Economics—looking backward

Posted: 9 November 2015 in Uncategorized
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The American Economic Association was, in the beginning, a radical organization—founded in 1885, according to Marshall I. Steinbaum and Bernard A. Weisberger, by “Richard Ely, an avowedly Christian Heidelberg-trained professor at Johns Hopkins with a calling to make economics a friend of the working man.” Now, of course, it is anything but radical.

What happened?

Steinbaum and Weisberger’s analysis is that

University presidents seeking stature for their institutions appealed to rich donors among the period’s Robber Barons, and that appeal was unlikely to be successful when rabble-rousers in the economics department were questioning the foundations of American capitalism, in particular the monopolization and labor exploitation that made the Robber Barons rich in the first place. . .

What had happened was that economists realized there was much to be gained in terms of professional stature and influence from making themselves appealing to the establishment, so they banished those elements that tainted them by association. In 1895, one of Ely’s students, Albion Small, the founding chair of the new, Rockefeller-endowed University of Chicago’s Sociology Department, did not come to the aid of another Ely student, Edward Bemis, after the latter’s public criticism of the Chicago traction [streetcar] monopoly brought down the wrath of the university’s president William Rainey Harper and its conservative chair of economics, J. Laurence Laughlin. Despite episodes like those of Adams and Bemis, economics was by no means as conservative then as it eventually became starting in the 1970s, but neither would it countenance a direct challenge to the economic status quo nor affiliate itself with radical elements in organized labor or elsewhere. Even Ely himself eventually came around after his own notorious trial before the Wisconsin Board of Regents in 1894. He returned to the AEA as its President in 1900, and though he was long affiliated with the “Wisconsin Idea” and its progressive exponent, Governor Robert LaFollette, he was careful not to stray far from the new, milder orthodoxy.

Perhaps the causes of the transformation in U.S. economics during the first Gilded Age help explain why academic unfreedom in economics is so prevalent now, in the second Gilded Age.

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