Paul Samuelson and the Scientific Awakening of Economics

Abstract

The death of Keynes in 1946 marked the end of the era of British supremacy in economic thought, an era stretching back to Adam Smith. The inheritance passed to the United States of America and the mantle descended upon Paul Samuelson. Thus, the passing of one great Cambridge economist was accompanied by the emergence of another, for Cambridge, Massachusetts has been the intellectual home of Samuelson since the mid-thirties. As part of a community noted for its intellectual leanings Cambridge contains, in particular, two distinguished institutions of re­search and scientific training — Harvard University and the Massachusetts Institute of Technology. In 1935, at the age of twenty, Samuelson made his way to Harvard where, for five years, he was taught economics that was truly iconoclastic. The long established modes of economic analysis, focusing upon a per­fectly competitive, supply-determined world of full employment, gave way to the heresies of monopolistic/imperfect competition and the Keynesian Revolution. Samuelson assimilated these heterodox ideas fully, but the originality and importance of his work stems from the manner in which he harnessed the other shockwave to hit economics — the mathematical revolution

He who goes out each morning to invent the wheel furthers his vanity more than his locomotion.

Paul Anthony Samuelson,Foundations of Economic Analysis(Japanese edn, 1967) Foreword.

I would like to acknowledge the assistance, cheerfully rendered, by C. A. Harvey, T. Flegg and P. Taylor in the writing of this chapter. As usual, they are to be entirely exonerated from the errors remaining.