The Hindu Business Line : What makes the Nobel economists tick?

The book brings together autobiographical essays by 18 Nobel economists. These are from presentations as part of `a continuing lecture series at Trinity College in San Antonio,' where the laureates spoke to lay audiences on `My Evolution as an Economist'.

Intro speaks of `an important side benefit of the lecture series'— "the lesson that some of the most illustrious figures of modern economics are human after all."

Quotable quotes

Begin with W. Arthur Lewis, who won the Nobel Prize in 1979. "I had never intended to be an economist. My mother taught us to make the best of what we have, and that is what I have tried to do," he narrates. "My mother was unsurpassed in the ways of stretching income, and this, combined with loving care, was what enabled her to bring up five sons, who were all minors when she was widowed," reminisces Lewis.

"It was psychologically difficult to grow up during the depression," says Lawrence R. Klein.

He won the Nobel in 1980 "for the creation of econometric models and the application to the analysis of economic fluctuations and economic policies," as http://nobelprize.org informs.

"But I was blessed with something else, that just happened. I was carrying around in my head the feeling that mathematics could be used in the analysis of economic problems."

Kenneth J. Arrow, who shared the 1972 Nobel with John R. Hicks, for "pioneering contributions to general economic equilibrium theory and welfare theory," recounts how his family was `very poor for about ten years' after losing everything in the Great Depression. "I was an omnivorous reader, and I added to that a desire to systematise my understanding," says Arrow.

Thus, history, for him, "was not merely a set of dates and colourful stories," but "a sequence in which one event flowed out of another."

Next is the essay by Paul A. Samuelson, the 1970 Nobel laureate. "I made a deal of money in the late 1940s on the bull side," he informs, and then advocates Samuelson's Law thus: "Always look back.

"You may learn something from your residuals. Usually one's forecasts are not so good as one remembers them; the difference may be instructive."

Milton Friedman, the 1976 laureate, wonders at "the role that pure chance plays in determining our life history."

He cites lines from Robert Frost: "Two roads diverged in a yellow wood, / And sorry I could not travel both I took the one less travelled by, / And that has made all the difference."

George J. Stigler, who won the 1982 Nobel "for his seminal studies of industrial structures, functioning of markets and causes and effects of public regulation" divides new economic ideas into two classes: "Those that arise out of the critical examination of the ideas of other economists, and those that seek directly to explain some body of empirical phenomena."

After narrating his story, he cautions, "A knowledge of the life of a scholar is more often a source of misunderstanding than of enlightenment about his work."

Next is James Tobin, the winner of 1981 Nobel "for his analysis of financial markets and their relations to expenditure decisions, employment, production and prices." He fondly remembers how his professors left the education mostly to the students.

"They expected us to teach ourselves and learn from each other, and we did. They treated us as adult partners in scholarly endeavour, not as apprentices." In contrast, today's graduate programmes "try too hard to convey a definite and vast body of material and to test how well students master what we know."

The oldest profession

Franco Modigliani won the 1985 Nobel "for his pioneering analyses of saving and of financial markets."

Economics is the oldest profession in the world, he claims. To substantiate, he narrates a story of how an engineer, an economist, and a surgeon each claimed that his profession was the oldest.

"The surgeon spoke first and said, `Remember at the beginning when God took a rib out of Adam and made Eve? Who do you think did that? Obviously, a surgeon.' The engineer, however, was undaunted by all this and said, `Just a moment. You remember that God made the world before that. He separated the land from the sea. Who do you think did that except an engineer?' `Just a moment,' protested the economist, `Before God made the world, what was there? Chaos. Who do you think was responsible for that?'"

Prize addition to your book-shelf.

BookValue@TheHindu.co.in

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