The existence of analogies between central features of various theories implies the existence of a general theory which underlies the particular theories and unifies them with respect to those central features. ~ Paul Samuelson
American economist Paul Samuelson (1915–2009) was one of the most influential economists of the 20th century. He broadly took a Keynesian perspective, adapting it as he saw fit.
Samuelson’s magnum opus was Foundations of Economic Analysis (1947). The book sought a common mathematical structure underlying all of economics, posited upon 2 basic principles: 1) the maximizing behavior of economic agents, such as consumers maximizing utility and firms maximizing profits; and 2) the stability of equilibrium in economic systems (in stark contrast to Schumpeter’s treatment of economies as gyres).
Foundations was a triumph of tidy mathematical theory over messy reality. The modern capitalist economic system has done everything but ever reach a stable equilibrium, and the idea of agent maximization is a tangential parody to how people and businesses actually operate. Bizarrely, given his premise, Samuelson admitted as much.
Free markets do not stabilize themselves. ~ Paul Samuelson
Foundations is a tough read for those lacking a graduate-level appreciation of economics. Samuelson is best known for his college-level Economics textbook, first published in 1948, and which eventually sold over 4 million copies.
Samuelson admitted that “under laissez-faire, income and wealth get distributed far from equally.” His solution was correspondent with conventional liberal thinking: to tinker at the edges, by having welfare programs and a tax regime that alleviates poverty.
In considering the externalities that arise under capitalist production, Samuelson again prescribed an atomistic approach.
Since no one profit maker has the incentive, or indeed the power, to solve problems involving “externalities,” here is a clear case for some kind of public intervention. ~ Paul Samuelson
Like many other capitalist economists, Samuelson was in thrall of the mystical market mechanism.
A competitive system is an elaborate mechanism for unconscious coordination through a system of prices and markets. It is a communication device for pooling the knowledge and actions of millions of diverse individuals. Without a central intelligence, it solves one of the most complex problems imaginable, involving thousands of unknown variables and relations. ~ Paul Samuelson (Here again we see storytelling instead of science: economics as a propaganda art form.)