Fri, Dec 28, 2001 page19

• In battle of economics departments, Harvard edges out MIT

  After decades of dominance, the program that Paul Samuelson built has finally succumbed to its cross-town rival after a number of prominent defections

  • By Michael Steinberger / NY TIMES NEWS SERVICE
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  Last March, when former Treasury Secretary Lawrence H. Summers was named the 27th president of Harvard University, nowhere was the popular choice greeted with more enthusiasm than on the second floor of Littauer Center, home to the economics department.

  "People were delighted," said Oliver Hart, the department's chairman. "Larry has a lot of friends here."

  

  PHOTO: NY TIMES

  Favorite son

  It's no wonder. Summers, 47, is almost a pure product of Harvard's economics department: While he attended the Massachusetts Institute of Technology (MIT) as an undergraduate, he received a Harvard doctorate in 1982, became the youngest tenured member ever of its faculty at age 28, and taught there for eight years before leaving for Washington in 1991.

  More importantly, Summers -- whose sharp rise has given him enormous influence in policy and scholarly circles -- epitomizes the increasingly important position that Harvard now holds in the world of academic economics.

  Harvard's economics department is on a roll these days, attracting a disproportionate number of the most coveted graduate students and turning out an equally hefty share of the most promising young economists. And making it all the sweeter is that Harvard's rise is helping it eclipse the profession's traditional lodestar, the economics department at cross-town rival MIT.

  "We feel we are currently winning the competition," Hart said. "Over the past five to eight years, things have moved in our direction."

  Ben Bernanke, who now chairs Princeton's economics department, recalls that MIT was long the premier incubator of economists and an intellectual hothouse that thoroughly overshadowed Harvard.

  Indeed, when he was an undergraduate at Harvard in the 1970s, even Bernanke's own Harvard academic adviser recommended that he apply at MIT.

  "He told me that's where all the best students went, and he was right," Bernanke said.

  That's no longer true. "Now, things aren't so clear-cut," he said.

  One reason the balance of power in Cambridge has shifted is because Harvard has made itself a much better teaching institution.

  At the same time, MIT has become, relative to Harvard at least, a less attractive place to study economics, in large part because it has suffered a number of prominent defections from its faculty over the past decade.

  The altered competitive landscape between the two schools represents another twist in a long, storied rivalry, but it also reflects the changes that have swept the field of economics generally.

  In a sense, MIT's department is being victimized by its own success. It has remained a small shop as the profession it led to prominence has become a sprawling subject.

  Moreover, the discipline's biggest names are now virtually celebrities, with opportunities extending beyond the lecture hall. Yet MIT clings to the egalitarianism that has always been its trademark; one former faculty member jokingly calls it "the last kibbutz in economics."

  Whatever their comparative strengths and weaknesses, which each admit around 25 doctoral candidates annually, still boast what are widely acknowledged to be the two finest graduate programs in economics.

  Storied rivalry

  The rivalry between Harvard and MIT is fueled nowadays primarily by proximity and ego. "It's the narcissism of small differences," says Michael Kremer, a specialist in issues of growth and development who jumped from MIT to Harvard two years ago. And while Harvard is a more politically active department, there is no real ideological divide.

  Both departments lean to the left politically, though Harvard is more catholic in its composition: its faculty includes two leading conservative economists, Robert Barro and Martin Feldstein.

  Each school practices what is known as Cambridge-style economics:

  While heavily mathematical, it is less formalistic and theoretical than the economics done, for example at the University of Chicago -- another storied institution that has a weaned dozens of well-known economists.

  Many of the professors and students have taught or studied on both campuses, and there is frequent collaboration among faculty members. Except during recruiting season. "Recruiting is a good old-fashioned fight," said Olivier Blanchard, MIT's chairman.

  "It usually takes a few weeks for friendships to be restored. Apart from that, it's a state of generalized incest."

  It's a rivalry, however, that was conceived in bad blood. In October 1940, a remarkably gifted 25-year-old economist named Paul Samuelson, then an instructor at Harvard, was offered a professorship by MIT, which at the time had a threadbare economics department.

  Harvard was expected to eagerly match the offer, but it didn't.

  It was widely understood that Samuelson was snubbed because he was Jewish.

  Even those who saw it differently acknowledged that anti-Semitism was a factor: the renowned Austrian economist Joseph Schumpeter, who was then teaching at Harvard, remarked: "I could understand if they didn't want to hire him because he is a Jew. But that wasn't it: he was just too brilliant for them!"

  From his perch at MIT, Samuelson revolutionized economics. Although firmly in the Keynesian camp, his foremost achievement was to unite a century's worth of economic insights, many of them seemingly at odds, into a single, coherent theory -- the neo-classical synthesis, as it was called -- that would dominate economic discourse for some three decades.

  He also wrote a primer on economics that, 50 years later, remains a popular introductory textbook around the world.

  In the early '50s, he was joined at MIT by another talented young refugee from Harvard, Robert Solow. Together, Samuelson and Solow turned MIT into the institution that best embodied mainstream economic thought.

  They were distinguished not just for their pathbreaking work, but for their dedication to nurturing students as well.

  From the 1950s through the 1980s, Harvard's economics department was no match for MIT's. While it had a fine faculty, professors were not particularly interested in teaching either undergraduate or graduate students, who were often left to sink or swim on their own.

  Not a first choice

  "One was hesitant to send students to Harvard," said David Colander, an economic historian at Middlebury College. "You knew they would receive a good education at MIT; at Harvard, they would have to educate themselves."

  Consequently, MIT almost always beat out Harvard for the most prized doctoral candidates.

  In the early 1990s, however, the first signs of shifting fortunes emerged. Samuelson and Solow, along with other members of the Old Guard, began to retire even as MIT lost some younger stars as well.

  In 1993, both Hart and Drew Fudenberg, two leading microeconomist theorists, bolted for Harvard. Shortly thereafter, Jean Tirole, another microeconomic theorist, returned to his native France.

  Meanwhile, Harvard was becoming a more user-friendly place, thanks mainly to an influx of MIT economists who had been reared on the Samuelson-Solow ethos and tradition.

  "In the past, if you were a graduate student, you really took your chances coming here," Hart, the department's chairman, said. "But the culture has changed.

  "We're able to compete with MIT now because we have people who were taught in the MIT tradition and believe in treating graduate students well," Hart said.

  In the meantime, MIT's faculty exodus has continued unabated. Besides losing Kremer, the department could not prevent Susan Athey, a highly respected and much-sought-after microeconomist, from going to Stanford.

  It also suffered an even bigger defection: Paul Krugman, arguably the world's most influential trade theorist and also a columnist for The New York Times, was lured away by Princeton University in New Jersey.

  MIT now finds itself at a disadvantage on several fronts. Over the past few decades, economics has flowered into a broad, highly specialized field. With some 60 full-time faculty, Harvard can blanket the subject. MIT's economics department is half that size.

  "It seemed to me that Harvard is a better place if you don't know exactly what you want to study," said one student there, who graduated from Princeton last May and chose Harvard's economics program over MIT's.

  "It's got almost every area covered, and in almost every area it has people who are at the top of the field," the student said.
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