Paul Samuelson's observations

From: Glyn Holton
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Date: 08 Dec 2006
Time: 08:19:48

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I just wrote a review of the outstanding new book by Davis and Etheridge on Louis Bachelier and the origins of stochastic calculus. Paul Samuelson contributed a Foreword, which actually takes up the Friedman-Markowitz issue. It seems Friedman objected to more than the issue of Markowitz's work not being economics. He was actually unimpressed with the work itself. It is worth quoting Samuelson, who states that Friedman's initial reaction to Markowitz's thesis was not a "hasty, tentative diagnoses. Forty years later in interviews with Reuters and the Associated Press, this truly great economist opined that the names of Markowitz, Sharpe, and Merton Miller would not be on connoisseurs' lists of 100 likely Nobel candidates. In some university junior common rooms, this incident brought into remembrance Max Planck's methodological dictum: science progresses funeral by funeral." I am sure Samuelson would have left out the last sentence had he known we would lose Friedman just a few months later. I do wonder, though, what Friedman's specific objections were. If you want to read my review of the Bachelier book, it is at http://www.riskbook.com/titles/davis_and_etheridge_(2006).htm

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