The great MIT economist Paul Samuelson died today, at age 94. The NYT, in its obituary, calls him “the foremost academic economist of the 20th century,” which sounds about right. Samuelson’s Foundations of Economic Analysis, a reworking of his doctoral dissertation that was first published in 1947, transformed graduate education in economics (by ending what he called “the laborious literary working over of essentially simple mathematical concepts,” and replacing this “peculiarly depraved” practice with hardcore math). And his 1948 textbook Economics—a brilliant literary reworking of economic ideas for a less sophisticated audience—dominated undergraduate education in the subject for decades. He also had his hand in many of the great economic advances of his day, including one that I spent way too much of the past decade immersed in, the efficient market hypothesis.
Yet he isn’t nearly as well known to the rest of the world as his fellow economists Milton Friedman or John Maynard Keynes. This isn’t because Samuelson was hiding out in the ivory tower. He wrote a textbook that introduced generations of American college students to economics. He wrote a regular column for Newsweek for years (and recruited Friedman to write for the magazine too). He was always accessible to reporters and ready to spell out economic concepts in clear language.
He was not, however, a crusader in the way that Friedman and Keynes were. Samuelson had very strong views about the methods of economics. Yet while he certainly formed opinions about real-world economic problems—he was basically a centrist with moderately Keynesian leanings—they often came with lots of caveats. One of my favorite examples of this comes near the end of his 1965 paper (Tyler Cowen has a link if you want to read the whole thing) “Proof that Properly Anticipated Prices Fluctuate Randomly,” a founding document of the rational market/efficient market worldview that I write about in my book. Wrote Samuelson:
One should not read too much into the established theorem. It does not prove that actual competitive markets work well. It does not say that speculation is a good thing or that randomness of price changes would be a good thing. It does not prove that anyone who makes money in speculation is ipso facto deserving of the gain or even that he has accomplished something good for society or for anyone but himself. All or none of these may be true, but that would require a different investigation.
I didn’t know Samuelson very well—I met him once and talked to him a couple times on the phone—and as a noneconomist I’m sure I don’t really get all the ways in which he influenced the discipline. But to my mind this reluctance to make greater claims for the theories of economics than they really deserved was perhaps his most admirable trait. It is also, however, why you seldom hear people talking about Samuelsonian economics.
