American Economic Association How Foundations Came to Be Author(s): Paul A. Samuelson Source: Journal of Economic Literature, Vol. 36, No. 3 (Sep., 1998), pp. 1375-1386 Published by: American Economic Association Stable URL: http://www.jstor.org/stable/2564803 Accessed: 23-07-2017 08:24 UTC JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://about.jstor.org/terms American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to Journal of Economic Literature This content downloaded from 193.54.110.56 on Sun, 23 Jul 2017 08:24:16 UTC All use subject to http://about.jstor.org/terms Journal of Economic Literature Vol. XXXVI (September 1998), pp. 1375-1386 How Foundations Came To Be PAUL A. SAMUELSON' 1. Introduction duller academic scholars have above- average I.Q.'s. IF THERE ARE PEOPLE born under a By accident, the public schools I at- lucky star, there must be books that tended-in Gary, Indiana and Chi- are lucky too. Foundations of Economic cago-were unusually good ones that Analysis (Samuelson 1947) was one such. turned out many future scholars and Unlike a biological embryo, this work scientists. By chance of geography, I had no definite moment of conception. went to the University of Chicago at a Gradually, over the period 1936 to 1941, young age, and under its experimental it got itself evolved. As I was mastering New Hutchins Plan I got a deep and the existent corpus of economic theory, I wide undergraduate education. By recognized that a limited number of chance, my freshman courses included qualitative truths obtained, along with a economics under Aaron Director greater number of indefinite relation- (1901-), who was later to be founder of ships. Puzzled to understand this, I ran- the Second Chicago School of Milton sacked the mathematical libraries of Chi- Friedman, George Stigler and Gary cago and Harvard to explain to myself Becker. In that academic year of 1931- what made the difference. Reading 32, although I didn't know it at the widely, I was a child of my time, but it time, Chicago was the leading world was the internal logic of the economic center for neoclassical economnics: next puzzles that guided Foundations' growth. in the hierarchy would probably have When you read biographies and come the London School of Economics, obituaries of scholars, they fall into a Cambridge University, and Columbia few familiar patterns. The most inter- University. Harvard, then as now, was esting-like Albert Einstein's or Knut the greatest university in the world; but Wicksell's-are cases of early adversity with the 1929 death of Allyn Young and and then final irresistible triumphs. My the aging of Frank Taussig, its theory autobiography is of the duller kind. I was then in a lean period. began as a precocious infant, with un- The stars at Chicago's First School in usually early conscious memories. Par- economics were Frank Knight, Jacob ents and two brothers were congenially Viner, Henry Schultz, Paul Douglas and supportive. Though it was fashionable Henry Simons. As an undergraduate I to hate school, I loved it. Early bloom- came to know them all well. A legend ers develop ridiculous heights of self- grew about an unself-conscious teen- confidence, not realizing that even the ager who used to correct the omnis- 1 Massachusetts Institute of Technology. cient Jacob Viner on the topography of 1375 This content downloaded from 193.54.110.56 on Sun, 23 Jul 2017 08:24:16 UTC All use subject to http://about.jstor.org/terms 1376 Journal of Economic Literature, Vol. XXXVI (September 1998) his graduate seminar blackboard dia- 1964) was at Harvard. Wilson was the grams. great Willard Gibbs's last (and, essen- Given my way, I would have stayed at tially, only) protege at Yale. He was a Chicago forever. Why leave Nirvana? mathematician, a mathematical physi- However, by chance, that happened to cist, a mathematical statistician, a be the year when the Social Science Re- mathematical economist, a polymath search Council began an educational ex- who had done first-class work in many periment: they would scour America for fields of the natural and social sciences. the eight best economics undergradu- I was perhaps his only disciple: in 1935- ates and generously underwrite their 36, Abram Bergson, Sidney Alexander, several years of graduate study. (Later I Joseph Schumpeter, and I were the only learned from the late Frank Fetter- students in his mathematical economics Fetter the younger-that he had been seminar. (Our ages were 21, 19, 52, and the examiner who discovered me: suc- 20.) Aside from the fact that E.B. knew cess, President Kennedy observed, has a everything and everybody, his great vir- thousand fathers; failure is an orphan.) tue was his contempt for social scien- There was just one catch to the awards: tists who aped the more exact sciences you could not stay where you had in a parrot-like way. He detested done your undergraduate study. So pseudo-learning and debunked many a my choice reduced effectively to Co- pretentious theory (such as the Pearl- lumbia or Harvard. My Chicago men- Verhulst infatuation with the logistic tors recommended the Columbia of curve in demography). I was vaccinated Wesley Mitchell, John Maurice Clark early to understand that economics and and Harold Hotelling. Never one to fol- physics could share the same formal low slavishly the advice of mentors, I mathematical theorems (Euler's theo- opted for Harvard. (Joseph Schumpeter rem on homogeneous functions, Weier- and Wassily Leontief were not my mag- strass's theorems on constrained max- nets: at Chicago Schumpeter was known ima, Jacobi determinant identities as the eccentric who believed the rate underlying LeChatelier reactions, etc.), of interest would be zero in the station- while still not resting on the same em- ary state. Edward H. Chamberlin of pirical foundations and certainties. monopolistic competition fame, by my Publications flowed merrily from my miscalculation, attracted me to Har- pen. It was my good luck to be ap- vard; but more important was my naive pointed as the first proper economist to notion that Cambridge, Massachusetts Harvard's prestigious Society of Fel- would be a peaceful green village where lows-24 youthful princes in all fields, book learning could explode.) free to work on whatever they liked, but As mentioned, again by good chance, forbidden for three years to work to- Harvard economics was just then awak- ward any degree or Ph.D. dissertation. ening from a fallow period of sleepi- For me, those 1937-40 years were veri- ness. New European blood-Schumpe- table heaven, and had I been offered ter, Leontief, Gottfried Haberler-plus the Faustian bargain of staying a Junior soon-to-come Alvin Hansen, the Fellow forever, I would have joyfully "American Keynes," was beginning to embraced it. make Harvard the mecca for advanced This explains how citations of my economic research. Perhaps most rele- journal articles had won me in my early vant of all for the genesis of Founda- twenties an international reputation as a tions, Edwin Bidwell Wilson (1879- comer. Their topics were diverse: capi- This content downloaded from 193.54.110.56 on Sun, 23 Jul 2017 08:24:16 UTC All use subject to http://about.jstor.org/terms Samuelson: How Foundations Came to Be 1377 tal theory, lifecycle saving, utility the- A learned treatise, like a poem, ory, international trade, Keynesian mul- stands on its own bottom or text. Ad tiplier-accelerator dynamics, revealed horninem gabble about its author is at preference, and much else. Miracu- best secondary. The times were ripe for lously, it dawned on me that there was Foundations. Nature abhors a vacuum, some unity of method and logic under- and Foundations helped fill the vac- lying much of these researches as well uum. I have written elsewhere about as much of current and historical eco- how much there was back in the 1930s nomnic theory. waiting to be discovered, and aching to In mid-1940 my Society of Fellows be codified. I was like a fisher for trout prohibition against writing a Ph.D. dis- in a virginal Canadian brook. You had sertation expired. Harvard's original Se- only to cast your line and the fish nior Fellows-President A. Lawrence jumped to meet your hook. Lowell, Alfred North Whitehead, John Let me give a few examples. Jacob Livingston Lowes, and Lawrence J. Viner (1931) made a famous error, Henderson-had launched the Society when his draftsman Y.K. Wong refused as a vendetta to reform the mediocre to draw a family of descending U- American Ph.D. system. My colleagues shaped cost curves with a lower en- as Junior Fellows-Willard van Quine, velope that went through their bot- the mathematical logician; George Birk- toms. Viner was ever after sensitive, but hoff, the founder of lattice theory he conceded his error. That same Viner mathematics; Harry Levin, the youthful (1929), in a discussion of his hero doyen of comparative literature-each David Ricardo, had discovered that deigned not to become Doctors of Phi- the domestic price ratio of cloth to losophy. Their Harvard careers never wheat, Pc/Pw, was as much equal to suffered from this. My Protestant wife, their respective (Marginal Cost in Marion Crawford, and I decided to fol- Land)c/(Marginal Cost in Land)w as it low the prudent course of taking a was to (Marginal Cost in Labor)c/(Mar- Ph.D.