In this essay we are going to closely analyze the importance of Allyn A. Young's theory of increasing returns. In truth, we could also discuss his position on economies of scale, in that the analytical definitions suggested by the theory, as we shall shortly see, are not that helpful in understanding exactly what this writer meant by (the principle of) increasing returns: in fact, the latter are always linked to the more general, all-pervasive concept of economic progress, as is evident from the title of his most famous work. Young's contribution to the debate (one only has to think of the cost controversy of the 1920s) over returns and economies (and diseconomies) of scale, was in truth somewhat marginal. His only work that dealt with these questions, besides his 1928 celebrated paper (Young 1928), dates back to 1913, when in an important critical note (Young 1913), which we shall briefly analyze in section 2, he criticized a number of economic policy rules deriving from Arthur C. Pigou's (1912) famous work. To put it more precisely, Young did not have any substantial role to play in the construction and perfection of the neoclassical theoretical paradigm; in fact, as we argue in section 3, there is significant evidence to suggest that he was probably moving increasingly further away from such a position. The essence of Young's work, summarized in the article written in 1928, would seem to consist in the request for a theoretical redirection, in the analysis of the dynamics of capitalist economies, along the lines of some of the classical economists, thus carrying the various suggestions on this matter already present in Alfred Marshall's theoretical contribution to extremes. In sections 4 and 5, dedicated to the discussion of this article and of its appendix respectively, we maintain that the logic of Young's analysis is based on a multi-sectoral model subject to qualitative and quantitative transformations, i.e., to structural change. Such a view enables us to understand: (1) the author's emphasis on the proportionality among different productive branches needed in order to ensure balanced economic expansion; (2) the attempt (made by the author in the appendix to his 1928 article) to explain the dynamics of the economic system in the presence of different intersectoral growth rates. In the concluding section we maintain that it is the alternative nature of his position compared with the “standard theory”—the reference here is particularly to Pigou's transcription of Marshall's economics—that represents the main feature of Young's work.

My reflections are at least partly those of the child of an emigré who grew up to beome an economist. Since my father was an engineer from Germany's Barmen-Elberfeld textile city—also the city of Friedrich Engels—he clearly is not among the first generation of German scholars who were deprived of their professional positions as the Hitler regime came into power. Indeed, somewhat like Joseph Schumpeter, he came to America to grasp an opportunity rather than to avoid a threat. Like many of educated men of his generation, he was fluent in five languages and an ardent student of philosophy, history, and political economy. His move to America, after three or four trial visits, preceded my birth, because in those days before international air travel the seven day ocean voyage between Bremerhaven and New York was so daunting for a woman approaching childbirth that I was close to a year old before our arrival in America. My early childhood was uneventful except for the arrival of two siblings, and the only negative I recall from those early days was that I hated my first name, Ingrid (so carefully chosen by my parents), and longed to be called Jane, Anne or anything other than Ingrid.

The rise of European fascism in the 1920s and '30s triggered the greatest migration of intellectual capital the world has ever known. This paper is concerned with the German-speaking economists who formed the core of the original Graduate Faculty of the New School for Social Research. Among émigré economists of the interwar period, those who found refuge at the New School exerted a distinctive influence on American economics, partly owing to their concentration at a single institution, and partly by virtue of the character and quality of their work. The paper has three aims: to provide an overview of the contributions of these economists, to assess their impact on American economics, and to account for the apparent evaporation of their legacy after the onset of the Cold War.

Historians of economic thought, as well as the emigré subjects themselves, are profoundly indebted to Harald Hagemann and Claus-Dieter Krohn for their efforts in documenting the phenomena of German-speaking emigré economists.

The expulsion of the academicians from Germany, Austria, and other central European countries is for the history of social science as traumatic and significant an event as the bombing of Pearl Harbor was for the United States' naval fleet in the South Pacific. The Restoration of the Civil Service Act occurred on April 7, 1933, shortly after the National Socialists came to power. It ordered “disagreeable” persons to leave the Universities and was the harbinger of other “cleansing” that followed the German war machine into Austria, the Czech Republic, and so on. The start of this intellectual exodus occurred a whole eight years before the United States entered the war on December 7, 1941. The destruction of the American naval fleet by the Japanese air force in 1941 required a massive State-sponsored mobilization as the United States prepared for and entered the war in the Pacific. The destruction of social science in the German-speaking Universities started on April 7, 1933, and continued as the German armies moved eastward, resulting in no less than 328 dislocated economists who emigrated out of central and eastern Europe to rebuild their lives and academic reputations in other places, especially in the United States. As Hagemann has demonstrated, the United States “was the direct or indirect destination for some two-thirds of the German-speaking emigré economists” (Hagemann 2005). This “rebuilding” of lives, families, and scientific reputations is amazing in its magnitude and complexity and is also itself a topic for serious study and understanding within the sociology of the social sciences. Hagemann has made major contributions to the telling of this story (Hagemann 1997).