Second Part

0:09:07 Last concert I played in was late 1952 and then I came back to England; then I fell in love with my now wife, Kitty; she was at that time married to Lucian Freud and had two little children; I met her at a party given by Freddie Ayer in London; spent a lot of time having a good time, going to France and Ireland and trying to write a novel; eventually realized I must get a job; Kitty's father was Jacob Epstein, a very genial man; he made a bust of me which I gave to my daughter; it was adapted for the head of St Michael at Coventry Cathedral and put up in 1958; fascinating watching him work; P.W.S. Andrews got me an interview with an executive in the Metal Box Company and I got a job at £60 a month; it was an insignificant job in information and statistics, so rather humiliating; Kitty noticed an advertisement in the 'New Statesman' for economists in the Treasury and I applied; I had been swotting up how to measure the national income; I happened to know something about the price of tin and got a lowly job there in 1956; Epstein made the bust of me in February of that year and I went to the Treasury in March; I did not feel so humiliated except on occasions; what we had to do was to interpret more or less raw figures for use by the Government and there was an array of economists and statisticians from other departments who fed you the data; I had to write a report once a month on what had happened and what was going to happen, then do a big forecasting exercise once every six months on which the budget would be based and Ministers briefed; as time past I became quite an expert; the big change in my professional life was in 1964-5; I went on secondment to the National Institute and wrote a lot of pieces which were published then; when I went back to the Treasury it had all changed with a Labour Government; then I met Nicky Kaldor which, as it turned out, was a very big event in my life; I formed a close relationship with him and worked on one or two things, like the Selective Employment Tax in 1966, when I had to create the statistical system for loaning the tax; in the following year there was devaluation and I did all calculations on how big it should be; by then I was considered to be a coming man because of my knowledge; we thought we were drawing on the work of Keynes but it could just be drawn on and we had our own way of modelling the economy which I now think was seriously inadequate; Nicky persuaded me to leave when I was an Under-Secretary and to come to Cambridge; I am sorry to say that from a personal point of view it was the worst thing I have ever done

14:01:23 Nicky Kaldor, a Falstaffian intellect who thought with his gut; he emanated genius; he was very persuasive and would never give up; William Armstrong was the Permanent Secretary and Kaldor used to sleep at meetings; he was extremely greedy; he loved laughter, usually at his own jokes; he wanted me to be Director at the Department of Applied Economics at Cambridge; he also wanted me to be a Fellow of King's; as he was on the appointments committee he knew that I was going to be Director before anybody else knew; he immediately went to Edmund Leach (it was in 1970) but the professorial quota was full; nevertheless, Edmund immediately wrote to me suggesting that if I waited then I would get a Fellowship at King's which was entirely contrary to the quota system; in the next post I received two letters from other Heads of Colleges inviting me to join them; I felt very awkward about this; Burkill, Master of Peterhouse, invited me for the weekend and it was good fun, but I prevaricated; in the end decided I would not be bound by Leach and went back to Burkill, but he then decided he didn't want me; I had been used to the Treasury which was entirely hierarchical but absolutely united in purpose; I came to Cambridge supposing as Director that people would do as I told them; I was wrong; all they wanted from me was that I preserve their jobs as none of them had tenure; the appointment structure of it was very questionable; the place was bursting and it was difficult to see how I could do my own research; the appointment committee was also the committee of management; they all went to the previous Director, Brian Reddaway, and asked him to get me to agree to the right of the management committee to co-opt members; Reddaway put this too me in a neutral way although he would not have tolerated it himself; as members of the management committee were also members of the appointment committee and none had tenure, they were very highly motivated to gain tenure; I wrote and complained to the General Board but they did nothing about it; I was very unpopular; there were also troublemakers among the assistant staff; I was unhappy and very soon wished I had not come; I very nearly resigned

25:59:00 I was not properly trained as an economist and would not have been able to pass Part I as I only had my Treasury experience; that I did have and, for instance, was special advisor to the public spending committee which I knew a great deal about; I also knew that the economy was very badly covered in public discussion and knew more than any of the journalists at that time; decided to do my Treasury work in the Department of Applied Economics; that was very successful, at least in the sense that we got a lot of cover in the newspapers; Francis Cripps left his tenured job in the Faculty and came and worked, untenured, as an ordinary economist; we started the Cambridge Economic Policy Group together which produced reports and bulletins which were evaluations of the economic situation and prospects; to begin with, these were with special reference to public expenditure, and were fairly successful and got a lot of coverage in the press; Francis built an elaborate model of the British economy which we used to make projections; we got a big grant from the SSRC;  we certainly got three of the big turning points right, 1974, inflation 1975, and the collapse of the economy 1979-80; we were unpopular with almost everybody and very pessimistic about the medium-term future; we very seriously entertained the  possibility of protection as an economic strategy which is very unpopular with economists; we had a staff of about eight so also wrote pieces about regional policy; Francis also built a world model which we were just beginning to use; then came catastrophe because the SSRC turned us down for renewal; there was a serious flaw in their procedures as they didn't consult us or pay a site visit

31.26:21 I went back to the Treasury for a year in 1975 and wanted to get a piece of computing done to prove something and went to Francis with the equation; he got it done very fast; as the subject was secret I didn't say anything about it to him; I went back to the Treasury and gave it to their computer men; four or five days later they hadn't produced the answer; they couldn't understand how it worked; I am advised that they said that our computing system was antiquated and very slow; furthermore, not one of the consortium had ever built a model; there was no recourse and that was really a catastrophe as it meant that the group was broken up; Francis left and went to Thailand; this was in 1982; Francis was so clever and I had never learnt to touch a computer; I had to start doing modelling on my own and became reasonably expert; in 1974 I started on a line in macroeconomic research; I had an insight about how the economy as a whole was put together and started to write about it in 1978; Francis joined me and we published the book in 1983 but only about six people thought it was the work of genius that I thought it was; but the point was that it was not completely thought out; I was not deterred in my belief in the fundamental model; from 1983 I had a very fruitful year in Denmark and soon after coming back I retired and went to the States; I was very fortunate in landing a job at the Economics Institute at Bard; I continued writing about whatever economy I was in and I became familiar with the US economy and started to write strategic pieces on it; simultaneously I was evolving a new version of the book and making all the models myself; I also started to understand the economics which most people teach; in that I was assisted by Professor Anwar Shaikh of New School University with whom I used to have brainstorming sessions on the neoclassical synthesis which went on for hours; in the end I came to what I now believe to be a proper understanding of the system of ideas that had been opposed to; I then had a letter from Ottawa, from Marc Lavoie, saying that as one of four full professors they could not understand an equation in a paper; admitted there was a bad mistake in it; he came to see me and we got on very well and agreed to co-author the book I was then writing; he was very deeply sympathetic and a good scholar; that is what I have been doing ever since; the book came out just over a year ago [Monetary Economics: An Integrated Approach to Credit, Money, Income, Production, and Wealth]

42:34:12 Economists at King's and in Cambridge, powerful people who were "descendants" of Keynes, were impossible - vain, didn't sponsor other people's work, quarrelsome, and they left no legacy; I knew a lot of Kaldor's ideas but there is no Kaldorian textbook; there is no post-Keynesian synthesis; found Richard Kahn and Joan Robinson very difficult to talk to and very opinionated; a tragedy as all gifted; believe that Marc Lavoie and I had made a statement on macroeconomics which is enough for other people to build on, to rehabilitate another way of looking at the economy apart from the neoclassical; amazing fact that there are two paradigms deeply hostile to one another; the post-Keynesian one has been largely routed for the time being, both with regard to teaching appointments, publications, and the way people think; the main political implication of the book is that the market is king; the less the Government does and the market is allowed to act freely, that is the orthodoxy

49:40:11 Memories of King's - Edmund Leach and his anthropological writings; Frank Kermode as a squash opponent and scholar; music at King's - David Wilcocks and Stephen Cleobury; Adrian Wood and Christopher Prendergast; both Kitty and I found Cambridge an unfriendly place and didn't have a real sense of Fellowship at King's; thoughts on the future of the British economy, China and the decline of America