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Nobel Laureate William Vickrey |
| [Reprinted from the
American Journal of Economics and Sociology, Vol.57, No.2,
April, 1998] |
C. Lowell Harriss is Professor
Emeritus of Economics at Columbia University in New York City.
Professor William Vickrey of Columbia University was named to
share the 1996 Nobel Prize with Professor James A. Mirrlees of
Cambridge University on October 9, 1996. A few days later on
October 12, Professor Vickrey was dead (J. Scott, "After 3
Days in the Spotlight, Nobel Prize Winner is Dead" New
York Times [October 12, 1996, pp. 1 and 52). Professor
Vickrey's university colleague and close friend, Professor Harriss
appeared at the Nobel Ceremonies in Stockholm on December 7, 1996,
where he presented a shorter version of the following remarks and
graciously accepted the award for Vickrey.
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Economics requires a "big tent," one large enough to house
many elements of wide diversity. The occupants will have an enormous
range of high skills. William Vickrey used his exceptional abilities to
work on many frontiers of the profession.
My life has included at least casual acquaintance with many, probably
most, of the recipients of the Nobel Memorial Prize in Economic Science.
I have some, albeit sadly inadequate, familiarity with their work. The
coverage is indeed extensive. One outstanding feature of Professor
Vickrey's body of achievements is the number and diversity of subjects
to which he made major contributions.
One thinks of social choice, counterspeculation, auctions, marginal
utility measurement, welfare (human well-being -- not the American usage
of aid to the poor), taxation (income averaging, death duties, capital
gains, progression), marginal cost pricing, public utility charges,
airline overbooking, subway fares (revenue and non-revenue effects),
urban affairs, use of land rents as a means of financing government,
paying for city services, macroeconomics (inflation control, fuller
employment), government debt -- one's amazement and admiration keep
rising. And there are more -- always, I believe, rated highly by
experts!
Vickrey's collection in Public Economics consists of essays on
twenty-six subjects. There is theory in the abstract sense: An
application to the realities of life, e.g., reducing the time (the human
life) lost when idling in avoidable traffic congestion! For him, "knowledge
for what?" was a challenge. He believed that economic knowledge
could help human beings get more out of life. Improvements can be made
in institutions, in the framework of economic, political, and social
structures -- not a sweeping restructuring in an engineering sense but
change in specific elements of taxation, of transportation pricing, and
so on! But he was not unwilling to propose change on a broad scale -- as
in his plan to prevent inflation.
He and I were friends and associates for sixty-one years, from graduate
school days that began in 1935, through service in the U.S. Treasury
during World War II, as colleagues on the faculty at Columbia University
for almost half a century, as members of innumerable professional and
civic associations, and as social friends. (I can still see him in
August 1996, explaining to uncomprehending non-economist guests at my
house how the growth of government debt could be -- he believed would
be -- a good thing!)
In recent years he became increasingly articulate in condemning "our"
toleration of unemployment. The "our" includes the community
in general, government policy makers, and professional economists. His
presidential address for the American Economic Association concentrated
on (unemployment but, as he told me, "it went over as would a lead
balloon." He was saying, in substance and probably in about these
words, "the vast majority of us who have more or less satisfactory
jobs or secure retirement should bestir ourselves to improve conditions
for the less fortunate." He reminded us repeatedly of the waste of
human idleness. A day, a week, a year, a life lost cannot be recovered.
All of us know this. But, Professor Vickrey would say, "Economists
should do more." (The epitome of normative economics!) Most of us
can give reasons why things are not better. He knew them all, I believe.
He was, really, very learned. He attended seminars, meetings, lectures,
and conferences at Columbia and around the world. He was both
sophisticated and simple -- and far from satisfied with our achievements
as a useful profession!
In the United States, and perhaps elsewhere, a large gap separates the
general public's understanding of the way the economy works and the
realities of economic processes. For example, the national government's
budget deficit, the accumulated debt, and increases in that debt present
complex problems and invite oversimplification.
In recent years Professor Vickrey made efforts to enlighten and to
persuade fellow economists and a broader public. Looking a few years
ahead, he foresaw conditions that remind me of a concern of the 1930s --
oversaving at full employment will call for budget deficits as offsets.
Beyond the "macro" aspects, he feared, I believe, that deficit
reduction would curtail spending programs that are desirable for the
benefits they produce and would also discourage desirable tax rate
reduction, e.g., the rates on corporation earnings.
How do the fruits of scientific advances such as those recognized by
the Nobel awards eventually affect human lives? The processes must be
numerous and varied, differing from discipline to discipline. As to
economics, some of the fruits of "frontier" research may be
usable by individuals, families, and voluntary association --
conceivably but probably rare. At times, business firms can utilize some
of the new knowledge in normal market operations. But the successful use
of economics, such as many of Professor Vickrey's intellectual
achievements, will require governmental (political) actions. This
occasion is not one to discuss the general relation of economics to
politics -- except to remind ourselves that evaluation of an economist's
work will not rest upon "testing" in a "political
marketplace" -- in implementation through government action. He was
not the only originator of good economic ideas whom I have seen
frustrated by politics and bureaucracy.
Some years ago he began speaking about an obstacle to tax revision
along the lines indicated by his work. The conditions -- in a sense,
forces of the "market" -- that make change (reform) desirable
have created a group with incentives to actively oppose both the
simplifying of tax laws and the closing of loopholes. Investment
advisers, attorneys, accountants, and others make a living by showing
persons of high income and large wealth how to save taxes by using
esoteric technicalities of the law. Whether or not much of the effective
opposition to Vickrey-type tax revision comes from such advisers, I
believe that professional economists, or at least some of us, can serve
by helping to disseminate understanding of economics, old and new.
One of Professor Vickrey's last public statements expressed hope and
confidence that Nobel recognition would enable him to get his ideas
understood. His credibility would rise. His audience would grow. His
passing will deprive the public of more than it can ever know.
Standing at the interment of my friend, I thought, "The oft-quoted
quip of Lord Keynes, 'In the long run we are all dead,' is sadly
misleading!" The "we" of the community continually
replenishes itself. And in the most meaningful sense are "we"
not more than the body? Ideas are also part c human life. And Professor
Vickrey's will continue to serve.
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