A Very Interesting Interview of Uzawa

Here are some interesting bits:

On Joan Robinson and James Meade:

We had the first Far Eastern Meeting of the Econometric Society, in the summer
of 1971 or thereabout, inviting James Meade, Michael Bruno, and Joe Stiglitz
from abroad. After the meetings were over, I organized a three-day seminar
meeting at the gracious villa of the Development Bank of Japan in Hakone. James
Meade gave an opening lecture, really a beautiful lecture, typical of him. Then
Joe Stiglitz asked him, “What Joan Robinson would say if she were here?” Meade
was quite upset and replied, with a stern voice. “I have not come this far to
hear that name!”

On Friedman and Lloyd Metzler

No, before that. When I had an offer from the University of Chicago, I was very
concerned with [Milton] Friedman. I did not want to do anything with Milton
Friedman. But Lloyd Metzler was very insistent that I come to Chicago. One day,
Metzler came to Stanford to urge me to accept the offer from Chicago. We had
lunch together and I asked him how things were done in Chicago. I asked him the
most important thing to me, that is, what were the relations between him and
Milton Friedman. Metzler said “Oh, I am getting along with Milton very well,
because I don’t pay any attention to what he says.” That was a classic statement
typical of Metzler. A few year before that, about four years before that,
Metzler suffered from a serious disease, a brain tumor, and he had a major
operation. That was the reason why I was invited to come to Chicago, because he
was the House Keynesian. So, I was invited to come to Chicago to work with him.

Here's the link.

Can Keynes Save Us All?

A short answer is no, and that's the conclusion of this interesting piece by Nobel Prize winner in economics (2006) Edmund Phelps in FT.

This bit is my favourite, at the very end of the piece:

Capitalism theory stresses diversity in sources of new commercial ideas, in the pool of entrepreneurs available for their development, in sources of finance – angel investors, venture capitalists and the rest – and in the array of end users.

It also stresses how important it is that owners of financial and business enterprises be accountable to no one (except their own consciences) – thus free to use their intuition – in contrast to the strict accountability rightly required of state employees. Thus a greatly increased presence of the central government in a country’s investment sector could constrict innovation and lower the quality of the innovations that are made. We would be left still in a slump.

At the end of his life Keynes wrote of “modernist stuff, gone wrong and turned sour and silly”. He told his friend Friedrich Hayek he intended to re-examine his theory in his next book. He would have moved on. The admiration we all have for Keynes’s fabulous contributions should not sway us from moving on.

Axel Leijonhufvud on New Keynesian Macroeconomics

Axel lamented:

New Keynesians adhere on the whole to the same DSGE modeling technology as RBC macroeconomists but differ in the extent to which they emphasise inflexibilities of prices or other contract terms as sources of short-term adjustment problems in the economy. Except for this stress on inflexibilities this brand of contemporary macroeconomic theory has basically nothing Keynesian about it. (my emphasis)...

The obvious objection to this kind of return to an earlier way of thinking about macroeconomic problems is that the major problems that have had to be confronted in the last twenty or so years have originated in the financial markets - and prices in those markets are anything
but inflexible.

This bit is even better:

But there is also a general theoretical problem that has been festering for decades with very little in the way of attempts to tackle it. Economists talk freely about inflexible or rigid prices all the time, despite the fact that we do not have a shred of theory that could provide criteria for judging whether a particular price is more or less flexible than appropriate to the proper functioning of the larger system. (my emphasis)

Read the whole thing here.

BTW, Axel was at UCLA and one of Professor Steven N S Cheung's colleague.

Jim Buchanan on John Rawls and Bob Nozick

Ever since reading Hayek's brief remark in Law, Legislation and Liberty that his approach to the subject matter at hand seems close to that of John Rawls, at least the earlier works of Rawls, I am interested in learning more about the alleged similarity between the two great minds. That is why I have recently purchased quite a number of books both by Rawls and by others on him, more here.

Therefore, I am extremely encouraged also by learning that Jim Buchanan has high regard of Rawls' work.

According to this blog entry:

Buchanan also spoke highly about Rawls. I think I mentioned that Hayek had said that his approach was similar to Rawls. I think Buchanan said he did not think that comment was surprising. I also believe I remember Buchanan saying that he thought more highly of Rawls than of Nozick.