Arguments

Gary Becker, 1930-2014

A giant has passed—not just in the field of economics, but for all of us living in a world ruled by economic logic.

By Nathan Pippenger

Tagged Economics

Gary Becker, the Nobel Prize-winning economist and University of Chicago professor, died this weekend at the age of 83. Becker’s wide-ranging work extended his influence far beyond economics—it’s impossible, in fact, to understand the last half-century of American social science without some appreciation of his legacy.

Becker was an intellectual giant: the uncommon scholar who not only performs the immense creative work of developing an innovative idea, but who manages to defy the narrowing, insulating forces of academia in order to spread his thinking out over a vast canvas. However one ultimately judges his legacy, this sheer intellectual virtuosity deserves notice and admiration. In Becker’s case, the innovative idea was rational-choice theory—an idea that, to be sure, he did not invent, but which he brought to a new level of theoretical sophistication, and which he applied far and wide, to topics which had never before fallen under the domain of economics.

That boundary-crossing approach was exemplified in his 1976 book, The Economic Approach to Human Behavior. (They just don’t title ‘em like that anymore.) The book had no modest ambitions, as Becker explained just a few pages in:

Indeed, I have come to the position that the economic approach is a comprehensive one that is applicable to all human behavior, be it behavior involving money prices or imputed shadow prices, repeated or infrequent decisions, large or minor decisions, emotional or mechanical ends, rich or poor persons, men or women, adults or children, brilliant or stupid persons, patients or therapists, businessmen or politicians, teachers or students.

In other words, Becker was proposing economics as a Unified Theory Of Everything—and if there’s anything that ought to automatically arouse our suspicion, it’s unified theories of everything. Alas, many in the academic world did not react that way to Becker’s arguments: During the 1980s and even into the 1990s, rational-choice seemed to promise—at long last!—an elegant, unified theory of action that could explain the totality of human behavior, even (for its most dedicated followers) across diverse cultures and historical periods. The approach was powerful and intuitive; its evangelists were bold; its domination seemed imminent. Yet as is often the case with new academic trends, there was a backlash and eventually a readjustment. Today rational-choice scholars are still influential, but they’re one camp among many.

That’s an important story in the history of American social science, but it’s not the only legacy of Becker’s work. One of the biggest trends in intellectual life, over the last few decades, has been the colonization by economics of diverse ways of knowing, thinking, and reasoning. The same boldness that characterized the rational-choicers; attempts to take over social science can be found in countless pop-economics books that promise to “explain everything” through the logic of economic action. This trend has hardly escaped the notice of political philosophers. Harvard’s Michael Sandel, for instance, singled out Becker for criticism in his 2012 book What Money Can’t Buy: The Moral Limits of Markets. Reviewing the book for Democracy, David M. Kennedy noted:

What Money Can’t Buy can be read in part as a systematic dismantling of the claim that economics is the unique key to enlightened public policy and the uncrowned queen of the social sciences. […] What [Sandel] objects to most vigorously is exemplified in the work of the University of Chicago’s Gary Becker, who won the Nobel Prize for extending economistic techniques to novel realms like racial discrimination, crime, and family life. That kind of thinking Sandel finds empirically suspect and morally questionable. “The most fateful change that unfolded during the last three decades was not an increase in greed,” he writes. “It was the expansion of markets, and market values, into spheres of life where they don’t belong.”

In politics, this imperious logic has become intertwined with the cruder versions of market-worship that plague American conservatism. And Becker was a major intellectual figure on the right, where his economic reasoning nicely dovetailed with the right’s prescriptions on a number of policy issues. In the late 1980s, for instance, Becker expressed the then-dominant opinion among economists that income mobility in the U.S. and other countries was healthily robust: “In all these countries, low earnings as well as high earnings are not strongly transmitted from fathers to sons.” Just a few years later, this claim was blown apart in a major paper by Gary Solon, who used new data to show that America was much further from the Horatio Alger ideal than economists had assumed.

Yet as late as 2007, when the literature on inequality and mobility was much more developed, Becker was still questioning the emergent consensus in opinion pieces for conservative institutions like the American Enterprise Institute. Noting that some of America’s inequality came from payoffs to those who pursued education, Becker and his co-author, UChicago’s Kevin Murphy, wrote: “We believe that the rise in returns on investments in human capital is beneficial and desirable.” So far, so good: Hardly anybody opposes the career payoffs that come from going to college.

But when it came to policy recommendations, Becker’s careful distinctions dissolved: In the end, the observation that some inequality results from educational differences transformed into an assumption that inequality is the result of those differences in general. This subtle move valorizes the rich, who are simply receiving their just reward for years of hard study. And it calms the fears of those who worry about inequality by assuring them that it is nothing more than a healthy side effect of the smart investments college students make in their own future. After all, who could be so cynical as to imagine that America’s colleges are designed to perpetuate the social position of wealthy dimwits?

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In the end, for Becker—or at least for AEI—the deplorable social trend was not inequality, which after all is merely the result of hard workers collecting their just deserts. Instead, the thing to worry about was the prospect that anybody might respond to inequality by considering higher taxes on the virtuous rich. “Attempts to raise taxes and impose other penalties on the higher earnings that come from greater skills could greatly reduce the productivity of the world’s leading economy by discouraging investments in its most productive and precious form of capital—human capital.”

Of course, the idea that people attend college simply to maximize their future earnings is unconvincing on its face. There’s an important insight buried within the assertion—the link between economic logic and major life decisions—but allowing the economic logic to take over, and ultimately to dominate the political argument, leads to an outcome that blurs the distinction between market values and human values. The progress of intellectual life is not linear. A brilliant intellectual legacy can transform whole fields of knowledge and advance our thinking on diverse topics. But even brilliant legacies are not unified explanations of everything, and other minds are never obligated to deferentially acknowledge them as such. Quite the contrary: An engaged, principled disagreement with a dynamic intellectual is some of the highest praise we can give. Our public life is poorer because economic logic has run amok. But we have also lost a brilliant mind with whom to argue, and our public life is poorer for that, too.

Photo credit: George Bush Presidential Library and Museum

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Nathan Pippenger is a contributing editor at Democracy. Follow him on Twitter at @NathanPip.

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