MFI conference salutes ‘economists’ economist’ Gary Becker

Steve Koppes
Associate News DirectorUniversity Communications

The President of the Czech Republic, a former U.S. Secretary of State, a Nobel laureate, and distinguished economists saluted the work of Gary Becker as they took part in a daylong conference held in honor of his 80th birthday.

University faculty joined with other leading scholars in the Weymouth Kirkland Courtroom at the Law School to discuss the role of markets in the modern economy, economics and government policy, and new directions and continuing breakthroughs in the field.

The remarks frequently referenced the pioneering contributions of Becker, University Professor in Economics and 1992 recipient of the Nobel Memorial Prize for Economic Sciences.

“Gary Becker is not only one of the world’s leading economists, he is also one of the most influential scholars in the world,” said President Robert J. Zimmer in his opening remarks at the Friday, Feb. 11 gathering organized by the Milton Friedman Institute for Economic Research.

"In his intellectual fearlessness, which he has demonstrated time and time again, he is an exemplar of the aspirations of the University of Chicago," Zimmer continued.

Former U.S. Secretary of State George P. Shultz, who served as Dean of the Graduate School of Business, now Chicago Booth, was the first presenter at the conference. He discussed one of Becker’s proposals—confronting the failure of the war on drugs by legalizing and taxing drugs—and made suggestions for further research.

Shultz urged Becker to study the experience of Portugal, where drugs have been decriminalized and treatment programs offered to addicts, and to explore other ways to shift the demand curve. Shultz, who recently turned 90, joked that at 80, Becker is a promising younger scholar who has years ahead to follow up on these research suggestions.

During a luncheon talk, Law School Dean Michael Schill pointed out the ways in which Becker’s work has contributed to legal scholarship. “Gary’s research on crime sent shock waves through the legal community,” he said.

He explained that Becker’s research on the economic motivations of people to commit crimes challenged scholars and the legal profession to rethink their understanding of crime.

Becker’s work on racial discrimination and family economics also had a big impact on the legal field, Schill pointed out.

Václav Klaus, President of the Czech Republic, also praised Becker’s work and the contributions of other UChicago economists in providing the intellectual foundation for transforming the economies of Eastern Europe after the fall of Communism.

Klaus, a professor of economics and a member of the Chicago Booth Global Advisory Board, said he was trained in Marxist ideology but had come to admire the work of Becker during the period before the fall of Communism. He pointed out that the work of Becker, as well as Milton Friedman and George Stigler, another leading Chicago economist, was influential in the creation of a market economy to replace the former planned economy.

As the first Prime Minister of a democratic Czech Republic, Klaus said he was firm in his resolve that a true market economy was the path for his nation’s future. “At the first meeting I attended of the World Economic Forum, I was asked if there was a third way. I said the third way was the fastest way to the Third World,” he said.

During the afternoon, economists discussed the challenges of applying the principles of economics to federal policymaking. Randall Kroszner, the Norman R. Bobins Professor of Economics at Chicago Booth and a former Governor of the Federal Reserve System, pointed out the value of having studied economic history.

“The majority of us on the board had studied economic history and the Great Depression, so we knew what could go wrong,” Kroszner said. “The challenge for policymakers is making decisions during a crisis without having the opportunity to revise and review a conclusion as economists do in their own research,” he said.

During a session on the future of economics, Steven Levitt pointed to Becker’s substantial contributions: “He has come up with the big ideas that have changed how we look at the world.” Levitt’s forecast for the field was that with ever–growing availability of data and computing power, economics will continue to become more empirical. Experiments will become more important to economists, added Levitt, the William B. Ogden Distinguished Service Professor in Economics and the College.

Before dinner, Lars Peter Hansen, the Director of the MFI, the David Rockefeller Distinguished Service Professor in Economics and the College, and Professor in Statistics, highlighted the role of the Milton Friedman Institute in advancing the study of economics: “The Institute nurtures the kind of creative collaborations that, when supported by rigorous analysis, have produced Chicago’s remarkable string of world–changing economic insights. No one exemplifies this form of Chicago economics better than Gary Becker, so it’s most appropriate and truly a pleasure for us to honor him tonight.”

James Heckman, the Henry Schultz Distinguished Service Professor in Economics, closed the conference with a slide show that cast Becker’s intellectual contributions in a historical context and highlighted other leading economists he had worked with and influenced over his career.

“Gary Becker is our Isaac Newton,” Heckman said, after showing slides of portraits of the two. He pointed out that each scholar had made enormous contributions, which were wide ranging. “Think of what Gary Becker has done,” Heckman said. He credited Becker with “unveiling the mysteries” of such topics as the labor market, migration, wages, schooling, crime, and addiction.

Heckman also cited an essay by John Maynard Keynes on Newton, in which Keynes pointed to Newton’s intuition. “Anyone who has talked to Gary Becker realizes how extraordinary his intuition is,” Heckman said.

Heckman said he first learned of Becker’s work when he was a graduate student at Princeton in the 1960s. Becker’s work already was legendary. “Gary was not yet 40 at the time, but had made definitive contributions to areas of knowledge, like racial discrimination, human capital, time allocation, fertility, theory of rational behavior. If he had stopped working then, done nothing else, his career would be worth celebrating today.”

“He did not stop,” Heckman said, with great understatement.

Heckman said Becker’s work represents the best of the tradition of Chicago economics: an understanding of the importance of theory and the value of a rigorous examination of serious problems.

“But the most important point is intellectual honesty, something Gary’s work has demonstrated,” Heckman said.

Conference organizers Kevin Murphy, George J. Stigler Distinguished Service Professor of Economics at Chicago Booth, and Edward Lazear, a former Chicago Booth faculty member, now with Stanford University and the Hoover Institution, closed the evening with toasts.

Murphy said that if all the economists in the room and those not present were polled, Becker would win the economist’s prize in economics. Lazear said, “The world is blessed by having a supremely creative thinker who did more to move social science in a new direction than any other 20th–century scholar.