The economist for whom the world was not prepared

Published: 2016-12-27

He advocated family planning and contraceptives already four decades before Elise Ottesen-Jensen. He was in a common-law marriage, was interested in social problems, and supported the women’s suffrage movement – and today his theories control the design of monetary policy in the West. Knut Wicksell, pioneering Professor of Economics in Lund 1901–1916, was a man ahead of his time.

Anna Bugge with her lifepartner Knut Wicksell and their sons Finn and Sven.

Knut Wicksell had a passionate interest in solving societal problems and combating poverty. He received a warning from the vice-chancellor for pursuing the issue that doctors were to help parents limit the number of children born in poverty. The world was not ready for this in 1880 – at least not in Uppsala where Knut Wicksell studied. In fact, the motto “It is a great thing to think freely, but it is greater still to think correctly” written over the entrance to the university auditorium in Uppsala was chosen in the wake of Wicksell’s lecture in which he advocated birth control which, at that time, was not only illegal but considered subversive.

After obtaining a licentiate degree and studying subjects including mathematics, physics, astronomy, history, Latin and Scandinavian languages, he gave lectures, wrote pamphlets, and formed public opinion. He was known to be critical of the Church, monarchy, the Swedish national defence – and even of marriage. Because he strongly opposed the legislation at the time which made the husband into the legal guardian of his wife, he refused to get married in the church and instead signed a common-law agreement with his Anna Bugge. She was the one who made sure that Knut Wicksell focused on his academic studies. Once he was appointed professor, she launched a career of her own and became involved in the peace movement, the women’s movement in general and the struggle for women’s suffrage in particular.

“Today, Knut Wicksell is seen as the country’s greatest economist, and even social scientist. He belongs to the classics of the history of economics”, says Lars Jonung, Professor Emeritus at the School of Economics and Management and expert on Knut Wicksell.

“Around the turn of the century 1900, he made a brilliant summary of the central aspects of economic theory that emerged in the latter half of the 1800s. His theories have had a profound influence on economic research as well as on economic policy. His proposals regarding taxation and decision-making in the public sector have inspired what is known as the public choice school.”

Wicksell’s main scientific contribution is in monetary theory. Today, central banks such as the Federal Reserve, ECB, Bank of England and Riksbanken base their monetary policy of a low objective and stable inflation on the theory developed by Wicksell more than 100 years ago.

“The ideas of Wicksell – not John Maynard Keynes or Milton Friedman – are what govern modern monetary policy”, says Lars Jonung.