Thursday, September 20, 2012

Paul Samuelson, the Gullible and Unrepentant Socialist

In a recent paper, historians of economic thought David M. Levy and Sandra J. Peart show that [Paul] Samuelson and other American economics textbook authors of the 1960s and 1970s kept forecasting rapid Soviet growth through their books’ successive editions, even while their own updated numbers clearly showed that the growth forecasts in previous editions had been too high.  In the seven editions of his textbook published from 1961 to 1980, Samuelson kept including a chart indicating that Soviet output was growing faster that U.S. output, and predicting a catch-up in about twenty-five years.  He repeatedly had to move the predicted catch-up date forward from the previous edition because the gap had never actually begun to close.  In several editions he blamed low realized Soviet growth on bad weather.  As late as the 1989 edition, he and coauthor William Nordhaus wrote: “The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.

1 comment:

Pedro H. Albuquerque said...

Levy & Peart: "Between 1960 and 1980 American economics textbooks overestimated Soviet growth. They held that the Soviet economy was growing faster than the US economy and yet they kept the ratio of Soviet-US output constant over two decades. The textbooks downplayed any uncertainty associated with such growth estimates. We offer evidence that the optimistic portrait of the Soviet economy in the textbooks was in part driven by an assumption of efficiency and abstraction from institutional concerns."