Schumpeter and Samuelson
Samuelson got to know Schumpeter well. Schumpeter was nominated as his “sponsor,” required to report regularly to the SSRC on his progress,52 and he kept in regular touch until shortly before Schumpeter’s death on January 8, 1950.
One reason why “Schumpy,” as they called him, was popular with the graduate students was that he made time for them. He spent the afternoons in a coffee shop near the library, where students knew they could talk to him, and he had immense patience even for the weaker students, especially if they had some interesting idea but lacked the skills to work it out. He was also quite willing for the bright students, including Samuelson, to correct his mathematics—something that, according to some of those present, was a frequent occurrence. His willingness to learn by going to Wilson’s lectures cannot have gone unnoticed by the students, even though few of them attended these courses. He regularly entertained graduate students and visitors to Harvard, over lunch and dinner, conversations often continuing into the night. “As the undisputed star of the Economics Department,... an inveterate showman who needed an audience,... being Joseph Schumpeter was just as important to him as being a great economist.”53Schumpeter continued to take a close interest in the development of Samuelson’s career. At the December 1938 meeting of the American Economic Association, he included Samuelson’s paper, “A Restatement of the Theory of Cost and Production with Emphasis on Its Operational Aspects,” in a session that he chaired, alongside papers by Irving Fisher—protege of Willard Gibbs and arguably the biggest name in mathematical economics—and Jacob
Marschak, then a Rockefeller-funded fellow visiting the United States, but who was to become director of the Cowles Commission, the major U.S. center for econometric research.
After the session, Samuelson had to prepare an abstract for publication in the March issue of the American Economic Review. Schumpeter told him, in a letter sent while Samuelson was visiting with Marion's family in Wisconsin, “Your abstract was too short and conveyed what you really had to say just as inadequately as did your oral presentation, which entirely failed to impress the audience as I hoped it would.”54’’ However, given that time was short, he proposed that Samuelson leave it unchanged, even though he thought it was inadequate. The material in this paper was to become an important part of his thesis. When Samuelson came to submit a thesis, it is no surprise that Schumpeter, along with Wilson, was one of his examiners. They remained in touch even when Samuelson's interests had developed in other directions. Schumpeter continued to read everything Samuelson wrote, writing at one point, “I like to have a complete collection of Samuelsonia" and describing him as “one of the ablest economists of our time.”55 Their relationship is indicated by a remark made in 1943 that is much more significant coming from a German speaker used to more formal forms of address, “Don't professor me any more—let's drop that!"56When Schumpeter became president of the American Economic Association, he invited Samuelson to join him on the program committee and to produce something to mark the centenary of Pareto's birth.57 Their last meeting was at this AEA conference, talking about many things in a hotel bar before they, along with Haberler, were persuaded to join a colleague for dinner in his apartment. When their host fell asleep, and Haberler had made his excuses, Samuelson and Schumpeter were left alone, talking about all sorts of things, until they too decided to make an exit.
Dismissing what he was writing as “psychoanalytical babble," Samuelson wrote about the inner melancholy that lay beneath Schumpeter's elegant and confident exterior.
He discussed his personal tragedy—the disappearance of the pre-1914 Hapsburg Empire whose high society was so important to Schumpeter and in whose rich culture he had been educated—and the conflicts brought about by the United States later fighting on the same side as the Soviet Union that he disliked so intensely and whose rise he feared. Schumpeter founded no school. Not only was he opposed to schools in economics, he was too much the showman and solo artist to be a leader. Hisj. The letter was typed, but Schumpeter had underlined was with a pen, as though it was a point he had made before and which Samuelson had resisted. love of aphorisms, many of which implied a cynicism about life, also worked against his creating a group who would loyally develop his ideas. He adopted an attitude of detachment toward his own work, never discussing it in class and being too eclectic in his appreciation of different types of work to engage in sustained controversy.58
He nevertheless inspired students. Samuelson wrote of Schumpeter's circle at Harvard as including a list of graduate students who were to become eminent in the profession.k After the war, Schumpeter continued to inspire students. Samuelson wrote that from his “perch three miles down the Charles River, I recognized that an Elizabethan Golden Age coincided with the late Age of Schumpeter.”' When praising his friends and colleagues, Samuelson invariably resorted to hyperbole, but there seems little doubt that Schumpeter was very important to him—a conclusion reinforced by the fact that, unlike his tributes to other teachers, Samuelson's stated intellectual debts to Schumpeter are so nonspecific.
When Schumpeter, increasingly unhappy at Harvard, was on the verge of moving to Yale, Samuelson appears to have been instrumental in organizing a petition among the Harvard graduate students urging him to stay.59
Each one of us has been stimulated by the breadth and vision of your thought.
As no one else, you have always shown intense interest in our problems regardless of the field; and we have always had reason to be extremely grateful for your willingness to give us your time and energy. Our research has been greatly aided by your helpful criticism and generous encouragement. You have implanted in us a belief in the importance of a more exact and objective economic science and a desire to contribute to its development. Above all, you have been more than a teacher to us we have always been proud to think of you as a true friend. We feel that our departure would be an irreplaceable loss to us and to future Harvard students.60The letter had, of course, to be sufficiently general that twenty-six students, working in a variety of fields, could sign it, but it is tempting to see the
k. Abram Bergson, Alice Bourneuf, Wolfgang Stolper (not to be confused with his father, Gustav Stolper), Richard Musgrave, Tsuru, Triffin, Sidney Alexander, Joe Bain, John Lintner, Lloyd Metzler, and Robert Bishop—together with Marion Crawford [Samuelson] and David Rockefeller.
l. Samuelson 2011b. Robert Solow, who was a graduate student at Harvard in the late 1940s, was less enthusiastic about Schumpeter. Samuelson may have failed to recognize that by this time Schumpeter had changed and was no longer the charismatic figure he was in the 1930s.
remark about encouraging “a more exact and objective economic science” as being either something that Schumpeter emphasized in his dealings with students or something that Samuelson picked out as particularly important. The letter went on to express the fear that the fields of theory and business cycles would collapse were Schumpeter to leave.
Samuelson would certainly have taken advantage of Schumpeter's generosity with his time, and their conversations no doubt ranged widely. It is hard to believe that they did not end up discussing Schumpeter's ideas about science: in addition to Samuelson's taking Schumpeter's courses in Economic Theory and Business Cycles, they were both among the four people taking Wilson's courses.
It is little exaggeration to say that they were both obsessed with the idea that economics should be a science. The “operationalism” on which Samuelson drew in his Foundations (1947a) was not the same as the “instrumentalism” of Mach and Poincare on which Schumpeter's early methodological work was based, but there was a strong resemblance. The same could be said about Schumpeter's skepticism of the “psychological method” and Samuelson's revealed-preference theory. It is possible that Samuelson tried to read Schumpeter's first book, though given that his German was limited, it is more likely that such ideas simply came up in conversation. Samuelson later wrote that he was surprised when, at the very end of his life, Schumpeter said that if one was faced with a choice between economic history or “mathematical econometrics,” one should opt for the former. His surprise at this remark may show that Samuelson had not consciously absorbed the many qualifications Schumpeter made to his support for the use of mathematics in economics, even if his later work was to show that he had, at least partially, internalized the message.mm. The last remark is based on the content of Samuelson's textbook (see chapters 25 and 27 this volume).