Yes, I admit it. I took Economics 101 principally because I thought that some knowledge of the subject might one day help me get a job. But there were other reasons, too. I had grown up in a small town in the Ozarks hearing stories of the Great Depression of the 1930’s over dinner, and of its effects on local businesses and families, and on the agricultural communities in the prairies to the west of us. My widowed maternal grandfather—who was a keen investor—lived with us and passed on annual reports for me to read. I remember thinking the annual report of U.S. Steel—in about 1962, when it was one of the country’s largest companies—was one of the most interesting things I had ever read; and it had great pictures of blast furnaces at night. Also, as a member of the high school debating team, I had become engrossed during my senior year in a national debating topic which had something or other to do with the Common Market. So I was excited about taking economics.
Better yet, I soon discovered I was in the one freshman class that Bill Gates, the departmental chairman, insisted on teaching each year. I counted myself very lucky but thought I would need to work hard to make an impression. So I summoned up my courage and sat in the second row on the first day of class.
Well, it was very unsettling. Gates had one of the worst stutters I had ever heard. Barely able to complete a sentence, he promised us that his stutter would disappear when he managed to put names to our faces—and that is exactly what happened. After that, his teaching style was all about pacing back and forth, body language, argumentation, and, yes, passionate belief.
Bill Gates was an evangelical Keynesian. In 1964, I do not think I appreciated how controversial some of this was; for example, the idea that a government should run a deficit to make up for a shortage of aggregate demand. It was just “economics” and it was sure to be on the exam. Gates was, I remember, particularly pleased that Congress had passed The Employment Act of 1946. This had made the Federal Reserve also responsible for promoting “maximum” employment as well as pursuing its original objectives of price stability and fighting inflation. (The Republicans, believing in the curative powers of the business cycle and a bit of unemployment, had vetoed the use of the term “full employment” in the legislation.)
Bill Gates instilled in me the belief that, after mass violence—such as he had seen during his service in World War II—mass unemployment was the greatest of all social evils. And I have never lost that faith, believing it to this day. He also persuaded me that economics explained quite a lot about how the world really worked—right now, in the present—and, being a small town boy, this had long been of passing interest to me.
Gates was educated in Switzerland, at the University of Geneva, at Williams and at the University of Chicago. A classmate of Jack Sawyer’s and James MacGregor Burns’ in the legendary class of 1939, he served as a Navy lieutenant in World War II and joined the Williams faculty in 1947.
Not unsurprisingly, he was an internationalist. He was an economist at the Export-Import Bank in Washington from 1950 to 1954 and a Brookings National Research Professor in Haiti in 1958 and 1959. He was a project director for the Harvard Advisory Group in Indonesia from 1961 to 1963 and for the Group in Malaysia from 1966 to 1968. He also consulted for the State Department and the Ford Foundation.
At Williams, he was one of the founders of the Center for Development Economics and was chairman of the Economics Department from 1961 to 1972. He was a Herbert Lehman Professor and then a Kenan Professor. He died at the age of 58 in 1975 and rated an obituary in the New York Times.
The economics department of the day, we must remember, was unapologetic about its biases. It was internationalist because, well, improving the lot of “under-developed” countries was one of the noblest aims of the economics profession, and Gates was a developmental economist through and through. And the department was overwhelmingly concerned with what it called the “real” economy of growth in output, employment and GDP per capita, having little time for the “financial” economy of government finance and financial markets. I suspect that the course offerings of the Williams Economics department are a bit more balanced today.
We are all people of our time, and Bill Gates —to the great benefit of his ‘baby boom’ students—was a man of his. Foreign educated in Switzerland in the 1930’s, a witness to the Great Depression both in Europe and the U.S., a naval war veteran, a contemporary of the U.S. economist Paul Samuelson, whose iconic textbook we used, and an accomplished story teller, he made no secret of his belief we all had a duty to make the world a better place. He was also a terrible dresser; fond of checks and stripes worn together, I recall, and of eccentric bow ties.