Suzerains and Sovereigns: As Robert Solow turns 99, long live Angus Deaton!

When I was a young journalist, just starting out, the economist whose writings introduced me to the field was Gunnar Myrdal. He hadn’t yet been recognized with a Nobel Prize, as a socialist harnessed to an individualist, Friedrich Hayek. That happened in  in 1974.  But he had written An American Dilemma: The Negro Problem and Modern Democracy (1944) , about the policy of segregation that had been restored de jure after the US Civil War.  A subsequent project, Asian Drama: An Inquiry into the Poverty of Nations (1968), longer in preparation, was in the news.

Myrdal’s pessimistic assessment of the prospects for economic growth in India, Vietnam, and China began to fade soon after it appeared. The between-the-wars era of economics in which he was prominent already had been superseded by a new era, dominated by Paul Samuelson, whose introductory college textbook Economics (1948), supplemented by the highly technical Foundations of Economic Analysis (1947), quickly replaced overnight Alfred Marshall’s Principles of Economics, whose first edition had appeared in 1890.

Basic textbooks dominate their fields by dint of the housekeeping that they establish.  Samuelson has ruled economics ever since through the language he promulgated; mathematical reasoning was widely adopted within a few years by newcomers to the profession.  Ruling textbooks are sovereign. Since the discovery and identification of the market system two hundred and fifty years ago, there have been only five such sovereign versions: Adam Smith, David Ricardo, John Stuart Mill, Alfred Marshall, and Samuelson (brought up to knowledge’s frontiers thirty years ago by Andreu Mas-Colell).

Sovereignty is binary; it either exists or doesn’t. A suzerainty, on the other hand, though part of the main, sets its own agenda. John Fairbank taught that Tibet was a suzerainty of China. (This Old French word signifies a medieval concept, adopted here to describe modern sciences, as in Dani Rodrik’s One Economics, Many Recipes (2007).

Suzerainties are personal. They rule through personal example. Replacing Myrdal as suzerain in my mind, in 1974, practically overnight, was Robert Solow. Eight years his junior, Solow was Samuelson’s research partner at the Massachusetts Institute of Technology, for the next thirty years.  Samuelson retired in 1982, died in 2009. Solow soldiered on.

Solow turned 99 last week, hard of hearing but sharp as ever otherwise (listen to this revealing interview if you doubt it.)  By now his suzerainty has passed to Professor Sir Angus Deaton, 78, of Princeton University.

What is required to become a suzerain?  Presidency of the American Economic Association and a Nobel Prize are probably the basic requirements: recognition by two distinct communities, one for good citizenship within the profession, the other for scientific achievement beyond it, to the benefit to all humanity.

In Deaton’s case, as in Myrdal’s, it helps to have displayed a touch of Alexis de Tocqueville, whose two-volume classic of 1835 and 1840, Democracy in America, set the standard for critical criticism by a visitor from another culture, and, in the process,  founded the systematic study today we call political science.  Deaton grew up in Scotland, earned his degrees at Cambridge University, and was professor of economics at the University of Bristol for eight years, before moving to Princeton. in 1983.  For the first twenty years he taught and worked in relative obscurity on intricate econometric issues. In 1997, he began writing regular letters for the Royal Economic Society Newsletter, reflecting on what he had learned recently about American life, “sometimes in awe, and sometimes in shock”.

In 2015, the year Deaton was recognized by the Nobel Foundation for “his analysis of consumption, poverty, and welfare,” he published The Great Escape: Health, Wealth, and the Origins of Inequality. Five years later, Deaths of Despair and the Future of Capitalism appeared, by Deaton and Anne Case, his fellow Princeton professor and economist wife, just as the Covid epidemic began. It became a national best-seller, focusing attention on the fact that life expectancy in the United States had recently fallen for three years in a row – “a reversal not seen since 1918 or in any other wealthy nation in modern times.”

Hundreds of thousands of Americans had already died in the opioid crisis, they wrote, tying those losses, and more to come, to “the weakening position of labor, the growing power of corporations, and, above all, to a rapacious health-care sector that redistributes working-class wages into the pockets of the wealthy.”

Now Deaton has written a coda to all that. Economics in America: An Immigrant Economist Explores the Land of Inequality (Princeton 2023) will appear in October, offering a backstage tour during the year that Deaton has been near or at the pinnacle of it.  I spent most of Friday and Saturday morning reading it, more than I ordinarily allot to a book, and found myself absorbed in its stories about particular people and controversies, on the one hand, and, on the other, increasingly apprehensive about finding something pointed about it to say.

Then it occurred to me.  I have long been a fan of Ernst Berndt’s introductory text, The Practice of Econometrics: Classic and Contemporary (Addison-Wesley, 1991), mainly because it scattered one- or two-page profiles of leading econometricians throughout pages of explication of their ideas and tools.  Deaton’s new book is far better than that, because no equations are to be found in the book, and part of some of those letters to British economists have been carefully worked in.

The argument about David Card and the late Alan Krueger’s celebrated paper pater about a natural experiment with the minimum wage along two sides of the Delaware River, New Jersey and Pennsylvania, is carefully rehashed (both were Deaton’s students).  The goings-on at Social Security Day at the Summer Institute of the National Bureau of Economic Research is described.  The “big push” debate in development economics among William Easterly, Jeffrey Sachs, Treasury Secretary Paul H O’Neill, and Joseph Stiglitz get a good going-over. Econometrician Steve Pischke’three disparaging reviews of Freakonomics are mentioned.  Rober Barro and Edward Prescott are raked over with dry Scottish wit; Edmond Malinvaud, Esra Bennathan, Hans Binswanger-Mkhizer, and John DiNardo are celebrated. The starting salaried of the most sought-after among each year’s newly-minted economics PhDs are discussed:

My taste is for theory because developments in theory are where news is apt to be found. That’s why I liked Great Escape and Deaths of Despair so much.  Economics in America is undoubtedly the best book about applied economics I’ve ever read, its breadth and depth.  But it is a book about applied economics – the meat and potatoes topics that I have tended to avoid over the years. What I craved when I finished is a book about the one-time land of equality that is Britain today.

Other suzerainties exist in economics.  The same and/or credentials apply: presidency of the AEA and realistic hopes of a possible Nobel Prize. They tend to be associated with particular universities: Robert Wilson, Guido Imbens, Susan Athey, Paul Milgrom and Alvin Roth at Stanford; George Akerlof (emeritus), David Card and Daniel McFadden at Berkeley; Claudia Goldin and Lawrence Katz at Harvard; William Nordhaus and Robert Shiller at Yale; James Heckman and Richard Thaler at Chicago; Daron Acemoglu and Peter Diamond at MIT; Sir Angus Deaton, Christopher Sims, and Avinash Dixit at Princeton.

Alas, the reigning head of the suzerainty in which I am most interested, macroeconomist Robert Lucas, died earlier this year, and won’t soon be replaced. He succeeded Sherwin Rosen, his best friend in the business, in the AEA presidency in 2001. Rosen died the same year, a decade or two short of what might have been his own trip to Stockholm.

Leave a Reply

Your email address will not be published. Required fields are marked *