MIT’s Offer

While at Harvard, Samuelson was still considered a specialist in mathemati­cal economics who would find it difficult to get a permanent academic posi­tion, because positions in that field were scarce.¹ Wilson, who had been making efforts to find possible openings, expressed the problem in a letter to C.

Now the problem of placing Samuelson will not be wholly easy because not many people want mathematical economics. Moreover it seems to me that Samuelson thinks rather as a mathematician than as an econo­mist. He tends to go into equations rather than into a literary form of expression without equations. While he has had a very fine training in mathematics and is entirely able to pick up what mathematics he needs he isn't as much a mathematician in the sense in which most departments of mathematics define the term just as he isn't as such an economist in the sense in which most departments define the term. Indeed I doubt whether he would be a great success teaching under­graduates economics from any of the standard texts now in use.²

Samuelson was a brilliant student who at that time simply did not fit into disciplinary categories. The reason Wilson thought he might interest Evans was that Berkeley was building up its department to include a broad range of applied mathematics; Samuelson could do research in mathemati­cal economics and would be able to do routine teaching in mathemat­ics. Evans replied that they already taught mathematical economics and did not have the space for a second person in the field.³ So, when at the beginning of December 1939 Samuelson received a letter from Harold Freeman, who had been a student with him in 1936—38, and was now an associate professor at MIT, inquiring about whether he would be inter­ested in a position and on what terms, he jumped at the opportunity.⁴ MIT was the one place where Wilson thought Samuelson would fit in because all students at the institute were required to study mathematics, and he would be able to take advantage of this in teaching even elementary economics.

Freeman told him that the professor who taught economic theory and business cycle theory was ill and might need to “rest up,” which explains why Samuelson replied that he had recently become interested in business cycle theory and that he had been working with Hansen at the Littauer Center.^a Samuelson explained that his appointment as a junior fellow ended at the end of the academic year and that he was interested in exploring all the alternatives open to him “at Harvard and elsewhere,” and he suggested they arrange an interview. However, no offer from MIT materialized and on June 19, 1940, Harvard took the decision to offer Samuelson a one-year position as “Instructor in Economics and Tutor in the Department of Economics.” On September ι, 1940, he began his teaching career at Harvard at a salary of $2,500 a year.

Events then moved rapidly, for by then several MIT faculty had been drafted for national defense purposes and its economics department needed to appoint someone very quickly. Harold Freeman persuaded Ralph Freeman, head of the Economics Department at MIT, that Samuelson would be a good appointment; not only was he a good scholar, but he would work with others.^b When Ralph Freeman asked whether Samuelson was a cooperator, Harold Freeman allegedly replied, “Is Samuelson a cooperator? Why the man writes joint articles,” the basis for this claim being the article Samuelson had written with Russ Nixon.⁵

This was the first, and far from the last, occasion on which Samuelson’s career was significantly affected by the military situation. Anxious to behave

a. His expertise in economic theory would have been clear from his publications, so he presumably had no need to mention that.

b. Ralph Freeman was no relation of Harold Freeman. properly, Ralph Freeman contacted Edward Chamberlin, who had by then replaced Burbank as head of the Harvard Economics Department, to ask per­mission to make an offer to Samuelson, no doubt explaining that MIT had been forced into doing so by the exigencies of preparing for war.

The last item on the committee's lunchtime agenda read simply “Samuelson.” They discussed Freeman's request along with a proposal to rec­ommend Samuelson immediately for a five-year instructorship. Schumpeter apparently threatened to resign if Samuelson was not made an offer, but despite this drama, no offer was made and Chamberlin acceded to Freeman's request.⁶ The outcome was that on October 10, MIT president Karl Compton officially offered Samuelson an assistant professorship, at a salary of $3,000 per year.⁷ He decided to accept and moved immediately, a few weeks into the new academic year.

To understand the significance of this move, it is essential to note that Harvard had, along with Chicago, one of the leading economics depart­ments in the country. It contained people, such as Chamberlin, Schumpeter, Hansen, Williams, and Haberler, who were acknowledged authorities in their field, as well as people such as Wilson and Leontief (still very young and only recently embarked on the project that was to bring him fame), who were engaged in mathematical economics at the level he was pursuing. Even those whom Samuelson did not respect, such as Crum and Frickey, were active in research. The list of Harvard's graduate students during the time Samuelson was there reads like an honor roll for postwar economics. In contrast, MIT had a Department of Economics and Social Science, in which the main research focus was in the field of industrial relations; its main function was providing service teaching for natural science and engineering students, half the depart­ment's teaching resources being devoted to a course in economics that was compulsory for virtually all students in the institute. MIT did not even have a graduate program in economics. If Samuelson moved to MIT, though he would be moving only two miles, he would be joining a department that was without the advantages Harvard, for all its faults, could offer.

In retrospect, Harvard's decision not to match MIT's offer seems like a monumental miscalculation. There is also a puzzle as to why, given the enor­mous disparity between the two departments, Samuelson chose to leave when he had the option of remaining at Harvard. The suggestion has been made that the answer to both questions was anti-Semitism, then rife at Harvard. It has also been suggested that some of his Harvard teachers were prejudiced against someone who was brighter than they were and, to boot, a Keynesian. Robert Solow, Samuelson’s colleague for many years at MIT, who had been at Harvard in the 1940s, expressed the view that Harvard was prejudiced against Jews, Keynesians, and people who were very bright, so Samuelson had no chance.⁸ It turns out, though there is considerable evidence to support this view, the story is more complicated.