Nobel Laureate William Vickrey
C. Lowell Harriss
[Reprinted from the American Journal of Economics
Vol.57, No.2, April, 1998]
C. Lowell Harriss is Professor
Emeritus of Economics at Columbia University in New York City.
Professor William Vickrey of Columbia University was named to
share the 1996 Nobel Prize with Professor James A. Mirrlees of
Cambridge University on October 9, 1996. A few days later on
October 12, Professor Vickrey was dead (J. Scott, "After 3
Days in the Spotlight, Nobel Prize Winner is Dead" New
York Times [October 12, 1996, pp. 1 and 52). Professor
Vickrey's university colleague and close friend, Professor
Harriss appeared at the Nobel Ceremonies in Stockholm on
December 7, 1996, where he presented a shorter version of the
following remarks and graciously accepted the award for Vickrey.
Economics requires a "big tent," one large enough to house
many elements of wide diversity. The occupants will have an enormous
range of high skills. William Vickrey used his exceptional abilities
to work on many frontiers of the profession.
My life has included at least casual acquaintance with many, probably
most, of the recipients of the Nobel Memorial Prize in Economic
Science. I have some, albeit sadly inadequate, familiarity with their
work. The coverage is indeed extensive. One outstanding feature of
Professor Vickrey's body of achievements is the number and diversity
of subjects to which he made major contributions.
One thinks of social choice, counterspeculation, auctions, marginal
utility measurement, welfare (human well-being -- not the American
usage of aid to the poor), taxation (income averaging, death duties,
capital gains, progression), marginal cost pricing, public utility
charges, airline overbooking, subway fares (revenue and non-revenue
effects), urban affairs, use of land rents as a means of financing
government, paying for city services, macroeconomics (inflation
control, fuller employment), government debt -- one's amazement and
admiration keep rising. And there are more -- always, I believe, rated
highly by experts!
Vickrey's collection in Public Economics consists of essays
on twenty-six subjects. There is theory in the abstract sense: An
application to the realities of life, e.g., reducing the time (the
human life) lost when idling in avoidable traffic congestion! For him,
"knowledge for what?" was a challenge. He believed that
economic knowledge could help human beings get more out of life.
Improvements can be made in institutions, in the framework of
economic, political, and social structures -- not a sweeping
restructuring in an engineering sense but change in specific elements
of taxation, of transportation pricing, and so on! But he was not
unwilling to propose change on a broad scale -- as in his plan to
He and I were friends and associates for sixty-one years, from
graduate school days that began in 1935, through service in the U.S.
Treasury during World War II, as colleagues on the faculty at Columbia
University for almost half a century, as members of innumerable
professional and civic associations, and as social friends. (I can
still see him in August 1996, explaining to uncomprehending
non-economist guests at my house how the growth of government debt
could be -- he believed would be -- a good thing!)
In recent years he became increasingly articulate in condemning "our"
toleration of unemployment. The "our" includes the community
in general, government policy makers, and professional economists. His
presidential address for the American Economic Association
concentrated on (unemployment but, as he told me, "it went over
as would a lead balloon." He was saying, in substance and
probably in about these words, "the vast majority of us who have
more or less satisfactory jobs or secure retirement should bestir
ourselves to improve conditions for the less fortunate." He
reminded us repeatedly of the waste of human idleness. A day, a week,
a year, a life lost cannot be recovered. All of us know this. But,
Professor Vickrey would say, "Economists should do more."
(The epitome of normative economics!) Most of us can give reasons why
things are not better. He knew them all, I believe. He was, really,
very learned. He attended seminars, meetings, lectures, and
conferences at Columbia and around the world. He was both
sophisticated and simple -- and far from satisfied with our
achievements as a useful profession!
In the United States, and perhaps elsewhere, a large gap separates
the general public's understanding of the way the economy works and
the realities of economic processes. For example, the national
government's budget deficit, the accumulated debt, and increases in
that debt present complex problems and invite oversimplification.
In recent years Professor Vickrey made efforts to enlighten and to
persuade fellow economists and a broader public. Looking a few years
ahead, he foresaw conditions that remind me of a concern of the 1930s
-- oversaving at full employment will call for budget deficits as
offsets. Beyond the "macro" aspects, he feared, I believe,
that deficit reduction would curtail spending programs that are
desirable for the benefits they produce and would also discourage
desirable tax rate reduction, e.g., the rates on corporation earnings.
How do the fruits of scientific advances such as those recognized by
the Nobel awards eventually affect human lives? The processes must be
numerous and varied, differing from discipline to discipline. As to
economics, some of the fruits of "frontier" research may be
usable by individuals, families, and voluntary association --
conceivably but probably rare. At times, business firms can utilize
some of the new knowledge in normal market operations. But the
successful use of economics, such as many of Professor Vickrey's
intellectual achievements, will require governmental (political)
actions. This occasion is not one to discuss the general relation of
economics to politics -- except to remind ourselves that evaluation of
an economist's work will not rest upon "testing" in a "political
marketplace" -- in implementation through government action. He
was not the only originator of good economic ideas whom I have seen
frustrated by politics and bureaucracy.
Some years ago he began speaking about an obstacle to tax revision
along the lines indicated by his work. The conditions -- in a sense,
forces of the "market" -- that make change (reform)
desirable have created a group with incentives to actively oppose both
the simplifying of tax laws and the closing of loopholes. Investment
advisers, attorneys, accountants, and others make a living by showing
persons of high income and large wealth how to save taxes by using
esoteric technicalities of the law. Whether or not much of the
effective opposition to Vickrey-type tax revision comes from such
advisers, I believe that professional economists, or at least some of
us, can serve by helping to disseminate understanding of economics,
old and new.
One of Professor Vickrey's last public statements expressed hope and
confidence that Nobel recognition would enable him to get his ideas
understood. His credibility would rise. His audience would grow. His
passing will deprive the public of more than it can ever know.
Standing at the interment of my friend, I thought, "The
oft-quoted quip of Lord Keynes, 'In the long run we are all dead,' is
sadly misleading!" The "we" of the community
continually replenishes itself. And in the most meaningful sense are "we"
not more than the body? Ideas are also part c human life. And
Professor Vickrey's will continue to serve.