Reading this account by Kenneth Arrow, I wondered why the lecturer in his history of economic thought course was not identified by name and who the lecturer was. In the Arrow papers at Duke’s Economists’ Papers Archive one finds his notes to John Maurice Clark’s course “On Current Types of Economic Theory” so for now I’ll presume that the son of the great John Bates Clark was the unknown lecturer of Arrow’s anecdote.
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Kenneth Arrow Recalls the Subordination of Price Theory at Columbia
The intellectual environment at Columbia University when I was a graduate student in 1940-1942 was far different from that in which the modern graduate student in economics finds himself. Neoclassical price theory now holds pride of place, as all students will acknowledge, some joyfully, some ruefully. But at Columbia at that period there was no required course in price theory. Indeed there was no course at all offered which gave a systematic exposition of microeconomics, except for Harold Hotelling’s one term offering of mathematical economics, the content of which would today be more or less standard for a general course but which was then regarded as highly esoteric indeed. The one required course which was most nearly equivalent to price theory was a course on the history of economic thought, where the lecturer gave potted summaries of everyone from the mercantilists on. Walras was barely mentioned and certainly was much less prominent than H. J. Davenport. Keynes was not mentioned (for that matter the General Theory was not mentioned even in the course on business cycles, though there were some glancing references to the Treatise on Money).
But the work of Thorstein Veblen was indeed prominently displayed in the course on economic thought, and it was no accident. The corrosive skepticism of Veblen towards “received” theory had, belatedly and even posthumously, under mined the never-very-secure hold of neoclassical thought on teaching of American economics. Of course he was not alone in effecting the change; the more benign, but equally negative, judgments of John R. Commons, in whose name we are gathered, shaped a generation of economists trained under him at the University of Wisconsin. At Columbia, the channel of influence was Wesley C. Mitchell, creator of the National Bureau of Economic Research. His version of the attack upon neoclassical economics was an insistence on the large-scale accumulation of data. It was in large part his direct influence plus the general background created by Veblen and Commons that led to the subordination of price theory at Columbia.
Source: From Kenneth J. Arrow, “John R. Commons Award Paper: Thorstein Veblen as an Economic Theorist.” The American Economist 19, no. 1 (1975): 5-9.
Image Source: Kenneth J. Arrow as Guggenheim Fellow (1972) John Simon Guggenheim Memorial Foundation.