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German classical liberal economist, and long-serving professor at Heidelberg.
Originating from Erlangen, Bavaria, Karl Daniel Heinrich Rau was the son of a Lutheran pastor and theology professor at the local university. Rau himself was educated at the University of Erlangen, obtaining his degree in 1812. Karl Heinrich Rau was a lecturer in public finance (cameralwissenschaft) at Erlangen from 1816. In 1822, he became a professor at the University of Heidelberg for the remainder of this life.
K.H. Rau's three-volume economics textbook (Lehrbuch, 1826-37), was extraordinarily successful in Germany and went through numerous editions. Rau is usually credited/blamed for introducing the tripartite division of German economic studies into economic theory (Volkswirtschaftslehre or Nationalökonomie), economic policy (Volkswirtschaftspolitik) and public finance (Finanzwissenschaft), a division which would prevail in German universities until the late 20th Century.
By virtue of his position in Heidelberg, Rau was heavily involved in the politics and administration of Grand Duchy of Baden, and was, for a time, tutor and advisor of the Grand Duke Frederick I of Baden. Rau was a champion of the liberal movement in 19th Century Germany, and was elected to the 1848 Frankfurt assembly.
Rau is often regarded as the representative of the Classical School in Germany - although his economics was closer to the French tradition of J.B. Say than the British tradition of Ricardo. Rau translated Storch, Say and Malthus into German. He always reserved a special role for demand, and so may be regarded also as a proto-marginalist. In the 1841 edition of his textbook, Rau graphically depicted the demand-and-supply curves in their (inverted) Marshallian form (v.1, App. to §154, p.527)
Rau was a strong proponent of laissez faire (e.g. 1847). Although highly influential during the main part of his career, Rau's star dimmed later on with the ascent of the German Historical School.
K.H. Rau founded the first German economics journal, the Archiv der Politischen Oekonomie und Polizeiwissenschaft ("Archive of Political Economy and Policy Science") in 1835. He brought on Georg Hanssen (of Leipzig) as assistant editor in 1844. In 1853, the Archiv merged with the Zeitschrift für die gesammte Staatswissenschaft (ZGS, a journal founded in 1844 by the Tubingen faculty). Rau would remain on the board of the new ZGS until his death.
Rau retired from Heidelberg in 1865, after over forty years of service. Rau's professorial chair at Heidelberg was inherited by the Historicist Karl Knies.
Major Works of Karl Heinrich Rau
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Resources on K.H Rau
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