Economists at War

Most economists go through their lives wondering if any of their work has had an effect on the world beyond academe. The seven economists that Alan Bollard writes about in Economists at War probably never had to wonder. Bollard, an economics professor at Victoria University in Wellington, New Zealand, traces the effects seven economists had on their governments’ policies before, during, and after wartime. He starts with the oldest economist, Takahashi Korekiyo, born in Edo (now Tokyo) in 1854, and ends with the second youngest, John von Neumann, born in Budapest in 1903.

The book’s weakness is that Bollard doesn’t always give enough background for a non-economist to understand the issues fully. Its strength is in its fascinating stories about the seven men’s lives, the various challenges they faced, and their views of the world. Especially interesting are their views of Communism, which three of the economists—Leonid Kantorovich, Wassily Leontief, and John von Neumann—lived under for all or part of their lives. Fortunately, this strength outweighs the weakness in Bollard’s discussion of economic issues.

These are the opening 2 paragraphs of David R. Henderson, “Economists Waging War,” my recent review of Economists at War: How a Handful of Economists Helped Win and Lose World Wars, by Alan Bollard.

Bollard’s treatment of Hjalmar Schacht, Hitler’s finance minister, changed my view of Schacht. What I knew about him, I knew from a short section of Milton Friedman’s book Dollars and Deficits. It turns out that he had a few virtues. I write:

One of the more interesting characters in the book is Hjalmar Schacht, Hitler’s finance minister from 1934 to 1937. Schacht, who is most famous among economists for implementing currency exchange controls in the 1930s, was more free-market oriented than I had thought. In 1914, he was appointed Administrator of the Dresdner Bank in Occupied Belgium, where he clashed with the German military. They simply took whatever supplies they wanted, while Schacht, sympathetic to the occupied Belgians, wanted to maintain a market-based economy. Schacht was involved in the currency reform that ended German hyperinflation, which lasted from 1921 to 1923. Schacht was not a Nazi but made peace with the Nazis. He often conflicted with Hermann Goering about how to run the German economy and, unfortunately, Schacht often prevailed. I say “unfortunately” because if Goering had prevailed, Germany’s wartime economy would have been less efficient. To his credit, Schacht often talked back to Hitler. Indeed, in 1939, he wrote a memo to Hitler condemning his treatment of the church and of the Jews. As president of Germany’s central bank, the Reichsbank, he even used Reichsbank resources to print and distribute 10,000 copies of a speech he had given in which he condemned Nazi policy. Because of his alleged association with some of the Germans who tried to kill Hitler in July 1944, he was imprisoned. Later, he was tried at Nuremberg. Although the U.S. prosecutor wanted him found guilty and the Soviet judges agreed, the British judges disagreed and he was freed. Schacht later went into development economics and died in 1970 at age 93.

Read the whole thing.


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The Mediterranean equilibrium

The Greek government has secretly expelled more than 1,000 refugees from Europe’s borders in recent months, sailing many of them to the edge of Greek territorial waters and then abandoning them in inflatable and sometimes overburdened life rafts. Since March, at least 1,072 asylum seekers have been dropped at sea by Greek officials in at […]

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The new McCarthyism

A new McCarthyism is emerging. Marxist intellectuals are being “canceled” with increasing frequency. So why aren’t we hearing more about this problem? Perhaps because the attempts to cancel Marxists are now coming from the left.

When David Shor recently lost his job it could be argued that he wasn’t being cancelled because of his Marxist beliefs, rather it was for tweeting a routine academic study by a black scholar.

In the most recent case, however, a prominent black Marxist scholar named Adolph Reed was barred from speaking at a left wing political event precisely because of his Marxist beliefs. Recall that Marxists believe that the most important distinctions in society are between economic classes, and that workers of the world should unite. That’s also Reed’s view.

This sort of traditional Marxist theory is now viewed as racist, because it denies that race, not class, is the most important distinction in society. Thus, just as in the early 1950s, Marxists are being cancelled—this time by their fellow leftists.

PS.  Reason magazine directed me to a wonderful short essay on cancel culture by Nick Cave.  Who says pop stars aren’t worth listening to?


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Sunday assorted links

1. Assorted links on progress studies. 2. James Altucher is bearish on NYC. Not my view, but worth a hearing. Of course I would never live there, but that has always been the case. 3. Arbitrage with stolen books? 4. Manufacturing vaccines, excellent piece (Bloomberg). 5. “A restaurant in central China has apologised for encouraging […]

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