Curried Keynesianism meets the master: Lauchlin Currie’s memorandum on The General Theory for the Federal Reserve Board Matías Vernengo* Full Professor, Bucknell University, Lewisburg, PA, USA This short paper introduces Lauchlin Currie’s unpublished memorandum to the Board of Governors of the Federal Reserve discussing Keynes’s General Theory. The memorandum falls short of a full review of Keynes’s magnum opus, but together with other published mat- erial it provides a picture of Keynesian ideas within the Fed during the Great Depression. It is suggested that Currie’s views on Keynes are relevant, in particular because, contrary to what would become the dominant view, he does not think that wage or interest-rate rigidity is at the heart of the Keynesian results. Keywords: history of thought, Keynes, Currie JEL codes: B22, B31 Lauchlin Currie was in many respects a pioneer. He is regarded by many as the first and most combative Keynesian in the Roosevelt administration during the early phases of the New Deal (Sandilands 1990). 1 He was also the first economist to work at the White House directly with president Roosevelt, from 1939 to 1945, years before the creation of the Council of Economic Advisors (CEA), with the Employment Act of 1946, which would consolidate the role of economic advisors to the president. Finally, he was the head of one of the early missions of the World Bank to Colombia, and later advisor to the Colombian government, in which role he defended planning as an important tool for economic development. It is important to note that Currie was an early defender of counter-cyclical macro- economic policies during the Great Depression. Laidler and Sandilands (2002) show how, in an early 1932 memorandum co-authored by several economists, including Currie and Harry Dexter White, both monetary and fiscal expansionary policies were defended as a way out of the Depression. 2 However, several pre-Keynesian * The author thanks Roger Sandilands for providing an unpublished paper by Lauchlin Cur- rie, and Tom Palley for comments on a preliminary version of this introduction. The usual caveats apply. 1. Interestingly enough, Currie suggested in 1987 that he had ‘ been characterized as “pre-Keynesian” but rarely as being “Keynesian.”’ In his view, that resulted from the fact that he was more influenced by Keynes’s works that preceded The General Theory, the latter being seen as Keynes’s definitive work. See Currie (1987). 2. Indeed Currie went to Washington from Harvard, with Jacob Viner of Chicago as his assis- tant, in 1934. Review of Keynesian Economics, Vol. 4 No. 1, Spring 2016, pp. 56–60 © 2016 The Author Journal compilation © 2016 Edward Elgar Publishing Ltd The Lypiatts, 15 Lansdown Road, Cheltenham, Glos GL50 2JA, UK and The William Pratt House, 9 Dewey Court, Northampton MA 01060-3815, USA Downloaded from Elgar Online at 02/01/2016 02:25:00PM via Bucknell University