Category: Yale

Before becoming the founding father of the department of political economy at the University of Chicago, the 35 year old Harvard assistant professor J. Laurence Laughlin (Harvard Ph.D. 1876) published an essay, transcribed below, arguing that liberal college education needed to be expanded beyond Greek, Latin, mathematics, and philosophy to include courses dealing with economic theory and its policy applications. He provides us a table of the limited course offerings in political economy at five major colleges/universities at the time. I stumbled upon an unsigned editorial written in response to Laughlin that I have also transcribed and which is placed at the end of this post. The editorial provides us with historical evidence that ill-tempered economics-bashing is hardly a creation of the Twitternet Age. No siree Bob! The editor was not amused by Laughlin’s presumption, calling him and his college professor colleagues who taught political economy to boys…”vealy milksops”. I dare any or all visitors to sneak that expression into a footnote.

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POLITICAL ECONOMY AND THE CIVIL WAR.
By J. Laurence Laughlin.

Atlantic Monthly, v. 55 (April, 1885) no. 330, pp. 444-450.

In some parts of our country there is a current maxim among the old-fashioned gardeners to the effect that “a wind-shaken tree will bear much fruit.” There is some subtle force in it. In fact, it is an expression which may be regarded as finding its parallel in individual and social life. As individuals, we know that there is no real growth of character except by a conquest over opposing difficulties; the doing right when it is against our inclinations and prejudices. And in a social organism we seem to see a moral law of conservation of energy by which a sacrifice is the parent of some gain,— a thing which evidently underlies the movements attending many great convulsions in political life. We saw armies go out of our sight during the civil war, only to come back thinned, injured by disease, with half their number left dead on the field. Death meant bitter, indescribable sorrow in all our homes. The experiences of the war were felt to be pitiless, inexplicable, and hard. And yet, perhaps, a subtle suggestion may have come into our minds that it was not simply by dying, or in living, that the best law of our being was enforced; that there was, in truth, some Power behind it all; that some purpose was being worked out through each one of us, just as each leaf on the tree, for example, is necessary to the completed organism of the whole tree, and ceases to be when it is separated from the stem. Now, perhaps, even at this short distance from the struggle, we can begin to see some of the effects of that social and political upheaval, the greatest since the foundation of our government. It is worth while to examine whether the wind shaken tree has borne much fruit.

The process by which citizens from the secluded districts and remote towns were sent through new cities to opposite parts of the Union, exchanging ideas with men of different habits of thought, was a marked feature of the war period, and leavened the mental life of the American people in a way hither to little suspected. It was something like sending a country boy to college, only the effect was multiplied a million times. The rural population came into a knowledge of our cities, while the urban classes were carried out into new climates and into unvisited parts of our vast domain. New sights, new methods of cultivation, different habits of living, stimulated the dull and fired the active and enterprising men in the ranks. The life of the farm and the village was widened to an interest in the nation. About the same time, moreover, came a vast increase in easy means of communication by railways and a greater extension of the use of the newspaper and telegraph, by which provincial towns were brought into direct connection with the outside world. Even oddities of customs and dress began to disappear, in the process of comparison with the more attractive ways of the dwellers in the great cities and towns. In this fashion, the thinking horizon was extended. Dull intellects learned the presence of complicated problems, and brighter minds found new spurs to ambition in the questions of larger interest. On all sides men felt themselves coming daily into contact with new difficulties, under a dim consciousness of their bigness, but with a strong belief that the knowledge how to deal with them was inadequate. In short, the tremendous crisis through which we passed, apart from its effect on the preservation of the Union, has been subtly at work in moral and intellectual directions. The working of these new forces on a quick and susceptible race can easily be imagined. They have, in fact, under somewhat similar conditions, had a distinct influence on a more phlegmatic people than ours. Old students at Göttingen, who have returned to the university since the late wars in which Germany has been engaged, have been amazed to find the old-fashioned spot — where the customs, habits, and naive simplicity of one hundred years ago had prevailed until quite recently — now wholly changed. The commercial spirit has seized the formerly simple-minded peasants, and the quiet town now hears the heavy march of cosmopolitanism in its streets.

Like Germany, the United States had new problems to solve. While the conflict closed the long slavery struggle, it brought with it intricate questions, but of a character very different from those which had gone before. Without warning, and consequently without the ability to get due preparation or acquire proper training, our public men were confronted, as the war progressed, with matters of vital importance in international and constitutional law, in taxation, and in every form of administration and finance. The demand for men who had given themselves more particularly to the province of governmental science was an imperative one; but it was, generally speaking, met in a way which showed that there existed in the community a class from whom these necessary men could be recruited. That class was the legal profession of the country. The questions of reconstruction, the relation of the general government to the States, the civil rights of the negro, our relations with foreign powers during the blockade of Southern ports, were not abandoned to men who had never habituated themselves to discussions such as were involved in their settlement. There were differences of opinion, of course; but inasmuch as these differences of opinion were produced by different political theories, this proved that attention had been given to such subjects to the extent that a crystallized system of thought, formulated in dogmas, had been created by the various parties.

But, as has been suggested, new considerations arose. The magnitude of the military operations involved an enormous expenditure of money by the state, and made a demand upon our statesmen for financial skill of an almost unparalleled kind. To meet these extended questions of taxation, finance, and currency, what body of men could be called upon? To this, answer must be made that the war overtook us without a supply — or even a few — of trained economists and financiers. The economic part in the equipment of a public official had been wholly neglected. In fact, political economy and finance had never been seriously studied in the schools; but, if studied, they were classed in the old-fashioned required curriculum with Butler’s Analogy and the Evidences of Christianity. Although Adam Smith wrote his Wealth of Nations in 1776, political economy was an unknown science to the American people before 1860. It is an interesting study to examine the manner in which our people went under the burdens and tasks of our great civil conflict. There was the quick adaptability of Americans to start with; there was plenty of patriotism and good will, and no lack of those high qualities of self-sacrifice and heroism which are still fragrant to us; but lawyers, such as Chase and Fessenden, were practically our only financiers. Early in the war they were required to consider a scheme — for the right settlement of which a vast experience is necessary — of raising loans, and adjusting a plan of taxation corresponding to the extraordinary war expenses. Without considering alternatives, in a few years they created a debt as great as that incurred by old despotisms of Europe in centuries; without foresight, they drifted into a ruinous issue of irredeemable paper money; without intending it as the object of a definite policy, but through a desire simply to gain a war revenue, they established an extended system of “protection to home industries” by levying duties on imports, which has brought into existence business interests largely dependent on the continuance of these temporary war measures. When it is realized that principles of taxation are to-day probably less understood than any other branch of economics, it is not surprising to find that in 1864 Congress was occupied only five days in passing the most gigantic taxation measure of the war. The National Bank Act, which has given us the best system of banking ever enjoyed by the country, was, however, in reality passed as an act to facilitate the sale of our bonds and aid our tottering credit. We blundered egregiously, but we were capable of learning by experience. Yet it was from these very blunders, from this revelation of inexperience made evident by the demands of a great emergency period, that the community received an impetus toward the study of economic questions which was certain to result in good fruit.

In fact, it is now clear that a new interest in economics and finance has already arisen. The civil war was, so to speak, the creation of economic study in the United States. The war did for this country — in a different way, of course — even more than the corn-law agitation did for England. It actually gave birth to new motives for study. There never was a time in our history when there was so evident a desire to get light on the economic problems of the day as now. There is a new stir among the ranks of the young men at college; and the printing-press sends forth an increasing stream of new books upon subjects which are constantly discussed in the daily newspapers. There is unquestionably a new-born, slowly growing attention by the younger men of our land to the necessity (as well as the duty) of fitting themselves properly for the responsibilities of citizenship. If the war has given us this, — the absence of which used to be so often lamented a few years ago, — then may some of our sacrifices not have been in vain. The wind-shaking has resulted in abundant fruit.

In the present awakening in educational discussion, one phase of which has been called the “Greek Question,” it is worth while to notice the influence of the war period on the college curriculum. In most of our schools and universities, on the breaking out of the war (and even to the present day), the pecuniary resources and endowments had been tied down, under the force of old traditions, to supply instruction in the customary Greek, Latin, mathematics, and philosophy, which were then considered the only essentials of a liberal education. But when the rude shock of the war awakened us to our ignorance, and we looked around for the schools where the new studies could best be followed, it was discovered that the college curriculum made practically no provision for such instruction. In the old days when sailing vessels alone entered Boston harbor, only one channel was practicable, and all the fortifications were placed in a way to command it: but when steam took the place of sails, another channel was adopted, but it is now wholly undefended. The old ship channel must be defended, but so must the new one. So, in the collegiate studies, the old subjects are necessary, of course, but they are not the only necessary ones. The new demands, due to the progress of the age, must also be met. In fact, the response of the schools to these new demands is at once the evidence and result of the quickening and stimulating forces so briefly sketched in these pages. A comparison of the amount of instruction in political economy given by the principal institutions of the land in the years 1860, 1870, and 1884 will furnish us new proof that the wind-shaken tree is yielding full fruit.

Nothing could show more distinctly than the accompanying table how young any real systematic study of political economy is in this country, and it accounts for the lack of any number of trained economists among us. But the younger generation are happily recruiting their ranks, now that these better opportunities are open to them.

At no time, however, have public affairs demanded unpartisan study in economics more than to-day. In past centuries governments were supposed to labor, in an unsettled state of society, for the protection of life and property. Now that the general progress of civilization and Christianity has made life and liberty more secure, legislation in later years has concerned itself rather with property than life. In the Middle Ages trade was considered plebeian; to fight or to oppress was regarded as more noble. Now the chief solicitude of the modern state is the increase of wealth: the castles have become mills; retainers, productive laborers; and arms, the hammers and tools of the artisan.

Consider the character of the questions at this time pressing upon Congress for immediate attention. If we omit the administrative and political legislation on the civil service, the succession to the presidency, and a national bankruptcy law, the remaining questions before Congress to-day are almost entirely economic. (1.) There is, in the first place, the false silver dollar, masquerading in sheep’s clothing, and waiting to catch the unwary business world napping, when it will suddenly assume its true depreciated character, and devour fifteen or eighteen per cent of all creditor’s dues estimated at present prices. What is Congress doing here? Just what it did in the last months of 1861, when it let the country drift on to the shoals of depreciated paper. Monometallists and bimetallists, business men and bankers, are assaulting the dangerous silver legislation, and yet Congress is a very Gibraltar in which the silver owners are intrenched. (2.) Next, there is the banking question. Nothing can be more delicate and sensitive than the machinery of credit and banking in a great commercial country such as this; and yet men, to satisfy the prejudices of constituents, handle this mechanism with about the same air of cheerful indifference as that of a child who drags a rag doll round by the heels. The present national bank notes give a stability to trade in separate parts of the Union, by means of a currency equally good in Maine and Texas, never reached in the days of the vicious and changing state banks; and yet the present system is gradually vanishing before our very eyes, as calls are made for government bonds. (3.) Again, Congress is struggling with the most difficult of all problems, – national taxation. It means a reëxamination of our whole scheme of taxation, the retention of internal taxes on distilled spirits and tobacco, the management of our surplus revenue, the whole sub-treasury system; while the situation inevitably requires a readjustment of our customs duties. Duties needed in order to procure a large revenue in time of war are no longer necessary when the war is ended, and the national debt is reduced one half. (4.) There are the barbarous and mediaeval navigation laws, to which we cling with a curious indifference to the influence of all progress and liberal ideas. The problem of our shipping and merchant marine needs the touchstone of some wider training than is furnished by selfish individual interests. (5.) Our public lands and the settlement of our vast Western domain are important matters of land tenures, and yet they are abandoned to accident, while the possibilities of good disappear under the cloud of accomplished facts, where nothing can be done. It will not be long before all the public lands will be gone, and yet no notice is taken of existing evils. (6.) Then, again, one has but to mention the word “railway,” and there arises to the mind a congeries of difficult questions dealing with Western “grangers,” the ability of the state to regulate freight and passenger charges, and in fact the whole vexed discussion of state interference. Here is a field by itself, to which a man may well give his whole life-work. (7.) It would be wearisome to more than mention the topics of Postal Telegraph, Chinese Labor, Strikes, Trades Unions, and Communism, which attract our instant attention. (8.) Then again the unfortunate legal-tender decision of Judge Gray has brought back to us all the troublesome and intricate discussions on the currency which we once thought had been forever settled. As matters now stand, power is given to Congress, if it chooses, to repeat all the errors of Continental currency policy, and we are put back a century in our paper money teaching. (9.) To pass from merely internal matters, so long as we were the only civilized people on the western continent, our relations with our neighbors gave us little thought. The growth of commerce, the expansion of populous areas north and south of us, the discovery of mineral wealth outside our own limits, which invites our capital, has forced on us the consideration of reciprocity with Canada and Mexico. We have refused reciprocity to Canada; but to-day we are considering the desirability of granting closer commercial relations with Mexico, while Cuba and Porto Rico have asked the same advantages by a new treaty.

Such, in brief, are some of the subjects which must be made matter of instruction in our schools and universities. It will be observed how overwhelming a proportion of public measures at present are economic, and what a heavy responsibility lies upon our institutions of learning, if they are to meet the new demands in a fitting manner. But there is a still stronger reason for strengthening our educational forces on the economic side. This is to be found in what may be called the “economic portents.” To the present time we have been properly called a “young country,” which to the economist means an abundance of unoccupied land, a scanty population, large returns to capital, and high wages. A full knowledge of our resources has not practically been reached as yet, and will not be, probably, for a considerable time to come. These resources and the lusty health of our young country have made it possible heretofore for legislators to blunder with impunity. Constantly receiving large returns, labor and capital would not naturally be over-critical and hostile to each other. The young-country theory has also led to the encouragement of unlimited immigration, with which to settle our prairies and build up our towns. These new-comers do not, in fact, all go upon the land; but, arriving on our seaboard, instead of being drawn off entirely, they remain in the cities, like dirty pools of water in the streets. Indeed, the importation of uneducated, un-American, un-republican workmen from foreign lands is a problem in itself, and makes a strong demand upon all who can possibly do so to educate these masses, both economically and politically. Lawless communism, it is said advisedly, feeds on bad workmen. A saving mechanic is never a communist. To-day these men mean little to us; but when, by an increasing population and a denser settlement of the country, land becomes more scarce and valuable, profits on capital lower, and wages less, then even honest men, finding themselves pinched by a barrier of their own creation, brought into operation by natural laws, unless economically trained, will not know what is happening, and may in entire ignorance fly in the face of the law, and do in the United States somewhat of the things they are now doing in Europe. The day is more or less distant when this may happen, but it is coming nearer in proportion as the methods of men accustomed to conditions in old and crowded countries are brought here by a never ending stream of immigration.

The war has plunged us into the consideration of gigantic questions of an economic character, and the growth of our country in numbers and wealth is making a true understanding of them more necessary than ever to the prosperity of the nation, and a rising tide of interest in such studies is unmistakably evident. But these new and increasing demands are met by meagre and inadequate means in the great schools. It is a surprising fact that in some of the most important institutions there is no separate provision for such studies, and not even one settled instructor. Above all, we must educate in an intelligent manner, by stimulating investigation into home problems, and by encouraging the preparations of monographs on some out of the multitude of our economic questions. The best of the men in the university cannot now find a career in economic teaching, because few positions exist in this country as an object for honorable and ambitious students. Men find a profession in teaching Greek and Latin, but not Political Economy. When the community wakes up to a realization of this gap in the instruction of the land, and the importance of filling it, we may hope to see a more correct relation between means and needs than now exists.

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COLLEGE PROFESSORS AS ECONOMISTS.

Mr. J. Laurence Laughlin, in the Atlantic Monthly for April, appends his name to one of those egotistical screeds which serve to make those who teach political economy to boys contemptible in the sight of those who have occasion to practice legislative economies as practical statesman. Its fundamental assumption is that for want of the wisdom with such boys as Laughlin and Sumner possess nearly all that Hamilton, Gallatin, Chase, and Fessenden have done in America and quite all that Colbert, Napoleon, Pitt, Turgot, and Bismarck have done in Europe in an economic and financial way has been sad botchwork. Why do magazines like the Atlantic Monthly publish such ridiculous rant?

Instead of Chase and Fessenden having been in need of going to school to such vealy milksops as J. Laurence Laughlin, this college tutor shows on every page that he writes how greatly he needs the practical information which he could have got by attending for two or three years on the sessions of the Ways and Means Committee at Washington. Indeed, it is not legislators that need to be educated in economics by college professors, but college professors who need some means of picking up a few grains of sense by being brought into contact with actual legislation.

It is a singular fact that no man who has ever accepted a chair in a college as a teacher of political economy to boys has ever yet rendered any demonstrable service either to the cause of economic science or of legislation. Laughlin has the impertinence to say that, though Adam Smith wrote his “Wealth of Nations” in 1776, political economy was an unknown science to the American people before 1860. Does Mr. Laughlin mean to assert that Franklin, the intimate personal friend of Adam Smith and suggestor of some of his views, or that Hamilton, Madison, Jefferson, Clay, or Webster, Chase, Fessenden, Garfield, or “Pig Iron” Kelly are any less familiar with Adam Smith’s crudities, blunders, wisdom, and garrulous mud than Laughlin himself is? Adam Smith fell so far below Alexander Hamilton, and in many respects below Madison and Chase, in economic insight that while every commentator on Smith points out errors of fact and of theory, stupidities of ignorance and obliquities of vision on every page of the old scotch dullard and mugwump, we challenge Laughlin to point out with equal ease the ignorances and blunders in Hamilton’s economic papers or financial reports.

Adam Smith had the merit, however, of only styling his work as an “Inquiry.” It is the men who come after him who arrogate for his utterly unscientific, undefined meandering, inconsequential and self-contradictory fog-banks the quality of a science. Still Smith is helpful matter to a sensible legislator, because the latter can generally see on the face of Smith’s statements wherein the good Scotch plodder was wool-gathering, and could rectify Smith’s errors out of his own more modern and ample reading. The notion however, that Cairnes, Mill, Jevons, McLeod, Say, Lavelaye, or any other boy teachers have ever been helpful in matters of practical legislation is not warranted by facts. Ricardo was listened to with great respect by practical legislators, but he was a practical businessman like Franklin, the Careys, and Greeley, who had never undertaken the egotism of a pedagogue. The only economists America has yet produced are those who have either never or hardly ever sat in a professor’s chair. There seems to be something in the air of a school room which, if the professor remains in it until it conquers him, unfits him absolutely to mingle as a man among men in the affairs of men. It causes a cranky adoption of the most impracticable and erratic notions on the most inadequate basis of observation and fact, and at the same time inflates with a lofty and unapproachable egotism which precludes its possessor from meeting the views of an opponent with anything but epithets, however superior his opponent may be to himself in learning, experience, or sagacity. A precipitancy that has no nerves left for investigation and patience at criticism marks his every act and word. Laughlin shows this demoralizing precipitancy, so fatal to level-headed usefulness, by speaking of the silver coin, whose equal dignity with gold coin in all legal respects is irrevocably fixed in the letter of the Constitution of the United States, “as the false silver dollar,” thereby implying, of course that from 1853 to 1870, when silver happened to be worth more than gold, we must have been under a “false gold dollar.”

Laughlin also calls those navigation laws which have never existed either among barbarous or medieval nations, but which began in England under Cromwell, “barbarous and medieval.” He might as well call steam or the art of printing “barbarous and medieval.” Sensible man weary of these impudent epithets flung at them by young and graceless upstarts who have still their spurs to win in everything that distinguishes useful men from snobs.

Source:  The Inter Ocean (Chicago, Illinois) April 15, 1885, p. 4.

Image Source: Portrait (1885-88) of James Lawrence Laughlin. Harvard Art Museums/Fogg Museum, Transfer from the Carpenter Center for the Visual Arts.