Paul Samuelson changed economics forever The world of economics lost one of its greatest stalwarts on Sunday as Paul Samuelson passed away at his Belmont, Massachusetts residence at the age of 94. Samuelson is credited with having provided the study of economics with the mathematical tools that have become indispensible to economic analysis today. In that sense, he is responsible for transforming economics from an essentially theoretical field of study to a practical science. His defining books Economics and The Foundations of Economic Analysis, changed the way academicians, politicians and the general public looked at economics.
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Most of what is taught in economics at the high school and undergraduate levels across the world today is fundamentally based on Samuelson’s books. In 1970, Samuelson became the first American to be awarded the Nobel Prize for Economics for doing, according to the Swedish Academy, “more than any other contemporary economist to raise the level of scientific analysis in economic theory”. Apart from his academic achievements, Samuelson also had a significant role in shaping American economic policies during the Kennedy era. It was on the basis of his advice that John F Kennedy used to formulate his economic agenda.
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But Samuelson’s lasting legacy is his propagation of the Keynesian model of economics. It is because of Samuelson’s efforts in popularising Keynesian economic principles among academicians and politicians alike that the world at large has dumped the concept of an absolutely free market economy with no Government control. As a result, even the most capitalist economy today is one that is regulated to a certain degree. This has held the world in good stead, something that can be gauged from the way Governments around the world have handled the recent economic crisis. Unlike the Great Depression of the previous century, this time around Governments responded by undertaking a slew of financial stimulus packages. The response has been rooted in Keynesian philosophy and has stemmed the freefall the global financial system seemed to be stuck in. Hence, had it not been for Samuelson and his work, the latest financial crisis would have been far more devastating than it turned out to be. Finally, no tribute to Samuelson can be complete without acknowledging his contribution to the economics department of the Massachusetts Institute of Technology. It was through a lifetime of hard work that Samuelson turned MIT into a leading institution for economic studies. It would be apt to say that it was due to Samuelson that MIT was able to attract brilliant students such as George A Akerlof, Lawrence R Klein, Paul Krugman, Franco Modigliani, Robert C Merton and Joseph E Stiglitz who in turn went on to win Nobels themselves. With Samuelson’s death, the world has lost a brilliant mind.
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