Truly great economists are distinguished by their ability to translate their theoretical insights into practical policy. This characterization certainly fits Jan Graaff. Many economists have written good theory, albeit few as good as his; fewer have shown his ability to translate it into meaningful policy. This was apparent from the first, when his PhD from the late 1940s was converted into one of the great texts on welfare economics, Theoretical Welfare Economics (1957). Despite its very abstract content, the book is alive throughout with the importance of linking theory and practice.
Theoretical Welfare Economics has been lauded from all sides. In his forward to the second edition in 1967, Nobel laureate, Paul Samuelson, called it, ‘a classic in our time’. When he wrote it Graaff was already known as one of a small circle of young intellectual pioneers who were developing the core concepts of welfare economics, regarded by many as most important area in economics at that time. This group included such luminaries as Little, Scitovsky, Baumol, Johnson and Samuelson himself. All of them acknowledge Graaff in their influential books. In Samuelson’s view, it was Graaff, Oskar Lange and Samuelson himself who followed through on Bergson’s lead in the 1930s to build the new welfare economics off the foundations of Pareto, Hotelling, Lerner, Kaldor and Hicks. Graaff's work was acknowledged by authors of the left too. Maurice Dobb referred to it frequently, while Ian Steedman described it as, ‘the single greatest book on modern welfare economics’.
What made Graaff’s work special is that he provided a yardstick for judging the well-being of an economy that went beyond the familiar Pareto efficiency criterion: although an economy may be operating efficiently in the sense of utilising all available resources, this may not coincide with the most desired distributional outcome. This distinction was crucial in revealing as overly harsh the 1930s assault on welfare economics as being severely limited by its inability to deal with arbitrary interpersonal comparisons of utility. In Graaff’s research he went on to show the usefulness of this distinction in clarifying feasible and potential social welfare, making decisions between present and future consumption and investment, solving index number problems through understanding social income, and setting optimal tax rates and tariff levels. These issues remain staples of contemporary microeconomics text books.
His talents were easily observed at the outset. He was renowned for his inordinate early precocity, having matriculated second in the country at the age of 15. At Cape Town, the Head of the Department of Economics, Professor H M Robertson, kept in his departmental archives the first year Economics examination script of the young Graaff in which, in his squiggly handwriting, he came up with the most astonishing and mature insights into the fundamentals of his subject, far above those expected of the ordinary first year student.
He attended St John’s College, Cambridge, in an era when economics was still enveloped in the ambience left by John Maynard Keynes. In these highly stimulating surroundings, Graaff set about studying his subject in depth. Even before completing his PhD the young man from South Africa made his presence felt. At the age of 20, he read a paper at the Oxford-London-Cambridge Joint Economics Seminar, ‘Towards an Austerity Theory of Value’ (published in the March 1948 issue of the South African Journal of Economics). The austerity referred to problems arising from consumer rationing in Britain after World War II. The paper took the form of the typical Graaff paper, it was tightly reasoned and backed through graphs and advanced mathematics. This, coupled with the high level at which he was wont to approach his subject, eased his way towards publishing in some of the most respected journals of economics.
Years later, Cambridge invited him as a pioneer Fellow in the newly established Churchill College. He was later honoured by the University of Stellenbosch, and was about to be honoured by his Alma Mater when he died. He served the South African government in various capacities and was chairman of Nedbank for 30 years. Through it all he kept a low profile and was not known to comment publicly on ephemeral economic events of the day.
However, he was known to comment on the state of the discipline, serve his country and his fellow South African Economists. In the ‘sixties, when uninspiring first year syllabi began with dull introductions, inclusive of such things as the definitions of a science, Graaff said students in the first year should be taught to read a newspaper intelligently — reminiscent of Keynes’s saying, to be a good economist ‘one must know one’s Marshall and read one’s Times.’ Graaff diligently kept reading top-level publications on economics, even when on his farm, Die Eike, located in Ceres in the Western Cape. He once said ‘I must be the only one in the world who has read all of Meade’s Trade and Welfare. I did so while overseeing sheep-shearing in a shed on the farm.’ Graaff's advice to the government led to important changes in both legislation and policy. In the 1970s he was on John Vorster’s National economic advisory committee. In the 1980s, he was the dominant figure on the Margo Commission that led to reform in tax law — Graaff favoured indirect taxation. He continued these activities in the 1990s, providing the comprehensive Katz Commission with a number of interim reports on a variety of the socio-economic aspects of taxation.
He was President of the Economic Society of South Africa for the 1968-69 term, and a true friend of the South African Journal of Economics throughout — including the long, dark days of Apartheid, when the Journal often teetered on the brink of closure. Overseas contributions dwindled distressingly, promising young graduates emigrated, and many an issue was saved by a paper that turned up at the very last minute. Graaff kept a friendly eye on the Journal from afar, often complimenting the editors.
He was an equable and soft-spoken man with a commanding presence. This could have been partly due to his international fame, and partly because, in debate, he affected a manner of speech that bespoke of a gravitas, which made younger economists stand in awe of him.
Jan was an accomplished rock-climber, mastering some of the most formidable climbs in the Alps, Himalayas and in Southern Africa. He had a number of hair-raising articles published in the South African Mountaineering Journal and, at 18, was a member of the sensational three-man pioneering team who — after many attempts by others — overcame the vertical heights of the rough rock face of the thousand meter Spitzkoppen mountains in Namibia.
Jan’s father was the grandson of Johannes Jacobus Graff (sic) (1754-1804) who came from Riedlingen on the Danube in 1775, as a carpenter for the Dutch East India Company. Jan’s grandfather married Anna Elizabeth de Villiers — a descendant of the 1688 Huguenots — whose father insisted that the de Villiers name be added to that of Graaff, also in future generations. His mother was Magdalena Susanna, daughter of the Dutch Reformed Rev J P van Heerden of Cape Town, who married Graaff’s father, a bachelor of 54, in 1913. In 1951 Graaff married Lillian Clare Thomson, daughter of Sir George Paget Thomson, a Cambridge physicist and Nobel prize winner. They had six children.
Jan Graaff, renowned economist, mountaineer and rock-climber, was born in 1928 and died on 6 January 2015 from a fractured skull, following a fall in Long Street, Cape Town.
Joubert Botha, Phillip Black, Murray Leibbrandt and Steven F Koch
with help from family, friends, and other economists.