[PEN-L:30111] forwarded from Mike Yates

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

James Galbraith has an interesting review of several books about the
post-Soviet economy, which appears in the American Prospect for August
2002. In one of the books, authored by Strobe Talbott, Lawrence Summers
is quoted as follows (Summers' quote is in quotation marks)::

Talbott was inclined to trust the economic issues to the hard-charging
Lawrence Summers, then deputy secretary at the Treasury Department.
Summers was a fierce ally of the so-called reformers in Russia, and of
the International Monetary Fund, which of course he controlled. On one
occasion, he explained to then-Prime Minister Viktor Chernomyrdin that,
as Talbott puts it, "The rules that governed IMF lending weren't
arbitrary or intrusive -- they were a reflection of the immutable
principles of economics, which operated in a way similar to the rules of

physics." Talbott relates this without irony. He does, however, give
Vice President Al Gore credit for conceding, after the meeting and out
of Summers' earshot, that the "hard realities of Russian politics" might

also have a place in the equation.


Physics indeed! I remember an economist at a graduate school seminar
saying the same thing in 1967. We had to attend these seminars every
Friday in the "English Room" at the University of Pittsburgh's Cathedral

of Learning (There is a set of "nationality rooms" in this building. The

English room was very proper, with lots of polished wood, fireplaces,
etc.) Once an economist named Sato presented an incredibly elaborate
model of so-called turnpike theorems of economic growth. A grad student
asked him of what value these might be to an actual poor country trying
to develop. Without missing a beat, Sato said this was not for him to
say. He only built the models. I don't remember, but I hope this was one

of the seminars I came to drunk or high!!! Hey, it was the 60s.

--

Michael Perelman
Economics Department
California State University
michael@xxxxxxxxxxxxxxxxx
Chico, CA 95929
530-898-5321
fax 530-898-5901