Development and Underdevelopment in the History of Economic Thought

Andreas Papandreou’s economic thought 1949-1963

Michel Zouboulakis, University of Thessaly

Andreas G. Papandreou is worldly known as a socialist political leader of Greece. He is lesser known as an economist having an important academic career in the United States in the 1950’s. In fact, there is no critical evaluation of his theoretical contributions, except two brief friendly accounts (Kariotis 1997, Nikos Papandreou 2018). The aim of this communication is to make an overall assessment of Papandreou’s theoretical contributions from the perspective of the history of economic thought. The post-war years were extremely productive in economic theory. Samuelson’s Foundations (1947) mark the beginning of the era of ‘Neoclassical Synthesis’. Still, in many sub-fields of economic analysis there are path-breaking contributions that largely exceed this Synthesis, in General Equilibrium Theory (Arrow-Debreu), monetary theory (Friedman), competition theory (Machlup, Stigler, Galbraith), macroeconomic theory (Muth, Tobin, Solow) and welfare economics (Arrow, Sen). How is Papandreou participating in all that? In what fields? What was the impact of his contributions? In 1939 (aged 20), he escaped Greece’s dictatorial regime, to study in Harvard (PhD). After the war he professed in Minnesota, Illinois, and finally in Berkeley, until 1959. He returned to Greece in 1961, to start a political career. In the late 1960’s he had a second academic career in Stockholm and Toronto, with poorer theoretical production. Papandreou merits to be mentioned in the post-war history of economic thought for two of his contributions: competition theory and the theory of rational choice. In the first case, he suggested a way of evaluating monopolistic power of a firm through a coefficient measuring its penetration in the market. In the second case, he proposed an original axiomatic model of rational choice. Furthermore, he actively participated in the methodological controversy of the early 1960’s between Friedman, Samuelson, Machlup and so, on the realisticness of economic assumptions.

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Keywords: Neoclassical Economics, competition theory, rational choice modeling, methodology