The American Economic Association (AEA) was founded in Saratoga in 1885.
Up until the 1880s, economics, and social sciences generally, had been the province of amateurs. American colleges were dominated by clerics, and had long adhered to a traditional curriculum dominated by ancient classics (Latin, Greek, mathematics), and next-to-no modern subjects were taught. Only in the final year were senior students given a generic "moral philosophy" or "political philosophy" course to inculcate finishing students with a general outlook on man and society. This was traditionally taught by the college president himself, or outsourced to a multi-faceted "moral philosophy" teacher. Although focused on ethics, law and politics, some lectures on economics were always included as part of this final year course. Pressure for curricular reform had led to some experimentation in the 1850s, such as the setting up of "scientific schools" to teach modern subjects (economics included), but they were usually kept strictly segregated from the main college. As a result, the economics profession primarily constituted a variety of social reform activists and a coterie of clerical "moral philosophy" teachers. The American "clerical economists" (e.g. McVickar at Columbia, Bowen at Harvard) loosely adhered to British Ricardian Classicism and its laissez faire tenets (although several were proponents of "American System" protectionism).
Things began to change after the end of the Civil War in 1865. The composition of college population changed, with the enrollment of greater numbers, especially older students and women, for whom a traditional classical education seemed inappropriate. Colleges gradually began expanding their curricula to include modern subjects and looking for new hires to teach them. They found them among the "new generation" of American scholars, who had gone abroad for graduate training in German universities, and came home looking for academic positions. German-trained Americans began as a trickle in the early 1870s, but turned into a flood by the 1880s. .The curricular reform in the old colleges were joined by a slate of new modern universities established by the private fortunes of Gilded Age magnates like Ezra Cornell, Johns Hopkins, Cornelius Vanderbilt, Leland Stanford, Jonas Clark, Joseph Wharton, John D. Rockefeller, Andrew Carnegie, etc. While there were only three professors of economics in the United States in 1880, there were twenty chairs in the subject by 1890, and fifty-one by 1900.
The German-trained "New Generation" economists brought along a different view of economics. Trained in the empirical methods of the German Historical School, and imbibed in its fervor for Statist ideas, they promptly challenged the theoretical approach and laissez-faire ideology of the conservative old guard of American colleges. They also had a different idea of the role of the economist in society In Germany, economics professors were not mere teachers, but prominent professionals, who enjoyed a particularly high status as technical experts, connected as advisors to the upper echelons of the Prussian-German State, and influential public leaders of social reform. .Tying it together was the Verein für Socialpolitik (f.1873). a Historicist-dominated association of professional economists with the explicit aim for economic and social reform. The New Generationists had a similar vision for the fledgling profession in the United States.
At the time, the closest thing to a association inhabited by economists was the American Statistical Association (ASA, f.1839) and, more prominently, the "finance" section of the American Social Science Association (ASSA, f. 1865). The ASSA was not an academic organization, but a social reform organization, founded by a group of urban charities, centered in New England and New York. Its intent was to bring together educated people of various backgrounds (activists, teachers, clerics, charity workers, businessmen, politicians, etc.) in contact with each other, to present their findings, and coordinate with each other on proposals to address problems in northeastern cities brought about by rapid urbanization, mass immigration and industrialization (e.g. public health, sanitation, education, urban planning, police and penal system, labor standards, etc.). The big event of the ASSA was its annual national conference, which (from 1876 on) met yearly in Saratoga, a small resort town in upstate New York.
In the 1880s, as social scientists were finally setting themselves up in universities as professional academics, it quickly dawned that the annual ASSA conference was a unique opportunity for holding parallel meetings among themselves. Academics from the Johns Hopkins University were the first to part ways and use the annual ASSA meeting to set up exclusive sessions for themselves, segregated from the hoi polloi of amateurs. The historians, under Herbert Baxter Adams, defected first, founding the American Historical Association (AHA) in 1884. This inspired his close Hopkins colleague, Richarrd T. Ely to gather up the economists and found the "American Economic Association" (AEA) the very next year (1885), drawing on the same rolls. These moves had been encouraged by Johns Hopkins president Daniel Coit Gilman as a way to raise the national profile of the fledgling university.
But Ely had a second, more overriding, interest - to galvanize the "New Generation" of German-trained young American economists, in common cause against the old academic guard. Ely had just come out of a bruising methodenstreit inside Hopkins with Simon Newcomb, an astronomer-turned-economist of the older apologist stripe, who denounced the historicism of Ely and the New Generation as "unsound" and "unscientific" and their ideas on State intervention as "socialism" in all but name. Indeed, the conservatives, led by Newcomb and Laughlin, had organized first, founding the "Political Economy Club" in 1883, on the model of the exclusive Ricardian London club of the same name, to rally for laissez faire, free trade and sound money.
The early members of the AEA divided over whether to conceive itself as an organization with broad membership (like the ASSA had been) or a narrower academic-oriented one. Many, including Ely himself, originally nurtured visions of the AEA becoming a applied and social policy body, an American version of the German Verein für Socialpolitik (f.1873) with a goal to influence the general public and politicians, and push for social and economic reform. Its original provisional platform was composed in the Spring of 1885 (see Ely, 1886, p.6). Its explicit aim was the "education of public opinion in regard to economic questions and economic literature". The Ely manifesto included professions of Historicist faith such as "we regard the State as an educational and ethical agency whose positive aid is an indispensable condition of human progress", that "laissez faire is unsafe in politics and unsound in morals" and "we believe in the existence of a system of social ethics". It rejected the economic theory "of the past generation" and demanded a new scientific economics based not on speculative inquiry but on "the aid of statistics in the present, and history in the past". It made explicit recognition of the "conflict of labor and capital", and that a solution needed the "united efforts of church, state and science", but that in the matter of restrictions on trade and protection "we take no partisan attitude". The provisional platform was circulated as a prospectus among American economists, and a founding meeting arranged at the Bethesda Parish Building in Saratoga, New York (Sep 8-11, 1885) to coincide with the conference of the ASSA and AHA (of which many economists were members; see partial list of participants). Ely's provisional platform was discussed at Saratoga, and broadly agreed with, although objections were raised to the negative tone of some of its statements. Although diluted (e.g. the condemnation of laissez faire and past economics was omitted), Ely's platform was incorporated as a "statement of principles" in Art III in the first AEA constitution (1885 Const).
The American Economic Association was formally founded on September 9, 1885 in Saratoga. While Ely managed to rope in the venerable General Francis Amasa Walker (then president of MIT) as the first President of AEA, New Generationists filled in the rest of the offices - John Bates Clark (then at Smith College), Henry Carter Adams (then at Cornell) and Edmund J. James (Penn) were the first vice-presidents, Richard T. Ely (Johns Hopkins) himself was installed as the first secretary and E.R.A. Seligman (Columbia). as treasurer. Local "branch associations" were established in several American cities, notably Connecticut Valley (CT), Buffalo (NY), Galesburg (Ill), Washington (DC), Orange (NJ), Canton (OH) and Austin (TX).
The idea for the AEA had arguably preceded Ely. While graduate students in Halle, Germany, the Pennsylvania economists Edmund J. James and Simon Nelson Patten had come up with a draft proposal to establish an American equivalent of the German Verein für Socialpolitik, to fight the influence of liberal "British" economics in America, and embrace a more "German" economics (with its more protectionist, interventionist tenets). But Ely pipped them to the punch with his 1885 manifesto, articulating similar Verein-like principles and goals. The Pennsylvanians were not completely convinced by the AEA. Institutional rivalry fueled suspicions that it was a bid by Johns Hopkins to assume control of the academic profession. Moreover, they were never quite reconciled to the AEA's overt goal of segregating economists from the rest of the social sciences, and initially argued for remaining inside the "finance section" of the ASSA. When the AEA began moving in a more pronouncedly professional direction after 1887, the Penn economists founded the American Academy for Political and Social Science in 1889, merging with the Pennsylvania branch of the ASSA, in order to maintain the connection to other social sciences and social reform.
Despite its initial radicalism, the AEA quickly became a broad professional organization as opposed to a narrower and more partisan association. In December 1887, the AEA Council proposed to amend the constitution to remove the radical "statement of principles" of the 1885 constitution, and a new constitution was adopted at the third annual meeting in Philadelphia in December 1888 (Report p.314). Nonetheless, the new constitution remained overtly Historicist in tone, including as its object: ""the encouragement of economic research, especially the historical and statistical study of the actual conditions of economic life" (1890, Art II), while simultaneously promising "perfect freedom of economic discussion".. Its social reform objectives also continued - among its early resolutions were requests to establish committees on hot policy topics like labor working hours, women in factories, municipal finance, public works, rent, a national railroad commission, suffrage in local elections, transportation and the silver question (1890: res).
If "New Generation" proto-Institutionalists were overrepresented in the early membership rolls of the AEA, it was also because the "old school" American economists - such as Laughlin, Sumner, Taussig and Hadley - refused to join. They viewed the AEA suspiciously as a socialistic organization. However, most of their misgivings were allayed after Ely's resignation as secretary in 1892. The AEA was set more firmly on a professional tack, unattached to any particular school of thought, as new Neoclassicals and even old school apologists began gradually joining it (Laughlin, however, continued to refuse throughout his career, and chided Taussig for breaking ranks and consorting with the upstarts).
Ely's "loss of control" of the AEA was not taken kindly his fellow travelers, and provoked a new split in 1895: the creation of the "Political Science Association" (PSA). The name was deceptive. It was an economics association, chock-full of bona fide economists - mainly Institutionalist economists from the Midwest, who had been former colleagues and students of Ely (notably HC Adams at Michigan and John Commons, then at Indiana; Ely himself had moved to Wisconsin in 1892). Disappointed by the neutral turn of the AEA, the PSA explicitly "restored" the original political and social reform goals of the original AEA. Although the PSA diplomatically assured the AEA that it was not a rival organization, but merely a regional one, limited to the Midwest, it was nonetheless perceived as a threat. The PSA charged that the AEA was dominated by eastern economists, that meetings were always east of the Alleghenies, negligent of the needs and struggles of Midwestern states, and the pressure which Midwestern economists were under in their universities (this was the height of agrarian socialism and the Bryan campaign, where Midwestern economists being asked to pick sides). The threat of schism prompted the AEA to hold joint meetings with the PSA in Indianapolis (Commons's base) in 1895 and elected HC Adams as president to mollify the midwesterners. The PSA lingered on as a regional organization, but its schismatic character dissipated when Ely was unexpectedly elected president of the AEA in 1899, healing some of the old rifts.
Curiously, it was only in 1925, and after some energetic lobbying efforts by Paul H. Douglas, that the AEA finally got around to offering Institutionalist icon Thorstein Veblen the presidency of the AEA - which Veblen, of course, refused with pleasure.
From the beginning, the American Economic Association began putting out the Publications of the AEA, in 1886, as a bi-monthly series. R.T. Ely had originally wanted the Pub AEA to serve as something akin to policy briefs, rather than pure academic fare. But over time it became more consciously academic. The Pub AEA was not a journal properly speaking, but more like a monograph or occasional paper series - each number usually contained a single study by a single author. Only the number dedicated to the "Papers & Proceedings" of the annual AEA conference had multiple articles. For a brief period, (1896-99), a bi-monthly series, including the proceedings, was published under a new title Economic Studies, reserving the Publications title for irregular briefs ("new series"). This was soon discontinued, and the Publications of the AEA was re-launched as a more regular quarterly ("third series") in 1900. Nonetheless, it still remained mainly a monograph series, save for the conference proceedings number, which contained multiple papers and discussions. In 1908, Pub AEA was re-titled American Economic Association Quarterly, and a separate series, consisting entirely of book reviews, began to be published separately as a new quarterly, the Economic Bulletin.
In 1911, the Publications of AEA and the Economic Bulletin were discontinued, and the AEA launched a single new quarterly journal, the American Economic Review (AER). .It was now determined to be a quarterly academic journal, with multiple articles per issue number. There were four numbers per year (March, June, Sep, Dec), with an additional fifth number of "Papers and Proceedings" (May). It maintained that structure for the next century.
The AER was designed in 1911 to compete with the rising economics journals put by other institutions - notably Columbia's Political Science Quarterly (PSQ, begun 1886), Harvard's Quarterly Journal of Economics (QJE, 1886), Chicago's Journal of Political Economy (JPE, 1892), the Annals of the American Academy of Political and Social Science (AAPSS, 1890) and the British Royal Economic Society's Economic Journal (EJ, 1890). The AER quickly muscled itself into the top of the heap.
In its early years, the American Economic Review was (and remains) aimed at a relatively wide audience and thus articles which were too technical or mathematical rarely found their way into the AER. To a certain extent, this anti-technical bias was also found in other contemporary American journals. Nonetheless, this proved intolerable for technically-inclined economists - and a rival, worldwide organization, the "Econometric Society" and its journal Econometrica, was set up in the 1930s to fill the void left by the AER and other conventional journals. As the technical language of economics advanced, the AER has admitted increasingly technical papers - although its wide audience does not permit it to overextend itself in this respect.
In the late 20th Century, the AEA introduced two additional quarterly journals to help its dissemination mission. The Journal of Economic Literature (begun 1963 as the Journal of Economic Abstracts, but recast as JEL in 1969) usually contains a few wide literature surveys, book reviews and annotated listings of new articles and abstracts in economics, is the reference journal of the profession. The Journal of Economic Perspectives (begun 1987) devoted exclusively to accessible articles and surveys of economic ideas and debates, serves as the communication line between increasingly specialized and often incomprehensible professional economists and the more general public.
Starting in 2011, with the 100th volume, the AER abandoned its long-standing quarterly structure began publishing bi-monthly (six numbers a year - February, April, June, August, October, December) with an additional seventh volume of Papers & Proceedings (still May). .From 2014, the AER has become a monthly (12 numbers per year).
In addition to its three long-standing journals (AER, JEL, JEP), the AEA recently (since 2009) began publishing four "field journals". All of them are prefixed American Economic Journal, with specific subtitle Applied Economics, Economic Policy, Macroeconomics and Microeconomics. The AEJ field journals, all of them quarterlies, were designed as outlets to handle the surge of new articles, and to give economists an alternative to the high-cost specialized journals put out by commercial houses.
Following up in the tradition of the old ASSA, the AEA continued to hold annual mid-winter meetings (usually early January), in conjunction with other associations under the overarching title of "Allied Social Science Association" (ASSA). These have sometimes been a cause of consternation because the programs, usually organized the presidents, naturally exhibit their personal preferences and thus often exclude issues and groups which they dislike or feel do not deserve a hearing. Although many presidents attempt to be magnanimous in their coverage, heterodox economics is sometimes shunted out of the formal AEA conference programs - although many heterodox organizations set up their own separate meetings at the same time.
Another accusation that the AEA has also borne in the past is that it is biased in its very lack of bias! At the very start, Ely & Co. sought to make the AEA an advocacy organization, with specific policy goals, but this was resisted. Since then, for the most part, the AEA has adhered to the idea that it should make no pronouncements, as an organization, regarding any economic, social or political programs. The one exception to this rule is that it (sometimes) speaks, as an organization, against political attempts by governments to curtail freedom of speech and academic research. Some economists have felt uncomfortable with that narrow position. The AEA's refusal to take a position about the Vietnam War during the 1960s, for example, divided its members.
AEA honors and awards
The American Economic Association has also been a fountainhead of professional accolades and honors for economists to gather over time and attach to their sleeves. Ever since 1885, the American Economic Association has elected a member of the American profession to its presidency more on the basis of merit than on organizational ability. Its most watched award is perhaps the John Bates Clark Medal - which as instituted in the 1940s and is traditionally awarded every second year (now yearly) to a promising young economist under the age of forty. Every year since 1962 it also gives out a Distinguished Fellow award to one or two American economists (increased to three, then four, in recent years) - perhaps in fear that deserving economists might miss out on the more conventional awards.
Previous to the Nobel Memorial Prize, the most prestigious prize in economics might have been the Francis A. Walker Medal, awarded every five years for outstanding lifetime achievements. It was discontinued after 1977, ostensibly because the Nobel Memorial Prize made it superfluous, even though they are not perfect substitutes. The Walker medal - like the Clark medal and Distinguished Fellow award - was exclusive to economists working in the United States (while the Nobel Memorial Prize is open to all countries). The AEA instituted the special award of "Foreign Honorary Member" to distinguished economists working in other countries.
In the 1960s, the AEA instituted the Richard T. Ely Lecture, an address given by renowned economists at the annual AEA Conference - which is not confined, as its other awards usually are, to American economists.. The Richard T. Ely Lecture and the Presidential Address to the AEA are often the two favorite places that the great elders of the profession finally get to air their long-held opinions and complaints about the field, and so have a tradition of being rather firecracker lectures.
Instituted in 1947 by the American Economic Association and awarded every five years to established economist for lifetime work, or rather "to the living American economist who in the judgment of the awarding body has during his career made the greatest contribution to economics". Named after early American economist, Francis Amasa Walker. The creation of the Nobel Memorial Prize has ostensibly made the Walker Medal effectively superfluous as a cap on a career, and the Walker medal was discontinued in 1981.
Instituted in 1947 by the American Economic Association and awarded every second year (annually since 2009) to a promising young economist - i.e. "to that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge". Named after early Neoclassical economist, John Bates Clark, it is widely considered to be the profession's most coveted award -- exceeding, perhaps, even the Nobel Memorial Prize in prestige.
Distinguished lecture to the AEA, instituted in 1962 and not confined to Americans. Named after one of the founders of the AEA, Richard T. Ely.
Established by the AEA in 1965, this is awarded annually to not more than two "economists of high distinction in the United States and Canada". The number was increased to "not more than three" in 2002-03 and to "no more than four" in 2010-11. All Walker medallists and presidents were awarded the title of "Distinguished Fellow" automatically. To highlight specifically elected distinguished fellows, we omit the ex oficio fellows from this list . Traditionally, portraits of the president appeared in the March (No.1) issue of the AER, and the distinguished fellows in June (No. 2) and September (No.3). After 2003, the third fellow appeared in the December issue (No.4). With the reorganization in 2011 of the AER to six numbers per year, and distinguished fellows to four, the portrait of the President now appears in April (No.2), and distinguished fellows appear in June (No.4), August (No.5), October (No.6) and December (No.7) in the year after their service.
Resources on the American Economic Association
All rights reserved, Gonçalo L. Fonseca