Emigration with a Pulled Handbrake: Friedrich A. Lutz's Internal Methodenstreit

Abstract

This article reconstructs the path of the German economist Friedrich A. Lutz (1901–75) to American economics. The correspondence with his former teacher Walter Eucken, the founder of the Freiburg school, constitutes a crucial yet unexplored source for the article. Through Lutz's case, this article demonstrates the growing gulf between German and Anglo-Saxon economics during the late 1930s. In his native Germany, Lutz was trained in methodologically and institutionally focused economics, which differed fundamentally from the mathematical economics dominating Anglo-Saxon academia. He realized that an academic career in the United States would be impossible if he did not adapt to the new methods and if he did not abandon the methods of the German tradition. This gave rise to his internal Methodenstreit. After his emigration in 1938, he constantly experienced doubts and tensions because he was convinced that without considering institutions, mathematical economics could never explain the occurrence and essence of macroeconomic phenomena. Despite his stellar career at Princeton, it was only after his move to Zurich in 1953, where he taught history and theory of socioeconomics for the rest of his life, that Lutz could reconcile this internal Methodenstreit.