Lives of the Laureates, Fifth Edition: Twenty-three Nobel Economists PDF
Preview Lives of the Laureates, Fifth Edition: Twenty-three Nobel Economists
MD DALIM 997386 12/24/08 CYAN MAG YEL BLACK Lives of the Laureates Lives of the Laureates Twenty-t hree Nobel Economists Fifth Edition Edited by William Breit and Barry T. Hirsch The MIT Press Cambridge, Massachusetts London, England © 1986, 1990, 1995, 2004, 2009 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or informa- tion storage and retrieval) without permission in writing from the publisher. For information about special quantity discounts, please email < Contents Introduction to the Fifth Edition vii Acknowledgments xiii W. Arthur Lewis 1 Lawrence R. Klein 17 Kenneth J. Arrow 35 Paul A. Samuelson 49 Milton Friedman 65 George J. Stigler 79 James Tobin 95 Franco Modigliani 115 James M. Buchanan 137 Robert M. Solow 153 William F. Sharpe 171 Ronald H. Coase 189 Douglass C. North 209 John C. Harsanyi 223 Myron S. Scholes 235 Gary S. Becker 251 Robert E. Lucas, Jr. 273 James J. Heckman 299 vi Contents Vernon L. Smith 335 Clive W. J. Granger 357 Edward C. Prescott 369 Thomas C. Schelling 393 Edmund S. Phelps 421 Lessons from the Laureates: An Afterword 437 Notes 455 Introduction to the Fifth Edition This book consists of autobiographical accounts of the careers of t wenty-t hree 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 Anto- nio, Texas, to deliver his story in person at Trinity University. The Nobel Prize in Economics was not created by Alfred Nobel him- self. In 1901 his will established prizes in physics, chemistry, medicine or physiology, literature, and peace. He wished to reward specifi c achieve- ments rather than outstanding persons. In the case of the natural sci- ences, the awards were to be given for “discoveries,” “inventions,” and “improvements.” In 1968 the Central Bank of Sweden, in connection with its tercentenary celebration, initiated a new award, the Central Bank of Sweden Prize in Economic Science in Memory of Alfred Nobel. This prize was to be granted in conformity with the standards that governed the awarding of the original Nobel prizes. According to the rules estab- lished by the Central Bank of Sweden, the “prize shall be awarded annu- ally to a person who has carried out a work in economic science of the 1 eminent signifi cance expressed in the will of Alfred Nobel.” The idea for a series of autobiographical lectures by Nobel laureates in economics was that of the senior editor, who has spent a good part of his academic career studying, teaching, and writing about the lives and ideas 2 of leading contemporary U.S. economists. This abiding interest in the relationship between biography and the creative process led naturally to the thought of providing a forum in which outstanding economists would express in their own words, in any way that seemed congenial, a per- sonal memoir under the general rubric “My Evolution as an Economist.” viii Introduction to the Fifth Edition At the very least, such a forum would preserve part of the rich record of accomplishment that helped to shape the direction and character of economic science in the post–World War II era. But the larger pur- pose was to provide important source material for a theory of scientifi c discovery. Little is known about the process by which original ideas are germi- nated and eventually accepted by one’s peers. To what extent is the sub- stance of scientifi c work in social science a refl ection of the lives of those who produced it? What is the role of infl uential teachers and colleagues? To what degree are the problems to which these thinkers addressed them- selves a result of their own backgrounds as well as the economic and social problems of their times? What forces were most responsible for leading them to their insights? In short, what is it that enables an indi- vidual to discover something that seizes and holds the attention of a large segment of a scientifi c community? To help answer such questions was the major rationale behind the series. But who should we invite? It was clear that budgetary and time con- straints would limit the number of invitations, and so the roster was restricted in the following ways: only economists who served on the fac- ulties of U.S. universities at the time that the Nobel Prize was awarded would be included; and the roster would represent as many different fac- ets of economics in terms of types of contributions, specifi c areas, meth- ods of analysis, and ideological differences as possible. This meant that only one member of a team of co-r ecipients of the prize would be invited. In 1983, when the program was being planned, there were twelve win- ners of the Nobel Prize who met the fi rst criterion, although one was too ill to travel. A diffi cult winnowing process in accordance with the second criterion narrowed the fi nal list to eight. To our pleasant surprise, only one invitee declined to participate. The autobiographical lectures that made up the fi rst edition of this volume were presented at Trinity University during the 1984–85 year. The success of the project encouraged us to ask then-P resident Ronald Calgaard to allow the series to continue. An economist himself, Calgaard quickly agreed. Each October after the Nobel Prize in Economics was awarded in Stockholm, an invitation was to be sent to a newly minted U.S. economics laureate to present an autobiographical lecture. Introduction to the Fifth Edition ix During the three years immediately following the end of the original series, a trio of Americans was honored with the Alfred Nobel Memorial Prize in Economic Science: Franco Modigliani of MIT in 1985, James M. Buchanan of George Mason University in 1986, and Robert M. Solow of MIT in 1987. Each of them accepted the request to present a lecture in which he would chart the route that led him to the highest accolade a scholar can receive. These lectures were included in the second edition of Lives of the Laureates, published in 1990. Economists at U.S. universities continued to receive the Nobel Prize. The third edition, published in 1995, included Trinity University lectures by William F. Sharpe (co- recipient in 1990), Ronald H. Coase (1991), and Douglass C. North (co- recipient in 1993). The fourth edition was published in 2004 with eighteen lectures, including new essays by John C. Harsanyi (co-r ecipient in 1994), Myron S. Scholes (co-r ecipient in 1997), Gary S. Becker (1992), Robert E. Lucas, Jr. (1995), and James J. Heck- man (co-r ecipient in 2000). This fi fth edition of Lives of the Laureates includes fi ve new Trin- ity University lectures: Vernon L. Smith (co-r ecipient in 2002), Clive W. J. Granger (co-r ecipient in 2003), Edward C. Prescott (co- recipient in 2004), Thomas C. Schelling (co- recipient in 2005), and Edmund S. Phelps (2006). For many of the laureates, the assignment has been a diffi cult one. There is an understandable reluctance to give a public talk about one’s own intellectual contributions. As one of the invitees put it, “I do not know that I could keep it between the Scylla of false modesty and the Charybdis of boastfulness, and I am afraid I would fi nd the whole busi- ness rather stressful.” Moreover, most of their work in its professional formulation was technical in nature, closed off to those not trained as economists. Yet each was being asked to make his contribution accessible to a lay audience at a public lecture open to the whole community. This provided greater diffi culties for some than for others. Paul A. Samuelson’s and Kenneth J. Arrow’s scientifi c contributions are largely in the domain of mathematical economics. Lawrence R. Klein, Heckman, and Granger, among others, make heavy use of statistical techniques and econometrics. All the Nobel economists express themselves in the technical vocabulary of their discipline.
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