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If you like Gary Becker's story, you might also like:
Milton Friedman,
Murray Gell-Mann,
John Hennessy,
Leon Lederman,
Paul H. Nitze,
John Sexton
and E.O. Wilson

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Gary Becker
Gary Becker
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Gary Becker Interview (page: 2 / 9)

Nobel Prize in Economics

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During the years when your work went unrecognized, wasn't it kind of disenchanting or disillusioning for you?

Gary Becker: Well it was, but I was working on other things I was also excited about. I was confident. I had a certain quiet confidence. I didn't like it that it was ignored of course. I can't say I was a masochist in that regard. I didn't like it. I can say acclaim and recognition was something I didn't seek, but of course I did want that. But I felt I had to take the long run. I thought I'd done something valuable and that ultimately it would catch on. That was my belief. I didn't know, but I felt that ultimately it would catch on. Plus the fact that I was working on other things. I had a good position at Columbia University. I just thought, "I have to keep at it, and let's hope that it will catch on." But of course it was a bit discouraging.

So what was the next focus of your work, after your study of discrimination?

Gary Becker: What we call human capital, that is, investments in people's education and training. I started working on that as soon as I came to Columbia in 1957. A small project, estimating how much, say, earnings that people could get from improving their education, by going to college rather than high school, for example. How much more they earned, what happened to their occupations, their unemployment, all the aspects of their economic situation. And starting doing that, I saw this was a much bigger problem than I had anticipated, and a much more challenging issue to look at more generally, the issue of investments in people, in knowledge, and in skills and in training. So I sat down to try to look at that in a very general way, both theoretically and then to also make these variety of calculations for the United States and a little bit for other countries. And I wrote a book called Human Capital that was published in 1964 on that subject. And some people will say that's the most important book I've written. I don't know if that's true. It certainly, maybe in some sense, has been the most influential thing I've done.

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The world has changed in the 30 years since that book was written. Is it still pertinent today?

Gary Becker: It's probably become even more pertinent, because...

Modern economic life is based a lot on knowledge and information. I mean that's the foundation, it's not based on strength. Traditional economies you have more strength, or simple machinery in a traditional agricultural economy. But that's not what the American economy is about. You can't get very far by strength, otherwise people like me would be well down on the totem pole. So it's what you can command, the information and the skills that you command that determines it. And this is not just the United States, this is globally. As economies experience economic development, there's a movement toward making human capital the focus of their economies. And so "investment in people" becomes a re-orientation and part of economics now, once you recognize the significance of human capital. Economies and individuals are oriented around the investment in themselves or in the populations. And economies that tend to neglect their people, they tend to do badly. And economies that help promote the human capital of their population -- not only their rich population, but the people coming from poorer backgrounds -- those are the economies as you look around that have become more successful. So I think the so-called human capital revolution has been a revolution in part because it's more relevant to the modern economies then it was, say, the more primitive economies. So I think the influence of this concept, people working in this area, has grown exponentially for those reasons, I think.

What do you think of the "welfare to work" concept? Some of those programs involve investment in people.

Gary Becker: A lot of government policies now, they talk, they discuss them -- and this is bipartisan, it doesn't matter whether you're Democrats or Republicans -- when they're trying to justify a policy affecting people, they say this is an investment in human capital. Sometimes, even in my judgment, they go too far. It's just a transfer to people. But the "welfare to work" and a bunch of the other ones, are attempts to, in part, get people with the skills, so that they can hold decent jobs, and the notion is they bring in their own earnings rather then getting support from the government. And more than that, they bring in more self-respect and so on. So this transcends simply the materialistic side, I think. Human capital transcends the material side. The material side is important, but also other components of living become part of human capital, including self-respect, self-reliance, pride in what you're achieving, are all part of human capital as we see it. And I think one of the main justifications for reform in a welfare program, why it was bipartisan -- supported by President Clinton and by the Republicans in Congress and outside -- was that it was a way of trying to bring more human capital to families that I think had been neglected from -- in a more fundamental way -- neglected in the sense of not trying to give them the capabilities so that they would be able to stand on their own feet. And I think that was an important reform that's now being emulated in other countries of the world.

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This page last revised on Mar 31, 2011 18:30 EDT
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