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Economics at Columbia
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Columbia University, nestled in the New York City, is one of the élite "Ivy League" colleges of the United States. Founded in 1754 as "King's College", Columbia was originally designed as a college for Episcopalian clergy, originally attached to Trinity Church in lower Manhattan. After the American revolution, the college applied for a new charter from the New York legislature. A public charter was granted in 1784, placing it under the governance of the Regents of the University of the State of New York and renaming it "Columbia". The charter raised its status from college to "university" and envisaged four faculties - Arts, Medicine, Law and Divinity, with an assortment of salaried and unsalaried professors. However, it was soon realized that the rotating politicians that constituted the Regents by virtue of their office was inadequate, so a the charter was amended in 1787 and governance entrusted in a permanent, self-perpetuating corporation of "Trustees". Religious tests were removed from the university charter, and it was open to all denominations, at least in principle, although Columbia remained nominally Episcopalian and some of religious restrictions that had come attached with endowments and gifts continued, despite being eliminated by the charter (notably, that the president must be an Episcopalian). This came to a head in 1811, when the prime candidate for the presidency of Columbia was John M. Mason, a religious delinquent. Columbia "resolved" the problem by appointing Mason to "Provost", with expanded near-presidential powers, and appointing a conventional Episcopalian as figurehead president.
Columbia's efforts in the professional faculties fared poorly. Of the original four faculties, Divinity was never established; and Medicine was established only briefly (it was discontinued in 1813). Law lingered on, but with difficulties.. Only the Faculty of Arts of Columbia College seemed to gain any traction, but fund-raising was always a problem. For much of its early history, the traditionalist Columbia remained on unfriendly terms with the more religiously diverse New York business community.
Its attempts to curry favor (and donations) with them may explain why Columbia was one of the first American universities to create a chair in political economy. Rev. John McVickar was hired as professor of moral philosophy and rhetoric in 1817, and his title was expanded to include "Political Economy" in 1826. McVickar was responsible for teaching a series of classes on economics, as part of a generic course on moral philosophy (which included ethics and history, also taught by McVickar) to final year students. This was in addition to his other teaching duties in classics, theology and English rhetoric. McVickar maintained this heavy teaching load at Columbia, for the next forty years. A popular Ricardian lecturer, McVickar's economics courses were well-attended.
Despite the efforts, Columbia's relationship with New York City did not improve.. In 1830, the New York financial and commercial community backed a proposal to create New York University, a non-denominational university with a modern curriculum, along the lines of London's UCL. Trying to fend off the challenge, Columbia responded immediately by creating the "Scientific and Literary Course" in 1830, a series of extension lectures in modern subjects (including economics, despite McVickar's opposition to the scheme) for non-matriculated students. But it was never a success - reportedly it was attended by a grand total of 43 students in its dozen years of existence - and so was quietly abolished in 1843.
Columbia's centenary in 1854 was overshadowed by a scandal. Wolcott Gibbs, backed by the faculty, was slated to succeed the outgoing professor of chemistry. But Gibbs was a Unitarian, and a group of conservative Episcopalian trustees rallied to prevent his appointment. The squabble spilled over into the public press and the New York State Senate opened an inquiry into the matter. .The Gibbs affair re-stoked acrimony between town and gown, and few lamented when Columbia ditched its lower city quarters (Park Place), and moved uptown, to a remoter area of Manhattan (49th & Madison) in 1857.
The Gibbs affair had provoked Samuel Ruggles, a New York lawyer and Columbia trustee, to issue a manifesto in 1855 calling for a complete overhaul and modernization of Columbia. Ruggles's call eventually led to the special commission assembled by president Charles King in 1857 to inquire into the state of education at the university. Ruggles was the leading light of the commission. Among its remarkable results was the decision in 1857 to introduce an "elective year" for senior students. That is, that after three solid mandatory years of classics, senior students could opt out of a fourth year of classics ("Letters"), and instead take either a course of Science or a course of Jurisprudence. The senior Jurisprudence course consisted of natural law, international law, modern history and economics. The commission also recommended that after their elective year, students in Science and Jurisprudence could continued for two more years to earn an M.A. The 1857 curriculum required expanding the offerings. The long-time lecturer McVickar, advancing in age and spread to thin, could not take on the implied larger teaching load, and so his position was split into three. McVickar retained theology, while two new hires took over the remainder: Charles Nairne took Moral and Intellectual Philosophy, Rhetoric and English literature, while Francis Lieber, then exiting South Carolina, was appointed professor of Modern History and Political Economy. German-born and an enthusiast of modern education, Lieber greatly expanded the economics course at Columbia.
But the great 1857 experiment never got traction. Once the crisis was over, the old denizens of Columbia reasserted themselves and reversed the reforms. The graduate degrees were mothballed before they even started, and by 1861, the "elective year" was abolished altogether. Columbia returned to its traditional classical curriculum. This was cemented by the arrival of new president Frederick A. Barnard in 1864. Among his first acts was ending the expanded economics course and removing Lieber in 1865. Everything went back to how it was before, with economics returning to its confined space in the final year moral philosophy course, now taught by Charles Nairne (who didn't much care for it; Nairne's primary teaching was in rhetoric and literature). Lieber stayed on, but was moved to the professional Law School (founded 1858), as professor of constitutional history and public law. Economics came virtually to end at Columbia.
Although the first Columbia experiment back in 1857 had failed, it was ready to try again by the late 1870s. Columbia president Barnard had changed his mind in the intervening decade. After the Civil War, the number and age of students enrolling in American colleges creeped up. Barnard concluded that while "character-forming" tour-de-force of the ancient classics was necessary for teenagers, it was not well suited for 19- and 20-year old adults that were the new college students. Elective courses in modern subjects would be more useful for their futures, and began pressing the trustees in that direction. Barnard found an ally in John W. Burgess, the ambitious young professor of history at Columbia, part of the "new generation" of American scholars who had trained in Germany. Lieber had died in 1872, and Burgess had taken up his law school chair sometime after. In 1876, a new chair in history, political science and international law was created by the now-repentant Barnard, and Burgess elected to fill it.
Barnard supported Burgess's scheme to launch a "School of Political Science" in 1880, designed along the lines of the French 'Grand Ecoles" as a training school for civil servants (indeed, Burgess's original curriculum proposal translated that of SciencesPo in Paris almost verbatim).. Its curriculum covered economics, modern history, international law and the like Unlike the "scientific schools" of Harvard and Yale, the SPS was not completely segregated, but was a re-visitation of the old "elective year". That is, after three years of solid classics, Columbia college students could enroll in the SPS for their fourth year (albeit they would receive a B.Phil. rather than a B.A.), and could carry on in the SPS for a few years more to earn a graduate degree (Ph.D. rather than M.A.). Besides reintroducing modern subjects, Burgess also transformed the style of learning. In imitation of Johns Hopkins, German-style seminars and a final thesis were instituted for the graduate degree. For the undergraduates, Burgess replaced the disciplined reading and recitation common in Anglo-Saxon schools with German-style responsive lectures and written exams (this style had in fact been first introduced by Lieber back in the late 1850s, but at the time was regarded suspiciously; Columbia colleagues complained Lieber's classes were "chaotic"). (On a side-note, adamant about research, Burgess built up a special library for the SPS, and secured the hiring of Melvil Dewey - the inventor of the Dewey decimal system - in 1883 for the main Columbia library).
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. Richmond Mayo-Smith, a German-trained social statistician, who been hired by Burgess as his assistant in history in 1877, took charge of the first new economics course at the SPS in 1880. He was joined by younger assistants Munroe Smith and Charles Bateman.. The first Ph.D. in economics at Columbia was awarded to F.B. Herzog with a dissertation on railroads.
Mayo-Smith was eventually promoted to the title of "professor of political economy" in 1887.. 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 1892. 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.
(to be completed)
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Pre-History
The Political Science Generation
Contemporary Columbians
The Institutionalist Generation
Hotelling's Statistical Research Group (SRG)
The Columbia Neoclassicals
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All rights reserved, Gonçalo L. Fonseca