Nobel Laureate Series Begins With Focus On Economics
The inaugural lecture of the Ford/MIT Nobel Laureate Lecture Series took place in Kresge Auditorium last night, featuring Franco Modigliani, Paul A. Samuelson, and Robert M. Solow, all Professors Emeriti of Economics.
Sponsored by the Ford Motor Company, this five-year program aims to bring Nobel Laureates of all fields from all over the world to speak at MIT.
Last night’s lecture was entitled “The US Economy: The Last 50 Years and the Next 50 Years.” The three Nobel Laureates have spent a combined 151 years on MIT’s faculty.
Each spoke extensively on the economic trends of the past and predicted an economic decline in the United States within the next 50 years.
End of the welfare state
Samuelson warned that the major problem of the next 50 years may be the current conservative trend, which leads away from that of the New Deal era.
Solow said that the economy has polarized since the mid 1970s and that the income of the bottom one-third of the population has actually decreased over this period.
While the earnings premium associated with higher education has increased, the horrendous job in educating the down-trodden risks “perpetuating a permanent lower class.”
Solow also suggested that the bulging group of aged people in America will drag the acceleration of economic growth and prevent the oft-mentioned “industrial revolution.”
Modigliani provided yet more gloom and doom as he predicted a “real nightmare” for the booming stock market, citing the ludicrous price earning ratio as a flagrant sign of the crash to come. He also attacked the gigantic deficit, suggesting that foreign loans may be denied in the future.
His primary focus, however, was the new Social Security system that he has been working on in the last few years. This “funded system” would allow contributions to be used to accumulate wealth into a collective fund rather than to pay for Social Security now.
He believes that this system will be more stable and less sensitive to the patterns of growth.
Laureates make partisan attacks
Despite attempts to omit politics from the forum, partisanship occasionally slipped in. Modigliani slammed Republican Presidential candidate George W. Bush for his Social Security plan, which would put a person’s contribution into their own portfolio rather than a collective fund.
Also, Solow sharply criticized Reform Party Presidential candidate Patrick Buchanan’s hasty dismissal of all globalization as irrational.
Laureates show humorous side
The three Laureates also showed their human sides throughout the lecture, with self-deprecating humor that sent ripples of laughter through the audience. Solow’s comparison between a snake swallowing a pig and the aging process grabbed the most laughs.
After closing remarks by Martin Zimmerman PhD ’75, the Nobel Laureates answered a few questions, offering high praise for the Feds and sidestepping some of the more incendiary queries.