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Born Poor?

Santa Fe economist Samuel Bowles says you better get used to it

February 3, 2010, 12:00 am

As becomes evident within a few minutes in his company, Bowles is a man in demand—at least by his SFI comrades. Institute staff, students and fellow faculty stop him every few minutes to ask about this upcoming meeting or that piece of data.

In the kitchen, a colleague asks about buying a textbook: Should she get it from Amazon or download the Kindle version? Bowles quickly rules out the Kindle because it makes the text impossible to share. Reading between the lines, Bowles’ choice reveals the hidden symbolism of each medium: If the paperback is Karl Marx, the Kindle is Ayn Rand.

A lifelong academic, Bowles, 70, lacks the polish and quotability of today’s celebrity economists, such as Freakonomics author Steven Levitt, “creative class” prophet Richard Florida or New York Times columnist and Nobel Prize winner Paul Krugman. However, Bowles tackles bigger questions than the pop economists. “Its scope is cosmic,” he says of his work at SFI.

Bowles’ most recent paper, published in the October 2009 issue of Science, was a huge project with 25 collaborators. It examines how wealth is transferred from parents to children in hunter-gatherer societies versus agricultural societies.
That might seem distant from the busy unemployment offices on Guadalupe Street. But everyone can relate to his chosen subject: inequality. He studies the economic differences between people with the same discipline that Jane Goodall studies chimpanzees or Stephen Hawking studies the cosmos.

Bowles’ course was set in 1968, when he was an assistant professor at Harvard, and the Rev. Dr. Martin Luther King Jr. came to his department looking for advice on the next stage of his social justice campaign.
“We were just elated that we could use economics, which we had so painstakingly learned, to answer questions that Dr. King thought were important,” Bowles tells SFR. “We were also extremely angry that we were totally unable to answer the questions on the basis of having gotten a PhD at Harvard.”

King’s assassination that year cut short the equality movement.

It was also the year that Bowles’ intellectual nemesis, Milton Friedman, proposed the idea of a “natural” rate of unemployment, a concept still employed by federal bureaucrats. Friedman, who died in 2006, was the father of a free-market school of economics at the University of Chicago. Friedman popularized the notion that government intervention in the economy does more harm than good. When Richardson talks about keeping taxes low, he’s channeling the conventional economic wisdom that evolved after Friedman.

Most economists in 1968 thought of inequality as “somebody else’s problem,” Bowles tells SFR. “I actually was denied the right to teach a graduate course in inequality because it was said not to be economics.”
It wasn’t always thus.

“The founders of the discipline of economics, almost to a man—and they were only men—thought that the problem of distribution between classes—they used the word classes—was the key to understanding why nations grew or not,” Bowles says.

What Bowles sees as the essence of his profession—problems of wealth distribution—the Friedmanites see as the road to hell.

In the years of easy credit, Friedmanites had the advantage. The recession has shifted the debate in favor of thinkers like Bowles.

“In the wake of what happened in the last year, it’s much easier for an economist to describe himself as being liberal, maybe even Social Democratic,” Henry Farrell, a political science associate professor at George Washington University, tells SFR. “Sam Bowles is still unashamedly and unabashedly a radical—God bless him.”

However, Farrell says, Bowles’ radicalism kept him from finding a wider audience.

Now it’s the free marketeers who have a hard time being taken seriously. Last month, The New Yorker described defections and “turmoil” within the Chicago School. Even former Federal Reserve Chairman Alan Greenspan, a hero to free marketeers, admits that his way of understanding the world was wrong.

Bowles is keenly aware that this crisis presents an opportunity. “It’s not just that the Chicago School is on the ropes—it’s that people are much more sympathetic to people who have less income,” Bowles says. “That attitude—‘Hey, it could happen to me’—is something the Great Depression taught us.”

Sympathy was forgotten in the boom times. But thanks to the hardships of today, “it’s coming back with a vengeance,” Bowles says.

With it, the influence of what Farrell calls “the Santa Fe approach to economics” may also be growing.

Last year, Indiana University professor Elinor Ostrom became the first woman to win a Nobel Prize in economics. “She’s not a radical by any stretch of the imagination but, in terms of the methods she uses and the questions she’s interested in, she’s closer to Bowles than anybody. She is probably the only Nobel Prize winner in the last 20 years to have cited Bowles extensively and to be genuinely influenced by him,” Farrell says.

Ostrom doesn’t distance herself from that assessment. “I have great respect for professor Samuel Bowles,” she writes in an email to SFR. “I have worked with several of his PhDs who do simply outstanding experimental research.”

If Bowles has a following among people who think for a living, the people who actually make decisions have some catching up to do.

And so here, in plain English, is the implication of Bowles’ basic ideas: The US and New Mexico will keep falling behind until they learn to share the wealth.

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