Lives of the Laureates

Lives of the Laureates: Twenty-three Nobel Economists

Roger W. Spencer
David A. Macpherson
Copyright Date: 2014
Edition: 6
Published by: MIT Press
Pages: 448
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  • Book Info
    Lives of the Laureates
    Book Description:

    Lives of the Laureatesoffers readers an informal history of modern economic thought as told through autobiographical essays by twenty-three Nobel Prize laureates in Economics. The essays not only provide unique insights into major economic ideas of our time but also shed light on the processes of intellectual discovery and creativity. The accounts are accessible and engaging, achieving clarity without sacrificing inherently difficult content. This sixth edition adds four recent Nobelists to its pages: Eric Maskin, who illustrates his explanation of mechanism design with an example involving a mother, a cake, and two children; Joseph Stiglitz, who recounts his field's ideological wars linked to policy disputes; Paul Krugman, who describes the insights he gained from studying the model of the Capitol Hill Babysitting Coop (and the recession it suffered when more people wanted to accumulate babysitting coupons than redeem them); and Peter Diamond, who maps his development from student to teacher to policy analyst.Lives of the Laureatesgrows out of a continuing lecture series at Trinity University in San Antonio, which invites Nobelists from American universities to describe their evolution as economists in personal as well as technical terms. These lectures demonstrate the richness and diversity of contemporary economic thought. The reader will find that paths cross in unexpected ways--that disparate thinkers were often influenced by the same teachers -- and that luck as well as hard work plays a role in the process of scientific discovery.The LaureatesLawrence R. Klein • Kenneth J. Arrow • Paul A. Samuelson • Milton Friedman • George J. Stigler • James Tobin • Franco Modigliani • James M. Buchanan • Robert M. Solow • William F. Sharpe • Douglass C. North • Myron S. Scholes • Gary S. Becker • Robert E. Lucas, Jr. • James J. Heckman • Vernon L. Smith • Edward C. Prescott • Thomas C. Schelling • Edmund S. Phelps • Eric S. Maskin • Joseph E. Stiglitz • Paul Krugman • Peter A. Diamond

    eISBN: 978-0-262-32586-8
    Subjects: Economics, History

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Introduction to the Sixth Edition
    (pp. vii-x)

    This book consists of autobiographical accounts of the careers of twentythree people who have three qualities in common. First, they are all economists. Second, each of them has been awarded the Alfred Nobel Memorial Prize in Economic Science. Third, each traveled to San Antonio, Texas, to deliver his story in person at Trinity University.

    The Nobel Prize in Economics was not created by Alfred Nobel himself. In 1901 his will established prizes in physics, chemistry, medicine or physiology, literature, and peace. He wished to reward specific achievements rather than outstanding persons. In the case of the natural sciences, the awards...

  4. Acknowledgments
    (pp. xi-xii)
    Roger W. Spencer
  5. Lawrence R. Klein
    (pp. 1-16)

    In studying the development of great economists and trying to understand why economic thinking takes particular directions, it has always seemed fruitful to me to look at the interaction, often one-way, between the prevailing situation of the economy and developing tendencies in economic thought. This has been most noticeable in macroeconomics but is also the case in the whole of economics. A primary example, which is closely tied up with my own development, is the emergence of Keynesian economics to deal with the problems of the 1920s and ’30s, especially the Great Depression. Keynes was intensely interested in the problems...

  6. Kenneth J. Arrow
    (pp. 17-28)

    Studying oneself is not the most comfortable of enterprises. One is caught between the desire to show oneself in the best possible light and the fear of claiming more than one’s due. I shall endeavor to follow the precept of that eminent seeker after truth, Sherlock Holmes, on perhaps the only occasion on which he was accused of excessive modesty. “‘My dear Watson,’ said he, ‘I cannot agree with those who rank modesty among the virtues. To the logician all things should be seen exactly as they are, and to underestimate one’s self is as much a departure from truth...

  7. Paul A. Samuelson
    (pp. 29-44)

    The last five or six decades have seen American economics come of age and then become the dominant center of world political economy. When I began the study of economics back in 1932 on the University of Chicago Midway, economics was literary economics. A few original spirits—such as Harold Hotelling, Ragnar Frisch, and R. G. D. Allen—used mathematical symbols; but, if their experiences were like my early ones, learned journals rationed pretty severely acceptance of anything involving the calculus. Such esoteric animals as matrices were never seen in the social science zoos. At most a few chaste determinants...

  8. Milton Friedman
    (pp. 45-56)

    The topic assigned to me was “My Evolution as an Economist.” I am sure, however, that some questions about the Nobel Prize hold greater interest for at least some of you than my evolution as an economist—in particular, how to get a Nobel Prize in economics. So, as an empirical scientist, I decided to investigate statistically what an economist has to do to get a Nobel Prize.

    As most of you may know, the economics award is relatively recent. It was established by the Central Bank of Sweden in 1968 to commemorate its three-hundredth anniversary. So far, twenty-two people...

  9. George J. Stigler
    (pp. 57-72)

    It is a good rule that a scientist has only one chance to become successful in influencing his science, and that is when he influences his contemporaries. If he is not heeded by his contemporaries, he has lost his chance: brilliant work that is exhumed by a later generation may make the neglected scientist famous, but it will not have made him important. Gossen was a genius, but nothing in the development of utility theory is different for his having lived. Cournot was a genius, and perhaps a bit of his work rubbed off on Edgeworth and later writers on...

  10. James Tobin
    (pp. 73-90)

    Rare is the child, I suspect, who wants to grow up to be an economist, or a professor. I grew up in a university town and went to a university-run high school, where most of my friends were faculty kids. I was so unfailing an A student that it was boring even to me. But I don’t recall thinking of an academic career. I liked journalism, my father’s occupation; I had put out “newspapers” of my own from age six. I thought of law; I loved to argue, and beginning in my teens I was fascinated by politics. I guess...

  11. Franco Modigliani
    (pp. 91-110)

    It’s been a lot of fun for me to prepare this talk because it has forced me to go over my history and pick up a number of things I had forgotten and see connections I did not see before. I was somewhat taken aback and overawed by the title, “My Evolution as an Economist.” It sounded as if I had to start from my invertebrate state and then move up to higher states. I then suddenly realized or remembered a very important thing: economics is a very old profession. In fact I think it is the oldest profession in...

  12. James M. Buchanan
    (pp. 111-124)

    I have been tempted to expand my title to “Born-Again Economist, with a Prophet but No God.” Both parts of this expanded title are descriptive. I was specifically asked to discuss my evolution as an economist, an assignment that I cannot fulfill. I am not a “natural economist” as some of my colleagues are, and I did not “evolve” into an economist.¹ Instead I sprang full blown upon intellectual conversion, after I “saw the light.” I shall review this experience below, and I shall defend the implied definition and classification of who qualifies as an economist.

    The second part of...

  13. Robert M. Solow
    (pp. 125-142)

    To be honest, I should warn you that I am going to tell you as little about myself as I can get away with in a lecture about “My Evolution as an Economist.” My reason is not that I have anything to hide. I wish I had more to hide; that would at least suggest an exciting life. My problem is that I think the “cult of personality” is slowly swamping our culture. You can see it at its most dangerous in presidential elections, where eyebrows seem to be more important than ideas. I tend to blame that on television,...

  14. William F. Sharpe
    (pp. 143-160)

    What an honor. What an opportunity. What a challenge. What a temptation.

    To speak about oneself before a captive audience is a rare opportunity indeed. The possibilities for self-aggrandizement boggle the mind. Why not abandon all pretense of false modesty? At the very least, seize the chance to propagandize for causes held dear—academic, political, personal.

    Had I not read the contributions of my predecessors I might have succumbed to these temptations. However, not one of the others did. And I shall try very hard to resist any siren songs to the contrary.

    When invited to give this lecture, I...

  15. Douglass C. North
    (pp. 161-174)

    I knew where I was going from the day I decided to become an economist. I set out to understand what made economies rich or poor because I viewed that objective as being the essential prerequisite to improving their performance. The search for the Holy Grail of the ultimate source of economic performance has taken me on a long and certainly unanticipated journey, from Marxism to cognitive science, but it has been this persistent objective that has directed and shaped my scholarly career.

    I was born in Cambridge, Massachusetts—not because my family had any connection with higher education, but...

  16. Myron S. Scholes
    (pp. 175-188)

    I was born in Timmins, Ontario, Canada on July 1, 1941. My only brother, David, was born five years later. My father was born in New York City but moved to Toronto as a young man to live with his older brother. After graduation as a dentist and after a start as a teacher at the Eastman Clinic in Rochester, New York, that was cut short by the Great Depression, my father ventured to Timmins, a relatively prosperous gold mining region in northern Ontario, to practice dentistry in 1930. This was targeted as a temporary move until the Depression ended....

  17. Gary S. Becker
    (pp. 189-208)

    It is my pleasure to be here and to participate in the Nobel economists lecture series, a series that has had the great modern figures in economics speak, people such as Friedman, Samuelson, and Buchanan, among others. I’m supposed to talk about my evolution as an economist and the forces that influenced me. I will take that as my charge. Yet it is a difficult assignment. It is hard to assess the forces that have had a major influence on one’s research. What I can do is to talk a bit about my development as an economist. I will emphasize...

  18. Robert E. Lucas, Jr.
    (pp. 209-232)

    Jane Templeton graduated in Seattle’s Roosevelt High School’s first class, in 1927. The Templetons lived right across 68th Street, in a house built the same year as the new high school. Jane enrolled as an art student at the University of Washington, hoping to become a fashion artist. But the art courses at the university were trivial—“tie-dyeing,” she later dismissed them—and unrelated to the world she wanted to enter. She got the idea to study in New York, and she and two girlfriends planned to rent an apartment and spend a year there. In 1930, when she was...

  19. James J. Heckman
    (pp. 233-266)

    I write this essay with some trepidation. Most of the essays in this series are retrospectives rather than progress reports of scholars in mid-career. I am not ready to announce my retirement. I won the Nobel Prize at a relatively early age (56) and hope that I have many more years of active research ahead of me. I welcome the Nobel Prize as an award that opens doors for further growth and learning. So I write this essay in the spirit that past is prologue. I describe my evolution as an economist to this point (March 2003) and my current...

  20. Vernon L. Smith
    (pp. 267-286)

    I want to begin by letting you walk through a part of my childhood home as it would have appeared that day in 1927 when I was born.

    Walking west through the front door you enter the living room. You see my mother’s old, but always-tuned, solid walnut upright piano on your left, facing north in the southeast corner. When you sit on the piano bench there is a window on your left, bathing the piano and sheet music with daylight, even on one of those rare cloudy days in Kansas—a condition that has already attracted the attention of...

  21. Edward C. Prescott
    (pp. 287-308)

    I was asked to lecture on my development as an economist, and this is what I will do. Before doing this, however, I will introspect a little on the related question of why I turned out to be successful as a teacher-researcher. I hyphenate teacher and researcher because in my case these two activities are joint activities, and cannot be separated. I love the enthusiasm of former students for economic research and teaching, as shown in the above quotation. In this essay, I will be discussing several collaborations with past teachers and students. I have a great debt to my...

  22. Thomas C. Schelling
    (pp. 309-334)

    In reflecting on this autobiography I have two impressions. They will appear, but I want to acknowledge these in advance and alert the reader.

    One is that I have been blessed with all kinds of advantages and opportunities. I grew up immune to the depression of the 1930s. (My father was a naval officer.) I had great school teachers at San Diego High School, especially Miss Olson, who spent two years teaching me to write a five-paragraph essay and so on, in college and graduate school, and in my first professional job, and my second and third. Everything good that...

  23. Edmund S. Phelps
    (pp. 335-348)

    Any account of my evolution as an economist must narrate my early struggle to depart from the scientism and determinism of the neo-Keynesian school—repairing as best I could their omission of expectations, learning, and knowledge creation—only to find myself bypassed by a new classical school founded on a belief in “rational expectations.” In the next decades, I struggled against the scientism and determinism of the new classical school—emphasizing their omission of Knightian uncertainty, Keynesian indeterminacy, and Hayekian discovery. Then I was rescued by fervent supporters and an august body from domination by the neo-neoclassicals, and am called...

  24. Eric Maskin
    (pp. 349-362)

    When I went to college, I had no intention of becoming an economist. In fact, I scarcely had any idea at that point what economics was all about. I was a mathematics major in college, and I studied such things as group theory and analysis with some superb but occasionally rather eccentric math professors. To give an example, I once bumped into my real variables professor, George Mackey, in the hallway. We talked for a while, and at the conclusion of our chat he asked me what direction he had been going in when we met. I was a bit...

  25. Joseph E. Stiglitz
    (pp. 363-380)

    We live in an era in which we strive to explain, systematically and scientifically, the world around us. But we also strive to understand the creative process. It is difficult to explain how that process works. How do our ideas come about?

    Those of us who are credited with having made advances in understandings, even breakthroughs, do not fully understand how they arise and get developed. So I welcome this long-standing endeavor by Trinity University to expand our understanding of the creative process by sharing some of my own reflections and experiences, joining a long list of distinguished colleagues who...

  26. Paul Krugman
    (pp. 381-392)

    This is actually a very tough assignment. The question ishow do you talk about yourself without coming across as pretentious and full of yourself?, and the answer is,There probably isn’t any way to do that. I’ll try to mix a bit of personal history with a bit of life philosophy (or, anyway, economics research philosophy) and see if that works.

    Back in 1976, when I was in grad school, the grad students at Harvard and MIT in economics combined to put on a special program celebrating the bicentennial of the publication of Adam Smith’sWealth of Nations, in...

  27. Peter A. Diamond
    (pp. 393-410)

    The title of this lecture series suggests that I try to decipher the process of my change from the time I took my first economics class as an eighteen-year-old math major to my present self as a seventy-two-year-old public policy analyst and public policy – oriented economic theorist. Perhaps a better title would be “My Memory of My Evolution,” for I have no diaries, no notes; just working papers and published papers, and memories. I have identified five phases in the evolution of my approach to being an economist: student (first economics class, 1958), applied mathematician (first research, 1960), teacher (first...

  28. Lessons from the Laureates: An Afterword
    (pp. 411-428)

    A goal of the Nobel Economists Lecture Series at Trinity University has been to enhance our understanding of the link between biography, especially autobiography, and the development of modern economic thought. Each of the twenty-three lectures, organized around the theme “my evolution as an economist,” provides source material for this endeavor.

    The purpose of this afterword is twofold. The first section identifies common themes as well as some disparate views expressed by the laureates in describing their development as economists. Among these are the importance of real-world events, coupled with a desire for rigor and relevance; the critical influence of...