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Abba P. Lerner
Keynesian economics
Birth October 28, 1903(1903-10-28)
Death October 27, 1982 (aged 78)
Nationality Ukrainian American
Field Economics
Alma mater London School of Economics
Influences Friedrich Hayek, John Maynard Keynes, Paul Samuelson
Opposed Milton Friedman, Barry Goldwater

Abba Ptachya Lerner (October 28, 1903 – October 27, 1982) was an American economist.

Lerner was born on October 28, 1903 in Bessarabia (territory now in Ukraine or Moldova). He grew up in a Jewish family, which emigrated to Great Britain when Lerner was three years old. Lerner grew up in the London East End. From the age of sixteen he worked as a machinist, a teacher in Hebrew schools, and as a businessman. He entered the London School of Economics in 1929 where he would study under Friedrich Hayek. A six-month stay at Cambridge in 1934–1935 brought him into contact with John Maynard Keynes. Lerner married Alice Sendak in 1930; they had twin children, Marion and Lionel, in 1932.

In 1937, Lerner emigrated to the United States. While in the US, Lerner befriended his intellectual opponents Milton Friedman and Barry Goldwater.


  • Lerner developed a model of market socialism, which differed form the pure planned economy. It became known as the Third Way. By the 1960s Lerner began to distance himself from his early work on socialism.
  • Lerner developed the concept of distributive efficiency, which shows that economic equality will produce the greatest total happiness with a given amount of wealth.
  • Lerner (1951, Ch. 14) developed the concept of the NAIRU (before Friedman and Phelps). He termed it "low full employment" and contrasted it the "high full employment," the maximum employment achievable by implementing functional finance.
  • The Lerner-Samuelson theorem goes back to Lerner.

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Up to date as of January 14, 2010

From Wikiquote

Abba Ptachya Lerner (October 28, 1903October 27, 1982) was an economist; born in Bessarabia he grew up in England and emigrated to America in 1937.


  • What is scarce is money. The lack of money to spend on goods is what keeps the unemployed resources from producing more goods. Work, moreover, instead of being a curse, is desired more than anything else because the alternative is not enjoyment of leisure but the suffering of unemployment and deprivation. Of course, if people could get income without they would not object too much (although their self-respect in feeling they are useful members in society who are earning their income is too easily underestimated). But it is only by finding work they can obtain the necessary income they need.
    • On the causes of unemployment (1951, pg.147-48) [1]
  • The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and withdrawal of money, shall be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine what is sound and what is unsound ...Government should adjust its rates of expenditure and taxation such that total spending is neither more or less than that which is sufficient to purchase the full employment level of output at current prices. If this means there is deficit, greater borrowing, "printing money," etc., then these things in themselves are neither good or bad, they are simply the means to the desired ends of full employment and price stability.
  • The scholars who understand it hesitate to speak out boldly for fear people will not understand. The people, who understand it quite easily, also fear to speak out while they wait for the scholars to speak out first. The difference between our present situation and that of the story is that it is not the emperor but the people who are periodically made to go naked and hungry and insecure and discontented - a ready prey to less timid organizers of discontent for the destruction of the civilization.
    • (1951, pg.16) [3]

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