Modern economics too often seems to devolve into statistics and mathematical formulas, which is only one of the reasons the world will miss Gary Becker, who died on Saturday at age 83. The Nobel laureate always put the study of humanity first and foremost, applying the principles of his discipline to human capital and how it can best be utilized for the common good.
Like so many other great free-market economists, Becker flourished in the second half of the 20th century at the University of Chicago, which rose as an alternative to the reigning orthodoxy of faith in government economic management. Milton Friedman was a teacher and colleague.
Gary Becker made his reputation in particular by applying economics to human behavior and problems not typically thought to be subject to economic analysis. His study of racial discrimination, for example, upended the view that bias benefits those who discriminate. He showed that an employer loses if he refuses to hire a productive worker for reasons of bias, and he demonstrated that discrimination is less likely in the most competitive industries that need to hire the best workers.
Becker also did ground-breaking work on the economics of crime and punishment, the family, and investments in human capital. He studied the allocation of time in the family unit, showing that rising wages increase the value of time and thus the cost of such work in the home as child-rearing. This combined with the need to provide more costly education for children tends to reduce fertility rates.
Americans now know this application of economics to human behavior as "Freakonomics," but Becker was a pioneer. He believed governments should invest in human capital through education in particular, but he also believed that humans flourish most when markets rather than governments allocate resources. His work graced these pages many times over the years, and we offer a sample nearby. Above all he believed in the ability of human beings to improve themselves if given the opportunity to exploit their talents.
