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Knowledge and the Wealth of Nations
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May
4, 2003 |
David
Warsh, Editor |
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A Short History of the Clark Medal For more than a half century, the American Economic Association has awarded a medal every other year to the economist under the age of forty judged to have made "the most distinguished contribution to the main body of economic thought or knowledge." Though there are other professional recognitions that may come later in life, the Clark Medal is the only widely-recognized prize given to the relatively young. It is bi-annual, on the theory that truly distinguished contributions don't appear like clockwork, year after year. You can't get scarcer than that. The winner this year was Steven Levitt, of the University of Chicago. The choice was surprising only insofar as the judges jumped him ahead a "class." That is, Levitt is only 35. He could have been given the medal the next time around, in 2005. As a result, several important economists, 38 and 39 years old, will pass into the second halves of their lives less conspicuously than if one or the other of them had been chosen this year. It is reasonable to ask why it happened this way, and what it means. But the discussion that follows won't mean much if you can't first quickly scan this table. (Here's a more printer-friendly version.)
When the Clark medal was created in 1946, a considerable discontinuity had developed in economics between the older generation and the new. The Keynesian revolution was gathering force. Already its center of gravity had shifted to the United States from England -- though relatively few persons recognized this at the time, even within the profession. There were older economists, well-known to the general public, awaiting their turns to be president of the American association -- Paul Douglas, Frank Knight, John Williams, Joseph Schumpeter, for example. And there were young Turks, many of them American and most of them virtually unknown outside the profession, yet already firmly making their marks on the world. Meanwhile, the general consensus was that economics was becoming the kind of field where the best work was done by the young; that age might confer wisdom, but that in very few cases did really good ideas come late; and that the production of knowledge, not wisdom, had become the main business of economic research. . Hence the logic of naming the award for Clark -- the first American economist to acquire an international reputation, for work he did more or less on his own in his thirties and forties. That was before he became a Columbia University professor in 1895 -- eventually a long-serving and well-known one. He died in 1937. The first Clark Medal was given in 1947 to Paul Samuelson. He was 32 -- meaning that he received the prize three two-year "classes" ahead of his 40th birthday. There was no surprise there. The same year Samuelson would publish Foundations of Economic Analysis, a book that had been largely written in 1937 when Samuelson was 22, then accepted as a dissertation in 1941. Its effect in those ten years had been to establish mathematics as the first language of economics. Kenneth Boulding received the prize two years later -- the last purely literary economist to be so honored. Milton Friedman won the medal in 1951, just ahead of his 40th birthday. People still argue about what exactly sort of an economist Friedman turned out to be -- besides successful, that is. But in 1951 nobody thought of him as a literary economist. No award was given in 1953. The impasse only served to underscore the transition from one style of doing economics to another that was taking place. Thereafter, all Clark Medal winners have been economists working in the modern tradition. Two economists have been honored at age 34, two turns ahead of their last chance -- Zvi Griliches in 1965 and Sanford Grossman in 1987. Six others were cited in their mid-30s, one turn early -- James Tobin, Kenneth Arrow, Robert Solow, Mark Nerlove, Joseph Stiglitz and now Steven Levitt. "That makes 9 of 28 winners who were selected ahead of their 'class,'" says Princeton University's Aviniash Dixit, chairman of the AEA committee that votes the prize. "So it's not exactly unheard of. But it does put Steve in very good company." People sometimes object to the singling out of one economist to represent even a two-year generation. There are so many good mid-career economists, and so many different ways to be good, that even if the award's criterion is kept in mind -- the best contribution to the main body of thought -- the thought is that giving overmuch attention to the Clark Medal risks mistaking a tree for the highly variegated forest. Why not at least publish the names of the others on the short list? "Why mention anyone else?" asks Dixit "Publish one name and you are making four or five people unhappy. Publish four or five names and risk making fifteen people unhappy." Very well: Clark Medal winners are almost all people who have made history in the discipline of economics. But the question remains, if you only knew these names, would you know the history of the discipline? The answer is, certainly not. Indeed, in some respects, the recent history of the medal leads you in almost the opposite direction. Six of the first seven Clark Medals went on to win the Nobel Award in Economic Science, after it was established by the Nobel Foundation in 1969 -- Paul Samuelson, Milton Friedman, James Tobin, Kenneth Arrow, Lawrence Klein and Robert Solow. Thereafter, the correspondence falls off sharply. Since 1961, only Gary Becker, Daniel McFadden/James Heckman and Stiglitz/Spence have won both. (There are, of course, other prospective Nobel laureates on the list.) Empirical economists have done very well since 1961; the significant theorists of the period are mostly absent. This may reflect the advent of the computer, as much as anything else. It may also be that the significance of new theoretical developments are slower to become unmistakably clear, or to produce practical results. Moreover, since the 1961 watershed, more Clark medalists have been drawn away from full-time research to stellar careers in policy (Hendrik Houthakker), consulting (Franklin Fisher), asset management (Sanford Grossman), education (Lawrence Summers) and journalism (Paul Krugman). This in turn may reflect the explosion in the sheer number of people doing economics. "The propensity to publish stays the same; the ability to read is limited," says 88-year-old Paul Samuelson, still following the field at a distance "We spent all our time reading the debates of seven or eight Englishmen. Today you can follow maybe three of the subsections at best. We are overwhelmed by our minuteness relative to the whole." What Clark Medal effectively disguises, however, is the community, at once cooperative and intensely competitive, in which economics is done. Clark Medal winners are not solo geniuses sitting around in closets waiting for inspiration to strike, but emerge from the ranks of students who often go to classes together, then seminars, then meetings -- for fifteen years. Take this year's candidates, for example. Late last month, Jon E. Hilsenrath, who covers economics for the Wall Street Journal, published what seemed to be the list of candidates under consideration for the award. Mentioned were Daron Acemoglu, Glenn Ellison and Jonathan Gruber of MIT; David Cutler, Edward Glaeser and Michael Kremer of Harvard; and Levitt, of the University of Chicago. Each of these is a remarkable economist. Each has made a mark in his field. But they are hardly coming together as a group for the first time. Kremer ('85), Cutler ('87), Ellison ('87) and Levitt ('89) had been undergraduates together at Harvard College, with Gruber ('87) down the block at MIT, Glaeser ('88) at Princeton and Acemoglu ('89) at the University of York, in England. Cutler, Ellison, Gruber, Kremer and Levitt then overlapped in graduate school at either Harvard or MIT, while Glaeser went to the University of Chicago and Acemoglu to the London School of Economics. All but Levitt came on the job market in 1992. After graduating in 1994, he stayed on in Cambridge as Junior Fellow at Harvard until 1997. It's against this backdrop that Levitt's works stands out -- a cornucopia of economic analysis applied to everything from soccer penalty kicks to the virtues of Lojack automobile-theft prevention, from street-gang finances to the relative economic performance of states ranked according to the seniority of their Congressional delegations. Nor are these simply clever exercises. Several have started widely-shared skeins of work. MIT's James Poterba is writing a piece about Levitt, to appear next year in the Journal of Economic Perspectives. There is the AEA's own press release. And also, Harvard's Ed Glaeser explains: "A few years ago, I would have said that his most exceptional quality is his ability to find exogenous sources of variation. He moved the literature on crime ahead by being much better than his predecessors in finding things that really exogenously shifted the degree of imprisonment, or the probability of arrest. "There is a huge problem is this area (as in all areas) in isolating cause and effect. Neighborhoods get more enforcement when they have more crime. This makes it very difficult to estimate enforcement effects. Steve has been the best at cleanly estimating these effects. I would have said that the most important substantive result of his early work is the importance of deterrence as opposed to incapacitation, relative to jail sentences. "In his later work, the theme has moved towards the ongoing ingenuity of human beings and their ability to circumvent the rules. I think of his very clever work on sumo wrestling as being in this category. His work on teachers' cheating, changing their student' results to make themselves look good, certainly also does this, as does his work on real estate agents practices. "In the midst of these papers is his bombshell -- the work on abortion and crime. This is certainly his most famous paper, and in some ways his most innovative piece. Certainly, he put the question of how abortion influences the amount of crime on the map." Levitt's results suggested that the legalization of abortion in the 1970s contributed to a reduction of crime in the 1990s -- because it reduced the number of unwanted and subsequently neglected children. So what does it mean that Levitt received his award early? Presumably it signifies that there is more good work in the pipeline. The Committee on Honors and Awards keeps its eye on the future, seeking to preserve the highest possible quality, year after year. Apparently, they are willing to move candidates from one class to another, in order to avoid foreseeable collisions in future years. There are some conspicuous examples of this in the past. Frank Fisher recalls predicting correctly in the early 1960s the next five awards -- including his award in 1973. "They knew that they had to jump Zvi Griliches to the head of the list or they were going to be in trouble later -- so they did," he says. "At that point the rest was obvious. Of course we were more thin on the ground in those days…." What a short history of the Clark Medal suggests, then, is that moving up on this list isn't just about extra merit, but about making room as well.
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