Radical Origins to Economic Crises: Germán Bernácer, A Visionary Precursor

459 Pages·2018·4.2 MB·English

by  Henri Savall

HENRI SAVALL
RADICAL
ORIGINS TO
ECONOMIC CRISES
GERMÁN BERNÁCER, A VISIONARY PRECURSOR
Radical Origins to Economic Crises
Henri Savall
Radical Origins to
Economic Crises
Germán Bernácer, A Visionary
Precursor
Henri Savall
ISEOR
ECULLY CEDEX, France
ISBN 978-3-319-93365-8 ISBN 978-3-319-93366-5 (eBook)
https://doi.org/10.1007/978-3-319-93366-5
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Foreword
Henri Savall asked me to present Germán Bernácer’s works (1883–1965),
which he analyses here better than anyone. The intellectual affinities
between the Spanish economist and Sir Dennis Robertson, my teacher at
Cambridge, are the reason why I surveyed the meticulous and penetrat-
ing research of Henri Savall. Thanks to his research, French-speaking
economists have discovered Germán Bernácer. Indeed, who knew about
this senior official at the Bank of Spain, cursed by a degree of disgrace and
by the isolation of Hispanic culture from Anglo-Saxon culture? However,
Sir Robertson admitted he was subconsciously impressed by the article
on disposable funds that Bernácer sent him in 1923.
Posterity is often unfair: Keynes eclipsed both Robertson and Bernácer,
even though the latter two have offered a much more dynamic concept of
the circulation period of active money, while Keynes adopted a compara-
tively static method. Bernácer, like Robertson, proposes a much more
accurate concept of interest rates in which the difference between the
actual and the monetary components explains the cycle, while Keynes'
General Theory contradicts the Treatise on Money. Bernácer and Robertson
see that hoarding dormant and speculative money does not coincide with
true savings, while Keynes rejects this notion.
Certainly, Bernácer and Robertson are divided on the subject of the
productivity of legal capital and the time preference. Bernácer rejects
those concepts, while Robertson’s Marshallian background forbade him
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from questioning them. We can imagine their discussions strolling in the
streets of Granada, where they met in 1954. Despite their differences,
Bernácer and Robertson criticized the general equilibrium theory in a less
paradoxical way than Keynes but with more objectivity and nuance.
Therefore, it would be a mistake to qualify Bernácer as pre-Keynesian.
On the contrary, he is very modern, a follower of the value of labour,
experienced in macroeconomic accounting, a supporter of companies’
self-management, an opponent of the private ownership of unearned
income-yielding assets, and convinced that the government’s role includes
the satisfaction of collective needs. Should Germán Bernácer—a mind
whose self-taught training ensured originality, whose contact with mon-
etary reality fed scientific induction, and whose doctrinal options led to a
unity of thought that could inspire the envy of contemporary techno-
crats—earn, through Henri Savall, his rightful place among the pantheon
of economists?
Colette Nême, Professor at the University of Law, Economics and
Social Sciences (University of Paris II), Paris, 1974
Preface to the First Edition
In the history of economic thought, 1883 was a momentous year: Karl
Marx died and Keynes and Schumpeter were born. Additionally, Germán
Bernácer, the subject of this book, was born in Alicante. In 1951, when I
wrote my book on economic fluctuations, I read Bernácer’s ideas on
cycles, and I was inspired by his thoughts and those of Sir Dennis
Robertson. In truth, Bernácer was barely known in France, but Louis
Baudin, André Piatier, François Perroux, and later Jacques Rueff con-
tacted him. In 1965, the Revue d’Économie Politique (Political Economy
Review) published a tribute written by one of his compatriots, José
Pozuelo (1965).
Unfortunately, the famous saying that no one is a prophet in his or her
own country has been proven. Among Spanish economists, there was a
conspiracy of silence against Bernácer. It was not until 1973, eight years
after his death, that the Spanish press finally paid homage to him.
Even so, it is now a young French author who, through this incisive
book, definitively takes Bernácer out of the shadows. Given his Spanish
background, Henri Savall had the privilege of knowing the family of the late
master, and thus went directly back to Bernácer’s origins. He told us that
Professor Jacques Monteil guided him towards this research, and this topic
was the subject of his Ph.D. in Economics at the University of Paris II.
We should highlight the subtitle chosen by the author: “A general the-
ory of employment, income and hoarding”. Noteworthy, isn’t it? Will
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Bernácer, who had been so long disregarded, therefore emerge as the
Spanish Keynes? The two thinkers do not appear similar, although there
are points of convergence in their scientific agendas. Keynes devoted
himself to probability, while Bernácer became dedicated to physics when
he was 22 years old. While Bernácer never belonged to the University, he
was a professor at the Écolesupérieure de Commerce d’Alicante for many
years and served as an industrial technology chair at the École des Hautes
Etudes Commerciales de Madrid. He also led the Research Department
at the Bank of Spain in times of the Republic and even after Franco’s vic-
tory. He was also interested in art, painting, and even classical music.
From a demure family without a fortune, Bernácer was unpretentious
and shy, constantly attracted by the landscape of his small hometown of
Alicante, where solitude among the pines, watching the sea, inspired his
deepest writings; he passed away there at 82 years of age.
Henri Savall considers Bernácer as the implicit author of a general
theory, but Bernácer himself was too modest to make such a claim and
considered it to be risky. In an incomplete world, there will always be an
opportunity to generalize a theory that still seems general.
All of Bernácer’s writings impress, and they cover almost all modern
problems. However, we must limit our focus to the key works.
The title of his book published in 1916—Science and Happiness—
reminds us of recent works by Philippe D’Iribarne and Louis Leprince-
Ringuet (1973). Even so, the subtitle is even more evocative: “Social
mechanical essay”. It suggests Pareto, an engineer, was also concerned
with the transformation of solid matter equilibrium to economic action
equilibrium.
A second theme is related to monetary problems. Bernácer does not
talk about cash, but in a 1922 paper, he constructed a theory of dispos-
able funds, which was similar to the Keynesian notion to which he would
return in his excellent 1945 book, The functional theory of money, where
we find outlines of Nogaro, Aftalion, and, more similar to us, B. Schmitt.
Finally, Bernácer’s last book—A free economy without crisis and without
unemployment—was published in 1955. This resembles the general the-
ory proposed by Savall, and the title is, antithetically so, current.
How can we express our gratitude to Henri Savall? Indeed, without
him, who could say that he or she knows Bernácer? Obviously, despite
Preface to the First Editio n ix
the convincing attempts to paint him as a new Keynes—almost a Keynes
precursor—Bernácer will never be among the pantheon of economists.
Could this reality be consistent with Bernácer’s vocation?
Is it not also valuable to honour the memory of a self-taught man (is
the lack of a teacher a merit?), a solitary researcher who, without the
knowledge of the rest of the world, touched the deepest roots of eco-
nomic problems?
Should we regret the lack of Bernácer’s influence during his lifetime,
recalling André Piettre’s malicious opinion: “he missed being Anglo-
Saxon”? From his place in the heavens, which he shares with Daniel
Villey, to whom he wrote on January 17, 1955, because he too was a
Christian humanist, Bernácer must give to Henri Savall the homage I just
attempted to express.
Paris, France Henri Guitton
Christmas 1974
Preface to the Third Edition
The work of Spanish economist Germán Bernácer is largely unknown in
English language scholarship despite the publication of the first edition
of this book in French in 1974. Bernácer’s legacy is an inspired and origi-
nal theory of economic fluctuations and crisis that provides a dramatic
and useful contrast to better known and more commonly used economic
theories of Marx, Keynes, Schumpeter, and liberal economists.
The search for new theories that can prevent and manage economic
crisis is a common and timely theme in contemporary discussions of
social and economic crises. Yet an innovative and uncommon theory can
be found in Bernácer’s work on economic crisis and unemployment writ-
ten over half a century ago. This theory is important and unique because
it provides an alternative to prevailing macro-economic theories that
posit the need for high rates of interest to attract investment and savings,
speculative markets that produce high interest and return on investment,
and high levels of unemployment to allow for frictional economic adap-
tations. In contrast, Bernácer’s theory shows how the presence of income
from speculative investments (income without work) and high interest
rates that allow for unearned wealth produce unemployment by remov-
ing money from the productive circuit of the economy and relegating it
to the more profitable circuit of speculative investments. This move
restricts economic activity by taking value added from past production
out of circulation. Thus Bernácer’s theory recommends against the very
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