Thursday, May 05, 2005

Paul A. Samuelson

Paul A. Samuelson is a Nobel Memorial prize (1970) winning economist and Professor of Economics at the Massachusettes Institute of Technology. He is also a very highly regarded teacher and researcher.

A recent read includes..

'Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization' , 2004 - The author takes a direct shot at the pro-globalization economists including Alan Greenspan, Jagdish Bhagwati, Douglas Irwin and Gregory Mankiw. He refutes the basic argument that "the gains of the American winners are big and more than enough to compensate for the losers" and considers the same as untrue.
Even though this paper has stirred an already hot debate, it has been considered UNIMPORTANT or IRRELEVANT (more eloquently) by leading trade economists and policy makers. And who exactly are these people? Here..
Jagdish Bhagwati: "Paul and I disagree only on the realistic aspects of this...The Samuelson model yields net economic losses only when foreign nations are closing the innovation gap with the United States. But we can change the terms of trade by moving up the technology ladder. The U.S. is a reasonably flexible, dynamic, innovative society. That's why I'm optimistic."
Douglas Irwin (as quoted in his mail to Daniel Denzer) : "[Samuelson’s paper] doesn't have much to do with outsourcing. If a foreign country experiences technological progress in a home country's export industry, it can deteriorate the terms of trade of the home country and make it worse off (not vis a vis autarky, but its previous trade situation). We've know this since the U of C's great Harry Johnson pointed it out in the 1950s…. Pretty thin stuff."
Arvind Panagariya..
I would like to come back sometime and write about more of Samuelson's contributions, that include..
'Foundations of Economic Analysis', 1947
'Economics: An Introductory Analysis', 1948
'Theory of Reveled Preferences', 1938, 1947
'Non-substitutions Theorem', 1951

All I can think of about the above quoted work of Samuelson and the response from the intellectual spectrum is a quote from Alfred Marshall, "Students of social science, must fear popular approval: Evil is with them when all men speak well of them". Though I see this logic applies to all economists, not many seem to accept they might be wrong!!


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