HANSEN, ALVIN

Alvin Harvey Hansen (August 23, 1887–June 6, 1975) transformed American economics from 1933 to 1945. Born into a Danish family in Viborg, North Dakota, Hansen studied economics at Yankton College and the University of Wisconsin. He taught at Wisconsin and Brown University before joining the University of Minnesota, where he worked from 1919 to 1937. Known for his Business Cycle Theory (1927), Hansen advised Social Science Research Council commissions and Secretary of State Cordell Hull on international trade policy. Hansen came to Keynesian economics via orthodox ideas in the work of Knut Wicksell, Arthur Spiethoff, Joseph Schumpeter, Gustav Cassel, and E. H. Robertson. Combining these with his interest in business cycles, Hansen evolved into an advocate of government compensatory spending policy.

In September 1937, Hansen moved to Harvard University to teach the Fiscal Policy Seminar with Dean John H. Williams. Participants included John Kenneth Galbraith, Walter S. Salant, Paul A. Samuelson, and James Tobin. In December 1938 in the presidential address to the American Economic Association, Hansen presented his "secular stagnation thesis." Lagging private investment, consumer credit, and decreased federal spending led to long-term stagnation. As population, land, natural resources, and technological innovation slowed, the economy went through a structural shift with few private investment opportunities. Only more consumer and government spending could spark increased production, consumption, and employment. On May 16, 1939, Hansen testified about his policy ideas before the Temporary National Economic Committee in Congress.

Between 1935 and 1943, Hansen advised the Social Security Board, the National Industrial Conference Board, the Federal Reserve Board, and the National Resources Planning Board (NRPB). When he promoted Keynesian spending policy in NRPB pamphlets during the war, outraged conservatives in Congress demanded abolition of the board. In 1958, he retired from Harvard. Known as the "American Keynes," Hansen helped to educate an entire postwar generation of Keynesians who changed professional economics into a policy discipline.

See Also: ECONOMISTS.

BIBLIOGRAPHY

Barber, William J. "The Career of Alvin H. Hansen in the 1920's and 1930's: A Study in Intellectual Transition." History of Political Economy 19 (1987): 191–205.

Barber, William J. Designs within Disorder: Franklin D. Roosevelt, the Economists, and the Shaping of American Economic Policy, 1933–1945. 1996.

Brazelton, W. Robert. "Alvin Harvey Hansen: Economic Growth and a More Perfect Society: The Economist's Role in Defining the Stagnation Thesis and in Popularizing Keynesianism." American Journal of Economics and Sociology 48 (1989): 427–440.

Galbraith, John Kenneth. "How Keynes Came to America." New York Times Book Review (May 16, 1965). Reprinted in A Contemporary Guide to Economics, Peace, and Laughter. 1972.

Jones, Byrd L. "The Role of Keynesians in Wartime Policy and Postwar Planning, 1940–1946." American Economic Review 62 (May 1972): 125–133.

Lekachman, Robert. The Age of Keynes. 1966.

Miller, John E. "From South Dakota Farm to Harvard Seminar: Alvin H. Hansen: America's Prophet of Keynesianism." The Historian 64 (2002): 603–622.

Rosenof, Theodore. Economics in the Long Run: New Deal Theorists and Their Legacies, 1933–1993. 1997.

Sweezy, Alan. "The Keynesians and Government Policy, 1933–1939." American Economic Review 62 (May 1972): 116–124.

PATRICK D. REAGAN