Tribute to Lauchlin Currie (1902-1993)

[Sam Lanfranco <LANFRAN@xxxxxxxxxxxx>]

Canada is a country that does not celebrate its heros. This passing is
worth noting.  Reposted by - Sam Lanfranco -------
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From:         Roger Sandilands <ECSSANDI@xxxxxxxxxxxx>
Subject:      OBITUARY

I am posting the following obituary notice I sent a few days ago to a
London newspaper in hopes it will be published. I don't think is has been
so far. Currie was a great friend of mine, and active as a development
economist to the last. The day he died I faxed him a long and favourable
review of my bibliography, "The Life and Political Economy of Lauchlin
 urry: New Dealer, Presidential and DEvelopment Economist", Duke Univer-
sity Press, 1990, that has just appeared in the October 1993 issue of
 "Economic Development and Cultural Change".
Unfortunately he did not live to see it.

Roger Sandilands, National University of Singapore

                        LAUCHLIN B CURRIE

Born: West Dublin, Nova Scotia, Canada, 8 October 1902
Died: Bogota, Colombia, 23 December 1993

Lauchlin Currie, who died in Bogota, Colombia on December 23 at
the age of 91, was the intellectual leader of the economics wing
of the New Deal in Washington in the 1930s and close adviser to
President Roosevelt in the White House, 1939-45.

Born and raised in Nova Scotia, he studied under Edwin Cannan at
the London School of Economics, 1922-25 before entering graduate
school at Harvard where he was profoundly influenced by the great
Allyn Young.

After Young's death in 1929 Currie remained at Harvard until 1934
as a junior faculty member, including periods as teaching
assistant to Ralph Hawtrey and Joseph Schumpeter. The latter he
considered a hopeless reactionary for his views on the "salutory"
nature of the Great Depression. There followed a series of
landmark articles on the monetary causes of the slump and
advocacy of deficit financing to revive the economy. These
heretical, "Curried-Keynesian" views caused his promotion at
Harvard to be blocked. But they also caused Jacob Viner to
declare him too good for Harvard, and in 1934 he invited Currie
to join the "freshman brain trust" at the US Treasury.

There he met Marriner Eccles, whom he persuaded to present to
President Roosevelt Currie's draft of what was to become the 1935
Federal Reserve Act (that established the Fed as a true central
bank), as Eccles' condition for accepting the chairmanship of the
Federal Reserve Board.

Currie moved with Eccles to the Board as assistant director of
research and remained until 1939 when Roosevelt appointed him as
the first professional economist in the White House as his
personal adviser on economic affairs.

Currie's early work in the White House, where he remained until
FDR's death in 1945, was an extension of his advice on lending
and spending out of recession, but with increasing attention to
the defence build-up prior to Pearl Harbour.

In January 1941 Currie was sent to China to advise on monetary
policy. On his return to Washington he recommended adding China
to the US lend-lease programme, the civilian side of which he
then administered. He also played a key role in the setting up of
Claire Chennault's famous Flying Tigers.

In 1943 he recommended General Joseph Stilwell's recall from
China on the grounds he was incapable of working effectively with
Chiang Kai Shek. This, together with his close association with
Harry Dexter White, the architect of the Bretton Woods system,
was to cause him to run foul of Senator Joseph McCarthy in the
late 1940s. He and White made voluntary appearances, at their own
request, before the House Committee on Un-American Activities in
August 1949 to vigorously deny charges of disloyalty levelled
against them by Elizabeth Bentley and Whittaker Chambers. White
died a few days later of a heart attack while Currie was hounded
by false accusations for many years to come.

Nevertheless, in 1949 he was appointed director of the World
Bank's first overall country study mission, to Colombia. In 1950
he was invited by the Colombian government to return to advise on
implementation of the "Plan Currie" for integrating Colombia's
transport system and liberalising the economy. He married a
Colombian, and in 1958 President Alberto Lleras personally
conferred Colombian citizenship upon him, following difficulties
in renewing his US passport.

Apart from an interlude in 1953-58, during the military
dictatorship of General Rojas Pinilla, when he turned very
successfully to dairy farming, and a period teaching at
universities in Canada, Glasgow and Oxford, 1967-71, Currie
devoted the remainder of his life to top-level economic advising
in Colombia.

He is particularly famous as the author of a controversial
"leading sector" programme known as Operation Colombia (1960) to
accelerate the urbanisation of a predominantly peasant economy.
Under the guise of the official "Plan of the Four Strategies",
this programme was implemented during the administration of
President Misael Pastrana, 1971-74. For this purpose Currie
devised a new system of index-linked housing finance to underpin
residential construction as a key leading sector to accelerate
overall economic growth, together with policies to stimulate non-
traditional exports.

These measures greatly increased higher-paying urban job
opportunities for redundant farm workers. He coupled his
macroeconomic advice with important work on a "cities-within-the-
city" design for metropolitan growth in developing countries.
Through his close collaboration with his old friends Virgilio
Barco (president of Colombia, 1986-90) and Enrique Penalosa, he
also played a key role in preparations for the UN Habitat
conference in Vancouver in 1976, of which Penalosa was the
secretary-general.

Currie's "leading sectors" model of development was conceived as
part of an early version of an "endogenous" theory of growth
based on the seminal ideas of Allyn Young. It stressed the role
of non-inflationary "real" demand in motivating an expansion of
market size to generate self-sustaining "increasing returns" of a
macroeconomic type that differs sharply from the internal
economies of scale stressed by other endogenous growth models
that have recently attracted widespread attention among
professional economists.

At a conference in Bogota in 1990 dedicated to discussion of
Currie's work, Professor Rudiger Dornbusch read out, on behalf of
his MIT colleague Paul Samuelson, the following tribute:
     "Lauchlin Currie and Alvin Hansen, working through Marriner
     Eccles and Franklin Roosevelt, were the two economists most
     influential in converting the original New Deal from a
     program to reform the institutions of capitalism into a
     Mixed-Economy system of macroeconomic stabilization. Before
     there was a Keynesian General Theory, Currie was one of the
     stellar band of economists who urged monetary easing on the
     Federal Reserve to mitigate and prevent a devastating and
     unnecessary depression.
     "The world owes Lauchlin Currie a great debt. Connoisseurs
     among scholars know how much economic science owes to
     Currie's originality. On the behalf of Harvard economists
     everywhere, on the behalf of researchers yet unborn, I
     proclaim Lauchlin Currie's praises."

At the time of his death Currie was still active as adviser to
the Colombian Housing and Savings Institute and was polishing the
final draft of a paper entitled "Implications of an endogenous
theory of growth based on Allyn Young's macroeconomic concept of
increasing returns".

A major pastime over the last 20 years was the cultivation of
irises on a small farm on the Sabana de Bogota. Through careful
experimentation with hundreds of new varieties that he imported,
he discovered which were the most suitable to the local climate
and soils. He said that his main pleasure from irises was that
they do not answer back or resist his policy prescriptions. And
he expected them to be blooming on the Sabana, giving pleasure to
people long after his own writings were forgotten.

He is survived by his second wife, Elvira Wiesner de Currie,
their daughter Elizabeth, and two granddaughters. Their son
Ronald died in 1979. He is also survived by his son Roderick from
his first marriage to Dorothy York Bacon. Roderick's brother
Morgan died in 1980.




Roger J Sandilands
Singapore
3 January 1994