I began to learn Economics sixty years ago during my second year undergraduate days. In those days, it was a four year degree and after the first two years we specialised. I did not know I was going to specialise in Economics.
Then after many more years of studying I worked as an Economist for forty years. Over those years spent largely at the LSE, I was lucky to meet many famous economists. I want to tell the story of those meetings in this series for Meghnad Desai Academy of Economics and The Curious Economist.
Sir John Hicks
When I was studying for my Masters degree in the Bombay Department of Economics during 1958-1960, John Hicks’s book Value and Capital was the advanced reference book. It introduced the world to indifference curves and the importance, fundamental to much micro theory, of breaking the price effect into Income and substitution effects. Value and Capital is a classic but in those days we only read parts one and two which dealt with consumer theory. The rest of the book goes on to develop the theory of general equilibrium and has many innovations.
When I got in to London School of Economics in 1965, I was aware that John Hicks had been at the LSE in the early Thirties.
Lionel Robbins had studied at LSE and then gone to Oxford. But within a few years he was recalled to LSE to be the Professor of Economics (In those days there was only one Chair in economics at LSE). He went on to establish a formidable department at LSE. He had known Hicks at Oxford. Hicks had done a modern languages degree. Robbins encouraged him to read the Italian economist Vilfredo Pareto and the French economist Leon Walras. In Britain at that time few read European authors. They all read Alfred Marshall whose Principles of Economics was the standard textbook which had gone through eight editions. Robbins wanted to make British economics less parochial and introduce continental authors from Lausanne and Austrian schools. He wanted to help Hicks establish the European knowledge in Britain and he knew Hicks had the potential to become a great economic theorist.
Hicks grappled with mathematics, read the European classics and established LSE as a centre for economic theory. Along with Roy (R.G.D.) Allen, another young colleague at LSE, he developed the insights of Eugene Slutsky, a Russian economist. They developed the indifference curves we all use nowadays. ( R.G.D. Allen later wrote Mathematical Analysis for a Economists which was the standard introduction of mathematics for a Economists and went through many reprints.)
Hicks went to Cambridge from LSE and then after a few years as Orofessir in Manchester settled at Oxford after the Second world War as the Drummond Professor of Economics at All Souls College. He wrote many articles and books. One of his most famous articles is “Mr Keynes and the Classics” written soon after the publication of Keynes’s General Theory which summarised the entire argument in the IS- LM curves we all use.
Meeting Hicks at his house
I had the good fortune to meet Hicks several times at conferences but in 1995 as part of the centenary celebrations of LSE I was asked to go and interview him. He had retired by then so I had to travel by train to his house in Gloucestershire. It was a glorious spring day. It was March and the Budget had been presented. One of the newspapers had been running a series on the Professionals’ Professional. It asked the professionals in any field to nominate their best person. Economists had voted Hicks as the Economists’ Economist. Of course he was not aware of it when I told him.
Hicks was quite fragile by then (he was 90) and walked with the help of a Zimmerframe. He received me very kindly but he had obviously forgotten why I was there. So he said to me early on in our conversation, “Don’t worry. I will give you a good reference”. I was puzzled as I had not asked him for any reference. He had just mixed me up with someone else who was applying for the Drummond Professorship.
But then we soon settled down to talk about him. I asked him about Lionel Robbins and those days at the LSE. But Hicks wanted to talk about his latest research. He sat me down and told me that he had worked out the problem of factor substitution in the context of a neoclassical production function with more than two factors. The broader context is to prove the stability of equilibrium. This was of course an old issue on which he had written in Value and Capital as had Samuelson in his Foundations of Economic Analysis. It involves determinants involving several variables with bordered hessians etc. I had done all that as a student but had left it long behind.
Hicks wanted to show me his latest simplification of the Stability conditions. So we sat at a long table (which was later the dining table where we had lunch) and he took out some paper and his pen. He began writing out the equations. He had all the enthusiasm of a fresh graduate who had just got a new result.
So there I was keen to talk about the 1930’s with this Nobel Prize winning genius and he was only interested in his latest work. It was a real lesson in how a fertile mind never stops working on new things. All my attempts to get him back on his days at LSE were unsuccessful.
I learned a lot. He very kindly gave me lunch. We promised to meet again for that conversation I wanted and parted.
But that was the last I saw of him. I shall always remember his kindness but above all his curiosity about problems of economic theory and how one could always find pleasure in working seriously no matter how long after one’s active career.