ABBA PTACHYA LERNER
October 28 1903-October 27, 1982
BY DAVID S. LANDES
A
in 1903 and came to England as a child of three,
one more lucky escapee from endemic and epidemic persecution
of Jews. We know little of his childhood, but the
variety of his early work experience bespeaks the Outsider.
No public or grammar school; no scholarships or fellowships.
From the age of sixteen he worked as a machinist, a
teacher in Hebrew schools (possibly the worst-paid job ever
invented), and as a businessman. When he entered the
London School of Economics in 1929, he brought with him
the lessons of a variegated career and a maturity beyond
that of his classmates, as well as an invaluable sense of what
it was like out there in the Real World.
At LSE Lerner found a subject to his measure and a
benign appreciative environment that gave full play to an
extraordinary natural talent. In his first year he won the
director's Essay Prize and a Tooke scholarship; these were
only the first of a series of honors that crowned a run as
first-place student in economics. He took his bachelor's
degree in 1932 and went on to graduate study, first at LSE,
then at Cambridge and Manchester. It was while still a
graduate student that he persuaded Paul Sweezy and Ursula
Webb (later Ursula Hicks) to join him in founding
BBA PTACHYA LERNER was born in Bessarabia (then in Russia)The Re-209
210 BIOGRAPHICAL MEMOIRS
view of Economic Studies.
a commercial printer and was not intimidated at the prospect
of publishing a journal.) The intellectual justification,
he recalled later, was that most journal articles were too
long—too much verbiage—and that there ought to be a
place for shorter notes that would make the sparks fly. Apparently
there was no lack of material, but the Young Turk
organizers needed to find money. Then, as later, the bestprovided
members of the discipline were the Americans; so
the organizers put the bite on all visitors from across the
sea, who couldn't have been more encouraging and gave
five pounds to prove it. (Note that five pounds then was
almost $25, and $25 then was like $500 today.) Only Jacob
Viner was skeptical: he felt there was already a plethora of
journals and he couldn't keep up; but he gave ten pounds.
With start-up funds in hand, Lerner and colleagues repaired
to the major centers of teaching and research to
drum up contributions. Oxford was splendid. The economists
laid out a festive board, and Lerner never forgot the
sliced grapes. But no one would talk about economics—
only about such urbane topics as weather, politics, and people.
In Cambridge, however, Joan Robinson took the provincials
from the capital in hand and exposed them to the new
macroeconomics. This proved so shocking to good students
of Marshallian economics that a weekend meeting
was held at Bishop's Stortford, a compromise site halfway
between London and Cambridge. Joan Robinson ran the
show, assisted from time to time by husband Austin, R. F.
Kahn, James Meade, and others. As Lerner remembered
the event, Joan did the talking. Lerner and company listened
and expostulated. Joan told them that, yes, they
were making progress; no, they were going backwards; and
they parted ways agreeing to disagree. They did not seem
to be able to understand one another—a clash of para
PTACHYA LERNER 211
(Abba had been, in one of his avatars,ABBAdigms. But Lerner kept thinking and worrying about the
issues and decided to spend a few weeks of a fellowship to
Manchester clearing up things in Cambridge. So with wife
and twin son and daughter, he moved to Cambridge and
stayed six months.
At Cambridge he talked to everyone and attended the
lectures of John Maynard Keynes. The text was the galley
proofs of the soon-to-appear
revolution in economics and posed the same kind of paradigm
shock that Joan Robinson had inflicted, only more so.
Looking back on this encounter, Lerner had trouble understanding
why everything had seemed so difficult. In 1936
he was asked by the International Labour Office to write a
review essay on the
remains one of the most limpid discussions of the Keynesian
argument, clearer than that of the inventor himself. Lerner's
puzzlement testifies to the pain of changing assumptions
and parameters when one has mastered another system.
Better to start from scratch, as Lerner was to find with his
own students.
After his year in Cambridge and Manchester, where he
went to learn about applied economics and statistics, Lerner
taught as assistant lecturer at LSE, then came to America,
where he was to spend the rest of his life teaching and
writing at an extraordinary array of institutions. These included
the University of California at Berkeley, Columbia
University, the University of Kansas City, the New School
for Social Research, Roosevelt University in Chicago, Michigan
State University, and others too numerous to mention.
Although he had started his teaching career late, he made
up for it by offering instruction almost to the end of his
life. After he retired from Berkeley in 1971, he served as
distinguished professor of economics at Queens College of
the City University of New York until 1978 (he was then
General Theory, which marked aGeneral Theory; the resulting article (1936)212 BIOGRAPHICAL MEMOIRS
seventy-five) and then took a chair at Florida State University,
which he held until his death in 1982. In addition, he
served as consultant or adviser at various times to the Rand
Corporation (1949), the Economic Commission for Europe
(1950-51), the Economic Advisory Staff in Jerusalem (1953-
55), the Institute for Mediterranean Affairs (1958-59), and
the Treasury and the Bank of Israel (1955-56).
The most productive years of Lerner's career came early,
during that first exhilarating stage as undergraduate (yes!)
and graduate student and the period that followed his first
exposure to Keynesian economics. Reflecting on this precocity,
Paul Samuelson later speculated that prodigies are
not necessarily young. Lerner was twenty-six when John
Hicks first discovered his quality in a class at LSE and called
him to the attention of Lionel Robbins; and he was twentyeight
when his first paper appeared. Samuelson suggested
that "it may be the number of years after you
that counts and not the number of years after birth"
(1964, p. 169).
Between 1933 and 1939 Lerner published twenty-nine articles
and notes, some of which made a lasting mark on the
discipline, on both its substance and folklore. In a country
that was not unready to appoint to a professorship in
Oxbridge on the basis of a single article, Lerner should
have been professor many times over. But his achievements
were counterbalanced in British eyes by religious origin,
dress, and manners: Abba Lerner, Jew from Eastern Europe
and then the brick and grit of the East End, bare feet in
sandals (because, he said, his feet sweat), unpressed trousers
hanging, shirt collar open, was a hippie before his time.
In some things he could be difficult; in others he was too
permissive. He had a disconcerting way of saying what he
thought. The would-be genteel folk of academe could not
see him twirling a sherry glass and making small talk in
enter economicsABBA PTACHYA LERNER 213
wood-paneled common rooms. The story is told, based on
unpublished letters, that Professor Lionel Robbins of LSE
consulted Keynes in this regard when a post opened at the
London School. Lerner was an unavoidable candidate.
Keynes Brit-wittily replied by referring to Lerner's origin as
from the Continent. Maybe, he wrote, if they found a job
for Lerner as a cobbler during the day, they might wear
him out and have him teach in the evening. Lerner did
not get the job. He probably continued to pay for his
particularities when he moved to the other side of the Atlantic.
At any rate, he did not receive a post at a major
university until very late in his career.
But those articles! Take, for example, "The Concept of
Monopoly and the Measurement of Monopoly Power," published
in 1934, Lerner's first year as a graduate student.
This revolutionary departure from the prevalent view of
limiting cases of perfect competition and perfect monopoly
was written before Edward Chamberlin and Joan Robinson's
books on monopolistic competition became available. Not
only did it introduce the notion of degrees of monopoly
but it offered a measuring stick: the distance of prices from
the social optimum reached in perfect competition, which
Lerner defined as equal to marginal cost. Lerner showed
that
optimum allocation of resources—hence that it is a necessary
condition for maximizing welfare.
In addition, the article introduced "the first clear, rigorous
and definitive statement of Pareto optimality" (Scitovsky,
1984, p. 1551). Pareto's statement of the principle had in
effect been forgotten if not misunderstood. As Samuelson
put it, Pareto was "obscure and a bit confused" (1964, p.
172); besides, the concept is a deep one. Lerner expressed
it in the form that has since become a staple of training
and thinking in economics:
P = MC is a necessary and sufficient condition of an214 BIOGRAPHICAL MEMOIRS
The social optimum relative to any distribution of resources (or income)
. . . will be reached only if the resources which are to be devoted to
satisfying the wants of each individual are so allocated . . . that his total
satisfaction would not be increased by any transference of resources from
the provision of any one of the things he gets to any other thing he wants.
This would show itself in
preferred position without putting another individual in a worse position.
the impossibility of any individual being put in aWe mayadopt this as our criterion or test of the achievement of the relative optimum.
(1934, p. 162; my italics)
Another theme of these early papers was international
trade, and here too Lerner generated ideas in almost wasteful
abundance. His readers—even the best of them—rarely
caught all the implications. In preparing his sixtieth-birthday
salute, Samuelson reread these pieces and was still making
discoveries. In the above-cited piece on "The Concept of
Monopoly," for example, Samuelson found "clear recognition
that Marshall's dictum, that one should tax increasing
cost industries to subsidize decreasing (or constant!) cost
industries, simply represents an error" due to Marshall's
failure to aggregate producers' with consumers' surplus.
(Lerner was not himself always aware of his iconoclasm.
Samuelson exclaims: "Lerner treats this as a well-known error!"
Kenneth Arrow, however, recalls that Allyn Young,
who taught at LSE until his death in 1930, had caught this
as early as a review of Pigou's
that perhaps Marshall's remark was indeed a well-known
error in some circles.) The same holds for the doctrine
that the harm resulting from deviation from marginal cost
is cumulative: Samuelson had always associated it with the
postwar work of McKenzie and Scitovsky. But it's right there
in Lerner's hypothetical calculations (1934, p. 172). And
Samuelson sums up: "Papers like those of Lerner's are so
packed with results that few readers have ever gleaned all
their fruits" (1964, p. 171).
Wealth and Welfare in 1913, soABBA PTACHYA LERNER 215
One wonders sometimes whether people were doing their
reading. Lerner's very first article, "The Diagrammatical
Representation of Cost Conditions in International Trade,"
published in 1932 when he was still an undergraduate, was
the first to combine Haberler's concept of a productionpossibility
frontier (1930) with collective indifference curves
to derive a two-country equilibrium of international trade.
Who read it? Can it be that
organ of LSE and lacked the resonance of the older, more
established journals? In any event, much the same ground
had to be covered again, and to much more attention, in
Leontief's 1934 essay in the Q/E on "The Use of Indifference
Curves in International Trade."
But one should not blame only Lerner's readers. He
himself was not always aware of what he had done. There is
the extraordinary example of his work on the equalization
of factor prices across countries. Classical economists understood
that free movement of labor and capital across
frontiers would equalize their prices from one country to
another, and the Swedish economists Eli Heckscher and
Bertil Ohlin took the story further by showing that free
movement of goods can substitute for factor mobility and
reduce international differences in factor prices. Then in
1948 and 1949, Paul Samuelson offered first a geometric
and then an algebraic proof that such movement would
equalize prices, subject to specified constraints.
Samuelson's demonstration found its way to the desk of
Lionel Robbins, who recalled that he had heard the same
argument from a student in seminar some fifteen years earlier;
and he still had a copy of that seminar paper, by Abba
Lerner. At Robbins's urging, Lerner published the piece as
originally written: "Factor Prices and International Trade,"
in
done with his copy of the paper during all those years?
Economica was seen as a houseEconomica in 1952. The question remains, what had Lerner216 BIOGRAPHICAL MEMOIRS
The story, as told by Scitovsky, is that it had been lost; that
Lerner had given the corrected typescript to a fellow student,
who had volunteered to type it for submission to a
periodical and then left it on a bus. It was never recovered,
and Lerner was too busy working on other papers and perhaps
too embarrassed by the circumstances to recover the
text. At least that was the talk among Lerner's students in
1935, when Scitovsky was one of them.
These early pieces were written in the context of a gathering
debate on the effectiveness of capitalism as an economic
and social system, especially by comparison with a
hypothetical socialist alternative. (It is always hard to argue
against Utopia.) Lerner was on the socialist side, but his
economic analyses gave little comfort to his spiritual and
intellectual comrades. His heart may have been in the right
place, but he never let his heart rule his head. As a result,
he preferred efficiency to orthodoxy, competition and freedom
to state monopoly and dictation. Not that he thought
private enterprise intrinsically superior: that had to be tested
in the marketplace, and both private and public sectors
should be free to prove their worth. (Ironically, Lenin had
had fewer doubts on the subject. He thought that to let
even one village grocer subsist would be to invite the return
of capitalism.)
In anticipation of this contest between public and private,
Lerner devoted a series of articles to those principles
that should govern socialist planners and economic managers
and enable them to duplicate the advantages of a free,
competitive market. He then worked these into his first
major book,
The Economics of Control—Principles of WelfareEconomics
user's manual for a command economy, but it is much more
than that, as the subtitle indicates. It is a study of the
character and conditions of optimality, presented in clear,
(1944). The book is written as a kind of owner's/ABBA PTACHYA LERNER 217
simple, nonmathematical prose. (That probably cost it with
the experts, who were moving increasingly to mathematization
of argument.) It begins with the exchange economy
and moves on to production, with special reference to the
problems posed by indivisibility of factors. From there it
takes up such matters as efficient allocation in the short
and long run, rent, economic surplus, taxation and fiscal
policy, investment, international trade and finance, and—a
gloss on Keynesian analysis—the thorny link between unemployment
and inflation. Scitovsky's appreciation of this
ambitious work will serve to situate it in the history of economic
thought: "By comparing Lerner's book to Pigou's
Economics of Welfare
one-sided was Pigou's interpretation of that term, and what
enormous progress was made in one generation. Had Lerner
written his
set of references, one would also realize the magnitude
of his own contribution to that progress" (1984, p.
1553).
The most controversial aspect of Lerner's book was his
discussion of distributional optimality: What distribution
of income would maximize happiness (aggregate satisfaction)?
As Lerner had recognized but set aside in his article
of 1934 ("We cannot here go into the problems connected
with optimum distribution"), Pareto optimality was compatible
with any and all distributions of income, however skewed.
The principle seems intuitively unjust. In
Control,
would maximize the sum of individual satisfactions
(1920), one realizes how narrow andEconomics of Control fully footnoted with a completeThe Economics ofLerner posed the question: What income distributionif(1) the size of income were independent of its distribution;
(2) the ability to experience satisfaction were independent
of distribution; and (3) the ability to experience satisfaction
were unknown, that is, if utility functions differed in
ways unknown, so that ignorance was symmetric? His an
BIOGRAPHICAL MEMOIRS
218swer: if we assume there is diminishing marginal utility (that
satisfaction decreases with growing consumption of any good
or service) and that a move away from equality is as likely
to increase as to diminish aggregate satisfaction, society's
overall satisfaction will be highest if income is equal for all.
This argument, needless to say, became a subject of sharp
debate, in which logical proofs alternated with comparisons
of abstract values and psychological attitudes. Was the
sum of individual utilities a proper measure of social welfare?
Was satisfaction a function of absolute income or
relative as well? Is equality of result inherently good or
does it reward some more and some less than they deserve?
And if it does the latter, that is, misallocate reward, does
such misallocation reduce the social pie? Do incentives
matter? And even if there are some distributions that are
more productive than others, who is to say what they are
and how to bring them about, much more convince people
of their productivity and fairness? The kind of demonstration
provided by Lerner is testimony to the power of economics
to pose questions clearly, specify conditions, and
generate answers within these constraints, but testimony also
to the limitations of such reasoning as constraints are relaxed
and complications introduced.
For all these original and important contributions, any
one of which might have been the making of a tenured
career at a major university, Lerner will probably be remembered
best for his clarification and extension of
Keynesian theory and policy. Keynes himself was not always
ready to keep up with him. In 1943 Lerner published an
article, "Functional Finance and the Federal Debt," that
announced a new approach to fiscal policy. (The subject
was further developed in his
Economics of Control and theEconomics of Employment.)
wisdom was based on the principles and morals of good
He noted that conventional fiscalABBA PTACHYA LERNER 219
household management: don't spend what you don't have—
a tacit reminder that the words "economy" and "economics"
are etymologically derived from
for household.
Lerner, however, picking up on the summary Keynesian
prescription of deficit spending, argued that governments
should not be concerned with conventional morality but
rather should consider only the results of their actions. The
aim of government spending and taxing, he said, should be
to hold the economy's total spending at a level compatible
with and conducive to full employment at current prices—
in other words, no unemployment and no inflation. In
doing this the government should not be concerned with
deficits or debt. Second, the government should borrow or
repay only insofar as it wants to change the proportions in
which the public holds securities or money. Changing this
proportion will raise or lower interest rates and hence discourage
or promote investment and credit purchasing. If
the only question, then, was how to finance a deficit, Lerner
advocated printing money. Third, the government should
put money into circulation or withdraw (and destroy) it as
needed to effect the results called for by the first two principles.
To those who objected to such a radical program (and
Keynes, at least initially, was one), Lerner replied that it
was not so radical as it seemed. If the government operated
as he prescribed, nothing would go wrong. The natural,
almost instinctive, concerns about inflation were denied
if not allayed by the reminder that, so long as the
government observed the first principle of good functional
finance and increased the money supply as much as and no
more than would hold effective demand at a level that would
sustain full employment at current prices, there would be
no inflation. (To this a cynical economic historian might
oikos, the Greek word220 BIOGRAPHICAL MEMOIRS
reply that if politicians were economists they would cease
being politicians, and conversely.)
By the same token, Lerner rejected the fear that servicing
a large public debt would entail heavy taxes and thereby
reduce the reward for risk taking and the incentive to invest.
He pointed out that the same high income tax that
reduces gain provides a deduction in the event of loss; net
return may in fact be improved thanks to tax offsets. Scitovsky
notes with surprise that "neither Lerner nor any of his critics
. . . thought of another and possibly real danger of the
high income-tax rates needed to service too large a public
debt: the diminished incentive to work" (1984, p. 1560).
To which I would add that entrepreneurs and investors do
not ordinarily enter into ventures with the expectation of
loss. They expect to make money, and the tax rate is necessarily
a factor in their calculations of potential gain. To be
sure, the rate at which tax deductions may be taken will
affect (distort) normal incentives—hence the world of tax
shelters and
anticipation of loss are surely less than optimal from a
macroeconomic point of view.
Keynes jibbed at Lerner's logical policy development of
his own macroeconomics. In a letter to James Meade in
April 1943, Keynes noted that Lerner had written that, once
the national debt built up big enough, it would no longer
be necessary to borrow to enhance purchasing power—that
the interest on existing debt would provide the necessary
injection. (In effect, the government would be printing
money.) "His argument," Keynes wrote, "is impeccable. But
heaven help anyone who tries to put it across [to] the plain
man at this stage of the evolution of our ideas" (cited in
Colander, 1984, p. 1574). And much later, at a seminar at
Boston University in 1972, Lerner recalled putting the matter
to Keynes in Washington in 1946, at the time of Bretton
Springtime for Hitler. But investments made inABBA PTACHYA LERNER 221
Woods: "Mr. Keynes, why don't we forget all this business of
fiscal policy, public debt, and all those things and have some
printing presses?" To which Keynes replied: "It's the art of
statesmanship to tell lies, but they must be plausible lies"
(ibid.).
from Paul Baran, who remembers Keynes's reply as,
"Mr. Lerner, how many times do I have to remind you that
you cannot run a government on
Keynes, like most people who think about government
and serve it, was of two minds; Lerner of one. When confronted
by the implications of his own reasoning, Keynes is
said to have remarked, "I am no Keynesian." The quip is
perhaps apocryphal, but
himself put it later in "Keynesianism: Alive, If Not So Well"
(1978), Keynes was timid: "He did not carry his conclusions
all the way."
That was one charge one could not lay against Lerner:
he was the quintessence of rationality if not practicality,
and, once he established his premises, the rest followed
inexorably. One of the best examples was his proposal in
1942, when the United States had just entered the war, that
each unit commander be allocated funds and permitted to
equip his unit as seemed best: so many tanks, perhaps some
air support, a few engineers, and so on. In effect, Lerner
the socialist was ready to turn that most socialized of institutions,
the army, into a congeries of small enterprises. The
very idea appalled those who heard it, and to the end of his
life Lerner regretted that he had allowed some of his colleagues
to talk him out of publishing the proposal. Tibor
Scitovsky, who was one of those friendly counselors, writes
that critics had more faith in the army's collective wisdom
than in the good judgment of individual commanders. (In
the light of generalized business incompetence in the military,
at all levels, I would have placed more stress on prob
BIOGRAPHICAL MEMOIRS
(Kenneth Arrow heard a somewhat different versiontransparent humbug?")se non e vero, e ben trovato. As Lerner222lems of coordination and transaction costs.) Besides, they
had Lerner's best interests at heart, fearing that "so fanciful
an idea . . . would worsen rather than improve his chances
for professional advancement" (Scitovsky, 1984, p. 1566).
Scitovsky subsequently had second thoughts about the
substance of the proposal if not about Lerner's advancement:
if the French had had such an arrangement in the
1930s, he writes, the young General de Gaulle might have
had the opportunity to put into effect his revolutionary
ideas of mechanized warfare, and the course of history might
have been different. In fact, there is historical precedent
for such an arrangement, although Lerner was probably
unaware of it. In the days of mercenary armies, it was not
uncommon for commanders to recruit their own force and
arm it, as a kind of personal venture.
The problem, of course, is that he who invests (even other
people's money) may expect a return. The result might be
some ferociously energetic warfare accompanied by equally
energetic rapine and pillage. The same for risk: one of the
constants of coalition warfare is the effort of some commanders
to transfer risk to others. A number of great battles
have been lost because of foot dragging by allies. That's
the market for you. To be sure, Lerner or another good
marketeer would not be at a loss for remedies. Why couldn't
one commander pay another for help? Of course, if the
bargaining took too long, the supplicant might lose his ability
to pay. That's war for you. (In Ottoman times there were
no public firefighters in Constantinople: private companies
ran to fires and negotiated competitively with owners the
price of intervention. Time was of the essence, on both
sides, for the willingness of the owner to pay fell with the
value of the shriveling remainder.)
Lerner kept this ability to reason things out to their logical
conclusion, however iconoclastic and revolutionary, to
ABBA PTACHYA LERNER 223
the end of his days. In 1979, vexed and troubled by monopolistic
oil prices levied by OPEC, he proposed a tax on
petroleum imports that would vary with the deviation of
prices from some imputed market level. The aim would be
to deter increases by multiplying their negative impact on
demand. To make his point to his fellow economists, Lerner
stood outside the entrance to the large hall where Robert
Solow was about to deliver his presidential address to the
American Economic Association and passed out flyers. The
proposal was probably seen once again as politically impractical;
and, in fact, the federal government has always been
very chary of increasing the price of gasoline by levying
higher taxes. But Lerner was surely right, as we have seen
from reactions to unmultiplied price increases in the 1970s
and 1980s. In the meantime, American motorists pay at the
pump a third or less of the price paid by European or Japanese
consumers and are correspondingly more wasteful.
In his last years one of Lerner's abiding concerns was
inflation and its cousin stagflation (inflation with inadequate
demand). As someone who believed that proper management
could be allied with market incentives, he sought a
way to discourage price increases while continuing to reward
enterprise and growth and to hold costs while not
increasing unemployment. Lerner was a manager at heart,
but he understood that compulsion in the form of such
traditional remedies as price controls simply did not work.
He found his answer in MAP—an acronym for Market Anti-
Inflation Plan, itself an abbreviation of Market Mechanism
Anti-Inflation Accounting Plan, which he first presented to
the Sixth Annual Atlantic Economic Conference in October
1978.
Stagflation, Lerner affirmed, was the result of an
expectational equilibrium in which prices, wages, and total
spending would keep rising and chasing one another in an
224 BIOGRAPHICAL MEMOIRS
inflationary zero-sum game. The cure, Lerner felt, had to
come from continued spending at a level that would buy
the output of full employment—but no more. Meanwhile
one had to stabilize the average price level while allowing
individual prices to vary to reflect changes in taste and
productivity. The aim: an economy that cools down while
retaining its dynamism. How to do this? Briefly, by setting
for all firms a normal rate of increase in sales, say to 103
percent of the previous year. If a firm sells more, it incurs
an "anti-inflation deficit"; if it sells less, it gets an anti-inflation
credit. Successful firms that can and want to grow
faster must buy credits from those that are growing slower.
Meanwhile, to encourage hiring, each new employee entitles
the firm to a free credit equal to his wage in previous
employment multiplied by the new firm's ratio in the previous
year between net sales and wage bill. This was later
modified to avoid rewarding mere shifts to more labor-intensive
techniques at the expense of efficiency. And so on.
The proposal was never put into effect, in part surely
because it would have entailed the creation of a costly bureaucracy
and generated a large (nightmarish?) accounting
burden for individual firms. But it is testimony to Lerner's
imagination and ingenuity and devotion to the common
weal. He loved and wanted to do something about problems.
Of his many proposals, only two or three have actually
found their way into common use. One is functional finance,
which shocked at first but has proved congenial to
governments. The second is government intervention to
counter speculation by monopolistic manipulators, now standard
procedure in money markets and foreign exchange.
Lastly, there is Lerner's recommendation that socialist planners
should choose between private and public enterprise
on the basis of efficiency. We see more and more of this in
ABBA PTACHYA LERNER 225
eastern Europe. But can public enterprise survive in open
and fair competition? And if it cannot, is this really socialism?
And what about power?
Abba Lerner died in October 1982. He was survived by
his wife, Daliah; a son, Lionel, and daughter, Marion, both
by an earlier marriage; sisters Hannah (Banerji), Bella, and
Dorothy; and brother Jack. Lerner was one of the greatest
economists of this century. But perhaps because he worked
with words and diagrams rather than equations—he was a
master of limpid prose—he never got the recognition he
deserved. That his name is not on the roster of Nobel
prize winners in economics is cause for regret.
REFERENCES
Colander, David. 1980. Post-Keynesian economics, Abba Lerner,
and his critics.
Colander, David, ed. 1983.
Lerner.
Colander, David. 1984. Was Keynes a Keynesian or a Lernerian?/.
Soc. Res. 47(2):352-60.Selected Economic Writings of Abba P.New York: New York University Press.Econ. Lit.
Samuelson, Paul. 1964. A. P. Lerner at sixty.
22(Dec.):1572-75.Rev. Econ. Stud.21(3):169-78.
Scitovsky, Tibor. 1984. Lerner's contribution to economics.
Econ. Lit.
J.22(Dec.):1547-71.226 BIOGRAPHICAL MEMOIRS
HONORS AND DISTINCTIONS
DEGREES
1932
1943
B. Sc. (economics), London School of Economics
Ph. D. (economics), London School of Economics
PROFESSIONAL RECORD
1935-37
1939-40
1940-42
1942-46
1946-47
1947-59
1959-65
1965-71
1971-84
Assistant
Lecturer
term)
Assistant
Associate
Professor
Professor
Professor
Professor
Professor
Lecturer, London School of Economics
in Economics, Columbia University (fall
Professor, University of Kansas City
Professor, New School for Social Research
New School for Social Research
Roosevelt University
Michigan State University
University of California, Berkeley
Florida State University
VISITING PROFESSOR
1938 (spring);
1958-59;
1960, 1962,
1963
(summers)
1940
1942-43
1947
1948, 1950
1954-56
1957
1957-58
1958, 1959
1965
1965-66
1976, 1977
CONSULTANT
1949
1950-51
University of California, Berkeley
University of Virginia (spring)
Amherst College (fall)
Roosevelt College (spring, summer)
New School for Social Research (summers)
The Hebrew University, Jerusalem
Columbia University (spring, summer)
The Johns Hopkins University
Michigan State University (summers)
University of Hawaii (summer)
University of Tel Aviv
Florida State University (winter and spring)
The Rand Corporation (summer)
The Economic Commission for Europe, Geneva
ABBA PTACHYA LERNER
2271953-55 Economic Advisory Staff, Government of Israel
1955-56 Treasury, Government of Israel, and the Bank of Israel
(Adviser)
1958-59 Institute for Mediterranean Affairs, New York
HONORARY SOCIETIES
1971 Fellow, American Academy of Arts and Sciences
1974 Member, National Academy of Sciences
HONORS
1932 Gonner Memorial Prize, LSE
1932 Gladstone Memorial Prize, LSE
1932-34 LSE Research Fellowship
1934-35 Leon Fellowship, University of London
1938-39 Rockefeller Fellowship
1960-61 Fellow, Center for Advanced Study in the Behavioral
Sciences
1963-64 Vice-President, American Economic Association
1964 Regents Lecturer, University of California, Santa
Barbara
1966 Distinguished Fellow, American Economic Association
1970 Honorary Fellow, London School of Economics
1973 President, University Centers for National Alternatives
1978 D.Sc. (honorary), Northwestern University
PROFESSIONAL SOCIETIES
American Economic Association
Econometric Society
228 BIOGRAPHICAL MEMOIRS
SELECTED BIBLIOGRAPHY
1932
The diagrammatical representation of cost conditions in international
trade.
1934
The concept of monopoly and the measurement of monopoly power.
Economica 12:346-56.Rev. Econ. Stud.
1:157-75.The diagrammatical representation of demand conditions in international
trade.
Economic theory and socialist economy.
1935
Economic theory and socialist economy: A rejoinder.
Stud.
1936
The symmetry between import and export taxes.
Mr. Keynes' "General theory of employment, interest and money."
Economica 1:319-34.Rev. Econ. Stud. 2:51-61.Rev. Econ.2:152-54.Economica 3:306-13.Int. Lab. Rev.
A note on socialist economics.
1937
Statics and dynamics in socialist economics.
1938
Theory and practice of socialist economics.
1941
The economics steering wheel.
1943
Functional finance and the federal debt.
User cost and prime user cost.
1944
34:435-54.Rev. Econ. Stud. 4:72-76.Econ. J. 47:253-70.Rev. Econ. Stud. 6:71-75.Univ. Rev. (Kansas City) June:2-8.Soc. Res. 10:38-51.Am. Econ. Rev. 33:131-32.The Economics of Control: Principles of Welfare Economics.
New York:Macmillan.
ABBA PTACHYA LERNER 229
1946
Money. In
Encyclopedia Britannica.1949
The inflationary process: Some theoretical aspects.
Rev. Econ. Stat.31:193-200.
1951
Fighting inflation.
Rev. Econ. Stat. 33:194-96.Economics of Employment.
1952
Factor prices and international trade.
The essential properties of interest and money.
93.
1953
On the marginal product of capital and the marginal efficiency of
investment.
1961
The burden of the debt.
1962
Macro-economics and micro-economics. In
New York: McGraw-Hill.Economica 19:1-15.Q. J. Econ. 66:172-J. Pol. Econ. 61:1-14.Rev. Econ. Stud. 43:139-41.Logic, Methodology andPhilosophy of Science: Proceedings of the 1960 International Congress,
eds. Ernest Nagel, Patrick Suppes, and Alfred Tarski, pp. 474-83.
Stanford: Stanford University Press.
1972
Flation: Not Inflation of Prices, Not Deflation of Jobs.
Books.
1978
Keynesianism: Alive, if not so well. In
Democracy,
pp. 59-69. Boston: Martinus Nijhoff.
New York: QuadrangleFiscal Responsibilities in Constitutionaleds. James Buchanan and Richard Wagner,230 BIOGRAPHICAL MEMOIRS
1979
MAP: The market mechanism cure for stagflation.
Atl. Econ. J.7:12-20.
1980
With David C. Colander:
York: Harcourt Brace Jovanovich.
1983
MAP: A Market Anti-Inflation Plan. NewSelected Economic Writings of Abba P. Lerner,
New York: New York University Pressed. David C. Colander.
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