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."
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.
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