A Road Less Traveled - Brief Article - Obituary

Challenge, Jan, 2001 by Roger Spencer

The Institutionalist Walter Adams

Economist Walter Adams, who died in 1998, was a leading institutionalist at a time when his profession was evolving in a different direction. Fellow economist Roger Spencer traces the life of a man who bucked the trend to the benefit of us all.

THE Walter Adams story began in August 1922 in Vienna, Austria, and ended in September 1998 in East Lansing, Michigan. Most economist readers of Challenge probably knew of Adams, longtime professor of economics and president emeritus of Michigan State University, as our profession's most outspoken advocate of the vigorous application of the antitrust statutes, but some may not be aware of the breadth of his interests and influence. His writings appeared in six issues of Challenge between 1973 and 1992, and his picture graced the cover of the magazine twice, the last time in 1994.

As my friend and colleague on the economics faculty of Trinity University the last several years of his life, Walter taught and wrote with a zeal that belied his age. He published dozens of articles and five books (most with his close associate and former student, James Brock) from age sixty-four to his death at seventy-six. [1] His teaching was as enthusiastically received by his students during his last class in spring 1998 as it was in the years that led him to be named one of the top ten professors in the United States by Rolling Stone magazine.

As an institutionalist of sorts, he was well aware that, with the passage of time, events and policies were moving against him. [2] Academic journals now publish the kind of theoretical, highly mathematical articles that he--a case-study man--had little use for. The Nobel Prize has been awarded more for contributions to economic science than to political economy (in keeping with its official title of "Prize in Economic Sciences in Memory of Alfred Nobel") and perhaps even, as Barbara Bergmann wrote recently, in honor of theoreticians uncovering the obvious. In any event, the Nobel has generally ignored institutionalists. [3] Economic advice to politicians in rapidly changing or emerging countries has frequently been on a one-size-fits-all theoretical basis, rather than on an institutional basis. More painfully, the ever-growing number and size of corporate mergers suggest antitrust officials have neither heeded nor acted upon Adams' advice during the past two decades.

He was neither depressed nor discouraged by these trends. He reveled in a minority status that inspired even greater efforts to get his views across at an age when most of his contemporaries had retired. As he said at a 1990 conference in his honor, "To a certain extent intellectuals are always condemned to defeat ... there's something suspect about an intellectual on the winning side. ... And let me say to those who may have intended to make this conference my swan song that I am not yet through--that I plan to suffer many more defeats." [4]

His vigor in expressing his views against concentrated economic power sprang from his much earlier encounters with the concentration of political power. As a youth in his native Austria, he and his family were exposed to growing political pressures from Nazi supporters, leading to their eventual settlement in Brooklyn, New York. Later, as a twenty-two-year-old American combat infantry soldier, Adams witnessed at close range the effects of Hitler's absolute political power when he helped liberate three Nazi concentration camps in Germany and Austria.

Writing about his experiences decades later following a trip to the European battlefields, Adams said, "After seeing--firsthand-the ultimate in man's inhumanity to man, I vowed that for the rest of my life I would stand up and speak up against injustice. Looking back, I hope I have been true to that pledge." [5] Over the years, he supported in his personal life the disadvantaged and minorities with the same vigor that he supported small businesses and emerging enterprises in his professional life.

By greatly oversimplifying, one might characterize his economic policy views as (1) "Institutions matter," and, among economic institutions, (2) "Big is bad." These views flowed logically from his underlying belief, along with that of his mentor Henry Simons, in the cardinal principle of libertarianism that no leader, no government, no corporation, no person or group can be trusted with much power. Thus, because "Big (or powerful) is bad," he favored a decentralized power structure in the case of both political systems and economic systems. As with Jefferson, Adams believed that the structure of the system is more important than the individuals exercising the power. Thus, "Institutions matter."

He was satisfied that the American Founding Fathers had ably constructed a political system with sufficient checks and balances to ensure competition for power across the judicial-executive-legislative branches. His concern, in the context of political economy, was an economic system that might not ensure sufficient competition to preclude the emergence of too much economic power in too few hands. In Adams's view, the antitrust laws could serve to check such abuses of economic power, but only if strongly written and strongly enforced. He expressed doubts on both counts.