Lester Thurow, an Economist Ahead of His Time

Lester Thurow, an Economist Ahead of His Time

Lester Thurow, one of the leading economists to challenge American inequality before that view became fashionable, died last week at 77. He spent most of his career at MIT, where he also served as dean of the Sloane School of Management between 1987 and 1993.

Born in Montana, he was a Rhodes Scholar, an avid mountain climber, and a full professor by age 30. And he was a genuinely nice person.

I got to know Les Thurow because we were part of a fairly small cohort of non-Marxian, left-of-center thinkers on economics.

Thurow joined Robert Reich, Ray Marshall, Jeff Faux, Barry Bluestone, and myself in 1986, to found the Economic Policy Institute.

We acted because virtually the entire mainstream economics profession had become something of a commercial for the proposition that markets are almost invariably efficient. Marxian economists, of course, had an entirely different view. But among non-Marxists, Thurow was perhaps the most eminent and well credentialed of those who challenged market verdicts as neither necessarily efficient nor just.

We founded EPI in part because there was a huge hole in the world of think tanks. Before EPI, there were outfits like the American Enterprise Institute on the right and the Brookings Institution in the center but no real left-liberal institution committed to high quality research.

Thinking about the years when Thurow was a well known public intellectual, one recalls what an uphill climb it was to get the American economics profession to take seriously the proposition that market outcomes could be wrong. Thurow lived long enough to see inequality become the leading economic issue.

He was criticized by many in the economics profession not only for his views, but for his insistence on writing clear prose that could be read by a broad audience. For this he was damned in some quarters as a mere popularizer.

His first major book, The Zero Sum Society, was written in 1980, a time when the economy was in big trouble from stagflation and the run-up of energy prices, and widening inequality first began to show up in the statistics. Thurow’s ingenious argument was that the economy was stuck because any reform that would make the economy as a whole better off would make some people worse off. Hence, the zero-sum conundrum.

And of course, the people who stood to lose were mainly the wealthy and the powerful. Thus was reform blocked.

The solution? More public sector intervention to override failed market outcomes—more reliance on democracy.

Thurow was writing at time when the conventional wisdom went in the opposite direction, but he stood his ground. Today, his views have a lot more company. His next book, Dangerous Currents: the State of Economics, published in 1983, was a careful critique of mainstream economic principles.

Thurow, like John Kenneth Galbraith or Albert Hirschman, was something of a loner in his profession. His method was historical and institutional, not rigorously quantitative. Though he had students, there was not really a Thurow “school” of economics.

Nonetheless, in the work of EPI and in the much broader legions of today’s economists who recognize the inefficiencies of markets, the role of political power, and the needless extremes of inequality, Thurow has plenty of company.