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Welcome to entering graduate students in economics at Berkeley, given 8/25/1997
Let me talk first about how you will leave here.
About three-quarters of you will leave Berkeley with a Ph.D. in Economics, somewhere between four and ten years from now. I highly recommend that you try very hard to make it closer to four than ten: time-to-completion of the Ph.D. is a powerful signal that potential employers use (I think overuse) in making their hiring decisions. The one-quarter of you who don't submit dissertations will lack the union card needed for most higher education employment in the United States, but that aside will have the same kinds of jobs and do the same kinds of things as those who do finish their Ph.D.'s--American universities turn out perhaps 1,000 Ph.D.'s a year, and yet somehow there are more than 60,000 people at work in this country who call themselves "economists."
Of those of you who submit your dissertations, more than nine out of ten will get academic or what I think of as semi-academic jobs: staff economists for the World Bank, or the IMF, or the Federal Reserve; assistant professorships at Michigan, or Arizona, or Reed, or Cal State-Northridge; staff economists at the Federal Trade Commission or the U.S. Treasury. Things are very different for others entering Ph.D. programs here at Berkeley: I have been told that for every nine people who receive a Ph.D. in the history department, one person gets a tenure-track academic job.
So that's where you are going. But what will happen to you in the meantime?
When I got into the economist business way back at the start of the 1980s, I soon ran into a guy named Jim Poterba--a senior at Harvard then who looked a couple of years younger and who seemed to have been taking graduate courses in economics since he was twelve--who addressed everyone as "Brother": "Brother DeLong" he would say, or "Brother Wilcox; Brother Summers; Brother Romer"--as if we were all part of a closed and disciplined religious order: the monks of the Blessed Adam Smith.*
It soon became clear to me that Brother Poterba--he is now head of M.I.T.'s public finance group--that this was one of those jokes that falls ito the category of "ha ha, only serious." That at one level he was making fun of the peculiar hours, intellectual rituals, and styles of life of those who could only start work at 5 PM when the "academic" accounts on the Data Resources, Incorporated, computer were enabled. But that an another level he was quite seriously saying that we were aquiring a faith and a mission.
What is the faith? By now you know it as well as I. Call it "constrained optimization" and "general equilibrium." The faith is the willingness to make an intellectual bet that most of the production and distribution of wealth, and a good chunk of social life in general is best understood by first examining what situations look like to individuals making choices, and then adding the individual choices up to make an aggregate result.
What is the mission?
For that, think back fifty-three years, to the closing days of World War II, when two of the Grand Masters of our order--Harry Dexter White for the U.S. Treasury, and the infinitely more famous John Maynard Keynes for the government of Great Britain--were hammering out the post-World War II international monetary system. They did a good job: the decisions made at their interminable round of conferences set in place an international monetary framework that supported the fastest generation of economic growth the world economy had ever seen. And in the course of those meetings they had many banquets, and offered many toasts.
Let me back up for a second. Keynes saw economics as a service profession--"rather like dentists," was the phrase he liked to use. In his view, economics was not especially desirable or worthwhile or beautiful or good in itself. It was not "civilization." Civilization--the things that were worthwhile--were things like the novels of his friend Virgina Woolf, the paintings of his friend and sometime lover Duncan Grant, the dances of his wife Lydia Lopokova. The things that were the good and the beautiful--Civilization--were the insights of artists, the achievements of artisans, and the pleasures of culture.
But economics was part of the underpinnings: political democracy and cultural advance do depend strongly on economic prosperity. In Keynes's view, without economic prosperity it was not even possible to attempt to reach the good and the beautiful.
And Keynes thought--I think--that economists have good advice to give about attaining economic prosperity, and making economic choices--just as dentists know how to extract rotten teeth, and tell you to brush twice a day and remember to floss.
So at one point--I think in Charleston, SC--when it was his turn, Keynes offered the following toast: "To the economists. While they are not the trustees of Civilization, they are the trustees of the possibility of Civilization."
It is an honorable order that you are joining. It is an order to which has been committed an important trust. Welcome. We are glad to have you join us.
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Professor of Economics
J. Bradford DeLong, 601 Evans
University of California at Berkeley; Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax