Paul Samuelson 1915 – 2009
To die at 94, still compos mentis, still engaged in the economic debate, is astonishing. Some people seem to be born lucky, and Samuelson is one of those people. Like many who grew up during the Great Depression, and like many of those who came after such as myself, one of the most important roles for economic theory and policy is to ensure there are as many jobs around as there are people who wish to work. It was this that was and is the major attraction of Keynesian economics. It appears to provide economists with a tool for maintaining high rates of employment without undermining economic growth and living standards.
Paul Samuelson taught Keynesian economics to the world. His 1948 text Economics, now in its 19th American edition, with local editions sold worldwide and no end of translations, was the book from which two (three?) generations of economics students learned their basic theory. Virtually all textbooks today seem to be a clone of some sort from that original source. I have a 1940 American text sitting beside me as I write, Principles of Economics by Lewis Froman, which is almost entirely words on the page with only a few diagrams and a handful of charts. Modern students are about as likely to get through that as they would The Wealth of Nations. Bad luck for modern students, but it was very good luck for Samuelson that he was able to put such a revolutionary text on the market when he did.
It was Samuelson himself who noted that once something gets into the textbooks, there is no getting it out again. It was his role to get the Keynesian blight into the economics texts of the world and in a way that everyone could understand. As I discovered from my HET colleague, Michael Schneider, Samuelson invented the ubiquitous 45-degree line with its C+I+G in 1939, a mere three years after Keynes’s General Theory was published. So far as macro is concerned, from a Keynesian perspective this is all one needs to know, and so far as I can tell when looking at macro policy, it is near enough to being all that anyone actually seems to know.
His other major contribution to economics was to hasten it towards its mathematisation which remains something of a curse to this day. Economics and mathematics are in some sense made for each other. Both are about numbers, concepts and abstract ideas. The intrusion of mathematics into the theoretical side of economics owes a great deal to Samuelson’s 1941 Foundations of Economics whose approach has spread like a weed across the whole of the discipline. I don’t agree with Keynes on much but his criticisms of the rise of econometrics in economics ought to be taken to heart (see Robert Skidelsky’s Keynes (2009) pages 88-90 for a fuller and quite interesting discussion). It need hardly be said that The Wealth of Nations would have had no impact had it been written as a set of equations. A battle continues within economics over the role of mathematics. Samuelson helped take the discipline in one direction which has made its close study almost without interest to the general population. The fall off in student numbers within schools of economics is to a significant extent a long-run effect of Samuelson’s work.
Samuelson was, however, a major contributor to the history of economic thought. Here within economics is a sub-branch, as important to the continued health of the subject as mathematics, which is nonetheless dying on the vine. The direction of economics towards abstract mathematics and away from rhetoric and argument has left economics without the kind of presence it needs to have. Economics has almost no history that an economist would be expected to know. There are a few ancient fables that economists pick up along the way, but there is no true effort to ensure that economists actually know about the history of their subject or about the economic history in which economic theory played a role. Economists seem to want to be like physicists where the history of their subject is of no genuine interest to themselves as economists. But economics is a social not a physical science in which its own history is part of what an economist needs to know. Samuelson understood this, as his many ventures into HET clearly show. He may well have been the greatest historian of economics during the whole of the twentieth century. I am not the first to say this.
I would finally like to add a personal note. Paul Samuelson was a kind man and free with his time. I wrote to him myself last year to seek his comment about a paper I had written since it involved his own role in the Keynesian Revolution. To my surprise, it pleases me to say, he wrote back a very kind and chatty letter almost a page in length.
Paul Samuelson understood the importance of ideas in shaping the world. It is his ideas as a disciple of Keynes that, for better or worse, now shape policy decisions across the entire world.