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Leontief Prize

Program from GDAE Leontief Prize Event
March 27, 2000

Introductions and Award Presentations by GDAE Co-director Neva Goodwin

The program for this event celebrates three extraordinary economists. Each of them has, in different but dramatic ways, advanced the frontiers of economic thought.

Not coincidentally, this occasion also celebrates the latest publication in our series, Frontier Issues in Economic Thought. Our institute has spent the last seven years in a massive research project to survey work that advances the frontiers of economic thought -- not just for the sake of intellectual novelty, but focusing on movement in what we regard as constructive directions: directions that address contemporary realities, and support just and sustainable societies.

The Global Development And Environment Institute has established the Leontief prize to memorialize Wassily Leontief, our friend and, from 1993 until his much regretted death last year, a member of our external advisory board.

Leontief is best known for the single, powerful methodological advance which earned him a Nobel Prize in 1973: the invention of input-output analysis. In talking with Wassily, and in reading his work, it was always clear that he perceived his special contribution within an even larger framework. He was deeply concerned that economics maintain a proper balance between theoretical and empirical analysis. He cared a lot about facts -- the visible wrinkles on the otherwise invisible fabric of Truth. This was a passion that had imbued his whole life.

The first time I met him, he described to me the excitement of being in prison in the early days of the Russian revolution, when he was a bright, uppity student. The memorable parts of that experience were the impassioned, all-night conversations with the prison guards: What were the facts about the revolution? What was the theory? How did facts and theory support one another?

Wassily had no patience for beautiful abstractions without application: his lifetime work was based on an unwavering assumption, that the purpose of economics is to be useful. Being useful meant making it possible for human beings to interact with the physical world in ways that would better the human condition.

Leontief's most concrete influence on the Global Development And Environment Institute grew out of his ongoing relationship with his natal Russia. He was the instigator of an introductory economics textbook we have developed for that country, whose history has in no way prepared it to use simple translations of U.S. economics texts. With Wassily's encouragement we worked with Russian economists, as well as with Kelvin Lancaster and Thomas Weisskopf in the U.S., to provide an introduction to market economics that takes account of Russia's reality.

Before presenting the first two recipients of the Leontief prize, which we inaugurate today, I would like to recognize Ann Carter, a long-time, close associate of Leontief -- now Dean of Arts and Sciences at Brandeis -- who is here to represent the Leontief family.

John Kenneth Galbraith, one of the two inaugural awardees of the Leontief Prize, has delighted and edified the many and devoted readers of his many and scintillating books by relentlessly describing the world as he so perceptively sees it -- sometimes leaving theory to come panting in his wake.

Against the tide of the last few decades, he has repeatedly warned of the cost to the powerless in society when governments cede too much of their power to market forces. In the early 1950s he recognized what is even more obvious today: that the growing power of giant corporations diminishes the usefulness of economic theories that start from the assumption of perfect competition.

The other side of the coin from Galbraith's trenchant observations of corporations is his recognition of how consumer behavior and consumer tastes are manipulated to increase demand. This observation, too, has only become more relevant with the passing decades, and has inspired the growing number of people who are concerned about the ways that modern materialist consumption fails to increase human well-being, and threatens the health of the environment. Ken Galbraith strides easily over what others perceive as boundaries between economics and the adjacent social sciences -- history, sociology, and political theory. With his eagle's eye view of what is relevant to our field, he has been a marvelously helpful and interested friend to our series on the Frontier Issues of Economic Thought. It was obvious that he was the right person to write the introduction to Volume 2, The Consumer Society, and it is especially appropriate to be taking this opportunity, of the publication of The Political Economy of Inequality, to thank him for his inspiration and guidance.

I would like to ask Kitty Galbraith to take to her husband this memento of the Leontief Prize for Advancing the Frontiers of Economic Thought.

I now turn to the third luminary of this occasion: Amartya Sen. Another very great boundary-crosser, Sen has merged the insights of economics and philosophy through a combination of rigor and humanitarian concern that have not been seen since John Stuart Mill. The problems he addresses include poverty, inequality, freedom, and the meaning of progress. He is not a man who avoids the large issues!

A casual observer might conclude that it is the philosopher in Sen who has paid such scrupulous attention to the logical use of economic methods; who has insisted that economists must care at least as much about equity as about efficiency; and whose work starts from the questions: What is a good life? How is it achieved?

But these are not only philosophical concerns. When they are ignored, there is a great danger that the field of economics in general, and development economics in particular, will produce policy recommendations that have no aim but GDP growth. There are things in the Gross Domestic Product that do, and things that do not, contribute to human well-being; and there are aspects of well-being that have nothing to do with GDP. Sen cuts across these, identifying, on a logically rigorous, ethically grounded basis, the human concerns that must be central to economics.

It should be obvious why, in 1996, when we finished writing the third Frontiers book, Human Well-Being and Economic Goals, it was an easy choice to dedicate that book to Amartya Sen. As I noted initially, this event is illuminated by three stars. The three economists whom we celebrate today embody in fullest measure the citation that goes with the Leontief Prize for Advancing the Frontiers of Economic Thought. They have each, as the citation says, made outstanding contributions to economic theory which address contemporary realities and support just and sustainable societies.

It is with the greatest pleasure that we present the Leontief Prize for advancing the frontiers of economic thought to Amartya Sen -- and turn over the podium to him.

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