Robert Solow Memorial Conference

my reaction to the video

MIT held a conference in memory of Robert Solow. He supervised my dissertation (among many others, including Alan Blinder’s and Glenn Loury’s). Solow did his important work in his thirties, for which he was awarded the Nobel Prize in 1987. I last saw him in person in 1980, when I was finishing up my dissertation¹. At that point, at age 56, he was neither publishing research in major journals nor promoting himself as a public intellectual². Instead, he adopted the persona of elder statesman of the profession, a role which he continued to play well into his 90s. He died last year at age 99.

Larry Summers, one of the last speakers at the conference, points out how members of Solow’s generation of economists were committed to the belief that economic policy is important. They shared a conviction that the Great Depression, which they lived through, could have been avoided at almost no cost with policies of Keynesian stimulus.

More recently, a generation of Democratic policy wonks became convinced that the recession that followed the financial crisis of 2008 could have been avoided at almost no cost with more stimulus. This preference for high demand carried over into the Biden Administration, with adverse consequences for inflation. Larry admits that part of him is sympathetic to the pro-stimulus view, but part of him worries about whether it poses dangers. Like me, Larry thinks that at some point if the government creates enough paper wealth that is bound to be inflationary.

I also was interested in Paul Romer’s critique of Milton Friedman, Robert Lucas, and the Chicago school in general. One issue concerns the role of assumptions in economics, such as the assumption that when individuals make choices they do so rationally based on mostly complete information. Friedman defended this by saying that you could evaluate the predictions that economists make based on their assumptions, and if the predictions are correct you need not worry that the assumptions may be unrealistic.

Romer says that Solow defended assumptions on different grounds. They are a simplification, the way that a map is a simplification of the territory. But you cannot leave assumptions unchallenged. In particular, if relatively small changes to assumptions can lead to large changes in predicted outcomes, then your analysis is not robust.

Romer condemns the macroeconomics of Lucas and others. Romer sees their form of macro as dogmatic, with no concern for the facts. Solow saw it the same way, as did I. See my macro memoir (it’s a long read, but in my opinion the best thing I have written.)

What is most interesting about Romer’s talk is his discussion of the fragility of science. He says that if scientific norms are sustained in a self-reinforcing way, then the scientific method is beautiful. But he argues that science can be corrupted by a coalition of “thugs” who violate scientific norms and instead impose dogma.

For me, macroeconomics is entirely the province of thugs. At this conference, they were well represented, particularly by Olivier Blanchard. Again, I refer you to my macro memoir.

I am afraid that in economics and the other disciplines that pertain to human interdependence (I try to avoid the term “social science”), the scientific norms are too difficult to maintain. Most interesting propositions cannot be tested in a rigorous, reliable way. Norms can be maintained in the natural sciences, where rigorous testing is more achievable.

In economics, coalitions of thugs are able to persist. Robert Solow had his weaknesses, but I think he appreciated that one needs to approach with humility the disciplines that pertain to human interdependence. I think that Larry Summers does as well. But most economists, whether they are of a Chicago, MIT, or Austrian persuasion, do not.

I hope that my readers take away a sense of humility about the study of human interdependence. Not that all theories are equally plausible. But social phenomena are more likely to be complex than to be simple. Explanations are more likely to be tentative and conditional than to be absolute truths. As my father liked to say, “The First Iron Law of Social Science is: Sometimes it’s this way, and sometimes it’s that way.”

1. We exchanged snail mails a few times. (He refused to use a computer, always having a secretary handle his correspondence.) When a young faculty member from Amherst who interviewed me on the job market stole my dissertation idea and published it himself without attribution, Solow told me that the plagiarist was “wrong, of course,” but I should do nothing about it. When I sent Solow a draft of a book and asked him for a blurb, he refused, writing back that he saw that in one of the essays in the book I quoted a blog post by Megan McArdle. He told me that he could not endorse a book that quoted a blogger. When Paul Krugman misquoted me in a NYT column to make me sound like a racist (and I the Web had a video that proved that Krugman was wrong), I wrote to Professor Solow to tell him that I thought that Krugman was unscrupulous. Solow replied that he was relieved to hear that I had not said the awful thing that I was quoted as saying, but he really admired Paul Krugman’s columns.

I did not attend the Solow memorial ceremonies.

2. All of the other economists I can think of from Solow’s generation or later stayed driven into their seventies. For example, Blinder and Loury, well into their seventies, are very active public intellectuals.