Paul Samuelson and the State

Here’s a letter that I sent earlier today to The Economist:

SIR:

You eloquently celebrate the life of the late economist Paul Samuelson (“Economic Focus,” Dec. 19). But it bears pointing out that, for all of his undoubted brilliance, Mr Samuelson did not examine government with the same rigorous skepticism that he brought to his examination of markets. Consider your own accurate summary of his view of financial markets: “Yet Mr Samuelson also understood that beyond the ivory tower the conditions necessary for efficient markets rarely existed; they needed regulating.”

Mr Samuelson jumped to this conclusion about the need for regulation far too cavalierly.

Neither as a matter of logic nor of history do market imperfections necessitate government regulation. Even on purely economic grounds, regulation might do more harm than good – a fact downplayed by Mr Samuelson. Mr Samuelson’s healthy skepticism of dreamy ivory-tower notions of market efficiency was strangely accompanied by his own dreamy ivory-tower notions of government efficiency.

Sincerely,
Donald J. Boudreaux

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garfield12345

Paul Samuelson and Milton Friedman were the two most influential economists of my era. Samuelson's view of policy was undoubtedly shaped by the ivory-tower view of the 30s, which was certainly not one of dreamy notions of government efficiency. Today, dreamy notions of government efficiency and market efficiency are both too prevalent inside the ivory-tower as well as outside the ivory-tower. Rigid adherence to any particular economic dogma is dangerous. Paul Samuelson advanced our understanding of economics in ways few others can claim.

Bill Stepp

Garfield 12345,

I must dissent from your view of ivory-tower economists' views of the 30s, which was well captured by Stuart Chase's book (forget which year) about how economic planning could save the economy. It was a template for the New Deal planners. Samuelson was too young to have participated in New Deal planning, but there is no doubt that he would have approved had he been old enough to do so.

mark

"Today, dreamy notions of government efficiency and market efficiency are both too prevalent inside the ivory-tower as well as outside the ivory-tower. Rigid adherence to any particular economic dogma is dangerous."

Oh, thanks for the sobering advice. I was about to get too enthusiastic about free exchange. I'm glad we such wisdom to draw from.

vidyohs

Why Mark,

I am surprised that you fail to see that being dogmatic and inflexible about your own personal freedom can be dangerous.

And it is even more surprising that the same view of economic freedom slips by you, and is therefore dangerous.

As Clinton (and garfield12345) said, we people just have too damn much freedom. Dangerous situation to be sure.

garfield12345

Yes, Bill and Garfield are after your freedoms, all of them. Socialism has been so successful. Better call Rush quick. Oh, I forgot, you're on Mars.

vidyohs

Yep, tis lovely up here where I have an unrestricted view of fools and idiots.

The fact that socialism is unsuccessful is the talking point of a conservative, and only a fool would think otherwise.

Socialist like Bill and Obama, perhaps garfield12345, don't give a shit that it is unsuccessful, its success is not the point with them, it is the power to control people and wealth that matters. When one culture crashes due to socialism, they just move on to another.

Talk to muirduck, garfield12345, you bore me.

garfield12345

The only things Bill and I have in common are race and gender. The only thing Obama and I have in common is gender. If you're actually anti-socialist, you need to distinguish between friend and foe a little better. I have no idea who muirdock is, but you and him have fun.

garfield12345

Thanks

vidyohs

Snicker.

vidyohs

An academic and a old time Cajun went fishing together because the Cajun promised the Professor that he would get fish.

Out on the bayou far from habitation the Cajun stopped his boat, ignored the fishing poles on the bottom of his piroux and reaching into a cupboard under the gunwale of the boat pulled out a box with a number of sticks of fused dynamite in it.

He lit the fuse of one and tossed it into the water, BOOM, and shortly a lot of large fish floated to the top of the water. The professor watched in total disbelief; and he said to the Cajon, "My good man that is against the law and immoral."

The Cajun smiled and handed the professor a stick of dynamite, lit the fuse and asked, "You come to fish or no?"

The point is that too many people miss the simple point of the whole exercise. To the Cajun it was to get fish, to the professor it was to play around in amusement.

Maybe Mr. Samuelson just liked to play in his own head way too much.

Methinks1776

If only he kept his games confined to his head.

Justin P

I have a very pessimistic view of Ivory Tower Intellectuals of late. Not a knock against Don or Russ, but the profession as a whole is a rotten corpse.
I think Don and Russ and a few others scattered around the country are but small beacons of light in a sea of darkness.

Is it any wonder that so many Academics promote Government, when their paychecks come from the US Treasury?

Methinks1776

Justin, I grew up around the Ivory Tower and share your disdain for it. Don and Russ are not the norm, for sure. Rotten corpse is a good way to describe it.

I don't know about paychecks. Academia suffers from an enormous amount of pathological narcissism. Few attain the level of a Ph.D. after all. Since they have, they must be smarter than you and better able to make decisions for you than you are. The detachment from reality that exists in academia is astonishing. Scarier still, an astonishing number believe that if they have a Ph.D. in, say, French Literature that they are also experts in economics and tops in the their adopted field in issues of "fairness".

Bob Miller

It reminds me of the famous Bill Buckley observation that he would rather be governed by 1000 names chosen at random from the Boston telephone directory than the faculty of Harvard university.

Justin P

There are a myriad of different incentives and reasons why Ivory Tower types promote government.

I totally agree with your French Lit Ph.D. Give someone a suffix or prefix on their name and watch out, they know everything!

Methinks1776

I have a suffix and you see what a know-it-all I am! Although, the only thing I'm absolutely certain of is that I don't know enough to direct your life to anyone's satisfaction. BTW, is that a picture of Karl Marx by your name?