As a child growing up in an impoverished West Virginia, Claudia Williamson Kramer would look across the Ohio River and wonder why all the businesses her family needed were located on the other side of the waterway. Ohio looked like the land of milk and honey compared to her home state, but she was too young to grasp the reasons.
“I’d ask, ‘Why do we have to drive up the river, cross the bridge and then drive back down the river to buy groceries?’” remembers Kramer, now 42.
Today, Dr. Claudia Williamson Kramer answers more questions than she asks. As a tenured economics professor in the Rollins College of Business at the University of Tennessee at Chattanooga, she possesses the understanding she lacked as a child and is sharing her knowledge with the school’s students, who enter her classroom asking the same question she once posed: Why is the world this way?
Kramer offers them an economist’s perspective.
“I use the economic way of thinking to help my students comprehend the world around them. It’s illuminating. One of my professors would say that learning about economics is like putting on glasses that make the world clearer.”
Kramer’s vision sharpened as she was taking a microeconomics course at Marshall University in West Virginia as part of her general course requirements. Although she was contemplating law school, the class helped her to make sense of the issues that had puzzled her since her childhood and inspired her to change her academic and professional bearing.
“I thought, ‘This explains why we had to shop for groceries in Ohio,’” Kramer recalls. “West Virginia had high taxes and excessive regulations, which disincentivized businesses from being in the state. Meanwhile, Ohio was more business-friendly.”
Economics education
Her intellect aroused, Kramer became a perpetual student of economics. She graduated from Marshall in 2004 and then completed a doctorate in economics at West Virginia University in 2008. A postdoctoral fellowship with American economist William Easterly at New York University followed from 2009–2012.
Kramer had no exposure to academia before attending Marshall, so she initially saw herself conducting research at a nonprofit or think tank. The path ahead was clear to her, as the yawning wealth gaps she’d observed in West Virginia and her persistent questions about the state of the world had sown the seeds for an interest in development economics, a subfield of economics that revolves around the conditions of low- and middle-income countries.
“I wanted to look at why some nations have grown and prospered and others haven’t,” Kramer says. “One of the institutional structures that explains wealth differences is property rights. Can you own land? Can you start a business? Are you allowed to keep your profits? Sub-Saharan African countries, for example, have very weak property rights, so those are some of the poorest places in the world.
“I essentially wanted to examine the rules of society, which encourage people to be either productive or unproductive.”
While in graduate school, Kramer gathered and scrutinized data focused on understanding the causes of wealth. This led her to study the effectiveness of foreign aid.
“There’s been a stream of research that shows foreign aid has not been helpful. Countries that have received massive influxes of aid for decades are at either the same level of development or worse. So, I did a lot of research in that space. What are the rules of the game that promote wealth? What are the policies that discourage wealth?”
By the end of graduate school, Kramer wanted to teach rather than work for a nonprofit or think tank, as she believed the academic environment would allow her to explore the topics that captured her interest.
“I wanted freedom,” she explains. “I wanted to be able to say, ‘I’m curious about this thing, so I’m going to look into it.’ If I’d taken a job with the World Bank or a government, my work would’ve been based on their interests.”
Probasco Chair
Kramer sampled her chosen profession while she served as an assistant professor of economics at Appalachian State University during the 2008-2009 school year. Following her postdoc, she relocated to Mississippi State University, where she continued to teach economics.
When UTC’s department of finance and economics offered Kramer a position in 2020, teaching was only part of the package; the department also asked her to become its new (deep breath) Scott L. Probasco, Jr., Distinguished Chair of Free Enterprise.
The Probasco Chair of Free Enterprise (for short) is a UTC faculty member tasked with studying the American system of free enterprise and contributing to the public’s understanding of economic theory and practice.
A $1 million gift from the estate of Burkett Miller, a prominent Tennessean and the son of Miller & Martin co-founder White Burkett Miller, established the chair in 1977. It’s still among the largest endowed chairs of free enterprise in the nation, according to the University of Chattanooga Foundation.
Miller’s estate established the chair in honor of Scott Probasco, a businessman and renowned philanthropist native to Chattanooga.
During years of research, Kramer has contributed volumes to what is now her mission as the Probasco chair. While her CV bursts at its seams with the details of her output, her bio on UTC’s website notes that she’s written 50 articles in refereed journals, co-edited two books and seen her research appear in several prestigious press outlets, including The Economist and BBC.
Also, many other scholars have woven Kramer’s work into their own. The top journals cite her work over 3,300 times, Google reveals, with eight of her articles accumulating over 100 citations each.
Kramer clearly fit the job description for the Probasco chair like a hand in a tailored glove. Yet she mused over the use of the phrase “free enterprise” in her job title. She concluded that Miller and Probasco – both of whom were successful entrepreneurs – wanted to ensure that the topic remained a part of the public discourse indefinitely.
“Endowed chairs in general are intended to ensure that there’s always a faculty member researching the area of the donor’s interest,” Kramer notes. “When I think about what was happening in the world in 1977, I believe [Miller and Probasco] were concerned that discussions about free enterprise were dwindling not only in the public space but also on college campuses.”
Kramer is flipping back the calendar nearly 50 years to a time of price caps on gas, fuel shortages and long lines of vehicles at service stations. President Nixon sparked the upheaval when he introduced price controls on gasoline in response to an OPEC oil crisis. This in turn caused domestic oil production to drop, which led to a scarcity of gas on the market.
Economists today generally consider the price controls of the 1970s to be a failed policy, Kramer says.
“We had these dueling effects of upward pressure on price levels and a decrease in supply of oil and gasoline, which bumped prices up,” Kramer clarifies. “People didn’t like that, so the political response was to freeze the prices. But it didn’t fix the problem; it caused a shortage.”
A more effective approach, Kramer posits, would have been to allow the market to take care of itself.
“Markets are made up of people who are always changing their minds about what they want, and we allocate goods and services by letting prices adjust. If we start using electric vehicles more, for example, then we’ll see downward pressure on gas prices, while prices for electricity will naturally go up. Free enterprise is simply allowing prices to allocate goods and services.”
Kramer reasons that Miller and Probasco channeled their concerns into the creation of the Probasco chair, which ensures the presence of a scholarly voice at UTC that’s educating the public, as well as the next generation of economists, about the free market and its role in an economically healthy world.
“When the explanations about what’s happening in the world aren’t satisfying your curiosities, there’s a voice expressing an alternative,” Kramer says.
Ongoing relevance
If Kramer’s guesswork about the mindsets of Miller and Probasco five decades ago is correct, then their thinking might seem almost prescient. In the least, she says, current discussions on the public stage reflect the need for voices like the one the Probasco chair provides.
“We’re still facing many of the same economic issues, largely due to the policies people adopt,” she informs. “Kamala Harris is talking about instituting various price controls, and no matter where any economist stands politically, we know what happens with those: If you don’t let prices adjust on their own, you cause either shortages or surpluses, depending on which way you’re trying to control the market.”
Kramer also voices concern about the tariffs Donald Trump is touting as the cure for the inflation that continues to deal heavy blows to the livelihoods of many Americans.
“Tariffs on imported goods actually raise the cost of those goods. The product with the tariff attached becomes more expensive, and any good that uses that product becomes more expensive. The hidden cost that’s harder to see is the loss of jobs in the sectors that had been or would be exporting to other countries.”
Fortunately, Kramer adds, the Probasco chair can turn the conversation that takes place during an election cycle on its ear.
“When we realize politicians are trying to maximize votes, then we can start to understand why they’d support a policy that would cause more unemployment. Again, it sounds good, but the populace doesn’t necessarily perceive the full consequences of certain policies.
“The average voter is busy with life and meeting its demands, so when these things start to percolate in the news cycle every four years, they haven’t taken the time to think them through. While I believe the basic economic principles are intuitive, we sometimes have to pause and do the work.”
Family benefits
If learning about economics is indeed akin to slipping on a pair of glasses that make the world clearer, Kramer has perhaps been looking through her pair long enough that she wouldn’t recognize her surroundings if she removed them. She jokes that she even views her familial relationships through these selfsame lenses, including her marriage to her husband, who owns a catering business, and her role as a parent of two children.
“I can’t turn it off,” Kramer says in reference to her economist’s mind. “Thankfully, my husband was an economics major at Grove City College, which has an excellent economics department, so we both think this way.”
Going further back, economics did more than help Kramer understand the circumstances in which she grew up; the discipline that has shaped her life also aided her understanding of her father, she observes.
“My dad was a pipe fitter. Jobs would come and go, and he sometimes wanted to work and sometimes didn’t want to work. So, there was some induced poverty in the choices he made.
“But I’ve since learned that he was confronting his own issues, and his cost-benefit analysis was different from mine. That helped me to understand that he isn’t a bad person, he simply sees costs and benefits differently than me.
“Economic value is subjective; it’s very much based on the individual. And while I might not like someone’s decision, I can understand how they made it.”
Kramer says she also appreciates how the early building blocks of her life, which included a job at a McDonald’s when she was a teenager, motivated her to pursue life based on her personal cost-benefit analysis.
“McDonald’s made me more driven to attend college and become financially independent,” Kramer says. “I was happy it was there, but I also knew I didn’t want to do that for the rest of my life. And I was fortunate to have access to resources that allowed me to work my way out of poverty.”
Kramer’s drive, intelligence and passion have carried her from the banks of the Ohio River to the classrooms of UTC, where she teaches economics at the undergraduate and doctoral levels. She also hosts the Burkett Miller Distinguished Lecture Series, which brings scholars and practitioners to UTC to discuss the market economy, and directs the university’s Center for Economic Education, which offers programs that teach K-12 students and the general public about economics and personal finance.
While Kramer can slice open an economic quandary like a lab rat and dissect its innards in a way that reveals things the public might not be seeing, the heart of a social scientist who wants to better the world for others beats beneath her inquisitiveness.
“When you think about the power of economics, it’s not only about maximizing income or solving economic puzzles. It’s ultimately about understanding how we can shape a world that allows human flourishing, whatever that looks like to an individual.”