Hostname: page-component-cd9895bd7-gvvz8 Total loading time: 0 Render date: 2024-12-28T08:10:18.410Z Has data issue: false hasContentIssue false
  • English
  • Français

HARVARD MEETS THE CRISIS: THE MONETARY THEORY AND POLICY OF LAUCHLIN B. CURRIE, JACOB VINER, JOHN H. WILLIAMS, AND HARRY D. WHITE

Published online by Cambridge University Press:  11 August 2015

Michele Alacevich ,
Pier Francesco Asso  and
Sebastiano Nerozzi
Michele Alacevich
Affiliation:
Loyola University Maryland, [email protected]
Pier Francesco Asso
Affiliation:
University of Palermo, Dept. of European Integration (DEMS), [email protected]
Sebastiano Nerozzi
Affiliation:
University of Palermo, Department of European Integration, [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

The paper discusses the interpretation of the Great Depression and the policy decision making by four Harvard economists: Lauchlin B. Currie, Jacob Viner, John H. Williams, and Harry D. White. All were eminent scholars in the field of monetary and international economics, and were deeply involved in policy decisions during the New Deal. We will discuss how their Harvard training provided them with a common methodological and analytical perspective, and how this common perspective translated into specific policies when they moved from the academia to public service in the US administration. Their interpretation of the causes of the Great Depression and their policy proposals show the eclectic approach that these four economists had to monetary, fiscal, and economic analysis, and the points of contact with both the US monetarist tradition and the work of John Maynard Keynes. At the same time, this very eclecticism, far from making them part of the monetarist or the Keynesian schools, characterized them as a group of their own: a network of scholars who, by virtue of their studies and the evolution of their professional careers, developed a style of analysis and policy prescriptions that deeply influenced the nature of the New Deal.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 37 , Issue 3 , September 2015 , pp. 387 - 410
Copyright
Copyright © The History of Economics Society 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Ahiakpor, James C. W. 2010. “On the Similarities between the 1932 Harvard Memorandum and the Chicago Antidepression Recommendations.” History of Political Economy 42, 3 (Fall): 547–571.Google Scholar
Alacevich, Michele. 2005. “Post-war Economic Policy for Development: Lauchlin B. Currie and the World Bank in Colombia.” Storia del Pensiero Economico 1: 73–92.Google Scholar
Alacevich, Michele. 2009. The Political Economy of the World Bank: The Early Years. Stanford: Stanford University Press.Google Scholar
Allen, W. R. 1993. “Irving Fisher and the 100 Percent Reserve Proposal.” Journal of Law and Economics 9, 2 (October): 703–717.Google Scholar
Angell, James W. 1934. “Gold, Banks and the New Deal.” The Political Science Quarterly 49, 4 (December): 481–505.Google Scholar
Asso, Pier Francesco, and Fiorito, Luca. 2009. “A Scholar in Action in Interwar America: John H. Williams on Trade Theory and Bretton Woods.” In Leeson, Robert, ed., American Power and Policy. Basingstoke, UK: Palgrave Macmillan, pp. 180–242.CrossRefGoogle Scholar
Barber, William J. 1985. From New Era to New Deal: Herbert Hoover, the Economists and American Economic Policy (1921–1933). Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Barber, William J. 1996. Designs Within Disorder: Franklin Delano Roosevelt, the Economists and the Shaping of American Economic Policy, 1933–1945. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Bernanke, Ben S. 1995. “The Macroeconomics of the Great Depression: A Comparative Approach.” Journal of Money, Credit and Banking 27: 1–28.CrossRefGoogle Scholar
Bloomfield, Arthur. 1992. “On the Centenary of Jacob Viner’s Birth. A Retrospective View of the Man and His Work.” Journal of Economic Literature 30, 4 (December): 2052–2085.Google Scholar
Burgess, W. Randolph. 1927. The Reserve Banks and the Money Market. New York: Harper.Google Scholar
Carlson, Valdemar. 1946. An Introduction to Modern Economics. Philadelphia: Blakiston.Google Scholar
Carlson, Valdemar. 1968. “The Education of an Economist before the Great Depression: Harvard’s Economics Department in the 1920s.” American Journal of Economics and Sociology 27, 1 (January): 101–112.CrossRefGoogle Scholar
Currie, Lauchlin. 1931a. Bank Assets and Banking Theory. Cambridge, MA: Harvard University Press.Google Scholar
Currie, Lauchlin. 1931b. “Review of Federal Reserve Policy (1920–1930) by Harold L. Reed.” American Economic Review 21 (March): 162–164.Google Scholar
Currie, Lauchlin. 1933a. “Treatment of Credit in Contemporary Monetary Theory.” Journal of Political Economy 41 (February): 58–79.CrossRefGoogle Scholar
Currie, Lauchlin. 1933b. “Member Bank Reserves and Bank Debits.” Quarterly Journal of Economics 48, 2 (February): 509–525.Google Scholar
Currie, Lauchlin. 1933c. “Money, Gold and Income in the United States, 1931–1932.” Quarterly Journal of Economics 48 (1): 77–95.CrossRefGoogle Scholar
Currie, Lauchlin. 1934a. The Supply and Control of Money in the United States. Cambridge, MA: Harvard University Press.Google Scholar
Currie, Lauchlin. 1934b. “The Failure of the Monetary Policy to Prevent the Depression of 1929–1932.” Journal of Political Economy 42 (April): 145–177.CrossRefGoogle Scholar
Currie, Lauchlin. 1934c. “A Proposed Revision of the Monetary System of the United States.” Submitted to the Secretary of the Treasury, Morgenthau, September 1934.Google Scholar
Currie, Lauchlin. 1968. Obstacles to Development. East Lansing: Michigan State University Press.Google Scholar
Currie, Lauchlin, Ellsworth, Paul T., and White, Harry D.. [1932] 2002. “Memorandum Prepared by L. B. Currie, P. T. Ellsworth, and H. D. White (Cambridge, Mass., January 1932).” Edited by Laidler, David and Sandilands, Roger. History of Political Economy 34, 3 (Fall): 533–552.Google Scholar
Currie, Lauchlin, and Krost, Martin. [1935] 1978. “Federal Income-Increasing Expenditures.” History of Political Economy 10 (Winter): 534–540.CrossRefGoogle Scholar
Davis, Ronnie J. 1971. The New Economics and the Old Economists. Ames: Iowa State University.Google Scholar
Eichengreen, Barry. 1992. Golden Fetters. The Gold Standard and the Great Depression. New York: Oxford University Press.Google Scholar
Ellis, Howard S. 1938. “Some Fundamentals in the Theory of Velocity.” Quarterly Journal of Economics 52, 3 (May): 431–472.CrossRefGoogle Scholar
Fiorito, Luca, and Nerozzi, Sebastiano. 2009. “Jacob Viner’s Reminiscences from the New Deal” (February 11, 1953). Research in the History of Economic Thought and Methodology 27A (June): 75–136.CrossRefGoogle Scholar
Fisher, Irving. 1935. 100% Money. New York: Adelphy Company.Google Scholar
Flanders, M. June. 1989. International Monetary Economics, 1870–1960: Between the Classical and the New Classical. Cambridge: Cambridge University Press.Google Scholar
Friedman, Milton. [1956] 2003. “The Quantity Theory of Money: A Restatement.” In Leeson, Robert, ed., Keynes, Chicago and Friedman. Two volumes. London-Brookfield: Pickering and Chatto, vol. I:31–51.Google Scholar
Friedman, Milton, and Schwartz, Anna. 1963. A Monetary History of the United States, 1867–1960. Princeton: Princeton University Press.Google Scholar
Hardy, Charles O., and Viner, Jacob. 1935. Report on the Availability of Bank Credit in the Seventh Federal Reserve District. Washington: U.S. Treasury Department.Google Scholar
Hawtrey, Ralph G. 1925. “Public Expenditure and the Demand for Labour.” Economica 5 (March): 38–48.CrossRefGoogle Scholar
Hawtrey, Ralph G. 1932. The Art of Central Banking. London: Longmans Group.Google Scholar
Keynes, John M. 1930. A Treatise on Money. Two volumes. London: Macmillan.Google Scholar
Keynes, John M. 1931. “An Economic Analysis of Unemployment.” In Wright, Quincy, ed., Norman Wait Harris Memorial Foundation, Reports of Round Tables: Unemployment as a World Problem. Chicago: University of Chicago Press: 1–42.Google Scholar
Keynes, John M. 1933. The Means to Prosperity. London: MacMillan and Co.Google Scholar
Keynes, John M. 1936. The General Theory of Employment, Interest and Money. London: Macmillan.Google Scholar
Keynes, John M. 1937. “The General Theory of Employment.” Quarterly Journal of Economics 51, 2 (February): 209–223.CrossRefGoogle Scholar
Laidler, David. 1993. “Hawtrey, Harvard and the Origins of the Chicago Tradition.” Journal of Political Economy 101, 6 (December): 1068–1103.CrossRefGoogle Scholar
Laidler, David, and Sandilands, Roger. 2002. “An Early Harvard Memorandum on Anti-Depression Policies: An Introductory Note.” History of Political Economy 34, 3 (Fall): 515–532.CrossRefGoogle Scholar
Laidler, David, and Sandilands, Roger. 2010. “Harvard, the Chicago Tradition, and the Quantity Theory: A Reply to James Ahiakpor.” History of Political Economy 42, 3 (Fall): 573–592.CrossRefGoogle Scholar
Leeson, Robert, ed. 2003. Keynes, Chicago and Friedman. Two volumes. London-Brookfield: Pickering and Chatto.Google Scholar
Leeson, Robert, ed. 2009. American Power and Policy. Basingstoke: Palgrave-Macmillan.CrossRefGoogle Scholar
Martin, Percy W. 1931. The Problem of Maintaining Purchasing Power. London: P.S. King.Google Scholar
Mason, Edward. 1982. “The Harvard Department of Economics from the Beginning to World War II.” The Quarterly Journal of Economics 97, 3 (August): 383–433.CrossRefGoogle Scholar
Mehrling, Perry. 1997. The Money Interest and the Public Interest, American Monetary Thought 1920–1970. Cambridge, MA, and London: Harvard University Press.Google Scholar
Mehrling, Perry, and Sandilands, Roger J., eds. 1999. Money and Growth: Selected Papers of Allyn Abbott Young. London and New York: Routledge.CrossRefGoogle Scholar
Meltzer, Allan H. 2003. A History of the Federal Reserve. Volume 1, 1913–1951. Chicago and London: The University of Chicago Press.Google Scholar
Nerozzi, Sebastiano. 2007. “Between Harvard and Chicago. Jacob Viner and New Deal Banking Reforms (1933–1935).” Storia del Pensiero Economico 2: 29–66.Google Scholar
Nerozzi, Sebastiano. 2009a. “Jacob Viner and the Chicago Monetary Tradition.” History of Political Economy 41 (Fall): 575–604.CrossRefGoogle Scholar
Nerozzi, Sebastiano. 2009b. “Building up a Multilateral Strategy for the United States: Alvin H. Hansen, Jacob Viner and the Council on Foreign Relations.” In Leeson, Robert, ed., American Power and Policy. Basingstoke: Palgrave-Macmillan: pp. 24–68.CrossRefGoogle Scholar
Nerozzi, Sebastiano. 2011. “From the Great Depression to Bretton Woods: Jacob Viner and International Monetary Stabilization (1930–1945).” European Journal of the History of Economic Thought 18 (1): 55–84.CrossRefGoogle Scholar
Patinkin, Don. [1969] 2003. “The Chicago School, the Quantity Theory and Friedman.” In Leeson, Robert, ed., Keynes, Chicago and Friedman. London-Brookfield: Pickering and Chatto: pp. 85–120.Google Scholar
Phillips, J. Ronnie. 1995. The Chicago Plan and New Deal Banking Reform. Armonk, NY: M.E. Sharpe.Google Scholar
Rees, D. 1973. Harry D. White. A Study in Paradox. New York: Coward, McCann & Geoghegan.Google Scholar
Riefler, Winfield W. 1930. Money Rates and Money Markets in the United States. New York: Harper.Google Scholar
Sandilands, Roger J. 1990. The Life and Political Economy of Lauchlin Currie. Durham, NC: Duke University Press.Google Scholar
Sandilands, Roger J. 2004. “New Light on Lauchlin Currie’s Monetary Economics on New Deal and Beyond.” Special Issue, Journal of Economic Studies: 170–403.Google Scholar
Sandilands, Roger J. 2009a. “An Archival Case Study. Revisiting The Life and Political Economy of Lauchlin Currie.” In Leeson, Robert, ed., American Power and Policy. Basingstoke: Palgrave-Macmillan: 105–133.CrossRefGoogle Scholar
Sandilands, Roger J. 2009b. “New Evidences on Allyn Young’s Style and Influence as a Teacher.” In Leeson, Robert, ed., American Power and Policy. Basingstoke: Palgrave-Macmillan: 134–179.CrossRefGoogle Scholar
Stein, Herbert. 1969. The Fiscal Revolution in America. Chicago and London: University of Chicago Press.Google Scholar
Sweezy, Alan. 1972. “The Keynesians and Government Policy, 1933–1939.” The American Economic Review 62 (1–2): 116–124.Google Scholar
Tavlas, George. 1998a. “Was the Monetarist Tradition Invented?” Journal of Economic Perspectives 12 (4): 211–222.CrossRefGoogle Scholar
Tavlas, George. 1998b. “More on the Chicago Tradition.” Journal of Economic Studies 25 (1): 17–21.CrossRefGoogle Scholar
Tavlas, George. [1997] 2003. “Chicago, Harvard and the Doctrinal Foundations of Monetary Economics.” In Leeson, Robert, ed., Keynes, Chicago and Friedman. Two volumes. London-Brookfield: Pickering and Chatto, vol. II:173–199.Google Scholar
Viner, Jacob. 1924. Canada’s Balance of International Indebtedness: 1900–1913. An Inductive Study in the Theory of International Trade. Cambridge, MA: Harvard University Press.Google Scholar
Viner, Jacob. 1931. “Problems of International Commercial and Financial Policy.” In Buffington, A. H., ed., Report of the round tables and general conferences at the eleventh session. Williamstown, MA: Institute of Politics: 165–193.Google Scholar
Viner, Jacob. 1932. “International Aspects of the Gold Standard.” In Wright, Quincy, ed., Norman Wait Harris Memorial Foundation, Reports of Round Tables: Gold and Monetary Stabilization: Lectures on the Harris Foundation. Chicago: University of Chicago Press: 3–42.Google Scholar
Viner, Jacob. 1933a. “Balanced Deflation, Inflation or More Depression.” In Day and Hour Series of the University of Minnesota. Volume 2. Minneapolis: University of Minnesota Press.Google Scholar
Viner, Jacob. 1933b. “Inflation as a Possible Remedy for Depression.” Proceedings of the Institute of Public Affairs, University of Georgia. Athens: University of Georgia: 120–135.Google Scholar
Viner, Jacob. 1934a. “How Money is Created in the United States.” Unpublished, Viner Jacob, File I, Morgenthau Papers, Box 301, Roosevelt Presidential Library, Hyde Park (NY).Google Scholar
Viner, Jacob. 1934b. “The Banking Examination Situation, October 1, 1934.” Unpublished, Viner Jacob, File I, Morgenthau Papers, Box 301, Roosevelt Presidential Library, Hyde Park (NY).Google Scholar
Viner, Jacob. 1935. “Memorandum on International Monetary Stabilization.” Unpublished, Viner Jacob, File I, Morgenthau Papers, Box 301, Roosevelt Presidential Library, Hyde Park (NY).Google Scholar
Viner, Jacob. 1936a. “Mr. Keynes and the Causes of Unemployment.” The Quarterly Journal of Economics 51: 147–167.CrossRefGoogle Scholar
Viner, Jacob. 1936b. “Recent Legislation and the Banking Situation.” American Economic Review, Supplement 26 (March): 106–119.Google Scholar
Viner, Jacob. 1950. The Customs Union Issue. New York: Carnegie Endowment for International Peace.Google Scholar
White, Harry D. 1933. The French International Accounts, 1880–1913. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Williams, John H. 1920a. Argentine International Trade under Inconvertible Paper Money, 1880–1900. Cambridge, MA: Harvard University Press.Google Scholar
Williams, John H. 1920b. “Germany’s Reparation Payments—Discussion.” American Economic Review 10, 1, Supplement, Papers and Proceedings (March): 50–57.Google Scholar
Williams, John H. 1928. “Opportunities for Research in International Relations—Discussion.” Social Science Research Council, Hanover Conference, mimeo.Google Scholar
Williams, John H. 1929. “The Theory of International Trade Reconsidered.” Economic Journal 39, 154 (June): 195–209.CrossRefGoogle Scholar
Williams, John H. 1931. “The Monetary Doctrines of J. M. Keynes.” The Quarterly Journal of Economics 45, 4 (August): 547–587.CrossRefGoogle Scholar
Williams, John H. 1932a. “The Crisis of the Gold Standard.” Foreign Affairs (January): 173–187.CrossRefGoogle Scholar
Williams, John H. 1932b. “Monetary Stability and the Gold Standard.” In Wright, Quincy, ed., Norman Wait Harris Memorial Foundation, Reports of Round Tables: Unemployment as a World Problem. Chicago: University of Chicago Press: 133–158.Google Scholar
Williams, John H. 1934. “The World’s Monetary Dilemma: Internal versus External Stability.” Proceedings of the Academy of Political Science XVI, 1 (April): 62–68.CrossRefGoogle Scholar
Williams, John H. 1936. “The Banking Act of 1935.” American Economic Review, Papers and Proceedings, (March): 95–105.Google Scholar
Williams, John H. 1937. “The Adequacy of Existing Currency Mechanisms under Varying Circumstances.” The American Economic Review, Papers and Proceedings 27, 1 (March): 151–168.Google Scholar
Williams, John H. 1941. “Deficit Spending.” American Economic Review 30 (February): 52–66.Google Scholar
Williams, John H. 1942. “The Implications of Fiscal Policy for Monetary Policy and the Banking System.” American Economic Review, Papers and Proceedings 32, 1 (March): 234–249.Google Scholar
Williams, John H. 1943. “Currency Stabilization: The Keynes and White Plans.” Foreign Affairs (July): 645–658.CrossRefGoogle Scholar
Williams, John H. 1944a. “The Post-war Monetary Plans.” American Economic Review, Supplement, Papers and Proceedings 34, 1 (March): 372–384.Google Scholar
Williams, John H. 1944b. “International Monetary Plans: After Bretton Woods.” Foreign Affairs (October): 53–55.Google Scholar
Williams, John H. 1948. “An Appraisal of Keynesian Economics.” American Economic Review, Supplement, Papers and Proceedings 38 (May): 273–298.Google Scholar
Williams, John H. 1949. Postwar Monetary Plans and Other Essays. Oxford: Blackwell.Google Scholar
Wright, Quincy, ed. 1931. Norman Wait Harris Memorial Foundation, Reports of Round Tables: Unemployment as a World Problem. Chicago: University of Chicago Press.Google Scholar
Wright, Quincy, ed. 1932. Norman Wait Harris Memorial Foundation, Reports of Round Tables: Gold and Monetary Stabilization: Lectures on the Harris Foundation. Chicago: University of Chicago Press.Google Scholar
Young, Allyn A. 1927. Economic Problems New and Old. Cambridge, MA: Riverside Press.Google Scholar
Young, Allyn A. 1928. An Analysis of Bank Statistics for the United States (1900–1916). Cambridge, MA: Harvard University Press.Google Scholar
Young, Allyn A. 1929. “Downward Price Trend Probable, Due to Hoarding of Gold by Central Banks.” The Annalist: A Magazine of Finance, Commerce and Economics 33 (January 18): 96–97.Google Scholar