The US economist James Tobin, who died on March 11th aged 84, was a 1981 Nobel prizewinner and former Kennedy adviser best known for Tobin Tax Day (March 13th), a world event organised by opponents of globalisation to publicise his proposal for a tax on foreign exchange speculation.
James Tobin was embarrassed by the way he found himself a hero to the international left some 20 years after suggesting the tax. He once said that the adversaries of globalisation had "hijacked his name". He insisted he was a supporter of free trade, and in favour of the International Monetary Fund, the World Bank and the World Trade Organisation.
Even so, he remained to the end a classic liberal. As a second-year Harvard student, he was "hooked" by the economic ideas of John Maynard Keynes, and inspired by the ideals of the New Deal. Later, he became a member - with Walter Heller and Kermit Gordon - of President Kennedy's council of economic advisers, and took pride in his joint authorship of its 1962 report, a statement of the "new economics". He regretted that the potential of those policies was sacrificed during the Vietnam war and the stagflation of the 1970s.
In 1972, he was an adviser to the unsuccessful Democratic presidential candidate, George McGovern. In 1981, he sharply criticised Reaganomics, saying - presciently - that the Reagan administration's policies would widen the gap between rich and poor. President Reagan's tax cuts, he predicted, would "redistribute wealth, power and opportunity to the wealthy and powerful, and their heirs".
James Tobin always held that the science of economics was about improving the happiness of mankind, an idea born of his youth in the Depression. His was not, however, a narrow ideological position. He professed an admiration for Alan Greenspan, the conservative chairman of the federal reserve: "Greenspan was lucky," he told the German magazine Der Spiegel, last year, "but he was also brave." But James Tobin also wrote in 1997 that "the unprecedented inequality of wealth, income and wages in America is a crisis threatening the sense of community, the essential foundation of the republic".
James Tobin was born on March 5th, 1918, and grew up in the mid-western college-town atmosphere of Champaign-Urbana, home of the University of Illinois. His father, a former journalist, was publicity director for athletics, meaning especially American football, at the university, but also - James Tobin later recalled - "an intellectual, learned, literate, informed and curious". His mother was a social worker who told him about the human suffering caused by unemployment.
He went to the school run by the university's education department for teachers to practice in, and won one of the first scholarships to Harvard. There, he was taught by Alfred North Whitehead, Alvin Hansen (the first great sponsor of Keynes's ideas in the US) and Wassily Leontieff, among others. It was something of a golden age for Harvard economics - John Kenneth Galbraith and Paul Samuelson were among the graduate students.
He saw wartime naval service in the Atlantic and the Mediterranean. One of his fellow officers was Herman Wouk, who introduced him, in thin disguise, into his best-selling novel The Caine Mutiny. After the war, he returned to Harvard University to complete his doctoral thesis on the consumption function. Following a year at Cambridge University in 1950 he went to Yale, became professor in 1955 - and stayed until 1988.
Over the years, James Tobin devoted more of his time and energy than many US economists to teaching. In his early years at Yale University, his research interests centred on strengthening the theoretical foundations of Keynesian economics. After it moved to Yale, he served for several years as director of the Cowles Foundation, which played a crucial part in spreading modern econometrics and mathematical economics.
He won the Nobel Prize for his work on "financial markets and their relations to decisions, employment, production and prices", and especially for his study of "portfolio selection" - how families distribute their wealth between different investments, such as property, bonds and shares. He called it a theoretical framework for "not putting all your eggs in one basket".
The James Tobin tax was an idea he came up with in 1972, at a time when the Bretton Woods system was in turmoil and currency speculation was rife - with computers making it easier. James Tobin suggested a tax of 0.1-0.5 per cent on foreign exchange transactions to limit speculation. After his idea was picked up by anti-globalisation campaigners, he seemed embarrassed. He told Der Spiegel, "I have absolutely nothing in common with those anti-globalistion rebels . . . the loudest applause is coming from the wrong side." In the same year that he suggested the controversial tax, James Tobin (with Bill Nordhaus) proposed changes to the measurement of the US gross national product, and a formula to predict the movement of capital investments.
James Tobin is survived by his wife Betty, an economics professor at Wellesley College, a daughter and three sons.
James Tobin: born 1918; died, March 2002