Intellectuals & Academics » Economists » BERTIL GOTTHARD OHLIN
|Full name||: Bertil Gotthard Ohlin|
|Alias||: Bertil Gotthard Ohlin|
|Address||: Klippan, Scania|
|Animals||: The Pig|
|Children||: Anne Wibble|
|Education||: BA University of Lund (1917) MA Harvard University (1923) PhD Stockholm University (1924)|
Born on April 23, 1899, Bertil Ohlin was the founder of the modern theory of dynamics of trade. His research on international trade and capital movement proved to be a turning point in his life. Due to Ohlin’s works and theorems, Economics was taken to a higher standard and recognition was brought to it. The Heckscher-Ohlin model faced many criticisms and finally, suitable credit was given to it. Ohlin cultivated his love for numbers and trade at an early age and this made him a successful economist and a scholar. The Nobel Prize that Bertil Ohlin earned was purely based on his wisdom. Apart from his academic interests, Ohlin was also keen on the politics of the nation. He served as the leader of the Swedish Liberal Party for 20 years with commendable contributions towards the country’s growth and development. Other than his professional life, he was certified by his colleagues, as being notoriously handsome and charming.
Ohlin served as a professor at the University of Copenhagen and eventually succeeded Eli Heckscher at the Stockholm University. This Swedish economist built upon the earlier work by Heckscher and worked on a thesis about theory of international trade, which later came to be known as the Heckscher-Ohlin theory.
According to this hypothesis, trade between two countries is proportionate to relative amounts of capital and labour of the respective countries. In nations where there is an ample amount of capital, wage rates are high and so they engage in capital-intensive productions and export and labour-intensive goods for import. It is based on this commutation that the nature and international trade are decided. Accordingly, in case of a country rich in labour, labour-intensive production in import and capital-intensive for export is opted for.
The Heckscher-Ohlin model exhibits the relationship between the relative advantage and the shared features of capital and labour of that particular country and the differences, which take place in them with time. Apart from that, research was conducted on the significances of the protection of real wages as a result of the Heckhscer-Ohlin model.
Being a member of the Stockholm School, Ohlin developed a theoretical treatment of macroeconomic policy and dwelled on the importance of aggregate demand.
In 1922, Bertil visited Cambridge after receiving a small stipend from the Swedish-American foundation and thereafter, to Harvard University. Following this, he wrote some books the on the laws of production for the university but never got it published since his friend, Frisch, came up with a superior analysis. After two months at Cambridge, Ohlin returned to Sweden with the lectures of D.H. Robertson in mind. His thesis was prescribed in English but he gradually translated and published it in Swedish. He earned his Doctorate degree and the position of assistant professor in 1924.
In 1933, he earned recognition through his book, Interregional and International Trade. Taking the help of his teacher, Heckscher, he proved that international trade occurs since commodities can move quickly and rather easily compared to the labour, capital and land which produce them. This implied that a country with a comparatively abundant element of production should export goods that intensively use that factor and should engage in import of those factors, which are relatively scarce. Eventually economists indicated that this would be true only for a world with just two goods.
Impressed with his work, in 1936, Ohlin was asked to deliver the Marshall Lectures at Cambridge. Here, he summed up the Swedish theory and made comparisons to Keynes’ work. Parts of his lecture were issued in the Economic Journal in 1937, called The Stockholm Theory of Saving and Investment. Later, this theorem was discussed with Keynes, D.H Robertson and R.G. Hawtray. A volume on International Economic Reconstruction was published by Ohlin, as a part of an investigation into world economic problems by the International Chamber of Commerce and the Carnegie Endowment for Peace. In 1938, Bertil became a member of the Swedish Riksdag and continued to teach at the Stockholm School of Business.
Ohlin became the political leader of the Liberal Party after 1944. He continued his career as a teacher from 1945-1965 and stayed on as party leader until 1967. As leader of this party, he accepted social reforms but rejected nationalization of the Swedish industry. Ohlin was disturbed with the notion that before 1970, there was no nationalization in Sweden. In 1968, a constitutional reform ended the Swedish two-chamber system that was prevailing and it led to a position of 50-50 in 1973 and a non-socialist majority in 1976.
As a party leader Ohlin wrote his thoughts in the form of articles and contributed to leading Swedish newspapers. He published almost 1200 articles between 1919 and 1977. He left Riksdag in 1970 and dedicated his time to scientific articles and lectures. The thoughts based on these works were useful in the monetary theory and the distribution of income and the protection of wages and economic issues.
Problem of Employment Stabilization
The future of the world price level
Interregional and International Trade
The son of the district attorney, Bertil was born to an upper-middle class family in a village located in Sweden. He was given private lessons and went to preparation school for a year, before he entered regular schooling. Ohlin passed his Bachelor's degree from the University of Lund in Hälsingborg. His favourite subject was mathematics, since he was interested in calculations from the age of 5. Inspired by the writings of a professor, Eli Heckscher, at the Stockholm Business School, Ohlin insisted on pursuing his studies there. He completed his post-graduation in M. A. from Harvard University in 1923. Later, he worked for the State Tariff Committee.
Bertil Ohlin died on August 3 in Åre Municipality at the age of 80.
An institute called Stiftelsen Bertil Ohlin Institutet (1933) was opened in this famous economist’s name. It was built to initiate research and carry out debate in areas of public policy in the tradition of liberal thinking.
Ohlin’s biggest contribution was in the subject of Economics. In 1933, he altered and elaborated the economic theory written by Heckscher on international trade. He called this book ‘Interregional and International Trade’. This expanded theory of Ohlin on foreign trade and got its recognition through the Heckscher-Ohlin model.
The Swedish economist received the Nobel Prize in Economics, jointly with James Meade, in 1977. Specifically, he was bestowed with this award for his research on international trade and international capital movement.