re

Economist Gary Becker returned to Chicago because "I knew I would

be challenged by the faculty, by the students." He met the challenge.

A RATIONAL CHOICE
This past June Gary S. Becker, AM'53, PhD'55, Chicago's University professor in
economics, sociology, and Chicago Booth, was awarded the Alumni Association's
highest honor, the Alumni Medal. for a career spent broadening the scope of eco-
nomic research. It is hardly his first honor; the Princeton graduate also won the John
Bates Clark Medal, given to the best U.S. economist under 40, in 1967; the 1992
Nobel Memorial Prize in Economic Sciences; and the Presidential Medal of Freedom
in 2007. His studies of human capital, familial relations, crime, and workplace dis-
crimination pioneered an explosion of economic research. A University professor
sínce 1970, he also writes a weekly politics and economics blog with Seventh Cír-
cuit Federal Appellate Judge and Law School Senior Ledurer Richard Posner. They
started the blog in December 2004, after Becker ended 19 years as a BusínessWeek
columnist. Collected here are samples of Becker's thoughts on hís work and lífe.
-Burke Frank, '11, and Asher Klein, '11

ON ECONOMICS
My teachers taught me
that economics was not
a game played by
clever academics, but a
serious subject that
helped
us understand the real world we lived in.
-Alumni Medal acceptance speech
The economic approach I refer to does
not assume that individuals are motivated
solely by selfishness or gain. It is a method
of analysis, not an assumption about par-
ticular motivations. Along with others, I
have tried to pry economists away from
narrow assumptions about self interest.
Behavior is driven by a much richer set of
values and preferences." – Nobel lecture
I began to think
about crime in the
1960s after driving to
Columbia University
for an oral examina-
tion of a student in economic theory.
I was late and had to decide quickly
whether to put the car in a parking lot or
risk getting a ticket for parking iIlegally
on the street. I calculated the likelihood
of getting a ticket, the size of the penalty,
and the cost of putting the car in a loto I
decided it paid to take the risk and park
on the street. (I did not get a ticket.)
As I waIked the few blocks to the
examination room, it occurred to me that
the city authorities had probably gone
through a similar analysis. The frequency
of their inspection of parked vehicles and
the size of the penalty imposed on viola-
tors should depend on their estimates of
the type of calculations potential violators
like me would make. Of course, the first
question I put to the hapless student was
to work out the optimal behavior of both
the offenders and the police, something I
had not yet done.
…I was not sympathetic to the assump-
tion that criminals had radically dif-
ferent motivations from everyone else.
I explored instead the theoretical and
empirical implications of the assump-
tion that criminal behavior is rational. ...
Rationality implied that some individuals
become criminals because of the financial
rewards from crime compared to legal
work, taking account of the likelihood
of apprehension and conviction, and the
severity of punishment.- Nobel lecture
ON HEALTH
Good health and a
long life are important
aims of most persons,
but surely no more
than a moment's
reflection is necessary
to convince anyone that they are not the
only aims: somewhat better health or
a longer life may be sacrificed because
they conflict with other aims. The eco-
nomic approach implies that there is an
"optimal" expected length of life, where
the value in utility of an additional year
is less than the utility foregone by using
time and other resources to obtain that
year. Therefore, a person may be a heavy
smoker or so committed to work as to
omit all exercise, not necessarily beca use
he is ignorant of the consequences or
"incapable" of using the information he
possesses but because the lifespan for-
feited is not worth the cost to him of quit-
ting smoking or working less intensively.
These would be unwise decisions if a long
life were the only aim, but as long as other
aims exist, they could be informed and in
this sense "wise."
-Introduction to The Economic
Approach to Human Behavior (1976)
ON HUMAN CAPITAL
Human capital is so
uncontroversial nowa-
days that it may be dif-
ficult to appreciate the
hostility in the 1950s
and 1960s toward the approach that
went with the term. The very concept of
human capital was alleged to be demean-
ing because it treated people as machines.

46 University of Chicago Magazine / Sept-Oct 2010

To approach schooling as an investment
rather than a cultural experience was con-
sidered unfeeling and extrernely narrow.
As a result, I hesitated a long time before
deciding to call my book Human Capital,
and hedged the risk by using a long sub-
title. Only gradua11y did economists, let
alone others, accept the concept of human
capital as a valuable tool in the analysis of
various economic and social issues.
-Nobellecture
The persistence of discrimination against
blacks shows that competition and free
enterprise do not by themselves eliminate the
effects of prejudice in the marketplace, espe-
cially when the prejudice is deep and wide-
spread and when governmental and private
discrimination are mutually reinforcing.
- "The American Dream Mar Be Coming
Closer Por Blacks," BusinessWeek, (April21,
1986; Becket's first BW column)
The point of
departure of
my work on the
family is the
assumption that
when men and
women decide to
marry or have children or divorce, they
attempt to maximize their utility by com-
paring benefits and costs. So they marry
when they expect to be better off than if
they remained single, and they divorce if
that is expected to increase their welfare.
-Nobellecture
Even sma11 amounts of market discrimi-
nation against women or sma11 biological
differences between men and women
can cause huge differences in the activi-
ties of husbands and wives. Therefore,
large market discrimination or strong
biological differences are not required to
understand why the gender gap in earn-
ings traditiona11y has been enormous. A
sizable gap is expected when women have
specialized in household activities, have
invested little in market human capital
and have allocated most of their energy to
the household.
-from A Treatise on the Family (1981)
ON GARV BECKER
I had a fine time in
12 years at Colum-
bia. But I began to
feel as a young elder
statesman. And I
felt if I carne back to
Chicago, I certainly wouldn't be allowed
to have that feeling. And I didn't want to
have that feeling. leven now don't con-
sider myself an elder statesman, and cer-
tainly not in 1970 when I returned to the
University of Chicago. I knew I would be
University of Chicago Magazine I Sept-Oct 2010
cha11enged by the faculty, by the students;
whatever I had accomplished wouldn't
matter in terms of the discussions we
had.-Alumni Medal acceptance speech
There was a sea change. I began to notice
it in the 1970s and 1980s. A lot of the
younger people coming out of Harvard,
MIT, and Stanford were very interested in
what I was doing, even though their fac-
ulty were mainly-not entirely-opposed
to the sort of stuff I was doing.
-interview, Financial Times, [une 17, 2006
Along with many others of my genera-
tion, I was a socialist when I started my
university studies. But my first few eco-
nomics courses taught me the power of
competition, markets, and incentives,
and I quickly became a classicalliberal.
That means someone who believes in
the power of individual responsibility, a
market economy, and a crucial but lim-
ited role of government
- 'f119 Year Dialogue on the Power of
Incentives," BusinessWeek, luty 12, 2004
(Becker's final BW column)
My whole philosophy has been to be
conventional in things such as dress and
so on. But when it comes to ideas, 1'11 be
willing to stick my neck out: I can take
criticism if I think I'rn right.
-interview, Financial Times, [une 17, 2006
47