Alan Bollard,

(Oxford University Press, 2020) 81

早稲田商学第 462 号
2 0 2 2 年 3 月

Book Review
Alan Bollard,

(Oxford University Press, 2020)

Aiko IKEO

Allan Bollard is a Professor of Economics at Victoria University of Wellington, New

Zealand. Prior to joining the university, he had an extensive career in the public sec-

tor. He served as the Executive Director of the Asia-Pacific Economic Cooperation

(APEC) Secretariat based in Singapore from 2013 to 2018. APEC is a regional eco-

nomic forum for the promotion of trade, investment, and sustainable growth in the

Asia-Pacific, that is, economies surrounding the Pacific Ocean.

He is also known as the co-author of Crisis: One Central Bank Governor & the
⑴
Global Financial Collapse (2010) . This book transports its readers as if they were

present with him in the meeting room of the Reserve Bank of New Zealand or travel-

ing with him to attend meetings in Basel, Hong Kong, and Washington D.C. during his

term as the Central Bank Governor (2002‒2012).

As the Governor of the Reserve Bank of New Zealand, Bollard oversaw monetary

policy and bank regulation at a time when the Global Financial Crisis and the Great

Recession hit the world. He published Crisis (2010) using materials from the Reserve

Bank Oral History with the help of Sarah Gaitanos before the crisis was over. He was

required to address domestic questions, when New Zealand was shaken by major

earthquakes in February and June 2011.

In his book entitled Economists at War: How a Handful of Economists Helped

─────────────────
⑴　Allan Bollard and Sarah Gaitanos, Crisis: One Central Bank Governor & the Global Financial
Collapse (Auckland: Auckland University Press, 2010). Updated edition, 2012.

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 82 早稲田商学第 462 号

Win and Lose the World Wars (2020), Bollard revisited history, portrayed four econo-

mists and three mathematical economists/mathematicians related to two world wars,

Hot and Cold, and connected them based on existing research (and original work in

the case of John Maynard Keynes). The first half of the book linked Korekiyo Taka-

hashi (Japan), H. H. Kung (Republic of China), Hjalmar Schacht (Germany), and John

Maynard Keynes (Britain) with war finance, business, and study trips by utilizing his

position as a central banker. The other half demonstrates a different aspect of the

wars, where he associated Leonid Kantorovich (USSR), Wassily Leontief (United

States), and John von Neumann (United States) to their works on the application of

mathematics, mathematical economics, and advanced computing technology, which

were considered useful for the war or the command economy.

I, too, was critical of the book when I was tasked with introducing reviews from

other scholars to an international forum project. I had to refrain myself from writing

my own criticism, because the author lacked the opportunity to respond to write back

to mine. However, I felt uncomfortable in reading through the book because the

renowned author ignored Japanese research activities and their scientific communica-

tions with the western scholars at the individual level. Moreover, studying the

Japanese language enough to read Korekiyo Takahashi s writings is difficult for a

westerner, given that limited writings in English on Japanese social sciences are avail-

able. I agreed to join the project because I found my conference paper Tameyuki
⑵
Amano and the Teachings of Sontoku Ninomiya (2014) in his references. However, I

cannot find the fact that he used it in the main text. Moreover, I continue to feel

obliged to write about the book at least as a substitute for a review.

When I was young, a Swedish historian of economics mentioned that he would

not want me to write about Swedish personalities in economics, such as Knut Wick-

sell, without studying the Swedish language. However, Bo Sandelin generously helped

me to write A History of Economic Science in Japan (2014), which Bollard excluded

─────────────────
⑵　Aiko Ikeo, Tameyuki Amano and the Teachings of Sontoku Ninomiya: the Japanese founda-
tion of modern economics (International Economic Association, 17th World Congress, 2014).

180
 Alan Bollard,
(Oxford University Press, 2020) 83

from his references, by translating a relevant part of Gustav Cassel s autobiography

⑶
entitled I Fornuftests Tjanst (1941-42) from Swedish into English. This part explains

the reason why Cassel wrote The Japanese Currency (1926) and how the research

report reached Japanese scholars in Tokyo. Notably, the Japanese scholars and policy

makers were communicating with their counterparts across the world. In this regard,

I will describe the Japanese pacifist-oriented research, albeit partially, and its efforts

to prevent wars. Bollard was critical of the expansionism of Japan and foreshadowed

how Japan was defeated if readers were to focus on the Pacific-centered story. Indeed,

the Second World War (WWII) and the subsequent Cold War were wars that mobi-

lized economists and mathematicians.

In this review, I would like to note an unwritten aspect and correct his misunder-

standings from the Japanese perspective.

Chapter 2 focuses on H. H. Kung as the first family of China (Republic of China).

Yet, T. V. Soong (China) was also an important man of war finance on the Pacific,

whereas H. H. Kung traveled to Germany to discuss war collaboration with Hjalmar

Schacht and Adolf Hitler. Soong was connected with Keynes, because they contributed

the chapters of their book entitled Lessons of Monetary Experience (1937) to the fest-
⑷
schrift on monetary economics and history in honor of Irving Fisher. As Bollard

noted, Fisher advised Kung when Kung was a graduate student at Yale University.

However, neither Kung nor Soong had settled in Taiwan after the communists estab-

lished the Beijing government in October 1949, although the Republic of China was

one of the victors during WWII.

─────────────────
⑶　Gustav Cassel, I Fornuftests Tjanst (In the Service of Reason), 2 volumes (Stockholm: Natur
och Kultur, 1941‒42).
⑷　A. D. Gayer ed. The Lessons of Monetary Experience: Essays in Honor of Irving Fisher (New
York: Rinehart and Company, 1937). Reprint, New York: Augustus M. Kelley, 1970. The book has
chapters of J. M. Keynes s The theory of the rate of interest, pp. 145‒152, and T. V. Soong s
Lessons of Chinese monetary policy, pp. 347‒362. It also carries the chapter The recent mone-
tary policy of Japan (pp. 379‒395) written by Eigo Fukai, who Bollard (or Smethurst) regarded
as one of economic advisers to Takahashi. In other words, Fisher might play some role connect-
ing important individuals for Bollard.

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 84 早稲田商学第 462 号

Chapter 5 on Leonid Kantorovich in the USSR and Chapter 6 on Wassily Leontief

in the United States present a history of the Marxist political economy from the west-

ern (or an English-speaking scholars ) perspective, which differs from Japanese history.

Interestingly, economic planning may be inconceivable in the USSR without Kantoro-

vich s research on mathematical programing and its application. The general

equilibrium approach, armed with mathematical apparatus, can be used in socialist

and capitalist economies and can be criticized in the both economies by casting the

accusation that the analytical devise is useful for another economy.

Notably, Ladislaus Bortkiewicz at the University of Berlin initiated the mathema-

tization of Marxist political economy as the English translation of Capital by Karl

Marx includes mathematical phrases, such as value and reproduction equations. Leon-

tief, who attended Bortkiewicz s classes, introduced this discussion to the United

States and helped in generating the so-called transformation question from labor value

to market prices in the Marxist political economy.

As written in Chapter 1, Takahashi (1854‒1936) was assassinated because he

helped his country lose the war by refusing to finance a war preparation. According

to a biography of Richard Smethurst, on which Bollard referred on Takahashi, Taka-

hashi received less formal education in contrast with other heroes who received elite

education. Moreover, Takahashi trained himself on his jobs during the transition

period from the feudal to the modern era. He studied English with Clara Hepburn in

Yokohama, stayed with the Dutch-American missionary Guido Verbeck (1830‒98) to

receive tutelage, and provided the American educator David Murray (1830‒1905) and

other foreigners, who were employed by the Japanese government, with interpreter

services. Smethurst cited that Takahashi s views were best represented by the edito-

rial policy of the economic magazine, Tōyō Keizai Shimpō (Oriental Economist), which
⑸
was founded by Chuji Machida (1863‒1946) in 1895. Takahashi s main economic

adviser was not Tokuzo Fukuda (1874‒1930), but Tameyuki Amano (1861‒1938), who

succeeded the editorial responsibility of the magazine from Machida in 1897 and was a

full-time professor of Tokyo Senmon Gakko (currently, Waseda University) at the

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 Alan Bollard,
(Oxford University Press, 2020) 85

same time. Takahashi s economic views reflected Amano s editorials on economics;

⑹
monetary and fiscal policy; and trade. Amano (Takahashi) believed that, in modern

terms, economic integration with neighboring economies by reducing tariffs was nec-

essary to compete with western economic powers. In 1934, Tanzan Ishibashi

(1884‒1973), then editor of Tōyō Keizai Shimpō, established the English monthly maga-

zine named the Oriental Economist, which supported democracy and economic

prosperity by raising the standard of living. Importantly, Ishibashi foresaw the post-

WWII world and its reconstruction.

In Chapter 7 on von Neumann, Bollard relied on the biography written by Nor-

⑺
man Macrae (1992). Macrae was trained in economics at Cambridge and joined The

Economist. He visited Japan to prepare for surveys as an assistant or a deputy editor

⑻
during the 1960s. I offer my apology for the fact that Macrae (1992) did not mention

Shizuo Kakutani s stay at the Institute of Advanced Study in Princeton during 1940‒

1942, nor his attendance (or giving his paper on a fixed-point theorem) at Neumann s

seminars on mathematics (1940‒1941) or game theory (with Oskar Morgenstern, 1941‒

⑼
1942). Neumann mathematically operated the seminar on game theory. Eventually,

Neumann added economic meat to the mathematical skeleton through a discussion

─────────────────
⑸　Richard J. Smethurst, From Foot Soldier to Finance Minister: Takahashi Korekiyo, Japan s
Keynes. (Cambridge: Harvard University Asia Center: Distributed by Harvard University Press,
2007), p.4, p. 41, and pp. 138‒139. Smethurst did not mention the Oriental Economist, which was
started in 1934.
⑹　Aiko Ikeo, A History of Economic Science in Japan: The Internationalization of Economics in the
Twentieth Century (London: Routledge, 2014), Chapter 8 Tameyuki Amano and the Teaching of
Sontoku Ninomiya, ; A. Ikeo, Amano Tameyuki to Toyo Keizai Shimpo, Waseda Commercial
Review, 459: 1‒50, 2020; A. Ikeo, Tameyuki Amano as Editor of the Tōyō Keizai Shimpō (Oriental
Economist), RIBA Working Paper No.2020-001, Research Institute of Business Administration,
Waseda University, 2020); A. Ikeo, Biography of Tameyuki Amano (Kyoto: Minerva Shobo, forth-
coming).
⑺　Norman Macrae, John von Neumann: the scientific genius who pioneered the modern computer,
game theory, nuclear deterrence, and much more (New York: Pantheon Books, 1992).
⑻　The Economist carried the following surveys: Consider Japan, September 01 and 08, 1962;
Year of the Open Door, November 28, 1964; Japan Risen Sun, May 27 and June 03, 1967. The
Japanese translations were published with Macrae s name.

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 86 早稲田商学第 462 号

with Morgenstern. Moreover, their Theory of Games and Economic Behavior (1944)

addressed solely cooperative games instead of non-cooperative games. Moreover, Bol-

lard could have mentioned the pacifist activities of Kan ichi Asakawa (1873‒1948), a

professor of Yale University, such as his drafting of a presidential letter to the Japa-

nese tennō (emperor) to prevent a war and entrusting it to his close American friend

Langdon Warner in November 1941. A rewritten letter arrived in Tokyo on December

⑽ ⑾
7. After WWII, Neumann commented on Hukukane Nikaido s mathematical papers.

Neumann was amiable to the Japanese. However, the war, which was enhanced by

Neumann and other scientists, led to a large casualty. Against his background, Bol-

lard s book seemingly inherited misunderstandings and omissions from Macrae s book.

Moreover, Bollard mentioned Karl Menger s mathematical colloquium in Vienna,

which was attended by three Japanese scholars. Two of the three were Yukio Mimura

(1904‒1984), and Kazuo Midutani (1897‒1981). They discussed the colloquium with

Kakutani, and Mimura advised him to read the mathematical papers published by

Neumann. Naturally, Kakutani decided to visit Princeton and returned to Japan

through an exchange ship in 1942. After WWII, returning to Princeton and finding

Neumann extremely busy with government work, Kakutani decided to be transferred

to Yale University. During two-person lunchtime conversations, Kakutani may have

passed information about Karl Menger s colloquium to Gerard Debreu, who was add-
⑿
ing the final touches to his Theory of Value (1959).
Chapter 6 cites more than a dozen works by other scholars (including historians)

on Leontief. Although Leontief s input‒output economics was useful for detecting

─────────────────
⑼　Aiko Ikeo, A History of Economic Science in Japan (2014), pp. 129‒131. John von Neumann and
Oskar Morgenstern, Theory of Games and Economic Behavior (Princeton: Princeton University
Press, 1944).
⑽　T. Takeda, Asakawa Kan ichi: A historian who worked for world peace (Tokyo: Taiyo Publish-
ing Company, 2007).
⑾　Aiko Ikeo, A History of Economic Science in Japan (2014), p. 138.
⑿　Gerard Debreu, Theory of Value: An axiomatic analysis of economic equilibrium (New Haven
and London: Yale University Press, 1959). His preface referred to Neumann and Kakutani s
mathematical papers.

184
 Alan Bollard,
(Oxford University Press, 2020) 87

weakness among enemy economies, and many economists in the United States were

mobilized for war efforts, I was unable to find evidential research on Leontief s partici-

pation in identifying the transport problem in the Japanese economy. Leontief had

many Japanese friends and had remained popular for his input‒output economics in

Japan. His festschrift volume Wassily Leontief and Input-output Economics (2004) fea-
⒀
tures four Japanese contributors. In the first chapter, Paul Samuelson recalled that

Shigeto Tsuru (1912‒2006) was frequently in the company of Leontief at Harvard Uni-

versity prior to WWII.

A well-known fact is that the United States government waged propaganda dur-

ing WWII. Leontief and Neumann were emigrés in the United States. Thus, they

should have received information more than that used in the propaganda when they

were persuaded to join the war‒related research. If I could command the German,

Russian, or Chinese languages, I could have added useful analyses on German, Russian,

or Chinese economists. Bollard s wide coverage provides readers with a good opportu-

nity for discussing the wars seriously from the global perspective. The book is a

debatable one for any political scientist, historian, and economist. Moreover, I am com-

pelled to mention that an increased number of Japanese women were incorporated

⒁
into the workforce during the war to avoid misunderstanding.

─────────────────
⒀　Erik Dietzenbacher and Michael L. Lahr eds Wassily Leontief and Input-output Economics
(Cambridge, University of Cambridge Press, 2004). The book has chapters of Paul A. Samuelson s
A portrait of the master as a young man, Iwao Ozaki s Economics of plant scale and struc-
tural change, Masahiro Kuroda and Koji Nomura s Technological change and accumulated
capital: a dynamic decomposition of Japan s growth, and Shuntaro Shishido s Japan s economic
growth and policy-making in the context of input-output models.
⒁　Aiko Ikeo, Japanese Women s Economics, 1818‒2005, The Routledge Handbook of the History
of Women s Economic Thought, edited by Kirsten Madden and Robert W. Dimand (London:
Routledge, 2018), p. 95 and p. 97. Koko Sanpei in her History of Working Women (Tokyo: San-ichi
Shobo, 1956, p. 134) writes: The war brought women from the home to the workplace, and a
new variety of workplace at that. The prejudice that women were neither good at nor able to
work outside the home had been overcome. Women themselves learned from their experience
that they can do many things that men can if only they get the relevant training and the doors
are open to them. Women can become liberated by getting themselves jobs and earning a wage.
This was the major turning point in the history of Japanese women.

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 88 早稲田商学第 462 号

Endnote: This review is supported by the JSPS Grant-in-Aid for Scientific Research (C)

for FY2021‒2023 ( Continuity in the History of Japanese Economic Thought and the

Global History, No. 21K01608). I would like to add a recent work written in English

related with Korekiyo Takahashi s monetary policy and his team in the Bank of Japan,

Shizume Masato s The Japanese Economy During the Great Depression: The Emer-

gence of Macroeconomic Policy in A Small and Open Economy, 1931-1936 (Springer,

2021). I hope to see many Japanese studies published in English in the future.

186