How it all began: Ragnar Frisch and the founding of the Econometric Society (2/3)

 

This post is the second of a three-parts serie on the founding of the econometric society. All comments are welcomed.

Ragnar Frisch, with Charles Roos and Irving Fisher, decided to hit hard. In June 1930, they sent out a 5-pages letter to 31 economists from twelve countries, mostly European and American, known as the “June letter” with the intent to go after the big fish. The letter had a dual purpose: 1) to ask for “opinion” and “encouragement”, and 2), to seek for a possibility to broaden the base (Bjerkholt, 2017: 183). The choice was thus to take a horizontal approach, to take the temperature before moving forward. This letter tells us a lot about the context at a time Economics was not yet mathematical.

The recipients of the June letter

Among the 31 recipients, one third were American: Fisher, Roos, T. N. Carver, John B. Clark, his son John M. Clark, Griffith C. Evans, Mordecai Ezekiel, Henry L. Moore, Warren M. Persons, and Henry Schultz, two-thirds were European reflecting the economic spectrum (Bjerkholt, 2017, 178).

Italian weigh particurlarly heavely with economists like Luigi Amoroso, Corrado Gini, Umberto Ricci, Alfonso de Pietri-Tonelli and Gustavo del Vecchio. Except Gini (famous for his index), most of them are now forgotten but as Schumpeter observed, “independently of Pareto, Italian economics attained a high level in a variety of lines and in all applied fields”. (Schumpeter, 1954 : 855 quoted in Bjerkholt, 2017: 180).

Four French economists were included: Jacques Moret, Clément Colson (a leading name at Ecole Polytechnique in France) and his disciples François Divisia and Jacques Rueff. Contrary to the picture, mathematical economics was only taught to a handful of engineers mostly at the Ecole Nationale des Ponts et Chausées where was kept alive the tradition of Cournot and Walras (Bjerkholt, 2017: 180). 

Only three English economists were selected but the big one were there : Arthur Bowley from Oxford and the two famous economists from Cambridge A. C. Pigou and John M. Keynes.

Two swedish economists were on the list: Gustav Cassel and Bertil Ohlin, a disciple of Knut Wicksell. At that time Sweden looms large in economics and especially on monetary and macroeconomic issues (Bjerkholt, 2014: 7). Surprisingly, very few from the Vienna Circle (which comprised talented economists and mathematicians) were contacted: only Hans Mayer from Vienna is on the list and Joseph Schumpeter (professor at Bonn at that time) (Bjerkholt, 2014: 7). Finally, the letter was adressed to the Danish statistician Harald Westergaard, the Polish Wlasdislaw Zawasdki, and the Russian Eugen Slutsky.

This diverse group had connections to pioneers like Leon Walras, Alfred Marshall, Pareto, Wicksell and others. This list thus reflects a genuine attempt to bring together all the national economic traditions (France, United States, England, Sweden, Italy…) and to encompass various ways to adress formally economic issues. (Bjerkholt, 2014: 10). It also shows that many young economists (aged less than 40) like Frisch (36), Ross (29), Ezekiel (31), Ohlin (32) and Rueff (35) were included among great figures like John Bates Clarck (84) and Clément Colson (78) without mentionning Keynes or Schumpeter.

A table summarizing the thirty-one economists:

The letter, signed by Fisher, Frisch and Roos required 4 conditions for membership which would not appal a Master’s student today:

a) To be familiar “with general economic theory” b) to have “a working knowledge of mathematics as applied to economic theory and statistics”, c) to have “some knowledge of accounting”, and d) to have “published an original contribution to economic theory or to the analysis of such economic statistics or accounting as have a definite bearing on problems in economic theory” (June letter, 1930, quoted in Bjerkhohlt, 2017: 182).

The b) condition was heavely discussed. Divisions emerged between supporters of Frisch’s view of a mathematically based economic science and American institutionalits like Maurice Clark or statisticians like Persons (Bjerkholt, 2017: 183). Even among this selection of economists, the question of the mathematization of economics proved to be not settled (Bjerkholt, 2014: 16).

If the association was not yet known as the “Econometric Society”, the letter suggests to name the journal of the society Oekonommetrika. Divisia prefered that term to “Economic Science” which seemed to him “dangerous” because it “indicate that we want to monopolize economic science and that we are the only ones who represent the true economic science.” (Bjerkholt, 2017: 187).

The June letter was a success. All the economists replied except Pigou and Cassel. Some refused to join the society for health reasons: Moore (known for extending Jevons’ sun spot theory) and the statistician and demograph Westergaard. Though, most of them welcomed the initiative and took part to its development (Bjerkholt, 2017: 183) until the effective founding of the Econometric Society in Cleveland in December 1930.

We’ll see in the next post the challenges faced by the society during the first years of its existence.

 

References