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« The Great Disruption in Economic Thought | Main | Institutions Matter, But Fixing Economics Requires More Than Just Saying That »


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Just two notes:

1) I agree that Samuelson missed the large new institutionalist lit focused on how varying tranactions costs (admittedly a fuzzy term including even the kitchen sink) alter how thins turn out, and that Coase was focused on this part of it, not the polar case emphasized by Stigler and textbooks. So, as Cheung noted in his "Fable of the Bees," we see orchard owners paying beekeepers to locate next to their orchards thereby internalizing positive externalities of pollination in that near-zero transactions cost case, whereas we are unable to get feasible global agreements about global warming where transactions costs are enormous.

2) I also agree that Samuelson responded inappropriately to Hayek's letter about Samuelson claiming he made a strong "slippery slope" argument in his Principles book. OTOH, it must be noted that Hayek never went out of his way to discourgage doggerel versions of RtS, such as the Readers' Digest version that essentially made such an argument, which is widely made by many who claim to be "Hayekians" even in current policy discussions (perhaps some of the "amateurs" that have had Pete upset recently).

Barkley, maybe Samuelson only read the Reader's Digest version.

"Fruitful" in what sense?

Economics is driven by self-interest & the bureaucratic structure of academia. "Fruitful" must be understood from the methodological individualist point of view of incentives facing the academic.

"Fruitful" = having a simple & univocal formal metric of "good" which makes teaching simple, Ph.D dissertation evaluation simple, peer review, advancing ones career simple, picking Clark winners & Nobel Prize winners simple, etc.

"Fuitful" = having formal puzzles with "objective", fixed solutions.

"Fruitful" = having endless statistical projects to crank through and publish.

"Fruitful" = having endless statistical problems to teach from a textbook.


"Hayek never went out of his way to discourgage doggerel versions of RtS" -- Rosser

Note that Hayek's permission was never asked nor granted before the Reader's Digest "version" was printed. That was the decision of Hayek's publisher, and Hayek wasn't involved in the decision.

John K. Galbraith was intentionally mis-reporting the content of Hayek's The Road to Serfdom and other aspects of Hayek's work in official AEA publications, for no reason but partisan advantage against a "political opponent" -- left economists did this *routinely* to Hayek.

What Samuelson did was common practice among left economists -- intentionally misreport Hayek's perspective in order to marginalize Hayek as an economists.

Arrow did it also. As did Keynes.

It was accepted academic practice in the day.

I should point out that Robert Solow is still using this strategy of misreporting Hayek's work as a technique in intentional marginalization of rival scientific work.

How does Samuelson rate as an economist in view of his commentary on the Soviet economy?

When will Stanley Wong get proper recognition for his demolition job on Samuelson on revealed preference? http://www3.nd.edu/~pmirowsk/pdf/Wong_Introduction.pdf

Interesting to note, despite Mirowski's dismissal of Wong's reference to Popper, the "little gem" is Popperian through and through, due to the influence of Larry Boland. It is an outstanding illustration of the power of Popperian/Austrian Situational/Institutional Analysis and the reconstruction of intellectual/scientific problem situations.

Incidentally Wong's experience, described in the preface to the new edition, also illustrated the dysfunctional intellectual climate of the economics profession, to the point where he quit and made a career in the law.

I happen to own the collected scientific paper of Samuelson, 7 volumes, several of them over 1000 pages in length. I have strongly disagreed with him on a number of issues and did so to his face the first time I ever met him over 40 years ago. It could be argued that he is the ultimate whipping boy of much of my complexity economics work, which he took with good humor, more or less.

There are many things he did that were either outright wrong, such as his presentation of the Soviet economy growth prospects in a bunch of editions of his Principles text and his characterization of Hayek's "slippery slope" views, along with lots of other stuff.

But, I would agree with Pete that whether one thinks he is the most brilliant economist who ever lived or the ultimate demon of economics of the 20th century (or something in between, with being brilliant not necessarily ruling out also being demonic, as it were), he probably was the most influential economist of the 20th century with a massive influence running through many different sub-fields to the point that much of it people forget was originally from him in the field textbooks, to, yes, the foundations as his PhD thesis addressed. Whether you like him or not (and my feelings are and were very mixed), one cannot deny his enormous influence, for better or for worse.

Nobody can deny his influence, just look at the way his textbook was standard for many years. The result of that is rather alarming if you think that he scored a trifecta of errors (abuse of maths, Keynesianism and the welfare state). How long will it take to wash Keynesian thinking out of the system if so many generations of students (now citizens) grew up on Samuelson's standard text?

Paul Samuelson straight up explained why his textbook economics took the form it did -- he constructed his textbook to fit the skills and interests of math-centric MIT engineers.

Think about that just a little bit. The textbook was no designed to capture and convey an understanding of the way the world works, it was designed to fit the math interests and math skill of undergraduate engineers.

I don't no were he explained that, but he was very up front about the genesis of his textbook economics.

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