Edited By Ulrich Fritsche, Roman Köster and Laetitia Lenel
Few areas in economics are as controversial as economic forecasting. While the field has sparked great hopes for the prediction of economic trends and events throughout the 20th and 21st centuries, economic forecasts have often proved inaccurate or unreliable, thus provoking severe criticism in times of unpredicted crisis. Despite these failures, economic forecasting has not lost its importance. Futures Past considers the history and present state of economic forecasting, giving a fascinating account of the changing practices involved, their origins, records, and their implications. By bringing together economists, historians, and sociologists, this volume offers fresh perspectives on the place of forecasting in modern industrial societies, thereby making a broader claim for greater interdisciplinary cooperation in the history of economics.
The Economist as Futurologist: The Making and the Public Reception of the Perspektivstudien in Switzerland, 1964–1975: Marion Ronca
Marion Ronca (Universität Zürich)
The Economist as Futurologist: The
Making and the Public Reception of the
Perspektivstudien in Switzerland, 1964–1975
Abstract: In the 1960s, long-term studies of the future that forecasted the development of a country became fashionable in the Western world. Whereas certain countries prioritized a multidisciplinary approach, in which both economic development and social change were taken into account, others only considered the development of economic variables and in particular economic growth. The Perspektivstudien, which projected the future of Switzerland 30 years ahead, focused solely on the economic development of the country, implicating that political events had no impact on economic development in the long run. This contribution traces back the conceptualization of the economy as a separated sphere that was inherent to the Perspektivstudien and investigates the historical context in which they were created. This chapter shows that to understand the emergence of those studies, Keynesianism has to be taken into account as a governmentality in which the idea of a macroeconomic controllability prevailed. Furthermore, the contribution suggests to conceptualize those long-term forecasts not as mere descriptions of possible outcomes, but as performative economic knowledge that invented an a-historical future.
Keywords: Long-term studies, Swiss economy, history of economic thought, performativity of economic knowledge
In 1968, the Swiss government assigned the economist Francesco Kneschaurek to analyze and forecast the economic development of Switzerland up to the year 2000.1 This assignment laid the basis for the Perspektivstudien, which asked for a study group to investigate the “ideal and long-term” development of Switzerland. The motion also pointed to the necessity of a general planning of the country, but it remained ambivalent whether the requested studies should forecast or suggest concrete goals for planning the country’s future.2←75 | 76→
In an international context, neither the mandate nor the ambivalence of the request were exceptional. In the course of the reconstruction of Europe after World War II and the rise of macroeconomic governance, planning and forecasting became intertwined and widely accepted practices of economic policy3 (Laak van 2010, 4). At the same time, futurology as an interdisciplinary approach to investigate the future gained momentum at the end of the 1950s, which caused a growing interest in long-term studies of social and economic development (Seefried 2015). Despite the fact that futurology had its origins in the humanities, a strong connection between economic planning and futurology became apparent at the beginning of the 1960s. This was most notably in the case of France, where economic planning had been known since the end of World War II. In 1962, the Commissariat du Plan asked the “Groupe 1985,” which included experts from distinct fields such as economics, medicine, agriculture, business and construction, to determine the most important features of the French economy and society by the year 1985 (La Documentation française 1964). Under the impression of lasting economic growth, the French planning horizon was pushed from five years up to twenty years. Moreover, by commissioning an interdisciplinary group to investigate the future of the country, the Commissariat du Plan considered planning no longer only as a means to achieve macroeconomic goals. Instead, it was also envisioned to anticipate the challenges of social change4 (Quinet 1990, 44–46).
In the case of the United States, in the “Commission on the Year 2000” presided by the sociologist Daniel Bell, the interest in economic development was less pronounced. The study group rather focused on long-range social questions and possible shifts of values (American Academy of Arts and Sciences 1968). Other countries such as the Netherlands, Germany, and Switzerland, however, strongly prioritized the long-term economic ←76 | 77→and demographic development5 (Steinmüller 2000, 41–42; Seefried 2015, 313–24). As those studies had a long-term perspective they were– despite their economic focus – forced to make assumptions about the overall development of the country. They had thus to consider also the possible change of non-economic factors or to conceptualize social change as the result of economic development. In Switzerland, Francesco Kneschaurek, who was mandated with the long-term study to the year 2000, chose the second option. This decision was not only motivated by the final parliamentary request, which asked for prioritization of the economic development, but was also in line with Kneschaurek’s professional convictions. He relied on Neoclassical theory to make assumptions about the future, which traditionally conceptualizes non-economic factors either as constant or as exogenous6 (Persky 1990). In both cases, the economy is treated as a separate sphere that is supposed to evolve following inherent principles and is only sparsely affected by socio-political events.
The Perspektivstudien are a suitable research topic to historicize the emergence of long-term forecasts in the 1960s that focused primarily on the development of the economy. They enable historians to problematize the neoclassical concept as a general framework in long-term studies and to analyze its implications regarding processes of self-reflexivity in modern societies. Accordingly, this contribution traces the origins of the conceptualization of the economy as a separated sphere and shows its crucial role in the design of the Swiss Perspektivstudien. Furthermore, this chapter investigates the historical context in which the Perspektivstudien were created, the political setting and the processes that led to the mandate and the ←77 | 78→publication of the studies. By this means, the article aims to provide a better understanding of the overall emergence of long-term studies in the 1960s. Finally, the contribution explores the impact of the Perspektivstudien shortly before and during the recession of 1975 in order to explain the effect of this specific type of economic knowledge in the 1970s.
1. The Economy as a Separated Sphere
The conceptualization of the economy as a separate sphere is of vital importance to understand the emergence of long-term studies focusing on the macroeconomic development in the 1960s7 (Morgan 1990; Armatte 1992; Tooze 2001; Friedman 2014). Whereas it contributed to a specific understanding of social change during the 20th century, in which the idea of a development towards modernity was emphasized,8 the conceptualization of the economy as a distinct sphere was itself the consequence of a momentous socio-political change: the rise of capitalism. As Ellen Meiksins Wood argues in her seminal essay “The separation of the ‘economic’ and the ‘political’ in capitalism,” classical economics emphasized the economic aspects of capitalism over the social aspects, thereby “emptying capitalism of its social and political content” as it dealt with society in the abstract (Meiksins Wood 1995, 19, 22). Karl Marx, by contrast, considered the economy as a set of social relations and accordingly the mechanism of surplus value as a particular social relation between “appropriator and producer” (Meiksins Wood 1995, 21, 24). As Meiksins Wood argues, Marx’ conception of the economy did not deny that the rise of capitalism was accompanied by a process of differentiation of the economic sphere, in which production and distribution increasingly assumed an ‘economic form’ that Karl Polanyi later on qualified as disembedded ←78 | 79→from social structures. However, Marx regarded this process as a historically specific development that could only be understood by considering its social meaning (Meiksins Wood 1995, 25, 28).
Whereas classical economics mainly relied on the idea that the economy could be differentiated from the social sphere as a means to understand the functioning of markets, this conceptualization was put to a next level with the emergence of marginalist and neoclassical economics, in which the economy became further formalized strengthening the idea of economic laws9 (Taylor 1929, 4–8; Hodgson 2013, 30–31). The idea of a universally valid description of market mechanisms remained, however, contested, as the Methodenstreit between Gustav Schmoller und Carl Menger in the 1880s and 1890s showed. Whereas the former argued that the economy generally takes a specific historical form reflecting power relations and institutions, the latter claimed the existence of universal economic laws. The Methodenstreit addressed the question whether empirical or deductive methods are better suited to describe the economy, but pointed also to the role of history in the development of economy. The prevalence of the deductive approach, as it finally materialized in modern mainstream economics, strengthened the belief in universal economic laws and led, as Geoffrey Hogdson argues, to the spread of the conviction that markets and the economy as a whole can be explained without taking historical or cultural specificities into account (Hodgson 2001).
It can be assumed that the conception of a separated economic sphere was originally methodically motivated by the notion of the historical specificity of economic development and the interdependence, respectively the distinction of social and economic factors, which appeared as far too complex to be taken into account. As institutions and the political balance of power could be considered as stable in the short-run, this heuristic was helpful to understand the functioning of markets and methodically acceptable as a simplification. Applied in the long-run however,10 as can be ←79 | 80→found in growth models after 194511 (Solow 1956; 1957), the conceptualization of the economy was no longer a simple heuristic but became a deterministic assumption about economic development and gained thus a strong ideological component. It is no coincidence that those growth models, whether they were Keynesian or neoclassical, emerged in the context of Keynesianism, that is an era, in which the idea of a controllability of the economy spread and economic interventionism became generally accepted12 (Hall 1989; Schanetzky 2007, 87, 169; Schmelzer 2016). As growth models reduced long-term growth to the outcome of economic variables, they did not only perpetuate the conception of the economy as a separated sphere but became part of the Keynesian governmentality (Foucault und Lemke 2005, 1759:171–72).13
With the rise of Keynesiansim, the general understanding of the function of economic knowledge changed (Mitchell 2008).14 It was no longer ←80 | 81→perceived solely as academic descriptions and explanations of markets, but became increasingly understood as a strategic means to improve the functioning of the economy at a national scale.15 This new understanding augmented the «performative» power of economic knowledge, that is its ability to influence the way the economy and more generally reality was perceived (Callon 2006, 7, 8, 21).16 In this new understanding and by the increased application in politics economic knowledge became popularized. However, beyond academia economic knowledge circulated in a reduced form. In particular, the methodological considerations and restrictions that a had led to a conditional acceptance of the conceptualization of the economy as a separated sphere were no longer explicit. Thus, the idea that the economy could be understood in itself without considering social forces and historical processes became increasingly taken for a fact rather than a contestable methodological position.
The spread of the concept of the economy as a separated sphere during Keynesianism affected not only how the economy was perceived, but also the general understanding of the future, changing its meaning from an uncertain horizon to a projection screen. As such it altered also the meaning of history. Since the future was no longer uncertain, history as an unpredictable event became associated with the idea of a planning error, that is an outcome that could have been avoided. In 1970, the Swiss philologist Karl Schmid argued along those lines when he stated: “Geschichte erscheint nun beinahe als eine illegitime Kategorie, die durch planendes Denken eliminiert werden sollte. Ausdrücke wie ‘Macht des Schicksals’, ‘Gesetz der Geschichte’ und ähnliche sind heute kaum mehr angängig. ←81 | 82→Geschichte war einmal; was vor uns liegt, soll nicht Geschichte sein, deren Objekt wir wären – man will die Zukunft in den Griff bekommen und steuern können” (Schmid 1971, 707).
2. Future Perspectives for an Economically Underexplored Country
For Switzerland, the Motion Borel that requested long-term planning of Switzerland’s future and led to the subsequent Perspektivstudien, was a novelty in many ways. Up to the end of the 1960s, neither economics nor future studies had played a major role in the guidance of Swiss economic policy. Switzerland had not developed explicitly interventionist economic policies up to this point. Due to its corporatist and federalist form of government applying the principle of subsidiarity, the Swiss Federal state developed political instruments for demand management only slowly, and with a considerable lag, in comparison to other European countries. Up to the end of the 1970s, the competences of the state regarding the organization of the economy remained limited to the prevention of economic downturns and the fight of already on-going recessions (Prader 1981).
The constitution of the Swiss federal state and its limited economic competences explain largely why Switzerland had not founded a federal institute for economic observation before the 1930s. The 1932 established commission for economic observation (Kommission für Konjunkturbeobachtung KfK) worked only part-time and was essentially trying to find an agreement amongst its very different members that ranged from officials from different departments to representatives from trade associations and unions. Economists from academia were underrepresented during in the first two decades, not at last because there was – due to the restricted interventionist competences of the government – only little use for economic expertise. Furthermore, the lack of economic statistics made it very difficult for the KfK to keep pace with the economic observation as it was practiced on an international level.
Especially the absence of production statistics, which were not introduced in Switzerland before the 1980s, made it almost impossible for economists to get a real-time sense of the “pulse” of the Swiss economy. And it prevented the implementation of national accounts according to ←82 | 83→the international standard System of National Accounts that provided an internationally standardized template for national accounts and the calculation of the Gross Domestic Product (GDP) for decades. The absence of production statistics was less due to a lack of demand, but the result of a political power struggle between representatives of the state administration (especially of the Bundesamt für Statistik) and members of trade associations that had fought it very successfully since the 1920s. Thanks to their traditionally strong position in politics that eventually granted them a voice in legislative affairs, trade associations repeatedly managed to prevent the introduction of productions statistics (Ronca 2020).
Finally, another factor contributed to the fact that economic observation and forecasting developed with a considerable lag in Switzerland. Because of its marginal position and the lack of relevant statistics, economic observation remained a small academic niche with very little competition among economists. For decades, a single name dominated Swiss economic observation: Eugen Böhler. The economist at the Federal Institute for technology in Zurich (ETH) was a distinguished expert for economic policy and in particular for economic observation. Böhler, who was member and later on president of the KfK, founded a center for economic observation at the ETH in 1938 that rapidly took over the economic observation that formerly had been supplied by the KfK. Being member of almost all federal commissions concerned with economic policy, Böhler had a strong influence on the Swiss government and on the perception of the business cycle from the 1940s up to the end of the 1950s (Prader 1981, 189). Böhler started his career with a strong disposition towards theory and scientific progress. Throughout the 1950s, he continued to expect an imminent economic downturn17 (Kommission für Konjunkturbeobachtung 1957; Prader 1981, 189–92). Due to his influence inside the state administration, Böhler’s belief in the imminent return of the economic crisis of the 1930s ←83 | 84→contributed strongly to a political culture of crisis expectation. For a long time, this culture prevented the perception of the economic expansion of the post-war era18 („Bericht des Schweizerischen Bundesrats über seine Geschäftsführung im Jahr 1965“ 1965, 232, 239, 287).
The misinterpretation of economic expansion as a short-term boom that was supposed to last only for a couple of years became apparent only at the beginning of the 1960s. Estimations of the state department of public finances showed that state income and state expenditure had repeatedly and systematically been underestimated due to the expectation of an economic downturn or at least a “normalization”19 (Jöhr 1966, 11–12; Kleps 1967, 7, 31; Eisinger 1998, 72–73). Moreover, the existing infrastructure of the country proved to be less and less adapted to meet the needs of a growing population and the expanding business activity. This situation explains why no less than three parliamentary requests submitted in 1964 were concerned with the long-time consideration of the country’s economic future. While the “Interpellation Schürmann” suggested a long-term finance policy, the “Motion Heil” requested a long-term economic policy. The “Motion Borel,” finally, called for a study group to investigate the long-term problems of the country.20
The coincidence of the three parliamentary requests could be explained by a late and somehow brutal awakening of the country from its post-Great Depression trauma to face the challenges of growth. This interpretation, however, would not sufficiently take into account that the demand for “long-term” forecasting emerged internationally almost at the same point ←84 | 85→of time.21 Because of the lack of forecasting and planning in Switzerland up to this point, the Perspektivstudien, which emanated from the “Motion Borel” could not rely on pre-existing practices. This permits to analyze the emergence of these long-term studies as a specific historical moment when the development of the economy was established internationally as a leading variable for the overall future of the country.
3. The Motion Borel: Between Planning and Forecasting
While the “Interpellation Schürmann” and the “Motion Heil” had a clear economic focus, the “Motion Borel” as it was submitted to the Ständerat22 a couple of months later in 1964, was not restricted to economic questions. In his request to the Council of States, Alfred Borel rather emphasized the general difficulty of the country to meet the different political, economic and social challenges of the present and the future. He highlighted the need for important investments to improve the country’s infrastructure, its educational system, water protection as well as the development of nuclear energy. To determine the order of priority, the motion asked for a study group that should investigate the broad lines of an optimal long-term development.
The request did not explicitly mention future or prospective studies, as they were called in France since the end of the 1950s to distinguish them from short-term and extrapolative forecasts (Steinmüller 2000, 41). The wording of the request, however, suggests that Borel had the academic work of the French futurologists Betrand de Jouvenel and Gaston Berger in mind, whose work he cited in a newspaper article from 1967 (Borel 1967). As the request brought up issues from different political fields, it was at first not clear which department of the federal administration had to answer it. It was eventually passed to the Finance and Customs department of the federal administration since it emphasized the importance of future investments.23←85 | 86→
When the request was discussed in the Ständerat, it became clear that Borel had an almost exclusively economic focus in mind, which he had missed to make clear in the text of the motion. In his introduction to the Ständerat debate, Borel not only enumerated many examples of countries already practicing economic planning, but also harshly criticized the Swiss government for its reluctance to pass laws to fight the overheated economy.24 Borel made clear that the overall goal of his request was to determine a long-term policy of growth. He asked for an improvement of economic statistics, a determination of measures for economic planning, and an appropriate economic policy.25 This was surprising, as it did not correspond with the original motion and overlapped with the Motion Heil that had asked for a long-term economic policy. Moreover, as Borel did not communicate the focus of his request to the head of the finance department, this led to an incongruity between his introductory remarks and the statement of the finance department which essentially focused on financial planning. Nevertheless, the Ständerat accepted the request and passed it to the Nationalrat,26 which also accepted it but did not take Borel’s focus on economic development into account. The Nationalrat did, however, emphasize the necessity of studies considering the overall development of the country.27
After the Nationalrat had accepted the request, it was – despite its disputed focus – passed to the deputy for economic questions, Hugo Allemann.28 Allemann, an economist himself, argued that the mandate, ←86 | 87→should it lead to useful results within reasonable time, had to be limited to the economy. Allemann’s request implied an implicit assumption of a separated economic sphere that could be studied independently. This assumption became explicit in Allemann’s recommendation that the study group should consider non-economic factors such as technical progress or the structure of society only insofar as they had an actual influence on economic development.
Allemann did not make clear in which case non-economic factors had an influence on the economy and how this influence could be assessed. Instead, he merely argued that the general objective of the motion, the determination of the long-term development, could only be achieved by limiting the scope of the request.29 It is unclear whether Allemann made this suggestion for the sake of the feasibility of the request or because he was convinced that the Swiss future could be forecasted by only considering the economic development. The fact, however, that Allemann justified this decision by merely pointing to its feasibility suggests that the implicit conceptualization of the economy as a separated sphere was not controversial and that there was a consensus within the Federal Administration regarding the economic development as driving force of the society.
Focussing mainly on economic growth, Allemann proposed to mandate the professor for economics from the University of St. Gallen, Francesco Kneschaurek, who had distinguished himself as an expert for economic growth and forecasting as well as for future studies.30 In 1968, Kneschaurek had founded an institute for future studies at the university of St. Gallen and considered himself a futurologist and founded in 1968 the St. Galler Zentrum für Zukunftsforschung at the University of St. Gallen (Reyhl 1976). Kneschaurek remained true to his conviction that the future was overall projectable – even when future studies went out of fashion after the 1970s31 (Neue Zürcher Zeitung 1990). Already in the ←87 | 88→1950s, Kneschaurek was publicly known for advocating a perception of the economic boom as a growth process, that was quite different from Böhler’s pessimistic outlooks (Kneschaurek 1956; 1962; Kneschaurek, Kaufmann, und Geiger 1964).
The Bundesrat32 as well as the different state departments accepted Allemann’s proposition to study mainly the long-term development of the economy without major modifications. Only the department of finance requested that the study group should not include merely “theorists” but also welcome “realists,” indicating thereby a certain reservation towards growth theorists.33 Francesco Kneschaurek became the director of the study group that was composed of economists from his chair. Collaboration with exponents from other disciplines only took place in smaller ad-hoc working groups.34
4. The Perspektivstudien and the Swiss Economy as a Separated Sphere
The reports of Kneschaurek´s study group were called “Perspektivstudien.” The first edition of the Perspektivstudien appeared in eight parts between 1969 and 1972, a revised version was published between 1972 and 1973. The final report and summary followed in 1974.35 A second edition of the ←88 | 89→Perspektivstudien appeared in 1978, but was much less publicized than the former edition (Kneschaurek 1980, 46). Originally, the studies were supposed to be published as a final report at the end of the investigation, in order to test the coherence of its different parts. Kneschaurek and the federal authorities agreed, however, that it was preferable to publish the results of the different parts right away as they thought that the studies could benefit from discussions and critical comments (Arbeitsgruppe Perspektivstudien 1970, 1).
The Perspektivstudien attracted much attention from the media, but were also harshly criticized (Kneschaurek 1980, 46). Because of the negative publicity of the Perspektivstudien, the Federal council abstained from holding a press conference to present the results of the second edition, as it had been done for the first edition in the early 1970s. Kneschaurek himself was ambivalent towards the critique. While he acknowledged the importance of a public feedback and a critical discussion of the results, he hardly took the critique into account. Notably, he at first ignored the harsh but well-grounded critique of his colleague, the economist Walter Wittmann, and attacked him personally, calling his critique dilettantish and contradictory, without addressing the different points in question in detail (Kneschaurek 1972).
The conception of the economy as a separate sphere appeared in the Perspektivstudien in different ways. In accordance with Allemann’s request, the Perspektivstudien only considered economic factors: the development of the population and workforce, overall productivity, different economic sectors, the educational system and agriculture. Non-economic factors such as shifts in values or new demographic or educational trends were assumed to be constant. This became obvious in Kneschaurek’s understanding of the so-called “Leitbilder” (overall concepts that are supposed to guide an entity). As he explained, he based his forecasts on the currently existing economic and socio-political “Leitbilder” of Switzerland. Kneschaurek’s use of the expression “Leitbilder” was unfortunate, since Borel’s request had asked precisely for developing new “Leitbilder” with the help of the studies. Moreover, no such official «Leitbilder» existed in Switzerland, or at least many of them were competing with another, as Walter Wittmann observed in his critique of the Perspektivstudien (Wittmann 1972, 1).←89 | 90→
By using the term “Leitbilder,” Kneschaurek wanted to make clear that he relied on the ceteris paribus principle. He assumed the social sphere to be constant and had not the intention to investigate social change. This decision was at least questionable with regard to the Swiss immigration policy, since an intense discussion about the limitation of immigration took place at this very moment in Switzerland. A popular petition issued at the beginning of the 1970s asked to limit the quota of foreigners to maximum 10 percent. If the initiative would have been accepted in the referendum, it would have led to the expulsion of hundreds of thousands of non-Swiss residents and would have strongly influenced the demographic development. The close run of the referendum with 46 percent yes-votes against 54 no-votes demonstrated that there was no “Leitbild” regarding immigration in Switzerland that could be assumed to be constant at that time (Maiolino 2011).
Though Kneschaurek acknowledged that it was not possible to make forecasts of the development of the non-Swiss population by considering past development patterns, he did not abstain from forecasting the development of the foreign population in Switzerland, as other studies did. Instead, Kneschaurek simply assumed that the number of foreigners would stabilize in the long run (Arbeitsgruppe Perspektivstudien 1969, 41–42). For the development of the Swiss population, Kneschaurek relied on models of democratic transition which predicted a continuous decline of the birth rate for industrial nations. Doing so, Kneschaurek neither took the ongoing value change of 1968 into account nor possible variations of the birth rate in relation to the growing female workforce participation (Arbeitsgruppe Perspektivstudien 1969, 17). Overall, Kneschaurek expected the Swiss population to grow from 5.9 million in the year 1965 to 7.5 million by the year 2000 (Arbeitsgruppe Perspektivstudien 1969, 59).
Retrospectively, this forecast proved to be accurate since the overall population of Switzerland counted 7.164 million inhabitants in the year 2000. This accuracy was, however, less the result of a correct population model rather than of Kneschaureks conviction that the number of non-Swiss residents and the overall situation would stabilize in the long-run. Retrospectively, this is surprising given the context of the cold war as well as of the experience of major global conflicts in the first half of the 20th century.←90 | 91→
That Kneschaurek based his forecasts on an implicit concept of economic development rather than on the assessment of individual economic and non-economic factors, became especially clear in his second report on the development Swiss economy. Kneschaurek had previously been criticized for not taking political factors into account36 (Arbeitsgruppe Perspektivstudien 1970, 13). So he decided to make explicit why he shared the conviction that the impact of non-economic factors could be ignored. In a first step, Kneschaurek acknowledged that non-economic factors such as political events had had an effect on the development of the economy during the last 25 years. In a second step, however, he argued that those events counterbalanced in the long-run so that it was not necessary to take them into account (Arbeitsgruppe Perspektivstudien 1970, 13). To illustrate his assertion, Kneschaurek added a graphic to the second volume of his study that showed the development of the Swiss GDP starting from 1946 to 1968 and amended what he called the most important events of global relevance. With an additional dotted-line, Kneschaurek traced the general trend of the Swiss economy, showing that the non-economic factors overall counterbalanced each other.
Fig. 1: “The Development of the Swiss Economy in the Light of the Most Important International Events since 1946.”
Source: Arbeitsgruppe Perspektivstudien (1970), 24.
As Kneschaurek stated, it was remarkable that those numerous global events had in sum almost no influence on the Swiss economy (Arbeitsgruppe Perspektivstudien 1970, 22). It seems obvious that the graphic served primarily as a justification for his methodology. It started precisely in the year 1947, when the Swiss economy had recovered from World War II, and was moving on a remarkably steady growth path. This had not been the case in the first half of the century, as Kneschaurek knew from his doctoral thesis on the Swiss business cycle from 1929 to 1939 (Kneschaurek 1952). Kneschaurek did not explain by which criteria he had selected the “most important events” of global relevance and how he assessed and isolated their assumed effects on the economy.
Kneschaurek did not explain his methodology in detail, but he reacted strongly regarding the critique that he had merely extrapolated historical trends. As he objected, the forecasts of the Swiss economy were not based on statistical extrapolations but resulted from international ←91 | 92→comparisons37 (Schaffhauser Nachrichten 1972; Wittmann 1972, 1). Kneschaurek used many graphs to demonstrate historical trends in his reports, but it seems nevertheless probable that he used historical data and trend extrapolation to historicize the economy and to assess possible developments. To forecast the Swiss GDP up to the year 2000, Kneschaurek could, however, not use trend extrapolation since there were no data series for the national production available. Kneschaurek instead used a simple production function which derived economic growth from the increasing employment rate and increasing productivity (Arbeitsgruppe Perspektivstudien 1970, 31). To determine the future productivity of Switzerland, Kneschaurek took the past productivity ←92 | 93→development of the USA, which he implicitly perceived as the highest developed country. He assumed, that Switzerland would follow the economic development path of the US with a time lag, disregarding the individual features of the Swiss economy.38 (Arbeitsgruppe Perspektivstudien 1970, 40)
Kneschaurek thus had – whether consciously or unconsciously – a “modern” conception of economic development, in which the United States were considered the highest developed country and a model for reaching modernity other countries such as Switzerland should follow (Wehler 1975, 12). Using past productivity records of the U.S., Kneschaurek expected the Swiss productivity to slow down as it had happened in the United States. Accordingly, he forecasted that Switzerland’s annual growth rate would drop from 4.6 percent to 3 to 3.5 percent in average (Arbeitsgruppe Perspektivstudien 1970, 21, 37–38, 43).
5. A Switzerland of 10 Million Inhabitants
Kneschaurek and the federal administration wanted to initiate a discussion about the future of Switzerland by publishing the results of the different reports right away. By doing so, they acknowledged that the forecasts of the Perspektivstudien could have an effect on the development of the country. They expected, however, that this effect would primarily materialize in political debates on future planning. The media coverage was accordingly of great relevance for the overall debate of the projects results (Arbeitsgruppe Perspektivstudien 1970, 3–4). The Perspektivstudien received a lot of media attention, as they were the first Swiss studies forecasting the future over a period of thirty years. Furthermore, the repeated publication of the reports from 1969 to 1974 and the set of press ←93 | 94→conferences that emphasized the importance of the results contributed to the fact that the Perspektivstudien remained a talking point for years (Weber 1970). When Francesco Kneschaurek became the new deputy for economic questions (Delegierter für Konjunkturfragen) in 1973, replacing Hugo Allemann, the Perspektivstudien got even more publicity. This was especially the case because Kneschaurek’s double function as forecaster and top-ranking official for economic policy was controversial (Basler Nachrichten 1973).
As Kneschaurek noted in his second report about the development of the Swiss economy, most newspapers gave a correct account of the published reports. In some cases, however, some of the results were incorrectly reproduced or falsely interpreted. The decreasing growth rate of economic wealth, for instance, was taken as evidence of generally decreasing wealth. This reactivated the fear of an economic downturn (Arbeitsgruppe Perspektivstudien 1970, 3). Generally, the newspapers interpreted the results of the study as alarming, even those which reproduced Kneschaurek´s forecasts correctly. The Neue Zürcher Zeitung worried about the slowing growth rate of the Swiss wealth (Neue Zürcher Zeitung 1970). The Basler Nachrichten qualified Kneschaurek’s forecast of the development of population and employment as indicating a “catastrophic labor shortage” (Basler Nachrichten 1970). The Aargauer Tagblatt started their article with Kneschaurek’s own words of a “keineswegs ermutigende Prognose” (Aargauer Tagblatt 1970).
These reactions were not only expected by Kneschaurek and Allemann, but intended. They inaugurated the first press conference with the confession that they had intentionally tried to shock the audience by presenting forecasts in an alarming way and that they wanted to wake the Swiss people from their lethargy (Berner Tagwacht 1970). Kneschaurek and Allemann thus communicated their forecasts as worst-case scenarios to prevent undesirable developments. This, however, contradicted Kneschaurek’s implicit development model, which promulgated an evolutionary process towards modernity supposedly valid for all countries. Moreover, in Kneschaurek’s and Allemann’s dystopic conceptions, the ambivalent character of the original mandate between planning and prediction became again apparent. The forecasts were presented both as a future to come and as a future that should be prevented by planning it.←94 | 95→
In 1974, the public perception of the Perspektivstudien started to change. Firstly, newspapers did not comment on the expected slowdown of the economic growth rate anymore, although Kneschaurek expected an even smaller growth of rate of 2.6 to 3.2 percent for the Swiss economy by the year 2000 in his revised report of January 1974 (Arbeitsgruppe Perspektivstudien 1974, 77). This can possibly be explained by the fact that the revised report did not get the same attention as the first one. The final report that followed a couple of months later contained hardly any numerical forecasts anymore, but focused on the description of the expected structural problems of the Swiss economy. Accordingly, the newspapers summarized the main statements without taking up particular aspects. Only a few articles honored Kneschaurek’s work that now came to an end (Böckli 1974; Keller 1974; Stauffer 1974). Others, however, questioned the general usefulness of the Perspektivstudien in the light of imminent problems such as inflation or the oil crisis (Meyer 1974). The public, it seems, had grown tired of the Perspektivstudien when the final report was released in August 1974.
At the end of the year 1974, however, when a severe economic recession hit Switzerland, Kneschaurek and his Perspektivstudien received again a lot of media attention. The rapidly worsening economic situation triggered a discussion about the “culprit” of the crisis. The building industry was hit particularly hard by the recession and experienced a dramatic downturn of demand that resulted in a fall in employment of 40 percent. Kneschaurek, who had been appointed Deputy for economic questions in 1973, attributed this overcapacity to a poor planning by industry. He explained that constructors had made the mistake to extrapolate the growth rate of demand of the last couple of years. As he argued, there was no possibility to get back to the pre-crisis equilibrium. The building industry had therefore no other option than to adjust their supply to a realistic amount (Basler Nachrichten 1975).
The problem was, however, that Kneschaurek had never – neither in his forecasts nor in his role as Deputy for economic questions – pointed to the possibility of an imminent recession that would force the building industry to reduce their supply dramatically. Therefore, exponents of the industry refused to be blamed for their situation and stroke back by accusing Kneschaurek for having forecasted a population of 10 million ←95 | 96→inhabitants in Switzerland by the year 2000. Among Kneschaurek’s harshest critics was the building contractor and national councilor Karl Flubacher, who expressed his deep contempt towards the economists who advised the Bundesrat in a talk at the annual conference of the association of the master carpenters in 1975:
„Der Schaden, der durch wirtschaftsfremde Theoretiker angerichtet wurde, ist wesentlich grösser als der Erfolg (…). Allzulange hat sich der Bundesrat bei seinen Entscheidungen auf den Rat wirtschaftspolitischer Technokraten verlassen. Während die Propheten die These von 10 Millionen Einwohnern im Jahr 2000 verkündeten und sich heute davon absetzen, macht man uns den Vorwurf, wir hätten zu vielen Wohnungen gebaut. (…) Viele wurden durch die falschen Bevölkerungsprognosen zu Fehlinvestitionen verleitet. Die Warnungen unsererseits, dass der Wohnungsmangel – aus politischen Gründen – stark übertrieben wurde, verhallten ungehört. Erst als man in den städtischen Agglomerationen Tausende von Leerwohnungen feststellte, zog man die Alarmglocken und suchte prompt Sündenböcke, aber am falschen Ort. Sie wurden nämlich von jenen Leuten gesucht, die selbst für die Misere verantwortlich sind“ („Die Widerwärtigkeiten der heutigen Zeit“ 1975, 643).
Flubacher did not name the Perspektivstudien and Kneschaurek personally, but pointed to the general practice of economic advising and forecasting, which he made responsible for decisions that went against the market expertise of the building industry. Flubacher’s critique shows that not the individual results of the Perspektivstudien, but the general practice of forecasting had contributed to the idea that the post-war prosperity would last forever. This became particularly clear in the case of the figure of 10 million inhabitants, which did not stem from the Perspektivstudien. The 10 million inhabitants represented precisely the idea that the population growth rate of the 1960s would persist and with it the high demand for apartments and consumption goods that that had boosted the Swiss economy. The figure of 10 million inhabitants was thus a metaphor for a stable growth path, in which the future became stabilized as a prolongation of the present state.
The practice of long-term forecasting relying only on the development of economic variables such as productivity and the workforce created thus a reality, in which institutions, political power relations as well as the conditions of world markets were assumed to be stable, thus discarding social change as a driving force. Since this projected reality inspired ←96 | 97→investment decisions, it became performative, changing the overall orientation of economic actors towards the future, and thus their decisions and actions. Their disappointment vis-à-vis the outburst of the crisis, in turn, cast doubt on the expertise of economists and the government and thus affected the political power relations in place.
Although the figure of 10 million inhabitants did not appear in the Perspektivstudien, the accusation that Kneschaurek had put it in circulation was taken over by newspapers and spread quickly (Walliser Volksfreund 1975, 13). The Perspektivstudien also came under attack politically by a parliamentary request that questioned their usefulness, alluding to the fact that the forecasts had to be readjusted repeatedly. Kneschaurek asked the Chancellor of the Confederation for an official clarification.39 In his cover letter that accompanied his request for clarification, Kneschaurek noted that neither he nor his team had ever forecasted a population of 10 million inhabitants.40 In a session of the parliament, the Federal Councillor and head of the economic department of the state, Ernst Brugger, declared accordingly that Kneschaurek never had forecasted a population of 10 million for Switzerland for the year 2000 (Brugger 1975, 656). Unfortunately, it turned out that Kneschaurek had once referred to the possibility of a Switzerland with 10 million inhabitants in a paper of 1962 (Die Tat 1975, 1).
The somehow odd recurrence of the figure of a Switzerland of 10 million inhabitants shows that economic long-term forecasts of the 1960s and 1970s cannot be conceptualized as mere descriptions or projections of an actual state of the economy that help political elites to anticipate unwanted developments. Instead, they have to be considered as performative, as they contributed to an overall idea that the future state of the economy could be projected and that its development was solely relevant to foresee the future of the overall society. Economic knowledge that relies on the conceptualization of the economy as a separated sphere to predict the long-term future of societies constructed a deterministic, a-historical ←97 | 98→reality that disconnected actors from short-run events and changes. The readiness to accept those studies and their methodical assumptions must be seen in the context of Keynesianism, in which after the experience of the Great Depression the idea that the economy could be controlled by demand management prevailed.
To understand the emergence of long-term studies and their temporary spread, Keynesianism has to be understood as a governmentality in which not only Keynes’ macroeconomic concepts, but also practices and institutions of the post-1945 nation-states supported and idealized the undertaking of a macroeconomic management that led eventually to a belief in the controllability and therefore predictability of the economy. The focus on the economic development, however, cannot be explained only by the emergence of Keynesianism. The Cold War and in particular the growing competition between capitalist and socialist countries, too, contributed to a prioritization of economic development and led to an obsession with economic growth rates and a neglect of the role history. It has thus a certain irony that the a-historical conceptualization of the economy as a separated sphere that reached an ideological summit with the emergence of long-term economic forecasts turned them into history with the outbreak of the economic crisis of the 1970s.
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1 Pressemitteilung der Schweizerischen Bundeskanzlei vom 21. Februar 1968, BAR E1010B#1986/151#181#.
2 Motion Borel (97170), vom 18. Dezember 1964, BAR, E1070#1974/32#1080*.
3 According to Dirk van Laak, the idea of planning as a state practice appeared in the context of the authoritarian High Modernism, that is from the beginning of the 20th century to the end of World War II, encompassing both world wars and the great depression and spread after 1945 in the context of the reconstruction.
4 Whereas the first plan contained no macroeconomic goal, the plans from 1954 to 1957, 1957 to 1961 and 1962 to 1965 asked for economic growth amongst others.
5 In the Netherlands, the economist Jan Tinbergen directed the Centraal Planbureau and started in 1955 to realize future studies. The German government mandated the private company Prognos that was specialized in economic forecasting for studies about the development of the German population and economy.
6 Classical economists adopted the term “ceteris paribus” first used by William Petty in the 17th century to make clear that they assumed “all other things” that is non-economic factors that account for social change to be constant. It was then spread by Alfred Marshall in his Principles of Economics. Correspondingly Robert Solow conceptualized technological progress in his neoclassical growth model as exogenous to avoid formalizing it in purely economic terms.
7 In contrast with long-term studies, short-run economic forecasts go back at least to the 1920s when numerous business cycle institutes and economic services released forecasts on a regular basis.
8 This idea of an overall development of mankind towards modernity appears particularly clearly in Walt Rostow’s “The stages of economic growth” in which the author conceptualizes social change as a mutual reinforcement of technological progress and increased economic output leading to new social forms (Rostow 1960).
9 Whereas the idea that economic actions are ruled by “natural laws” can be traced back to antiquity but remained implicit in the classical writings, it became explicit by the marginalist and neoclassical endeavor to formalize economic behavior such as scientific laws.
10 A long-run economic development is considered as a period of one or several decades.
11 Whereas the Harrod-Domar model treated long-term growth as the outcome of investment and capital stock, the Solow-Swan growth model added technical change as explanatory variable to the Harrod-Domar model. But Solow treated technical change as a residual and did not further conceptualize it or investigate its origin. The model remained thus stuck in the general framework of a separated economic sphere.
12 Many Western countries applied Keynesian principles of anticyclical demand management to different degrees and at different points in time depending on their institutional setting, their political agenda and not last the status and influence of economic experts. However, as a significant number of countries adhered somehow to policies inspired by Keynesian theory and identified with the growth policy of the OECD that presupposed the possibility of growth planning, a general belief in the controllability of the economy can be assumed for the three decades after 1945.
13 The term governmentality refers here to the Foucauldian concept of an ensemble of institutions, procedures, analyses and ideas that secure and perpetuate an economic order and legitimize specific policies. Whereas Foucault spoke of a governmentality of neoliberalism to point in particular to the aspect of the individual internalization of neoliberal values, I argue that Keynesianism, too, can be considered as a governmentality in the Foucauldian sense, since the prevalence of Keynesian policies cannot be explained only by Keynes’ theoretical concepts. However, it also has to be understood as the convergence of different ideas, values, and technologies of the nation state that gained momentum after World War II such as national accounting, unemployment assurance, economic planning etc.
14 According to Timothy Mitchell “the economy” was invented as an object only mid-20th century. Although this article doesn’t follow Mitchell’s claim of the late invention of “the economy,” it shares its understanding of the increased meaning of economic knowledge in the context of Keynesinism when it became increasingly used in a strategic way and in the believe that the economy could be managed in the way of a company.
15 The idea that economic knowledge could be used a strategic means emerged with early concepts of scientific management already at the beginning of the 20th century. With Keynesianism the concept that economic knowledge could be used to regulate and plan the economy spread at a national level.
16 According to Michel Callon’s concept of performativity economic concepts should be understood as programs altering the way how reality is perceived and thus changing the way actors behave.
17 Böhler was among the first Swiss economists to embrace John Maynard Keynes’ General Theory and to promote keynesianism within the KfK. Although Böhler made hardly no original contribution to economic theory he kept up with the development of economics, taking up new economic theories and methodologies. This became amongst others apparent in his text book he continuously revised.
18 This culture of crisis expectation appeared distinctly in the figure of the deputy of work provision. This role had been institutionalized during the great depression, but remained in place up to the mid-1960s when it finally became converted into a deputy for economic fluctuation since the lasting economic growth made the role of a deputy for work provision appear superfluous.
19 This misperception of the economic development became particularly apparent when the state department of public finances underestimated repeatedly state income as expenditure.
20 Interpellation Schürmann vom 23. September 1964, Nationalrat Herbstsession 1964, BAR E6100B-01#1980/#198*, Nationalrat. Herbstsession. Motion Heil. Langfristige Konjunkturpolitik, in: Amtliches Bulletin der Bundesversammlung, 1964, 406, Motion Borel vom 18. Dezember 1964, BAR E1070#1974/32#1080*.
21 See introduction and footnote 8.
22 The Ständerat is the upper house of the Federal Assembly of Switzerland.
23 Stellungnahme des Finanz- und Zolldepartements zur Motion Borel betreffend die Schaffung einer Arbeitsgruppe zum Studium der langfristigen Landesprobleme, 23.01.1967, BAR E1070#1974/32#1080*.
24 Ständerat Wintersession 1965. Auszug aus dem stenographischen Protokoll der Sitzung vom 30. November 1965. 9170 Motion Borel. Arbeitsgruppe zum Studium der langfristigen Landesprobleme. BAR E1070#1974/32#1080*.
25 Ständerat. Wintersession. Auszug aus dem stenographischen Protokoll der Sitzung vom 30. November 1965, S. 5, BAR E1070#1974/32#1080#, p. 4.
26 The Nationalrat is the lower house of the Federal Assembly of Switzerland. Together with the Ständerat, they form the Swiss legislative.
27 Kommission des Nationalrates für die Behandlung der Motion Borel – Arbeitsgruppe zum Studium der langfristigen Landesprobleme, Protokoll der Sitzung vom 1. Februar 1967, S. 5, 7, BAR E1070#1974/32#1080*.
28 Schreiben des Vorstehers des Finanz- und Zolldepartements Roger Bonvin an den Vorsteher des Volkswirtschaftsdepartements Hans Schaffner vom 19. April 1967 betreffend die Motion Borel; Arbeitsgruppe zum Studium der langfristigen Landesprobleme, BAR E6100B-01#1980/150#198*.
29 Notiz für Herrn Dr. K. Huber, Generalsekretär des Eidg. Volkswirtschaftsdepartements vom 27.9.1967, BAR E7296A#1994/333#431*.
30 Bericht und Antrag über das weitere Vorgehen i. S, Motion Borel von Hugo Allemann an den Bundesrat vom 29. Dezember 1967, S.5, BAR E4110B#1986/81#248*.
31 In his valedictory lecture “Der Griff nach der Zukunft” of 1990, which Kneschaurek titled after the German futurologist Robert Jungk’s writing, he tried again to promote the importance of future studies and to defend it against wide spread objections.
32 The Bundesrat is the Swiss executive.
33 Bericht und Antrag über das weitere Vorgehen i. S. Motion Borel, Mitbericht des Eidg. Finanz- und Zolldepartements zum Antrag des Eidg. Volkswirtschaftsdepartements vom 29. Dezember 1967, BAR E 7001C#1982/118#1626*.
34 Beschluss des Bundesrates bezüglich des Expertenauftrag an Prof. Rotach vom 22. März 1968, BAR E7001C#1982/118#1626*, Schreiben der Schweizerischen Bundeskanzlei an die Departemente und Abteilungen vom 7. Mai 1968, BAR E7296A#1994/333#431*.
35 The first report focused on the development of the population and the workforce, the second on the development of the economy, the third on the sectoral development of the industry and the last five reports respectively on the development of the agriculture, the education, transportation, energy and construction (Kneschaurek 1980, 39).
36 Kneschaurek was accused of assuming a standstill of the political discussions or a neutralization of all non-economic factors.
37 It was mainly the economist Walter Wittmann who accused Francesco Kneschaurek of using only extrapolation of time series and of not considering the accelerated change.
38 With regard to the USA, Kneschaurek wrote: „Die USA werden doch im allgemeinen als das Land mit dem fortgeschrittensten Stand der Technik und der ausgeprägtesten Unternehmerdynamik bezeichnet, in welchem die Rationalisierung, Standardisierung und neuerdings Automatisierung besonders grossgeschrieben werden. Es kommt nicht von ungefähr, dass man selbst von einem ‘technological gap’ oder von einem ‘managereal gap’ zwischen den USA und den industriell am weitesten fortgeschrittenen Industrieländern Westeuropas spricht.“
39 Einfache Anfrage Ganz vom 30. Januar 1975, Frühjahrssession des Nationalrates, Amtliches Bulletin der Bundesversammlung, Bd. II, 1975, p. 589.
40 Notiz von Francesco Kneschaurek an den Bundeskanzler vom 19.02.1975, BAR E1010C#2009/102#53*.