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The vast influence of Gary Becker

University of Chicago Photo

Gary Becker, one of the most influential economists of the 20th century, died yesterday at the age of 83.

Becker is known not so much for one empirical finding or theoretical conjecture, as for a broad meta-insight that he applied in several areas and that is now so broadly used that many people probably don't realize that it was invented relatively recently.

Becker's idea, in essence, was that the basic toolkit of economic modeling could be applied to a wide range of issues beyond the narrow realm of explicitly "economic" behavior. Though many of Becker's specific claims remain controversial or superseded by subsequent literature, the idea of exploring everyday life through a broadly economic lens has been enormously influential in the economics profession and has altered how other social sciences approach their issues.

Part of this project was showing that economic models can incorporate a broader range of human desires than simple lust for money.

In his early work, on the economics of discrimination, incorporated some actors' desires to behave in a discriminatory manner into the model of how the economy work. He further showed that in a competitive marketplace the presence of discriminatory business practices would create profit opportunities for less-discriminatory business practitioners.

Becker also wrote a series of influential papers on the economics of family life, exploring the "traditional" 1950s marriage between a breadwinner and a housewife as a form of division of labor and forecasting that rising market wages would tempt more women out of these kind of arrangements in favor of reliance on automation or low-skilled paid labor to handle household tasks (see "A Theory of the Allocation of Time" for example).

Becker further went on to incorporate crime into an economic framework, modeling legal violations not as moral failings or a social illness but as a rational calculation of costs versus benefits. This kind of approach offered much of the intellectual underpinning for drastically increasing the length of prison sentences in response to rising crime (see "Crime and Punishment: An Economic Approach").

Becker thought that the behavior of politicians and regulators should be analyzed through an economic lens, using it to cast doubt on the idea that state intervention would improve on market outcomes even in situations where market failures are present (see "Competition and Democracy").

Last but by no means least, Becker pioneered the concept of "human capital" — the idea that individuals could and did act to deliberately increase the value of their labor by investing time and effort in gaining more skills. This was, at the time, a new way of bringing the traditional process of education into the framework of economic life. In the human capital view, people pursue schooling not merely for love of learning but because effort expended in learning is rewarded in the labor market.

Becker, like several of his colleagues at the University of Chicago economics department, was also an active popularizer of pro-market political ideas, including both standard right-of-center economic policies and more exotic ideas like auctioning permits to immigrate to the United States. But much of his influence can be seen in work that has little direct relationship to politics. His paper "A Note on Restaurant Pricing and Other Examples of Social Influence on Price" seeks to explain why popular restaurants with long waiting times for tables don't simply raise prices until the market clears. These kind of applications of economic research methods to the dilemmas of everyday life have become increasingly popular over the years in both academic work and popular journalism, and the spirit of such inquiries all goes back to Becker.

Of course these efforts to translate everything into the language of economics were not universally liked — either by people who disliked Becker's politics or by practitioners of the other social sciences — but the influence of this approach has clearly been enormous.

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