Paul Samuelson, the father of modern economics

The world of economics has been rendered immeasurably poorer by the death of Paul Samuelson, the doyen among contemporary economists and a torch-bearer of the ideas and tenets propounded by another distinguished member of this tribe, John Maynard Keynes.

To many, who took up this science for study, his name is a household word for the popular text-book — Economics, An Introductory Analysis — but among those who have carved a niche in the profession, he is much more, a mentor, and guide.

His interests  and concerns ranged far and wide in the subject that was close to his heart, and in each of these specialised fields, such as public finance, welfare economics, international trade and macro-economics,  his contributions  were  seminal and had  much to do in enriching the quality and content of modern economic  thought.

To his credit, numerous scholarly papers, numbering close to 400, had issued from his pen, not to mention, scores of columns that he wrote for Newsweek magazine. Through all these efforts, he had elevated this “dismal” subject to a relevant domain of study, as it deeply impacts the lives of the people as no other discipline does. There was lucidity, depth and insight in his manifold writings, besides a sense of humour and directness.

At 94, Paul Samuelson had indeed a long innings but the void left behind him will be hard to fill. His legacy is precious. He had brought the rigours of mathematics to unravel and explain many of the economic doctrines and if today, there is greater clarity and understanding of how economics works, his role cannot be minimised.

Rightly, while he was honoured with the Nobel Prize in 1970, the citation referred to his role in lifting the level of “scholarly analysis in economic thery”. Later, in 1996, when President Clinton awarded the National Medal  of Science, he hailed Samuelson for his “ fundamental contribution to economics science for over 60 years”.

Though he held no public office, many had benefited from his advice — and many of his students hold high office today — which included President John F Kennedy and Lyndon Johnson. His distaste for this role stemmed from his desire to write as he felt.

Samuelson was, of course, an economist, cast in the Keynesian mould. But, he was no dogmatic  adherent to the theoretical framework of Keynes.

He had sought to blend the free market economies as propounded by Adam Smith and in our times by Milton Friedman — his friend and ideological opposite with whom had often crossed swords — with the Keynesian philosophy via his attempts at neoclassical synthesis.

In this he was truly prophetic. The convulsions that the world economy went though in 2008 that is still persisting — and India’s own difficult economic  times — had suggested that, market forces of supply and demand and full employment — and a hands-off approach of the government — cannot be a solution to the crisis we are grappling with.

While a bloated government is inefficient and becomes a resource-guzzling entity, a considerable degree of freedom is essential for the economy to function at its optimum. Like Keynes, he had argued that, government must act when  free economies founder and are unable to come out of the crisis.

Neither the market or government can advance the public good, he averred.
How apposite this stance is evident from the massive intervention by governments the world over, including ours, to bail out the economy out of the mire in which it has found itself.

Truly an influential, titanic figure has been removed from our midst by the scythe of death.