Abba P. Lerner, in full Abba Ptachya Lerner, (born October 28, 1903, Bessarabia, Russian Empire—died October 27, 1982, Tallahassee, Florida, U.S.), Russian-born economist whose contributions included theoretical works on inflation, unemployment, and international trade.. Lerner’s family immigrated to England when he was three. Earlier, he had written, but not published, a proof of the conditions under which free trade in goods causes the prices of factors to be equal even when factors are immobile. Like Friedman, Lerner was a brilliant expositor of economics who was able to make complex concepts crystal clear. BY DAVID S. LANDES. Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy.Market socialism differs from non-market socialism in that the market mechanism is utilized for the allocation of capital goods and the means of production. "Theory and Practice in Socialist Economics". "The Symmetry Between Import and Export Taxes", Abba P. Lerner, 1934. Liberty Press, 1981. If you look at libertarian socialism (Kroptokin, Proudhon, Chomsky, Graeber, Zinn, Bookchin) or market socialism (Oskar Lange, Abba Lerner, John Stuart Mill, Richard Wolff, Yanis Varoufakis), it’s actually quite sophisticated and pretty brilliant. These thoughts are often attributed to Keynes, and they do follow from Keynes’s reasoning. It was his early association with the plethora of socialist movements prevalent Like Friedman, he praised private enterprise on the ground that “alternatives to government employment are a safeguard of the freedom of the individual.” Also like Friedman, Lerner loved Free Markets. 1938, pp. "Functional Finance and the Federal Debt,", Abba P. Lerner, 1952. Keynes denounced Lerner on the spot, but Keynes’s colleague Evsey Domar, seated beside Lerner, whispered, “He ought to read The General Theory.” A month later, wrote Lerner, Keynes withdrew his denunciation. The amount by which the price exceeds marginal cost is a measure of monopoly power in an industry. As for the socialist aspect of his synthesis, James Meade adopted the market socialist model of Fred M. Taylor, Oskar Lange, and Abba Lerner. March 8—Ideology—Labor and Democracy. William D. Nordhaus, "The Political Business Cycle," Review of Economic Studies (April 1975) Abstract. He grew up in a Jewish family, which emigrated to Great Britain when Lerner was three years old. 3 (1964): 169. Abba P. Lerner, 1936. particularly Barone and Taylor on the viability of socialist economy based — on rational economic calculation. 9 economy, how would socia lism motivate and inform its participants in order to achieve Abraham "Abba" Ptachya Lerner (also Abba Psachia Lerner;[1][2] 28 October 1903 – 27 October 1982) was a Russian-born British economist. Birthplace: Rumania Location of death: Tallahassee, FL Cause of death: unspecified. On the Modern Economic Theory of Incentives, Markets, and Socialism. At about the same time Abba Lerner, often in close collaboration with Lange, developed similar ideas (Lerner 1934, 1935, 1936). Home Economy Economic systems Lange model. Abba P. Lerner, 1938. Lerner was also an unusual kind of socialist: he hated government power over people’s lives. By the 1930s, defenses of socialist economic efficiency were advanced in the main in British economic literature by a number of authors, among them Henry Dickinson, Evan Durbin, Maurice Dobb, Oskar Lange, and Abba Lerner. "The Concept of Monopoly and the Measurement of Monopoly Power,", Abba P. Lerner, 1943. Lerner, Abba P., "Functional Finance and the Federal Debt," Social Research 10 (February 1943): 38-51. Paul A. Samuelson, “A. Historical debate took place between the Austrian School embodied by Mises and Friedrich Hayek, who argued against the viability of socialism, and between neoclassical and Marxist economists, in particular Cläre Tisch (as forerunner), Oskar R. Lange, Abba P. Lerner, Fred M. Taylor, Henry Douglas Dickinson and Maurice Dobb, who argued that socialism was both feasible and superior. March 29—Prophesy—Labor Under Full Employment. At about the same time Abba Lerner, often in close collaboration with Lange, developed similar ideas (Lerner 1934, 1935, 1936). It’s not socialist by any means. In an article titled “OPEC—a Plan—If You Can’t Beat Them, Join Them,” Lerner advocated that the United States and other governments of oil-consuming countries impose a 100 percent excise tax on the difference between OPEC’s price and the pre-OPEC price adjusted for inflation. Like Friedman, Lerner was a brilliant expositor of economics who was able to make complex concepts crystal clear. Abba Lerner. Abba P. Lerner (1903-1982) was born in Russia, raised on the London East End and worked as a machinist, a capmaker, a Hebrew teacher, a Rabbinical student and tried his hand at business before enrolling in 1929 at the London School of Economics. Lange, since the rate of growth in the socialist community is controlled.29 Professor Lange has been joined by Abba Lerner in theorizing about the conditions of efficiency under market socialism. Ludwig von Mises, 1922[1936] Socialism, an Economic and Sociological Analysis, M. Kahane translator. He turned to economics, enrolling in a night course at the London School of Economics in 1929, in order to discover why his business had failed. P. Lerner at Sixty,” Review of Economic Studies 31, no. At some point, their marriage ended and Lerner ended up remarrying to Daliah Goldfarb at the age of 57. He exhumed this gem, which appeared 17 years later in the 1950 Economica.”4, Probably Lerner’s best-known article is “The Concept of Monopoly and the Measurement of Monopoly Power.” In it he laid out clearly why setting the price of a good equal to its marginal cost is important for efficiency. "Factor Prices and International Trade,", Nobel Memorial Prize in Economic Sciences, Learn how and when to remove this template message, Abraham Psachia Lerner, Assistant Lecturer in Economics, "Functional Finance and Full Employment: Lessons from Lerner for Today? Abba Lerner articulated a fiscal strategy for a federal government which takes Keynesian macroeconomic analysis to its logical conclusion and it became known as functional finance. Enter your email address to subscribe to our monthly newsletter: 1934. “The Concept of Monopoly and the Measurement of Monopoly Power.”, 1934. “The Diagrammatical Representation of Demand Conditions in International Trade.”, 1936. “The Symmetry Between Import and Export Taxes.”, 1943. “Functional Finance and the Federal Debt.”, 1972. “The Economics and Politics of Consumer Sovereignty.”, 1980. “OPEC—a Plan—If You Can’t Beat Them, Join Them.”. We know little of his childhood, but the variety of his early work experience bespeaks the Outsider. Though Lange's initial By age 16 he had begun a succession of jobs (as a … Here I’ll touch on one of his primary ideas. October 28 1903-October 27, 1982. As capitalism lurches from crisis to crisis, combined with the heavy toll wrought by Covid-19, there are people talking about a concept called Modern Money Theory. I would not have been so upset if she had said that I could not have it, whatever it was, or that it was very wicked of me to want it. MMT. The "Socialist Calculation" debate emerged at the end of the 19th Century. Way back July 2014, I wrote for The Pen, about Abba Lerner, the economist. Lerner was active in economic analysis until the day he died. In 1932, they had twin children Marion and Lionel. Abba Lerner was the milton friedman of the left. ProCon/Encyclopaedia Britannica, Inc. 325 N. LaSalle Street, Suite 200 Chicago, Illinois 60654 USA Therefore, at that price, the tax would have been 100 percent of 26 − 6, or twenty dollars. [4][5] While in the US, he befriended intellectual opponents Milton Friedman and Barry Goldwater. It was his early association with the plethora of socialist movements prevalent Facebook Twitter LinkedIn YouTube NEWSLETTER DONATE. Economic Studies, 1936, pp. Oct. 1936, 72-76) The pre-OPEC price adjusted for inflation was six dollars. MMT maintains that there is a particular state in the economy that is defined by Abba Lerner’s first law of functional finance. On the Modern Economic Theory of Incentives, Markets, and Socialism. One reason, wrote Tibor Scitovsky of Stanford, was “Lerner’s unrelenting logic,” which “overruled whatever loyalties he started with” and “made him seem like a cold fish to just about everybody.”6 Another reason was that Lerner rarely stayed in one university long; he taught at Columbia, the University of Virginia, Kansas City, Amherst, the New School for Social Research, Roosevelt, Johns Hopkins, Michigan State, and the University of California at Berkeley. Lerner was born on October 28, 1903 in Bessarabia (Russian Empire). Reflecting his familiarity with Austrian marginali~m,~~ Lerner proposes to replace Lange's statics Lerner married Alice Sendak in 1930. He opposed Minimum Wage laws and other price controls because they interfered with the price system, which he called “one of the most valuable instruments of modern society.”1. Lerner was also an unusual kind of socialist: he hated government power over people’s lives. As for the socialist aspect of his synthesis, James Meade adopted the market socialist model of Fred M. Taylor, Oskar Lange, and Abba Lerner. Ludwig von Mises, 1922[1936] Socialism, an Economic and Sociological Analysis, M. Kahane translator. Based on effective demand principle and chartalism, functional finance, is a theory of purposeful financing (and funding) to meet explicit goals, including the attainment of full employment. It took Lerner’s clear thinking to get from Keynes’s model of the economy to these policy conclusions. Both his clear writing and his hatred of authority are illustrated in the following defense of consumer sovereignty: One of the deepest scars of my early youth was etched when my teacher told me, “You do not want that,” after I had told her that I did. 4 (1984): 1549. From the age of sixteen he worked as a machinist, a teacher in Hebrew schools, and as a … Lerner’s plan, if followed, would have caused the price to consumers to rise two dollars every time OPEC raised its price one dollar. During World War II, for example, when john maynard keynes gave a talk at the Federal Reserve Board in Washington, Lerner, who was in the audience, found Keynes’s view of how the economy worked completely convincing and challenged Keynes for not carrying his own argument to its logical conclusion. Another reason was that although he made major contributions in so many areas, he did not have a specialty. March 22—Policy—Labor and Prosperity. Lerner, Abba P., "Functional Finance and the Federal Debt," Social Research 10 (February 1943): 38-51. March 15—Theory—Bourgeoisie, Marxist and Laborist Economics. Lerner’s thinking, which was absolutely watertight, was that this plan would double consumers’ elasticity of demand, causing them to demand less oil at higher prices and thus reduce the strength of the cartel. In 1929, Lerner entered the London School of Economics, where he studied under Friedrich Hayek. More important, it would have caused the price to fall by two dollars every time OPEC lowered its price by one dollar. Abba Lerner. March 1—Philosophy—Capitalism, Socialism, Laborism. At about the same time Abba Lerner, often in close collaboration with Lange, developed similar ideas (Lerner 1934, 1935, 1936). These include his writings on micro- and trade theory, socialist economics and the economics of Keynes in the 1930s; his influential book, The Economics of Control, and the notion of ‘functional finance’, and research on inflation, employment … • Lerner developed a model of market socialism which featured decentralised market pricing proportional to marginal social cost and in so doing contributed to the Lange–Lerner–Taylor theorem. Lerner, like Friedman, had a sharp analytical mind that made him follow an argument to its logical conclusion. Lerner thought that if governments wanted to increase aggregate demand so as to maintain employment, and if the federal budget was balanced, the government should run a deficit by increasing government spending or decreasing taxes. His appointment as assistant lecturer at the LSE in 1936 was the first of many teaching positions, the rest of which he held in the United States after 1937. paul samuelson, in a tribute to Lerner on his sixtieth birthday, wrote that Lerner’s experience “tempts one to advise students in Economics A to quit college, fail in business, marry and raise a family, and resist being overpaid.”3, One of Lerner’s first papers, published in 1934, is a clear diagrammatic exposition of international trade. March 8—Ideology—Labor and Democracy. Lerner was born in Romania and immigrated with his parents to Britain while still a child. [8] Fundamental economic "concepts, theorems and rules" were derived and/or furthered by Lerner's work throughout his academic career. Also, Lerner made his insights so clear and so apparently obvious that people who adopted his ideas forgot where they learned them. Abba Ptachya Lerner (October 28, 1903 – October 27, 1982) was an American economist. March 29—Prophesy—Labor Under Full Employment. Lerner’s main contribution to macroeconomic policy is his concept of functional finance. What rankled was the denial of my personality—a kind of rape of my integrity. The plan was never adopted. Tibor Scitovsky, “Lerner’s Contributions to Economics,” Journal of Economic Literature 22, no. by Abba P. Lerner Tuesday Evenings, 7:30-9:30, March 1 to 29, 1949. Like Friedman, Lerner was a brilliant expositor of economics who was able to make complex concepts crystal clear. Lange also made contributions in various com. MMT maintains that there is a particular state in the economy that is defined by Abba Lerner’s first law of functional finance. Probably because he lacked a following, Lerner never received the Nobel Prize, although many economists think he should have. From “The Economics and Politics of Consumer Sovereignty,” p. 258. March 22—Policy—Labor and Prosperity. Liberty Press, 1981. ", https://en.wikipedia.org/w/index.php?title=Abba_P._Lerner&oldid=994048441, Imperial Russian emigrants to the United Kingdom, Distinguished Fellows of the American Economic Association, Academics of the London School of Economics, Articles needing additional references from March 2020, All articles needing additional references, Wikipedia articles with SNAC-ID identifiers, Wikipedia articles with SUDOC identifiers, Wikipedia articles with WORLDCATID identifiers, Creative Commons Attribution-ShareAlike License, Lerner (1951) developed the concept of the, This page was last edited on 13 December 2020, at 21:12. 53-71) Abba P. Lerner - A Note on Socialist Economics (The Review of Economic. At about the same time Abba Lerner, often in close collaboration with Lange, developed similar ideas (Lerner 1934, 1935, 1936). “After I had enunciated the same result in 1948,” Samuelson later wrote, “Lord Robbins mentioned to me that he thought he had a seminar paper in his files by Lerner of a similar type…. A six-month stay at Cambridge in 1934–1935 brought him into contact with John Maynard Keynes. the other main contributor to the economic theory of socialism was Abba Lerner. [7] Lerner was 62 when he was given a professorship at the University of California, Berkeley in 1965 and left after reaching mandatory retirement age six years later. In 1980, for example, he laid out a plan for breaking OPEC. Oskar Lange (1904 – 1965), a Polish economist and later a member of the postwar Polish Communist government, took up the cudgels to argue that it was possible, writing in reply “ On the Economic Theory of Socialism ” (1936), as well as an essay with Abba Lerner. His works provided the earliest model of market socialism. March 5, 2019 at 2:16 PM THE SPEAKER Lerner grew up in the London East End. by Abba P. Lerner Tuesday Evenings, 7:30-9:30, March 1 to 29, 1949. March 1—Philosophy—Capitalism, Socialism, Laborism. Further, socialism was tried over and over in the 20th Century with 100 million slaughtered, grinding poverty and ecocide. In 1964 Samuelson wrote: “Today this may seem simple, but I can testify that no one at Chicago or Harvard could tell me in 1935 exactly why P = MC was a good thing.”5. [7] During his time there, Lerner criticized the unrest caused by the student protests as a threat to academic freedom.[7]. Please. Although Lerner never received the Sveriges Riksbank's Nobel Memorial Prize in Economic Sciences, he has been recognized as one of the greatest economists of his era. Samuelson showed the same thing in an article much later. The Institute for New Economic Thinking. particularly Barone and Taylor on the viability of socialist economy based — on rational economic calculation. Lerner’s thoughts are attributed to Keynes because textbook writers, wanting to make Keynes’s thinking clear, were immediately drawn to Lerner’s thinking. Reflecting his familiarity with Austrian marginali~m,~~ Lerner proposes to replace Lange's statics Abba Lerner was the Milton Friedman of the left. Many socialist theorists disagree with the conclusions of Mises, including contemporary economists such as Oscar Lange and Abba Lerner and continues to … This model was first proposed by Oskar R. Lange in 1936 during the socialist calculation debate, and was expanded by economists like H. D. Dickinson and Abba P. Lerner. March 15—Theory—Bourgeoisie, Marxist and Laborist Economics. [6], Lerner never stayed at one institution long, serving on the faculties of nearly a dozen universities and accepting over 20 visiting appointments. 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