Lawrence Klein: Keynesian Economist Who Wanted to Sidestep the Constitution

By Richard M. Ebeling

Nobel Prizing-winning Keynesian economist, Lawrence Klein died on October 20, 2013, at the age of 93. A long-time professor of economics at the University of Pennsylvania, he was awarded the Nobel Prize in 1980 for his development of econometric (or statistical) models of the United States “macro” economy for purposes of prediction and “activist” government policy making.

 

He also was a senior economic advisor to Jimmy Carter during his successful run for the presidency in 1976, but Klein declined a position in the Carter Administration for fear of the negative publicity from his membership in the American Communist Party in the 1930s. 

 

What is less well known today is that immediately after World War II he was one of the great popularizers of the “new economics” of John Maynard Keynes, especially in his widely read book, The Keynesian Revolution, published in 1947.

 

Keynes’ Conception of Government as Savior

In The General Theory of Employment, Interest, and Money (1936) Keynes had argued that the market economy was inherently unstable and susceptible to wide and unpredictable swings in output, employment, and prices. Worse yet, he asserted, the market could get stuck in a prolonged period of high unemployment and idle resources. Only judicious government monetary and fiscal policy could assure a return to sustainable full employment.

Remembering Armen Alchian

by Jerry O’Driscoll

Earlier this year, we lost one of the greatest economists of this century, UCLAs Armen Alchian, who died at age 98. David Henderson wrote a wonderful appreciation of him for the Wall Street Journal.

Alchian taught at UCLA from the early 1950s until his retirement in the 1990s. Few men have put their stamp on a department as he did. Milton Friedman comes to mind at Chicago. Alchian taught the economic way of thinking, and his approach permeated the course offerings by almost all the other professors. If you took macro from Axel Leijonhufvud, you got a dose of Alchian’s micro. In monetary classes, works like Alchian’s “Why Money” were topics of discussion.  Alchian’s analysis of price searching behavior was background in all the courses.

Liberty Fund published a two-volume collection of his writings. I can obviously touch on only a few issues.

One of Alchian’s greatest contributions was to the theory of market pricing.

An Appreciation: James M. Buchanan (1919-2013)

by Shruti Rajagopalan* 

James M Buchanan, who died last week at age 93, was one of the most profound thinkers of our age. Few Indians would be familiar with his academic contributions or even recognize his name. Yet, the insights from his research would strike a chord with every Indian navigating the inefficiencies and excesses of government on a daily basis.

Buchanan, professor emeritus at George Mason University in Fairfax, Virginia, won the Nobel Prize in Economic Sciences in 1986 for his contributions to the economic analysis of political decision-making. By bringing politics back into economics, Buchanan made economics more humane, realistic, interesting, and relevant. He challenged the economics orthodoxy, dared to be different, inspired his students and colleagues, and developed one of the most unique and creative research programs in economics at the Center for the Study of Public Choice at George Mason University. 

James M. Buchanan: A Preliminary Appreciation

by Mario Rizzo

The great economist James M. Buchanan died today at 93. I am still too stunned to write a proper appreciation of his tremendous contributions to economics and, indeed, to moral philosophy.

Buchanan won the Nobel prize in Economics in 1986. But even this does not capture his greatness. There have been many Nobel prizes in Economics since 1969, the year they were initiated. (In my view there have been too many.) Many of these prize winners will be long forgotten and even viewed with puzzlement by future generations, but this prize will stand out.

Student Debt Bubble Side Effect

by Chidem Kurdas

Gore Vidal died a few days ago. He was a remarkably erudite author, as any reader of his marvelous historical novels – Burr and Lincoln are just a sample – notices.  He never went to college. 

Vincent Ostrom, RIP

by Mario Rizzo

One of the finest political scientists of our time has died just a few weeks after his wife and scholarly collaborator Elinor Ostrom died. He was a mighty intellectual force in his own right. He was one of the few political scientists to appreciate the idea and phenomenon of polycentric order. Richard Ebeling has an excellent appreciation of Vincent Ostrom here.

Samuelson’s Legacy and that of Mises

by Roger Koppl

One of our all-time greats, Paul Samuelson, has passed.  We should mourn the passing of a great mind and fellow human being.  He influenced so many economists so deeply that it easy to underestimate his influence.  Barkley Rosser makes the key point at Econospeak.  “His influence is so great in so many areas that the key papers by him that lie behind the standard textbook accounts in many areas do not even bother to cite them.”  Barkley adds the interesting comment that Samuelson “himself was generally personally aware of the flaws and limits of many of his own ideas” whereas the “sons of Samuelson” have been “more simplistic.”

The Death of Paul Samuelson and Selection Bias

by Mario Rizzo  

Paul Samuelson has died at the age of 94. There is already a big New York Times obituary lauding his many contributions and more will inevitably follow. Many economists will want to use this occasion to demonstrate how much they appreciate economics as a science and how this appreciation transcends ideological divides. This will reassure them that all is well in the queen of the social sciences.

Of course, I’d like to strike a discordant note.

Rose Director Friedman, RIP

by Mario Rizzo

Rose Friedman, wife of Milton Friedman, insighful economist in her own right, has died today. She lived a very long life. But when a person has been so positive an influence even these years are not enough.

See an obituary here.

Ave atque vale.

Jack Kemp, RIP

by Sandy Ikeda

I was a student at Hillsdale College when the Congressman from New York gave a speech there, probably in 1976 or 77.  I remember little about the speech itself — probably touting tax cuts and supply-side economics — except that at one point he held up a copy of Human Action and praised its author, Ludwig von Mises. I was thrilled!  His NYT obit is here.

Beth Hoffman, RIP

by Sandy Ikeda

Beth Hoffman died in her sleep yesterday.  I can’t quite remember when I first met her, but it was probably at the Foundation for Economic Education over 20 years ago. She was an important part of FEE and a reassuring constant over many years and through several of its leadership changes.  She not only did important editorial work at The Freeman magazine and organized and ran many summer seminars (and countless other indispensable things we never heard about), but I personally felt that as long as Beth was around FEE things were fundamentally Ok.

She exuded warmth, poise, and a sharpness of mind.  I also know that she was a loving mother, wife, and devoted daughter-in-law.  I always felt a special connection to her, partly because we knew we were committed to the same ideals of a free society, but also because we both attended Hillsdale College, she a few years ahead of me.  It pleased me deeply that we were always genuinely happy to see each other.  She was one of my favorite people, and now I will miss her very, very much.  We all will.