UChicago Economics, Setting the Highest Standards

With the recent Nobel award to UChicago economists, it is good to be reminded of spirit of Chicago economics, and why it keeps producing Nobel Prize winners.

A friend who is a UChicago economics professor, who was a PhD student at the time, witnessed the following episode.

Gary Becker ran the Applications of Economics workshop in the Department of Economics for decades. This workshop was legendary as Ground Zero for tough microeconomics workshops. Frequent attendees included George Stigler, Ted Schultz, Sherwin Rosen, Kevin Murphy, Eddie Lazear, Bob Lucas & more. In addition, many PhD students (including myself) attended. That’s where we learned how to do research & think critically.
In the late 1980s (probably 1988), Asser Lindbeck came to present a paper he was working on. At the time Lindbeck chaired the Nobel Prize selection committee, & Gary was the #1 choice in the betting pools to receive the Nobel next. He did in fact win in 1992.
Lindbeck sent paper #1 ahead of coming to Chicago. As was the culture of the workshop, attendees had read it & were prepared to discuss the paper. As always, Gary showed up with a couple of questions scribbled on the front of his copy of Lindbeck paper #1.
Unfortunately, Lindbeck had sent the wrong paper. He arrived prepared to present paper #2. At the start of the workshop, he announced that he would not take any questions for the first 20 minutes, while he presented paper #2, & then he would open it up for discussion.
Gary immediately replied, “No, we prepared the paper that you sent, & that’s what we will discuss.” Lindbeck had a stubborn personality & replied, “No, I will present #2 & that’s what we will discuss,” & proceeded.
Gary immediately interrupted him with a question about paper #1. Lindbeck interrupted him with a blunt admonishment that he was going to present #2, & started again.
Gary interrupted again with another question about #1. Lindbeck tried to stop him. This continued for a couple of minutes until Lindbeck relented & we discussed paper #1. A vigorous & constructive discussion then followed (since the audience was prepared).
Watching this as a PhD student was frightening & inspiring. Gary was fearless. He clearly was not interested in playing Nobel politics, but only in running his workshop with the highest of standards. His expectation was that we all read the paper & arrived prepared, that the presenter had high standards, & that the discussion was vigorous, rigorous & thoughtful.
I never forgot this lesson from Gary Becker in what is most important at Chicago: Economics.

May it always be so.

Gary Becker, Nobel 1992, above.

9 thoughts on “UChicago Economics, Setting the Highest Standards”

  1. “Unfortunately, Lindbeck had sent the wrong paper.” Maybe. The first time I saw that at a seminar, an old hand leaned across and whispered “The bugger does that quite often”.

  2. One nit picky point. It is not a Nobel prize. This prize was established by Sweden’s central bank as the Nobel Memorial Prize. See wiki on this. They have some interesting comments by Hayek.

    I think it was scandalous how long it took them acknowledge Milton Friedman.They made themselves look foolish with that delay.

  3. Lex I whole heatedly agree with you.

    But, not all of or fellow alum’s agree. I present as evidence a letter written by a young alum to the Alumni magazine. I will save my commentary for the next post. I have not edited it as it needs to be read to appreciate the full horror of what he said.

    Recently at a coffee shop near my home, a scruffy young barista looked at the University of Chicago T-shirt I was wearing. His face soured and he disdainfully said, “I don’t know about the University, just their economics department.” It’s a reaction the shirt has been getting more frequently the last few years. He was more or less implicating me by association with creating the economic crisis many of us are still slowly clawing our way out of. I felt stung. I’m a social worker, and not only do my politics not agree with that of the Chicago school’s libertarian bent, but in the wake of the crisis, with the state and federal budgets that pay for my work being slashed, I certainly haven’t reaped any financial rewards from my association with the University or its economics department.

    Now, sure, maybe Surly Barista Guy is a die-hard radical leftist and feels the Original Sin of Chicago’s having propagated free market neoliberalism across the globe is so great that all the good done by other alums in the many fields of study and practice the University produces is rendered irrelevant. Maybe, like a lot of millennials, he just feels salty because he’s been stuck doing barista jobs since the recession hit and can barely cover his student debt, let alone save for retirement or buy a home. Maybe he’s upset that the Chicago school he’s read about advanced theories and policies that would ultimately make a very small number of people extraordinarily rich through financial business practices of at least questionable ethics if not legality while everyone else was left struggling to keep their homes. Perhaps he’s also aware that former Treasury secretary Hank Paulson was hired by—the University of Chicago. Paulson’s migration to Chicago remains a direct link in many minds between the free market economic policies that emanate from the University and the global financial meltdown that nearly resulted from them.

    When I applied to Chicago, the school’s reputation was for its Great Books curriculum and producing top-notch teachers, not global finance Masters of the Universe. Over the 16 years since I graduated, I’ve been able to watch how reactions have shifted when I tell people where I went to school. Whereas the U of C used to be considered closer in character to schools like Reed or Saint John’s Colleges, it’s now more associated with places like the University of Pennsylvania’s Wharton School. People are surprised to find that I work directly with poor communities and have used my Chicago education to serve the public good.

    The University has never addressed its role in forming and advancing the economic policies that destroyed trillions of dollars in wealth during the financial crisis and created epic human misery across multiple continents. It has heavily publicized and promoted its many Nobel Prize for Economics winners, driving the public’s perception of Chicago as a one-dimensional institution. I doubt I’m the only alum who would appreciate the University making a statement addressing the economics department’s role in creating the crisis and articulating a plan for how its policies can benefit the greater good by expanding opportunity and prosperity for all. I also doubt that I’m the only alum who would support the University shifting its focus back to producing graduates who want to live the “life of the mind” rather than to conquer the global marketplace. We would appreciate it, frankly, because we’re getting tired of the guilt by association thing.

    Jeff Deeney, AB’97


  4. My first observation is that the writer is a moron.

    His quick 2 word come back could have been “President Obama”, but beyond that he reveals a tremendous ignorance of where he was and when.

    He is a 97 grad. At that point Milton Friedman had been awarded the Nobel prize 31 years before and had retired to the left coast 30 years before. Friedman was a a national celebrity by then with his series on PBS and his numerous op-eds and television appearances.

    Mr. Deeney might not have been aware of that when he applied to Chicago, but he must have known all about it after a year or two. Why didn’t he quit then?

    Further, he mentions the University’s reputation as a liberal arts school. Good lord. They had buried Western Civ along with the guys who taught it long before Deeney’s time. He could have transferred to Reed and been high on the locally grown choom.

    Finally his letter brings up the notion over a claim that the Economics Department had something to do with the Panic of 08, if only in spirit. This, of course is nonsense. The only persons connected with that debacle who have a connection to the UofC were Obama and Austan Goolsbee, one of Hussein’s early economic advisers. Denny mentions Hank Paulson who named as a senior fellow at the University of Chicago’s Harris School of Public Policy in 2011. Three years after he left Washington.

    Deeney them makes a stereotyped leftist move and demands that the University engage in self-criticism of its Economics department. I think there are lots of things the University should be ashamed of, like failing to educate Mr. Deeney, but the economics Department is one of its gems and it should be praised and honored.

    A good item on the controversy is on John Cochrane’s web site:


  5. renminbi: Picky, picky. I note that nobelprize.org “the Official Web Site of the Nobel Prize” lists the prize in “Economic Science” without an asterisk.

  6. Call me crazy but I’d say the guy who wrote that silly letter didn’t take many econ courses (where “many” is neoliberal code meaning “any”) at the U of C. Yet he feels justified in holding a grudge against the University over matters he doesn’t understand, and he seems to give a lot of weight to the imputed opinions of other ignorant people. Why should anyone pay attention to him?

  7. Tough shit. He went to the University and should have known about its economics department. That is WHY I went there, among other reasons, like they gave me good scholarship money. The U of C Econ department is a massive force for good in the world. The claim that the U of C Econ department caused the 2008 crash is pure stupidity.

  8. Lex: “The claim that the U of C Econ department caused the 2008 crash is pure stupidity.”

    So is the rest of leftist ideology. But there are still a lot of them out there.

  9. Fortunately UChicago shows no sign of apologizing for its Economics Department or its Business School, where Fama is based.

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