William Vickrey was an American economist who was born in Canada. He was known for coming up with unusual answers to everyday problems. Born at the beginning of the 20th century, he met orphans from the Armenian holocaust very early in his life. The event had a big impact on his young mind, and he felt like every dollar he spent on other things was a dollar he didn’t give to the orphans. He was a well-known post-Keynesian economist who went to Yale and then Columbia University for his education. He taught at Columbia University for the rest of his life. He didn’t care much about money, comfort, or even getting credit for himself. Instead, he cared more about spreading ideas and solving problems. When he got the Noble Prize, he was glad that it would be harder for government officials to turn down his ideas. He didn’t care much about the money that came with it. In fact, many of his ideas, like “congestion pricing,” were not taken up because they were too controversial. His work, on the other hand, had a big impact on other economists. His seminal work from 1961, on which the modern theory of auctions is based, is one example. He wrote a lot and left behind 8 books, 140 articles that were published, 27 reviews, and 61 articles and notes that were never published.
Early years and childhood
William Spencer Vickrey was born in Victoria, Canada, on June 21, 1914. Victoria is the capital of the province of British Columbia. Charles Vernon Vickrey, his father, was an American citizen, and Ada Eliza Spencer Vickrey, his mother, was Canadian.
Three months after he was born, his family moved to the United States, where his father became the executive secretary of Near East Relief, a charity that helps orphans of the Armenian Holocaust. He was the oldest child of his parents and ate breakfast with Armenian orphans.
At the age of 16, he graduated from high school in Scarsdale. He then went to Phillips Academy Andover, a school that prepares students for college and has both boarding and day students. He graduated from Phillips Academy Andover in 1931. He then went to Yale University, where he got his B.S. in mathematics in 1935.
In 1935, he went to Columbia University to study economics. In 1937, he got his M.A. He used to take the train to Harlem-125th Street station and then roller skate across town to get to the university from his home. His friends liked him even though they thought he was a bit strange.
William Vickrey ‘s Career
William Vickrey started his career in 1937 as a junior economist at the National Resources Planning Board in Washington. He worked there until 1938. In 1938, he also came up with the cumulative averaging method for figuring out how much income tax to pay. He called it his “proudest achievement” because it was a good idea.
In 1939, he got a job as a research assistant at the Twentieth Century Fund, where he worked on fair prices for public utilities, especially electric supply. His work during this time had effects that reached far and wide.
When the United States joined the Second World War, Vickrey had to do alternative services because he didn’t want to fight. During part of his time at the U.S. Treasury Department, he worked on an inheritance tax for Puerto Rico.
In 1946, he went to work as a lecturer in economics at Columbia University. Working with Carl Summer Shoup and Robert M. Haig, he wrote a thesis called “Agenda for Progressive Taxation” for his doctorate. In 1947, he got his Ph.D. in economics. It turned out to be his best-known work in the long run.
In 1948, he got a job at Columbia University as an assistant professor of economics. In 1950, he was given the title of Associate Professor. In 1949, he was put on the Shoup Mission, which was set up to come up with a full tax system for Japan after the war.
In 1949 and 1950, Vickrey and five other economists went to Japan with Vickrey’s research advisor, Carl Summer Shoup, and proposed a new tax structure that would make people more likely to follow the law on their own. The Japanese Diet passed its plan into law in 1950.
In 1951, he was chosen to be on the Mayor’s Committee on Management Survey, which looked into New York City’s transit fares. The next year, he suggested that fares should go up in high-traffic areas and at peak times, but go down in other places.
Since the tech wasn’t ready yet, it was turned down. Even the elected officials thought it was a bit of a risk. But he didn’t give up on the idea. Instead, he worked on it. He also kept teaching at Columbia University the whole time.
Vickrey got a full professorship at Columbia University in 1958. In 1959, he kept working on congestion pricing and gave a proposal to a Congressional Committee that had been set up to look into traffic jams. In it, he said that the traffic could be stopped with a user fee that is calculated electronically.
He said that each car should have a transponder so that traffic officials could keep track of when and how often it entered and left a busy area. The owner could then get a bill that was highest during peak hours and went down gradually after that. But once again, his idea was politely turned down.
Vickrey kept working on the problem of traffic jams even though his ideas were turned down over and over again. He also worked on the theory of auctions at the same time. In 1961, he wrote the most important paper on the subject. He came up with a new way to do things that later became the basis for more research.
In 1963, he wrote a paper for the American Economic Review called “Pricing in Urban and Suburban Transport.” It got the attention of the British government, which sent him to England to meet the Minister of Transport. Singapore and Hong Kong later put in systems that were the same.
Vickrey was chosen to be the Chairman of the Economics Department at Columbia University in 1964. He held this position until 1967. At the same time, he began to advise a number of countries on taxation, public utilities, transportation, and urban issues.
In 1971, he got a job at Columbia University as the McVickar Professor of Political Economy. During this decade, he suggested again to the Port Authority of New York and New Jersey that they charge more for crossing the Hudson River during rush hours, but he was again turned down.
Vickrey stopped being a professor at Columbia University in 1981. During this time, he was involved in a number of professional organizations and gave a lot of lectures.
In 1982, Columbia University named him Professor Emeritus. Even at this point, he was still a busy person on campus. He worked from a small office on the eighth floor of a building on Amsterdam Avenue and 118th Street, where he published a number of books and papers.
Since the 1980s, most of his work has been about how the government can stabilize the economy as a whole. He brought Keynesian theory back to life by supporting policies that guarantee full employment. He was very against what he called “the mania for budget-balancing” because it would make people less able to buy things and cause more people to lose their jobs.
Vickrey’s last big article may have been “Fifteen Fatal Fallacies of Financial Fundamentalism: A Disquisition on Demand-Side Economics,” which he wrote in September 1996. In this short article, he urged readers to be “free from the dogmas of the apostles of austerity.”
Works of note
“Agenda for Progressive Taxation,” which William Vickrey first wrote as his doctoral thesis, is what most people remember about him. It was turned into a book in 1972, and now it is known as an economic classic. In this book, he argued for an “optimal income tax” that is based on long-term earnings instead of annual income.
“Public Economics,” which is one of Vickrey’s best-known works, is another. The book, which came out on February 25, 1994, is a collection of his papers that were published in different journals. The selected articles are arranged in a way that makes sense, and the book gives an overview of his whole body of work.
Awards & Achievements
Vickrey shared the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1996 for his “fundamental contributions to the economic theory of incentives under asymmetric information.” Since he died of heart failure three days after his name was announced, his colleague C. Lowell Harriss got the award for him.
In 1967, the Econometric Society made him a Fellow. In 1978, the American Economic Association did the same. In 1996, the National Academy of Sciences did the same.
He was the leader of the American Economic Association in 1992.
In 1979, the University of Chicago gave him a degree of honor.
Personal History and Legacies
William Vickrey got married to Cecil Thompson in the year 1951. They lived in Hastings-on-Hudson, New York, and did not have any children. He followed the Quaker faith.
In October 1996, when his name was announced as the winner of that year’s Nobel Prize in economics, he became famous overnight. Not only did he have to take a lot of phone calls, but he also had to go to a lot of press conferences, TV and radio interviews, and champagne parties, which was hard on his health.
By October 11, 1996, he was back in his office and planning to meet with people in charge of city transit. At 11 o’clock at night, he left his office to go to another meeting. About 45 minutes later, he was found on the Hutchinson River Parkway in New York, slumped over the steering wheel of his car.
He was taken to St. Agnes Hospital, where he was declared dead. The autopsy showed that he had a slightly enlarged heart, and it looked like arrhythmia caused him to die suddenly. It’s possible that the stress of the last three days sped up the process. He was 82 years old at the time.
In his honor, a type of auction called a “Vickrey auction” has been named after him. He was the first academic to develop the idea.
Estimated Net worth
Even though New York City officials didn’t follow Vickrey’s plans for congestion pricing, electric, telephone, and airline companies later did. Later, London, Singapore, and Hong Kong also took some parts of the policy.