At the time, he was married to a woman who was also an economist, and later became influential in her own right, Sonja Denisovak, of Ukrainian origin. The problem for Ms. Denisovak, it was later discovered, was that she was a passionate defender of local languages - notably, the now defunct, Obviak Lesser Georgian. In the '30s, she openly criticized Stalin for his attempts to destroy local loyalties, regional cultures and vernacular languages. She was accused of crimes against the people, was sent to Siberia and never seen or heard from again. Evidently, even from his distinguished post at the Economics Committee, Mr. Pavlovovich either could not or would not save her.
But let us turn to his novel ideas on economics.
The central concept of Pavlovovich's pensee was that people do as they are told to do. Few people are original thinkers. Few are willing to defy authority. The job of the ruler, he figured, was merely to direct human action in a way that was salutory. That is, people could be enticed, lured, and ordered to do many different things. The challenge for the elite who were in charge of an economic system was to find the course of action that would be most beneficial to their citizens, and to themselves.
"Policy should direct people where they ought to go," was one of his famous dicta.
"Give them a bottle of vodka, or 7 years in a gulag, that will help make up their minds," was another.
Unfortunately for Pavlovovich, Stalin seems to have made up his mind during the war that he no longer needed his chief economics minister. In the winter of '41 Pavlovovich was transferred to Byelorussia to do a "survey of the attitudes towards the Soviet economy of the invading of German troops." Interviewing the Nazi soldiers proved hazardous, as he was shot as an agent provocateur.
Still, his oeuvre grew more influential, if not more coherent. We thought we heard whispers of it in a recent speech by Ms. Yellen (who by the way, is of Russian extraction):
"As modern economists, we have to approach old problems with new energy and determination. You see, despite all you have heard, the economy is not responding to our stimulus efforts as we had hoped. While we are making progress in some areas, in others...the progress has been slow...or even negative.
"I am speaking of two key areas. First, consumer price increases have been extremely low. We know that this is dangerous. When prices do not go up at a regular pace, consumers may determine to save their money rather than spend it. This has severe repercussions throughout the economy. Spending falls. The retail sector slows. Incomes drop. And finally employment goes down too. This is clearly not a good thing.
"And we can understand it most clearly as the result of people not doing what they should be doing. This deflationary tendency reinforces itself. As spending and incomes fall, businesses cut back output further, in anticipation of lower sales. This further reduces spending...which further reduces pressure on consumer prices. In some cases, prices may actually go down. While you may think this gives you more for your money, we economists determined that falling prices are extremely deleterious to a properly functioning economy. So, we must try to avoid consumer price deflation at all costs.
"And you probably think this is nothing but gobbledygook BS...economists' mumbo jumbo...or the old blah, blah, blah. But it's not at all. We are principally interested in human action, and in guiding our fellow citizens to make the right decisions.
"Now, working together with my colleagues at other central banks all over the planet, we have been able to bring $30 trillion dollars of additional credit into being over that period. I am very proud to have been a part of this, of course. Again, you may regard an additional $30 trillion of debt as a burden or a nuisance. But again, we economists have studied the matter in depth. More credit - not based on savings, but created by banks - increases the supply of money. More money generally increases prices, which is what we were after in the first place.
"So you see, more debt and higher levels of consumer price inflation are good things. You should be happy to have them. And you should thank your central bankers for making them possible.
"Another thing we have done for you lately is give you stable markets. I know that some people will dispute this point. They will mention the crash of '87, the tech crash of '2000, and the lollapalloosa of a crash in 2008-2009. But they should remember that since we have been on the job there have been plenty of years when the markets didn't crash. And the way I see it, the more money we can lend people the less likely there is to be a crash.
"Let's face it, people make mistakes. Not central bankers, of course. But normal people like you. You might make a mistake in your investments, in your business, or even in your personal life. We can't do anything about your personal shortcomings, but in business and investing, we can help by telling you straight out what you should be doing.
"If you want this economy to be worth a tinker's damn, get out and spend money. If you don't have any money, borrow. We'll help by pushing down interest rates to ridiculously low levels.
"And if that doesn't work, we'll put a more robust plan into action. All retailers will be required to raise prices at least 2% per year. At least.
"And that's just for starters. To lower unemployment, all employers will be required, by law, to hire one new person every month.
"And we're going to have growth if it's over your dead bodies."
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.