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Roger Noll

Roger Noll

Professor of Economics, Emeritus, Stanford University

By David Zierler, Director of the Caltech Heritage Project
June 1, 2022

DAVID ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Wednesday, June 1st, 2022. I am delighted to be here with Professor Roger Noll. Roger, it's great to be with you. Thank you for joining me today.

ROGER NOLL: My pleasure.

ZIERLER: To start, would you please tell me your title and institutional affiliation?

NOLL: I am a Professor Emeritus of Economics at Stanford University.

ZIERLER: When did you go Emeritus?

NOLL: When I turned 66, in 2006.

ZIERLER: What have you been doing in the interim? What kind of scholarship are you interested in?

NOLL: My life has changed very little between non-retirement and retirement. I failed retirement miserably. [laughs]

ZIERLER: What are you working on right now?

NOLL: Many things simultaneously. I'm working on a project about decarbonizing the California economy. One of my main interests is the economics of regulation. This is the combined activities of the Public Utilities Commission, the Energy Commission, and the Air Resources Board, to make a transition to a 100% electric economy based on renewable electricity generation. That's project number one, which I'm doing in collaboration with Bruce Cain, who used to be at Caltech and is now at Stanford. Project number two is I have an ongoing interest in the economics of intercollegiate sports. I was an expert witness for the plaintiffs in the antitrust case that was decided a year ago at the Supreme Court in which the NCAA's practices with regard to limiting scholarships were found to be an antitrust violation. One of my interests—I've written a couple articles about it in the last year—has to do with the future of intercollegiate sports in a world in which the NCAA no longer is setting uniform limits and caps on the compensation of athletes.

I also am working on a project on the end of cap and trade in California. Forty-some years ago at Caltech, we did a research project for the Air Resources Board and the South Coast Air Quality Management District which led to the adoption of Project RECLAIM by the South Coast Air Quality Management District, which was a cap and trade program for controlling smog. That program is being terminated as of January 1st of next year. Then it turns out that the cap and trade program statewide for greenhouse gas emissions is not dead yet but it's on life support at the Air Resources Board. One of my projects, which is just beginning, is to try to figure out the political economy, if you will, because they're not being killed because of poor performance; they're being killed for other reasons having to do with the politics of the incidence of cap and trade programs. I'm just beginning a project to try to figure that out. That's what I do on Monday, Tuesdays, and Wednesdays. Thursday I go fishing. [laughs]

ZIERLER: There's the retirement. You wouldn't fish on Thursdays otherwise.

NOLL: [laughs]

ZIERLER: Let's go all the way back. You're of course an alum of Caltech as well. Tell me about your education in math as an undergraduate, perhaps as an origin story for your later interest in economics.

NOLL: Interestingly enough, my story writ larger is why we have a social science program at Caltech. In my class, six out of the 200 graduates became professors of economics. The reason for it was that the discipline was undergoing a big transformation at the time I was an undergraduate, in the late 1950s, early 1960s.

ZIERLER: The discipline of math or economics?

NOLL: Economics. It was becoming much more mathematical-ized, both in terms of the use of mathematics to develop theory, and more importantly from my perspective, the use of statistics. The invention of the computer transformed the discipline of economics. Most undergraduates at the time I was an undergraduate were of course oblivious to this change, because the formal teaching of economics at the undergraduate level didn't have any of this in it. But being at Caltech, I managed to combine my major in mathematics with my classes in economics to begin to do things. A classmate of mine and I did, as a research project for one of the courses we took, an attempt to replicate a paper that got the Nobel Prize for Robert Solow in economics. We tried to replicate the results for countries other than the U.S. and found that we couldn't. There's this very Caltech-y notion that an undergraduate, a junior undergraduate, would go after a Nobel Prize winner. [laughs]

In any case, that was how it all happened. I was a math major, but I was also really interested in the real world. I took a lot of classes in social sciences and humanities, including everything that was offered in economics. I still didn't know what I wanted to do for graduate school. I applied in both mathematics and economics, and I ended up deciding at the last possible moment that I was going to go into economics instead of mathematics. I had first said, "I'm going to let my admissions decide" and then I got admitted to all the same schools in both. Then I said, "Well, I'll let the fellowship money decide" and then I got the same fellowship everywhere. [laughs] So I actually had to eventually pick, and I picked economics.

ZIERLER: If we can zoom out on the undergraduate curriculum—we all know on the humanities side, that goes back to Caltech's origins. Millikan and Hale and Noyes wanted Caltech undergraduates to be worldly and to take classes in history, literature, and things like that. How developed was social sciences at Caltech when you were an undergraduate? Who was teaching those kinds of courses?

NOLL: Actually in the lingo of Caltech, in lengua Caltecha, humanities included social sciences. When you go back to origins—when people like Noyes and Hale and Millikan used the word "humanities," they meant to include social sciences, so right from the beginning, there were people on the Caltech faculty who were actually quite distinguished social scientists. One of them was William Bennett Monroe, who became President of the American Political Science Association. A distinguished historian at the boundary of humanities and social sciences was Wallace Sterling, who became President of Stanford. A well-known economist was Ray Untereiner, who became Chair of the California Public Utilities Commission.

Right from the beginning, when Throop made the transition to Caltech, the school's leaders had the same basic idea for social sciences as for humanities. What then happened was that sfter World War II, the vision became much more to emphasize teaching and stopped being to have humanities faculty at the level of distinction of a William Bennett Monroe. By the time I got to Caltech, there was essentially no one doing research in social sciences and few in humanities. Instead, Caltech hired people who were expected to be primarily teachers.

ZIERLER: Let's go back to the person who became Stanford president.

NOLL: William Bennett Monroe was a distinguished political scientist. He was a nationally renowned scholar. There were several people of that stature in the humanities and social sciences at Caltech in the 1930s. By the time I arrived, they had been replaced by people who you would expect to be on the faculty at Occidental College. They were not research scholars. They were primarily teachers. They were not people who were known outside of Caltech with a couple of exceptions, like Rod Paul, a distinguished historian of the American West, and Hallett Smith, a distinguished Shakespeare scholar. But for the most part, the faculty in the Division were essentially people who had not pursued a research career. The big transformation that occurred during the period you're mainly focusing on was the change of the name of the division and the creation of the undergraduate majors in humanities and social sciences and the graduate program in social science. These changes were all an attempt to go back to what it was in the 1920s and 1930s, which was that the people who were in the Division were expected to be distinguished scholars, just like the scientists and engineers.

ZIERLER: Do you have a sense of why the program went into some period of decline from the origins of Caltech? It would seem counterintuitive. In other words, if it was the founders who considered social science to be part of the humanities, you would expect that that would not have attracted top-tier talent to Caltech at that point.

NOLL: Yes, and obviously, it wouldn't attract everybody, but it wouldn't exclude everybody, either. It was always difficult to find people who were distinguished in humanities and social scientists who would want to be in the Caltech environment. On the other hand, there were attractions. There were reasons to want to be here. One is the incredibly low teaching load. Not only did you teach fewer classes than you would teach at other schools, but the enrollment in your classes would be much smaller, so teaching was a much better experience. The students were extremely good and, despite Caltech's STEM orientation, many were genuinely interested in humanities and social science. Consequently, teaching was a better experience here than almost anywhere else you could go.

Secondly, for humanities scholars, there was the Huntington, which is one of the great treasures in the universe. To me, I would put the shoe on the other foot. I would say, "Why did it take so long for Caltech to start taking advantage of the fact it's walking distance from the Huntington?" Now, they do, but until I became division chair, people didn't even attempt to have the scholars at the Huntington be on the Caltech faculty. It was a weird phenomenon. It was such an obvious thing to do, because the Huntington Library is the equivalent of having LIGO and all the other huge laboratory facilities at Caltech. It's an incredible attraction to people who are in the right parts of the humanities.

I can't give you a good explanation for why we went through this hiatus, but it definitely was there. I've read some of the oral histories of faculty in humanities who were the downtrodden, the people who were disrupted by the revolution that took place, and their complaint is completely valid. They were hired to do job A, and in mid-career, it switched to job B, and they felt done-in and mistreated, and I understand that.

ZIERLER: When you were an undergraduate, was there anything about the math curriculum itself that pulled you into an interest in economics, or was that mostly coming from you?

NOLL: It came from me, but in a broader sense. Remember, go back to what I said: my class was full of people who became economists. [laughs] It was not only people who became economists, but other people who responded positively to the possibility of making use of mathematical methods and computer technology om the social sciences. It was something we talked about. It was in the water. As I said before, I did projects with my classmates, and we would teach each other, because the faculty didn't know what we were doing. They encouraged us, and they were happy that we were doing it, and even to play role reversal and let us explain to them what the math we were using was all about.

I remember when I was a senior and I had decided I was going to graduate school, I went to one of the Caltech faculty in economics and said, "What should I be doing to—I feel somewhat unprepared for graduate school in economics," given the limited courses I had. He fished around. He hadn't been to graduate school for 15 years. He got some information about what was going on, and had me read the classic book by Paul Samuelson called Foundations of Economic Analysis, which is basically the bible for the introduction of mathematics into economic theory. We read it together. I think I taught him more than he taught me, because he didn't know the math, and I had to teach it to him, for him to be able to understand the book, because the book is basically mathematics. It was a strange phenomenon to be in that situation, but it was only possible because of that strange moment of time that social science was undergoing, right at the beginning of this transition to mathematization, which many people—both on the science part of the Caltech faculty and in the divisional faculty (the people who were already there), many strongly resisted this mathematization. Some of them still don't like it. But the point is, in the Caltech environment, dealing with the kind of kids you have as Caltech undergraduates, it was just great. You could retain your technical skills, make practical use of your technical skills, and at the same time be interested in something about policy, or about how the real world operates, how businesses operate, how the political system works. You didn't have to pick one or the other. To us, that was just wonderful. We had a great time doing that.

ZIERLER: You obviously had to make that choice, as you said, between math and economics. The fellowships, the admissions wouldn't do that for you. Why ultimately economics? Why ultimately Harvard?

NOLL: Well, the Harvard part is the easiest, because at the time, it was clearly number one. The only thing even close to it was MIT. The reason I picked Harvard over MIT is I had already been to Caltech, and MIT would be like going to Caltech some more. [laughs] I went to Harvard simply because it wasn't Caltech. At that time, essentially those were the only choices. If you were a top student, that's where you wanted to go. With regard to why economics, it was just that I asked myself, "What are the things you have done in the last two years as an undergraduate that gave you the biggest thrill?" It was doing projects in social sciences. Not just economics; psychology and political science as well. It was this feeling of being on the frontier of a transformation of how social science is done.

ZIERLER: What were some of the big ideas in economics at Harvard at the time you became a grad student there?

NOLL: There were two things going on simultaneously. I'll emphasize the methodological first, because that was by far the most important—that the core courses that all students take were in the process of making this transformation from using mainly words and graphs to using mathematics and formal statistics. The core micro theory course, the core macro theory course, and the year of econometrics were all about taking advantage of a new skill set that had only recently penetrated economics.

The reason that econometrics was in an especially rapid transition was that until the late 1950s it was almost impossible to do sophisticated statistics. You couldn't build statistical models on big datasets like the kind the Census Bureau has, or something like that. It would take forever. In my first year of graduate school, we were not given access to the Harvard Computer Center. We had to do our homework problems in econometrics on calculators. Not the kind we have today; they looked like gigantic adding machines. It would take hours to do something very simple.

As an undergraduate at Caltech, I was given access to the Caltech computer system, and the work that I did with my friend, on applying the Solow growth model to European countries, instead of taking three days to run a regression, it would take an hour. [laughs] I knew what was going on, and I knew that the constraints I was facing at Harvard were artificial, owing to the fact that it was Harvard and they were not yet treating their students right. That's part one, the methodological transformation.

In terms of what the issues of the day were, the big issues for me were first of all, what are the origins of modern economic growth, which had its manifestation both in economic history and in economic development. Two of the fields that I specialized in as a graduate student at Harvard were economic development and economic history, because I was interested in the origins of economic growth. Again, that relates to the Solow article on the sources of economic growth in the United States. That research was all undergoing a massive change in the few years after I got out of undergraduate school, so it was really of interest to me. Then the second major issue, which is related but I was not a party to it because I wasn't terribly interested in it, was the whole idea of forecasting. The idea that you could build forecasting models, forecast the economy with enough reliability in the next two years so you could actually do monetary and fiscal policy the way it was suggested in Keynesian economics. In order to have monetary and fiscal policy that is countercyclical, you had to be able to predict the cycles, and that was essentially impossible until the 1960s, because it required computer analysis of data. Now, that was a hot topic. I wasn't part of it because I decided I wasn't particularly interested in macro, but that occupied a significant fraction of my colleagues at Harvard.

ZIERLER: Your time at Harvard was on the early side of the 1960s and all of the political tumult, but were you politically conscious? Were you politically engaged? Did that influence the kind of scholarship you wanted to pursue in graduate school?

NOLL: No. It should have, but it didn't. When I was at Harvard, the big issue was the war in Vietnam. I was very much involved in the student side, protesting the war in Vietnam and the draft. I was aware of that. Then of course, in addition to that the Civil Rights Movement was going on, which brought attention to distributional issues. Again, interested and supportive, but I didn't connect it to my own research at the time.

I finished my dissertation while at Caltech for a strange reason, which is this faculty member that I was telling you about, where we worked together through Samuelson's Foundation, died of a massive heart attack in the Spring of 1965 when I was just finishing my third year of graduate school. Alan Sweezy called me up and said, "As an emergency measure, could you come and replace him and teach classes next year? Because it's too late in the year for us to replace him with anybody good." I agreed to do it, partly because my dissertation adviser was going to be on leave at Berkeley, so I came without my dissertation being finished. As I was finishing my dissertation in that next year, which was highly mathematical and theoretical, I realized that that wasn't why I had become an economist [laughs], to prove more theorems. That would have been the natural thing to do if I was a mathematics student, but I had let the fact that I had an advantage over most of my fellow students in mathematics drive my research program.

What I did in the Fall of 1966 was contact a faculty member at Harvard for whom I had been a teaching assistant, who by that time was now at the President's Council of Economic Advisors working for Lyndon Johnson, and said, "Would you hire me to be a staff member, because I really want to make a transformation where I'm not a theorist; I'm doing empirical policy work." He brought me to D.C. as a staff member at the Council of Economic Advisors. That's where all of my current research interests come from, the year and a half that I spent in the White House in Washington.

ZIERLER: How mathematical was your thesis retrospectively? In other words, looking back, was it as mathematical as it should have been?

NOLL: Yes, it was the appropriate level of mathematics for the topic at hand. What my dissertation was about was economic applications of some techniques in operations research mathematics that are closely related to, but not the same as, linear and non-linear programming. It's essentially optimization models applied to such things as the design of military weapons systems and large-scale complicated projects where there's a lot of uncertainty about how long and how expensive each component of the task is likely to be, and what is the right way to manage such a program in a flexible way so that as you progress, the differential luck and rates of progress cause you to reallocate your resources in an optimal way. That was what my dissertation was about. Whereas there were some examples in it of applications, it was basically mathematics. It was never problematic that I'd get my degree, but when I was done with it, I thought, "Meh, why did I spend two years of my life doing this?"

ZIERLER: When you came to Caltech initially in 1965, it was as an instructor? It was not tenure track?

NOLL: No, and my intention was that I was not going to stay there. It was prior to my making any decision about what I was going to do as a career. Indeed, meanwhile, back at the ranch, during my entire graduate school period, I was also working at Honeywell as a computer programmer. I was working on a project to develop the Fortran—if you remember Fortran—the Fortran compiler for Honeywell computer's competitor to the IBM System 360. I was one of 25 people working on this Fortran compiler as a part-time job while I was a graduate student. At that time, a perfectly plausible outcome for me would have been to go into the computer industry as a coder. I never had a strong, specific occupational goal. I was mainly just doing things I liked to do, and would then get rewarded for. That's why I didn't really know what I was going to do.

When I came to Caltech to do teaching, my expectation was that I'd finish my dissertation and then I'd decide what I was going to do, based on what the job market told me I should do. I would keep open all my options. Then the explanation for the going to Washington to work at the CEA was that was another educational experience that would determine my career. I didn't really think that I would necessarily come back to Caltech. I knew I had that option, because they wanted me to come back, but while I was there, I did the normal job market thing. I interviewed at other schools, and looked around at what my possibilities were, looked around at the possibility of staying in government, maintained contact with my group at Honeywell. All these options were still there. It wasn't until pretty much near the end of my period in D.C. that I decided to come back to Caltech.

ZIERLER: As an instructor, the initial appointment, what you were saying earlier about as an undergraduate, the faculty in social science, they were primarily teaching faculty, was that a retrospective observation? Did you understand that in sharper focus when you were there as an instructor from 1965 to 1967?

NOLL: Oh, I understood that completely, but they knew that I wasn't that way. In particular, my main mentor, who's Alan Sweezy, wasn't that way. Alan wasn't at the very top of the profession, but he was a good, solid economist. When he was still in the academic mainstream, he was a macro economist. Then he got interested in population issues, and he became a leader in that field, sort of internationally recognized, a leader of Planned Parenthood and someone who did research on population and environment and resources and all that. He knew that I was going to be more like that, more like him, than like the normal faculty member. When I was brought back to teach, the decision had already been made to have an economics major. That meant having people there who could teach it in the modern, contemporary way. When I was brought in, it was in part that I was going to teach introductory economics, which was one of the courses that was taught by Mel Brockie, the guy that I replaced, but I was also going to, for the first time, teach undergraduate microeconomic theory and econometrics the way I had been taught it at graduate school, which is with math. That's the first time that math was actually used in undergraduate economics classes at Caltech.

ZIERLER: Roger, what did you do at the CEA? What were your projects?

NOLL: When I arrived, I didn't know what I was supposed to do. I sort of was given all the things that nobody else was interested in. [laughs] The range of my assignments was almost like dying and going to heaven. One of the areas was anything having to do with antitrust and regulation, public policies towards business. Not only was there no staff person who had any background or interest in that area; none of the three members of the Council of Economic Advisors had that as an interest. They were all macroeconomists. Anything having to do with regulatory policy was mine, you dealt with me, and then if you wanted to go around me, you had to go all the way to the White House. You had to go to the president! [laughs] That was one area. Another one was education policy. There was nobody interested in that, so I did that. A third one was income maintenance, welfare, social security, all that. Now, that's a pretty big hunk of what the government does, those three things.

Right off the top, I remember the day I arrived to check in and went to say hello to the person I was going to be working for, Jim Dusenberry from Harvard. He said, "Well, you're just in time. We have a crisis." He says (as close as I can recall): "I have no way of knowing how to deal with this, and I need you to figure it out for me. The railroad unions are about to go on strike, and both the unions and the railroads have asked the White House to enjoin the strike through the Taft-Hartley Act. The question we have—and we assume the answer is, like everybody before us for the past 20 years—we should enjoin the strike, invoke the Taft-Hartley Act. But just to be sure, check it out, and by the end of the day, come to us with a recommendation."

Here I am; I didn't even know what the Taft-Hartley Act was! [laughs] I didn't even know the President had the power to enjoin a strike. I just started calling people, and I learned a magic secret code—"This is from the White House." [laughs] When you call someone in the government, that gets their attention. [laughs] By the end of the day, I went into his office and I said, "I am not done yet. Give me another day, because I think the right answer to the question is we shouldn't do it. Just let them strike." I gathered a bunch of information. By the end of the second day, I had something concrete, which is literally nothing—because of stockpiles and inventories, the very first thing that's going to happen that's bad, in a strike, is in 26 days, the City of Cincinnati is going to run out of chlorine for its water system. [laughs] That's how specific it was. So I said, "Let them strike, and then invoke it 20 days into it." I went to the White House with my friend, who I had TA'd for, and went to the chief of staff, Joe Califano, and we made the case to him. He said, "This is fascinating." Then we made the case to the President, and he said, "This is fascinating." He says, "Yeah, let's just not invoke it." He issued a press release that "It's time that labor and management, the rail industry, should grow up and learn how to solve their own problems. They don't need the help of the President. Go ahead and strike if you want." Well, the next day, they settled. Both of them were just shocked that the federal government wasn't going to give them a mandatory arbitrated outcome, that they actually would have to decide things on their own. It worked. It was a great success. [laughs] That was my first job, first two days on the job.

ZIERLER: Looking back, what do you think this experience had in your approach to scholarship? How did it change the kinds of things you wanted to work on?

NOLL: I knew what my interests were; I didn't know how to formulate a good policy question. The year and a half I spent at the Council of Economic Advisors taught me that. Because the first four or five publications I had—remember I received my PhD two weeks before I showed up at the Council of Economic Advisors. My career fork at that moment was, shall I polish off two or three chapters of my dissertation for articles in theory journals, or shall I just completely change and start over? I picked the "start over" branch. The first three or four articles I published were research papers driven by a policy topic. The skill that I learned and that affected the rest of my career was knowing how to identify a policy problem that real-world people were facing that had a researchable issue at its core, and how to connect the design of a research program to something useful to make a policy decision. That skill was what I learned from a whole sequence of projects that included the railroad strike. They included the design of the Public Broadcasting System. They included the attempt to bring the negative income tax into the welfare system, which eventually did happen in a truncated way in the earned income tax credit. It came through the beginning of deregulation in telecommunications and rails and trucks and all that. All those issues were on the table as policy issues in the White House at the time I was at the CEA, and I was fortunate enough that I was assigned to be the CEA person who did those things. Each one of those topics then generated a research question that I could attack as a staff member but that also was crucial to the design of the policy.

ZIERLER: Coming back to Caltech, joining the faculty as a tenure-track professor, did you know at the outset that you would have a larger program in front of you? In other words, not just your own career but building up the program at Caltech as you wanted to see it happen?

NOLL: I knew that there was going to be such an attempt. It was not known at the time what it would look like, and there were multiple ways it could have gone. There was a competition among various groups as to how it would go.

ZIERLER: But everybody agreed that it had to go someplace?

NOLL: Yeah, by the time I returned from the Council of Economic Advisors, the die had been cast. Once you decide you're going to have a PhD program, you have to have a research program.

ZIERLER: What insight did you have on that decision given that you were not part of it? How did that happen?

NOLL: It's not quite true I wasn't part of it. I certainly wasn't in any way a decider, I didn't have a vote, but I was asked about it. I knew it was going to happen before I left. That is to say, the second year I spent as an instructor was the first year of the great debate of what form it would take, and we began to interview people for faculty appointments. It wasn't viable in the long run that there would be exactly one person on the faculty who could teach a modern economic theory course or a modern statistics course, so we knew we had to hire people who could teach theory, who could teach econometrics, and who could teach some of the applied microeconomics field.

The issue that was just beginning to be enjoined then was who these people would be and what their interests would be. In that second year as an instructor, several people that I knew were invited to come and give talks at Caltech and to talk to faculty about where they thought we should go. When I then left to go to the CEA, that continued for another couple of years, and by the time I came back, it was still not obvious what it was going to be, and in particular, how the elimination of macroeconomics and the infusion of political science into the core curriculum of the graduate program would be accomplished. All but one of the first hires in political science were done in the early 1970s, and I came back from the CEA in January of 1969.

ZIERLER: Roger, the timing, the decision to have PhDs in economics predates the creation of HSS?

NOLL: The change in the name came about as a result of the decision to have degrees, both undergraduate and graduate, in social science. In other words, the argument, contrary to a lot of stuff that people say, if you were actually at the meeting [laughs] when the name change happened, the reason for it was simple—if we change the name to Humanities and Social Science, it's going to be a lot easier to recruit social scientists, because they don't regard themselves as humanists. Even though in the Caltech lexicon, humanities includes social science, in the larger world it doesn't, and it's going to be easier for us to become a visible player in political economy, which was what we had decided to do, if the name is different.

ZIERLER: A question I'm always interested in—in making this decision to have a PhD program for social sciences, why not for humanities also?

NOLL: The humanists didn't lobby for it. I agree with you, it's a strange choice, because again with the Huntington, having a doctoral program in a humanities discipline that was closely related to the Huntington's collections made evident good sense. But the argument against it was that you're never going to have a big enough faculty, because the number of things you would need to teach is just too great. I, to this day, don't know how valid that is. I think it's probably valid for literature, but it's not clear it's valid for history, because the social sciences part has had a sequence of graduate students who earned PhDs who do economic and political history. Why there couldn't have been a social history component as well, I don't know. It seems to me it was that the argument for a history graduate program is equally good as the argument for a social sciences graduate program.

ZIERLER: I would have thought that the case that would have been made at the time is that social science is science, and so therefore a place like Caltech should have graduate students in social science, just like it does in biology and chemistry and physics.

NOLL: Interestingly enough [laughs] nobody put it that way. That wasn't the argument at the time.

ZIERLER: Fascinating.

NOLL: The argument at the time was, there's this thing out there called deductive logic, which is the foundation for research no matter what the topic is. C.P. Snow was not a popular person in the Division in the 1960s. [laughs] The notion of two cultures—there's a science-y way to do things and a humanities way to do things—was not at the forefront of the debate because most of the people in the Division didn't agree with that.

ZIERLER: When you get back to Caltech from Washington, who's driving these discussions? Where are they happening?

NOLL: This was right in the middle of a jockeying for position among—there were a bunch of things going on simultaneously. The topical orientation—one of them was what actually happened, which is interdisciplinary work in social science that has a policy orientation but that is methodologically rigorous. That's the one that eventually won. But I didn't think in 1969, 1970, that was the likely winner, even though that was my preference. One of the reasons I went to Brookings and didn't come back for three years is I didn't think that my way of doing things was actually going to win. Another one was national security issues. Indeed, when Harold Brown became president of Caltech, I pretty much thought that would be the winner. [laughs] At that time, again, the RAND Corporation connection through Burt Klein was really important, because the RAND Corporation was the center of the universe in McNamara-style national security analysis.

ZIERLER: That had not been discredited at that point, at least at Caltech?

NOLL: No. The issue of the analytics of deterrence and national security and arms control and all that, that was probably the leading candidate, circa 1970, to be the winner.

ZIERLER: What was the paper trail? Once these decisions were made, how does the process of creating HSS get formalized? Is there a white paper? Is there a faculty vote? What does it look like?

NOLL: The Division was highly undemocratic. Hallett Smith ran the Division, as division chair. When Bob Huttenback replaced him, he loosened it somewhat and democratized it somewhat, but it was only going from a dictatorship to an oligarchy. [laughs] It didn't become a democracy until later. [laughs] This is consistent with the history of Caltech. You didn't have a committee decide to build the 100-inch telescope on Mount Wilson; you had George Ellery Hale decide that. [laughs] Millikan decided the physics agenda. [laughs] So it's not surprising that's the way things were done, because governance at Caltech was very hierarchical in the early years of its history, and the Division was similar. What would happen is you'd show up to work one day and there would be a new faculty member. Like when Burt Klein was hired, I didn't find out about it until after he had agreed to come. Likewise, when Lance Davis was hired, I didn't find out about it until after he had agreed to come. There was no consultation, nothing. It's just that the division chair decided he'd hire somebody. One of the major transformations that occurred, when Huttenback replaced Hallett Smith, was to change the appointment process into the kind of process that is used at peer institutions, where you have committees, they review multiple candidates, they write a report, they ask for outside recommendations or letters of evaluation where they compare candidates, and you do that outside of the knowledge and input of the person you're recruiting. You don't evaluate just one person; you have a list of finalists, and you compare them, and you ask other people. That whole process of how you do appointments was invented at Caltech in the early 1970s. It wasn't used until then. That's why I was hired myself, is Alan Sweezy goes to Hallett and says, "Well, Mel Brockie is dead, let's get Roger to come back and teach these courses." There was no formal review or anything.

That's why it was always so much in doubt, what was going to happen. You had this policy-oriented methodologically strong social sciences thing that it actually became. But in the running were national security, population and the environment, and science policy. So you had magical people appear. An example was John Holdren, the distinguished science policy scholar, who just appeared and was on the faculty one day. [laughs] There was another one that had to do with development economics, the main leader of which was Bob Oliver. So, I didn't know, as a 20-something fresh PhD, what was going on. I just knew that this debate was going on about what the future should be. Actually initially Bob Huttenback was part of the developing countries orientation. I remember the year before I went to the Council of Economic Advisors, we had a yearlong seminar where everybody was asked to participate in essentially a yearlong seminar series on how to stop poor countries from being poor. I participated by giving a two-hour presentation on the role of agricultural reform in economic development.

ZIERLER: In making this decision, what was the response of the administration—the provost, the president, the Board of Trustees? How did they react to these developments?

NOLL: It depends completely on who the president was. The relevant presidents for this history are DuBridge, Harold Brown and Murph Goldberger. You couldn't ask for three more different people. I think DuBridge had no clue what we were doing or why we were doing it. He essentially just trusted that his provost, Bob Bacher, would just tell him what to do that would work. Bacher, likewise, had no clue, except for the fact he as a scientist had been deeply involved in policy, so he was amenable to these policy-oriented themes, but I had no idea which—I suspected he would prefer the national security one, because that's where his background was, but I didn't know that for sure.

ZIERLER: Did you engage Bacher at all in his policy work? Did you learn about what he had done earlier in his career?

NOLL: Oh, yeah. Have you gotten into this?

ZIERLER: A little bit, but I'm curious what conversations you might have had with him.

NOLL: Oh, very little. Maybe twice, we had a five-minute conversation about it. It was all positive; he was just giving his input, and talking to me, and asking questions, and that kind of stuff. It was very informal and it had no obvious end point. They were just conversations.

ZIERLER: What about the Board of Trustees? Any insight into how they felt about this development?

NOLL: Only later. I didn't have any significant contact with the trustees at this time. I didn't have any significant contact with the trustees until I came back from Brookings.

ZIERLER: What about other divisions? In other words, today, if it's so normal on campus for there to be collaborations between the economists and the neuroscientists, was that part of it as well? Were there interdisciplinary collaborations that were already bubbling up at that point?

NOLL: Especially in the environment area. My first two graduate students at Caltech were actually students in environmental engineering. They were in basically the civil engineering department in the School of Engineering. One of the advantages at Caltech is its complete lack of formal organization. I didn't have any graduate students in economics, but I had graduate students in engineering. My collaborator for my very first paper in the American Economic Review was at the time a graduate student in civil engineering who was one of my PhD students. I didn't know it then, because I wasn't experienced enough, but that was a unique feature of Caltech. It certainly would never have been the case at Stanford that, as a junior faculty member [laughs] in economics, I would have graduate students in the Civil Engineering department. It just wouldn't happen at Stanford.

ZIERLER: How did these developments affect your own research? What were you working on at this time, and how did you benefit by having the creation of HHS?

NOLL: As I said before, I had a number of things that I did as a consequence of being at the CEA, one of which was involvement in income distribution issues. In that context, a couple of the first papers I wrote were on rural-urban migration and north-south/south-north migration in the U.S.—did it make people better or worse?. That caused me in the economics profession initially to be thought of as an urban economist because I was doing research about how cities develop and how the distribution of the employment differs from the distribution of residency in metropolitan areas and how that's affected by policies like highway policies and all that kind of stuff. The first couple of papers I wrote were on that topic, and it came directly out of a presidential task force that I was working on when I was at the CEA. That basically never had any further Caltech implications.

But the one that had the Caltech implication, and it's still having implications actually, was the design of the Public Broadcasting System. I was on the committee that set up the Corporation for Public Broadcasting. The act that created the Corporation for Public Broadcasting was passed during the Johnson Administration when I was at the CEA, and I was put on a five-person committee to organize what became CPB and PBS. There's an appendix to our report about how one decides what the program content would be on a public broadcasting system, given that you want it to be a major player in public information. You want it to do news programs and documentaries. But you don't want that to become politicized, so how do you design a program selection process that will make it immunized against political interference? Well, that task force report proposed the outlines of a decentralized mechanism for picking programming content, where the stations would make collective-choice decisions, sort of like political decisions, in a decentralized fashion, about what the programs would be. That eventually became something called the Station Program Cooperative in public broadcasting. Which means that when a member of Congress doesn't like a program, he doesn't have anybody to call [laughs] who could actually change it, because it was selected by 155 program managers of the PBS system, operating in a computer-driven program selection process.

Likewise, the whole idea of emissions trading that we talked about earlier—again, it's how you design a market-like mechanism, a collective choice institution, to achieve a policy objective in a decentralized fashion. That became the whole idea of market design, which is now a field in economics. It wasn't a field in economics in 1970. It is what a lot of the experimental work at Caltech has been about. A lot of Charlie Plott's work is about market design. When Vernon Smith was at Caltech, he essentially won the Nobel Prize for his market design work about treasury options, using experimental methods to test ways of organizing actions. So, that part really did become a big component of what the social science program at Caltech was all about.

ZIERLER: When you were at Brookings, what was your status at Caltech? Were you on leave? Were you dual-hatted? How did that work?

NOLL: I was on leave the first year and then I quit, I resigned, because I decided to stay at Brookings permanently. Then I was brought back—remember I said it was all up for grabs? When Caltech hired two people that I had recruited in political science and who I thought were not going to get jobs there, then I agreed to come back. They was John Ferejohn and Mo Fiorina.

ZIERLER: Did you enjoy your time at Brookings? Was that intellectually stimulating?

NOLL: Oh I loved Brookings. I still love Brookings. Brookings is not like it was then.

ZIERLER: What does that mean? What was it like then? How is it different now?

NOLL: The main difference now is that due to the nature of the financing of research, Brookings is much less wealthy as an institution, and as a result, they don't have the caliber of staff, top to bottom, that they did when I was there. That is to say, if Brookings had been academic departments in economics and political science, they would have ranked in the top ten nationally. That's not true now. It would probably be 25th or 30th now. But at the time, some of the genuine superstars in economics whose work is especially plugged into policymaking were on the staff at Brookings. That's what made it attractive. It was like being in a top department except that everyone around you is interested in policy applications. Whereas at that time, if you had gone to MIT or Harvard or Chicago, most of the faculty would have been writing for their colleague, not writing to inform policy decisions.

ZIERLER: As a potential permanent career move as you saw it at the time, were you okay with not having students, not teaching, shedding that area of your professional responsibilities?

NOLL: No. By the time I came back, there was a PhD program. When I came back, it was to interact with the first cohort of PhD students. No, one of the reasons I resigned was I didn't think that was going to happen.

ZIERLER: You're not the person to ask, obviously, but I wonder if luring you back was one of the tipping points, the causes for creating the PhD program.

NOLL: Oh, I don't think so, no. I think it was going to succeed. I think the crucial decisions were basically hiring Ferejohn and Fiorina. I think that was the crucial decision that guaranteed that Caltech was going to succeed. At the time, it wasn't obvious, because political science was undergoing the same transformation in the 1970s that economics went through in the 1950s. It was just the very beginning of formalization and rigor in political science research. Mo and John were in the first generation of people who did that. When Caltech hired them, it had committed itself to this radical transformation of political science that had just begun. At the time, it was highly controversial. People at the leading political science departments thought we were crazy. It's strange looking back on all the members of the National Academy of Sciences in political science who were at Caltech in the 1970s. Those people were not offered jobs at the top universities, because it was not regarded as the mainstream of political science. Today, someone of the caliber of Ferejohn and Fiorina would be offered a job at every department in the country, but at that time, there wasn't much competition for them. The University of Rochester and Carnegie Mellon were the only research universities that were hiring people like that. Of course, we could compete easily against them.

So, I think that was the crucial hire. It was necessary to be able to hire Dave Grether and Jim Quirk and people who would teach core theory and econometrics. Certainly hiring Charlie Plott, and even though he never came permanently, having Vernon Smith hang around a lot—he was there half the time for several years—that created this experimental base which turned out to be extremely important, because again, like the political science story, it was regarded as a strange, unpromising part of economics at the time these people came, but 20 years later, it's generating Nobel Prizes. I regard those as all being tied together—that putting money in experimental methods when nobody thought it was going to matter, putting money into formalization and rigor in political science when nobody thought that was going to matter, and emphasizing that the whole point of the rigor is to solve real-world problems, they were all part of the same package. It was the success in hiring people to do that, and to create a critical mass of people who did it, that made it successful.

ZIERLER: Your first three major book projects were all published by Brookings. Was that part of the deal? Were you supposed to publish with Brookings while you were there?

NOLL: The basic rule of thumb at Brookings is a book every two years.

ZIERLER: With Brookings Press? That's the deal?

NOLL: Oh, yeah. Your job is to generate a book every two years for the Brookings Press.

ZIERLER: Were you more productive there, do you think, than you would have been had you just stayed on the faculty at Caltech?

NOLL: It would have been different. Let's go back to your three books. One of them was Economic Aspects of Television Regulation. That made me a player in the field of regulation.

ZIERLER: More than Reforming Regulation?

NOLL: Yes, much more so. That was a project that grew out of being at the Council of Economic Advisors, being involved in the creation of the Public Broadcasting System. By the time that I left, the member in charge of that part of the Council of Economic Advisors' Portfolio was Joe Peck, who was a coauthor on this book. We decided, while I was at the CEA, that we were going to write that book. That is classic CEA mainstream economics. Caltech had nothing to do with that! [laughs] I would have done it no matter what—Brookings, Caltech, Mars. [laughs]

Now, Reforming Regulation is a classic Brookings tale. I get a phone call from the President of Brookings saying, "The Presidential Task Force on Regulatory Reform is issuing a report. You have been hired to be in charge of the regulation program at Brookings. Why don't you organize a conference based on this report?" I said, "Okay," and I organized a conference. When the report actually came out, I thought it was completely crazy, and so I wrote what became this small book—it was called a staff paper; it was about 120 pages long or something like that—basically criticizing it, for missing the boat. But that was purely Brookings. I never would have done that in a million years had I not been at Brookings, because it was a response to a short-term salient political issue that would never have happened at Caltech or any other university. The only reason it hit home to me was that it was right at the nexus of this thing we were talking about before vis-a-vis Caltech—the intersection between economics and political science and policy. It was dealt to my natural interest and strength.

Then the third one was the book on sports, which by far is the most citations, because of the nature of sports in society. That came about simply because very soon after arriving at Brookings, I got a phone call from a staff guy in the Senate saying that the two competing professional basketball leagues had asked for an antitrust exemption to allow them to merge, and would I help them organize some hearings on that. After going through the hearings—organizing the hearings—I then went to Brookings and said, "This is a field that is really potentially interesting, and I want to have a conference about it, and here are the people I'm going to invite, but I need money to be able to pay them to write the papers and to hold the conference." Again, that was classic Brookings. I probably never would have done it had it not been for the phone call from a Senate staffer saying, "Help us organize some hearings." On the other hand, I had to get interested in it, as well, so it played to an interest I had, which is the role of competition in the economy and the dislike for cartels.

ZIERLER: Given the fact that there were so many things that were happening at Caltech when you got back, what aspects do you feel were already completed, and where was there still building mode? Where was there opportunity for you to contribute to what was happening in these formative years?

NOLL: I organized a fairly large fraction of the research program for the first years after I came back. There weren't very many faculty, and a lot of them were junior. Because of my Washington experience, I, better than anybody else on the faculty, could tap into the policy-oriented research programs being financed by the federal government. At the time, the National Science Foundation had a program called Research Applied to National Needs, which almost nobody knew about except me. I was able to get some large grants—multiple hundreds of thousands of dollars in 1970 dollars—each one of which supported four or five graduate students. The bookends for that, the first one was something about policies to encourage technological change and the last one was the one about designing the air pollution market for Los Angeles. There were two or three in between. Maybe half to two-thirds of the graduate students during the first five years I was there were being paid out of my grants. I think that's the main way that I influenced how the program developed, was that simply I was the one dealing with so many of the graduate students.

ZIERLER: What research did you take on? Your next monograph didn't happen for a few years. What were you working on when you returned to Caltech?

NOLL: Yeah, my publications were mainly journal articles. That's where I developed my collaboration with the political scientists. I had several articles that I wrote either with Ferejohn or Fiorina. The basic theme was formalizing political theory. I also did some experimental stuff because you couldn't be at Caltech and not do that. A research program on the Station Program Cooperative produced like four or five articles, where it was transformed into the next level of generality which is decentralized acquisition of public goods, common goods. That was another part of the program. I'm having trouble without having my CV in front of me remembering what they all are.

ZIERLER: You did a lot. You did a lot during those years.

NOLL: Also, that was the period of the origin of my interest in administrative law, about the sort of law and economics of administrative law. That began in that period as well. That led to the most cited works that I have, which is called McNollgast—McCubbins, Noll, and Weingast. McCubbins and Weingast were Caltech grad students in the late 1970s and early 1980s, and we wrote a series of papers on the sort of formal positive social science theory of administrative law and its relationship to the courts. That work gets thousands of citations. The reason is it appeals to scholars in three disciplines—economics, political science, and law.

ZIERLER: During this time, were you starting to get recruitment offers away from Caltech?

NOLL: Oh, yeah. It didn't take long at all. It only took two or three years for the rest of the world to figure out we were on to something. Both Ferejohn and Fiorina were gone by the early 1980s. If you look at who was on the Caltech faculty in the 1970s, almost nobody stayed. [laughs] We went from being pariahs, people who were doing something that was unimportant, to being people who could go anywhere we wanted, within a few years, so it was a great selection of an orientation of a program that is exactly consistent with the whole Caltech ethos. You have a small group that goes off and tries to do something that everybody thinks is crazy, and then they do it. It was very much a team game. You can't point to any single person and say they were the crucial part. It was a group of people who had the crazy overconfidence that you have in your youth that you can actually do something novel, and the fact that nobody has done it in the past 100 years doesn't mean that it must be stupid. [laughs] It was a great environment. It was a Camelot period at Caltech, in that what we were doing was unique, and we went from nobody cared what we were doing to everybody cared.

ZIERLER: Why do you think that is? What's the big takeaway? What was so unique about the research that was happening at Caltech that resonated how it did, when it did?

NOLL: In the end, I think you just have to say it was because there were certain kinds of questions that people had not gotten much traction on historically that were made feasible as research projects that could produce a useful output. They didn't become feasible until about the time the Caltech social science program was created. Remember, a lot of this is history, in the sense that you can't have a Caltech program with its data-drivenness without computers, and the theoretical foundations are game theory and that wasn't invented until the 1960s, so there's no way you could have done the Caltech program prior to the 1970s. It just wouldn't have been possible. We were just positioned well to be in an environment where we could take advantage of those things that happened in the outside world, and apply that to make a new product.

It didn't really matter what the output was, because it was new. I frequently say this to my graduate students—if you happen to fall upon a brand-new dataset, there's nothing bad that can come out from being the first person [laughs] to analyze it. No matter what you get, it's going to be just fine. [laughs] That's sort of the game we were in. I don't think it was predictable precisely how the program would produce the influential scholars that it produced in the 1970s, both junior faculty becoming senior faculty and graduate students being trained, in roughly equal measure. Caltech produced an enormous number of graduate students in economics and political science that became highly distinguished scholars with appointments at top-five departments in economics and political science. No one would have dreamed in 1970 that an unranked school in economics and political science could by 1980 be producing some of the best graduate students in the country and have several faculty members elected to the National Academy. That just doesn't happen. Historically, it doesn't happen. But notice how it parallels the history of the sciences at Caltech. It's exactly what happened there. A physicist decides he wants to do genetics? That's so Caltech! [laughs] Why would a physicist believe he could do genetics, right? [laughs]

ZIERLER: That's great. Roger, how well did HHS replenish when these other programs started to recruit away some of the top people at Caltech?

NOLL: It's interesting; Caltech I think always will have this problem that if—the best thing that can happen to an idea is for it to flourish in the greater community of scholars, and so it is completely natural that others are going to value it and try to do it better. It may well be that the socially optimal distribution across universities of the people that were at Caltech in the 1970s is for them now to be spread all over the universe, to have more students to have access to it, to train more students, expose themselves to a broader community. So I don't think of this in a negative way; it means the job of the division chair is especially hard, because you've got to do a good job replenishing people. You have to get yourself into the mindset that at as long as we are innovative and not just doing what everybody else is doing, we're going to lose a large fraction of our people. I've talked to Jean-Laurent about this issue of making certain that the 30-year-olds he hires are the people who are going to be the 50-year-olds that he's losing. That's a tough job, but that's what you have to do. If you're going to be innovative and doing things that are different, that's just the way life is. The indicator of your success is that somebody you hired for whom you had no competition when they were 30 suddenly gets offers at every university in the country when they're 40. That is a great measure of your success.

ZIERLER: When did you start to think seriously about leaving Caltech? What were some of the offers that were really interesting to you?

NOLL: The leaving of Caltech part was mainly about not wanting to stay on after not being division chair. The first year after I was division chair was from hell.

ZIERLER: What year was that? When did you start?

NOLL: I stopped being division chair in the summer of 1982, and the academic year 1982-1983, I was still on campus. That year was hell, because everybody wanted me to carry their water in battles with my successor or with the provost. I was getting involved, and I didn't want to. I never envisioned myself as a permanent academic administrator. I viewed myself as someone who was dealing with a short-term problem. The idea that I was going to be pulled into all these crazy battles going on that are not very important in the long run as a permanent thing just drove me nuts.

When I went away, I knew I didn't want to leave California, and I thought I would probably go to UCLA. The best offer I had then was UCLA. Then when I went to Stanford, Don Kennedy became president, and Jim Rosse, who was the person in the Economics Department at Stanford who was in my field—antitrust and regulation—became the provost. All of a sudden, magically, this position opened up in the department, and within a few weeks after I arrived, they started recruiting me to replace Jim in the Economics Department. That's why I stayed at Stanford. I knew that the only places that I would be willing to be on the planet were San Diego, UCLA, Cal Berkeley, Stanford, and Caltech. Those were the only things in my choice set. From my perspective, Stanford is the best of those options, but I'd have been perfectly happy at any of them, because they were all great intellectual environments. I was fortunate that with Stanford, the timing was perfect.

ZIERLER: What do you see as your key achievements as division chair of HHS?

NOLL: Women. By far. Getting us extracted from the Jenijoy [La Belle] fiasco. Hiring Eleanor Searle, hiring Jennifer Reinganum. Getting Annette Smith promoted from lecturer to tenured professor. The achievement that I am most proud of is going from a place where there were no women—well, one untenured woman on the tenure-track faculty and all the rest lecturers—to a world in which a significant fraction of the faculty is women. That was my single best achievement.

ZIERLER: Were you following when the undergraduates in 1969, 1970, were agitating for women to be admitted to the undergraduate program?

NOLL: Oh, yeah. I was on their side. I'm a feminist! I've been one since the day I was born! [laughs] I remember going to absolutely insane faculty meetings circa—there was a period when—there's a Catholic women's college that wanted to merge with Caltech. I can't remember the name. But we had some of the nutty—I think it was 1969, 1970, something like that—we had a couple of faculty meetings in which you couldn't believe what you were hearing. [laughs] The combination of woman and religion just brought out the worst in so many of my colleagues. [laughs] But, it was clear it was going to happen. The issue was how long it would take and how painful it would be.

ZIERLER: What was bittersweet about leaving Caltech for you?

NOLL: I have great affection for Caltech as an institution. There can't be very many of them. My advice to someone like Bill Gates would have been, "Instead of building computer science department buildings in your name at all of the top 20 universities, endow a couple more Caltechs—small, research-oriented, low student-faculty ratio universities, where the size of both the student body and the faculty is so small they're forced to work across boundaries." Minimal organizational obstructions and hierarchies.

I think the intellectual environment of Caltech is just terrific. It's much harder to create those kinds of exciting, weird radical departures from what everybody else is doing at a highly successful, large research university like Stanford. Stanford probably is the best university in the world in terms of the average quality of everything it does, but it does it by brute force. It has all of Silicon Valley off of which to feed, populated by its own alumni, who are incredibly generous to it. It can waste an enormous amount of money. Caltech can't waste an enormous amount of money. Also, everything is big at Stanford. Departments have 50 to75 people and, in STEM fields as well as economics, hundreds of graduate students. The advantage of such a place is that you can create a marvelous research team on any important area of current research and immediately start publishing useful new results. The disadvantage is that spontaneous intellectual combustion across disciplines and even schools is far easier at Caltech, which means that a greater fraction of the effort is on high-risk, crazy ideas that, if they hit, hit very big.

An example is a project that I did at Caltech that came out of a lunch I had at the Athenaeum with a geophysicist. We ended up doing a project on earthquake prediction. That just wouldn't happen at Stanford because the probability that I would ever encounter someone in geophysics at Stanford and have a long discussion with them about what they were doing—it's not that it's impossible; it's just that it's extremely unlikely, because I have 75 colleagues I can talk to in my own field. [laughs] Why would I go to geophysics? [laughs] The idea of Caltech in terms of scale is extremely attractive and intellectually precious. The world would be a better place if there were more Caltechs.

ZIERLER: Roger, on that note, I'm so happy we were able to do this and capture all of your recollections. Have you kept up with HSS over the years? Have you followed its development?

NOLL: Oh, yes, I was just there. I was just there a couple weeks ago. Yeah, I go down there at least once a year. In fact, I have several friends on the faculty there, some of whom I was an undergraduate with, like Kip Thorne and Gary Lorden.

ZIERLER: Oh, wow.

NOLL: I have former students who are on the faculty, so yeah, I'm there at least once or twice a year.

ZIERLER: I hope we can have some kind of an anniversary celebration when one comes up. We could put all of this information together. It's a remarkable story.

NOLL: Yeah!

ZIERLER: Roger, I want to thank you so much for spending this time with me. I really appreciate it.

NOLL: It was my pleasure.