LAST week, the doyen of mainstream economics and its greatest proselytiser, Paul Samuelson, died. It can be safely said that Samuelson taught more people economics than anyone else. This was simply because of his best-selling textbook, Economics: an Intro-ductory Analysis, which was first published in 1948. It's now in its 19th American edition and has been translated into 20 languages, with 4 million copies sold. In Australia, there have been three generations of students who have studied the dismal science using an Australian adaption of his text. The adaption of the text was undertaken by two Flinders University economists, Bob Wallace and Keith Hancock.
The book was colossal; 900 pages long but made lighter by Samuelson's breezy style and occasional wit. It was lavishly illustrated with tables and diagrams when, before, there had been just abstruse text. One of the key diagrams in that book was the Keynesian cross or 45-degree diagram, a diagram upon which the meaning of Keynes' General Theory was hoist. Michael Schneider of La Trobe University, in a contribution towards a book on some of the more famous diagrams in economics, was told by Samuelson that he first began using the diagram in 1938, just two years after Keynes wrote his magnum opus. Samuelson recalled that writing the text took three years of hard labour where he "sweated blood" over its composition.
Historians of economic thought believe that, in America at least, Samuelson's text saved the representation of Keynes from complete oblivion at a time when the spirit of McCarthyism was sweeping through that country. An earlier textbook on Keynes by a Canadian economist, Lorie Tarshis, had been pulled from library shelves because it was perceived as communist and preaching economic heresy. Former president Herbert Hoover always referred to Keynes as the devil incarnate while Franklin Roosevelt thought him to be some type of mathematician.
Samuelson's text covered the whole gamut of economics, including Soviet economic planning. He knew the power of textbooks, saying: "I don't care who writes a nation's laws . . . if I can write its economic textbooks." He knew that once an idea got into a textbook, it became "practically immortal".
Samuelson's textbook even made prime-time television in Australia. Robert Moore, the presenter of the ABC Monday Conference, interviewed Samuelson when he visited in March 1973. Introducing his guest, Moore held aloft Samuelson's text to the audience. This was at a time when the newly elected Whitlam government was about to encounter rising inflation amid a booming economy and the world descended into the morass of stagflation. On the show, Samuelson admitted that economists had not found a cure for creeping inflation, but he added that the cure, disinflation, was probably worse than the disease. He also prophesied — quite correctly — that the last third of the 20th century would be an Asian one. He said that Asian industrialisation meant that Australia's resource bounty would give it "a new take-off" with export-led growth. A man for all time, Samuelson also queried the obsession with growth, saying that economic welfare or happiness was far more important.
Alex Millmow is president of the History of Economic Thought Society of Australia.
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