Abba Lerner

Background

Lerner, Abba Ptachya was born in 1903 in Bessarabia, Russia. Son of Morris Isaac and Sofie (Buchman) Lerner.

Education

It was his early association with the plethora of socialist movements prevalent in the 1920s Britain that brought him into contact with economics. The L.S.E. attracted the self-taught Lerner largely because of its Fabian associations, but found himself instead in the hands of Lionel Robbins.

ABba Lerner's student career was sheer brilliance. He published several first-rank papers in economic theory and still found time to launch the Review of Economic Studies with Paul Sweezy and Ursula Webb. His 'student' papers catapulted him into the frontlines of the "Paretian revival" of the 1930s which consolidated neo-classical theory.

A six-month stint at Cambridge in 1934-1935 brought him into contact with John Maynard Keynes's "Cambridge Circus".

Career

For forty years, Lerner has replaced a stunning number of institutions, rarely stayed in one place for more than five years.

Abba Lerner's numerous contributions to economic theory and policy make him one of most influential economists of the century - although his congenital inability to play academic politics ensured that he would not lead a conventional career.

Achievements

• Lerner's special contribution to the economy has been following:
  
  • The use of fiscal policy and monetary policy as the twin tools of Keynesian economics is credited to Lerner by historians such as David Colander.
  
  • The Lerner symmetry theorem states that an import tariff can have the same effects as an export tax
  
  • The Lerner Index measures potential monopoly power as the negative inverse of demand elasticity.
  
  • Lerner improved a formula of Alfred Marshall, which is known since as the Marshall–Lerner condition.
  
  • He developed a model of market socialism, which differed from the pure planned economy. It became known as the Third Way. By the 1960s Lerner began to distance himself from his early work on socialism.
  
  • Lerner improved the calculations made by Wilhelm Launhardt on the effect of terms of trade.
  
  • He developed the concept of distributive efficiency, which shows that economic equality will produce the greatest total happiness with a given amount of wealth.
  
  • Lerner contributed to the Lange-Lerner-Taylor theorem.
  
  • Based on effective demand principle and chartalism, Lerner developed functional finance, a theory of purposeful financing (and funding) to meet explicit goals, including full employment, no taxation designed solely to fund expenditure or finance investment, and low inflation.
  
  • Lerner developed the concept of the NAIRU (before Friedman and Phelps). He termed it "low full employment" and contrasted it the "high full employment," the maximum employment achievable by implementing functional finance.
  
  • The Lerner-Samuelson theorem goes back to Lerner.
  
  Lerner has proved himself in other areas. For example, in the 50's Lerner was adviser of the government of Israel. In 1966 he became an honorary member of the American Economic Association. In 1980, when Lerner was already 77 years old, he became President of the Atlantic Economic Society, thus added to a long list of economists-centenarians.
  
  

Works

• article

  • Money as a Creature of the State, 1947

  • The Diagrammatical Representation of Cost Conditions in International Trade, 1932

  • The Diagrammatical Representation of Demand Conditions in International Trade, 1934

  • Economic Theory and Socialist Economy, 1934

  • The Symmetry Between Import and Export Taxes, 1936

  • A Note on Socialist Economies, 1936

  • Theory and Practice of Socialist Economics, 1938

  • The Economic Steering Wheel; the Story of the People's New Clothes, 1941

  • Interest Theory: Supply and demand for loans or supply and demand for cash? 1944

  • The Inflationary Process: Some theoretical aspects, 1949

  • The Essential Properties of Interest and Money, 1952

  • Factor Prices and International Trade, 1952

  • On the Marginal Product of Capital and the Marginal Efficieny of Investment, 1953

  • Consumption-Loan Interest and Money, 1959

  • On Generalizing the General Theory, 1960

  • On Some Recent Developments in Capital Theory, 1965

  • The 1971 Report of the President's Council of Economic Advisers: Priorities and Efficiency, 1971

  • The Economics and Politics of Consumer Sovereignty, 1972

• book

  • Alternative Formulations of the Theory of Interest, 1947

  • The Burden of the National Debt, 1948

  • The economics of Employment, 1951

  • The Economics of Control: Principles of welfare economics, 1944

  • The economics of control, 1975

  • Flation: not inflation of prices, not deflation of jobs, 1972

  • From Pre-Keynes to Post-Keynes, 1977

  • Mr Keynes's General Theory, 1936

  • Keynesian Economics in the Sixties, 1963

  • Macro-Economics and Micro-Economics, 1962

  • Map: A Market Anti-Inflation Plan, with D.Colander, 1980

  • Money, Debt and Wealth, 1973

Views

analytic philosophy

Membership

Fellow American Economics Association (past vice president), Econometric Society, London School Economics (honorary). Member National Academy Sciences Atlantic Economics Society (president 1980), Western Economics Association (Vice-President 1980), Royal British Academy President, University Centers for Rational Alternatives, 1975-1977.

Interests

• creating of wire car models

• Philosophers & Thinkers

  Rene Dekart

• Sport & Clubs

  football

• Music & Bands

  classic

Connections

Father:

Morris Lerner

Mother:

Sofie Lerner

child:

Marion Lerner

child:

Lionel Lerner

Brother:

Arthur Lerner

Brother:

Jack Lerner

Brother:

Nat Lerner

Sister:

Bella Costello

Sister:

Doris Bornstein

Sister:

Hannah Banerji

1st wife:

Alice Sendak

university friend:

Paul Sweezy

university friend:

Ursula Webb