The Pseudoscience of Paul Samuelson


In 1993 Reason asked a bunch of libertarians to nominate "a book published in the last 50 years that is significant because it has helped promote wrongheaded ideas with serious consequences." One participant, the economist and historian Robert Higgs, wrote about Foundations of Economic Analysis, the influential textbook by Paul Samuelson. Since Samuelson just died, it's worth looking back at Higgs' comments from 16 years ago:

Samuelson fashioned his models, which set the standard, after 19th century physics. Functions were assumed to be smooth and continuous. Economics was reduced to various types of the same calculus problem: finding a constrained extremum. The economist's job was to state the objective function and the constraints, then grind out the solutions. This required considerable mathematical ability and stomach for tedium but little imagination and no familiarity with economic reality.

By the 1960s, if not earlier, academic economists who quarreled with this way of doing the job were, as Roy Weintraub put it, "regarded by mainstream neoclassical economists as defenders of lost causes or as kooks, misguided critics, and anti-scientific oddballs." By aping 19th-century physicists, neoclassical economists convinced themselves and others that they were doing science, but the effort was basically misguided, not so much scientific as, in F.A. Hayek's term, "scientistic." Human beings, purposeful and creative, are not like atoms; nor is a market analogous to a physical or chemical system. In the view of Hayek and his teacher Ludwig von Mises, neoclassical economics is, in critical respects, pseudo-science.

The whole thing is here. For more from Higgs on Samuelson, go here and here. For more from Reason on Samuelson, go here.