Remarks on Paul Sweezy on the Occasion of His Receipt of the Veblen-Commons Award

Article excerpt

I would like to quote at length from Paul Samuelson, who wrote a piece exactly 30 years ago for Newsweek magazine about a time 30 years before "when giants walked the earth and Harvard Yard":

When Diaghilev revived his ballet company he had the original Bakst sets redone in even more vivid colors, explaining, "so they would be as brilliant as people remember them." Recent events on college campuses have recalled to my inward eye one of the great happenings in my own lifetime.

It took place at Harvard back in the days when giants walked the earth and Harvard Yard. Joseph Schumpeter, Harvard's brilliant economist and social prophet, was to debate with Paul Sweezy on "The Future of Capitalism." Wassily Leontief was in the chair as the moderator, and the Littauer Auditorium could not accommodate the packed house.

Let me set the stage. Schumpeter was a scion of the aristocracy of Franz Josef's Austria. It was Schumpeter who had confessed to three wishes in life: to be the greatest lover in Vienna, the best horseman in Europe, and the greatest economist in the world. "But unfortunately," as he used to say modestly, "the seat I inherited was never of the topmost caliber."

Half mountebank, half sage, Schumpeter had been the enfant terrible of the Austrian school of economists. Steward to an Egyptian princess, owner of a stable of race horses, onetime Finance Minister of Austria, Schumpeter could look at the prospects for bourgeois society with the objectivity of one whose feudal world had come to an end in 1914. His message and vision can be read in his classical work of a quarter century ago, Capitalism, Socialism and Democracy.

Whom the Gods Envy

Opposed to the foxy Merlin was young Sir Galahad. Son of an executive of J.P. Morgan's bank, Paul Sweezy was the best that Exeter and Harvard can produce . . . [and] had early established himself as among the most promising economists of his generation. But tiring of the conventional wisdom of his age, and spurred on by the events of the Great Depression, Sweezy became one of America's few Marxists. (As he used to say, you could count the noses of American academic economists who were Marxists on the thumbs of your two hands: the late Paul Baran of Stanford; and, in an occasional summer school of unwonted tolerance, Paul Sweezy.)

Unfairly, the gods had given Paul Sweezy, along with a brilliant mind, a beautiful face and wit. With what William Buckley would desperately wish to see in the mirror, Sweezy faced the world. If lightning had struck him that night, people would truly have said that he had incurred the envy of the gods.

So much for the cast. I would have to be William Hazlitt to recall for you the interchange of wit, the neat parrying and thrust, and all made more pleasurable by the obvious affection that the two men had for each other despite the polar opposition of their views [Samuelson 1969].

The debate on that occasion 60 years ago, which Samuelson so vividly recalled 30 years later, was part of the great stagnation debate of the late 1930s. Both of the famous protagonists - Sweezy, whose first professional economics article appeared in the Review of Economic Studies when he was 23, and who by his late twenties already had a host of brilliant publications to his credit, was as much an enfant terrible as Schumpeter had been - agreed that rapid growth under capitalism had given way to economic stagnation. But for Schumpeter, the causes were largely political: the downfall of classical liberalism and the growing alienation against the system - of which Sweezy was the "talisman," while for Sweezy they could be attributed to the economic flaws of the accumulation process: the real barrier to capital was capital itself.

The irony in all of this is that Samuelson's recollections in 1969 of the Schumpeter-Sweezy debate were not brought on by any awareness of approaching stagnation at the time that he himself was writing. …