Paul Anthony Samuelson
Samuelson, Paul A.
Samuelson, Paul A. 1915-
If one could do a mental time-and-motion study of a modern economic theorist at work, a large fraction of what he or she actually does from day to day would turn out to have its origins in Paul Samuelson’s work. In that precise sense, Samuelson has been the economist’s economist.
Paul Anthony Samuelson was born in Gary, Indiana, on May 15, 1915. He graduated from Hyde Park High School in Chicago in 1932 and went on to the University of Chicago and an already precocious B.A. in 1935. The next step proved to be important: he moved to Harvard for his Ph.D., studying with Joseph Schumpeter (1883–1950), Gottfried Haberler (1900–1995), Wassily Leontief (1906–1999), and, more to the point, the polymath Edwin Bidwell Wilson (1879–1964), from whom he may have learned some tricks of the trade in dealing with equilibrium systems of equations. From 1937 to 1940 Samuelson was a junior fellow of the Harvard Society of Fellows; that was—and is—a plum appointment, providing a stipend, stimulating company, and three undisturbed years in which to pursue one’s own research. In 1940 he was appointed assistant professor of economics at Massachusetts Institute of Technology (MIT), retiring as institute professor emeritus in 1986. If Harvard had retained Samuelson as an assistant professor, the history of economic thought might not have been affected, but the center of gravity of economic teaching would not have shifted so strongly toward MIT. Anti-Semitism certainly played a significant role in Harvard’s failure to keep him, but there were other factors as well: Lloyd Metzler and James Tobin also slipped away.
Samuelson has probably been the last great generalist in economics. His five volumes of published papers (with more in the works) range from the pure theory of consumer demand to macroeconomics and the history of economic thought. The place to start, however, is with The Foundations of Economic Analysis, published in 1947 (and reprinted with additions in 1983) but already containing the results of earlier articles. It is fair to say that this book was the major influence in the transformation of economics into the mathematical-model-building discipline it is today.
Of course there had been many important prior uses of mathematics in economic theory. What the Foundations did was to turn scattered stand-alone efforts into a paradigm, in Thomas Kuhn’s (1922–1996) original sense of a standard way to answer standard questions. In particular, Samuelson explained, exemplified, and inculcated the notion of comparative statics, aimed at answering a fundamental class of questions: how do the coordinates of an equilibrium point defined by a system of equations shift when one or more of the given determining parameters changes? Bread-and-butter examples range from determining the effects of a changing excise tax on the price and quantity of a single good to determining the effect of a changing quantity of base money on the basic variables of a macroeconomic model. A second focus of the book was on the logic of constrained maximization, and a third on the importance of explicit dynamic modeling both for its own results and for understanding the stability, and therefore the significance, of a longer-run equilibrium. The wealth of examples was an eye-opener to younger economists.
Despite the broad landscape over which his work has ranged, there are especially important concentrations. His first three articles, dating from 1937 to 1938, are on utility theory and consumer behavior, the pure theory of capital, and welfare economics and international trade. The theory of consumer behavior has been on Samuelson’s mind for seventy years.
There is a story that, asked by a science department colleague at MIT to name a theory in economics that was neither false nor trivial, Samuelson named the theory of comparative advantage. True to his word, he has made outstanding contributions to the theory of international trade. They include a complete statement and clarification of the gains from trade, the factor-price equalization theorem (when does free trade in produced goods induce uniform prices of immobile factors, wherever they are, and when does it not), the transfer problem, and more.
Yet another such monument is the theory of public goods (initiated by Erik Lindahl [1891–1960] but worked out in its modern form by Samuelson). These are goods the use of which by one “consumer” does not foreclose use by others. Examples include weather forecasts, national defense, and clean air. Instances with a “public-good element” outnumber the pure public goods, and this adds importance to the problem.
There is room merely to mention only one more of these clusters in Samuelson’s work, the theory of finance. Here he has not only made contributions himself—for example, the martingale property of asset prices, and even the beginning of a theory of option pricing—but he has directly inspired the work of others. For further references, comments by specialists, and discussion of Samuelson’s contributions to still other branches of economics, see E. Cary Brown and Robert M. Solow (1983) and Michael Szenberg et al. (2006).
What has been described so far was aimed at other economists. Another side of Samuelson’s activity has been directed at a broader public. Apart from columns in newspapers and magazines in the United States and elsewhere and many public lectures, there is the famous elementary textbook Economics. The first edition was published in 1948, with up-to-date revisions published at approximately three-year intervals until 1985, when it acquired the joint authorship of William D. Nordhaus of Yale. Successive editions have followed, the 2005 edition being the eighteenth. For many years Economics was the runaway leader in sales, but it was eventually overtaken by other textbooks, most of which had imitated the form and tone that Samuelson had pioneered.
Economics was an innovator in several respects. The textbook taught economics to beginning students as the model-building enterprise it had become, taught to them in simplified form, of course. Students were expected to use the supply-and-demand apparatus or a simple macro-economic model as devices for understanding made-up events, and also real-world data. It was a style of teaching that lent itself to problem sets, certainly appropriate at MIT but equally appropriate to the view of economics as a pragmatic discipline, a “How Things Work” discipline. The three-year revisions were intended to keep the noses of students, classroom teachers, and the author to the grindstone of what was actually happening in the economy at large. The unity of theory and practice has been a hallmark of Samuelson’s work.
Samuelson, Paul A.  1983. Foundations of Economic Analysis. Enlarged ed. Cambridge, MA: Harvard University Press.
Samuelson, Paul A. 1966–1986. The Collected Scientific Papers of Paul A. Samuelson. Vols. 1–5. Cambridge, MA: MIT Press.
Samuelson, Paul A., and William D. Nordhaus. 2005. Economics. 18th ed. Boston: McGraw-Hill.
Robert M. Solow
Samuelson, Paul Anthony
SAMUELSON, Paul Anthony
Samuelson was born to Frank, a pharmacist, and Ella (Lipton) Samuelson. He enrolled at the University of Chicago when he was sixteen, before he finished high school, and completed a B.A. in economics in 1935. He was the first person to be awarded an economics fellowship by the Social Science Research Council, which provided financial support for his continuing studies in economics at Harvard University. He earned an M.A. from Harvard in 1936 and his Ph.D. in 1941, both in economics. During World War II, Samuelson was a consultant to the National Resources Planning Board from 1941 to 1943 and the War Production Board and the Office of War Mobilization and Reconstruction in 1945.
Samuelson was renowned even before completing his graduate studies at Harvard. His first major published work, Foundations of Economic Analysis (1947), was developed from his dissertation. The work demonstrated his promise as a scholar, and he was honored with the American Economic Association's John Bates Clark Medal in 1947, awarded to promising scholars under the age of forty.
He married Marion E. Crawford on 2 July 1938; they had six children. Crawford died in 1978; Samuelson married Risha Eckaus in 1981. Samuelson joined the economics department at the Massachusetts Institute of Technology (MIT) in 1940. He was named associate professor in 1944, was promoted to full professor in 1947, and received a Guggenheim Fellowship the following year. He was awarded a Ford Foundation Research Fellowship in 1958. In his years at MIT, Samuelson helped create what he would later describe as "a leading world center for economics." He was named institute professor and chairman of the economics department in 1966.
John F. Kennedy made the sluggish rate of U.S. economic growth vis-à-vis the Soviet Union the leading issue in his successful presidential campaign in 1960. Samuelson, who began advising Kennedy during the 1950s, was instrumental in shaping Kennedy's economic arguments. Samuelson declined Kennedy's offer to become chairman of the Council of Economic Advisers, recommending University of Minnesota economist Walter Heller in his place. Samuelson's influence within the Kennedy administration was as great, however, as that of Heller and the other members of the Council.
The president-elect gave Samuelson the job of drafting a transition report on the economy to serve as a policy roadmap for the new administration. The report reflected Samuelson's belief that measures taken during the Eisenhower administration to hold down prices might also be stifling economic growth. "Avoiding inflation," he later wrote, "is not an absolute imperative, but rather is one of a number of conflicting goals that we must pursue and that we may often have to compromise." Accordingly, he envisioned a constant struggle, necessitated by growth at or near inflationary levels, that would enable the economy to grow without the uncertainty of volatile price shifts.
In his report Samuelson advocated aggressive action to boost the economy. During his first few months in office Kennedy called for a 10 percent increase in defense spending. This move reflected the Kennedy administration's view that Eisenhower's efforts to control defense expenditures out of concern for the domestic economy were neither warranted nor wise. Samuelson endorsed this position by maintaining that defense expenditures ought not "be kept below the optimal level needed for security because of the mistaken notion that the economy is unable to bear any extra burdens." While the White House argued that the defense-spending increases were predicated on their strategic merit, Samuelson observed that "any stepping up of [defense] programs that is deemed desirable for its own sake can only help rather than hinder" the health of the economy.
Samuelson labored to convince the president of the merits of Keynesian economics, and he was instrumental in convincing Kennedy to drop plans for a tax increase during the summer of 1961. By the summer of 1962 Kennedy's opposition to deficit spending had softened, and his support for a Keynesian-style tax cut in 1963 reflected Samuelson's success in promulgating these ideas within the White House.
Samuelson's influence was not restricted to policymaking in the 1960s. He also shaped professional and popular attitudes toward economics through his regular columns in Newsweek magazine from 1966 to 1981. Meanwhile, he continued to influence economic theory at a professional level, and his peers repeatedly recognized him as a leader in the field. He was president of the American Economic Association in 1961 and served as president of the International Economic Association from 1966 to 1968.
Samuelson helped train a generation of students through his introductory textbook, Economics. First published in 1948, the book reached the pinnacle of its influence in the 1960s as a new generation of economics professors used Samuelson's simple yet sophisticated description of the basic principles of economics to teach hundreds of thousands of undergraduates. The editions published during the 1960s sold over 1.1 million copies.
In his writings Samuelson established the key features of post-Keynesian economics, a framework characterized as the postclassical or neoclassical synthesis. The central features of this synthesis combined many of the macroeconomic principles of Keynesianism—especially faith in the use of government fiscal policy to maximize economic performance—with classical theory, which celebrated the operation of the free market and focused especially on consumer behavior.
Samuelson rejected the libertarianism of contemporaries, such as Milton Friedman, in part because he doubted the morality of a strictly laissez-faire economic system that tolerated great disparities in wealth between the rich and the poor. Instead, he believed the government had a role to play in ensuring high levels of employment, and he was an enthusiastic supporter of the welfare programs embodied in President Lyndon B. Johnson's War on Poverty of the mid-to late-1960s.
In 1970 Samuelson was awarded the Nobel Prize for economics, the first American to be so honored. In awarding the prize the Swedish Royal Academy of Sciences praised him for his contributions "covering nearly every area of economic theory," concluding that Samuelson "had done more than any other contemporary economist to raise the level of scientific analysis in economic theory." Samuelson also was awarded the Medal of Science in 1996.
Samuelson's influence during the 1960s contributed to, and was reflective of, the ascendancy of Keynesian economic theory. Through the hundreds of columns and articles he published for both scholarly and popular audiences, Samuelson facilitated a dramatic transformation in the way in which political leaders and the public thought about government spending and taxes, budget deficits, inflation, and economic growth. By the end of the 1960s Keynesian principles dominated economic discourse and served as the foundation for the government's economic policies.
Samuelson's scholarly writings are published in five volumes in Joseph E. Stiglitz, ed., The Collected Scientific Papers of Paul A. Samuelson (1966–1986). Many of his Newsweek columns from the 1960s are in The Samuelson Sampler (1973), and others are in MaryAnn O. Keating, ed., Economics From the Heart: A Samuelson Sampler (1983). Samuelson reflects on his career in William Breit and Roger W. Spencer, eds., Lives of the Laureates: Seven Nobel Economists (1986). In addition to his classic textbook, Economics: An Introductory Analysis (1948), Samuelson's approach to economics during the 1960s is described in Problems of the American Economy: An Economist's View (1962); Stability and Growth in the American Economy (1963); and, with Arthur F. Burns, Full Employment: Guideposts and Economic Stability (1967). See also Mark Skousen, "The Perseverance of Paul Samuelson's Economics," Journal of Economic Perspectives (spring 1997): 137–152. Biographical information about Samuelson and analyses of his writings are in George R. Feiwel, ed., Samuelson and Neoclassical Economics (1982); C. Cary Brown and Robert M. Solow, eds., Paul Samuelson and Modern Economic Theory (1983); Stephen Martin, "Paul A. Samuelson," in Thinkers of the Twentieth Century (1987): 670–672; John C. Wood and Ronald Woods, eds., Paul A. Samuelson: Critical Assessments (1989); and K. Puttaswamaiah, ed., Paul Samuelson and the Foundation of Modern Economics (2001).
Christopher A. Preble
Paul Anthony Samuelson
Paul Anthony Samuelson
The American economist Paul Anthony Samuelson (born 1915) was the most distinguished of the economists who entered the profession during and after the mid-1930s—the "Keynesian generation." He was frequently referred to as the last of the generalists.
Paul Samuelson was born on May 15, 1915, in Gary, Indiana. He graduated from the University of Chicago in 1935 and pursued graduate study in economics at Harvard University, where he received the master's degree in 1936 and the doctorate in 1941 and was made a member of the prestigious Harvard Society of Junior Fellows. In 1940 he joined the faculty of the Massachusetts Institute of Technology.
Samuelson's Foundations of Economic Analysis and numerous pioneering articles on economic theory, statistics, mathematical economics, and the important postwar policy issues placed him among the select few of the world's leading economists by the 1940s. In 1947, he was awarded the John Bates Clark Medal, which acknowledged him as the outstanding American economic scholar under the age of 40.
A continuing steady stream of scientific books and articles and the appearance of Samuelson's textbook, Economics: An Introductory Analysis (1948), made him not only the most respected but also the best-known economist of his time. His Economics had been the standard textbook in the United States and throughout the world for more than two decades. Its unprecedented success was of course attributable to its overall greatness. However, high on the list of specific reasons were Samuelson's concern with the big, vital economic issues, his changing of these issues as appropriate with each new edition, and his sparkling and lucid writing style, which made these issues come alive to both teacher and student. He also wrote Economics from the Heart: the Samuelson Sampler (1983); and co-authored with William D. Nordhaus, Microeconomics (1989) and Macroeconomics (1989).
Samuelson was president of the Econometric Society (1951), the American Economic Association (1961), and the International Economic Association (1965-1968). In 1970 he was awarded the Nobel Memorial Prize in Economics, the first American economist to be so honored. In 1991 MIT established the Paul A. Samuelson Professorship in Economics in his honor. In 1996 Samuelson received the Medal of Science, the nation's highest award in science and engineering, for his contributions to economic science, education and policy and for establishing both the agenda of modern economics and scientific standards for economic analysis. He received honorary degrees from a host of colleges and universities. He delivered, among many other prestigious lectures, the Stamp Memorial Lecture (London, 1961), the Wicksell Lectures (Stockholm, 1962), and the Franklin Lecture (Detroit, 1962).
Samuelson, a leading figure in the new, more activist intelligentsia, was an advisor to President's Kennedy, Johnson and their Councils of Economic Advisers, government agencies, and other public and private institutions. His frequent appearances on television and radio and in the printed media made Samuelson's name, and his economic views on vital economic issues, widely familiar. He, along with several other MIT faculty members, made President Nixon's "enemies list" for his harsh criticism of the economic policies of the Nixon administration. The economics profession became accustomed, over three decades, to hearing MIT students proclaim, with justifiable pride, that they were taught by Professor Samuelson. In a much broader sense, he taught more economics to more of the world's citizenry than any other economist of the 20th century.
Information on Samuelson was in Lawrence Boland, The Methodology of Economic Model Building: Methodology After Samuelson (1989); John Cunningham Wood and Ronald Woods, Paul A. Samuelson: Critical Assessments (1989); E. Cary Brown and Robert M. Solow, Paul Samuelson and Modern Economic Theory (1983); George Feiwel, Samuelson and Neoclassical Economics (1982); Marc Linder, The Anti-Samuelson (1977); Ben B. Seligman, Main Currents in Modern Economics: Economic Thought since 1870 (1962); and in Robert Lekachman, The Age of Keynes (1966). □
Samuelson, Paul Anthony
SAMUELSON, PAUL ANTHONY
SAMUELSON, PAUL ANTHONY (1915– ), U.S. economist. Born in Gary, Indiana, Samuelson received his B.A. from Chicago University in 1935 and his M.A. (1936) and Ph.D. (1941) from Harvard University. He first taught at Harvard (1937) and from 1940 at the Massachusetts Institute of Technology, where he was appointed professor in 1960. From 1941 to 1943 he served as consultant to the National Resources Board, from 1945 to the War Production Board, and from 1945 to 1952 to the U.S. Treasury. In 1948 and 1949 he was chairman of the U.S. President's Task Force for Maintaining American Prosperity. His major interests were economic theory, statistics, business cycles, mathematical programming and econometrics.
In 1970 he was the first American to be awarded the Nobel Prize for Economics for his efforts to "raise the level of scientific analysis in economic theory." From 1966 to 1981 he wrote a regular column in Newsweek.
After retiring from teaching, he became professor emeritus at mit.
Among his many published and widely translated works are Foundations of Economic Analysis (1947); Economics – An Introductory Analysis (1948, 18th edition 2004), the bestselling economics textbook of all time; Readings in Economics (1952, third edition 1958); Linear Programming and Economic Analysis (with R. Dorfman and R.M. Solow, 1958); Stability and Growth in the American Economy (Stockholm, 1963); International Economic Relations (1969); Economics from the Heart (1983); and The Collected Scientific Papers of Paul A. Samuelson (five volumes, 1966–86).
Current Biography Yearbook 1965 (1965), 356–9. add. bibliography: M. Linder and J. Sensat, The Anti-Samuelson (2005).
[Joachim O. Ronall /
Ruth Beloff (2nd ed.)]
Samuelson, Paul Anthony
SAMUELSON, Paul Anthony
SAMUELSON, Paul Anthony. American, b. 1915. Genres: Economics. Career: Massachusetts Institute of Technology, assistant professor of Economics, 1940-44, associate professor and staff member, Radiation Laboratory, 1944-45, professor, 1947-66, Institute professor, 1966-86, Institute professor Emeritus, 1986-. Consultant, National Resources Planning Board, 1941-43; professor, International Economic Relations, Fletcher School of Law and Diplomacy, Medford, MA, 1945-47; Consultant, U.S. Treasury, 1945-52; Member, Advisory Board, National Commission on Money and Credit, 1958-60; Consultant, Council of Economic Advisors, 1960-68. Recipient: Nobel Prize in Economics, 1970. Publications: Foundations of Economic Analysis, 1947; Economics, 1948, 17th ed. (with W. Nordhaus) 2001; (ed.) Readings in Economics, 1955; (with R. Dorfman and R. M. Solow) Linear Programming and Economic Analysis, 1958; The Collected Scientific Papers of Paul A. Samuelson, vols. I and II, 1966, vol. III, 1972, vol. IV, 1978, vol. V, 1987. Address: MIT, E52-383C, Department of Economics, Cambridge, MA 02139, U.S.A.