Stanford Report, Mar. 10, 2004
Memorial Resolution: Tibor Scitovsky
Professor Tibor Scitovsky died on June 1, 2002 at the age of 91. He was Associate Professor and Professor of Economics at Stanford University from 1946 through 1958 and Eberle Professor of Economics from 1970 until his retirement in 1976, when he became Professor Emeritus. He also served on the faculties of the University of California at Berkeley and Yale University. In honor of his deep contributions to economic analysis, he was elected Distinguished Fellow of the American Economic Association, Fellow of the Royal Economic Society, member of the American Academy of Arts and Sciences, Corresponding Fellow of the British Academy, Guggenheim Fellow, Frank E. Seidman Distinguished Award, and Dr. (h.c.), University of Budapest.
Professor Scitovsky was a pioneer and major influence in several different areas of economics: the basic concepts of welfare economics, i.e., the meaning of judgments that a policy is a social improvement; foreign trade; the welfare implications of competition; notions of externality, particularly with regard to developing countries; and deeper philosophical examination of the nature of human satisfaction as reflected in the arts and the economy.
Scitovsky was born in Hungary in 1910. His birth name was Tibor De Scitovsky. As the "de" indicates, he was born into a noble family; his father held the post of Foreign Minister. He was educated at the University of Budapest (from which he held an undergraduate degree in law), University of Cambridge, and the London School of Economics. He came to England in the midst of a very exciting period in the development of economics, mixing in a confusing and stimulating way the influences of Keynes, of new developments in microeconomics such as imperfect competition (developed in part by his adviser at Cambridge, Joan Robinson), and of the merger of English and Continental thought especially prominent at the London School of Economics. He quickly showed his mastery and originality with his first few papers , published from 1940 on. He came to the United States on a traveling fellowship. He enlisted in the United States Army, in counter-intelligence. Since he had family behind enemy lines, he was required to change his name, preferably with the same initials. He decided to take this opportunity to have a name that was easy to spell, so he chose, "Thomas Dennis." His commanding officer was pleased but asked, "Is 'Dennis' spelled with one n or two?." As Lieutenant Dennis, he served with the United States Strategic Bombing Survey, under John Kenneth Galbraith, a famous postwar study which concluded that our strategic bombing had had been of little use in bringing the war in Europe to a successful conclusion. The memoranda of "Lieutenant Dennis" were considered impressive by those who read them.
He resumed his original name in slightly simplified form. At this point, the two leaders of the Stanford Economics Department, Bernard Haley and Edward S. Shaw, were determined to raise the quality and visibility of the department above its prewar level. Although there were no funds for expansion, there were vacancies due to war-induced movements. They made Scitovsky one of their first appointments, in 1946. He became for several years the main guide of the department in making further appointments. Within a few years, the reputation of the department rose radically. (Full disclosure: two of the signatories of this resolution were among these early appointments.) Scitovsky remained central to the workings and teaching of the department.
He left Stanford for Berkeley in 1958 and remained there until 1968, although he was on leave to do research at the Organization for Economic Cooperation and Development, the organization of the most developed countries, with headquarters in Paris, during the last two years. Before leaving Berkeley, he served as Department Chair for two years. From 1968 to 1970, he was Heinz Professor of Economics at Yale, and then he returned to Stanford until his retirement in 1976. His retirement was marked by a notable Festschrift. After retirement, he taught at London School of Economics, Stanford, and the University of California at Santa Cruz.
Scitovsky's earliest research dealt with the foundations of John Maynard Keynes's rather impressionistic analysis of unemployment. Scitovsky related the presence of unemployment to rigidities in product prices and in the capital markets. At almost the same time, he studied the nature of welfare judgments, showing that then current criteria for welfare improvements could lead to a paradox. He continued further work, especially about the nature of external economies in developing countries, and applied his work to the evaluation of alternative forms of competition. For many years, his book, Welfare and Competition, was the standard analysis. His interests in problems of international trade and finance started early and later became dominant. He focused on the institutional developments of trade liberalization in Europe and later on the consequences of protection among developing countries. His book on the latter with I.M.D. Little and M.G. Scott, published in 1970, was extraordinarily influential in pointing out the adverse consequences to the developing countries of excessive protection for domestic industries, a doctrine which had been very widespread among both those countries and international institutions.
Starting as early as 1959, he began an examination of the nature of human well-being from a broader viewpoint than is customary among economists. In particular, he drew on the arts as an example of the nature of human aspiration. His 1976 book, The Joyless Economy, remains a major critique of modern and especially economic values.
He continued publishing further developments of these topics until a few years before his lamented death.
Personally, he gave a misleading impression of diffidence and delicacy. In fact, he was very fit, swimming his daily half-mile until a few years ago and displaying remarkable mechanical ability.
His passing has left a void in the worlds of economics and of his many friends and family.
Kenneth Arrow, chair