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Archive for Thursday, April 28, 2005

Nobel Prize winner backs free trade, reducing subsidies

April 28, 2005

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A Nobel Prize-winning economist who earned his master's degree on Mount Oread returned to campus Wednesday with a global perspective.

Vernon L. Smith, in Lawrence to deliver a lecture about the role of economists in world affairs, said Wednesday afternoon that the lessons learned during a meeting in Denmark would serve the world community well.

That meeting, known as the Copenhagen Consensus, gathered some of the world's pre-eminent economic minds to tackle a single question: "How would you spend $50 billion on the world's most pressing issues?"

The consensus coalesced around a common theme.

"The one thing we were all in unanimous agreement on was the importance of free trade and reducing subsidies to industries and businesses," Smith said during a meeting with reporters before his speech at Woodruff Auditorium. "The reason is very simple. Trade is the primary basis of human betterment and increasing and allowing specialization and wealth to be created.

"If you're going to reduce poverty, it's hard to think of anything more important. And, today, the whole entire world is viewed as the area of specialization and development. You have all kinds of new countries that ... are starting to contribute to world wealth."

Smith won the Nobel Prize in 2002, along with Daniel Kahneman, a professor at Princeton University. They established lab experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms.

Smith received his master's degree in economics from KU in 1952. The Wichita native's lecture was sponsored by KU's Center for Applied Economics.



-- 6News reporter Brook Wehner and 6News photographer Doug Donahoo contributed information to this story.

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