Roads to Wisdom: Conversations with Ten Nobel Laureates in Economics

Published by EH.NET (November 2011)

Karen Ilse Horn, Roads to Wisdom: Conversations with Ten Nobel Laureates in Economics. Cheltenham, UK: Edward Elgar, 2009.? vii + 369 pp. $55 (paperback), ISBN: 978-1-84844-694-6.

Reviewed for EH.Net by Lall Ramrattan, University of California, Berkeley Extension, and Michael Szenberg, Lubin School of Business, Pace University.
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Karen Ilse Horn states that the aim of this book is to ?shed more light on the miraculous process of the generation of excellence and progress in science? by way of probing the ?genesis and rise of new ideas, paradigms, approaches or methods … as ?history,? ?theory,? and ?personality of scholars.?? The target audience includes ?future scholars who might now grow up and later create different schools yet to be discovered.?

The ten Nobelists interviewed by Horn represent the prize given over a large span of time starting with Paul Samuelson, the first American to receive the prize (in 1970), and ending with Edmund Phelps, a 2006 Nobel Laureate. The sample is representative of mathematical economics (Samuelson), general equilibrium theory (Kenneth Arrow), experimental economics (Vernon Smith), growth theory (Robert Solow and Phelps), public choice theory (James Buchanan), social economics (Gary Becker), game theory (Reinhard Selten), and economic history and institutions (Douglass North). Although the economic Nobelists now number over sixty, the author justifies this selected sample on both subjective and objective bases to cover the ?leftist Keynesians,? the ?classical liberals,? people with methodologies ranging from ?the more formal to the more verbal approaches,? ?people of different generations,? and those ?with whom it would be fun and exciting and enriching to speak? (pp. 25-26).

Horn presents extensive background material on the sample of laureates in economic methodology. The book contains chapters with elaborate discussions of purpose and theory, choices and methods as well as postscripts on findings and insights. These sections are well researched for background materials, philosophical viewpoints, and learning perspectives. Indeed, they ?present the excellence of the laureates, which tends to be less disputed than that of other scholars? (p. 13). They are silver-platter presentations of the laureates? thoughts for our insatiable appetite, as ?we are boundlessly curious about their accomplishments, their motives, and the resources they bring to their tasks? (Szenberg quoted in Horn, p. 14).

Horn does not feel limited to only praise for the laureates. We learn that ?Economists at U.S. universities continued to receive the Nobel Prize? (p. ix), and a list of the laureates indicates that the recipients are mostly Americans.? On the exclusion of others, Horn cites Samuelson that, ?providing rewards to one elite would exclude from tribute a larger group of worthies whose body of research achievement is, if anything, only slightly different in quality and quantity? (p. 23). We may wonder also about other limitations the prize puts on the laureates: ?Sociologists of science study how the Nobel award affects a scholar. Do the laureates go into an era of depressed fertility? Do they write fewer or more joint papers and more often list their names first or list them last? Are they cited more frequently? What is the propensity to change fields?? (Samuelson 1986, Volume 5, p. 808). As far as we know, none of the ten have changed fields. Samuelson has left enough material for another two volumes, on top of his already five volumes of collective works. Phelps found that the prize has been constraining: ?Ever since I?ve received the Nobel Prize, I don?t have much time. I?m now really drawing on what I?ve done before. I don?t like that? (p. 242). In general, the laureates continue to write both joint and single papers, do research and attend conferences. Many became policy advisers. Their collected papers and their students tend to propagate the fruits of their erudition for future generations.

As for Horn?s method of investigation, the author chose to interview the laureates because this method allows for a recollection of their true lives. The question arises as to whether this approach peeks too much into the private lives of the laureates. The answer turn on the type of questions asked.? If the question is not of the nature of investigative journalism, then the information would be provided in a voluntary way, a retelling of the laureates? achievements. Such an interviewing technique helps to provide ?some increased understanding, if only one goes about it in a respectful, sympathetic way? (p. 286).

It is clear that the ?Roads to Wisdom? would not be dialogues of the nature of Plato?s Republic, but somewhat more of the nature of dialogue in Hemmingway?s Old Man and the Sea. As Horn illustrates, if one wants to catch a glimpse of the General Theory of John Maynard Keynes, one can use ?The Advantage of Old Age,? for ?as these people look back, they remember and communicate things that are beyond younger people?s own reach? (p. 14). A quote from Samuelson?s entry illustrates this point: ?The Great Depression was not Euclidian geometry. I was very sensitive to this mismatch, that is to the fact that what I was learning in class could not rationalize for me the fact that almost every bank in my neighborhoods in Northern Indiana and Illinois went broke. … To try to handle this kind of disequilibrium system with the historic tools of economics … was impossible? (p. 47).

Horn observes some of the ten contributions from a paradigmatic point of view.? Buchanan, for instance, came up with a ?whole new paradigm? of looking at collective choice and the world (p. 89), Solow was a ?puzzle solver? (p. 114), Arrow, who is also a ?puzzle solver? (p. 89), is ?open to requests? and has ?done things that were sort of implied in the literature? (p. 61), Samuelson is carried as a ?generalist? with contributions to theories of trade, consumption, capital, growth, dynamics and stability, business cycles, and public finance (pp. 40-41), and Phelps is carried as performing a ?paradigm shift … that there can be unemployment in equilibrium? (p. 245). In a section titled ?Puzzle Solvers or System Builders,? Horn shows how the contributors? works fit into the Kuhnian concept of paradigm (pp. 298-99).

There is yet another sense in which all ten participants are paradigmatic — they authored major works that serve the scientific community. To name a few, Samuelson gave us the Foundations of Economic Analysis, which synthesizes classical with neoclassical thoughts (p. 50); Arrow gave us Social Choice and Individual Values, which proposes the Arrow?s impossibility theorem; Buchanan co-authored The Calculus of Consent, which distinguishes between constitutional and day-to-day political phenomena (p. 103); Solow authored ?A Contribution to the Theory of Economic Growth,? expounding the famous ?Solow residual? that measures technological progress; Becker outlined The Economics of Discrimination, which advanced the ?discrimination? coefficient; North gave us ?cliometrics,? which is a way to measure history; Selten gave us the ?trembling hand? solution to game theory; Akerlof gave us the ?lemons? problem, which studies how to separate good from bad risks; and Smith established ?laboratory experiments? for economics. Last but not least, Phelps gave us the ?expectations-augmented Phillips curve.? Those contributions of the ten laureates are not exhaustive of their works, but represent the foundation of their paradigmatic contributions.

There seems to be a correlation of wisdom with age in this text. The average age of the laureates in this sample is 67. The author appeared tempted to take a stand that wisdom comes with age, but soon backed off such a position in reasoning that ?age doesn?t always necessarily square with wisdom, but in most cases that I know of, there is at least some grain of truth in the saying? (p. 14). If we subtract the fact that the prize is awarded for work done for the prior 20 to 30 years of their lives, their scientific achievements are only slightly later in age than the achievers in mathematics, for which the prize is not given, and the physical sciences. The interviews indicate the laureates? stand in the domain of economics regarding methodology, vision, model building, forecasting, experimenting, welfare and development.

In general, by concentrating on the sample of laureates, the author is able to provide deep insights into their contributions, which explains the 369 pages of the book. We learn that crisis situations such as the Great Depression and post-war inflation create desperate calls for new thinking, which bring forth new theories and approaches. The book demonstrates that many research programs and problem solutions have resulted in the progress of economics. The vocabulary of economics has been enriched by core thoughts of the ten contributors, which will provide practitioners of economics with challenging problems to be solved in the twenty-first century and beyond. This fine, absorbing and lucid book has the potential of serving as an inspiration to new generations of economics students.

Reference:

Samuelson, Paul, ?Economics in My Time,? in The Collected Scientific Papers of Paul A. Samuelson, edited by Kate Crowley, (Cambridge, MA: MIT Press, 1986, Volume V), pp. 797-808.

Michael Szenberg and Lall Ramrattan are authors and editors of several books, including Franco Modigliani, A Mind That Never Rests (Palgrave Macmillan, 2008), Samuelsonian Economics and the 21st Century, eds., (Oxford University Press, 2006), with a Foreword by Kenneth Arrow, and New Frontiers in Economics, eds., (Cambridge University Press, 2004), with a Foreword by Paul A. Samuelson. They are the authors of many scholarly articles and encyclopedia entries such as in the International Encyclopedia of Social Sciences, and the Encyclopedia of Quantitative Finance.

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