Gottfried Haberler

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Gottfried Haberler
Born(1900-07-20)July 20, 1900
DiedMay 6, 1995(1995-05-06) (aged 94)
Institution Harvard University
Field International economics
School or
Austrian School
Alma mater University of Vienna
Othmar Spann
Ludwig von Mises
Richard E. Caves
Influences Friedrich von Wieser

Gottfried von Haberler (German: [ˈhaːbɐlɐ] ; July 20, 1900 – May 6, 1995) was an Austrian-American economist. He worked in particular on international trade. One of his major contributions was reformulating the Ricardian idea of comparative advantage in a neoclassical framework, abandoning the labor theory of value for an opportunity cost concept. [1]


Haberler was born in Austria-Hungary in 1900, and was educated in the Austrian School of economics. In 1936 he moved to the United States, joining the economics department at Harvard University. There he worked alongside Joseph Schumpeter.

Haberler's two major works were Theory of International Trade (1936) and Prosperity and Depression (1937).

He was President of the International Economic Association (1950–1953).

In 1957 the General Agreement on Tariffs and Trade commissioned a report on the terms of trade for primary commodities, and Haberler was appointed Chairman. The report found that there was a decline in the terms of trade for primary producers, since 1955 commodity prices were said to have fallen by 5%, while industrial prices rose by 6%. Haberler's report seems to echo the report written by Raúl Prebisch in 1949 as well as Hans Singer in 1950. However, when a second Prebisch's report for the United Nations Conference on Trade and Development (UNCTAD) came out in 1964, Haberler denounced it. His particular disagreement was with the idea that there was a systematic long-term (secular) decline in the terms of trade.

In 1971, Haberler left Harvard to become a resident scholar at the American Enterprise Institute.

One of the things Haberler is accredited with is developing the theory of opportunity cost. The question of who first developed the concept of opportunity cost is slightly debated, but for the most part John Stuart Mill is given the credit. Other contributors are Professor Friedrich von Wieser and Gottfried Haberler. Opportunity cost is defined in the Oxford Dictionary as “the loss of potential gain from other alternatives when one alternative is chosen.” This basically means what a person gives up in order to pursue another thing/job/opportunity, etc. One of the men given credit for developing the concept of opportunity cost is Professor Friedrich von Wieser, an Austrian economist who studied things like opportunity cost and the distribution of wealth (Quiggin, 2015). Weiser first called opportunity cost the “Alternative Cost Theory.” Wieser’s discovery of opportunity cost led other economists to study scarcity (Quiggin, 2015). This early research of alternative cost theory in 1914 pioneered the way for further discussion about opportunity cost. Another man who contributed to the development of the theory of opportunity cost is Gottfried Haberler. In 1936 Haberler writes that “the marginal cost of a given quantity X of a commodity A must be regarded as the quantity of commodity B which must be foregone in order that X, instead of (X-1) units of A can be produced” (Haberler, 1968). Haberler came shortly after Friedrich von Wiesser, and they introduced the beginnings of the theory of opportunity cost. John Stuart Mill however was the man who refined and is given most of the credit for developing the idea of opportunity cost. [2] [3]

He died from Parkinson's disease in 1995. [4]

Major works

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  1. Baldwin, Robert E. (1982). "Gottfried Haberler's Contributions to International Trade Theory and Policy". Quarterly Journal of Economics . 97 (1): 141–48. doi:10.2307/1882631. JSTOR   1882631.
  2. Quiggin, J. (2015, May 26). Opportunity Cost: A Fabian Idea?
  3. Haberler, G. (1968). Theory of International Trade.
  4. "Economist Gottfried Haberler, A Defender of Free Trade, Dies". The Washington Post. Retrieved May 14, 2020.

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