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Development theory: Who is Who? Part 40 – Andreas Predöhl (1893-1974)

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Development theory: Who is Who? Part 40

Economic space, political space and development

By Wolfgang Hein

In a great number of publications between 1925 and 1971, Andreas Predöhl examined development processes in connection with world economic centre-periphery structures and the incongruity between political spaces and economic spaces. His work anticipated newer area theories. At a time of globalisation, his analysis of the expansion and uneven development of the world economy appears to be more topical than ever.


I. Biographical outline

Andreas Predöhl was born in Hamburg on October 26, 1893. He read law at the universities of Berlin and Bonn (1912-1914) and after World War One studied economics in Kiel until 1921. From 1921 to 1930 he was an assistant professor at the Institute for World Economics at the University of Kiel, including from 1925 to 1928 as a Rockefeller Foundation scholar in England, the USA and Canada. In 1930 he was appointed a full professor in Königsberg (from where he made extensive study tours in the Soviet Union which strongly influenced his preoccupation with the issue of development). In 1932 he moved to Kiel, where from 1934 to 1945 he was head of the Institute for World Economics. His role during this period is a contentious subject. Predöhl himself insisted that he had to Òestablish the best possible relationship with the Nazi regime, while not in a single case sacrificing scholarship to the regime. He was not a member of the NSDAP, but during World War Two worked closely with the military economic staff. In November 1945 he was dismissed by the British Occupation authorities, but retained his chair of economics.

Predöhl now devoted himself to his main work, Aussenwirtschaft (Foreign Trade), which was published in 1949. In 1953 he was appointed head of the Institute of Transportation Economics at the University of Münster. As an emeritus professor, he was from 1965 to 1969 the first Director of the German Overseas Institute (DüI) in Hamburg. He died on July 18, 1974, aged 80.


II. Work and appraisal

Two theses run through PredöhlÕs entire work, namely that a) economic development processes can be understood only in the link between spatial theory and development analysis, and that b) tensions arise between economics and politics in the relationship of the basically global economic space and the territorially limited political space.

He relates the term development to the historical development of industrial growth, starting from a unicentric English world economy whose gravitational field influenced the industrialisation of the Continental European countries. In the second stage of the world economyÕs expansion there emerged a second gravitational field in North America, while the third stage of the Industrial Revolution started off with the industrialisation of Russia (beginning in the 1930s). With the industrialisation of Japan, as well as parts of the South, this led finally to the forming of a multicentric world economy. In his analysis of the evolutionary dynamics of the development of the industrial world economy, Predöhl relates to the economic cycle theory of Joseph Schumpeter (1883-1950).

In his analysis of spatial theory he deals with the conditions of the formation of an industrial centre, which at the same time implies the development of centre-periphery conditions. For the concentration of industrial activity in one centre always depends upon the existence of peripheral regions as suppliers of raw materials, and of partly-developed regions in which labour-intensive industrial branches cluster. Predöhls thoughts on area theory take up on those of the classic location theorists, such as Johann Heinrich von Thünen (agricultural specialisation in the form of concentric rings around centres of population commensurate with transport costs), and Alfred Weber, who elaborated the factors of agglomeration-forming (with regard to advantages of organisation and proximity).

PredöhlÕs characterisation of the spatial development of the world economy in the sense of an ideal-typical dynamism arises from the combination of both approaches. The starting point is his thesis that due to high transport costs and its low substitutability through other production factors, the iron and steel industry constitutes the central basis for the forming of economic gravitational fields. This differs from the textiles industry above all, and also, to a lesser degree, from the mechanical engineering sector.

ÒThus, European trade and industry grows at first around huge industrial complexes into a homogeneous economic space É There arises a powerful industrial field of gravitation, which stretches from the English Midlands to deep into Central Europe. Since the exchange links of these industrial complexes finally span the entire world, economic space is essentially borderlesss. Rather, we perceive it as economic gravitational fields which penetrate each other but essentially are clearly separate from each other ... Small cores form distant from big ones ... small gravitational fields. We want to call them marginal cores. They differ from the central in that they are not involved in exchange with the entire world economy, but have locally limited sales ...Ó (1971: 72f.).

In the case of this analysis, Predöhl initially recognises as actors only economic subjects; he abstracts from national political actors and thus also from state borders. Development processes are not seen a priori as processes of the development of national societies, but as the development of the relations between locations in an expanding world economy. This does not mean that Predöhl attaches no importance to the national state; he merely insists on a clear analytical differentiation between economic space and political space. It is not the objective distinction between the national and world economy which forms our object, but solely the tensions between politics and economics that are expressed in the relationship of political and economic space. Accordingly, national economy is for us exclusively a political notion, namely the entirety of the economic activities in their alignment on the goals of the population of the state territory.Ó (1971: 18)

The concepts of political and economic spaces form together with the previously characterised approaches of spatial economics and the (historical) development theory a four-field matrix whose single fields identify the central issues that run through PredöhlÕs works.

This central grid of issues has hardly changed since his early works (1925, 1928, 1932, 1934). His major work, Aussenwirtschaft (1949, 2nd Edn. 1971) provides a theory of national and international trade and currency policy against the background of the worldwide expansion of the Industrial Revolution. However, with the development from 1930 to 1970, there have been changes to the concrete economic and development theory problems to which he referred in the various epochs of his academic work.

The global centre-periphery structures outlined above arose during the Òliberal world economyÓ phase of the19th century. This phase ended in the conflicts between the imperialist powers which led finally to the First World War, the global economic crisis, the rise of fascism, and the Second World War. Predöhl summarised the diverse economic policy reactions to this crisis of the liberal world economy (Socialism in the Soviet Union, fascist autarchical strategies, populist-authoritarian systems in Latin America) with the concept of the Òbreak-in of state borders into the world economic systemÓ.

Predöhl dealt with the concept of autarchy, which allows the question of the relationship of political space and economic space to become the focus of attention, in a lecture in 1934 on Nationalisation of the economic space by means of economic policy. He emphasised the limitation of economic opportunities by the specific resources within the individual territories; in the final analysis, for EuropeÕs industrial core countries an autarchical policy would mean becoming agrarian countries again. For the territories on the periphery of the world economy, which specialised mainly in agricultural and raw materials production, a nationalisationÓ of their economic spaces could only mean a decline in their production for export, and as a result a lack of capital for industrialisation. Thus only a nationalisation either on a quite primitive basis was possible or one based on foreign capital, which, however, would work against the actual goal. Even in the case of Russia, the rapid industrialisation it aimed at caused an Òenlarged industrial need for subsidiesÓ, meaning a growing import of capital goods and thus an increasing interdependence with other countries.

The reconstruction of the world economy after the Second World War took place then on the basis of a strengthened state interventionism (trade cycle policy, welfare state, etc.) within the framework of a neo-mercantilist economic policy. After the end of the (spatial) expansion of the world economy (1962: 92), a stage of Òintensive development in the given space began. The industrialisation of regions which previously were only suppliers of raw materials was forced by three factors: a) the enormous population growth due to the reduction of the mortality rate resulting from the introduction of hygiene... b) the political emancipation of these countries, which triggered the desire to take part in industrial development... and c) the industrial countriesÕ own interest in expanding the economic exchange...Ó (1967: 30).

These thoughts form the background for Predöhls contributions to the postwar debate on the developing countries. It is about the third stage of industrialisation, meaning the emergence of new marginal cores in regions which previously were integrated only peripherally in the world economic division of labour as raw materials suppliers. For that, certain preconditions are necessary, such as the separation of traditional links as the prerequisite for a country becoming a developing country at all (Predöhl used the term in the positive sense of a country that begins to develop itself). He emphasises the importance of the development of agriculture and consumer goods industries as a necessary, but insufficient precondition (density of demand, technical capabilities, capital) for the successful development of an iron and steel industry, which alone can form the basis of an independent developmental core.

With the general change to a neo-mercantilist economic policy, the development opportunities for countries on the periphery have also become better because state management of the economy is a prerequisite for overcoming the immense difficulties of development. This management of the economy will be less probable to be reached by liberal political means the greater the resistance that must be overcome. If the resistance lies even in the state leadership of the countries themselves, then they cannot be overcome at all or only by revolutionary meansÓ (1963: 321). Due to the possibilities of state or state-promoted exports of capital, neo-mercantilism also creates better opportunities of financing. ÒThe funds of so-called development aid lead together with other means to an expansion of the world economic circulation and a stronger division of labour not only in the interest of the new countries, but also in that of the old countriesÓ (1967: 30).

A strong state which drives industrial development, supported by capital transfers from the industrialised nations – that is a constellation which really has enabled the rapid catch-up process of the East Asian tigers. According to Predöhls reflections it was to be expected, that the successes of development assistance in many countries remained limited – in view of the frequent lack of political and social prerequisites.


III. Impact

PredöhlÕs books Aussenwirtschaft (Foreign trade), Ende der Weltwirtschaftskrise (End of the world economic crisis) and Verkehrspolitik (Transport policy) (1957/1964) were very widely read among economists in the 1950s and 1960s. A number of his followers used the Predöhlian approach in examining world economic problems (Harborth, Voigt, Lemper), but the intellectual tide was not favourable for a historically spatially-oriented approach. Economic development theory focused on neo-classic or Keynesian approaches or the analysis and modelling at the sector or problem level, while the political science and sociological debate largely ignored the German historical school – which was disowned because of its dubious attitude towards National Socialism. Of the participants in the dependency discourse, which at least in its structuralistic shape shows considerable similarities to the Predöhlian approach, hardly anyone took notice of his works.

Despite occasional references to Predöhl, his name no longer plays a role in the debate on development theory, which is unjustified. He links the tradition of the historical school of economics with that of spatial economics. With his Weltwirtschaft (World Economy), he, like no other, built a bridge between both approaches to development theory. This enabled him to see the development problem as being a process of interdependent and uneven development, and at the same time as part of the long-term expansion of modern industrial structures. The dynamics of production locations – in terms of the competitiveness of specific economic activities within the framework of specific locational conditions – formed the focus of his analysis. At the same time, however, he also emphasised the role of local politics and of a transfer of resources to stimulate economic expansion. Besides, it is quite possible to separate the central elements of his concept of industrial gravitation fields from the sector of the iron and steel industry and relate them to what are now more important agglomeration-strengthening factors (see the Global City discussion and the significance of industrial districts). In all, the development in recent decades has confirmed PredöhlÕs expectation of more a liberal reintegration of the world economy, and also his scepticism with regard to overly strong restraint by state intervention in the case of industrialisation of the periphery.


Works by Andreas Predöhl

1925: Das Standortsproblem in der Wirtschaftstheorie [The location problem in economic theory], in: Weltwirtschaftliches Archiv, XXI, pp. 294-321

1928: Die örtliche Verteilung der amerikanischen Eisen- und Stahlindustrie [The local distribution of the American iron and steel industry], in: Weltwirtschaftliches Archiv, XXVII, pp. 239-292

1932: Die Industrialisierung Russlands [The industrialisation of Russia], in: Weltwirtschaftliches Archiv, XXXVI, pp. 456-475

1934: Staatsraum und Wirtschaftsraum [Political space and economic space], in: Weltwirtschaftliches Archiv, XXXIX, pp. 1-12

1949/1971: Aussenwirtschaft [Foreign trade]. Göttingen

1957/1964: Verkehrspolitik [Transport policy]. Göttingen

1962: Das Ende der Weltwirtschaftskrise [The end of the world economic crisis]. Reinbek

1963: Die sogenannten Entwicklungsländer in der Entwicklung der Weltwirtschaft [The so-called developing countries in the development of the world economy], in: Zeitschrift für die gesamte Staatswissenschaft, 119, pp. 312-327

1965: Gegenwartsprobleme der Weltwirtschaft als Aufgabe des Deutschen übersee-Instituts [Current problems of the world economy as a task for the German Overseas Institute]. Hamburg

1967: Gedanken zu einer Theorie der wirtschaftlichen Entwicklung [Thoughts on a theory of economic development], in: Jahrbuch für Sozialwissenschaft, Vol. 18, pp. 24-31


Works on Andreas Predöhl

– Harald Jürgensen (ed.): Gestaltungsprobleme der Weltwirtschaft [Problems of shaping the world economy], Festschrift für Andreas Predöhl. Göttingen 1964 – Hellmuth St. Seidenfus (ed.): In Memoriam Andreas Predöhl (1893-1974). VortrŠge und Studien aus dem Institut für Verkehrswissenschaft an der UniversitŠt Münster [Lectures and studies from the Institute for Transportation Economics, University of Münster], Issue 15. Göttingen 1975 – Wolfgang Hein: Konstitutionsbedingungen einer kritischen Entwicklungstheorie [Conditions for the constitution of a critical development theory], in: Franz Nuscheler (ed.): Dritte-Welt-Forschung [Third World research]. Opladen 1985, pp. 27-55 – Frank Omland: Das Institut für Weltwirtschaft in Kiel [Kiel Institute for World Economics] (Arbeitskreis zur Erforschung des Nationalsozialismus [Working group for research of National Socialism] in Schleswig-Holstein e.V.), www.theo-physik.uni-kiel.de/~starrost/akens.html (downloaded on 20.11.2002)



Dr Wolfgang Hein is a Senior Research Fellow of the German Overseas Institute in Hamburg. hein@duei.de