When Donald Harris, father of Kamala Harris, contributed to India’s economic policy debates

In this April 1965 photo provided by the Kamala Harris campaign, Donald Harris holds his daughter, Kamala. (Source: Kamala Harris campaign via AP)

The publications  and economic and political views of Donald Harris, emeritus Professor of economics at Stanford University, and father of Kamala Harris, have been in the limelight, and for obvious reasons.  This article is about Donald Harris’ links to Indian economics. The motivation for this piece is primarily to document these links, and the impact of post-Keynesian economics on India. Post-Keynesian economics is an offshoot of mainstream Keynesianism.

Starting in the 1950s and more so the 1960s and into the 1970s, India was a Mecca for renowned global economists. They spent time at the Delhi School of Economics and at The Indian Statistical Institute, were involved with and advised the Planning Commission on its various Five-Year Plans. To list the most prominent ones -- the Swedish economist Gunnar Myrdal who wrote Asian Drama, John Kenneth Galbraith (also US Ambassador to India in the early 1960s), the Dutch econometrician and theorist Jan Tinbergen, the Polish macroeconomist Michal Kalecki (who formulated his own version of the Keynesian multiplier), and even the University of Chicago’s pro market Milton Friedman. From a later generation, there was George Akerlof (microeconomic theorist and husband of Janet Yellen, who was Powell’s predecessor as Federal Reserve Chair).  However, most important of all was Joan Robinson. Her influence on India was both overwhelming and over decades.

Donald Harris was also a member of this eminent group. To get an accurate sense of the orientation of Indian policy over these decades, and that of Harris and his contributions, it is necessary to proceed chronologically.

It is generally known that Keynesian economics emerged from Keynes’ path breaking 1936 book The General Theory of Employment, Interest and Money.  His recipe of deficit spending to fight recessions has ruled globally since then. What is lesser known is that he was greatly helped in developing his theory by a group of economists, mostly from his own Cambridge University, England - specifically Joan Robinson and Richard Kahn.  In 1931, Kahn formulated the multiplier formula, paving the way for the General Theory. Another noteworthy disciple of Keynes was Nicholas Kaldor, who later advised India on taxation and had taught former PM Manmohan Singh at Cambridge. PTO

Most of post Keynesian economics  was about growth, income distribution, employment and how they are impacted by technical progress. It entailed esoteric, algebraic debates starting in the 1950s between Joan Robinson and the relatively right-wing MIT macroeconomists Robert Solow and Paul Samuelson, about the valuation of capital and related issues.  Solow pioneered neoclassical growth theory.  His 1957 paper showed that most of growth in USA resulted not from inputs of labour and capital but from technical progress. This was a vital conclusion. It also perhaps implied, over optimistically, that poor countries can prosper by relying on the bounty originating from research labs. Sacrifice and yagyas may not be needed.

Contemporaneous with, but independent of the Cambridge returned statistician Mahalanobis, who formulated its 1956 Second Five Year Plan big push to heavy industry and machine tools and whom many Indians know about, Joan Robinson also hugely shaped India’s economic policies.  Her 1956 book titled The Accumulation of Capital led up to the 1960 choice of techniques model of Amartya Sen, recommending capital intensive techniques for poor countries. She also influenced policies followed under Mao Tse Tung.  In 1957 she delivered three lectures in China on choice of technique and capital accumulation.

Even before  Joan Robinson, another pioneering influence upon the policies chosen by poor economies in the 1950s, including India, was Sir Arthur Lewis of Manchester University.  His wide ranging 1954 article “Development with Unlimited Supplies of Labour” spawned the field of development economics.   Like Donald Harris, Lewis who won the Nobel Prize in economics in 1979, hailed from the West Indies. Lewis’ model is based on the classical assumption of Ricardo and Marx of a subsistence wage.  This assumption is used by Harris too in some of his writings.

An analytical discussion of the Lewis model -- and its corollary that the key to growth is to raise savings – similar to the Sen-Dobb criterion of maximizing the reinvestible surplus -- is clearly beyond the ambit of this article.  All one can say here is that, based on these frameworks and models, China and India embarked upon non-market strategies that they abandoned in 1979 and 1991 respectively.

Based on his stint at the Delhi School of Economics, Donald Harris wrote a paper in the Indian Economic Review 1969, econometrically estimating a standard model. It was a rejoinder to a 1966 paper by Professor K.N. Raj, examining the Keynesian versus Quantity Theory approaches to demand with Indian inflation data. Overall, Harris’s work is squarely in the post-Keynesian and even Marxist tradition. His 1978 book with a Joan Robinson type title, The Accumulation of Capital and Income Distribution, is dedicated to his daughters Kamala and Maya.

Further, Harris coauthored a piece in 1987 titled The Complex Dynamics of the Ricardian System with Amit Bhaduri, India’s leading post Keynesian theorist.  At Jawaharlal Nehru University, where I obtained my Master’s degree, I had taken two courses with Professor Bhaduri, who has also coauthored with Joan Robinson.  His lucidity in explaining the wages and profits based Kaleckian version of the Keynesian multiplier, and many other topics, was stupendous.  Many other former students, I am sure, would concur.

In late December  1978 a tectonic shift occurred in the global economy. Deng Xiao Ping announced at a long four-day session of the Central Committee of the Communist Party that China was now going to allow private plots in agriculture to flourish.  That winter Joan Robinson was passing through Delhi and JNU en route to the Center for Development Studies in Trivandrum, set up by K.N. Raj, which she would visit often. From what I recall, in early January 1979 she gave a general talk on multinationals, which I got to attend.  At the end she spoke factually about the policy shift in China, neither criticizing nor complimenting it.  But that December an economic era had ended.