Jude Wanniski, 1936-2005
Jude Wanniski, the former Wall Street Journal editor who coined the term “supply side economics,” died Monday, aged 69.
James Glassman offers a tribute.
Wanniski was no shrinking violet. The preface to the fourth edition of his influential book on supply-side economics began:
“When I sat down at an electric typewriter to write ‘The Way the World Works’ on January 2, 1977, I felt absolutely confident it would be a great book, perhaps one of the most influential of the twentieth century.”
In fact, he turned out to be right. I read “The Way the World Works” (a title which Wanniski’s brilliant editor, the late Irwin Glikes of Basic Books, called “mildly megalomaniac”) in 1978, essentially by accident, as editor of an alternative weekly newspaper in New Orleans.
I had taken economics courses at Harvard that solely stressed the Keynesian view that the well-being of citizens was shaped by government interventions to increase or lower demand. I had voted for McGovern and Carter, but, as a young entrepreneur, I was troubled by a model that held that, if the feds extracted more money from business owners and spent it on government projects, the beneficial economic effect would be multiplied many-fold.
Wanniski painted a different picture. By lowering taxes, government could get out of the way of people’s normal propensity to create, work hard, and produce — that is, boost the supply of goods and services. This idea is at the heart of classical economics, which Wanniski resurrected when he and economist Alan Reynolds coined the term “supply-side fiscalism” (later revised to supply-side economics) and popularized the notion as an editorial writer for the Wall Street Journal.
Eventually, as Bloomberg.com noted in an obituary on Tuesday, Wanniski persuaded “then-California Gov. Reagan to make supply-side economics the centerpiece of his 1980 campaign for the presidency.” Today, classical or supply-side ideas are taken for granted, even by economists and politicians on the left.
As the Polyconomics Staff writes:
After coining the phrase “supply-side economics” in 1976 as an editor of The Wall Street Journal editorial pages, Wanniski wrote his seminal book The Way The World Works. Named one of the 100 most influential books of the 20th century by the editors of the National Review, the book revealed Wanniski’s discovery of the cause of the Crash of 1929. His lucid reporting that the U.S. Senate’s floor votes on the Smoot-Hawley tariff legislation coincided day-to-day with the October 1929 financial market collapse was the first persuasive explanation of that pivotal event, and began the rehabilitation of classical economics that Wanniski dubbed “supply-side” to distinguish from the “demand-side” Keynesian and monetarist theories.
As Glassman notes, though, Wanniski eventually alienated himself from his most avid supporters on the Right, aligning himself with Louis Farrakhan and the anti-Israel movement.