Myrdal, Gunnar (1898–1987)
MYRDAL, GUNNAR (1898–1987)ECONOMIST
Nobel Prize–winning Swedish economist, politician, social scientist, and internationalist.
Gunner Myrdal early in his career established himself as one of the foremost proponents of the Stockholm school of thought in economics. In his thesis from 1927, Prisbildningsproblemet och föränderligheten (The price formation problem of variability), he emphasized the role of expectations in economic life, criticizing the static character of neoclassical equilibrium-oriented economics. In Monetary Equilibrium (1933) he introduced the ex ante/ex post distinction to overcome the deficiency in neoclassical economics. Another fundamental line of argument was his critique of conceptions of neutrality of social science: in Vetenskap och politik i nationalekonomien (1930) he criticized open and concealed value premises in prevailing economic theory. He further developed this critique in The Political Element in the Development of Economic Theory (1953).
As an economist Myrdal presented a very early theoretical underpinning for a counter-cyclical-oriented economic policy in Konjunkturer och offentlig hushållning (1933; Business cycles and public finance) and published an appendix to the Swedish government's budget proposition, emphasizing the need for state powers to counteract economic depression through increased public expenditure. Later, as chairman of Sweden's Postwar Economic Planning Commission (1944–1945) he further developed his analysis of financial policies, taking into account the larger possibilities opened up by an economic policy consciously geared toward macroeconomic growth. He was the main architect behind the formulation of full employment as an overarching goal of Swedish economic policy after World War II. Contemporary with but distinct from John Maynard Keynes, he argued for the role of investment levels as the key element of economic policy.
Myrdal's scientific and political work were to be intertwined from the 1930s on when he and his wife, Alva Myrdal, joined the Swedish Social Democracy. Together they gained considerable political influence, both as writers and as part of a larger network of modernizers. During the 1930s they were central to the reformulation of Swedish social policy. Starting with their Kris i befolkningsfrågan (1934; The population problem in crisis), which challenged contemporary attitudes about racial biology, they advocated a "prophylactic social policy" focused on better housing, child allocations, and free school meals. Their ideas came to be the tenets of Swedish postwar welfare policies.
In 1938 Myrdal was chosen to be the director of an extensive research project on "Negro relations" sponsored by the Carnegie Foundation. It resulted in the publication of An American Dilemma: The Negro Problem and Modern Democracy (1944), a landmark study in U.S. sociology. Arguing that the problem did not concern the "other" but was central to the self-conception of U.S. society, a true dilemma for the "American creed" on which its constitution was based. Myrdal further developed these ideas in works on welfare problems including Challenge to Affluence (1963).
During World War II, Myrdal developed close contacts with U.S. New Deal economists, and as chairman of the Commission for Economic Postwar Planning of the Swedish Commission he largely pursued their ideas in the economic planning for Sweden after the war. Internationalist in attitude, Myrdal worked with exiled Social Democrats in Sweden such as Willy Brandt and Bruno Kreisky on postwar reconstruction plans. He argued for a common all-European reconstruction effort and promoted the planning of vast Swedish government credits to support reconstruction efforts in neighboring countries.
In 1945 Myrdal became Sweden's minister of trade and promoted a broad trade policy, including agreements with Poland and the Soviet Union to open up world trade. With the onslaught of Cold War tensions these agreements—although ratified—became subject to heated domestic debate, and Myrdal personally came under fire. Partly because of this—but also because of tensions within the government—Myrdal resigned in 1947 to become executive secretary of the United Nations Economic Commission for Europe (ECE), a position he would hold for ten years. Myrdal developed the ECE into a first-rate analysis agency while at the same time facilitating East-West trade relations on a practical level.
Myrdal's later works concentrated on international development, trade, and cooperation issues (Economic Theory and Development, 1957; Asian Drama, 1968; Challenge of World Poverty, 1970), developing an institutional economic analysis and criticizing classic free-trade theory. In 1974 he was awarded the Nobel Prize in economics for his groundbreaking work in monetary and market theory and for his studies of the relationship between economic, social, and institutional conditions. Egalitarian in social politics and intellectually provocative, Myrdal was a heterodox Swedish social democrat, a radically liberal American, and a world citizen.