Economics Celebrates 100th Birthday

Economics has been taught at the Urbana campus of the University of Illinois from the earliest days of this institution. But the Department of Economics was not established until 1895. To commemorate this 100th anniversary, alumni, faculty (past & present), students, and friends gathered for a gala celebration on the last weekend in September. Jon S. Corzine (BA Economics 1969), chairman and senior partner of Goldman, Sachs & Co., presented the keynote address at the banquet. The festivities included a welcoming reception on Friday night, an all-day seminar on Saturday, and concluded with the Saturday evening banquet.

Goldman Sachs Chairman Gives Keynote

"Financial Markets at the End of the 20th Century."

"Education, particularly public education, is the basis of renewal and progress . . . as we approach the 21st century," Jon Corzine told the celebrants at the Economics Centennial dinner. In a democratic society, public education "serves a vital and irreplaceable role by providing quality educational opportunity . . . on an affordable basis." Returning to the university after many years, Corzine expressed his gratitude not only for the first-rate education he and his wife Joanne received here, but also for the "broader appreciation for accumulated knowledge and culture that has served as a foundation for our personal and professional lives."

Corzine said his perspective on the world economic view was shaped by the "common sense, values, and knowledge developed on the farm fields of central Illinois and at Champaign-Urbana" as well as by the workings of Wall Street. The fundamentals needed for success in business or academia are "a commitment to integrity, a belief in intellectual excellence, hard work, and an openness to change." These basics are easier to state than practice, he observed.

Five key trends shape today's financial markets: market growth and maturation; globalization; the impact of technology; product innovation; and market liberalization and deregulation. And Corzine argues that these forces will also shape broader economic life.

One effect of these forces on financial firms like Goldman Sachs is intensified competition, which Corzine believes will lead to industry consolidation. "Only a handful of firms will be able . . . to compete as truly global players; Goldman Sachs will be one of them."

"For governments, these forces mean increased exposure to market discipline and volatility." For example, large international trade imbalances and fiscal deficits, in both mature and developing economies, are destabilizing and must be controlled.

"For financial markets, these forces have created a paradox." Technology has reduced the probability of collapse, but inter-dependence has increased the potential severity should a collapse occur. "Addressing this risk requires a joint effort among international institutions, governments, and financial intermediaries to improve the efficiency and transparency of markets."

The lives of billions of people around the globe are shaped by financial markets. "Free enterprise," therefore, "like free government, requires checks and balances. These include non-intrusive regulatory oversight by public institutions, disciplined management by corporate exec-utives, and, not least, the personal integrity of all those who work in today's international markets."

"Markets are not just places in which business people work. They are places for which we are all responsible." In bringing his talk to a close, Corzine echoed his opening remarks when he said, "This concept of stewardship is surely one of those basics."

Medallion of Adam Smith, father of modern economics, from the Hollander Collection.

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