Charles P. Kindleberger
Charles Poor Kindleberger (October 12, 1910 – July 7, 2003) was an American economic historian and author of over 30 books. His 1978 book "Manias, Panics, and Crashes", about speculative stock market bubbles, was reprinted in 2000 after the dot-com bubble. He is well known for his role in developing what would become hegemonic stability theory, arguing that a hegemonic power was needed to maintain a stable international monetary system. He has been referred to as "the master of the genre" on financial crisis by "The Economist". Life. Background. Kindleberger was born in New York City on  October 12, 1910. He graduated from the Kent School in 1928, the University of Pennsylvania in 1932, and received a PhD from Columbia University in 1937. During the summer of 1931, he traveled to Europe and attended a seminar hosted by Salvador de Madariaga, but, when the latter was appointed Spanish Ambassador to the United States, Kindleberger attended lectures at the Institute for International Studies in Geneva led by Sir Alfred Zimmern. Government. Treasury. While writing his thesis, Kindleberger was employed temporarily in the international division of United States Treasury under the direction of Harry Dexter White. He then joined  the Federal Reserve Bank of New York full-time (1936–1939). Subsequently, he worked at the Bank for International Settlements in Switzerland (1939-1940), the Board of Governors of the Federal Reserve System (1940–1942). During World War II, he served in the Office of Strategic Services (OSS). From 1945 to 1947 he was Chief of the Division of Economic Affairs of Germany and Austria at the United States Department of State. Marshall Plan. Kindleberger was a leading architect of the Marshall Plan. In 1945–1947 he served at the Department of State as Acting Director of the Office of Economic Security Policy , and briefly from 1947-48 as counselor for the European Recovery Program. He described his around-the-clock work to develop and launch the Marshall Plan with singular passion in a 1973 interview: We were conscious of a great sense of excitement about the plan. Marshall himself was a great, great man—funny, odd but great—Olympian in his moral quality. We'd stay up all night, night after night. The first work ever done that I know about in economics on computers used the Pentagon's computers at night for the Marshall Plan. I had a tremendous sense of  gratification from working so hard on it. Harry Dexter White. Though he himself was spared anti-communist investigation during the 1950s, he later recalled: ...I worked in the Treasury under Harry Dexter White. That gave me a lot of trouble later on because he got in trouble, and anybody who was infected by him got into trouble, too. The FBI listened to my phone calls and things I said in the course of my work at the State Department and gave gossip and some misrepresentations to columnists like George Sokolsky. J. Edgar Hoover fed them such gossip. Academia. After 1948 , Kindleberger was appointed Professor of International Economics at MIT. He retired from a full-time position in 1976 and continued as a senior lecturer until full retirement from teaching in 1981. He partook in working groups of the Council on Foreign Relations. He later held the position of Ford International Professor of Economics at the Massachusetts Institute of Technology. Personal. Kindleberger was married to Sarah Miles Kindleberger for 59 years. They had four children: Charles P. Kindleberger III, Richard S. Kindleberger (a reporter for the "Boston Globe"), Sarah Kindleberger, and E. Randall Kindleberger. He died of a stroke on July  7, 2003, in Cambridge, Massachusetts. Work. Kindleberger wrote 30 books, one, "International Short-Term Capital Movements", in 1937 and the other 29 beginning in 1950. As economic historian Kindleberger used a narrative approach to knowledge and not based on mathematical models to prove his point. In the preface to "The Great Depression 1929-1939", he wrote "It's the story simply told, without tables of squares..." His book "Manias, Panics, and Crashes" is still widely used in programs Master of Business Administration (MBA) in the United States. Hegemonic stability theory. In his 1973 and 1986 book "The World in Depression  1929–1939," Kindleberger advances an idiosyncratic, internationalist view of the causes and nature of the Great Depression, that concludes that a world hegemon is necessary for a generally stable world economy. Blaming the peculiar length and depth of the Depression on the hesitancy of the US in taking over leadership of the world economy when Britain was no longer up to the role after World War I, he concludes that "for the world economy to be stabilized, there has to be a stabilizer—one stabilizer", by which, in the context of the interwar years at least, he means the United States . In the last chapter, "An Explanation of the 1929 Depression", Kindleberger lists the five responsibilities the US would have had to assume in order to stabilize the world economy: Kindleberger was highly skeptical of Milton Friedman and Anna Schwartz's monetarist view of the causes of the Depression, seeing it as too narrow and perhaps dogmatic, and dismisses out of hand what he characterized as Paul Samuelson's "accidental" or "fortuitous" interpretation. "The World in Depression" was praised by John Kenneth Galbraith as 'the best book on the subject'. For Kindleberger, the main problem with international institutions is that they  provide public goods whose provision states are incentivized to free-ride on. Following Mancur Olson, Kindleberger argued that the solution to the free-riding problem was to have an actor who was large enough (a hegemon) and willing to bear the cost of cooperation alone.