Some of you are probably already aware of this. Gary Becker, an economist at the University of Chicago and a winner of the Nobel Prize in Economics died over the past weekend. I know I've mentioned him in class prior to this and I believe he is mentioned in the Backhouse text. He is a significant figure in late 20th century economics. He felt that economics and economic thinking played a significant role in decisions people make that most consider outside economics (discrimination, relationships, children, crime, etc.). At the same time, he chastised the profession for thinking too narrowly about what incentives people react to when making choices.
He also was a strong believer in the power of human capital to change economic circumstances on both a micro and macro level.
There are numerous obituaries in major newspapers and numerous tributes on various economics blogs. You might want to consider looking them over, either in preparation for our discussions on Dr. Becker or just as a response to this blog.
http://dish.andrewsullivan.com/2014/05/06/the-legacy-of-gary-becker/
ReplyDeleteI have included in my comment a link to tribute to Gary Becker that discusses his major contributions to economics. One of Becker's main contributions was that of "human capital". This attention to human capital made education become a priority in not only expanding ones personal education but the development of the labor market. Becker also brought to light the study of discrimination in economics. His main point of racism study was that profits could be made if their was tolerance (I'm assuming tolerance with racism.
Many others in the article shared their favorite memories about Becker as well.
http://www.economist.com/news/finance-and-economics/21601841-economists-everywhere-should-mourn-passing-gary-becker-great-trailblazer?zid=295&ah=0bca374e65f2354d553956ea65f756e0
ReplyDeleteAs above, I included the link to the article that I found relating the career of Gary Becker to his contributions that have shaped the direction of modern economics. One of the major distinctions that brought him the Nobel Prize was that "individuals maximise welfare as they conceive it." This statement suggests that people only act when they see an incentive to their situation. This can lead to the application, such as Becker used to examination social aspects of life in addition to the economic ones. He began this thesis with his work in the discrimination of the south and its effects on the field of economics. He continued on in his career to study crime, and the "human capital" of education in the market. The article concludes that the economic contributions of Gary Becker, though annoying to some in the field for their hand in requiring a change, leading to the improvement of social understanding to better prepare policy.
I also looked at Becker's "individuals maximize welfare as they conceive it" topic. I interpreted it a little differently than people only act when they see an incentive. I looked at it more like people will act in a way that they see most rational. For example, he cites an example from his life when he was late to a meeting and had to decide whether or not to park illegally. He decided that the benefits outweighed the potential punishment and parked illegally. He was not caught in this situation and essentially broke the law based on a rational decision. Professor Schilling had the same kind of situation and also decided to break the law because he thought the chances of him not getting caught were greater than the chances of getting caught.
ReplyDeleteI also remember learning about this rational decision making process in Intermediate Microeconomics last semester. The expected utility hypothesis was used in order to determine if someone would take a gamble or not. If the expected utility was high enough, they would take the gamble. That is essentially what Becker is saying in his statement.