MEMORANDUM
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Kiel was the capital of Schleswig-Holstein, a small city at the Western end of the<br />
Baltic, diametrically opposite St. Petersburg. Schleswig-Holstein had been under Danish<br />
rule for centuries when it was annexed by Prussia in the 1860s after war with Denmark.<br />
Prussia moved its naval headquarter from Danzig to Kiel. The Kiel Institute moved in<br />
1920 to a prominent seafront building, which once had been the Seebadeanstalt owned by<br />
the Krupp family.<br />
As arranged between Werner Sombart and Bernhard Harms Leontief arrived at the<br />
beginning of 1928 to work as scientific staff in the Kiel Institute’s recently established<br />
department for statistical economics and business cycle research directed by Adolf Löwe; it<br />
was nicknamed Astwik from the acronym of the German name. 107 Business cycle institutes<br />
emerged in many countries after World War I, in the wake of the business cycle forecasting<br />
service established around Warren Persons at Harvard University from 1917. The Institut<br />
für Konjunkturforschung in Berlin was founded in 1925, and the Astwik department was<br />
established in 1926. In the Kiel Institute lore this had happened after Adolf Löwe had<br />
visited the Institute and met with Harms who offered him a professorship if he would take<br />
charge of a new department for studying international business cycles! Among other staff<br />
of the department were Gerhard Colm and Hans Neisser who both joined in 1927. Later<br />
arrived Jakob Marschak, Alfred Kähler and Fritz Burchardt, the latter shortly after Leontief<br />
had arrived in 1928. Leontief with his broad background from Petrograd and Berlin may<br />
have appreciated to find at the Kiel Institute in addition to the bright Astwik economists the<br />
sociologist Ferdinand Tönnies. 108<br />
Leontief was the Benjamin in the Astwik group of scholars, roughly ten years younger<br />
than his above-mentioned colleagues. His title was Assistant and in the hierarchical order<br />
of the Institute Leontief was assigned to Colm as his superior.<br />
Löwe and the Astwik group at the Kiel Institute were more theoretically oriented and<br />
more diverse than the Harvard group of business cycle forecasters around Warren Persons.<br />
They are referred to in German as the Kieler Schule der Wachstums- und<br />
Konjunkturtheorie. 109 In Kiel Leontief was for the first time in a research institution more<br />
permeated by modern economics than he had met with in his study years. In this setting he<br />
became increasingly familiar with “demand analysis”, “business cycle theories”, and the<br />
somewhat ambiguous concept of “dynamic economics.” Increasingly he also came to<br />
consider himself as a mathematical economist.<br />
Leontief was employed in two separate sub-periods at the Kiel Institute. The first<br />
period was through 1928 during which Leontief developed his innovative theoretical<br />
107 Abteilung für statistische Weltwirtschaftskunde und internationale Konjunkturforschung.<br />
108 Ferdinand Tönnies (b.1855) had been banned from a professorship by the Prussian government<br />
in late 19th century and stayed on long enough in Kiel to be ousted by the Nazis in 1933.<br />
109 Hagemann and Kurz (1984).<br />
40