How I became an economist
by Paul A. Samuelson
1970 Laureate in Economic Sciences
5 September 2003
From one point of view my studying economics was the result of accidental blind chance. Prior to graduating from high school I was born again at 8:00 a.m., January 2, 1932, when I first walked into the University of Chicago lecture hall. That day’s lecture was on Malthus’s theory that human populations would reproduce like rabbits until their density per acre of land reduced their wage to a bare subsistence level where an increased death rate came to equal the birth rate. So easy was it to understand all this simple differential equation stuff that I suspected (wrongly) that I was missing out on some mysterious complexity.
Luck? Yes. And all my life I have been at the right place at the right time. Chicago was at that period the top center for old-fashioned neoclassical micro-economic study. But I didn’t know that; my reason for entering there was simply because the University of Chicago was close to my high school and home. Later when I was bribed to leave the Eden of the Chicago womb, choice boiled down to either the Harvard or the Columbia Graduate School. My revered Chicago mentors – Frank Knight, Jacob Viner, Henry Simons, Paul Douglas, … – without exception said, “Pick Columbia.” Never one to blindly accept adult advice, I picked Harvard. I picked it by miscalculation, expecting that it would be a little oasis on rolling green hills.
Thanks in part to the evils of Adolph Hitler, my 1935-40 sojourn at Harvard coincided with its economics renaissance under Joseph Schumpeter, Wassily Leontief, Gottfried Haberler, and the “American Keynes” Alvin Hansen. (Also, for me, I was able to become the sole protegé of the polymath Edwin Bidwell Wilson, who had himself been the sole protegé of Yale’s great physicist Willard Gibbs.) Contemporary Harvard graduate students came to match in brilliance the new Harvard faculty. Richard Musgrave, Wolfgang Stolper, Abram Bergson, Joe Bain, Lloyd Metzler, Richard Goodwin, Robert Triffin, James Tobin, Robert Solow,… – all of them my pals – became the 1950-2000 era stars in world frontier economics. Harvard made us, yes. But as I have written many times, we made Harvard.
The Duke of Wellington said, “The battle of Waterloo was won on the playing fields of Eton.” I can say, “World War II was won in the seminar rooms of Cambridge, Princeton, and Los Alamos.”
Perhaps more important than the causal role of casual luck was the salutary fact that economics was just right for me. This field was then entering a mathematical phase in both theory and statistics. As a precocious youngster I had always been good at logical manipulations and puzzle-solving IQ tests. So if economics was made for me, it can be said that I too was made for economics. Never underestimate the vital importance of finding early in life the work that for you is play. This turns possible underachievers into happy warriors.
1932 was the bottom point of the Great Depression. That was a good time to be not yet in the labor market. Just when I had completed my advanced training, World War II came, followed by fifty years of exploding college economics enrollments. My generation had a strong wind at its back. My famous teachers had become full professors only after 40. Wunderkinds in my generation could become anointed before age 30. Outside the Ivory Tower, economists were sought out by governments, corporations, Wall Street traders, and textbook publishers.
One comes to understand the importance of biography in a scholar’s research contributions. Before university, I never opened the copy of Adam Smith on my father’s bookshelf. But I did experience first hand, in my virtual infancy, the disappearance of the horse economy, the arrival of indoor plumbing and electric lighting. After that radio waves through the air or TV pictures left one blasé.
More important it was to see with my own eyes the First War’s induced boom in the U.S. Steel-planned Gary, Indiana: East European workers were overjoyed to be able to work 12-hour shifts, seven days a week. I saw, too, and my family learned the hard way, how recession follows the boom the way sparrows used to follow the horse. Also, when I was age 10 and we lived in Miami Beach, Florida, I experienced first hand what a real estate mania was like. And what it was like when the bubble burst.
All that prepared me for the Great Depression and for post-war inflations. My Chicago-trained mind resisted tenaciously the Keynesian revolution; but reason won out over tradition and dogma.
So after all, as I look back in my ninth decade over my long career in economics, I realize that all those incidents of good luck have to be understood against the background of fundamental trends in economic history. Mine has been a grandstand seat from which to observe most of a century of basic economic history. Bliss it was to be in the forefront of the revolutions that have changed economics forever.
Always, I have been overpaid to do what has been pure fun.
Is there life after Nobel coronation?
by Paul A. Samuelson
1970 Laureate in Economic Sciences
7 March 2002
The role of luck
Young Einsteins and Bohrs may have been inspired to be more creative and harder workers by the dream of winning a Nobel Prize. Since there was no political economy Nobel award before 1968, that could not have been an operative motive for my generation of economists.
On the 1970 December day in Stockholm when I met the erudite King Gustaf–who spoke to all new laureates in their own language–my obligatory personal autobiographical speech addressed the question asked so often of Nobelists such as the Swedish chemist Tiselius: “How can one win a Nobel Prize?” With a straight face, I stressed the importance of working hard. Also I ticked off the value of knowing great teachers and great contemporaries at great university centers. Having great students didn’t hurt either. Finally, in a crescendo of becoming modesty, I concluded by stressing the indispensable role of simple Luck.1
This last banality puts emphasis on being at the right place at the right time. After Max Planck stumbled onto quantum physics, opportunity arose for Bohrs and Borns, Heisenbergs and Schrödingers, Einsteins and de Broglies, Diracs and Feynmans. In a way, that is the kind of luck not vouchsafed to a random 1890s physicist. Also, it is a variety of luck to happen to be at Göttingen or Copenhagen in a particularly active epoch. (All the more credit to a Fermi or Landau who started out in Italy or the USSR.) To levitate down from Valhalla to economic studies, a similar serendepity obtained in certain years at Chicago, LSE, Cambridge, and Harvard. Of course, one must add what Pasteur said should go without saying: “Luck fructifies in the prepared mind.”
To these obvious connotations of “luck,” I need to add attention to a quite different dimension. When A wins a scarce prize, inevitably there is usually a B of essentially equal promise and accomplishment who gets passed over. Science and scholarship constitute a galaxy of stars. Prizes are of necessity, and by their nature, miniscule in number relative to potential deservers of them. The Fifty-fifth Chair of the Academy–the one just not given–is occupied by Nx50 worthy creators. Nature does not define a unique hierarchy of achievement: Newton, Darwin, …. Another committee, or the same one on a rainy day, could spin the wheel of fortune and come up with a different, and who can say an inferior list?
Why is there no Willard Gibbs on the Pantheon’s shield? The chance factor of death often intervenes. Why a Marconi and no Hertz?2 Deprived by sepsis of a normal life span, Heinrich Hertz, like Moses, could not live on into the Promised Land. Diabetes being the scourge it is, the blessed 1923 Prize for the development of insulin was shared between Banting and his department head Macleod. Fair? Banting did not think so. Boycotting Stockholm, he insisted on splitting his half of the prize money with his lab co-worker Best. Historians of science have concluded that at least four scientists were key to the insulin breakthrough: Banting, Best, Macleod, and a biochemist visiting London, Ontario from Alberta. Judged by cumulative later achievements, Best’s was the most distinguished career.
Just as luck may determine whether or not a person ever wins a Nobel, luck can decide whether an ultimate prize comes too late or too early. It ought to be enough, you may say, to receive one’s just reward ultimately? Actual human beings have not always felt that way. In point of historical fact, even Planck and Einstein were honored unduly long after their 1900 and 1905 achievements. One great scholar privately complained that Swedish “political correctness” delayed his inevitable award. At another time A and B once shared one award, which competent juries could regard as unfair to each: according to my unprovable surmise it was not because of lack of recognition of B’s superlative merits, but rather that some voting member might have begrudged giving a full amount to A. That sort of thing can motivate novels, but of course real life often does anticipate art. In a novel, X’s well-deserved recognition can be delayed until after a committee member makes sure that borderline B is beatified. Ibsen’s characters know that this sort of thing could never happen in academia.
Important discoveries often come from a team coordinated by a leader. Sometimes the second banana deems it cruel bad luck that all the kudos went to the Maestro. When it was the year for physicist Alvarez to go to Stockholm, he spent his prize money to take all his Berkeley lab with him: they filled a bus. Another Berkeley physicist, when his year arrived, told the press modestly but not necessarily with utterly false modesty, “A Berkeley committee gave me this award. They did so by luckily picking me to have first whack on a new important collidor.” Research is a cooperative game involving more players than there can be prize winners.
Effects of the Prize
I pass on to speculations about what the effects the Prize tend to be on a laureate’s subsequent career. Certainly, Nobel’s own original purpose has not been realized: he seems to have thought that each prize would go for the best work in the recent previous year(s). That prize, he hoped, would subsidize and support the young winner’s research efforts for the rest of life. One vulgar view is that the reverse of Nobel’s wish is what actually happens. After winners receive the award and adulation, they wither away into vainglorious sterility. More than that, they become pontificating windbags, preaching to the world on ethics and futorology, politics and philosophy. At circular tables, where they sit they believe to be the head of the table. Having known essentially all of the 1969-2002 laureates in economics, I must report a more nuanced pattern of outcomes. Since prizes do not arrive at the beginning of careers or at their inflection points, we ought to estimate before-and-after age-corrected productivities on an age-corrected basis. Once Newton has discovered the one-and-only System of the World, do not expect to find a new version in every subsequent decade.
An acquaintance of mine in biology regarded his Nobel year as the worst one in his life. Being a research wet-lab worker, he hated the press interviews and hoopla. Others I’ve known have gloried in it: so to speak they sported their bauble on the January subway. One wife of a physical scientist attributed her divorce to the Nobel Prize. (Her spouse has not recorded his opinion.) It is a matter of record that Einstein promised his first wife the future Prize money: in his case this was not an act of chutzpa or hubris–it was a sure-thing expectation. A more recent laureate, receiving the million-dollar award when he did and not a year later, was obligated to split it half-and half with a previous spouse. When the press quizzed him, he replied philosophically: A deal is a deal. One science leader informed me that his prize in effect amplified his subsequent academic salary annually (!) by an equivalent amount. In the more modern epoch, the Nobel Foundation has been such a skillful investor in a time of ebullient stock markets that this can no longer be true.
Here is my summing up. Of the more than two-score economic winners, about half of whom have had their careers closed by death, I judge them to have subsequently published about what could have been rationally extrapolated from profiles of performance. An exact quality measure would be more difficult to estimate.
Nobelists in all fields have been known, like Attila the Hun, to suddenly invade other fields. Study of the brain is one tempting field, but as yet with perhaps no revolutionary breakthroughs. Scholars who began in physics–Delbrück and Crick and Gilbert–do seem to have scored well enough in molecular biology to win the Prize in Medicine (and in Chemistry for Gilbert, ed.). I am not aware that a reverse flow from genetics to physics has been symmetrically voluminous or successful. A scholar I know best, to jusfity his imperialism, proclaimed: “It was Pius Ninth who promulgated the nineteenth century Dogma of Papal Infallibility, asserting, ‘Before I was Pope I believed in that. Now that I am Pope, I can feel it.'” The laureate’s jest is: “Before I won a Nobel, I felt my omniscience. Now I know it.” In my own case, after 1970, I relaxed on Sundays my focus on mathematical economics to publish papers on mathematical Darwinism. It was an engaging experience, and in the event not a particularly humbling one.
Yes, there does seem to be life after Stockholm. But this doesn’t give a definitive answer to the question: “Net, are prizes and gold medals good things?” The answer must be Gödel-esque: A Scotch Verdict of “Unprovable.”
Is the joy of the universe outweighed by the Weltschmertz of those who do not win? October can be a somber month in the Senior Common Room: many are called, few are chosen. On the other hand, science, scholarship, and human welfare are bigger than the passing mob of researchers who struggle with them. A more egalitarian society, with no differential payoff to effort and to ability, however acquired, might well be a more serene society. One must weigh against this how actual humans have evolved under the realistic Darwinian and cultural conditions of the past: perhaps cumulative progress might then result to be the less? Is there not some realistic tradeoff between more equality and more cumulative progress?
My title began with a question. And now my final sentence answers a question with a question.
1. See my brief personal 1970 autobiography delivered at the Nobel Banquet and my assigned speech to the Stockholm students at the midnight dance.
2. Gustav Ludwig Hertz (not to be confused with Heinrich Hertz referred to by the author) won the Nobel Prize in Physics, 1925. Ed.
Their work and discoveries range from the formation of black holes and genetic scissors to efforts to combat hunger and develop new auction formats.
See them all presented here.