An example of a great economist: Joesph Stiglitz

As I stated in my previous entry if you are considering the career of an economist or really any career for that matter, it is really important to learn what it is like to work in the the career itself as there may be a lot of aspects to that career that you were unaware of while in school. In addition to the generic skills-set of an economist that I spoke about earlier I feel it is also useful to give more of a case study of one persons journey from a student to a world renowned economist. Here is part of an ethnography I wrote on Joseph Stiglitz  the 2001 Economic Nobel Laureate.

Joseph Stiglitz was born in Gary, Indiana, USA in 1943, a town that suffered from the usual difficulties common to industrial cities in postwar America including poverty, periodic unemployment and massive racial discrimination. Stiglitz recalls that he grew up in a household where political discussion was commonplace, molding him into an “inquiring youngster” who began to wonder about the economic and social problems around him. This background became significant as Stiglitz began his studies in economics. He was taught theoretical economics which predicted outcomes very different from the reality he had seen growing up: he knew that full employment was not the norm, that poverty was endemic in even the world's richest society and therefore that there might be reasons to suspect the economic models of the day were incorrect.

     Stiglitz attributes the development of his capacity to question to both his family's influence and the kind of schooling he had. From 1960 to 1963 he attended Amherst College in New England, a liberal arts college where he learned “that what mattered most was asking the right question -having posed the question well, answering the question was often a relatively easy matter”. Stiglitz also took much enjoyment from his involvement in debate at Amherst College, he says it was the extra-curricular activity that he enjoyed the most and that it helped shape his interest in public policy. From a wide range of possibilities Stiglitz eventually decided to major in economics at Amherst. He recalls, “I thought it provided an opportunity for me to apply my interests and abilities in mathematics to important social problems, and somehow, I thought it would also enable me to combine my interest in history and writing. I wanted it all and economics seemed to have it all” (Nobel Interview, 2001).

     Stiglitz actually left Amherst without graduating, although the college awarded him a BA in 1964. He opted for graduate studies at the Massachusetts Institute of Technology (MIT). Stiglitz summaries the differences in the education he received at Amherst and MIT, “Amherst was pivotal in my broad intellectual development; MIT in my development as a professional economist.” Also, according to Stiglitz “The particular style of MIT economics suited me well - simple and concrete models, directed at answering important and relevant questions”(Nobel 2001). He was awarded a PhD from MIT in 1966. After a year at MIT, Stiglitz took up an opportunity to edit Samuelson's collected papers. In 1965-66, having been awarded a Fulbright Fellowship, Stiglitz attended the University of Cambridge, UK where he was tutored by Joan Robinson and then by Frank Hahn. He received an MA from Cambridge in 1970. In the same year Stiglitz was awarded an MA by Yale University; in 1976 he was awarded an MA by the University of Oxford, UK. Stiglitz is not only famous for being an economist but also for being an extraordinary economic educator, his academic highlights include: assistant professor at MIT, assistant and then associate professor at the Cowles Foundation, Yale University, Tapp Research Fellow at Gonville and Caius College, senior research fellow at University College, Nairobi, and appointed Professor of Economics at Yale, a post held until 1974. From 1974 to 1976 Stiglitz taught at Stanford University as Professor of Economics. Later, he became Professor of Political Economy at All Souls College, University of Oxford, Professor of Economics at Princeton University, and returned to Stanford until 2001. Since then, he presently teaches at Columbia University (Skousen, The Making of Modern Economics: The Lives and Ideas of the Great Thinkers. 462).

     In the late seventies Stiglitz began work on asymmetric information (a type of imperfect information) and its effects on economics. Asymmetric information deals with decisions in transactions where one person has more or better information than the other. The economic models of the day did not account for asymmetry and as a result were not accurate. Stiglitz spent many years studying the effects asymmetric information has on the accuracy of economic models and predictions, his work resulted in the creation of the field of Information Economics and in 2001 Stiglitz became the Economic Nobel Laureate for that year (Simon 306). Every year since 2009, Foreign Policy Magazinehas made a list of the top 100 global thinkers, and every year Joseph Stiglitz has made the list. In 2009 he was number 25, 2010 number 30, and 2011 he was number 33. Joseph Stiglitz has founded one of the leading economics journals, The Journal of Economic Perspectives. He is also chairman of the Brooks World Poverty Institute at Manchester University Manchester. He was appointed to US President Bill Clinton's Council of Economic Advisers in 1993 and served as its chairman from 1995 to 1997. From 1997 to 1999 he was chief economist and senior vice president at the World Bank (Nobel Interview 2001).

As you can see, Joseph Stiglitz is a very successful member of the economic Discourse. His success comes at least partly from his skills-set, a skills-set which is not unlike that of most members of the economic profession. Reading Stiglitz’ autobiography gave me a window into his thought process and allowed me to find out some of what it takes to become an economist. It has also allowed me to notice a lot of similarities between myself and Stiglitz during his early academic years, for example when Stiglitz recalls switching to an economic major, “I thought it provided an opportunity for me to apply my interests and abilities in mathematics to important social problems, and somehow, I thought it would also enable me to combine my interest in history and writing. I wanted it all and economics seemed to have it all”. I share that same inquisitive nature as Stiglitz did when he wondered why the town in which he grew up had such high unemployment and what could be done to fix it. To me that is a major hallmark of an economist - to ask why. To have the desire and the ability to step back and recognize that the issues shared by many individuals in a community (microeconomics) can be caused by imbalances and bad policies of a much larger system (macroeconomics). Researching, writing, and learning about Joseph Stiglitz has deepened my interest to pursue economics professionally.

      The similarities that I have noticed between Joseph Stiglitz and myself helped reassure me that I will succeed in the economics profession after my education. If you do not think you are similar to Stiglitz try looking up biographies of other famous economists to get a feel for who they were and what they did.

Here is link to the website for the Nobel Prize. It is to the section on Joseph Stiglitz and his 2001 award in the field of Economics of Information. I referenced the autobiography throughout this post, and there is also more information on Stiglitz and his contribution.
 http://www.nobelprize.org/nobel_prizes/economics/laureates/2001/stiglitz-autobio.html