User:Robjump1/Josef Steindl

Josef Steindl (April 14, 1912 - March 7, 1993) was an Austrian-born economist, best known for his work on long-run capitalist development set out in Maturity and Stagnation in American Capitalism. Steindl trained initially in the liberal Austrian tradition, but moved to England after the German occupation of his home country and fell rapidly under the influence of Michał Kalecki at the Oxford Institute of Statistics. He worked at the Austrian Institute of Economic Research, the University of Oxford, the University of Vienna and Stanford University over the course of his life, and published three books - Small and Big Business, Random Processes and the Growth of Firms, and Maturity and Stagnation in American Capitalism.

Biography
Josef Steindl was born in Vienna on April 14, 1912, and was first taught economics by Richard Strigl, who himself had been taught by Eugen von Böhm-Bawerk. He was brought up in the Austrian tradition of that period, and secured his first post at the Austrian Institute of Economic Research (WIFO), set up by Ludwig von Mises, from 1935-38. Hostility to the Nazi regime following Germany's occupation of Austria lost Steindl this position, and with the help of Austrian liberals abroad (including Friedrich von Hayek) he moved to England and the University of Oxford. Here he met Michal Kalecki, who would become the greatest influence on his subsequent work (he would later describe himself, as an economist, as "the product of England and Kalecki").

Steindl remained in England for the next 22 years, lecturing at Balliol College, Oxford, and working with Kalecki and a number of other European exiles at the Oxford Institute of Statistics. It was here that he published Small and Big Business (1945). His major works were not published until after he returned to Austria in 1950, however - Maturity and Stagnation in American Capitalism was published in 1952, and Random Processes and the Growth of Firms in 1965. Steindl spent the remainder of his career working at WIFO, and remained a consultant until his death in 1993. He was made an Honorary Professor of the University of Vienna in 1970 and was a visiting professor at Stanford University from 1974-5.

Small and Big Business
Small and Big Business, published in 1945, was Steindl's first published examination of industrial organisation and its impact on the economy as a whole. It was published whilst Steindl was at the Oxford Institute of Statistics, and is introduced with a foreword by D. G. Champernowne (the then director of the institute, and another considerable influence on Steindl's work). The book is not long, at 66 pages, and takes the form of a brief monograph, but in it can be found a number of the elements that Steindl would expand upon in later work. The book begins with a critique of Marshall's theory of the representative firm, after which an examination of all the relevant factors affecting his problem is undertaken. This is followed by a presentation of the statistical evidence available. The analysis remains micro with an eye to the macroeconomic situation, although Small and Big Business is a much less developed analysis than his subsequent output. It nevertheless takes into account differentials in risk faced, access to capital and markets and economies of scale between small and large firms, and one can identify the developed mathematical empiricism and the refusal to be drawn into either of the traditional delineations of 'micro' or 'macro' economics that runs through all of Steindl's published work.

Maturity and Stagnation in American Capitalism
Maturity and Stagnation in American Capitalism is Steindl's magnum opus, and presents a theory of capitalist development which "moves freely between the micro-economics of the individual firm, and the macro-economics of the economy" (Toporowski in Mott and Shapiro, 108). The theory is then applied to the American experience leading up to the Great Depression, utilizing Kuznet's groundbreaking statistical work on the period.

Capitalist economies move, by Steindl's analysis, from a situation characterised by classical dynamic competition, driven by the need of individual firms to utilise productive capacity, to one of monopoly capitalism, in which the remaining firms are relieved of this need by the existence of higher profit margins. Excess capacity and supernormal profits discourage investment, and thus a period of stagnation ensues in which excess funds are channelled into the financial sector. It is similar in this way to Baran and Sweezy's Monopoly Capital, and Maturity and Stagnation is an acknowledged influence on the book, having been published 14 years before. Steindl's theory differs from the later Marxist analysis by its explicit basis in Kalecki's economic dynamics. The main addition Steindl makes to Kalecki's system is to define a "planned degree of [capacity] utilization" for firms to which a rate of mark-up profit is related. Using this construct, Steindl argues that increasing monopoly power leads to a decline in utilization via increasing (and downwardly rigid) mark-ups. Low utilization reduces the incentive for firms to invest, and therefore oligopolistic capitalism leads to economic stagnation. What Steindl does not consider is the possibility of a lack of investment opportunities as triggering stagnation. In the introduction to the 1976 edition, however, Steindl admits to a change of heart on this issue appears more sympathetic to 'long-wave' theories of the type proposed by Kondratiev.

Random Processes and the Growth of Firms
Random Process and the Growth of Firms continues the "recurring theme" of "the tendency towards industry concentration" in Steindl's writing (Bloch in etc p23). This last book is a great deal more mathematically rigorous (and complex) than Small and Big Business and Maturity and Stagnation, but this is not used merely to replace clear economic logic and exposition which run alongside.