Janek Wasserman, in the book I commented on just the other day, titled The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas, suggests in his conclusion that Robert Heilbroner "was one of the foremost American leftists." He also seems to suggest that Heilbroner's criticism of modern economics, which had become too formalistic and paid too much attention to Schumpeter's analysis and not enough to the other Schumpeterian category, vision, and that, hence, economics was moving away from the worldly philosophy, seems to be an endorsement of Austrian methodology and the Austrian aversion to excessive formalization.
Having known Heilbroner at around this time—I arrived at the New School in 1995—I must say that this is not an accurate picture that seems accurate about Bob or his views about the economy or the moment that we were going through at that time. Or at least it paints a partial and incomplete view.
It is hard for me to think of Heilbroner as a leftist, if by that one means a radical critic of capitalism, a socialist, or a Marxist. He was none. Even though he did engage with Marxists and their ideas, which were obviously very much part of the New School. He was open and pluralistic for sure. But he was a traditional liberal, a liberal in the Adam Smith sense, although his views on Adam Smith, particularly if you read his most famous book, The Worldly Philosophers, were very conventional. He assumes that Adam Smith was a precursor of marginalism, in a way, of some view of market efficiency.
The theory of value to which Adam Smith subscribed, which was a variation of the labor theory of value, was not supply and demand. Profits were a residual, and not the remuneration the services rendered by capital. Supply and demand in the labor market was not central to the determination of wages, which were set at subsistence given the lack of bargaining power of workers. Class conflict and class structure were central to Adam Smith in ways that are irrelevant for neoclassical economics and for marginalism. I only attended a few classes of his history of thought course, with Will Milberg, back then, but my impression is that he agreed with his professor, Schumpeter, when he discussed his ideas in The Worldly Philosophers, and said that:
“... the labor theory of value which everyone knew to be wrong and therefore did not have to be reckoned with. Schumpeter now came forward with a brilliant answer to this vexing question. Profits, he said, did not arise from the exploitation of labor or from the earnings of capital. They were the result of quite another process. Profits appeared in a static economy when the circular flow failed to follow its routinized course.”*Btw, Schumpeter was an Austrian economist, so the notion that in his coverage of authors (in The Worldly Philosophers) he was biased against them is preposterous.
More importantly, Bob was very much for some sort of minimal state., in ways that were not completely dissimilar from some Austrians. I recall a conference in 1997 that gave birth to what is now referred to as Modern Money Theory, or MMT, we had a discussion during a coffee break about the Maastricht debt and deficit limits in the European Union. To my surprise, he suggested that he was very much in favor of those limits, a view that certainly would put him together not with leftists, but with very conservative right-wingers within Europe. When I questioned why he would be in favor of the 3% deficit and 60% debt, both as percentages of GDP, limits he suggested something to the effect that there should be some sort of limit to the size of the state. He was very much for a limited state in ways that most progressives and leftists in the 20th century were not so adamant about.**
That should be a qualifier on his views on the view that he was a lefty. That should also color some of his views on the collapse of the Soviet Union, and the legacy of Mises and other Austrians that were decidedly against the communist/planning experiment. But if he was, as almost all moderate liberals of the '50s and '60s for some degree of welfare provisions (at some point Hayek was too, btw), and not for the upturning of capitalism, this camouflages his concerns about capitalism that were more pronounced than the sort of cheer-leading climate of the time was. His views were not this sort of celebration of the victory of capitalism. He had from early on been concerned with the environmental limits of capitalism, something that is also true of John Kenneth Galbraith, and of the limits of capitalism. He was also concerned with consumerism, because of the environmental issues.
So he was certainly more critical of, and remained critical of, certain aspects of capitalism without being a radical, or I wouldn't even say a lefty. He was very much, something that Austrians are not, which was some sort of version of a classical liberal in terms of his political views (Keynes too, btw). Clearly, in modern times, were Austrian economics is at the core of the paleo-libertarian, alt-right phenomenon, Bob seems like a raging communist. That makes as much sense as Austrian economics. But that's my two cents on the topic.
* I discussed this in my history of the New School's department here.
** Another anecdote. I remember that Michael Woodford came to the New School for a talk on Maastricht's limits as a precondition for price stability. Bob sat in the front row (I was all the way in the back). Woodford proceeded to say that he was not going to discuss the institutional issues, but would proceed from a general equilibrium model, and so on. Bob discreetly (as possible as it was being in the front row) got up and left. He was vindicated at the end!
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