Transformational Growth and Full Employment
Edited by Edward J. Nell and Mathew Forstater
In 1941, Professor Abba Lerner of the University of Kansas City (later the University of MissouriÐKansas City) laid out the principles that he believed should guide the governmentÕs budgetary policies. These principles, spelled out in his article, ÔThe Economic Steering Wheel,Õ which appeared in the University of Kansas City Review, were offered as an alternative to the orthodox principles of so-called Ôsound finance.Õ Lerner later moved to the New School for Social Research where he elaborated his ideas in ÔFunctional Finance and the Federal Debt,Õ published in 1943 in the New SchoolÕs Graduate Faculty journal, Social Research. The New SchoolÕs Program on Transformational Growth and Full Employment, under the direction of Edward J. Nell, Malcolm B. Smith Professor of Economics, has revived the tradition that Lerner began. Part of this revival, a conference on ÔFunctional Finance and Full Employment,Õ was held in the spring of 1998 at the New School, attracting economists from around the globe. The conference re-examined monetary and fiscal relationships Ð both in theory and policy Ð in the light of LernerÕs prescient principles. Among the participants were Harvard University Professors Richard Musgrave, the father of modern public finance, and James Duesenberry, best known for formulating the relative income hypothesis, an alternative to the permanent income and life-cycle theories of consumption. The late Robert Eisner of Northwestern University, former President of the American Economic Association, and the late Lynn Turgeon of Hofstra University both presented papers at the conference. This would be the last...