Hans Gestrich

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Hans Gestrich (born September 17, 1895 in Berlin ; † November 21, 1943 ) was a German economist . As press officer at the Reichsbank from 1931 onwards, he fought emphatically against the continuation of the deflationary policy . He later took on the position of economic advisor to the Prussian State Bank , which he held until his death.

Gestrich comes from the ordoliberal school, saw himself in the tradition of Knut Wicksell and declared with appreciation that the fundamental knowledge that led to the modern credit and business cycle theory was already contained in Wicksell's money interest and goods prices in 1898 .

Act

Hans Gestrich can be counted among the major advancers of modern credit theory and, alongside Wilhelm Lautenbach , Otto Pfleiderer, Leonhard Gleske and later Wolfgang Stützel ( balance mechanics ), one of the founders of the credit mechanism .

An important finding from the credit mechanics is, for example, the credit that can still be granted ( its potential ) as an interest-determining factor (in contrast to the classic thesis, where the interest rate would be determined from the amount of an existing capital fund). From the perspective of the credit mechanics , an expansion of the money supply by inactivating savings assets is understood in a relative manner, "as long as its effect as an additional means of purchase is canceled by the temporary shutdown in the form of a savings deposit in the corresponding amount."

Balance sheet pictures for loans
(dashed 1936)

In Loan and Saving , Gestrich clearly analyzes the issue of money and credit creation . He points out the interdependence of credit expansion and credit contraction as follows: “Of course, the credit expansion of the individual bank and its money creation always tends to credit expansion and money increase in the entire banking system. Whether the trend prevails depends on how strong the counter-tendency is the contraction of credit and the reduction in the total amount of money through loan repayments. If it is just as strong, the total volume does not change; if it is stronger, a contraction of the total credit volume and the total money supply can even be observed. ”(Cf. net borrowing ).

Gestrich's paper Monetary Policy and World Economy was praised by Wilhelm Lautenbach as “work in the best modern style”, in which Gestrich countered the (then customary) argumentation of “necessary market shakeout”: “The question of whether a declining economy will cope with itself with certainty, whether so there is a theoretical depression low point, is to be answered in the negative. "from the Great depression (1929-1933), in particular the German banking crisis (1931) drew Gestrich further concluded that commercial banks generally should not be considered as entirely by the state regardless, because the The state must by no means let the collapse of the big deposit banks happen because that would mean the destruction of part of the payment system and unforeseeable destruction in the economy - a sudden deflationary shock for the entire economy. He advocated an additional type of private bank. He also considered it to be an illusion "that the central bank could really be independent of the state."

Economic position

Price stability , i.e. stability policy, represents the highest economic policy value for Gestrich, whereby he also states in credit and saving that in this regard the observation of the (for him subordinate) employment rate as an indicator of the subsequent price change tendency is essential insofar as experience shows that prices are still extremely high when employment is falling remain at the usual level for a long time before the macroeconomic stagnation (triggered or intensified by falling employment) causes prices to decline.

Even though the saving of individuals ( in the sense of foregoing spending for the purpose of increasing their own financial assets ) tends to have an unfavorable effect on the economy (s), it is nevertheless important to Gestrich to recognize an important, also cultural, element of self-responsible lifestyle. Regarding the degree of interventionism of the state, Gestrich represented the regulatory stance "that the state must be ready to intervene to protect freedom."

Works (selection)

Web links

Individual evidence

  1. ↑ Walter Eucken (ed.) In: Credit and saving. Preface, VI.
  2. ↑ New credit policy. P. 55.
  3. ↑ Credit and Saving. (1st edition) Jena 1944. pp. 105–106:
    “He [Knut Wicksell] recognized that the price cosmos of such an order is by no means so clearly determined by the relative scarcity of goods and that consumption and production are controlled accordingly as had been assumed until then because the money interest is not determined by the economic fact of saving , but by the monetary fact of the supply of credit . [...] Wicksell, whose basic work Geldzins und Güterpreise appeared as early as 1898, had already overcome traditional credit theory and fully recognized the     elasticity of the modern credit system. "
  4. ↑ Reinhard Pohl: The effects of national debt on the financial markets. In: Problems of Public Debt. Berlin 1980. p. 89.
  5. ↑ Reinhard Pohl: The effects of national debt on the financial markets. In: Problems of Public Debt. Berlin 1980. p. 89.
  6. ^ Wilhelm Lautenbach: Interest, credit and production. (Ed. Wolfgang Stützel) Tübingen 1952. p. 95:
    “How does the credit system work when the state finances large expenditure through credit? Where do the funds come from?
    Most of the people who ask the question, and they are by no means just laypeople, think that there is some limited supply of money or credit. This notion is usually linked to the worried question whether the state might not tighten credit for the economy through its credit claims. In truth, however, it is exactly the opposite. When the state takes credit on a large scale, the entire credit economy is loosened up. The money and credit markets are becoming liquid, entrepreneurs are becoming liquid, their bank loans are decreasing, business deposits are increasing [...] "
  7. ↑ Werner Ehrlicher: Monetary Theory. In: Compendium of Economics. Volume 1. ( online ) p. 358.
  8. ^ Wolfgang Grosse-Büning: The relationship between the savings banks and the central bank. Cologne 1957. ( online ) p. 97.
  9. ^ Peter Bernholz: Monetary Value Stability and Currency Order. Tübingen 1989. ( online ) p. 14.
  10. ↑ Credit and Saving. (1st edition) Jena 1944. p. 55.
  11. ^ Wilhelm Lautenbach: Interest, credit and production. (Ed. Wolfgang Stützel) Tübingen 1952. p. 207.
  12. ↑ Monetary Policy and the World Economy. Berlin 1934. p. 13:
    “If in the years 1931/1932 the opponents of active economic policy always argued that if the crisis were to run, the economy would have to be“ cleansed ”of weak and inefficient enterprises, experience has shown that the crisis itself has made more and more enterprises weak. The “inability to perform” consisted more and more only in the existence of debts, which remained the same with falling sales and prices. Financing with outside capital is not yet a criterion of inefficiency, especially in the modern economy. It makes good sense to speak of a cleaning function for economic crises, since the bad and inept actually fall first. But the longer a crisis lasts, the deeper it becomes, the more purification becomes simple senseless destruction. The theories of "burning out" of the economic crisis and its "cleaning function" had a fatal influence on German economic policy in 1931/32. "
  13. ↑ New credit policy. Stuttgart and Berlin 1936. pp. 73–95:
    “It cannot be left to the discretion of a bank manager, no matter how qualified, whether they want to impose deflation on the national economy or lower exchange rate parity. In such fateful questions, only the government, which also has to bear the social and political consequences, can make the decision. Today the effectiveness and success of general economic policy are all too dependent on credit policy; this has penetrated the general consciousness too much. Therefore, today more than ever, the central bank must be an organ of the state. "
  14. ^ Gerold Blümle: Basic texts on the Freiburg tradition of order economics. (Eds. Nils Goldschmidt, Michael Wohlgemuth) Tübingen 2008. ( online ) p. 350.
  15. ^ Gerold Blümle: Basic texts on the Freiburg tradition of order economics. (Eds. Nils Goldschmidt, Michael Wohlgemuth) Tübingen 2008. p. 351.
  16. ↑ Credit and Saving . (1st edition) Jena 1944. p. 95:
    “The observation of the price level is always the most important point of orientation. However, this alone cannot be enough. Once the price system has been established, there is a certain inertia [...]. Such obstacles stand in the way of falling prices in the modern economy. As a result, a stagnation, which could mean the first sign of a reversal in the economy, will mostly, or at least often, not immediately become noticeable through falling prices, but rather through falling employment while prices remain the same. Observing the level of employment remains extremely important even if full employment is not viewed as the main objective of economic policy. "
  17. ^ Gerold Blümle: Basic texts on the Freiburg tradition of order economics. (Eds. Nils Goldschmidt, Michael Wohlgemuth) Tübingen 2008. p. 351.
  18. ↑ Credit and Saving. (1st edition) Jena 1944. p. 116:
    “It is useful to realize that individual saving belongs to a certain order of human life. It is provision for the future that is voluntary and under one's own responsibility, the timing and scope of which is determined by the saver at his own discretion. Saving in this real and original sense presupposes: freedom in the use of income, security and the fundamental inviolability of property. "
  19. ^ Gerold Blümle: Basic texts on the Freiburg tradition of order economics. (Eds. Nils Goldschmidt, Michael Wohlgemuth) Tübingen 2008. p. 262.
personal data
SURNAME Dash, Hans
BRIEF DESCRIPTION German economist
DATE OF BIRTH September 17, 1895
PLACE OF BIRTH Berlin
DATE OF DEATH November 21, 1943