Paul Samuelson Memorial @ AEA 2010

Paul Samuelson (from Nobelprize.org)

There was a memorial session to Paul Samuelson that was added to the program of the ASSA/AEA meetings in Atlanta. The session was presided by Robert Hall (Stanford University) and had as speakers: Robert Solow (MIT), Peter Diamond (MIT), Avinash Dixit (Princeton University), Robert Merton (Harvard University) and James Poterba (MIT). Both Kenneth Arrow and Stanley Fischer were invited but could not attend. Nonetheless they wrote some remarks that were read by Bob Hall at the session.

Solow was the first to speak and started by posing the following question: who was the most influential economist of the last 70 years? He then argued that this is an ambiguous question. If it refers to the world of politics, newspapers and media, the answer would be Keynes, Friedman, among others, and Paul Krugman in the future. If the question refers to how economics operates and what we do, the answer would undoubtedly be Paul Samuelson, he continued.

Solow then went on and talked about many sides of Samuelson, about his broad interest on economics (he was, to Solow and other panelists, the last generalist in economics), about his understanding that the role of economic theory is to make business journalism better, and other things. Two things are worth mentioning here. First, Solow argued that Samuelson abandoned several areas of economics because he saw them going in the wrong direction and becoming uninteresting. Solow took the opportunity to implicitly raising his criticisms to modern macro by observing that Samuelson abandoned macroeconomics for this reason. Second, Solow said that the Great Depression was really an experience that marked his and Samuelson’s life very much, and made them question the stability of a capitalist economy. This made them become, in Solow’s own words, “cafeteria Keynesians“: those who say “I’d have a little bit of this, and a little bit of that” and “No, thanks, not that”.

Peter Diamond reinforced the role played by Samuelson’s Foundations in his training as an economist, and also praised Samuelson’s overlapping-generations model. He mentioned that as a graduate student at MIT he had both micro and macro with Samuelson because in that year Solow (who usually taught macro) was away.

Other panelists talked about Samuelson’s outstanding intelligence and his habit of working hard, but also of playing tennis regularly in the afternoons, about the fact that he raised 6 children and about his unique habit of calling people and start talking about economic models and ideas without even asking either how the person was doing or if the time was appropriate. Samuelson was praised as a teacher (who was good at showing the subtleties of an issue but not very good in teaching the basic ideas), as someone who understood that mathematics was a powerful language, and as a giant on whose shoulders the current generation stand.

Relevant to historians, two of the panelists repeated two stories already known to some of us. The first was told by Dixit: that Samuelson liked telling stories about economists (like Smith, Marshall, Fisher, Keynes, Joan Robinson…) during his lectures and that he had a special affection for Frank Ramsey. Dixit said that in a class Samuelson told the students that Ramsey has learned German in a week, by reading Kant using a dictionary (with my apologies for self-promotion, details on this apparently false story can be found in my article on Ramsey published in HOPE). The second was by Poterba who mentioned that Samuelson had made a very important contribution to the theory of optimal taxation in a memorandum to the US Treasury in 1951, in which he explained and recast Ramsey’s result of 1927 and which was later published in the Journal of Public Economics (1986) as a historical document.

All in all, it was a very interesting session.

P.S.: AEA members ca watch this and other recorded sessions online at the AEA website. If you want to read Krugman on Samuelson, check his blog.

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