Introduction

The title of this chapter – ‘Why Economists Disagree’ – takes its name from Fritz Machlup's speech before the American Philosophical Society on 12 November 1964, five months after the fourth Bellagio Group conference. In his speech, Machlup explained his decision to bring together economists from eleven countries, many of them chosen because they were well-known advocates for divergent, often feuding, schools of thought on the problems and solutions to problems facing the international monetary system in the 1960s, for an ‘inquiry into the sources of disagreement on international monetary prescriptions’. Like scientists, Machlup said, ‘Economists also have an exact-construct world, created for purely theoretical analysis; but no outsider cares what they do with it or appreciates the broad agreement of the analysts about the theoretical system that constitutes their discipline. The economists’ work becomes known only where it deals with the real-life world, in which most things are unknown and almost everything is uncertain’. Machlup was interested in a process whereby participants would collaboratively define the problem they wanted to solve, examine possible solutions in light of the desired outcome, and allow themselves the freedom to consider hybrid or compromise solutions. The group that came to be known as the Bellagio Group met eighteen times between 1964 and 1977 in Bellagio at Lake Como, Washington, DC and Princeton, as well as in nine European centres.

We have set out in this study to explore an old question from a new perspective. The relationship between migration and urban change in Europe's long nineteenth century has already been the subject of considerable scholarly attention and debate. While recent historiography has dismissed the once powerful image of urbanization as a one-off transfer of impoverished villagers to overcrowded cities, this work has instead stressed the complex nature of migration patterns, the strong degree of continuity with earlier migration traditions, and the relative success of urban migrants. Yet, however illuminating these revisions have been in many respects, it remains difficult to reconcile their emphasis on continuity and success with the speed and intensity of societal disruption that was taking place in Europe's long nineteenth century. This study therefore aimed to re-explore the dynamics of urban migration by combining an elaborate conceptual framework with an instructive case study in a way that could address and transcend the paradoxes of continuity and change, of structure and agency, and of winners and losers. The setting of the case study was the city of Antwerp in present-day Belgium between 1760 and 1860, when it changed from a medium-sized textile centre to a booming international port town – a setting which was deemed particularly relevant because of the profundity of societal change, and because of the availability of exceptionally rich source materials which allowed us to reconstruct the main dynamics and compositions of urban migration flows over a century-long period. What, then, has this specific case study taught us with regard to the relationship between migration and urbanization in the transition from pre-industrial to industrial society, and with regard to the limits, constraints and dynamics of migration as an adaptive strategy in periods of structural social change?

A first general dynamic that was confirmed by the case study is that push and pull conditions at macro level were a main determining force of migration change, by shaping the main constraints and opportunities within which households and individuals operated.

Introduction

There are significant parallels between the calls for monetary system reform in the 1960s and those for reform following the financial crisis of 2008–9. Efforts at reform continue into 2012. The system attributes (gold versus fiat, fundamentally fixed versus managed floating) are different, as is the size of the deficits, from 1 per cent or less in 1960 to over 10 per cent of GDP in the aftermath of the 2008–9 financial crisis. While no attempt has been made to revisit the numbers, the question of confidence in the system and the credibility of policymaker response has been everywhere in this book.

Whatever the value of hindsight provided by ex post analysis, there is no question that many policymakers and academic economists in the UA and Europe perceived a potential crisis for the dollar. Europe was already deeply engaged in building an external monetary policy to end dependency on the USA and the US dollar as the pivotal international currency, which involved reforming the international monetary system to base it on a neutral, non-dollar standard. Some of the same economists who would become important to international monetary system reform as members of the so-called Group of thirty-two non-governmental economists (the Bellagio Group) were also involved in European integration, including Jacques Rueff, monetary economist and close adviser to French President Charles de Gaulle, and Pierre Uri, among the French; German economists Herbert Giersch, member of the Kiel Institute of World Economics, and Egon Sohmen; Belgian economists Alexandre Lamfalussy and Robert Triffin.

This volume remains a work in progress, given the complexity of the topic and evolving interrelationships between the two regions. Some of the major trends and developments discussed in the volume include: the importance of openness to trade and the ability for developing economies to benefit from it including poverty reduction; the importance of India's strategic position in trade and energy transmission between North-East Asia and the Middle East; GCC harmonization of energy production and minimization of redundancies in the power sector; Middle Eastern economies’ interest in investing in future growth prospects in Asia; and increasing people-to-people contact between North-East Asia and the Middle East in various fields, such as in the field of education (tertiary education), cultural exchanges, art shows and exhibitions.

Overall, it appears that East Asian diversification away from reliance on Middle East crude oil may be accompanied by other interactions between economies within the two regions beyond mutual interests in energy. Trade in non-oil-related export goods and cross-investments in each other's economies may increase, leading perhaps to other economic and trade exchanges between the two regions.

This trend towards increased investments show that Gulf financial and investment interests in Asia are not restricted to large emerging economies like India and China, but that they also seek mature and established economies in North-East Asia, such as South Korea and Japan. These exchanges increase contact at the individual level.

Introduction: Becoming Wealthy

The Shaw's endeavours helped to create a world of things and possessions, pleasures and comforts, for themselves as for others. John's working life was devoted to selling things that would make people's lives better and more convenient, if not actually more beautiful or elevated. He sold, for the most, the useful, practical things that the Black Country was so adept in producing. The nails and tacks that secured joints and fixtures, the pans and kettles with which to cook, the door furniture that allowed elegant egress, the japanned ware such as trays that served at sociable teas, even the mills that ground coffee for those soirees, the locks and keys that secured a burgeoning world of private goods, the coffin plates and handles that added a dignified gloss to a customer's journey to the final bourne.

Today we expect a successful entrepreneur to show an uncomplicated enjoyment of the material benefits that their work has brought them. John and Elizabeth, though, had a decidedly ambiguous relationship to this realm of ‘earthly things’ and the wealth that it generated. Elizabeth often feared that to turn her back on her conscience ‘in order to gratify the senses momentarily’ might lead in return to ‘days, weeks, and months of sorrow’. The corporeal world of things and pleasures was a dangerous one, strewn with tares and traps.

In the post-war era, multinational enterprises had to adapt to a new type of political economy. The international economic system was changed. When operating abroad they often had to accept a set of new regulations in their host countries. This was also the case for multinationals operating in Norway. Politics and business were more closely intertwined than ever before.

The social democratic Labour Party dominated Norwegian politics during 1945–65. The economy was strongly regulated, especially in the earlier years. This chapter offers a brief description of Norwegian industrial policy in the 1940s and 1950s. What were the prevailing views on foreign ownership and foreign investments? How were the foreign-owned companies treated?

As we shall see, Falconbridge and the Kristiansand refinery had three important points of contact with the Norwegian authorities: hydroelectric power supply, the tax regime and the institutions regulating the labour market. The main questions in this chapter are how Falconbridge and its subsidiary adapted to Norway's post-war social democratic business system and what benefits the company managed to extract from the state and local authorities.

Foreign Ownership in the Social Democratic Era

The post-war Labour Party governments aimed at high growth, rapid industrial modernization and full employment. Investments and economic growth were prioritized over welfare and redistribution. The government was planning for the long run. Growth was considered necessary in order to create a better and fairer society.

Most studies of multinational enterprises focus on the parent company, while the subsidiaries tend to be neglected. Most often firms are analysed from an owner or a top management perspective. When the viewpoint is changed, and the development is analysed from the perspective of the affiliate, other aspects of business development come to light. As multinational companies – and their subsidiaries – steadily increase in number this may enhance our understanding of international capitalism. By the year 2000 multinational companies had established more than 690,000 affiliates scattered around the world.

Just as parent companies differ, so do subsidiaries. Some are just instruments of their parent companies, set up to exploit their parents’ ownership advantages. Some affiliates belong to centralized organizations and have little room for independent action, while others are quite autonomous and have developed considerable innovative capabilities.

This book analyses the making of a subsidiary in the nickel industry – of Falconbridge's nickel refinery in Kristiansand in Southern Norway. The refinery traces its origins back to 1910 when the small and independent company Kristiansand Nikkelraffineringsverk (KNR) started production. The history as a subsidiary started in 1929 when the Canadian company Falconbridge acquired the Kristiansand plant, its patent rights and most of its personnel. The refinery was from the beginning an essential part of Falconbridge. Canadian ownership proved a success, but as will be demonstrated below, the refinery remained a mostly autonomous entity within the Falconbridge organization for a very long time.

Introduction

The change in life expectancy and mortality, combined with the economic changes which took place in society between the middle of the nineteenth and the middle of the twentieth century, also had an impact on widowed females. This is true both for the group of younger widows (under forty-five), which represented 13.2 per cent of all widows living in Switzerland in 1860 and had declined to only 6.4 per cent in 1940, as well as for the group of older ones (sixty-five years old and more), which increased considerably from 35.8 per cent in 1860 to 53.8 in 1941.

The population of widows was in no way homogeneous and the older widows, often frail and lacking adequate financial resources, had different material needs from those of the younger ones, especially those who had lost their husband and had children not yet able to be engaged in gainful employment. Up until World War 1, widows with dependant children figured prominently in the assistance registers of local authorities. This was because when a widow's relatives were unable to assist her in kind or with money her commune was obliged to provide the necessary help. Conflicts were frequent as many local authorities were unwilling to assist the poor adequately or could not meet the rising cost of expenditure resulting from the provision of assistance as their own budgets were very limited, especially in upland and rural regions.