CORES » Economist Paul Davidson responds to Provost’s comment

Economist Paul Davidson responds to Provost’s comment

From: Davidson, Paul
Sent: Thu 8/21/2008 2:05 PM
To: provost@uchicago.edu
Cc: t.rosenbaum@uchicago.edu
Subject: Milton Friedman Institute

Stimulated by the article about the Milton Friedman Institute in the August 20, 2008 issue of the WALL STREET JOURNAL, I have sent the enclosed (below) letter to its author, Thomas Frank. In this letter I suggest a test of your comment that the Milton Friedman Institute “would bring in Keynesian economists as well as traditional Friedmanites”.

I would be very interested in whether you take up my challenging test.

Sincerely;

Paul Davidson Editor, Journal of Post Keynesian Economics Bernard Schwartz Center for Economic Policy Analysis The New School 79 Fifth Avenue, 11th Floor New York, New York 10003 phone and fax number: (732)605-0255 email: pdavidson@utk.edu http://econ.bus.utk.edu/davidson.html

From: Davidson, Paul Sent: Thu 8/21/2008 1:33 PM To: thomas@wsj.com Subject: Friedmanites and/or Post Keynesians?

August 21, 2001 Dear Thomas Frank: I am the editor of the JOURNAL OF POST KEYNESIAN ECONOMICS as well as one of five critics whose comments on Milton Friedman’s monetary framework was published in the JOURNAL OF POLITICAL ECONOMICS (1972) and reprinted in book form by the University of Chicago Press as MILTON FRIEDMAN’S MONETARY FRAMEWORK: A DEBATE WITH HIS CRITICS (1974) Accordingly, I was very interested in your column “We’re Not All Friedmanites Now” that appeared in the Wall Street Journal on August 21, 2008.. Particularly I was attracted to your report that University of Chicago Provost Thomas Rosenbaum “would bring in Keynesian economists as well as traditional Friedmanites” to the Milton Friedman Institute. I have never been invited to give a seminar, much less visit the University of Chicago. If invited I could give a seminar on “Keynes’s Monetary Theory vs. Friedman’s Monetary Theory”. Besides carefully distinguishing between these two extremely different views of the economic world, this analysis would explain why even competitive free markets per se can not optimally allocate resources and why there is a role for government intelligent rules and regulations, especially for financial markets. [This message seems to have been ignored even though general equilibrium economics expert Frank Hahn wrote in 1973 that “Practical men and ill-trained theorists everywhere in the world do not understand what they are claiming to be the case when they claim a beneficent and coherent role for the invisible hand”.] In 2007 I published a book on Keynes for the Palgrave series “Great Thinkers in Economics” entitled JOHN MAYNARD KEYNES, by Paul Davidson (Palgrave/Macmillan, London and New York, 2007) ISBN# 978-1-4039-9623-7 Some of the comments on this book are as follows: “Global imbalances, the unshackling of capital, the precarious state of modern capitalism: rarely has the world of economics been in more need of the thoughts of John Maynard Keynes. Although Keynes is no longer with us, this book is the next best thing. Paul Davidson is the leading expert on Keynes and Keynesianism and his book should be read by anybody who wants to understand the world as it is, rather than as the economic text books say it ought to be.” - Larry Elliott, Economics Editor, The Guardian “This could be the best one-volume treatment of Keynes’s economics since Keynes himself. Clear, logical and faithful, Paul Davidson introduces the real Keynes to a new generation. And do we ever need him.” - James K. Galbraith, The University of Texas at Austin and Levy Economic Institute “Davidson convincingly shows how Keynes’s radical assault on classical economic theory was undermined by mainstream interpreters anxious to make his doctrines politically acceptable. Keynes’s own ‘general theory’ is compellingly explained; its obfuscators attacked with Davidson’s familiar panache.” - Lord Skidelsky, author of John Maynard Keynes 1883-1946: Economist, Philosopher, Statesman. [Skidelsky is the author of a three volume biography of Keynes.] “Paul Davidson’s fascinating, encyclopaedic book captures the drama of the appearance of the General Theory, illuminates the controversies still surrounding it, and passionately defends Keynes’s radical innovations in economic theory and policy. It is high time for economists and policymakers to go back to Keynes’s own words, whose power Davidson so effectively articulates.” Peter L. Bernstein, President of Peter L. Bernstein, Inc., and author of the best selling book: Against the Gods: The Remarkable Story of Risk I would think that these credentials should convince Provost Rosenbaum that it might be desirable to extend an invitation to me to at least provide a seminar to this budding Milton Friedman Institute. [ To test this I am sending a copy of this letter to Provost Rosenbaum. If I get any response I shall let you know. I will be interested in your view as to whether I receive an invitation to at least give a seminar at the Milton Friedman Institute.]

Paul

CORES: Committee for Open Research on Economy & Society

Economist Paul Davidson responds to Provost’s comment