Gary Becker

On May 3rd, 2014 the world lost a great economist in Gary Becker.  A 1992 Nobel Prize winner for his work arguing that most human behaviors are rational and utility maximizing, Becker’s name is not broadly know – in fact, it was unknown to me until I read this article in the Economist.

Today it’s common to hear economists explaining why we might choose to buy one car versus another, cheat on our taxes, or write an over-the-top recommendation for a friend.   The success of the Freakanomics franchise (books, podcasts, movie, etc) has shown that audiences have a great appetite this sort of material.  Gary Becker was the pioneer here as the first person to try to apply economic principles to everyday life.

Some of his early works were very controversial.  His dissertation for the University of Chicago covered the economics of discrimination.  He found, and proved by mathematical model, that bigotry hurts both the target and the bigot.  Imagine a hiring manager removing some applicants based on race.  This would not only harm those who did not get work due to this bigotry, but also harms the business in that it has a smaller pool of qualified applicants from which to choose.

Other controversial topics Becker covered include:

  • Why the number of children a society has is inversely related to their wealth
  • How crime might make sense for the criminal when evaluating the costs/benefits
  • Why drug addiction is very rational for some
  • Why popular Broadway shows don’t gouge their audiences more (though some may argue this one)

The next time you read a fascinating article on human behavior based on economics take a moment and think of Gary Becker, the man Milton Friedman called “the greatest social scientist who has lived and worked in the last half century”.  

Gary Becker - making it easier than it looks
Gary Becker – making it easier than it looks

For those who would like to read more, the University of Chicago hosts a page on the books and collections of work by Gary Becker.

 

 

Learning about Money

Piggy Bank Drawn on Blackboard

I never thought too much about money when I was growing up.  We certainly weren’t rich, so it’s not that money wasn’t an object.  And we weren’t poor either, so I never had to think about a lack of money, or wish for more of it to buy food or the pay the rent or mortgage.

From an early age my mother tried to instill the concept of saving your pennies in me.  For the most part it took pretty well.  When I was old enough to receive an allowance for doing chores around the house, which I think was five dollars a week, I would add the money to my piggy bank.  I would also save any money I received as gifts during birthdays or holidays.  All of this money was almost invariably used to Continue reading

I’ve Always Liked Pigeons…

People often look at me like I’m crazy when I say this, but I like pigeons.  There’s something about their gentle way that I’ve always found incredibly calming.  I’m also ceaselessly entertained by their rhythmic head bobbing as they walk.

I don’t keep pigeons, nor do I feed them in the park.  And I’m not trying to convince anyone to like pigeons.  I know many people find them to be dirty gutter-dwelling ‘rats with wings’ – but I like them!

Picture of a pigeon
Pigeon

So what on earth does this have to do with anything?  One day when I was doing my normal routine of chasing five ideas at a time on the Internet I stumbled upon… the passenger pigeon. Continue reading