Dead, Paul Anthony Samuelson on December 13, 2009 at the age of 94, he was an American economist, and the first American to win the Nobel Memorial Prize in Economic Sciences.
Born in Gary, Indiana, on May 15, 1915, to Frank Samuelson, a pharmacist, and the former Ella Lipton, his family, he said, was “made up of upwardly mobile Jewish immigrants from Poland who had prospered considerably in World War I, because Gary was a brand new steel town when my family went there”.
In 1923 Samuelson moved to Chicago; he graduated from Hyde Park High School (now Hyde Park Career Academy); he then studied at the University of Chicago and received his Bachelor of Arts degree there in 1935.
He said he was born as an economist, at 8.00am on January 2, 1932, in the University of Chicago classroom.
He felt there was a dissonance between neoclassical economics and the way the system seemed to behave, and he said Henry Simons and Frank Knight were a big influence on him.
He then completed his Master of Arts degree in 1936 and his Doctor of Philosophy in 1941 at Harvard University.
Even while a graduate student at Harvard, he had already won international renown and had made significant contributions to economic theory.
Confronted by contradictions, overlaps, and fallacies in the classical language of economics, he sought unification – and clarification – in mathematics.
In his first major work, Foundations of Economic Analysis, published in 1947, he demonstrated that this approach worked.
He told economists that they had been practicing “mental gymnastics of a peculiarly depraved type,” and that they were like “highly-trained athletes who never run a race.”
He was not claiming mathematics as the cure-all or end-all of economic analysis, but he was insisting that mathematics was essential to an understanding of what economics was all about.
He was co-author of Readings in Economics, published in 1955, and has co-authored numerous other works in the field.
His latest book is Linear Programming and Economic Analysis, written in collaboration with Robert Dorfman and Robert Solow and sponsored by a grant from the Rand Corporation.
Mathematical economics is applied to practical problems in international trade, transportation and marketing, competitive strategy in business and government, industrial production, and defense planning.
Such complex problems of choice can now be analysed by the mathematical economics which Professor Samuelson has developed.
In an interview in 1960 with U.S. News World Report, Professor Samuelson talked about a new kind of inflation – what he called “cost-push.”
As contrasted to the familiar kind of inflation – where too much spending power pulls up prices and wages – cost-push inflation is “a force that operates year-in and year-out, whenever we are at high employment, to push up prices.
It’s a price creep, not a price gallop; but the bad thing about it is that, instead of setting in only after you have reached over full employment, the suspicion is dawning that it may be a problem that plagues us even when we haven’t arrived at a satisfactory level of employment.”
Samuelson’s book Foundations of Economic Analysis (1947, Enlarged ed. 1983), is considered his magnum opus.
It is derived from his doctoral dissertation at Harvard University, and makes use of the classical thermodynamic methods of American thermodynamicist Willard Gibbs.