Here are some notes from Inside the Economist's Mind, Conversations with Eminent Economists edited by Paul A. Samuelson and William A. Barnett.
Overview
This is a collection of interviews commissioned for a journal, Macroeconomic Dynamics. The idea is to gauge the position of the profession by asking the people who invented large swathes of the theory their motivations for doings what they did, when they did it, and how they did it. Readers find eccentric and irascible characters behind some of the major innovations in economic science. I loved this book, and read it cover to cover in a day.
The book purports (pg. xi) to "contain[] unique insights into the thinking of some of the world's most important economists, whose work contributed to the evolution of modern economic thought", and does.
Scientific biography is a passion of mine, ever since reading Richard Feynman's writings on his life and work. Looking at the path integral method as an undergraduate, you can see how he came up with it (if, in fairness, I didn't really understand it), how startlingly original he was in doing his physics, because that's how he lived his life---he followed different paths as he felt he needed to, and arrived at different destinations that others because of his personality.
So it's great that William Barnett, the editor of Macroeconomic Dynamics, and the co-editor of this book, decided to ask these men these questions.
I'll add to this post as I get time to make the notes I want to keep for my reference.
Chapter 7, An interview with Paul A. Samuelson, pp. 143--165
Samuelson is the big one. Arguably the best economist of his generation and certainly the mst highly lauded, his contributions have gone across the board of modern economics. Loads of information on him in his own words is here, as well as a nice long rant at Milton Friedman at the start of the interview.
Cool quotes from the chapter:
Firstly, he seems to reject the metaphor made by Phillip Mirowski in his book More Heat than Light that economics is a social physics that Samuelson helped bring into the world. We find Samuelson refuting his interviewer's assertion that he had become highly influenced by the work of physical scientists (pg. 157-158, emphasis in original):
...I would be stupid, if out of "physics envy" or snake-oil salesmanship, I would inject into economic theory analytical mathematics that fit only gases and liquids. In my writings, I have criticised wrong analogies to physics by Irving Fisher (whom I admire as a superlative American Theorist). Even the genius of von Neumann has not escaped my critical auditings. I have given on qualified approval to Marshall hope for a more biological and less physical approach to future economics....Maybe someday, future Phillip Mirowskis and Roy Weintraubs will better fine-tune their nuances.
Next we find Samuelson's hope for a truly successful grand theory of economics is rooted in its need to explain the emergence of economic history (pg. 163--164):
"My notion of a fruitful economic science would be that it can help us explain and understand the course of actual economic history. A scholar who seriously addresses commentary on contemporary monthly and yearly events is, in this view, practicing the study of history---history in its most contemporary time phasing."
Chapter 1 Wassily Leontief, interviewed by Duncan Foley
pg. 18 "My feeling is that the fundamental theoretical understand of economic fluctuations is a dynamic process. I still believe, what explains the fluctuations of economies is some kind of difference, differential equations. Of course, structural change is very important, its important, particularly now. It's always dynamic. It's a system of interrelationships, a system of equations, but still the quantitative approach is important. "
pg. 20 "As I explained in my Presidential Address, If you really want to understand an empirical science, you must have the facts"
His Nobel lecture, 'Structure of the World Economy' is here.
Leontief on Keynes [pg. 21]:
...Keynes was very pragmatically oriented. In spirit, he was very much a politician, an excellent politician. I think he developed his theory essentially as a way to support his policy advice. He was incredibly intelligent.
On the relationship between theoretical and empirical economics [pg. 23]:
" I am essentially a theorist. But I felt very strongly that theory is just construction of frameworks to understand how real systems work. It is an organising principle, while for many economists theory is a separate subject."
On gathering data for economic prediction (pg. 29):
To exploit the influence of technological change on economic change, you just can't compute some supply curve; you must really have a mass of information. I wrote up how it can be done, and I nearly succeeded in getting some money to do it. My feeling is one could even do some anticipation, prediction, if one had really detailed data....I think this is the future of the work, in the interaction between economics, engineering, science, and the substructure of production.
On economists and the economic profession (pg. 31):
....economists are just a particular type of management,...
Chapter 4 An interview with Franco Modigliani
pg. 91 "I am revising [the famous 1944 Liquidity Preference paper] and starting from an approach which I think is much more useful. I am starting from the notion that both the classics and Keynes take their departure from the classical demand for money model, which is one of the oldest and best established paradigms in economics. The demand for money is proportional to the value of transactions, which at any point can be approximated as proportional to nominal income (real income multiplied by the price level). The nominal money supply is exogenous. Therefore, the money market must reach an equilibrium through changes. Nominal income is the variable that clears the market.
Where then is the difference between classical and Keynesian economics? Simple: The classics assumed that wages were highly flexible and output fixed by full employment (clearing of the labor market). Thus the quantity of money had no effect on output but merely determined the price level, which was proportional to the nominal money supply (the quantity theory of money). One the other hand, Keynes relied on the realistic assumption that wages are rigid (downward). That is, they do not promptly decline in response to an excess supply of labor. Workers do not slash their nominal wage demands, and firms do not slash their wage offers, when unemployment exceeds the frictional level. What, then, clears the money market? Again, it is a decline in nominal income. But since prices are basically fixed, the decline must occur in real income and particularly in employment. When there is insufficient nominal money supply to satisfy the full employment demand for money, the market is cleared through a decline in output and employment. As Keynes said, the fundamental issue is that prices are not flexible."
Modigliani on the foundations of macro;
(pg. 91) "Macroeconomics, or the mechanisms through which money supply determines output (employment), stands on hour basic pillars: 1. liquidity preference, 2. the investment function, 3. the consumption or saving function, and 4 the equality of saving or investment (properly generalized for the role of government and the rest of the world)"
In future editions of this book and the further volumes to come, I'd love to see a focus on the characters behind different approaches to economics and their reasons for taking contrarian positions to the mainstream---Foley, Nell, Solow and Velupillai (my thesis advisor, in full disclosure), as well as more traditional mainstays of the profession. A focus on economists regarded primariy as great teachers would be great as well, not just the theoretical giants.
The book is a very rare thing---an economic page-turner, like The Worldly Philosopher, Adam's Fallacy, and Freakonomics. The personalities behind the science's blleding edge make for compelling reading.