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Gary Stanley Becker (1930 - 2014) was an American economist. He was a professor of economics and sociology at the University of Chicago. According to Milton Friedman he was “the greatest social scientist who has lived and worked" in the second part of the twentieth century.[1] Economist Justin Wolfers called him, "the most important social scientist in the past 50 years."[2] Becker was awarded the Nobel Memorial Prize in Economic Sciences in 1992 and received the United States Presidential Medal of Freedom in 2007. A 2011 survey of economics professors named Becker their favorite living economist over the age of 60, followed by Ken Arrow and Robert Solow.

Gary Becker
GaryBecker-May24-2008.jpg
Gary Becker speaking in Chicago, May 24, 2008
Born
Gary Stanley Becker

(1930-12-02)December 2, 1930
DiedMay 3, 2014(2014-05-03) (aged 83)
InstitutionColumbia University
(1957–1968)
University of Chicago
(1968–2014)
FieldEconomics
School or
tradition
Chicago School of Economics
Alma materPrinceton University
University of Chicago
Doctoral
advisor
H. Gregg Lewis
Doctoral
students
David O. Meltzer
Russ Roberts
Shoshana Grossbard
InfluencesMilton Friedman
Theodore Schultz
Contributionshuman capital
rotten kid theorem
AwardsJohn Bates Clark Medal (1967)
Nobel Memorial Prize in Economic Sciences (1992)
Pontifical Academy of Sciences (1997)
National Medal of Science (2000)
John von Neumann Award (2004)
Presidential Medal of Freedom (2007)

Becker was one of the first economists to analyze topics that had been researched in sociology, including racial discrimination, crime, family organization, and rational addiction. He argued that many different types of human behavior can be seen as rational and utility maximizing. His approach included altruistic behavior of human behavior by defining individuals' utility appropriately. He was also among the foremost exponents of the study of human capital.

Contents

CareerEdit

Born to a Jewish family[3] in Pottsville, Pennsylvania, Becker earned a B.A. at Princeton University in 1951, and a Doctor of Philosophy at the University of Chicago in 1955 with a thesis entitled The Economics of Racial Discrimination.[4] At Chicago, Becker was influenced by Milton Friedman, whom Becker called "by far the greatest living teacher I have ever had".[5] Before turning 30, he began to teach at Columbia University in 1957, and in 1970 returned to the University of Chicago. In 1965 he was elected as a Fellow of the American Statistical Association.[6]

Becker was a founding partner of TGG Group, a business and philanthropy consulting company. Becker won the John Bates Clark Medal in 1967. He was elected a Fellow of the American Academy of Arts and Sciences in 1972.[7] Becker was a member, and later the president of, the Mont Pelerin Society.[8] Becker received the Nobel Prize in 1992 "for having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including nonmarket behavior".[9] Becker also received the National Medal of Science in 2000.[10]

A political conservative,[11] he wrote a monthly column for Business Week from 1985 to 2004, alternating with liberal Princeton economist Alan Blinder. In 1996 Becker was a senior adviser to Republican Presidential Candidate Robert Dole.[12] In December 2004, Becker started a joint weblog with Judge Richard Posner entitled The Becker-Posner Blog.[13]

Becker's first wife was Doria Slote, from 1954 until her death in 1970.[14] The marriage produced two daughters, Catherine Becker and Judy Becker.[12] About ten years later, in 1980[14] Becker married Guity Nashat, a historian of the Middle East whose research interests overlapped his own.[15]

In 2014 Becker died in Chicago, Illinois aged 83.[16] The same year, he was honored in a three-day conference organized at the University of Chicago.[17]

Economic analysisEdit

DiscriminationEdit

Becker recognized that people (employers, customers, and employees) sometimes do not want to work with minorities because they have preference against the disadvantaged groups. He goes on to say that discrimination increases the cost of the firm because in discriminating against certain workers, the employer would have to pay more so that work can proceed without them. If the employer employs the minority, low wages can be provided, but more people can be employed, and productivity can be increased.[18]

PoliticsEdit

These contributions to politics by Becker have come to be known as "Chicago political economy" of which Becker is considered one of the founding fathers.[19]

Becker's insight was to recognize that dead-weight losses put a brake on predation. He took the well-known insight that dead-weight losses are proportional to the square of the tax, and used it to argue that a linear increase in takings by a predatory interest group will provoke a non-linear increase in the dead-weight losses its victim suffers. These rapidly increasing losses will prod victims to invest equivalent sums in resisting attempts on their wealth. The advance of predators, fueled by linear incentives slows before the stiffening resistance of prey outraged by non-linear damages.[20]

Crime and punishmentEdit

Jurist Richard Posner has stressed the enormous influence of Becker's work "has turned out to be a fount of economic writing on crime and its control",[21] as well as the analytics of crime and punishment.[22]

While Becker acknowledged that many people operate under a high moral and ethical constraint, criminals rationally see that the benefits of their crime outweigh the cost such as the probability of apprehension, conviction, and punishment, and their current set of opportunities. From the public policy perspective, since the cost of increasing the fine is trivial in comparison to the cost of increasing surveillance, one can conclude that the best policy is to maximize the fine and minimize surveillance. However, this conclusion has limits, not the least of which include ethical considerations.[23]

Human capitalEdit

In his 1964 book Human capital theories Becker worked through the labor capital theory and introduced the economic concept of human capital. This book is now a classic in economy research and Becker went on to become a defining proponent of the Chicago school of economics. The book was republished in 1975 and 1993. Becker considered labor capital theory, because it was applied in communist countries such as Russia, China and the Eastern block. He mused "economists and plan-makers have fully agreed with the concept of investing on human beings".[24]

Modern household economicsEdit

Together, Becker and Jacob Mincer founded Modern Household Economics, sometimes called the New Home Economics (NHE) in the 1960s at the labor workshop at Columbia University that they both directed. Shoshana Grossbard, who was a student of Becker at the University of Chicago, first published a history of the NHE at Columbia and Chicago in 2001. [25] After receiving feedback from the NHE founders she revised her account. [26]

Among the first publications in Modern Household Economics were Becker (1960) on fertility,[27] Mincer (1962) on women’s labor supply,[28] and Becker (1965) on the allocation of time.[29][30] Students and faculty who attended the Becker-Mincer workshop at Columbia in the 1960s and have published in the NHE tradition include Andrea Beller, Barry Chiswick, Carmel Chiswick, Victor Fuchs, Michael Grossman, Robert Michael, June E. O'Neill, Sol Polachek, and Robert Willis. James Heckman was also influenced by the NHE tradition and attended the labor workshop at Columbia from 1969 until his move to the University of Chicago. The NHE may be seen as a subfield of family economics.[31][32]

In 2013, responding to a lack of women in top positions in the United States, Becker told the Wall Street Journal reporter David Wessel, "A lot of barriers [to women and blacks] have been broken down. That's all for the good. It's much less clear what we see today is the result of such artificial barriers. Going home to take care of the kids when the man doesn't: Is that a waste of a woman's time? There's no evidence that it is." This view was criticized by Charles Jones, stating that, "Productivity could be 9 percent to 15 percent higher, potentially, if all barriers were eliminated."[33]

Home productionEdit

In the mid 1960s Becker and Kelvin Lancaster developed the economic concept of a household production function. Both assumed that consumers in a household receive utility from the goods they purchase. Such as for example, when consumers purchase raw food. If it is cooked, a utility arises from the meal. In 1981 Becker published Treatise on the Family, where he stressed the importance of division of labor and gains from specification.[34]

Rotten kid theoremEdit

At the core of Becker's economic theory on the family, which he developed on the basis of figures for United States families in 1981, is the rotten kid theorem. He applied the economics of an altruist to a family, were a person takes actions that improve the well-being of another person, despite more self-interested action being feasible. Becker pointed out that a parent foregoes higher income, by focusing on family work commitments to maximize a well-meaning objective. Becker also theorized, that a child in a US family is perfectly selfish because it maximizes its own utility, thus possibly rotten in economic terms. There have been attempts to test this economic thesis, in the course of which it was found that cross-generational families do not necessarily maximize their joint income.[35]

Organ marketsEdit

A 2007 article by Gary Becker and Julio Jorge Elias entitled "Introducing Incentives in the market for Live and Cadaveric Organ Donations"[36] posited that a free market could help solve the problem of a scarcity in organ transplants. Their economic modeling was able to estimate the price tag for human kidneys (about 15,000 USD) and human livers (about 32,000 USD). It is argued by critics that this particular market would exploit the underprivileged donors from the developing world.[37]

Selected publicationsEdit

  • Gary Becker (1993) [1964]. Human capital: a theoretical and empirical analysis, with special reference to education (3rd ed.). Chicago: The University of Chicago Press. ISBN 9780226041209.
  • Gary Becker (September 1965). "A theory of the allocation of time". The Economic Journal. 75 (299): 493–517.
  • Gary Becker (1968), "Discrimination, economic", in Sills, David L. (ed.), International Encyclopedia of Social Sciences, Vol. 4 Cumu to Elas, New York, New York: Macmillan, pp. 208–10
  • Gary Becker (March 1968). "Crime and punishment: an economic approach". Journal of Political Economy. 76 (2): 169–217.
  • Gary Becker (1969), "An economic analysis of fertility", in National Bureau of Economic Research (ed.), Demographic and economic change in developed countries, a conference of the universities, New York: Columbia University Press, pp. 209–240, ISBN 9780870143021
  • Gary Becker (1971). The economics of discrimination. Chicago: University of Chicago Press. ISBN 9780226041049.
  • Gary Becker (1971) [1957]. The economics of discrimination. Chicago: University of Chicago Press. ISBN 9780226041155.
  • Gary Becker & H. Greeg (March 1973). "On the interaction between the quantity and quality of children". 81 (2). Journal of Political Economy: 279–288.CS1 maint: Uses authors parameter (link)
  • Gary Becker (July 1973). "A theory of marriage: part I". Journal of Political Economy. 81 (4): 813–846.
  • Gary Becker (1974). Essays in the economics of crime and punishment. New York: National Bureau of Economic Research distributed by Columbia University Press. ISBN 9780870142635.
  • Gary Becker (March 1974). "A theory of marriage: part II". Journal of Political Economy. 82 (2): 11–26.
  • Gary Becker (November 1974). "A theory of social interactions". Journal of Political Economy. 82 (6): 1063–93.
  • Gary Becker & Gilbert Ghez (1975). The allocation of time and goods over the life cycle. New York: National Bureau of Economic Research Distributed by Columbia University Press. ISBN 9780870145148.CS1 maint: Uses authors parameter (link)
  • Gary Becker (1976), "Pride and prejudice", in Becker, Gary S. (ed.), The economic approach to human behavior, Chicago: University of Chicago Press, pp. 15–17, ISBN 9780226041124
  • Gary Becker & George J. Stigler (March 1977). "De gustibus non est disputandum". The American Economic Review. 67 (2): 76–90.CS1 maint: Uses authors parameter (link)
  • Gary Becker, Elizabeth Landes & Robert T. Michael (December 1977). "An economic analysis of marital instability". Journal of Political Economy. 85 (6): 1147–1187. JSTOR 1837421.CS1 maint: Uses authors parameter (link)
  • Gary Becker (1991) [1981]. A treatise on the family. Cambridge, Massachusetts: Harvard University Press. ISBN 9780674906983.
  • Gary Becker (August 1983). "A theory of competition among pressure groups for political influence". Quarterly Journal of Economics. 98 (3): 371–400.
  • Gary Becker (January 1985). "Human capital, effort, and the sexual division of labor". Journal of Labor Economics. 3 (1): 33–58.
  • Gary Becker & Kevin M. Murphy (August 1988). "A theory of rational addiction". Journal of Political Economy. 96 (4): 675–700.CS1 maint: Uses authors parameter (link)
  • Gary Becker (December 9, 1992). "Nobel prize lecture: the economic way of looking at life". nobelprize.org. Nobel Media AB.
  • Gary Becker (1996). Accounting for tastes. Cambridge, Massachusetts: Harvard University Press. ISBN 9780674543560.
  • Gary Becker & Guity Nashat Becker (1997). The economics of life: from baseball to affirmative action to immigration, how real-world issues affect our everyday life. McGraw-Hill. ISBN 9780070067097.CS1 maint: Uses authors parameter (link)
  • Gary Becker & Kevin M. Murphy (2000). Social economics market behavior in a social environment. Belknap Press of Harvard University Press. ISBN 9780674011212.CS1 maint: Uses authors parameter (link)
  • Gary Becker & Julio Jorge Elías (May 2007). "Introducing incentives in the market for live and cadaveric organ donations". Journal of Economic Perspectives. 21 (3): 3–24.CS1 maint: Uses authors parameter (link)
  • Gary Becker (2012), "When illegals stop crossing the border", in Miniter, Brendan (ed.), The 4% solution unleashing the economic growth America needs, New York: Crown Business, ISBN 9780307986153

See alsoEdit

ReferencesEdit

  1. ^ Catherine Rampell. "Gary Becker, an economist who changed economics"Washington Post May 5, 2014
  2. ^ Justin Wolfers. "How Gary Becker Transformed the Social Sciences" New York Times May 5, 2014
  3. ^ "Gary Becker (1930–2014)". jewishvirtuallibrary.org. Jewish Virtual Library. Retrieved March 29, 2015.
  4. ^ Gary Becker (1971). The economics of discrimination. University of Chicago Press. ISBN 9780226041049.
  5. ^ Daniel B. Klein & Ryan Daza (September 2013). "Ideological profiles of the economics laureates: Gary S. Becker". Econ Journal Watch. 100 (3): 285–291.CS1 maint: Uses authors parameter (link)
  6. ^ View/Search Fellows of the ASA
  7. ^ "Book of Members, 1780–2010: Chapter B" (PDF). American Academy of Arts and Sciences.
  8. ^ "Mont Pelerin Society Directory" (PDF). DeSmogBlog.
  9. ^ Staff writer (June 6, 2006). "Gary S. Becker - Facts". nobelprize.org. Nobel Media AB.
  10. ^ "Home page". University of Chicago.
  11. ^ Steven M. Teles (2008), The rise of the conservative legal movement: the battle for control of the law, Princeton University Press, p. 98, ISBN 9781400829699
  12. ^ a b Robert D. Hershey Jr. (May 4, 2014). "Gary S. Becker, 83, Nobel Winner Who Applied Economics to Everyday Life, Dies". The New York Times Company.
  13. ^ "The Becker-Posner Blog". University of Chicago Law School.
  14. ^ a b Gary Becker (May 3, 2014). "Gary S. Becker - Biographical". Nobel Memorial Prize in Economic Sciences.
  15. ^ "Gary S. Becker profile". University of Chicago.
  16. ^ William Harms (May 4, 2014). "Gary S. Becker, Nobel-winning scholar of economics and sociology, 1930–2014". University of Chicago.
  17. ^ F. P. Comment (November 4, 2014). "A school in decline: In Chicago, economists honour Gary Becker - Financial Post".
  18. ^ "Economics explains discrimination in the labour market". Open University. October 7, 2013.
  19. ^ Filip Palda (2016) A Better Kind of Violence, Chicago Political Economy, Public Choice, and the Quest for an Ultimate Theory of Power, Cooper-Wolfling Press
  20. ^ Gary Becker (August 1983). "A theory of competition among pressure groups for political influence". Quarterly Journal of Economics. 98 (3): 371–400.
  21. ^ Richard A. Posner (2004). Frontiers of legal theory. Harvard University Press. p. 52. ISBN 9780674013605.
  22. ^ Bernard Harcourt, ed. (2011), The illusion of free markets: punishment and the myth of natural order, Harvard University Press, pp. 133–34, ISBN 9780674057265
  23. ^ Gary Becker (1974), "Crime and punishment: an economic approach", Essays in the economics of crime and punishment, New York: National Bureau of Economic Research distributed by Columbia University Press, pp. 1–54, ISBN 9780870142635
  24. ^ Min Zhu (2012). Business, Economics, Financial Sciences, and Management. Springer Science & Business Media. p. 436. ISBN 9783642279669.
  25. ^ Grossbard-Shechtman, Shoshana. (2001) “The New Home Economics at Columbia and Chicago.” Feminist Economics 7(3) :103-130.
  26. ^ Shoshana Grossbard (2006) “The New Home Economics at Columbia and Chicago” in Jacob Mincer: A Pioneer of Modern Labor Economics, edited by S Grossbard, Springer
  27. ^ Becker, Gary S. 1960. "An Economic Analysis of Fertility." In National Bureau Committee for Economic Research, Demographic and Economic Change in Developed Countries, a Conference of the Universities. Princeton, N.J.: Princeton University Press
  28. ^ Jacob Mincer (1962). "Labor Force Participation of Married Women: a Study of Labor Supply". In H. Gregg Lewis (ed.). Aspects of Labor Economics. Princeton University Press.
  29. ^ Gary Becker (1965). "A Theory of the Allocation of Time". The Economic Journal. 75 (299): 493–517.
  30. ^ Jan De Vries (2008) The industrious revolution: consumer behavior and the household economy, Cambridge, p.26
  31. ^ Richard A. Berk, and Sarah Fenstermaker Berk. "Supply-side sociology of the family: The challenge of the new home economics." Annual Review of Sociology 9.1 (1983): 375-395.
  32. ^ Shoshana Grossbard-Shechtman, "The new home economics at Colombia and Chicago." Feminist Economics 7.3 (2001): 103-130.
  33. ^ David Wessel (April 3, 2013). "The Economics of Leaning In". The Wall Street Journal. Retrieved April 4, 2013.
  34. ^ Wei Zhang (2006). Economic Growth with Income and Wealth Distribution. Springer. p. 71. ISBN 9780230506336.
  35. ^ Herbert Gintis (2000). Game Theory Evolving: A Problem-centered Introduction to Modeling Strategic Behavior. Princeton University Press. pp. 34–35. ISBN 9780691009438.
  36. ^ Gary Becker & Julio Jorge Elías (Summer 2007). "Introducing incentives in the market for live and cadaveric organ donations". Journal of Economic Perspectives. 21 (3): 3–24.CS1 maint: Uses authors parameter (link)
  37. ^ Vivekanand Jha & Kirpal S. Chugh (September 2006). "The case against a regulated system of living kidney sales". Nature Clinical Practice Nephrology. 2 (9): 466–467.

External linksEdit