The Weekly Sage hopes to regularly bring brief profiles of key contributors to thought and faith before a Christian audience for historical education and awareness of valuable resources.

Sometimes history brings together a special combination of resources and people that form a center of intellectual influence. The Weekly Sage will occasionally consider such “Schools” together. As such this is the fourth of a five-week series on Chicago-School Economists. This will be understood simply to mean uniquely impactful members of the faculty of economics at the University of Chicago in the 20^th century.

Gary Becker

• “The approach taken here follows the economists’ usual analysis of choice and assumes that a person commits an offense if the expected utility to him exceeds the utility he could get by using his resources at other activities. Some persons become ‘criminals,’ therefore, not because their basic motivation differs from that of other persons, but because their benefits and costs differ. I cannot pause to discuss the many general implications of this approach, except to remar that criminal behaviour becomes part of a much more general theory and does not require ad hoc concepts of differential association, anomie, and the like, nor does it assume perfect knowledge, lightning-fast calculation, or any of the other caricatures of economic theory. This approach implies that there is a function relating the number of offenses by any person to his probability of conviction, to his punishment if convicted, and to other variables, such as the income available to him in legal and other illegal activities, the frequency of nuisance arrests, and his willingness to commit an illegal act.”[1]
• “Economists are primarily concerned with the operation of the market sector in an industrialized economy. Yet I will often argue, and this is perhaps the unique theme of these lectures, that the economic principles developed for this sector are relevant to all problems of choice….It is my belief that economic analysis is essential in understanding much of the behaviour traditionally studies by sociologists, anthropologists, and other social scientists. This is a true example of economic imperialism! In other words, I argue that the broad definition of economics in terms of scarce means and competing ends should be taken seriously and should be a source of pride rather than embarrassment to economists since it provides insights into a wide variety of problems.”[2]

Gary Becker (1930 – 2014) was a revolutionary economist who greatly expanded the range and influence of the economic discipline, method, and approach. While centuries of economists had focused the application of the principles of self-interest and choice in situations of scarcity to market phenomena. Price, value, rent, utility, and money were considered the economist’s proper realm. Becker refused to be bound by this traditional mold, and his work continues to influence the field and the broader culture.

Becker argued that every aspect of human life is subject to the same premises of man’s nature that guide our choices in the marketplace. As a result, he wrote on a breadth of topics, including marriage, racial discrimination, crime, and the family, always maintaining a strict and powerful application of the economic method. The influence of his work flows from his unique combination of mental clarity and mathematical precision. While his essays are primarily composed of a profusion of proceeding equations, Becker is always able to bring together his empirical and theoretical work with the real circumstances of people’s daily lives at home.

Gary Becker’s successful career reflects the excellence of his educational background. Receiving his undergraduate degree summa cum laude from Princeton, he proceeded to the University of Chicago, at a peak of teaching and research excellence, obtaining a PhD in economics in 1955.[3] He proceeded to work at the National Bureau of Economic Research and the Center for Economic Analysis of Human Behavior and Social Institutions, honing his technique and prolifically applying it across the range of human experience.[4]

As a result, by 1967 Becker had received the John Bates Clark medal, an award that goes to an economist in the United States under the age of 40 has made the most significant contribution to the field. This presaged the continuing recognition of Becker’s influence, as he also was made a member and later President of the Mont Pelerin Society, a recipient of the National Medal of Science, and the Nobel Prize in Economics in 1992.

One of Becker’s insights that impacted me the most when I came across it this week was the recognition that time is a key metric of what humans value and how they evaluate. For instance, time spent in the household, as opposed to the workplace, indicates a preference for something as opposed to wages. But if a preference can be expressed towards household goods, whether a good-looking house or even good children (which Becker most controversially describes as a durable consumer’s good), then economic analysis can be used to understand the reasoning and outcome of household preferences.

To some extent, Becker’s work would be incredibly challenging for most economic laymen. There is very little text and explanation often, outside of a summary that is much shorter than the mathematical appendix. Further, I certainly had difficulty with some of Becker’s arguments because of the worldview underlying them. Becker appears to ground some of his thought in the ideas of Jeremy Bentham, the Enlightenment utilitarian, having updated them with the new techniques and mathematical rigor of the twentieth century. All individual aims are generally treated as equal – aims as such are hard data, impregnable to further analysis along the lines of virtue. The moral nature of the human being and the eternal nature of the soul do not influence Becker’s analysis of crime, for instance, which leads to conclusions that differ from the Biblical paradigm.[5] Nevertheless, understanding Becker’s influence and ideas is essential for recognizing and responding to the field of economics today, and may provide an opportunity for interesting considerations of the relationship between free market and Christian ideals.

• “The result on the unimportance of the distribution of income among persons linked by transfers can also be used to understand the interaction among generations. Suppose that the resources of the present generation are changed at the expense of or to the benefit of the resources accruing to future generations. For example, increased government debt or social security payments are financed by increased taxes on future generations, or increased public investment, perhaps in schools, with benefits accruing to future generations is financed by taxes on the present generation. If present and future generations are fully connected by a series of intergenerational transfers, called ‘bequests,’ then each of these apparent changes in the relative resources of present and future generations are fully connected by a series of intergenerational transfers, called ‘bequests,’ then each of these apparent changes in the relative resources of present and future generations would tend to be offset by equal but opposite changes in bequests. In particular, increased public debt would not raise the real wealth or consumption of the present generation or reduce that of future generations because increased taxes on future generations would be matched by increased bequests to them. Similarly, increased public investment in education would be matched by reduced private investment in education.”[6]
• “States earmark transfers to higher education mainly through highly subsidized public institutions. Private spending was apparently reduced by (at least) $0.75 per dollar of public spending in 1966-67; private spending may have been reduced by more than $1.00 per dollar of public spending in 1959-60, so that total spending on higher education in that year would have been reduced by public spending.”[7]

[1] Gary Becker, Crime and Punishment: An Economic Approach, in Essays in the Economics of Crime and Punishment, edited by Gary S. Becker and William M. Landes, (New York: National Bureau of Economic Research, 1974), p. 9.

[2] Gary Becker, Economic Theory, (New York: Knopf Books, 1971), 1-2.

[3] Gary Becker, An Economic Theory of Discrimination, in Discrimination, Affirmative Action, and Equal Opportunity: An Economic and Social Perspective, edited by W.E. Block and M.A. Walker, (Vancouver: The Fraser Institute, 1982), 128.

[4] Ibid, 128.

[5] For instance, that a regime of fines would be an optimal way to punish and dis-incentivize crime. See Becker’s argument in his essay Crime and Punishment: An Economic Approach.

[6] Gary Becker, The Economic Approach to Human Behavior, (Chicago: The University of Chicago Press, 1976), 267.

[7] Ibid, 276.