----------------- HES POSTING ----------------- I would be interested to learn of the training of people like Arthur Lewis, Ragnar Nurkse, Paul Rosenstein-Rodan, Albert Hirschman, and Raul Prebisch. Who would others nominate as the most influential development economists of the 1950s and early 1960s? My own favourite would be Lauchlin Currie who headed up the very first of the World Bank's comprehensive country study missions, to Colombia in 1949-50. He stayed on in Colombia after the mission report was completed to advise the Colombian government on its implementation, eventually becoming a Colombian citizen. Albert Hirschman came down to Colombia shortly after, also as an adviser to the government for two years, but offering very different advice from Currie's. (Basically, Hirschman was a protectionist while Currie focused on openness and a massive urban housing programme. Unlike Hirschman, Currie wanted to accelerate rural-urban migration and get the birth rate down.) Despite working in Colombia for over 40 years, Currie never felt that there is an economics for poor countries and another for rich countries. There is just economics, and it was the job of a well-trained economist to apply universal principles to a different set of conditions. His own training was at the LSE, 1922-25 under Edwin Cannan, whose common sense economics (particularly in getting behind the money veil) he admired. (Harold Laski was his tutor in the field of politics.) But he also absorbed Keynes's ideas on the importance of the money veil, the distinction between private and social accounting, and the related fallacy of composition (in ridiculing Dalton's capital levy proposal, for example). In 1925 he moved to Harvard where his chief inspiration was Allyn Young (but he was also one of Frank Taussig's top students). Unlike today, Harvard's graduate programme in economics included mandatory classes in politics, economic history, and a foreign language (German in Currie's case), as well as statistics (but little maths). >From Allyn Young, Currie absorbed the profound lessons of "Increasing Returns and Economic Progress" (Young's seminal presidential address to the British Association, September 1928). He discussed this with Young on a visit to London in the summer of 1928 while collecting data on British banking for his PhD dissertation which he undertook under Young's initial guidance. Currie's masterly "Control of the Supply of Money in the United States" (Harvard 1934) was dedicated to Young's memory. In 1934, after several years as an unorthodox teacher at Harvard, where he assisted Ralph Hawtrey, whom he admired, and Joseph Schumpeter, whom he regarded as a reactionary and even something of a charlatan, he joined Jacob Viner's Freshman Brain Trust at the US Treasury. (He remained a life-long friend of Viner's.) >From the Treasury, he moved to the Fed as assistant to the new governor, Marriner Eccles, and drafted the 1935 Banking Act that greatly increased the powers of the Fed to avert the calamitous mistakes of 1929-33. Along with his close friend Harry Dexter White, he had earlier strongly condemned the Fed for its passivity in the face of mass liquidations, and had also urged fiscal deficits, financed by the Fed, as the best way to revive the economy in the face of a Hawtreyan "credit deadlock". At the time this was heresy. His distinguished career as the intellectual leader of the spending wing of the New Deal culminated in his appointment to the White House in July 1939 as FDR's personal adviser for economic affairs. He remained in this post until Roosevelt's death in 1945. Among other duties he was head of the lend-lease programme to China, 1941-43, acting head of the foreign economic administration, 1943-44, and head of the allied delegation to Bern in early 1945 to get the Swiss to block Nazi gold accounts and shipments of material to the Italian front. That was his background before dedicating his life from 1949 until his death in 1993 to economic development. In Colombia he fought against the pernicious influence of the Kemmerer commissions of the 1920s that established central banks in Latin America that combined central banking with development banking. This perpetuated the confusions of the real bills doctrine that had so perverted Fed policy in the US. In the Latin American context, it imparted an inflationary bias to the financing of development projects. Inflation was disastrous in fixed exchange rate regimes, and hindered the capture of non- inflationary savings, especially for long-term projects such as urban housing and infrastructure -- so necessary if the mass of disguisedly unemployed rural labour was to be reallocated to more worthwhile activities, and the birth rate curbed. As a top presidential adviser in Colombia for 40 years, Currie had a profound influence on economic policy, institution-building, and urban planning there (though much less than he would have liked), and some influence, through his writings, on development theory and practice more generally. Much of this, however, was against the grain of some fashionable development economics expounded by those who believe that development economics must be something different in principle from what would be good theory and practice in the US or Europe. The last thing to bear in mind is that our profession used to be development economics. Certainly, if you look at 1920s economics texts (for example, Ely's best-selling "Outlines of Economics", 4th ed., 1923, of which Allyn Young was a major co-author), what was it but development economics, albeit for a maturing United States? And what was Adam Smith's "Wealth of Nations" if not development economics? Roger Sandilands University of Strathclyde ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]