Foreword by Professor Paul A Samuelson
J.R. Hicks - - Sir John Hicks - - was the first British economist to receive the Nobel Prize. This was a wise and informed choice, a richly deserved honor. He was one of the great economists of the twentieth century. For more than fifty years numerous important contributions bubbled out from his pen.
Hicks was one of the last of an almost extinct species of scholars: a generalist who covered microeconomics and macroeconomics, mathematical economics and literary economics, pure theory and policy applications. He was part of no school; John Hicks was his own school. Blooming late after taking his Oxford degree, Hicks achieved world notice as part of the early 1930s LSE renaissance under Lionel Robbins: Abba Lerner was his tutee; he married Ursala Webb, one of the young founders of The Review of Economic Studies, along with Nicholas Kaldor. Hicks learned much from the mathematically talented R.G.D. Allen and together they made beautiful avant garde music. A temperament of no small aspiration, he thought of himself as a rival of Keynes in creating a new less-than-fullemployment equilibrium paradigm. And in point of objective fact, with an important assist from Roy Harrod, Hicks did provide the IS-LM graphical diagram of The General Theory, which still best serves the realistic macro analysts at century's end. Axel Leijonhufvud, in his 1966 On Keynesian Economics and the Economics of Keynes, put forward the thesis that Keynes himself was different from and much greater than his General Theory disciples who formalized the 1936 system-Reddaway, Meade, Harrod, Hicks, Lange,.... I believe he got things 180° wrong: what counts in a serious discipline is its I'ormulateable and testable hypotheses and not the elusive intuitions of even the subtlest genius; what economists can and do do with a paradigm is what, in the end, constitutes its pragmatic cash value, plus or minus.
From Hicks' strategic posts at LSE, Cambridge, Manchester and finally at Oxford he influenced three generations of students, drawn from the Empire, America and Asia. Lionel McKenzie, Ian Little, Charles Kennedy and Michio Morishima are only a few of the many names in his seminar circles. At a lime when the U.K. was losing its 1900-1930 dominance in economics, Sir John as a lone-wolf researcher kept the flag flying near in the frontier of evolving political economy.
Am I strident in my claims for Hicks, as so to speak the Hayden of political economy? (Hayden wrote more than 100 symphonies, no one of them unworthy of his genius.) Yes, I am. For, as I have written before, Hicks in his own country was not sufficiently appreciated. At LSE where the Marshallian tradition was not all dominant, the young Hicks was early much influenced by Knut Wicksell, who at that time had to be read in German or Swedish. It was a happy happenstance to abjure the fading tradition in favor of the rising suns.
A final element of luck enhanced Hicks' total impact on the field. He was privileged to be able to write well and knew how to blow his own horn. His books, ranging from pure theory to a theory of economic history and a beginners' textbook exposition of national income accounting, sold well over a long period of years. It would be unfair to compare Hicks' total impact on the evolution of our subject with that of Harry Johnson who wrote hundreds more papers than Hicks did. A better contrast would be to compare William Fellner, a deep and fertile migrant from Hungary who taught at Yale and Berkeley. Fellner wrote on a number of important topics and with considerable subtlety and novelty, swimming sometimes against the tides of politically-correct post-Keynesian fashion. But he lacked Sir John's facile pen and easy prolific flow. And in consequence the scales of history understandably curtsy down in Hicks' direction.
Readers stand to learn much from the many facets of this important scholar's work as collected together here.
Paul A. Samuelson
Institute Professor Emeritus
Department of Economics,
Massachusetts Institute of Technology,
The development of economic ideas from ancient to the medieval period, then, ideas during the period of classical economists like Adam Smith, Thomas Robert Malthus, David Ricardo and their critics were a good beginning to thinkers in economics. During the period when capitalism and socialism were the main themes for writers and their critics, it was yet a better period for economists to ponder over new ideas. The Das Capital and the Ricardian theories swept all paths and led to the modern period. The works of Ricardo and Marx are the starting milestones and laid the foundation to the present day thoughts, to a large extent. It was during the modern period predominated by the development of the new economic ideas, neoclassical economics and, as an offshoot of that, the recent economic thought, which we may term as new economics came to stay. Starting from Principles of Economics by Alfred Marshall and Economic Welfare by A. C. Pigou, it was J. M. Keynes who through his General Theory (1939) tried to influence economics through his various ideas including areas concerning micro and macro economics, the Theory of Employment, consumption and investment and the concept of marginal efficiency of capital and many more concepts including Theory of Price and Trade Cycles. John Maynard Keynes is, in fact, the important stand point in the annals of modern economic theory.
Later, R. G. Hawtrey, D. H. Robertson and Lord Lionel Robbins tried to develop their own ideas based on the General Theory. The General Equilibrium Theory was well set by J. M. Keynes and the strength of the English economists lie under the writings of Keynes and his predecessors. Sir John Hicks was one economist who was considered as the eminent economist in England after J.M.Keynes. He was undoubtedly the greatest economist after Marshall and Keynes. It is Hicks who gave further orientation to the General Theory of Keynes by his wide ranging contributions. He is the first British Economist to win the Nobel Prize in Economic Science (1972) for his wide ranging contributions in general and Value and Capital in particular. Hicks shared this Nobel Prize with Prof. Kenneth J. Arrow for his pioneering contributions in the General Equilibrium Theory and Welfare Theory. Sir John Hicks has contributed to this fundamental areas in no less a measure.
Prof. Paul A. Samuelson has aptly put it in his paper: 'My John Hicks' and has said, referring to Value and Capital that it "was a major intellectual stimulus for me. I went over his contributions with a powerful microscope, a much more intensive analysis than he ever gave either to my own work or to that of any other economist. That was the way Hicks was. Always he preferred to do things his way. And that was the source both of his creative originality and prolific scientific productivity". He has further said that "Value and Capital is a scientific epic saga and a jewel among his works". Prof. Samuelson has further rightly mentioned that: "if J.M. Keynes was the greatest economist of the World (J936), J.R.Hicks was the greatest young economist of the time". Hicks later became one of the greatest economist, in fact, a World economist by his contributions which are listed at the end of this Volume (the list is reprinted from Puttaswamaiah, K. Nobel Economists - Lives and Contributions, Vol. I, Ch. VII, pp 333-343). Prof. Samuelson has done much research work on Keynes and his praise on Hicks in his paper and quoted from the New Pal grave Dictionary of Economics (1997) - is the real description which one has to keep in mind while recognising Hicks as a British pioneer in new ideas in economics which made him great. While Prof. Paul A. Samuelson has quoted from Christopher Bliss about Value and Capital as above, I am tempted to quote a few more lines from the same source. It is stated that "Value and Capital is a work so rich in ideas that a short account of it cannot hope to do it justice. It showed that the basic results of consumer theory could be obtained from ordinal utility; it expounded what became known as the 'Hicksian substitution effect', obtained by varying income as relative prices changed so as to maintain an index of utility constant; it developed the parallel results for production theory; and it popularized among English speaking economists the notion of a general equilibrium of markets" (1939, p.60). The Value and Capital (1939, 46) was written when the author was 35 and is described by Prof. Samuelson "as a scientific epic saga -full of new and beautiful things and a springboard toward future advances". The appreciation of the works of Hicks, the first British Nobel Laureate, by Prof. Paul A. Samuelson, the first American Nobel Laureate, has established more credibility in the hard work of Hicks, which, one is afraid, even the British economists have rarely done. It is noteworthy that Prof. Samuelson himself has said "no single misprint mars its mathematical text; and the one major omission in its first edition, he was able to repair by altering a few pages only". The Value and Capital which is undoubtedly the monumental work of
Hicks came out as it did just after three years of the publication of the General Theory of Keynes which, in fact, revolutionized the entire fabric of economic science and became a starting point for the subsequent micro and macro economic theories in Britain and United States too, thanks to the pioneering efforts by Prof. Paul A. Samuelson, who revolutionized economics and led to further research on the General Theory and many others followed. Prof. Samuelson's abiding interest in General Theory may be amplified by the fact that when the copies of it were not available, when published, he managed to borrow one from his teacher and summarised it in a few days. The summary prepared in short duration, will certainly have covered the crest areas of Keynes's 'General Theory' and would be an invaluable piece if that could be traced and printed. He is the first American economist who has evinced such great interest in the works of Keynes and created himself and scope for others a World of research pieces which might be called "Keynes ramified World created by Professor Samuelson" and he himself became popular among economists as the 'American Keynes'. It is with this background that Professor Samuelson took interest in the works of John Hicks and studied them 'microscopically' and appreciated his works and became so intimate that he has aptly given the title My John Hicks to his paper. The idea of bringing out this volume on 'John Hicks' occurred to me because of the following reasons: -
i. Prof. Hicks, Prof. Ursula Hicks and their family friends and colleagues were known to me eversince 1975 when I started translating Value and Capital into an Indian language, and since then, they have been very affectionate;
ii. Hicks, as a great thinker, by his varied contributions including Value and Capital which is termed by one and all as the 'Jewel' of his works was translated by me, published by the University of Mysore and released by Hicks himself in 1979 at the campus of University of Mysore, India;
iii. Hicks by nature is a brilliant British economist without whose effort the present day economist would not have grown in such dimension by now and the Value and Capital is a work which revolutionised the science of economics and, probably, such of these works prompted the Royal Swedish Academy to institute the Nobel Prize lo 'Economics' recognising it as a 'Science' in 1969; iv. Prof. Samuelson has taken very keen interest in the works of Keynes
iv. Prof. Samuelson has taken very keen interest in the works of Keynes and Hicks and there is no part of Hicks' works which is not touched by him by one way or the other and he has presented his frank and fair views. He has so much of admiration to Hicks that he has titled his paper: 'My John Hicks';
v. There was an overwhelming enthusiasm when I requested the Keynesian economists and those who were friends of Hicks, colleagues and students, and they agreed to contribute papers in the areas of Hicks in which they were very familiar and they informed me of the title even before they started writing;
vi. When I thought of a work on 'John Hicks' and contacted the right men who could contribute, about 25 in number, all of them happily contributed and lent their support to bring out this volume. The authors are very eminent in areas of 'Hicksian Economics', each one of them specialised in some aspect or the other in the contributions of Hicks;
vii. Personally. I had become part of Hicks' family and we were in good correspondence till the Hicks Couple passed away; and
viii. The works of Hicks after Keynes have definitely created land marks which became the basis for further research for economists later and, therefore, the current thinking was felt necessary.
Keeping the above points in view, it was felt necessary to bring out this volume in memory of Hicks, and contrary to expectations, the overwhelming enthusiasm among authors resulted in receiving about 25 papers (all authors requested sent their papers) -depicting various aspects of Hicks's works and personality. Some of the facts contained in the articles, probably may throw new light to economists on the works of Hicks. Before we go into the details of this 'Contents' in this book, based on
Chapter 7 of Volume 1 of Nobel Economists - Lives and Contributions authored by Puttaswamaiah,K., pp.309-343, and 'Foreword' by Jan Tinber-gen, the first Nobel Laureate in Economics, I would like to briefly summarise Hicks and his works.
The chief characteristic of Hicks's works was that he moved away from the partial equilibrium approach of Alfred Marshall back towards the older continental Walrasian General Equilibrium approach. He also introduced a dynamic dimension with his work on period analysis and his theory of elasticity of expectations. His book Value and Capital in which his approach to general equilibrium theory really is one of the rarest books in economic science which marked a definite stage in the advance of a science. It may be pertinent to quote that "Everything Prof. Hicks writes bears the hallmark of quality and connoisseures will pick up his book on Value and Capital expecting authentic, desiccated thrill which can be got only from the contemplation of abstract reasoning. They will not be disappointed". His work in developing concepts in the theory of value is built on the writings of Edgeworth, Parcto and Slutsky. This led to an original exposition of the roles of income elasticity of the elasticity of substitution in determining the elasticity of demand. He later drew heavily on the great Swedish School, led by Myrdal and Lindhal in working out his ideas on income and the role of expectations. Further, modern and demand theory substitutes indifference curves for marginal utility. More than any other economist, he rehabilitated and extended the indifference curve apparatus. The book contains, in its first 52 pages, the best exposition of contemporary theory. Before the General Theory of Keynes appeared in 1936, Hicks had already acquired the necessary background through his well-known papers. Hicks's reaction to General Theory of Keynes was therefore valuable. Hicks in his paper The General Theory: A First Impression has approached Keynes's work in a typically Hicksian style. He has said: "The reviewer of this book is best by two contrary temptations. On the one hand, he can accept Mr.Keynes' elaborate disquisition about his own theory, and its place in the development of economics; praising or blaming the alleged more than Jevonian revolution. Or, on the other hand, he can concentrate upon investigating these disquisition, and tracing (perhaps) a pleasing degree of continuity and tradition, surviving the revolution from the ancient regime. But it seems better to avoid such questions, and try to consider the new theory on its merits .... The new theory is a theory of employment, in so far as the problem of employment and unemployment is the most urgent practical problem to which this sort of theoretical improvement is relevant".'
With the General Theory behind him, Hicks completed Value and Capital, which may be regarded as his greatest work, perhaps which was more successful intellectually. Harrod wrote in 1939: "Prof. Hicks, his place in the first rank of economic
theorists long since secure, establishes by this volume his claim to admission to a narrow circle-the economists with a distinctive and distinguished style of writing. Take up any page of Pigou, Macgregor, Keynes, Robertson; you do not need to be told the author. And, henceforth, I think the Hicks' manner will be unmistakable".2 "Value and Capital is sometimes misrepresented as an attempt to bridge
the gap between micro and macro propositions, in a comparison between it and the General Theory. However, a much more reasonable interpretation would be as an attempt to bridge the gap between statics and dynamics, and in particular to extend static methods to dynamic cases. Just as consumer theory had been unrealistic in employing cardinality assumptions, so economic theory was in general unrealistic in being 'out of time'. Value and Capital should be perceived more as an attempt to drop the latter assumption"³. To quote Dieter Helm, "What did Hicks make of the new theory in his first
attempts at reviewing it? Analytically he broke down its components in a fashion that would enable the Keynesian theory to be compared and contrasted with the position that it purported to attack, the Classic view".4 F.A.Hayek, has evaluated Hicks Value and Capital in the following words: "absolutely first-class work in his time. So far as there is a theory of value proper, which does not extend beyond this and which doesn't really analyze it in terms of directing production, I think it's the final formulation of the theory of value"5. Ordinal utility in terms of indifference curves and budget lines could
derive the same conclusions as cardinal utility in terms of justifiable marginal utilities. However, the former achieved the ends with greater precision. Hicks appears to have tacitly accepted Marshall's neglect of the income
effect so long as the commodity in question forms a small part of the consumer's budget.
The other pioneering works are The Social Framework and A Revision of Demand Theory. Pigou writing about 'The Social Framework' has said that "beginner coming to this book will find concepts with which he has long been familiar in a vague way clarified and given a more significant meaning and he will also acquire a good deal of actual knowledge. Hicks's experiment is an enterprising and ingenious one'. While praising this book, Harrod has observed that 'it is an introduction to economics written by an economist of the highest calibre. His style is easy and popular.... the presentation is straight forward and dignified'. Hicks explains that the ideas with which economics is concerned are chiefly those which arise, not in connection with one industry only, but with most of all industries, such ideas as capital, income, cost, arise in all business problemsthese are the sort of ideas we have particularly to study. Economic theory tends to shape itself into a system of thought, for the questions we want to ask turn out to be inter-related."
His contribution to the Theory of Trade Cycle has been regarded as one of the major contributions to trade cycle theory. It is apt to quote. "A beautiful theory of the cycle is here built up with an admirable economy of means.... Undoubtedly a tour de force." His book on A Revision of Demand Theory has received academic acclamation, being "A superb exercise to exposition" and "Probably the last word there is to be said on this aspect of demand theory". He explains that the law of demand does apply, with full force, to the behaviour of groups as much as to the behaviour of individuals. The theory of the demand for a single commodity is only the beginning of demand theory. The general theory of demand is a theory of the relation between the set of prices, at which purchases are made, and the set of quantities which are purchased. The foundations of demand theory have deserved careful definition, mainly because we are thereby enabled to get significant results in this wider field also.
The generalised law of demand, when properly stated, is a symmetrical relation between price changes and quantity changes. It can accordingly be interpreted into a "price into quantity" or in a "quantity into price" manner. In his book on Essays in World Economics, the problems of the underdeveloped countries are discussed. The problem of inflation has also been discussed. The problem is severe in most of the underdeveloped countries. One of the most crucial difficulties of monetary theory is to distinguish between temporary changes in conditions and permanent conditions and to make adjustments that are appropriate to each.
The countries have been classified into two groups viz., manufacturing countries and primary producing countries. The first depending mainly on manufactured exports and the second upon the export of raw materials and foodstuffs. Though the under-developed countries are primary producers, but there are primary producers which arc not underdeveloped. There are countries which have natural resources that are so abundant, relatively to their population, that they can do better by exploiting those resources than they could do if they turned to manufacturing. The under-developed countries are primary producers which are not in this happy position, their natural resources are insufficient for them to be able to achieve a full prosperity by the exploitation of those resources alone. It is futile to tell such countries to rely for development on the further exploitation of their natural resources. Of course they will only harm themselves if they neglect to do what they can in that direction, but they are right in thinking that the only way in which they can break out of their impasse is by industrialising.
In Capital and growth. Hicks assumes that prices are determined exogenously. The flex price/fix price bifurcation of markets is adopted. The former refers to the price flexibility of competitive markets; the later to the 'stickness' of prices in some types of markets. This distinction has vital and different implications for stocks and flows. In his analysis of the bond market. Keynes, according to Hicks, realised the essentiality of this distinction. The multiplier process is dependent on supply adjustments in fix price markets. Critical Essays in Monetary Theory is a collection of papers published in journals right from 1935. Though not a monetary economist, the book is the result of his original thinking on the subject. Two of the papers viz., A Suggestion for Simplifying the Theory of Money and Mr.Keynes and the Classics are well known in the World of economists and monetary thinkers. The book contains gist of the contributions to monetary theory of three economists-Henry
Thornton (Paper and Credit), Keynes (Treatise), and Hayek (Prices and Production). The equilibrium is determined by subjective factors like prices, when we are looking for policies which make for economic stability, we must not be led aside by a feeling that monetary troubles are due to bad economic policy. He emphasises that money is a human institution. A fully developed monetary system is very sensitive and is therefore unstable. The famous 'Hicks- Hansen' effect in interest theory is an acknowledged improvement in the Keynesian framework.
A Theory of Economic History (1969), in this, he introduces the concept of an impulse, a shock which can be traced through a sequence of consequences flowing from the potential of a major new invention. It is the same impulse which Capital and Time attempts of model.
In his Theory of Economic History Hicks delves into the past to analyze the effects of operations of merchants in the flex price market-merchants were the price sellers depending on the stock positions of goods. He emphasises the transformation of the economy through different stages. The poorer a country, the narrower will be its range of technological opportunities, the more likely, therefore, it is that it will suffer long-lasting damage, now and then, from a backwash of improvements that have occurred elsewhere. Even in already industrialised countries, mobility of labour is not perfect. It is a motive for protectionism. But it is an obstacle. Temporary use of such measures is defensible. The symptoms are inflation, balance of payments deficits, a variety of monetary and exchange disorders. These will change their forms by technical adjustments, purely monetary adjustments and changes in monetary policy. So long as the resources of the richer countries are kept under strain, what they have to spare for furthering the growth of the world economy is bound to be restricted. The book Capital and Time-A Neo Austrian Theory was published after he secured the coveted award in 1972. This is the third book that Hicks has written about Capital, the first two being Value and Capital, and Capital and Growth. Value and Capital was a product of the Keynesian thirties. It is deeply influenced by Keynes. The second book Capital and Growth is critical and expository, rather than constructive. The concept of full employment is emphasised in this volume. With the given techniques and given employment of labour, production and distribution are entirely separated. The movement of productivity will fairly reflect the movement of wages.
The Crisis in Keynesian Economics elaborates on the 'fix price' and 'flex price' market systems described earlier. In the context of high transaction costs, prices arc geared to absorb 'permanent' market conditions. Transaction dominating assets emerge the highest being money which substitutes for all, at the margin. There is a lucid plea for a wider portfolio composition than the narrow choice of money versus bonds. In the last chapter, the lack of a coherent wage theory in the Keynesian tradition is pinpointed. The Theory of Wages was originally published in 1932 and revised in 1963. While the first edition was an extension of the thinking of Marshall in his principles, Clark in his Distribution of Wealth and Pigou in his Economics of Welfare, the second edition contains his revised views on the subject. Section 3 contained in the book entitled 'Commentary' is a piece written exclusively for the new edition. Hicks pays highest recognition to all the critical reviews of his book published in 1932 and says that "I am very anxious that my readers who ever now are tempted to take the 1932 volume literally should read Shove's criticism." Thus Section 3 of this book contains "pre-natal as well as the post-natal vicissitudes" of his earlier edition of this book. The book is a valuable contribution in the theory of wages.
The concept of elasticity of substitution was introduced to demonstrate its usefulness in highlighting relative factor shares. Inventions are autonomous and induced and can be neutral, labour-saving or capital saving. With a given capitallabour ratio, a labour-saving change reduces labour's share of national income. Autonomous inventions are likely to be neutral; induced inventions, are in developed countries, likely to labour saving with upward shifts in the supply price of labour. These concepts saw the rise of prolonged debate with Harrod, Samuelson and other savants on the nature of inventions. The way relative factor prices change, determines the isoquant chosen by the firm. He emphasises that despite high interest rates inflation is not controlled and there is a real threat to recession and unemployment. The supply of commodities is concentrated in a small group of countries for this he has given the example of the recent oil crises. There is a major shift in distribution of international income, without it leading to corresponding changes in consumption since the oil consuming countries have failed to reduce their consumption or to generate savings for the required transfer of income and the oil producing countries have failed to reduce their consumption or investment in keeping with their higher income. In this context, he has made an important contribution to the study of Keynesian economics.
Economic Perspectives contains several refreshing ideas. His concept of long-term growth approximates to that of Kuznets. The Ricardo-Wicksell effects in monetary theory are examined. The quantity approach of Friedman is decried. He favours a credit squeese to control inflation.
Causality in Economics is developed from his stock flow analysis. Three relationships are identified-static, contemporaneous and sequential. It is difficult to trace out causal relationships when stock and flow relationships have to be dovetailed. Relations must be deduced in sequential form. There is an intermediate stage between cause and effect where decisions are made. Prior and posterior lags should be understood as also reactions to signals. An integrated general theory of the multiplier process and liquidity spectrum is attempted. Regarding Causality in Economics (1979), it may be quoted that: "It was a brave book to write; it strays on to others' territory, and it contains a particular view as to the nature of economics as distinct from science, history, and other areas of social concern, yet requiring all three types of consideration. But its importance for the student of Hicks' work lies with the critique which it provides of the possibility of economic theory. In particular it provides careful reasons as to why prediction is not a strong possibility, and thus it explains Hicks' dislike of econometric practice. The book provides careful categorisation of different kinds of 'cause' from two dimensions; first with regard to time in terms of contemporaneous sequential and static causality, and second in terms strength of influence. This later division is between 'strong' and 'weak' causality, where to claim that A strongly causes B is to say that A is the only cause of B. If A is a weak cause, then it is one of potentially many, and in explanation must be protected by a series of ceteris paribus clauses. Now it is only in cases of strong causality that prediction is possible, and it is unlikely, Hicks points out, that there are many cases of strong causality in economics. Economists are doomed to deal with weak causality, and are thus limited in their ability to predict. Falsification, at least in its naive form, is inapplicable, as the ceteris paribus clauses cannot be tested for. And the evolution of economic theory is not to be perceived as the rationalistic programme encapsulated by the philosophers of science such as Lakatos and Popper."
Wealth and Welfare (Vol.1) is a collection of earlier pieces having a penetrating one on social income. The other two of his collected works are Money, Interest and Wages (Vol. II) and Classics and Moderns (Vol.III). The Wealth and Welfare (Vol. I) brings together into a coherent whole certain essays which are already justly celebrated and others, often of no less importance, which have been relatively neglected, perhaps because till then, they were not readily accessible. These essays on welfare economics are not represented in any previous collections of the author's works, although it was for some of them that Sir John received the Nobel Prize for Economics in 1972.
Again in volume Wealth and Welfare, the economist has observed that: ".. .much of what is taken for granted in the subject has its point of departure in Sir John's writings. Moreover, a good deal which seems obvious to commonsense turns out to be extremely problematic when subject to the critical scrutiny of a Hicks. In this connection, it is very much to his credit that so much of what he has had to say on the theory of value and welfare is incorporated into the main body of the economics and is now taken for granted with scarcely a reference to its origin....Sir John is an extremely careful and rigorous thinker." The Money, Interest and Wages, the second volume of the collection, has centered upon the monetary discussions and shows that the author is not merely an interpreter of Keynes but has views of his own, which owe as much to other of Keynes' contemporaries as to Keynes himself. This second volume of Hicks's Collected Essays traces the evolution of his thinking over five decades. Five highly original papers, published before he saw Keynes's General Theory, show that he anticipated certain aspects of the Keynesian revolution. The story of this early work is set out in an introductory paper written especially for this book. The essays which follow show how subsequently his thinking was modified and expanded.
Robert M. Solow, who became a Nobel Laureate later, has said as follows about this volume: "Here are both the classic paper of 1937 and after thoughts of 1980, together with Hicks's review of the General Theory on its appearance. These, and other references reprinted in this fascinating collection, will help the contemporary reader to understand both the depth of the Keynesian revolution and the importance of John Hicks as an economic theorist." In the third volume, Classics and Moderns, John Hicks discusses the various classical traditions, the nature of revolutions in economics, and, indeed, the nature of economics itself. He has also presented his contributions to our understanding of competition, monopoly and international trade. All the essays are distinguished by the clarity and elegance which is characteristic of his approach to economic problems.Talking about Classics and Moderns, Milton Friedman, the other Nobel Laureate has said thus: "There can be no doubt that Sir John Hicks is one of the most distinguished theorists of the twentieth century. He has had a tremendous influence on economic thought…... ". Besides, the above books, Hicks has contributed countless numbers of articles to the various journals of repute in the world like Econometrics, Review of Economic Studies Economica, Economic Journal, etc. His article on A
Suggestion for simplifying the theory of money is a masterpiece. Three decades after his eloquent call for a marginal revolution in monetary theory, our students still detect that their mastery of the presumed fundamental theoretical apparatus of economics is put to very little test in their studies of monetary and aggregative models.
As Hicks complained, anything seems to go in a subject where propositions do not have to be grounded in some one's optimising behaviour. Mechanics or thermo-dynamics take the place of inferences from utility and profit maximisation. From the other side of the chasm, the student of monetary phenomena can complain that pure economic theory has never delivered the tools to build a structure of his brilliant design. The utility maximising individual and the profit maximising firm know everything relevant about the present and future and about the consequences of their decisions. His prescription for monetary theory in 1935 was in much the same spirit as the approach of Lavington and Pigou. His strictures were nonetheless timely. The spirit of the original Cambridge theory had become obscured by the mechanical constant-velocity tradition. Macro-economics texts have immortalised Hicks' decomposition of the Keynesian system into sub-models. One of these tells what asset stock equilibrium corresponds to any tentative assumption about aggregate real income and the commodity price level. In this conditional equilibrium, the interest rate equates the demand and supply of money and clears the markets for other assets. Two of his articles viz., Preface and a manifesto and The Rehabilitation of Consumer's Surplus have been included in one of the books edited by Arrow and Scitovsky entitled Readings in Welfare Economics. These two papers stress the narrowness of traditional welfare economics and warn against the aridity into which it might too easily fall. Hicks has eminently argued that the increasing affluence renders wealth relatively unimportant. These papers are quite in tune with the present policies of the Government of India where equal opportunities for all and equalisation of wealth among the different people of the society are emphasised. The most well-known contribution by Hicks to welfare theory are his analysis of criteria for comparisons between different economic situations and his revision of the concept of consumer's surplus. Pigou had correlated economic and general welfare and he had made freely interpersonal comparisons. He had identified the sum of consumer surpluses with the real value of the national dividend. Hicks has advocated certain steps to rectify these measures. To mention a few, he suggested changes in tax structure and alternations in tariff schedules. Later, he felt that there could be gains to some when tariff schedules are altered and he felt vital to identify the gains and losses. Modern welfare economics thus became the process in the precise identification of the conditions of maximum welfare.
Some other imporatnt articles of Hicks are: Mr. Keynes and the Classics, Public Finance in the National Income, Distribution and economic progress: a revised version, Marginal productivity and the principle of variation, Wages and interest-the dynamic problem, Marshall and the indeterminates of wages, Maintaining capital intact: a further suggestion, Mr.Hautrey on bank rate and the long term rate of interest, and Theory of uncertainties and profits. Hicks has contributed abundantly on various aspects of economic theory. However, his major contributions are in the field of equilibrium theory which culminated in his book Value and Capital. This immortal book has been translated into a number of other languages in the world and the author of this present volume has had the fortune of translating it into Kan-nada, one of the important languages in India, at the instance of the University of Mysore which has published it.
By his brilliant contributions in the field of economic theory, Hicks has joined the rank of immortals like the earlier economists like Alfred Marshall and Keynes. He has a language of his own and his style and diction are uncommon among other economists. His language is full of profundity of sense and the real meaning could be available at times at a farther distance. He has been outstanding as a clear and tireless thinker, a widely read scholar and a lucid expositor. He is the pioneer who has laid theoretical ground-work for the renewal of the equilibrium theory. His books on Value and Capital and The Theory of Wages are the masterly works in the field of economic science. For the most part, he has worked with labour and capital only. He correctly perceived that capitalism has shown greater growth of capital than of labour. Even more important is his analysis of how technical invention affects progress. Hicks' Causality in Economics published in 1979 examines the heart of the problem. Questions like why economics? Is it a science? Kinds of causality and its theory of application are the subject matters of contemporaneous causality in Keynes as well described. Hicks says that as a youngster he started reading history and went into philosophy which provided him thinking the causality in Economics. Certain other questions like macro and micro economics are discussed. Although it is over five or six decades that the author started dositing, in this treatise, he has examined Causality in Economics as one case of causality in general. The book contains an unconventional approach which sheds new light on some of the old basic concepts of economics. The role of statistics and economics is examined. Hicks has rightly observed that "the economist is concerned with the future as well as with the past; but it is with the past that he has to begin. It is the past that provides him with the facts, the facts which he uses to make his generalisations; he then uses his generalisations as bases for predictions and for advice on planning."7 According to Schumpeter (1954), "Economics does not possess scientific status, nor can this be attained….Economics is for Hicks's discipline, not a science, and it might be added, a pluralistic one. It is the discipline of which Hicks has become a master."
The last book of Hicks is The Status of Economics. It is said that, at the time of his death, the manuscript of this title was still to be published and was published in September 1991. This volume brings together the selection of work spanning the late Sir John Hicks' entire career, highlighting his concern with the status of economics as a science and the controversies between economists. This concern with the validity of the discipline led Hicks to consider subjects traditionally outside the boundaries of economics, in particular political theory and cultural history. In the concluding, previously unpublished, essay, Hicks reflects on his own role as an economist. The volume as a whole stands as a magnificent testament to a remarkable career.
According to Hicks, "theory should be the servant of the applied economics, but I have also been aware that theory gives one no right to pronounce on practical problems unless one has been through the labour, so often the formidable labour, of mastering the relevant facts."9 This observations of Keynes shows that he was aware that theories alone would not help, unless they are applied to the practical problems with formidable labour. Royal Swedish Academy in its official announcement has said that General equilibrium theory had earlier essentially the character of formal analysis which was brought to light in his celebrated work Value and Capital. The construction of the model relating to the general equilibrium theory included a number of innovations, i.e., a further development of older theories of consumption and of production, the formulation of conditions for multimarket stability, an extension of the applicability of the static method of analysis to include multiperiod analysis and the introduction of a capital theory based on profit maximization assumptions. By being deeply anchored in theories of the behaviour of consumers and of entrepreneurs Hicks' model offered far better possibilities to study the consequence of changes in externally given variables than earlier models in this field and Hicks succeeded in formulating a number of economically interesting theorems. Hicks model became of great importance also as a connecting link between general equilibrium theory and current theories of business cycles... As his mathematical tool Hicks used traditional differential analysis. When later on more modern mathematical methods were introduced in economic sciences, Arrow applied these methods in his studies of general equilibrium systems. In a series of papers, which preferentially treated the properties of solubility
and stability of such systems, he provided the basis for a radical reformulation of the traditional equilibrium theory. Though this reformulation, which was based on the mathematical theory of convex sets, the general equilibrium theory gained both in generality and in simplicity. The pioneering work, a paper from 1954, was written together with Gerard Debreu. The model presented in this paper became the starting point for the major part of further research in this field. Among Arrow's many important contributions should also be mentioned his development of the theory of uncertainty and its incorporation within the frame of general equilibrium theory and, furthermore, his analysis of the possibilities for decentralized decisions in a society where the price system is fixed by the central authority. This analysis was made in collaboration with Leonid Hurwicz."10 Ragnar Bentzel of the Royal Academy of Sciences, in his speech on the occasion of prize awarding function has said about Hicks thus: "When in 1939 John Hicks published his book Value and Capital, he breathed fresh life into general equilibrium theory. He constructed a complete equilibrium model, which was systematically built up, to a much greater extent than previous efforts in this field, on assumptions about the behaviour of consumers and producers. This gave greater concreteness to the equations included in the system and made it possible to study the effects produced within the system by impulses coming from outside it. For example, the model could show how changes in phenomena such as the harvest yield, the consumers' taste and the price expectations of business enterprises had consequences which spread throughout the whole economic system and affected prices, production, employment, interest rates, etc. However, Hicks could not have got as far as this if he had not, on several points, himself created the necessary foundations for his model construction, amongst other things, by developing earlier theories of consumption and production and by constructing a theory of capital on the basis of assumptions about profit maximization”."
Hayek has expressed in Economics and Knowledge about Hicks thus: "Maximising behaviour is a characteristic of Hicks of the making of choices; in that sense it is a priori true, but its truth is also argued to derive from intuitive appeal. There can be no micro/macro distinction for Hicks; macro propositions cannot be allowed to float without foundation. He is never to be found picking out observations, in the manner of Keynes, such as 'a man's habitual habits having first claim on his income' or, in the long run, 'as a rule, a greater proportion of income (will be) saved as real income increases', without first deriving the result from simple principles. These have to be explained within the framework of rational behaviour. Value and Capital is completed by a mathematical appendix in which the amenability of the arguments in the book to this type of reasoning is demonstrated. But it is more than that; mathematical arguments are used to prove the generality of the propositions to n commodities. It is in the appendix where Hicks demonstrates the general equilibrium method to its full potential.
While I got in touch with Prof. Jan Tinbergen in 1977, I had the fortune of establishing intimate contacts with Sir John Hicks and Prof. Ursula Hicks in 1975 itself. Though I was very familiar with his works as an economist and a researcher, I was fortunate that the University of Mysore in Karnataka, India, through a resolution of the Syndicate requested me through the Institute of Kannada studies of the University to take up translation of one of the two books under the Government of India funded textbooks series in the local language. A History of Economic Thought by Eric Roll (1938) and Value and Capital of John R. Hicks were suggested to me to take up one of them. I chose the latter as Value and Capital is a landmark text in the history of economic thought. It is very terse in its presentation of the fundamental ideas of Hicks, making it difficult to find equivalent words. I thought I should try out Value and Capital only. I came in touch with Hicks and Ursula Hicks by writing to them to ensure that the Oxford University Press released the copyright so that my work would not be delayed. Though the letter from Oxford University Press came later, there was already a letter from Hicks to go-ahead. At that time, I was working in the United Nation's Asian Institute at Bangkok and in afternoons, I used to devote to identifying equivalent words for tough technical words in economics contained in Value and Capital and also used my leisure hours in developing parameters for identifying or demarketing backward and forward areas with particular reference to Karnataka, a major state in South India, which work, of course, was later used by the Indian Planning Commission for identifying backward areas in India. Sri.B.Shivaraman, a well-known planner and a Member of the Planning Commission at that time mentioned this book and its utility in several meetings and in all parts of India. After completing my tenure with the United Nation's Asian Institute, I concentrated, in addition to my official work which was abundant, on Hicks's Value and Capital. The experience of translating this work was thrilling. The Kan-nada version of Value and Capital was released at the University of Mysore on February 7, 1979 in a function organised by the University. Prof. Hicks and Ursula Hicks came to India at that time. It was our fortune that he received in a public function organised by the University of Mysore his own Value and Capital translated into Kannada. This function was very largely attended from all economists who could afford to reach Mysore and of course by the Mysore citizens. It was one of the grandest function, that I have ever seen. I was given the task of introducing Hicks to the audience - it was a task to talk about Hicks and his contributions in his own presence. Prof. John Hicks in his reply said that he wrote Value and Capital and as days passed, he went on changing his ideas and now many of the concepts mentioned in that work have undergone some changes in his mind which could be seen in his later books. He was surprised to hear from 12. Hicks, John. The Economics of John Hicks. Selected and with an Introduction by Dieter Helm. Basil Blackwell, 1984. pp.9-10. Economica. 1937, pp.33-54; reprinted in his Individualism and Economic Order, 19481212 l me that my translation was the eleventh language to which Value and Capital was going. He said that he was not himself aware that it had gone to so many languages. Prof. Ursula Hicks mentioned on this occasion that it was the first instance that she and her husband were found on the same platform in a public function of that kind.
Prof. V.K.R.V. Rao, my well-wisher, who was the first professor to estimate national income of India in the 1940's said that "Value and Capital does not make easy reading, especially Parts I and II and the reader has to keep alert all the time lest he miss a step in the intricate but continuous logic that characterises this work and Dr. Puttaswamaiah has done an excellent job. It is now possible for Kannada students to obtain in their own language access to a key book in economic theory, and in turn this should enable production in Kannada of books and articles on practical problems of both macro-economic and micro-economic policy by using the logical apparatus and the lucid analysis of economic inter-relations and economic causes and consequences that Prof. Hicks has contributed in this pioneering treatise. I count it as a piece of good fortune and should mark the beginning of a new era of Kannada literature in economics".
I have described some of the outstanding works of Hicks. There are many books and research articles and right from his early days, each one of them created a landmark. Value and Capital - A Inquiry into Some Fundamental Principles of Economic Theory (1939, 1946), Capital and Growth (1965) and Capital and Time (1973), which may be called 'Hicks's Triology of Capital', are the most important of his contributions which have created landmarks after the General Theory and provided opportunity to several economists to do further research on these works. These three works of Hicks relating to 'Capital' are the three 'Avataras' of 'Capital' of which consider Value and Capital as the Jewel among them and even among his works.
This Volume in Memory of John Hicks consists of 24 papers. Prof. Paul A. Samuelson's paper identifies the land marks in Hicks's life. He considers "Value and Capital as a scientific epic saga - full of new and beautiful ideas and a springboard toward future advances, as said earlier. He goes on saying that even before the General Theory, if Keynes was considered as the greatest economist of the world, J.R.Hicks was the greatest young economist at that time. - Hicks's works are immortal". Thus, Samuelson has briefly but aptly described Hicks's works and I am extremely grateful to him for his immediate response in sending this paper under the title: My John Hicks. The title itself shows what an amount of affection Prof. Samuleson has had for Hicks and how his works were held in esteem.
Prof. Colin Simkin who describes vividly his close association with Prof. Hicks and his wife gives a vivid account of their inner life which makes the reader want to read it more than once. Prof. Colin Simkin tells that he had the good fortune of knowing two men who are something of genius, both of whom became lifelong friends. He derived intellectual benefits from them and feels that he cannot forget them and also their two exceptionally friendly wives. These two exceptional friends are Sir John Hicks and Karl Popper. Simkin has given a separate paper on Karl Popper also, since these three had a close association in academic work discussions and even in travels. Prof. O.F.Hamouda in his paper: Hicks, a World Economist has tried with great difficulty to condense as best he can all he has to say about Hicks and his works. The paper presents a scholarly and comprehensive analysis of Hicks's economics. The paper is an offshoot of his ambitious work: John R. Hicks - The Economists' Economist (Basil Blackwell, 1993). Prof. Michio Morishima, Sir John Hicks Professor of Economics in London School of Economics and Political Science writing under the title "Mr. Keynes in Hicks's Value and Capital deals with the theory of firm and ideas of Hicks's IS and LM curves and his views on it.
He gives a vivid account of Keynes and Value and Capital - how they are related and in the process identifies some inconsistencies. Syed Ahmad, McMaster University, Canada, while, writing about Hicks on Capital briefly writes about Hicks and classifies capital into three ways: (i) exactly like any other factor, (ii) as a produced means of production and (iii) as representing the role of time in the production process and Hicks contributed to theories in all these frameworks. After describing under these three main heads, he comes out with the significance of the Theory of Capital.
Prof. Frank Hahn in his paper: Hicks and Economic Theory vividly and with brevity writes about his views on major works of Hicks and he has been a balanced critic without loss of appreciation whereever necessary in the paper. Harald Hagcmann has chosen the area of Monetary Causes of the Business Cycles and Technological Changes: Hicks vs. Hayek tries to distinguish between the works of Hicks and Hayek. While Hicks was a pure economist, Hayek was not only an economist but a social thinker. Harald Hagcmann has brought out very well in his paper a critical analysis of the works of these two great thinkers, both Nobel Laureates. The rest of the authors like Professors Michael Emmett Brady, Joseph Halevi, J.W.Nevile, B.B.Price, John Lodewijks, Carlo Benetti, Kunibert Raffer, Mauro Ba-ranzini, Michael Rosier and Christian Tutin, John Luc Gaffard with other authors, Keith Griffin, Surajit Sinha, R.S.Dhananjayan with N.Sasikaladevi have chosen different areas of Hicks's works - sometimes confining themselves to a single work of Hicks and have given a vivid account of their own thoughts on selected Hicks's works. These papers are invaluable to any economist and to all those senior professors and students who are concerned with Hicks's works in relation to his earlier thinkers and the present day thinking. Since each paper contains the summary of one work or the other of Hicks and their views, I do not wish to elaborate further as the papers speak for themselves.
Sir John Hicks started the Sienna Workshop and he attended the first two workshops during 1987 and 1988 and he was to attend the third in 1989 but could not do so as he had by then passed away. Proceedings of the first two workshops have been published. We are fortunate in getting a small piece in the form of a "memoriam" of John Hicks by Axel Leijonhufvud. He goes to Sienna to attend the Third Summer Workshop. He was earlier anticipating that he would listen to the presentation of Hicks; instead he had to present a memoriam containing the life and works of Hicks and, to some extent, the main events of Hicks' life and works in economics. Though the memoriam provides the necessary material which gives more and more of Hicks inner life, yet, I am tempted to, draw attention to a few points. He was dedicated and determined in his life when he thinks of a academic life. Axel Leijonhufvud checklists three important points as reflections on the achievement of Hicks: (i) He has, of course, been enormously, amazingly influential. His ideas have seeped into the ways economists think and work to the point where the very familiarity of many Hicksian ideas make it difficult for us rightly to assess the contribution.
Yet, it is parts of his work that has had this influence - and some of it has not had quite the influence that he originally intended or would later have wished. Hicks, more than most authors, had to experience in his life time how the readers wrest control of the text from the author. So it was part of the Suggestion for Simplifying Monetary Theory', most of ‘Mr.Keynes and the classics, only the first eight chapters of ‘Value and Capital ‘, and so on- that went into the foundations on which post-world War 11 economic theory was built . (ii) Economic theory to John Hicks was always more an exercise in judgment than in deduction. The economist constantly makes choices - among methods or approaches, among assumptions, and among 'facts'. Hicks, even 55 years ago, always discussed his choices with the reader. You always know the reasons for all his choices and, if you disbelieve his conclusions, it is possible to track back and find where you differ with his judgment, (iii) Over the years he developed a style of writing that is really quite remarkable. It is clean, spare, direct with a simple conversational tone that is quite engaging - but can be in equal measure misleading, if the apparent simplicity lulls you into overlooking the depth at which he is penetrating very complex problems. It is clear that whatever Hicks has said is not final and he would go on thinking time after time and change his views. Ex: At the Mysore Function on the occasion of the release of the translated Value and Capital, he said that he had changed his views on several concepts contained in it. His nature was one of churning, meaning he would go on brooding over something till he saw the ultimate reality. In this connection, I will not be wrong if I quote: "John Hicks was a Ulysses among economists; his life is a journey in economics of a striver, seeker, a finder and a non-yielder. The paths are hewed by him; and the tools designed by him. The strange and fascinating aspect of his journey is that he is always going forward and back, back and forward. The greatest critic of Hicks is Hicks himself. And he has left a complete record of these introspections and forward thrusts. He is thus both a contributor and a commentator, a player and a sports critic, the latter of himself.
The other qualities of Hicks are those which relate to his nature as an economist and a man. He gave away the entire Nobel Prize money to the Library of London School of Economics. He phrased it as a gift of gratitude lo that institution but it was also a declaration of his dedication to a life of strictly limited material ambitions. He was always thoughtful and thought provoking. He would profess on his own some ideal and not allow himself to be detracted from it. In Sienna Workshop II, Hicks with his few friends including Axel Leijonhufvud was eating in a grape arbor at a restaurant outside town, Axel asked Hicks whether he still did a number theory which was a pet for him, "No" he said, "I stopped doing that a couple of years ago. Now, I have this game I play with myself to go to sleep. I try to remember at least one stanza of poetry from each century from about 500 BC to the present." And he started to tell about what centuries were the most difficult and so on. Before they left that place, they had heard John Hicks quote poetry from memory for atleast a couple of hours. Hicks on the occasion of the function at Mysore for releasing the Kannada version of Value and Capital said that "I have changed my emphasis of ideas quite a good deal. My book Theory of Economic History was of quite of different kind from Value and Capital; but there is change to make a sort of statement from our point of view and of a much less formal kind.... I should perhaps say that in my very last published book of essays called Economic Perspectives-Further Essays on Money and Growth (1977), there is a process which is what is called a survey and it is from my own point of view on the development on my ideas. I tried to stress there what things seem to be important where my emphasis is drastically changed. All, I can say is on this happy occasion that I am glad to receive the Kannada version of Value and Capital. My blessings to the Translator".
Finally to end with the words of Prof. Paul A. Samuelson "Sir John Hicks was as he had been throughout his life: a loner scholar, for whom the sun rose in the morning when first he opened his eyes. His works constitute his immortality". Coming to the acknowledgement, I cannot express in mere words the blessings of Prof, Paul A. Samuelson, the Nobel Laureate who has given an excellent piece under the title: My John Hicks spontaneously which shows the utmost affection to the Editor of this book. I wish to place on record my affectionate and highest regards to him. I am extremely grateful to him for writing his "Foreword' also to this work. It is again a brief piece of literature on economic history and his views on Hicks is true and remarkable which runs thus: "He was part of no school, John Hicks was his own school." Prof. Samuelson has thus said that Prof. Hicks did not belong to any school of thought and he had his own independent thinking in his works. The other Professors who are also members of the Editorial Advisory Board of the International Journal of Applied Economics and Econometrics (formerly Indian Journal of Applied Economics) have supported me in large measure by writing papers, like Profs. Nevile, Keith Griffin, and many others also refereed the articles. I was happy to have received the articles from many others including Prof. Frank Hahn and Prof. Michio Morishima. It is really fortunate to have received two papers from Prof. Colin Simkin who has given us the real insight into Hicks' way of working and life style. It is good that Prof. Axel Leijonhufvud has given a brief memoriam in which he has pointed out Hicks as a great traveller and has appreciated him which throws lot of light about Hicks to the readers. Prof. O.F.Hamouda, the author of book entitled: John R. Hicks - The Economist's Economist has summarised Hicks's works and called him a World Economist. The paper from Prof. B.B.Price, is also an excellent contribution of Hicks's works. Many British economists including Prof. G.C.Harcourt have supported and encouraged me to great extent.
The status of economics today would have been something far behind what it is. It is the work of earlier economists which has really prompted the Royal Swedish Academy to recognize Economics as a Science and institute the Nobel Prize Award. In a work of this nature it is always likely that we miss somebody or the other who should have been mentioned. If I have erred in any way, I hope I will be forgiven; but I wish that the readers will take all the good contained in this work. I am happy that most of the authors are eminent professors from all parts of the World and some of them are students of Hicks and many of them are intimate colleagues and friends. I am glad that this book, which is based on the special issue published in three parts in the Indian Economic Journal, which is now retitled as International Journal of Applied Economics and Econometris, has now come out. I lack words to express my gratitude to Dr. Irving Louis Horowitz, Chairman and Editorial Director, and Ms. Mary E. Curtis, President and Publisher, Transaction Publishers, RUTGERS, The State of University of New Jersey, for all the support and co-operation in bringing out this publication in such a short time and so well. I wish lo record my appreciation in this context. I also thank Ms. Anne Schneider, Associate Editor and other staff connected with this publication.
Foreword by Paul A. Samuelson ix
1. My John Hicks 1
Paul A. Samuelson
2. John and Ursula Hicks - A Personal Recollection 5
3. Hicks, a World Economist 15
4. "Mr. Keynes" and Hicks's Value and Capital 29
5. Hicks on Capital 43
6. Hicks and Economic Theory 53
7. Monetary Causes of the Business Cycles
and Technological Change: 'Hicks vs Hayek' 61
8. Capital and Growth: Its Relevance as a
Critique of Neo-Classical and Classical
Economic Theories 78
9. Equilibrium, Expectations and ISLM 98
10. The Function of the Hicksian Economic Institution 111
11. Hicks and the Crisis in Keynesian Economics 138
12. A Note on Don Patinkin's Misspecification of Keynes'
Consumption Function and Misinterpretation of Keynes'
Elasticity Analysis in Chapter 10 of the General Theory 144
Michael Emmett Brady
13. Money. Individual Choice and Frictions 149
14. Patinkin, the General Theory and Keynes's Aggregate
Supply Function : A Study of the Reasons Underlying
Patinkin's Misinterpretation of the GT 170
Michael Emmett Brady
15. Neoliberalism and Globalisation - Justifying Policies
of Redistribution 185
16. J.M. Keynes's Bad Habit: A Critique of His Correspondence
Style Based on the Hicks-Keynes Exchange over the
General Theory in 1936-37 209
Michael Emmett Brady
17. Sir John Hicks's Contribution in the Field of Income
Distribution, Profit Determination and Differentiated
Behaviour of Economic Classes 215
18. The Birth of Karl Popper's Open Society : 235
A Personal Reminiscence Colin Simkin
19. Mr. Hicks and the Classics 245
20. Neo Austrian Process(es) 270
Jean Lue Gaffard, Lionello F. Piinzo and Mario Amendola
21. Culture and Economic Growth: The State and Globalization 287
22.Financing of Government Expenditure and the 304
Efficacy of IS-LM
23. Hicks' Approach to Economic Theory 311
R.S. Dhananjayan andN. Sasikaladevi
24. In Memoriam : John Hicks 317
Annex - I Sir John R. Hicks : Published Writings 322
Annex - 2 Presentation of the Kannada Version
of "Value and Capital' to Prof. J.R. Hicks,
at Mysore on 7th February 1979 332
“I could not find a poor article in the collection, in the sense that I learned
something new from each article, even when the}' appeared to reach opposite
conclusions, over ISLM for example. It really is a tour deforce to assemble such
a cast of specialists on Hicks....Indeed the collection gives us a mutidimensional
view of Hicks—his private life, his scholarship and his place in the
—John Lodewijks, Professor. University of New South Wales, Australia,
and Editor, History of Economic. Review
"The presentation is very 'user friendly' and balanced. It is particularly rare to
find a collection in which its 'gems' are so well distributed and carry the burden
of maintaining interest and contact from beginning, to middle, to end. The
articles reflect Hicks's tremendous variety of thought and production in their
emphasis on the variety per se or on specific areas of his exploration and
—B.B. Price. Associate Professor, York University, Toronto, Canada
"This is an important contribution to the existing literature on the subject."
—Bimal Jalan, Governor. Reserve Bank of India
"This work on Sir John Hicks constitutes a major contribution to the History of
Economic Thought and I congratulate this highly creative initiative."
—Manmohan Singh. Former Finance Minister. Government of India
VOL. 47 APRIL-JUNE 1999-2000, NO.4
THE INDIAN ECONOMIC JOURNAL
AN INDIAN ECONOMIST'S INTERNATIONAL MEMORIUM FOR JOHN HICKS
Dr.K.Puttaswamaiah is well known to economists for, his early contribution to economics of project evaluation and for his monumental two volume book on "Karnataka Economy". Recently he brought out a three volume major biographical treatise on "Nobel Economists". Dr.Puttaswamaiah has been the pioneering editor of the international quarterly, "Indian Journal of Applied Economics". He had also translated into Kannada, John Hicks's seminal work on "Value and Capital". He nas brought out three issues of the above Journal in respectful memory of John Hicks. These three issues together amounting to 346 pages have special articles on Hicks from Paul A.Samuelson, Axel Lejonhufuvd, Colin Simkin, O.F.Hamouda. Michio Morishima, Syed Ahmad, Frank Hahn. Harald Hagemann, Joseph Halevi, J.W.Nevile, B.B.Price, John Lodewijks, Michael Emmett Brady, Mauro Baranzini, Michael Rosier and Christian Tutin, Jean-Luc Gaffard, Lionello F.Punzo and Mario Amendola, Surjit Sinha , and R.S.Dhananjayan and N.Sasikaladevi. A bibliography of John Hicks's published writings is annexed. In his "My John Hicks", Samuelson with his usual wit writes "John-Hicks ha^ another fault. He wrote well. This is not a common crime among economists". Samuelson also chides the Nobel Committee for not awarding Hicks alone the second Nobel Prize in 1970, following immediately after Ragnar Frisch and Jan Tinbergen in 1969. Samuelson adds "That would have left Kenneth Arrow to receive later an unshared award" Note that Samuelson was the single recipient of the Nobel award in 1970! We should not conclude that Samuelson would have liked to miss the Nobel award in favour of a just hierarchical order of Frisch, Tinbergen, Hicks and Arrow! Samuelson also remarks that Kenneth Arrow deserves at least two Nobel Prizes. Two prizes better than half a prize! Puttaswamaiah's memorial issues should be read if at all only for Samuelson's contribution. Hahn in his paper on “Hick” and Economic Theory' states "That Hicks read a rather limited subset of the economic literature which was relevant to what he was doing, is quite clear. Certainly it meant that he 'rediscovered' results". The papers of both Samuelson and Hahn raise the issue of the nature and importance of originality in economics. Is originality a flash, a paper, or a detailed worked out volume on a flash, Those who have read Pareto, would not consider the indifference approach as original to Hicks. But, Hicks does generalise it in a manner Pareto did not "A revision of demand theory " can be considered as a detailed working out of the strengths and limitations of Samuelson's flash on revealed preference, "A contribution to trade cycle theory" may be considered as a detailed working out of the flash of Richard Goodwin. Yet, the Hicksian stretching out of the flashes makes the original contributions appear better than they would have been. Is Shakespeare original? If Shakespeare has his own individuality, the same should be attributed to John Hicks. Hahn seems to give the impression that Hicks often is "British commonsense with a little extra". The extra is very important. Imagine the significance of the porter's knock in Macbeth.
Dr.Puttaswamaiah should be congratulated for his massive effort of mobilisation in this three volume memorium. He had performed a similar feat in respect of Tinbergen. I understand that his collection of papers in honour of Samuelson is also now in print. Indian economists should be truly proud of Dr.Puttaswamaiah'’s marathon efforts. The papers on Tinbergen have also appeared in the form of a volume. It is hoped that the other two efforts will also be brought together in the form of volumes.