Economics at Columbia
Columbia University, nestled in the New York City, is one of the Úlite "Ivy League" colleges of the United States. Founded in 1754 as "King's College", Columbia was originally designed as a college for Episcopalian clergy. For much of its early history, the traditionalist Columbia remained on unfriendly terms with the more diverse and business-minded New York community. Its attempts to curry favor with them may explain why Columbia was the first American university to create a chair in political economy. Established in 1817, the first holder of the chair was the Rev. John McVickar, a popular Ricardian lecturer.
The creation of non-denominational New York University in the 1830s, along the lines of UCL, spurred Columbia to institute several changes to modernize its curriculum. However, resistance among those who preferred the traditional "Oxbridge" model ensured that Columbia maintained its "finishing school" character.
Columbia only began re-organizing itself into a serious "research" university in the 1870s, despite stiff resistance from traditionalists. The first step was the creation of a "School of Political Science" in 1880, designed along the lines of the French "Grand Ecoles", as a civil service training school. This was the brain-child of John Burgess, a very modern-minded history professor. Modern subjects (such as economics) finally got a vent and serious graduate instruction began.
The initial preference in the appointments to Department of Economics and Social Science within the School of Political Science went to the "new generation" of German-trained Americans. The first appointee was Richmond Mayo-Smith, a German-trained social statistician. In 1886, he was joined by his student, E.R.A. Seligman, freshly back from a training tour of Germany. That same year, Seligman helped launch the Political Science Quarterly, which was to become the house organ of Columbia. The quantitative sociologist, Franklin H. Giddings, joined the department. In 1895, Columbia lured yet another German-trained economist: American marginalist theorist John Bates Clark. Under Clark, Columbia became the home of his "Social Value" school of marginalist economics.
As Mayo-Smith and Giddings gravitated away from economics (a separate department of sociology was finally created in 1905), economics remained firmly in the hands of Seligman and Clark for the next two decades. Surprisingly, although Seligman and Clark belonged to different schools of thought, they got along very well. If events elsewhere were any indication, they should have had a Methodenstreit to capture the "soul" of the Columbia economics. But Seligman and Clark respected each other's spheres of activity and remained close friends.
In 1902, Columbia bolstered its ranks with the appointment of Henry R. Seager, a labor economist, and the shy Henry L. Moore, virtually the sole Walrasian on American shores. The Columbia philosopher John Dewey and the historians Charles A. Beard and Harvey James Robinson contributed to the training of Columbia economics students. Somewhat apart was the German-trained Vladimir G. Simkhovich, who taught courses on socialism and economic history.
The talismanic Clark gradually retired. But with these first-rate appointments, Columbia catapulted itself to the forefront of the social sciences in the United States. From the early 1900s to the end of the First World War, under the leadership of Seligman, Seager and Moore, Columbia was doubtlessly America's premier economics department. It leapfrogged over Johns Hopkins and was well ahead of Chicago, Harvard, Yale, Cornell or Princeton. Only Wisconsin could ostensibly challenge Columbia's lead. The eclecticism of the Columbia economics department in its early glory days is reflected in many of its Ph.Ds, such as William Z. Ripley, Alvin S. Johnson, Benjamin M. Anderson, John Maurice Clark, Paul H. Douglas and Henry Schultz.
The character of the department began to change in 1913 with the appointment of Wesley C. Mitchell (then at Berkeley). Already a prominent business cycle empiricist, Mitchell and his students would make Columbia the formidable bastion of the American Institutionalist school, a hue that would color the department until after World War II.
However, the First World War was the more urgent problem. In 1917, Columbia's conservative President Nicholas Murray Butler fired two Columbia professors for publicly opposing the entry of the United States into the war. The historian Charles Beard resigned in protest. A spate of high-level resignations followed, including John Dewey, James Robinson and Wesley Mitchell. In one fell swoop, Columbia was decimated. Inspired by Veblen, some of the exiled Columbia professors got together and formed the New School for Social Research in 1919. However, facing a lack of research students at the New School, Mitchell, Dewey and Robinson were gradually lured back to Columbia.
The Institutionalist dominance of Columbia began to take hold around this time. William Ogburn was appointed to the sociology department in 1919. In 1920, Mitchell's students, Paul Brissenden and Frederick C. Mills was appointed to the business school. Rexford Tugwell joined the economics department in 1920 and James Bonbright followed suit in 1921. Robert Hale was given a position in legal studies in 1922 (the year of Mitchell's return). The hiring of the Neoclassical James W. Angell in 1924 was balanced by the hiring of the Institutionalist John Maurice Clark (son of J.B.) in 1926, away from Chicago to teach the theory component (Jacob Viner was also considered, but his candidacy was set aside, partly over Columbia's concern about "too many Jews" in the department).. Karl Llewellyn joined the Columbia School of Law in 1924 and Adolph A. Berle followed him in 1927. Eveline Burns and her husband, Arthur R. Burns joined the economics faculty in 1928.
In the 1929-31, Seager died and Dewey, Moore and Seligman retired, thereby leaving the department fully in the Institutionalists' hands. Carter Goodrich was lured from Michigan in 1930 to take over economic history while Leo Wolman was lured away from the New School in 1931 to take over labor economics. Benjamin Graham came in from Wall Street to teach finance. Carl S. Shoup and Joseph Dorfman, two Columbia Ph.Ds, were appointed to the faculty in early 1930s.
Wesley Mitchell's presidential address to the A.E.A. set the tone of the new age: Institutionalism had arrived at its mature stage, and Columbia would lead the way. Jacob Viner's and Henry Schultz's responses to Mitchell set the other side of the equation: the Neoclassicals had arrived at Chicago and they would resist them every step of the way. This conflict, Institutionalists vs. Neoclassicals, Columbia vs. Chicago, AER vs. JPE, would be carried on through the 1920s through the 1940s.
Interestingly, Harvard remained in the middle ground, leaning tentatively towards the Institutionalists. There was much cross-fertilization between Harvard and Columbia. The landmark Berle and Means study, Modern Corporation and Private Property (1932) anticipating the monopolistic competition revolution, can be regarded as a joint Columbia-Harvard product.
The firmest asset in the hands of the Columbia Institutionalists was the National Bureau of Economic Research (NBER) -- an institute the Chicagoans could not match. Wesley Mitchell had set this up in 1920 with the help of Harvard's E.F. Gay, but the NBER remained very much Mitchell's baby. Mitchell directed its research program on the empirical analysis of business cycles. Despite its nominal independence, research positions at the NBER were filled by Mitchell's students from Columbia, such as Simon Kuznets in 1926, Arthur F. Burns and Solomon Fabricant in 1930, Milton Friedman in 1937 and Moses Abramovitz in 1938. The crowning achievement of the NBER's research program was Mitchell and Burns's massive study, Measuring Business Cycles (1946).
The Columbia faculty also participated in a variety of advisory roles and sat on government commissions during the New Deal and in wartime planning. Adolf Berle and Rexford Tugwell were original members of President Roosevelt's "Brain Trust" in the 1930s.
For a while, it seemed as if the Columbia Institutionalists might hold on the crown of American economics. But, in the 1930s, the Paretian Revival to restore Neoclassical economics got under way. This was heralded by Schumpeter's arrival at Harvard, pulling it more firmly into the Neoclassical camp. With the arrival of the Cowles Commission in 1939, the Chicago Neoclassicals finally had a well-funded research institute to rival Columbia's NBER. Henceforth, Columbia Institutionalists would be fighting a rear-guard action. The battle reached a fever pitch in 1947-9, when Koopmans pitted Cowles's "theoretical" approach to econometrics against the NBER's "measurement" approach.
But there was also some "boring from within". Arguably the most important appointment during the 1930s was that of the statistician and mathematical economist Harold Hotelling in 1931 to replace the retired Henry L. Moore. Hotelling single-handedly carried the flame of the Paretian Revival deep into the heart of enemy territory. Kenneth J. Arrow, Meyer Girshick, W. Allen Wallis and Milton Friedman were a few of the Columbia students who worked under Hotelling.
Hotelling was intent on creating a separate program for mathematical statistics and secured the appointment of Abraham Wald in 1939 for the purpose. In 1942, Hotelling formed the wartime "Statistical Research Group" (SRG) at Columbia. The SRG was under contract with the US government to study statistical methods and operations research for war objectives. Leonard J. Savage joined Hotelling, Wald, and their students at the SRG. The great outcome of the SRG was the development of Wald's "sequential analysis" and statistical decision-making, that would later propel the theory of choice under uncertainty. The SRG was disbanded after the war and many of its members gravitated to the University of Chicago (they formed the nucleus of the postwar "Chicago School"). Although Wald stayed on at Columbia, Hotelling departed for North Carolina.
Mitchell's retirement in 1944 dealt a blow to the Institutionalist hold. Arthur F. Burns (arguably more of a Marshallian than a red-blooded Institutionalist) took over the business cycle courses and the NBER; John Maurice Clark, who took over Mitchell's standard courses, aimed for a less confrontational position. Karl Polanyi's arrival in 1947 energized the old guard, but his adjunct position ensured watered down his influence.
The appointment of four Neoclassical theorists in 1945-7 period -- Abram Bergson, George J. Stigler, A.G. Hart and William Vickrey -- set the tone for the future. Ragnar Nurkse arrived around the same time to teach international trade. General Dwight D. Eisenhower, became president of Columbia around this time, marking another break with the past. By the late 1950s, with a spate of retirements and departures of interwar Institutionalists, the Neoclassicals had taken a firm hold of the Columbia economics department.
The Glorious Generation
The Institutionalist Generation
Hotelling's Statistical Research Group (SRG)
The Columbia Neoclassicals
Resources on Columbia Economics
All rights reserved, Gonšalo L. Fonseca