(This essay was published in Hong Kong Economic Journal on 14 May 2014)

 

Professor Gary Stanley Becker, my teacher, passed away on Saturday 3 May 2014 in Chicago at the age of 83. He was University Professor of Economics and Sociology at the University of Chicago, had won the Nobel Memorial Prize in Economic Science in 1992, the Presidential Medal for Freedom in 2007, and was a giant among Nobel Laureates in the field of economics. News of his death came as a big shock because he was in good health, had planned to visit Beijing in August to give lectures, and to come to Hong Kong in September to kick off the Asian Chapter of the Chicago Economists Society. Hardly anyone I met in the past week who knew him expected him to pass away so suddenly.

 

I grieve at the passing of my teacher. My son Michael (柏林), who attended Professor Becker’s price theory class last fall (see Photo 1), shared with me the following passage mourning his death:

 

“What is grief?” I recently asked psychologist Steven Stosny, posing the obvious question I’d avoided for so long.

 

“It’s an expression of love,” he told me. “When you grieve, you allow yourself to love again.”

 

“How do you grieve?” I asked him.

 

“You celebrate a person’s life by living your life fully.”

 

Becker led a very full life. He was a towering intellectual giant, a person you simply stood in awe of. As a person he was generous, kind, and courteous; someone you grew to love and respect. Economics was a big part of his life and conversations with him almost always revolved around economics. He had the rare gift of discovering important and original ideas on a recurrent basis throughout the 60 years of his academic career, scoring home runs almost every year.

 

Towering Intellectual Giant

 

In this essay I shall speak of Becker the economist and person I knew. Next week I shall speak of his scholarship and contribution to economics and social science.

 

Becker was born in 1930 in Pottsville, Pennsylvania. The family later moved to New York where he attended the James Madison High School. He was a very accomplished student distinguishing himself in mathematics and sports. Becker’s sister Natalie writes about his family influence, “[W]e all were supposed to study hard, to focus, to plan ahead, to think independently, to not follow the crowd, to use your brains as they would say. Gary was intense about the Giants, about ping pong, stickball, handball, math problems, about strength, competition, ringolevio (my note: a sophisticated form of hide-and-seek requiring team work), but not about religion, politics, art, poetry” (see Natalie Becker, 2011).

 

Becker entered Princeton at the age of 17 and graduated in three years with a degree in mathematics, summa cum laude. At Princeton, he took some economics courses, but was initially repelled by its formalism. He dabbled with sociology, but found it too hard and thought the jargon of leading academician Talcott Parson was too difficult for him (and everyone else) to understand. He eventually decided to pursue graduate studies in economics. Faced with a choice between going to the University of Chicago and Harvard, he chose the former.

 

Although Becker majored in mathematics as an undergraduate, he wrote a senior thesis on trade theory under Jacob Viner. He also completed another research paper on monetary theory with William Baumol. By the time he graduated from Princeton, he had already published two articles in leading economics journals. The legendary Professor Viner spoke of Becker in unbelievably glowing terms in his reference letter: “He is the best student I have ever had.”

 

This is most incredible because Viner had been teacher to Milton Friedman, George Stigler, and Paul Samuelson at the University of Chicago before arriving at Princeton. Viner obviously held the twenty-one year old young man from Potsville in the highest regard. Interestingly, Becker inherited one characteristic of Viner’s teaching style. Becker was famous for calling on students in class to answer difficult, open-ended questions. It they answered correctly, he would continue to press them until they made a mistake, and then explain the mistake to them. Outside the classroom, even if you were meeting with him one-on-one, he still tried to keep you on your toes, because he felt you had to continue to apply yourself and question your own thinking.

 

Becker and Friedman

 

In 2010, Becker was in Hong Kong to give a public lecture at the University of Hong Kong. Francis Yuen Tin-Fan and I accompanied him to Shenzhen the next day where he gave another public lecture. On our way back I asked if he would be interested in visiting Macau. He asked what there was to see. I mentioned there were a lot of casinos that looked very much like those in Las Vegas and a good collection of colonial heritage structures. I explained the Portuguese government had done a better job of preserving the past than the Hong Kong government. He immediately asked, “Is that better for the people?” We then plunged into deep conversation about government, conservation, and economic development. When the discussion finally moved on to another subject, Macau had been forgotten.

 

Becker’s decision to attend the University of Chicago was momentous for Becker, for Chicago, and for economics. Chicago of the 1950s was a meeting place for intellectual tectonic plates that created stress and uplift. Milton Friedman was building a new teaching curriculum and research agenda there that would become renowned as the Chicago School.

 

Friedman made the rigorous empirical testing of economic hypotheses the central activity of research. The assumptions used to build theoretical models were unimportant. What was critical was whether the models were supported or rejected by the data and whether they could predict outcomes. Friedman was embarking on a research program that struck at the central elements of the Keynesian system, namely (1) the consumption function, (2) the ineffectiveness of monetary policy, and (3) sticky real wages in the labor market.

 

In teaching, Friedman reoriented the study of economics away from being formalistic, an intellectual game played by smart people to impress each other, and instead approached it as a method for understanding the world and solving its problems. The central role of prices in the economic system was re-emphasized. Although Friedman made his reputation in studying macroeconomic phenomena (for which he won the Nobel Prize), his real contribution was in recreating the microeconomic foundations for macroeconomics that had been abandoned in the Keynesian Revolution. Friedman held the learning of price theory central to the study of economics and he always taught Chicago’s legendary Price Theory courses up until his retirement in 1976.  I was very lucky to have sat in on these classes in the academic year 1972/73 and witnessed his teaching.

 

Becker came to Chicago full of himself as a Princeton hot shot with two published articles. But he immediately got the stuffing knocked out of him on the first day in Milton Friedman’s Price Theory class. Friedman asked the class a question and Becker’s hand was the first to shoot up. After answering the question, he was told by Friedman that he had just restated the question in another way and not answered it.  Becker often retold this experience in later years to many individuals. He told me he felt humiliated by the episode, but he realized Friedman was right. On his way home, he said to himself, “Gary, stop writing papers. Go back to studying economics.”

 

A year and a half later Friedman was writing about Becker in the following terms when recommending him for a fellowship:

 

“Gary Becker is a young man who received his A.B. from Princeton. He was recommended to us by his Princeton teachers for a departmental fellowship in terms that we found hard to take seriously – the best person that we have had in the last ten years; the best student that I have ever had, and the like. After observing him closely for the past year and a half, I am inclined to use similar superlatives: there is no other student that I have known in my six years at Chicago who seems to me as good as Becker or as likely to become an important and outstanding economist….”

 

“Becker has a brilliant, analytical mind; great originality; knowledge of the history of economic thought and respect for its importance; a real feeling for the interrelationships between economic and political issues; and a profound understanding of both the operation of a price system and its importance as a protection of individual liberty. This is one of those cases in which there is just no question at all about Becker being preeminently qualified for one of your fellowships. I wish I could look forward to being able to find a candidate this good every year, but that is asking for too much.”

 

Becker as Teacher

 

Becker was fascinated with Chicago’s approach to studying economics, but from the beginning he also regarded the central reason for studying economics as poverty alleviation – of understanding why people were poor, why economies were poor, and what could be done to alleviate poverty in terms of policy. He was not interested in joining government, and he turned down all requests to sit on the boards of companies, choosing instead to devote his entire life to studying and teaching economics, including public education. In this respect, he was like Milton Friedman, and not Jacob Viner.

 

Becker’s knowledge was incredibly broad, and he had interesting and insightful observations to make about almost anything. When people were stuck in their work they would say, let us go and ask Gary. Becker was generous with his time and would take your questions seriously, but he did not like people to waste time in unproductive chitchat.

 

His fertile mind and keen observations had a particular flavor, – I believe, akin to a Weltanschauung or worldview that is uniquely Beckerian. Underlying his approach to interpreting everything was a deep theoretical structure rooted in price theory that he kept at the back of his mind. While economists understand the central role of prices in guiding choices in a market economy, Becker could see the role of shadow prices guiding choices in non-market situations. Prices could be explicitly observed in markets where money was exchanged for goods, but shadow prices were implicit in non-market exchanges. The latter could not be observed directly and had to be inferred from the behavior and outcomes of choices that people made.

 

Becker’s unique gift was to be able to see and grasp intellectually what was implicit in people’s choices. He possessed amazing powers of intuition. He also had the ability of holding a problem continuously in his mind until he could see straight through it to its fundamental elements. This could take hours, days or weeks of concentrated introspection before the problem surrendered its secret to him. Intuition and concentration were the strongest and most enduring elements of his intellectual genius.

 

My Priviledge

 

Becker would sometimes ask whether a proposition was still true under an extreme situation. He was in fact demonstrating that if a proposition fell apart under extreme situations, then it couldn’t be a general proposition. We know from experience that it is usually easier to intuitively see whether a proposition is true under these circumstances because the results may become “ridiculous” and therefore easier to judge. For example, we can tell immediately whether a mathematical equation still makes sense by applying it to either very large numbers (like infinity) or very small ones (like zero). Intuition then becomes like a quick test for contradiction to rule out “ridiculous” results.

 

I came to know Becker at Chicago mostly through formal interactions. I took his Price Theory course in 1972-73, became his research assistant for two years, attended his Workshop in Applications of Economics for many years, and eventually wrote a PhD thesis under his supervision. In class, he was very well organized, lectured from hand-written notes, spoke methodically, and as far as I remember never joked. In the workshop people did not joke either because he thought it detracted from concentration and serious discussion. One usually had to make an appointment to see him and there were a line of chairs outside his office where we sat while waiting our turn. In the queue were assistant professors. It was difficult to get to know him as a person.

 

Even when I was writing my doctoral thesis our interaction was quite formal. I presented an early draft in his workshop once and had two private meetings of 30 minutes each with him. He had two pages of written feedback passed to me before the meeting so that the discussion would be conducted very efficiently. Those two pages were very useful as he made me see my own work in a much broader light and he identified my contribution. He also showed me how I must not over-interpret my empirical results in trying to account for every finding.

 

I had first come to his attention in my senior year when I asked him if he would be interested in reading and commenting on a paper I had written for a British economic history course on crime and punishment in England and Wales in the second-half of the nineteenth century. He asked me if I could present it in his workshop as he had an opening slot. My heart raced and I said yes. It was an opportunity to die for, but it was very scary, too, to live through it. Later he asked me if I would be interested in pursuing the crime paper further as a thesis topic. He could find some funding to support such work. I decided not to as my interest was more in demography. Two decades later I reworked the old paper and had it published. I sent him a copy and he wrote back saying that it was a long wait and he urged me to take a look at the first-half of the nineteenth century and see what I would find. I smiled when I received the note and thought, that is just like my teacher, Gary Becker. Well maybe someday I will.

 

Becker in Hong Kong

 

I came to know him as a person after leaving Chicago when he visited Hong Kong and China many times. In 1978, he was in Hong Kong for the Mont Pelerin Society meetings. On that occasion I took him to Aberdeen. Knowing that he would not be interested in a meal on the floating restaurant, I took him on a ride in one of the sampans through the harbor. It was a very touristy thing to do, but appeared otherwise. Becker became very interested in how the woman who rowed the sampan made a living, what she did before showing tourists around, her family situation, and so on. He then asked me many more questions that I didn’t know the answer to and could only guess. Suddenly it was like being in his class again. He was obviously interested in knowing how traditional livelihood adapted to modern times. I could tell he enjoyed the sampan trip very much.

 

In the early 1980s, Becker was in Hong Kong with his wife Guity Nashat (they were married in 1980) and I took them to Shatin, which at that time was being completely redeveloped, to see what remained of the old village areas. Guity, who was originally from Iran, was also very interested. We came across a street vendor selling traditional Chinese food and snacks. Becker immediately became very fascinated with the sticks of water chestnuts soaked in large jars of cold water. He asked me what they were, how much they cost, and whether they were tasty. By the time I had answered, Becker had already taken two sticks out of the jar, offering one to Guity and munching on the other. It was too late for Guity to stop him, as she evidently took exception to eating uncooked food sold on the streets. She refused to take part in this naughty adventure leaving the two of us to enjoy the chestnuts together. Guity successfully prevented further forays into eating uncooked street food for the rest of the trip.

 

We also went to the park on the Peak (see Photo 2). Guity took pictures of the two of us. While enjoying the scenery, Becker challenged Guity to a race around the circular path on the edges of the park. They would go in opposite directions and come back to the same spot. I was given the job of counting to three to start the race. Guity, who was in high heels and obviously handicapped, started to run after I had counted one to make a head start. Upon finishing the race Becker accused Guity of cheating in a tone reminiscent of young children. Becker I noticed did not start to run until I had counted three even though he realized Guity had taken off.

 

On his many subsequent visits with Guity to Hong Kong, I could see how close they were to each other. We spent a lot of time discussing developments in China. Becker was very hopeful that China would succeed at developing its market economy and believed that there was a real chance it would happen. He felt that as long as China could keep competition in the market place alive, then incentives for the efficient allocation of resources to stimulate growth and innovation would be present, and institutional change would emerge in good time. He also thought the inability of Japan to enhance market competition was a major stumbling block in sustaining her economic growth. I felt he saw China’s economic success as a major breakthrough in alleviating poverty around the world, just as Hong Kong had showed the world the power of market competition in promoting prosperity for the people.

 

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