The Scrapbook cited Gary Becker last week, in a list of outstanding recipients of the Bradley Prize. We’re sorry to have a sadder reason to mention his name this week: He died May 3, at the age of 83. “He was perhaps the greatest living economist,” George Mason University economist Tyler Cowen eulogized. Becker’s influence is felt far beyond his own field, however. If the basic lesson of economics is that incentives matter, Gary Becker taught the world that incentives matter everywhere.
Becker’s late mentor Milton Friedman called him “the greatest social scientist who has lived and worked in the last half-century.” But his triumphant career, which culminated in the 1992 Nobel Prize in economics, didn’t come easily. Gary Stanley Becker was born December 2, 1930, in Pottsville, in Pennsylvania’s coal region, to parents with eighth-grade educations. His father had left Montreal for the United States at 16, and in the mid-1930s the family left Pottsville for Brooklyn, where they would remain. The younger Becker planned to major in mathematics until he “accidentally took a course in economics” his freshman year at Princeton.
By the time he graduated, in just three years, he had become disillusioned with the dismal science. But he found sociology “too difficult,” so he stayed in economics when he started graduate studies at the University of Chicago. A course with Professor Friedman reinvigorated him. “He emphasized that economic theory was not a game played by clever academicians, but was a powerful tool to analyze the real world,” Becker later recalled. He received his doctorate in 1955 and began his career at Chicago, but left for Columbia two years later. He returned to Chicago in 1969, “hastened by the student riots in 1968.” At his death, he was professor of economics and sociology at Chicago and a senior fellow at Stanford’s Hoover Institution.
Becker’s great insight was to apply the lessons and methods of economics to the other social sciences—something neither economists nor social scientists appreciated at first; both treated him, he later said, with “much hostility.” His Nobel citation noted his “radical extension of the applicability of economic theory in his analysis of relations among individuals outside of the market system.” Adam Smith famously encapsulated the market and the incentives that make the system a success in one line: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest.” Economists studied the behavior of the butchers, brewers, bakers, and those who work for and buy from them. Becker realized that what explains those interactions—incentives, rent-seeking, and the like—could explain other social interactions. What many of his critics didn’t grasp—and still don’t—is that “rational choice theory,” as it is unfortunately named, takes into account the complicated nature of human behavior better than Smith’s pithy line implies. This approach “does not assume that individuals are motivated solely by selfishness or gain,” as Becker said in his Nobel speech. “I have tried to pry economists away from narrow assumptions about self-interest. Behavior is driven by a much richer set of values and preferences.”
As Professor Cowen says, “Summarizing Becker’s contributions is like trying to summarize economics and it is not really possible.” He used an economic understanding of decision-making to shed light on racial discrimination, crime, addiction, the family, and much else besides. Years ago, fellow Chicago economist Steven Levitt recounted a story from Becker’s wife on his Freakonomics blog that might serve as a fitting tribute. Guity Nashat was dating the man who would become her husband, to the chagrin of a friend who called all Chicago economists “fascists.” The day after a party Nashat hosted, the friend called to say she wished she had met Becker while she was there. “I said to her, you were talking to him all evening,” Nashat recalled. “She was taken aback, and said, ‘I thought Gary Becker is an economist; that man was fascinating. He spoke about marriage, divorce, and all kinds of interesting things.’ ”