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Anybody with a love for
conspiracy theories would read all the wrong
conclusions from Milton Friedman’s
tongue-in-cheek statistical analysis of the
first winners of the Nobel Prize in economics.
The initial 22 laureates were all men, 12 of
whom were American, and nine of these 12 either
studied or taught at the University of Chicago.
Why is it that American males with a Chicago
link were more likely than any other group to
win the coveted Nobel Prize in economics?
The gender bias is a bit inexplicable though
Friedman says there was only one female
candidate who could have made the cut: Joan
Robinson. Even if we leave aside the disturbing
fact that modern economics seems to be a boys’
club, there is still the rather intriguing
tendency to award the prize to Americans from a
few universities. This is where the conspiracy
theorist would raise his eyebrows (needlessly,
one might add).
The best economics has always come from
certain spots in the world. For economists, the
centre of intellectual gravity in the years
leading to World War II was Cambridge, home to
A.C. Pigou, Denis Robertson and then John
Maynard Keynes and his band of disciples. This
centre of gravity shifted across the Atlantic
after 1945, to another Cambridge — home to
Harvard University and the Massachusetts
Institute of Technology (MIT). Not too far away
was Chicago.
The point is that economists seem to flower
when they are in close proximity with others of
their species, rather than in splendid
isolation. Hence, the preponderance of laureates
from a few universities. A modern management
consultant would perhaps describe this
arrangement as an intellectual cluster.
The book under review is a series of talks
given by Nobel laureates in economics at Trinity
University in Texas. Each of them spoke on the
same subject: my evolution as an economist. This
outstanding book can be read as a series of
individual autobiographical musings, or it can
be read as an interwoven history of the great
centres of excellence in modern economics and
the high noon of modern economics.
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WILLIAM BREIT is
professor emeritus at Trinity University. He has
taught at the University of Virginia and
Louisiana State University. Breit is highly
regarded for his expertise on antitrust
economics, market and non-market
decision-making, and the history and
intellectual development of modern economic
thought |
First, let’s look at some of the lessons from
the individual stories. It is truly surprising
how many of the greatest economists of the past
50 years accidentally stumbled into the room.
Many of them were pushed in there by the harsh
realities of the outside world, and the Great
Depression in particular. There was a problem
that economists could (and did) solve. Once
inside the room, they were drawn to the subject
by its analytical rigour. And, they had great
teachers in great universities who showed them
the way forward.
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BARRY T. HIRSCH is
distinguished professor, Trinity University, and
president of the Southern Economic Association.
Earlier, he taught at Florida State University
and the University of Kentucky. Hirsch is on the
editorial boards of top economics journals in
the United States |
Many of the older economists whose speeches
are collected in this book owe a lot to Keynes’
insurrection against the received wisdom of the
day. “Keynes’ uprising against encrusted error
was an appealing crusade for youth. The truth
would make us free, and fully employed too,”
says James Tobin in his speech. The Chicago
boys, who were never impressed by Keynes, had
Frank Knight as their guiding light.
Later, there were Paul Samuelson and
Friedman. James Heckman describes the impact of
Samuelson’s great textbook (which he wrote as a
precocious graduate student): “It demonstrated
to me that economics could be as rigorous and
empirically relevant as physics.” And Gary
Becker on the effect of attending Friedman’s
lectures: “Here I saw economics as a tool and
not simply a game played by clever academics…
You can do economics and do it in a rigorous way
and, nevertheless, talk about important
problems.”
The eighteen lectures collected in this
volume give us an inside view of what could,
perhaps, be called the Golden Age of Economics.
These were the men who built the grand post-war
synthesis that coincided with the golden years
of capitalism between 1950 and 1970, when there
was strong economic growth, low inflation and no
major financial crises. Part of the credit for
the achievements of those years should go to
people like Samuelson, Tobin and Franco
Modigliani. Meanwhile, the sharpest attack on
the economic policies of post-war Europe and
America was led by the likes of Friedman, Gary
Becker and Robert Lucas.
The interesting thing is that the ideological
battles never came in the way of personal
friendships. Let’s go back for a moment to
Friedman’s observation about Joan Robinson: “The
failure of the Nobel Committee to award her a
prize may well have reflected bias but not sex
bias. The economists here will understand what I
am talking about.” What Friedman is most
probably alluding to is the fact that Joan
Robinson could have been denied the prize
because of her left-wing political views. And
this observation comes from Friedman, a
free-market man.
Whether these great economists worked with
each other or against each other, they
maintained their intellectual honesty and
personal friendships. They were a bit like the
group of brilliant scientists across Europe who
rewrote the fundamentals of physics a hundred
years ago: the generation of Albert Einstein,
Niels Bohr and Werner Heisenberg.
It will be difficult for any subsequent
generation of economists to match the
achievements of Friedman, Tobin, Samuelson and
their other great contemporaries.
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