Bulletin Autumn‧Winter 2004

intellectual f e rment of Camb r i d ge i n the early 1960s. I t was i n h is Ph.D. t hat he began to w o r k o n the neglected question of u n c e r t a i n ty 一 h o w , f or e x amp l e, i t affected the o p t i mal rate of s a v i ng i n an e c o n o m y . U s i n g h i s m a t h e m a t i c a l b a c k g r o u nd he was able to p r o d u ce an o r i g i n a l m o d e l f o r s h o w i n g t h a t ' un c e r t a i n ty is a reason for sav i ng more, n o t less'. The b r e a k t h r o u gh came after months of not getting anywhere, a product p a r t ly of sheer d e t e rm i n a t i on a nd of the happiness of his recent marriage. H i s first experience of Asia was a visit to I n d i a, wh e re he l e a r n ed a great deal about h o w d e v e l o p i ng economies w o r k , p a r t l y f r o m t a l k i n g t o p e o p l e i n g o v e r nme nt a nd ob s e r v i ng at first h a nd h o w people l i v ed i n r u r al areas. O n his r e t u rn to Britain Prof. Mirrlees t o o k u p a f e l l o w s h ip i n e c o n om i cs at Trinity College, Cambridge. The stimulus of teaching led h i m to t h i nk increasingly about welfare economics and to conceive a general theory of economic activity. I n fact, the g e rm of his No b el Prize w o r k was contained i n an e x am i na t i on question he set o n o p t i m a l t a x a t i o n. The q u e s t i on t u r n e d o u t to be t r o u b l e s ome a n d t oo difficult, b u t it set h i m off i n the direction of o p t i mal t axa t i on theory. The teaching at C amb r i d ge was s t i mu l a t i ng b u t v e ry h e a v y, a nd i t wa s n 't u n t i l he t o ok u p a c h a i r i n m a t h e m a t i c al e c o n o m i cs at N u f f i e ld College, Ox f o r d, that he h ad the t i me to w o r k o n a more general theory of the relationships b e t we en p r i n c i p al a nd a g e nt i n e c o n om ic c o n t r a c t s. A f t e r a sabbatical at M I T , he p r o d u c ed the first v e r s i on of the o p t i m al i n c ome t a x a t i on p a p e r; b u t i t t o o k s e v e r al mo r e years' intellectual labour to produce the rigorous mathematical reasoning that w o u l d justify the No b el Prize w i n n i ng theory. It is characteristic of Prof. Mirrlees that he gives great credit to his collaborators, s u c h as Pe t er D i a m o n d . A s he s a ys himself, ' I f o l l owed the ma i n principle for academic success: get a g o od co-author ( a nd also t he second: get another).' Creative i n s p i r a t i on i n t he l i fe o f t h o u g h t , h e b e l i e v e s, r e q u i r es at least three things. The f i r st is s p e n d i ng t i me i n d i s c u s s i o n w i t h i n t e l l i gent people, not o n ly i n y o u r o w n f i e ld 一 p e o p l e w h o c an k e e p u p w i t h y o u r thoughts and grasp the p r o b l em y o u are t r y i ng to solve. H e was fortunate i n Ox f o rd and Camb r i d ge to be challenged by very sharps m i n ds 一 those of ph y s i c i s t s, f or e x amp l e. The s e c ond t h i n g needed is curiosity a nd interest 一 really wa n t i ng to k n ow wh at other people are do i ng; really w a n t i ng to unde r s t and, at the deepest level, w h y t h i n gs are so. The t h i r d is sheer persistence. There are ma n y b l i nd alleys i n the life of strenuous t h o u g h t. The p e r s on w h o is d r i v en b y a ...The stimulus of teaching led him to think increasingly about welfare economics and to conceive a general theory of economic activity. In fact, the germ of his Nobel Prize work was contained in an examination question he set on optimal taxation—After a sabbatical at MIT, he produced the first version of the optimal income taxation paper; but it took several more years' intellectual labour to produce the rigorous mathematical reasoning that would justify the Nobel Prize winning theory. Chinese University Bulletin Autumn • Winter 2004 30