Economic Theory and Economic Policy: Two Views

I am delighted and honoured to give the Seventh Colin Clark Memorial Lecture. I only met Colin a few times but, of course, as a graduate of both Melbourne and Cambridge I was often referred to his writings and regaled with anecdotes about him. I witnessed the celebrated clash between Colin and Trevor Swan over the history of import controls in Australia at an Annual Meeting of Australian economists; and I was delighted to get a letter from Colin concerning my 1978 Academy Lecture, ‘The Social Science Imperialists’, in which he enthusiastically approved of the critique I made of Becker’s writings on marriage, divorce and extra-marital affairs! We rarely agreed on economic, political or religious matters but I like to think, certainly this is so for me, that this enhanced our affection and respect for each other. So if I talk today about the contributions of Nicky Kaldor and Joe Stiglitz, whose views on theory and policy do not overlap that much with Colin’s but whose general approach to political economy and policy-making and whose raison d’être for being economists certainly do, perhaps it may be granted that I have chosen an appropriate set of people, ideas and issues with which to celebrate the life and work of one of Australia’s most illustrious adopted sons.