Paul Volcker’s Greatest Lesson Wasn’t on Economics. It Was on Being a Public Servant.

If a central bank views higher pay for workers as a potential cause for alarm, but is more sanguine when corporate profits rise, it’s reasonable to expect that the share of national income going to capital, versus labor, will rise over time. And that is exactly what has happened in the United States since the Volcker era.

These kinds of re-assessments are important for taking the right lessons from Mr. Volcker’s era. After all, he left the Fed chairmanship 32 years ago. What made Mr. Volcker a great economic statesman was not so much the details of his analysis of inflation dynamics and the money supply in 1979. It was a culture and mind-set he brought to that job, and all of those he held over a career in public service that stretched from the Eisenhower administration to the Obama administration.

Mr. Volcker was a civil servant’s civil servant. At the Treasury Department in the Kennedy, Johnson and Nixon years, he toiled at rethinking an international monetary system that was breaking down.

Despite jobs at the epicenter of world financial power — early in his career he worked at Chase Manhattan, and he would lead the Federal Reserve Bank of New York before Mr. Carter picked him as Fed chair — he seemed uninterested in the trappings of wealth and power.

Always rumpled, always mumbling, his 6-foot-7-inch frame often slumping, he was not trying to be a globe-trotting master of industry or political mover and shaker. He was often dismissive of the views of powerful bankers and politicians. And he lived modestly, wearing ill-fitting suits and smoking cheap cigars and living in a small, not-at-all-posh apartment in Washington with his family back in New York. He didn’t focus much on his own status, which made him especially suited to resist the inevitable political pressure that arose when his course of action caused mass unemployment in the early 1980s.

The tidy story of Mr. Volcker’s early years at the Fed — that a central banker needs to be willing to tank the economy to prevent inflation — is not necessarily the most important lesson. What made Mr. Volcker such a consequential figure is that he did not merely take the conventional wisdom of public policy as he inherited it. He was willing to rethink the Fed’s policy based on what was happening on the ground, not on the theories of politicians and tradition-bound economists.

Right now, Fed leaders are grappling with an opposite set of problems from those that Mr. Volcker inherited. Inflation is too low, not too high. Workers’ wages are rising too slowly, not too fast. With interest rates persistently low, it’s not clear how central banks will fight the next recession.

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