A feisty economist who coined the term “voodoo economics” for President George H.W. Bush, had been dean of Simon for a nine-year stretch from 1981 to 1990, helping to put the business school on the map. He later served as dean of SOM from 1992 to 1994.
In a note to her colleagues about MacAvoy’s death, Professor Sharon Oster wrote, “In his economics work and in his life outside of the academy, Paul was committed to the idea of public service and to the view that economic thinking and evidence could and should be used to improve society…. Paul was demanding of his students and devoted to them, drawing several of them into his considerable research operation and following and helping their careers over many years. In his teaching, Paul exemplified the SOM mission of ‘educating leaders for business and society.’”
TAUGHT AT CHICAGO, MIT, DARTMOUTH & YALE BUSINESS SCHOOLS
MacAvoy had taught at several of the nation’s most prestigious business schools, from the University of Chicago to MIT Sloan and Dartmouth College’s Tuck School of Business. After receiving his doctoral degree from Yale in 1960, MacAvoy taught at Chicago for three years before moving on to MIT’s economics department in 1963, only to join the School of Management faculty two years later in 1966. For the next ten years, he was a mainstay of Sloan until being appointed co-chairman of the President’s Council of Economic Advisers in the Ford Administration in 1975. It was as an advisor to Bush that MacAvoy came up with the term voodoo economics on the porch of Bush’s home in Kennebunkport, Maine, in 1977, to describe Ronald Reagan’s economic policies.
He joined Yale’s SOM that same year, until taking over his first deanship at Rochester’s Simon School in 1981. When MacAvoy became dean, the school boasted a strong faculty in finance and accounting, but was small and virtually unknown in the business community. MacAvoy built on the faculty’s dedication to market economics, cultivating one of the best economics-trained faculty of any business school, and pulled in the naming gift from former Treasury Secretary William Simon.
When MacAvoy became dean, the school boasted a strong faculty in finance and accounting, but was small and virtually unknown in the business community. MacAvoy built on the faculty’s dedication to market economics and pulled in the naming gift from William Simon, who had made his fortune in leveraged buyouts.
‘I’M REALLY NOT IN THE BUSINESS OF BUYING B-SCHOOLS’
In his autobiography, Simon recalls a 1986 visit to his New York office by MacAvoy and David Kearns, then chairman of Xerox Corp. and a member of Rochester University’s Board of Trustees. When the pair told Simon that they wanted to name the school after him, he initially demurred. “That’s very flattering, but I’m really not in the business of buying B-schools,” he said, assuming that MacAvoy was looking for a sizable donation from him.
“No,” Simon recalls MacAvoy saying, “you misunderstand. We want to have the school named after an entrepreneur, a successful business and government leader, who has done all the things you have done. That is an inspiration. We would ask you to do one thing. We need to raise $30 million and the university is willing to pitch in $15 million, so that leaves $15 million to raise. We’re not asking you to give anything. We’re just asking you to help us raise it. Will you do that?”
“Well, that sounds like a fair deal,” Simon remembers saying, turning to Kearns, who was on the board of trustees. “David, why don’t you start us off by pledging $5 million from Xerox?”
MACAVOY RETURNED TO YALE IN 1990 AND BECAME DEAN OF SOM IN 1992
Kearns came through with the donation, and within six weeks, Simon had raised the $15 million. The school was then named the William E. Simon Graduate School of Business Administration.
MacAvoy returned to Yale in 1990, becoming SOM dean for a two-year stint starting in 1992.
His many books and journal articles include The Unsustainable Cost of Partial Deregulation (Yale University Press, 2007) and The Failure of Antitrust and Regulation to Establish Competition in Long-Distance Telephone Services (The MIT Press, 1996.)
MacAvoy served on the Council of Economic Advisors during the Ford Administration, as co-chairman of the President’s Task Force on Regulatory Reform, and on a variety of other government panels. He was on the boards of directors of the Chase Manhattan Bank Corporation, the Alumax Corporation, the American Cyanamid Corporation, and other companies.
MacAvoy was awarded honorary doctorates by Bates College, where he received his undergraduate degree, and Sacred Heart University. He received Yale University’s Wilbur Cross Medal in 1982.