It was a huge thing. It was just the second year since the Nobel prize in Economics was established. And an American – Paul Samuelson – had won it!
It wasn’t really a surprise however. Because Samuelson was the most famous economist alive in 1970. He had advised Presidents. And his book “Foundations of Economic Analysis” has sold over 4 million copies – the most any Economics book has ever sold!
But Samuelson didn’t start with economics. In fact, he had graduated with a degree in Physics from the University of Chicago!
So how did a science guy become the most famous economist in the world?
While studying at the University in 1932, 17 year old Samuelson attended a class that talked about how Thomas Malthus studied the effects of food production and population growth. (How increase in per capita food production increased population. But increase in population reduced per capita food available.) And this completely hooked him.
But when Samuelson took further econ classes, he was disappointed. They were amidst the great depression, yet not a single economics lecture spoke about the double digit unemployment. Not a single teacher spoke about what caused the great depression. Theories were being taught that didn’t help anyone do anything except sound intelligent.
And so, in his spare time, Samuelson started thinking about how economics could be used to predict cause and effect. How economics could actually become a subject that helped solve problems instead of merely ruminating theories.
Samuelson was attending a class on thermodynamics by professor Edwin Wilson. And one sentence struck him like a bolt of lightning. It connected the fields of physics and economics for him. “Increase in pressure is accompanied by a decrease in volume in a thermodynamic equilibrium system.”
Pressure affects systems. Chemical systems. As well as our monetary systems. And there was a whole field of thermodynamics calculus that helped scientists calculate these changes in a system. Samuelson started trying to use this math for economic systems. Specifically to calculate changes in equilibrium when different economic constraints are marginally tightened or relaxed.
He went on to earn a PhD for this idea of merging thermodynamic math to economics from Harvard University.
But he wouldn’t have become popular if he didn’t face one of his own constraints. Being poor with a growing family.
The family constraint
During world war 2, Samuelson was working at MIT’s radiation lab. Trying to build computers that could detect aircrafts. When his wife became pregnant for the fourth time. And gave birth to triplets!
Having 8 mouths to feed on a single income was difficult. And so, Samuelson wrote an economics textbook to earn more money. But he didn’t write a boring textbook. He made it lively with charts. And jokes!
Because of which, the book became popular and schools started using it widely!
It’s the book that made him a millionaire. And made him famous.
Avoiding a recession
When John F Kennedy was running for President, Samuelson was made part of his campaign’s brain trust. And Samuelson taught him economics in 40 minute classes!
When Kennedy became the president, Samuelson asked him to reduce taxes and increase government spending! Kennedy was aghast: one of the campaign promises he had made was balancing the government budget!
But Samuelson showed that America was headed towards a recession! Kennedy increased minimum wages and government spending.
And when Kennedy was assassinated, Lyndon Johnson continued with Samuelson’s ideas. And reduced taxes. And created medicare and public housing programs.
Having a government deficit was a very unpopular thing at the time. But Samuelson understood systems and knew that without it, a recession was certain!
The tryst with resistance
But Samuelson wasn’t loved by everyone! He was called a socialist. And a radicalist. The smallest of his mistakes were harped on. Even when he pointed to data, he was ridiculed.
Whenever you come up with a completely novel idea, you will face resistance. People will misunderstand you and challenge you.
Whenever your ideas become famous, these challenges will multiply.
You have to be ready for it. As the laws of thermodynamics state, every action has a reaction.
- Merge ideas from different fields to create novel breakthroughs!
- Promote your ideas. Create tools to spread them. Write!