Gary Becker

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Gary Becker
Rotten kid theorem
AwardsJohn Bates Clark Medal (1967)
Nobel Memorial Prize in Economic Sciences (1992)
Pontifical Academy of Sciences (1997)
National Medal of Science (2000)
John von Neumann Award (2004)
Presidential Medal of Freedom (2007)
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Gary Stanley Becker (/ˈbɛkər/; December 2, 1930 – May 3, 2014) was an American economist who received the 1992 Nobel Memorial Prize in Economic Sciences.[1] He was a professor of economics and sociology at the University of Chicago, and was a leader of the third generation of the Chicago school of economics.[2][3]

Becker was awarded the Nobel Memorial Prize in Economic Sciences in 1992 and received the United States Presidential Medal of Freedom in 2007. A 2011 survey of economics professors named Becker their favorite living economist over the age of 60, followed by Kenneth Arrow and Robert Solow. Economist Justin Wolfers called him "the most important social scientist in the past 50 years."[4]

Becker was one of the first economists to analyze topics that had been researched in sociology, including racial discrimination, crime, family organization, and rational addiction. He argued that many different types of human behavior can be seen as rational and utility-maximizing, including those that are often regarded as self-destructive or irrational. His approach also extended to altruistic aspects of human behavior, which he showed to sometimes have self-serving ends (when individuals' utility is properly defined and measured, that is). He was also among the foremost exponents of the study of human capital. According to Milton Friedman, he was "the greatest social scientist who has lived and worked" in the second part of the twentieth century.[5]

Career

Becker was born to a

Fellow of the American Statistical Association.[11]

Becker was a founding partner of TGG Group, a business and philanthropy consulting company. Becker won the John Bates Clark Medal in 1967. He was elected a Fellow of the American Academy of Arts and Sciences in 1972,[12] a member of the National Academy of Sciences in 1975,[13] and a member of the American Philosophical Society in 1986.[14] Becker was a member, and later the president of, the Mont Pelerin Society.[15] Becker received the Nobel Prize in 1992 "for having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including nonmarket behavior".[16] Becker also received the National Medal of Science in 2000.[17] Becker received the Golden Plate Award of the American Academy of Achievement in 2001, presented by Awards Council member and Nobel Prize laureate Leon M. Lederman.[18][19]

A political

Robert Dole.[21] In December 2004, Becker started a joint weblog with Judge Richard Posner entitled The Becker-Posner Blog.[22]

Becker's first wife was Doria Slote. They were married from 1954 until her death in 1970.[10] The marriage produced two daughters, Catherine Becker and Judy Becker.[21] About ten years later, in 1980[10] Becker married Guity Nashat, a historian of the Middle East whose research interests overlapped his own.[23]

In 2014 Becker died in Chicago, Illinois, aged 83.[24] The same year, he was honored in a three-day conference organized at the University of Chicago.[25]

Economic analysis

Becker's work has been influential not only in economics but also other disciplines including sociology and demography. His most famous work is Human Capital, and he wrote on sociological topics as diverse as marriage, the family, criminal behavior, and racial discrimination.[26]

Discrimination

Becker recognized that people (employers, customers, and employees) sometimes do not want to work with minorities because they have bias against the disadvantaged groups. He went on to say that discrimination increases a firm's cost because in discriminating against certain workers, the employer would have to pay more to other workers so that work can proceed without the biased ones. If the employer employs the minority, low wages can be provided, but more people can be employed, and productivity can be increased.[27]

Politics

Becker's contributions to politics have come to be known as "Chicago political economy" of which he is considered one of the founding fathers.[28]

Becker's insight was to recognize that deadweight losses put a brake on predation. He took the well-known insight that deadweight losses are proportional to the square of the tax, and used it to argue that a linear increase in takings by a predatory interest group will provoke a non-linear increase in the deadweight losses its victim suffers. These rapidly increasing losses will prod victims to invest equivalent sums in resisting attempts on their wealth. The advance of predators, fueled by linear incentives, slows before the stiffening resistance of prey outraged by non-linear damages.[29]

Crime and punishment

Jurist Richard Posner has stressed the enormous influence of Becker's work which "has turned out to be a fount of economic writing on crime and its control",[30] as well as the analytics of crime and punishment.[31]

While Becker acknowledged that many people operate under a high moral and ethical constraint, criminals rationally see that the benefits of their crime outweigh the cost which depends upon the probability of apprehension, conviction, and punishment, and their current set of opportunities. From a public policy perspective, since the cost of increasing a fine is trivial in comparison to the cost of increasing surveillance, one can conclude that the best policy is to maximize the fine and minimize surveillance. However, this conclusion has limits, not the least of which include ethical considerations.[32]

Human capital

In his 1964 book Human capital theories Becker introduced the economic concept of human capital. This book is now a classic in economy research and Becker went on to become a defining proponent of the Chicago school of economics. The book was republished in 1975 and 1993. Becker considered labor economics to be part of capital theory. He mused that "economists and plan-makers have fully agreed with the concept of investing on human beings".[33]

Modern household economics

Together, Becker and Jacob Mincer founded Modern Household Economics, sometimes called the New Home Economics (NHE), in the 1960s at the labor workshop at Columbia University that they both directed. Shoshana Grossbard, who was a student of Becker at the University of Chicago, first published a history of the NHE at Columbia and Chicago in 2001.[34] After receiving feedback from the NHE founders she revised her account.[35]

Among the first publications in Modern Household Economics were Becker (1960) on fertility,[36] Mincer (1962) on women's labor supply,[37] and Becker (1965) on the allocation of time.[38][39] Students and faculty who attended the Becker-Mincer workshop at Columbia in the 1960s and have published in the NHE tradition include Andrea Beller, Barry Chiswick, Carmel Chiswick, Victor Fuchs, Michael Grossman, Robert Michael, June E. O'Neill, Sol Polachek, and Robert Willis. James Heckman was also influenced by the NHE tradition and attended the labor workshop at Columbia from 1969 until his move to the University of Chicago. The NHE may be seen as a subfield of family economics.[40][41]

In 2013, responding to a lack of women in top positions in the United States, Becker told the

Wall Street Journal reporter David Wessel, "A lot of barriers [to women and blacks] have been broken down. That's all for the good. It's much less clear what we see today is the result of such artificial barriers. Going home to take care of the kids when the man doesn't: Is that a waste of a woman's time? There's no evidence that it is." This view was criticized by Charles Jones, stating that, "Productivity could be 9 percent to 15 percent higher, potentially, if all barriers were eliminated."[42]

Home production

In the mid-1960s Becker and

division of labor and gains from specification.[43]

Economics of the family

During Becker's time at Chicago in the 1970s, he mostly focused on the family. He had previously done work on birth rates and family size, and he used this time to expand his understanding of how economics works within a family.[10] Some specific family issues covered during this time were marriage, divorce, altruism toward other members of the family, investments by parents in their children, and long-term changes in what families do. All of Becker's research on the family resulted in A Treatise on the Family (1981). Throughout the decade, he contributed new ideas and information, and in 1991 an expanded edition of the work was published. His research applies basic economic assumptions such as maximizing behavior, preferences, and equilibrium to the family. He analyzed determinants for marriage and divorce, family size, parents' allocation of time to their children, and changes in wealth over several generations. This publication was an extensive overview of the economics of the family and helped to unite economics with other fields like sociology and anthropology.[44]

Rotten kid theorem

At the core of Becker's economic theory on the family, which he developed on the basis of figures for United States families in 1981, is the rotten kid theorem. He applied the economics of an altruist to a family, wherein a person takes actions that improve the well-being of another person, despite more self-interested action being feasible. Becker pointed out that a parent foregoes higher income, by focusing on family work commitments in order to maximize a well-meaning objective. Becker also theorized that a child in a US family may be perfectly selfish because it maximizes its own utility. There have been attempts to test this economic thesis, in the course of which it was found that cross-generational families do not necessarily maximize their joint income.[45]

Organ markets

A 2007 article by Gary Becker and Julio Jorge Elias entitled "Introducing Incentives in the market for live and cadaveric organ donations"[46] posited that a free market could help solve the problem of a scarcity in organ transplants. Their economic modeling was able to estimate the price tag for human kidneys (about US$15,000) and human livers (about US$32,000). It is argued by critics that this particular market would exploit the underprivileged donors from the developing world.[47]

Selected publications

See also

References

  1. ^ "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1992". NobelPrize.org. Retrieved September 3, 2019.
  2. ^ "Our Legacy". BFI. Retrieved September 3, 2019.
  3. ^ "The Fourth Generation in Chicago". Economic Principals. November 16, 2014. Retrieved September 3, 2019.
  4. ^ Justin Wolfers. "How Gary Becker Transformed the Social Sciences" New York Times May 5, 2014
  5. ^ Catherine Rampell. "Gary Becker, an economist who changed economics"Washington Post May 5, 2014
  6. ^ "Gary Becker (1930–2014)". jewishvirtuallibrary.org. Jewish Virtual Library. Retrieved March 29, 2015.
  7. ^ Becker, Gary Stanley. The Theory of Multi-Country Trade (Thesis).
  8. ISBN 9780226041049
    .
  9. ^ Daniel B. Klein; Ryan Daza (September 2013). "Ideological profiles of the economics laureates: Gary S. Becker". Econ Journal Watch. 100 (3): 285–291.
  10. ^ a b c d e f Gary Becker (May 3, 2014). "Gary S. Becker – Biographical". Nobel Memorial Prize in Economic Sciences.
  11. ^ "View/Search Fellows of the ASA". Archived from the original on June 16, 2016. Retrieved August 20, 2016.
  12. ^ "Book of Members, 1780–2010: Chapter B" (PDF). American Academy of Arts and Sciences.
  13. ^ "Gary S. Becker". www.nasonline.org. Retrieved May 12, 2022.
  14. ^ "APS Member History". search.amphilsoc.org. Retrieved May 12, 2022.
  15. ^ "Mont Pelerin Society Directory" (PDF). DeSmogBlog. Archived from the original (PDF) on September 23, 2015. Retrieved September 10, 2014.
  16. ^ Staff writer (June 6, 2006). "Gary S. Becker – Facts". nobelprize.org. Nobel Media AB.
  17. ^ "Home page". University of Chicago. Archived from the original on April 16, 2014. Retrieved December 11, 2004.
  18. American Academy of Achievement
    .
  19. ^ "Jeffrey P. Bezos Biography Photo". 2001. Seated from left to right: Prime Minister of Israel Ehud Barak, nautical archaeologist Dr. George Bass, recipient of the Nobel Prize in Economics Gary S. Becker, CEO of Hearst Corporation Frank A. Bennack, Jr., CEO of Amazon Jeff Bezos, and director of the National Gallery of Art J. Carter Brown at the honoree reception prior to the Banquet of the Golden Plate ceremonies during the American Academy of Achievement's 2001 Summit held in San Antonio.
  20. ISBN 9781400829699
  21. ^ a b Robert D. Hershey Jr. (May 4, 2014). "Gary S. Becker, 83, Nobel Winner Who Applied Economics to Everyday Life, Dies". The New York Times.
  22. ^ "The Becker-Posner Blog". University of Chicago Law School.
  23. ^ "Gary S. Becker profile". University of Chicago. Archived from the original on October 13, 2014. Retrieved July 15, 2007.
  24. ^ William Harms (May 4, 2014). "Gary S. Becker, Nobel-winning scholar of economics and sociology, 1930–2014". University of Chicago.
  25. ^ Palda, Filip (November 4, 2014). "A school in decline: In Chicago, economists honour Gary Becker". Financial Post.
  26. ^ Nelson, Robert H. (2001). Economics as Religion. Pennsylvania State University Press. p. 194.
  27. ^ "Economics explains how discrimination can persist in the labor market". Open University. October 7, 2013. Archived from the original on October 7, 2013. Retrieved January 28, 2016.
  28. ^ Filip Palda (2016) A Better Kind of Violence, Chicago Political Economy, Public Choice, and the Quest for an Ultimate Theory of Power, Cooper-Wolfling Press
  29. JSTOR 1886017
    .
  30. ISBN 9780674013605
    .
  31. ISBN 9780674057265
  32. ISBN 9780870142635
  33. ISBN 9783642279669
    .
  34. S2CID 153814425
    .
  35. ^ Shoshana Grossbard (2006) “The New Home Economics at Columbia and Chicago” in Jacob Mincer: A Pioneer of Modern Labor Economics, edited by S Grossbard, Springer
  36. ^ Becker, Gary S. 1960. "An Economic Analysis of Fertility." In National Bureau Committee for Economic Research, Demographic and Economic Change in Developed Countries, a Conference of the Universities. Princeton, N.J.: Princeton University Press
  37. ^ Jacob Mincer (1962). "Labor Force Participation of Married Women: a Study of Labor Supply". In H. Gregg Lewis (ed.). Aspects of Labor Economics. Princeton University Press.
  38. JSTOR 2228949
    .
  39. ^ Jan De Vries (2008) The industrious revolution: consumer behavior and the household economy, Cambridge, p. 26 [ISBN missing]
  40. doi:10.1146/annurev.so.09.080183.002111
    .
  41. S2CID 153814425
    .
  42. ^ David Wessel (April 3, 2013). "The Economics of Leaning In". The Wall Street Journal. Retrieved April 4, 2013.
  43. ISBN 9780230506336
    .
  44. ISBN 0674906985
    .
  45. ISBN 9780691009438
    .
  46. PMID 19728419
    .
  47. S2CID 9253108
    .

Further reading

External links

Wikimedia Commons has media related to Gary Becker.
Awards
Preceded by
Ronald H. Coase
Laureate of the Nobel Memorial Prize in Economics

1992 		Succeeded by
Douglass C. North
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