Friday, October 18, 2013

King’s Nicholas Kaldor: Chapters 1–3

I currently reading John King’s book Nicholas Kaldor (Basingstoke and New York, 2009), and note below some interesting points about Kaldor’s early life and career from Chapters 1 to 3.

Nicholas (Miklos) Kaldor (1908–1986) had been born in Budapest on 12 May, 1908. His father was a lawyer, and he attended the Model Gymnasium in Budapest until he enrolled in economics at the Humboldt University in Berlin in 1925 (King 2009: 4). Kaldor left for England in 1927 and began study at the London School of Economics (LSE).

He was first taught by the American Marshallian Allyn A. Young, and then Lionel Robbins (King 2009: 5).

One of Allyn A. Young’s major achievements in economics was original work on increasing returns to scale, an issue which would concern Kaldor throughout his career (King 2009: 5).

After Young’s death, Kaldor was influenced by Lionel Robbins who was more in the tradition of Walrasian and Austrian economics, than Marshallian theory.

When Hayek arrived at the LSE in 1931, Kaldor fell briefly under his spell, but abandoned this flirtation with Austrian economics by the mid-1930s (King 2009: 17).

In 1935–1936, Kaldor held a Rockefeller Scholarship and travelled widely in the United States.

Already in 1937, Kaldor was criticising Austrian capital theory (King 2009: 18–19), and another of his early articles was on welfare economics, ordinal utility and the compensation principle (King 2009: 23– 27).

King judges Kaldor’s “Speculation and Economic Stability” (Kaldor 1939a) to be one of the most important of his early articles (King 2009: 27–28). The paper analyses the nature of speculation, expectations and the effect of speculation on economic activity.

During WWII, the LSE was relocated to Cambridge, and there Kaldor had a productive friendship with Piero Sraffa, Joan Robinson and Keynes (King 2009: 36).

In “Principles of Emergency Finance” (Kaldor 1939b), Kaldor anticipated Keynes’s arguments in How to Pay for the War.

After the war, Kaldor resigned from the LSE and worked briefly for the United Nations in Geneva from 1947 to 1949, but returned to Cambridge in 1949 to take up a fellowship in King’s College, where he would spend most of his career (King 2009: 57).

Kaldor, N. 1939a. “Speculation and Economic Stability,” Review of Economic Studies 7: 1–27.

Kaldor, N. 1939b. “Principles of Emergency Finance,” The Banker 51: 149–156.

King, J. E. 2009. Nicholas Kaldor. Palgrave Macmillan, Basingstoke and New York.


  1. Very nice book.

    Also check the biographies written by Anthony Thirlwall and Ferdinando Targetti.

  2. When I look at books on the history of the Austrian school or about Hayek, I always check the index to see if Kaldor gets a mention. He rarely does, unsurprisingly given his devastating articles against Hayek's business cycle theory in the 1930s. Sraffa also rarely gets mentioned as well, for the same reason.

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