Money and Markets: Essays in Honor of Leland B. Yeager

8 Leland’s favorite economists *Jürgen G. BackhausIn a private conversation, when I invited Leland to come to Maastricht and give alecture on Walter Eucken on the occasion of his 100th birthday, Leland agreedimmediately because, as he said, Walter Eucken was his favorite economist. 1Although Walter Eucken (1891–1950) kept a strong influence on post-World WarII German economics literature, this influence was tongue-tied and almost exclusivelyrestricted to the German language area, in both scholarship and policy application.This is despite the fact that some of his work has been available in English(Eucken 1950, 1951). Ten years ago, however, a first book-length appreciationof Eucken’s work appeared in English as a special issue of the Journal of EconomicStudies and, 50 years after his death, at least three books in German have appearedin appreciation of Walter Eucken’s work.This essay essentially makes three contributions. First, the recent literature onWalter Eucken is briefly reviewed. Second, Eucken’s constitutive principles ofmarket economy, a central focus of his work, are discussed from the point of view oftheir philosophical origin. Third, the issue of hedonic price indices is discussedfrom the point of view of maintaining price-stability, Eucken’s central concern.In this sense, I try to respond to some of Leland’s most fundamental concerns inscholarship. These are the origin and meaning of concepts in economics and theprecision of language. Hence, section II emphasizes the origin and meaning, whilesection III focuses on the precision with which economic phenomena are to beexpressed.I Recent appreciation of Eucken’s workThe first of the four publications reviewed here appeared in 1994 in the Journal ofEconomic Studies (21:4) under the guest-editorship of Gerrit Meijer. The title of thisvolume is appropriately: The Intellectual Roots of Market Economies: Walter Eucken’sContribution to Economics. This volume has six essays in addition to the guest editor’sintroduction focusing on the intellectual roots of the market economy notable inWalter Eucken’s work. Heinz Grossekettler has an extremely thorough article “OnDesigning an Institutional Infrastructure for Economies: The Freiburg LegacyAfter 50 Years.” Since the article was presented at a conference in Maastricht in1991, it could still have had an influence on theory construction with respect to all