Lance Taylor (1940–2022): Reconstructing Macroeconomics

On 15 August 2022, Lance Taylor, the towering structuralist macroeconomist and a thinker of uncommon breadth, sadly passed away. His work, spanning almost six decades, stands out for its originality, creativity, (policy) relevance theoretical rigour as well fearless commitment to speak truth power in academic policy-making circles. This essay reviews Taylor's progression from an early development planner radical Keynesian macroecono-mist on mission reconstruct failing mainstream macroeconomics build relevant, practical ‘structuralist’ alternative, grounded real-world stylized facts benefit broad-based sustainable economic progress. Taylor will be missed but, this aims demonstrate, his legacy live on, through prolific writings generations heterodox economists who were mentored by him or have been influenced work. once painted following picture ‘ideal’ macroeconomist: ‘Ideally, one ought able teach at university morning, advise Minister how apply afternoon, write scholarly papers night, all while practising same craft’ (Taylor, 1988a: 25).1 When he wrote this, probably had John Maynard Keynes mind — British economist revolutionized economics policy making 1930s but matter fact, came very close himself. Those us working with could drop off set notes scribbled calculations thoughts mail slot we would detailed reaction back day afternoon. I also recall visiting office first time discovering that hammock installed where frequently found reading latest paper caught attention. (Darity, 2022) Fast forward Özlem Ömer, whom acted unofficial advisor her 2018 PhD thesis (40 years after Darity), writes: ‘We exchanged thousands emails, which learned approach macroeconomic theory …. He was incredibly patient kind. … Lance's responses immediate thoughtful no day. didn't want waste any because so much share, teach’ (Ömer, 2022: 174–75). Email replaced notes, otherwise things stayed exactly same. Interestingly, consistent dissenting position within profession, not located building housed MIT Economics Department, rather old, rambling, wooden Food Nutrition Department. office, door generally open, did indeed full books, reports visitors, reportedly, often meet Saint Bernard dog brought along it comes ‘advising Minister’, gave counsel governments over globe, starting Chile 1968–69, including Brazil, Egypt, India, Pakistan, Portugal, Nigeria, South Africa, Thailand others. In students difficult name country to. made practice collaborate concerned, former students. deeply disliked ‘foreigners fly packages developing post-socialist countries [and particularly those who] staff two international agencies World Bank International Monetary Fund (IMF)’ 1997: 145). complained that: ‘Their members are grossly over-paid comparison their counterparts countries. missions they interact each other more than happen visiting, communicate virtually only among themselves office’ (ibid.: 152). And last means least, output (presumably written night) is impressive. By my (imperfect) count, published eight weighty monographs, co-authored edited around 10 hundreds journal articles, book chapters during career decades. top editor-in-chief Journal Development 1976 1984, managed create high-quality publication window variety opposing schools thought closed retired editorial board. During late 1980s 1990s, pivotal organizing leading various projects Institute Research (WIDER), provided substantive critiques orthodox IMF macro stabilization structural adjustment programmes damaging many world. recipient prestigious prizes special lectures, Marshall Lecture 1986–87 1988a), University Cambridge, V.K. Ramaswami Delhi School 1988 1988b). what might call casual every-day dress, though appeared public talks turned even jaunty accessories. It unusual, however, appear clothes Maine farmer. some these occasions, when travel delays cancellations disrupted work plans, try persuade graduate least interesting goats hopes getting spend New York, headway issue. worthy note Yvonne donated farm conservation easement order protect preserve natural reserve future generations. Whatever talents part-time farmer, remembered principally accomplished practitioner equally skilled abstract theory, complex modelling approaches, political economy analyses pragmatic planning. impossible do justice contributions macro- economics; essay, single key contributions, against background biography.4 Jerome born 25 May 1940 Montpelier, small town rural Idaho, parents ran local weekly newspaper 2000). received BSc honours mathematics California Technology5 1962, decided continue science, ‘I minimal mechanical talent thereby experimentalist, quick enough theory’ 665). A ‘marvellous course macroeconomics’ Alan Sweezy (a left-Keynesian older brother Paul Sweezy6), Keynes’ General Theory read, persuaded go into economics. think retrospect sunk place deep down subconscious’, said adding that, ‘Basically, got him’ (quote Lavoie, 2015: 250). Following Fulbright scholarship year Lund Sweden, married 1963, worked under supervision Hollis Burnley Chenery, student Wassily Leontief pioneer using input-output analysis According (2000: 666): ‘[Chenery] view should applied help poor people countries, displayed relatively open attitude towards dissent (many Harvard tending toward radicalism 1960s modicum intellectual protection him)’. himself (Lavoie, 2015); just wanted ‘apply countries’ quite line Chenery's American liberal Democratic leanings. Using formal econometric methods, analysed sectoral production structures changed proceeded, led patterns growth The Review Statistics (Chenery 1968), Quarterly 1969).7 laid (part of) foundation Chenery et al.’s (1974) Redistribution Growth: An Approach Policy Syrquin's (1975) Patterns Development, 1950–1970, influential books McNamara era. After finishing thesis, Chile's Planning Office 1968 1969 part advisory Rosenstein-Rodan; before Allende elected. Santiago de dynamic multisector programming models, publishing technical Econometrica (Kendrick 1970) Economic Studies 1970).8 Looking back, hold high regard, considering them standard works.9 general, felt ‘there sense being overwhelmed algebraic fireworks’ 2000: bundled expertise models planning, ‘term has long since vanished polite discourse’,10 widely used Charles Blitzer Peter Clark (Blitzer, 1975). experience living 1968–69 proved life-changing. learned, less, highly inegalitarian works interested distribution issues there’, noted 251). Chile, wrote, derived basic views’. These views ‘heavily ideas Commission Latin America air. ECLA economists, turn, owed debts Kalecki Kaldor’ 666). teaching three Harvard, spent 1972 Brasilia, project11 construct computable general equilibrium (CGE) model analyse why rapid went hand-in-hand regressive distributional change Brazil. Together Edmar Bacha, knew Office, titled ‘The Unequalizing Spiral: First Growth Model Belindia’ (Taylor 1976). ‘Belindia’, coined expressed dual-economy nature Brazil minority population lived well-to-do advanced modern economies, such Belgium, vast majority way low-income India. team pioneered construction CGE Cardoso Lysy, 1980), parallel similar efforts Korea Irma Adelman Sherman Robinson (Adelman Robinson, 1978).12 must mentioned here Lysy ‘was held up Walters, then high-level bureaucrat later Margaret Thatcher’ 2016: 499). Walters ‘politically unacceptable’. unwillingness publish error, however. Consciously unconsciously, understood axe root Bank's self-image providing neutral, ‘technical’ advice client governments. point jointly Frank offered proof newly developed ‘neutral’ tools explore data numerically examine possible repercussions changes institutional 1979). Rather, are, always everywhere, ‘non-neutral’, is, ‘are designed quantified illustrations designers’ conceptions Each becomes rhetorical tool, expound detail builder's about linkages “real” there’ 1995b: 271). Specifically, (1979) show superimpose particular ‘macroeconomic causal structure’ ‘closure’ model, choice specific closure rule affect significantly influence qualitative character results.13 reason, (2016: 496) explains, ‘CGE stupid. They closures tell do’. view, does make useless, imply informed prior understanding ‘vision’) question choose most appropriate given historical context. basically restating claim vigilant observers art, ersatz science: ‘Economics science thinking terms joined art choosing relevant contemporary Good scarce gift “vigilant observation” good although require specialised technique, appears rare one’ (Keynes, 1938/2012: 297). master observation, important lesson: ‘As little dust exemplifies, politics world, based Washington DC’ 500). whose father communist became Mrs Thatcher's ‘finest friends’, stop al. (1980). nevertheless run, especially ‘Anne Krueger's palace coup Bank’ 507). From promoted ‘neutral tools’ advocate Consensus policies. But pointed out, neoclassical Trade Organization extent rigged generate results modellers have. As 500) wrote: argue modeling beyond research design aimed sell purported benefits liberalization, I'll leave judgment others’. assuming employment, produce net welfare gains trade liberalization period, actual contractionary effects occur chosen (see Kohler Storm, 2017). Raza, Tröster von Arnim (2016) present assessment Transatlantic Investment Partnership (TTIP); assumptions regard determination output, income employment fundamentally different arrive results. retrospect, realization 1970s never neutral exercise, involves choices ‘vigilant observation’ builder outcomes, inspiration explicitly (prior) outcomes and, hence, recommendations. justify closure, context investigation. doing real read ‘Sraffa, Kaldor, lot anthropology’ 667) ironically, mostly England.14 Returning Brasilia Massachusetts, tenured professor Departments 1973 1976. Several themes dominate 1980s: focus industrial structure change; continuing emphasis balance payments central constraint development; explicit concern (and conflict) driver influencing growth; lack automatic self-correcting mechanisms resolve imbalances deal external shocks. factors impose constraints performance, may contribute growth. (in own words) ‘you cannot describe functions, demand supply functions maximising instead institutions history matter’ novel two-sector economy, distinguished between price-clearing agricultural sector demand-determined, quantity-clearing included Engel curves (for consumption demand), perennial problems highlighted Kalecki, Preobrazhensky Sylos-Labini (Chichilnisky 1980). Krugman, student, now classic showing currency depreciations likely semi-industrialized economies: all, increase import prices (of essential consumer items capital goods) lowers incomes if exports sensitive exchange rate (Krugman 1978). together monograph, Macro Models Developing Countries 1980s, deepened models. 1974 Stephen J. Black application modelling, form 35-sector Chilean Black, 1974), Leif Johansen's (1964) classic, Multi-sectoral Study Growth. Solving large-scale non-linear numerical sinecure expensive, time-consuming, room-sized mainframe computing, solution algorithm, involved log-linearizing equations efficient. new efficient iterative involving combination Gauss-Seidel Newton-Raphson powerful approximating general-equilibrium 1983). algorithm Egypt 1982), Pakistan (McCarthy 1980) India Sarkar Rattsø, 1984). simulations broadly Kaleckian specification, showed abolishing existing food subsidies lead contraction adverse nutritional change. recalls: ‘These strike me surprising, provoked debate opposed alleged microeconomic inefficiencies. My report (never per se) mini-cause célèbre Cairo erupted riots attempt end January 1977. Ill-planned shifts can substantial effects’ 667–68).15 collaboration colleagues orientated issues. analyses, centred conflicts productive, export import, land ownership characteristic industrializing useful quantify forced relative importance chains. Edited collections (1990) (1993). 1983 synthesis serious codification macroeconomics, both short run.16 contained pioneering describing interactions industrialized North primary-resources-exporting 1981), heavily ECLA's structuralism which, inspired cottage industry North–South (e.g., Conway Darity 1991; Dutt 1989a, 1989b). Retaining modified version neo-Keynesian IS-LM (with exogenous money supply) parts overall cause (Bacha, 1985). Nevertheless, treatment foreign-exchange industrialization inflation illuminating, chapter 4, discusses outright brilliant; words Bacha: ‘More fifteen applying multisectoral world neatly packed thirty pages. All tricks presented masterful exposition, treat planners alike’ 1985: 540). further contributed (long) two-volume edition Handbook Economics, T.N. Srinivasan; chapters, Persio Arida, students, dealt short-run long-run 1988, 1989). monetary tightening Federal Reserve 1979–81, combat US, triggered debt crises (highly indebted) Africa. aftermath global fallout Volcker shock, devoted 1990s analysing criticizing stabilization, privatization policies imposed conditionality relief financial support IMF, US Treasury. economies ‘helped’ undertake drastic measures fiscal consolidation account prolonged recession, rising inequality poverty, lost decade Under aegis WIDER Gerald Helleiner, organized 18 comparative studies IMF-sponsored countries; reviewed (1988a, 1989) aim identifying alternative better ones IMF. instinctively approached lens dynamical systems typically dimensions, realm completely home ‘spoke language’. (Not everyone gifted respect, tendency assume degree familiarity properties low-dimensional challenged backgrounds readers ….). (This certainly rings true author few hours consumed effort massively efforts.) 1991 final act Massachusetts. Importantly, sole gradually shifted generally, Thus, commonly unthinkingly theories constructed developing-country contexts, (1991) began ‘structuralism’ Northern particular. Over time, grew increasingly dissatisfied extreme 670). believed 1980, irrelevant: ‘mainstream large become second-rate social content. pity’ 2010: 253). leave. ‘Lance shock waves across profession when, professor, left MIT, department apex take School’, writes (2022), ‘New faculty right, somewhat marginalised heterodoxy. far supportive inspiring environment life’. Indeed, already superlative productivity increased move. At School, critique mindless ‘get right’ (then) transitional Excellent summaries enterprises, deregulation finance, austerity umbrella available Ocampo (1998) (1997). (1997: 151) pay costs errors: ‘A [World IMF] member flying chastened frame represents sort response collapsed; health worker trying malnourished infants recover drastically lower national another’. always, identified progressive redistribution replace IMF-World dogma, acknowledging limits productive structures, integrated system. strategies explored Ocampo, Rada (2006). We fearful example Russia today evils insane unnecessary haste. sacrifices losses transition vastly greater pace processes rooted time. involve pure destruction wealth state affairs be, first, worse grand experiment discredited. 1933: 765) Sadly, authors proven right disastrous performance 1990s: Russia's GDP declined 44 cent 1989–98 (according data), death rates non-natural causes sharply increased. Unfortunately, argument co-authors impact policies, strongly orthodoxy. Even worryingly, boys escaped professional ethical accountability biggest disasters caused engineering history. With Eatwell, case effective regulation markets (Eatwell Since liberalized accounts, urged exposed vagaries inherently fragile markets, actors base decisions guesses investors behave. To stabilize inflows, authorities resort deflationary (high interest rates), depressing imposing societal occur. Eatwell argued bias removed finance. turn millennium, (Ocampo, 2006; 2001, 2006), main decisively economy. Inspired Goodwin's (1967) ‘growth cycle model’, embarked trajectory relationship growth, demand, conflict USA. Barbosa-Filho (2006) (2012) repetitive ‘profit squeeze’ cycles17 exist economy; Foley Rezai (2019) demand-driven profit-squeeze cycle, Kalecki's conflicting claims Kaldor's progress function. Proaño, Carvalho Barbosa-Filho, 2012), (rising) 2019; Rezai, Kumar, Carvalho, 2004, magnum opus, tome 442 pages, Reconstructing Macroeconomics: Structuralist Proposals Critiques Mainstream 2004). book, h