Consider a conversation that Gary Becker, the brilliant and prolific Chicago economist who won a Nobel Prize 10 years ago, had with his mother:
“I remember I went to my mother (and) said, ‘Mom, I want to be a professor.’ She said, ‘But you will only make $10,000 a year.’ That was not much, even then. …”
Becker made that extraordinarily revealing statement in the current issue of the Region, a quarterly publication of the Federal Reserve Bank of Minneapolis.
His statement raises a question economists prefer to avoid: Is their work shaped in any way by the levels of affluence or need they experienced while growing up?
I should state at the outset that I had a very comfortable, if not affluent, childhood.
My father, a factory foreman, died the year I was born, leaving my mother with two toddlers. Social Security totaling about $250 per month made up the bulk of household income.
On less than $3,000 per year between 1950 and 1960, we ate and dressed well, had books and records, and took periodic vacations in our 1949 Chrysler Windsor.
We did not lack anything, but $10,000 a year would have seemed a fortune.
Becker got his bachelor’s degree from Princeton in 1951; that’s when he apparently had the conversation with his mother.
Per capita annual income in 1951 was a little more than $1,300, so his idea of income that was “not much even then” still was about seven times the per capita average for the United States as a whole.
In 1951, a $10,000 income was equal to about $75,000 in 2000, if one adjusts for inflation using the Consumer Price Index. In 2000, the median household income in the United States was about $42,000.
The $75,000 equivalent of Becker’s “not much money” when he was contemplating graduate school was about 1.75 times the national average. Actual median household income for 1951 is not readily available, but it probably was about half the $10,000 his mother scorned.
What does this prove besides the fact that brilliant economists are not exempt from the American habit of underestimating where their earnings fall relative to national averages? Nothing.
But it suggests that we might examine whether the social and economic status of economists influences what they choose to study and the conclusions that they eventually reach.
The suggestion that this is true is anathema to many economists, especially at the University of Chicago, where many faculty members are intellectual disciples of Milton Friedman, who taught there for decades.
Friedman was an outspoken advocate of a philosophy known as “logical positivism,” which held that all knowledge was divided into two categories, positive and normative.
Positive knowledge dealt with matters of fact: Chicago is in Illinois; Ed Lotterman is balding; this column is printed using black ink. Normative knowledge dealt with values: Chicago is exciting; bald men are ugly; black ink is somber.
Friedman argued that economics should deal only with positive knowledge rather than with normative questions of what should be good or bad.
Dispassionate economists should analyze facts, not be influenced by personal opinions.
Most philosophers have long concluded that this is bunk. Lots of research by psychologists and sociologists demonstrates that “scientific objectivity” is difficult, if not impossible, to achieve in real life.
Leonard Silk, longtime economics writer for the New York Times, described how Friedman’s bitter experience as a small, Jewish ROTC cadet who was brutally treated by his WASP cohorts shaped his attitudes toward compulsory military service.
Friedman argued for an all-volunteer army on the basis of economic efficiency, but many of his friends thought that his own youthful experience with forced service was certainly a factor.
The idea that economics should be a “positive” discipline untainted by beliefs still holds sway within the discipline itself.
When I ask non-economists whether a person who considers an income seven times the national average per capita “not much even then” will view economic and social questions in the same light as someone who grew up in a poorer household, most answer “no.”
This intuitive response could be in error, but I doubt it.
If the discipline is going to cling to the notion that economic and social origins of scholars don’t influence their work in any way, it should carry out research to test that hypothesis.
It would be enlightening to take a sample of scholars in different disciplines and survey them about their social and economic origins and about where they stood on ideological scales within their discipline.
I venture that people who choose to study economics come from more affluent backgrounds than those who go into history, sociology, political science or psychology.
I would also venture that within the discipline of economics, scholars from more-affluent households are more likely to trust in market outcomes than those who come from lower-income families.
Perhaps no one will ever carry out such a study. However, the public is likely to discount findings of scholars who think that incomes in the 70th percentile are “not much” money.
© 2002 Edward Lotterman
Chanarambie Consulting, Inc.