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ABBA PTACHYA LERNER October 28 1903-October 27, 1982

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ABBA PTACHYA LERNER October 28 1903-October 27, 1982 NATIONAL ACADEMY OF SCIENCES Abb A P T A C H Y A L ERNER 1903—1982 A Biographical Memoir by DA V I D S . L ANDES Any opinions expressed in this memoir are those of the author(s) and do not necessarily reflect the views of the National Academy of Sciences. Biographical Memoir COPYRIGHT 1994 NATIONAL ACADEMY OF SCIENCES WASHINGTON D.C. ABBA PTACHYA LERNER October 28 1903-October 27, 1982 BY DAVID S. LANDES BBA PTACHYA LERNER was born in Bessarabia (then in Rus- A sia) in 1903 and came to England as a child of three, one more lucky escapee from endemic and epidemic perse- cution 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 fellow- ships. 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 The Re- 209 210 BIOGRAPHICAL MEMOIRS view of Economic Studies. (Abba had been, in one of his avatars, a commercial printer and was not intimidated at the pros- pect 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. Ap- parently there was no lack of material, but the Young Turk organizers needed to find money. Then, as later, the best- provided 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 re- paired to the major centers of teaching and research to drum up contributions. Oxford was splendid. The econo- mists 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 stu- dents 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 lis- tened 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- ABBA PTACHYA LERNER 211 digms. 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 General Theory, which marked a revolution in economics and posed the same kind of para- digm shock that Joan Robinson had inflicted, only more so. Looking back on this encounter, Lerner had trouble under- standing why everything had seemed so difficult. In 1936 he was asked by the International Labour Office to write a review essay on the General Theory; the resulting article (1936) 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 in- cluded the University of California at Berkeley, Columbia University, the University of Kansas City, the New School for Social Research, Roosevelt University in Chicago, Michi- gan 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 212 BIOGRAPHICAL MEMOIRS seventy-five) and then took a chair at Florida State Univer- sity, 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 pre- cocity, 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 twenty- eight when his first paper appeared. Samuelson suggested that "it may be the number of years after you enter econom- ics that counts and not the number of years after birth" (1964, p. 169). Between 1933 and 1939 Lerner published twenty-nine ar- ticles 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 trou- sers 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 ABBA 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 At- lantic. 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," pub- lished 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 P = MC is a necessary and sufficient condition of an optimum allocation of resources—hence that it is a neces- sary condition for maximizing welfare. In addition, the article introduced "the first clear, rigor- ous 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.
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