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10/11/93

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Author of first U.S. college textbook on Keynesian economics dies

Economist Lorie Tarshis, who was influential in spreading Keynesian economics in the United States, died Oct. 4 in Toronto after a lengthy illness. He was 82.

"Lorie was one of the leading Keynesian economists of his day and was author of the first introductory textbook on Keynesian economics in the United States," said David Starrett, chair of Stanford University's economics department, who was himself introduced to Keynesian thinking in Tarshis' graduate class in macroeconomics.

A member of Stanford's economics faculty from 1946 to 1971, Tarshis became controversial at Stanford and elsewhere following the 1947 publication of the textbook The Elements of Economics.

Conservative Stanford alumni who disliked the ideas of British economist John Maynard Keynes tried to get Tarshis fired from Stanford, said Tibor Scitovsky, a Stanford professor emeritus of economics who was Tarshis' colleague here.

Tarshis had studied under Keynes at Cambridge. His textbook was "a very good book and a best-seller," Scitovsky said, "but somehow or another, very conservative people among the alumni thought that Keynes was some kind of revolutionary, and, of course, he was, in economics, but they thought he was subversive as well. President Tresidder was under some pressure to get rid of [Tarshis], which he correctly withstood.

"Keynes' revolution was that he was trying to save capitalism," Scitovsky said. "Until Keynes, economists believed that the market economy had self-adjusting qualities, that it always tended toward some kind of full employment equilibrium," Scitovsky said.

"To continue to believe that in the Great Depression of the 1930s took a certain sort of naivete.

"Keynes had a very interesting insight, which was simply that there was no such market equilibrium mechanism, and he also recommended [government] policies that would help to eliminate the Depression and restore higher employment."

Keynesian economics eventually dominated macroeconomics but began to fall out of favor in the 1970s. Now, Scitovsky said, economists generally recognize that Keynes' ideas "were sound for that time but don't work under the modern condition. We now have a much freer system of trade and capital movement with flexible exchange rates, and his theory was based on the assumption of closed [national] economies with high tariffs."

Tarshis' particular research interests were in income and employment theory and enterprise economics. He taught economic seminars in the 1950s in Japan and India, and he also taught at Stanford campuses in Italy and Germany. A Guggenheim and Ford fellow, he was the author of several books and several dozen journal articles and served several stints as chair of the economics department.

He loved teaching and "brought a lot of emotion to it, which most students liked very much," Scitovsky said. "He took early retirement in 1971 because, at the time, Stanford still retired people at 65 and he wanted to go on teaching as long as he possibly could."

Tarshis taught at the University of Toronto until 1978, then at York College in Toronto and finally at Glendon College in Toronto, where he was teaching a full load of classes and was acting department chair when Parkinson's disease forced him to stop at age 80, said his son, Andrew Tarshis of Roseville, Calif.

An excellent squash player, the senior Tarshis was also interested in art and music and became somewhat of an amateur art historian in his later years, his son said. He also served as director of research for the Ontario Economic Council, a provincial economic policy advisory board, from 1978 to 1980.

Born March 22, 1911, in Toronto, Tarshis earned his bachelor's of commerce degree from the University of Toronto in 1932 and then went to Cambridge University, where he earned bachelor's, master's and doctoral degrees. He became an instructor at Tufts College in Medford, Mass., in 1936 and an assistant professor there in 1939.

Before he went to England, Tarshis was a member of the Canadian national ice hockey team, but squash was his lifelong sport. "He was very proud because he always beat his students at squash," Scitovsky said.

"He was beating 20-year-olds with regularity into his 70s," said Andrew Tarshis.

The senior Tarshis was hired in 1941 by Stanford, in part because of his knowledge of the new Keynesian economics, Scitovsky said. Tarshis did not actually come to Stanford until 1946, however, because of World War II.

During the war, Tarshis became a U.S. citizen and served first as assistant executive director of the Joint War Production Committee of the War Production Board and later as an operations analyst with the 9th Bomber Command in Libya, the 12th Bomber Command in Tunis and the 15th Air Force in Italy. He was commended by Major General N.F. Twining for his "selection of aiming points and the types of aircraft formations that would optimize bombing targets."

After coming to Stanford, he joined Stanford colleagues Edward S. Shaw and Scitovsky in writing a book for the Rand Corp. called Mobilizing Resources for War. He also published An Introduction to International Trade in 1955, Modern Economics: An Introduction, in 1967, and he edited a volume on the U.S. balance of payments in the late 1960s.

The controversy surrounding Tarshis began in August 1947, when the National Economic Council published an essay saying that The Elements of Economics "plays upon fear, shame, pity, greed, idealism, hope. . . . This is not an economics text at all; it is a pagan-religious and political tract."

Merwin K. Hart, president of the council, wrote to Tresidder that Tarshis was "drilling" at the foundations of America's greatness. Others, including newspaper publishers and at least one congressman, wrote to Stanford alumnus Herbert Hoover and other members of the Board of Trustees protesting the book.

In a letter to University Chancellor Ray Lyman Wilbur found in the University Archives among the Tresidder presidential papers, Tresidder wrote that the methods Hart "is using in attacking us in this matter really should disquiet any American interested in preserving freedom of speech."

"Even a cursory look at Tarshis' book itself would convince anyone" that the essay "seriously distorts the author's position," Tresidder wrote. Tresidder died suddenly in January 1948.

Acting President Alvin C. Eurich then took up the defense of Tarshis, writing to the publisher of the Santa Ana Register that the economics department considered the text "a valid reference, representing one point of view. Our faculty in economics includes scholars of varying points of view, but I can assure you that I have no question regarding the integrity or patriotism of any of them," he wrote.

In another letter, Eurich wrote that "it is the purpose and obligation of every university to see that its students are introduced to the varying viewpoints and theories given substantial acceptance and current thought." He rejected the newspaper's request for a mailing list of economics students and their parents.

Despite the controversy, Tarshis gained tenure in 1948.

Tarshis is survived by his wife, Inga; sisters June Bernhard and Madeline Waisberg and brother Dick Tarshis, all of Toronto; four children, Andrew Tarshis of Roseville, Calif., Susan Tarshis of Burlington, Vt.; Janet Reynes of Montpelier, Vt.; and Tanya Tarshis of Toronto; and five grandchildren.

At his request, no memorial service was held. Interment will be at Calais, Vt.

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