There are many theories of how shifting involvements among generations might create a cycle in politics lasting thirty or forty years — periods during which public purpose and private interests would alternate in dominating the agenda. Ralph Waldo Emerson had such a theory. So did Henry Adams. So do Albert Hirschman and Arthur Schlesinger Jr., who carries on the analysis of his father. The most striking image I know was contributed by the late philosopher Robert Nozick (He died at 63 in 2002.) In an essay in The Examined Life, he described politics as a zigzag, rather like a sailboat slowly tacking back and forth toward a distant goal.
Liberty and justice, self-reliance and compassion, innovation and contentment with present arrangements: not all good things can be combined together into a single harmonious package, wrote Nozick. But many goals that cannot be pursued together at the same time can be reconciled by pursuing them serially. The electorate knows this, he asserted. Most voters /want/ a zigzag.
Sensible folk, they realize that no political position will adequately include all the values and goals that one wants pursued in the political realm, so these will have to take turns. The electorate as a whole behaves in this sensible faction, even if significant numbers of people stay committed to their previous goals and favorite programs come what may. For there may be a significant swing bloc of voters that will shift to new goals and make the difference….A new generation of voters will appear on the scene ready to seek a different balance, eager even to try something new.
The long-term political cycle inevitably comes to mind in connection with the death last week of Milton Friedman. Thinking about him, it is impossible to miss the resemblance of his career to that of John Maynard Keynes, emphasized this week by Harvard University professor Lawrence Summers. Keynes was born in 1883 and made his reputation as an analyst of the causes of the Great Depression. Friedman was born in 1912 and made his reputation as an analyst of the causes of the Great Inflation of the 1960s and ’70s. Neither man had a great deal of direct influence on the profession; each was quickly superseded by a generation building on his insights. Both were essentially public intellectuals who were elevated by events to the role of prophet.
If Keynes’ political influence peaked twenty years after his death, at the height of the Cold War during the presidency of John F. Kennedy in the United States, then Friedman made his contribution in real time. His friend Thomas Sowell is almost certainly correct when he writes that “It is doubtful that Ronald Reagan could have been elected president in 1980 without the changes in public opinion produced by Friedman’s work in the previous decades” — in particular his books, his “Capitalism and Freedom” and “A Monetary History of the United States 1867-1960,” which appeared in 1962 and 1963 respectively.
Now the tide seems to be turning around the world. The sheer usefulness of markets; the tendency of political bargaining to raise taxation to unsustainable levels; the crucial role of central banking: each of these verities, all but overlooked when Friedman entered the political lists in the late 1940s, now seem more or less permanently well-established. The great issues facing nations around the world today are collective ones, arising from abrupt demographic swings, globalization and climate change. Thus when we find Samuel Brittan of the Financial Times longing for a new champion of markets (“What would one not give for a re-born 30-year-old Milton Friedman to comment on and analyze these new challenges?”), we are far more likely to find ourselves a new Keynes instead.
What might that mean? A new book of interviews with prominent macroeconomists of the late twentieth century has just appeared, Inside the Economist’s Mind: Conversations with Eminent Economists, edited by William Barnett and Paul Samuelson. All the interviews appeared originally in the journal, “Macroeconomic Dynamics,” which is edited by Barnett. All were conducted by knowledgeable fellow economists. This is as close as anyone in economics has come to the interviews with influential writers for which Paris Review was famous.
Thus Janos Kornai and Stanley Fischer are interrogated by Olivier Blanchard, Wassily Leontief by Duncan Foley, Robert Lucas Jr. by Bennett McCallum, Paul Volcker by Perry Mehrling, Martin Feldstein by James Poterba, Friedman by John Taylor, and Samuelson himself by Barnett. Other stars included in the collection are James Tobin, Franco Modigliani, David Cass, Christopher Sims, Thomas Sargent, Jacques Dreze and Robert Aumann. Still more conversations are on their way in a second volume; among those that have appeared already in journal form are Alan Meltzer, Elhanan Helpman, William Brock, Karl Shell, Axel Leijonhufvud, Anna Schwartz, Guillermo Calvo and Assar Lindback. All the interviews make interesting reading.
In his introduction to the collection, Samuelson notes that scientific research, by its very nature, is designed to exclude personal motives of the research. And yet knowledge of economists’ life experiences is helpful in understanding the overall development of the field. “The book permits us to step back and view the whole of the field in a revealing context that otherwise is easily missed in the narrow focus of individual expert researchers…. Good history of science deserves a non-zero weight in the university curriculum.”
Thus Janos Kornai’s thesis defense in Budapest, on the eve of the Revolution in 1956, attracted an audience of several hundred people. But its appearance as a book, Overcentralization, got him fired (while, for other activities, a close friend was executed). Robert Lucas turned down George Shultz’s offer of a job in Washington and Arthur Laffer was hired instead. Jacques Drèze, the Belgian polymath who founded CORE (the Center for Operations Research and Econometrics) at the Catholic University of Louvain and turned it into a world-class incubator of new ideas, started adult life in London representing his father’s small-town bank in 1949. Before long he was representing most of the other businesses in his little Belgian hometown: selling sterling forward on behalf of wool washers, bartering pig iron to Finns in return for textile machinery, raising equity capital and mediating labor agreements. The book is full of illuminating personal stories like these.
The problem, of course, is excessive discretion. Taylor does not ask Friedman about Tjalling Koopmans, the austere scholar he badgered out of Chicago in the early 1950s along with the rest of the highly mathematical Cowles Commission (they moved to Yale) — or how he felt when Koopmans won the Nobel Prize in economics before he did. Blanchard doesn’t bring up the Swedes’ failure to recognize Kornai. Poterba doesn’t inquire into the circumstances in which Feldstein discovered that he was a conservative when he returned to liberal Cambridge, Mass., in the late 1960s, having attended graduate school in England. Stephen Spear and Randall Wright don’t ask Cass about the vicissitudes of his department at the University of Pennsylvania.
In his interview with econometrician Christopher Sims, Lars Peter Hansen doesn’t even mention the nine years Sims spent at Yale in the 1990s, much less asks what happened there, or why Sims moved to Princeton. (David Colander, in his session with Robert Shiller and the late James Tobin on “the Yale Tradition,” hints at one possible answer: a collision with Yale’s more institutionalist views). And so on.
The same is true of Samuelsonian Economics and the Twenty-First Century, a volume of essays prepared for Samuelson’s ninetieth birthday last year, and edited by Michael Szenberg, Lall Ramrattan and Aron Gottesman. There is a wealth of material in the book for anyone seriously interested in economics, including a foreword by Kenneth Arrow. But anyone hoping for a balanced assessment of Samuelson’s career will be disappointed (except by Arrow, who writes at one point, “Finally, I mention one interesting characteristic not only of Paul but of most, though not of all, of the economic theorists in the second half of the twentieth century: the minimal influence of John Maynard Keynes on his and their work”). You’d be a fool to expect otherwise from a ninetieth birthday celebration.
E. Roy Weintraub says as much in an introduction to Inside the Economist’s Mind. A Duke professor, Weintraub is one of the world’s most distinguished historians of economic thought. It is a measure of editor Barnett’s seriousness that he included his critique of the interviews in his collection. Weintraub writes, “[T]he fact that the materials were edited with the approval of (and in some cases rewritten by) the various subjects suggests that the economists themselves were effectively in charge of the interviews, and no material that undermined their own understandings of their work would be developed in the conversations.”
“[T]he historians’ interest is different,” Weintraub continues. “For historians, context is everything, so they would treat the conversations as partial source material of some limited use in constructing a serious history. The historical narrative is not a succession of this, then that, then that, then that. Rather, it is an interweaving of many stories in a tapestry, involving the local, and contingent, in a contextualization of all the this-s and that-s. The historian is interested in a larger story, a more multi-layered story than ‘I came, I saw the problem needed to be solved, I figured out the way to do it.’”
Alas, in recent years, the history of economics has too often mainly been a means of doing a kind of radical economics — economics as if none of the standard categories had real meaning. In a lecture delivered last spring in Portugal to the European Society for the History of Economic Thought, Weintraub surveyed the situation and declared “The economic science war is over and the historians of economics have lost.” It had been a walk-over, in fact; economists no longer paid any attention to most of the present generation of historians and methodologists.
There were, however, some grounds for hope, he said. “If historians of economics can shed their professional identification with the community of economists, can refuse to act as critics of economics, can refuse to take sides in the mainstream-heterodox controversies, but can instead turn to history, to constructing narratives of context, their institutional future might look brighter.” They could join other communities, link up with departments of anthropology, philosophy, history of science, even history itself.
But they will have to become more diligent to do so, Weintraub said, for “many historians consider work in the history of economics under-researched and over interpreted, while many philosophers believe that too much work in ‘methodology’ is insufficiently nuanced.” That will take time, of course. More than a few historians of thought are working on it, including Weintraub himself. Eventually, they will tackle problems of the political tides that seem to be influenced, however distantly, by what goes on in economics — by the likes of John Maynard Keynes, Paul Samuelson, Milton Friedman and all the rest.
For them, books like Inside the Economist’s Mind and Samuelsonian Economics and the Twenty-First Century will be useful fodder. Meanwhile, there is plenty of room for the sort of journalism that goes on here.