Frank Hahn

Frank Hahn (RES President, 1986-89), who died on 29 January aged 87, was an economic theorist of the first rank. Moreover at his prime he had command over the technical details of pure theory that, as far as I could tell, was not surpassed by any economist of the time. A fuller account of his contributions to theoretical economics would require greater scholarship than I am able to master in the rush of our Newsletter’s time table, but among Hahn's greatest achievements are his work (with Takashi Negishi) on the stability of general competitive equilibrium [1]; the indeterminacy of warranted growth paths with constant saving rates in economies with heterogeneous capital assets [2]; the problems of placing money in economies in general equilibrium [3,4]; and the inevitability of sequential markets in a world with transaction costs, and thence to the role of money in such economies [5,6].

Although Hahn never wrote on the history of economic thought, my father, the late Amiya Dasgupta, said to me that his understanding of the ways in which the concerns of Classical economists were being addressed by contemporary Marginalists was deep. But given the range of his interests and expertise, it is surprising to me that despite annual visits to the IMSSS Summer School at Stanford, which he maintained for some 20 years, he never seriously worked on the theory of games. To the best of my knowledge Hahn didn’t put his game-theoretic pre-occupations on paper except tangentially in an article on rational conjectures [7]. I have no explanation for that.

Hahn's oft-repeated visits to the study of ‘money’ is a sign of his life-long search for a complete general equilibrium theory, one as beautiful and comprehensive as the one in Debreu’s Theory of Value, in which the Arrow-Debreu world, and versions of imperfect (Keynesian) worlds would emerge as special cases. We had strong whiffs of that vision in the magisterial treatise he wrote with Kenneth Arrow [8]; but over the years he told me several times that his treatment of the problem there wasn't really satisfactory. Nor was he entirely satisfied with the masterly monograph, written jointly with Robert Solow, on the macroeconomics of output and employment [9].

Hahn’s standards regarding what should be judged as a satisfactory resolution to a theoretical problem in economics were more demanding than is customary today pretty much anywhere. He was, for example, never wholly comfortable with the partial equilibrium setting in which much contemporary economic analysis is conducted. Fastidiousness to detail and an insistence that theoretical exercises should offer a glimpse of the inter-connectedness of economic transactions made him one of the great economics mentors of the second half of the twentieth century. He was unrushed and I never knew him to be too occupied to meet students or fellow academics. His departmental office was always open to interruption.

The Scholar and Mentor
It is the mark of great mentors that those they inspire and influence are able to find their own ways of framing problems. Over the years Hahn’s ‘academy’ (there's no other way to describe it) nurtured as wide a range of economic theorists as Luca Anderlini, Christopher Bliss, Adam Brandenburger, David Canning, Robert Evans, Douglas Gale, Oliver Hart, Geoffrey Heal, Walter Heller Jr., Timothy Kehoe, Mark Machina, Eric Maskin, David Newbery, Joseph Ostroy, Hamid Sabourian, Paul Seabright, Ross Starr, David Starrett, Joseph Stiglitz, and myself, among others. At our time we brought our academic problems to him, we showed him drafts of our writings, and on every occasion he would respond with comments no matter how far removed the work happened to be from his pre-occupations or his style of thinking. A frequent refrain would be: ‘It’s all a lot of nonsense, of course; but what you have done is not bad — although the proof can be tightened. Let Uncle show you how.’ I have reason to believe that's also how he treated Kenneth Arrow and Robert Solow, two of his closest friends and academic collaborators. In 1992 his students and colleagues offered him a Festschrift, aimed for his 65th birthday [10]; a number of them also travelled to a conference in Siena to celebrate his 75th birthday.

Hahn wasn’t averse to public recognition such as Honorary Degrees and was visibly pleased on those occasions. He was President of the Econometric Society (1968), the Royal Economic Society (1986-89), and Section F of the British Association for the Advancement of Science (1990), and was elected Fellow of the British Academy, Foreign Honorary Member of the American Academy of Arts and Sciences, and Foreign Associate of the US National Academy of Sciences.

Frank was born in Berlin (on 26 April 1925) in a Central European household. His father was a chemist by profession but also worked for a prominent literary and current affairs magazine. As I understand it he was both scholarly and stern, expecting Frank and his brother Peter to excel at their studies. The family moved to Prague in 1931 and to England in 1938. When asked about his early years in England Frank recounted with affection the time as a student at Bournemouth Grammar School, which he attended from the age of 13. His love of England’s landscape and of English culture, he often told me, developed from that time. It is a mark of Frank’s loyalty to his adopted country that even after becoming famous, migration to the States was never on his agenda. He joined the air force in the Second World War as a navigator and resumed his education at the London School of Economics. There he met Dorothy Salter, who was employed as a Research Assistant and Secretary to Friedrich von Hayek, at that time Professor in the Economics Department. Frank proposed to her on their second date and married in 1946. They were both 21 years old.

In his doctoral dissertation (his thesis supervisor was Nicholas Kaldor) Hahn developed a macro-economic theory of income distribution in which the Keynesian IS-LM analysis was built on contemporary theories of the firm. It's a reflection of his character that he felt no urgency to publish it. The dissertation was indeed published, but years later [11], by which time our discipline had moved on to other ways of framing such problems. He was appointed to a Lectureship at the University of Birmingham in 1948, was promoted to Reader in 1958, and remained there until 1960. Appointments in Birmingham in the 1950s were prescient in that among his colleagues were Terence Gorman, Alan Walters, Esra Bennathan, and David Rowan. The years in Birmingham would in many ways prove to be his happiest professionally. In later years he spoke frequently of the influence of Terence Gorman on his thinking. The contrast in their personalities cannot be exaggerated, but the mutual affection and admiration that underlay their banters was evident to all. It was in Birmingham that Hahn became a modern general equilibrium theorist.

Hahn spent the 1959-’60 academic year at MIT and moved to Cambridge in 1960 as a Lecturer in the Faculty of Economics & Politics and Fellow of the newly established Churchill College. The intellectual life in the University suited his personality more than what would have been on offer at any other campus I can imagine. He was elected to the Apostles, a secret intellectual society whose membership had included James Clark Maxwell, Bertrand Russell, G.E. Moore, Ludwig Wittgenstein, Lytton Strachey, Keynes, and Ramsey. Hahn's commitment to the ‘Society’, as it is called by its Members, was total. His latent interest in moral philosophy and the theory of knowledge found expression there. People phoning him on Sunday evenings during Term would find him inexplicably absent from home.

Hahn remained in Cambridge until 1967, which is when he moved to the LSE as Professor of Economics. That is where and when he first displayed his remarkable gifts as an academic visionary and administrator. Denis Sargan had joined the LSE in 1964 as Professor of Econometrics; and Gorman, who had previously assumed the Professorship of Economics at Nuffield College, Oxford, moved to the LSE to join Hahn. The three together transformed the LSE Economics Department into the dominant force it continues to be today. They re-structured the graduate programme into its modern form, persuaded the other Professors to call a moratorium on appointments to Lectureships until a suitable cohort had been trained (David Hendry and Stephen Nickell were among the first of the new batch of Lecturers there), and organized the establishment of Chairs so as to attract Amartya Sen and Michio Morishima. In this they were of course supported by colleagues such as Peter Bauer and Harry Johnson, but it was the stature and style of Hahn, Gorman, and Sargan that helped to make routine the teaching and practice of mathematical economics and theoretical econometrics in the UK. In contrast, the Faculty of Economics at Cambridge failed to establish a modern Masters programme until 1996.

It was perhaps inevitable that Hahn would return to Cambridge (Dorothy and he had continued to live there), which he did in 1972. However, the beginnings of his second tenure there were to be nowhere as intellectually stimulating as the first. In Joan Robinson, Richard Kahn, and Nicholas Kaldor he had previously faced an outstanding if fading and insular set of academic stars. Moreover he had the steady support and company of James Meade. By the time he returned to Cambridge, however, they had retired, and Hahn faced an insular and worse-than mediocre Faculty, displaying nevertheless an academic self-confidence unsurpassed anywhere I have seen. That self-confidence was maintained through the exercise of raw politics, and it worked like this: the sovereign body of the Faculty of Economics is the Faculty Board which, with the exception of Professorial appointments, controls all other decisions. Apart from a few designated seats, the Board in turn is elected by Faculty Members. At the time I speak of the Faculty's Membership List included in addition to University Teaching Officers (Lecturers, Readers, and Professors), short-term Research Officers in the affiliated Department of Applied Economics and people who were entirely peripheral to the Faculty’s teaching and research. To be sure, there was a rationale behind the inclusion of non-University Teaching Officers in Economics to the Faculty's Membership List, but it is a curious feature of the Cambridge system that the Board has the power to determine the extended list of Faculty Members. It should have been clear to University authorities when they were writing the Statutes that the system harbours two stable equilibria. It was Cambridge’s misfortune that by the time Hahn returned, the Faculty Board had been tipped into the bad one.

Unable to modernize the Faculty (the best deal he was able to reach with those wielding political power in the Faculty Board was to have one Lectureship appointment of his choice for every three), Hahn made a move that displayed for a second time his gifts as an academic visionary and administrator. He obtained, what would be impossible today, a loosely specified research grant for studying risk and incentives from the then Economic and Social Research Council. Over a period of fifteen years (the project ended in 1991, a year before his retirement) Hahn used the project's grant to attract from outside Cambridge Ken Binmore, David Easley, John Geanakoplos, Sanford Grossman, David Kreps, Mark Machina, Louis Makowski, Eric Maskin, and Herakles Polemarchakis, among others. The group's weekly seminar was conducted in the manner presumed of those gathered in Friends' Meeting Houses; and so, inevitably, the group came to be known as the ‘Quakers’. To commemorate the Quakers Hahn edited a selection of their articles in 1989 [12]. Cambridge produced a steady stream of fine work in economic theory during the late '70s and '80s, but it had little to do with the directives of its Faculty Board of Economics. Hahn had been unable to affect changes in the way the Economics Faculty was run because he didn't have the required tools. Those became available with the establishment of the Research Assessment Exercise and were used to bring about the necessary changes some years later.

It is conventional wisdom that pure theorists are impractical in institutional affairs. Hahn was not the only exception I can think of, but he was one of a very few. With Michael Farrell he co-edited the Review of Economics Studies in the early '60s and introduced the practice of inviting submissions for Symposia on new developments in economic theory. And my friend Geoffrey Heal and I have personal experience of his outstanding gifts as an Editor of the Cambridge Economics Handbook Series. When elected President of the Royal Economic Society for the customary two-year period, Hahn took over a moribund institution; but with the then Secretary General Aubrey Silberston’s help transformed it into the hugely influential body it is today. In order to enable Hahn to oversee the changes, the Statutes were altered to the current one where Presidents serve for three years. Hahn retired from Cambridge in 1992 and joined the Department of Economics at the University of Siena as a Distinguished Professor until reaching 75. On his retirement from Siena he and Dorothy returned to live permanently in Cambridge.

The Person
When I first came to know Frank, in the late 1960s, he was an intellectually terrifying figure. In discussions he was quick and deep, and if he didn’t temper his language with niceties, it was because his mind worked many times faster than his vocal chord and moved on before the mental error-correcting mechanism that social learning equips us with could be called into operation. In the course of time I realized, of course, that what appeared to be rudeness was intellectual zest and a love of clarity and depth. When on listening to someone he was heard to remark that the person had been educated beyond his natural ability, it would be his way of saying that the person had made a mess of a potentially interesting idea. My wife Carol, who knew him from when she was 13 years old, recognized the child in him. For her, Frank even at his most outrageous was simply innocent and loveable. He bore no malice and had a rare gift for friendship and loyalty.

He lived a measured life, twined with Dorothy’s. And over the nearly five decades that I knew him it has always seemed to me that without Dorothy there would be no Frank. She was the practical and emotional centre of his life; she had a professional career, but it was her support at home that enabled him to spend his days thinking, reading, scribbling (his words), conversing, and listening to music and to others. He loved his garden at 16 Adams Road, but beyond cutting the odd flower head, I don’t believe he did any gardening himself. I cannot remember an occasion when on arriving at his home for tea or a glass of wine I didn’t find him reading. Equally, I can’t recall an occasion when he didn't greet me with the words, ‘Come in dear boy, what have you to say for yourself?’ The greatest compliment he could pay someone was to acknowledge that he had learnt something from a remark the person had made or something the person had written. He was the complete academic.

Frank often said if he had his life all over again he would have chosen to be a cosmologist. The subject’s grandeur was a factor of course, but speculation over possible worlds attracted him; and if the speculation could be disciplined with mathematical precision so as to meet the test of coherence, so very much the better. The beautiful, austere features of general equilibrium of economic systems drew him to their study.

His views on the uses to which economic theory could be put were unusual by contemporary standard. He was suspicious of computable general equilibrium models; simulation exercises weren’t suggestive to him; and he couldn't but look astonished at attempts to put general equilibrium models to use in deriving practical policy. The purpose of economic theory was to test the logical coherence of social thinking, or so he often said and occasionally wrote [13]. In that attitude to theoretical musings he resided in Classical Greece and the centuries of the Talmud. When I once remarked to him that his sense of the purpose of theoretical discourse resembled that of logicians in Sanskritic India, he said so much the better for that lost world.

Although the few pieces where he touched on welfare economics could give the impression he was a Utilitarian, the life he and Dorothy constructed gave little evidence of a Utilitarian bent of mind. The philosopher he professed to admire most was Kant, but I don't believe it was the categorical imperative that guided his ethical life. To speak an untruth was for him to place a blemish and further disfigure what should have been a pristine world. Personal betrayal, no matter how slight in the Utilitarian scheme of things, would to him be an aesthetic horror. In this he was much influenced by Moore. On the other hand, I could never convince him that stupidity isn’t a moral failing. In that he was a thorough-bred Aristotelian.

His last years were blighted by illness, as he became increasingly confined to a wheel-chair. Looked after and cared for with infinite fondness by Dorothy, his lack of mobility and the burden Dorothy had to bear frustrated and thereby irritated him. Over time he saw less and less in the point of economics, even theoretical economics. He read history, biographies, and the New Yorker (an annual gift from Maskin), and enjoyed visits from friends and to their apartment in Alderburgh. During the last several years my wife and I would spend evenings with Frank and Dorothy, where the meal consisted of sandwiches Carol had prepared and wine that Dorothy had provided and where dinner and conversation was followed by an opera Dorothy had recorded. Frank would gaze at us benignly, ask after our children, and remark that Carol has always been far too good for me.

At his death our profession has lost one of its intellectual and moral forces. We have cause to mourn.

Partha Dasgupta
St John’s College


[1] (with T. Negishi), ‘A Theorem on Non-tatonnement Stability,’ Econometrica, 1962, 30, 463-9.

[2] ‘Equilibrium Dynamics with Heterogeneous Capital Goods,’ Quarterly Journal of Economics, 1966, 80, 633-45.

[3] ‘The General Equilibrium Theory of Money: A Comment,’ Review of Economic Studies, 1952-53, 19, 179-85.

[4] ‘Money and General Equilibrium’, Indian Economic Journal, 1975, 23, 109-22.

[5] ‘Equilibrium with Transaction Costs’, Econometrica, 1971, 39, 417-39.

[6] ‘On Transaction Costs, Inessential Sequence Economies and Money’, Review of Economic Studies, 1973, 40, 449-61.

[7] ‘Exercises in Conjectural Equilibria’, Scandinavian Journal of Economics, 1977, 79, 210-26.

[8] K.J. Arrow and F.H. Hahn (1972), General Competitive Analysis (San Francisco: Holden Day).

[9] F. Hahn and R. Solow (1995), A Critical Essay on Modern Macroeconomic Theory (Cambridge, MA: MIT Press).

[10] P. Dasgupta, D. Gale, O. Hart, and E. Maskin (1992), Economic Analysis of Markets and Games (Cambridge, MA: MIT Press).

[11] The Share of Wages in the National Income: An Enquiry into the Theory of Distribution (London: Weidenfeld and Nicolson), 1972.

[12] F. Hahn ed. (1989), The Economics of Missing Markets, Information, and Games (Oxford: Clarendon Press).

[13] ‘In Praise of Economic Theory’, in F. Hahn (1985), Money, Growth and Stability (Oxford: Basil Blackwell).

From issue no. 161, April 2013, p.15-17 and p.23

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