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Theodore Schultz

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Theodore Schultz
Born(1902-04-30)April 30, 1902
Arlington, South Dakota, United States
Died26 February 1998(1998-02-26) (aged 95)
Evanston, Illinois, United States
NationalityUnited States
Academic career
FieldAgricultural economics
InstitutionIowa State University
University of Chicago
School or
tradition		Chicago school of economics
Alma materSouth Dakota State University
University of Wisconsin-Madison
AwardsNobel Memorial Prize in Economic Sciences (1979)
Information at IDEAS / RePEc

Theodore William "Ted" Schultz (30 April 1902 – 26 February 1998) was an American economist, Nobel Laureate, and chairman of the Chicago School of Economics. Schultz rose to national prominence after winning the 1979 Nobel Memorial Prize in Economic Sciences.

Early life and education

Theodore William Schultz was born on April 30, 1902 ten miles northwest of Badger, South Dakota on a 560-acre farm. When Schultz was in eighth-grade, his father Henry decided to pull him out of Kingsbury County Schoolhouse No. 19. His father’s view was that if his eldest son left the farm and continued to get an education he would be less inclined to continue working on the farm. Schultz subsequently did not have any formal post-secondary education. Schultz eventually enrolled in the Agriculture School at South Dakota State, in a three-year program that met for four months a year during the winter. Schultz moved on to a bachelor’s program later, earning his degree in 1928 in agriculture and economics. He also would receive an honorary doctorate of science degree from the College in 1959. He graduated in 1927, then entered the University of Wisconsin–Madison earning his doctorate in Agricultural Economics in 1930 under Benjamin H. Hibbard with the thesis, entitled The Tariff in Relation to the Coarse-Feed Grains and a Development of Some of the Theoretical Aspects of Tariff Price Research.[1]

Schultz married Esther Florence Werth (1905–1991) in 1930. She was born and raised on a farm near Frankfort, South Dakota of German parents, who encouraged her to pursue schooling. Werth would be the first in her family to attend college, receiving a bachelor's degree in commercial science from South Dakota State College in Brookings in 1927,[2] and subsequently worked as a school teacher in Waubay from 1927 to 1929 and then in Gregory from 1929 to 1930. Werth shared Schultz’s background in agriculture and commitment to ideals of education and economic development, and throughout his career worked as a primary editor of his published works. In his Nobel Prize Lecture he acknowledged her contributions thusly: "I am also indebted to my wife, Esther Schultz, for her insistence that what I thought was stated clearly was not clear enough.” The couple was survived by two daughters and one son.

Academic career

He taught at Iowa State College from 1930 to 1943.[3] He left Iowa State in the wake of the famous Oleo-Butter War, and he served as the chair of economics at the University of Chicago from 1946 to 1961. He became president of the American Economic Association in 1960.[4] He retired in 1967 though he remained active at the University of Chicago into his 90s.

Shortly after his move to Chicago, Schultz attracted his former student, D. Gale Johnson to the department. Their research in farm and agricultural economics was widely influential and attracted funding from the Rockefeller Foundation to the agricultural economics program at the University. Among the graduate students and faculty affiliated with the pair in the 1940s and 1950s were Clifford Hardin, Zvi Griliches, Marc Nerlove, and George S. Tolley.[5] In 1979, Schultz's was awarded the Nobel Prize in Economics for his work in human capital theory and economic development.

Contribution to economic theory

University of Chicago

While he was chair of economics at the University of Chicago he led research into why post-World War II Germany and Japan recovered, at almost miraculous speeds from the widespread devastation. Contrast this with the United Kingdom which was still rationing food long after the war. His conclusion was that the speed of recovery was due to a healthy and highly educated population; education makes people productive and good healthcare keeps the education investment around and able to produce. One of his main contributions was later called Human Capital Theory, and inspired a lot of work in international development in the 1980s, motivating investments in vocational and technical education by Bretton Woods system International Financial Institutions such as the International Monetary Fund and the World Bank.

Nobel Memorial Prize in Economic Sciences

Schultz was awarded the Nobel Prize jointly with Sir William Arthur Lewis for his work in development economics, focusing on the economics of agriculture. He analyzed the role of agriculture within the economy, and his work has had far reaching implications on industrialization policy, both in developing and developed nations. Schultz also promulgated the idea of educational capital, an offshoot of the concept of human capital, relating specifically to the investments made in education.[6]

Legacy

Schultz receiving Nobel Prize from King of Sweden Carl XVI Gustaf in 1979.

Schultz received eight honorary degrees in his career. As well as the distinction of being the first South Dakota State University graduate and the second South Dakotan to win a Nobel Prize after Ernest Lawrence winner of the 1939 Nobel Prize for Physics. Between 2012 and 2013, South Dakota State University built the Theodore W. Schultz Hall, a residence hall from students pursuing degrees in agriculture.[7]

Schultz died in Evanston, Illinois on February 26, 1998 at the age of 95. He is interred at Badger Cemetery in Badger, South Dakota.

Quotes

The dominant social thought shapes the institutionalized order of society...and the malfunctioning of established institutions in turn alters social thought. — Theodore W. Schultz (1977)[8]

Few scientist think of agriculture as the chief, or the model science. Many indeed do not consider it a science at all. Yet it was the first science - the mother of all sciences; it remains the science which makes human life possible; and it may be that, before the century is over, the success or failure of science as a whole will be judged by the success or failure of agriculture. -T.W Schultz ( ??)

Most people in the world are poor. If we knew the economy of being poor, we would know much of the economics that really matter.[9]

Articles

Schultz, Theodore W. (1956). "Reflections on Agricultural Production, Output and Supply". Journal of Farm Economics. 38 (3): 748–762. JSTOR 1234459.

Books authored

  • 1943. Redirecting Farm Policy, New York: Macmillan Company.
  • 1945. Agriculture in an Unstable Economy, New York: McGraw-Hill.
  • 1953. The Economic Organization of Agriculture, McGraw-Hill.
  • 1963. The Economic Value of Education, New York: Columbia University Press.
  • 1964. Transforming Traditional Agriculture, New Haven: Yale University Press.
  • 1968.Economic Growth and Agriculture, New York: MacGraw-Hill.
  • 1971. Investment in Human Capital: The Role of Education and of Research, New York: Free Press.
  • 1972. Human Resources (Human Capital: Policy Issues and Research Opportunities), New York: National Bureau of Economic Research,
  • 1981. Investing in People, University of California Press. Description and chapter-preview links.
  • 1993. The Economics of Being Poor, Cambridge, Massachusetts, Blackwell Publishers
  • 1993. Origins of Increasing Returns, Cambridge, Massachusetts, Blackwell Publishers

Books edited

  • 1945. Food for the World, Chicago: University of Chicago Press.
  • 1962. Investment in Human Beings, Chicago: University of Chicago Press.
  • 1972. Investment in Education: Equity-Efficiency Quandary, Chicago: University of Chicago Press.
  • 1973.New Economic Approaches to Fertility, Chicago: University of Chicago Press,
  • 1974. Economics of the Family: Marriage, Children, and Human Capital, Chicago: University of Chicago Press.

References

  1. ^ Shaars, Marvin A. (1972). "The Story of The Department of Agricultural Economics: 1909–1972" (PDF). Retrieved 2009-09-17.
  2. ^ http://www.sdsufoundation.org/theodore-and-esther-schultz-society
  3. ^ "the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1979Theodore W. Schultz, Sir Arthur Lewis". Nobelprize.org. Retrieved October 3, 2012.
  4. ^ "Theodore W. Schultz". Find A Grave. Retrieved October 3, 2012.
  5. ^ Sumner, Daniel A. Agricultural Economics at Chicago, in David Gale Johnson, John M. Antle. The Economics of Agriculture: Papers in honor of D. Gale Johnson. University of Chicago Press, 1996 p 14-29
  6. ^ "Theodore Schultz, 95, Winner Of a Key Prize in Economics". The New York Times. Retrieved October 3, 2012.
  7. ^ http://www.sdstate.edu/reslife/reshalls/northeast.cfm
  8. ^ Justin Yifu Lin. "Cambridge University Marshall Lecture – Development and Transition: Idea, Strategy, and Viability" (PDF).
  9. ^ Theodore W. Schultz, 1981.Investing in People. p. 3. University of California Press.
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