The most eminent academic economist of the 20th century

Paul A. Samuelson, the first American Nobel laureate in economics and the most prominent academic economist of the 20th century, died Sunday at his home in Belmont, Massachusetts. He was 94 years old.

His death was announced by the Massachusetts Institute of Technology, which Samuelson helped make one of the world’s leading centers of higher education in economics.

Upon receiving the Nobel Prize in 1970, Samuelson was credited with transforming his discipline from a discipline that ruminated on economic issues to one that solves problems, answering cause-and-effect questions with mathematical rigor and clarity.

When economists “sit down with a piece of paper to calculate or analyze something, it must be said that no one is more important in providing the tools they use and the ideas they use than Paul Samuelson”, said Robert M. Solow, another Nobel Laureate and Samuelson’s colleague at MIT.

Samuelson drew a brilliant list of economists to teach or study at the university, including Solow as well as others who would go on to become Nobel Laureates like George A. Akerlof, Robert F. Engle III, Lawrence R. Klein, Paul Krugman, Franco Modigliani, Robert C. Merton, and Joseph E. Stiglitz.

Samuelson wrote one of the most widely used college textbooks in American educational history. The book, Economics, first published in 1948, was the country’s best-selling textbook for almost 30 years. Translated into 20 languages, it sold 50,000 copies a year half a century after its first appearance.

“I don’t care who drafts a nation’s laws – or drafts its advanced treatises – if I can write its economics textbooks,” Samuelson said.

His textbook taught students how to think economics. His technical work – in particular his disruptive doctorate. thesis, shamelessly entitled “The Foundations of Economic Analysis” – taught professional economists how to exercise their profession. Between the two books, Samuelson redefined modern economics.

The textbook introduced generations of students to the revolutionary ideas of John Maynard Keynes, the British economist who in the 1930s developed the theory that modern market economies could be trapped in depression and then needed a strong push in public spending or tax cuts, in addition to a lenient monetary policy, to restore them. Many economics students would never again feel comfortable with the 19th century view that private markets would cure unemployment without government intervention.

This lesson was reinforced in 2008, when the international economy entered the sharpest downturn since the Great Depression, when the Keynesian economy was born. When the depression started, governments held on or made it worse by trying to balance fiscal budgets and erect trade barriers. But 80 years later, after absorbing the Keynesian teaching of Samuelson and his followers, most industrialized countries have taken corrective action, increasing public spending, cutting taxes, maintaining exports and imports, and lowering rates. near zero short-term interest.

Samuelson explained Keynesian economics to US presidents, world leaders, members of Congress and the Federal Reserve, not to mention other economists. He has served as a consultant to the US Treasury, the Bureau of the Budget, and the President’s Council of Economic Advisers.

His most influential student was John F. Kennedy, whose first 40-minute class with Samuelson, after the 1960 election, took place on a rock near the beach at the family compound in Hyannis Port, Massachusetts. . Before class there was a lunch with politicians. and the Cambridge intellectuals aboard an offshore yacht. “I was expecting a delicious meal,” Samuelson said. “We had francs and beans.”

After the 1960 election, he told the young president-elect that the nation was heading into a recession and Kennedy would have to impose a tax cut to ward off it. Kennedy was shocked.

“I just campaigned on a platform of fiscal responsibility and balanced budgets and here you are telling me the first thing I should do in power is cut taxes?” Samuelson recalled, quoting the president.

Kennedy eventually accepted the professor’s advice and signaled his desire to cut taxes, but he was assassinated before he could act. His successor, Lyndon B. Johnson, executed the plan, however, and the economy rebounded.

Samuelson provided a mathematical structure to study the effect of trade on different groups of consumers and workers. In a famous theorem, known as the Stolper-Samuelson, he and a co-author showed that competition from imports of clothing and similar products from underdeveloped countries, where producers depend on unskilled workers, could lower the wages of low-paid workers in industrialized countries. countries.

The theorem provided the intellectual scaffolding for opponents of free trade. And at the end of his career, Samuelson sparked intellectual turmoil by pointing out that the economy of a country like the United States could be affected if productivity increased among the economies he traded with.

Open trade lawyer

Yet Samuelson, like most academic economists, remained a supporter of free trade. Trade, he taught, raises the average standard of living enough to allow the workers and consumers who benefit from it to compensate those who suffer and who still have additional income. Protectionism would not help, but higher productivity would.

Paul Anthony Samuelson was born May 15, 1915 in Gary, Ind., Son of Frank Samuelson, pharmacist, and former Ella Lipton. His family, he said, was “made up of upward moving Jewish immigrants from Poland who had prospered tremendously during World War I, because Gary was a whole new steel town when my family went there.”

But after his father lost much of his money in the years after the war, the family moved to Chicago. Young Paul attended Hyde Park High School, where in his first grade he began studying the stock market. At one point, he helped his algebra teacher select stocks to buy in the boom of the 1920s.

“Hupp Motors and other losers,” he recalls in a 1996 interview. “Evidence of systems fallibility,” he says.

He left high school at 16 to enter the University of Chicago. “I was born as an economist on January 2, 1932,” he said. It was the day he heard his first academic lecture, on Thomas Malthus, the 18th century British economist who studied the relationship between poverty and population growth. Hooked, he began to take economics courses.

After graduating from Chicago in 1935, he went to Harvard, where he was drawn to the ideas of Harvard professor Alvin Hansen, the leading representative of Keynesian theory in America.

Among Samuelson’s fellow students at Harvard was Marion Crawford. They married in 1938. Samuelson received his master’s degree from Harvard in 1936 and a doctorate. in 1941. He wrote his thesis from 1937 to 1940 as a member of the prestigious Harvard Society of Junior Fellows. In 1940, Harvard offered him a professorship, which he accepted, but a month later, MIT invited him to become an assistant professor.

Harvard made no attempt to keep him, even though he had developed an international clientele by then. Solow said of Harvard’s economics department at the time: “You could be disqualified from a job if you were either smart or Jewish or Keynesian. So what chance does this smart, Jewish, Keynesian have?

During World War II, Samuelson worked in MIT’s radiation lab, developing computers for aircraft tracking and was a consultant for the War Production Board. After the war, having resumed teaching, he and his wife founded a family. When she got pregnant the fourth time, she gave birth to triplets, all boys.

Marion Samuelson died in 1978. Samuelson is survived by his second wife, Risha Clay Samuelson; six children from his first marriage: Jane Raybould, Margaret Crawford-Samuelson, William and the triplet sons, Robert, John and Paul; and 15 grandchildren. Samuelson is also survived by a brother, Robert Summers, Emeritus Professor of Economics at the University of Pennsylvania and father of Lawrence H. Summers, Director of the National Economic Council under President Barack Obama and former Secretary of the Treasury under President Bill Clinton and former president. from Harvard. – © 2009 The New York Times Press Service