Abraham "Abba" Ptachya Lerner (also Abba Psachia Lerner; 28 October 1903 – 27 October 1982) was a Russian-born American-British
economist
An economist is a professional and practitioner in the social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...
.
Biography
Born in
Novoselytsia,
Bessarabia
Bessarabia (; Gagauz: ''Besarabiya''; Romanian: ''Basarabia''; Ukrainian: ''Бессара́бія'') is a historical region in Eastern Europe, bounded by the Dniester river on the east and the Prut river on the west. About two thirds of ...
,
Russian Empire
The Russian Empire was an empire and the final period of the List of Russian monarchs, Russian monarchy from 1721 to 1917, ruling across large parts of Eurasia. It succeeded the Tsardom of Russia following the Treaty of Nystad, which ended th ...
, Lerner grew up in a
Jewish
Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
family, which emigrated to Great Britain when Lerner was three years old. Lerner grew up in London's
East End
The East End of London, often referred to within the London area simply as the East End, is the historic core of wider East London, east of the Roman and medieval walls of the City of London and north of the River Thames. It does not have uni ...
and from age 16 worked as a machinist, a teacher in
Hebrew
Hebrew (; ; ) is a Northwest Semitic language of the Afroasiatic language family. Historically, it is one of the spoken languages of the Israelites and their longest-surviving descendants, the Jews and Samaritans. It was largely preserved ...
schools, and as an entrepreneur. In 1929, Lerner entered the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 mill ...
, where he studied under
Friedrich Hayek
Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Hayek ...
. A six-month stay at
Cambridge
Cambridge ( ) is a university city and the county town in Cambridgeshire, England. It is located on the River Cam approximately north of London. As of the 2021 United Kingdom census, the population of Cambridge was 145,700. Cambridge beca ...
in 1934–1935 brought him into contact with
John Maynard Keynes
John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...
. In 1937, Lerner emigrated to the United States. While in the US, he befriended intellectual opponents
Milton Friedman
Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...
and
Barry Goldwater
Barry Morris Goldwater (January 2, 1909 – May 29, 1998) was an American politician and United States Air Force officer who was a five-term U.S. Senator from Arizona (1953–1965, 1969–1987) and the United States Republican Party, Republ ...
.
Lerner never stayed at one institution long, serving on the faculties of nearly a dozen universities and accepting over 20 visiting appointments.
Lerner was 62 when he was given a professorship at the
University of California, Berkeley
The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California) is a public land-grant research university in Berkeley, California. Established in 1868 as the University of California, it is the state's first land-grant u ...
in 1965 and left after reaching mandatory retirement age six years later.
[ During his time there, Lerner criticized the unrest caused by the student protests as a threat to ]academic freedom
Academic freedom is a moral and legal concept expressing the conviction that the freedom of inquiry by faculty members is essential to the mission of the academy as well as the principles of academia, and that scholars should have freedom to teac ...
.[
Abba Lerner taught in the Economics Department at Florida State University, for several years. He stopped teaching after he suffered a stroke while visiting Israel.
Although Lerner never received the Sveriges Riksbank's ]Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
, he has been recognized as one of the greatest economists of his era.
Research
* Lerner developed a model of market socialism
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, or one that contains a mix of worker-owned, nationalized, and privately owne ...
which featured decentralised market pricing proportional to marginal social cost[ Tibor Scitovsky, (]987
Year 987 ( CMLXXXVII) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar.
Events
By place
Byzantine Empire
* February 7 – Bardas Phokas (the Younger) and Bardas Skleros, two membe ...
2008). "Lerner, Abba Ptachya (1905–1982)," ''The New Palgrave Dictionary of Economics
''The New Palgrave Dictionary of Economics'' (2018), 3rd ed., is a twenty-volume reference work on economics published by Palgrave Macmillan. It contains around 3,000 entries, including many classic essays from the original Inglis Palgrave Diction ...
'', 2nd Edition. Previe
link.
/ref> and in so doing contributed to the Lange–Lerner–Taylor theorem.
* Lerner contributed to the idea of a social dividend by incorporating it into Oskar R. Lange
Oskar Ryszard Lange (27 July 1904 – 2 October 1965) was a Polish economist and diplomat. He is best known for advocating the use of market pricing tools in socialist systems and providing a model of market socialism. He responded to the economi ...
's original model of socialism, where the social dividend would be distributed to each citizen as a lump-sum payment.[''Who framed 'social dividend'?'', by Van Tier, Walter. March 2002. USBIG Conference, CUNY.]
* The use of fiscal policy
In economics and political science, fiscal policy is the use of government revenue collection ( taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variable ...
and monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often ...
as the twin tools of Keynesian economics
Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output ...
is credited to Lerner by historians such as David Colander.
* The Lerner symmetry theorem states that an import tariff can have the same effects as an export tax.
* The Lerner Index measures potential monopoly power as mark-up of price over marginal cost divided by price or equivalently the negative inverse of demand elasticity
A good's price elasticity of demand (E_d, PED) is a measure of how sensitive the quantity demanded is to its price. When the price rises, quantity demanded falls for almost any good, but it falls more for some than for others. The price elastici ...
.
* Lerner improved a formula of Alfred Marshall
Alfred Marshall (26 July 1842 – 13 July 1924) was an English economist, and was one of the most influential economists of his time. His book '' Principles of Economics'' (1890) was the dominant economic textbook in England for many years. I ...
, which is known since as the Marshall–Lerner condition.
* Lerner improved the calculations made by Wilhelm Launhardt on the effect of terms of trade.
* Lerner developed the concept of distributive efficiency, which argued that economic equality will produce the greatest probable total utility
As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosoph ...
with a given amount of wealth.
* Based on effective demand
In economics, effective demand (ED) in a market is the demand for a product or service which occurs when purchasers are constrained in a different market. It contrasts with notional demand, which is the demand that occurs when purchasers are not ...
and chartalism, Lerner developed functional finance, a theory of purposeful financing (and funding) to meet explicit goals, including full employment
Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. Fo ...
. This is in contrast to “sound finance” principles where taxation is designed solely to fund expenditure or finance investment and low inflation.
* The Lerner–Samuelson theorem goes back to Lerner.[Murray C. Kemp, 2008. ''International Trade Theory: A Critical Review'', Routledge, pp]
xiv–xvii.Description.
/ref>
References
External links
"Abba Lerner"
*
* Mathew Forstater (July 1999)
"Functional Finance and Full Employment: Lessons from Lerner for Today?"
''Working Paper''. No. 272. The Jerome Levy Economics Institute
Founded in 1986 as the Jerome Levy Economics Institute, the Levy Economics Institute of Bard College is a nonprofit, nonpartisan public policy think tank. The purpose of its research and other activities is to enable scholars and leaders in busi ...
.
*
{{DEFAULTSORT:Lerner, Abba P.
1903 births
1982 deaths
Bessarabian Jews
Emigrants from the Russian Empire to the United Kingdom
British emigrants to the United States
Alumni of the London School of Economics
Post-Keynesian economists
Welfare economists
20th-century British economists
Fellows of the Econometric Society
Distinguished Fellows of the American Economic Association
Academics of the London School of Economics