Kazimierz Łaski (December 15, 1921-October 20, 2015) was a Polish-Austrian economist. He was one of the most famous representatives of Post-Keynesian economics in Austria.

Life and career

Łaski was born in Warsaw. He studied political economy at the Academy of Political Sciences (Akademia Nauk Politycznych), and at the University for Planning and Statistics (Szkola Glowna Planowania i Statystyki – SGPiS) in Warsaw (1945–1954), and did his doctoral studies at the Institute for Social Sciences at the Central Committee of the Polish United Workers’ Party (Institut Nauk Spolecznych przy KC PZPR – INS). He earned his doctorate in 1954 with a dissertation on "Accumulation and consumption during the industrialization of the People's Republic of Poland".

Łaski started work at the SGPiS in 1949 as an assistant to Professor Włodzimierz Brus. In 1955 he became assistant professor and in 1960 associate professor at the Chair of Political Economy of the Faculty for Foreign Trade at the SGPiS. In his capacity he supervised research and teaching, which made him invite Michał Kalecki, one of the most prominent Polish economists to give courses at the SGPiS. At the same time, Łaski lectured at the INS and, after its closure, at the University for Social Sciences at the Central Committee of the Polish United Workers' Party (Wyzsza Szkola Nauk Spolecznych przy KC PZPR – WSNS). In 1957 – 1960, Łaski was deputy-dean and then dean of the Faculty of Economics of Production, and in 1961 – 1963 deputy Chancellor of the SGPiS in charge of teaching and research. In 1961–1966 he served as a member of the executive committee of the Higher Education Council at the Ministry of Higher Education. He was one of the founders of the Higher Course in Planning for Economists from Developing Countries, chaired its scientific council and thereafter Deputy Head of the Course in 1963–1968. In 1965–1968, Łaski was president of the Warsaw Chapter of the Polish Economic Society.

In 1960, Łaski held a Ford scholarship at the Institut de sciences économiques appliquées (with Professor François Perroux) in Paris. In 1964, he was visiting professor at the Institute for Higher Studies and Scientific Research (IHS) in Vienna, and during the academic year 1966–1967 "Directeur d'études à titre étrangère" at the Ecole pratique des hautes études, Sorbonne in Paris.

In the wake of the anti-Semitic and anti-intellectual campaign in the People's Republic of Poland in 1968–1969 (as a result of which a total of 20,000 Jewish citizens had to emigrate), students and colleagues of Michał Kalecki were subject to harsh, politically motivated attacks. In November 1968, also Kazimierz Łaski emigrated from Poland and settled in Austria. In 1969–971, Łaski initially worked as a research fellow at the Austrian Institute of Economic Research (WIFO) in the department for International Comparative Economics, and as a visiting professor at the Université catholique de Louvain in 1970. Łaski's work at the WIFO entailed an intensive collaboration and exchange i.a. with the Austrian economists Kurt W. Rothschild and Josef Steindl and the Czech-Austrian economist Friedrich Levcik. In 1971, Łaski was appointed full professor at the Johannes Kepler University of Linz and started work as a research associate of the Vienna Institute for International Economic Studies (Vienna Institute for International Economic Studies (wiiw)). In 1990, Łaski also served as an official advisor of the then acting Polish minister Jerzy Osiatyński, Head of the Central Planning Office. In 1991, Łaski retired from the Johannes Kepler University of Linz as professor emeritus and became research director of the Vienna Institute for International Economic Studies (wiiw) until 1996. Furthermore, in 1994–1995 Łaski was a fellow at the Institute for Advanced Study, Berlin. Since 1996, Kazimierz Łaski has been working as a research associate at the wiiw.

Works

Early period at the INS und SGPiS (1945–1961)

Kazimierz Łaski studied at a time when Marxist economics enjoyed administrative hegemony at Polish universities. In an interview, he tells about the early stages of his scientific research: "First I was, as most Polish economists in the early 1950s, a dogmatic Marxist. Actually, I only engaged in economics when I met Michał Kalecki. In between, I evolved from a dogmatic to a critical Marxist and then turned away from it completely." During his doctoral studies at the INS, Łaski immersed himself in the works of Karl Marx, first and foremost the "Capital". As many others, he was impressed by Marx’s schemata of reproduction in Volume II of the "Capital". The inconsistency between accumulation and consumption in the course of industrialization became the topic of his doctoral thesis: "Accumulation und consumption during the industrialization of the People's Republic of Poland" (1954). In the period of the "Polish October" in 1956, Łaski gradually became influenced by Michał Kalecki, who had returned to Poland from the UN General Secretariat in early 1955. Kalecki's influence can already be identified in Łaski's publications on the equilibrium in the consumer goods market at that time. Marx’s schemata were used to identify the sources of inflation and the shortage of goods in the centrally planned economy. In his publications, Łaski gradually detached himself from dogmatic Marxism and attained a certain critical distance. However, he had not yet gone beyond the mere critique of economic policy. According to his perception at that time, the sources of inflationary pressures were to be found in the mistakes of the central planner, his unwillingness to learn from the errors of the past, and the inadequate discipline of managers and workers of socialist enterprises. At that time, Łaski had not yet put into question the ability of a central planner to gather unbiased information and set up physically consistent plans.

The period of close collaboration with Michał Kalecki (1961–1968)

With Michał Kalecki joining the SGPiS in 1961, a new leaf was turned over in the scientific career of Łaski. He belonged to the inner circle of Kalecki’s collaborators, and the main focus of his work shifted to the growth theory of socialist economy. He gave one of the key presentations (together with Włodzimierz Brus) at the congress of the International Economic Association in Vienna in 1962 and published in "Ekonomista" several papers on the factors of growth of the national income, on the effects of external trade on the rate of growth, and on the role of the choice of production methods in determining the growth rate of consumption and national income. Among other topics, he analysed the effects of a one-time reduction of the capital-output ratio on the short- and long-term proportions in the growth process. Łaski also published more general papers on full employment, resource allocation and developing economies. His extensive studies on growth theory culminated in one of his main works "On the theory of socialist reproduction". The book was considered a classical work on growth theory in socialism, was used as a textbook at Polish universities, and was translated into Czech language. Together with Michał Kalecki Łaski chaired a workshop on growth theory, which soon became an assembly point of a group of predominantly young research fellows interested in planning theory. Several scholars who subsequently became renowned both in Poland and abroad originated from this group. A further main focus of Łaski’s research and teaching activities was the course for economists from developing countries. In 1968, the circle around Michał Kalecki fell victim to the attacks of an anti-Semitic campaign. One – though not the only – reason for these attacks was the intellectual autonomy of the circle which contradicted the authoritarian claims of the system, even if the circle around Michał Kalecki took a definitely pro-socialist stance. Thereupon Łaski emigrated to Austria.

The period in Austria prior to the transition crisis (1968–1989)

In Austria, Łaski participated first in founding the department for International Comparative Economics at the Austrian Institute of Economic Research (WIFO). He continued his theoretical studies in the field of growth theory of the socialist economy. The outcome of this work was his book "The Rate of Growth and the Rate of Interest in a Socialist Economy". In this book, the profit rate is a distributional category, and the interest rate as a determinant of choice of production methods. They diverge even under the condition of the “golden rule of accumulation”, assuming capital-intensive technological progress. After being appointed to chair the economics department at the Johannes Kepler University of Linz Łaski broadened his research and teaching activities. One of his closest colleagues in Linz was Professor Kurt W. Rothschild. On the one hand, he imparted on his students – apart from the General Theory of John Maynard Keynes – the knowledge of Kalecki’s approach, particularly the dynamics of the capitalist economy and the theory of business cycles. On the other hand, he reexamined Marx’s theory and also took part in the discussion on transformation (of labor values into prices of production) which sparked up again. His criticism of the labour theory of value deepened under the influence of the works of Piero Sraffa and the Cambridge capital controversy. In his paper "Marx's Theory of Exploitation and Technical Progress", Łaski put into question even the relationship between the rate of exploitation and the profit rate, particularly in the case when technical progress was accounted for. Łaski also participated in discussions on the theory of the tendency of the rate of profit to fall. At the same time, he continued studies in the main area of his research, i.e. on Eastern Europe. Łaski published many papers on the proportions of expanded reproduction and the role of capital imports in a socialist economy. In his analysis he took account of inflation, of foreign trade turnovers, and of the “grey economy”. Further topics of his research at that time were the problems of national accounting, and comparisons of consumption volumes between the East and the West, particularly the comparability of price indices in a market and a centrally planned economy. Łaski also worked closely with Włodzimierz Brus, who became in the mid-1970s obtained a professorship chair of economics at the University of Oxford . The major result of their long-standing research collaboration was their book "Marx and the Market" (1989). It contains the final reckoning of the authors with the theory and practice of “real” socialism on the eve of its collapse. From the 1970s onwards, Łaski has also been in close research collaboration with Josef Steindl and the Indian post-Keynesian economist Amit Bhaduri.

The period in Austria after the collapse of the state-socialist economies (1989–today)

Following the breakup of the communist bloc, Łaski concentrated on the transition of the Central, East and Southeast European countries and particularly Poland. He criticized the supply side measures of the "Washington Consensus" proposed and enforced by various international organizations by way of a “shock therapy”, i.e. the quickest possible liberalization and privatization. Already back in 1989, he predicted – contrary to the mainstream and many other economists – the sharp contraction of output and the long-lasting recession in the transition countries at the beginning of the 1990s. During his time as director of the Vienna Institute for International Economic Studies (wiiw) (1991–1996), Łaski developed it into a worldwide respected research centre on economic and social developments in Central, East and Southeast European transition countries. Furthermore, Kazimierz Łaski continued to devote himself to advancing Kalecki’s approach and its application to the new economic realities. In several papers, Łaski demonstrated the fundamental flaws of one of the basic tools of the neoclassical (synthesis) theory: the model of aggregate demand and aggregate supply (AD-AS model). Applying demand-oriented analysis, he continues to investigate current growth developments and the problems of European countries and the US, as well as the issues of the European cohesion process. Thus e.g. in his paper "From Accession to Cohesion: Ireland, Greece, Portugal and Spain and Lessons for the Next Accession" (2003), he critically examined the first achievements of the EU cohesion countries – an analysis which proved to be particularly relevant during the economic crisis which broke out in 2007.

Selected Publications

• From Marx to the Market: Socialism in Search for an Economic System (with Wlodzimierz Brus), Oxford University Press, Oxford, 1989
• An Alternative Economic Policy for Central and Eastern Europe, in: Mark Knell (ed), Economics of Transition. Structural Adjustments and Growth Prospects in Eastern Europe, Edward Elgar, Cheltenham, UK and Brookfield, Vermont, US, 1996, pp. 87–115
• Lessons to be drawn from main mistakes in the transition strategy (with Amit Bhaduri), in: Salvatore Zecchini (ed), Lessons from the Economic Transition. Central and Eastern Europe in the 1990s, OECD, Kluwer Academic Publishers, 1997
• Three Ways to High ... Unemployment, wiiw Working Papers, No. 12, Vienna, January 2000
• Effective Demand versus Profit Maximization in Aggregate Demand/Supply Analysis: A Dynamic Perspective (with Amit Bhaduri and Martin Riese), Banca Nazionale del Lavoro Quarterly Review 210 (2001), pp. 281–93.
• Growth and Savings in USA and Japan (with Roman Römisch), wiiw Working Papers, No. 16, Vienna, July 2001
• Mity i rzeczywistość w polityce gospodarczej i w nauczaniu ekonomii (Myths und reality in economic policy and teaching), INE PAN i Fundacja Innowacja, Warszawa, 2009
• The basic paradigms of the EU economic policy-making need to be changed (with Leon Podkaminer), Cambridge Journal of Economics, February 2012