Tuesday, December 15, 2009

Paul Samuelson RIP, where R = Requiescat, I=In, P=Pace

By William L. Anderson

The recent death of Paul Samuelson, the 1970 Nobel Prize winner in Economics, is ironic, for it was Samuelson who popularized Keynesian economics in this country, and the Obama administration has jumped fully onto the Keynesian bandwagon. Thus, Samuelson dies even as his influence grows, at least among the political classes.

I never was a fan of Samuelson, and while I will try not to speak too much ill of the recently departed, nonetheless I think the guy was bad for economics and he leaves a legacy of economic wreckage and bad theory. However, I will concentrate today on one of his legacies: the transformation of economics from something that an educated layperson could understand to a branch of inferior mathematics.

Samuelson published his doctoral dissertation in 1948 with the title of Foundations of Economics. In that book, he argued that economics had to adopt the analysis of the physical sciences if it was to be accepted as a science at all. While his famous textbook was the standard of college economics classes for many decades, it was Foundations that ultimately helped to create the intellectual morass that is academic economics today.

Before Samuelson hit the scene, the top economic journals published essays that could be read by any educated individual. For example, F.A. Hayek's 1945 essay "The Use of Knowledge in Society" in American Economic Review is a real classic which is timeless in its relevance and has been read by thousands of people, including many who have had no training in higher math. Ronald Coase's "The Problem of Social Cost," published in 1960 in the Journal of Law and Economics, is not written in the usual mathematical style that dominates the journals today, yet it is one of the most cited papers in academic economics.

I can think of no advantage that using high-level math brings to economic analysis. None.

Read the rest here.

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