Wesley Clair Mitchell

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Wesley Clair Mitchell
Wesley Clair Mitchell.jpg
Wesley Clair Mitchell
Born(1874-08-05)August 5, 1874
DiedOctober 29, 1948(1948-10-29) (aged 74)
NationalityAmerican
Institution NBER 1920–45
Columbia University 1913–44
UC Berkeley 1903–12
University of Chicago 1899–1903
Field Political economics
Macroeconomics
School or
tradition
Institutional economics
Alma mater University of Chicago
Doctoral
advisor
J. Laurence Laughlin
Doctoral
students
Simon Kuznets
Arthur F. Burns
Raymond J. Saulnier
Influences Thorstein Veblen
John Dewey
ContributionsEmpirical research on Business cycles

Wesley Clair Mitchell (August 5, 1874 – October 29, 1948) was an American economist known for his empirical work on business cycles and for guiding the National Bureau of Economic Research in its first decades.

Economist professional in the social science discipline of economics

An economist is a practitioner in the social science discipline of economics.

The business cycle, also known as the economic cycle or trade cycle, is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend. The length of a business cycle is the period of time containing a single boom and contraction in sequence. These fluctuations typically involve shifts over time between periods of relatively rapid economic growth and periods of relative stagnation or decline.

National Bureau of Economic Research American private nonprofit research organization

The National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end dates for recessions in the United States.

Contents

Mitchell was referred to as Thorstein Veblen's "star student." [1]

Thorstein Veblen American academic

Thorstein Veblen was a Norwegian-American economist and sociologist, who during his lifetime emerged as a well-known critic of capitalism.

Paul Samuelson named Mitchell (along with Harry Gunnison Brown, Allyn Abbott Young, Henry Ludwell Moore, Frank Knight, Jacob Viner, and Henry Schultz) as one of the several "American saints in economics" born after 1860. [2]

Paul Samuelson American economist

Paul Anthony Samuelson was an American economist. The first American to win the Nobel Memorial Prize in Economic Sciences, the Swedish Royal Academies stated, when awarding the prize in 1970, that he "has done more than any other contemporary economist to raise the level of scientific analysis in economic theory". Economic historian Randall E. Parker has called him the "Father of Modern Economics", and The New York Times considered him to be the "foremost academic economist of the 20th century".

Harry Gunnison Brown American economist

Harry Gunnison Brown was a Georgist economist teaching at Yale in the early 20th century. Paul Samuelson named Brown in a list of "American saints in economics" that included only 6 other economists born after 1860.

Allyn Abbott Young American economist

Allyn Abbott Young was an American economist. He was born into a middle-class family in Kenton, Ohio. He died aged 52 in London, his life cut short by pneumonia during an influenza epidemic. He was then at the height of his intellectual powers and current president of Section F of the British Association. Uniquely, Young had also been president of the American Statistical Association (1917) and the American Economic Association (1925).

Biography

Mitchell was born in Rushville, Illinois, the second child and oldest son of a Civil War army doctor turned farmer. In a family with seven children and a disabled father with an appetite for business ventures "verging on rashness" a lot of responsibility fell on the oldest son. Despite these challenges, Wesley Clair went to study at the University of Chicago and was awarded a PhD in 1899. [3]

Rushville, Illinois City in Illinois, United States

Rushville is a city in Schuyler County, Illinois, United States. The population was 3,192 at the 2010 census and 3,212 in 2000. It is the county seat of Schuyler County.

University of Chicago Private research university in Chicago, Illinois, United States

The University of Chicago is a private research university in Chicago, Illinois. Founded in 1890, the school is located on a 217-acre campus in Chicago's Hyde Park neighborhood, near Lake Michigan. The University of Chicago holds top-ten positions in various national and international rankings.

Mitchell's career as a researcher and teacher took the following course: instructor in economics at Chicago (1899–1903), assistant professor (1903–08) and professor (1909–12) of economics at the University of California, Berkeley, visiting lecturer at Harvard University (1908–09), lecturer (1913) and full professor (1914–44) at Columbia University. In 1916 he was elected as a Fellow of the American Statistical Association. [4]

University of California, Berkeley Public university in California, USA

The University of California, Berkeley is a public research university in Berkeley, California. It was founded in 1868 and serves as the flagship campus of the ten campuses of the University of California. Berkeley has since grown to instruct over 40,000 students in approximately 350 undergraduate and graduate degree programs covering numerous disciplines.

Harvard University Private research university in Cambridge, Massachusetts, United States

Harvard University is a private Ivy League research university in Cambridge, Massachusetts, with about 6,700 undergraduate students and about 13,100 postgraduate students. Established in 1636 and named for its first benefactor, clergyman John Harvard, Harvard is the United States' oldest institution of higher learning. Its history, influence, wealth, and academic reputation have made it one of the most prestigious universities in the world. It has often been cited as the world's top university by most publishers.

Columbia University Private Ivy League research university in New York City

Columbia University is a private Ivy League research university in New York City. Established in 1754 near the Upper West Side region of Manhattan, Columbia is the oldest institution of higher education in New York and the fifth-oldest institution of higher learning in the United States. It is one of nine colonial colleges founded prior to the Declaration of Independence, seven of which belong to the Ivy League. It has been ranked by numerous major education publications as among the top ten universities in the world.

He was one of the founders of the New School for Social Research, where he taught for a time between 1919 and 1922, and of the National Bureau of Economic Research (1920), where he was director of research until 1945.

There were interruptions for government service during the First World War and Mitchell served on many government committees; he was chairman of the President's Committee on Social Trends (1929–33). In 1923–4 he was president of the American Economic Association. Mitchell and John Whitridge Williams represented the United States at the World Population Conference held in Geneva, Switzerland in 1927. [5] From 1941 he was on the original standing committee of the Foundation for the Study of Cycles.

The National Bureau was the institution through which Mitchell had greatest influence. There his important associates included Arthur Burns and Simon Kuznets. In his autobiography Kuznets acknowledges his "great intellectual debt to Mitchell."

Mitchell has also made valuable contributions to the history of economic thought.

Mitchell was married to Lucy Sprague Mitchell, a pioneering educator and the founder of Bank Street College of Education. He assisted his wife with the founding of the school.

Work

University of Chicago

Mitchell’s teachers included economists Thorstein Veblen and J. L. Laughlin and philosopher John Dewey. Although Veblen and Dewey did more to shape Mitchell’s outlook, Laughlin supervised his dissertation. Laughlin's main interest was in currency questions; he was a strong opponent of the quantity theory of money. The currency question facing the US in the 1890s was the choice between alternative monetary standards: inconvertible paper, gold monometallism and gold/silver bimetallism.

Mitchell’s thesis, published as A History of the Greenbacks, considered the consequences of the inconvertible paper regime established by the Union in the Civil War. However this, and the follow-up study Gold Prices and Wages Under the Greenback Standard, transcended conventional monetary history of the kind Laughlin did and provided a comprehensive quantitative account of the behavior of the US economy in the recent past.

Business Cycles, 1913

Mitchell's next project, which would occupy him for the rest of his life, was the study and measurement of the business cycle, which was then emerging as the big problem in economics. His magnum opus, Business Cycles appeared in 1913. The Preface begins

This book offers an analytic description of the complicated processes by which seasons of business prosperity, crisis, depression, and revival come about in the modern world. The materials used consist chiefly of market reports and statistics concerning the business cycles which have run their course since 1890 in the United States, England, Germany and France.

In chapter I Mitchell reviews 13 theories of the business cycle and admits that "All are plausible." He then puts them aside, arguing,

To observe, analyse, and systematise the phenomena of prosperity, crisis, and depression is the chief task. And there is better prospect of rendering service if we attack this task directly, than if we take the round about way of considering the phenomena with reference to the theory.

Mitchell's research strategy was thus quite different from that adopted by H. L. Moore or Irving Fisher who started from a hypothesis and went looking for evidence to support it. Moore and Mitchell offer another contrast in that, while Moore embraced the new statistical methods of correlation and regression, Mitchell found little use for them. [6]

Measuring Business Cycles

Thirty years later Mitchell was still working on business cycles and he published another large work, Measuring Business Cycles with A.F. Burns. This book presented the characteristic "National Bureau" methods of analyzing business cycles. While Mitchell was still following the 1913 agenda, other economists had taken to studying the economy using models and even to constructing macroeconometric models. Against this background of Keynesian economics and the new econometric methods Mitchell and his project looked dated.

Milton Friedman believed that, "Mitchell is generally considered primarily an empirical scientist rather than a theorist". However, Mitchell's main creative efforts went into his empirical work on business cycles. Mitchell stated an endogenous theory, based on the internal dynamics of capitalism. Whereas neoclassical theories are deduced from unproven psychological axioms, he builds his theory from inductive generalities gained from empirical research. Also, he was considered a critic of conventional economic theory. As influenced greatly by Veblen, Mitchell is usually categorized with him as an American institutionalist.

Bibliography

There is a bibliography in the volume edited by Burns (below). Lucy Sprague Mitchell, Wesley Mitchell's wife, wrote the book Two lives; the story of Wesley Clair Mitchell and myself (New York, Simon and Schuster, 1953).

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Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the other. Its name and core elements trace back to a 1919 American Economic Review article by Walton H. Hamilton. Institutional economics emphasizes a broader study of institutions and views markets as a result of the complex interaction of these various institutions. The earlier tradition continues today as a leading heterodox approach to economics.

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Geoffrey Hoyt Moore, whom The Wall Street Journal called “the father of leading indicators”, spent several decades working on business cycles at the National Bureau of Economic Research, where he helped build on the work of his mentors, Wesley Clair Mitchell and Arthur F. Burns. Moore also served as commissioner of the Bureau of Labor Statistics from March 1969 to January 1973.

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References

  1. Alexander C. Cartwright. 2016. “Book Review: Illiberal Reformers: Race, Eugenics, &American Economics in the Progressive Era.” Libertarian Papers. 8 (2): 336-342
  2. Ryan, Christopher Keith (1985). "Harry Gunnison Brown: economist". Iowa State University. Retrieved 7 January 2019.
  3. Mitchell, Lucy Sprague (1953). Two Lives: The story of Wesley Clair Mitchell and Myself. New York: Simon and Schuster.
  4. List of ASA Fellows, retrieved 2016-07-16.
  5. Sanger, Margaret (1931). My Fight for Birth Control. Farrar & Rinehart. p. 301.
  6. Morgan, M. S. (1990). The History of Econometric Ideas. Cambridge: Cambridge University Press. pp. 44–56. ISBN   0-521-37398-0.
  7. White, Horace (Mar 1904). "Review: A History of the Greenbacks by Wesley Clair Mitchell". Political Science Quarterly. 19 (1): 136–139. doi:10.2307/2140243. JSTOR   2140243.
  8. Sprague, O. M. W. (June 1916). "Review: Business Cycles by Wesley Clair Mitchell". Journal of Political Economy. 24 (6): 609–611. doi:10.1086/252843. JSTOR   1819628.

Further reading