Expansion and consolidation of economics after the Second World War

After the Second World War, economics became even more significant at the University of Basel. With Edgar Salin and Gottfried Bombach, both chairs in the field were held by leading experts. Student interest in the subject also grew. This led to a steady expansion of the curriculum, the consolidation of subjects within the Business and Economics Center, and finally, in 1996, the establishment of a separate Faculty of Business and Economics.

In the early postwar period, i.e., the 1950s and 60s, economics at the University of Basel enjoyed high international esteem. Not only did Salin reach the zenith of his career, but the second chair of economics was also prominently filled in 1957 with Gottfried Bombach (born in 1919). Salin and Bombach subsequently achieved institutional successes, particularly in creating a third chair in 1959, the first dedicated entirely to sociology. The rapidly increasing number of students required a further significant expansion of the field,

with the explosive expansion of the education system in the 1960s and 70s lending even more support, both in terms of the discipline’s scope and its place at the institution. By 1970, two additional chairs in economics as well as two extraordinary (associate) professorships were added.

Bombach was appointed to the university in 1957 as the successor to Valentin Wagner, who had resigned. After earning his doctorate in 1952 at the Kiel Institute for the World Economy, Bombach worked for several years at the OECD (Organisation for Economic Co-operation and Development) in Paris. He possessed profound econometric knowledge and took positions closely affiliated with neoclassical approaches, as well as working on issues of Keynesian economic and monetary policy. Before and during his time in Basel, he acted as a consultant to the government of the Federal Republic of Germany, including for the minister of economics Ludwig Erhard. For economics in Basel, Bombach’s appointment represented the first prominent advocate of an approach based in mathematics and aligned with developments in the Anglo-American world. Given the neglect that mathematical statistics and business administration had previously received in Basel, his appointment marked a fundamental change in the profile of the field in Basel.

Times of change
The significant increase in student numbers in economic sciences during the 1950s and 1960s kept the question of the field’s institutional expansion continuously relevant for the next two decades. In 1959, authorities approved a third chair in economics, though it was effectively allocated to sociology, thus affording the discipline a new status as an independent field of study: the creation of the chair was accompanied by a new Institute for Social Sciences. Heinrich Popitz (1925–2002), a German sociologist and student of Karl Jaspers, was appointed to this position in 1959. In the 1950s, Popitz’s work focused on the sociology of technology and industry. Later, he made significant theoretical contributions to the sociology of power and of roles, as well as to historical anthropology. As sociology was also expanding significantly in West Germany during the 1960s, Popitz soon had the opportunity to move to another position, which he took in 1963, at University of Freiburg, where he served as the founding director of the new Institute for Sociology. This left the chair in Basel in sociology vacant once again, until a new appointment was made in 1969 with Paul Trappe (born in 1931).

The early 1960s were also a time of change for economics. Initially, there was an acute need for a new chair in the field, especially since the newly created professorship was de facto allocated to sociology, not economics. In 1961, the conditions were favorable for further expansion. Bombach, as dean, and Salin, as rector, successfully advocated for a new chair in economics. In 1962, shortly before Popitz’s departure, his position was transformed into a chair in sociology, and a third chair in economics was granted. This position was filled by Jacques Stohler (1930–1969), a Keynesian and specialist in European economic integration and transport economics. In Basel, Stohler primarily focused on Swiss economic studies and policy, successfully continuing the traditions of Julius Landmann and Fritz Mangold.

Another moment of change was the need to fill the chair of Edgar Salin, who retired in 1962. Continuing Salin’s tradition, the focus remained on political economy, and in 1965 K. William Kapp (1910–1976), a critic of neoclassical economics, was appointed. Kapp began his studies in Germany but emigrated in 1933 with his wife, who was of Jewish descent, first to Geneva and then, following the Frankfurt school with which he increasingly identified, to New York. Kapp early on worked on environmental and developmental economic issues, examining the “external effects” of capitalist market economies. After spending three decades in the United States, he returned to Europe for the chair in Basel, where he continued his studies in development and environmental economics.

Institutional expansion
In the 1970s, the expansion of economic sciences continued. Following the unexpected death of Jacques Stohler in 1969, his chair was filled in 1970 by René L. Frey (born in 1939). Frey, who earned his doctorate in Basel, collaborated closely with Stohler during the 1960s on regional economic development and public infrastructure policy. After his appointment, a focus on fiscal science was added. In addition, in 1971, economics received a fourth chair dedicated to international economic relations, monetary theory, and policy. Its newly appointed holder, Peter Bernholz (born in 1929), focused primarily on macroeconomic issues, especially monetary and currency theory. The chair held by K. William Kapp also needed to be filled after his retirement in 1975. The global economic focuses of the Kapp era were essentially maintained but were more strongly oriented toward the national implications for Switzerland. Silvio Borner (born in 1941) was appointed as Kapp’s successor in 1978, concentrating on Swiss economic and social policy, particularly the development of the welfare state, under the conditions of global structural change. Borner, who had earned his doctorate from the University of St. Gallen, increasingly embraced neoclassical approaches in his work, in contrast to Kapp. In the 1980s and 90s, Borner also emerged as an advocate of new public management. As another step in this structural expansion, the cantonal government decided in 1973 to establish a chair for business administration. However, the appointment proved difficult as the responsible commission could not agree on a suitable candidate, and the search process failed. In 1977, the government revoked its decision and reallocated the resources to another trending discipline, psychology.

Beyond these chairs, the university established two extraordinary (associate) professorships in the field of economic sciences. Starting in 1957, Hans Guth, the cantonal statistician, taught as an extraordinary (associate) professor of statistics – a position that was transformed into a chair of statistics and applied economic research in 1984 under Guth’s successor, Peter Kugler. Additionally, in 1964, an extraordinary (associate) professorship for business economics (i.e., business administration) was created, initially filled by Otto Angehrn (1916–1992) and, after his move to ETH Zurich in 1965, by Wilhelm Hill (born in 1925).

University collaborations beyond academia – Prognos AG
It was not only academic activities but also extracurricular engagements of the faculty in economics that were expanded. Until the Second World War, most contacts between science, politics, and business were facilitated through the university-affiliated Friedrich List Society. At the end of the 1950s, circles within the List Society established an independent company for policy and economic consulting projects, effectively commercializing academic political and economic connections. Prognos AG, founded as a corporation in 1959, was closely linked not just with the List Society but also with the economic professorships at the University of Basel. Among its main shareholders were Edgar Salin, one of the company’s initiators, and Hans Guth, extraordinary (associate) professor of statistics. Gottfried Bombach, a key founding figure alongside Salin, chaired the scientific advisory board. Salin even served as the delegate of the board of directors in the management of Prognos AG. For Salin and Bombach, the company also provided an opportunity to offer their scientific protégés an attractive field of activity beyond an academic career. Until the 1970s, the management of Prognos AG was largely in the hands of Salin’s and Bombach’s students. The company began in 1959 with eight employees, six of whom were tasked with research tasks. The following years were highly successful for the business, leading to rapid expansion. By 1965, the company had twenty-six employees, and by 1972, over one hundred.

The company specialized in empirical studies based on the mathematical approaches of econometric research. Many assignments were in the fields of economic forecasting, transportation, research and education planning, or the management of social security systems. In an era when both public and private institutions increasingly followed a planning rationale for their activities, Prognos AG successfully sold the necessary scientific expertise. In the first few years, a large part of the clientele, such as Sandoz or Migros, was Swiss. The Swiss Federal Administration, such as the Office of Transport, also consulted Prognos in the 1960s. From the outset, however, the company also targeted the German market and sought contact with the bodies of the European Community – doing so with success: in the 1960s, large German companies such as AEG and VW were among its clients. Prognos AG also successfully established itself in policy consulting, working for entities such as the German Association of Cities or the German Federal Ministry for Research and Science. The breakthrough came in 1965 when Prognos published its first “Germany Report.” On its own initiative, without a specific commission, the company produced an integrated future analysis of German society and offered it under the title “The Federal Republic of Germany 1980” at a high price to interested buyers, especially private and public institutions. Prognos regularly updated the forecasts and released new editions of the “Germany Report.” The product was a great success and earned the company significant positive media attention, helping to make Prognos one of the leading German-speaking addresses for quantitative research focused on economic developments in the future.