David Warsh: We should pay more attention to this outfit

1050 Massachusetts Ave. in Cambridge, where the National Bureau of Economic Research is based.

— Photo by Astrophobe

SOMERVILLE, Mass.

An interesting fact: The leaders of Harvard University, Stanford University, Brown University and the University of California at Berkeley have something in common.  Alan Garber, Jonathan Levin, Christina Paxson and Richard Lyons are all research associates of the National Bureau of Economic Research.  Four out of 17,000+ NBER researchers, the preponderance of them economists, is not a large portion of the whole. But it may offer a hint of what top universities are looking for in their presidents.

The NBER is an unusual organization.  Founded in 1920 by two individuals of very different outlooks, an executive of the American Telephone and Telegraph Company and a socialist labor organizer with a PhD from Columbia. Their idea was to fund independent studies of issues about which widespread differences of opinion existed: changes in the gap between rich and poor during the Gilded Age and the Progressive era, as well as the effects of large-scale immigration on wages. National income and its distribution have been the core of NBER studies ever since, along withe the structure of business cycles, too.

Since the 1970s, though, when its headquarters moved from New York City to Cambridge, Mass., and decentralized its research, a host of new topics have come under the NBER microscopes. Everything from the economics of health insurance and childhood education to inflation and national defense practices are investigated with imaginative theory, data, and statistical technique.

A look at the governance of the organization discloses the key to its success over a hundred years. Three classes of directors keep their eyes on the organization’s pursuits: a diverse collection of outsiders; a class of representatives of universities; and another of professional associations of one sort and another.

As in the days of its founding, the NBER seeks to bridge gaps between antagonistic factions. Its culture is suffused with respect for differences of opinion. Its goal is building consensus.

Would those characteristics be attractive to universities eager to get themselves off the front pages of newspapers?

Of course they would. A little more attention in those newspapers to NBER findings might help as well.  

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based Economic Principals.