John Bates Clark was born in Providence, Rhode Island on 26 January 1847.

His child­hood was characterised by a strict and religious upbringing and his parents set high value on the education of their three children. Clark was educated at Brown University, Rhode Island and Amherst College, Massachusetts and graduated from Amherst in 1872 at the age of 25.

His time at Carleton College was important for two reasons (Henry 1999): first, he met T.B. Veblen - one of his most famous students - and, second, he published a range of arti­cles (Clark 1879a, 1879b, 1882, and so on) which made him known to the economic com­munity and to the public. In these articles Clark clarified his view on the capitalist order in consideration of the transformation of the US economy at that time from a system of free competition to one with oligopolistic and monopolistic tendencies (‘trusts’). He was convinced that these developments resulted in rising inequality of income distribution and an aggravation of living conditions for the working class. He considered it as justi­fied that the working class formed unions to defend their rights, since “[l]abor imparts utilities to matter, and the impulse to it is that these may be enjoyed by the laborer. To be enjoyed they must be owned; the fruits that the laborer raises or the implements that he fashions must belong to him, and to no other” (Clark 1882: 843).

At the beginning of the 1880s Clark left Carleton College and took a professorship for political science and history at Smith College in Northampton, Massachusetts. His early work at Smith College saw the transformation of Clark from a putative ‘Christian socialist’ to a neoclassical economist; his last public spiritual argument can be found in Christianity and Modern Economics (1887). Further, Clark no longer supported the posi­tion that oligopolistic and monopolistic tendencies are inevitably harmful to society (and in particular to the working class), but instead held the view that a non-competitive order is not condemnable and can be part of a capitalist order. Thereupon, Clark developed his theory of property rights, which was formulated against the works of K. Marx and H. George. In his time at Smith College, a further series of articles emerged (Clark 1888, 1889, 1890, 1891, 1894), where Clark continually developed his general theory of distri­bution, strengthening his neoclassical position. In addition, through these works Clark did the preparatory work for his magnum opus The Distribution of Wealth. A Theory of Wages, Interest and Profits (hereafter DoW), which was first published in 1899.

In 1892 Clark returned to Amherst College and held a chair for political economy. At the same time he gave a few lectures at Johns Hopkins University, partly acting in place of R. Ely. Noteworthy during his short stay at Amherst is the debate between Clark and E.

In 1895 Clark was offered a chair at Columbia University where he remained until his retirement in 1923, except for the period 1898-99 when he replaced I. Fisher at Yale University, who was recovering from severe illness. During his time at Columbia University, Clark mainly researched in the field of industrial organization and published some of his most influential books, among them his magnum opus DoW as well as The Control of Trusts (1901) and The Essentials of Economic Theory (1907). At the core of his distribution theory developed in DoW lies the idea that in capitalist societies under com­petitive conditions each factor of production gets its share in the social product accord­ing to what it has contributed to the production of the former: “It is the purpose of this work to show that the distribution of the income of society is controlled by a natural law, and that this law, if it worked without friction, would give to every agent of production the amount of wealth which that agent creates” (DoW 1899: preface).

Thus, some natural law for the distribution of the social product exists and Clark considered every intervention in this natural law as harmful to the capitalist order — even if non-competitive tendencies are prevailing. What also today is associated with Clark’s main contribution to economic theorizing is the extension of the Classical law of diminishing returns on land for the explanation of the rent to the explanation of all factor incomes:

Wages then, conform to the product of the final increment of social labor and interest to the product of the final increment of social capital.

Yet, how to measure and, above all, in what unit should the share of each factor in the social product be expressed? While a physical measurement of labour did not constitute a severe problem, Clark was aware that a universal measure of capital was lacking. However, he only treated this severe problem in passing (see Kurz 1999). In developing his theory of distribution Clark borrowed heavily from J.H. von Thunen - especially concerning the marginal productivity principle - and from F.B.W. Hermann. However, only few references to them can be found in DoW. As Hagemann (2009) stresses, the distinction and complementarity between statics and dynamics is a crucial element in Clark’s theory of distribution since in order to explain the distribution of the social product among the different factors of production an abstraction from dynamic forces is required. Instead concentrating on a static state of a stationary equilibrium is necessary:

A static state, however, is imaginary. All natural societies are dynamic; and those which we have principally to study are highly so. [...] Yet this does not invalidate the conclusions of a static theory; for static laws are nevertheless real laws. [...] All the forces that would work in the unchanging world are not only working in the changeful one, but are even the dominant forces in it. (Clark 1899: 29-30)

Apart from his vivid academic life at Columbia, Clark actively participated in the local political and cultural life and gave several talks and lectures at the Cooper Union Forum and the Lake Mohonk Conferences. As a confident pacifist, Clark was involved in ongoing discussions about the eradication of wars. In 1911 Clark was consigned by the Carnegie Endowment for International Peace with directing the department of econom­ics and history, which he held until his retirement.

Clark died on 21 March 1938. In honour of Clark, since 1947 the AEA awards the prestigious ‘John Bates Clark Medal’ to young American economists every two years. The first awardee of this medal was P.A. Samuelson, who called John Bates Clark ‘America’s first great theorist’ (Samuelson 1999: 55).

Marlies Schutz

See also:

Eugen von Bohm-Bawerk (I); British marginalism (II); Capital theory (III); German and Austrian schools (II); Income distribution (III); William Stanley Jevons (I); Karl Heinrich Marx (I); Marie-Esprit-Leon Walras (I).