Sunday, December 20, 2009

Paul Samuelson: The Greatest Economist Since John Maynard Keynes

A week ago I gave a paper at Erasmus University in Rotterdam, the alma mater of Jan Tinbergen, the first winner of the Nobel Prize in Economics. As I passed a memorial to Tinbergen in the centre of campus, I remarked to a colleague that I thought it was Paul Samuelson who had been more deserving of the honour of being the Prize's first recipient. This sentiment is no doubt being echoed around the world following Samuelson's death yesterday, at the age of 94.

No one did more to make economics a rigorous analytical discipline than did Paul Samuelson. For that very reason, some people blame him for making economics inaccessible to ordinary folk (somewhat true, but most of the basic ideas taught at the introductory level still require little math to understand) and for reducing the vagaries of social life to black and white formulas. This latter complaint is unfair, however, because Samuelson always prized subtlety and eschewed simple ideological answers. It was his near-contemporary and sometimes intellectual rival, Milton Friedman, who was far more guilty of a living in a "black and white" universe.

I can only agree with what Samuelson earlier this year in an interview with Forbes magazine:

"Today we see how utterly mistaken was the Milton Friedman notion that a market system can regulate itself," ... Everyone understands now, on the contrary, that there can be no solution without government. The Keynesian idea is once again accepted that fiscal policy and deficit spending has a major role to play in guiding a market economy. I wish Friedman were still alive so he could witness how his extremism led to the defeat of his own ideas."

(For A Christmas Coda: )

No comments: