Sylvia Nasar’s Grand Pursuit

Sylvia Nasar probed the intersection of genius and madness in her book-turned-movie, A Beautiful Mind, about Nobel economist and mathematician John Nash. Her latest work analyzes a more historic intersection: the coming together of economists’ thinking that gave the industrialized world unparalleled prosperity.

If this consensus surprises you, you might want to catch Nasar’s talk about her latest book, Grand Pursuit: The Story of Economic Genius, at the Photonics Center September 27. You may hear how Friedrich von Hayek, a hero to Tea Party types like Glenn Beck for railing against excessive government, nevertheless endorsed a government safety net, including national health insurance. By the same token, great liberal economists like John Maynard Keynes did not question capitalism as a requirement for national prosperity; they wanted it regulated, not abolished.

Reviewing a century of economics ending in the 1950s, Grand Pursuit touches on the field’s known and less-known seminal thinkers—from The Communist Manifesto coauthors Karl Marx and Friedrich Engels to British socialite-turned-socialist Beatrice Webb and Austrian-Hungarian economist Joseph Schumpeter (the last two, Nasar contends, brainstormed the welfare state and are undeservedly obscured by the shadow of Otto von Bismarck, the German leader who enacted pioneering social legislation in the 1880s).

BU Today recently spoke with Nasar, a professor at Columbia Journalism School and a former economics reporter for the New York Times, about her new book.

BU Today: Economist Paul Krugman argues that the economics profession has largely failed to prescribe policies that would end the current joblessness. Do you think he has a point?

Nasar: I don’t agree. Most economists supported some combination of monetary and fiscal stimulus to fight unemployment. Most argued for permanent tax cuts or infrastructure programs instead of temporary breaks like Cash for Clunkers. Many considered the 2009 stimulus too small. Most supported a bank bailout. And most cautioned against adopting major new regulations, i.e., overhauling health care, until the economy was out of the woods. Is that all so different from what Krugman has been saying? The advice was good, but often unpopular.

How did the personal lives of the economists in your book affect their thinking?

Ah, the mind-body problem. It’s not especially useful to make such sharp distinctions. Even the most detached scientist is an integrated personality and responds to his or her environment and history. Beatrice Webb identified with workingmen because she felt so powerless as a woman, so frustrated in her attempt to realize her aims. Irving Fisher’s causes all had to do with promoting health, economic and otherwise. His battle with TB surely was one factor, if by no means the only one. In history and biography, you’re doing the opposite of compartmentalizing. You’re looking for connections, in part because that’s how the reader will be able to connect.

Did writing the book change your take on a particular economist or school of economic thought?

Only about a hundred times. Engels is the guy with the ideas; Marx was a victim of a German university education. Beatrice Webb and Schumpeter, not Bismarck, are the brains behind the modern welfare state. I had no idea that the standard of living debate—are you better off than four years ago?—has been raging since the 1840s. Or that Charles Dickens, and every other thinking Victorian, took sides. In economics, history, journalism, you’re supposed to change your conclusion when the evidence changes. Eric Hobsbawm, a lifelong communist, finally agreed that real wages rose unambiguously after the early 1840s, and that a proletariat was not a necessity for capitalism. Pretty cool.

What’s your opinion of the current debate about how to shake off the recession? Whose prescriptions make more sense, President Obama’s or Governor Romney’s?

Presidents don’t deserve most of the blame or censure they get for the economy’s ups and downs. The housing bust and banking crisis were the product of 30 years of good economic times. And recessions that follow such episodes tend, as the Swedes learned in the 1990s, to produce long and painful hangovers.

Obama has done more right than wrong. One could fault him for letting Congress take the lead in crafting the nonstimulating stimulus. Or for fighting for universal health insurance and new financial regulation while business was still reeling. Or for not supporting the Federal Reserve more vigorously. Obama’s record isn’t as good as Reagan’s or Kennedy and Johnson’s. Still, he’s done better than Hoover, and he’s avoided FDR’s worst blunders. I’m not sure what Romney would actually do if he won the election. He seems to be a pragmatist, a competent executive. I can’t imagine that he’ll have his VP making economic policy, or much policy, period. I can’t even remember the name of Clinton’s VP.

Sylvia Nasar will speak about her book Grand Pursuit: The Story of Economic Genius on Thursday, September 27, at the Photonics Center, 8 St. Mary’s St., Room 206, from 4 to 5:30 p.m. Paul Solman, correspondent for NewsHour on PBS, will moderate. The talk is part of the College of Arts & Sciences Economics Department lecture series Conversations with Economists and is free and open to the public.