Solana Beach resident’s grounding in the ‘real world’ experiences of the poor provided vital insights in ‘superstar’ career as economist

Gordon Hanson (Photo: Jon Clark)

By Arthur Lightbourn

In the field of international economics, UC San Diego professor Gordon Hanson, son of medical missionary parents, is regarded as a superstar — and one of the most productive and highly cited economists in the United States.

Interestingly and significantly, when he was 21, after earning his undergraduate degree, he postponed going to graduate school until he had spent a year working among the poor in Peru and Honduras.

“Before I went off to graduate school in economics, which is very mathematical and very abstract,” he said, “I wanted to have grounding in the real world experiences of people whose problems I wanted to study so I wouldn’t just get lost in the math.”

Hanson was recently honored at UCSD with a Chancellor’s Associates Faculty Excellence Award for his work in international economics and cited “as one of his generation’s pioneers who have combined original ways of investigating problems empirically with astute innovations in theorizing.”

Hanson, a resident of Solana Beach, is the director of UCSD’s Center on Emerging and Pacific Economies.

He is considered an authority on international trade and migration, economic development and foreign investment, and applying economic analysis to understanding the social implications of timely issues.

We interviewed the 46-year-old Hanson in his office on the La Jolla campus of UCSD.

Casually dressed on his day-off in jeans and a sport shirt, he is 5-foot-10, 165 pounds and keeps in shape surfing and paddle boarding.

He is the youngest of three brothers. Both of his parents were physicians. He was born in Berkeley, Calif., while his parents were on medical furlough from 10 years of service as medical missionaries in northern Thailand. He accompanied his family back to Thailand for another six years before his parents returned to California in 1970 to enter private practice.

“They needed to put the kids through college,” he said.

Hanson attended Occidental College in Los Angeles where he earned his A.B. degree in economics, summa cum laude, in 1986.

He applied for and was granted a Watson Fellowship. “It’s a wonderful fellowship given to graduates from liberal arts colleges that allows you to propose a project to learn unusual things about the world we live in…So I spent a year divided between Peru and Honduras working in urban shantytowns.”

Later, while attending graduate school at the Massachusetts Institute of Technology, he spent another year in Mexico working on his dissertation.

He completed his doctorate from MIT in 1992.

Before joining UCSD 10 years ago, he taught at the University of Texas and the University of Michigan.

“People like to make fun of economists,” he said, when asked about his profession, “partly because they’ve been around for a long time.”

While economists are still asking similar questions to those posed by the Scottish social philosopher and economist Adam Smith 250 years ago, Hanson said, what has changed is that economics as a discipline has matured and has tried to strike a balance between being formal, scientific and mathematical, which is needed for credibility among scholars, and trying to address real world problems.”

This “trying-to-address-real-world-problems” approach is making economics the most popular or second most popular major at most universities, he said.

“And it has made economists influential in policy circles, sometimes for good, sometimes not; but you see economists playing an important role in almost every major economic policy decision that this country has made in the last three or four decades.”

The teaching mission of UCSD’s Center on Emerging and Pacific Economies, Hanson said, is to train master students in international economics with an emphasis on the Pacific region, Asia and Latin America.

“Our vision is that the 20th century was the Atlantic century in which the U.S./Atlantic countries really defined global affairs. The 21st century is the Pacific century… So we want to be at the forefront of understanding how the economies and political systems of the Pacific interact.”

In his capacity as a researcher, Hanson, at any one time, usually has 10 different projects in the works, evenly divided between migration and international trade.

“With international migration of skilled labor,” Hanson said, “what we’re trying to understand is why highly skilled people move between countries. What are their motivations? And why does the U.S. continue to be such an incredible draw despite all the obstacles we put in the way of people who want to come here?”

He also wants to ascertain how the movement of those folks affects the process of immigration and economic development both in the U.S. and in the countries where these folks come from.”

In the study, Hanson is focusing in particular on people who come here to obtain their Ph.D.s

As a basis for the study, Hanson and his team are tracking everyone who received a Ph.D. in the U.S. since 1958.

As it’s shaping up, there is considerable evidence that immigration of those who obtain their Ph.D.s here is highly beneficial to the U.S.

He is of the opinion that those who earn their Ph.D.s here and get a job offer from a U.S. company should be allowed to stay. “They’ve succeeded in requirements of any reasonable apprenticeship and there is a lot of evidence to show that the arrival of those folks would bring strong benefits to the U.S. economy.”

Currently, any Ph.D. graduate who is not a U.S. citizen is required to go through a time-consuming, expensive, often discouraging, process of dealing with immigration officials and lawyers to obtain a visa and eventually a green card.

He urges streamlining of the bureaucratic process to encourage the highly skilled to stay rather than putting obstacles in their way. “Think of the immigration process as a talent search,” he advises.

Hanson considers economics part of the social sciences.

“We’re certainly not part of the hard sciences because there are not immutable rules of human behavior as there are immutable rules of physics and chemistry.”
Economics, as he sees it, is somewhat of a cross between the social sciences and an art.

“We develop models of how individuals and firms behave and how countries operate. Any model is wrong. It’s a simplification of reality that cuts corners and misses important features that make our lives special and enriching. What you hope is that the models are wrong in relatively unimportant ways and they can still give us insight to help make choices about: Is a free trade agreement between the U.S. and Korea a good idea? And what should we do about illegal immigration in the country?”

Over the past several years, Hanson has addressed the politically-charged question of illegal immigration.

“One of the points I try to emphasize is that, surprising as it may seem, there are some attractive things about how illegal immigration has worked in the U.S.,” he said. “It attracts people who have had to work hard to get here,” he said. Bottom line, although illegal, these determined immigrants comprise a motivated, flexible, mobile workforce that comes when and where there is a demand for their skills.

“And we’ve done that in this bizarre way by saying we’re really going to make it hard for you to come here, but once you’re here, and you work and you’re a productive member of society, we’ll more or less leave you alone. That’s OK, but it could be a lot better.”

He advocates granting visas to those immigrants who are making positive contributions to the U.S. “Again, it’s a talent search,” he said.

“Now that we have a population of 11 million illegal immigrants, that’s significant enough to say, ‘OK, it’s not good for the U.S. in the long run to have so many people in effect living underground. And it’s not good for them [illegals] either.”

In his research, he has measured the effects of a wide range of influences on people’s welfare including the divide between church and state in the economic realm and how the spread of U.S. churches is affecting the provision of social services in various countries.

U.S. churches, seeking to expand their membership, in addition to offering doctrines, are providing material aid to people in countries ravaged by wars, natural disasters and poverty.

“Churches,” his research showed, “thrive in an environment where governments have abdicated their role of taking care of people when they are down.”

“None of that is to pass judgment on whether religion is a good or bad thing, but to understand how the church and the state interact.”

As for Mexico, in a recent publication, he posed the question: “Why isn’t Mexico rich?”

Part of the reason is Mexico has accepted and followed the U.S.’s advice. “It has privatized its industries, it has deregulated its markets, it opened itself to international trade and investments,” he said. “And yet what has happened is Mexico’s growth performance has lagged behind, not just much of Asia, but behind much of Latin America.”

While Mexico privatized state-owned companies, it did not protect itself against the formation of monopolies “that dominate the country to an amazing extent,” Hanson said.

A prime example, he said, is the telecommunications monopoly Telmex, “notorious for high prices, not great service, among the highest broadband connection fees in the world, very high prices for cell phone use and spotty land line coverage” and owned by Carlos Slim, reputedly the world’s richest person.

“Here we are in the midst of a worldwide information technology revolution and Mexico is disadvantaged by a company that is fattening its profits and limiting the pace of technological change in the country.”

Also, Hanson says, Mexico’s financial system is archaic and impedes the flow of investment to entrepreneurs; and is a country has the “bad luck” of producing manufactured goods that China also produces for the U.S. market instead of producing goods that China needs.

And, Mexico has to deal with the violence associated with the drug trade.

But Mexico has a rich cultural heritage, Hanson points out, which could lead to artistic and entrepreneurial innovations, such as Italy’s development as a design center.

As for China, Hanson predicts it won’t surpass the U.S. in international purchasing power for some time yet. The challenge facing China is whether it can continue to develop without an economic and/or a political crisis which is a historical norm for rapidly growing countries.

“China hasn’t experienced its bumps yet, and the big question is, given the repressiveness of its political system, how will it manage when the inevitable economic downturn comes?”

But, he added, China’s ability and capacity to adapt is astounding and augers well for its future.

And as for the U.S. and its future, he concedes we have lived beyond our means and have to make “adjustments,” — “but it’s not an impossible task.”
“The reason for continued optimism is that the U.S. remains the most productive economy in the world. It remains the leading source of innovation…and we haven’t lost that capacity. But there is medium-run pain and there is also coming to terms with the fact that we aren’t going to be the biggest kid on the block anymore.”

Quick Facts
Name: Gordon Hanson

Distinction: Hailed as one of a handful of superstars in the field of international economics in the United States, UCSD Economics Professor Gordon Hanson, was recently honored with the UCSD Chancellor’s Associates Faculty Excellence Award for his research in the humanities and social sciences. He is director of UCSD’s Center on Emerging and Pacific Economies.

Resident of: Solana Beach for 10 years

Born: Berkeley, California, 46 years ago

Education: A. B. in economics, Occidental College, Los Angeles, 1986; Ph.D., economics, Massachusetts Institute of Technology, 1992.

Family: He and his wife, Caty (nee McGuckin), who met in college, have been married 20 years. They have two daughters: Thea, 13, a student at Earl Warren Middle School, and Carly, 11, a student at Skyline Elementary School.

Interests: Surfing and paddle boarding

Recent reading: “The Party: The Secret World of China’s Communist Rulers,” by Richard McGregor

Favorite film: “Chinatown,”

Favorite TV: “Mad Men”

Favorite foods: Thai cuisine

Philosophy: “I believe in constructing your own meanings and doing so successfully revolves around relationships in your life.”

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Posted by Staff on May 9, 2011. Filed under Featured Story, Solana Beach. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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