------ EH.NET BOOK REVIEW ------
Title: 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.


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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Geographic Location: General, International, or Comparative
Subject: History of Economic Thought; Methodology
Time: 20th Century: Pre WWII, 20th Century: WWII and post-WWII