Robert M. Solow said “[When economists] sit down with a piece of paper to calculate or analyze something, you would have to say that no one was more important in providing the tools they use and the ideas that they employ than Paul Samuelson.” samuelson.jpg

Paul Samuelson was born in Gary, Indiana on May 15, 1915. He graduated from Chicago University for his Bachelor of Arts in 1935, then continued his education and received his Masters of Arts from the same university in 1936. After he received his Masters, he transferred to Harvard University and graduated in 1941 with a Doctorate in Philosophy. Samuelson earned international renown, and won multiple awards while at Harvard, including the David A. Wells prize in 1941. He published his first book in 1947, called Foundations of Economic Analysis. In this book, he took the controversy and overlaps of the classical theories and, using mathematics, successfully unified and clarified these theories. He claimed that understanding mathematics was the key to understanding economic theory.

Paul Samuelson not only wrote novels, but he also wrote the best selling economics textbook of all time. “Economics: an Introductory Analysis” was first published in 1948, and was the top selling textbook for the next thirty years. Sinsamuelson2.jpgce it was first published, it has been translated into twenty different languages, and is currently on its fifth edition. Samuelson was quoted saying “I don’t care who writes a nation’s laws — or crafts its advanced treatises — if I can write its economics textbooks.”

Samuelson’s theories backed the great works of John Maynard Keynes. Keynesian economics started back in the 1930’s when the Great Depression was in full swing. John Keynes advised the government to increase spending while decreasing taxes and keeping the money market conservative in order to get out of the depression. Although they did not listen to Keynes right away, eventually the government was able to recover and get the country out of the depression.

Mr. Samuelson also created a theory of public goods. He said that public goods that can be provided effectively only through collective, or government action. One example of a public good is National Defense, because it exists to protect every citizen of a given country. Mr. Samuelson taught that the features of public goods stand in direct contrast to those of ordinary goods, like apples. “An apple eaten by one consumer is not available to any other. Public goods, he concluded, cannot be sold in private markets because individuals have no incentive to pay for them voluntarily. Instead they hope to get a free ride from the decisions of others to make the public goods available.”samuelson3.jpg
Samuelson influenced countless people in his lifetime. He was advisors to multiple United States presidents. One notable president was John F. Kennedy. Samuelson headed an economic task force and advised many of Kennedy’s decisions during his time in office. Kennedy asked Samuelson to be the chairman of the Council of Economic Advisors, but Samuelson declined the position. When asked why, he said he did not want to be in a political position where he could not say and write what he believed. In the classroom, Mr. Samuelson was a lively, funny, articulate teacher. On theories that he and others had developed to show links between the performance of the stock market and the general economy, he famously said: “It is indeed true that the stock market can forecast the business cycle. The stock market has called nine of the last five recessions.”


References:


Official Website of the Nobel Prize: http://nobelprize.org/nobel_prizes/economics/laureates/1970/samuelson-bio.html

New York Times, Online Obituary: http://www.nytimes.com/2009/12/14/business/economy/14samuelson.html?pagewanted=1&_r=2&adxnnlx=1291094371-uDK2k0Tg9UTyh727bxHCAg

The Economist: http://www.economist.com/node/15127616?story_id=15127616