David Warsh: Claudia Goldin's Nobel Prize was for many reasons
Claudia Goldin
SOMERVILLE, Mass.
The award of any Nobel Prize is an invitation to go prowling through the past. In the case of Claudia Goldin, of Harvard University, born in 1946, the history on offer is that of an entire generation – not just one crucial generation, in fact, but three. Hers is the first fifty-year career by a woman in major league economic research since that of Joan Robinson (1903-1983). Perhaps not since John Nash shared the prize, in 1994, has a single life in economics been so intricately connected to the context of its times as that of Goldin.
Calling Sylvia Nasar, author of the Nash biography, A Beautiful Mind!
For one thing, Goldin is a third-generation Nobel laureate. She wrote her dissertation under the direction of economic historian Robert Fogel, of the University of Chicago, who wrote his under Simon Kuznets, of Johns Hopkins University (in Goldin’s case, with significant influence by labor theorist Gary Becker as well.)
For another, she lived the full University of Chicago experience, before escaping to a place of her own. Some years ago, she told Douglas Clement, of the Federal Reserve Bank of Minneapolis, that her Cornell undergraduate mentor, Fred Kahn (who later became Jimmy Carter’s economic adviser), discouraged her from going.
“When I went to Cornell, the room that I entered was filled with paintings and good food. But Chicago was a castle, a completely different universe. I walked in and realized, once again, that I knew nothing. Now I knew absolutely nothing.… [She had gone to study industrial organization with George Stigler.] And then Gary [Becker] arrived, and once again I realized that the world of economics was much larger than I had thought. Gary was doing brilliant work on many different issues that I would call the economics of social forces. And then, to make things even better, I met Bob Fogel … [who] mesmerized me with economic history, and that combined my liberal arts junkie taste with my more rigorous math sensibilities.”
There followed twenty years of professional turbulence. After top-tier Chicago, she spent two years at third-tier Wisconsin, followed by six years in a top-ranked Princeton department, before settling down to tenure at the second-tier University of Pennsylvania. These were years when the Committee on the Status of Women in the Economics Profession was organizing, decades in which women began going to law and medical schools in significant numbers, but advances came much more slowly in economics.
Goldin’s major phase began in 1990, when she was appointed Harvard’s first tenured female professor of economics. She published Understanding the Gender Gap: An Economic History of American Women the same year, and was named director of the program on the Development of the American Economy of the National Bureau of Economic Research. Since then, nobody has written more thoughtfully and imaginatively about the myriad economic complexities of female gender in and out of the labor force, culminating in Career & Family: Women’s Century-Long Journey toward Equity (Princeton, 2021).
There is, as well, a love story. Goldin married her fellow Harvard economist Lawrence Katz, a labor economist. Over the course of several years, the pair produced an important and heavily documented study of the rise of the high-school movement in the United States in the late 19th Century, designed to prepare workers for an emerging industrial economy. The Race between Education and Technology Society (Harvard Belknap, 2009) is routinely cited among their most enduring contributions. In most respects, Katz is not a trailing spouse; earlier this month he was elected president of the American Economic Association.
Peter Fredriksson, of the University of Uppsala, a member of the committee that recommended the prize to Goldin, described last week several years of hard work as committee members untangling one contribution from the many others that warranted recognition. In the end, he said, they settled on the combination of economic history and labor economics that produced a U-shaped portrait of the changing trade-off between careers and family. Per Kussell, professor at Stockholm University and secretary to of the committee, emphasized “The prize is not the person, it’s for the work.”
Yet in this case, the person is equally interesting. I don’t know any of the details. But I am fairly certain Goldin’s is an unusually good story. Her prize was overdetermined, in that it was awarded for many overlapping reasons. For more than a decade it was understood that it eventually would be given. Better sooner than later. It makes a fitting climax to the story of one generation and the rising of the of the next.
David Warsh, a veteran columnist and an economic historian, is proprietor of economicprincipals.com, where this essay originated.
David Warsh: Exploring ‘quantum weirdness’
Main building of the Swedish Royal Academy of Sciences, in Stockholm.
SOMERVILLE, Mass.
I spent its time last week reading up quantum entanglement. Instantaneous connections between far-apart locations – the possibility of “spooky action at a distance” that was dismissed by Einstein – turns out to have become the basis of quantum computing and fail-safe cryptography.
First I read The New York Times story: Nobel Prize in Physics Is Awarded to 3 Scientists for Work Exploring Quantum Weirdness. by Isabella Kwai, Cora Engelbrecht and Dennis Overbye. I especially liked the part about John Clauser’s duct-tape and spare-parts experiment in a basement at the University of California at Berkeley that opened the laureates’ path to the prize. (Stories in The Washington Post, The Wall Street Journal and the Financial Times each had distinctive strong points as well.)
The Times story led me back to MIT physicist/historian David Kaiser and his 2011 book, How the Hippies Saved Physics: Science, Counterculture, and the Quantum Revival. I didn’t read it when it appeared, having a mild prejudice against hot tubs, psychedelic drugs and saffron robes. I was wrong. I ordered a copy last week.
Next was a Science magazine piece from 2018 by Gabriel Popkin that showed the discoveries well on their way to acceptance: Einstein’s ‘spooky action at a distance’ spotted in objects almost big enough to see.
Then came a Scientific American article, The Universe Is Not Locally Real, and the Physics Nobel Prize Winners Proved It, by David Garisto, that seemed to me to offer the most lucid explanations of the profound uncertainties involved. These are more daunting than ever in the face of irresistible technological evidence that they exist.
At that point I returned to the Nobel announcement, and skimmed the citations in the scientific background to see if the story was as I had been taught (by my mother, Annis Meade Warsh, who was herself entangled with science and religion!). Sure enough there among the citations was the history of the argument, from Erwin Schrödinger, in 1935; to Albert Einstein, Boris Podolsky and Nathan Rosen, in 1935; to David Bohm, in 1951; to John Stewart Bell, in 1964; and to Stuart Freedman and Clauser (the former having been Clauser’s graduate student), in 1972. Imagine my surprise last year when I discovered the distinguished historian of physics John Heilbron was reading Bohm’s last book, Wholeness and the Implicate Order, the very title recommended to me by my mother not long after its publication, in 1980. I checked Wholeness out from the library. I could not fathom the implicated order.
In fact, the most beguiling explication of the prize I found was the 15-minute talk that Nobel Committee member Thors Hans Hansson gave to journalists after the prize announcement in Stockholm last week. The 72-year old theoretical physicist personified the combination of collective energy, sobriety and delight that enables the Royal Swedish Academy of Sciences to keep the world abreast of developments, year after year.
David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this column originated.
David Warsh: Nobel economics prize committee needs to look at the lessons of the 2008 crisis
Lehman Brothers headquarters in New York before the firm’s bankruptcy in September 2008 sent the world into the worst financial panic since the Great Depression.
SOMERVILLE, Mass.
It was a substantial responsibility the government of Sweden licensed when, in the 1960s, it gave its blessing to the creation of a prize in economic sciences in memory of Alfred Nobel, to be administered by Nobel Foundation and awarded by the Royal Swedish Academy of Sciences. That bold action wasn’t easy, but it was as easy as it would get.
The Cold War smoldered ominously between two very different systems, “capitalist” and “communist.” In the West, the prestige of the Keynesian revolution was at its height, compared by some historians of science to the Darwinian, Einsteinian, Freudian and quantum revolutions. And the Science Academy possessed seventy-five years of experience as administrators of the physics and chemistry awards that were among the five prizes mandated by Nobel’s handwritten will.
Since 1969, when the first economics prize was awarded, the committee that oversees it has done pretty well, at least in the judgment of those who have followed the program closely. The Nobel system has imposed a narrative order on various developments since the 1940s in an otherwise fractious profession, often by recognizing its close neighbors. Goodness knows where we in the audience would be without it – still reading Robert Heilbroner’s The Worldly Philosophers, perhaps, first published in 1953, as though nothing since had happened.
Now, however, the Nobel Prize in economic sciences is facing a crucial test. The authorities need to give a prize to clarify understanding inside and outside the profession of the events of 2008, when emergency lending and institutional restructuring by the world’s central banks halted a severe financial panic. What might have turned into a second Great Depression was thus averted. Governments’ responsibilities as lenders of last resort were the heart of the issue over which Keynesians and Monetarists jousted for seventy-five years after 1932.
Either the Swedes have something to say about what happened in 2008, not necessarily this year, but soon, or else they don’t. Their discussions are well underway. The credibility of the prize is at stake.
The Nobel committees that administered the prizes in physics and chemistry faced similar problems in their early years. When the first prizes were awarded, in 1901, well-established discoveries dating from the 1890s made the decisions relatively noncontroversial – the discovery of x-rays, radioactivity, the presence of inert gases in the atmosphere, and the electron. Foreign scientists were invited to make nominations; Swedish experts on the small committees, several of them quite cosmopolitan, made the decisions. The members of the much larger academy customarily accepted their recommendations.
But a pair of scientific revolutions, in quantum mechanics and relativity theory, soon generated “problem candidacies” that took several years to resolve. Max Planck, first seriously considered in 1908 for his discovery of energy quanta, was final recognized in 1918. Albert Einstein, first nominated in 1910 for his special relativity theory, was recognized only in 1921, and then for his less important work on the photo-voltaic effect.
It is thanks to Elisabeth Crawford, the Swedish historian of science who first won permission to study the Nobel archive, that we know something about behind-the-scenes campaigns among rival scientists that underlay these decisions. Overlooked altogether may have been the significance of the work of Ludwig Boltzmann, who committed suicide in 1906.
The economics committee has what it needs to make a decision about 2008. The Swedish banking system suffered a similar crisis in the early Nineties and dealt with it in a similar way. Fifteen years later, Swedish economists paid close attention to what was happening in New York and Washington,
In 2017, in cooperation with the Swedish House of Finance, the committee organized a symposium on money and banking, at which the leading interpreters of the 2008 crisis contributed discussions. (You can see here for yourself some of the sessions from that two-and-half day affair, but good luck making sense of the program. That’s what the committee exists to do – after the fact.)
A previous symposium, in 1999, considered economics of transition from planned economies, and wisely steered off. No such inquiry was required to arrive the sequence of prizes that interpreted the disinflation that followed the Volcker stabilization – Robert Lucas (1995), Finn Kydland and Edward Prescott (2004), Thomas Sargent and Christopher Sims (2012) – a process that unfolded more slowly and less certainly than the intervention of 2008.
The money and banking prize should be understood as fundamentally a prize for theory. For all the talk in the last few years about the rise of applied economics, the Nobel narrative, at least as I understand it, has emphasized mainly surprises of various sorts that have emerged from fresh applications of theory, in keeping with Einstein’s dictum that it is the theory that determines what we can observe.
Some of these applications may have reached dead ends, leading to new twists and turns. The advent of cheap, powerful computer and designer software in the Nineties handed economists a power new tool, and two recent prizes have reflected the uses to which the tools have been put – devising randomized controlled tests of economic policies, and drawing conclusion from carefully-studied “natural experiments.” But otherwise “the age of the applied economist” may be mainly a marketing campaign for a generation of young economists eager to advance their careers. It won’t be an age in economic science until the Nobel timeline says it is.
As a journalist, I’ve covered the field for forty years. My impression is that many exciting developments have occurred in that time that have not yet been recognized, some of them quite surprising, many of them reassuring. As the Nobel view of the evolution of the field is revealed in successive Octobers, the effect may be to buttress confidence in the field and diminish skepticism about its roots – or not. As for natural experiments, it is hard to beat the events of 2008. The Swedes have many nominations. What they must do now is decide.
David Warsh, an economic historian and a veteran columnist, is proprietor of Somerville-based economicprincipals.com, where this essay first appeared.
David Warsh: 'Technocrats vs. democrats?'
Flowchart of four phases (enrollment, allocation, intervention, follow-up, and data analysis) of a parallel randomized trial of two groups (in a controlled trial, one of the interventions serves as the control), modified from the CONSORT (Consolidated Standards of Reporting Trials) 2010 Statement.
—From Wikipedia
SOMERVILLE, Mass.
Ten years ago, Princeton University economist Angus Deaton used his Keynes Lecture to the British Academy to sound a note of caution about the new New Thing in development economics: the randomized controlled trial (RCT), or field experiment. He recounted the general frustration with the failure of traditional econometric methods to swiftly unlock the secrets of economic development (and with the inability of development agencies to learn more from their own experience). He surveyed the rising enthusiasm for RCTs as an alternative path to reliable knowledge without the traditional fuss.
He argued against the trend. “[E]xperiments have no special ability to produce more credible knowledge than other methods, and… actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority.” Citing a maxim of philosopher Nancy Cartwright, Deaton wrote,
Randomization is not a gold standard because “there is no gold standard,” Randomized controlled trials cannot automatically trump other evidence, they do not occupy any special place in some hierarchy of evidence, nor does it make sense to refer to them as “hard” while other methods are “soft”. These rhetorical devices are just that; a metaphor is not an argument.
More positively, Deaton continued,
I shall argue that the analysis of projects needs to be refocused towards the investigation of potentially generalizable mechanisms that explain why and in what contexts projects can be expected to work. The best of the experimental work in development economics already does so, because its practitioners are too talented to be bound by their own methodological prescriptions. Yet there would be much to be said for doing so more openly. I concur with the general message in [Ray] Pawson and [Nick] Tilley…, who argue that thirty years of project evaluation in sociology, education and criminology was largely unsuccessful because it focused on whether projects work instead of on why they work.
Nevertheless, the RCT movement continued to attract adherents, and researchers attracted more and for funding from the World Bank and like-minded foundations with an interest in ameliorating global poverty. Poor Economics A Radical Rethinking of the Way to Fight Global Poverty (Public Affairs, 2012), by Abhijit Banerjee and Esther Duflo, both of the Massachusetts Institute of Technology, imparted an impetus to the movement. Duflo’s 2017 Ely Lecture to the annual meeting of the American Economic Association, The Economist as Plumber, especially attracted interest. As economists seek to help governments design new policies and regulations, she argued,
[T]hey take on an added responsibility to engage with the details of policy making and, in doing so, to adopt the mindset of a plumber. Plumbers try to predict as well as possible what may work in the real world, mindful that tinkering and adjusting will be necessary since our models gives us very little theoretical guidance on what (and how) details will matter. Economists should seriously engage with plumbing, in the interest of both society and our discipline.
In 2015, awarding the Nobel Prize for economics, the Royal Swedish Academy of Sciences cited Deaton “for his analysis of consumption, poverty, and welfare.” Last month, they cited Banerjee, Duflo, and Michael Kremer, of Harvard University, “for their experimental approach to alleviating global poverty.”
Last week Deaton was back, with “Randomization in the tropics revisited: a theme and eleven variations,” a chapter prepared for Randomized Controlled Trials in the Field of Development: a Critical Perspective (Oxford, forthcoming), by Florent Bédécarrats, Isabelle Guérin and François Roubaud, Economic Principals tumbled to Deaton’s essay too late to do much more than read it and recommend it here. Many EP readers will wish to read it for themselves. Deaton is a remarkably clear and forceful writer.
This time the tenor was a little more personal.
Jean Drèze has provided an excellent discussion of the issues of going from evidence for policy. One of his examples is the provision of eggs to schoolchildren in India, a country where many children are inadequately nourished. An RCT could be used to establish that children provided with eggs come to school more often, learn more, and are better nourished. For many donors and RCT advocates, that would be enough to push for a “school eggs” policy. But policy depends on many other things; there is a powerful vegetarian lobby that will oppose it, there is a poultry industry that will lobby, and another group that will claim that their powdered eggs – or even their patented egg substitute – will do better still. Dealing with such questions is not the territory of the experimenters, but of politicians, and of the many others with expertise in policy administration. Social plumbing should be left to social plumbers, not experimental economists who have no special knowledge, and no legitimacy at all.
The argument – does it load the dice to call it technocrats vs. democrats? – promises to be long running, with attention soon to shift to Silicon Valley know-it-alls and the Gates Foundation. Banerjee and Duflo’s new book, Good Economics for Hard Times (Public Affairs) appears November 12. The next chapter will air Dec. 8, when this year’s laureates are scheduled to give their lectures in Stockholm – live-streamed, for those who care to watch.
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New on the Economic Principals bookshelf:
The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution, by Gregory Zuckerman (Penguin)
David Warsh, an economic historian and veteran columnist, is proprietor of Somerville-based economicprincipals.com, where this column first ran.
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