Paul Samuelson 1915-2009

How will Paul Samuelson be remembered? This is the positive side of the story, the glowing record of  the Nobel Laureate and author of the most widely read textbook in modern times.

History may be kind to Samuelson. He had the good fortune to surf three waves that carried all before them, for a time. The waves were the General Theory of Keynes, the Big Government welfare state and Mathematics. To capture the mood of the Keynesian revolution he recycled a famous response to the French Revolution “Bliss was it in that dawn to be alive, But to be young was very heaven! …”.

It is likely that critical scholarship will be less kind. He may be remembered as the man who thought that the Soviet economy was robust and rapidly overhauling the US. The man who was relaxed and comfortable with Keynesian stimulation of the economy. The man who thought that the Austrians are rubbish. I think he was wrong on all three counts.

An essay topic “Compare and contrast the outcomes of the French and Keynesian revolutions”.

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Joshua Gans
Joshua Gans(@joshua-gans)
12 years ago

The second and third charges are correct, Rafe, and are to Samuelson’s credit.

The first charge is irresponsibly misleading. I explained why at considerable length the last time you made it, but that evidently didn’t have much impact. I can’t say I’m surprised, and I won’t make the effort again.

Richard Tsukamasa Green
Richard Tsukamasa Green(@richard-green)
12 years ago

I can make Rafe’s response for him

“Can we at least all agree that the Soviet union was a failure?”.

He’s very fond of that variety of rhetorical crutch!

On a more serious note, I think Samuelson was intellectually honest and was making genuine efforts to support the expansion of understanding of economic phenomena rather than advancing an agenda. This is very important! But I fear that much of the neoclassical synthesis that he popularised, and much of his important work is rather useless in the end. It doesn’t lead to ideological conclusions (like both Austrians and left wing heterodoxy usually believe). It can lead to any conclusion one wants (something being discussed over in the Utility post).
I think his textbook, however popular, may have had a poor legacy. Important concepts (like uncertainty) that were not initially formalised slipped through the cracks. They weren’t formalised because it was difficult to do so. This is understandable, but they were then forgotten because economics concepts were taught through formalism solely, rather than subsequent and a test of intuitive understanding. Samuelson may have been known these concepts well, but his textbook style spawned generations of economists who missed them.

Joshua Gans
Joshua Gans(@joshua-gans)
12 years ago

Richard is referring to your tactic of dodging a challenge by posing your own question on a related topic where you feel you’re on safer ground.

Another tactic is just to ignore the challenge, which is what you did in the Samuelson = soviet apologist case. It was on JQ’s blog a couple of years ago in a thread about Austrian economics or Popper or both. Since you didn’t respond at the time, the onus isn’t on me to dig it up.

Edward Mariyani-Squire
Edward Mariyani-Squire
12 years ago

For those interested souls, here is the Ghost of Farrell Past:

James Farrell September 20th, 2006 at 00:54 | #43
Samuelson, the man who wrote year after year, up to the fall of the wall, that the Soviet economy was strong and overhauling the US?

Fiddlesticks. What Samuelson did, year after year, was to explain that long run estimates of US growth and in particular Soviet growth were so uncertain that a very wide range of outcomes could occur. Overhauling the US was one possibility. In the 1967 edition I have on my shelf he says

Over the whole period since World War II, the percentage growth rate of the Soviet Economy almost certainly exceeded the American growth rate. But in the 1960s the Soviet growth rate may well have fallen behind the American (and it has certainly fallen below those of West Germany, Japan, Italy and France). Furthermore many experts believe that it is easier initially for an economy that starts frrom a lower level of productiveity to achieve a high percentage growth ratethe unused opportunities for imitating Western technology are likely to diminish. Hence it may be unwise to extrapolate past growth rates in the Soviet Union into the distant future.

I dont know whether Samuelson was still drawing on the best available information in 1989, but the claim that Soviet growth exceeded US growth in the 1960s accords with the figures (4.9% versus 3.8) in Kornais magnum opus The Soshalist System, which is not exactly an apologia for soshalist planning.

The point is, as both Samuelson and Kornai know perfectly well, that a high GDP growth in itself means nothing if high and indeed increasing investment rates are necessary to sustain it. Far less does high growth imply that people are satisfied either as consumers or as political beings.

I defy any fair minded person to read Samuelsons chapter on alternative economic systems and find there an endorsement of central planning. Certainly the Soviet censors didnt think so, since they removed
the entire section on growth from the Russian edition.

Rafe, I would have thought you would have been aware of James’ comments at the time because you copied and pasted them on the The Austrian Economists blog.

Joshua Gans
Joshua Gans(@joshua-gans)
12 years ago

Thnaks for taking the trouble, Edward. JQ’s site wasa down, and I didn’t think of googling. It’s illuminating to discover that Rafe was too busy to answer my comment (despite ‘the best will in the world’), but not too busy to copy and paste the whole discussion on another website and beg the site’s author to come and bash me up.

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[…] blog posts of the year competition, Also noting the mixed record of Paul Samuelson, including his massive mis-reading of the Soviet economy.

Joshua Gans
Joshua Gans(@joshua-gans)
12 years ago

I never realised that Samuelson relied on Manning Clarke for information about the performance of centrally planned economies. I suppose Kornai did too.

But you’re right, Rafe. Your contributions are pure buffoonery, and I should just enjoy them in that spirit.