A Guide to Keynes

Alvin Hansen is best remembered as the American economist who brought the Keynesian revolution to America. Born in a small rural community in South Dakota, he received his early education in a one-room schoolhouse, then studied at Yankton College and the University of Wisconsin. After teaching at Brown University, he went on to the University of Minnesota and then to Harvard University. In 1927 Hansen published his classic Business-Cycle Theory, a comprehensive survey of business cycle theories and theorists. The waste and despair of the Great Depression affected him greatly, and he became an ardent supporter of Keynesian economics. His Full Recovery or Stagnation? (1938) analyzed the Great Depression, especially the premature termination of the recovery in 1937. Other publications, including Fiscal Policy and Business Cycles (1941) and Business Cycles and National Income (1951), argued the Keynesian proposition that unemployment was caused by a failure of private investment. Hansen's popular Guide to Keynes (1953), with its paragraph-by-paragraph dissection of the General Theory, was often assigned to graduate students to be read along with the classic text. Hansen served as a consultant to, and shaped the form of, the current Social Security system. He was also instrumental in the formulation of the Full Employment Act of 1946 and the creation of the President's Council of Economic Advisers. He was elected president of the American Economic Association in 1967 and taught as a visiting professor at universities around the world after he retired from Harvard University. When he received the prestigious Walker Medal on his eightieth birthday, James Tobin observed that, for Alvin Hansen, "economics was a science for the service of mankind."