The 1920s were not a good time to be a Neoclassical theorist, particularly if one had a mathematical bent. The Marginalist Revolution had basically petered out by then. The Institutionalist and Historicist schools dominated economics in America and the European continent. In Great Britain, it had given way to the avowedly non-mathematical Marshallian School. The few mathematically-minded Neoclassical economists that existed were scattered obscurely around the world. In the English-speaking world, Irving Fisher had long been the sole voice in defense of Neoclassical formalism. In 1912, he had tried to bring mathematical economists together into a society for professional advancement, but to no avail.
Channels for the exposition of mathematical economics had failed to grow in the interim. With the possible exception of the Italian Giornale degli economisti, most economics journals had explicit or implicit editorial policies against publishing articles with mathematical content. According to Gérard Debreu, the entire 1933 volume of the American Economic Review "contained exactly four pages where any mathematical symbol appeared, and two of them were in the Book Review Section" (Debreu, 1991).
In 1928, prodded by the young Ragnar Frisch and Charles F. Roos, Fisher took up the issue of a society for mathematical economists again. Fisher agreed to support it if one hundred economists could be found to charter it. Frisch and Roos could come up with only eighty tentative names. A letter signed by Fisher, Frisch and Roos was sent out in June 1930 to these eighty economists to test its viability and get more suggestions for members. Frisch had came up with the term "econometrie" in 1926 and, after undergoing much wrangling over alternative spellings (e.g. "Oekonometrika", "Econometrika", etc.), "Econometric Society" was decided upon.
On December 29th, 1930, sixteen people gathered at the Stalton Hotel in Cleveland Ohio: Frisch, Roos, Joseph A. Schumpeter, Harold Hotelling, Henry Schultz, Karl Menger, Edwin B. Wilson, Frederick C. Mills, William F. Ogburn, J. Harvey Rogers, Malcolm C. Rorty, Carl Snyder, W. A. Shewhart, Oystein Ore, Ingvar Wedervang and Norbert Wiener). These became the founders of "The Econometric Society, an International Society for the Advancement of Economic Theory in its Relation with Statistics and Mathematics". Aptly, its first academic meetings were held in September 1931 in Lausanne, Switzerland. It had 173 charter members.
The Constitution of the society, largely written by Frisch, was almost guild-like in its structure, a self-perpetuating society of "Fellows" who nominated the scholars that were to enter into their ranks. Membership was wider, but all power remained in the hands of the Fellows. The Fellows elect the ruling Council. The Econometric Society's first president was Irving Fisher and its first council members included Frisch, Roos, Schumpeter, Wilson, Luigi Amoroso, Ladislaus von Bortkiewicz, Arthur Bowley, François Divisia and Wl. Zadawsky.
The idea for a journal came up. The question of whether it would "ghettoize" mathematical economics was hotly debated, but it was the question of financing that made it particularly knotty. In 1931, the American businessman, Alfred Cowles, offered to help finance the entire venture. Cowles also offered to fund an "Econometric Foundation", but this was vigorously resisted by the European members, fearing that it might compromise the independence of the Econometric Society itself. A compromise was reached and the separate Cowles Commission for Economic Research was founded in 1932. Cowles himself stayed on to serve as treasurer and circulation manager for the Econometric Society. For a while, the Econometric Society and the Cowles Commission shared the same offices in Colorado Springs.
The journal, Econometrica, was launched in January 1933 with Ragnar Frisch as Editor-in-Chief and a circulation of 300. Articles could be submitted in English or French (and occasionally German) and there were no restraints on the degree of mathematical content.
There was a sufficiently large backlog of mathematical economics papers to make its first few issues relatively large. But this pool quickly dried up. Two other journals, the Vienna-based Zeitschrift für Nationalökonomie (re-founded 1929) and the Review of Economic Studies (founded 1933 by L.S.E. students) competed for papers in high theory. As such, Econometrica quickly became surprisingly thin. To "bulk it up" -- and to bring mathematical economics to a wider audience -- Frisch commissioned a series of famous yearly surveys on Equilibrium Theory, Business Cycle Theory, Statistical Techniques and Statistical Information. After a few famous initial contributions (e.g. Marschak (1933), Tinbergen (1935), Hicks (1935), Frisch (1936)), these were eventually discontinued as regular pieces. Only occasionally surveys were commissioned for the next half-century (e.g. Negishi (1962)).
Frisch also commissioned a series of articles on famous mathematical economists. Thus we find the classic biographical pieces by Åkerman on Wicksell, Roy on Cournot, Schneider on von Thunen, Hicks on Walras, Bowley on Edgeworth and, perhaps most controversially, Amoroso on Pareto. Also, important historical pieces such as the Jevons-Walras correspondence and Slutsky's 1915 article were reprinted.
A good part of the Paretian Revival of the 1930s was played out in Econometrica (e.g. Hotelling, 1938, Lange, 1942, etc.). It was also the home of Kalecki's first English-language publication (1935) on macrodynamics. Hicks contributed his famous 1937 "Mr Keynes and Classics" paper, launching Neo-Keynesian macroeconomics. But perhaps its most immediately significant piece was Haavelmo's 1944 "Probability Approach" paper which laid the foundation for modern econometrics.
During World War II, Econometrica foundered a bit as European universities were thrown in an upheaval and many mathematical economists scattered. From 1942 to 1946, Oskar Lange of Chicago took over temporarily as editor because Frisch, then in German-occupied Norway, had been unable to continue his duties (the University of Oslo was closed and Frisch sat in prison for one year).
The late 1940s and early 1950s saw an explosion in mathematical economics -- much of it arising from the research programs that stemmed in part from the Cowles Commission. Besides the "Cowles" approach to econometrics, the most significant was the launch of Neo-Walrasian general equilibrium theory. The famous existence theorems of Arrow and Debreu (1954) and McKenzie (1959) were published in Econometrica. The series of Arrow -Hurwicz papers of the late 1950s-early 1960s on stability theory were also published here.
The prestige of the Econometric Society and Econometrica rose over time, both driving and echoing the increasing mathematization of the discipline as a whole. Many have viewed this movement as having gone too far, to the point to which Econometrica has, it is charged, became inaccessible to most economists. This has been a perennial source of complaint. As Evsey Domar once cracked, "the only connection I have with econometricians is the $8 I pay every year for their incomprehensible journal." In1958, Joan Robinson declined an invitation to serve on council of the Econometric Society, noting that she could not very well serve as an overseer of a journal she could not read.
Ragnar Frisch's tenure as Editor-in-Chief of Econometrica lasted until 1955, but the imprint he left at the journal was deep. After his departure, Econometrica began to swerve away from abstract theoretical economics and econometrics and towards more applied empirical studies -- a swing that has ebbed at times but remains pronounced to this day.
The Econometric Society has gradually evolved from a guerilla cell of mathematical mavericks to the most prestigious club in the economics profession. Today, being elected a Fellow to the Econometric Society is widely regarded as one of the highest achievements of any professional economist. As bizarre as it sounds, several top departments in the United States often make the request that a junior professor have at least one publication in Econometrica if he is to have any hope for tenure.
The very "institutionalization" of the Society has also made it a little bit dull. The controversial polemics, the crusading spirit and the energy of scientific advance that could be felt in the early years of the Society have diminished considerably. To look for a trace of that old spirit today, we would probably have to turn to the Journal of Economic Theory, Economic Theory or the Journal of Mathematical Economics.
President of Econometric Society
Resources on the Econometric Society
All rights reserved, Gonçalo L. Fonseca