by Pranab Bardhan
As with game theory, I also attended some courses in Berkeley in another relatively new subject for me, Psychology and Economics (later called Behavioral Economics). In particular I liked the course jointly taught by George Akerlof and Daniel Kahneman (then at Berkeley Psychology Department, later at Princeton). I remember during that time I was once talking to George when my friend and colleague the econometrician Tom Rothenberg came over and asked me to describe in one sentence what I had learned so far from the Akerlof-Kahneman course. I said, somewhat flippantly: “Kahneman is telling us that people are dumber than we economists think, and George is telling us that people are nicer than we economists think”. George liked this description so much that in the next class he started the lecture with my remark. On the dumbness of people I later read somewhere that Kahneman’s earlier fellow-Israeli co-author Amos Tversky once said when asked what he was working on, “My colleagues, they study artificial intelligence; me, I study natural stupidity.”
Of course, by dumbness or stupidity in this context economists really mean departures from rationality, and knowing that people are often irrational, behavioral economics is really about the systematic departures from rationality which gives the subject its analytical coherence, that there is method in the madness as Polonius says in Hamlet. And in the departures from self-centered individual rationality social norms and fellow-feeling (like empathy and sympathy and social solidarity) often play an important role. In Berkeley I had a friendly colleague for many years, Matthew Rabin (now at Harvard), from whose talks and writings I have learnt a great deal on fairness in social preferences in a modified game-theory framework, apart from common human errors in probabilistic reasoning and human frailties like individual self-control problems. These are big changes in traditional ways of thinking in Economics.
I might as well take this occasion to make a brief comment on the ongoing changes in Economics as a discipline. Over the last fifty years Economics has been transformed into a discipline that is highly nuanced, socially conscious, aware of the pitfalls of both the market and the state, wary of informational traps and uncertainty beyond measurable risks, and deeply learning from insights from other disciplines. While there is much more to learn and discover ways of handling the complexity of social processes, one cannot help pointing out that the lay public, journalists, and even academics from some other disciplines go on criticizing Economics in ways and with caricatures that are often decades outdated—it feels like, as Keynes so memorably expressed in 1936, they are “distilling their frenzy from some academic scribbler of a few years back”, may be “some defunct economist”.
There was one important, branch of Economics, Environmental Economics, where I wanted to take some courses but did not get around to do it, partly because there was no course offered in our Department (as it was left to the separate Agricultural and Resource Economics Department in the campus). I myself did quite a bit of research on the local environmental resources (irrigation water, forestry, fishery, etc.) which are crucial to the livelihoods of the rural poor all over the world, and on how the management of these local commons depends on the socio-economic characteristics of the community (including inequality). In this connection I once participated in a detailed study of 48 irrigation communities in Tamil Nadu (one of the few times I took part in village surveys outside West Bengal) with the help of my collaborators in the Madras Institute of Development Studies.
But on the global commons I think initially I used to underestimate (or did not pay enough attention to) the severity of the effects of global warming, a problem mainly caused by the rich of the world over many decades and that the world’s poor would bear the main brunt. Here is another policy problem where the contours of some of the major solutions are by now reasonably well-known but the political economy of the needed international coordination and collective sacrifice and climate aid (even reparations) to the poor is extremely difficult to manage.
Looking back I think it was the senior Japanese economist Hirofumi Uzawa who in conversation first made me conscious of the seriousness of the global environmental problem (long before I read the papers of environmental economists like Bill Nordhaus, Nick Stern, Marty Weitzman or Partha Dasgupta). I came to know Uzawa first when we were both working on the theory of economic growth. We used to correspond when I was still a student at Cambridge, England, and we finally met at Cambridge, Mass. at the initiative of my friends, George Akerlof, Joe Stiglitz, and Mrinal Datta Choudhuri (all three of them had gone from MIT to attend the summer workshop on economic growth organized by Uzawa in Chicago just a few weeks before then).
Politically, he was on the left, and when he resigned from his position at University of Chicago at the end of the 1960’s he told me he had mentioned the Vietnam War as one of the reasons why he decided to leave the US and go back to Japan. Earlier I had also heard a bizarre story about Uzawa’s interaction with the econometrician Marc Nerlove when they were both at Stanford. This must be the early 1960’s. Apparently they were neighbors, and when Nerlove reportedly once proposed that they should share costs in building a common nuclear shelter underneath their homes, Uzawa refused to have anything to do with this. This enraged Nerlove and he said, as and when the nuclear war would break out if the Uzawas at that point wanted to take refuge in the shelter Nerlove was going to build underneath his house, they’d be definitely denied access. After some time Nerlove had second thoughts, and came back and said that he’d allow Uzawa’s children to take refuge in his shelter, but not Uzawa and his wife. To which Uzawa apparently said that he’d not allow his children to go there, as when the Nerloves would run out of food in the shelter they might eat up the Uzawa children!
Uzawa became an active environmentalist when he went back to Japan (starting with his participation in the protests against the construction of Narita airport). He once visited our home in Berkeley. By that time he had grown a long white beard, and I told him that he looked like the ‘wise man from the East’. Other Japanese economists had told me he was by then a guru of the active environmental movement in Japan.
In Berkeley over the years I have had the good fortune to have many talented Ph.D. students. My style of Ph.D. supervision is bit of laissez faire kind; I do not enjoy breathing down the neck of students urging them to perform, I let them be, and when they have something to show me I read it carefully and give them comments. This leads to some sorting out, I think I attracted more students who prefer this style—of course, in my areas of specialization, like economic development, political economy or international trade.
My academically successful students from Berkeley whose doctoral dissertation committees I chaired include Eric Verhoogen and Suresh Naidu (both now Professors at Columbia University), Ken Kletzer (at University of California, Santa Cruz), Bruce Wydick (at University of San Francisco), Eric Fisher (at Cal Polytechnic), Jeff Dayton-Johnson (now Dean at Middlebury Institute of International Studies), Leonard Cheng (now President of Lingnan University in Hong Kong), Lemin Wu (at Peking University), Michael Kevane (at Santa Clara University), and Maurice Kugler (at George Mason University). Of these, I have published joint papers with Kletzer and Dayton-Johnson. A larger number of my Ph.D. students have been at international organizations like the World Bank (for example, John Giles, Margaret Miller, and Yongmei Zhou, who has now left the Bank and is at Peking University). One of my Ph.D. students, Marcelo Tokman, was for a time the Energy Minister in Chile.
Something unusual happened in the case of Michael Kevane. He was a good student, and after passing the Ph.D. qualifying test, he went off to Burkina Faso to research on structural aspects of the rural economy there. But shortly after he arrived, there was a bad famine as a result of which the whole economy almost collapsed, and there was no way he could collect the kind of data that he needed and carry out the various aspects of his interesting research proposal. He sent an SOS to me and George Akerlof, the other member of his dissertation committee. He had two options: one was to come back and do a dissertation on something completely different, and the other was for him to stay on and still do it on the Burkina Faso economy but the famine would not allow him to do a standard economics dissertation, it’d be more like how a society coped with such an economic disaster. The latter option would produce more a treatise in economic anthropology, which was not usually accepted as a doctoral dissertation in an Economics Department. George and I took a tough and risky decision and suggested to him to follow the latter option, and after some time he got his degree. This also is an example of an important difference between a doctoral dissertation in US and that in the UK. In US the Ph.D. supervisors have the major say on the acceptability of a dissertation, but in the UK the supervisors cannot be the examiners of a thesis—the latter, one internal from the university and the other from outside, take the decision and you do not know who they’ll be at the point when you submit the thesis.
I have earlier commented on the system of faculty appointment and merit evaluation in Berkeley. One positive aspect of evaluation within the Department I have not commented on. When a new appointment is made, either at the junior or at the senior level, all of the departmental faculty including the junior most members take part in the faculty meeting. This makes for more informed, diverse and vigorous discussion, and the Chairperson of the Department in their report summarizes the thrust of the whole discussion, apart from the final vote count.
In general, compared with much of the rest of the world, younger members of the faculty here play a more active role in most departmental matters. In fact when I first joined Berkeley faculty I noticed that the departmental deliberations were dominated by 30-40 year olds, and the veterans, including even Nobel Prize winners, did not have the major voice, or at least voice proportionate to their eminence. This kind of culture with the premium on youth ultimately acts as a major source of dynamism in American academia. Of course, there is also a downside: younger members sometimes, not always, display a tendency to follow certain fads or fetishes, a passing craze or fascination with some dazzling methods or techniques, which may not stand the test of time or is not sustainable from the larger viewpoint of the Economics profession. But on the whole I have to say that I have been invigorated by the quality of faculty discussion and the collegiality with which it is conducted in my Department.
There is, however, one aspect of my career choice as a teacher I have always somewhat disliked, which is the examination system and my role in it as a teacher. I understand the need for it in some form but I have always taken part in it with some reluctance (my students have sometimes complained to me that I have not given them enough exams and tests during the course). For one thing, during the class exam time students who hardly ever practice any handwriting on any other occasion have to provide hand-written answers to exam questions, which for many are barely legible. So it is a strenuous job to read what they have written. (I have often suggested the need for the campus to arrange silent typewriters made available to students at exam time). Secondly, students who have diligently followed the class and taken notes, often reproduce them in a way that makes the teacher feel that he or she is looking at oneself through some kind of fun house mirror—you recognize in their writing what you said in class but not quite, it comes to you in a slightly distorted version, which is not a pleasant experience.
In Berkeley my office was on the sixth floor of a building that housed Mathematics, Statistics and Economics Departments. During the exam season there was a regular hazard. In many rooms when exams were in process, some unprepared student or other would inevitably want to disrupt/delay the process and deliberately trip the fire alarm. And when the fire alarm went and you were to evacuate the building you were not supposed to use the elevator. So with unpleasant frequency in the exam season I had to walk down the stairs of six floors and wait outside until after a considerable length of time the firemen would give us the all-clear to go back to our office.
After exams there is the matter of grading, which is another unpleasant task. (University of California at Santa Cruz for a time adopted the system of not letter-grading the student, but that of the teacher writing a short essay on the student’s over-all performance in the whole term. But such narrative evaluation in place of letter grades has its own problems including comparability with other places where letter grading is used). For some (usually undergraduate) students the grade is considered a negotiable matter, and they’d try hard to ambush you in your office on attempts to jack it up. Sometimes in the case of students with Asian parents the excuse was that the grade I had given them even if it were ok with them, they said, would be simply unacceptable to their parents (“If I take this grade B home, my mother will stop eating!”).
In the final analysis I dislike being in the power-asymmetrical situation of my being the grade-giver and this harried young person as the grade-receiver. When I was teaching at MIT I once had an occasion when I could not refrain from admiring a female graduate student who dramatically turned the tables on this power asymmetry between the examiner and the examinee. This was the day of her Ph.D. qualifying viva test, where we were supposed to ask her questions on her dissertation proposal and her general abilities as an economist. We were four examiners waiting for her to appear. She arrived a little late, but as soon as she entered the room she went on the offensive. She said: ”Shame on you guys! Shame! You’ve made me so nervous. I feel jumpy, twitchy, my stomach is queasy, and my palms are all sweaty. Feel’em, feel’em! Here!” She outstretched her palms to each of us, one after the other, and we sheepishly had to feel her palms. In the rest of the hour, she made us hesitant to ask her any tough question.