Erik Visits an American Grave, Part 1,579

This is the grave of Paul Saumelson.

Born in 1915 in Gary, Indiana, Samuelson grew up in a Jewish immigrant family. His father was a pharmacist who did well and overall, by the time he was a teen, the family was quite comfortable. They moved to Chicago in 1923, where he spent the rest of his childhood.

Samuelson was a brilliant kid and he entered the University of Chicago at the age of 16. He did an economics degree there and went on to Harvard for his PhD, which he achieved in 1941. In 1940, MIT hired this 25 year old assistant professor. By 1952, he was a full professor. He would spend his entire academic career at MIT, although as someone who was going to become quite famous, he would not necessarily be on campus that often. In a different time, he probably would have stayed at Harvard. But Harvard was a known center of anti-Semitism and Samuelson had to deal with all sorts of prejudice in that department. He wanted nothing to do with it professionally.

Samuelson was a major proponent of centering mathematics in the field of economics. I am sure that has been for very good reasons, but it should be stated that the inability or unwillingness of economists to translate those mathematics into language that regular people can understand is not great. Samuelson believed that math was “the natural language” of economists. He pushed this forward significantly in his 1947 book Foundations of Economic Analysis, which was the revised dissertation. Then he published what became the most important textbook in the field for a long time, Economics: An Introductory Analysis, in 1948. It is still in print, having sold around 4 million copies in the last 70 plus years. Now those are some royalty payments! As Robert Solow, his student and future Nobel winner, said upon Samuelson’s death, when economists “sit down with a piece of paper to calculate or analyze something, you would have to say that no one was more important in providing the tools they use and the ideas that they employ than Paul Samuelson.”

Samuelson became a critical Keysenian. Moreover, he did it the right way. Rather than be an ideologue (imagine that, an economist not thinking the economy works according to their own personal ideology, a problem in the field from the Marxists to the Friedmanites), he was what he called a cafeteria Keynesian. He believed in the ideas generally, but realized that a lot of them needed updating and he would work with what made sense at a given time. This is of course how we should think about all ideas, but then I was never a good ideologue, which helps explain why both internet leftists and LGM liberals get angry with some of my thoughts.

By the 1960s, Samuelson was not only academically important. He was a key political advisor in both the Kennedy and Johnson administrations. Shortly after the 1960 election, Kennedy called Samuelson out to Cape Cod for a summit with him in order to understand more about the economic ideas he needed for his presidency. Samuleson became super critical in working out the economics of the Great Society. He also was a public thinker and writer. He and Milton Friedman agreed on almost nothing. This made it perfect for them to debate frequently in Newsweek, where they would write from different perspectives on given issues. Personally, the idea of giving a crank lunatic like Friedman a public forum every week makes me sick, but it was the time and it’s not like someone like that wouldn’t still be influential publicly today. But they were good personal friends, in the way that Ruth Bader Ginsburg and Antonin Scalia put aside the fact that one of them wanted to overturn the 20th century and the other was an icon of freedom to enjoy some opera and wine and such. Elites, grumble.

Among his contributions was the Stolper-Samuelson Theorem, which stated that competition from low-wage workers around the world in industries importing to industrialized nations could lower wages in those industrialized nations too. This seems like obvious common sense to me, not to mention something that the labor movement had argued for approximately forever before this, and it’s precisely this sort of thing that drives me nuts about economists and the tongue baths they get from the media who see them as being seers on these issues. For stuff like this, Samuelson won the Nobel Prize in 1970, the first American to win the prize, though the award was only created by the Swedish central bank in 1969 to allow the field to self-fellate about capitalism. I do think that Samuelson was more or less correct though in noting that protectionism wasn’t a realistic answer for workers in industrialized nations. No one was going to put globalization back in the closet. There were however many better ways to handle it, which were ignored in favor of ideological globalization of the type practiced by Jimmy Carter and Bill Clinton, not to mention most of the Republican Party and corporate elites who saw the whole thing as a great way to make even more money.

As an academic, Samuelson worked hard to make MIT a center of the economics profession and was critical in hiring a whole generation of leaders in the field, non-right wing crazies edition, including Robert Stiglitz, Robert Solow, and Paul Krugman. Given Harvard’s anti-Semitism, I am glad he took away some of its thunder for awhile. And from the perspective of a site like this, I’m also glad Samuelson maintained some space in the field for economists who weren’t so thrilled about working with Augusto Pinochet or Ronald Reagan or pushing the libertarian bullshit that should make everyone suspicious about this field of study for eternity.

Samuelson also kept pushing his ideas of mathematical models in the academy, including later his career on stock prices, which certainly garnered plenty of interest. To his credit though, he knew that theories could not predict the stock market and used to make fun of those claims in classes. I agree of course, but then if these formulas predict nothing useful, I don’t see why we should see them as anything scientific or worth paying attention to more than any other field. I mean, we need people studying the economy, of course. My problem is not with the study or even the field, but with two other things. First, the ways that the Beltway drools over itself to breathlessly report anything they say and second, that they get paid more than other similar fields in Arts and Sciences because of this and their spurious and self-promoting claims of being a science. But at least Samuelson would just say this stuff publicly.

In 1996, Bill Clinton awarded Samuelson the National Medal of Science. I’m not sure why because economics is not a science. In any case, Samuelson remained a good guy until the end. Among other things, he openly opposed the Bush tax cuts in 2003. It’s interesting in that during and after the economic crisis of 2008, a lot of people noted that nations had learned from Samuelson, and I guess that’s true in the sense that they did something to help people eventually by intervening in various aspects of the crisis instead of letting it turn into a new Great Depression, but I think really learning from Samuelson would have meant doing something to stop such a crisis from beginning in the first place. But hey, capitalism baby! Aren’t these new financial products great!!!!

Samuelson died in 2009. He was 94 years old.

Paul Samuelson is buried in Mount Auburn Cemetery, Cambridge, Massachusetts.

If you would like this series to visit other American winners of the Nobel Prize in Economics, a true list of rogues, you can donate to cover the required expenses here. Wassily Leontief is buried in Salisbury, Connecticut and Theodore Schultz is in Badger, South Dakota. Previous posts in this series are archived here and here.