Nicholas Kaldor

(1908—1986) economist

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Hungarian-born British economist. He was created a life peer in 1974.

Born in Budapest, Kaldor moved to Britain in the 1920s to study, graduating at the London School of Economics in 1930 and lecturing there until 1947, when he was appointed director of the Research and Planning Division of the Economic Commission for Europe in Geneva. He was a member of the Royal Commission on Taxation of Profits and Incomes (1951–55) and later special adviser to the chancellor of the exchequer on the social and economic aspects of taxation policy. He advised on tax reform for the government of India and subsequently for Ceylon, Mexico, Ghana, British Guiana, Turkey, Iran, and Venezuela. In 1966 he was appointed professor of economics at Cambridge University.

An antimonetarist, Kaldor was involved in the discussions of the Radcliffe Committee in the 1950s, whose report in 1959 stated that in ordinary times monetary policy should be subordinate to other measures in economic policy. Attacking the government's monetarist policies in the early 1980s, he wrote The Scourge of Monetarism (1982) and The Economic Consequences of Mrs Thatcher (1983). In welfare economics he put forward the compensation principle: with Sir John Hicks (1904–89) he postulated that state A is preferable to state B if those who gain from moving to A can compensate those who lose and still be better-off (whether or not compensation is actually implemented). This is known as the Kaldor–Hicks test and may be compared with Pareto's system, which requires that no-one is made worse-off by such a move.

Among Kaldor's most important publications were essays on Economic Stability and Growth (1960) and on Value and Distribution (1960), Capital Accumulation and Economic Growth (1961), Causes of the Slow Rate of Growth of the UK (1966), and Conflicts in Policy Objectives (1971). Kaldor was a leading figure in the postwar Cambridge school, which emphasized a macroeconomic approach following J. M. Keynes.

Subjects: Economics.

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