Last week Sherwin Rosen of the University of Chicago got a call from a reporter in Tokyo after a U. of C. professor won the Nobel Prize in economic science for the fourth year in a row.
Rosen, chairman of the economics department, said the reporter wanted to know how he managed to produce all those Nobel laureates.
“I told her, too,” said the jocular Rosen exploding with laughter. “We use the Toyota model of total quality management here.”
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The university’s economics department hasn’t really invented a production line capable of mass-producing Nobel Prize winners. It might seem that way, though.
Of all the economics schools in the world, probably none is as intense and passionate about the subject as the economics school at the U. of C. Even though some critics wonder if the school’s galaxy of aging superstar professors has played out its glory years, it continues to be a legendary place that students and teachers describe as a crucible of heated competition unbearable to many.
“Chicago has been accused of being a school that not only believes in survival of the fittest, it practices it,” said George Neumann, a University of Iowa economist who taught at the U. of C. for 10 years. “A lot of very bright people didn’t like that environment and left simply because they couldn’t take the kind of pressure Chicago puts on you.”
In most circles “workshop” might conjure an image of dull or routine administrative meetings. When economists at U. of C. mention “the workshops,” the tone of voice holds a certain awe of something that is powerful and slightly sinister.
At most universities, workshop meetings are polite affairs in which faculty and students come in and listen to a colleague read a research paper he or she is working on. At U. of C., the papers are distributed weeks in advance, and the audience usually comes in loaded with questions and criticisms noted for brutal harshness.
The late George Stigler, a 1982 Nobelist who helped establish the workshop tradition, talked about them a few years ago, before his death in 1991.
A workshop “is no place for rank or privilege,” he said. “It’s a place where people are undressed.”
Other schools might argue they have had more success in shaping economic policy at home and abroad, though they might be hard-pressed to prove it in the last 20 years. Certainly no other school can point to a faculty with more individual successes than the U. of C. faculty, particularly if you measure success with Nobel Prizes.
Economic historian Robert Fogel’s 1993 award (shared with Douglass North of Washington University in St. Louis) constitutes a “four-peat” championship of sorts for the university.
Fogel joined three colleagues on the Hyde Park campus-Merton Miller (1990), Ronald Coase (1991) and Gary Becker (1992)-as the school’s fourth recent winner of the world’s top prize in economics. In fact, since the special Nobel Prize for economics was created in 1967, 16 economists with U. of C. connections, either as active professors, former professors or former students, have won the award.
“It’s a very intense culture here,” Rosen said. “We’re constantly arguing and discussing economics, whether it’s in class, at lunch, in seminars, or over the back fence. About 70 percent of us live in Hyde Park, and we see each other off campus all the time.”
Neumann, the Iowa economist, taught and researched at U. of C. from 1974 to 1984. He said the intense workshops set U. of C. apart from the other 150 universities that grant economic doctorates in the U.S.
“They are a bloodbath,” he said. “People’s feelings get hurt, but money can’t buy the kind of expertise and input that you get when you give a paper there.”
Neumann resigned from the faculty after he was not offered a full professorship. But, he said, he loves the school and is grateful for his days there, particularly the workshops. In fact, he continues to return at least once a year to deliver a paper for critiquing.
“The workshop system there really forces people to confront serious issues,” he said. “You strip away all the inessential parts of the problem. I’m going to Cornell next week to deliver a paper, and to England after that, but in neither place will I bring back half of what I’ll bring back when I go to Chicago.
“The Chicago workshops have turned out some tremendously important work.”
Success breeds success. Because U. of C. is full of world-class economists, it is sought by other world-class scholars and would-be scholars who want to do research.
The place is famous worldwide as “The Chicago School,” a term meaning the center of arch-conservative monetary theory that dictates government has no useful role in a nation’s economic life. It is a reputation the university disputes, but one that has stuck since Milton Friedman, a 1976 Nobelist, developed his theories there on laissez-faire capitalism.
The Nobel committee, Rosen said, looks for scholars whose body of work over their careers have produced “big ideas” that have challenged accepted economic theory and shifted economic policy.
“That’s what we do here,” said Rosen, trying to explain the school’s incredible string of Nobel successes. It’s an exercise many people have engaged themselves in these past few years.
Paul Samuelson, a 1970 Nobelist from the Massachusetts Institute of Technology, said the key to the success of U. of C. always has been its great faculty, true even when he was an undergraduate there in the 1930s.
“Chicago,” he said, “concentrates on excellence and pays people very well to attract excellence. That’s what breeds prize-winners, to my mind.”
Indeed, top economics professors at U. of C. make well more than $100,000 annually and receive big budgets for research support. They also have squads of very bright graduate students under their command to lighten the workload, and they can make handsome amounts on the side writing books, speaking and consulting.
“We are very picky about whom we allow to come here,” said Rosen. “It’s very hard to get into this school and stay here.”
Robert Hamada, dean of the Graduate School of Business at U. of C., credited the success to the university’s history of cross-disciplinary teaching and research. U. of C. economists often hold joint appointments in the university’s schools of business, law, public policy or education, or, like Fogel, in history.
“This lack of boundaries makes the place very fertile for new ideas and new approaches to solving old problems,” said Hamada.
Few critics of the school would take exception to the individual honors accorded to the U. of C. faculty.
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But recently gadflies such as David Colander have been predicting that the Chicago economics department’s days of Nobel Prize glory are about to end.
The most recent Nobels for economics have honored work U. of C. scholars did 20 or 30 years ago, said Colander, a professor at Middlebury College, Vermont, who monitors economic research methods.
Colander does not criticize U. of C. so much as he criticizes academic economic research in general.
In its greatest days, U. of C. giants were intuitive geniuses who got their hands dirty going into the real world to research and study institutions and people.
“Men like Friedman and Stigler were great at that,” Colander said, “teasing out how things relate to and fit into the economy and worrying about real policy implications.”
Younger researchers, he said, have become enamored of numbers-crunching and high-tech analysis with computers. They value what he called “technical finesse” over work that relates to economics in the real world.
“Research now is making abstract arguments, discussing abstract policy in reference to a make-believe world,” he said. “That’s unfortunate.
“Since the 1980s Chicago has been doing the same things as most other schools, producing the same kind of papers on the same kind of issues as everyone else.”
He said that as a result, he thinks in the near future fewer American researchers, let alone those from U. of C., will win the Nobel in economics.
But University of Chicago officials are not ready to concede.
“So far, we’ve beat the Chicago Bulls,” one official said of the “three-peat” world champions. Now U. of C. is thinking “five-peat.”