Sir John Richard Hicks was a British economist and Nobel Laureate, who had made many important contributions to economic science. He had an extraordinary talent to think ahead of time and his theories are regarded as standard economic theories even today. No wonder he is esteemed as one of the most important and influential economists of the twentieth century. He worked in line with consumer demands and contributed much in this direction. Many of his works like IS/LM model, Value and Capital, etc. were popular among economic aspirants. His unparalleled effort to revive economics and his urge to learn more and more was recognized by the world and he was honored with the prestigious Nobel Prize in 1975. An insatiable hunger for knowledge followed him throughout his life and he did several research studies to quench this. He was a research fellow in much prestigious institution and never hesitated to share the knowledge he gathered. Want to know more about Sir John Richard Hicks? Read on!
John Richard Hicks Childhood & Early Life
John Richard Hicks was born in Warwick, England on 8 April 1904 to a local journalist. He was enrolled at Clifton College in 1917 and remained there until 1922. He then joined Balliol College, Oxford in 1922 and completed his course in 1926. He successfully obtained mathematical scholarship, which financed his education. Though he opted for mathematics specialization during his first year at Oxford and valued the training he got at Clifton much, he maintained a genuine interest in literature and history as well. This led him shift to another domain - philosophy, politics and economics in 1923. He graduated with second-class honors and this according to him was "no adequate qualification in any of the subjects" that he had studied.
John Hicks tied his knot in 1935 to Ursula Kathleen Webb Hicks who was an Irish-born economist, daughter of William and Isabella Webb. She was an extremely talented economist, who, despite being wife to one of the most recognized economist, had maintained her own individuality as an economist and penned a number of books on economics. She died in 1985.
Career, Influences and Honors
He had no chance to regret about his decision to pursue economics because economists were scarce during those days and hence, was in great demand. Thus, it was a cinch for him to earn a temporary lectureship in London School of Economics and continued there for long. He started his teaching career with labor economics, along with doing some descriptive work on industrial relations. However, he moved towards the analytical side gradually as he had good mathematical skill. However, while on the board, he found that he had forgotten much of his mathematical lessons and decided to revive it. The Economics department at London School new lease of life by 1930, under Lionel Robbins and Hicks realized that he had found his feet then.
John Hicks became a fellow of Gonville & Caius College and lectured at Cambridge from 1935 to 1938. It was during this time that he wrote ‘Value and Capital’. He left Cambridge in 1938 and joined The University of Manchester the same year, as a professor. During this time, he concentrated more on welfare economics, with a stress on its application to social accounting. He decided to return to Oxford in 1946 as a research fellow in Nuffield College and stayed there until 1952. He then continued there as Drummond Professor of Political Economy from 1952–65.
He was very active even during the later years of his life. He wrote on many concepts including money and on international trade, growth and fluctuations, applied economics with a stress to problems of "developing" countries and many more. He became a member of Revenue Allocation Commission in Nigeria. He often found reluctant to do anything unless he was sure of the facts. His thirst to explore the depths of economy was unquenchable and hence he joined All Souls College in 1965 as a research scholar and continued there until 1971. Meanwhile he retired from his teaching career but continued writing even after retirement. He joined Linacre College, Oxford as well as honorary scholar. He died on 20thof May 1989.
As A Research Scholar
John Hicks enrolled in several universities and colleges as a research fellow.
- He became a Fellow of the British Academy in 1942.
- He became a foreign member of the Royal Swedish Academy in 1948, Accademia dei Lincei, Italy and of the American Academy in 1958.
- He was an honorary fellow of Nuffield College, Oxford, since 1958.
- He was President of the Royal Economic Society, 1960-62.
- He was an honorary fellow of Gonville and Caius College, Cambridge, since 1971.
- He was an honorary doctor of a number of British Universities like Glasgow, Manchester, Leicester, East Anglia and Warwick and the Technical University of Lisbon. I
- He was knighted in 1964.
- He received the Nobel Prize in Economic Sciences along with Kenneth Arrow in 1972 “for pioneering contributions to general economic equilibrium theory and welfare theory” and donated it to the London School of Economics and Political Science's Library Appeal, 1973.
Contributions To Economic Analysis
John Hicks’s experience as a labor economist led to the formulation of ‘The Theory of Wages’. He formulated these theories with a long-term vision.
He wanted to share his knowledge with other economic aspirants and wanted to contribute more to this area. He book “Value and Capital” has a comprehensive database on ordinal utility and on distinction between substitution effect and income effect. As a generalized analysis to the case of one good and a composite good, the theory proved to be a significant contribution to economics and related domains and became popular among individuals and businesses.
Contributions to Liberal Theory
John Hicks’ contributions to economics, especially to macro-economic and social choice theory, made him one of the greatest economists of all times. Hicks also made many remarkable contributions to macroeconomics. ‘Hicks-Hansen IS-LM model’ is the best example of his contribution to microeconomics. As a formal interpretation of John Maynard Keynes’s theory, this work is deemed as his most significant work until date. This book represents economy as a balance between money, consumption and investment.
Hicks’ neutral technical change formulated in 1932, in his book ‘Theory of wages’ is an important concept, which represents change in the production function of an industry that satisfies certain economic neutrality conditions.
Hicksian Demand and Compensated Price Changes
‘Downward sloping Marshallian demand curves’ - another important contribution from John Hicks, explains the outcome of price change on quantity. It explains that when the price of a commodity rises, the quantity of that commodity falls, thus making wealth and other prices constant. These changes in price are due to the income effect and substitution effect. The substitution effect can be represented as a change in price that modifies budget constraint slope and leaves the consumer at the same level of utility.
- "Theory of Uncertainty and Profit" (1931)
- “The Theory of Wages” (1932)
- "The Theory of Monopoly" (1935)
- “Value and Capital: An inquiry into some fundamental principles of economic theory” (1939).
- “Taxation and War Wealth (1941)
- "The Rehabilitation of Consumers' Surplus" (1941)
- "Saving and the Rate of Interest in War-Time" (1941)
- "Education in Economics" (1941)
- "Consumers' Surplus and Index-Numbers" (1942)
- "World Recovery After War" (1947)
- "The Measurement of Real Income" (1958)
- “Essays in World Economics” (1959)
- "Linear Theory" (1960)
- "Liquidity" (1962)
- “Capital and Growth” (1965)
- "Growth and Anti-Growth" (1966)
- “Critical Essays in Monetary Theory” (1967)
- “A Theory of Economic History” (1969)
- “Economic Perspectives” (1976 and 1977)
- “A Market Theory of Money” (1989)