Newly Established Political Economy Departments at American Universities

From the 16th century to the last few decades of the 19th century, American universities were not oriented toward scientific research or advancing new knowledge, creativity, and critical thinking.

Prior to being influenced by the GHSE, American universities and col­leges would typically offer a ‘brief course in Political Economy’ conducted by ‘the Professor of Moral and Intellectual Philosophy [Cocker], who would

The Early Establishment of Political Economy Departments 143 prefer to confine himself to his own special work’ (Dickinson 1951, 532). To be more precise, most teachers of political economy were ministers or preach­ers, because the clerical school exercised influence over academia at that time. That was made possible by the fact that the requirements to obtain a degree or gain employment as a professor were much less stringent at American uni­versities relative to their German counterparts. In fact, ‘almost any one could teach political economy, no special training being necessary,’ as a graduate degree was not even a criterion for obtaining a professorship at American universities and colleges (Haney 1915, 515). Richard T. Ely (1883, 226) went so far as to state that the quality of education in political economy was so poor that teaching classical economics required only a few hours of study ‘to make of the village schoolmaster both a statesman and a political economist.’ He further noted that ‘neither high attainments nor previous study and in­vestigation were required even in a professor of the science’ (ibid.). That is to say, being ‘familiar with the subject’ was by ‘no means indispensable’ for instructors (Haney 1915, 515). It was sufficient to read ‘one good book’ in order to become an economist or economic teacher (Ely 1938, 125). As such, an education in political economy required little more than ‘a well-arranged text-book, together with some effort on the part of the teacher and attention on the part of the pupil’ (Haney 1915, 515). Teachers would basically read the passages from the textbook and students learned ‘by heart a few truisms’ (Ely 1889, 61). Consequently, the economics education being offered at American colleges failed to help students ‘understand the practical questions of the day,’ such as ‘labor strikes, trusts,’ financial matters, and issues related to banking and money (Patten 1895, 132).

Most American students usually went to ‘college merely because their par­ents sent them’; at the same time, their parents did not believe that studying political economy provided good prospects for earning a decent living (Far­nam 1887, 69). The fact that there was little possibility for a fruitful career as an economist in the US represented a real hindrance to those individuals who wanted to dedicate themselves to the field. Consequently, any American student who wanted to take courses ‘in history, politics, political economy, mathematics, physics, philosophy, or in any one of many other studies lying outside of the three professions, law, medicine, and theology,’ had to go to Europe (Ely 1880, 256). Ely (1880, 257) warned that until Americans adopted ‘a satisfactory system’ of education, ‘thousands of parents will continue to educate their children in Europe.’ This was particularly true in the case of American economists, as training in Germany was crucial if they wanted to secure academic work and promotions.

Before the influence of the GHSE took hold at American academic institu­tions, well-known political economists like Charles Franklin Dunbar (1830— 1900), John Bates Clark (1874-1938), Arthur Twining Hadley (1856-1930), and many others never had ‘more than one undergraduate course in political economy, never earned more than a four year degree, all traveled abroad’ (Parrish 1967, 4, fn.11). In fact, in 1870, all American colleges and universities across the entire nation only offered a combined 18 economic courses (ibid.).

Many young Americans were unhappy with the unfruitfulness of studying and teaching at their domestic universities. In response, they went to Ger­many in order to advance their knowledge and education under the guidance of the theorists of the GHSE (St. Marc 1892, 1-2). They eventually returned to the US ‘as the missionaries of the new cult’ that would guide a new gen­eration of American economics students (Walker 1899, 310). For example, Richard Theodore Ely (1854-1943) (1910, 80) confessed that while he had ‘little notion’ of what he was ‘to get in Germany’ when he set off, he had ‘very definite notions’ when he returned. He explained that he came back in ‘open revolt against the traditional concepts’ of economics ‘and found the narrow self-satisfied attitude of the American very trying’ (ibid.). He was particularly frustrated that ‘many good people’ at American universities were blindly attached to the classical orthodoxy (ibid.: 259).

Edmund Janes James (1855-1925), who received his doctorate in politi­cal economy from the University of Halle in 1877 under Conrad, was also frustrated that American colleges and universities did not have the kind of education system that prevailed in the political economy departments across Germany, which provided excellent training and encouraged critical think­ing and original research; instead, they elected to impose a uniform curricu­lum on students along with a homogeneous and monotone teaching method (James 1882, 262). Ely (1880, 260) agreed, but clarified that the presidents and professors of the best American institutions should not be blamed ‘for not doing more,’ because it was the institutions themselves that lacked ‘favorable

The Early Establishment of Political Economy Departments 145 circumstances for a high development.’ He claimed that if American academ­ics had ‘the same advantages as the German professors, they would not do less in advancing science’; unfortunately, they were ‘less independent than the German professors’ (ibid.). Ely (1938, 132) believed that American professors were ‘denied the right to exist scientifically,’ because followers of the Old School exercised ‘a very large influence,’ particularly ‘in university circles.’ This sad state of affairs in higher education delayed the progress and ‘devel­opment of economics in the United States’ (Ely 1936, 142).

The opinions expressed by James and Ely with respect to the situation of the discipline of economics at American institutions were actually very common among German-trained American economists. After experiencing how economics was taught and studied at German universities, ‘the group of young rebels who returned from Germany about 1880’ were disappointed with the ‘barrenness’ and ‘the sterility of the old economics which was being taught in the American colleges’ (Ely 1936, 143, 1938, 132). However, they were also hopeful that the situation could be remedied and committed to fighting against those who stood ‘in the way of intellectual expansion and of social growth’ (Ely 1938, 132).

In their efforts to reform the discipline of economics in the US, German-trained American political economists essentially relied on their German experiences to transform their domestic universities and ‘colleges into German universities’ (Ely 1880, 254). Accordingly, ‘the German methods of teaching, including the lecture system, were generally adopted’ (Laughlin 1912, 169). American institutions effectively underwent ‘a complete trans­formation,’ which helped raise the quality of education being offered in the US (Dunbar 1891, 400). German-trained American political economists played instrumental roles in shaping the political economy departments at many American universities and colleges, including Columbia, Wisconsin, Pennsylvania, Johns Hopkins, Michigan, Cornell, Massachusetts Institute of Technology (MIT), Harvard, and Yale. Thus, ‘a new impetus was given to the development’ of political economy at American universities, as almost all of the teaching staff, with few exceptions, spent some time at German uni­versities in pursuit of a higher education (Ingram 1915, 172).

Charles Franklin Dunbar (1830—1900), who ‘turned to German writ­ers’ during the latter part of his career, started to teach political economy at Harvard College in 1871 after spending two years in Europe (Taussig 1904, X). When he initially arrived at Harvard, he had to teach his classes ‘under

the head of Philosophy,’ as there was no dedicated department of political economy at that time (Eliot 1900, 478). Later that same year, Dunbar was appointed the first chair of political economy at Harvard University (Scott 1889, 188). Then, during 1872—1873, his political economy courses, which focused on connecting political economy with history, were being offered in the political science department (ibid.). In 1876, he was made Dean of the Faculty of Harvard College, remaining as such until 1882. In 1875, Har­vard awarded its first PhD in political economy to Stuart Wood (1853—1914), despite the fact that it still did not have an independent political economy department. However, ‘after awarding its first Ph.D. in political economy in 1875, Harvard did not award another for 20 years’ (Parrish 1967, 7).

In 1882, Dunbar went back to Europe, and his absence resulted in James Laurence Laughlin (1850—1933) being appointed as an assistant professor the following year. Previously, Laughlin had been a student of Dunbar at Har­vard before going on to complete his PhD dissertation under the supervision of Henry Carter Adams (1851—1921) at Johns Hopkins University in 1876. Frank William Taussig (1859—1940) also began teaching at Harvard Univer­sity in 1883 after having studied political economy at the University of Ber­lin, where he was highly inf luenced by Wagner and Schmoller. He continued to teach at Harvard until 1935. After Dunbar returned from Europe, his plans for ‘the development of his department in the University became apparent to the academic world’ (Eliot 1900, 479). In 1890, he became the first Dean of the Faculty of Arts and Sciences at Harvard University, a post that he retained until 1895 (Taussig 1904, XI). In 1892, the Department of Economics was officially established at Harvard University, followed by the creation of a graduate program in political economy in 1894. Dunbar continuously sought to increase ‘the number of teachers and courses’ being offered in political economy (Eliot 1900, 479). Over the course of his 28 years at Harvard, Dun­bar was ‘a complete collegiate instrument for training young Americans in Political Economy, the first such instrument ever constructed’ (ibid.: 480). During that time, the progress and development of political economy at the Harvard was a direct outcome of ‘Dunbar’s sagacity, sobriety, and fairness’ (ibid.).

Sir William James Ashley (1860—1927) was a well-known English politi­cal economist who joined Harvard University in 1892 and taught there un­til 1901. During that time, he ended up holding the first known Chair in Economic History in the world (Harvard University 1897—1898). Prior to joining Harvard, Ashley was a supporter of historical economics in Britain along with John Kells Ingram (1823-1907), Thomas Edward Cliffe Leslie (1825-1882), and William Cunningham (1849-1919). Ashley not only trans­lated some of Schmoller’s works into English, but the two of them also shared many similar views. In particular, Ashley supported ethical economics and believed that political economy should include both deductive and inductive methods. According to Ashley (1893, 8), Harvard was among the first Amer­ican universities to ‘see the wisdom of having both attitudes-the theoretical

The Early Establishment of Political Economy Departments 147 and the historical-represented in a great institution of learning.’ Furthermore, he claimed that teachers at Harvard showed ‘a confidence in free inquiry, and an understanding of the true nature of a university,’ thereby resembling the theorists of the GHSE (ibid.). In 1902, the courses on economic history that Ashley taught at Harvard University were taken over by Edwin Francis Gay (1867—1946), who obtained his PhD from the University of Berlin under the supervision of Schmoller that same year after having studied with the theorists of the GHSE in Berlin and Leipzig for 12 years. His ‘first courses at Harvard were Medieval Economic History, Economic History of Europe (from 1500), and Nineteenth Century German Economic Thought’ (Mason and Lamont 1982, 406). He ended up teaching at Harvard from 1902 to 1917 and once again from 1924 to 1936. During his first stint at the institution, Gay served as a principal advisor to Harvard President Charles William Eliot (1834—1926) when he launched the Harvard Graduate School of Business Administration in 1908.¹ He was also appointed the first Dean of the Harvard Business School in 1908.

The teaching of political economy at Harvard gradually improved since the 1870s. In the early 1890s, Taussig (1892-1893, 116) pointed out that ‘Ten years ago, the Department of Political Economy had one professor and one instruc­tor, neither giving all of his time to the subject. At present, the Department of Economics has three professors and two instructors.’ He further noted that the number of political economy courses being offered at Harvard increased from ‘two to a dozen, with a corresponding development in the variety of topics treated,’ while the number of students also rose significantly (Taussig 1892-1893, 116-117). Taussig (ibid.) mainly attributed this progress to ‘the change in name, from Political Economy to Economics,’ which also involved in ‘an enlargement of the range of subjects’ being offered at the department.

In the beginning of the 20th century, the economics department of Har­vard University continued to appoint new professors, which corresponded with the enrollment of more students and additional courses being offered (Ripley 1903, 246). At that time, it was generally accepted that Harvard had ‘the strongest department of economics in the country’ (Carver 1949, 142). In 1902, Thomas Nixon Carver (1865-1961) began to work at Harvard, having previously studied at Johns Hopkins University under David Kinley (1861­1944), Herbert Baxter Adams (1850-1901), and Ely, before completing his PhD at Cornell in 1894. Carver ended up working at Harvard for 32 years, during which time he served ‘two periods as chairman of the Department of Economics (1901-1903 and another period of three years in the twenties)’ (ibid.: 212).

Charles Jesse Bullock (1869-1941), who obtained his PhD in econom­ics from the University of Wisconsin in 1895 under the supervision of Ely, joined the economics department of Harvard University in 1901. He even­tually became one of the leading economists at Harvard. In 1902, William Zebina Ripley (1867-1941) was hired to teach a course in Statistics, which at­tracted a great deal of interest. Prior to that, he obtained his PhD at Columbia

University in 1893. In 1910, Allyn Abbott Young (1876-1929) joined the department as a visiting professor, having previously completing his PhD at the University of Wisconsin under Ely. Young became ‘the most highly respected economics professor at Harvard. Under him a considerable number of the outstanding students wished to write their doctors’ theses’ (Carlson 1968, 106).

Johns Hopkins was one of the oldest universities in the US. It was also among the earliest to be modeled after ‘German research universities’ in order to ‘provide a domestic alternative to the Migration of Americans to Germany for graduate study’ (Barber 1993, 11). In 1876, it became the first university in the country to establish a graduate program in political economy, largely due to the work and efforts of Ely (Carver 1949, 111). Henry Carter Adams was ‘the first registrant’ in the program, as well as the first economist to obtain a PhD from Johns Hopkins in 1878; the second political economy PhD would not be awarded for another ten years (Parrish 1967, 7). In fact, it was Francis Amasa Walker (1840-1897) who conducted Adams’s doctoral examination (ibid.: 6-7). Walker played a major role in the development of the econom­ics department at the school. In particular, he taught a series of lectures on monetary policy, which led him to develop close relationships with Ameri­can disciples of the GHSE (Adelstein 1993, 304). It was recognized that his ‘teaching of economics on a university basis at Johns Hopkins... helped to create a group of younger scholars who soon filled the chairs of economics throughout the country’ (Seligman 1911, 388).

In 1881, German-trained Ely and Herbert Baxter Adams, who obtained his PhD in political science from Heidelberg University in 1876, started to teach at Johns Hopkins University, where they worked ‘well together,’ as they shared many common interests and views (Barber 1993, 213). They wanted American universities to have seminaries and libraries, as well as a spirit of teaching and conducting research, comparable to those that they witnessed and experienced during their time in Germany. While at Johns Hopkins, Ely and Herbert Baxter Adams were able to utilize the inf luence of the GHSE and the growing role of the New School to attract many students to the uni­versity. In 1891, Ely requested that political economics be separated from his­tory to become its own stand-alone department at Johns Hopkins. However, his proposal was rejected on the basis that ‘the time has not yet come to constitute a department of political economy distinct from the department of historical and political science’ (ibid.: 222). Subsequently, Johns Hopkins officially established a separate political economy department in 1901.

In 1892, Ely left Johns Hopkins after teaching political economy there for a little over a decade in order to join the University of Wisconsin. One of the main reasons for his departure was the hostile attitude of Simon New­comb (1835-1909), who was opposed to Ely’s defense of historical ethical economics and heavily criticized his defense of labor rights and movements. The same year that Ely left, John Bates Clark, who studied under Roscher, Conrad, and Knies between 1872 and 1875, began to teach political economy

The Early Establishment of Political Economy Departments 149 at Johns Hopkins, but then left for a position at Columbia University in 1895. Henry Ludwell Moore (1869-1958)joined the faculty of Johns Hopkins in 1896 and taught classes covering German history, Prussian history, and rail­way problems. Previously, he obtained his PhD at Johns Hopkins, where he was significantly influenced by Clark and Herbert Baxter Adams. Moore also studied with Carl Menger for one year in Vienna before completing his PhD.

In the 19th century, Johns Hopkins played a major role in the development of ‘American economics far greater than that of any other institution in the land’ (Barber 1993, 224). During his time there as a professor, Ely ended up influencing many important economists and other prominent figures who studied under him, including ‘Woodrow Wilson, Newton D. Baker, John H. Finley, Charles Levermore, E. A. Ross, John R. Commons, W. A. Scott, Albert Shaw, Albion W. Small, David Kinley’ (Taylor 1943, 2). In fact, it was claimed that ‘no man in the United States has done so much’ as Ely ‘to bring economic thought down out of the clouds and into contact with ac­tual human concerns’ (Ely 1938, 230-231). Unfortunately, the success that the economics department at Johns Hopkins University experienced under German-trained economists, particularly Ely and Herbert Baxter Adams, was largely forgotten in the 20th century.

When Ely (1938, 180) arrived at the University of Wisconsin in 1892, he set out to ‘establish a school’ of economics. He wanted to provide his students with a broader approach to life and economics than what classical economics could offer, as he was of the view that ‘better economic knowledge’ would eventually ‘bear its fruits in better citizenship’ (ibid.: 187). Under Ely’s lead­ership, the school of economics at the University of Wisconsin was ‘preparing to challenge’ the supremacy of the Faculty of Political Science at Columbia, which was established in 1880, and the School of Political Science at the Uni­versity of Michigan, which was established in 1881 (Henderson 1993, 326). During his time at Wisconsin, which spanned the period of 1892-1925, Ely encouraged his students to study under the theorists of the GHSE. However, he was also able to introduce the spirit of his past German professors to his students and colleagues in the department of political economy. He did this by exclusively advocating the ideas, methods, and approaches of the GHSE in his classes, speeches, and publications. In particular, he promoted the ‘look and see method’ of the GHSE, which played a key role in the development of the political economy department of the University of Wisconsin. Addi­tionally, Ely managed to inf luence many people to some extent through his defense of ethical historical economics and the social aspects of Christianity, which he often discussed in his classes and books (Taylor 1943).

When Ely left Johns Hopkins for the University of Wisconsin in 1892, he brought some of his most promising students with him to work on the estab­lishment of an economics department, including David Kinley (1861-1944), William Amasa Scott (1862-1944), and Charles J. Bullock (1869-1941). Shortly before that, in 1890, Charles Homer Haskins (1870-1937) was appointed as an instructor at the University of Wisconsin after completing his studies at

Johns Hopkins. He later became a full professor and remained at Wisconsin until 1902. In 1904, Ely invited John Rogers Commons (1862-1945), another former student of his from Johns Hopkins University, to work at Wisconsin. Commons (1963, 44, 97) acknowledged that many of his own ideas and writ­ings were inspired by Ely’s ‘new economics,’ and he confessed that working with Ely at the University of Wisconsin was his ‘new birth.’ During his time at Wisconsin, Commons supervised or co-supervised the ‘completion forty-six PhD’ (Yefimov 2009, 40). Additionally, Selig Perlman (1888-1959), who ob­tained his PhD at Wisconsin in 1915, played a key role in the development of Wisconsin institutionalism along with Commons (ibid.: 39).

Some of Ely’s former students from the University of Wisconsin went on to become professors at its political economy department. For example, Al­lyn Abbott Young, who obtained his PhD under Ely at Wisconsin, ended up joining the department after graduating. Two other former students of Ely from the University of Wisconsin that obtained prominent positions at its political economy department were Max Otto Lorenz (1876-1959) and Ed­ward David Jones (1870-1944). Lorenz was known for developing the Lorenz curve. Meanwhile, Jones went to Germany to study under Engel, Knies, and Conrad before returning to the University of Wisconsin, where he gave lec­tures on political economy and statistics from 1895 to 1901. Furthermore, in the 1890s, University of Wisconsin graduate Helen Page Bates (1860-1933) started to teach at the economics department, followed by Henry C. Taylor (1873-1969), another Wisconsin alumnus, in 1901. Many of these economists were influenced by the ideas, methods, goals, and approaches of the GHSE to some degree, which is not surprising given that Ely sought to make the eco­nomics department of the University of Wisconsin into a replica of the ones that existed at German universities. Ultimately, the appointment of so many professors who were influenced by the GHSE led to the political economy department at the University of Wisconsin becoming highly prestigious in the US. In fact, ‘the University of Wisconsin became a pioneer in the training of persons for public administration’ (Lafayette 1962, 253).

Another political economy program that rapidly gained prominence in the US due to the influence of the New School was at Stanford University, which was founded in 1885 and began teaching economics in 1891. In 1892, Amos G. Warner (1861-1900), who completed his PhD at Johns Hopkins under the supervision of Ely, became head of the new Department of Economics and Social Science at Stanford. Edwin A. Ross (1866-1951), another Johns Hop­kins alumnus who obtained his PhD under Ely, also joined the department in 1893 and taught political economy. Subsequently, in 1906, Young, another former student of Ely, became head of the Department of Economics and So­cial Science at Stanford University and remained in that position until 1910. A number of German-trained American political economists also joined the economics department at the school during that period. For example, Ed­ward Dana Durand (1871-1960) joined in 1898 after completing his PhD at Cornell University and then studying under Wagner at Berlin University. Stanford also hired Frank Albert Fetter (1863—1949), who obtained his PhD from the University of Halle in Germany in 1894.

German influence was also present in the early days of the economics de­partment at Yale University. In fact, in the first decade of the 20th century, out of:

116 economists and sociologists at Yale, 59 had studied at some point in Germany, with 20 earning Ph.Ds; of 80 listing their most impor­tant muse, 30 indicated the historical school, and 23 the scientific and historical method combined. They noted their influences as Wagner, Schmoller, Conrad, Roscher, and Knies.

(Herbst 1965, 130-131)

In 1872, Walker, who was highly influenced by the GHSE, was invited ‘to join the faculty of the Sheffield Scientific School [connected with Yale Col­lege] with the title of “Professor of Political Economy”’ (Barber 1993, 143). That same year, William Graham Sumner (1840-1910) also started to work at Yale College, which became a university in 1887. In fact, Walker and Sumner took the first chairs of political economy at the school when they arrived in 1872. Sumner was an adherent of the Old School and focused on teaching classical economics. Meanwhile, Walker, who was a leading American econ­omist and statistician, introduced one of the first courses in statistics in the country at the Yale Graduate School (Adelstein 1993, 301).

Despite the fact that Sumner exhibited a hostile attitude toward the New School, a number of its adherents joined the economics faculty at Yale while he was there. For example, Henry Walcott Farnam (1853-1933) began his ca­reer as a professor of political economy at Yale in 1880 after having obtained his PhD under the evaluation of Schmoller. He remained there until 1918 and was credited with establishing The Yale Review in 1892. Arthur Twining Hadley (1856-1930), who previously studied under Wagner at the University of Berlin, also joined Yale where he became a professor of political science (1886-1891), a professor of political economy (1891-1899), and the first Dean of the Graduate School (1892-1895). He was also ‘inaugurated as first lay President of Yale University in 1899,’ and held on to that position until 1921.² Furthermore, John Christopher Schwab (1865-1916) became a professor of political economy at Yale, where he began editing The Yale Review in 1892³ after obtaining his PhD at the University of Gottingen in 1889. Yale also hired Irving Fisher (1867-1947) as a professor of mathematics and political economy. He remained there for the entirety of his career, during which time he made notable contributions to the development of methodologies of quantitative empirical research, which were highly influenced by the works of the GHSE. Previously, Fisher attended Yale as a student from 1888 to 1891, where he studied under leading political economists Hadley and Farnam. However, he also studied under Sumner. After obtaining his PhD in 1891, Fisher went to study in Berlin during 1893-1894, due in part to a desire to

152 The Early Establishment of Political Economy Departments improve his German so that he could read books written by theorists from the GHSE and the Austrian School of Economics.

In 1881, Walker felt pressured to resign from his position as chair of polit­ical economy at Yale due to the hostile attitude of Sumner. After his resig­nation, he became president of MIT, and remained as such until his death in 1897. During that time, he played a major role in the establishment of a political economy department at the school. In 1885, Walker met Davis Rich Dewey (1858—1942) at the founding of the American Economic Associa­tion (AEA) and invited him to come work at MIT. Dewey, who previously studied under Ely and Herbert Baxter Adams at Johns Hopkins University, accepted the offer and became a professor of economics and statistics at MIT shortly thereafter. Subsequently, he served as head of the department of eco­nomics and statistics at MIT from 1907 to 1933. Walker and Dewey played instrumental roles in the development of the economics department at MIT, as well as efforts to attract the best students to it.

Charles Herbert Levermore (1856—1927), another former student of Ely from Johns Hopkins where he obtained his PhD in 1885, also played an important role in the development of economics at MIT. Like Walker and Dewey, he was committed to the historical approach and ethical econom­ics. In 1900, astronomer Henry Smith Pritchett (1857—1939) became pres­ident of MIT shortly after the death of Walker in 1897. He immediately began implementing major changes at the university that ref lected the high value he placed on branches of the natural sciences for facilitating the pro­gress and development of society. Pritchett wanted the teaching of social sciences to be connected to the branches of the natural sciences. However, these new changes negatively affected all of the progress that was achieved by Dewey and Walker, who accepted political economy as an ethical and histor­ical science. In the end, Dewey managed to retain the most important ideas and approaches of the New School, thereby saving economics at MIT from Pritchett’s efforts to make it into a branch of the natural sciences (Adelstein 1993, 317).

The political economy department of the University of Chicago was founded in 1892. In its early years, very few of its academics were influenced by the GHSE compared to the newly established economics departments at other American institutions. In 1892, Laughlin, who was an adherent of the Old School, was appointed as the inaugural head of the department of Po­litical Economy at the University of Chicago. He brought Thorstein Bunde Veblen (1857-1929) and Robert Franklin Hoxie (1868-1916), two of his for­mer students, with him. The three of them were early contributors to the development of the department. Edward Webster Bemis (1860-1930), an adherent of the New School and a former student of Ely at Johns Hopkins, also became a professor of economics at Chicago in 1892. However, he was concerned about being ‘placed in a position of subordination to Laughlin,’ given that they belonged to two contrasting schools of economic thought (Barber 1993, 249). His instinct was correct, as their relationship was strained

The Early Establishment of Political Economy Departments 153 from the outset and only deteriorated over time (Barber 1993, 251). In the 1890s, Laughlin admitted to distancing himself from the ‘dangerous doc­trines associated with the organizers’ of the AEA; however, he eventually ended up joining the organization in 1904 (ibid.: 248). Bemis left the depart­ment in 1895. That same year, he stated that ‘the University of Chicago was the captive of big business interests and that they, in turn were responsible for Bemis’s undoing’ (ibid.). In 1893, Edmund Janes James, who was an adherent of the New School, left the University of Pennsylvania in order to work at the University of Chicago.

In 1925, the Department of Political Economy at the University of Chicago officially became the Department of Economics. Eventually, the Chicago School of Economics became the leading school of economic thought and the most prominent advocate of a free market economy. Its economists and their ideological commitment to free market capitalism have influenced not only the academic world but also public opinion and the public policies of American presidents and the leaders of many other countries around the world.

In 1881, the School of Political Science was set up within the Department of Literature, Science, and the Arts at the University of Michigan. In addition to political economy, it also offered classes in subjects like history and inter­national law. Henry Carter Adams, who obtained his PhD at Johns Hopkins University and studied in Berlin and Heidelberg, became the first president of the School of Political Science the same year that it was established. As it turned out, the creation of a School of Political Science was premature, as it came to an end in 1889. However, this was not the end of political econ­omy at the University of Michigan, as courses in the subject continued to be taught. In fact, Henry Carter Adams continued to teach political economy and finance at the school until 1921 (Dickinson 1951). It is widely accepted that ‘Adams was a pioneer among American economists in the development of syllabi and texts in various political economy courses’ (ibid.: 541).

In 1892, Fred M. Taylor (1855-1932), who studied under Ely and Herbert Baxter Adams at Johns Hopkins, began teaching political economy at the University of Michigan with the support of Henry Carter Adams. Subse­quently, in 1901, Edward David Jones, who trained under Ely at the Uni­versity of Wisconsin before heading off to Germany to study under Engel, Knies, and Conrad, accepted a post at the Department of Political Economy and Sociology of the University of Michigan at the invitation of Henry Carter Adams. In 1909-1910, Political Economy and Sociology were separated into their own independent departments at the university.

German inf luence had a strong presence in the early days of Cornell University. Charles Kendall Adams (1835-1902), who studied history in Germany, served as president of Cornell University from 1885 until 1892. During that period, he looked to the German education system as a model and supported historical and ethical studies (Ely 1938, 202). In fact, the po­litical economy department employed many adherents of the New School.

For example, Henry Carter Adams taught political economy at Cornell from 1880 until 1887, when he was fired for having socialist views. Additionally, Fetter was hired at Cornell after obtaining his PhD from the University of Halle in Germany in 1894. Jeremiah Whipple Jenks (1856-1929) also held a professorship at Cornell University after graduating from the University of Michigan in 1878 and then obtaining his PhD from the University of Halle under Conrad in 1885. Another adherent of the New School, who was also a former student of Ely, that ended up working as a professor in the economics department of Cornell was Young. Furthermore, Laughlin taught political economy at Cornell from 1890 to 1892, while Ross, who also previously studied under Ely, joined the faculty in 1892. In 1895, Cornell hired Bullock, another past student of Ely. Adams, Fetter, Jenks, and Bullock all promoted historical ethical economics in their teachings and publications.

The Wharton School of Finance and Economy, which was established at the University of Pennsylvania in 1881, was also significantly influenced by the GHSE. That same year, Albert Sidney Bolles (1846-1939), who was inspired by the German education system and historical economics, joined the department to teach business classes. However, it was ultimately James, who arrived two years later in 1883, that played a major role in the develop­ment of the political economy department, based on the ideas and principles of the GHSE.

His ultimate goal was to bring an advanced political economy education program to the Wharton School of Finance and Economy that was on par with those headed by the GHSE. Accordingly, he introduced the first re­search seminary at the University of Pennsylvania in 1885, which was based on those of the GHSE. Under his influence, ‘its corps of instructors was largely increased, the subjects of instruction multiplied, and its curriculum extended from two years to four, changes which were followed by a large increase in the number of students’ (Annals of the American Academy of Po­litical and Social Science 1896, 79). His hard work also meant that ‘statistics, journalism, sociology, transportation, municipal government, jurisprudence, and politics was added to the work in history, economics, and finance’ (ibid.). Furthermore, James encouraged his students to improve their knowledge and skills by going abroad to study at German universities. Thanks to the efforts of James, ‘the Wharton School of Finance and Economy became not only a successful department for higher commercial education, but also one of the leading centres for the study of economics and politics in the United States’ (ibid.).

James brought Simon Nelson Patten (1852-1922) to the University of Pennsylvania in 1888. Patten, who obtained his PhD in political economy under Conrad at the University of Halle in 1877, remained at the University of Pennsylvania until his retirement in 1917. During that time, he played a major role in the development and improvement of political economy at the school. Ely (1936, 159) stated that while Patten was ‘something of a rough diamond in his early days, he did such remarkable work both as teacher and

The Early Establishment of Political Economy Departments 155 writer’ at the University of Pennsylvania. In fact, Patten was ‘the originator of the idea of schools of experimental economics and he founded and lived with the Wharton School’ (Tugwell 1923, 186). Ultimately, he significantly contributed to enhancing the reputation of the Wharton School in the US. Roland Post Falkner (1866—1940), who was a German-trained political econ­omist, also joined the faculty of the University of Pennsylvania in 1888 to teach accounting and statistics after having previously graduated from the Wharton School of Finance and Economy and then going abroad to study political economy in Berlin, Leipzig, and Halle. Falkner was able to utilize the advanced training he received from Conrad at Halle to significantly in­fluence the development of statistics at the University of Pennsylvania and in the US in general. In fact, he was credited with being ‘the first man to hold a leading American university post devoted exclusively to statistics, at the Wharton School of the University of Pennsylvania’ (Dorfman 1955, 23). Henry Rogers Seager (1870—1930) also taught political economy at the Wharton School of the University of Pennsylvania from 1894 to 1902 after studying at Johns Hopkins University, going abroad to Halle, Berlin, and Vi­enna, and finally completing his PhD at the University of Pennsylvania under Patten in 1894. In 1902, he left Pennsylvania in order to work at Columbia University.

John William Burgess (1844—1931) played an instrumental role in shap­ing the economics department at Columbia University. In 1871, he went to Europe to study ‘history and public law at Gottingen, Leipzig, and Berlin’ under theorists of the GHSE (Columbia Law Times 1893, 123). After com­pleting his education, he worked at Columbia from 1876 to 1912, during which time he founded the Political Science Quarterly in 1886. He also played a significant role in establishing the Faculty of Political Science in 1880, which was intended to train students for the public service. The creation of this fac­ulty was primarily ‘responsible for Columbia’s transition from a college to a university’ in 1896.⁴ Burgess was highly influenced by the style and method of education he witnessed during his time at German universities. As such, he basically implemented those ‘same methods of instruction’ at Columbia University (Columbia Law Times 1893, 124). In the end, the changes that Burgess instituted at the School of Political Science at Columbia University set ‘an example which has since been followed by a considerable number of American colleges’ (ibid.).

Richmond Mayo-Smith (1854-1901) studied in Berlin from 1875 to 1877 and then in Heidelberg in 1878. In 1877, he was offered the Chair of the Eco­nomics and Statistics in the Faculty of Political Science at Columbia College, which was about to be established, on the condition that he completed his graduate studies in Germany. After he joined Columbia, he ended up having a significant inf luence on the way statistics was taught and applied to the so­cial sciences in the US. In fact, he was credited with teaching the first course on statistics at an American university in 1880, which he continued to do until his death in 1901 (Herbst 1965, 140).

After graduating from Columbia College in 1879, Edwin Robert Anderson Seligman (1861—1939) went on to study at universities in Berlin, Paris, and Heidelberg until 1882. Subsequently, he went back to Columbia to obtain his PhD. After graduating in 1885, he remained at Columbia University, where he taught political economy from 1891 to 1931. Seligman’s views were highly influenced by the theorists of the GHSE, as well as Ely and Herbert Baxter Adams. In fact, Seligman’s dedication to improving the way political economy was taught along with his work as editor of the Political Science Quarterly were key factors in the establishment of the Department of Economics at Columbia University. In 1895, Clark joined Seligman at Columbia, and the two of them played important roles in the development of its economics department.

In 1902, Henry Ludwell Moore was hired as a professor of political econ­omy at Columbia University, where he taught the elementary principles of statistics. Previously, in 1898, Vladimir G. Simkhovitch (1874—1959) became a professor of economic history at the school after studying at Halle where he attended the lectures of Wagner. He was particularly influenced by Wagner’s socialist ideas and actually became known as a socialist economist (Simkho- vitch 1938). Edward Thomas Devine (1867—1948) also joined the faculty at Columbia University after completing his PhD in economics under Patten at the University of Pennsylvania in 1889 and then studying for one year in Germany. The combined efforts of Moore, Seager, Devine, and Seligman helped the economics department at Columbia University achieve a leading role in the US until the end of WWI. Their teachings and publications fo­cused on historical ethical economics and multidisciplinary studies, thereby ref lecting the inf luence of the GHSE.

David Kinley (1861—1944), who was significantly influenced by Ely’s lec­tures and views at both Johns Hopkins and Wisconsin, arrived at the Univer­sity of Illinois in 1893 to start working at its newly established department of economics. In 1893—1894, it offered seminars and courses on ‘the principles of economics, public finance, state and local taxation in the United States, money, sociology,’ and ‘social pathology’ (Kinley 1949, 29). The following ac­ademic year, courses on ‘practical economic problems, financial history of the United States, railroad problems, statistics, and social problems’ were added (ibid.). Additionally, Ernest Ludlow Bogart (1870—1958), who obtained his PhD at Halle, joined the University of Illinois ‘in the fall of 1909 as Associ­ate Professor of Economics’ at the recommendation of Kinley.⁵ Bogart’s text ‘Economic History of the United States,’ published in 1907, was adopted by:

Kinley prior to his joining the faculty at the university: it was the second text in American Economic History ever to be written, and would bring Dr. Bogart the immediate distinction of being one of the top Economic Historians in the country.⁶

During his career, Kinley consistently made efforts to improve the depart­ment of economics of the University of Illinois based on the German model.

Before German influence took hold, there was not ‘much teaching’ of political economy going on at American universities and colleges (Patten 1895, 131). However, returning German-trained American political econ­omists significantly improved the quality of the education and teaching of political economy being offered at American institutions by implementing changes based on the German model. They became leaders in their field, and as such, contributed to the progress of their discipline by establishing the new foundation of economics in the US. In doing so, they founded successful economics departments at a variety of colleges and universities across the US during the 1880s and 1890s. Their efforts also resulted in a multiplication in the number chairs available at political economy departments in colleges and universities throughout the country. In 1880, only three scholars ‘in the 28 leading schools “devoted most of their time to political economy” by 1890 there were 20 chairs in the subject, and 51 by 1900’ (Coats 1985, 1700). In fact, each university had ‘either an independent chair of Political Economy or a combined chair of economics and history, or some other subject’ by 1890 (Devine 1894, 88). Then, in early 20th century, ‘institutions like Columbia, Harvard, Yale, Chicago, and Wisconsin’ had ‘from six to ten professors of economics and social science, together with a corps of lecturers, instructors, and tutors’ (Seligman 1911, 388). Additionally, all of the reforms and changes that were implemented resulted ‘in the six or eight leading American in­stitutions the number of hours of instruction given per week to econom­ics has increased on the average six or seven fold since 1876’ (Dunbar 1904, 54). The expansion and improvement of political economy departments at American universities, which contributed to better teaching and an increase in high-quality academic research, would not have been possible without the influence of the GHSE.