The Janus Face of Eli Heckscher: Theory, History and Method

Abstract

Throughout all his life as a scientist Eli Heckscher struggled with the problem of how to bring economic theory and economic history together in such a fashion that the one could profit by making use of the other, but without merging the two. Knowing this,¹ it comes as a bit of a surprise to learn that he hardly made any use in his historical writings of his own greatest contribution to economic theory: the classic 1919 article on international trade where he presents the core of what would with time become known as the Heckscher-Ohlin theorem and the factor price equalization theorem (Heckscher, 1919a). On the contrary (Findlay and Lundahl, 2002, pp. 497–498), in Mercantilism, the main historical work of his after 1919 to deal with foreign trade, the factor proportions approach to international trade is only mentioned in a footnote (Heckscher, 1955, p. 124), and in his discussion of protection he points out that when wages are low, this will result in exports of labor-intensive goods (Heckscher, 1955, p. 153). Nor does he use the factor proportions approach in his history of industrialization (Heckscher, 1931a) or in his monumental volumes on the economic history of Sweden (Heckscher, 1935b, 1936, 1941, 1949a, 1949b). One would think that making use of your own theoretical findings would be natural, but it was not until the publication of the article ‘A Plea for Trade Theory in Economic History’, by Ronald Findlay (1998), that an explicit research program was launched that was based on the application of Heckscher’s factor proportions approach to economic history.