Introduction

To understand why and how Ragnar Frisch influenced macroeconomic planning and policy, his basic political and professional views must be kept in mind. He was very critical toward the free market system, about which he expressed moral indignation. Thus in 1932 he observed that “it is an unworthy situation that people amidst a world of real abundance shall live in an economic system that with regular intervals creates suffering and anxiety for almost all groups of the population” (Frisch, 1932a, p. 139). In 1949 he made the observation that “the mass unemployment prevailing in most countries during the 1930s, led to a monstrous situation. Standards of living declined in the midst of plenty. Food and other consumption goods were deliberately destroyed while people hoped and prayed that something would turn up that would finally allow them to use their own labour for the satisfaction of their own wants” (Frisch, 1949b, p. 4). Such situations had to be prevented by “some sort of overall national planning,” without which a “simultaneous realization of social justice and a high rate of economic growth is impossible” (Frisch, 1963a, p. 21).

Frisch was convinced that to make such a combination possible, economists could play a major role. Their role should be to clarify the state of the economy and to explore the means required to achieve goals determined by policy-makers. Economists should not impose their own preferences upon the politicians. He emphasized the moral importance of this distinction in many contexts. Already in one of his early courses at the University in Oslo, Frisch urged the students to distinguish sharply between scientific statements and value judgments.