The manuscript collection of the National Library of Scotland contains two undergraduate essays in “political economy” written for the Rev. Thomas Chalmers while he was Professor of Moral Philosophy at St Andrews University from 1823 to 1828. The first is signed “Pat. J. Stirling.” The second is unsigned, but is in the same hand. The Library attributes both manuscripts to Patrick James Stirling (1809–1891). The essays are marked with deletions and insertions, most of which appear to be by Stirling himself, and the summary appraisal at the end of each in Chalmers's own hand is signed “Thomas Chalmers.” In the transcription of the shorter essay printed in section VI below, [bracketed] words are those which have been deleted. Underlined words are those inserted by Stirling or possibly Chalmers. Stirling's erratic capitalization and hyphenation, and the indentation of his first paragraph, have been preserved.

In the late nineteenth century, Eugen von Böhm-Bawerk's magisterial work (1881) or capital and interest provided the foundation upon which virtually all modern theories are built. In his first volume, History and Critique of Interest Theories, Böhm-Bawerk classified and (in his mind) refuted all previous explanations. Böhm-Bawerk thought a proper theory of interest must explain the apparent undervaluation of future goods For example, if a machine is expected to yield annual rents of $1,000 for ten years why does it sell now for less than $10,000? To answer this question was to provide a theory of interest, for only with such an undervaluation would it be possible for a capitalist to invest in machines, for example, and reap a flow of returns, over time greater than his initial investment.

The 150th celebration of the repeal of the Corn Laws in 1846 was a major stimulus for new publications on the issue of free trade versus protection, a question that dominated economic policy agendas all over Europe in the nineteenth century. Original texts dating from that period were again made public (Kadish 1996, Schonhardt-Bailey 1997), the works of Richard Cobden became available (Cain 1995), and Douglas A. Irwin's book (1996) and Anthony Howe's treatise (1997) can be seen as the “cosmopolitan” answers to older (Semmel 1970) and contemporary (Magnusson 1994 and Wendler 1996) defenses of a “national” economic policy. This literature, however, as well as conferences on the reception of free trade (Marrison 1998), concentrated on the commercial policy of the most economically advanced nations, leaving completely out of scope discussions, debates and economic policy dilemmas related to international trade in other, less-developed countries.

The early literature on ordinalism and Vilfredo Pareto's incomplete development of ordinal theory, by John R. Hicks and R. G. D. Allen (1934), Oskar Lange (1934), Hicks (1939), George Stigler (1950), Paul A. Samuelson (1974) and others, referred exclusively to Pareto's more mature French language works: the Manuel d'Économie Politique (1909) or the subsequent encyclopaedia entry entitled “Économie Mathématique” (1911). The related discussion considered whether Pareto was an inconsistent ordinalist, a cardinalist, or confused.

The dismissal of academicians from German universities under the Restoration of Civil Service Act (Gesetz zur Wiederherstellung des Berufsbeamtentums), promulgated by the National Socialists on April 7, 1933, and the expulsion of academicians from Germany, Austria, and other European countries interrupted or destroyed promising developments in economics, as well as in physics or other areas. According to this new “law,” which was passed by the Nazis in a short cut immediately after coming to power, “disagreeable” persons could be dislocated from the public service predominantly for racist (section 3) or political (section 4) reasons.

My reflections are at least partly those of the child of an emigré who grew up to beome an economist. Since my father was an engineer from Germany's Barmen-Elberfeld textile city—also the city of Friedrich Engels—he clearly is not among the first generation of German scholars who were deprived of their professional positions as the Hitler regime came into power. Indeed, somewhat like Joseph Schumpeter, he came to America to grasp an opportunity rather than to avoid a threat. Like many of educated men of his generation, he was fluent in five languages and an ardent student of philosophy, history, and political economy. His move to America, after three or four trial visits, preceded my birth, because in those days before international air travel the seven day ocean voyage between Bremerhaven and New York was so daunting for a woman approaching childbirth that I was close to a year old before our arrival in America. My early childhood was uneventful except for the arrival of two siblings, and the only negative I recall from those early days was that I hated my first name, Ingrid (so carefully chosen by my parents), and longed to be called Jane, Anne or anything other than Ingrid.

The rise of European fascism in the 1920s and '30s triggered the greatest migration of intellectual capital the world has ever known. This paper is concerned with the German-speaking economists who formed the core of the original Graduate Faculty of the New School for Social Research. Among émigré economists of the interwar period, those who found refuge at the New School exerted a distinctive influence on American economics, partly owing to their concentration at a single institution, and partly by virtue of the character and quality of their work. The paper has three aims: to provide an overview of the contributions of these economists, to assess their impact on American economics, and to account for the apparent evaporation of their legacy after the onset of the Cold War.

Historians of economic thought, as well as the emigré subjects themselves, are profoundly indebted to Harald Hagemann and Claus-Dieter Krohn for their efforts in documenting the phenomena of German-speaking emigré economists.

The expulsion of the academicians from Germany, Austria, and other central European countries is for the history of social science as traumatic and significant an event as the bombing of Pearl Harbor was for the United States' naval fleet in the South Pacific. The Restoration of the Civil Service Act occurred on April 7, 1933, shortly after the National Socialists came to power. It ordered “disagreeable” persons to leave the Universities and was the harbinger of other “cleansing” that followed the German war machine into Austria, the Czech Republic, and so on. The start of this intellectual exodus occurred a whole eight years before the United States entered the war on December 7, 1941. The destruction of the American naval fleet by the Japanese air force in 1941 required a massive State-sponsored mobilization as the United States prepared for and entered the war in the Pacific. The destruction of social science in the German-speaking Universities started on April 7, 1933, and continued as the German armies moved eastward, resulting in no less than 328 dislocated economists who emigrated out of central and eastern Europe to rebuild their lives and academic reputations in other places, especially in the United States. As Hagemann has demonstrated, the United States “was the direct or indirect destination for some two-thirds of the German-speaking emigré economists” (Hagemann 2005). This “rebuilding” of lives, families, and scientific reputations is amazing in its magnitude and complexity and is also itself a topic for serious study and understanding within the sociology of the social sciences. Hagemann has made major contributions to the telling of this story (Hagemann 1997).