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Gary Beckerís career has focused on using economics to better understand society

Oct. 30, 2007

In being awarded the Presidential Medal of Freedom by George Bush, Gary Becker has achieved another distinguished honor, adding to his Nobel Prize in Economic Sciences (1992) and the National Medal of Science (2000).

Becker, University Professor in of Economics, Sociology and the Graduate School of Business, was born in the coal-mining town of Pottsville, Penns., in 1930 to parents whose schooling never advanced beyond the eighth grade.

When Becker was growing up he read aloud stock quotations and other reports on financial developments to his father, who was losing his sight. Another definitive moment came when Becker was 16 and had to decide between being on the math or handball teams because they met during the same time period. Sports had been his previous priority and he was better at handball, but choosing math indicated a shift in direction.

An examination of Becker’s body of work points to a strong work ethic and intellectual curiosity that reach back to his disciplined upbringing. Combine that with his deep interest in human behavior, a fascination with the way economic forces affect the lives of everyday citizens, and a talent for explaining complex and dry concepts in plain language, and one begins to understand the full impact of the man who has been called one of the most influential economists of the 20th century.

In fact, when Becker finished high school, mathematics had another competitor for his attention: his desire to do something useful for society. He was initially excited about the economics course that he accidentally took during his freshman year at Princeton University because it was a subject with mathematical rigor that dealt with social organization. But in his final year, he found himself losing interest in economics because it seemed to lack relevance to social issues. He considered majoring in sociology then, before graduating from Princeton (summa cum laude) in 1951. But his interest was rekindled when he enrolled in the University of Chicago for graduate study in economics.

“I was flabbergasted by how stimulating the atmosphere was,” he recalled, citing an exchange his first day in economist Milton Friedman’s class, in which Friedman bluntly pointed out that Becker’s answer to a question was simply a restatement of the question. Friedman’s insights into economic theory and its applications to the real world would profoundly affect Becker’s later research, as did the work of other members of the Chicago School of economic thought, including T.W. Schultz and H. Gregg Lewis, whose interdisciplinary nature encouraged Becker to apply economics to social issues. He earned two degrees from the University of Chicago, an A.M. in 1953 and a Ph.D. in 1955.

In 1957, Becker turned his doctoral dissertation into his first major publication, The Economics of Discrimination. In it, he applied race theory to the influence and effects of discrimination. At the time, such an examination was considered controversial and the work met with fierce criticism. It was only published after Friedman and another future Nobel laureate, George Stigler, spoke out on Becker’s behalf.

The Human Factor

With the goal of becoming more intellectually independent, Becker left Chicago in 1957 for Columbia University in New York. There he explored what would evolve into his next major economic theories, which eventually were collected in his book Human Capital, first published in 1964. The book examined the economic influences on the decision to invest in human capital through education, training, and health care.

Stigler again had a significant impact on Becker, when he returned to Chicago in 1970, renewing his interest in the economics of politics. Two articles that he published in the 1980s developed a theoretical model of the role of special interest groups in the political process.

Becker’s research on time as an economic factor led him to consider how economic factors influence choices for raising children, child care, and divorce. This study resulted in his 1981 book A Treatise on the Family. At once influential as well as controversial, this book presented basic matters of marriage, education, and divorce as decisions made on the basis of costs and benefits.

In one of the best-known parts of the book, “the Rotten Kid Theorem,” Becker demonstrated that selfish children who have altruistic parents can act in a way that is in their own best interest in order to please their parents and hide their true motives.

“The sorts of topics I have worked on, like discrimination, crime, and the family, are things that are fundamental to peoples’ everyday lives,” Becker observes. “I’m doing analysis and not out there giving advice, but indirectly, I would like to believe it has had a significant effect on the way people live.”

Becker’s first wife died in 1970, and he later married Guity Nashat in 1980. In 1985, she convinced him to begin writing monthly columns for Business Week despite his fear of writing for a general audience. Becker later credited the pressure of writing the columns with keeping him abreast of many subjects that interest business and professional readers. He also points out that he and his wife, who is an historian of the Middle East, share professional interests in the role of women in economic and social life, and the causes of economic growth. He considers Nashat’s influence on both his professional and personal life to be enormous, and adds that he could not have continued to be productive without her support and contributions.

Not “Out There” Any More

Throughout much of his career, Becker was considered “way out there” by many leading economists, some even questioning whether or not he really was an economist. But professional opinion has shifted as he has received awards that show respect for his ability to examine huge problems in ways that stand up to empirical challenges, such as the presidency of the American Economic Association, the Seidman Award, and the first social science Award of Merit from the National Institute of Health. Being offered a joint appointment in the Department of Sociology in 1983, also gave a signal to the sociology profession that the rational-choice approach was a respectable theoretical paradigm.

About the Presidential Medal of Freedom, he comments: “This is often said to be the highest civilian award in the United States. The National Medal of Science is the highest scientific award given to an American, and I am fortunate to receive both. To be linked to the notion of freedom is something significant. I believe strongly in economic and political freedoms. To be linked to the people who have received the Presidential Medal in the past is very humbling, and I’m proud to be in that group.”

Today, Becker shows little sign of slowing down; he writes a joint blog with Richard Posner, Senior Lecturer in the Law School. Also with Posner, Becker teaches a wide-ranging workshop that, along with traditional topics in law and economics, stretches the bounds of both fields. In the workshop, they cover a range of topics from evolutionary biology to computer simulations of games on the Internet. The workshop carries on a central goal of much of Becker’s work: Making connections where connections have not been made before.

This article was written by free-lance writer, Greg Holden.


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Last modified at 10:04 AM CST on Wednesday, October 31, 2007

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