Paul A. Samuelson Quotes (47 quotes) | Quotes of famous people

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Foundations of Economic Analysis

Paul A. Samuelson

Paul A. Samuelson: 47 quotes 5 likes

Famous Paul A. Samuelson Quotes

“I would guess that most MIT Ph. D.’s since 1980 might deem themselves not to be “Keynesians.” But they, and modern economists everywhere, do use models like those of Samuelson, Modigliani, Solow, and Tobin. Professor Martin Feldstein, my Harvard neighbor, complained at the 350th Anniversary of Harvard that Keynesians had tried to poison his sophomore mind against saving. Tobin and I on the same panel took this amiss, since both of us since 1955 had been favoring a “neoclassical synthesis,” in which full employment with an austere fiscal budget would add to capital formation in preparation for a coming demographic turnaround.”

Paul A. Samuelson

New millennium, An Interview with Paul A. Samuelson, 2003

“I think Marshall was a great economist, but he was a potentially much greater economist than he actually was. It was not that he was lazy, but his health was not good, and he worked in miniature.”

Paul A. Samuelson

Kotaro Suzumura, An interview with Paul Samuelson: welfare economics,“old” and “new”, and social choice theory (2005)
New millennium

“When I once called myself a “Sunday painter” dabbling in stochastic finance, that was not meant to belittle finance theory as a branch of serious economic theory. Such a peculiar view was expressed again and again by the late Milton Friedman, a dizzy view that I still find incomprehensible.”

Paul A. Samuelson

New millennium, An Enjoyable Life Puzzling Over Modern Finance Theory, 2009

“Moral: free markets do not stabilize themselves. Zero regulating is vastly suboptimal to rational regulating. Libertarianism is its own worst enemy!”

Paul A. Samuelson

New millennium, An Enjoyable Life Puzzling Over Modern Finance Theory, 2009

“Markets are not perfect, which is true even for rationally regulated markets. Nevertheless, over the last thousand years every attempt to organize sizeable societies without important dependence on markets has generated its own failure …”

Paul A. Samuelson

New millennium, An Enjoyable Life Puzzling Over Modern Finance Theory, 2009

“After 1929 it was the sturdy middle classes, and not just the lumpen proletariat, who were down and out. It was not all that unfashionable or disreputable to be bankrupt. By the last Hoover years, the states and localities had run out of money for relief. In middle-class neighborhoods like mine, you constantly had children at the door, asking by mouth or with a note for a dime, a quarter, or a potato: saying, in a believable fashion, we are starving.”

Paul A. Samuelson

Samuelson (1985; p, 6) as cited in: Klein, Daniel B., and Ryan Daza. " Paul A. Samuelson (Ideological Profiles of the Economics Laureates). http://econjwatch.org/file_download/767/schultzipel.pdf" Econ Journal Watch 10.3 (2013): 561-569.
1980s–1990s

Paul A. Samuelson Quotes

“The recent market run-up that appreciated run-of-the- mill shares also chanced to send up those token gold holdings. Pure luck, undeserved and unlikely to reoccur. Good questions outrank easy answers.”

Paul A. Samuelson

1980s–1990s
Source: Paul Anthony Samuelson, ‎Kate Crowley (1986), The Collected Scientific Papers, Volume 5, p. 561

Question

“There is really nothing more pathetic than to have an economist or a retired engineer try to force analogies between the concepts of physics and the concepts of economics.”

Paul A. Samuelson

Source: 1950s–1970s, Maximum Principles in Analytical Economics, 1970, p. 69
Context: There is really nothing more pathetic than to have an economist or a retired engineer try to force analogies between the concepts of physics and the concepts of economics. How many dreary papers have I had to referee in which the author is looking for something that corresponds to entropy or to one or another form of energy. Nonsensical laws, such as the law of conservation of purchasing power, represent spurious social science imitations of the important physical law of the conservation of energy; and when an economist makes reference to a Heisenberg Principle of indeterminacy in the social world, at best this must be regarded as a figure of speech or a play on words, rather than a valid application of the relations of quantum mechanics.

“I can claim that in talking about modern economics I am talking about me. My finger has been in every pie.”

Paul A. Samuelson

February 1985, in William Breit and Roger W. Spencer (ed.) Lives of the laureates
1980s–1990s
Context: I can claim that in talking about modern economics I am talking about me. My finger has been in every pie. I once claimed to be the last generalist in economics, writing about and teaching such diverse subjects as international trade and econometrics, economic theory and business cycles, demography and labor economics, finance and monopolistic competition, history of doctrines and locational economics.

“I return to economics and to economists, and to the question of why the profession’s directions have evolved in the manners evident from this book. A major conservative economist once explained that a source of his antipathy to government traced back to the defeat of his southern ancestors by a larger north economy. Here is a similar factoid. Joan Robinson once wrote that her opposition to having the U. K. enter the European Market was due to the fact that she “had more friends in [Nehru’s] India than on the continent.””

Paul A. Samuelson

Coeditor's Forword in Inside the economist’s mind: conversations with eminent economists (2007)
New millennium

Books , Question

“The stock market has forecast nine of the last five recessions.”

Paul A. Samuelson

Paul Samuelson (1966), quoted in: John C Bluedorn et al. Do Asset Price Drops Foreshadow Recessions? (2013), p. 4
1950s–1970s

“Often I’ve stated how I hate to be wrong. That has aborted many a tempting error, but not all of them. But I hate much more to stay wrong. Early on, I’ve learned to check back on earlier proclamations. One can learn much from one’s own errors and precious little from one’s triumphs. By September of 1945, it was becoming obvious that oversaving was not going to cause a deep and lasting post-war recession. So then and there, I cut my losses on that bad earlier estimate.”

Paul A. Samuelson

New millennium, An Interview with Paul A. Samuelson, 2003

Hate , War , Error , Learning

“Modigliani's theory was a powerful searchlight on what was happening… It is the best explanation of what has actually been happening in the great swing of American life since the 1950's.”

Paul A. Samuelson

Paul Samuelson in: Louis Uchitelle. " Franco Modigliani, 85, Nobel-Winning Economist, Dies http://www.nytimes.com/2003/09/26/obituaries/26MODI.html" in New York Times, September 26, 2003.
New millennium

Life

“An American economist of two generations ago, H. J. Davenport, who was the best friend Thorstein Veblen ever had (Veblen actually lived for a time in Davenport’s coal cellar) once said: “There is no reason why theoretical economics should be a monopoly of the reactionaries.” All my life I have tried to take this warning to heart, and I dare call it to your favorable attention.”

Paul A. Samuelson

Source: 1950s–1970s, Maximum Principles in Analytical Economics, 1970, p. 76

Life , Time , Heart

“From the beginning I could not believe that the “efficient market” hypothesis was dependent on a pure Brownian motion white noise or any truly random random walk. Place a minuscule colloidal molecule on a horizontal table that covers unlimited acres. Bombard it from every direction with thousands of minute atoms; and then if you wait long enough that original molecule can have traveled a billion miles in one direction. That’s truly a random Bachelier-Einstein walk, but not my notion of economic fluctuations.”

Paul A. Samuelson

New millennium, An Enjoyable Life Puzzling Over Modern Finance Theory, 2009

Travel , Waiting , Dependency

“In the preface to the reissue of Risk, Uncertainty and Proﬁt, Frank Knight makes the penetrating observation that under the conditions envisaged above the velocity of circulation would become inﬁnite and so would the price level. This is perhaps an over-dramatic way of saying that nobody would hold money, and it would become a free good to go into the category of shell and other things which once served as money. We should expect too that it would not only pass out of circulation, but it would cease to be used as a conventional numeraire in terms of which prices are expressed. Interest bearing money would emerge. Of course, the above does not happen in real life, precisely because uncertainty, contingency needs, non-synchronization of revenues and outlay, transaction frictions, etc., etc., all are with us. But the abstract special case analyzed above should warn us against the facile assumption that the average levels of the structure of interest rates are determined solely or primarily by these differential factors. At times they are primary, and at other times, such as the twenties in this country, they may not be. As a generalization I should hazard the hypothesis that they are likely to be of great importance in an economy in which there is a “quasi-zero" rate of interest. I think by this hypothesis one can explain many of the anomalies of the United States money market in the thirties.”

Paul A. Samuelson book Foundations of Economic Analysis

Source: 1940s, Foundations of Economic Analysis, 1947, Ch. 5 : Theory of Consumer’s Behavior

Life , Money , Way , Thinking

“The general method involved may be very simply stated. In cases where the equilibrium values of our variables can be regarded as the solutions of an extremum (maximum or minimum) problem, it is often possible regardless of the number of variables involved to determine unambiguously the qualitative behavior of our solution values in respect to changes of parameters.”

Paul A. Samuelson book Foundations of Economic Analysis

Source: 1940s, Foundations of Economic Analysis, 1947, Ch. 2 : The Theory of Maximizing Behavior

Behavior , Problem , Change

“It is some relief to move from the exalted realm of philosophical ethics to the mundane realm of scientific methodology. However, I rather shy away from discussions of Methodology with a capital M. To paraphrase Shaw: Those who can do science; those who can’t prattle about its methodology.”

Paul A. Samuelson

“My Life Philosophy: Policy Credos and Working Ways,” in M. Szenberg (ed.) Eminent Economists: Their Life Philosophies (1992)
1980s–1990s

Science

“The existence of analogies between central features of various theories implies the existence of a general theory which underlies the particular theories and unifies them with respect to those central features. This fundamental principle of generalization by abstraction was enunicated by the eminent American mathematician E. H. Moore more than thirty years ago. It is the purpose of the pages that follow to work out its implication for theoretical and applied economics.”

Paul A. Samuelson book Foundations of Economic Analysis

Source: 1940s, Foundations of Economic Analysis, 1947, Ch. 1 : Introduction

“The very name of my subject, economics, suggests economizing or maximizing. But Political Economy has gone a long way beyond home economics. Indeed, it is only in the last third of the century, within my own lifetime as a scholar, that economic theory has had many pretensions to being itself useful to the practical businessman or bureaucrat. I seem to recall that a great economist of the last generation, A. C. Pigou of Cambridge University, once asked the rhetorical question, “Who would ever think of employing an economist to run a brewery?” Well, today, under the guise of operational research and managerial economics, the fanciest of our economic tools are being utilized in enterprises both public and private.”

Paul A. Samuelson

Source: 1950s–1970s, Maximum Principles in Analytical Economics, 1970, p. 62: Lead paragraph

Way , Home , Question , Thinking

“I had a great admiration for Pigou. I thought that, in many ways, he was not only a faithful follower of Alfred Marshall, but he was also a more fertile developer of the Marshallian tradition than Marshall himself. … Whitehead said to me:“Don’t you think that Pigou was an overrated economist? Wasn’t Foxwell a better man?” Since I am an honest man, I said to Whitehead:“No, I think Pigou was a much more important economist than Foxwell.””

Paul A. Samuelson

Kotaro Suzumura, An interview with Paul Samuelson: welfare economics,“old” and “new”, and social choice theory (2005)
New millennium

Faith , Way , Thinking

“I reproach myself for a gross error. But I would reproach myself more if I had persisted in an error after observations revealed it clearly to be that. I made a deal of money in the late 1940s on the bull side, ignoring Satchel Paige’s advice to Lot’s wife, “Never look back.” Rather I would advocate Samuelson’s Law: “Always look back. You may learn something from your residuals. Usually one’s forecasts are not so good as one remembers them; the difference may be instructive.” The dictum “If you must forecast, forecast often,” is neither a joke nor a confession of impotence. It is a recognition of the primacy of brute fact over pretty theory. That part of the future that cannot be related to the present’s past is precisely what science cannot hope to capture. Fortunately, there is plenty of work for science to do, plenty of scientific tasks not yet done.”

Paul A. Samuelson

February 1985, in William Breit and Roger W. Spencer (ed.) Lives of the laureates
1980s–1990s

Money , Law , Hope , Error

“I tell no secret when I repeat that fame and reputation are much a matter of luck and chance.”

Paul A. Samuelson

Samuelson's Economics at Fifty: Remarks on the Occasion of the Anniversary of Publication (1998)
1980s–1990s

Secret , Chance

“An evolving discipline–whether it be history or economics or astrophysics or immunology–is ever dynamically changing. Two steps forward and X steps back, so to speak. Periodically, the scholarly group registers more or less self-confidence, self-esteem, and complacency. We careerists are happiest when recent past achievements have seemed to be successful, but when still there are completable tasks dimly visible ahead.”

Paul A. Samuelson

"Foreword: Eavesdropping on the Future?" in New Frontiers in Economics (2004)
New millennium

Confidence , History , Change , Success

“Econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.”

Paul A. Samuelson

Paul Samuelson, Tjalling Koopmans, and Richard Stone. "Report of the evaluative committee for Econometrica." Econometrica- journal of the Econometric Society. (1954): 141-146.
1950s–1970s

“Well, I'd say, and this is probably a change from what I would have said when I was younger: Have a very healthy respect for the study of economic history, because that's the raw material out of which any of your conjectures or testings will come. And I think the recent period has illustrated that. The governor of the Bank of England seems to have forgotten or not known that there was no bank insurance in England, so when Northern Rock got a run, he was surprised. Well, he shouldn't have been.
But history doesn't tell its own story. You've got to bring to it all the statistical testings that are possible. And we have a lot more information now than we used to.”

Paul A. Samuelson

Conor Clarke, An Interview With Paul Samuelson http://www.theatlantic.com/politics/archive/2009/06/an-interview-with-paul-samuelson-part-two/19627/, Part Two (2009)
New millennium

History , Thinking , Study , Change

“Well, I will say this. And this is the main thing to remember. Macroeconomics -- even with all of our computers and with all of our information -- is not an exact science and is incapable of being an exact science. It can be better or it can be worse, but there isn't guaranteed predictability in these matters.”

Paul A. Samuelson

Conor Clarke, An Interview With Paul Samuelson, Part One http://www.theatlantic.com/politics/archive/2009/06/an-interview-with-paul-samuelson-part-one/19572/ (2009)
New millennium

Science

“What sex is to the biology classroom, stocks and investment riskiness is to the sophomore economics lecture hall.”

Paul A. Samuelson

Samuelson's Economics at Fifty: Remarks on the Occasion of the Anniversary of Publication (1998)
1980s–1990s

Sex

“Arrow’s general impossibility theorem does not disprove the existence of the Bergsonian social welfare function, neither does it disprove the existence of the Benthamite hedonistic function.”

Paul A. Samuelson

Kotaro Suzumura, An interview with Paul Samuelson: welfare economics,“old” and “new”, and social choice theory (2005)
New millennium

“A later writer, such as Leijonhufvud, I knew to have it wrong, when he later argued the merits of Keynes’s subtle intuitions and downplayed the various (identical!) mathematical versions of The General Theory. The so-called 1937 Hicks or later Hicks–Hansen IS–LM diagram will do as an example for the debate.”

Paul A. Samuelson

New millennium, An Interview with Paul A. Samuelson, 2003

Mathematics

“My notion of a fruitful economic science would be that it can help us explain and understand the course of actual economic history. A scholar who seriously addresses commentary on contemporary monthly and yearly events is, in this view, practicing the study of history—history in its most contemporary time phasing.”

Paul A. Samuelson

New millennium, An Interview with Paul A. Samuelson, 2003

History , Understanding , Study , Science

“Moral: To understand economics you need to know not only fundamentals but also its nuances. Darwin is in the nuances. When someone preaches “Economics in one lesson,” I advise: Go back for the second lesson.”

Paul A. Samuelson

New millennium, An Enjoyable Life Puzzling Over Modern Finance Theory, 2009

Understanding

“Globalization presumes sustained economic growth. Otherwise, the process loses its economic benefits and political support.”

Paul A. Samuelson

Quoted in: Richard Duncan (2011) The Dollar Crisis, p. 232
New millennium

Support

“Figure 12-6 pulls together in a simplified way the main elements of income determination. Without saving and investment, there would be a circular flow of income between business and the public: above, business pays out wages, interest, rents, and profits to the public in return for the services of labor and property; and below, the public pays consumption dollars to business in return for goods and services.
Realistically, we must recognize that the public will wish to save some of its income, as shown at the spigot Z. Hence, businesses cannot expect their consumption sales to be as large as the total of wages, interest, rents, and profits.”

Paul A. Samuelson

8th ed., 1970, p. 218
1940s, Economics (1948-)

Way , Business

“What then is it that, since 2007, has caused Wall Street capitalism's own suicide? At the bottom of this worst financial mess in a century is this: Milton Friedman-Friedrich Hayek libertarian laissez-faire capitalism, permitted to run wild without regulation. This is the root source of today's travails. Both of these men are dead, but their poisoned legacies live on.”

Paul A. Samuelson

Farewell to Friedman-Hayek Libertarian Capitalism (2008)
New millennium

Men , Suicide , Dead

“My mind is ever toying with economic ideas and relationships. Great novelists and poets have reported occasional abandonment by their muse. The well runs dry, permanently or on occasion. Mine has been a better luck. As I have written elsewhere, there is a vast inventory of topics and problems floating in the back of my mind. More perhaps than I shall ever have occasion to write up for publication. A result that I notice in statistical mechanics may someday help resolve a problem in finance.”

Paul A. Samuelson

February 1985, in William Breit and Roger W. Spencer (ed.) Lives of the laureates
1980s–1990s

Idea , Problem , Help

“Economics never was a dismal science. It should be a realistic science.”

Paul A. Samuelson

[Samuelson, Paul Anthony, Puttaswamaiah, K., 2002, Paul Samuelson and the Foundations of Modern Economics, 10 http://books.google.co.uk/books?id=_Lvflq4Wv-wC&lpg=PP1&pg=PA10]
New millennium

Science

“The proof of the pudding is in the eating. There was a widespread myth of the 1970s, a myth along Tom Kuhn’s (1962) Structure of Scientific Revolutions lines. The Keynesianism, which worked so well in Camelot and brought forth a long epoch of price-level stability with good Q growth and nearly full employment, gave way to a new and quite different macro view after 1966. A new paradigm, monistic monetarism, so the tale narrates, gave a better fit. And therefore King Keynes lost self esteem and public esteem. The King is dead. Long live King Milton!
Contemplate the true facts. Examine 10 prominent best forecasting models 1950 to 1980: Wharton, Townsend–Greenspan, Michigan Model, St. Louis Reserve Bank, Citibank Economic Department under Walter Wriston’s choice of Lief Olson, et cetera. … M did matter as for almost everyone. But never did M alone matter systemically, as post-1950 Friedman monetarism professed.”

Paul A. Samuelson

New millennium, An Interview with Paul A. Samuelson, 2003

Way , Dead

“I used to joke to Bob Solow that the distance between me and Joan Robinson is less than the distance between Joan Robinson and me. His reply was, “You’ll never convince her of that.””

Paul A. Samuelson

Still one lives in hope.
On April 14, 1972, quoted in Marjorie Shepherd Turner, Joan Robinson and the Americans (1989)
1950s–1970s

Hope

“We economists love to quote Keynes’s final lines in his 1936 General Theory—for the reason that they cater so well to our vanity and self-importance. But to admit the truth, madmen in authority can self generate their own frenzies without needing help from either defunct or avant-garde economists. What establishment economists brew up is as often what the Prince and the Public are already wanting to imbibe. We guys don’t stay in the best club by proffering the views of some past academic crank or academic sage.”

Paul A. Samuelson

Coeditor's Forword in Inside the economist’s mind: conversations with eminent economists (2007)
New millennium