About professor Juris Vīksniņš

JURIS VĪKSNIŅŠ
(1937 – 2012)

Juris Vīksniņš, one of the most distinguished modern Latvian economists, made a historically crucial contribution to strengthening the stability of the Latvian national currency, to building the economy aimed at well-being and long-term development and to creating a new generation of economists.

Juris Vīksniņš was a professor emeritus of economics at Georgetown University, USA, and a lecturer of macroeconomics at the same university between 1964 and 2003. Georgetown, which was the world of the pedagogue and researcher Juris Vīksniņš for nearly 40 years, is a global university of science located in Washington, DC. It was among the first Catholic universities established in the USA, and its credo has remained unchanged, i.e. to enhance the building of a fairer world.

Social media archives, which contain information about Juris Vīksniņš' discussions on economic topics, offer his concise self-description:

"I uphold the free market principles as well as a responsible policy on monetary and budgetary issues."

At the end of the 1990s, the Latvian press quoted him saying: "I'd like to confess that I'm an economist with a poet's heart and that nature, virtues and customs of the nation fill me with a sense of awe." Joseph A. Schumpeter (1883–1950), a professor of Austrian origin at Harward University who emphasised the ever-changing and growing nature of capitalism, relationship with the notion of the so-called gale of creative destruction, was his most highly esteemed economist of the 20th century.

The underlying causes of economic prosperity in various countries and analysis of their economic systems were the most important red threads running through Juris Vīksniņš' work both in relation to research and teaching. He helped to trace the history of ideas, i.e. which system is the one that contributes to the building of a better life and which, on the contrary, hampers human and economic development. Is it the illogical command economy of the totalitarian Soviet Union? Is it the economic nationalism and one-party rule in Marxist-inspired Robert Mugabe's Zimbabwe? Or is it capitalism if free competition is ensured? Juris Vīksniņš' own position is well described by the award he received from The Fund for American Studies – a group promoting ideas of the free market economy.

In parallel to his favourite job of teaching, Juris Vīksniņš provided advice to the US central bank, the Board of Governors of the Federal Reserve System in particular, the World Bank, the US Agency for International Development and the International Monetary Fund. Between 1976 and 1981, Juris Vīksniņš was the Director of a financial consultancy company FMI Financial Corporation.

The economist, born in 1937 in Riga, was an adviser to Latvijas Banka during the period of the introduction and stabilisation of the lats in the restored country. With the Soviet regime collapsing, his key interests since 1989 were related to his native Latvia which was preparing for the establishment of the monetary and banking systems as well. Juris Vīksniņš was an adviser to Latvijas Banka from 1992 to 2005.

His work dedicated to development of the monetary system and his decisive advice in relation to the re-establishment of the Latvian national currency, i.e. to peg the lats to the SDR basket of currencies created by the International Monetary Fund, earned him the Order of the Three Stars in 2004.

Despite the undeniable contribution made by Juris Vīksniņš, he himself assessed it by giving a cheerful and modest smile and saying: "Since I'm a very presumptuous person, I regard myself as godfather of the lats whose father is the Governor of Latvijas Banka!" [1] Overall, the professor praised the monetary reform and compared it to a skilfully laid foundation-stone of the country to be rebuilt: "The stability of the lats is one of the most important achievements of Latvija in the 1990s."

Governor of Latvijas Banka Ilmārs Rimšēvičs remembers: "It was Juris Vīksniņš who recommended us to peg the lats to the so-called paper gold or SDR at the time, and this pegging made it possible for the lats to steer a course through all storms and turmoil of the financial world."

Juris was six when he fled Latvia with his family during World War II. The family settled in the Philadelphia area after the war, and Juris added the English version (George) to his Latvian first name after becoming a US citizen as a young man. He earned a bachelor's degree at Temple University in Philadelphia and received a master's degree from the University of Pennsylvania in 1960.

During the Cold War, Juris Vīksniņš was together with Latvia in his thoughts, and he inspired his students and allies to do the same. Latvia is not only a free, independent and democratic republic today but also a Member State of the European Union. The country's primary objective is consistent with the values proposed by Juris Vīksniņš, i.e. peace among European countries which is based on the commonly agreed principles of the free world, such as respect for law, freedom of choice and the market economy.

Juris Vīksniņš was very successful in performing one of the tasks of a public intellectual and lecturer, i.e. to participate in discussions and enter into polemics on various issues, thus improving discussion quality in society. [2] He often commented on Latvia's economic policy, advocated the "strong lats" policy and published several research papers on the economies of Latvia and the Baltic States as from the Soviet era. His involvement in the Latvian community of economists was fulfilling; he was a foreign member of the Latvian Academy of Sciences and a member of the Economists Association 2010.

Juris Vīksniņš' enthusiastic approach to the teaching process made him a leading lecturer. The professor never hesitated to share his personal values and views on government and the economy with his students [3], encouraging them to generate their own ideas, make conclusions and defend them. It was his cheerfulness that helped him in teaching and encouraged several generations of students to refer to the demanding but good-natured lecturer as Uncle George. He was a lecturer who loved his job and took a good care of his students. However, his smile could turn into a sharp and elegantly used rapier during public clashes of economy-related opinions.

Juris Vīksniņš was an eminent scientist and expert in the economies of East Asian countries. He had encyclopaedic knowledge of economic theory and analysis of economic systems, i.e. comparison of capitalistic and totalitarian societies. It was the second half of the 20th century Juris Vīksniņš covered in detail in his studies on Asian economic development, beginning with a successful transition to the system of private initiative and that of free market in several Eastern and Southeast Asian countries. Juris Vīksniņš carried out in-depth studies to establish the ways growth of these countries was financed.

He skilfully merged theory and practice both when teaching students in lecture-rooms and when providing advice to the USA, Latvia and international institutions. At the end of the 1960s, he acquired his regional field experience in Thailand [4] where he lived and worked over several years following the secondment by US government. His farewell lecture at Georgetown University was also dedicated to this region. Among other factors of success seen by the region, Juris Vīksniņš mentioned guarding against inflationary policies and the evolution of values of these countries accomplished by "a marriage of Confucian ethics and modern macroeconomics" [5].

Was a "third way" going to emerge between capitalism and communism in Asia and consolidate the existence of private property and more active role of government in preparing the concept of development? Juris Vīksniņš concluded: "It turned out that the foundations were unsafe, they were laid on sand in some places. A greater reliance on the free market principles, i.e. better provision of information and more vigorous competition, would have yielded better results since "you can't cheat the market" as my friend Gundars Ķeniņš-Kings says." [6]

Juris Vīksniņš, through his interest in research, found lessons in the East Asian economic model the newly-reborn Baltic States could draw from the "tigers". Of course, transition to a market economy is important, ".. but the nation's philosophical system, which emphasises virtues of work and economy, respect for work and other people as well as patriotism, are more relevant. Will we be able to find it again [in Latvia]?" [7]

It is Juris Vīksniņš and Gundars Ķeniņš-Kings, also a US professor of economics, who deserve most of the credit for macroeconomic education of the young leaders of Latvia at the best US universities in the 1990s following the country's regained independence [8]. They both voluntarily committed themselves to making it possible for young people of Latvia to become students of US universities to study economics which was insufficiently taught in Latvia at that time. Juris Vīksniņš performed, on a voluntary basis, the duties of the Director of the Baltic Studies Fund, which is a non-profit international education and research organisation.

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[1] Fokuss, 25–31 August 1997; or another quote: "I would have recommended [in 1993] somewhat lower exchange rate, say, 100 temporary rubles equal to 1 lats, but Repše was the father of the lats, I was just its godfather. Kapitāls, No. 8, August 2004.

[2] "We entered [Latvia of the awakening period] with other prospects, with ideas unknown to the economic and political systems [of the Soviet Union]. Maybe this is exactly what will change people's thinking in terms of the way the world will move forward. We can help with some very specific issues, i.e. the monetary reform, establishment of the banking system." Atmoda, 28 August 1989.

[3] Viksnins, George J, Economic Systems in Historical Perspective. Dubuque, Iowa : Kendall/Hunt Pub. Co., 1997, pp. 136–137. A textbook by Juris Vīksniņš on the comparison of economic systems helps a student grown up in the free world to understand absurdity of socialism practised also in the Soviet Union. The author illustrated his textbook by a story of the fate of his rural relatives living in Nereta during the period of collectivisation of agriculture. He used the experience of the inhabitants of the homestead "Vīksniņi" to generalise the tragedy faced by farmers in a larger part of the continent (Eastern Europe, Russia and Ukraine) in an emotionally precise way.

[4] "When I was in Thailand in 1968, I got interested in the economic development theory: .. why was Thailand advancing so rapidly, but African countries [whose starting points were similar] were lagging behind? In 1965, Korea and Kenya were at the same level. Over the next 30 years, Korea's growth rate increased swiftly, but that of Kenya fell. Why? Mainly because African local governments steal from the state. Asian countries try to go in the right direction." Diena. SestDiena, 20 March 1999.

[5] http://www.thehoya.com/speech-viksnins-bids-georgetown-farewell-in-economics-speech/.

[6] Kapitāls, No. 5, 1998.

[7] Fokuss, 18–24 August 1997. See also: Viksnins, George. The East Asian model and the Baltic states. Intereconomics, vol. 33, issue 5, September 1998, pp. 238–244.

[8] Governor of Latvijas Banka Ilmārs Rimšēvičs: "The contribution by Juris Vīksniņš to Latvia's economy and the community of economists is indispensable." Kapitāls, No. 5, 1998.