x Abu Dhabi, UAETuesday 25 July 2017

Theorist who demystified economics

Paul Samuelson Nobel laureate's book explaining principles of Keynes's thinking became a standard text.

A playful Paul Samuelson receives the 1996 National Medal of Science from the US president Bill Clinton.
A playful Paul Samuelson receives the 1996 National Medal of Science from the US president Bill Clinton.

Paul Anthony Samuelson, the leading economist of the 20th century, was the first American to be awarded the Nobel Prize in Economics in 1970. A wunderkind at the University of Chicago and later Harvard, he commented that his contemporaries in the field were like "highly trained athletes who never run a race". In contrast, he laboured to create a common economic language, to bring the subject out of the classroom and render its abstract, mathematical theorems comprehensible to the quotidian experiences of the layman.

His bestselling book, aptly named Economics, was first published after the Second World War in 1948, when memories of the Depression were still raw and fear that unemployment would return to America widespread. Translated subsequently into a host of languages, including Punjabi, Arabic and Portuguese, it is currently in its 19th English edition. The book, the first to explain the principles of Keynesian economics to students, became a standard university text and made its author a fortune.

The children of Jewish immigrants who settled in Indiana, Samuelson began studying the stock market in high school, advising his teacher on where to invest her money. He left Hyde Park High School at 16 to attend the University of Chicago where his first college lecture - on the 18th-century British economist Thomas Malthus - had him hooked immediately. His interest never wavered, though he found the disconnect between the topics addressed in his economic theory classes and what he could see of life outside on the streets of Chicago perplexing.

At Harvard, where he studied for his PhD, the British economist John Maynard Keynes was Samuelson's guiding light. In the 1930s, Keynes developed the theory that modern market economies could become mired in depression and recover only if government incentives, either in spending or tax cuts, could restore them. Harold Hitchings Burbank, the chairman of the Harvard economics department, in whom Samuelson found an unyielding adversary, did not share his student's enthusiasm for his hero. Despite open opposition and aided by his colleagues, Samuelson managed nonetheless to advance the Keynesian school's cause, if not his own.

In 1941, when it became apparent that he had no future at Harvard, Samuelson transferred to MIT's Department of Economics. There he remained for more than six decades, contributing significantly to the advancement of the institution to its current elevated position. In 1966, MIT awarded him an Institute Professorship, and in 1991 established the Paul A Samuelson Professorship in Economics in his honour.

Early on, he advanced a model called the "multiplier-accelerator" that captured the inherent tendency of market economies to fluctuate. Though an advocate of open trade, latterly he had warned of globalisation's impact on trade to the disadvantage of workers in developed economies. His influence extended beyond academia, though he never assumed a formal administration post, preferring to say what he wished freely. In that spirit, he wrote a regular column for Newsweek magazine for 15 years, and debated hotly with his fellow economist Milton Friedman. An adviser to presidents John F Kennedy and Lyndon B Johnson, he advocated tax cuts to stave off imminent recession he thought likely to occur otherwise. In 1974, he coined the term "stagflation" to describe the condition from which America was suffering - a blend of high unemployment and high inflation over a long period. Thirty years later, he added his voice to nine other Nobel laureates calling on President Bush to abandon extensive tax cuts passed by Congress.

Long after his official retirement in 1985, Samuelson continued to arrive at his office at MIT. He attributed his longevity to the female members of his family, advances in the treatment of hypertension and a switch to low-fat milk. His happiness, he claimed was due in part to "having a little more money" than his colleagues. Samuelson was born on May 15, 1915; he died on December 13. He is survived by his second wife, Risha Clay Samuelson, and six children (including triplet sons) from his first marriage to Marion Samuelson.

* The National