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J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z.
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Okay now, question one on this confidential reference form,
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how long have you known the applicant and in what capacity?
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Almost a decade now, comma, since he came
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as a distinguished graduate from Swarthmore
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to the MIT graduate school, period.
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I knew him as a crack graduate student, comma,
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and as an assistant and associate professor at Yale, period.
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More recently, MIT invited him to a chair here,
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comma, so I see a good deal of him
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as an esteemed colleague, period.
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Now two, the answer is yes.
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Three, Dr. Weitzman is undoubtedly one
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of the world prominent economists
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in the age group around 35, period.
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He would rank well in any top group
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of economists anywhere in the world.
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Four, A, would you seek him as a colleague?
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The answer is yes, period.
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Obviously, period.
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We have, period.
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Five, A, excellent, B, not known to me,
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C, excellent, D, excellent.
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Six, I believe that, aside from his excellence
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and potential as an economics scholar, comma,
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Dr. Weitzman has already enjoyed unique opportunities
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to spend a year in Moscow as an advanced student, period.
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Consequently, he has already met many of the young and able,
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mathematical economists, comma,
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the sort of people whom distinguished professors
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in the West, like me, (coughs) never get a chance to meet
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since the people we meet are essentially top bureaucrats.
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Seven A, check that.
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Definitely.
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Eight, (coughs) I think I've already elaborated sufficiently
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on Dr. Weitzman's strengths, period.
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I think of no specific weaknesses
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from the standpoint of this application, colon:
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he has a no-nonsense quality about him
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that, comma, I should think, comma,
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would actually serve as an advantage, period.
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Nine, in view of the fact that Dr. Weitzman
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has spent much more time in the Soviet Union
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under the difficult conditions of being a student
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and looks back with pleasure on the experience, comma,
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I do not think that this trip would be at all taxing
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on him from the personality viewpoint.
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Ten, I think that what Dr. Weitzman wants to do
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is very much worth doing, comma,
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and that there are very few economists
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in the country who have the combination
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of mathematics and economics that he does
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and the previous acquaintanceship,
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which ought to be helpful in his research project, period.
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Therefore, comma, I am enthusiastic about it, period.
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I have known Professor Weitzman for almost a decade now,
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comma, since he came, since he was one
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of the most distinguished PhDs in economics
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turned out by our select department, period.
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I followed his work when he was an assistant
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and associate professor at Yale, period.
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Subsequent to his accepting a call to an academic chair
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at MIT, comma, I have had a chance to talk with him often
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and read his published and unpublished works, period.
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I guess all that was one.
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Two, Weitzman earned an international reputation
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as a fruitful economist of great future potential
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even at a young age, period.
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He has continued to live up to that early promise, period.
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I can think of few in the whole world
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of any age who posses his combination of mathematics,
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comma, economics, comma, and developmental
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and comparative-, hyphen, systems interests, period.
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His is a refreshing, comma, no-nonsense,
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hyphenate that, personality, period.
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He is much liked, as well as admired,
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by his colleagues and students, period.
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Three, much of Soviet economics
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has for a long time been of low quality, period.
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There are many specialists in this country who follow
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the work of these typical Soviet economists, period.
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However, comma, in comparatively recent years,
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there has appeared in the Soviet Union
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a very fruitful school of mathematical economists
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and programmers, period.
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Because Weitzman spent the whole year as a student
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in Moscow, comma, he got to know many of the young
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and able Soviet mathematicians and mathematical economists,
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whom distinguished scholars in the West
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like me never get a chance to meet, period.
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Usually, it is successful bureaucrats, comma,
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often little more than stuffed shirts, comma,
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who get the traveling assignments
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from the Soviet Union to American universities
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and to international conferences, period.
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Weitzman assures me, comma, and I have reason to believe
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that he is correct, comma, that there is a whole,
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other world of able young people
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not yet observable to the likes of me, period.
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The fact that Weitzman already has
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a considerable acquaintanceship among this group
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should be of great aid to him in his project, period.
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Paragraph, I ought to add that his project
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is a very interesting one in its own right
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as well as being of considerable importance
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for anyone who wishes to be well informed
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on the future of the Soviet economic system, period.
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On the basis of a perusal of his research plans,
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comma, I would judge this to be a very well worthwhile,
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comma, and a well thought out, comma, project, period.
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New paragraph, in short, comma,
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I strongly endorse Professor Weitzman's application
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and, comma, although I have tried hard
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to find some qualifications for this endorsement,
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comma, I did not really come up with any, period.
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Messiahs usually don't have John the Baptists
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running ahead of them and announcing them,
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but what they say is that the forecasters
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have been doing more poorly recently,
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and they show six or eight prime forecasters.
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What their forecast was for the four quarters
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of 1974 at the end of 73 and what they are now,
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and they have written up their inflation expectations.
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They've written down their real growth expectations,
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and the amount of those revisions is fairly dramatic,
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and this is used to illustrate the, what should I say,
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mean that economics as a science has played out.
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Well, that makes good journalism,
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but I don't think that if one studies it.
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First place, you can't be disillusioned
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unless you're first illusioned,
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and if anybody thought that economists
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could forecast accurately in the sense of 100% accuracy
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or 80% accuracy as against the batting averages of 50%,
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although a layman doesn't know what 50% means as against 60
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or 40, then he just was ill-informed previously.
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It still is the case that economists,
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and there's no exception to this empirical statement,
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that economists forecast better,
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imperfectly as they forecast, than any other group,
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whether it's businessmen who become Secretaries of Treasury
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from Wall Street or whether it's businessmen
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who become Secretaries of the Treasury
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from some other calling in life
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or astrologers or gypsy or brokers
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or anybody whom you could name.
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If you will examine their mean squared error
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of estimate of forecast, the general economist,
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and I mean people like Chase Econometrics
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with the Wharton model, the DRI,
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Otto Eckstein's model, or throw in a monetarist
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as one of the half dozen, although they happen
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to have the worst forecasts recently, last three years,
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if you take them as a collective,
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or it'll serve the purpose, take all the business economists
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who report to the national bureau every quarter
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on what they think's gonna happen,
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they have imperfect records, but they're better
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than that of any other group.
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They're better than they used to be,
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but I don't think they're converging on accuracy.
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They're converging on a certain,
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irreducible amount of uncertainty.
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God Almighty doesn't know what investment
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is gonna be two years from now.
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He hasn't made up his mind, or mid East wars and so forth.
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I don't wanna be complacent or disillusioned.
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We can do better than we are now doing,
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but if you see how much better we've been doing,
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the signs don't suggest that without some new breakthrough,
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that we will converge to complete,
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actually looks as if your law of diminishing returns
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is applying, and now, I said mainstream economics
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is under attack.
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The article is liberalism at bay.
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Is there some new, up and coming group
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which hasn't yet been recognized
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but which is the wave of the future?
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Well, usually these things don't come out of the blue.
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It turns out that there're signs that they're doing better.
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I think one has to say that the radical economists,
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one had to say, it's a new movement.
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You can't expect a baby to do that which an adult will do.
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You have to give a movement time,
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and many people, myself included,
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and in the Wall Street Journal
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with direct quotes, somewhat embarrassing,
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have said that there's gonna be fruit from the movement.
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One has to say with equal objectivity
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that that fruit has been a little disappointing
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and slow in coming.
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I don't know how old, a dog at three is pretty old, 30,
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how old a movement should be that,
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that breakthroughs, and certainly no breakthroughs
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on the topics that have disillusioned the public
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with economists.
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The public is disillusioned with economists
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because of the inflation.
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Now, there's no Galbraithian theory of inflation.
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There's no Marxian theory of inflation
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which has any fruit at all.
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If you think of what, let's say,
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the Democratic opposition oughta do,
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they've got the biggest opportunity they've ever had
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in all captivity, so here's the president in trouble,
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and they're, I don't want to be quoted on this,
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but they're pretty much bereft of ideas.
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There's no research, moreover, you don't get it
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from monetarism although monetarists believe
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that they have it, have the theory,
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but the actual forecasting record of monetarism,
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if you use something so prosaic
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as a squared error, has been about two or three times
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as much as the other forecasters in this period,
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and I'm speaking of the best monetarist forecast,
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which is by the Federal Reserve Bank of St. Louis.
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The, as against the, well, let's take that New York bank,
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which will be nameless, which sent the market up
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for three days on the prime rate, gonna be down
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to 6% by the end of the summer.
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That's a monetarist outfit.
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Whether it's a fellow in Chicago in a bank,
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who shall be nameless, who thinks he can make money
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in the stock market by examining
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the rate of growth of the money supply, the Sprinkle Book.
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I'll just look at a study here, University of Rochester,
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by certainly not an anti-Chicago type,
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and it turns out that there's nothing in that at all.
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It's already in the.
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(tapping)
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Well, so that the, you see, what is the case?
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The simple case is this.
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That no mixed economy, and we've got a dozen mixed economies
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in the world, and they're all pretty similar
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in this respect, whether it's the United States
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and Canada, or Sweden and Switzerland,
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or Germany and Japan, or France and Italy,
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or Holland and Belgium, this is a lot of territory
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that I've just talked about.
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There isn't any one of these mixed economies
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that knows how to have full employment and price stability.
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Now, this is bothering--
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(beeping)
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This is bothering the hell out of the public
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because the public is really concerned about inflation.
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Now, the sad truth is that you can't get a jury
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of economists who will agree on what's a good incomes policy
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to handle this dilemma.
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Now, I know that Galbraith thinks
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that permanent wage, price controls are worth,
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but the rest of the jury won't agree with him.
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Friedman thinks if you only control the money supply,
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that on a cost-benefit analysis,
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you get a lot of cure for inflation
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with the, well, the little human suffering.
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Although, if there's some suffering,
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you say you can't make omelets without breaking egg shells,
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but the jury cannot agree.
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Now, that's a defect of the mixed economy,
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and the honest economist brings that message.
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Now, you know that there are Greek kings
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who used to slay the messengers
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who brought bad news, or the saying in the saloon,
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the don't shoot the piano player.
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He's doing the best he can.
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Economists aren't the economy.
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You have to keep those separate.
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However, if part of your prestige
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with the community is as a shaman and medicine man,
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and you take credit when you get the economy moving again
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as in the 1960s.
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He who takes credit for the sun has to prepare to be blamed
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for the rain, so if I give you an exact analogy.
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If certain types of malignancy are brought
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to the best, a jury of the best of the medical profession,
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the only honest thing that they can say to each other,
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whether they say it to that patient is a different problem,
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is in the present state of medical,
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scientific knowledge, we cannot cure this.
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Now, you wouldn't shoot a jury of doctors
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for telling the truth, but on the other hand,
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you wouldn't adore them in the same way
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as if they were a group of jury who could cure cancer,
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so I think part of this difficulty you see
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is that the unsatisfactoriness of the mixed economy
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rubs off on the economists.
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Now, do you think that's gonna be translated
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into the class I'm teaching?
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Are you, for example, I know that people have told me
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that you revised your textbook
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to account for changes in emphasis and so on,
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and I don't know if you're planning any further--
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I would say yes, that, well, let me put it this way.
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My concern in each revision is to,
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I try to think of the next half dozen years,
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what are going to be the salient issues
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and dilemmas for policy, and then I try
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to anticipate them and speak to them.
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Well now, I do this pretty well
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but, not being given omniscience, imperfectly.
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I very much discuss, have you looked at my ninth addition?
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Uh uh.
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And I don't know if you've looked at it
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and compared it with earlier additions.
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You'll see, for example, net economic welfare.
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Instead of the numbers game, by growth
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with respect to Russia, that doesn't interest
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the present generation, but on the other hand,
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zero population growth, zero economic growth,
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the pros and cons of that, that is relevant.
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I did not anticipate, I had not way of doing it,
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the mid East war.
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The strengthening of the energy monopoly.
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Therefore, energy doesn't have as big a role
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in the addition written in 1972-73
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as it would have if I were revising it today.
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On the other hand, I tried to open up,
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get rid of the complacency in mainstream economics,
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and there's a chapter for the first time
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on alternative doctrines.
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There's even a Marxian section.
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I don't think you can have a conspiracy
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of silence about Marxian economics.
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People think that you're refusing to divulge them
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something which is very powerful,
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and let's look at it and see what the power there is in it.
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There hasn't been very much power in Marxian economics
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in understanding the dynamics of the mixed economy.
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If somebody'd been a well trained Marxist in 1950,
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he would not be in a good position
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to understand the 1955 to 1975 world,
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so I think that there're changes.
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Now, I would think, for example,
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that the average economist, do you understand statistics?
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Somewhat.
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There's a bigger standard deviation, bigger spread
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among the economists than was true 10 years ago,
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and there are more people, but they're still
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very much a minority on the left,
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but that the center of gravity has shifted
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a little bit rightward, and certainly a little bit rightward
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compared to Congress.
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Say, don't choose a fixed base,
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but use where the center of the country is.
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That economists are more conservative
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than they were 10 years ago because they've seen
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interferences into the market system
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that have fulfilled their worst foreboding.
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Now that's conservative in theory,
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not conservative in political orientation, isn't it, or no?
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I think, for example, which you didn't have the zest,
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anything like the zest from a govern
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in the university community that you had for Kennedy.
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That's interesting.
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Okay, fair enough.
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Has it been a course finding shift academically
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towards the Chicago school?
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If you identify the Chicago School as the,
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I think, by the way, the important designation
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of the Chicago School is not monetarism,
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which is just a special crochet,
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but it is an emphasis upon the merits of the market,
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and I would say that, I think that there's been a,
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within the 15,000 to 20,000 members
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of the American Economic Association,
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which would include practically all the teachers,
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but it would also include others,
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that you would find an increased allegiance to the market.
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Now, that doesn't mean that most of them are laissez-faire,
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or they have no concern about strip mining
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or something like that but that,
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I was just at the Western Economic Association meeting.
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There were 2,000 people there at Las Vegas,
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and I think that I was really surprised at the--
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(phone rings)
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Conservatism that seemed to be--
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(drowned out by ringing phone)
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Hello?
379
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Fine, how are you?
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Let's see, Joan?
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She's not here.
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I'll give you Kate, hold on.
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Kate.
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But now, let's, if you look at the text books,
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I would say that, since I'm an interested party,
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I don't really want to be quoted on this.
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You ought to check anything I say
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and get an authoritative estimate elsewhere,
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but lemme give you my impression.
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My impression is that there are about two radical,
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economics textbooks, plainly radical.
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Sherman and Hunt and Fusfeld, and that they've gone nowhere.
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That their publishers have not made very much money.
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00:28:31.060 --> 00:28:34.610
Now, there's an iconoclastic textbook.
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00:28:34.610 --> 00:28:36.214
Roger Miller, have you heard of this one?
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No, I haven't.
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00:28:37.047 --> 00:28:38.800
Roger Miller is a, he's really a member
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of the Chicago School, but he's a hippie
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00:28:44.210 --> 00:28:45.730
whose hair is down to his shoulders,
400
00:28:45.730 --> 00:28:50.180
and he writes well, and half the time,
401
00:28:50.180 --> 00:28:52.750
anything he's writing about involves pot.
402
00:28:52.750 --> 00:28:57.250
He's got pot on the brain and so forth.
403
00:28:57.250 --> 00:29:00.790
His textbook starts out, it's with too shocking.
404
00:29:00.790 --> 00:29:03.750
Besides solving the economics of prostitution,
405
00:29:03.750 --> 00:29:06.193
marijuana, and something else and so forth,
406
00:29:07.916 --> 00:29:12.230
it's had modest use, but generally,
407
00:29:12.230 --> 00:29:14.810
the books that are selling the biggest
408
00:29:14.810 --> 00:29:19.810
are McConnell, that's a McGraw-Hill book,
409
00:29:20.560 --> 00:29:22.920
that's the poor man's Samuelson, as it's called.
410
00:29:22.920 --> 00:29:24.070
It's just, you know, a.