Peter Howitt, prize in economic sciences 2025: Official interview

Added: 2026-05-31

[00:00:00]Failure is an important part of the process of creation.

[00:00:11]Uh as I was a very happy child, I'm told uh for most of my upbringing uh in a small city in in Ontario in Canada. And uh when I became a teenager and went to high school, I was not so well behaved.

[00:00:29]Uh I uh I was not a good student in high school. Uh uh I was fortunately at a very very good high school.

[00:00:41]Uh when I I should say with one of the physics laureates of 2018 got in touch with me after my uh prize was announced uh to tell me that she went to the same high school as I did in G Ontario. And uh uh so it was a very good high school, but I was not a good student. Uh but I had the good fortune of getting a part-time job working during my last couple of years in high school for a wool broker, a man who had a small company with two other employees who imported wool from all over the world uh and sold it to textile mills in Ontario in Quebec. and uh he took me on uh doing odd jobs in his office cleaning up the wool samples and helping him to uh uh to deal with some of the correspondence in a very minor way. I don't think I did much help for him, but he did a lot of help for me. He uh this bit of work uh inspired me. I I remember watching his teletype machine rolling away with this tape coming across with prices of different kinds of wool from all around the world. And the prices would go up and go down. And I remember asking him, why are these prices gyating like this? And he started telling me about supply and demand. And I thought, well, this sounds all very mysterious. And and he is the one who said, if you want to learn more about this, you should go study economics.

[00:02:17]when you uh when you finish high school.

[00:02:20]Uh so I did and I went off to McGill University uh uh to uh take a degree in economics and political science.

[00:02:31]Uh and I fell even I I I really fell in love with economics uh as as an undergraduate and uh I I got interested in other aspects. I got more interested in macroeconomics and how the whole system uh uh is fits together in ways that we don't really realize in our normal way that we're almost like uh ants in an anthill.

[00:02:58]An anthill is a very complex social organization, but uh and each of the ants is playing its own role, but probably quite unaware of the grand picture. And of course, we're a lot smarter than ants, but uh we also have a correspondingly more complex organization. And and uh this whole idea of how we're in this world, it's controlled by forces that we don't really think of in from day to day, but we could perhaps understand if we stand back and take a look at it. Really uh caught my imagination.

[00:03:34]I went on uh when I graduated, I was offered a job working for one of the textile companies that had been u a customer of my part-time boss when I was in high school. A very uh attractive offer to start working in business. And I had to make a decision. Should I do that or should I go on and study more economics and perhaps become an economist? And I remember uh it was a it was a difficult decision but I decided that what I really loved was studying economics. So I went on to do that and I've never regretted that decision. The the company that had offered me this job was one of the largest in Canada at the time. It it doesn't even exist anymore uh because the whole textile business in North America has has moved uh uh elsewhere. And uh uh so I've I've been very happy with uh the decisions that I made even as a troubled child. I managed to make uh good decisions uh but largely with the help of others. uh this person who offered me this job uh uh I don't think he had any idea of how much his little it was basically an act of kindness because I wasn't that much help to him and uh uh but he he sort of took me under his wing and acted as a mentor and it has made all the difference in my life.

[00:05:07]Well, I think uh it helps to uh to show to tell people that uh if something is really interesting to them that uh they they should shouldn't be afraid to to pursue that even if it seems that there's not much payoff to them that pursuing your curiosity can really pay off. I think another lesson is that I never really uh had a lot of purpose to my life until I actually started working. And as I say, it wasn't much of a job. It was just a part-time job, but it was getting involved in an organization that was doing important things in in in their own little way. And it was in that context that I first became inspired.

[00:05:54]And I and I think that uh that a lot of the meaning in life comes not from the money you make from working but just from the experience and from the fulfillment and the uh the challenge that you find in working.

[00:06:13]Uh well curiosity is number one. Um and uh I think the ability to uh to pursue through failure because most of what I ever tried didn't work out. Uh so you just have to keep trying. Uh there's an old saying that if at first you don't succeed, you should redefine the question. Start looking at looking somewhere else. Keep on searching around until uh you find something that really works.

[00:06:50]Persistence is important.

[00:06:56]Well, I I uh I I tell them to work hard uh and uh to be uh constantly on the lookout for new ideas. Uh uh never think that you've got the complete answer to anything. Um, most of the students that I've had in my career have been real self-starters and they haven't really needed a lot of advice. I've learned as much from them as they have from me.

[00:07:27]Philipe is a very dynamic and creative, energetic person. Uh, even now I think he has more energy than I ever had. uh uh we uh when we first met up it it was a great combination. First of all he was a a microeconomist, I was a macroeconomist and we were both interested in similar things and uh and we really we really clicked well together. Um Philipe and I think he'll tell you the same thing tends to be a little more impatient than than I am. Uh, and when we would be working things out at the blackboard, if it wasn't working, he would suggest, well, well, let's throw that away and try something different.

[00:08:10]And I would always be the one that would say, "Well, let's just a minute now.

[00:08:13]Let's pursue this a little further." And sometimes it he was right. We should have moved on. And sometimes we we'd discover things that uh that I don't think he would have discovered on his own because he would have moved on. And we were we were very we had very complimentary skills and personalities.

[00:08:32]Uh and uh he was he's a very uh generous and uh uh warm-hearted person and and someone with a great sense of humor. It was tremendous fun uh working with him.

[00:08:50]I remember uh have many memories. uh I remember the the uh when we wrote our very first paper together which is uh it still remains our most important paper.

[00:09:02]It's really the foundation on which everything else that we did together was built. I remember uh we were we were coming up with a lot of different ideas and I remember suggesting to him well maybe we should make it a a series of papers. We'll write one paper about growth, another one about cycles, another one uh uh about some other aspect. And I remember him saying, "No, no, no, Peter. No, we put it all together. We build a balm." And that's uh uh and I remember just thinking, well, that's that's a good way to do it. And we packed a lot into that first paper, and it was a tremendous success. And uh uh uh I just remember that that's we're going to build a bomb. And we did I think we realized very very quickly that it was on it that was something groundbreaking. I mean what we were doing we were in a situation where the theory of economic growth was clearly underdeveloped and needed uh needed something new in into it. uh this idea of creative destruction was had been around for decades but it hadn't yet been incorporated into uh the theories of economic growth that economists uh really used or taught to students. So we knew it was an important thing to put this in.

[00:10:33]uh and it wasn't very long after we wrote the paper and started presenting it in seminars uh at different universities and research institutes that that we we started to get a lot of positive feedback and we we realized we were on to something big. Um and uh and it just led to uh to a lot of further research. We we we had a very intense period for the next 15 years or so. Uh uh and and and indeed we continued to collaborate for long after that. But the the first 15 years or so were really intense periods even though we were for almost all of that period on opposite sides of the Atlantic. Um we uh we were constantly in touch. we would constantly go visit each other, stay with each other's families. Uh we were really part of each other's families. Uh it was a was a very intense period that uh and we knew we were on to something big and uh uh especially after we produced our first book, which I've just donated to the museum as a as a little artifact representing our our our work together.

[00:11:48]Uh it it uh it was just uh a period in my life that was unlike any other where uh I was I had already celebrated my my 40th birthday before coming to MIT where Philipe and I met and I was beginning to think that uh I had at one time thought that when I turned 30 I'll be over the hill and uh and finished and do nothing more. Well, when I got to be 30, I didn't think that way anymore. But when I got to be 40, I thought, well, now I can sort of take it easy. I don't have to work so hard. I I probably won't do anything really important after that. And I didn't realize that the best was yet to come.

[00:12:32]And it's largely because because I met Phipe and because I met him in the sort of atmosphere that they had at MIT, very collegial atmosphere. They had other brilliant people there that we learned a lot from. And uh it it was uh it was just a great coincidence. Uh it was a great coincidence that we were both there. Phipe uh uh will probably tell you about how he he was disappointed to have come to MIT as his first job which it was. He had hoped to join the Society of Fellows at Harvard but had been turned down. And I had come to MIT not to work on growth theory. It was the furthest thing from my mind when I came there. Uh I had come there as an as a visiting professor uh hoping to do some work on on unemployment theory and some things that were really not all that closely related.

[00:13:28]Uh but uh we we uh we connected we started talking this idea of you know how could we bring creative destruction into growth theory came up and we started talking and it just happened but it was just it was it could easily not have happened.

[00:13:48]Well, there were always periods of of doubt because when we would decide, all right, let's study how growth affects problems of unemployment or let's see how it's affected by public health or by national debt or something like that. Uh it it's like in any research project at first you try things and oh they're not they're not working out and you try something else and they're not working out and and uh you know doing that sort of research is is very much a trial and error procedure and uh uh I don't remember any particular time when I got more discouraged than others but I do remember that whenever we started a project there was a long period that was rather discouraging and we would have to sort of encourage each other to to to pursue. Uh but uh but we did I was I was the one who was very patient at exploring every possibility before we threw it away. And uh Philipe was always the one to try something new and uh between us uh we got through those periods very well. uh and uh you know together with a lot of humor it it it really helps to to be collaborating with someone that you really enjoy being with.

[00:15:18]Well, you know what we're we're we're trying to as anybody who's engaged in any kind of scientific work is is is trying to innovate. They're trying to come up with something that nobody's come up with before. Uh if it was obvious what it took to do, it wouldn't be so important.

[00:15:40]Uh and if it's not obvious, then that means that you're not going to find the right way the first time you try it. Uh you just have to persist. I think it's uh failure is an important part of the process of creation. Uh and we should we in a way we should think of failure as being just as productive as success because you need a whole foundation of uh ideas that you've tried and failed with before you can come up with something that actually works. Uh so we should think of failure as being a very productive process.

[00:16:26]Well, I think AI has the uh the possibility to make us all much more productive. Uh I I've already noticed myself that when I I have a question that uh I' I'd like to see a bit of a survey of the literature, the first thing I tend to do now is to to go to chat GPT or Gemini and ask them, you know, to for a little bit of a survey just as a sort of a first stab at things. It really lays out the groundwork for me. and often in a very sophisticated and complex way. Uh and I I could imagine all sorts of uh jobs in which uh that will be the case.

[00:17:11]Uh but of course in some cases they'll do the job so well that they could actually replace people. And um I think that there is a challenge to society of making sure that we still have lots of meaningful and rewarding jobs uh for people uh doing work that is in the future going to be done by artificial intelligence.

[00:17:38]Uh I could imagine that there are a lot of jobs in which someone the very best people will be made so productive in whatever it is organizing people's accounts or writing speeches or whatever it is. they will be so much more productive having this artificial intelligence as a tool that they're going they're going to be able to do most of the work that the whole industry requires in a country. Uh they'll be superstars being tremendous tremendously productive but then the question is what are the rest of them going to do? uh and I'm confident uh that history has shown that in the long run uh there are going to be lots more jobs for people. It's just that the working out of a general purpose technology like this and we've had a few of them in the past. It it takes a long time and it takes a lot of downstream innovations before these new jobs that are going to open up uh are actually created. U so I I thought about this a while ago thinking what would what would people have said in 1875 in in North America. I imagine will be the same in in in mostly Europe when half the population was uh engaged in agriculture and it took half the people in the population just to produce enough food for uh for the uh for the other half.

[00:19:22]uh what would you what would they have said if you told them that well we're only going to need one or 2% of the population to produce the food and they surely would have asked well what are what are the rest of them going to do and you couldn't tell them well they'll you know they'll be so much more productive because they'll have phones and computers and uh TV and so on that they wouldn't have heard of any of that the telephone the the patent on the telephone wasn't until 1876. Uh certainly none of the none of the rest of the things have been invented.

[00:20:00]But these things did come along. Now I think what's what's unique about this particular general purpose technology is that it's progressing so rapidly that it's not as if we're going to have to create these jobs over the next 150 years.

[00:20:16]uh we're going to have to do it over the maybe the next 10 or 15 years uh to employ all of the people that are going to be rendered redundant by this possibly. I mean it it seems to me now I don't I'm not an expert on the technology. I've only experienced it from my own personal uh point of view, but it does seem to have that potential.

[00:20:39]And I and I think that this is a uh a national challenge that most governments ought ought to be taking a look at to uh because you know like with any other act of creative destruction if the people who are going to be the losers from this new technology can't be somehow brought on board and and compensated or or made part of the the benefits. They're going to find ways to stop it and we're not going to be able to enjoy the positive benefits that we could get from it.

[00:21:17]I have retired from teaching and I'm largely retired from doing uh research but uh uh but winning of course winning this prize has rather brought me back into the the world of research. Um uh my wife and I live in the hills of western North Carolina in the United States uh far from any leading research university. Uh uh we enjoy uh nature. We enjoy uh walking in the hills. Uh uh and we particularly enjoy playing golf. uh and uh uh I find it it's especially in the hills it's gives us lots of exercise, fresh air, companionship uh uh and uh uh it's it's a wonderful new chapter of our lives.