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Managing the Mixed Economy

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Alvin Hansen

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Abstract

If the interwar period had shown that laissez-faire and the market economy required a hel** hand, then the experience of the Second World War not only radically increased the size of the state but showed that it was possible for the state and private enterprise to work in partnership. Rather than the “boondoggling” of some of the New Deal, there was a firm theoretical foundation to a suitable stabilisation. A dynamic mixed economy could be successfully managed through an adaptive and agile set of federal economic policies, led by fiscal policy with supportive monetary, state and local government policies, all set in a new international framework of cooperation and development. That required not only better information but also new priorities and a new role for political economy. The strands of Hansen’s thought on the mature economy, the cycle, growth and a better society could be combined through public policy.

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Notes

  1. 1.

    New York Times 1944-06-04:25.

  2. 2.

    Harris Foundation (1931: 49–50).

  3. 3.

    ibid:185, also 1947a: 217–9 where he also comments on Lerner’s functional finance proposals.

  4. 4.

    see (1942c: 355).

  5. 5.

    1942d: 264–5, see also 1942c: 358, Hansen and Kindleberger (1942: 470–3).

  6. 6.

    See Commons (1893: 79–86).

  7. 7.

    reported in Providence Sunday Journal, June 4, 1944, p. 17, New York Times, June 4, p. 25.

  8. 8.

    See also (1942c, p. 355, 1942d: 257).

  9. 9.

    eg 1964a: 65, 1945h: 17.

  10. 10.

    see Hansen and Viner (1947: 73–4).

  11. 11.

    See Stevenson and Vaile (1935).

  12. 12.

    See Özgöde (2020), Rutherford (2011: 257ff).

  13. 13.

    Frisch was also responsible for the term “econometrics” in its modern sense.

  14. 14.

    ibid.:106.

  15. 15.

    see Hansen (1966a).

  16. 16.

    1941a:418.

  17. 17.

    See Samuelson in Colander and Landreth (1996: 175).

  18. 18.

    1947e: 564.

  19. 19.

    1946b, see also 1957a: 22.

  20. 20.

    see also 1957a: 49, 1960a: 174.

  21. 21.

    ibid:13, referencing Hansen 1957a: 45.

  22. 22.

    1953a: 229.

  23. 23.

    As was made clear in his 1952 comments, see Samuelson et al. (1952).

  24. 24.

    See also ibid: 47, 1959b, c.

  25. 25.

    ibid p. 32.

  26. 26.

    ibid: 37-8, see also 1962e.

  27. 27.

    see also Musgrave (1976: 6).

  28. 28.

    1974: 235–6.

  29. 29.

    Hansen defined reasonable price stability as wholesale prices rising by 1–1.5% p.a. and consumer inflation of 2–2.5%.

  30. 30.

    The modern use of the term dual economy has migrated away from Hansen’s use that was purely in terms of state planned activities and private enterprise working together. See also the reviews of Full Recovery or Stagnation? by Machlup (1939), Kaldor (1939), and Rostow (1939).

  31. 31.

    see (1947a: 276–9, 1959d: 370–1).

  32. 32.

    See Colander and Landreth (1996: 105–6).

  33. 33.

    1960a: 66, see also 1974: 234.

  34. 34.

    ibid: 172–3.

  35. 35.

    Colander and Landreth (1996: 104).

  36. 36.

    Harris Foundation (1931: 65).

  37. 37.

    See eg. 1962b: 338, 1962f.

  38. 38.

    1960b: 256, 1961a.

  39. 39.

    ibid: 44.

  40. 40.

    ibid: 45.

  41. 41.

    ‘The Growth of Government over the Past 50 Years: An Analytical Review’ Arnold M. Soloway in Federal Expenditure Policy for Economic Growth and Stability Papers Submitted by Panelists Appearing Before the Subcommittee on Fiscal Policy Joint Economic Committee, November 5, 1957, Washington DC: US Government Printing Office, p. 37: https://fraser.stlouisfed.org/title/1151/item/1614?start_page=2

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    Robert J. Bigg

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Bigg, R.J. (2023). Managing the Mixed Economy. In: Alvin Hansen. Great Thinkers in Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-42216-4_13

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