Paul A. Samuelson 1915-2009

Paul Samuelson was the greatest economic theorist of the 20th century. If we see Leon Walras, with his general equilibrium theory, as the Newton of economics – which I think Samuelson did – then Samuelson was its Einstein. In his Foundations of Economic Analysis in 1947, he laid out the fundamental mathematics that underlay the ideal market economy. For the rest of his life he made theoretical breakthroughs in a range of fields within economics.

Till the end of his life he was, above all, a theorist, and, being no ideologue, prepared to go where theory took him. In 2004, at the age of 89, he published a paper in international trade theory demonstrating mathematically that “technical Chinese progress in goods that America previously had competitive advantage in can, ceteris paribus, lower permanently per capita U.S. real income.” Economists for whom free trade was a matter of faith were unable to deny Samuelson’s math, and had to resort to insisting that he had stumbled upon a special case with slight real world relevance, but when a theorist appeals to fact he has already lost the argument.

It is, of course, possible, that what Samuelson had done was find a flaw in trade theory that had considerable real world relevance. After all, it was the same Samuelson who earlier in his career had laid out the mathematics of the factor-price equalization theorem. And was it not possible that equalization could happen by one’s country’s wage falling as the other country’s rose?

So talented was Samuelson that, as we know, he also wrote the first mass circulation economics textbook in introductory economics.  First edition 1948 to 19th edition today. In between, I was privileged to co-author with Samuelson the Instructor’s Manual for the 4th edition in 1958. It’s been downhill for me ever since. He was a wonderful person to work with. I still treasure a memo he sent me signed “Paul.”

Was Samuelson a “progressive” who deserves to be celebrated here? Absolutely. He was a Keynesian when Keynes was dismissed as  a dangerous liberal by the American establishment When stagflation made Keynesian no longer good enough, Samuelson called himself a post-Keynesian. He never bought into monetarism or rational expectations nor supply-side economics. He deplored the increasing maldistribution of income and wealth.

To the economist who could justify anything in the name of efficiency, Samuelson had a simple answer: “My belief is that any good cause is worse some inefficiency.” If all mainstream economists would admit to that, the world would be a better place

4 comments

  • Hi Mel,

    I will definitely need to do more reading on Paul S. Glad to hear of your thoughts on him.

    By the way, welcome aboard the blog I have always been an avid reader of yours.

    paul t.

  • I have come here neither to praise nor to bury Caesar. However this sentence from the hortatory eulogy makes little sense:

    “Till the end of his life he was, above all, a theorist, and, being no ideologue, prepared to go where theory took him.”

    What could this sentence possibly mean?

    Let us rewrite this:

    “He was a man steeped in Marxist economic theory and thus no ideologue and thus only prepared to go where the theory took him.”

    Ok let us try again:

    He was man steeped in fascist theory and thus was no ideologue and went only where the theory took him.”

    Ok let us try again:

    “He was a man steeped in new-classical economic theory and thus was no ideologue and went only where the theory took him.”

    Ok let us finally try one more time.

    “He was a man steeped in reform liberal economic theory and thus no ideologue and went only where the theory took him.”

    Ok ok one last time:

    “He was a sophisticated theorists (of his particular position) and thus was an exceptional champion of reform liberalism who always went where his ideological instincts took him.”

    And this last re-worked sentence we know to be true given his position during the capital controversy. In fact, as we all know, given as this is posted under history of economic thought, Samuelson would defend neoclassical capital theory on the basis of being a useful parable –a reasonable heuristic– even if the logic of the theory was in fact unsustainable.

    I hereby give all my friends, boosters, and enemies upon my death the permission to speak honestly and not falsely.

    The eulogy lacks a fundamental honesty: a fundamental accounting of reality as it were. And I am not sure how we honour each other or the ideas we stood for by *not* acknowledging those ideas. Presumably Paul had reasons for why he championed the ideas and theories he did. To remind the crowd of those reasons is not diminish the man but to provoke a conversation that continues him.

  • I meant nothing so sophisticated as does Travis Fast, with whom I agree. I meant simply, in the context in which I was writing, that when trade theorizing led him to see that free trade was a problem, he was, unlike most mainstream economists, willing to say so not only within the profession but outside as well.

  • I wrote to Paul Samuelson once and received a generous and affable reply. I don’t believe he was the “greatest economic theorist of the 20th century.” I would give that honor to Keynes. Second? Third? No. No. My own nominees would be Veblen and Schumpeter. I personally would also rank a now largely forgotten economist of the early 20th century above Samuelson. Maybe Michal Kalecki, too… (umm, Minsky?) A four-way tie for seventh place? Oh, well. I guess I just don’t think that ranking Samuelson’s theoretical contribution is the most enduring tribute to his memory. Paul Samuelson was certainly influential but his theoretical contribution was not necessarily where he had his greatest impact.

    When I die, I implore Travis Fast to recall my puckish sense of humour, my impeccable grammar but please, please don’t say that I was the greatest theorist of working less that ever lived!

Leave a Reply

Your email address will not be published.