Ronald Findlay, one of the great trade theorists of his generation, passed away in October 2021 at the age of 86. A professor of economics at Columbia University from 1969 to 2013, he anchored the international economics group there for more than four decades. He will be remembered by colleagues and students for his brilliant intellect, his encyclopaedic knowledge of theory and history, and most of all for his modesty, warmth and supportive friendship.
Findlay was born and raised in Burma but was forced to flee the country on foot during the Second World War.1 After the war, he returned and later received an excellent education at the University of Rangoon. A precocious student, Findlay was appointed as a teaching tutor at the age of 19, and he was giving economic advice to the Burmese government in his very early 20s.2
In 1957, Findlay went to graduate school at MIT where Robert Solow was his dissertation adviser. He was also deeply influenced by Charles Kindleberger and “the master” Paul Samuelson. As a graduate student, Findlay published several papers, including his 1959 classic with Harry Grubert, “Factor Intensities, Technological Progress, and the Terms of Trade”. This paper examined the impact of Hicks-neutral and factor-biased technological change on production and factor allocation in a simple two-good, two-factor model. This influential analysis illuminated some important features of that workhorse model, and it continued to be influential when the issue of factor-biased technical change returned to prominence in the 1980s and 1990s.
Findlay completed his PhD in just three years and returned to Burma to teach at Rangoon.3 One early paper stepped into the minefield of the Cambridge versus Cambridge capital theory and sought to formalise Joan Robinson’s model of accumulation, something that had to be done “due to the obscurity of Mrs. Robinson's literary presentation of what are fairly intricate quantitative relationships” (Findlay 1963). The paper not only elicited a reply from the formidable Cambridge economist, she even made a special trip to Burma (detouring from India) just to “have it out with this young Findlay guy”, as he later put it.
This paper and other early work displayed what was a trademark Findlay approach: to provide a formal model of what was implicit in the non-mathematical writings of economists such as Arthur Lewis and Ragnar Nurkse. The goal was to provide a check on the underlying logical structure of non-traditional approaches and see under what conditions the claims for them might hold. For example, Findlay (1959) showed that a policy of “balanced growth”, as advocated by Lewis and Nurkse, would not solve the problem of increasing the returns to investment and could be counterproductive compared with international specialisation along lines of comparative advantage.
Burma’s future darkened after a 1962 military coup began the country’s slide into political repression and state socialism. In 1965, General Ne Win asked two competing groups of economists to propose an economic strategy for the military government. Findlay joined with colleagues in proposing an outward-oriented trade and foreign investment strategy with market prices for rice farmers and other agricultural producers. The alternative proposal from Marxist economists advocated tight government controls and inward-focused socialist development that would extract resources from agriculture.
A representative from each group met with the general but the debate was no contest: the plan endorsed by Findlay was swiftly rejected as “something the CIA would come up with”.4 The result was an “unmitigated economic disaster”, as Findlay (2016) described it, with the so-called Burmese Way to Socialism leading to a repressed and isolated economy that remained impoverished for decades.
The political situation in Burma made it difficult for him to remain there. Fortunately, in an unsolicited act of generosity, Harry Johnson, the leading international economist of the day, reached out to Findlay and helped him receive job offers at Princeton and Columbia. Findlay chose Columbia, which he joined in 1969 and where he remained for the rest of his career.
Findlay was a Mozart of trade theory. He was enormously creative, combining clean and elegant geometry with simple and uncluttered mathematics in his papers. His hallmark approach was to start with a simple small-scale general equilibrium model and modify some of the basic assumptions to yield fresh insights into some topical question. He brought his gifts to a wide range of topics, including tariffs and trade policy; oil shocks and employment; capital, time and trade; wage differentials and economic development; primary exports and industrialisation; and North-South models.
Many of his papers focused on the uneasy connections between trade and development. As he once put it: “In a sense I have been trying, throughout most of my professional career, to reconcile Haberler and Viner, representing the great tradition of Ricardo, Mill, Marshall, and Edgeworth on comparative advantage and the gains from trade, with the insights and concerns of Lewis and Nurkse about development” (Findlay 1984b: 23).
He was a genius at modifying some of the basic assumptions of standard models to incorporate the apprehensions of some economists about the interchange between rich and poor countries. He seriously and respectfully considered the views of Lewis on unlimited supplies of labour, Nurkse on balanced growth, Prebisch on centre-periphery asymmetries, Emmanuel on unequal exchange, and many others. He did so in order to probe the conditions under which their unconventional conclusions would stay intact.5
He was particularly adept at integrating trade into basic growth models to address the complaint that standard theory was static and could not address issues of growth and dynamics. His 1970 Journal of Political Economy paper, “Factor Proportions and Comparative Advantage in the Long Run”, elegantly showed how comparative advantage would evolve according to the propensity to save and the growth rate of the labour force.
One of his most cited papers, “Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model” published in the Quarterly Journal of Economics in 1978, examined how a country’s distance from the technological frontier would create the opportunity for foreign investment to close that gap. And he introduced Prebisch-style North-South asymmetries in his 1980 American Economic Review paper “The Terms of Trade and Equilibrium Growth in the World Economy”.6
If the 1970s was a trade and development decade for Findlay, the 1980s saw him turn to the political economy of trade policy and the state. In papers written with his colleague Stanislaw Wellisz, the goal was to “endogenise” policy – that is, to have it become the outcome of a particular political process. The famous 1982 Findlay-Wellisz paper “Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare” became a widely-cited starting point for later work on explaining protectionist policies across countries.
In the 1990s, Findlay developed the field of “clio-theoretics” – the use of trade theory to illuminate economic history.7 He was a master practitioner of using small-scale general equilibrium models to analyse some of the biggest events in world economic history, such as the Black Death, the opening of trans-Atlantic trade, the 18th century triangular trade, and more.8 He would start, as always, with something like a two-factor, two-good model, but with deft skill he would modify it appropriately and extend it fruitfully. He would endogenise the frontier, endogenise technological improvement, endogenise capital accumulation, endogenise fertility, endogenise time preference, and much more – all in the service of exploring some fascinating historical phenomenon.
This clio-theoretic work was backed by his encyclopaedic reading of political and economic history. His landmark 2006 book, co-authored with Kevin O’Rourke, Power versus Plenty: Trade, War, and the World Economy in the Second Millennium, provides a masterly overview of world economic history from 1000 to 2000.
Findlay was a tremendous teacher and his impact in the classroom was as great as his influence as a researcher. At Columbia, he taught international trade to hundreds of graduate students from around the world. Findlay’s clarity of expression, deep knowledge, and amazing insight and intuition made him an admired and memorable teacher.
I will never forget his vivid opening words on the first day of class. Unlike macroeconomists, he told us, trade economists “do not slit the throats of our ancestors”, Instead, trade economists respect tradition and build on the work of their predecessors, from Smith and Ricardo to Heckscher and Ohlin, Haberler and Viner, down to the present age. He was an enthusiastic fan of Ricardo – less for his theory of comparative advantage than for his thinking about trade and growth (Findlay 1974). And he especially revered the Swedish dynamic duo of Heckscher and Ohlin, whose rich insights on factor endowments he explored throughout his career (Findlay 1995).
His graduate trade course was a tour-de-force, a beautiful blend of mathematical trade theory (as in Ron Jones) with geometrical trade theory (as in Max Corden).9 His mastery of all trade theory enabled him to lecture without any notes – a truly impressive performance. (I distinctly recall the one single class in which he brought a small index card with a few equations jotted down; it was memorable only because it was unusual.)
Of course, the standard 2X2 model was the foundation, but he considered all sorts of modifications and extensions to that foundation, opening up a wealth of possible thesis topics that would draw students into the field. More than anything else, he emphasised three things: general equilibrium, general equilibrium, general equilibrium. (Once that lesson was learned, the next lesson was endogenise, endogenise, endogenise.)
As a lecturer, he had a gift for simplifying the complex and clarifying the obscure without sacrificing rigour. His approach was simple but not simplistic, and he presented sophisticated material without needless complication. He left students with an appreciation of the ability of simple trade models to shed light on all sorts of situations. His personal kindness and patience won him the affection of legions of students.
“I have always maintained that a good teacher is always more important than a good school”, Findlay said, perhaps reflecting his Rangoon undergraduate education (Turnell 2019: 154). Those of us fortunate enough to study with him encountered not just a good teacher but a great teacher. Moreover, he worked hard to make Columbia a great school for international economics. He was a key figure in building the international group by recruiting Robert Mundell, Guillermo Calvo, Jagdish Bhagwati, Carlos Diaz-Alejandro and many others to the faculty.
Findlay’s role in presiding over the weekly international seminar at Columbia was just as important to the educational process as his classroom instruction. At the seminar, he would often leave the attendees in awe of his uncanny ability to make the paper comprehensible and point out its true contribution, both of which often eluded the presenters themselves. Within the first ten minutes, Findlay would see through the logical implications – and weaknesses – of the analysis faster and farther than anyone in the room. He did so with quiet and unassuming modesty. When he pointed out the flaws or shortcomings in the analysis, which he did not hesitate to do for the benefit of the graduate students sitting along the wall, he did so gently.
In a fitting arc to his career, Findlay returned to economic policy in Burma as the prospects for economic and political change improved in the 2000s. In various reports and visits to the country, Findlay argued that Burma had to make up for lost time by opening up to international trade and investment. “It is imperative not only for the regime but for the nation as a whole to single-mindedly focus on the need to catch up, as rapidly as possible, with the achievements of its Southeast Asian neighbors”, Findlay (2012) insisted: “The key to this is an export-oriented development strategy”, much as he had proposed about 50 years earlier.
Findlay was always a liberal in the best sense of the word. Although he was never dismissive of the development economists of the 1950s who believed that developing countries should turn inward to avoid being harmed by their engagement with the international economy, Findlay (1984a: 24) said “my instincts were always more ‘outward looking’” – something he attributed to the insights of his compatriot Hla Myint. Having seen firsthand the tragic results of Burma’s closed economy approach, with its extreme nationalism and xenophobia, he could never truck with illiberal economic policies.10
His personal experience demonstrated to him the benefits of international openness to trade, investment, ideas and people. Yet he was never dogmatic about trade policy. Furthermore, he believed open trade was not enough to satisfy standard conditions of justice; international labour mobility was essential too, as he noted in his 1982 paper “International Distributive Justice”, published in the Journal of International Economics.
Findlay’s colleagues and students will miss his warm and supporting friendship, his laughter and his keen insights that went far beyond economics. As Kevin O’Rourke (2021) has so aptly put it: “Ron had the wisdom and knowledge that comes with age but retained a boyish enthusiasm and impishness that made him a joy to be with: the schoolboy was never very far from the surface.”
References
Baldwin, R (1982), “Gottfried Haberler’s Contributions to International Trade Theory and Policy”, Quarterly Journal of Economics 97: 141-48.
Brown, I (2013), Burma’s Economy in the Twentieth Century, Cambridge University Press.
Findlay, R (1959), “International Specialization and the Concept of Balanced Growth: Comment”, Quarterly Journal of Economics 73(2): 339-46.
Findlay, R (1963), “The Robinsonian Model of Accumulation”, Economica, 30(117): 1-12.
Findlay, R (1970), “Factor Proportions and Comparative Advantage in the Long Run”, Journal of Political Economy 78(1): 27-34.
Findlay, R (1973), International Trade and Development Theory, Columbia University Press.
Findlay, R (1974), “Relative Prices, Growth and Trade in a Simple Ricardian System”, Economica 41(161): 1-13.
Findlay, R (1978), “Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model”, Quarterly Journal of Economics 92: 1-16.
Findlay, R (1980), “The Terms of Trade and Equilibrium Growth in the World Economy”, American Economic Review 70(3): 291-99.
Findlay, R (1982), “International Distributive Justice”, Journal of International Economics 13: 1-14.
Findlay, R (1984a), “Growth and Development in Trade Models”, Handbook of International Economics Volume 1, edited by Ronald W Jones and Peter B Kenen, Elsevier.
Findlay, R (1984b), “Trade and Development: Theory and Asian Experience”, Asian Development Review 2: 23-42.
Findlay, R (1990), “The Triangular Trade and the Atlantic Economy of the Eighteenth Century: A Simple General Equilibrium Model”, Essays in International Finance No. 133, Princeton University, International Finance Section.
Findlay, R (1993), Trade, Development, and Political Economy: Selected Essays of Ronald Findlay, Edward Elgar.
Findlay, R (1995), Factor Proportions, Trade, and Growth, MIT Press.
Findlay, R (1998), “A Plea for Trade Theory in Economic History”, Economic and Social Review 29: 313-21.
Findlay, R (2012), “Export or Die”, Foreign Policy.
Findlay, R (2014), “Development and Freedom in Burma”, in The Open Society and its Enemies in East Asia: The Relevance of the Popperian Framework, edited by Gregory GC Moore, Routledge.
Findlay, R, and H Grubert (1959), “Factor Intensities, Technological Progress, and the Terms of Trade”, Oxford Economic Papers 11: 111-21.
Findlay, R and K O’Rourke (2006) Power and Plenty: Trade, War, and The World Economy in the Second Millennium, Princeton University Press.
Findlay, R and M Lundahl (2016), The Economics of the Frontier: Conquest and Settlement, Palgrave-Macmillan.
Findlay, R, C-Y Park and J-P A Verbiest (2016), “Myanmar: building economic foundations”, Asia Pacific Economic Literature.
Kyi, K M, R Findlay, R M Sundrum, M Maung, M Nyunt, Z Oo et al. (2000), A Vision and a Strategy: Economic Development of Burma, Olof Palme International Center.
O’Rourke, K (2021), “Ronald Findlay (1935-2021)”, The Irish Economy, 15 October.
Turnell, S (2019), “First Person: An Interview with Emeritus Professor Ronald Findlay”, Myanmar Economic Bulletin 2(1): 151-59.
Thet Tun, U (2011), Waves of Influence, Yangon: Thin Sapay.
Endnotes
1 The arduous two-month trek over thousands of kilometres to India (when Findlay was seven years old) became known as the “road of death” because the refugees were afflicted with hunger and faced occasional strafing by Japanese aircraft.
2 See his interview with Turnell (2019).
3 His teacher and colleague later recalled that his students nicknamed him “Dr. Findlay” “because of his bulky body and lethargic movements. And behind his large spectacles he hid his youthful amiable face” (Thet Tun 2011: 173).
4 As Findlay (2014, 106-7) noted, the plan “called for a strong export-oriented approach, revising the existing pricing system for paddy purchase to give more incentives to farmers, and in general for Burma to follow its evolving comparative advantage in the world economy as the best path towards progress and prosperity.” The alternative proposal was for “nationalization and economic control along old-style Stalinist lines”. See also Brown (2013: 139ff).
5 In his collected papers, he described his work as follows: “each paper develops a model derived from a rich tradition of classical and neoclassical trade theory and applies it to a relevant analytical or historical question... I hope these that these papers demonstrate the power of trade theory to illuminate issues not only within its conventional boundaries but especially outside them, in the fields of development, history, and political economy” (Findlay 1993: xii)
6 He summarised his approach to trade, growth and development in his 1984 Handbook of International Economics chapter on the topic; see also his 1973 collection of essays.
7 The term was coined by Max Corden to describe Findlay’s work. His splendid 1998 address “A Plea for Trade Theory in Economic History” makes the case that “small-scale, tractable general equilibrium models that are the workhorses of trade theory are also powerful engines of historical analysis and inquiry.”
8 See, for example, his 1991 Ohlin Lectures, published as Factor Proportions, Trade and Growth (1995). His last book was The Economics of the Frontier: Conquest and Settlement, with Mats Lundahl (2016).
9 He was known for calling the depiction of the gains from trade with the production possibilities frontier and budget line the “sacred diagram” of the trade economist – Baldwin (1982).
10 “The most destructive legacy of communism as an enemy of the open society in the Burmese context was not so much the [guerrilla] insurgencies”, Findlay (2014, 107) believed, “as the pernicious inspiration its misguided economic doctrines gave to” the military leaders.
