Our favorite story about Robert Mundell, the Nobel laureate in economics who at age 88 died Sunday at his villa in Italy, illuminates what a country would do for an hour of his time. It was the late 1980s. We were based in Brussels as an editorial writer for the Wall Street Journal. One day at 7 a.m., our phone rang. It turned out to be Mundell, calling to thank us for mentioning him in that morning’s editorial.
“Gee, Bob,” we said, “it’s 2 a.m. in New York. How’d you get the Journal so early there?” He turned out to be in Geneva and had read it in the Journal’s European edition. Just then, a second line on the phone lit up, and we asked Mundell where he was staying. He said he was in room 306 at the Beau Rivage. We said we’d call him right back, dropped his call, and picked up the other line.
It was Jacques Raiman, adviser to Édouard Balladur, France’s minister of the economy. “By any chance,” Raiman said, “do you know how I could reach Professor Mundell.” Sure, we said, he’s in room 306 of the Beau Rivage in Geneva. Raiman said he wanted to get Mundell on the blower with Balladur. “Splendid,” we said. “Even better, you could bring him up to Paris for lunch.”
Raiman, we later learned, did invite Mundell to coffee with Balladur in the minister’s magnificent office in the Rue Rivoli. Mundell said he absolutely had to be back in Geneva for dinner. He was reassured and told to head to the airport. Soon Balladur gets a call from the Sûreté, saying that an aging hippy was at the Air France check-in at Geneva, lacking a ticket but insisting he had an appointment with the minister.
The hippie, the detective said, was wearing a blazer, blue jeans, and shoulder-length hair. Soon Mundell was seated in the minister’s magnificent office. They had a fine talk, and at 5 p.m., Balladur looked at his watch and said, “I understand I’ve promised to get you back to Geneva for dinner.” A gleaming Renault Vingt-Cinq limousine, motor purring, was waiting in the ministry courtyard.
A liveried officer helped Mundell into the car. Then the vehicle roared into the Rue Rivoli, hauled up the Elysian Fields, careered around the Arc de Triomphe, and swooped onto the beltway known as the Périphérique — where it stopped cold in the rush-hour traffic jam. In half an hour, they managed a quarter kilometer, but were now at a standstill. An impatient Mundell got out of the car to case the situation.
Suddenly, the Périphérique was enveloped in sirens and blue lights as motorcycle-riding flics swarmed through the traffic jam, slapping the vehicles and ordering them to pull over. Mundell scampered back into his car. “C’est pour vous!” his driver exclaimed, throwing the Vingt-Cinq into gear and swerving into a left lane that was now empty. Balladur had cleared the highway to Charles de Gaulle airport so the professor could catch his plane.
We don’t know what happened in Balladur’s meeting with Mundell. Was that when he clinched his idea for the euro, of which the economist would become known as the father? He’d already written “A Plan for a European Currency.” The euro, in any event, made its debut a few years later. Dayenu, we say. The amazing thing is that the euro was but one of Mundell’s astounding projects.
Mundell had already played a leading role in developing the economic strategy — high interest rates combined with supply-side tax cuts — that was so central to defeating the stagflation of the 1970s and enabling the Reagan boom. Mundell would go on to advise the central bank of China, which he had foreseen would emerge as an economic power. He launched the Nobel Laureates Beijing Forum.
Mundell inspirited and emboldened thousands of economists and students. In 1999, when Mundell won his Nobel, he invited the editor of the Wall Street Journal, Bob Bartley, who’d backed him through thick and thin, to join him in Stockholm. Economist Judy Shelton tells of how he reacted to a setback in her early career by inviting her to a conference on the coast, where he seated her between Paul Samuelson and James Tobin.
One of great economist’s tools was a villa in the glorious Tuscan Hills of Italy. He’d purchased the estate, we’re told, as a hedge against inflation. There he and his wife, Valerie, welcomed over the years what must be hundreds of economists, business leaders, politicians, and newspapermen in a running seminar on monetary reform that those who attended will never forget.
Early today from Santa Columba, Valerie cabled friends that she, their son Nicholas, and an aide had on a lovely day last week taken Mundell down to the garden “where the tulips, narcissi and hyacinths were starting to bloom and the trees were starting to bud.” Trailed by their dogs, the economist “kept repeating beautiful, beautiful and then fell asleep in the sun.” Back at the villa, “he slept continuously and peacefully — joined on the bed by our two cats” until he took Sunday the last breaths of one of the great lives of our time.