For Vickrey, the Nobel Prize was the culmination of a lifetime of work. A native of British Columbia, he joined the Columbia Economics department faculty in 1946 and never left it.
He was a big man with a shock of white hair and a deep voice that no one in the department ever heard expressing anger or even annoyance. His modesty, combined with the fact that his ideas were so far ahead of his time, meant that recognition outside the circle of fellow researchers came late. But when it came, it was a flood. In the last four years, he was elected President of the American Economic Association, a member of the National Academy of Sciences, and finally Nobel laureate.
But ideas, not honours, were what motivated Vickrey (that's why he appeared such an eccentric). Not just any ideas - practical ones about how to make the world a better place. A Quaker and a conscientious objector in the Second World War, his shoes were never leather and his briefcase was always cloth. The money from the Nobel Prize meant little to him; his joy came from the hope that finally important people (not just clever ones) would start paying attention to those ideas. For three days he pushed as hard as he could to make sure people would hear them.
His Nobel Prize was for auction theory, and today US presidential candidates are competing to take credit for Vickrey-inspired auctions of the electromagnetic spectrum. Auctions are an example of "asymmetic information": the bidders know what they are willing to pay but the seller doesn't. Vickrey was the first to analyse successfully how different kinds of institutions would work in such settings. But auctions were not one of the ideas he cared most about: it was, he said, "one of my digressions into abstract economics. At best, it's of minor significance in terms of human welfare."
The range and depth of his contributions to economics are best conveyed in the volume Public Economics (Cambridge University Press, 1994). This is a selection of 26 of his 140 papers, lovingly and expertly edited by four outstanding economists - Richard Arnott, Kenneth Arrow, Anthony Atkinson and Jacques Dreze. Arrow and Dreze had been Vickrey's students at Columbia in the late Forties and Fifties.
In this book, for instance, are his plans to make public utilities and transit systems operate better - essentially by charging each user neither more nor less than the costs he imposes on the rest of society, including other users. This leads to a wealth of ingenious and practical solutions - for subways, drastic reductions in off-peak fares, high rush-hour fares to popular destinations, and a land tax to make up the deficit. For highways and bridges, he showed how a smoothly varying peak-hour toll could make everyone better off - even people who wanted to go over a bridge cheaply could do so by sitting in their cars the old way, but in a parking lot or their own driveways rather than a traffic jam.
He also thought about the US tax system, saying his proudest accomplishment was a "cumulative averaging" taxation plan that would eliminate over two- thirds of the current tax code - the parts devoted to assigning income between years - and resolve the controversy over taxing capital gains - all without sacrificing progressivity. His study of taxes led to his early utilitarian anticipation of the "original position" or "veil of ignorance" approach to the ethical foundations of a criterion for social welfare made famous by John Rawls.
A week ago, Vickrey finished a paper called "Fifteen Fatal Fallacies of Financial Fundamentalism" in which he assailed the current American obsession with balancing the budget. He was convinced it was leading to a major recession.
That paper was going to be the basis of his lecture in Stockholm when he accepted the Nobel Prize. We will never hear his voice again, but that doesn't mean we shouldn't listen to him.
William Spencer Vickrey, economist: born Victoria, British Columbia, Canada 21 June 1914; married 1951 Cecile Thompson; died White Plains, New York 11 October 1996.Reuse content