junkers and many German farmers. After Germany lost World War I in 1918, the Junkers started to work against democracy. They brought back policies that protected farming even more. This again helped the farmers and Junkers.

Gerschenkron concluded that for Germany to become democratic and for world peace, the Junkers needed to lose their power. He suggested a big change in how land was owned. He also recommended that the government control the trade of most farm products in Germany. With this control, the government could set prices. This would force some farmers to stop growing grain for sale. This would help German farming adjust to international market prices.

Gerschenkron also warned that creating a government monopoly would be difficult. He thought it would need "great practical skill and energy." He believed Germans should include this plan in peace treaties. He also suggested an international group should oversee it.

How Gerschenkron Influenced Others

Gerschenkron had a big impact on his students. At Harvard, he led a workshop on economic history. He also taught classes on the Soviet economy and economic history. His year-long economic history course was required for all graduate economics students. Students had to write two major papers and take a final exam. He also held evening meetings once a week. In these, his graduate students would talk about ideas for their research and discuss ways to use numbers in their studies.

Many of his students went on to have successful careers. A good number of them became presidents of the Economic History Association. Ten of his students wrote a book in his honor in the mid-1960s. The book was called Industrialization in Two Systems and was published in 1966.

Gerschenkron as a Scholar

Gerschenkron was known as a very smart scholar. One of his former students, Deirdre McCloskey, said he was "the best scholar I have known."

Gerschenkron studied many different subjects. These included the history of economics, the Soviet economy, statistics, and Greek poetry. He also learned many languages easily. From his studies in Austria, he learned Latin, Greek, French, and German. Later in life, he could pick up new languages quickly. For example, he might learn Swedish one week and Bulgarian the next.

He also studied literature. He and his wife wrote an article together about different translations of Shakespeare. This article was published in a literary journal.

Alexander Gerschenkron Prize

The Economic History Association created the Alexander Gerschenkron Prize. This award is given for the best research paper (dissertation) in economic history. The paper must be about an area outside of the United States or Canada. To be considered for the prize, a student must have received their Ph.D. within two years of the award date.

Selected Books and Articles

• (1943). Bread and democracy in Germany, Berkeley and Los Angeles: University of California press.
• (1945). Economic relations with the U.S.S.R., New York.
• with Alexander Erlich (1951), A dollar index of Soviet machinery output, 1927–28 to 1937, Santa Monica, California: Rand Corporation.
• with Nancy Nimitz (1952), A dollar index of Soviet petroleum output, 1927–28 to 1937, Santa Monica, California: Rand Corporation.
• with Nancy Nimitz (1953), A dollar index of Soviet iron and steel output 1927/28–1937, Santa Monica, California: Rand Corporation.
• (1954), A dollar index of Soviet electric power output, Santa Monica, California: Rand Corporation.
• (1954), Soviet heavy industry: a dollar index of output, 1927/28–1937, Santa Monica, California: Rand Corporation.
• (1962), Economic backwardness in historical perspective, a book of essays, Cambridge, Massachusetts: Belknap Press of Harvard University Press.
• (1966), Bread and democracy in Germany, New York: H. Fertig.
• (1968), Continuity in history, and other essays, Cambridge, Massachusetts: Belknap Press of Harvard University Press.
• (1970), Europe in the Russian mirror: four lectures in economic history, London: Cambridge University Press.
• (1977), An economic spurt that failed: four lectures in Austrian history, Princeton, New Jersey: Princeton University Press.
• (1989), Bread and democracy in Germany with a new foreword by Charles S. Maier, Ithaca, New York: Cornell University Press.