U.S. Economic History

...He found the genetic approach attractive, one which permitted a useful distinction between making goods and making money...

...Yet Dorfman has not faced up to the patent fact that it is the institu-tionalists who are losing the battle...

...The main criticism must be that Dorfman has not given his voluminous lists a cohesive shape...

...The few who may still be around, such as Morris Copeland, continue to look askance at the cloak of formal mathematics with which contemporary economics clothes itself, for this strikes them as something as interesting as a game of chess and just about as useful...

...At first a physician, Rubinow moved over to economics in 1900 with an intense interest in social insurance...

...Unfortunately...

...There is the same exacting concern with minutiae as in the earlier installments, the same impulse to inventory everything, and the same all-too-frequent tedious quality...

...His fanatical, virtually single-handed campaign for social insurance did more than anything else to make the country aware of its backwardness in this area...

...A conservative in his commitments, he has certainly "enlivened the intellectual scene...

...Workers' education was also important to him, and...

...Despite the complaints that could be registered about the excessive zeal in collecting so many obscure and antiquarian practitioners of economics, one can only voice admiration and awe for the tremendous energy and superhuman industry that went into the making of these five volumes...

...Reviewed by Ben Seligman Economist, contributor, "Commentary," "Dissent" SOME THIRTEEN years ago, Joseph Dorfman...

...Hamilton was quickly absorbed into public affairs, an experience that strengthened his belief in social controls...

...of course, much more in Dorfman's volumes...

...The robber baron abounded and while railroads attacked each other in places where they were rivals, they recouped their losses when they enjoyed an absolute monopoly...

...Many more writers pass across the Dorfman stage: Clarence Ayres, Irving Fisher...

...who earlier had written a monumental biography of Thorstein Veblen, published the first two volumes of a huge, sprawling and encyclopedic treatise on American economic thought...

...A gifted writer and conversationalist, he was the teacher of many generations of economists and lawyers...

...This short period of 15 years takes up almost as much space as the three centuries covered in the first two volumes, but that also is understandable, for major interest does center on more recent events...

...They take the story of American economic thought from the end of World War I to the Great Depression...

...Veblen produced no treatises for the classroom...

...If there was any one American economist who may said to have struck a new note, it was Thorstein Veblen...

...Despite the homespun modifications imposed on classical theory by the Careys and Walkers, two famous father-son teams, economics in the United States was substantially what Adam Smith and David Ricardo made it...

...Mitchell was taken to task for enclosing himself in a system of index numbers and time series, without regard to the acknowledged fact that theoretical analysis can be a useful guide to research...

...Undaunted...

...Morris Copeland...

...The accepted canons of economic doctrine, with their utilitarian presuppositions, could find no room in the Veblenian corpus...

...David Friday, Walter W. Stewart...

...Collecting facts for their own sake was an evasion of the job of constructing analytical tools, and for this, it was said, one could still find something worthwhile in the standard approach...

...like Mitchell and Commons and the other institutionalists, he knew that advances in economics had to be made through the painstaking accumulation of factual data...

...Yet institutionalism has not attracted too many economists today: They prefer rather the game of chess...

...Their world was the realm of economic man with his pleasant higgling on the market...

...Yet he was astute enough to recognize, as some of his followers do not, that willy-nilly free enterprise winds up in monopoly...

...Perhaps the most pugnacious major economist around...

...Knight came to economics via ethics and metaphysics, and by his teaching spawned a group of economists who today find universal truths only in Adam Smith...

...Dorfman's time span does not permit him to review the more recent reactions to the extreme empiricism of Mitchell's later period...

...Mergers and consolidations multiplied apace, often financed by the simple art of watering stock, something for which the public ultimately paid...

...Veblen's world was one of farmer rebellion, currency disturbance, wild-cat expansion and the predatory capitalist...

...Viner has gleefully traded polemics with many a rival...

...and when he described the pulpit as "an accredited vent for the exhudation of effete matter from the cultural organism," his contemporaries were compelled to sit up and take notice...

...Benjamin Anderson, Harold G. Moulton, the Foster and Catchings duo...

...His books and articles were merciless exposures of the false philosophy that underpinned standard economic thinking...

...The institutionalist outlook, so characteristically American in its pragmatic emphasis, was advanced further by Wesley C. Mitchell and John R. Commons...

...By 1915, he could say that "now the country swarms with social insurance experts...

...rejected "received" doctrine, calling for a new economics that would make man as he is the center of attention...

...Dorfman now gives us the last two parts of the series...

...This, at least, was the view of such new traditionalists as Frank H. Knight and Jacob Viner...

...With a reputation solidly grounded on an abstruse essay regarding the role of risk and uncertainty...

...Mitchell had studied with Veblen and in his own work was able to impart an empirical and practical quality to his teacher's broad and still vital conceptions...

...AH this was intended to prove, even to the most obtuse, that a system of free enterprise was vastly superior to public ownership, simply because responsibility for decision-making could easily be ascertained...

...Time and again his efforts were frustrated: Even the official labor movement gave him no support, for Samuel Gompers did not countenance anything that could not be won through the ordinary processes of collective bargaining...

...His method was essentially a genetic one: He insisted that institutions and attitudes were modes of existence as well as factors for change...

...He practiced "vivisection on his society without benefit of anesthesia...

...appeared to be in complete and utter turmoil...

...Dorfman's final assessment is a positive one...

...His analyses of business cycles, now world famous, emphasized over and over again that the motive force in economic life was the perpetual search for profit...

...I. M. Rubinow, for example, deservedly appears here with a career spanning the fields of medicine, statistics, economics, social work and communal affairs...

...Rubinow continued to call for old age pensions and unemployment insurance...

...It was this world that Veblen dissected with quiet savagery and a solemn prose style...

...He, too...

...Veblen was aware of what was going on, even if the other economists of his day were oblivious to the rapid-fire changes that were taking place...

...Another fascinating character in Dorfman's cast is Walton Hamilton, whose passing in 1958 received but grudging notice in the obituary columns...

...Yet none of this is intended to be disparaging, for Dorfman's book is without question a work of major importance...

...It is indeed a vast panorama, scrupulously examining books, articles, pamphlets and casual pronuncia-mentos...

...both out of the University of Chicago...

...Yet it is possible to discern a pattern, if we start some years prior to World War I. As was the case with so many other things, economic ideas were borrowed from England...

...Knight embarked on a relentless campaign to demonstrate that a proper economics must embody the principles of utility, choice and rational conduct...

...This was understandable, for in the absence of definite schools of thought and the kind of academic textbooks which now proliferate, he could not help but turn to the expressions of business men, theologians and politicians...

...Rex-ford G. Tugwell and Paul Douglas all have their contributions subjected to helpful paraphrase and summary...

...Beginning with the Colonial period, it included such peripheral sources as sermons, political debates, pamphlets and acts of legislation...

...As a sympathetic student of their views, Dorfman is particularly good in these sections...

...Dorfman quite aptly describes Viner, now at Princeton, as a 20th century Ricardian...

...The experience of World War I, he says, and of the prosperity of the '20s, made economists aware of our true capacities and they worked hard to provide an objective empirical basis for public policy...

...But again, to get the full flavor of the institutionalist attack, one would have to consult the earlier volumes...

...When the Depression came along, they did not fear to explore heretical notions: They learned that the classical competitive model did not exist in the world of reality...

...There is...

...But one must digest them slowly, for the fare is indeed more than ample...

...But he has also delved into theoretical analysis, working on such recondite matters as cost and supply curves and diminishing utility...

...Viner's work has been mainly in the field of international trade, to which he contributed an enormous and important treatise...

...His work came to fruition when the U.S...

...Anyone interested in how economic thought developed in this country will be in his debt forever...

...His story is impressive only by the sheer cumulation of weight...