We take a deeper look into Paul Samuelson and his influence on economics. Though Chamberlin drew Samuelson to Harvard it was Wassily Lenotief and Edwin Bidwell Wilson who where the big influences on Samuelson, the latter being of more importance. Wilson was a protégé of the thermodynamicist Willard Gibbs. After taking a class from Wilson, Samuelson began applying mathematical methods used in thermodynamics to economics.
The book gives the example of Samuelson using a chemistry principle, Le Chatelier, and applying this to a broad range of economic applications. Samuelson was applying calculus to obtain maximum and minimum values for consumer behavior, international trade, public finance and more. Samuelson was applying math along the spectrum of economics.
In 1936 Keynes wrote The General Theory and Samuelson stated he didn’t fully understand what it was about, or the significance of it. As the mathematical models appeared and as Samuelson began to realize the future of these concepts, he set out to demonstrate the underlying unity of the Modern approach and Keynesian theory. As he states, he wanted to create a “general theory of general theories.” Samuelson wrote his thesis Foundations of Analytical Economics, which became a book seven years later as Foundations of Economic Analysis. Samuelson, and this book, had a large effect on the post WW II generation of students and "economists now learned to express themselves mathematically."
A for Tom.
ReplyDeleteIn economics, we apply Le Chatelier's principle just about everywhere (but we've dropped the French name). It's what's behind the idea that if I'm away from the equilibrium (for some reason) that consumer and producer behavior push us back towards it.
Those of you that had me for ECON 2500 have already been exposed to Leontief. He's the guy that came up with an indifference "curve" that is shaped like an "L". I used it to introduce the idea that marginal utility of one good often depends on the availability of other goods: like hot dogs and buns, or cars and tires, that we typically consume in the same proportion.