An Economic Giant Departs: Gary Becker 1930-2014

On May 3, world-renowned Chicago economist Gary Becker passed away at age 83. For the last 25 years he served as a mentor, co-author, and a great friend to me and many economists of my generation. I here reflect on what made this economic giant so unique and influential to us younger economists under his wings.

Gary was, in many people’s minds, one of the greatest economists of the last century. The awards and honors he received reflected this belief. The ones that stand out are, of course, his 1992 Nobel Prize and his 2007 Medal of Honor from President Bush; the latter only shared by one other economist, Gary’s mentor Milton Friedman.

Both before and now after Gary has passed, many people wrote about his unparalleled impact and breadth. There are many volumes and treatises on Gary’s work, including “The Essence of Becker” from Stanford where he spent many winters. His work had an enormous wing span and included the invention of new fields such as the economics of racial discrimination, the quantitative analysis of the economics of education, family formation and separation, fertility, crime and punishment, addiction, as well as social influences on economic behavior.

Overall, Gary was a great believer in competition stemming from free enterprise. For example, his work on racial discrimination argued that competition reduces racial biases in hiring practices, even by racist firm owners. This is because owners could not compete if they hired less productive workers of their preferred ethnic group. For example, LA Clippers’ owner Donald Sterling, in order to compete in the NBA, employed many African-American players and a coach despite what appears as his racist preferences. Indeed, Gary’s belief in competition as the driver of societal gains was present in many other areas and often was echoed his policy positions in public debates; many discussed his long running column in BusinessWeek or his more recent blog with Judge Richard Posner.

However, Gary’s unsurpassed intellectual accomplishments only make up the official story on Gary that many came to appreciate and admire. His lesser-known role as a mentor and role model to a large set of us younger economists and students was also important to his great influence.

I first met Gary in 1988 when he gave a seminar at Wharton, where at the time I was doing my graduate studies. I was obviously aware of his work as it was central to many of my courses, as it is across the world. I was working on an odd topic and I thought Gary was the perfect person with which to discuss it; it turned out I was correct. Little did I know at that time that, Gary was the best person to discuss economics with for almost any topic. A month later he invited me to do a post-doc at Chicago and I could not have been more thrilled.

After arriving at Chicago, the honeymoon was quickly over. In my first meeting with Gary in his office, he essentially told me that the research I spent the last few years working on was not worth the paper it was written on. Of course, as it turned out, he was right. This experience was my first with Gary’s direct and honest communication as a mentor. Sugar-coating criticism was not on his radar. I thought his honesty was very refreshing since people in academics often try to avoid constructive criticism because of academic politics or a fear of antagonizing people. Gary was not like that and was very direct in what he thought was both good and bad about your work. The upside was that when Gary said he liked something, you could bank on it being something worth pursuing.

The economics seminar Gary organized on Mondays had a similar tone and was always the place where you wanted your best work aired. It was hard-hitting with punches from all over the room, some of them more damaging than others. Many times those raising the question were more interested in hearing their own voices and were off on tangents not essential to the main point of the work. But almost without exception, when Gary spoke it was directly to the heart of the matter and often exposed a serious flaw to the central theme of the work. In addition, he often tried to educate the speaker and the audience on the broader point he was trying to make or the larger picture in which the presented research fit in. Indeed, many times the audience learned more from Gary discussing the work than from the speaker presenting it. Gary’s targeted and central suggestions very often changed your own opinion about what you were doing and made you write a different paper. In fact, Gary would often make a point to have a “debriefing” in his office the day after your talk, summarizing what he thought were the useful points discussed and what your future research should look like in order to address them.

Gary was in many respects the ultimate role model to many applied Chicago economists of my generation. He was extremely hard working, though he of course did not view it as work. I had the office next to him as a junior faculty member and almost any weekend I was in my office, Gary was in his. I often thought, ‘if this is how energized this guy is now what was he like when he was a young gun?’ He was very thirsty for talking economics and almost saw a meal wasted if he did not get to discuss whatever was on his mind. Countless mornings I woke up to an email from Gary asking “up for lunch at the faculty club today?” My suspicion was that he had just realized he would have an unproductive meal that day without talking shop.

Gary was the greatest believer in economics I have known, I think because he understood economics better than anyone I have known. His belief partly explains why he reacted somewhat negatively to the development of behavioral economics as a field that attacked basic economics. He almost took it personally. Discussions on behavioral economics came up in the Tuesday night “Rationality” workshop he ran for a long time. This workshop ran at the unusual hours 7.30-9.00pm, obviously only attracting those obsessed with economics. I am aware of no other economics seminars at that time around the country. Because Gary understood economics so much better than many of those who set out to bash economics in the workshop, many times what was exposed was not the weakness of economics but the lack of economic understanding by the basher.

Gary was passionate about pioneering new and big ideas and saw before anyone else why his current work would turn out to be important in the future. For example, his microeconomic work on the economics of the family concluded that a major cost of raising a child was the foregone earnings of women. As women entering the labor force thus reduced fertility, this work became central to the macroeconomic study of economic- and population growth. In an infectious manner, his intellectual ambition lifted the bar for acceptable research by those around him even though they could never fly as high as Gary. However, it inspired those around him to fly higher than they would have otherwise.

At his core, Gary was an economic theorist who generated great insights into important real world phenomena that affected economies. These insights and predictions were intended to be confronted with data and empirically evaluated. He was more concerned with what was said than the language it was said in whether English or its more precise version mathematics. He had little patience for economic theorists who were not making important substantive claims, though he greatly appreciated people developing methodologies to aid in making such claims. He had a distaste for academic work or games that did not interest anyone but academics themselves. He was much more interested in using economics to claim unrecognized insights into real world phenomena of great substantive concern to a larger audience than academics.

Unfortunately, the type of economist that Gary was the preeminent example of is becoming scarce, perhaps due to economic forces. The fact that the cost of producing and analyzing data has fallen over time has led the economics profession to substitute towards empirical work rather than generating the type of conceptual insights that were the hallmark of Gary’s work. Given the falling cost of empirical analysis, today many economists are obsessed with how things are estimated rather than the economic novelty or substantive importance of what is estimated. In contrast, Gary always viewed important theoretical works as complements to empirical analysis, as opposed to being substitutes where one replaces the other. In other words, important conceptual insights should inform us about what empirical work is important to undertake next and vice versa. If Gary’s view on complementarity was shared in the profession, the fall in the cost of data over time should generate more theoretical work like Gary’s aimed at making predictions about the now more abundant data. Unfortunately, this has not taken place. If Gary was still around, he would likely have a simple explanation why this was an obvious implication of rational behavior.

Last but certainly not least, Gary was great friend and cared deeply about the people around him. Because of his belief in economics, he many times took the work of junior faculty and students more seriously than they did themselves. Despite his hard-nosed intellectual style, he was a very warm and caring man to many of us that viewed him as our main mentor. Personally, Gary was extremely important to me during many of my hardships, including a divorce and the passing of my father back in my home country of Sweden. During our many discussions about marriage during my divorce, he was the only person to congratulate me on it. When I looked at him a bit puzzled he replied, “since you chose to do it, you must be better off.” We both smiled. Generally, outside of economics he played the role of my American father-figure as he was always there for me.

RIP Gary, you will be greatly missed. But rest assured, your influence will carry on much longer than your life through the incredibly giving person you were and the lasting memories you generated.