Wednesday, January 6, 2010

What Went Wrong With Summers?

Someone asked. After all, his uncles Kenneth Arrow and Paul Samuelson are two of the Greatest Econ Nobels of all time, and both were obsessed with things such as market failure, asymmetric information, and externalities. Instead of doing a Ph.D. at MIT, Summers crossed over to the dark side of Cambridge, studying under Martin Feldstein at Harvard, which had essentially shown Samuelson the door.

Have a look at Summers' tribute to Milton Friedman penned in the NYT, in which Summers, in no uncertain terms, says Milton Friedman was a better economist than either of his uncles. This is a big deal, in part, because Samuelson and Friedman had a contentious, though respectful, rivalry. It's also a big deal b/c Friedman was very wrong on many of the big issues -- he argued that monetary policy alone caused/could have saved the Great Depression, that financial markets should be completely free, and that the Clinton tax increases would lead to a deep recession.

Kenneth Arrow and Paul Samuelson are not just two Nobel Prize winning economists -- they are two of the most respected economists ever. Both were well-respected by nearly everyone -- and they were politically liberal, technically-oriented, and smart. Both are responsible, in a big way, for economics being so technical today, only both were keen real-world observers in contrast to most economists today who can just do lots of math.

I can only imagine there must have been some raging debates at his family reunions, especially went larry went over to the dark side at the H. Larry's relations with his uncles was strained at times -- although both of his uncles are not the type of people who are difficult to get along with. I posted awhile back a quote of Samuelson in which, when asked about Summers, said "We're not in contact."

Here's another thing -- people I know who know either Arrow or Samuelson always say they are very nice, down-to-Earth, easy-going, and are not the least bit arrogant. Larry Summers is none of those things. So, what I suspect is that Summers always wanted to live up to the family name (or rather, the family name his father changed -- something I think is really, really strange and bears investigating). Summers then found he couldn't even come close to matching his uncles -- despite having the not-insubstantial doors of MIT and Harvard open to him, but then again, almost nobody could live up to them -- and so I'd speculate that this fact probably caused the over-amitious Summers a lot of pain, pain he helped assuage himself by mentally imagining Milton Friedman to be the greatest economist of all the post-war era rather than Samuelson or Arrow (in reality, I don't see how Milton isn't the 3rd best among those three), and perhaps as a quasi-revenge on his uncles for being too much for little Larry to compete with. Perhaps there was also some brotherly-competition between Robert Summers and Paul Samuelson? Larry's father, Robert Summers, strikes me as an extremely conventional "economists'-economist" who was competent enough, but a nothing next to his wunderkind/genius-brother Paul or brother-in-law Kenneth (which is no knock on Robert). Both went on to dominate the field. And Larry might also have felt a grudge for seeing his father so thoroughly outdone even if his father himself bore his brothers no grudge...

Another thought is that anyone raised by conventional economists is likely to have some screws loose...

Also, its worth mentioning that there exists a strange brand of economist-Democrats who might not have voted for Bush, but who, influenced and confused by their identities as economists, nevertheless buy into all kinds of conservative myths. I think Summers is probably one of these, or possibly an authentic moderate conservative who wants to makes sure liberals don't destroy the country...

1 comment:

  1. Who is more famous now ? I think summers is the smartest of the family!