Crises and Compassion: From Russia to the Golden Gate 9780773586499

Table of contents :
Cover
Contents
Preface
1 My Youth in Soviet Russia
2 Leaving Soviet Russia
3 My Father’s Empires
4 A Graduate and the Gauntlet
5 A Seminal Sojourn
6 At the Council on Foreign Relations, New York City
7 Coming West: The Berkeley Environment 1946–1951
8 A Landmark Visit to Europe
9 Berkeley in Uproar
10 Working in Africa: The Sterling Area and Ethiopia
11 Working in Africa: The Franc Zone
12 Dinner at the White House
13 Concluding Observations: The Short Term and the Long
Notes
Bibliography
Index
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
Y

Citation preview

Crises and Compassion

Footprints Series Jane Errington, Editor The life stories of individual women and men who were participants in interesting events help nuance larger historical narratives, at times reinforcing those narratives, at other times contradicting them. The Footprints series introduces extraordinary Canadians, past and present, who have led fascinating and important lives at home and throughout the world. The series includes primarily original manuscripts but may consider the English- language translation of works that have already appeared in another language. The editor of the series welcomes inquiries from authors. If you are in the process of completing a manuscript that you think might fit into the series, please contact her, care of McGill-Queen’s University Press, 1010 Sherbrooke Street West, Suite 1720, Montreal, QC H3A 2R7. Blatant Injustice The Story of a Jewish Refugee from Nazi Germany Imprisoned in Britain and Canada during World War II Walter W. Igersheimer Edited and with a foreword by Ian Darragh Against the Current Memoirs Boris Ragula Margaret Macdonald Imperial Daughter Susan Mann My Life at the Bar and Beyond Alex K. Paterson Red Travellers Jeanne Corbin and Her Comrades Andrée Lévesque The Teeth of Time Remembering Pierre Elliott Trudeau Ramsay Cook

The Greater Glory Thirty-seven Years with the Jesuits Stephen Casey Doctor to the North Thirty Years Treating Heart Disease among the Inuit John H. Burgess Dal and Rice Wendy M. Davis In the Eye of the Wind A Travel Memoir of Prewar Japan Ron Baenninger and Martin Baenninger Roots Matter I’m from Bouctouche, Me Donald J. Savoie Alice Street A Memoir Richard Valeriote Crises and Compassion From Russia to the Golden Gate John M. Letiche

Crises and Compassion From Russia to the Golden Gate

John M. Letiche

M c G i l l - Q u e e n ’s U n i v e r s i t y P r e s s Mon t r e a l & K i ngston • L on don • I t h ac a

© McGill-Queen’s University Press 2011 ISBN 978-0-7735-3820-7 Legal deposit first quarter 2011 Bibliothèque nationale du Québec Printed in Canada on acid-free paper that is 100% ancient forest free (100% postconsumer recycled), processed chlorine free This book has been published with the help of a grant from the University of California at Berkeley. McGill-Queen’s University Press acknowledges the support of the Canada Council for the Arts for our publishing program. We also acknowledge the financial support of the Government of Canada through the Canada Book Fund for our publishing activities. Library and Archives Canada Cataloguing in Publication Letiche, John M., 1918Crises and compassion : from Russia to the Golden Gate / John M. Letiche. (Footprints series ; 13) Includes bibliographical references and index. ISBN 978-0-7735-3820-7 1. Letiche, John M., 1918-. 2. Economists -- United States -- Biography. 3. College teachers – California -- Berkeley -- Biography. 4. Economics teachers – California – Berkeley -- Biography. I. Title. II. Series: Footprints series ; 13 HB119.L47A3 2011 330.092 C2010-905687-6 Typeset in New Baskerville ITC Pro 11/16 by Michel Vrana, Montreal

To Emily I am because you are.

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Contents

Preface | ix 1 2 3 4 5 6 7 8 9 10 11 12 13

My Youth in Soviet Russia | 3 Leaving Soviet Russia | 22 My Father’s Empires | 31 A Graduate and the Gauntlet | 51 A Seminal Sojourn | 64 At the Council on Foreign Relations, New York City | 78 Coming West: The Berkeley Environment 1946–1951 | 97 A Landmark Visit to Europe | 115 Berkeley in Uproar | 136 Working in Africa: The Sterling Area and Ethiopia | 163 Working in Africa: The Franc Zone | 188 Dinner at the White House | 200 Concluding Observations: The Short Term and the Long | 206 Notes | 215 Bibliography | 219 Index | 239

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Preface

A key aim of this book is to entertain the reader by recounting – with as much humor as intellectual decency will permit – the major phases of my life. They range from my youth in Russia to teenage years in Montreal, a seminal sojourn at the University of Chicago, a Rockefeller fellowship at the Council on Foreign Relations, Fulbright and Guggenheim fellowships that took me to Europe, a long stint as special technical economic advisor to the Economic Commission for Africa, and fifty-four years of teaching and research at Berkeley, with attendant appointments to the World Bank and the U.S. government. It concludes with a working dinner at the White House and a discussion on the role of civility in international, national, and personal affairs. Throughout, I have attempted to shun technical jargon so that the book may be enjoyed by a wider circle of readers than those initiated into the language of my profession. The book might never have come into being if not for the enterprise and persistence of my dear friend Marion Ross,

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formerly professor of economics and dean of faculty at Mills College in Oakland, California. It was she who thought that my reminiscences of a long life and academic career ought to be given some permanent form, and she took on the role of gentle enforcer. Week after week, she would come to my campus office armed with a tape-recorder and would listen attentively as I revisited scenes from childhood and each succeeding decade. Then she and my incomparable secretary, Lynn Watts, would review and transcribe the material. But the project had only just begun. The spoken word does not become publishable text by the mere act of transcription. Three years of further work lay ahead of me before I could be satisfied that I had the book I – and, before me, Marion Ross – had envisioned. It is a pleasure to express my gratitude to a number of people for having read the manuscript and provided helpful suggestions: Nobel laureate Lawrence R. Klein, Dr K.Y. Amoako, Dr Jacques R. Artus, Dr Kazuko K. Artus, Ellison Berg, Andrew Berlin, Professor Basil Dmytryshyn, Ambassador Jeremy Kinsman, Donald S. Lamm, and Linda Rice. Simon Marcus has served as an excellent editor, and Justin Soffer has provided first-rate general assistance, including management of a succession of drafts. I want also to acknowledge the professional expertise of my MQUP editors, Mark Abley and Joan McGilvray, whose guidance in the preparation of this book for the press has rendered the process a thoroughly pleasant experience. Archival sources at the Bancroft Library, University of California, Berkeley, and in the rare book room at the University of Chicago have been indispensable in checking historical details. Fortunately, my wife Emily has saved all the passports

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we have utilized in travels throughout the world since our marriage in 1945. I have also kept my pocket yearbooks containing records of daily appointments. These sources enabled me to check the dates of all meetings and consultations at home and abroad. The discussion of the turmoil at Berkeley in the 1960s is based entirely on my own experience, with exact chronologies confirmed from relevant sources. The accounts of historical events in the chapters on subSaharan Africa are drawn from reports I prepared for the United Nations and the World Bank. Recent publications on Africa – as well as my own articles – have contributed to the interpretation of developments up to the present. John M. Letiche Berkeley, California May 2010

John M. Letiche in his study, 2007

Emily Kuyper Letiche, 1943

Marusa Letichevsky, the author’s mother

Leon (father), Emily, Hugo, and the author in the Laurentians

Theodore W. Schultz, Nobel Laureate in economics, University of Chicago

Jacob Viner, professor of economics, University of Chicago

The author, 1987

The author and Emily, at home in Berkeley, 2009

A view of the Golden Gate from the Letiche balcony, Berkeley

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Crises and Compassion

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Chapter one

My Youth in Soviet Russia

Historically, fear has been a dominant feature of Russian life, and I was shaped by three fears in particular. The first was the fear of terror and pogroms, symptoms of the fragility of all societies and how readily they can be disrupted. The second was the fear of a father who, though brilliant, reflected the tendencies of a thousand years of czarism: he trusted no one, including my mother and all of his three children. The third fear was of famine, which shadowed my childhood and has remained a haunting memory. We lived in Uman, a moderate-sized city in the region of Kiev. Our house was part of a circular enclave that was owned by my father. Around a central yard stood six houses in all. Ours had a tall, attractive front door that faced away from the enclave onto a street corner; five red-brick steps led up to it. This door was never used as everyone entered the house at the rear. There were no toilets inside these homes but on the periphery of the enclave was an outhouse, which we all used. At the age of four or five, sitting on a couch in our living

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room, I suddenly noticed an irregular feature of the house. “Look, Mama,” I said, “there’s a hole in the ceiling!” “Yes,” she replied, “I know that hole in the ceiling very well. Several years ago, after the Communist revolution, there were pogroms. Raiders came here on horses, and as they entered the house, one of them said to your father, “Give us all your silver, and be quick about it!” My father replied that our silverware was all gone. “Well, where is it?” snapped the ruffian. “I know you Jews. You must have buried it. Go get it!” “No, I truly don’t have it,” my father told him. “A group like yours was here just a week ago and they cleared everything out.” “Oh, they did, did they? Go stand against that wall!” As soon as my father did so, the raider picked up his rifle and pulled the trigger. Providentially, my mother had knocked his elbow a millisecond before he fired, and the bullet went through the ceiling. The noise of the shot brought the leader of the gang into the room in a state of outraged panic. “What the hell are you doing?” he yelled. “I told you not to shoot!” “I was just frightening him,” stammered the underling. “He was being difficult.” The gang made a hasty retreat, leaving my parents shaken, but grateful that tragedy had been averted. The hole in the ceiling was a grim memento of that day. There was no Jewish ghetto in Uman, and our lives bore few traditional imprints of Jewish identity, whether religious or cultural. Neither I nor my siblings received any form of Jewish education. Though my parents could speak Yiddish,

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the language was never heard at home. Furthermore, they did not socialize with other Jews (or with non-Jews, for that matter). Yet there was no question about who we were. When asked, we always declared ourselves to be Jews, not Russians. As evenings at home drew to a close, my father would take me by the hand and lead me toward our back door, which formed a giant entryway through which even a wagon could have driven. Next to the door he kept a correspondingly long iron bar that at night he would thread through slots on the interior sides of the door to secure us against intrusion. He no doubt had me observe this routine to instill in me the importance of guarding one’s boundaries against a malicious breach. After the door was shut, my mother would put me to bed. But before I could fall asleep, I would always hear from the street a shouted chorus of “All is well! All is well!” One morning, I asked my father, “What’s that shouting about?” He explained that about twenty volunteer watchmen walked around the block for several hours at night making sure that everything was in order and communicating that fact to the residents. He himself was supposed to perform that duty on certain nights, but he admitted that he usually sent my half-brother, Abie, in his place. The shouting frightened me, and I began to have nightmares. When they persisted, my parents worried that I might have a serious problem, so my mother took me to a doctor. He said there was nothing much he could do to help but suggested that she take me away to the Black Sea for a couple of weeks. “What your son needs is some water, sand, and sunshine.”

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When we got home, my mother told my father what the doctor had recommended. His reaction was hardly enthusiastic. “Hmm, to the Black Sea?” The fact is, my father had both a beautiful wife and a strong streak of jealousy. The prospect of her taking a vacation without him was intolerable. I noticed that my mother began sewing an attractive new shirt for me, light beige with small blue squares. She was clearly preparing for a trip to the sea. About a week after the visit to the doctor, on a bright summer day, my father said, “Ianik, come outside.” In the middle of the yard, he pointed to a pile of sand and a tub filled with warm water under the radiant sun. “There,” he said, obviously pleased with his handiwork. “Just what the doctor ordered!” My mother was deeply disappointed. To some degree, my father’s improvised solution helped, but my nightmares continued. The shouting at night never allowed me to forget the potential for a bloody pogrom. This fear clung to me throughout my childhood. Within our family home, terror had a different face. My dear brother, Israel, who was two years older than I, was constantly persecuted by our father. At the slightest provocation, he was pounded. He would bounce off the walls, slam onto the floor, finally reduced to helpless sobs. I would stand by as a silent witness, imagining myself next in line. The experience was so harrowing that I, too, would begin to weep. Perhaps, since I was the younger and already crying, my father figured that there was no point in lashing out at me as well. But his behavior toward my brother taught me that my father could pulverize us whenever he wanted to,

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thereby keeping us under his tight control. I knew he was also prepared, literally, to throw us out of the house if we did not kowtow to him. When I was about five, my half-sister, Shelia, a highly attractive eighteen-year-old, married a rich, handsome young man named Abrasha Berlin, who loved the arts, especially the opera and singing. Together, they decided to flee Russia and go to Canada, via Japan. When Shelia told my father of these plans, he was irate and responded by giving her a fierce spanking. Her marriage to Abrasha had deeply disappointed him: he had been pinning his hopes on a young doctor Shelia had been dating before she met Abrasha. Now, apparently, he was going to lose her altogether. There was a particular personal reason why my father held the unchosen doctor in such high regard. A year or so earlier, he had faced a medical crisis: urination had become excruciatingly painful. (He believed it was because he had used salt water to drain his nose and some of the salt had accumulated in his penis.) The doctor, then still an intern, came frequently to our house to see Shelia. When he learned of the problem, he instructed my father to lie down and proceeded to pierce his penis with a needle. The cure was instant, and the gratitude immeasurable. But the feat did not settle Shelia’s marital future. She was adamant about leaving Russia. One of her motivations was fear of the ongoing pogroms. Soon after she told my father of her plans, a gang commandeered the home of Abrasha’s father and ordered him to equip twenty horses with saddles, as well as providing a substantial amount of cash the next morning. Failure to comply would mean death. Shelia and Abrasha had to escape before dawn.

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That evening, Abrasha arrived with a patopa (potato) in his hand. He knew I liked potatoes, and he threw this one to me, which I unsuccessfully tried to catch. As it rolled away from me, he said, “Goodbye, Patopa,” and they left. This was the last time I saw him until we ourselves left Russia more than a decade later. The next day, I played with some boys in the late afternoon and lost track of the time. I didn’t get home until after six o’clock, when it was already dark. My mother, trying to protect me from my father’s wrath, suggested that I go right to bed. But at that moment, he entered the room. “Where were you?” he demanded. “I was walking with a crowd down Main Street,” I said, although this was not true. By this time my wish to avoid my father’s wrath had made me an incorrigible liar. “What crowd?” “The crowd that was walking to the prison. There were policemen who were taking a group of prisoners there. Some policemen were in the front, some were on the sides, and a few were at the back of the group.” My father was getting more and more tense. “What group are you talking about?” he shouted. Instantly, my instinct for self-preservation came into play. “Oh, they were grown-ups, and near the middle I saw Shelia and Abrasha.” Both my parents turned pale. “Shelia and Abrasha were in that group of people?” Clearly, this meant they had been captured. Before I could back-pedal, my mother interjected: “Ianik, you had better tell the truth. Then Papa won’t hurt you.”

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I noticed that his right hand had already formed the usual fist. My mother attempted again to draw a confession from me. “Ianik, did you make all this up?” My silence was no protection. They could read me. My mother took me by the arm and very firmly said: “To bed. No dinner.” But my father had the last word: “Make up a story like that again, young man, and you will not be able to tell another lie the rest of your life!” My third fear descended on me without warning. It was in 1923, I think. My father came home as usual, but we weren’t called to dinner. I asked my mother what was happening, and she said, “There’s a terrible shortage, not even bread.” “No food?” we kids all exclaimed. “You’d better go to bed,” she said. And we did, taking our hunger with us. The next morning, my father said, “You want to come with me?” I asked him where he was going. “I saw a notice that, if we go to the bakery, there may be some bread and we might be able to buy a loaf.” On entering the baker’s store, we saw five or six loaves still on the shelves. My father said, “I’ll take three loaves.” “Sorry,” said the baker, “Only one to a customer.” “How much is it?” asked my father. After being told the price, my father put extra money on the counter, put up two fingers and said, “Two loaves.” It was my first experience with bribery. When we got back home, my father asked the entire family to get together. Although he was not religious in an institutional sense, he recited the

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ritual Hebrew blessing over bread, then tore the heel off the loaf and handed it to me. Realizing this might be the last morsel of bread I had for some time, I bit into it without waiting for the rest of the family to be given their portions. Since that day, I have always preferred the heel to any other part of a loaf. These, then, were the three fears that dominated my early life – the fear of pogroms, the fear of my tyrannical father, and the fear of famine. As I evolved into adulthood, they seem to have produced three abiding character traits: a general fear of adversity, a determination to exert effort to prevent it, and confidence that a sense of balance and proportion will ensure success. When I was five, for reasons I have never understood, my father told me, “A teacher is coming to the house to work with you.” “A teacher?” I said, with some apprehension. I immediately saw that my play time with friends was about to be curtailed, but there was no arguing with my father. Three times a week, a young woman in her late twenties, who walked with a cane because of polio, came to teach me. The first time she came, she reassured me: “This is not going to be work – we’re going to have fun! I’ll read a story to you, and then I’m going to ask you what you think of it.” When I asked what kind of story, she said she would read a fairy tale by a man called Pushkin. She then read for about fifteen minutes. “Well, what do you think of it?” she asked. The rhythm and fantasy of the following stanza may illustrate for the reader Pushkin’s appeal to a child:

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On seashore far, a green oak towers, And to it with a gold chain bound, A learned cat whiles away the hours By walking slowly round and round. To right he walks, and sings a ditty; To left he walks, and tells a tale …1 I had no particular objection to the story she read, but I couldn’t say I actually enjoyed it. That would have been going too far. My ho-hum review was followed by another fifteen minutes of reading – and that was my limit. But my tutor persisted with her questions: “Ianik, what did Pushkin say? How did you like it?” This was to be the pattern of our lessons, and gradually I would become more responsive to Russia’s great poet. This young woman was as kind as could be. The truth is, I fell in love with her because it was such a delight to be in her company. Our house tended to be a scene of crisis – not always serious but invariably a cause of high-decibel pleas and protests. With her, all was serene, trouble-free, and I felt nothing but harmony. When she arrived, I’d be playing with my friends outside. It was important to me not to appear a sissy by withdrawing from our games and following this woman into the house, so I made a show of hating her. Russians have a distinct talent for swearing, and even at age four I could outswear anybody. I’d mutter, “Here’s that bitch again!” And as I went into the house, I would promise my friends, “I’ll be back in a half-hour!” One day, she asked me, “How would you like to go to a movie?”

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“A movie?” I replied. “What’s that?” “Oh, it’s moving pictures. There’s going to be a show at the high school.” “But I can’t go alone.” I said. “Israel will have to come, too.” Israel, for some reason, was always willing to serve in this capacity. It was agreed that he would join us. She said we would go on Saturday afternoon. When Saturday arrived, she came to the house and told my mother, “I’m taking the children to see Douglas Fairbanks in a movie called The Mark of Zorro.” My mother was receptive and asked about its content. She was told it was a fascinating film, full of action, and that we’d surely enjoy it “because it’s about bandits, and Fairbanks is a brilliant American actor.” My father was home this Saturday, and he walked in on the conversation. “What’s going on?” he asked, dissipating the excitement in the room. “I’m taking the children to a movie,” my teacher replied. “You mean, pictures on the wall? How could you be interested in seeing pictures on a wall? I understand people putting on a play, but this is nonsense. It’s not a play. It’s crazy! I’m against it, and they’re not going.” My teacher remained poised. “I’m sorry.” “What do you mean, you’re sorry?” my father shot back. “You’re here to teach Ianik, not to see pictures on a wall!” “In that case, I can’t continue teaching Ianik. I won’t be back. I had promised I would take them. My word is my honor.” My father, giving up, looked at my mother. “You talk to her. An intelligent person can’t!” And he stomped out of the room. That was my father’s way of saying we could go. We

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saw the movie and had a splendid time. Another aspect of my youth was disappointment that I could not become a Communist. My brother was already a member of Komsomol, the youth wing of the party, and had a bright red shirt to wear. But I was too young and was told I could only have a red tie. Nonetheless, I attended some meetings of the junior group, where we were taught mindshaping songs. One began, “Down, down with the Pope!” and went on to bury the Church of Rome in vivid images of wickedness. The propaganda was pervasive. Foreign capitalists were, of course, the most sinister bogeymen. One warm afternoon, when my brother and I came home from one of these meetings, we decided to bask in the sunshine streaming through one of our windows. After some minutes, he suddenly shouted, “Smell that?” I breathed in deeply. “It’s poison gas!” cried my brother. “They’re using poison gas on us! Those dirty capitalists!” “Poison gas?” I said. “It doesn’t smell like poison gas to me. It smells very pleasant.” “Of course it smells pleasant. That’s how they fool you! They’re the enemies of our country!” “Israel, I don’t know what poison gas smells like, but this smells more like apples.” There was an apple tree just across the street. The fact that even my brother could be taken in by hysterical propaganda left an indelible impression on me. A week or two later, a gift arrived. It was my mother’s birthday, and the gift came from my sister Shelia, who had arrived in Montreal with her husband. She had sent my mother a suitcase. We all gathered around it in a state of awe. “From

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America! What beautiful leather! And look at all these compartments!” On the one hand, we were imbued with a dread that the capitalists were going to poison us. On the other, we were transfixed by this outstanding example of American manufacturing. In our family, a day of leisure was practically unknown. However, on one exceptional Sunday afternoon, my father suggested that we go to a Cossack performance. Although the Cossacks were out of favor with the government, we went to see the show. Costumed in white blouses with red scarves flying, they made a spectacular tableau as they galloped into the arena on their legendary Don horses. Their command of horse and sword, displayed in one daredevil acrobatic stunt after another, was breathtaking. It was most unusual for our father to spend a day with us like this – unless there was a catch. When we returned home, the catch was revealed: he told me I was going to start school. I was six. The very first thing that happened at school was that the teacher told us not to be afraid, because Russian schools had changed. No teacher had the right to ever strike a child, she said. It was evident that, in the dark ages before Communism, such punishment had been a standard form of discipline. My mother took me to this school every morning. I made friends there, and as I look back at my youth I regard these years as highly satisfying. But I recognize that one of the reasons I enjoyed school more than the other students is that I was, academically, the standout. My successes began with reading, thanks to a skilled teacher, and continued with mathematics, the subject on which the school placed the

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greatest emphasis. The expert teachers had all been trained by Muscovites, which left them with fine accents, complete with “r”s that they rolled with a vengeance. There are two other aspects of my life as a youth that I have not mentioned. When I was very young, my mother would hire a girl to take me out to play – as a sort of babysitter. We would go to a large, grassy hill where I would play with a ball. She was supposed to teach me to play catch, but instead she would sit at the bottom of the hill with a soldier boyfriend, ignoring me while they were absorbed in intimate conversation. To reclaim her attention, I would throw the ball down the hill at a considerable angle from where she was sitting. This obliged her to get up, go after the ball, and return it to me. As the number of these incidents mounted, so did her visible irritation. She was paid by the hour. To consume more time, she and her boyfriend would walk me home through the center of Uman. We passed a cafeteria where people sat outdoors on an elevated platform. On the sidewalk there were small white poles through which I could poke my face and see tourists sipping colorful beverages through straws. To my child’s eye, this was an enchantment. Even after the pogroms had ceased, my nightmares recurred. Again my mother took me to the doctor. This time he recommended a different cure. Since my father would not permit a vacation, the doctor suggested that my mother give me something that would relax me before going to bed: chocolate squares, known as pletkas. My mother spoke to my father about it, as she dared not make any expenditures without his approval. For example, once, she had purchased a pair of gloves for placing coal in

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the fireplace. The first time she used them, my father asked, “What are those gloves for?” “So I won’t get my hands dirty,” she explained. “We are lucky that we have coal!” he exploded, snatching the gloves and throwing them into the fire. Health, however, was a different matter. When my mother told him of the doctor’s pletka recommendation, he immediately saw how helpful it could be. So my mother and I went to a small store and bought some of these chocolate squares. I was given one square each evening before going to bed. As far as I remember, by the time the box of chocolates had been emptied, my nightmares were over. I’m not sure whether my father deserves to be called a miser, but he did believe in the strictest control of money. We all knew that none of us should ever spend an extra kopek. The underlying principle seemed to be that a businessman would not be able to accumulate wealth unless expenditures were tightly monitored. But we all felt there was an additional motivation at work: by retaining the right to approve even the pettiest outlay, my father ensured that he wielded the ultimate power in the family. Politically, my father was not a Communist; he had been a supporter of Alexander Kerensky, a reformist, Rooseveltian figure who had been minister of justice, then minister of war in the Provisional Government of 1917. My father believed strongly in the first parliament, the Duma, which had been established before the Communist revolution. Every evening, politics would be discussed at our house. As a child, I would hide behind our bedroom door, listening to the ceaseless debates. My father often argued that extreme conservatives, who had refused to legislate essential

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reforms, were behaving in a self-destructive manner. He spoke derisively of the czars. Always to the left of center, he was a realist about the weaknesses of the leftist groups as well: their leaders had extreme egos and were consequently unable to achieve unity by harmonizing their respective economic policies. Failings on both the right and the left, therefore, provided an environment conducive to the Communist revolution.2

I had been told by my mother that one of my father’s earliest jobs was helping his father keep the mails open between Uman, Kiev, and Moscow. Russia had a good record in that regard, often using relays of horses to deliver mail even to small villages. Despite his valuable service, my grandfather had been shot during the revolution. The Communist government had rapidly socialized enterprises during the war and immediately thereafter. They then suffered from a severe shortage of skilled personnel, requiring the imposition of a New Economic Policy (NEP), which prevailed from the early months of 1921 to the end of 1928. My father was employed by the government during part of this period, with the express understanding that he would train a group of men to run the mail system. He was a firstrate administrator, a no-nonsense manager who appeared to crave the challenge of climbing steep mountains. By early 1925, he felt that his task was done, and knowing his political background, his bosses had no objection to letting him go. He and my mother began working at a new enterprise -drying fish in our cellar. The drying was done on rectangles of wire mesh, about twelve fish on each tray.

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One summer morning, my father said to me, “Let’s go to the market. Get the box and sacks.” It was such a rare invitation that I was pleased to go with him. I put the dried fish into the sacks, grabbed a box on which the fish would be displayed, and we were off. The market was huge, a block long, and in the past everything had been sold there. But the market had fallen into disuse and when we arrived, the place was almost deserted. My father set down the box and laid the dried fish on it, and we waited. Soon a man came up to us who looked like a peasant, wearing a warm coat with a rope around the middle. He examined a string of fish and asked the price. When my father told him, he handed over the kopeks and quickly put the string of fish under his coat. My father asked me if I had seen anything strange. I hadn’t. He explained that the man had hidden the fish because he thought he had fooled us. There were thirteen fish on that string, instead of twelve. Some strings of fish were a little older, so my parents had put an extra fish on those strings. The man had counted thirteen fish, believed we had made an error, and wanted to make sure that we wouldn’t notice it. My father said: “In satisfactory business transactions, one side doesn’t fool the other, and they both benefit.” He was always giving me lessons in economics. Once, he put thousands of rubles into a sack and told me to follow him. He walked to a garbage bin at the end of our yard, threw the rubles into it, then lit a match and instructed me to toss it in among the banknotes. The government, he explained, had printed too much money, which had become practically worthless as a result. If he had taken this huge quantity of old rubles to the bank, he would have received

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one new ruble for a mammoth amount of old rubles, but not without facing questions as to how he had obtained the money. The effort of trading in the old rubles, he said, would have outweighed their value. We watched as the mound of currency burst into flames; it was my first lesson in inflation. My father’s action in re-opening the market attracted many other sellers and led to a rapid expansion. Initially, people came with old clothing and furniture. After six months or so, the government allowed it to continue as an exception to the command economy. That individual citizens could engage in private enterprise of this kind was a major advance. My father’s fish business expanded along with the market, quickly growing to employ seventy-five workers. Every evening after seven o’clock, drivers who had delivered fish to customers came to our house, sat around the dining-room table, and discussed the day’s affairs. They gave my father the ration stamps they had collected from customers, and these were put into a large bowl on the table. One night, there was a loud bang on the door. Two men from the secret service, the Cheka, walked into the living room and ordered everyone to remain seated. They asked for an accounting of the volume of fish that had been delivered that day. They then counted the ration stamps and found that there were more stamps than deliveries. This excess was illegal. My father explained that the drivers brought ration stamps for both that day and the next, so that they would know how much to deliver the following day. But this practice was also illegal. My father was arrested and remained behind bars, with his trial scheduled for a couple of weeks later. Every day, my mother and I would bring him a lunchbox.

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A young lawyer appointed by the state prosecuted the case. He happened to be the son of one of my father’s acquaintances and, in that paranoid, self-conscious milieu, he was therefore even more brutal than normal. My father was charged on two counts: drawing an excessive salary as president of the company and fraud (collecting more ration stamps than fish deliveries). The prosecutor droned on for days, citing legislation on pay limits and on rationing. He stopped only when the judge became ill and the trial was suspended for several days. Finally, on a Friday morning, he completed the presentation of his case. This was followed by a somewhat weak rebuttal from my father’s attorney. The judge then asked my father if he had a statement to make. My father said he was not guilty of either crime and pointed to an elderly, goateed man he said could testify to that. Over the prosecutor’s objections, the judge beckoned this man, who had sat through every day of the trial, to come forward. Asked his profession, he replied that he was the accountant for the Uman region. He had been hired by my father to draw up the company’s charter when the dried fish business started. My father had also asked him to work on weekends as the new company’s accountant. He further testified that my father’s salary was exactly what he had been earning at the time he left his government job at the post office. As for the ration stamps, the records showed that the number collected each week exactly matched the amount of fish delivered. He had the books to prove it. My mother had tears in her eyes as she listened to this testimony in support of my father.

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The judge, stern but fair, tabled the case, stating that my father was free to go but should be prepared to be called back if necessary. That was the end of it. My father decided that, with Shelia and Abrasha now settled in Montreal, the time was right to leave Soviet Russia. However, permission to migrate had to be sought from both the Soviet and the Canadian governments. The process took nearly two years. In the spring of 1927, an opening fortunately occurred in the Canadian quota and, even more remarkably, we received official permission to leave the Soviet Union – one of the last families to be granted that right. We left on 21 March 1927.

Chapter Two

Leaving Soviet Russia

The years 1921–29 were stable in Russia, a more relaxed period identified with the “New Economic Policy” (NEP). My nightmares over, most of my childhood, with the exception of my father’s trial, was fairly tranquil. But the values expressed by Russian schoolteachers, as well as the perceptions of my parents – voiced at the time and thereafter – were notably different from those I would encounter after leaving Russia. For instance, in learning about the history of Russia, I was often told that, with the exception of Siberia, most of the country had been carved from forests. Early Russians would have led an isolated life, which encouraged superstition and fear. And fear generates aggression. Furthermore, Russian behavior tended toward excess: keeping things within limits and proportions did not come naturally. Throughout its history, we were taught in school, Russia suffered from foreign invasions. In medieval times, Genghis Khan and his hordes laid waste to Russia. In more modern

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times, western countries were the predators. Particular attention was devoted to Poland, which had invaded Russia and captured the Kremlin in the early seventeenth century. In later years, invaders ranged from Sweden to Japan, and even the United States. The capitalist countries, one was taught, were an ever-present threat. Foreign companies exploited Russian resources and were untrustworthy in the extreme. Russia had to take the strongest possible measures to protect its national interests. Xenophobia has deep roots in Russia. My mother, a cultivated person who periodically tutored children, would sometimes speak about the origins of Russian distrust, perhaps in an attempt to rationalize her own relationship with my father. It was excessive fear, she often argued, that generated pathological distrust and the consequent use of power. Russia’s neighbors were treated as its enemies; those countries, in response, were prepared to take up arms. Historically, therefore, Russia was locked in a face-off with the nations on its borders. Great stress was placed on nationalism, military pomp, and the essential need to protect “Mother Russia.” These views were ingrained in childhood. Conversely, harmony and uniformity among Russian citizens were given high priority. As a child in school, I was taught that harmony among the children in class, among members of the family, and between children and adults was of extraordinary importance. The principle of harmony was usually conjoined with that of equality. In capitalist countries – especially America – we were often told, black people were not treated as equals. But under Communism, this would not be tolerated. To my knowledge, none of my friends in school had ever seen a black person. We had no

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idea what the teacher was referring to. The overarching message, however, was clear: we were fortunate to be living in a superior state. In hindsight, it is clear that equality was given much more emphasis than was opportunity. Religion was never mentioned in class. On one occasion, I was in our living room, looking out the window, when I suddenly saw some Russian peasants pulling a priest with a long beard down the sidewalk. It was an awful sight, and I called my father. “Do you see that? What are they doing?” I asked him. “Before the revolution, they would wash their hands in a bowl of water in which that priest had washed his feet. That was the extent of Orthodoxy – emotion and belief. Now it’s turned around and they’re dragging him down the street.” Any leader of the Russian Orthodox Church who insisted on taking an active role with his flock was in great danger, said my father, of being abused in this way, or even of being arrested and exiled to Siberia. Although discrimination against religious practice prevailed, the desire to build national harmony was apparently strong enough to permit the existence of a synagogue in Uman, so long as it was unobtrusive and uncritical of the regime. My father attended on the High Holy Days of Rosh Hashanah and Yom Kippur. There was another holiday – Purim – when I accompanied him to the synagogue. To my surprise, he was asked to go up onto the ceremonial platform and read from the Torah. I had no idea that he knew Hebrew. On the way home, he told me that there was a passage in the Talmud of particular interest to him. It raised the question, if you come into a village and desire to build both a synagogue and a school, but you only have the funds to

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build one, which should you choose? According to the Talmud, the answer is, build the school first. If you build the school, the children will be prepared to learn a facht, a craft. That, in the Jewish tradition, was indispensable. No person, according to my father, was worth his salt unless he possessed “tooled knowledge.” Once the people were trained, he continued, their incomes would increase and then they would have the wherewithal to build a synagogue, but not conversely. In the first years at school, athletics were greatly encouraged. My father saw it as preliminary training for the army. I loved it and was also intensely competitive. One warm Sunday afternoon shortly before our departure, our neighbors organized an exhibition of children’s athletic and musical talents. I watched intently as boys performed acrobatics on a high bar; several of them were well-trained on this apparatus. Young girls, all dressed alike in white blouses and red scarves, danced and sang. After about half an hour, the activities stopped for a recess. Seeing an opportunity, I jumped on a chair and climbed to the bar, where I did a flip and landed smoothly on the grass. My mother was shocked. “Where did you learn to do that?” she asked. I had no reply, for I had simply watched the other boys and felt jealous of their moment in the limelight. At school, efforts were made to prevent the bullying of younger boys by older ones. We were instructed to be polite and patient, but, with a teacher as back-up, not to allow ourselves to be put upon. Uncivil behavior was to be met with retaliation in kind. But there was one principle that transcended all such practical guidelines: respect for authority in all its manifestations.

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About a week before we left, my mother’s two brothers – one a doctor, the other an engineer – arrived in Uman from Leningrad, bringing with them fish that were several feet long. All our neighbors in the enclave, as well as the caretaker’s family, were invited to the farewell feast. The noise and laughter were evidence of a liberal flow of vodka. One evening during this last week, my father had a serious meeting with his best friend. At age eight, I was in the habit of eavesdropping, through the Dutch door of my bedroom, on any discussion taking place in the adjacent living room. I gathered that my father was proposing that he leave with his friend whatever money he could not take out of Russia. There was much technical discussion that I could not understand, but it was clear to me that this was an important decision for both men. My father’s complete trust in his friend was paralleled by his friend’s respect for my father’s judgment and his expressed hope that everything would turn out satisfactorily for us all. Not until some five years later did I understand the implications of this risky agreement between two friends. When we arrived at the train station, this friend was already there, with two other members of the dried fish company, which my father had left following his trial. There was a short distance between the sidewalk and the train. My father picked up some earth from this strip and said to my mother, “Are you sure you want to go?” Clearly, he was taking out insurance against possible adverse circumstances. She understood the maneuver, pushed him gently, and said, “It’s for the children.” We stepped up onto the train, and the three men joined us. They, too, sat down in the third-class web-covered seats. When the train began to move, they remained seated. I was

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mystified by this turn of events, but learned that the men were simply demonstrating their respect for my parents and the family. They rode with us to the first station out of Uman, where, in keeping with Russian etiquette, they kissed my mother on the cheeks and my father on the lips. They then disembarked, and we were on our way to Moscow. It was a long, tedious journey, with countless stops at small stations, each consisting of a wooden shed with a light bulb hanging from the ceiling. But arriving in Moscow was a vivid experience. In the bustling station, our luggage was removed from the train and put on a wagon drawn by two horses as we had to ride to another Moscow station for the next leg of our journey. Rumor had it that this would be the time when items would be stolen from our baggage. My father therefore asked me if I would mind sitting on top of all the luggage for the drive through the center of Moscow, while the rest of the family made their way separately. I was delighted by this prospect. Though the streets of Moscow were very wide, the wagon was driven close to the sidewalk. People waved at me, and I waved back. But they were also laughing hysterically, and I couldn’t imagine why. When we arrived at the other station, the entire family was already there. My sister took one look at me and burst out laughing. The puzzle was solved: I was wearing one of my shoes and one of hers! As was the case throughout our trip, arrangements had been made for us to spend the night with a family living several blocks from the train station. Next day, our journey west continued. Several stops along the line, an unnerving experience awaited us. Our luggage was being transferred to yet another

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train, and we had to take a bus between the trains. It was mid-afternoon. We all sat in the bus as the driver stood outside, chatting. The quiet atmosphere was suddenly shattered by a tall official of the railroad, who stepped onto the bus and bellowed, “Comrade Letichevsky, come with me!” This was a summons to my father. My mother looked around anxiously, wondering what the trouble was. I stepped into the aisle. “Sit down!” my father barked. “We have enough trouble as it is!” He was escorted off the bus by the official. We sat in silence for quite a while, fearing the worst. Then we saw the official and my father walking back toward the bus with another, short man pulling at my father’s sleeve and repeating, even as they were stepping onto the bus, “You’ll have to pay for this! You’ll have to pay!” My father sat down again beside my mother, while my brother and I stood in the aisle, puzzling over what had happened. Plaintively, my father muttered, “Marusya, was it necessary to take the keg of preserves to Canada?” My mother had prepared a jumbo keg of strawberry preserves and had used a large cork to close the keg. Somehow, in the heat of the luggage compartment, the cork had popped, spilling preserves onto the down-filled cushions and bedcovers of one of the other traveling families. It was a debt that my father would pay several times over in the years to come. The aggrieved family had a son named Nathan, who was ten years of age. My sister, Bronia, was eight. They met and giggled about the “jam crisis.” In their early twenties, they were married in Montreal.

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We boarded a train going toward Riga, Latvia. As we sat in our third-class compartment, three inspectors – two men and a woman – came in. One man searched through the compartment, while the other man and the woman observed. The woman ordered my mother to go with her. This, as it turned out, was to be a full body search. The male inspector then jumped onto a seat, opened a small door near the ceiling, and examined the cavity behind it to be sure that nothing was hidden there. Climbing back down, he turned to my father. “Take off your coat!” He took the coat and cut open the lining with a blade. He then slipped his hand into the cut and thoroughly examined the inside of the coat. My sister’s coat was given the same treatment. The inspector then peered at my brother, Israel. At that moment, my mother returned with the woman. I let out a tactical howl, slid down from my seat, and began banging my legs against the floor. My howling annoyed the inspector. He looked at my mother and, swearing liberally, demanded: “What is he yelling about?” I told my mother that I had to go to the bathroom. She cast a pleading glance at the inspector, and he snapped disgustedly, “Take him!” Still wearing my coat, we walked out of the compartment into the corridor that gave access to the rest of the train. We found the bathroom at the very end. I told my mother I’d be all right, that she should go back to our compartment, and I would return when I was done. The bathroom was minuscule, and the toilet lacked a seat. Afraid of falling when the train began to move, I held onto

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the sink. I seemed to be there a long time, though it was probably only five or ten minutes. Suddenly, there was a loud knock. “Ianik, open the door!” My father had come to fetch me, and we slowly walked back to our seats. Not a word was spoken between us; he merely put his hand on my head. When we re-entered the compartment, I saw that my brother’s coat had also been slit open. My mother had previously told me to be mindful of my coat. I suspected that something important had been secreted in the lining, but only later did I learn that I was carrying a large quantity of Russian currency.

Chapter Three

My Father’s Empires

I must have slept soundly on the way to Riga, for I don’t recall any of the country through which we passed. The city enthralled me. The lakes and bridges were delights to a child. After eighty years, I still recall running around on my own with complete abandon. The very smallness of the place, with its many parks, gave me a sense of joyous conquest. Wherever I looked, colorful wildflowers were coming into bloom. Regrettably, we were there for only a few days. Traveling steerage, we took a boat across the turbulent English Channel to London. London in early April was also a festival of color. Flowers of every hue were in full bloom. We stayed overnight with a family on a bustling street near a railroad station. Across the road was a small circular park where my sister and I strolled hand in hand, listening to the incomprehensible chatter of children playing in sandboxes. The food we ate must have been very plain, for it left no memory whatsoever. Next morning we arrived in Liverpool, where we embarked on the Montclair bound for Halifax, Nova Scotia. With our

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luggage still standing outside our cabins, my father and I went up on deck to watch the ship’s progress down the waterway. “I’m beginning to feel seasick,” my father said. I looked through the gaps between the lifeboats and saw that the ship was still secured to the wharf. Pointing this out to my father did not ease his imagined seasickness or improve his disposition toward me. We went back down to our cabins. These were below the water, and water was all we could see through the portholes. The three classes of the ship were partitioned from one another, and unless we could find a way to sneak out of thirdclass, the voyage promised to be a purgatory of boredom. After the first dinner, my brother and I decided to explore the ship. We slithered under a partition and went upstairs to second-class. There we found a small gymnasium and played in it. Next we breached another barrier and infiltrated firstclass. That was a different world. We entered a ballroom where people were dancing to a live orchestra. I had never seen anything like it. The men were dressed in tuxedos, the women in long gowns. Dancing the black bottom, rolling their eyes and pointing their index fingers up to the ceiling, they seemed crazy. When the music stopped, a very pleasant man saw me standing by the wall. He came over to me, put his right hand in his pocket, and took out a fistful of small change, which he handed to me with a smile. I took it, and my brother and I ran back to our third-class cabins. I laid the money on a small table. My father was resting. When he woke up, he asked, “Where did this money come from?” I told him.

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“Go right back up and return his money! You don’t take charity from anybody!” I felt terrible. How could I return it? Negotiating the partitions again, I went back to the ballroom. The orchestra was taking a break. I saw the man who had given me the money standing with a group of people engaged in conversation. Stealthily I went up to him and slipped the money into his side pocket. He turned around in surprise, and then he smiled. I felt he understood what might have happened downstairs. He waved to me as I turned to run out of the ballroom. When I returned to the cabin, my father was still displeased with me, and I felt saddened by the entire incident. Crossing the Atlantic was uneventful. Our ship arrived in Halifax, and several hours later we took a train to Montreal, where we were soon immersed in a hard-driven and challenging life dedicated to the building of a new empire.

When we stepped off our train in Montreal, we were greeted by my sister Shelia, her husband, Abrasha, and their young son. We took a taxi to their building. Their comfortable apartment had a living room and two bedrooms. Shelia and Abrasha had set themselves up, with my nephew, in one bedroom, leaving the other rooms for the rest of the family until we found a place of our own. In the late afternoon of our arrival day, my sister asked us if we would like a bite to eat. We wondered what our first meal in Canada would be like. Shelia served us tea with soda crackers and Philadelphia cream cheese. We tasted these

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with caution. The verdict was: very good. My sister told us that in the evening we were going to have dinner at the home of a well-to-do friend and client of Abrasha’s. This, apparently, had become a custom in the extended immigrant community. My father demurred. “Who is this person?” he asked. Clearly, a sense of Russian propriety was coming to the fore. Shelia explained that Abrasha had begun to import silks and velvets from France and our prospective host was one of his best customers. He had a large store in what was then the main shopping center on St Catherine Street. “I’m sorry,” my father insisted, “we don’t go to dinner where we have not been invited.” My sister tried to explain that the entire family had been invited, but to no avail. Just then, the telephone rang. It was the would-be host, who asked to speak to my father. Once the proper invitation was extended, he was happy to accept. We were picked up by our hosts and spent a most cordial evening with them. The only training my father had had was in entrepreneurship. He appeared to relish the challenge of building from the bottom up. He had, in Russian terms, become a millionaire before the age of twenty. His first endeavor had been to build two beet-sugar mills. These had been confiscated by the Communists. He had later created the dried fish company. Now, in Montreal, he found a storefront space on Duluth Street, with a house adjoining it in the back. We moved into the house, and he was on his way to building another empire. When building a business, my father would say, success depended on certain key factors. First, you had to select men and women who were competent and trustworthy. (My father, like any first-rate entrepreneur, was an excellent judge of people.) Second, while prices were driven by the

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market, costs were to a large degree under your control. In that regard he was ruthless. In bargaining with suppliers, he pushed to the utmost any advantage he had. A firm, he often told me, was not merely a locus of technological operations. It was an organization constantly undergoing change, and reliant for success on both workers’ willing participation in a team effort and a sufficient element of wariness in judging risk and the actions of one’s competitors. The next essential factor was innovation. Regardless of how small a company was, customers should always experience an element of surprise, which would come in the form of new products, more efficient ways of financing, an improved service environment. Just a few years before his death, my father told me that in every business he had built, he had eventually brought in a partner. Given his controlling personality, this was puzzling to me. “Why did you do that?” I asked him. His reply was complex. “For you as a scholar, the conducting of research is paramount. For a businessman, the primacy lies in making decisions. But as an individual, the head of a company never knows enough. There is always someone who is more competent than you are and from whom you can learn. Therefore, it is important to find a partner who you believe will make better decisions than you would yourself. The challenge is to learn enough from the partner to beat him at his own strength.” Over time, I watched my father put these principles into effect. While I generally judged him to be too fierce a disciplinarian, I must admit that he was also a source of uncommon practical wisdom.

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My father’s new venture was a grocery store. On the first day we opened, my father and I stood expectantly at the back of the store. The bell attached to the front door tinkled as our first customer walked in – a diminutive figure, about five or six years old. “Go ahead and serve him,” said my father. The boy walked toward a glass case that contained candy and pointed to the Tootsie Rolls. I gave him one, and he paid me a penny. That was my first sale. I went behind the counter, opened the wooden cash box, and placed the penny in it. We were in business! My father and mother opened the store each day of the week at about 7:00 a.m. and closed it at 11:30 p.m. Between 2:30 and 3:00, my father would take a nap. At least once a week, he took a red wagon and went to a vegetable market on the banks of the St. Lawrence River. Ours was the only grocery store that on certain market days had fresh vegetables in the morning. Additionally, there would usually be a surprise: some unusual fruit or vegetable that happened to be in season. To attract customers, my father extended two kinds of credit. Patrons who had steady jobs were given a small black book in which their purchases were recorded. On pay day, usually Friday evening, these customers would bring in their books, we would add up the amounts owed, and the bills would be paid. A less well-defined group was granted credit on a more ad hoc basis. Their more limited purchases were recorded in a folder that was kept at the counter. The law permitted groceries to be sold only until 7:00 p.m. After that hour, the shelves were covered with chicken wire so that no canned goods could be accessed. For some reason, it was my task to occasionally flout the law and sell

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groceries after seven o’clock to a credit customer. This favor was granted if, for example, the customer claimed she had forgotten to buy tuna for the evening meal. On several occasions, the illicit transaction was spotted by “Fatso” and “Skinny,” two detectives who were responsible for interdicting such sales. My father then had to go to court, speak to his alderman, and pay a fine that the alderman would remit to the judge. This was a time-consuming process. After a few years, we developed a more efficient alternative: I befriended Fatso and Skinny and periodically gave them a modest supply of free groceries. By 1929, our grocery store was the most popular in the neighborhood. We appeared to be settling in to a prosperous and contented life. On 29 October 1929 I returned from school at about 3:15 p.m. As I spoke English better than my father, he would often ask me to call his stockbroker and ask for quotations on several stocks that he owned. The broker had kindly taken an interest in my queries and my discussions with him began my education in the stock market, at the age of about ten. When I called this time, he informed me of the crash. The stock market crash was of course a devastating experience. In the late afternoon, my father and I went to the corner of Duluth and St Lawrence Streets to pick up a newspaper. There were no newspapers left. We walked north some three blocks before we found a copy of the Montreal Daily Star. On returning home, my father read the quotations. To a child of nearly eleven, the next few hours were unforgettable. I regarded my father as a strong man of outstanding self-control. He was a man who showed no fear. He was ready to tell anyone what he thought of him or her. His

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analysis of events always seemed prescient. He was certain about everything he did; maintaining control was always his highest priority. But now, the most formidable and powerful man I had ever known became pale. He began to pace from one corner of the room to the other. His pacing continued for some time. I stood quietly beside a door and watched. It was the most fearful experience I had yet encountered. When my father stopped walking, I waited a while and then asked him what would be the effects of today’s events. He told me that we would not be seriously affected. He owned his stocks outright. But what concerned him was the state of my brother-in-law’s finances. Abrasha, he said, had bought his stocks on margin. His broker would call Abrasha tomorrow, if he had not done so already, and ask him to bring in cash for cover, or his stocks would be sold off. He had bought his equities with a comparatively small percent of cash, borrowing the rest from his brokerage house. Now that the value of his stocks had fallen so sharply his assets were less than his borrowings. “He may be wiped out,” my father said. Moreover, he continued, if the value of Abrasha’s stocks fell far enough and he didn’t have the money to cover his indebtedness, he could go bankrupt. My father felt that this eventuality had somehow to be prevented. He called Abrasha and asked him to come over. In the interim, my father confided to my mother that Abrasha and Shelia might not be able to continue living in their apartment. My parents agreed that, if necessary, beds could be set up in our living room and they could move in with us for a while. Abrasha arrived and said that his broker had already phoned him. He had to bring in $10,000 next morning. My

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father, who couldn’t write English, told him to make out a check. Abrasha did so, and insisted that the repayment would include a rate of interest of five percent. My father thought that was unnecessary, but it was done. As for moving in with us, Abrasha said he and Shelia would remain in their apartment. He was now going to redouble his efforts in the selling of silks and velvets, and he hoped his family would be able to scrape through. As it turned out, they did.

Since I was unable to speak English when I entered primary school, the only tests I could be given were in arithmetic. Having had two years of arithmetic in Russian schools, I found these tests simple. However, withstanding the taunts of “Greenhorn!” from the older boys with whom I had been placed was more challenging. I attempted to suffer in silence, but a highly competitive child doesn’t easily remain passive, so I didn’t always succeed in staying mute under hostile bombardment. It was a miserable period of my life. But the teachers in this English Protestant school, all competent and admirable women, made up for the few insensitive bullies in every class. I was comparatively short for my age, growing rapidly only after I turned fourteen, but at the age of twelve I tried out for defense on the school’s basketball team and made it. The captain of the team also played defense and was quite tall. He therefore had no objection to having a shorter defenseman feeding him the ball. In the final game of the season, we both were rushing to score and I found myself with the opportunity for a baseline shot. Suddenly the captain shouted, “Shoot!” I did – and

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swish, the ball zipped right into the basket. I ran back to defense as if this was a customary occurrence for me. Though I thought it was an accident, it gave me enough confidence to start a basketball career. The school’s students began to treat me with some respect. A serious turning point came when I graduated from primary school and was assigned to Commercial High School. My brother was already a student there, earning nearly one hundred percent in all his math exams, although all the other subjects bedeviled him. On my first day at the school, I went to class and sat down in the middle of the first row. A male teacher came in and told us to read the first chapter in our books while he took care of some administrative matters. About a half-hour later, his work apparently completed, he sat back in his chair and put his feet up on the desk. I was shocked. Such behavior was not what I expected of a highschool teacher. He then announced that he would be our classroom teacher, with a primary interest in accounting. He would be preparing us for business careers. Again, this was not what I had anticipated. At 10:45 a.m., there was a fifteenminute recess. As the boys and girls dispersed, I picked up all my books and left the school. Several blocks west was Park Avenue, which was a streetcar route. I had a streetcar ticket, which at that time cost seven cents. I got on and rode north about ten blocks, disembarking at Rachel Street. From there it was about a fiveminute walk to Baron Byng High School. The janitor told me that the principal’s office was on the third floor. I walked up the stairs and found it immediately – an open door, right on the corner. With some trepidation, I asked the secretary if I could see the principal for a moment or two. She

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walked into his adjoining office and, after a few seconds, reappeared with him. I told him my problem, emphasizing that the teacher at Commercial High School kept his feet up on the desk, which I did not think was proper professional behavior. The principal picked up a small pad and wrote a note, which he told me to hand to the teacher in room 29. I knocked on the door of room 29 and a student let me in. The class was nearly full. The teacher read the note I gave her, looked around, and, pointing, politely said, “Please take that seat at the back of the room. I’ll assign seats alphabetically in a few days.” I felt as if I had entered another world. The principal’s name was Mr Byng (no familial relation to the founder), an outstanding man who would later make a lifelong impression on me with his strong, thoroughly prepared teaching style. The school he directed had a full liberal arts curriculum. Had I not transferred there, admission to a first-rate university would have been extremely difficult, if not impossible. Depression conditions notwithstanding, I greatly enjoyed my high-school days. All the senior teachers at my school were Protestant men and World War I veterans, well-trained and dedicated. All the students were Jewish. There could not have been a better combination, for the teachers were interested in our success, and the students were extraordinarily responsive to their guidance. My father considered athletics a nonproductive activity and was against my playing basketball and hockey, but I made both senior teams. Acceptable stealth was the arrangement between us, and the prohibition was not enforced. Following a game, I would return home somewhat late in the afternoon to deliver groceries. Before I left for school on

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a hockey day, my mother and I would place my hockey stick and bag in the entryway of our house and leave the door open. I then went to the back of the house and through the store and said goodbye to my father. I would then walk outside, pick up my hockey stick and bag from the entryway, and go to school. My father knew, of course, that I played, but we had a tacit understanding: my rank in class had to be in the top decile; should I slip, sports would be out. I kept my part of the bargain, but not without crises. On one occasion, when I was still on the intermediate team, the coach happened to be my French teacher. Our senior hockey team was tied with Montreal High in first place. This was unusual, because Montreal High nearly always had the best hockey team in the league, while Baron Byng typically reigned over basketball. The senior hockey teams were to hold their playoffs on a Friday afternoon. On Thursday, as I was leaving our French class, the teacher told me to suit up for the game the next day. This would mean playing with the seniors for the first time. As the game progressed, I sat on the bench with the coach. About five minutes before the end of the game, the score was one all. At the next whistle, the coach said to me, “Go in at left forward.” I was surprised. I had always played right defense. However, the coach had noticed that whenever I shot, I would shoot the puck from the left-hand side. As luck would have it, at the next play our team captain, playing center, was behind me, and the puck was right in front of me. I skated toward the goal, held the stick to the puck, pretended I was about to shoot at the goal, but suddenly raised the stick, leaving the puck for the captain to shoot. We won two to one.

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After the game, I took care of my grocery deliveries. When I returned to the store later, a family friend came running in with the Montreal Daily Star. Excitedly, he said to my father, “Jack’s name is in the paper!” I thought my father would turn purple. A name in the paper could only be bad news. “What did you do?” he asked. The friend said he would read the item to my father. The write-up of the hockey game concluded with the sentence, “Jack Letichevsky was awarded an assist for the winning goal scored by the captain of the team.” Several weeks later, I witnessed a truly tragic event related to the Great Depression. As always in the morning, I left our house and went through the store to say goodbye to my father on the way to school. It was a cold winter day, with snow about three or four feet high on both sides of the street. I heard shouting. About two houses down, a wagon was piled with household belongings and a man was sitting on top of some goods at the edge of the vehicle. He wore an old coat and seemed to have a wooden leg. In the cold, the door to his house was open. It was clear that the family was being evicted for non-payment of rent, something that happened frequently in our neighborhood. A woman was sitting beside the driver, who was holding the reins. A policeman standing nearby told them to shove off, but there was some difficulty in closing up the end of the wagon. The policeman attempted to speed things along by pushing some of the furniture forward, against the man’s leg. Reacting angrily, the man thrust out his leg as if to kick the policeman, who drew his pistol and shot him. I was stunned. I turned around and ran back to our store. After explaining to my father that I had seen a man shot, I telephoned for an ambulance. But I was going to be late for school and missing

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a class was considered intolerable, so I had to leave. I arrived just as the first bell rang. When I returned home in the afternoon, my father told me that a crowd had gathered at the wagon. The man had been shot in the hip but had been taken to the hospital and was going to recover. I asked about his family. The couple had no children. The wife was a seamstress, and the husband had been an elevator operator. Both had lost their jobs. The incident had made an indelible impact on me. Mass unemployment – which was rife in Montreal – appeared to be a curse of capitalism. I wondered if I would ever be able to do anything about it. In fact, I was so moved that I asked my father if he had any ideas on the subject. I also spoke to Abrasha and asked for his opinion. Several weeks later, our history teacher asked each student to speak for three to five minutes on a subject of his or her choice. With deeply felt compassion, I spoke about mass unemployment. I argued that rates of interest were too high. If the Bank of Canada would lower them, people would be in a better position to build houses and apartments. Prices might rise a little, but there were plenty of unemployed people looking for jobs at current wage rates. The increase in employment would raise aggregate demand and increase sales in grocery stores and in other businesses. I told the class about the shooting I had seen and maintained that economic measures such as those I had described might reduce the eviction of unemployed families from their homes. My talk lasted less than five minutes. To my astonishment, my classroom teacher told me some time later that, at their weekly faculty luncheon, the history teacher had spoken to his colleagues about my remarks. The faculty decided that

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I should be encouraged to go to college. This was a mixed blessing, for now they all expected me to work harder than I had ever worked before.

My father had a high regard not only for learning by doing but also for doing by learning. He often referred to me in a critical tone of voice as Panura, meaning pomegranate. He objected that I was always peeling from layer to layer, with elements of indirectness, and at times even evasiveness. I rationalized that this sort of escape was essential for my self-preservation. My father spent a short time every night examining the day’s activities and entering purchases from the loose-leaf book at the store counter into a proper ledger. When he found no entry against a particular customer’s name, he would ask my mother whether that person had not come in that day. Often, the customer had come in, but my mother had forgotten to enter the purchase. One night, while engaged in this review, he brought up three issues, only one of which related to our store. Several customers with little black books had moved from the neighborhood without clearing their accounts with us. These families had been gone more than six months and my father wondered if I would like to take over these accounts and visit the families on Sunday. All the proceeds would be mine. I said I would try it. As I went collecting, I would have the opportunity to visit briefly with three of my friends: Sidney Barza, who became a distinguished psychiatrist; Arthur King, who became an engineer; and Sidney Wagner, who became a physicist.

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The results of my collecting were gratifying. I told the families that once their respective fathers went back to work, they could repay their bills at the rate of a dollar or fifty cents per week. All but one agreed. The exception was a sour man who told me that, when his mother-in-law died, he would receive an inheritance and would pay his bill. I came to his house every Sunday and had tea with his mother-in-law, He was hoping to outlive her, inherit her money, and pay off his many debts. I preferred the prospect of her outliving him and paying us herself, and this is in fact what occurred. By 1936, as the breadwinners in these families returned to work, they all paid down their accounts. They had become my friends, and I had become convinced that, like most people, they were fundamentally honest and derived satisfaction from doing the right thing. The second matter my father raised while looking over the books that night was more serious: he was concerned about both my brother, Israel, and my brother-in-law, Nathan. Nathan was a part-owner of his father’s cheese company, which was poorly managed and was on the brink of bankruptcy. With better management, my father thought, the company could survive and prosper. Meanwhile, Israel was attending Commercial High School and had failed the ninth grade. Given this, my father thought that perhaps he should drop out of school and join the company. I argued against this; I felt it was important that Israel finish high school. My mother listened quietly to both sides of the debate. My father’s next question disarmed me. It was thoughtful, unsentimental, and to the point: “Do you think he can make it?” Exaggerating a bit, I said that I was certain he could. My father replied with one word: “Panura.” This time I took it

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as a compliment. Israel repeated the ninth grade and graduated satisfactorily. The next issue my father raised concerned my own future. When I finished high school the following year, would I like to take a business job or try to get into college? One summer I had worked for Steinberg’s, a notable grocery chain, and had been told that, if I joined the company permanently, I would have good prospects of becoming a manager. When I mentioned this to my father, he had raised his hand in chagrin. By contrast, my inclination toward an academic career had never been discouraged. But my father did remind me of the cautionary example of a Russian cousin of ours who had wanted to become a doctor. Discrimination against Jews had prevented him from entering the academy, so he studied on his own. The extremely difficult qualifying exams pitched him into a nervous breakdown and he gave up the whole idea. So I was forewarned: “If you go for an academic career, remember, you may have to live with holes in your pants.” I knew that a business career would be easier, but had no worry whatsoever about striving for a university degree. Several days after our discussion, Nathan said his cheese company was likely to invoke the Canadian equivalent of Chapter 11 to protect itself from its creditors; bankruptcy seemed unavoidable. My father intervened and offered creditors fifteen cents on the dollar. After extensive negotiation, a settlement was reached. But there was much uncertainty about getting credit to continue running the business and it looked as if it might go bankrupt anyway. My father was set to build a third empire; however, the means of doing so turned out to be extremely complex. As part of keeping the cheese company going, he opened a second store

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specializing in dairy products. He streamlined the management of the company, and the practice of employees taking home free goods in the evening was curbed. When Israel finished high school, he joined the company, which was renamed Liberty Brand Products. Every Friday evening, my father would give me the week’s cash for deposit in the bank. I had been performing this task for several years and had noticed that the amounts varied greatly from week to week. I wondered about the cause of this variance. I thought it would be embarrassing to ask, but learned the answer by serendipity. One Saturday, while my father was taking a nap, a frequent customer came in and asked me to tell my father that her sister had received the money. When I gave him the message, I asked him what it meant. He explained that, for many years, he had asked our best customers whether they had relatives in Russia to whom they might wish to send money. Quite a few of them – and quite a few of their friends – had such relatives. They gave him the names, addresses, and amounts to be sent. He would then write to his friend in Uman with whom he had left his capital, passing on this information in a disguised form. The amounts, for example, would often appear as our customers’ ages. My father’s friend would give the money to the relatives, who were instructed to inform their kin in Canada that they had received the money and were all right. This was the cue for our customer, or a customer’s friend, to pay my father. My father was very glad to get the message about the customer’s sister, because this was to be his last such transaction. About half his capital had been transferred, and he authorized his friend to keep the remainder for himself. The

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arrangement, of course, was a way to evade Soviet foreign exchange controls. Bad laws generate bad practices. If my father’s friend had been caught, the consequences would have been dire. Liberty Brand Products prospered. Our original grocery store was sold and the dairy facilities were moved to a new and larger plant on the outskirts of Montreal. Israel managed the drivers and the bookkeeping. Nathan was in charge of production. His brother, named Abie, like my half-brother, was responsible for milk deliveries from the Laurentian Mountains, and he also produced the cottage cheese. My father hired a very competent Frenchman as manager of the refrigerated goods and of operations on the floor. Unknown to anyone, when my father took over the dairy company, he feared that it might still go bankrupt. Rather than placing ownership in his own name, he had my half brother, Abie, sign the key documents as owner. Abie, though honest, was generally seen as the weak member of the family and therefore malleable. When Liberty Brand Products finally appeared to be solid, the record of ownership needed to be set straight. One evening, as I came into our living room, I saw Abie sitting at a small desk with my father standing behind him. The atmosphere was tense. I heard my father say, “Sign that paper!” Abie refused. He understood the ownership situation and felt that things should remain as they were. My father put his two hands on Abie’s shoulders and thundered, “You sign that paper or you won’t get out of that chair!” Abie signed the paper. One Sunday, Israel and I made a date with two girls to visit the Laurentians in my brother’s new blue Plymouth. On returning to Montreal, we stopped at an outdoor bistro

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for dinner. As we were waiting for our food, we heard an announcement on the radio: Germany had invaded Poland. Two days later, World War II had been declared. I sensed that an epoch had come to an end.

Chapter Four

A Graduate and the Gauntlet

On graduating from Baron Byng High, my grades were satisfactory but I did not have all A’s – which was, for a Jewish boy, an indispensable condition for getting into McGill University. The discrimination was well-known, and I did not even apply to McGill. At the time, Queen’s University in Kingston, Ontario, had the best department of economics in Canada. Since economics was my main interest, I applied and was admitted. Queen’s was an extraordinarily demanding and rewarding experience. I was taught economics by the principal of the university, Professor William Archibald Mackintosh, who was later known as the Grand Old Man of Canadian Economics. He was a tall, well-dressed man with an imposing presence. His first lecture to us was exhilarating. He demonstrated that economics was a serious discipline that could be taught in a fascinating way. I worked hard in his course, as I did in all my courses. If I earned all A’s, it might be possible for me to transfer to McGill. Living at home would be much less expensive.

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As a freshman, I had to wear a colorful tam, which limited my extracurricular activities. Kingston had blue laws, which meant that on Sundays theaters were closed and no liquor of any kind could be purchased. On Saturday evenings, the only recreation open to me was to go skating with a friend. Moreover, the Canadian winters were very cold and, as might be expected, some students spent their weekends drinking and cavorting in hotels. My friends and I merely worked and worked and worked. Two of them, Murdoch McLean and Malcolm “Mac” Urquhart, were Scottish; McLean was a freshman and Urquhart a senior. Conversing with them was a delight. We devoted at least sixteen hours a day to our studies. The main library was a haven where we read and wrote practically every night until 10:00 p.m. One night, at the end of April, I was preparing to leave the library around 9:45 when I passed a room with an open door. It was intriguing. Walking in, I saw books about ancient gardens and began to peruse them. Suddenly, through an open window, I heard the gurgle of rushing water. I looked out onto the neighboring glade. The snow had melted! I was thrilled by the promise of spring. Next morning, when I arrived for breakfast, Mac Urquhart must have noticed a taut expression on my face, because he asked me if I was feeling well. (Preparing for exams, many students had suffered nervous breakdowns.) I told Mac that my left arm was somewhat swollen. He asked to see it. After struggling to pull up my shirtsleeve, we were both alarmed by what we saw. Above the elbow, the arm was green and thicker than a baseball bat. “You’re going to the hospital,” Mac said. “They may have to amputate your arm.”

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A doctor in the emergency ward determined that the arm would have to be lanced at once. The procedure took at least a half-hour. We were all shocked by the amount of pus, and at the end I felt somewhat dizzy. The doctor then asked me, “Do you have any more exams?” “Yes, I have a French exam tomorrow morning.” “You need rest,” he said. “Postpone the exam.” When I did not answer, he continued, “If you don’t rest for the next few days, I cannot be responsible for your health.” I thanked the doctor, and Mac and I left. Walking toward the house where I was staying, Mac asked me, “Are you going to take the exam?” I told him I would think about it. He cautioned me about the possible consequences. I took the exam, rested for a day or two, and returned to Montreal. The exam results were more than satisfactory. (Years later, Mac and I arrived in Chicago for graduate studies at the same time. He was my closest friend: a firstrate mind, with impeccable integrity and a willingness to help friends even at his own dire risk and cost. I saw him as a person worthy of emulation, though my success in that regard necessarily fell far short of the ideal.) It was not long before I had put on an apron and was serving in the grocery store. Customers expressed satisfaction that I was back. Little did they know of my plans to befriend them. In my early teens, I had decided to run for alderman in our area as soon as possible. After a few sessions, I would run for Parliament in Ottawa. Thereafter, I planned to become a judge. These were my ambitions, and I was carefully laying plans accordingly. Our representative in Parliament was about to run for re-election and I volunteered to work on his campaign. There would be no pay but,

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at my request, the campaign manager was kind enough to arrange an interview for me with the member of Parliament. On a Sunday morning, I sat waiting for him in the living room of his home. He came down the stairs in a beautiful silk robe. His appearance did nothing to dampen my ambitions. I told him that I was eager to work for his re-election and, in time, I would appreciate his advice on my running for alderman. Talking with him was a pleasure. He asked me what alternatives I might have to going into politics. I told him that I liked economics and might even obtain an advanced degree. When he first became a lawyer, he said, it was a respected profession in Montreal. Currently, however, young men obtaining law degrees had to spend several years “ambulance chasing” in order to get trial work and earn a livelihood. If I decided to become an alderman, he promised to help me get elected but suggested that a career as an economist would be much more promising. I thanked him and wished him well in the coming election. Next morning, I went to see the campaign manager. He gave me instructions and told me to come to his office around 4:00 p.m. on the day of the election. When I arrived, he directed me to go downstairs. A group of men were already there, and I introduced myself. Around five o’clock, we were told that it was time to vote. Cars were waiting for us, and each of us was given several names of people for whom we were to cast ballots. We were also given identification cards, which included the addresses of the people involved. The cards bore no photographs. Some of the men had small clubs in their pockets, just in case we had to be protected. I left with two other men, and we performed our task. Our candidate was re-elected by a margin of nearly 65 percent.

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There was a celebration that evening, and I asked the campaign manager why, given the candidate’s popularity, it was necessary to use the fake ballots. “In politics,” he said, “you take no chances.” Several days later, I was shocked by an announcement from my father. We were standing behind the counter of our store, which was otherwise empty. “I have to tell you something,” he said. “Mother and I are going to be divorced.” Nothing could have been more shocking and disappointing for me to hear. It was clear that he realized this. “You and Israel,” he continued, “will come with me. Bronia will go with Mother. You will be able to continue your schooling.” Without any hesitation, I said, “No, I will go with Mother.” He was taken aback. “But what will happen to your schooling?” he asked. I answered simply that I would get a job, work during the day, and go to school at night. It was a spontaneous and honest answer. To the best of my knowledge, nothing was ever said again about a divorce. Having obtained excellent grades at Queen’s, I was able to transfer to McGill in September 1938. War had broken out in Europe, and although there was no draft in Canada, it was awkward not to be in uniform. I volunteered for officer training and, after I had completed my course work, boot camp was conveniently arranged. The faculty at McGill was impressive. The principal was F. Cyril James, a distinguished economist who had come from the Wharton School of Finance. The head of the Department of Economics, J.C. Hemmeon, had obtained

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his Ph.D. in economics from Harvard, having been also awarded the distinguished Wells Prize. Outstanding teachers included Eugene Forsey, who spent many years as an eminent Canadian senator, and professors of philosophy who were leaders in their fields. The intellectual and social atmosphere at McGill was exemplary. I lapped it up. We still had the grocery store, but my father was gradually transferring his interest to Liberty Brand Products, which was being managed, under his overall control, by my brother and brother-in-law. I was no longer spending many hours serving in the store or delivering grocery orders and was instead concentrating on my studies. The one exception was Friday evenings, when I still took over the store. When there was no one to serve, I restocked the shelves with canned goods. There was also another task delegated to me, which usually took place on Friday evening between nine and ten: Fatso, the police detective, would come in, and I would prepare the usual grocery order for him. He would feign paying, and I would feign accepting the payment. I would take the order to his car, and then his colleague Skinny would come in and we would repeat the procedure. All parties were satisfied with these transactions. On a Friday evening in early May 1940, my half-sister, Shelia, and her husband, Abrasha, had joined my father and mother for coffee. Mother’s coffee was special. She added a little chicory to it, which Abrasha liked, combined with fresh sweet cream. They stayed quite late, and I closed the store around midnight. Next morning, I slept in. Around 10:30, my father nudged me awake, saying, “Ianik, there’s a letter for you from McGill.” He had already opened it. It simply stated my last year’s grades: six subjects, all A’s! Five

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were in economics and one was in philosophy. As my father turned around and began walking back to the store, it was the only time I saw him show a certain degree of contentment. Clearly, he was paying me a compliment. At the graduation ceremonies for the BA degree, I was in uniform, part of an honor guard. As I looked at the graduates, parents, and friends sitting on an attractive lawn on the McGill campus, I saw my mother standing in the distance beside a tree. She had been a beautiful woman. She came from a well-to-do-family, played the piano, and was in every sense a cultivated person who dressed attractively. But now she wore boots – the same boots she wore in the store – and a dark gray coat with a small collar, which she doubtless had had for over ten years. She was the only member of the family who came to my graduation. Rifle in hand, I walked up several stairs to receive my degree. Professor James was officiating. A confident orator, he suddenly appeared flustered because he had known me only by an abbreviated name and apparently had no idea how to pronounce “Letichevsky.” He said something to the effect that the next candidate, having earned all A grades and ranked first in the graduating class, was being awarded the Allen Oliver Fellowship in Economics. He proudly christened me “Jack Letiche.” Friends told me later that they thought I would be angry, but when I walked down the stairs and looked about, I was smiling from ear to ear. And the name stuck. Immediately, gun in one hand and degree in the other, I walked to join my mother. It was, of course, a joyous embrace. I offered to take her to lunch, but she said that she had to get back to the store. Several classmates asked me to

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join them, along with one of our professors, for lunch. The professor was a wine connoisseur, who taught us to drink wine by slowly sipping it and then allowing it very gradually to pass down the throat. The Allen Oliver Fellowship carried a stipend enabling its recipient to work for an MA in economics. But I had planned to enter law school and, step by step, to follow a career path toward becoming a judge. On a Sunday not long after the graduation, while on my rounds collecting the unpaid debts of our previous customers, I stopped off at the house of my friend Sidney Barza, whose mother served us tea and cookies. Since I respected her judgment, I asked her what she thought of my postponing law school for a year and working for a degree in economics. She replied in the terms of a well-known dictum: “A little more knowledge will not be a heavy weight on your shoulders.” I decided to get the master’s, although I knew that the Army was increasingly likely to want to ship me overseas. A wandering scholar, Professor Moritz J. Bonn, who had worked in Germany on reparations after World War I, was scheduled to teach at McGill during the next year, and Professor James was scheduled to teach a graduate course in money and banking. I decided to take courses with both these men and to write a master’s dissertation on foreign exchange controls. As it turned out, Professor Bonn had left Germany with many documents on that subject. Evasions of such controls had been rampant and by 1938 Germany had instituted the death penalty for this crime. Professor Bonn made the documents available to me and served as an indispensable advisor.

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Professor James’s advanced seminar in money and banking was held at the Redpath Library on Friday afternoons from 3:00 to 5:00. On several occasions, the professor left town and asked me to chair the seminar. Tragically, during that year my mother contracted cancer. She died in early March 1941. My grief was overwhelming. Being too distraught to look at or speak to practically anyone, I buried myself in work. For about six weeks, I toiled unremittingly – day and night – writing my thesis. During that time, I did not remove my clothing and I slept just three or four hours a night. I finally completed the thesis a few hours before the noon deadline on Saturday, 10 May 1941. (Cutting it fine has always been a weakness in my character.) Shortly before noon, I walked up the steps of the McGill engineering department, where the thesis was to be delivered, and found that a caretaker was about to lock the doors. As I thrust my work of scholarship into his hands, he asked, “Do you know what time it is?” I said, “Yes. It’s five minutes to twelve – I’m five minutes early.” He looked at me in consternation, shook his head, and shut the door. The war in Europe was going badly. Regulars in the Army were being shipped out at an increasingly rapid pace. Both Bonn and James had read my thesis and encouraged me to apply to the Bank of Canada for work on evasions of foreign exchange controls. The chairman of my thesis, Professor Hemmeon, thought I should apply to the Department of Economics at the University of Chicago to pursue work toward a PhD. The leave that I had been given from the Army was now over. I returned to training in the Armory, where there was

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increasing talk by the regular soldiers of leaving for the western front. On a Friday afternoon in mid-August, my platoon was standing at ease in the Armory. As usual, I was among the last ones to fall into line. The sergeant shouted: “Attention!” There were quite a number of McGill volunteers in the platoon. Volunteers had a choice: to go overseas or to remain in Canada. The sergeant thundered, in stronger language than I shall quote, “If there’s any coward in this platoon who will refuse to go overseas, get out of line and step forward!” The regulars to my left and right looked at me. I remained in my place. Next morning, we left for Three Rivers, Quebec, whence we would be shipped to an undisclosed destination in Europe. We continued our training in Three Rivers and in the evenings I played basketball. On a Wednesday afternoon near the end of our training, a lieutenant handed me a letter. It was from my brother in Montreal, who attached a short note from the University of Chicago. The note read that the chairman of the department was away and the writer had the responsibility of notifying me that I had been awarded a fellowship covering the fees for the first period of the year. This document was signed by Jacob Viner, one of the most distinguished economists in the United States. Next day, I asked the leader of our platoon – a lieutenant – if I could see him about a personal matter. He was most cordial and invited me to his office. I explained my situation and showed him Viner’s note. He asked me what I would like to do. I said I was not quite sure, it was a difficult position to be in. While I wanted to continue my education, I had a strong sense of obligation to the war effort. I also knew that if a soldier opted not to go overseas, people

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would revile him for shirking his duty. I asked the lieutenant for his opinion. To my amazement, he said, “If possible, go to Chicago.” He told me that he had gone to law school at McGill and had regretted ever since that he had joined the military rather than continuing in his professional work. But in his family, he explained, there was a tradition that one of the sons would enter the Army. He gave me a pass for three days and advised me to go to the Bank of Canada, see the personnel manager, and inquire whether the bank could be of assistance in my leaving the Army and going to Chicago. He also gave me a letter of introduction to the bank. He said, “I’m sure you would make a greater contribution to the country as an economist than as a soldier!” As I walked away from his office, I had to ponder what he really meant… That very evening I took the train to Ottawa. The next day, at least in part, was the most arduous I had ever spent. Without an appointment or a telephone call, I went to the Bank of Canada. The man in charge of personnel was not helpful. I decided to see the secretary of the governor of the board. I gave her the letter of introduction from the lieutenant and the letter from Professor Viner. She was not only knowledgeable but eager to help. She told me that the governor, Dr Louis Rasminsky, had meetings scheduled for the entire day; however, perhaps he could see me very briefly between sessions. She suggested that I sit down and wait. At about ten minutes before noon, she said the governor would see me before going to lunch. I gave him a concise summary of my problem. Without making any promises, he suggested that after I had written my PhD prelims at Chicago, it might be possible for me to

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conduct my dissertation research at the Bank of Canada. I mentioned that evasions of foreign exchange controls were likely to become a serious problem. He said: “I couldn’t agree more.” He also told me he had the highest regard for Professor Viner, noting that they had worked together at the League of Nations in Geneva. Working with Viner, he thought, would be a great privilege for me. At my request, he gave me a short note indicating my possible work at the Bank of Canada upon completing my PhD exams. Now I faced the seemingly impossible task of obtaining permission from the Canadian authorities to withdraw from the Army and leave for Chicago. I needed four signatures on my petition, and I had to get them by 5:00 p.m. The first man on my list was adamant: the answer was no. He disagreed with the lieutenant and with the governor of the Bank of Canada. He also gave me a brief lecture on patriotism. It was my duty to serve and I should return to Three Rivers. He claimed that I had no choice. Thinking quickly, I asked him if I could use the telephone on his desk to call the governor’s office and report this refusal. Angrily, he said it was not his intention to overrule the governor of the Bank of Canada. If I insisted on leaving, he would sign my paper, but he would let his superiors know that he had done so under duress. The second bureaucrat I saw was no more sympathetic. He was vehement in his disagreement with both the lieutenant and the governor. In fact, he suggested that I let Chicago know that I would reapply for admission after I had completed my military service. In his judgment, he said, this was a matter of personal conscience and I had an obligation to

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complete my military service. My studies at the University of Chicago could wait. I agonized over the most appropriate course of action. It was Friday afternoon, four o’clock, and I had only one more hour to obtain the necessary papers. I requested that the man sign my petition, saying I would give the matter further thought. He was displeased, but he signed. The third man was a milquetoast. My request was “unusual.” He thought I was making a wrong decision. However, since the other two men had signed the petition, he would reluctantly sign the portion pertaining to his jurisdiction. The last hurdle was the most difficult of all. Mistakenly, I told the official that, since it was 4:45 p.m., I had only fifteen minutes to obtain the final signature. He said he was sorry, but he would have to think about it. I felt he was stalling. He suggested that I return to Three Rivers and he would take the matter under advisement. I countered that I only had a pass for three days and his was the last signature I needed. That, he replied, was just too bad. He became insulting. As a last resort, I again asked for permission to call the bank governor’s office. Like the first signer, he became livid. If he had control over the law, he said, I would be compelled to go overseas. Under the circumstances, however, he felt he had no choice. He signed the petition. I called the lieutenant in Three Rivers and told him that I was still uncertain of what I believed, and what I should do. He assured me that our decision was correct and wished me well. I took the train to Montreal for a much-desired visit with the family. Succeeding at the University of Chicago would be another mountain to climb.

Chapter Five

A Seminal Sojourn

Registering for courses in the economics department at the University of Chicago led to a fortuitous meeting. There were only two of us in line. The other student was Arthur H. Leigh. He was standing in front of me with report card in hand – all A’s. He, too, had been granted a fellowship. The man in charge of registration was Professor Frank H. Knight, one of the world’s most eminent scholars in the history of economic thought and in religion. He had the reputation of being a curmudgeon. Here, on the contrary, he was sweetness and light. After congratulating Leigh on his fellowship, he inquired about his long-term interests. Leigh told him that he planned to pursue a career in the history of economic thought. They then discussed Kenneth Boulding, who had been one of Leigh’s professors at Colgate University. An outstanding economist, Boulding had worked with Knight in Chicago. When Leigh was finished registering, he stood aside so that I could approach. Knight congratulated me on my own fellowship and asked what my future plans might

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be. I told him that my major interests were international trade and the history of economic thought. The two fields, he said, would complement one another. We conversed for several minutes. Neither of us had any idea, of course, that he would later play a vital role in my career. With Leigh still standing at the table, Knight noted that we had registered for the same courses, and he assumed we knew each other. And that is how our friendship began. As we were walking out of the building, Leigh asked if I would like to work with him. Aware of his record, I didn’t hesitate in accepting his invitation. But he then cautioned me that he couldn’t read. I didn’t understand; his clear blue eyes seemed to sparkle with life. At an early age, he explained, he had had an operation on his eyes that had left his vision permanently impaired. I asked him how he did his work. He said he had a helper who read his lectures and readings to him while Leigh summarized them on a typewriter. When he studied for exams, the helper would read the summary material to him. I realized that being his helper would require a serious adjustment in the form of my own studying, but it seemed embarrassing to change my mind. For the next two years, we were like twins, living on the same floor in International House, going to classes together, eating similar food, studying and writing about sixteen hours a day. (I was always tired.) Art came from a comparatively poor family and was eager to get his PhD as quickly as possible, while my inclination would have been to take more time. But our being harnessed together turned out to be a blessing: we finished our prelims and took the required exams in French and German in a record two years. However, the challenges were immense.

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For me, the first class meeting in Professor Jacob Viner’s course has remained the most memorable episode. On the Sunday evening prior to Monday’s morning class, there was a knock on my door. I opened it to an older student, who said, “My name is Jim Dingwall.” I asked him to come in. He was at least five years older than I, a serious, no-nonsense person who was prematurely bald. “You’re a freshman, aren’t you?” “Yes,” I replied. “In graduate school.” He got straight to the point. “Tomorrow morning you’re going into 201 with Jacob Viner.” “That’s right.” “You’re going to find out that it’s the Spanish Inquisition. That’s how he teaches. And you are probably going to be embarrassed. Do you have a fellowship?” I told him it was a small fellowship. “Well, let me tell you what’s going to happen. You’ll walk into the classroom tomorrow, and he’ll say, ‘Letiche, up to the board.’ There’ll be other students, but he’ll take the fellow that’s going to be most embarrassed. And you’re also Canadian, so you’re certain to be his pigeon.” Viner had come from McGill and then gone to Harvard for his PhD. My own teacher at McGill, Professor Hemmeon, had told me that Viner had once come back to the Canadian university, either to be interviewed for a position or to deliver a lecture, and that he had lorded it over everyone he encountered, even having the presumption to plant his foot on Hemmeon’s desk while they were conversing. Recalling this story did not calm my apprehensions. I asked Dingwall, “If he calls on me, what’s he going to say?”

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“He’ll say to you, ‘Put a particular expenses curve on the board.’” I was baffled. “What’s that?” I asked. “I’ve never heard of it.” Dingwall explained that that’s what Viner would expect. Dingwall himself had gone through that very experience several years ago. “Here, you’d better read my notes.” Dingwall handed me his notes on Viner’s lecture. I began to read the notes but told Dingwall I couldn’t use the material because Viner would ask me where I had seen the particular expenses curve. Dingwall exited, saying he’d be back in a few minutes. He had a room on the same floor in International House and quickly returned with a book in hand, briefly telling me the history of the particular expenses curve. During World War I, Professor Frank W. Taussig of Harvard, who had been Viner’s teacher, had been appointed chairman of the U.S. Foreign Trade Commission. An agency of the U.S. government asked him to determine how it could obtain more copper and what the additional cost would be. The cost of copper at the time was nine cents a pound. Taussig’s staff found that increases in supply could only be obtained at higher costs. Taussig presented this evidence in the form of a “particular expenses curve.” It was, in effect, a statistical approximation of a supply curve for copper. Dingwall showed me the book he had brought -- a wellknown volume by Paul Douglas on wages. Douglas, a professor of labor in the economics department at Chicago, had used a particular expenses curve to illustrate the notion of a statistical supply curve for labor. Under certain conditions,

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Douglas argued, higher wages would have to be offered to obtain a larger number of hours worked. He referred to this in a footnote, which Dingwall pointed out to me. Dingwall also said that Viner had written an article entitled “Cost Curves and Supply Curves,” which would be assigned later in the course as required reading. Viner would correctly assume that none of the students just entering his course would have read it. As a result of Dingwall’s warnings, it was very difficult for me to sleep that night. Next morning, Art Leigh and I went to Viner’s class. There were about twenty-five people in the room. A considerable number of them were professors who had come to Viner for a refresher course. Viner came in, the door barely closed, and he said, “Letiche, up to the board!” As I approached the blackboard, he continued, “Put up a particular expenses curve!” My foreign origins came in handy. I turned around and asked him, “Would you please repeat that, sir?” His voice raised, he repeated, “Put up a particular expenses curve!” I picked up a piece of chalk, drew the Y and X axes, and traced the supply curve Viner had requested. Small beads of perspiration appeared on his upper lip. Angry as could be, he asked, “Where did you see that?” I thought for a few seconds and then answered, “I think I saw it in a book by Paul Douglas on labor.” Firmly, Viner said, “Sit down!” As I went back to my seat and sat down at the oblong table of 201 South Hall, I looked again at the blackboard and saw that the continuous supply curve that I thought I had drawn

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was, in fact, a dotted line. Clearly, my nerves were not under effective control. But a student sitting beside me – one of the professors in the class – cupped his hand and whispered in my ear, “You’re still swimming.” Although I had begun with a defiant attitude toward Viner and had overturned the introduction to his first lecture, I came to appreciate him as a brilliant teacher. His lectures were highly technical for the time, but they had a distinct ring of relevance. The course was used by the Department of Economics to assess which students were capable of obtaining a PhD. At the end of the term, each student was asked to see the chairman of the department. My own case was somewhat strange, for it reflected my characteristic self-doubt. I thought I had failed the course and had gone to see Viner during his office hours several days after the exam. I apologized for the quality of my exam. He seemed startled. “You weren’t first in the class,” he agreed, saying that honor had gone to one of the professors. I said I thought my paper was terrible; the last question was not answered well at all. In light of my self-indictment, he decided to re-read the paper right there and perhaps revise my grade. Looking over the paper, he said, “Well, you drew all the curves, and they’re all correctly labeled.” I apologized for not having listed all the answers below the curves. He laughed and said I was the first student in his career who had objected that he had been given too high a grade. I felt like a damned fool, and left. Several days later I saw the chairman of the department, Simeon E. Leland. He congratulated me on my grades, told

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me my fellowship had been renewed, and asked me what my long-term plans might be. After completing my PhD. prelims, I told him, I hoped to write my dissertation at the Bank of Canada. That seemed realistic to him, but he cautioned me that the possibility of a professional career in the United States, leading toward a professorship, was slim. The discrimination against Jews was simply too great. I was disappointed to hear this, even though I knew that I would be able to get a junior position at McGill, but said nothing further to the chairman. The intellectual atmosphere at the University of Chicago in the early 1940s was matched only by the delights of the city, with its symphony, art museums, quaint restaurants, and the shores of Lake Michigan. After Art and I had completed our prelim requirements, he obtained a position at Reed College in Portland, Oregon. In record time, he wrote his dissertation and had one chapter, on the nineteenth-century German economist Johann von Thünen, published in the Journal of Political Economy (JPE), winning a prize for the best article of the year. He went on to enjoy a distinguished career at Reed, culminating in the chairmanship of the Department of Economics. I remained at Chicago for two more years, 1943–45, working on my dissertation and taking on several wartime commitments. Principally, however, the experience was of a continuous, intellectually stimulating seminar. The group included brilliant economists, some of whom have become Nobel Laureates, others presidents of the American Economic Association, and still others professors at renowned universities. After a day’s work, we would walk together to Hutchins and Commons for dinner. We were oblivious of the other

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people around us, and the intensity of our discussions made it uncomfortable for anyone else to join our table. A noted professor in the business school, Theodore O. Yntema, was preparing a study for the federal government on price controls and rationing. I joined his staff to interview the leaders of Chicago’s industries and to determine the most practical ways of legislating on these issues. I spoke to CEOs and managers in the meat industry, as well as top executives at corporations ranging from Sears Roebuck to Montgomery Ward. In each case, a report was prepared, discussed with superiors, and submitted to the government. Typically, the CEO knew little about the particular issues, but it was essential to begin with him, since he could give me letters of introduction to more informed individuals farther down the chain of command. Not all the discussions were even-tempered. At Montgomery Ward, I was ushered into a room the size of a hall, where CEO Sewell Avery was standing at an opulent desk. Before I had even reached him, he began inveighing, in street language, against President Roosevelt, price controls and rationing. His tirade ended with a question: did I know who in Washington would be implementing these repugnant policies? And he added a warning: “You’d better be careful, they’ll creep in.” He didn’t think it necessary to spell out who “they” were, and neither did I. In different circumstances, I might have responded to his anti-Semitic bigotry with a fist. When I interviewed members of his staff, the first thing they wanted to know was what Mr Avery thought. Only after I had assured them that he hadn’t expressed any views on the policy issues could we have a productive discussion.

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One evening a few months later I picked up a copy of the Chicago Tribune and saw a photograph of policemen carrying Avery out of the Montgomery Ward building. He had failed to abide by government regulations. After this project was completed, I received a message from the chairman of the department to come to his office as soon as possible. When I got there, he asked me whether I would be willing to serve as an economist for President Roosevelt’s Emergency War Railroad Board. Professor Viner had recommended me for the position. The board was to hold hearings with representatives of the railroads and the union on a number of contentious wage-related issues. The union was threatening a strike. After weeks of hearings, there was deadlock: the chairman of the board had found it impossible to effect a compromise between the parties. He suggested that I speak to each of them privately. Following separate lunchtime meetings with each side, I decided to inform the union that the railroads would increase wages by no more than 8 percent. In fact, I had learned that they would probably go to 8.5 percent. Similarly, I told the railroads that the union would accept nothing less than 9 percent, knowing that its true minimum was 8.5 percent. With somewhat specious precision, other members of the board and I calculated that “comparable” industries had given wage increases of about 8.5 percent. We recommended to our chairman that he offer the parties a compromise wage increase of 8.5 percent. As anticipated, they accepted the offer, both sides feeling they had won. President Roosevelt’s Emergency War Railroad Board had performed its function of averting a strike.

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Socially, a graduate student’s life in Chicago was a feast. After working like hell all week, on Saturday evenings Art and I would go to the Chicago Philharmonic. The price of our seats in the third balcony was nominal. Female companionship was abundant. However, Art was always with me, thereby playing an important role in curbing the amount of time I devoted to the ladies. After we had written the concluding PhD exam in international economics, we returned to our dorm exhausted. But as we were walking to the elevator, the person in charge of social activities stopped us. “Won’t you please come into the dance hall?” she pleaded. “There are many more women than men!” Art and I decided to drop in for a while. As we walked in, across the room stood a gorgeous young woman, about 5 feet 7 inches tall, blond, with a warm and cordial demeanor. She looked at me and I looked at her. That young woman, Emily Kuyper, was to become my wife. In 2009 we celebrated sixty-four years together. Our meeting transformed my life, for Emily is a person of deep integrity, perhaps incapable of telling a lie. I quickly learned that no man has a good enough memory to be an effective liar with women. Though it was a challenge for me to tell the truth, I took a personal oath to do so on all matters of substance. Another transformation, this one not requiring a decision, was that I no longer felt the need for romantic conquests. Emily was a gifted pianist, with two volumes of clippings attesting to her talent as a performer. She had taken her degree in music at Cornell College, in Iowa. The first time I heard her play, with just the two of us there, I was transfixed; her music was filled with beauty and pathos.

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Fortunately, Art also met a wonderful person, Dorothy Eaton, whose father, Scott Eaton, was a professor of botany at the university. This made it possible for me to spend some leisure time with Emily. Emily’s family belonged to a Dutch Reform clan in Pella, Iowa. Her uncle was Pete Kuyper, founder of the Pella screen company. Emily’s father had died when she was twenty-two, and she had come to Chicago to work as a secretary for a vice president of Continental Insurance. Quite often, because of her limited means, she had to decide whether to buy lunch or to join me for dinner at Hutchins and Commons. On Sunday mornings, we would go for brunch to the YWCA, where we obtained a wonderful meal for 99 cents. While working on my dissertation, drafts of which were being typed by Emily, I served as a research assistant to Professor Viner. This entailed preparing statistical materials on international economics and gathering books and journals from the library stacks. On several occasions, the professor asked me to speak to government officials and members of the Chicago faculty who had requested elucidation of his writings. To make ends meet, I needed additional income. A crisis in the economics department at Iowa State University worked to my advantage. One of the young faculty members at Iowa State, Oswald Brownlee, had been a student in my 201 class with Viner. He returned to Iowa State and wrote a paper contending that margarine was, for reasons of health, preferable to butter. Politicians in Iowa representing the dairy industry found this research unacceptable and ordered the chairman of the department, Professor Theodore W. Schultz, to fire Brownlee. Schultz took responsibility for

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the research and said he would leave the university if the dismissal was insisted on. The politicians remained adamant. Schultz promptly left Iowa State and joined the Department of Economics at Chicago. I had the highest regard for Schultz’s work and had audited two of his courses. In one of them, close to the end of the term, Schultz came into the class and distributed the examination, at which point I prepared to leave the room since I was not an enrolled student. Schultz stopped me and asked that I take the exam. I replied that I had not read any of the assignments. This fact notwithstanding, he said he wanted to see what a student had learned solely from his lectures. I allowed myself to be persuaded and sat down to the exam. Several days later, Schultz’s secretary summoned me to his office. He asked whether I could recommend a research assistant. I said I would give it some thought. As I was leaving the office, he said, “You can be autobiographical.” I turned around and told him I’d be delighted to do so. Thus began an intellectual collaboration and friendship that lasted until he passed away in his early nineties. For about two years, from mid-1943 to mid-1945, I worked as a research assistant for both Viner and Schultz. During that time, two notable events occurred. First, I received a “greetings” letter from the U.S. military authorities. The law stated that, when an immigrant was called for service, he (or she) had to either report or leave the country, with the understanding that he would be unable to return. I told Viner of the choice I faced. He was most attentive. He told me that his son had been called up and sent for duty to Alaska, only to be frustrated by a long period of idleness. He strongly recommended that I return to Canada and

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continue to write my dissertation at the Bank of Canada. This was the only personal conversation we had had up to that time, and I held back, as too personal, the fact that I had fallen in love and did not want to forfeit my right to live in the United States. Next morning, I brought him the books and journals he had requested, with a note saying that I had decided to enlist. The enlistment site was like a large corridor. I was given a basket and told to strip to my shorts and then proceed from one examination table to the next. All went smoothly until I reached the last station but one. The man in charge asked me if I would prefer to be a pilot or a gunner. I told him that I’d had boot camp training and would prefer to be a pilot. There then followed a detailed examination of my eyes, testing both vision and color determination. The tests were satisfactory, although there was some question about my accuracy in distinguishing between certain colors. At the final station, the man in charge asked me what work I was doing. After I had told him, he said the quota of enlistments for the period had been met, I should notify them of any change in address, and I would be called up again at a later date. My clothing was returned to me and I went back to the university. Shortly thereafter, a crisis developed between members of the Chicago economics department and the university president, Robert Hutchins. The issue centered on the departmental prerogative of academic appointments. President Hutchins took the position that he had the right to make such appointments. Professor Viner maintained that only the department had the technical knowledge to determine who should or should not be appointed. When

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Hutchins refused to yield, Viner decided to leave Chicago for Princeton. Several days after the crisis, I brought some library materials to him. He asked me to sit down and inquired if I would be interested in an appointment as Rockefeller Fellow at the Council on Foreign Relations in New York. He thought it would be a good opportunity for me to conduct research and to participate directly in the formation of international economic policies for the postwar world. I was, of course, honored to accept, and I left Chicago for the Council on 1 September 1945.

Chapter Six

At the Council on Foreign Relations, New York City

At the corner of 68th Street and Park Avenue in New York City stands an exquisite limestone mansion built in 1920 for Mr and Mrs Harold Irving Pratt. Harold’s father, Charles, had been an oil baron whose Astral Oil merged with the Rockefeller empire in 1874. The Pratt House was occupied by the family until about 1940, and then stood empty and boarded up for a while. In 1944, the Council on Foreign Relations asked Harold’s widow if she would donate the property to the Council for use as its headquarters. Following her agreement, the building reopened in its new role just a few months prior to my arrival in fall 1945. With its marble floors, elegantly proportioned rooms, lofty purposes and constant procession of the high and the mighty, it was, I must say, an awe-inspiring workplace. Aside from publishing the then-quarterly (now bimonthly) journal Foreign Affairs, the Council’s major activities were threefold. First, study groups, composed of senior government officials, scholars, and members of the press, met

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regularly to discuss major issues of national and international policy. Second, a series of lectures was delivered by top U.S. officials, such as the Secretary of State, to a select number of Council members. Third, United Nations ambassadors and other international dignitaries were periodically invited to introduce discussions and to meet with large numbers of invited members. I participated in all these activities, under the supervision of Percy W. Bidwell, the director of research. The study groups were my main responsibility. They gave government officials an extraordinarily valuable opportunity to take soundings on new or contemplated provisions of government policy in complete confidence. It was understood that the discussions would not be referred to in any way whatsoever. As rapporteur, I was responsible for recording the exchange of ideas in a coherent form. These reports were embalmed in the Council’s archives. A study group would consist of about twenty men. (Reflecting the times, there were no women in any of the groups.) At about 5:00 p.m., the participants would gather in one of the building’s classically charming rooms. I had been instructed by Percy Bidwell to wear a tuxedo and black tie, mirroring the attire of some of the study group members. Waiters outfitted in red jackets and blue trousers would first serve us cocktails. During the initial half-hour, a member of the group would introduce the evening’s subject. Thereafter, we would be served dinner in an adjacent dining room. We would then return for focused discussion until about 8:30 or 9:00. The chairman of the study group was always a distinguished scholar or an authoritative journalist from the New

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York Times or Washington Post. The issues that commanded the groups’ attention included such matters as Treasury and Fed policies, the establishment of an international trade organization, atomic weapons, nuclear energy, and the functioning of the CIA and National Security. It would be difficult to overestimate the contribution these study groups made to those at the highest reaches of government. The discussions led to clarification, improvement, and new ideas, as well as the abandonment of ill-conceived measures. Wherever confidentiality is feasible, study groups of this kind can play a significant role in improving national governance. At the Council’s study groups, renowned professors of economics often brought accounts of their work as consultants to the government. Jacob Viner, for example, served as a consultant to Secretary of the Treasury Henry Morganthau; John H. Williams of Harvard served as an economic advisor to the Federal Reserve Bank of New York. Secretary of State John Foster Dulles often delivered formal lectures to large audiences at the Council. Herbert Feis, economic advisor to President Roosevelt, and Soviet foreign minister Andrei Gromyko appeared at special meetings; both were to play significant roles in my future relations with American and Soviet officialdom. Salient among the Council’s contributions to U.S. postWorld War II international economic policies was its work on multilateralism. In several study groups for which I was rapporteur, leading American economists and government officials prepared the legislative framework for multilateral trade, investment, and aid policies. The groups provided the officials with cogent arguments with which they could

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counter the protectionist claims expected from vested interests at Congressional hearings. (Generally, multilateralism has served the United States and the global economy well. However, from 1994 to 2009, the U.S. signed fifteen bilateral free trade agreements that weakened the multilateral basis of both the General Agreement on Tariffs and Trade (GATT), which, in 1947, replaced the Reciprocal Trade Agreements program, and the World Trade Organization (WTO), created in 1996.) Through study groups and discussions with Viner and Williams, I had been privileged to learn of the general position taken by U.S. officials on the role of Britain in the postwar international order – a position that has at times not been accurately represented. Issues such as International Monetary Fund (IMF) quotas, imperial preferences, and a large U.S. loan to Britain are illustrative of the different national interests that were involved, as well as the fundamental objectives of the U.S. in regard to Britain. John Maynard Keynes led the British negotiating team at the Allied economic conference at Bretton Woods, New Hampshire, in July 1944, where the U.S. Treasury was represented by Harry Dexter White. Keynes believed that Britain would suffer from postwar trade deficits (balanceof-payments crises), and that it was therefore in Britain’s interest to have a large quota in the IMF, i.e., to make a large contribution to the Fund and to have the right to draw on correspondingly large amounts of financial assistance when necessary. Access to substantial dollar balances would help Britain finance its external deficits. The U.S. Treasury believed that such large quotas would tend to delay the process of economic readjustment in

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Britain, and that the dollar balances would rapidly be exhausted, rendering the IMF inoperative. White therefore argued strongly against the British position. A compromise was reached that largely reflected the American argument. Nevertheless, Keynes held White in high regard, considering him an able economist who worked arduously for the establishment of a satisfactory postwar international economic order. According to Viner’s reports on the negotiations, there was never any doubt about the U.S. government’s commitment to work toward the restoration of Britain as a healthy, world-class economy. A strengthened Britain in Europe was understandably regarded by most negotiators as a positive contribution to the Western and U.S. balance of power. However, Keynes’s biographer, Robert Skidelsky, has suggested that the U.S. government sought to keep Britain weak in order to prevent it from re-emerging as a challenger to U.S. hegemony.3 (By implication, at least, Skidelsky ascribes these allegations to Keynes.) According to Viner’s lectures and discussions, these are erroneous interpretations of U.S. policies. And I have not been able to find any such allegations in Keynes’s published writings. In fact, at the closing of the Bretton-Woods conference he said, “We have shown that a concourse of forty-four nations are actually able to work together at a constructive task in amity and unbroken concord.”4 However, Keynes was chagrined by the fact that the U.S. Government refused to grant Britain an interest-free loan. He believed that charging interest was out of tune with the underlying realities and that American negotiators were using a false analogy in treating Britain as a corporation. He wrote his mother: “They mean us no harm – but their minds

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are so small, their prospect so restricted, their knowledge so inadequate, their obstinacy so boundless, and their legal pedantries so infuriating. May it never fall to my lot to have to persuade anyone to do what I want, with so few cards in my hand.”5 A controversy did arise about Britain’s use of “imperial preferences” in the postwar period, a controversy in which Herbert Feis participated and in which I became involved. Keynes argued that British trade preferences favoring former colonies such as Australia, New Zealand, and Canada should be maintained as part of a “common market” in which tariffs and other trade restrictions would be lower than those faced by the rest of the world. White disagreed. He argued that the preferences were not part of a common market and would be an impediment to building a freer trading world. Viner also disagreed with Keynes, arguing that if a common market were established, the overall lowering of trade restrictions would also be of benefit to the United Kingdom. The Council on Foreign Relations also played an indirect, intermediary role in these negotiations. While the controversy over imperial preferences was not resolved, this was not construed as a debate on the balance of power in the postwar world.

Hamilton Fish Armstrong, head of the Council and editor of Foreign Affairs, commissioned Herbert Feis to write an article on imperial preferences, but Feis fell ill and was unable to work on it. Since I had discussed the problem with him on several occasions, he suggested to Armstrong that I collaborate with him on the article. This entailed my spending

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time at his home in Georgetown, Washington, DC. In effect, we wrote the article together, and Feis graciously submitted it under both our names. What neither of us knew, and Armstrong had to tell us, was that, as an employee of the Council, I could not be named as an author. I therefore contented myself with an acknowledgment. Meanwhile, Fleis and I had become friends. He and his wife had met Emily, who was expecting a child, and they had suggested that the baby be born in their second home in Yorktown, Virginia. More presciently, Feis told me that, should I ever need immigration assistance, I should not hesitate to call him. Before Emily joined me in New York in 1945, I had a room in International House on the Columbia campus. Whenever time permitted, I worked on my dissertation at the university library. Life was lonely. On a Sunday morning in early October, I went downstairs to the telephone booth (there was no telephone in my room) and called Emily’s number at her dorm in Chicago. The operator asked me to insert $2.75 in coins for three minutes. I had no money. Emily answered the phone, and the operator again asked for $2.75. I told her and Emily that the call would have to be collect. I heard the coins drop. Ding, ding, ding, Two dollars had been collected. The operator said, “Seventy-five cents more, please.” Ding, ding, ding. “Twenty-five cents more, please.” At that point, I could wait no longer. “Emily,” I said, “will you marry me?” She replied, “With this investment, how could I refuse?” Apparently, there is something to be said for proposing collect. I returned to Chicago for our wedding on 17 November

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1945. Emily’s mother knew that I was usually late for social occasions. She told me that the wedding would be in the beautiful chapel on the Chicago campus at 7:00 p.m. I arrived just in time, only to be told that Mrs Kuyper had made the arrangements for eight o’clock. It was a wonderful wedding, and even though I had thought it improper to notify members of the economics department of the event, the chairman, Simeon Leland, somehow found out about it and was gracious enough to come. I had temporarily rented a room for us in a large flat on 122nd Street, near Columbia University. We shared kitchen facilities with two other couples. In the evenings, we watched warships gliding down the Hudson River, every deck crammed with soldiers returning from the western front. Finding an apartment in New York was extremely difficult. Discrimination against Jews was rife, and one had to pay a substantial amount in “key money” as a bribe. We eventually found a satisfactory apartment in Queens. From then on, our lives were lived at two poles: on the one hand, a salary of $4,000 a year and strict rationing of practically everything; on the other, the glittering dynamism of New York, with dinners at the tables of high society. During the week, Emily would take the subway and meet me for lunch in Central Park. Every meal was a picnic. We would visit the zoo and, on occasion, take a walk through the Frick Museum, which was only a few blocks away. Emily’s breakfasts were noteworthy. I had had no idea that she was a wonderful cook. On our first Monday morning in Queens, I strode into the kitchen for breakfast to find a magnificent plate of scrambled eggs and bacon surrounded by

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slices of pineapple and freshly baked buns. In keeping with her Dutch tradition, the coffee was just right. On Tuesday morning, the pineapple was replaced by baked bananas and a little apricot jam. This pattern continued on Wednesday and Thursday. However, on Friday morning, I sat down and found some porridge. Baffled, I said to Emily, “Only a loving and devoted wife would take time to make the kind of breakfasts we’ve had the last four days. How come, today, we only have porridge?” She replied, “I’m not hungry this morning.” Years later, I told this story to a close friend. With a wink, she said, “Maybe that was your fault, Jack!” (My friend was the daughter of a missionary.) Our social life was conducted at a social echelon to which we were unaccustomed. George Franklin, son of a New York banker who was known as Number One Wall Street, held an administrative position at the Council. Politically, he was well-balanced and serious in purpose, and we had a friendly association. George was in his early thirties and lived with his mother. On several occasions, he invited Emily and me to dinner. Half in jest, he told us that his father took him to Europe with the express purpose of teaching him, while they were afloat, how to drink dry martinis. George was well-versed in the stock market and, I surmised, devoted much of his time to managing his portfolio. I learned from one of his friends that on weekends the two of them often flew to Bermuda to play golf. At his dinner parties, the elaborate offerings were prepared by professional caterers. When we were finished eating, the men would retire to one room while the women were escorted into another. The men’s discussions were always

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more formal than personal, and great importance was attached to social ritual. On one occasion, after we had been talking for about fifteen minutes, George literally jumped out of his chair and hurriedly walked to a desk, apologizing; he had forgotten to distribute cigars. Other social activities were of a more relaxed nature. For example, professional economists who were members of the Council frequently invited me to lunch at the Waldorf and other New York hotels. By the end of 1945, Emily was pregnant. It was practically impossible to get meat at the butcher’s, so we had to rely on the special connections of a neighbor who worked in a restaurant to obtain a pork chop or a slice of beef for Emily each week. We received a call one day from my half-sister Shelia and brother-in-law Abrasha, who invited us to join them for dinner. Emily and I understood that this was a family “reconnaissance” mission. At the time, mixed marriages were an extremely rare occurrence among Montreal Jews. I had not even discussed my marriage to Emily with my father. Perhaps mistakenly, I had decided to marry her first and introduce her to the family later. I knew that some members of the extended family would not take it well. But Abrasha had good taste. He liked Emily, and so did Shelia. They reported back to the rest of the family, and before long Emily became my father’s favorite. However, I was becoming concerned about my future employment. Although the principal of McGill, Cyril James, had told me that I could have a junior appointment there after I had finished my PhD prelims, I thought it would be preferable, for both professional and personal reasons, to

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seek a position at an American university. But my prospects seemed uncertain. Before I had left the University of Chicago, Professor Schulz, my friend Bert Hoselitz, and I had prepared separate papers on the Reciprocal Trade Agreement Program, which were submitted to a Congressional committee. I asked Emily to forward my paper to several leading economists, including Jacob Viner, in the field of international economics. Not only did most of them acknowledge receipt of the paper, but several inquired if I would be interested in working at their institutions. One such letter came from Professor John Condliffe at the University of California in Berkeley. He mentioned that he was coming to New York and invited Emily and me to lunch at the Faculty Club at Columbia. At the close of the luncheon, he offered me an appointment as a Sloan Fellow at $4,000 per year, for a period of at least three years. This would not be an appointment to the Department of Economics, and it therefore carried the risk that I would not be kept on. Nevertheless, Emily was enthusiastic. I therefore told Condliffe I was interested but that I had to discuss it first with McGill. The Sloan stipend was slightly higher than the salary at McGill, but I strongly felt that money should not be the decisive consideration. More important was the fact that Berkeley offered me the chance to work primarily with graduate students; at McGill this would not have been possible. I called Principal James and asked for his advice. He was hesitant: did I want his advice as principal of McGill or as a friend? I asked for his advice as principal. “You have made a tentative commitment to come here,” he said, “and I think you should.”

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“And what would be your advice as a friend?” “Take the first train to Berkeley.” I called Condliffe and accepted his offer. But at that moment I had no idea of the difficulties I would encounter with American and Russian immigration authorities. When I told Bidwell of my plans to leave the Council, he suggested that I consider a longer-term appointment. Satisfying as my work for the Council had been to me, I told him that I would prefer an academic career. He went on to mention that Gromyko was due to introduce a discussion at the Council on Friday evening and he hoped I would come. Oscar Lange, a former professor of mine at Chicago who was now Polish ambassador to the United Nations, would also be there. Gromyko, speaking in English, took a moderate tone. However, the members of the Council who came up to speak with him were highly critical of the Soviet Union, expressing themselves in language that was far from diplomatic. Gromyko clearly felt that the members were not being respectful, and his responses became curt. As a larger crowd gathered around him, the atmosphere grew cold. To break the ice, Professor Lange came over to me and asked if I would like to meet Gromyko. I very much wanted to, but felt I should wait a while. The meetings usually adjourned at 9:00, and it was now 8:30. At about 8:45, I told Lange that I would appreciate his introducing me to Gromyko. Lange told Gromyko that I had been one of his students at Chicago, and that I had assisted him in writing a book on price flexibility and employment. I shook Gromyko’s hand and asked him if he would be good enough to explain to me an argument he had used in his PhD dissertation on investment in agriculture.

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“You read my thesis?” he asked. I told him that we had a draft of it at the University of Chicago, and that I had used it in my work. As anyone who has earned a PhD in economics knows, a question about one’s thesis is likely to elicit an hour’s reply. Gromyko began to speak about his dissertation and then said, “Let’s go and sit down.” At nine o’clock, Armstrong was about to put the lights out. Gromyko waved to him and said, “We’ll be a few more minutes.” He was an excellent expositor and answered my questions incisively. A week later, this meeting proved to have been invaluable. The morning after the talk, Bidwell told me that Gromyko had asked Armstrong for some assistance. He would be speaking at the United Nations and needed clippings from the New York Times and the Washington Post. The Council had complete clippings on key international issues. Bidwell asked me to deliver a batch of those clippings to Gromyko, who was staying at Rockefeller Center. Bidwell told me to go to Room 2500. On arrival at Rockefeller Center, I pressed the elevator button for the twenty-fifth floor. When I got out of the elevator, the floor appeared to be empty. There were no knobs on the doors. As I approached one door, I saw it was covered with green felt, similar to the covering of a billiards table. I tried to push the door open, when a man shouted, “What do you want?” I told him I was looking for the office of Mr Gromyko. “There’s no Gromyko here!” he said. “Get out!” I asked him if he would please inquire as to the number of Mr Gromyko’s room. He called the front desk and was told that it was Room 3500. I took the elevator to the proper

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floor and delivered the clippings to Gromyko’s secretary. Many years later, when I told this story to a group of people in Berkeley, a visiting professor from Wales, Brimley Thomas, interrupted me. “Did you say you stopped on the 25th floor? That’s where I was working.” He explained that the floor was assigned to Operation Intrepid, part of the U.S. Lend-Lease program devised by President Roosevelt that provided military and other supplies to Allied nations before the U.S. entered the Second World War.

20 July 1946. A heat wave enveloped New York City. At five o’clock in the morning, Emily’s water broke. I obviously had to rush her to the hospital, but we had no telephone. I ran to a corner grocery store, knocked on the window, and after a short while a man appeared, pulling up his trousers. I shouted about an emergency, and he let me in to use the phone. Our taxi driver took no notice of speed limits or red lights, but when we arrived at the hospital Emily was consigned to a waiting room, where she lay for several hours before a doctor appeared. At least three other women were similarly affected by the heat wave and were lying on gurneys awaiting attention. The doctor told us, without elaborating, that the delivery was going to be extremely difficult. Indeed, he needed the help of a second doctor and a nurse to deliver our son, Hugo. The baby’s weight was less than five pounds, and the doctor cautioned me that any attempt to have more children would be ill-advised. This was now Saturday, about 1:00 p.m., and I heard the doctor invite his associate for a round of golf.

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We began making plans to leave for Berkeley. I inquired about my immigration status with the INS and was informed that I would need to exchange my student visa for a permanent one. This could be done by presenting myself to the U.S. consul in Niagara Falls, Canada. I called the consul, and he told me to bring along my passport and birth certificate. There was a problem. I had no birth certificate, and the one in Uman, Russia, would be virtually impossible to procure. The consul advised me to go to the Soviet Consulate in New York and request a simple statement of place and date of birth. He assured me that this would be willingly provided. The consulate is located just a few blocks from the Council on Foreign Relations. I called and asked to speak to the consul, who told me to come over and obtain the statement. When I arrived, the doors were closed. I rang the bell, and an officious young man peered through the glass door, opened it slightly, and asked what I wanted. I said I had spoken with the consul and would appreciate seeing him. The doorkeeper let me in, pointed to a bench, and told me to wait. It was a little past 1:00 p.m., and I planned to leave for Niagara Falls as soon as possible in the hope of getting the permanent visa before the U.S. Consulate closed, or the next morning at the latest. I sat and waited for about half an hour and then asked the doorkeeper if the consul was available. He said the consul wasn’t on the premises but would return soon. I waited another three-quarters of an hour, when suddenly the young Russian sprinted to the door and let a man in. He then rushed back to see that the elevator was ready for the VIP. It was Gromyko!

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As the foreign minister walked in, he waved and said hello to me. He strode to the elevator as the young man held the doors open for him. The factotum then excitedly came back to me. “You know Mr Gromyko?” he asked. I told him that Gromyko was a friend of mine. Barely catching a breath, he asked me to accompany him to the consul’s office. There the consul sat. The young man said to him: “On znyaet Gromyko!” (“He knows Gromyko!”) The consul apologized for the young man’s negligence in keeping me waiting. I graciously accepted the apology. I then told him the place and date of my birth, and in less than ten minutes a secretary provided me with the statement I had requested. It was late Friday afternoon before I could get a train to Niagara Falls. On Saturday morning, the U.S. Consulate was closed; I therefore had time to enjoy what was, in those days, the pristine atmosphere of the falls. I noticed, to my surprise, that a gondola ran, suspended, over the Niagara River. I purchased a round-trip ticket without even thinking about it. As the gondola began to cross the river, I saw nothing but tall trees and shrubs on both banks, while far, far below was the vast, ceaseless torrent. The sight unnerved me, and I wished I could undo my absurd decision to take this perilous ride. Now, not only did I have to get to the other side, but I had to endure an equally terrifying return trip. By the time I got back to my lodgings, my appetite for entertainment had been purged and my sole preoccupation was my meeting with the U.S. consul on Monday morning. It was 9:00 a.m. when I arrived at the consulate, but the consul was not there. He had gone on a vacation. I told the

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man in charge about my telephone conversation with the consul, handed him the documents I had been told to bring, and requested the permanent visa. The man told me that I must have misunderstood the consul’s instructions. In order to obtain a permanent visa, I would have to apply to the U.S. Immigration and Naturalization Service for a number under the U.S. quota for my country of origin. Looking at my passport, he said, “You were born in Russia.” He wondered where I went to school. I told him, McGill University. “You know,” he said, “there have been some Communists at McGill lately.” His attitude was bureaucratic and distant. He asked me what I was doing in the United States. I told him about my Rockefeller appointment at the Council on Foreign Relations, about my new job at the University of California, Berkeley, and that my wife, who had recently given birth, was an American. We were looking forward to leaving for California and my new job as soon as possible. The Russian quota, he said, had been filled for some time, and he had no idea how long it might take to get on the next quota. I told him that I had a commitment to start working at Berkeley in September. I could not now re-enter the United States, because I had had to surrender my student visa before crossing the border. I asked the man if he could please get in touch with the consul so that I could speak with him. The consul had left instructions not to be disturbed. There was nothing the man could do. I told him I would have to call the Council on Foreign Relations to see if officials there could help me. He asked about my work at the Council. I told him it was quite professional, that I was a junior economist, and would now

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be pursuing an academic career in the United States. It was important for me to get to California. “When was the University of California founded?” the man asked. I said I thought it was in the latter 1860s. “They’ve gotten along well without you, haven’t they?” he blurted. I tried to suppress my rising anger. Would he please try to get in touch with the consul, I repeated. He would try. I sat and waited in the office until 5:00 p.m. No word came. I returned to the consulate on Tuesday morning, sat and waited all day. No one paid any attention to me. This continued through Wednesday and Thursday. I felt at a loss. By Friday morning, further waiting appeared useless. The idea came to me that I should call Herbert Feis, who I was sure would be capable of intervening in the matter. I went to a telephone booth outside the consulate and managed to reach him. I related my predicament. He told me to stay in the telephone booth and he would see what he could do. I sat in that booth for more than two hours. Then the telephone rang. Feis said, “A number has been granted to you. Someone in Shanghai was in the quota but failed to use the number, so it has now been transferred to you.” He mentioned that his friend Justice Charles Evans Hughes, who had been chief justice of the U.S. Supreme Court from 1930 to 1941, had been most helpful. The information had already been submitted to the bureaucrat in the consulate. I returned to the consulate, where the man who had been so obdurate only days before was now all accommodating. He wondered what I was doing for the U.S. government. No one could get a quota number unless he or she were doing something important. He assured me that he could

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be trusted with confidential information. I thought it was best not to be drawn into unnecessary conversation with this person, so I merely repeated that I was eager to get my wife and child and leave for California. He persisted. He was having a small dinner at his home that evening and wondered if I could attend. He then broached a personal matter. He had been stationed in Spain, transferred to Niagara Falls, and now wished to go elsewhere. Perhaps I could be of assistance to him? Offended by his opportunism, I politely declined. With documents in hand, I still had to remain in Canada for six weeks, until all immigration procedures were completed. I spent much of that time in Montreal with my father and sister Bronia. Finally, I was able to return to New York. Emily and Hugo were no longer there. Her mother had come to the city, helped with the packing, and taken them to her home in Des Moines. I completed my work at the Council. It seemed a long time without seeing Emily and our young son. Happily, we were soon reunited in Berkeley, for our new life at the University of California.

Chapter Seven

My Coming West: The Berkeley Environment 1946–1951

Yale and Harvard provided the intellectual stimulus for the spectacular development of the University of California, Berkeley. The roots of the university go back to the middle of the nineteenth century. On 23 March 1868, the state governor signed into law the Organic Act, creating the university. In effect, it was a merger of two fledging institutions: the private College of California, in Oakland, and a new state land-grant institution, which was to specialize in agriculture, mining, and mechanical arts. After much controversy in the state legislature over the objectives of establishing a university, the Organic Act defined its mission as organizing a full-fledged institution that would conduct research and teach in the natural sciences, mathematics, social sciences, humanities, and the arts. The university was opened in 1869 in Oakland with a faculty of ten and forty students. In 1873 a small group of California officials were joined by officials from Yale to select a site for a spacious campus in Berkeley. Two buildings were constructed – South Hall and North Hall – which opened for instruction in May

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1879. Generous funding by the state legislature enabled the university to combine a distinguished faculty with the most modern technology and equipment in order to induce young scholars from around the world to join in innovative research. (The National Research Council, in its most recent report, ranked Berkeley number one in the nation in the number of graduate programs offered.) This emphasis on distinguished research and the love of teaching were the principal reasons for my wish to seek an academic career at the University of California, Berkeley. After a three-day transcontinental train journey that passed through the unforgettable Sierras, I was met at my Berkeley destination by Professor Howard Ellis, the most eminent member of the department at that time, and his wife, Minnie, a former opera singer in Vienna. We had dinner together at a cozy restaurant on University Avenue, and they then dropped me off at a private home where I had rented a room. Next morning, I walked to my new office in California Hall on the university campus. John Condliffe had hired two other men who were also working on their PhD dissertations. We all had spacious accommodations, entirely consistent with what Condliffe had described. One issue, however, preoccupied me: what relationship, if any, would I have with the Department of Economics, which I was intent on joining? In the early afternoon of that first day, I asked my two new colleagues how I might find a furnished flat. “Extremely difficult,” said one of them. “As scarce as hen’s teeth.”

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They suggested I inquire at the premier realtor in town, Mason-McDuffie, situated several blocks from the campus. When I entered the Mason-McDuffie offices and told an agent of my interest, he laughed and said nothing was available. If I wished, however, I could speak to a lady who was sitting behind a counter in the corner. In her late sixties or early seventies, she was wearing a brownish wig tilted over one ear. I asked her if she might know of a place I could rent. “Are you at the university?” she asked. “Yes, I am.” “Are you married?” “Yes.” The next question was more puzzling: “Do you have a child less than six months old?” I told her our son was two months old. The last question was even stranger: “Does the family come from the Middle West?” Pella, Iowa, fit the bill. Feigning anger, she told me to go upstairs and tell Mr McDuffie that she had more things to do than play games, and that I appeared to have passed his test. I took no heed of this message and merely ran upstairs. There, I met an imposing gentleman who said he was about to go into a meeting with his board, which would last ten to fifteen minutes. I waited in his spartan office – nothing but a roll-top desk, a telephone, and a chair. After about ten minutes, he returned. His house, he told me, was at 11 Roble Road. He and his wife had a chauffeur who had been living in a small furnished flat upstairs but had married and moved out. The McDuffies

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were now inclined to rent the flat to a junior member of the university faculty. Duncan McDuffie came from the Midwest, and he preferred to rent the place to a young family from that region. Since they had a large garden, they wanted to be sure that any child was young enough not to destroy the azaleas. He offered to show me the quarters right away; his chauffeur and car were waiting downstairs. The flat was accessed via a door and staircase immediately inside the entrance of the luxurious home. A living room (with ample space in a corner for a crib), a goodsize bedroom, and a kitchen were all well furnished. The rent, McDuffie told me, would be $66.00 a month, including all utilities except telephone. It was a godsend! But when I said I would take it, he informed me that the final decision was up to Mrs McDuffie. We went downstairs to find Jean McDuffie – a tall, handsome woman – reclining on a lounge. A barrage of questions followed, ranging from my general intellectual interests to what I considered to be the main economic problems facing western Europe. She also asked for my references. I told her of my work at the Council on Foreign Relations and my association with Professor Condliffe. She scribbled notes on a piece of paper, which she then stuck down her bosom. “We know Professor Condliffe. I’ll speak to him and call you around eight o’clock.” She rang on time and said we could move in at our convenience. The semester at Berkeley was just beginning. Condliffe was scheduled to teach three courses, one of which was a graduate seminar in international trade theory. This was not his primary interest and he asked me if I would like to teach it.

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Having covered this material with Viner, I thought it would not give me much trouble. However, the thought crossed my mind that the chairman of the department, as well as other faculty members, might react adversely to my gaining entry to a teaching position via the back door. A competent candidate for a faculty position, Alexander Gerschenkron, had previously been rejected on such grounds and had been obliged to leave the university. He landed a junior appointment at Harvard, where he went on to become the doyen of American economic historians, but in 1946 I had no basis for expecting that I might fall out of favor at Berkeley and find academic glory elsewhere. The risk of losing everything was great. Nevertheless, I decided to take the assignment. It turned out to be the most difficult course I would ever teach. It covered the most advanced literature of the time on international trade theory. About twenty students registered for the seminar, all men. Among them were the two other Sloan fellows and several GIs. They were a remarkable group – intellectually gifted, highly motivated, eager not only to master the literature but also to contribute to it. Each student was assigned a research topic on which he would write a paper that the group would discuss. At the end of the semester, I submitted the grades to the chairman of the department, Malcolm Davisson. Several days later, the chairman’s secretary asked me to see him. He told me that he had heard about the seminar and asked if I would be interested in teaching next semester’s undergraduate course in international economic theory, which would give me an entry into the Economics Department. He cautioned me, however, that Condliffe was unusually successful in raising grants, thereby drawing the resentment of several

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members of the department, who envied his influence. To obtain a long-term appointment in the department, I would have to gain the confidence and support of conflicting faculty interest groups. It would not be an easy task. I asked Condliffe for his advice. He told me that the chairman had already spoken to him about the matter, and he was glad to support my teaching the undergraduates. To my surprise, he raised a further possibility. Professor James T. Shotwell, then head of the Carnegie Endowment for International Peace, had asked him to commission a study on the Reciprocal Trade Agreements in the world economy. It would be published by King’s Crown Press in the United States and Cambridge University Press in England. In lieu of royalties, the author would be paid a fee of $500 – at that time, a considerable sum. I had met Shotwell at Columbia University, where, in collaboration with the Council on Foreign Relations, he had organized a small meeting of experts to discuss the probable impact of nuclear energy. Among the economists attending that meeting were John M. Clark and Jacob Viner. At the close of the session, Shotwell had asked me to prepare a brief on their discussion. We also had a short chat, during which Shotwell told me of his theory of economic history and graciously gave me as many copies of his books as I could carry! It may have been at his suggestion that Condliffe urged me to undertake the Carnegie assignment. It would mean postponing work on my dissertation, but I felt an obligation to accept. An appointment at Berkeley comes with a dangerous pitfall: the temperate climate and the charms of San Francisco have frequently lured new faculty into the temptations of

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leisure, with tragic consequences. The victims realize too late the university’s strict publication demands. I did not fall into that trap. Teaching three courses each semester, one of which was often new for me, was a time-consuming task. Furthermore, at a salary of about $4,000 per annum, it was difficult to make ends meet. I therefore undertook to teach an additional course for the extension service (Berkeley’s non-degree classes for the community at large), a course that met bi-weekly in San Francisco. I finished the Carnegie assignment in record time. It appeared in early 1948 as a small book and contained conclusions still relevant to U.S. international economic policy. The data I presented showed that wages in American export industries were significantly higher than those in industries producing primarily for the domestic market. In addition, industries that were protected by the highest tariffs had the lowest wages, and vice-versa. Generally, the major export industries operated under the freest trade conditions. Another finding was that the most protected industries were least likely to move into higher-valued production. Nonetheless, the book argued in favor of qualified – rather than unqualified – free trade. The Economic Journal, published by the Royal Economic Society in Cambridge, England, made favorable reference to the book. Similarly, the New York Times drew attention to it on its first business page. I took the Times home and showed it to Emily. “We will add this to the other clippings,” she said. Since this was my first publication, I wondered what she had in mind. She soon appeared with two large folders – filled with clippings about her piano recitals! Two years

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later, I was surprised to receive two copies of the book in Japanese. The publishers included a note: “We hope you will enjoy looking at these.” I did. Socially, our first three years in Berkeley were very different from the later years. Town and gown were then closely associated, conjoining at dinners, dances, and even literary readings. The McDuffies were at the top of the social pyramid. But Duncan McDuffie’s right hand shook a little from palsy, and age was beginning to take its toll on Jean McDuffie, too. They therefore often asked Emily and me to serve as co-hosts, showing faculty guests around their magnificent garden prior to cocktails and dinner. On the second Friday after we moved in, I came home at around 5:30 p.m. and found Emily disturbed. “Who does she think she is?” Emily asked me. Jean McDuffie had called several hours previously, and invited us for dinner at 6:30 p.m. But she hadn’t asked if we were free – she merely put down the phone. Despite this discourtesy, at the appointed time we put Hugo into his stroller and went downstairs. Suddenly, I heard a loud laugh that I recognized from the inaugural meeting of the new term. It was the president of the University of California. At the inaugural, the president’s assistant had told me of one occasion when the president had called the governor of California in Sacramento. “He spoke so loudly that the governor asked why he was using the phone!” As we walked toward the McDuffie reception room, a butler came running to assist us and Jean McDuffie extended greetings.

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“Mr. Letiche, Emily, I would like you to meet President Sproul and David Rockefeller.” After cocktails, we went into the round dining room for dinner, during which President Sproul entertained the group with a stream of engaging anecdotes and bons mots. After dinner, we moved to the large living room where Jean McDuffie settled on a bench in front of a huge fireplace. Her husband sat on a plain chair to her right, and Emily and I were seated at the center of the horseshoe grouping, the guests taking their places to Jean’s left. As was her custom, she plunged her hand down her décolleté and withdrew a small piece of paper. “Mr. Letiche,” she began, consulting her note, “what do you think about … the need for the U.S. government to assist in European reconstruction?” Happily, this was a question with which both I and the assembled guests had been engaged. I merely had to set the ball rolling and a lively exchange of ideas was quickly underway. Over the next three years, Emily and I would be invited about once a month to dine with the McDuffies and their guests. Our social life with members of the Department of Economics took a different form. The university and its department presented different faces to insiders and outsiders. To the world at large, they appeared to be well-integrated, harmonious entities. In reality, factious tensions prevailed. In our own department, a serious conflict had emerged between two groups – one that emphasized economic theory and quantitative methods, and another that emphasized more institutional, historical work. Although I made every effort not to engage in political controversy,

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members of the first group treated me as a supporter and would even call to advise me how to vote at departmental meetings. I would tell them that I appreciated their calls but would have to hear all sides of an issue before making a voting decision. With respect to research proposals, I would vote solely on the basis of quality, disregarding the particular approach being taken. I therefore developed a consultative role with practically every member of the department, an arrangement with which I was most comfortable. I became professionally and personally close to Professor Ellis. Like Emily, he was an Iowan, and their speech shared a similar cadence. Howard became very fond of Emily. He and I became close professional and personal friends. I admired his superlative writing style, he respected my theoretical criticism, and we therefore became excellent collaborators. Howard was my staunchest ally in the department, though I should add that virtually all my colleagues were consistently supportive of my work. The mobility of economists in the latter 1940s was extremely high, with many serving in domestic and international government affairs. I was no exception, maintaining my contacts with the Council on Foreign Relations. One day, a banker whom I had met at the Council called and requested that I meet with Amadeo (A.P.) Giannini, the legendary founder and chairman of Bank of America. I was to inquire whether he would be interested in joining several banks on the eastern seaboard in the development of a program of financial assistance to western Europe. Although Giannini’s assistant had arranged an appointment for me, the old banker stood at the door of his office with a look that seemed to be mulling whether he would see me.

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I had to walk a considerable distance before reaching him; I quickened my pace as I approached. He was a large, imposing man, with the most enormous head and face I had ever seen. To my left, there was an elevated platform on which three or four men were working at their desks, constantly under the master’s eye. Giannini shook my hand, waved me into his office, and said, “Shoot!” I spoke briefly and he responded without hesitation. He had just returned from Latin America, where he and other bankers had discussed providing reconstruction assistance to several governments. The risks, he said, were too high. It was not for private banks to engage in government lending. As for western Europe, he thought the fundamental needs of industrial expansion, of re-establishing a multilateral trading system, and of counteracting the spread of Communism called for the assistance of the U.S. government. I reported his views to the banker who had sent me on the mission. When I discussed them with President Sproul and David Rockefeller at the McDuffie dinner party, the two men strongly agreed. As a teacher, with respect to important matters I have emphasized the need for my students to develop a sense of balance and proportion. But among scholars, including myself, this principle has been more honored in the breach. A renowned Swedish professor of economics, Erik Lindahl, called this to my attention in a very personal way. Lindahl was visiting Berkeley as a Rockefeller fellow, but the department could not provide him with an office. I was ensconced in a temporary building, really a wooden shack. I invited Lindahl to join me, and we worked nearly every day until about 10:30 p.m. I was writing my dissertation, and he

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was preparing a lecture to be delivered in Sydney. After the first evening of work, I asked him if he would like to join Emily and me for coffee and dessert in our flat, and this immediately became a custom. One evening, two senior professors and I delivered lectures at a university affair. When Lindahl and I returned to the flat, he gave Emily a burlesque version of my lecture. At first, he showed, I politely referred to the brilliant lectures of the two preceding speakers, my two hands remaining firmly on the lectern. Then things began to change. Practically without emphasis, my presentation began to reveal that the two previous professors were utterly misguided. As the lecture continued, extravagant oratory took over. My (meaning Lindahl’s) hands were flaying the air and my eyes were nearly popping out of my head. Emily and I were in stitches! Lindahl was about twenty-five years our senior, a handsome man with a flock of white hair. Before leaving the men’s room, he would tuck in a slightly protruding tummy, put his right hand over his chest, à la Napoleon, look with satisfaction into the mirror, and then walk out to an appreciative public. On one occasion, Emily was helping him to find a street on a map. I noticed that he did not appear to mind being close to her. But we were completely oblivious to what was happening. About a week after he had left Berkeley, we received a fourteen-page letter from him, a confession that he had fallen in love with Emily. The concluding sentences, however, were written to me. He wondered if I had realized that, for a sophisticated woman, being at home most of the time with a child was hardly a stimulating experience. My habit of working at the university practically every night until 10:30 p.m., he pointed out, was not consistent with my frequent

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emphasis on a sense of balance and proportion. He admonished me to change my ways. I took his advice to heart, and made it a point to spend more time with Emily and Hugo. Another Swedish economist, the future Nobelist Gunnar Myrdal, visited Berkeley in the late 1940s to deliver a lecture. He was on a tight schedule, needing to return to Sweden the next day. I drove him to the airport. On the way there, we fell into an intense discussion. He was advocating that a newly established nation, such as India, should maintain extremely low long-term interest rates. I disagreed, arguing that low long-term interest rates would lead to excess demand for credit. To prevent inflation, the commercial banks would have to ration credit, which would mean discriminatory, ad hoc direction of saving and investment. The outcome, I maintained, would be a form of distorted growth. Myrdal replied that higher real rates of interest would result in stagnation. While that was conceivable, I preferred to take the risk of moving as rapidly as possible toward freer markets and freer trade. Myrdal was about to respond, when we reached the airport. “Come with me while I check in,” he said. We approached a gate. An attendant told us that only passengers could go any further. “I’m Gunnar Myrdal,” declared Myrdal. “He’s my friend, and I want him to come with me to the plane.” The attendant either had heard of Myrdal or pretended to do so, for he opened the door without further protest and we both walked across the tarmac toward the plane. We boarded, sat down in the front row, and continued our discussion. Soon, a stewardess came over and greeted us, and Myrdal showed her his ticket, explaining that I would get off

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in due course. A few minutes later, the stewardess returned and told me it was time to leave. This prompted a further invitation from Myrdal. “Come with me to New York. We’ll be able to talk, and you can catch a returning flight.” While I found this highly flattering, I just laughed and explained that I had lectures to prepare for the following day. Affably, we shook hands and bid each other goodbye. Over the years, we had occasion to meet again, both in Berkeley and Stockholm. My encounter with another visitor to Berkeley had a more concrete outcome, an embarrassing one. Gottfried Haberler, a celebrated professor of international economics at Harvard, and his wife were close friends of Howard and Minnie Ellis, and they came to stay with the Ellises for an extended visit. I had the highest regard for Haberler’s scholarship. Prior to World War II, his International Economics was the most advanced text in the field and I had used it in a course at McGill. Howard invited me to have lunch with Haberler, who inquired about my own research. I told him that about a month earlier I had forwarded my dissertation to Viner. He and Viner knew each other very well. During our discussion, I referred to a chapter in my dissertation, “The Keynesian Contribution,” which piqued his interest. He said he would like to read it. I ran off a copy that afternoon and gave it to him. Several days later, he called and invited me to deliver a lecture on the Keynesian revolution at a well-known Harvard seminar that he led with Professor Alvin Hansen. Considering it an honor, I accepted. A number of weeks later, I received a call from Haberler, now back at Harvard. He spoke hesitantly and said he had

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some disconcerting information. Viner had come from Princeton to deliver a lecture at the Haberler-Hansen seminar and, without citation, had drawn heavily on “The Keynesian Contribution.” Haberler wondered what we should do. I said I would be willing to deliver a lecture based on other material in my dissertation. Haberler was relieved and said he was looking forward to my visit. Emily was livid. I was disappointed with my mentor, but also flattered that so outstanding a scholar would use “The Keynesian Contribution” for his lecture at Harvard. Alvin Hansen had also visited Berkeley, giving a course on business cycles during a summer session. I attended some of his stimulating lectures. On 25 June 1950, the Korean War began with a surprise attack on the South by the North Korean army. Professor William Fellner, who had joined our department from Hungary and for whom I had the highest regard as an economist, argued with virtual certainty that this was the beginning of World War III. Hansen quietly but incisively maintained that this would not be the case. One of them was right. I was walking to a class on international economic policies one sunny morning when a man, whom I took to be a professor, asked me if I could direct him to California Hall. Since that was where I was headed, I suggested that he accompany me. As we approached California Hall, he inquired where room 201 might be. Room 201 was my classroom. This stranger, it turned out, was Jurgen Pedersen, a professor of economics at Aarhus University in Denmark, who was well known as a hot Keynesian. My lecture that morning was to be on the pros and cons of a common market in Europe. I tried to persuade Pedersen

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to give the lecture in my place, saying the students would be much more interested to hear his views than mine, but he declined. In my lecture, I built a case in favor of the common market concept. Pedersen, I saw, was shaking his head angrily. “Would you like to comment?” I asked him. So when I finished, he did. Denmark, he told the students, was importing grain from Argentina and Canada at exorbitant prices. It was also exporting dairy products to England and was being exploited in that relationship by its much more powerful trading partner. He thought that a common market would be to Denmark’s disadvantage. There was loud applause from the students. But I was not convinced. Would not Denmark benefit, I asked Pedersen, from the increased bargaining power of a group of countries negotiating in concert? I wish he had had the opportunity to respond, but at that instant the noon bell rang, signaling the end of the class. As Pedersen and I shook hands, the students again clapped enthusiastically. I invited Pedersen to lunch. As we walked toward the Faculty Club, he asked if I would be interested in an appointment as a visiting professor under the Fulbright program. In effect, it would be under the Smith-Mundt legislation, which assured a higher stipend in U.S. dollars and would entail delivering lectures at the universities in Aarhus and Copenhagen. If Emily agreed, I would be pleased to accept, I told him. But, first, I would have to get my Chicago PhD. Several weeks later, I received a letter from Viner, congratulating me on my dissertation and making one helpful suggestion. Another reader of the dissertation, Professor Lloyd Mints, also made favorable comments. The awarding

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of the degree, however, was contingent on my passing an oral examination given by the Department of Economics. This was chaired by Professor Frank H. Knight and attended by five other members of the department. The questions they asked covered a variety of topics, and I felt I answered them satisfactorily. At the close of the session, I was asked to leave the room. About ten minutes passed as I waited outside for the verdict. The door then opened and members of the committee began marching out, shaking my hand and offering congratulations. Professor Knight remained seated in the room. I joined him, and in a cordial manner he expressed appreciation of the manner in which I had answered the questions. A decade later, a Berkeley faculty member told me that Knight had again supported me at a meeting that decided on the award of a Guggenheim fellowship. After that final PhD hurdle, I felt quite alone as I walked along 63rd Street in Chicago toward the I.C. train for my return to Berkeley. But an unprecedented contentment settled on me, a feeling of having accomplished a singularly difficult task. For the first time in my life, I went into a bar and ordered a margarita, with lots of salt. Then I telephoned Emily to tell her that I had passed. The next challenge was delivering my lecture at the Haberler-Hansen seminar at Harvard. As always, I was confident about speaking without a written text but was nevertheless nervous before “curtain up.” In attendance were luminaries of the Harvard and MIT departments of economics, as well as graduate students. The classroom was full, with several people standing in the back. I presented material from chapters in the dissertation dealing with the new

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relations between the balance of payments, economic development, and growth in the emerging global economy. A stimulating and lively discussion followed. Haberler could not have been more gracious in expressing his thanks. At a dinner afterwards, he asked me about my future plans, and I told him that I would be spending the next year in Denmark. He said I should let him know whenever I was on the East Coast, extending an open invitation to lecture at his seminar. My visit to Cambridge concluded with a splendid weekend tour of New England’s historical sites as the guest of Alvin Hansen and his family. When I returned to Berkeley, I had occasion to see our chancellor, Clark Kerr, with whom I exchanged views on the unique historical environment of Harvard and the relative strengths of the two universities. Kerr said he thought Berkeley offered the more creative environment, dubbing it “the Yale of the West.” More personally, he assured me that, having been granted my PhD, I would return from Denmark to a tenure-track appointment in the Department of Economics.

Chapter Eight

A Landmark Visit to Europe

With the Smith-Mundt contract to serve as a visiting professor in Denmark, we sailed to Europe on the Queen Mary, firstclass, on 4 August 1951. It was a wonderful trip: interesting fellow passengers, fine food, excellent entertainment, and, to my perhaps misplaced regret, an extremely small library designed more for relaxation than for hard work. We disembarked in London with the twin aims of visiting friends and seeking a publisher for a historic economic tract that I had prepared for publication before leaving Berkeley. As we were leaving the ship, a man approached us and asked if we were the Letiches. “Your friend,” he said, “Mr Francis Gaster, sent me to pick you up.” With no fuss, he gathered our luggage and asked us to wait while he got the car. In a short time he was back, at the wheel of a Rolls-Royce. He told us that reservations had been made for us at White’s Hotel. Emily, Hugo, and I were all fascinated

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by our ride through London: the grand elegance of The Mall and Regent Street, Buckingham Palace, Hyde Park … White’s Hotel was situated in a residential area near Marble Arch. As we checked in, I was handed a note from Francis Gaster suggesting dinner at about seven. At that hour, we made our way to White’s Bar, where we met them and ordered dry martinis, which were served to us only after Francis had vouched for us. (Normal protocol dictated that one had to be a member of “the Club” to qualify for a drink.) At dinner, while Emily and Amalie Gaster were conversing, Francis quietly suggested that, next morning, I should see his banker at Barclays about a deposit he had made in my name nearly two years earlier. Intrigued, I inquired as to its nature. It was a fee, he told me, for advice I had given him after a session at the World Affairs Council in San Francisco. On 15 September 1949, I had delivered a lecture there entitled, “Will the Pound Sterling Be Devalued?” I discussed the fact that Britain’s inflation was generating crises in its external accounts, rendering devaluation practically inevitable. Political considerations, I suggested, would influence its timing, but it should be no surprise if the chancellor of the exchequer, Sir Stafford Cripps, were to announce a devaluation the very next weekend. Near the close of the question period, a tall, impressive Englishman stood up and spoke with both clarity and force. My analysis, he conceded, was correct, but my conclusion was mistaken. He had spoken to a senior official in the chancellor’s office several days previously and was assured that the pound would not be devalued in the near future. Unfazed, I responded to this alleged intelligence with a dismissive quip, which raised a chuckle in the room, but the questioner, who was

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Francis, had the last word: “Let us have tea after the close of the session.” He was staying at the luxurious Mark Hopkins Hotel. We took an outside elevator to the top floor, where the view from the bar encompassed vistas of the Pacific Ocean, the Golden Gate, and the Bay Bridge. We took one of the small tables near the bar. Francis explained that his interest in the pound was practical and immediate. He had come to the United States to buy equipment that would be leased to his customers, including the government, in Britain. Credit had been granted to him by Barclays, but it was in pounds sterling, to be converted into dollars at the time of his purchases. I asked him if he had already bought some equipment. Yes, the day before, he had made a large purchase from a firm in Oakland. Since the pound was unlikely to rise, I remarked, it could only remain steady or fall. Why not tell his financial agent to transfer as large a volume of pounds as possible into dollars? He said that at midnight – 8:00 a.m. London time – he would do just that. The following Sunday afternoon, Emily and I heard on the television news that the chancellor had devalued the pound by 30.5 percent, from $4.03 to $2.80. Several days later, we received a bottle of wine, with a note, from Francis. He was deeply appreciative of the advice I had given him. The deposit at Barclays amounted to five hundred pounds, a respectable honorarium. Subsequently, whenever Francis came to San Francisco, he visited with us in Berkeley, and we became close friends. Before leaving Berkeley, we had received an invitation to visit Sir Dennis Robertson, the greatest British economist at the time, in Cambridge. His invitation may have been

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prompted by my reference to his work in my publication on the reciprocal trade agreements in the world economy. When we arrived at his Trinity College quarters in Cambridge, he wheeled in a small food cart glistening with silverware and served us a delicious luncheon. On his mantel was a display of diminutive carved animals. Hugo was fascinated by them and asked if Sir Dennis had carved them. No, he replied, they had been sent to him by former students from around the world. Sir Dennis and Hugo examined them together, piece by piece. When they had gone through all of them, Sir Dennis said he had more in his basement. Excitedly, they both went downstairs to pore over the larger collection. Sir Dennis must have formed a good impression of Hugo’s judgment, for when they returned, he asked if we would like to have our six-yearold enrolled at Eton! We thanked him warmly, but said that we thought it more appropriate if we remained together in Berkeley as a family. Sir Dennis took us for a walk in the Fellows’ picturesque private garden. He also wanted us to see King’s College Chapel, whose massive Late Gothic splendor filled us with awe. Cambridge economists at that time were split into conservative and radical camps, Sir Dennis falling among the conservatives. On the afternoon of our visit, I had an appointment with Piero Sraffa, a well-known Marxist. Given the ideological divide between the two men, my parting was a little awkward, but Sir Dennis eased the moment by breezily saying he had other things to show Emily and Hugo while I was gone. The meeting with Sraffa was not what I had expected. A distinguished Italian scholar, he was preparing the definitive

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volumes of the works of David Ricardo, one of the founders of classical economics. In our conversation, however, he emphasized only Ricardo’s contribution to the labor theory of value and its key role in Ricardo’s theoretical model. While I appreciated his presentation, my attempt to broaden the discussion was not successful. I raised the issue of the empirical context of Ricardo’s analysis and of his role in the debate on Britain’s adopting freer trade and thereby becoming the world’s manufacturing center. But Sraffa would speak only on what appeared to be of interest to him. Nonetheless, our meeting was cordial and constructive. He asked me to send him any writing I might do on Ricardo. Several years later, I forwarded to him a preliminary article on Adam Smith’s and Ricardo’s analyses of economic growth.6 Upon returning to Sir Dennis’s quarters, I asked him about Keynes’s attitude toward students. Biographers of Keynes had hardly touched on the matter. The issue was of personal interest to me because, while working on my PhD dissertation, I had sent a copy of its prospectus to Keynes and requested his views on Britain’s control of capital movements after World War II, in the short and long terms. This was at the height of the war, when Keynes was working at the Treasury. He took a few weeks to reply. His letter began, “Dear Mr. Letiche: You must not ask me to write your dissertation for you.” Nevertheless, he provided a succinct and definitive statement of his views. To prevent balance-of-payments crises, Britain would have to retain control over capital movements in the short term. But in the longer term, once economic stability was restored, controls should be removed.

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I considered Keynes’s reply to be an act of great generosity. Sir Dennis spoke of Keynes with evident respect and affection. But even the brightest students, he recalled, displayed a sense of massive inferiority in Keynes’s presence. He made no further response. In the official biography of Keynes, it is reported that Robertson made reference to the “impishness” of Keynes’s mind. This was applicable to his brilliant slashing of opposing views by officials or colleagues. With respect to students, however, “One of the secrets of his charm was that he would go out of his way to make something flattering out of what a student had said.”7 As we were leaving, Sir Dennis asked, “Did you know that I was Keynes’s “boot” at Trinity? (A boot was a student who was responsible for doing chores for an older student at that Cambridge college.) Emily and I reacted with surprise, but there was another revelation to come. “And do you know who my boot was?… Harold Macmillan!” Macmillan was Britain’s prime minister from 1957 to 1963. We returned to London and once again discovered the importance of having credentials in English society. But before I proceed with that story, I must fill in some background. In his classic Studies in the Theory of International Trade, Jacob Viner had discussed the work of Isaac Gervaise, author of a brilliant 1720 essay on international economics, The System or Theory of the Trade of the World. Viner, a paragon of our profession, could generally be relied on for accuracy in his writings, but one sentence stood out as suspect to me: Gervaise, he wrote, “was of French Huguenot birth, and was taken by his parents to Ireland as a child, upon the revocation of the

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Edict of Nantes. He became an Anglican clergyman and a friend of Bishop Berkeley.”8 Something was awry here. How would an Anglican clergyman in Ireland – more than fifty years before Adam Smith’s Wealth of Nations – have acquired the necessary practical knowledge to write such a tract? Only after much research did I discover that Viner had inadvertently attached to the merchant/economist Gervaise the biography of a fellow Huguenot, the Rev. Isaac Gervais. That puzzle solved, my scholarly interest in this classical economist broadened. Gervaise was a member of the Royal Lustring Company in London, which was involved in the silk trade. His family was engaged in manufacturing, trading, and smuggling alamodes – black silk decorations for the collars of stylish clothing. In the Age of Mercantilism, when commercial interest groups dominated the formation of trade policy, Gervaise’s essay was the first unambiguous statement of the advantages of free trade. His analysis of the equilibration of international accounts was a prodigious achievement. Emily had copied the original essay, in pencil, in the rarebook room of the University of Chicago. I had then obtained a facsimile copy from the British Museum, prepared a comprehensive introduction, and presented the entire work to Viner for his endorsement. He suggested that I forward a copy to Professor Lionel Robbins, editor of a series of scarce historical tracts in economic thought, saying that he recommended its publication. I asked Viner if he would write a foreword, and he did. Now back to our stay in England. I called Robbins’s office at the London School of Economics and asked if I might meet with him. His secretary replied that he was working at

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home and would not be seeing any visitors. I wrote to his residence, saying that Jacob Viner had suggested I should see him about a professional matter. I anxiously awaited a reply. About a week later, I received a call from Robbins’s secretary, who this time spoke in a most friendly tone. Clearly, my dropping Viner’s name had had a salutary effect. Robbins invited me to tea in his office. Our meeting proved to be pleasant but also disappointing. He explained that, while he had the authority to publish scarce tracts of the nineteenth century, those of the eighteenth century were published by Professor Fritz Machlup at Johns Hopkins University. I should therefore forward a copy to Machlup, telling him that both Viner and Robbins recommended its publication. He added, cannily, “Do let Machlup know that if he won’t publish it, I will.” When the time came to leave London and sail to Denmark (Aarhus via Copenhagen), Francis sent a chauffeur to take us to the wharf. Using shortcuts, he drove through narrow East End streets pockmarked with empty lots where German bombs had fallen years earlier. In some places, iron staircases still hung from the tops of shattered buildings. Our driver told us that during the Blitz he and Francis often had to drive to the Thames to examine stored equipment; they would weave this way and that in an attempt to dodge falling bombs and debris. We arrived in Aarhus and moved into our flat; several days later, our luggage arrived in large crates. Among the deliveries was a new tricycle that Hugo’s grandmother had given him as a going-away present. He was eager to show it to a group of boys playing downstairs, so I carried the tricycle down for him and returned to the flat. Minutes later,

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I opened the window and saw the boys surrounding Hugo on his prized new possession. Another boy was approaching them from across the street. The apparent leader of the group shouted to him, in Danish that I could just manage to understand, “Get over here fast and listen to him speak – he must come from Copenhagen!” Next day, I had an appointment with the secretary of the Aarhus Department of Economics. I was struck by the then-novel architecture of the building: large plates of glass surrounded the entrance and the sides of the attractive redbrick structure. It seemed an anomaly among its neighbors. I asked the secretary about its origins, and she recounted the story with obvious pride. During World War II, Germany had used Denmark as a source of food and a location for military leave. The original university buildings had been taken over and were used for many purposes by the occupiers. The Danish underground learned, at a certain point, that a large meeting of military officers and their superiors from Berlin was scheduled to take place at the university; this intelligence was passed on to friends in Sweden, who in turn notified the British government. While the meeting was underway, the Royal Air Force bombed the buildings, effectively demolishing them. After the war, in an act of reparation, Britain helped finance their rebuilding. I was to teach a semester-long graduate course in Keynesian economics. When I first entered the classroom, the students rose up from their seats, but I reminded them that I was from Berkeley, implicitly giving them permission to set aside formality, and they seemed happy to relax. Teaching them, however, proved to be a more disturbing experience. When they came to see me individually during my office hours,

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they spoke freely and asked significant questions, but in the classroom they would remain utterly silent. The reason, they explained in private, was fear of peer criticism. Clearly, this fear impeded intellectual interchange. Illustrative for the current reader – and reflective of more current events – I used the following kinds of arguments to encourage class discussions and to show that Keynesian economics had to be revised to explain the new economic conditions: Keynes, in his classic, The General Theory of Employment, Interest and Money (1936), correctly maintained that during a depression, with the concomitant high level of uncertainty, central bank policy was unlikely to succeed in restoring normal economic activity. Even if the central bank reduced its interest rate for commercial banks to zero, those banks were more likely to use any increased reserves to improve their balance sheets rather than to expand lending to other banks, to investors, or to consumers. (In recent decades, the advance in information technology and in the communication industry has been revolutionizing the financial sector. The investment banks and hedge funds have developed innovative financial instruments and have greatly expanded their loans relative to those of the commercial banks. However, the investment banks and hedge funds have not been under the control of the central bank.) No less important, in the United States the banking reforms of the 1930s had become obsolete. They did not provide the central bank with authority to directly expand the volume of aggregate expenditures. Disconnects had therefore developed between new financial conditions, banking legislation, and mainstream macroeconomics. In consequence,

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without further fundamental reforms, central bank policies in a contemporary recession were likely to be less successful than even Keynes had emphasized. Clearly, there had been – and continues to be – great need for relevant postKeynesian research. Keynes maintained that a large expansion of government expenditure was essential to overcome a depression or a serious recession. Any form of increased government expenditure would do, even building tanks and pushing them off a pier. However, this theorizing was applicable to the short term only, for once government expenditures had run their course, the consequent increase in employment would evaporate. The longer-term restoration of high levels of income and employment therefore depended on spin-offs from the government expenditures in the form of increased private investment, innovation, and productivity growth. However, these would be much more likely to occur if the expenditures took the form of key infrastructural investments in education, health, and transportation. The issues here would take an economist into much uncharted territory, and I endeavored to engage my Danish students in discussing them. I even suggested that monetary and fiscal policy per se might not be the key propellant of economic activity. High, steady levels of private investment, saving, and consumer expenditure ultimately depended on a healthy political-economic environment.9 An issue of critical importance to Denmark was improvement in its international competitive position. I suggested to my students that, as a small and open economy, its interests would be well served by association with a European economic market, which I advocated. I gave three reasons for

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this. First, such a market would make member states interdependent, practically guaranteeing peace among them. Second, it would prevent the economic exploitation of one state by another. Third, membership in a related monetary union, with fixed exchange rates among the national currencies, would preclude competitive devaluations in time of recession and reduce the danger of a financial crisis. At the time, these were highly controversial issues, and still, in the classroom the students were too fearful to discuss them. This form of quiescence, I found, was also prevalent among members of the faculty and among students’ parents. In private, my colleagues were cordial and open to discussion, but when they attended a seminar I gave, they, too, resisted dialogue. My subject was the economic aspect of democratic development. The following factors, I argued, rather than philosophical principles, generated European democracy: concrete advances in industrial technology, the advance in monetary and financial institutions, and the development of religious tolerance and political stability. Fundamentally, democracy was not exportable. I stated at the seminar that the experience of the northern countries was a closed book to me, and I would be appreciative of their comments on the matter. But to no avail. A number of my students invited us to dinner. In every case, the student was living with a girlfriend at her home. The practice, we were later told, was not modern but reflected the ingrained traditions of the most backward fishing villages. When a student told me of this custom, I asked him if he planned to marry the girl. He replied, “Yes, when our luck runs out.”

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Parents talked to us about the war. The Nazis, they said, had held the country in an unshakeable grip. Resistance was virtually impossible, especially given the fact that up to ten percent of the population was collaborating with the occupier. Shortages of practically everything were acute; six years after the German defeat, imports were still in short supply. In early December, I received a letter from Professor Erik Lindahl, inviting me to deliver a lecture at the Stockholm School of Economics and inviting my family to spend the holidays with his in Stockholm. It is an enlightening experience to visit a great capital city such as Stockholm for the first time. The beauty of the city and its deep historical heritage were only to be matched by the extraordinary importance attached to personal status in an environment of sharp competitive markets. I entitled my lecture, “A Critique of the Keynesian Contribution to International Economics.” Faculty members and graduate students questioned me and commented perceptively, many pointing to Swedish antecedents to the issues at hand. I tried to show the differences between those alleged antecedents and the Keynesian contributions. The discussion evolved into a genuine problem-solving exercise rather than mere debate. (Several years later, I became better acquainted with the faculty when I was invited to spend a year at the Stockholm Institute of Economic Research.) I took our 1951 visit to Stockholm as an opportunity to meet with Professor Eli Heckscher, a world-renowned economist, then seventy-one years old, who had produced a two-volume classic on mercantilism (as well as more than eleven hundred other books and articles!). Viner held his

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work in high regard.10 However, on one matter, a scholarly disagreement between Viner and Heckscher had emerged over the years: the English mercantilist understanding of the relationship between power and plenty as objectives of foreign policy. While Heckscher maintained that these writers had subordinated “plenty” (their term for wealth) to power, Viner cited evidence to show that they saw power and plenty as joint and harmonious objectives.11 From what Viner had told me, this dispute had not been fully settled. When I called Heckscher’s home, his wife answered the phone. I told her I was interested in visiting her husband and, to my surprise and delight, she suggested that I come over that very afternoon. I took a city tram, carrying a slip of paper on which Emily had written the address. Not being sure where to get off, I showed the address to a nearby student and asked if he could please let me know when we reached my stop. This brief exchange caught the attention of the tram conductor, who immediately came over to us and admonished the student: only he, the conductor, was entitled to provide directions to passengers. Proper form was then followed and I disembarked at the right corner. Mrs Heckscher answered the doorbell and led me into a large study, with books covering every wall from floor to ceiling. Heckscher soon joined me – a tall, imposing man dressed in a conservative blazer. In conversation, he impressed me as one of the most learned minds I had ever met. When I asked him about Viner’s criticism, he simply said, in the same objective tone he had used in speaking of other issues, that Viner was correct. The dispute thus evaporated in an instant.

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When I was bidding goodbye to the Heckschers, I turned to Mrs Hekscher and said, “Take care of him.” Feigning anger, she retorted, “What do you mean, take care of him? Tell him to take care of me!” I couldn’t resist continuing the repartee. I said that her husband had shown the mercantilists to have been wrong in believing that one nation’s gain from trade was necessarily another’s loss; normally, they both gained. My final, adjusted farewell was, “Take care of one another!” Several days later, I had lunch with Erik Lindahl in the university cafeteria. While we were eating, a man in his midthirties came over to pay his respects to Lindahl. He seemed unnecessarily obsequious, and when he left, Lindahl grimaced in embarrassment. I gathered he was an associate professor. That evening, the same man called me to invite me and my family to dinner, an invitation we accepted. He and his wife turned out to be splendid hosts, as well as interesting people who were completely at ease with us. The attitude I had previously noted in this professor was nowhere to be seen. I can only assume that his professional relationship with the more senior Lindahl was a source of anxiety to him. In conformity with Swedish tradition, the couple’s two young children were about to bake pre-Christmas delicacies, and they asked Hugo to join them. They all had a wonderful time. We spent Christmas Day in Stockholm with the Lindahls, who then took us to their home in Uppsala, about thirty miles to the north. Uppsala is a historic city, with the oldest university in Sweden. In a holiday spirit, we spent an enjoyable week exploring the many significant sites. Emily and I felt that Uppsala rivaled Paris as an ideal city for romance.

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When the holidays came to an end, we returned to Denmark, where I had an obligation to deliver several lectures at the University of Copenhagen and to give a course on international economic policies at Aarhus. Having already covered the latter material at Berkeley, I now had the time to prepare technical articles on the subject for both Danish and American professional journals. After I had delivered my weekly lecture at Aarhus, we would sometimes take the overnight ship to Copenhagen, nearly one hundred miles away, where I met with members of the University of Copenhagen faculty and graduate students. Early in this term, we received an invitation to dinner from Mrs Eugenie Anderson, United States ambassador to Denmark (in fact, the first woman ever to be appointed chief of mission at the ambassador level). While riding in a taxi to her residence, I remarked to Emily that the invitation sounded personal and that I expected the party to include ten or twelve people. Emily thought the gathering would be much larger and, as usual, she was right. There were about a hundred guests – ambassadors from other countries, government officials, and a number of academicians. Emily and I sat at a table with eight other people, including the ambassador, who we quickly learned was a remarkable raconteur. She was also incisive about and keenly interested in international economics. After dinner, her husband, John, a member of the Quaker Oats family, took us to their private quarters and showed us a collection of stellar prints and paintings. We were deeply appreciative of this and other kindnesses, and the evening marked the beginning of a friendly and productive association with the Andersons.

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On returning to our hotel room around 10:30 p.m., we found Hugo in bed, surrounded by three young Danish girls. “What’s going on?” I asked. “We are learning English,” one of the girls replied, as they made a hasty retreat. Now we understood why Hugo had no objection to our leaving him in the hotel whenever we had an engagement. On those evenings, he was amply catered to. Emily and I would arrange for him to be served dinner in the hotel restaurant and later, if he wanted a snack or a drink, he could call room service. Apparently, he also led a social life. One evening, as we subsequently learned, the restaurant manager approached our six-year-old’s table and inquired whether he was ready to order. Hugo asked what was on the menu. When the list of offerings was recited for him, he was unsure what to choose, so he made the perfectly logical request that he be escorted into the kitchen for a preview of the dishes. “Of course, sir, come this way.” Hugo inspected the fare, made his selection and returned to his table. The manager then asked if he would like a drink before dinner. “Will it go on the bill?” “No, sir, it’s on the house.” “Then I’ll have a Shirley Temple, please.” The manager told us that other guests in the restaurant found Hugo’s performance highly entertaining. Ambassador Anderson showed great interest in discussing with me the consequences of the Marshall Plan and its impetus to expansion of trade among the European countries. I had the advantage of having read important

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forthcoming literature on the subject. All the writers agreed that the United States government should encourage the formation of a European common market. But the ambassador was also concerned about the potential for mass unemployment during a Danish recession. Most Danish economists were arguing that, under such conditions, it was essential for the government to greatly increase its domestic expenditures. In general, I agreed with these views but insisted that, in a small, open economy with a stable exchange rate, it was important that the increased expenditures be directed in such a way that rises in domestic prices be minimized. If such rises did occur, measures would need to be taken to prevent their impacting domestic costs and weakening Denmark’s international competitive position. The ambassador understood these considerations. Through periodic discussions with members of the press, her views to some extent entered the public domain. On one of our trips from Copenhagen back to Aarhus, my poor sense of direction caused a near-scandal. Emily would often arise in the middle of the night and sleepwalk to the bathroom, which was situated in a dimly lit corner of the ship’s deck. When she stirred, I would awaken and follow her out to make sure she didn’t come to any harm. On this occasion, I pulled a red blanket around my shoulders and over my head, walked behind Emily, saw her back to our room, and then went to use the facilities myself. When I returned, I checked that she was well covered. From underneath my red shawl, I reached out with both hands and patted the bed. Two green eyes gazed back at me and a female voice I didn’t recognize yelled, “Jurgen! Jurgen!” There were several other words, too, but I didn’t wait to understand them. I quickly

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made my escape and found my true destination next door. The following morning, Emily and Hugo couldn’t understand why I was taking so much time to get dressed. It seemed to me prudent to let the other passengers disembark before making an appearance. As the semester was coming to a close, the rector of the university, at my suggestion, invited Ambassador Anderson to deliver a lecture in Aarhus. She spoke persuasively on the role of Denmark in emerging U.S.-European economic relations. A splendid reception followed, largely organized by Emily, who had formed a good relationship with Mrs Anderson. After that, the ambassador had more than an hour to spare before returning to Copenhagen. We took her to the Regents’ office, where she talked about vestiges of World War II that were still hindering the creation of a cohesive society. Some of these vestiges had been reported to her by government officials. I had obtained further elaboration privately from faculty members and students. The German occupiers had been confident that, if ten percent of the population could be enlisted as collaborators, they would be able to maintain effective control of Denmark. After confiscating the financial assets and property of Jews who had been transported to Auschwitz, they used this wealth to bribe Danes of German descent and other potential turncoats. A professor I had met had periodically traveled to Berlin. Although there was no direct evidence, it was generally assumed that he had cooperated with the Nazis. The German authorities in Denmark believed that they had succeeded in instilling Nazi sympathies in approximately one Dane in ten. This made resistance impractical and perilous in the extreme. Nazi propaganda promised

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that in the post-war world dominated by Germany, Denmark would occupy a place of distinction. Hitler’s Mein Kampf was cited in support. Although a number of Danish factories had been dismantled and shipped to the German mainland, the authorities asserted that unemployment had been reduced and that full employment would be guaranteed at war’s end. Bankers, the financial sector, and the rich in general were continually reminded that they were being saved from communism. Meanwhile, slogans that students repeated even to me slandered the United States. American democracy was dubbed “demo-crazy.” Ambassador Anderson said Danish officials had reassured her that the vast majority of the population was immune to these scurrilous attacks. Nevertheless, they had some influence. Divisiveness had made the task of postwar reconstruction more difficult. But the ambassador concluded her talk on a positive note. During the war, Danish workers and students had risked their lives ferrying Jews from Aarhus to Sweden in the dark of night. Those rescued had been hiding in the attics of Danish homes. Had they been discovered, the most dire fate would have been visited not only on them but on their hosts. The vestiges of the war were mixed. The ambassador suggested that the electorate was increasingly concerned about the provision of economic safety nets that would protect the population in times of adversity. Again and again, Denmark’s vulnerability to external shocks would be emphasized. As a result, the country was tending to differentiate its social, economic, and financial policies from those of larger European countries. Nevertheless, the ambassador believed that Denmark would cooperate in

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establishing a truly democratic and durable European economic community. Before leaving Aarhus, we gave a large party for university colleagues. Emily had never learned how to make a weak dry martini, and our guests were demonstrably grateful. Even the rector had two or three. When the telephone rang and a journalist asked to speak to him, he was loquacious – or should I say liquacious? His wife was astonished; she had never heard him speak to a journalist so candidly about university affairs. Emily had prepared a sumptuous dinner, and the conversation around the table was buoyant. At the end of the evening, we followed Danish tradition by serving tea and cake before everyone departed. The warm goodbyes seemed to go on for an hour. Finally, one couple remained. The party had been a remarkable occasion, the man said. In his more than twenty years at the university, he had never spent a single social evening with his colleagues. More amazing to him was that, even though all our guests had been faculty members, he had had a good time! Our obligations fulfilled, we set sail for London and then returned to New York on the Queen Mary. Of the turmoil that was awaiting us in Berkeley, we were blissfully unaware.

Chapter Nine

Berkeley in Uproar

As former University President Clark Kerr has pointed out in his memoir The Gold and the Blue, approximately every twenty years since its founding in 1868, the University of California’s Berkeley campus has been beset by turmoil of one kind or another. With the exception of the early 1950s, when a disengaged student body earned the title “the silent generation,” Berkeley students have been notable for their alacrity in making their grievances known. When I returned to Berkeley from Denmark in the fall of 1952, the campus was in a state of revolt. But on this occasion those in revolt were not students. The provocation was a loyalty oath that had divided the University Academic Senate from the Board of Regents, as well as sowing discord among their members. Article XX, section 3, of the California Constitution contains a loyalty oath that includes the following declaration: And I do further swear (or affirm) that I do not advocate, nor am I a member of any party or organization, political

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or otherwise, that now advocates the overthrow of the Government of the United States or of the State of California by force or violence or other unlawful means; that within the five years immediately preceding the taking of this oath (or affirmation) I have not been a member of any party or organization, political or otherwise, that advocates the overthrow of the government of the United States or of the State of California by force or violence or other unlawful means… In early 1949, as a product of the Cold War, the state legislature of California passed the Levering Act loyalty oath, which extended the oath of the state constitution by ruling specifically against the employment of communists by any state agency. This, of course, included all employees of the University of California. The president of the university, Robert Gordon Sproul, had been kept informed of the legislation’s progress toward passage by his representative in Sacramento, James A. Corley. This enabled him to take preemptive action intended to ward off encroachment by the legislature on campus management: he recommended to the regents that they initiate a loyalty oath applicable to all employees of the university. The regents proclaimed that membership in the Communist Party was incompatible with objective teaching and with the search for the truth. The new oath was formulated as follows: I do solemnly swear (or affirm) that I will support the constitution of the United States, and the constitution of the State of California, and that I will faithfully discharge the duties of my office according to the best of my ability,

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that I am not a member of the Communist Party or under any oath, or a party to any agreement or under any commitment that is in conflict with my obligations under this oath. The regents’ loyalty oath led to a rebellion by many members of the faculty. They regarded the oath as demeaning. In the end, according to university records, thirty-one faculty members were “dismissed” for refusing to sign the oath: twenty-four at Berkeley, four at UCLA, two at Santa Barbara, and one at San Francisco. Some faculty members resigned in protest. Among them were the distinguished psychologist Erik Erikson, who went to Harvard, and the renowned physicist David Saxon, whom the regents later appointed president of the university. I had become an American citizen in 1949 and was obliged to sign a federal loyalty oath at that time. Perhaps for that reason, I was never asked by the university to sign its loyalty oath. Nevertheless, I was strongly opposed to it and expressed my views publicly. In early 1952, Kerr became chancellor at Berkeley. Sproul told Kerr he had evidence that three faculty members were Communists who had perjured themselves by signing the regents’ loyalty oath. He instructed Kerr to fire them. Kerr met with each man privately, and all admitted that they had been and still were members of the Communist Party. Each offered to resign from the university, provided his name was not made public. Without such a proviso, they feared they would suffer all manner of negative repercussions. Kerr accepted their resignations on those terms. One of the men later committed suicide.

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Sproul had been a stalwart and highly respected president of the university. His mistaken action with regard to the regents’ loyalty oath was exacerbated by his failure to notify the university Senate for a period of six weeks. His reputation never fully recovered. Ironically, in late 1952, the Supreme Court of the State of California ruled the regents’ loyalty oath unconstitutional. All in all, the regents’ oath was a costly and avoidable abomination. Nonetheless, like other upheavals on the Berkeley campus, this divisive controversy did not ultimately impede the school’s climb in academic stature. Indeed, Berkeley was in the midst of a golden age. The prestigious Keneston survey of 1957 ranked Berkeley first in the physical sciences and second overall to Harvard. By the early 1960s, in the reputational rankings of departments, Berkeley scored twenty-eight on a twenty-nine-point scale and Harvard twenty-three. These advances led up to Berkeley’s 1964 ranking as the country’s “best balanced distinguished university.” Before Kerr was appointed chancellor in 1952, he had been a member of the Department of Economics. He taught a course on collective bargaining in California Hall. Immediately after his lectures, I taught a class on foreign trade in the same classroom. Kerr was an excellent teacher, always well prepared and compelling, and with a selfdeprecating sense of humor. To hear him speak, I would come to class about ten minutes before the end of his lecture. We became friendly colleagues, periodically having lunch at the Faculty Club. On several occasions, Kerr invited Emily and me to dinner at his home. These were engaging affairs, with excellent food served in an atmosphere of serious faculty discussion on a single issue.

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While visiting London on our trip to Denmark in August 1951, I received a letter from the chairman of our department to the effect that I had been granted an accelerated promotion. This was a double-edged sword, for while the salary increase was welcome, it also meant that I would be considered for promotion to associate professor and tenure at a more rapid pace than customary. Clearly, in the demanding environment of Berkeley, tenure was far from guaranteed, but I accepted the risk – with a mixture of confidence and apprehension. While “publish or perish” was a working principle at Berkeley, recognition was also given to quality of teaching, service to the university, and national reputation. Fortunately, favorable circumstances enabled me to devote energy to all three. With respect to university service, I tried to limit the number of invited committees on which I served, but to no avail. Among those worthy of mention were: Graduate Committee, Department of Economics; Library Committee (Berkeley campus) – chairman; College Committee on the Reconsideration of the General Curriculum; Board of Editors of In Economics series, University of California Press; and many Senate ad hoc committees. As to national and international reputation, I had, of course, already served as a Fulbright Fellow and lectured at both Danish and Swedish universities. After returning to Berkeley, I had participated in conferences of the Merrill Center for Economics, Southampton, Long Island – where I was fortunate to share quarters with Britain’s chancellor of the exchequer, Hugh Gaitskell – and the Institute of the History of the USSR, New York.

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In 1952 I submitted a final manuscript of my edition of Isaac Gervaise, The System or Theory of the Trade of the World, to Johns Hopkins Press, and it was published in 1954. Two years later, the Japanese translation of my book on the reciprocal trade agreements in the world economy appeared. As for new research, I published articles in the three leading American economics journals: The American Economic Review, the Journal of Political Economy (at Chicago), and the Quarterly Journal of Economics (at Harvard). Two other articles, “The Bretton Woods Objectives” and “The Flow of Economic Ideas,” were published in the Proceedings of the American Economic Association after I had delivered papers on those topics at two AEA annual meetings. I also contributed a major article on the balance of payments to Encyclopædia Britannica. By mid-1955 I had completed a manuscript for a book on the balance of payments and economic growth. Seeking constructive feedback on the work, I circulated copies to several members of the Berkeley economics department, as well as to experts at the universities of Chicago, Cambridge (England), and Stockholm. Shortly thereafter, I was notified that I had been recommended – by an unnamed party – for a Guggenheim Fellowship, annually awarded to individuals “who have demonstrated exceptional capacity for productive scholarship or exceptional creative ability in the arts.” Meanwhile, I kept my expectations restrained with respect to promotion to associate professor. One day, I was taking a walk from our rented house on Grizzly Peak when I stopped and gazed at some bamboo while pondering a problem. An elderly man came up to me and asked, “Want to buy the lot?”

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I had no idea what he meant. “What lot?” “The lot you are looking at.” “I’m looking at bamboo, not at a lot.” “Raise your eyes,” he urged. As I looked up, in the distance – straight ahead – was the Golden Gate. “$2,000,” he said. I told him that I was an assistant professor at the university, did not have tenure, and might not be kept on. In that event, I’d have to look for another job and probably leave Berkeley. “$1,900,” he said, without missing a beat. I asked him why he was so anxious to sell the lot. “We’re in a recession, and we are going into a depression like that of the 1930s.” “If that’s your concern,” I told him, “there’s no need for you to sell the lot.” “Why not?” he asked. I explained that 1954 was very different from the early 1930s. We now had banking and fiscal policies that would be used to stimulate the economy and prevent a depression. “What do you do for a living?” he asked. “I’m an economist.” “Oh, now I’m sure we’re going to have a depression!” he chortled. I bought the lot, and built a house. In early 1955, our department chair told me that he would be preparing a report on my status and asked me to provide him with copies of all my writings. He said he would give the materials to the chairman of the department’s personnel committee, who would have several members report on

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them. This would be merely the opening round in a tortuous, multilevel review process that would eventually produce a decision, yea or nay, by the chancellor. Several weeks into the fall quarter, a family friend who was also a distinguished member of our department gave me some heartening news: a key committee of professors – notorious for its resistance to giving any candidate a green light – had unanimously recommended me for promotion. Over the course of the next few months, I received inside information that the other committees involved in the process had done likewise. One Sunday morning, because I had a deadline to meet, I went down to my office on campus. As I was approaching South Hall, Professor Carl Sauer – who had founded our geography department – waved to me and said he had just returned from New York, where he had attended a meeting of the Guggenheim Foundation. The good news was that I had been awarded a Guggenheim Fellowship. However, a budget committee would make the final decision. About two weeks later, on a Saturday afternoon, we were visiting in our living room with a faculty guest. The mailman arrived, and among the items he delivered was a letter from the Guggenheim Foundation. When I mentioned this to our guest, she courteously offered to leave, but I suggested she stay and share the news with us, regardless of what it might be. Apprehensively, I asked Emily to open the letter. The Guggenheim Fellowship had been conferred, with a stipend covering salary and travel for one academic year. As we drank champagne, I noticed that my optimism with respect to the faculty promotion had been strengthened – but I didn’t know that I had only two more days to wait before the

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decision was announced. On Monday morning, I was sitting at my desk in South Hall when Mary Drew, our departmental secretary, handed me an official letter. As I recall, it read as follows: Dear Dr Letiche: I regret to let you know that your position at the University of California, Berkeley, is terminated as of June 30 of the next academic year. You will therefore have a year to find another position. Sailor Davis Associate Chancellor This terse notice hit me like a thunderbolt. I quickly left South Hall for my private office, where I reread the letter and began to consider what I might do. I pulled a copy of the Guggenheim letter from my desk and telephoned the chancellor’s office. I told his secretary that I had received a letter of deep concern to me and wondered if I could see Dr Kerr for a few minutes. She replied that, because he had just returned to work after an absence, he had a full schedule for the day. I said it was an emergency. She asked me to wait. When she got back on the line, she said “Clark” had suggested that I come in at the end of the day. I entered Kerr’s office, we shook hands, and he waved me over to a couch. I showed him the Guggenheim letter and he warmly congratulated me. I then handed him the letter from Davis. “I’m very sorry,” he said.

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He had known nothing about it. I told him that friends had disclosed to me the unanimous recommendations for my promotion that had been made by the various reviewing committees. He pondered for a moment and then told me to disregard the letter; he would postpone the process of promotion until next year. I said that would create great uncertainty for me and would seriously affect my work during the year, for I would have to prepare for the possibility of another rejection. I also mentioned that I had recently received invitations to join two American universities, two Canadian universities, and the staff of the World Bank. Postponing the process, I said, would be a disincentive for me to remain at Berkeley. Kerr stood up, and so did I. There was a dramatic pause. He then reached out his hand to me and said, “Congratulations!” In about a week, the formal appointment arrived, signed by the chancellor. I left Kerr’s office greatly relieved. While walking to my car, however, I thought of other faculty members who were experiencing a similar personal crisis. They, too, had been denied promotion or tenure as a result of Davis’s autocratic management style. Davis had abandoned the university’s established procedures, relying on power rather than consensus. Acting on his own while Kerr was away, he had failed to understand that procedures were no less important than outcomes. Indeed, procedures are normally established to determine outcomes. Acute as my personal crisis had been, it was more than matched by a general crisis that befell the Berkeley campus in the first quinquennium of the 1960s, precipitated by a combination of external and internal forces. Externally, the

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civil rights struggle in the South, after first sending shockwaves through the campuses of the University of Chicago and Stanford, finally shook Berkeley. But these developments were soon intensified by the tensions of the Cold War and Vietnam. Internally, there were escalating student grievances provoked by a “flight from teaching” into scientific research. Unbounded faculty expectations also ran into unexpected disappointments. Space for laboratories and budgets for equipment were more limited than had been expected. Leaders of both faculty and students made serious errors that ended in unprecedented civil strife and personal tragedies. Historically, the Board of Regents and the Berkeley Academic Senate had agreed that the campus must not be used as an arena for political activity. This agreement had applied particularly to such actions as soliciting funds or organizing membership drives for local or national political campaigns. However, by the latter part of the 1950s, the post-World War II trend against middle-class morality as well as against any attempt by universities to act in loco parentis had tilted the scales. In September 1959, President Kerr suggested to the regents that a 26 by 40 foot area next to Sather Gate on the southern perimeter of the campus be designated for legal political activity by students. The regents agreed. The chancellor at the time was the Nobelist and co-discoverer of plutonium Glenn T. Seaborg, a celebrated teacher who believed in cooperative resolution of problems between faculty and students. He had no objection at all to the expansion of students’ political rights. However, his successor, Edward Strong, appointed in 1961, was a man of different mettle.

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A disciplinarian, Strong followed a policy of challenge, confrontation, and the use of force when, in 1964–65, mass student protests erupted on behalf of campus free speech. Strong believed that the Free Speech Movement (FSM) was directed by communists and was a vehicle for core communist ideology.12 Kerr, before leaving on an extended trip to Europe and Asia, cautioned Strong not to take aggressive action against politically active students, saying it would only escalate the conflict. However, on 14 September 1964 – one day before Kerr’s scheduled return to Berkeley – Strong ordered the dean of students to announce the permanent closure of the Sather Gate safety valve. Because 14 September was a day of registration for the fall term, the dean of students decided to make the closure effective as of 21 September. Kerr would later acknowledge that, as soon as he returned to Berkeley, he should have declared Strong’s order null and void. Regrettably, he did not do so.13 On 28 September, Strong spoke in Dwinelle Plaza, making several anemic recommendations intended to smooth troubled waters, but nevertheless proclaiming that students would not be permitted to use university property either for the collection of money or for signing up participants to engage in off-campus political activities. FSM leaders requested permission to set up tables for purposes of dissent in Sproul Plaza. This was denied. Regardless, on 29 September the students set up their tables. University administrators ordered five of these students to appear next day for disciplinary action by the dean of students. They appeared – accompanied by some five hundred others shouting that they were equally culpable. The students

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entered Sproul Hall and sat down near the dean of students’ office. Strong suggested that the police should be called in to remove them, but Kerr warned him that this would further inflame the crowd, and the request to the police was not made. Gradually, during the evening of 30 September, the students began to leave and, by 2:00 a.m. on 1 October, Sproul Hall was empty of its occupiers. However, two hours earlier, Strong had issued a directive suspending eight students from the university: the five who had failed to appear properly before the dean of students and three FSM leaders, including Mario Savio, who had led the march into Sproul Hall. For their part, the FSM leaders, before abandoning Sproul Hall, had agreed on a plan to set up tables later that morning in Sproul Plaza and to hold a rally at noon. Accordingly, by 11:00 a.m. on 1 October, many tables had been installed. Around 11:30, two university officials approached a table staffed by a former student – known as one of the more fiery FSM leaders – and requested his identification. When he refused to provide it, the officials called a police officer and authorized him to arrest the man. As the officer approached, the former student went limp. A police car was then called, with instructions to drive onto the plaza and arrest him. The car arrived shortly before noon. About seven thousand people, reportedly, were massed in the plaza for the rally. Spontaneously, a large group surrounded the police car and sat down. Mario Savio took charge. Climbing onto the roof of the car, he delivered a blistering attack on the university administration, in effect threatening that, if the FSM demands were not met, the campus would be shut down.

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Around 4:00 p.m., Savio led about 150 students into Sproul Hall in an attempt to win a rescission of the directive suspending the students. A comparatively moderate woman protester attempted to enter the dean of students’ office, but a police guard stopped her. If she was not to be let in, she said, the officer would not be let out. A melee followed. The officer was pushed to the ground, his boots were removed, and he was badly bitten in the leg. Meanwhile, a scuffle had occurred outside between members of a fraternity and FSM supporters. The following day, 2 October at 8:30 a.m., it came close to a full-fledged battle. In the early afternoon of 2 October, some six hundred police officers were being assembled on Bancroft Way and in the surrounding area to restore order and to retrieve the police car. Tension among students, the faculty, the administration, and the regents was reaching a high point. Two decisive phone calls to Kerr saved the day. First, Governor Edmund G. “Pat” Brown called and said he had received alarming information of possible bloodshed on campus and he expected Kerr to prevent it. The second call came from Professor Henry Rosovsky, who had been meeting with a small group of faculty members who had generated some recommendations for addressing the issue of political activity on campus. They were now inviting Kerr to meet with them. He accepted the invitation. The group proposed that students be granted the right to participate in legal political activity at designated places on the campus. They also recommended that the suspensions and probations of students be rescinded. There were additional detailed provisions. Kerr broadly agreed with the

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group but insisted on certain revisions, which were accepted. Around 7:00 p.m., a final statement was formulated. A copy was given to Mario Savio, who not only agreed with it but went to Sproul Plaza, read it to the students, and moved for its acceptance. He then told the students to go home. The police car was released, and a number of students remained to clean up the debris in the plaza. The next day, Saturday, 3 October, “Family Day” was held on the Berkeley campus. To all appearances, order had been restored. But that was not the case. Two faculty committees were also said to be working on student political behavior on campus, one of them awaiting the appointment of faculty members by the Academic Senate. But in fact, that committee did not exist. Strong began to create the committee himself and to appoint all its members. Not surprisingly, FSM leaders found this unacceptable. The second committee was to include both faculty members and students. Strong filled two of the four student seats with members of the Associated Students of the University of California (ASUC) and then asked leaders of the FSM to propose two other names for his consideration. The FSM, however, was not content to play a role only in the selection of student members: it insisted on having input on the faculty nominations, too. Strong refused to meet this demand and the FSM withdrew its participation. Kerr and the faculty group with whom he had met on 2 October had called for rapid action. But Strong was opposed to its recommendations and stalled. Disagreement within the FSM had also developed. The more radical leaders were in favor of returning to the campaign of protest; on 10 November, they were outvoted, twenty-seven to nineteen.

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Rather than bowing to this democratic decision, they seized control of the steering committee and directed strategy for the next month. Once again, tables were set up in Sproul Plaza in a flagrant display of civil disobedience that flouted the agreement reached on 2 October. The decision of the FSM steering committee to renege was later endorsed by Mario Savio. Strong announced that he would henceforth deal exclusively with the ASUC and the Senate.14 On 20 November, the regents met in Berkeley and angrily expressed their concern over the deteriorating situation. Kerr and Strong recommended that six students be suspended from the university and that two others, including Savio, be put on probation for the current semester. They also joined in the recommendation that students be permitted to engage in legal political and social advocacy in designated areas on the campus. The regents unanimously accepted these recommendations. This initiative was positive, but not as liberal as those recommended by a new committee, chaired by Michael Ira Heyman, a professor of law who would later become Berkeley’s chancellor. In its report, the Heyman Committee recommended that the six student suspensions be rescinded and that the two orders of probation be lifted immediately. The report also advocated no academic penalties. In a gesture of no confidence, Heyman’s committee submitted its report not to Strong but to the Senate. Meanwhile, the FSM steering committee also rejected the regents’ initiative, finding both the suspension provisions and continued limitation of campus political activities unacceptable. Strong considered the Heyman Report “outrageous” and its direct submission to the Senate an insult. On 28

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November, during the Thanksgiving holiday, he sent out letters of citation to four of the students the regents had decided to penalize, including Savio. The FSM responded with an ultimatum: if the citations were not withdrawn, Sproul Hall would be reoccupied on 2 December. And that is what I witnessed. About one thousand people, including faculty, crowded into the building. Joan Baez sang “We Shall Overcome” on the front steps, and Mario Savio delivered his soon-to-be-legendary speech comparing the university to an “odious machine.” Students were urged to “put your bodies upon the gears, and upon the wheels, upon the levers, upon all the apparatus, and you’ve got to make it stop.”15 On Strong’s orders, a call was made to Governor Brown, requesting that he send in the police. Around 3:00 a.m. on Thursday, 3 December, Strong appeared in Sproul Hall and ordered the students to leave. They refused. In the morning, there were still some six hundred protestors in the building. When the police arrived, the students went limp; it took about twelve hours to carry them out. They were taken to Santa Rita jail, booked, and released. On that day, a substantial part of the campus went on strike. A large council of department chairmen took over the leadership of the campus. They and their representatives met with President Kerr and a small group of regents over the weekend of 5–6 December and, reaching agreement on how to proceed, they called for an all-campus meeting on Monday, 7 December, at 11:00 a.m. in the Greek Theater. There were to be no police in attendance. I was among the reported fifteen thousand people packed into the amphitheater. Professor Robert Scalapino, a renowned East Asia scholar, took the chair.

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When Kerr was introduced, he was greeted with an ovation. But there was also a well-orchestrated, loud protest by members of the FSM. Kerr read the key provisions of the agreement. The central decision was that no disciplinary action would be taken for any past infractions of the rules. (However, the cases against participants in the Sproul Hall sit-in were already in the courts. Many of these students were tried and some convicted, with jail sentences of up to three months.) Kerr’s speech was greeted with a mixture of applause and boos. Savio rushed up the stairs to the stage, made for the podium, and grabbed the microphone from Kerr. Police, who had been hidden by the administration behind the stage, stormed out and pulled Savio to the ground. At that point, all hell broke loose in the theater. Kerr insisted that Savio be allowed to speak. Savio stood up and called for an immediate rally in Sproul Plaza. For the FSM, the Greek Theater fiasco appeared to bring unexpected success. The faculty was tired of conflict. It wanted peace and a return to intellectual tasks. Again, a Senate committee of two hundred called for a meeting of its members the next day, 8 December, in Wheeler Auditorium. The committee had agreed to go beyond the amnesty provisions drawn up by the department chairs. Though not explicitly stated, it was clear in context that no disciplinary action was proposed by the committee for on-campus planning of legal political activities. The meeting was not structured for open debate. Most of the comments, I thought, were charged with emotion rather than tempered by cool consideration. The committee’s proposals were immediately endorsed by the Senate Committee on Academic Freedom. Around 6:00 p.m., when

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the faculty left the auditorium, members were met by a cordon of students enthusiastically shouting their approval of the Senate action. On 18 December, the regents, with restraint, adopted the Senate’s recommendations. Effective immediately, certain campus facilities, carefully selected and regulated, could be used by students and staff for planning and engaging in lawful on-campus and off-campus political activities. The permission embraced, among other things, speechmaking, fundraising and the recruitment of participants. These provisions, however, did not apply to unlawful campus or off-campus action. Final disciplinary authority over student behavior remained with the regents. Mario Savio resigned as leader of the FSM on 26 April 1965, and the organization was dissolved shortly thereafter. The regents dismissed Chancellor Strong in December 1964. On 2 January 1965, Martin Meyerson, dean of environmental design, was appointed acting chancellor. Incidents on campus were becoming rougher and tougher. In many areas of the world, 1965 witnessed an increase in protests and violence. During the summer, more and more non-students came to Berkeley as national protesters. In the fall, one of them sat on the steps of Sproul Hall waving an obscene placard. The chairman of the Board of Regents sent an officious notice to Meyerson and Kerr demanding that they get rid of that individual at once. The acting chancellor and the president found the order offensive and indicated to the regent that they would resign immediately if he insisted on their compliance. They also passed on this reply to a Bay area newspaper, with instructions that it not be published until the evening, after the regent had received

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his copy. The newspaper ignored this request and published the story at once, creating a highly tense moment. Kerr later acknowledged that he and Meyerson had made a mistake. “Never take anybody by surprise,” he wrote, a lesson he had learned as a youngster on the farm but had not applied this time.16 Meyerson’s position became increasingly difficult and, in the fall of 1965, the regents appointed Roger Heyns, president of the University of Michigan, as chancellor. Heyns and the regents, however, did not develop an effective relationship and he, too, was about to be dismissed when he had a heart attack and resigned. Meanwhile, the regents had dismissed Kerr as president on 20 January 1967; his opponents referred to him as the “Red Chancellor” in the red university. J. Edgar Hoover had written in the FBI files, “Kerr is no good.” The combined forces of Governor Ronald Reagan, extreme conservatives on the Board of Regents, and J. Edgar Hoover made Kerr’s ouster inevitable. After his dismissal, he commented that he had been “hired and fired with enthusiasm.” Vice President Harry Wellman served briefly as acting president until the appointment of Charles Hitch, who had been Kerr’s vice president for administration. Despite outbreaks of extraordinary violence on several of the university’s campuses, the conciliatory Hitch served more than seven years, from 1968 to 1975, ushering in a long period of stability and rebuilding.17 The Berkeley campus witnessed its most violent turmoil in May 1969 and May 1970. As on other campuses, the Vietnam War at first impelled protest marches on and offcampus. An actual battle occurred over “People’s Park,” a 1.8-acre lot three blocks south of the campus, which had

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been purchased by the university for the construction of a student dormitory. It was seized in May 1969 by activists, including many non-students, who sought to preserve the lot as a refuge for the city’s street people. On behalf of President Hitch, one of his vice presidents called Governor Reagan, requesting that he send in the police to take back the lot from the activists. National Guard forces arrived with rifles and bayonets, buttressed by police with shotguns. A confrontation followed. A chainlink fence was thrown up by the National Guard. Martial law was imposed and remained in force for seventeen days. The campus looked like a war zone. Helicopters sprayed the campus and the southside area with CS gas – a strong form of tear gas. Eleven hundred people were arrested, one person was killed, one blinded, and dozens wounded. This was the worst episode in Berkeley’s succession of conflicts with disaffected and militant students. In the end, the university surrendered control of People’s Park to the student activists and street people. However, the consequences for the administration and the academic community were comparatively minor.18 Another eruption occurred on campus in the spring of 1970. As at other universities, when the United States invaded Cambodia, both faculty and students rebelled. Politically active students demanded that the faculty in the social sciences and humanities “reconstitute” all lectures as protests against the Vietnam War. They shut down many classrooms and it became necessary to hold some classes off-campus. The work of administration became practically impossible. Many final exams – and the commencement – were canceled.

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The Free Speech Movement had a positive effect on teaching at Berkeley that, to my knowledge, has gone unrecorded. The student population had grown significantly, yet there had not been a commensurate expansion in the number of permanent faculty members. Competent visitors did much of the teaching, and about fifty percent of the classes were taught by teaching assistants. The shortage of permanent faculty had at least two consequences: first, undergraduate studies were neglected, and second, PhD exams were often set by faculty members who had not taught the corresponding graduate courses. The FSM highlighted these legitimate student grievances and, as a result, many faculty members began to moderate their “publish or perish” ethos. The transformation took place primarily at a personal rather than an institutional level, but in time the university itself changed its ways. Students were asked, at the close of a term, to evaluate – with considerable specificity – the quality of a professor’s instruction. Teaching assistants gathered the confidential responses, which were then tabulated to provide a global picture of the professor’s performance. The university made clear that the granting of tenure and merit increases in pay would be more reflective of the quality of a person’s teaching. This criterion was often more honored in the breach; nevertheless, the personal adjustments made by the faculty appeared to have been profound. When the budgetary situation improved, the proportion of permanent faculty was increased, and the regular teaching of classes by faculty members was also greatly expanded. Thanks to the FSM, most of the faculty found a better balance between teaching and research.

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As serious as the consequences of the turmoil had been, many parts of the campus community were hardly affected. In my own case, I considered the students’ demand that I “reconstitute” my lectures unwarranted and did not yield. Further, even in the midst of the greatest disruptions, I never missed a scheduled class on campus. At a departmental centennial celebration in 2008, I asked former graduate students about their experiences during the FSM crisis. Those questioned fell into three groups. The first group said they had come to Berkeley to obtain a PhD in the shortest possible time and did not permit politics to have any effect whatsoever on their work. The second group said they had been sympathetic to the FSM, but their only personal gripe against the university was that their final PhD exams had been prepared by economists with whom they had not taken courses, which they believed was unfair. Finally, there was a small group who claimed to have been among the graduate students who comprised the FSM. They had devoted considerable time to FSM activities and nearly jeopardized their future careers. Several of their FSM friends, they said, had become dropouts and never recovered.

Tragic events are often not without their lighter moments, occasionally even bordering on farce. One afternoon, in the early days of unrest on the Berkeley campus, Emily was shopping at Andronico’s grocery store on Telegraph Ave. Four National Guardsmen, guns in hand, were also shopping there. Emily was taken aback by this armed presence and spoke to the manager about it. Several days later, she

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was back in the store and again saw the guardsmen, this time without their guns. She was pleased. Only on exiting did she see that the guns had been neatly stacked outside the store, beside the entrance! Some stories underline how much our world has changed. In another incident, a dual intrusion occurred in my classroom on the worst day of the Berkeley uproar. As I was walking toward Wheeler Auditorium to my undergraduate class on international economic policy, the campus was blanketed with tear gas. My eyes were tearing, and I held a handkerchief over my nose. However, when I entered the classroom, the usual number of students was present. The day’s lecture described how France had used international economic policies in Vietnam as a weapon of colonial exploitation. Shortly after I had begun, the door opened and an unfamiliar student carrying a green backpack came in and sat down. I didn’t interrupt my lecture on his account. I discussed how France’s exchange-rate policy, and a related trading system, had adversely affected Vietnam’s economic development. The system had contributed to an anti-colonialism that was generalized to all Western countries. This climate intensified the resistance of the population against the United States during the Vietnam war. As I was drawing graphs to explain the exchange-rate policy, the door to the classroom opened again and a National Guardsman, toting a rifle, came in and asked me: “Do you know a young man who might have run into this classroom?” Well, I thought to myself that I honestly didn’t know the young man, so I said, “No.”

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The guardsman left. When my lecture ended, the young man came up to me and said, “I see you have reconstituted your lectures.” I told him that, on the basis of new analysis and facts, I continually revised my lectures. The economic policies of France in its colonies had been a regular topic in this course for many years. I saw no reason to “reconstitute” my lectures. At which point the young man looked at me with all the zeal of youth and asked: “May I take this course?” On an afternoon when the battle was raging for People’s Park, I was working in my office on campus. When I heard the chimes of the Campanile ring out five times, I decided to pack my bag and leave for home. As I entered the garage, mine was the only car there, and a guardsman was on duty. He removed the chain at the exit, and bid me a respectful good night. I drove down Bancroft Way to Dana Avenue, turned left toward Haste Street, then left again, planning to drive home via the back of the campus. To my amazement, two tanks were approaching. I stopped, and so did they. Angrily, I jumped out of my Alfa Romeo and approached the tank on my left, shouting, “Where the hell do you think you’re going?” Quietly, the guardsman replied, “Sir, this is a one-way street, and you’re driving in the wrong direction”!

I draw several lessons of general validity from the uproar on the Berkeley campus. The actions of President Sproul and the regents’ institution of the “extra” loyalty oath were disastrous. In any institution, the attempt to mitigate mistaken policies at the top by enacting less mistaken policies

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at a lower level is most likely to lead to failure. Moreover, Sproul’s decision not to notify the University Senate of his action for a period of six weeks not only exacerbated conflict but had other regrettable consequences. According to former chancellors of the Berkeley campus whom I have had the opportunity to interview, historically, timely disclosure of significant information has been the most important single factor in preventing – or, at least in limiting – corruption by both administrators and members of the faculty. Analysis of the pros and cons of disclosure by governments, universities, and businesses is long overdue. In an attempt to resolve grievances, threat and the use of force are most likely to be destructive to all parties. Coercive tactics, rather than sustained consultation and compromise, are a curse to conflict resolution. This curse was at the core of Chancellor Strong’s failure to come to terms with the Free Speech Movement. Almost invariably, surprise is a counterproductive tactic in negotiations. Former President Kerr writes in his memoir, as previously noted, that he had learned this lesson as a youngster. He acknowledges, however, that he ignored it in precipitately notifying the regents that he was ready to resign when commanded to remove a young man holding an offensive sign from the steps of Sproul Hall. A key lesson of the FSM turmoil is that every college and university needs a committee representing the faculty, the administration, graduate students, and undergraduates that can address legitimate student grievances as they arise. Dialogue must be never-ending. Truly objective teaching and research are contingent on protecting the faculty from political domination by

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legislators and Boards of Regents. An equally important principle is that the survival of an intellectually free university depends in part on the ability of students to exercise their right to organize lawful on-campus and off-campus political activities. On the other hand, the usurpation by students of the power to determine curriculum or set key administrative policy goes far beyond any legal or moral entitlement and is likely to stir reactionary forces to their own unfortunate excesses.

Chapter Ten

Working in Africa: The Sterling Area and Ethiopia

The second half of the 1950s witnessed a considerable expansion at Berkeley of research and teaching on the global economy. This was the age of Sputnik, a race to the top in practically all fields. In the economics department, groups of colleagues worked collaboratively on various joint projects. I continued to publish articles and books at a rapid pace while also guiding graduate students toward their PhD degrees in international economics. My department and the university took note of my work: in 1960, after a period of four years – a comparatively short interval at Berkeley – I was promoted to Professor of Economics. In the summer of 1961, I accepted a one-year United Nations appointment as a Special Technical Economic Advisor to the Economic Commission for Africa (ECA), headquartered in Addis Ababa, Ethiopia. My task was to prepare a report on the sterling area and the franc zone on that continent, which would entail my interviewing monetary and financial officials

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in most African nations. It promised to be a challenging experience. Emily felt that I was going to Africa, while she was being taken! Hugo, aged fifteen, would attend a French high school in Addis and would also do correspondence studies through the University of Kentucky. When we arrived, our living quarters had already been arranged at the Ghion Hotel, adjacent to the estate of Emperor Haile Selassie, with its stables of magnificent Arabian horses. The emperor allowed Hugo to photograph him whenever he was leaving the estate, a privilege not granted to any Ethiopian. I had been told in New York that I would have an office in a new United Nations building and would be provided with competent secretarial assistance and modern equipment. To my consternation, the reality was otherwise. The office I was assigned was in a dilapidated building without air conditioning; satisfactory equipment was nowhere to be seen. Soon after I installed myself, I found that young men in search of employment were continually knocking on my door. The scenario was bleakly inauspicious. However, I wasn’t being singled out for squalor; other UN officials complained that they were similarly situated. The reason we were not housed in the new UN building, I learned from Ethiopian officials, was that the emperor would not permit the organization’s personnel to move in unless Ethiopian ministers were also given the right to work there. Fortunately, this demand was met after only a week and all of us were able to move into our intended offices. Mine was a splendid perch on the top floor, with commanding views of the city.

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That same weekend, my family and I had a dismal experience. We all wanted to see the Addis “downtown,” so I called a cab and asked the driver to take us there. As we drove, it began to drizzle. After about half an hour, the driver stopped at the building that housed the emperor’s office, two statues of lions guarding the entrance. That was the sum total of what could be seen at this august address. But the driver had one more sight to show us. Five minutes’ drive from the emperors’ lions was a small park, and in the park a large cage, and in the cage a live, prowling lion. Having seen all three lions, we had now “done” Addis Ababa. My wife and son were despondent. I recalled the expression that might apply to all of us: “You got there, and there wasn’t any there there.” On Monday morning, the ECA executive secretary told me I would have to go to Johannesburg and Cape Town. South Africa was not on the agenda for my assignment and I had no interest in visiting the seat of apartheid. However, I was told there would be adverse financial consequences to ECA if I did not go. The organization’s travel bureau made the arrangements. I was met at the Johannesburg airport by two executives of the central bank. The drive to the city took us through lush landscape and gently rolling hills. We arrived at the bank in time for lunch, which had been arranged by the bank’s governor, a Harvard graduate (by coincidence, I had read his dissertation). We ate in a private dining room, in the company of seven or eight men, including one black economist, who were experts in money and banking. The governor chaired the session, methodically presenting a number of issues confronting the bank, as well as a disagreement that had arisen with the IMF.

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I was well prepared for the discussion, since I had been in close touch with the chairman of the U.S. Federal Reserve System and with the managing director of the IMF. In fact, my own mentor, Jacob Viner, had worked with John Maynard Keynes on the establishment of the IMF in the mid-1940s. At the time, the U.S. Senate had not had the necessary votes to pass the IMF legislation. Certain senators decided to nudge influential opinion toward support by sending a number of young economists, including myself, to key American states, where we would lecture members of the American Bankers Association, hitherto an opponent of the bill. My first lecture was in Chicago, where the session was chaired by Senator Estes Kefauver, Democrat of Tennessee. I then lectured in about ten other cities. The outcome of our efforts was heartening: after we had concluded our task and the administration had done other lobbying, the Senate passed the Bretton Woods Agreements Act in July 1945. The seminar at the central bank in South Africa lasted about an hour and a half. To my surprise, several senior executives were keenly interested in educating me on the positive aspects of apartheid. One of them stressed that it was a question of “culture,” not race. To illustrate his point, he explained that his son was going to marry the Japanese ambassador’s daughter the following week, with his strong approval. I listened politely to what I considered to be obnoxious arguments and told him that I found his statements unintelligible. We adjourned with promises of future meetings. The governor of the bank let me know that his private chauffeur would take me to my hotel. It was a bright, very private-looking place that resembled a late-nineteenth-century English hotel. I was tired and wanted to rest. A little

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after five o’clock, the telephone in my room rang; the black economist I had met at the luncheon invited me to join him and several of his friends for dinner at his home. When he picked me up, he explained that, if he had spoken out about apartheid at our meeting, he probably would have been fired. He now gave vent to bitter criticisms of the system. The discrimination against blacks, and the conditions in which they worked, were outrageous, as I was to see for myself when I visited Soweto. The dinner guests all said that they lived two lives – one professional, which had to include the hypocrisy of silence, and the other private and secret at home. They spoke of Berkeley with awe and dreamed of visiting the university at some unspecified time. Meeting with these men produced painfully mixed emotions in me. I fully shared their hopes and values but feared a bloodbath before apartheid could be abolished. Next morning, a young black man in a chauffeur’s cap arrived to take me for interviews with the ministers of finance and trade and members of their staffs. As he opened the door of the large black car for me, I was startled to see that he was in tears. His father, he explained, had just been fired from his job as an elevator operator. When I inquired why, he told me, “There’s going to be an election.” Since black Africans would not be voting, many of their jobs had been transferred to white Afrikaners who, it was hoped, would vote with gratitude. His father, he said, was the major breadwinner in the family. There were several younger children. He didn’t know how they would survive. My meetings with the ministers were conducted professionally but left me exhausted. When I returned to my hotel, I found a message: a UN official would take me to Soweto

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next morning to speak with some black Africans and see new buildings that were being constructed for them. I had no concern about any risks I might incur in going into what I knew was a destitute and soul-crushing environment; to the contrary, I welcomed the opportunity to observe conditions there at first hand. We walked, not on a sidewalk but on a mud pathway, toward our first site: a collection of bright new houses, comparatively small but not without an appearance of comfort. Children were playing outside. In one of the houses, a young black woman was expecting me and gladly showed me around. The house consisted of a kitchen and two other rooms. The woman said it was a definite improvement on the family’s previous dwelling. Her husband worked in a factory in Johannesburg, but it was impossible for them to live there, she said. They were compelled to live in a segregated area. Every morning men were driven to work and had to return to the township promptly in the evening. The entire family had to spend all non-working hours in Soweto. Evenings, the woman told me, the men spent a lot of their time at a gymnasium where they could get a cheap jug of beer. I was taken around the area for several hours. Away from the batch of new houses, it was a dismal scene. As we walked along the road, I noticed a shack up ahead with its door open. I told the UN official that I would like to see what was going on there. I walked over and peered inside. An old, white-haired man was sitting at a Singer sewing machine. The shack was quite dark, with just one light bulb hanging from the ceiling. The floor was covered with dirt. I asked the man what he was sewing.

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“Oh,” he said, “it’s a pair of pants. It will be a gift for my son’s birthday.” The man had heard of California and knew of its eucalyptus trees. We spoke for a while before I moved on. “Now,” said the UN official, “I’ll take you to the gym.” It was a large structure, resembling a stadium. “Come upstairs,” he said. “We’ll get some beer.” He gave me a jug, paid, and half-filled the jug with beer. Many men were standing around, their conversations carried on at high volume. There was quite a bit of pushing and jogging. The beer was insipid but, to be polite, I kept drinking. Suddenly, a gruff-looking man said to the other men around him, all of whom had had too much to drink, “What the hell are they doing here?” Menacingly, the group began to approach us. It was fortunate that I had played hockey in my day. I turned around and grabbed my UN escort by the arm and we sped down the steps and out of the building. The group, we were relieved to find, didn’t pursue us beyond the steps. Our hasty exit from the gym was my final experience in Soweto. The next day I spent in Cape Town, an attractive city that is somewhat reminiscent of San Francisco, especially in the areas close to the wharf. As I entered a small restaurant for lunch, a crowd of sailors looked me over, as if silently questioning whether I knew where I was. At such moments, I had learned to act with confidence, as if I were on familiar terms with everyone present. There were no harassing comments or moves. I ate my good, inexpensive lunch undisturbed. The atmosphere of Cape Town was noticeably different from that of Johannesburg. To a substantial degree, there was a Scottish tradition. Most of the people with whom I

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spoke were critical of the bifurcated society. My interviews with officials were cordial and informative. The officials with whom I met displayed no interest in discussing apartheid. When I returned to Johannesburg, a substantial group of black Africans was quietly marching within sight of a main street, in civil protest. The marchers looked sad, but not beaten. Their heads were bowed, eyes glued to the ground. An unexpected message was handed to me when I returned to my hotel. Would it be possible for me to meet with some of the children of the black South Africans with whom I had previously dined? The young official at the central bank picked me up. I had hardly entered the host’s living room when a group of high-school students began showering me with questions. They spoke in a vibrant, highly spirited way. Their hatred of apartheid was conveyed in every inflection. They were prepared to commit coercive (i.e., illegal) disobedience. I told them that my Berkeley students and I often expressed similar views. I was terribly afraid, however, that if they protested by occupying buildings and classrooms, as one of them had suggested, the Johannesburg police would react with force. I said that, as a visitor to their country, I would not give advice. However, I would discuss certain factors that they might need to consider before settling on a course of action. The United States civil-rights protests, I said, seemed to suggest that civil disobedience could produce successful results. Coercive disobedience, on the other hand, was likely to escalate conflict, resulting in a violent reaction by police. Two approaches, then, were possible. One looked toward compromise between the apartheid government and black political leaders, resulting in resolution of the most burning

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grievances. This called for the exercise of bipartisanship and political determination. The second approach made use of challenge, threat, and coercive disobedience. There were occasions when the latter might be unavoidable, but history suggested that it seldom succeeded, whether adopted at the outset of a conflict or embraced as a strategy of last resort. A serious and practical discussion followed among the students, who were clearly interested in more than mere abstract debate. Mosala Mosegomi asserts that high-school students played a significant role in the struggle against apartheid. They share credit for the extraordinary political feat of achieving abolition without a bloodbath.19 When I checked out of the Johannesburg hotel to return to Addis, for the first time in my life I was unable to utter a polite word of thanks. I placed my room key on the manager’s desk, and he courteously said, “I hope you’ve had a pleasant stay and that you’ll return soon.” I had lost my capacity to speak. I just picked up my bag and walked out. The ECA executive secretary met me at the airport when I returned to Addis. He told me that arrangements had been made for interviews I was to conduct the following week in Kenya, Uganda, and Tanzania (then Tanganyika). This would begin my work on the sterling area. But first I would have several days of rest with my family. On Saturday evening, there would be a dinner followed by a dance at the Ghion Hotel. Announcing the dance, the leader of the orchestra said – as he repeated in his thick accent every Saturday evening thereafter – “Ladies and gentlemen, we will now play our theme song, ‘Are You Shins Sheer?’” On my further travels, I soon observed for myself one of the most regrettable failings of colonialism: very little

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investment had been made in Africans. There were practically no well-trained African economists with whom I could consult. In consequence, my discussions had to be held mainly with presidents, top officials, and foreign advisors. On my first visit to Tanganyika, I had the privilege of discussions with President Julius Nyerere. He was a wonderful man of impeccable integrity; economics, however, was not his forte. Prior to our discussions, he and his wife entertained me at a very pleasant lunch in their private home. Then the two of us spoke about the need for economic reforms. The president said that in the monetary and banking spheres, colonial institutions would have to be abolished as soon as possible. The development of villages via communal agriculture appeared to be of primary importance. Crafts were to be governmentally encouraged. Nyerere placed no emphasis on the development of labor-intensive industries. He had no appreciation of market mechanisms. At independence, East Africa had been operating under the Currency Board System, administered by the Bank of England. Under this system, which operated autonomously, variations in a country’s volume of money were determined by changes in its balance of payments. If the country had a surplus in trade and capital flows, the funds would be converted into sterling, held for the Currency Board at the Bank of England, and an equivalent amount of East African currency would be supplied by the Bank of England to the country. The system was thus based on one hundred percent reserves. In theory, if Tanganyika had a surplus in its external accounts, it was assumed that the increase in the quantity of money would raise the nation’s prices and money incomes, generating an increase in imports, which would in

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turn entail payments in sterling from the Bank of England and an equivalent reduction in Tanganyika’s quantity of money. President Nyerere and all government officials with whom I later spoke understandably called the Currency Board System a colonial institution, which would be abolished as soon as feasible. Several Tanganyikan officials believed that the system had been deflationary under colonialism and that it had hindered East African economic development. Although the system had no features of a modern central bank, and there was therefore no mechanism for monetary regulation, my own research showed that, in East Africa, the system had not worked in a deflationary way. Not having been trained in economics, the officials often confused what they considered to be a shortage of money with a shortage of real capital. Discussions with President Nyerere and his close advisors made it abundantly clear that, when a Tanganyikan central bank was established in the near future, its management would require experts that the country did not possess. In concluding our discussions, I asked President Nyerere if it might be productive for him to discuss with President Kenyatta of Kenya possible interim measures in the banking sphere to prevent contagious capital flight. It would be useful, I thought, to work together in this way in order to help maintain some of the free trade policies among Kenya, Uganda, and Tanganyika, as well as to ensure free capital movements among them. The president was not receptive to these suggestions. Since Kenya, he said, was the most developed of the three countries, it would be more appropriate for President Kenyatta to take such initiatives. I

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had a feeling that ego sensitivities may have prompted this response. The discussions with President Nyerere and his close advisors highlighted the fact that any post-independence failure would be traceable to the lack of investment in “tooled knowledge” of African people under colonialism. My next trip was to Kenya, where I had the opportunity to meet with President Kenyatta and his top officials. The president was an expansive, well-informed leader, who wielded a fly swatter with zeal. Since Kenya was indeed the most developed member of the East African community, President Kenyatta and his advisors felt that they would have more flexibility in going it alone. They, too, believed that the Currency Board System should be liquidated as soon as possible. It would be replaced by a Central Bank of Kenya. Controls over capital flight, the officials said, were already being imposed. Foreign companies would be permitted to pay dividends and normal profits, but would be proscribed from making larger outpayments. Proposed foreign-exchange controls were intended to prevent reductions in the value of the country’s assets and equipment. I drew the Kenyans’ attention to the fact that companies would in all probability inflate dividends, deposit export earnings abroad, and so forth. Capital flight could also occur through Tanganyika and Uganda unless joint cooperation continued in the financial sphere. In the Currency Board System there were advantages to maintaining free capital movements among the three countries. Although the officials reacted positively to these suggestions, it was clear that the euphoria of independence would seriously undermine the historic economic integration of the

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three nations. President Kenyatta was not to initiate discussions with President Nyerere on any comprehensive issues of this kind for a long time to come. The next visit was to Uganda, and it was practically useless. I found a political and administrative vacuum: there was no one in charge with whom to speak. The environment was clouded by the grim aura of civil strife. As later demonstrated, that strife became a key cause of economic stagnation. The post-independence decade of the 1960s was, in the advanced industrial countries, a golden economic era. The United States, particularly, experienced a singular period of economic expansion with stable prices. This general environment was conducive to the growth of East African exports, while also hiding from view some of the misguided protectionist policies that East African countries initiated, both in agriculture and industry. Those policies, as will be noted, had a disastrous effect on per capita food production. Upon returning to Addis Ababa, I found that arrangements had already been made for me to leave in a few days for Ghana and Nigeria. A considerable number of Germans had come to Ethiopia after World War II, some of whom stayed with us at the Ghion Hotel. Although they had all been Nazis and served in various government capacities, some of them came to Addis as a genuine act of sacrifice or penance. One appeared to be a competent doctor, who came to take care of Emperor Haile Selassie and his family. He told us the emperor’s wife had grown so fat that he had the task every morning of helping her to turn over so that she could get out of bed. Another was a banker who served as chairman of the Ethiopian

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Development Bank. He and his wife had come to Addis with a sturdy German Shepherd, and the three of them, plus the doctor, often joined us for martinis before dinner. The dog would sit next to Emily and watch her as she assembled hors d’oeuvres of crackers and cheese. He would never lunge at these treats, but every so often would politely tap Emily on the elbow to indicate his interest, which she would usually satisfy. I, too, was solicited in this manner, but in my case the appeals were calibrated: they would begin with a tap on the arm, but if I continued in conversation and failed to respond, he would slap me with his paw. In the event that I persisted in ignoring him, the slapping became progressively more forceful until the Berkeley professor did what he was told. Emily was acquainted only with Dr Jekyll; I had experience of Mr Hyde. On the evening of my return from Uganda, we were all gathered around a table with our martinis when the doctor suddenly asked me, “Do you have another trip planned for the near future?” I told him that I would be leaving for West Africa in three days. “I don’t think you should go,” he said. “I think you have hepatitis.” Tests taken the next morning proved him right. But I did not want to cancel my meetings. He gave me some pills, and two days later I left for Ghana and Nigeria. Fortunately, the hepatitis was not serious and had no adverse effect on my energy. Senior UN officials traveled first-class. To my surprise, when I got on the plane and was taken to my comfortable, oversized seat, I noticed that Emperor Haile Selassie was

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already sipping a drink in the front row. Most, if not all, of his cabinet members were flying first-class as well. I had been told that the emperor always took his ministers with him on long trips, for fear of a coup if he left them behind. In this instance, I was the beneficiary, as I was able to have useful conversations with several of them. Arriving in Accra, the capital of Ghana, on a warm summer night was a delight. After dinner, a jovial group was dancing on the patio of the hotel to the music of a small orchestra. Hands on one another’s hips, they danced in a round. I joined them – the only non-African in the group – and was warmly accepted. Ghana had gained independence a few years before the countries of East Africa. President Kwame Nkrumah strongly believed in Pan-Africanism: his ambition was to integrate as many West African countries as possible. But the leaders of countries that had only recently gained their independence were not inclined to give up any aspects of sovereignty for multinational union. This was a great disappointment to Nkrumah. Even in Ghana, governance was marked by division, fear, and uncertainty. On one occasion, while I was talking with the president in his presidential palace, a light fixture accidentally fell to the floor. Nkrumah shuddered, reacting as if there had been an attempt on his life. He and his advisors were comparatively well informed about economic matters, although protectionist views concerning the country’s development were not in short supply. I held productive interviews with the president, with the banking authorities, and with ministers of trade, development, and finance. These sessions were indispensable in

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the preparation of my report. No less satisfying was the fact that the officials were eager to learn about the latest international economics literature and the foreign experience of Western countries. Not surprisingly, however, the conversations always began with a declaration by the officials that their situation was unique and a visitor had to be fully cognizant of that uniqueness. Later, they would eagerly ask how their situation differed from those of other countries! The next trip was to Lagos, then the capital of Nigeria. The drive from the airport to the center of the city took us through bedlam – scenes of unimaginable chaos in which our car was thronged by young toughs intent on off-loading a cornucopia of dubious merchandise. It was a great relief to pull into the relatively calm driveway of the hotel. My schedule of interviews proved less professional than I had anticipated. All the officials with whom appointments had been made by the Addis office arrived either late or very late. But they were forthcoming when they did sit down with me, providing all the information I needed. Nigeria, they emphasized, was the major economy of sub-Saharan Africa, and it would provide the base for West African economic development. Several officials drew attention to the risks of secession and civil strife, especially in the eastern region of Biafra. (I had met several Biafran officials, who had impressed me as well trained and competent, as well as possessing an exceptionally strong work ethic. In the late 1960s, secession did indeed occur. Biafra was reunited with Nigeria only after two and one-half years of catastrophic warfare.) After the third day of meetings in Lagos, I was walking up the stairs to my hotel room when I was approached by an

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unknown white man. He said he was American and asked if I was. He then confided that he needed assistance in solving a puzzle. He was a salesman for Boeing Aircraft and had experienced something he couldn’t understand. Though I told him I wasn’t a businessman, he invited me to join him for dinner. He had been negotiating a deal with Nigerian security officials for the sale of two planes. The contract was close to being signed. He had received a letter from one of the officials confirming that the terms of the sale were satisfactory; however, the price cited in the letter was ten percent higher than the Boeing quotation the salesman had given. He wondered if this was an error. I suggested that it was not. The two main political parties in Nigeria needed financing. If the amount to be paid by the government were inflated, Boeing could receive its quoted price while the extra ten percent could be divided between the parties. Alternatively, the Nigerian negotiators could pocket the difference. The salesman wondered momentarily how he would write up the transaction, but came to a rapid conclusion that he could handle it. This was my first personal encounter with African corruption. After Lagos, my next stop was the University of Nigeria in Nsukka, where I held seminars with faculty and graduate students in the Department of Economics. The department included several well-known economists, with whose work I was familiar. The students’ particular interest, it seemed, was to be brought up to date on the international economic literature. Three to four seminars a day were scheduled, ranging from early morning to late into the night. Both professors

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and students seemed voracious. At the close of the last session, a student asked a penetrating question, and for the first time in my life, I literally lacked sufficient physical and mental energy to respond. It was a frightening experience. I feebly raised my arm, indicating that I was through. The students broke out in spontaneous applause, which rendered the occasion quite memorable. The drive back to Lagos from Nsukka involved a frightening experience. I shared the back seat of a large black limousine with an African American who had also been lecturing at the University of Nigeria and a representative of the Nigerian Institute of International Affairs, who was hosting our return to Lagos. It was a moonless night. The driver of the car had a rifle beside him. He turned onto a narrow street thinking it was a short cut to the highway. When he stopped the car at an intersection, two armed soldiers approached us. They ordered the other American and me to lower the windows. One soldier poked the end of his rifle into my chest, and the other did the same to my fellow passenger. “Get out of the car!” one of them ordered. When we got out, he yelled, “Put up your hands and walk towards that wall.” The rifles were now at our backs. Our Nigerian host was a very short man, who compensated for his lack of height by booming out his words. He began shouting at the two soldiers. Under the circumstances, I thought that was unwise and asked him to “cool it.” “May I show you my identification?” I asked my assailant. He shrugged and nodded. I removed my wallet from my jacket, opened it, and handed it to him. It was clear then that he was illiterate.

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“We know who you are,” he said. “We have been notified of the attempted coup. The governor is inside the house.” “Your friend,” I suggested, “could cover both of us. And would you please show my identification to the governor?” The soldier rang the bell and someone showed him in. A tall, formidable looking man came out who we surmised was the governor. Our Nigerian host spoke to him. The big man came over to us and rather formally explained that there had been some trouble in the region, but the soldiers had made a bad mistake. He wished us well. We were not quite sure what he meant when he added that these two soldiers would never again make such an error. When I returned to Lagos, a message awaited me at the hotel from a former student of mine who was now serving in the nearby U.S. embassy. He had studied at Berkeley – and taken an international economics seminar with me – as part of a State Department program in which selected Foreign Service officers spent a semester at one of several respected universities. On their return to Washington, they would be reassigned, sometimes as ambassadors, to posts around the world. Whenever I visited countries where they were stationed, they would know of it in advance and often make contact. On this occasion, there was little time for a gettogether since I had to return to Addis the next morning, so we decided to meet right away at my hotel. He gave me a brief report on the state of Nigeria. Poor governance was a major cause of its economic difficulties: corruption was rife in the government and the higher the official, the higher the bribe. Insufficient attention was being given to the modernization of agriculture. A well-balanced tariff structure that would have helped to diversify the economy had not been

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instituted. Investment in secondary and higher education and training was inadequate. The military and police forces, which the government was in a position to use in an authoritarian manner, were largely drawn from a single region, the north. The rule of law was strengthened by a long tradition of fine legal training, but the democratic formation of central and regional governments was seriously compromised by tribal conflicts. Although a nation had been formed, social solidarity – a prerequisite for democratic governance – did not exist. The military was forever poised to take over power, yet it did not possess the competence to launch a program of diversified economic development. The Foreign Service officer was very pessimistic about Nigeria’s future.20 Though it was by now late at night, I met for a further hour with the Biafran official with whom I had previously held discussions. He wanted me to know, primarily, that the central government was discriminating economically against Biafra. He cited evidence of inequitable allocation of expenditures among the country’s regions and alleged that it was sapping receipts from Biafra. If the discrimination continued, the likely outcome would be civil strife, even war. The effects on both Nigerian and Biafran economic wellbeing would be disastrous. His views were prescient. My major objectives on returning to Addis were to conduct further research, analyze the accumulated data, and prepare a report on my interviews. But the ECA executive secretary had other plans. He asked me to report my findings to him and to the staff economists orally, and for this he scheduled several seminars. These discussions helped to focus attention on the key issues. He then asked me to work with a small group that was preparing a charter for the planned African

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Development Bank. The group was headed by Hans Singer, an economist at the United Nations. We held a number of sessions in Addis and, when the draft was completed, it was forwarded for comment to the future member states. The final draft became the foundation of the new bank. I then began work on a report of my findings in Englishspeaking East and West Africa and decided to fly to London for face-to-face discussions with Africa specialists at the Bank of England. Visiting “The Old Lady of Threadneedle Street,” as the bank has been quaintly known since the end of the eighteenth century (founded in 1694, it moved to its present address in 1734), is a unique experience. As you walk up the interior steps, you are confronted by two tall, stalwart men, handsomely dressed in pink tails, red vest, and black trousers, who inquire as to the purpose of your visit. They then direct you to an adjacent office where your appointment is swiftly confirmed. A few minutes later, an escort arrives and takes you upstairs, via a spacious elevator, to an alcove next to the office of your host. At the precise time of your appointment, a secretary appears, knocks at the official’s door, and he or she welcomes you in. My first meeting at the bank was with John Barraclough De Loynes, manager of the East African Currency Board, whose expertise, accumulated over several decades, proved invaluable. He took me down to the bank’s cellar and showed me a complete set of the East African Currency Board’s reports dating back to its inception. These would not have been available to me from any other source. Over lunch, we discussed impending changes in the administration of regional trade. Understandably, he hoped to retain aspects of the Currency Board System, particularly

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the free movement of goods between Kenya, Uganda, and Tanganyika. I reported to him that this was unrealistic from the point of view of the East African leaders. Moreover, African businessmen I had interviewed believed they were being discriminated against by English and Scottish commercial banks with respect to the financial services they were offered. On my next trip to the Bank of England, I had cause to regret these comments, for De Loynes showed me a published report stating that many of the discriminatory practices had ended. However, when I returned to East Africa and examined the evidence, it became clear that nothing, in fact, had changed. On a further visit to the Bank of England, I pointed this out to De Loynes. He explained, apologetically, that though he had recommended policies to reduce discrimination at the commercial banks, the Treasury had disagreed and no action had been taken. I refrained from criticism but I found it disconcerting that the official report painted a much rosier picture than the facts warranted. In general, however, I found De Loynes – and later, other Bank of England officials – to be men of competence and integrity who performed their duties conscientiously within the bounds set by law. It was clear that, once English colonial institutions were dissolved, African officials would be largely left on their own. While this seemed commendable at the time, later events showed that foreign intervention was often essential to avert or resolve post-independence crises. After my third consultation at the Bank of England, I spent several months in Addis Ababa, examining some of the causes of African underdevelopment, which were directly observable in Ethiopia. The country had been independent;

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hence, colonialism was not an issue. But it was one of the most backward nations in Africa. Political leaders told me that the emperor had recommended reforms – particularly agricultural reforms – but extremely conservative landholders had aborted them. Parliament, they said, was not a constructive participant in governance. Meanwhile, virtually every night, we heard gunfire as rebel groups and military defectors made their grievances felt. One of my finest graduate students at Berkeley was now teaching at the University of Ethiopia. He introduced me to some of his colleagues, who believed that a military coup was practically inevitable unless there were effective economic reforms. But these were not in the offing. Reactionary, obstructionist legislators were masters of passive resistance: when policy initiatives did not suit them, they simply failed to appear. Lawmakers were not the only practitioners of such tactics. We were at lunch one day when a vice president of an American university joined us and said he was about to be appointed president of a new university in Addis Ababa. Having encountered Ethiopian pride, I doubted that Ethiopian officials would accept an American as president of their university, regardless of what the emperor desired. As the man left for his career-boosting appointment, I said, “We’ll see you soon.” Within twenty minutes, he was back, and annoyed. “How did you know?” he demanded. “No one was there!” The officials he was due to see simply did not show. The jilted candidate returned in pique to the United States. After I had given a standing-room-only lecture at the University of Ethiopia on “The Theory and Practice of

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Common Markets,” my former student and his colleagues spoke to me about the importance of establishing a common market among African countries. I suggested that research could be done on the feasibility of such economic integration, but they told me that research was out of the question. They had neither the time (each of them teaching four or five courses per term) nor the funding (research not being a priority for the government). Furthermore, they had to be extremely careful in anything they wrote. The slightest criticism of government policy, they believed, would somehow get on their vita, seriously jeopardizing future employment. Wages in Ethiopian agriculture and industry hovered around a dollar a day, sapping the motivation to work. Young men and women told me that if they worked harder, they would obtain so small an increase in earnings that it could not affect their economic or social status. There was thus little hope of ever improving one’s living conditions. Many parents took scant responsibility for the education and care of their children. Teenagers would work the streets, vandalizing cars if they weren’t paid to keep watch on them. Every day I would see women who were probably in their thirties and forties but looked to be in their sixties walking down the road, backs laden with firewood, heads bent and eyes affixed to the ground, like cattle trudging homeward. Another common sight was that of a handsome young man from some forlorn village walking down the main street with nothing more than a green ribbon around his head, hoping to be selected as a marriage partner by an unknown girl’s family. These were the conditions I observed in the early 1960s. Nearly fifty years later, Dr Kingsley Amoako, a Ghanaian

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former student of mine who had been appointed executive secretary of the ECA, invited me to come to Addis and assist in the preparation of his inaugural address to finance ministers sponsoring the organization. The city I saw on my arrival had grown in size, yet it looked barely less impoverished than it had all those decades before. It was a pleasure to work with a speech writer on the draft that Kingsley had prepared. However, I could not ignore the fact that life in the capital was now lived with great circumspection. When Kingsley’s wife and I decided to take a walk, for example, we did not venture beyond the large, tightly fenced yard that encircled their house. I recalled that the driver who had brought me from the airport to the Amoakos’ compound a few days earlier had had a rifle on the seat beside him. After the meeting with the finance ministers, I asked to consult an economist who was a member of the Ethiopian parliament. He had no address, but my driver knew where he lived. When I asked about the absence of an address, the economist told me that having one was dangerous, since it increased the likelihood of one’s being shot. For protection, he kept a gun on the table while we spoke. He said there had been some improvements in Ethiopia’s economic conditions, but the causes of its difficulties were manifestly still at work. As recent voluminous literature has shown, many of these factors – as well as new strains of countervailing hope – characterize the greater part of the African continent.

Chapter Eleven

Working in Africa: The Franc Zone

During the Christmas holidays of 1961, the ECA suggested that I prepare for visits to the West African franc zone. Though all of France’s West African colonies had been granted their independence by the end of 1960, they would remain for decades adjuncts of the French economy, with currencies linked to the French franc. First, some background on the development of French economic policy in the area. During World War II, France had a higher rate of inflation than most of its international competitors. This led to a substantial devaluation of the French franc on 26 December 1945, resulting in the overvaluation of the West African currency, the CFA franc. For example, before France’s devaluation, one CFA franc was equal to 1.7 French francs; but after the devaluation, one CFA franc was equal to 2 French francs. This meant that exporters in the West African franc zone were charging prices that were too high – they were penalized – and importers were paying prices for imports that were too low – they were subsidized.

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Meanwhile, the comparatively low price of the French franc generated an outflow of private capital from the colonies to France and a reduction of inflow from France. Inevitably, the colonies became easy sellers’ markets for French exporters and, as a result, they were incurring frequent balance of payments deficits. French policy had thus created a substantial threat to the colonies’ economic development. To compete abroad, they had to do whatever they could to lower domestic costs and prices. The overvaluation of the CFA franc persisted into the post-independence period. It was my responsibility to determine the effects of France’s new monetary and trading policies. The ECA had made arrangements for me to visit Ivory Coast (Côte d’Ivoire), and then most of the other countries in the franc zone. Ivory Coast was the largest economy in the region. When I arrived in the capital, Abidjan, I had several spare days to confer with economists at the American embassy and to enjoy the sights of the city. Abidjan was a gem. What French architects could not do in Paris, they did in Abidjan: the city sparkled with modern, spectacular buildings. Some were innovative in their adaptations to the tropical climate. Restaurants in the center of the city were designed with windows that adjusted to any gentle breeze. From fountains that reached the high ceilings, water flowed into marble pools. Dining in these spaces was a delight. My first meeting was with the president of Ivory Coast, Félix Houphouët-Boigny. It was held in an imposing office. Elegantly dressed, with a small goatee, the president was the very image of an African Frenchman. In recounting his background, he told me that he had served in the French National Assembly and in the government as minister of

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health. Displaying unbounded self-confidence, he made it clear that he was not interested in discussing economics; questions on monetary affairs would be answered by his subordinates. However, he expressed satisfaction with the political and economic state of his nation. No mention was made of the overvalued CFA franc. To my amazement, he veered off into a tirade against the Chinese government. When he was through, and our meeting was coming to an end, he declared that Ivory Coast formed the secure basis of French power in West Africa. My ensuing meetings with Ivorian officials were a deep disappointment as they knew practically no economics. When I asked a technical question, they called on a French consultant, who typically worked alongside them. The French consultants were clearly in charge. They informed me that the monetary system France had initiated in the area following independence still required formal authorization. They described its timing and structure as follows. In 1962, France would institute the West African Monetary Union, comprising Benin, Ivory Coast, Niger, Senegal, Togo, and Upper Volta (now Burkina Faso), and its sister institution, the Central African Monetary Union, comprising Cameroon, the Central African Republic, Congo, Gabon, and Chad. Both institutions would be based on a common currency, the CFA franc, which would be freely convertible into French francs. The treaty of the six West African nations would establish a central bank with its headquarters in Paris and a branch in the capital of each state. The Ivorian officials and the French consultants maintained that the initiation of the monetary system was progressing satisfactorily. Given President Houphouët-Boigny’s

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sympathy toward France, they behaved more like cheerleaders than objective observers. They did provide me with indispensable data, however, which would enable me to compare the record of Ivory Coast with that of the other potential member states. My next trip was to Bamako, capital of Mali, where my interviews had quite a different character from those conducted in Ivory Coast. Though Mali was a member of the franc zone, it was not participating in plans to establish the West African Monetary Union. Indeed, several officials believed that the nation should leave the franc zone altogether. On technical economic matters, French consultants were still in charge. However, local officials freely expressed their own views. The overvaluation of the CFA franc, they argued, had been detrimental to the Malian economy. Their export prices were too high and their import prices were too low. Consequently, Mali was suffering from balance of payments deficits and accumulating ever larger indebtedness to France. Officials at all levels alleged that colonization was the primary cause of Mali’s economic difficulties. Next in line of responsibility were international economic institutions, particularly the World Bank, which were faulted for neither assisting Mali in its agricultural development nor providing moderate foreign aid. Vigorous criticism was also directed at Western European countries, Japan, and the United States for subsidizing their agricultural producers, thereby undercutting Mali’s export opportunities. Although resentment of the West was quite general, it was directed primarily at France. I got to witness the antipathy to Westerners at first hand. After completing my work, I took a walk in downtown Bamako.

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In the middle of the main block, a large music store with a beautiful window display attracted my attention. Bright and lively portraits of Malian artists, Edith Piaf, and even Frank Sinatra decorated their albums. A young boy was standing in front of the window, gazing at the spectacle. I joined him. Like companions, we enjoyed the scene and the sound of pleasing music. Suddenly, the young boy’s mother shouted, in French: “Henri! You’d better come on, or the white man will get you!” He looked at me, and I smiled. He smiled back. We continued to admire the display for several more minutes. Then, with the nonchalance of youth, he scampered off without another word. Next on my agenda were visits to four countries where the attitude toward France was more pragmatic than adversarial: Benin, Niger, Togo, and Upper Volta. Local officials stated that the monetary union would be destroyed if France preyed on it, for instance by continuing to maintain an overvaluation of the CFA franc. The CFA franc, they contended, would have to be devalued. Corruption was endemic in these countries, as well as in all the other states I had visited. But in my next visit, which was to Guinea, it became personally threatening. Guinea had left the franc zone and established its own central bank. Inflation was raging, and the Guinean franc was in a freefall. I was continually harangued by sellers of all manner of goods. At the end of an unproductive day’s work, I asked a clerk at my hotel to call a taxi. A large black limousine arrived and I asked the driver to take me to the airport. For reasons I could not understand, he turned off the main road and drove down a narrow street. When we came to a corner, he stopped. The left door of the limousine opened and a man

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in a black suit jumped in and pushed me to the center of the back seat. As I turned my head to look at him, the right door of the limousine flung open and another man in a black suit squeezed in, trapping me between the two. It was a disturbing moment. I had no idea what to expect, but my two hands turned into fists. Suddenly, the man to my left thrust his left hand into his pocket. My gaze darted in all directions, and I saw the man at my right thrust his right hand into his pocket. The man on the left produced a wad of bills. “I’ll give you the best price for CFA francs,” he said. “I’ll give you a better deal,” countered the man on the right. Sternly, I told them that I was not in the currency market. They opened the doors and got out. The driver – an obvious accomplice – drove on to the airport. My concluding visit during this trip was to Dakar, capital of Senegal. The city looked and felt like a metropolis. The local officials were well trained; several had attended universities in France. French consultants were their subordinates. They mentioned that, in colonial days, Senegal had representatives in the French National Assembly. Generally, their feelings toward France were cordial. The primary Senegalese official with whom I worked was a graduate of the Sorbonne, where he had taken a PhD in Linguistics. He spoke English fluently. As for economics, he was self-taught and competent. His sympathies toward France notwithstanding, he acknowledged inconsistencies between French principles – such as granting independence – and the practice of maintaining control of the economies of the now-independent countries. The overvalued CFA franc was an example. For many decades, he believed, France would not only maintain control over the CFA franc

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but would have a powerful influence on the monetary, banking, and trading policies of the states within the West African monetary union. Nevertheless, he and his colleagues strongly favored Senegal’s entry into the monetary union. Moreover, they encouraged me to visit the Bank of France and to convey their views on two issues. French plans called for the head office of the monetary union’s central bank to be located in Paris. Senegalese officials thought this was not unreasonable in the short term, but that later it would be appropriate for the head office to be situated in West Africa, preferably in Dakar. This location would be advantageous not only because the bank would be close to all the member states but because it would help foster a sense of shared responsibility for price stability and economic growth. One official was particularly concerned about corruption in the extractive industries. There was a serious danger, he believed, that governments in control of these exports – as well as foreign importers of them – would collude in depositing the proceeds abroad into the bank accounts of African leaders rather than sending them home and adding them to the pooled reserves. He requested that this problem, too, be discussed with officials at the Bank of France. After completing my interviews, I returned to my Dakar hotel. It was a splendid, friendly place. A member of a small group invited me to join them for a drink. The discussion soon turned to their respective missions. One guest was an attractive nurse from Paris. Her father, she said, was a Protestant minister. He had encouraged her to accept a twoyear appointment with Dr Albert Schweitzer, the renowned

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missionary who was caring for lepers in Lambaréné, Gabon. She had learned that he was eccentric. Though crates of advanced medicines had been sent to him, he was not using them; they had simply been stockpiled in a shed. The nurse said she had taken specialized medical courses at McGill University and hoped to improve procedures in Lambaréné. I mentioned that I also had attended McGill and had several nurses as friends. To my astonishment, she shot back, “Like all men, I bet you thought all nurses were easy!” Startled, I replied that that had not been the case; the nurses were no different from any of my other girlfriends at McGill. She retreated into silence. By implication, at least, she had established her pious chastity. When the group broke up, she and I walked down the hallway toward our rooms. As we approached her door, she coquettishly said, “I’ve got a bottle of Scotch, would you like to come in?” Politely, I declined, murmuring about work I had to do for the next day. My first visit to Paris was professionally rewarding and personally a delight. I was swept away by the treasures of the Louvre, and I found the streets of the city – Les Invalides above all – promenades of enchantment. The government officials at the Bank of France, graduates of the most prestigious academies, were first-rate. Invitations to lunch at their homes left no doubt that they were members of the upper class, but they were hardworking, often scheduling interviews until eight or nine o’clock in the evening. These were professional, technical officials, permanent civil servants who remained in their positions regardless

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of changes in administration. One of them had worked in the French embassy in Washington and he remarked on this striking difference in French and American practices. The extremely high turnover of technical personnel in Washington with each new administration, he thought, should be on the agenda for reform. The French experts on West Africa expressed a humane interest that France should continue to play what they considered a “hospitable” role in the formation of a viable West African Monetary Union. On such matters as the location of its central bank, they agreed that in time it should be moved to Dakar. Moreover, they thought the central bank should, as soon as possible, establish an institute for the training of African bank executives and their staff. French foreign trade officials, as well as economists at the Treasury, sought my impressions of the views I had heard expressed by officials of the member states. They also wondered about my general prognosis for the monetary union. I passed on the West Africans’ concerns about corruption, particularly in the extractive industries. The French officials shared those concerns but emphasized that this was a worldwide problem that required enforceable worldwide solutions. They agreed that the monetary union’s central bank needed to have oversight powers in this regard. They also believed that the IMF and the World Bank should provide leadership in a program of this kind. As for my views on the likely success or failure of the monetary union, I drew attention to the following issues: •

African officials had stressed that the monetary union should play a significant role in their governments’ plans

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to increasingly engage in economic activity. In several cases, I had found that governments had already drawn on commercial banks beyond agreed limits. If this tendency were not curbed, I warned, it would jeopardize the success of the union. • I stated that the increased role of governments in economic activity would become a problem of the first rank. The role of the monetary union was important in economic management, but not as a large financier, for it could run into the problem of unprofitable public enterprises, and pose the risk of inflation. These factors could undermine the union. However, I pointed out that subSaharan Africa did not have an “economic heritage” in manufacturing production. During the colonial period, primary emphasis was placed on natural-resource production – agricultural and extractive – the bulk of which went to exports. Manufactured goods were imported. Incentives for business activity unrelated to naturalresource production were therefore scant. Talented young men tended to enter public service instead. Understandably, the supply of entrepreneurial capacity for manufacturing or telecommunications was very low. The union’s central bank could play an influential role, I suggested, by establishing an institute for the training of senior executives in banking as well as entrepreneurship. • Difficulties notwithstanding, I thought that the prospects for moderate success of the monetary union were favorable. As compared with the available alternatives, leaders of the member states had recognized that shared responsibility was essential for success in managing their monetary systems.

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The ability of member states to draw checks on France gave France a significant continuing role in the states’ monetary, fiscal, and trading systems. This “hands-on” French policy – though it came at a cost to the member states – was likely to provide a measure of stability in a turbulent world. • With two possible reservations, I stated what I considered to be the most important reason why the West African Monetary Union would have a long and evolving existence. Regions in Africa had to unite. This was even truer for security reasons than economic ones. The latter centered on the need for diversification, and ample heterogeneity of resources existed in West Africa to provide gains from unification. Plans for the monetary union called for its central bank to establish a competent training institute. This would be a multinational project. Together with the collective responsibility of the banks’ management, the monetary union would tend to have a unifying effect on the member states. The economic gain to each state – with the informal security anchor of France – and the costs of possible exclusion would be a significant factor in mitigating irresponsible national behavior. Clearly, this would contribute to the prevention of warfare. •

As for the two reservations, which I thought comparatively insignificant, the first was autarchy. I was concerned about the authoritarian nature of the governments I had visited. At points of political succession, coups and political rivalries would tend to undermine the operation of market-oriented institutions, including the West African Monetary Union.

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Second was the fact that monetary institutions per se were not capable of generating economic breakthroughs and diversified growth. Furthermore, in times of global recession, they would not be able to prevent economic catastrophe. These two reservations would call for the strengthening of the central bank. Understandably, the French officials were more responsive to the positive aspects of my prognosis. After completing work in Paris, I returned to Addis Ababa with the hope of writing my report for the United Nations. But the ECA had other plans. The executive secretary had made arrangements for me to visit practically all the other countries in sub-Saharan Africa, as well as those of North Africa. It was an arduous assignment, but it would contribute to my understanding of the continent and to the preparation of two reports on the emerging monetary situation in the former sterling area and in the franc zone.

Chapter Twelve

Dinner at the White House

South Hall is the only remaining original building on the Berkeley campus, a serious-looking edifice built between 1870 and 1873 in the style of the French Second Empire. For decades, the Department of Economics was headquartered on the first floor. As one entered the large lobby, to the immediate right sat Mary Drew, our formidably efficient departmental secretary. The space was not only Mary’s working quarters; it was also used for advising students, and it served as a community focal point where faculty members would cross paths and visit with one another. Most of our individual offices were in neighboring buildings – and were considered sacrosanct. To minimize distraction from the silent labors of scholarship, we were given no telephones of our own; all calls came in to Mary, who, if we happened to be in South Hall at the time, would summon us to the second phone at the back of the lobby by bellowing out, for example, “Letiche, answer the phone!” Picking up my mail one morning in early June 1969, I heard this gentle request.

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The secretary of Dr Arthur F. Burns, chairman of the Council of Economic Advisors, was on the line. She asked if I would be available on June 12 to attend a dinner meeting with President Nixon at the White House. Unaware of the protocol under which invitees to the White House customarily paid for their own transportation, I asked who would defray my expenses. There was a brief, embarrassing silence, and I suggested she speak to Dr Burns about it. Fifteen minutes later, she called back to say that Dr Burns would be pleased to take care of the expenses. She also told me of my hotel reservations and said that, if I wished, she would send a driver to take me to the White House. On arriving at the Mayfair Hotel, I was escorted to my spacious, elegant room and rested a while in preparation for the evening. Around 5:45 p.m., I went down to the lobby where, to my delight, I found Professor Erik Erikson, formerly of Berkeley and now (following his refusal to sign the controversial loyalty oath) at Yale. He suggested that we walk to the White House. “You should be forewarned,” he said solemnly. “We are probably going to be used.” I asked him what he meant. He told me he had attended a previous meeting at the Nixon White House, which had been manipulative. The chairman had presented two options in regard to prospective legislation, neither of which Erikson favored. But the possibility of looking beyond these options was clearly, if implicitly, ruled out. The participants were asked to comment on the issue and to make recommendations. In Erikson’s view, one of the options was distinctly less desirable than the other; nevertheless, the choice lay between two undesirable courses. While the consultants

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to the president, who sat with the guests around the table, vociferously supported one of the options, Erikson had demurred. Yet subsequent press reports, based on administration sources, stated that a unanimous consensus had been reached. The guests had unwittingly been cast as players in a political charade and Erikson was piqued. “I have learned my lesson,” he declared. “If they try the same thing again, I won’t let them get away with it.” His wife, he said, hated Nixon’s guts; she had been against his attending the meeting. I told him that Emily would match her. But we both believed that, as scholars, we had an obligation to accept the invitation and would simply make every effort not to be manipulated. When we arrived at the White House gate, we showed our invitations and were taken to a large, hall-like room. Against the main wall stood two short men in black suits whose role as security guards was self-evident. About fifteen guests and ten government officials were present. We had been advised that liquor would not be served. This was untrue, for in one corner of the hall, guests were being served any drink they desired. Around 6:15 p.m., President Nixon came into the room. On television, he was decidedly not photogenic. In person, his looks were more appealing. Suited in an attractive Mediterranean blue, he walked casually to the center of the room and the group formed a half-circle around him. I was standing in the front row, to his left. We shook hands, and he asked me where I was from. I said Berkeley. Another professor was from UCLA, and a third from Harvard. Nixon quipped, “The proportion is just right – two from California, one from Harvard!”

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His brief comments were impressive, conveying an incisive mind and an easygoing demeanor. Daniel Patrick Moynihan, assistant to the president for urban affairs (later the longserving senator for New York), appeared to play the role of host as a scholar in residence. I had met Moynihan at Harvard, and now asked him about how Nixon comported himself before different groups. His capacity to switch into and out of roles, Moynihan said, approached the uncanny. Some time before, a prominent group of women from Texas had visited the White House and had been invited into the Oval Office. When they entered, they looked at the president and began singing, “The Eyes of Texas Are Upon You.” Nixon not only joined them in song, but was affable with each one of them. When they left, he vilified them in as foul language as Moynihan had ever heard. He then moved on cheerfully to a cabinet meeting. Around 6:30, we all took our seats around a large table. Moynihan chaired the meeting. To his right sat a White House advisor, followed by Erikson, then myself. Nixon sat across from Moynihan, with a puzzlingly empty chair beside him. Its designated occupant arrived last: the national security adviser, Henry Kissinger. Moynihan said a senator was planning to introduce a bill on financial aid to students that presidential advisers thought ill-advised. He was somewhat vague about the details, but the aim was clear: to prohibit any federal agency, college, or university from using federal funds to assist students who had engaged in unauthorized political activity, whether on or off campus. This would mean that such students would have to sustain themselves on loans from commercial banks or other private institutions, whose interest rates were more onerous

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than those of the usual sources. The president’s advisers considered the bill too sweeping, as well as unenforceable. They proposed alternative legislation that would apply only to federal agencies. Our group was asked to weigh in on the respective merits of the two proposals. We went around the table, beginning with participants at Moynihan’s left. I listened as each of my fellow guests spoke in support of the more limited legislation. When it came to my turn, I drew on the experience of the loyalty oath crisis at Berkeley twenty years earlier. The California state legislature (as I have recounted in chapter 9) had passed the Levering Act loyalty oath, which was applicable to all state employees, including employees of the university. Prior to passage, UC president Robert Gordon Sproul had become alarmed by the all-encompassing sweep of the bill and, in an attempt to ward off interference in campus management by the state legislature, had recommended to the regents that they institute a loyalty oath applicable to university employees only. But the new oath was seen as demeaning by many members of the faculty – including Erik Erikson, who was sitting next to me as I was addressing the group – and had provoked a rebellion. While Sproul had sought to avert institutional damage that might have been caused by the Levering Act, he had turned a blind eye to the fact that the offensive principle underlying it – namely, coercion – was left intact by the oath he had introduced. If a measure is flawed in its very essence, little is gained by snipping off this or that provision. In the matter we were discussing, the sponsoring senator was seeking to use student aid as a battering ram against wayward political expression. This was unconscionable, whether the threat was to all aid or to

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aid from a single source. I therefore suggested that President Nixon not only take a stand against the proposed bill but also refrain from advocating a replacement of narrower scope. Moynihan, without comment, then called on Erikson. My former colleague said that I had stated his views exactly. Several of the president’s advisors bristled and made clear that they felt we were off-base. That marked the end of the discussion. Moynihan thanked everyone for coming and invited us to stay for dinner. I did, of course, and appreciated the excellent fare that I and other taxpayers had provided. Afterward, Erikson and I walked back to the hotel. We were both dismayed that eminent presidential advisors appeared to be colluding in specious policy analysis. Manifestly, they were out of touch with reality outside the Beltway. We were certain that the legislation they were advocating would have dire consequences for all concerned. I was tired and looked forward to a good night’s rest. Normally, I fall asleep at once, but on this occasion I tumbled about until the early hours of the morning. I felt as though I had been intoxicated, almost chloroformed, by the aura and mystique of the American presidency and the White House. How easily, I thought, might those working close to the president be transfixed by their proximity to vast power and the half-hidden levers of wealth-making. After returning to Berkeley, I eagerly watched for indications that our meeting had had some practical consequences. To my great satisfaction, the senator in question did not introduce his legislation, and the president took no action.

Chapter Thirteen

Concluding Observations: The Short Term and the Long

In May 1989, the chair of our department asked me to join him at the commencement exercises. When we reached the stage of the Greek Theater, the thought crossed my mind that the proceedings would not be as lively as the year before. Then, I had sat beside the great humorist Bill Cosby, who was to deliver the commencement address. At the very start, a young faculty member gave a short speech, which included a joke about the long walk to the restrooms at the Greek Theater. Suddenly, Cosby shot to his feet and strode to the podium. He cupped his hand to the speaker’s ear, murmured something, and marched back to his seat. My young colleague confided to the audience, “I have just been chastised. Mr. Cosby told me that he was here to tell the jokes!” A year later, we at least were blessed with a wonderful afternoon. A Mediterranean blue sky shone over some five thousand celebrants: graduates in their robes, families and friends. At one point, a dean spoke appreciatively of my long Berkeley career, now being brought to a close. But, following applause,

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he went on to say, “Professor Letiche is actually not retiring; he’s being recalled.” I had no idea what he meant. Later, Emily and I were entertained at a department dinner in my honor. In his remarks, our chairman noted that I had taught at Berkeley for more than forty years, served for twenty years (now thirty) as chairman of the Campus Committee on Visiting Professors and Lecturers, published and edited nearly one hundred articles and books, served as consultant to the Economic Council of Canada and on the board of the American Society of International Law, and was continuing to work with the Senior Executive Program of the U.S. government. He concluded by awarding me the highest honor Berkeley can bestow, the Berkeley Citation, which reads: “For distinguished achievement and for notable service to the University.” To have my decades of service acknowledged in this way was deeply moving. As for being recalled, the chairman asked me to teach a seminar on international economic policy for a select group of twenty freshmen. This assignment would bring about a totally unexpected shift in my priorities as an educator. It would also trigger a reconsideration of the key events discussed in this memoir. The change was not so much in my basic attitudes, beliefs, or conduct as in the degree of importance I attached to a particular principle, namely, civility in intellectual exchange. What I came to see, in a sort of philosophical awakening, was that everything of worth in the academy depended on this one fundamental and vanishing virtue. The truth is, throughout all the years of my career prior to the early nineties, I had never given much thought to the indispensable nature of civility. There had been no need.

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Thanks to the general and scholastic culture in which I and most of my colleagues and students had been raised, it was taken for granted that those with whom one struggled for greater understanding were worthy of respect. To the incoming students in my seminar, this was not self-evident. Rather, opposite presumptions seemed to be embraced: if an opinion is not aligned with one’s own, it may be summarily dismissed, and arguments are best advanced by decibel rather than thoughtful exposition. At the second session in which students were presenting their work, I felt obliged to comment on the combative style of the proceedings. Taking a risky leap, I asked the students whether the many years they had spent almost exclusively in the company of a computer screen might have rendered them incapable of relating to other people. I was not comfortable practicing psychological diagnostics and I half expected some protests. But that did not happen. Astonishingly, my provocative statement met with unanimous agreement! Yes, they admitted, they were handicapped when it came to face-to-face communication. This was a turning point in the seminar. Having been edged into a “collective confession,” the participants, now a cooperative working group, treated each other in an entirely new spirit. They addressed each other with neither belligerence nor defensiveness, gave their whole attention when listening, spoke in ways that fed the developing awareness of whatever topic was being explored, and as a group arrived at an exceptional level of intellectual productivity. Their achievements, including several awards of $1,000 for papers submitted to a national undergraduate competition, reflected the excellence of the group dynamic. As

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a source of satisfaction to me, the transformation in attitudes far outweighed the stellar academic accomplishments. Civility, apparently lost without trace, had been rediscovered as the result of a simple acknowledgment of a damaging narrowness. This episode finds echoes in many of the environments in which I have lived and worked, as described in these pages. During my youth in Russia, there was no civility of discussion in our household. My father would not tolerate any challenges to his opinions. If my older brother, Israel, evidenced the slightest resistance to my father’s authority, he would be brutally punished. Being the youngest, I would cry for him, and usually I was spared a similar fate. The task of obtaining the most modest pleasures for my brother or sister fell to me. But the moral cost was high. I learned to manipulate and maneuver. In defense against my own fears, I became an incorrigible liar. But there were also countervailing forces. A dread of adversity and chaos stoked my fierce belief in hard work and in the virtues of balance and proportion. Nevertheless, for many decades, the expedients I resorted to in childhood and youth not only left a blot on my character but also inhibited my ability to innovate and to implement intellectual discoveries. The paramount lesson of childhood schooling in Russia was respect for authority in all its manifestations. Emphasis was placed on harmony, and on the prevention of bullying, rather than opportunity. At the age of eight, I heard at school and at home that, in ancient times, Russia had been overrun by Genghis Khan and his hordes; also that, in modern times, Russia had been invaded by many countries, from Sweden to Japan, and even by the United States.

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We were surrounded not by friendly neighbors but by potential enemies. Furthermore, it was often said that foreign companies had pillaged Russian resources and were untrustworthy. Russia therefore had to protect itself militarily, politically, and economically. I had heard from my parents about Russian xenophobia at a very early age, though they had never mentioned that excessive use of Russian power might engender fear and enmity in neighboring countries. My father and his business associates, however, were acutely aware of this risk and argued for a studied civility in discussions between Russia and foreign governments. Any lack of civility by foreign governments toward Russia was seen as confirming their malign intent. Ironically, relations between the Russian government and its own populace were so riddled with mistrust that no amount of surface civility in that arena would have had any ameliorating effect. Understandably, since my father and his associates did not trust the government, they relied overwhelmingly on establishing an inner circle of companions upon whom they could rely in their business and personal financial affairs. This aspect of the culture persisted through and beyond the decades of communism and provided the foundation for today’s emerging information-communications industry in Moscow and St Petersburg. The responses of Berkeley administrators to the Free Speech Movement provided a solid case study of both effective and ineffective conflict management. Chancellor Edward Strong, a disciplinarian, pursued an approach of challenge, confrontation, threats, and force. President Clark Kerr cautioned him that, in dealing with adults, this approach would

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likely lead to polarization; he recommended cooperation, sustained discussion, and compromise. Some believe events showed that, in the short run, Strong’s approach was prudent. However, in the longer term, Kerr was proved right. It would take the leadership of law professor Michael I. Heyman (later chancellor) to establish not only a cooperative and constructive attitude toward the FSM but also systematic procedures assuring civility of discussion on contentious issues among members of the faculty, students, and the administration. The lack of civil discussion between sub-Saharan political leaders and their electorates has intensified civil strife in Africa. The absence of such dialogue is due to the capacity of governments to live off undisclosed export revenues rather than accountable taxation, thereby obviating the need to persuade voters of the soundness of policy programs. In these circumstances, there are no democratic constraints on corruption; governance runs on patronage and falls into the hands of the barely qualified. The resulting vacuum presents an irresistible opportunity to lawless elements, who take up arms in struggles for control of exportable resources such as diamonds and copper. They will risk everything for a victory, and even when a conflict ends in a settlement, the monetary proceeds are less likely to be used for socioeconomic improvement than for a renewed campaign of militancy. The stagnation of sub-Saharan Africa is thus perpetuated.21 Civility of discussion has also been important in my work with government officials. In January 1975, I was one of three professors invited to deliver a lecture at the inaugural ceremony for Governor Jerry Brown. I praised the new governor’s bipartisanship and spoke about the long-term role of the

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university in California’s economic development. At the close of the session, legislators of both parties were encouraged to raise questions, some of which were controversial. I decided not to engage in debate with the governor’s opponents but merely to affirm my own professional economic principles. The exchange proved to be a pleasant and lively affair. From 1972 through 1977, I served as consultant to the Economic Council of Canada. It was a tumultuous time for the Canadian economy. The nation was facing excessive public spending, and inflation and interest rates were climbing. I took the position that the world was now on a “fiscal standard,” by which I meant that international investors regarded a nation’s fiscal policies as a key factor in its economic stability. Budget deficits, therefore, had to be kept under strict control. Our work centered on controversial issues in foreign investment, commercial policy, and optimal way of reducing government expenditures. Politically, too, the nation was facing a potential crisis, since a secessionist party was emerging in the province of Quebec. By 1976, it had formed a government. The distinguished economist André Reynauld chaired the Council’s meetings dispassionately, steering clear of political debate. I also avoided confrontation when called on to answer controversial questions, focusing on the economic principles involved and the probable consequences of various courses of action. However, disagreement did arise among participants in the Council’s meeting on the secession issue. Whenever assertiveness was met with assertiveness, the result was polarization; whenever it was met with a careful hearing and a problem-solving response, the result was a felicitous outcome.

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Another appointment was with the Senior Executive Program of the U.S. government, for which I conducted seminars on controversial issues involving the United States, China, Russia, and the Middle East. Participants came from the armed services, the CIA, the FBI, the Departments of the Treasury and Agriculture, and so on. They were first-rate public officials who were skeptical about the competence and objectivity of the “country advisors” assigned to them. The seminars continued for thirty-five years, from 1970 through 2005. It was an unbeatable assignment: to a considerable extent, I was the one being taught, and I was paid! At one session a participant claimed that China kept two sets of books on its GDP growth rate: one for its own use and another for external propaganda. Other members thought this was unlikely, and the discussion became argumentative. One advocate of the double-bookkeeping view cited a China advisor in his retort. I was asked if any evidence was available on the matter. It was: a study produced by the University of Pennsylvania had calculated the data on China’s GDP growth in three different ways and found no inconsistency between these results and those published by the Chinese authorities. There was no indication whatsoever that China had maintained two sets of GDP data. Attempting to mute the discord, I said that there may have been grounds for misunderstanding. Whenever China’s GDP growth rate was at a high level, the official forecast would be an underestimate. Whenever it was at a low level, the authorities would overestimate. The underestimate may have been an attempt to ward off U.S. pressure on China to appreciate the value of its currency and thereby reduce its export surplus. The overestimate in bad times may have been an effort

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to forestall a decline in the stock market. Mistakenly, these actions may have given the impression that China maintained two sets of data on the GDP growth rate. While China was misrepresenting the true state of its economy, there had not been two full sets of data. My comments helped resolve the tense and unproductive debate, but it was clear that the absent China advisor and some of the members favored a confrontational approach toward China. I believed that, on a level playing field, the U.S. national interest would be better served by a cooperative stance. Looking at the way tension was sustained, I inquired whether the Chinese advisor had spoken of the exculpatory University of Pennsylvania study. He had not. From my experience with the Berkeley Free Speech Movement, the divisive policies of rival African nations, and the often confrontational, counterproductive stance of government leaders and executives, I have drawn an important lesson: the absolute necessity to distinguish between the short- and the long-term consequences of actions. While threats, ultimatums, and the use of force may appear to be appropriate in the short term, they tend ultimately to lead to failure. Sustained success is typically the fruit of cooperation, ongoing consultation, and compromise. At times, of course, there may be no satisfactory alternative to open hostilities. In general, however, I have found that conflict is most effectively managed not by plunging further into polarization but by retaining confidence in the power of deeply held principles – and acting upon them.

Notes

C h a p t e r On e 1 2

Alexander Pushkin, Ruslan and Ludmila: A Poem, trans. Irina Zheleznova (Moscow: Raduga Publishers, 2000). Richard A. Pierce, Interview of Jacob Marschak, “Recollections of Kiev and the Northern Caucasus, 1917–18.” University of California, Berkeley, Bancroft Library, Regional Oral History Office, 1971.

C h a p t e r Si x 3

Robert Skidelsky, John Maynard Keynes, Vol. 3, Fighting for Britain 1937–1946 (Chatham, Kent: Macmillan, 2000), 438. 4 Donald Moggridge, ed., The Collected Writings of John Maynard Keynes, vol 26, Activities, 1941–1946: Shaping the Post-War World, Bretton Woods and Reparations (London: Macmillan 1980), 100,103. 5 Skidelsky, John Maynard Keynes.

216

Notes to pages 118-–152

C h a p t e r E igh t 6 John M. Letiche, “Adam Smith and David Ricardo on Economic Growth,” in Theories on Economic Growth, chap. 2, 7

ed. B.F. Hoselitz (Glencoe, Il : Free Press, 1960), 65–88. Skidelsky, John Maynard Keynes. 460–1.

8 Jacob Viner, Studies in the Theory of International Trade (New York: Harper & Bros., 1937), 2n. 1. 9 A reduction in the real rate of interest can, of course, reduce costs and increase confidence. As the experience of the 1930s shows, this could be achieved if the rate of interest is even close to zero. As Christina Romer has pointed out, in the 1930s, “monetary expansion took a surprising form: it was essentially a policy of quantitative easing conducted by the U.S. Treasury.” Lessons from the Great Depression for Economic Recovery in 2009. Presented at the Brookings Institution, Washington, D.C., 9 March 2009, 5–7. 10 Viner, 2n. 1. 11 Jacob Viner. “Power Versus Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries,” World Politics 1 (October 1948): 1–29.

Chapter Nine 12 Edward Strong, Oral History, University of California, Bancroft Library, http://bancroft.berkeley.edu/FSM/ohist. html. 13 Clark Kerr, The Gold and the Blue, vol. 2, Political Turmoil (Berkeley: University of California Press, 2003), 179. 14 Ibid., 204. 15 Video and text of Savio’s speech available at http://www. americanrhetoric.com/speeches/mariosaviosproulhallsitin. htm.

Notes to pages 155–211

217

16 Kerr, 257. 17 Ibid., 414. 18 Ibid., 271–4.

Chapter Ten 19 Mosala Mosegomi, Soweto Explodes: The Beginning of the End of Apartheid (Dubuque, Ia: Kendall Hunt, 2009). 20 For a more thorough analysis of these issues, see John M. Letiche, “Transforming Sub-Saharan Africa,” Journal of Policy Modeling (March/April 2010), 1–13.

C h a p t e r T h i rt e e n 21 In sub-Saharan Africa, the root cause of adverse effects from countries possessing rich exportable resources has been the lack of democracy, transparency, and civil discussion. See Peter Maass, Crude World: The Violent Twilight of Oil (New York: Alfred A. Knopf, 2009).

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Reviews Halm, George N., “Monetary Theory,” Foreign Affairs, 1946. Henius, Frank, “Dictionary of Foreign Trade,” Foreign Affairs, July 1946, 745. Polanyi, Michael, “Full Employment and Free Trade,” Foreign Affairs, July 1946, 745. Kahn, Alfred E., “Great Britain in the World Economy,” Foreign Affairs, October 1946, 170.

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Index

Aarhus, Denmark, 112, 122–7, 130, 132, 133–5 Abidjan, Ivory Coast, 189–90 Abie (Nathan’s brother), 49 Abley, Mark, x Academic Senate, UC Berkeley, 136, 139, 140, 146, 150–4, 161 Addis Ababa, Ethiopia, 163–5, 171, 175–6, 182–3, 184–7, 199 Africa, 163–99; civility lacking, 211; corruption, 179, 181, 192, 194, 196, 211; Economic Commission for Africa (ECA), 163–99; franc zone, 188–99; Pan-Africanism, 177; South, 165–71; sterling area, 163, 171–87, 199 Allen Oliver Fellowship in Economics, 57, 58

American Economic Association, 141 American Economic Review, 141 Amoako, Kingsley Y., x, 186–7 Anderson, Eugenie, 130, 131–2, 133, 134–5 Anderson, John, 130 apartheid, 165, 166, 167–71 arm injury, 52–3 Armstrong, Hamilton Fish, 83, 90 Army, 25, 55, 58, 59–63 Artus, Jacques R., x Artus, Kazuko K., x Associated Students of the University of California (ASUC), 150, 151 athletics: basketball, 39–40,

240

Index

41–2, 60; hockey, 41–3; school, 25, 39–40, 41–3 authority, respect for, 25, 209 Avery, Sewell, 71–2 Baez, Joan, 152 banking, 124–5; Africa, 165–6, 172–6, 182–4, 190, 191, 193–4, 196–9; Bank of America, 106–7; Bank of Canada, 44, 59, 61–2, 70, 75–6; Bank of England, 172–3, 183–4; Bank of France, 195–6; International Monetary Fund (IMF), 81–2, 165–6, 196; World Bank, 145, 191, 196 Baron Byng High School, 40–2 Barza, Sidney, 45, 58 basketball, 39–40, 41–2, 60 Benin, 192 Berg, Ellison, x Berkeley, 97–114, 135–62; flat, 98–100; house, xvii, 142; social life in, 104–6, 139. See also University of California, Berkeley Berkeley Citation award, 207 Berlin, Andrew, x Berlin, Abrasha: leaving Russia, 7–8; Montreal, 21, 33, 34, 38–9, 44, 56–7; New York visit, 87 Berlin, Shelia (half-sister):

leaving Russia, 7–8; in Montreal, 13–14, 21, 33–4, 38–9, 56–7; New York visit, 87 Biafra, 178, 182 Bidwell, Percy W., 79, 89, 90 blacks: discrimination, 146, 165, 166, 167–71, 184; Russian schools on, 23–4. See also Africa Black Sea, 5–6 Bonn, Moritz J., 58, 59 Boulding, Kenneth, 64 Bretton Woods Agreements Act, 166 Bretton Woods conference, 81–2 Britain, 81–3; British Museum, 121; U.S. loan to, 81, 82–3; “Will the Pound Sterling Be Devalued?” (Letiche), 116; World War II, 123. See also Cambridge; London Brown, Edmund G. “Pat,” 149, 152 Brown, Jerry, 211–12 Brownlee, Oswald, 74–5 Burns, Arthur F., 201 Byng (high school principal), 40–1 California legislature: loyalty oath, 136–7, 204 Cambodia: U.S. invasion, 156

Index Cambridge, England, 117–20; Cambridge University Press, 102; economists, 118–19, 141; Royal Economic Society, 103 Canada: Economic Council of Canada, 212; family emigration to, 21, 26–33; immigration from, 84, 89, 92–6; Queen’s University, 51–3, 55; Shelia and Abrasha leaving for, 7–8; World War II, 55, 59–60. See also banking: Bank of Canada; Montreal capitalists: Depression

241

Shotwell, 102 Committee on Academic Freedom, UC Berkeley, 153–4 common market concept, 83, 111–12, 125–6, 132 Communists: Free Speech Movement (FSM) and, 147; loyalty oath and, 137–8; McGill, 94; Soviet Russia, 4, 13, 14, 16–17, 23–4, 34. See also Marxists Condliffe, John, 88–9, 98, 100–2 Copenhagen, 112, 122, 123, 130,

unemployment and, 44; Russians and, 13–14, 23–4 Carnegie Endowment for International Peace, 102–4 Central African Monetary Union, 190 CFA franc, 188–99 Chicago, 53, 70, 71–2, 73. See also University of Chicago China, GDP growth rate, 213–14 citizenship, American, 138 civility, 25, 207–14 civil rights struggles, 146, 170–1 Clark, John M., 102 Cold War, 137, 146 colonialism, Africa, 171–3, 184, 185, 188–9, 191, 197

132, 133 Corley, James A., 137 Cosby, Bill, 206 Cossacks, 14 Council of Economic Advisors, White House, 201–5 Council on Foreign Relations, New York, 77–96, 106 Cripps, Sir Stafford, 116 Currency Board System, East Africa, 172–3, 174, 183–4

Columbia University: International House, 84;

126; Nazis and, 134 Denmark, 122–7, 130–5, 140;

Davis, Sailor, 144–5 Davisson, Malcolm, 101 De Loynes, John Barraclough, 183–4 democracy: economic aspect,

242

Index

Aarhus, 112, 122–7, 130, 132,

Depression, 44–6; exchange

133–5; Copenhagen, 112, 122,

rate policies, 126, 132, 159;

123, 130, 132, 133; social life,

father and, 16, 18–21, 26,

130–1, 133, 135; U.S. ambassa-

32–49; foreign exchange

dor to, 130; World War II, 123,

controls, 58–9, 62, 174;

127, 133–4

golden era (1960s), 175; leav-

Depression, Great, 37–9, 41, 43–6

ing Russia, 26, 30; particular expenses curve, 67–8;

Dingwall, Jim, 66–8

partners in business, 35;

discrimination: vs. African

stock market, 37–9. See also

businessmen, 184; vs. Biafra, 182; civil rights struggles vs.,

banking economists/economics

146, 170–1; vs. Jews, 47, 51, 70,

departments: Africa, 172,

71, 85; South African apart-

179–80, 190, 193–4; Allen

heid, 165, 166, 167–71

Oliver Fellowship, 57, 58;

Dmytryshyn, Basil, x

Cambridge, 118–19, 141;

Douglas, Paul, 67, 68

Denmark, 123–6, 130, 133;

Drew, Mary, 144, 200

Economic Council of

Dulles, John Foster, 80

Canada, 212; Harvard and MIT, 113–14; Iowa State

Eaton, Dorothy, 74

University, 74–5; Keynes,

Economic Commission for

81–3, 110–12, 119–20, 124–5;

Africa (ECA), 163–99 Economic Council of Canada, 212

McGill, 55–9, 66; Paris, 195– 6; Queen’s University, 51–3, 55; Stockholm, 127–9, 141; UC

The Economic Journal, 103

Berkeley, 98, 101–2, 105–6,

economics: Africa, 163–99, 211;

114, 139, 140, 141, 158, 163,

China, 213–14; Communist

200; University of Chicago,

New Economic Policy (NEP),

60–77, 112–13, 141; University

17, 22; Council on Foreign

of Nigeria, 179–80. See also

Relations and, 80–3, 106;

Viner, Jacob

Index education: Jewish tradition

243

22, 23, 209–10

and, 24–5; McGill, 51, 55–60,

Feis, Herbert, 80, 83–4, 95

66; Montreal, 39–47, 51,

Fellner, William, 111

56–7; Queen’s University,

fellowships: Allen Oliver

51–3, 55; Russian school,

Fellowship in Economics,

14–15, 22–3, 209–10; Russian

57, 58; Fulbright, 112, 140;

tutor, 10–13; stock market, 37.

Guggenheim, 113, 141, 143,

See also University of Chicago

144; Rockefeller fellowship,

Ellis, Howard S., 98, 105, 110

77, 94; Sloan Fellow, 88;

Ellis, Minnie, 98, 110

University of Chicago fellow-

Emergency War Railroad

ship, 60, 64, 66, 70

Board, 72 Encyclopaedia Britannica, 141

fish business, 17–19, 34 Foreign Affairs, 78, 83 foreign exchange controls,

Erikson, Erik, 138, 201–5

58–9, 62, 174. See also

Ethiopia, 163–5, 171, 175–6,

exchange rate policies

182–3, 184–7, 199 Europe: common market concept, 111–12, 125–6, 132;

Foreign Service officers, 181–2 Forsey, Eugene, 56 France: and African econom-

reconstruction assistance

ics, 188–99; Paris, 195–9;

to, 106–7; World War II, 50,

World War II, 188

55, 59–60. See also Britain;

franc zone, Africa, 188–99

France; Germany

Franklin, George, 86–7

exchange rate policies, 126, 132, 159

Free Speech Movement (FSM), 147–54, 157, 158, 161, 210–11 Fulbright fellowship, 112, 140

FBI, on Kerr, 155 fears: Danish students, 124,

Gaitskell, Hugh, 140

126; early life, 3, 6, 7, 9–10,

Gaster, Amalie, 116

209; faculty communists, 138;

Gaster, Francis, 115–17, 122

Haile Selassie, 177; Russian, 3,

General Agreement on Tariffs

244

Index

and Trade (GATT), 81

Heyns, Roger, 155

Germany: Ethiopians from, 175–6; and foreign exchange controls, 58; World War II,

Hitch, Charles, 155, 156 hockey, 41–3 Hoover, J. Edgar, 155

50, 123, 127, 133–4 Gerschenkron, Alexander, 101 Gervaise, Isaac, 120–2, 141; The

Hoselitz, Bert F., 88

System or Theory of the Trade of the World, 120, 141 Ghana, 176, 177–8 Giannini, Amadeo (A.P.), 106–7

Houphouët-Boigny, Félix, 189–91 Hughes, Charles Evans, 95 Hutchins, Robert, 76–7 immigration: from Canada, 84, 89, 92–6; Russia to Canada,

grocery store, Montreal, 36–7, 43, 45–6, 49, 53, 56 Gromyko, Andrei, 80, 89–91,

7–8, 21, 26–33 imperial preferences, 81, 83–4 Institute of the History of the

92–3 Guggenheim fellowship, 113,

USSR, New York, 140 interest rates, long-term, 109

141, 143, 144 Guinea, 192–3

International Monetary Fund (IMF), 81–2, 165–6, 196

Haberler, Gottfried, 110–11, 113–14; International

international trade theory: Berkeley course, 100–1; Carnegie study, 103. See also

Economics, 110 Haile Selassie, Emperor, 164,

foreign exchange controls Iowa State University, 74–5

175, 176–7, 185 Hansen, Alvin, 110–11, 113–14

Ivory Coast, 189–91

harmony, principle of, 23–4 Harvard, 97, 110–11, 113–14, 139, 141 Heckscher, Eli, 127–9 Hemmeon, J.C., 55–6, 59, 66 hepatitis, 176 Heyman, Michael Ira, 151–2, 211

“jam crisis,” 28 James, F. Cyril, 55, 57, 58–9, 87–9 Jews: discrimination vs., 47, 51, 70, 71, 85; education indispensable to, 24–5; mixed marriage, 87; pogroms, 3, 4, 6, 7, 10, 15; Uman, 4–5;

Index

245

World War II, 133, 134

Leigh, Arthur H., 64–5, 70, 73,

Johns Hopkins Press, 141 Journal of Political Economy, 141

74 Leland, Simeon E., 69–70, 85

Keneston survey (1957), 139 Kenya, 173–5, 184 Kenyatta, Jomo, 173–5 Kerensky, Alexander, 16 Kerr, Clark, 114, 136, 138, 139, 144–5; The Gold and the Blue, 136; “hired and fired with enthusiasm,” 155; and political activity by students, 146–55, 161, 210–11 Keynes, John Maynard, 81–3, 110–12, 119–20, 123–5, 127; The General Theory of Employment, Interest and Money, 124; and IMF, 166 “The Keynesian Contribution” dissertation (Letiche), 110–11, 112–13, 119–20 King, Arthur, 45 King’s Crown Press, 102 Kinsman, Jeremy, x Kissinger, Henry, 203 Klein, Lawrence R., x Knight, Frank H., 64–5, 113 Korean War, 111 Lamm, Donald S., x Lange, Oscar, 89 Laurentians, xiv, 49

Letiche, Emily Kuyper (wife), x–xi, 73–4, 84; Africa, 164, 176; Berkeley, xvii, 96, 104–5, 107–9, 139, 143, 158–9, 207; breakfasts, 85–6; Cambridge, 118–19, 120; clippings, 103–4; Denmark, 122–3, 130, 132–3, 135; and Fulbright program, 112; Gervaise’s essay, 121; helping with economics papers, 88; Iowa, 73, 74, 96, 99, 106; London, 115–16, 120; and National Guard, 158–9; vs. Nixon, 202; PhD news, 113; photos, xiii, xvii; pregnant, 84, 87, 91; Sweden, 128, 129; and Viner’s use of “Keynesian Contribution,” 111; wedding, 84–5 Letiche, Hugo (son), 91; Africa, 164; Berkeley, 96, 104, 109; Cambridge, 118– 19; Denmark, 122–3, 130, 131, 133; Des Moines, 96; London, 115–16; photo, xiv; Stockholm, 129 Letiche, John M.: “The Bretton Woods Objectives,” 141; “A Critique of the Keynesian Contribution to International Economics,”

246

Index

127; “The Flow of Economic

and economics, 16, 18–21,

Ideas,” 141; “The Keynesian Contribution” dissertation, 110–11, 112–13, 119–20;

26, 32–49; Emily favored by, 87; leaving Russia, 21, 26–33; Montreal, 34–9, 41–51, 55,

national and international reputation, 140–1; PhD, 112–13, 114, 119; photos, xii,

56–7, 96; photo, xiv

xiv, xv, xvi, xvii; promotion to Professor of Economics, 163; publications (general), 141, 163; “The Theory

Letichevsky, Marusa (mother), 4–9, 12–16, 17, 20; brothers, 26; death, 59; leaving Russia, 26–30; Montreal, 42, 46, 55, 56–7; photo, xiv; and Russian history, 23

and Practice of Common

Levering Act loyalty oath, 137,

Markets,” 185–6; “Will the Pound Sterling Be Devalued?,” 116. See also

204 Liberty Brand Products, 48–9, 56

fellowships Letichevsky, Abie (half-

Lindahl, Erik, 107–9, 127, 129 London, 115–17, 120, 121–2,

brother), 5, 49 Letichevsky, Bronia (sister),

140; Bank of England, 172–3, 183–4; leaving Russia

55, 96 Letichevsky, Israel (brother), 6, 12, 13, 29; World War

through, 31 loyalty oaths, 136–9, 160–1, 201, 204

II, 50; leaving Russia, 32; Liberty Brand Products,

Machlup, Fritz, 122

49, 56; photo, xiv; school in Montreal, 40, 46–7; and

Mackintosh, William Archibald, 51

University of Chicago note, 60

Macmillan, Harold, 120 mail delivery, Russia, 17

Letichevsky, Leon (father), 3, 4–10, 12–22; best friend, 26; businesses, 34–50, 210; court appearances, 19–21, 22, 37; talk of divorce, 55;

Mali, 191–2 Marcus, Simon, x The Mark of Zorro, 12–13 marriage, mixed, 87 Marshall Plan, 131–2

Index martial law, 156 Marxists: Cambridge, 118–19. See also Communists McDuffie, Duncan, 99–100, 104, 107 McDuffie, Jean, 100, 104–5, 107 McGill University, 51, 87–9; discrimination vs. Jews, 51, 70; immigration difficulties and, 94; nurses, 195; teaching courses, 110; transfer to, 55–60; Viner, 66 McLean, Murdoch, 52

247

Foreign Relations and, 80–1 Myrdal, Gunnar, 109–10 Nathan (brother-in-law), 46, 47–8, 49, 56 National Guard, Berkeley, 156, 158–60 National Research Council, 98 New Economic Policy (NEP), 17, 22 New England, 114 New York: apartment, 85; Council on Foreign Relations, 77–96; heat wave,

Merrill Center for Economics, Southampton, Long Island, 140 Meyerson, Martin, 154–5 military service, 25, 55, 58, 59–63, 75–6 Mints, Lloyd, 112–13 Montreal, 33–51, 53–7, 63; father, 34–9, 41–51, 55, 56–7, 96; grocery store, 36–7, 43, 45–6, 49, 53, 56; mother, 42, 46, 55, 56–7; Shelia, 13–14, 21, 33–4, 38–9, 56–7. See also McGill University Moscow, 27 Mosegomi, Mosala, 171 Moynihan, Daniel Patrick,

91; Institute of the History of the USSR, 140; Pratt House, 78; social life, 85, 86–7 New York Times, 103 Niger, 192 Nigeria, 176, 178–82 nightmares, 5–6, 15–16, 22 Nixon, Richard M., 201–3, 205 Nkrumah, Kwame, 177 Nyerere, Julius, 172–4, 175

203–4, 205 multilateralism, Council on

People’s Park, Berkeley, 155–6, 160

Organic Act, 97 Paris, 195–9 particular expenses curve, 67–8 Pedersen, Jurgen, 111–12

248

Index

PhD, 112–13, 114, 119

religion, Russia and, 24

Pierce, Richard A. pogroms, 3, 4, 6, 7, 10, 15 politics: campaigns, 53–4; civil-

Reynauld, André, 212 Ricardo, David, 119 Rice, Linda, x

ity in, 210–14; family debates in Russia, 16–17; Free Speech Movement (FSM), 147–54,

Riga, 31

157, 158, 161, 210–11; most vio-

Robbins, Lionel, 121–2 Robertson, Sir Dennis, 117–21 Rockefeller, David, 105, 107

lent turmoil at UC Berkeley, 155–6; protests and violence around the world, 154; stu-

Rockefeller fellowship, 77, 94 Romer, Christina, 216n9 Roosevelt, F.D., 72, 80, 91

dent activism, 146–58, 161–2,

Rosovsky, Henry, 149

203–5, 210–11; UC Berkeley policies, 146–55, 161–2, 204. See also Communists;

Ross, Marion, ix–x Royal Economic Society, Cambridge, 103

discrimination Pratt House, New York, 78

Russia: Communists, 4, 13, 14, 16–17, 23–4, 34; early years

Proceedings of the American Economic Association, 141

in Uman, 3–26, 48, 92, 209; history, 22–3; information-

Pushkin, Alexander, 10–11 Quarterly Journal of Economics,

communications industry, 210; leaving, 21, 26–33; sending money to relatives

141 Queen’s University, Kingston,

in, 48; Soviet, 3–22, 89, 92–3; xenophobia, 23, 209–10

Ontario, 51–3, 55 San Francisco, World Affairs railroads, wage-related issues, 72

Council, 116–17 Sauer, Carl, 143

Rasminsky, Louis, (governor, Bank of Canada), 61–2 Reagan, Ronald, 155, 156 Reciprocal Trade Agreement Program, 81, 88, 102, 141

Savio, Mario, 148–54 Saxon, David, 138 Scalapino, Robert, 152 Schultz, Theodore W., xv, 74–5, 88

Index Schweitzer, Albert, 194–5 Seaborg, Glenn T., 146 Senate, Academic, UC Berkeley, 136, 139, 140, 146, 150–4, 161 Senegal, 193–4 Senior Executive Program, U.S. government, 213 Shelia. See Berlin, Shelia (half-sister)

249

Sweden, 127–9, 140; Stockholm, 127–9, 141 Tanganyika, 172–5, 184 Taussig, Frank W., 67 Thomas, Brimley, 91 Togo, 192

Shotwell, James T., 102 Singer, Hans, 183 sister: “jam crisis” and, 28; leaving Russia, 28–9, 31 Skidelsky, Robert, 82

Uganda, 175, 184 Uman, 3–26, 48, 92 unemployment, mass, 44 unions, railroad, 72 United Nations, 79; Economic Commission for Africa (ECA),

Smith, Adam, 119; Wealth of Nations, 121 Smith-Mundt legislation, 112, 115 Soffer, Justin, x South Africa, 165–71 Soviet Russia, 3–22, 89, 92–3 Sproul, Robert Gordon, 105, 107, 137, 138, 139, 160–1, 204 Sraffa, Piero, 118–19 Stanford, civil rights struggle, 146 sterling area, Africa, 163, 171–87, 199 Stockholm, 127–9, 141 stock market: crash, 37–9; George Franklin and, 86

163–99; first-class travel, 176–7; Singer, 183; South Africa, 167–9 University of California, Berkeley, 88–9, 92, 94–5, 96, 97–114, 135–62; Academic Senate, 136, 139, 140, 146, 150–4, 161; Associated Students of the University of California (ASUC), 150, 151; Berkeley Citation award, 207; “best balanced distinguished university,” 139; civil rights struggle, 146; committees, 140; Economics Department, 98, 101–2, 105–6, 114, 139, 140, 141, 158, 163, 200; “flight

Strong, Edward, 146–8, 150, 151–2, 154, 161, 210–11

from teaching,” 146; golden age, 139; loyalty oath, 136–9,

250

Index

160–1, 201, 204; publication

Relations, 80, 81, 82, 83,

demands, 102–3; “publish or perish,” 140, 157; roots, 97–8; “the silent generation,” 136;

88; and Gervaise, 121–2; and Heckscher, 127–8; and IMF, 166; and impact of

social life, 104–6, 139; South Hall, 200; student political activity, 146–58, 161–2, 203–4,

nuclear energy, 102; inter-

210–11; terminations, 144–5;

national trade theory, 101; and Letiche “Keynesian Contribution” disserta-

turmoil, 135, 136–9, 145–62 University of Chicago, 60–77; civil rights struggle, 146;

tion, 110–11, 112–13; photo, xv; research assistant to, 75; Study of the Theory of

economists/Economics

International Trade, 120–1;

Department, 60–77, 112–13, 141; fellowship, 60, 64, 66, 70; Gervaise’s essay,

University of Chicago, 60, 61, 62, 66–9, 72, 74–7

121; Gromyko thesis, 90; International House, 65, 67;

Wagner, Sidney, 45 Watts, Lynn, x

Journal of Political Economy, 141; Lange, 89; PhD, 112–13;

Wellman, Harry, 155 West African Monetary Union,

Schultz, 75; Viner, 60, 61, 62, 66–9, 72, 74–7 University of Copenhagen, 130

190, 191, 193–4, 196–9 Westerners, African antipathy to, 191–2

University of Ethiopia, 185–6 University of Nigeria, 179–80

White, Harry Dexter, 81–2, 83 White House, 200–5

Upper Volta, 192 Uppsala, Sweden, 129

Williams, John H., 80, 81 “Will the Pound Sterling Be

Urquhart, Malcolm “Mac,” 52–3

Devalued?” (Letiche), 116 World Affairs Council, San

Vietnam War, 146, 155–6, 159 Viner, Jacob: “Cost Curves and Supply Curves,” 68; and Council on Foreign

Francisco, 116–17 World Bank, 145, 191, 196 World Trade Organization (WTO), 81 World War I, 58, 67

Index World War II, 50, 55, 59; Denmark, 123, 127, 133–4; France, 188; Lend-Lease program and, 91; military

251

service, 55, 58, 59–63, 75–6 Yale, 97, 201 Yntema, Theodore O., 71