The economic historian Earl J. Hamilton’s papers at the Economists’ Papers Archive at Duke University are, we shall say, rather disheveled, though not quite in the archival dusty way that John Maurice Clark’s papers at Columbia University are found by the rummaging historian. There are numbers of folders that might as easily be labelled “Everything plus the kitchen sink, 1930-1970” and it was in one such folder that the following undated memorandum of Simon Kuznets was found.
The backstory to this memo is that sometime around 1941 Simon Kuznets (then a forty-year old professor at the University of Pennsylvania) self-nominated his quantitative approach to economic history to become one of the pillars of a major project in economic history to be supported by the Rockefeller Foundation through the Social Science Research Council. His project was rejected which just might have had something to do with his later resignation from the Committee. The larger context is described in Arthur H. Cole. The Committee on Research in Economic History: An Historical Sketch. The Journal of Economic History, vol. XXX, No. 4 (December 1970), pp. 723-741.
In the debate pertinent to the fields most worthwhile for the Committee, considering the whole situation of public needs, quantum of research funds, paucity of existing talent, and the like, two proposals were elaborated for Committee consideration, both of which caused much debate and a postponement of decision on the selection of suitable subjects. One was submitted by [Edwin] Gay. He had apparently been much impressed by the summaries of changes in national foreign policies which Arnold Toynbee was then preparing for publication in England. (One of Gay’s personal connections was that of treasurer and active member of the Council on Foreign Relations.) He suggested a continuing group to record the significant alterations of conditions in the principal segments of the American economy. After lengthy debate, it was decided that this project would entail too great a commitment of our limited funds, and the proposition was tabled-and never called back into debate. The second scheme was that which Kuznets has prosecuted over the past two or three decades. At the period of our debate, he seemed unable to outline his program and define his objectives in a manner that satisfied his fellow members of the group. In the end this proposal also was shelved-permanently. Happily Kuznets did secure other financial backing within a few years and has been busy with the investigation ever since: the measurement of economic change and a determination of its cause. [p. 728]
In an earlier article, the (losing) Kuznets and Gay proposals were not mentioned however the winning topics were named in Arthur H. Cole, Committee on Research in Economic History: A Description of Its Purposes, Activities, and Organization. The Journal of Economic History. Vol. 13, No. 1 (Winter, 1953), pp. 79-87.
The Committee on Research in Economic History owes its start to the scholarly interests of Dr. Joseph H. Willits and Dr. Anne Bezanson, at that time both associated with the Rockefeller Foundation. A committee of inquiry was nominated by them; a report of the needs of economic history was drafted by the committee; and, at the instance of Dr. Willits, a grant was made by the Foundation. In all these latter proceedings, Dr. Edwin F. Gay, director of research at the Huntington Library and the dean of American economic historians, was the energizing element. The grant was made in 1940.
During the following ten years, the committee operated as an organ of the Social Science Research Council. Subsequently it withdrew from the Council, secured incorporation as a nonprofit institution under the laws of the District of Columbia, and is now an independent body.
The objective specified for the committee in the grant of the Rockefeller Foundation was broad but simple: merely to develop the field of economic History….
…The specific areas in economic history which the committee found to be especially worthy of research attention and to which it decided initially to devote effort were (i) the relation of the state to American economic development; (2) the evolution of the corporation in the United States and Canada; (3) the history of banking in these same areas; and (4 ) the role of entrepreneurship in our economic progress. [pp. 79-80]
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Memorandum on General Bases of the Research Program
To: Members of Committee on Research in Economic History
From: Simon Kuznets
- The concern of economic history is to describe and analyse changes over time in the structure and performance of an economic system. This should comprise not only qualitative changes in character of economic organization or faults in its structure (associated with such events as wars or revolutions), but also (b) quantitative measures of the economic factors and of their performance. Whatever may be said of the adequacy with which the discipline of economic history carried through task (a), it has, for various reasons, neglected (b). Yet it is in the combination of study of qualitative changes and structural faults with a quantitative analysis of factors, their interrelations and their performance, that lies the way to significant results.
- The aims of economic history may be viewed as (a) providing economic changes, raw materials so as to reveal the lines of causal relation among them, and the patterns of quantitative change — all in application to the concrete historical unfolding of economic events, but with a view to results that can serve as tests and cornerstones for analysis of the present and prognosis of the future. The two aims are interdependent. Whatever may be said of the past efficiency of the discipline of economic history in satisfying aim (a), there appears to be a pressing need for strengthening its performance in attaining aim (b). Also, there is an obvious relation between the neglect by economic history in the past of quantitative analysis of the substantive performance of the economic system and its failure to interpret economic change in analytical categories (i.e., between 1b and 2b)
- The adequacy or inadequacy of any specific study of qualitative changes in economic structure, or of any collection of raw materials, is to be judged in terms of the analytical uses to which the results can be put. The need for new data, whether qualitative or quantitative, can be seen clearly only in the light of a study guided by some significant problem which one intends to analyse in terms of historical experience. There is no way, barring the extreme and unimportant cases of complete absence of any empirical data, to determine the adequacy of raw materials and the character of the lacunae, except by coming to the data with a broad and well articulated question to which one seeks an answer.
- Hence, the Committee should, in planning its research program, consider the advisability of selecting at least one broad problem, one comprehensive study that could serve as a focus of whatever narrower undertakings may be launched. In view of the need of emphasizing a combination of historical-qualitative, statistical and analytical methods of inquiry, the broad central study should force the investigators to use fully each and all of these types of research tools. This, of course, does not mean that similar combination of research tools should not be employed in any of the narrower studies the Committee may wish to launch.
- As stated in my earlier communication, it seems to me that such a central comprehensive study could be formulated on, the broad topic of economic change in this country, to comprise: (a) a study of long term changes; (b) a study of shorter term recurrent fluctuations; and supplemented by (c) a chronological record of specific changes of the type provided by economic annals. (a) The study of long term or secular changes would deal with the quantitative aspects of the growth of population, production, size and organization of enterprise, various facets of the trade, transportation and credit systems, relation of domestic and foreign trade, relation of government etc. to the economic system, and so on. It would attempt to show how fast or slow such changes were in the past; what were the quantitatively measurable or qualitatively recordable factors that appeared to determine these rates or their changes; and what elements of persistence and variation in these long term trends can be discerned. (b) The study of shorter term fluctuations would attempt to present a record of business cycles in this country in their historical succession their peculiarities, in the light of qualitative and quantitative data available as well as of the hypotheses offered by economic theory. (c) Economic annals will seek to record the succession of specific events, which are of bearing upon both long and short term changes in the economy, events that do not appear clearly in continuous quantitative records. They will thus provide largely the qualitative materials needed for studies (a) and (b), and indeed will follow the principles of selection imposed by these broader studies.
- Objections may be raised to the effect that such studies are impossibly wide; that we don’t have the materials for a complete story of secular changes of business cycles in the economy of this country; that the compilation of economic annals, if taken seriously, would alone absorb the efforts of a score of investigators for years to come. To all these objections I would reply that to wait with initiation of such broad, synthetic studies until materials are relatively complete would be to wait until the Greek Kalends; that if such studies are essentially impossible, we had better give up economic history; and that we shall contribute much more to the enrichment of society’s knowledge and understanding through a glorious allure in such broad undertakings than through inglorious successes in more specific, pedestrian studies. I would also point to a complete absence of even a single broad history of business fluctuations in this country: to the relative inadequacy of the synthesis of secular changes offered in the available literature; and to the reasonable assumption that a tentative synthesis now is not the less valuable because it is necessarily tentative and will give room to a more thoroughly grounded one in the decades to come.
- The need for such a broad comprehensive study is suggested also by the following two considerations. First, a large literature already exists on the long term changes in various special fields, such as population various industries, some segments of the banking system, foreign trade, tariffs, business organization, etc.; and yet there are few thoroughgoing attempts, if any, to pull the threads together and weave the secular tendencies in these various, essentially related aspects of the economic system into a coherent study that would use adequately quantitative and qualitative data as well as theoretical hypotheses. On cyclical fluctuations too there are a number of special published studies, inadequate as they may be in toto. Even if the proposed inquiries of secular change and of business cycles accomplish nothing more than to bring the results of already published studies together, evaluate them critically, and point to the questions still unanswered, a valuable service will be performed. But naturally, the inquiries proposed may and will in addition utilize primary data that have not yet been analysed and published.
- The second important consideration is that at present, in times of rapid change in structure and performance of our economic and social system, it is particularly necessary to think through our past in terms that will shed some light on the present and on the future. I do not suggest that the broad studies proposed will provide a definitive answer as to where we go from here, or enable us to establish immutable trends and laws. But they should help us to distinguish durable from transient phenomena; guard us and others against interpreting the past and present in terms of emotionally determined patters of group or class thinking; and thus bring the results of dispassionate social study to bear most efficiently and directly to the understanding and solution of present problems. I fail to see how studies of narrower scope can be expected to perform this important function.
- It will be noted that the broad studies proposed involve no confining scheme except the distinction among various types of economic change by the temporal span of their persistence. This distinction is so fundamental that it cannot and should not be neglected in any historical study. Within the framework of each type of change, all the related processes of economic life should be considered — in proportion to their relative importance in determining the character and significance of the changes under study. The other topics suggested in our discussions and correspondence so far, such as the increasing control by the state, or influence of free land, or studies of firms in a given industry, or studies of a region, all appear to be too narrow to serve as the focusing point and central study of the Committee’s research program. They can be justified only within a broader framework that should explain why this and not another facet of economic life is to be studied; and how the studies so circumscribed can be expected to yield results of analytical validity without consideration of related factors presumably excluded.
- The carrying out of the central, basic group of studies would provide the justification for narrower undertakings, since they will supply the framework for the latter. It is the broad picture of secular changes and recurrent fluctuations in the economy of this country that will provide the needed background against which, e.g., a tendency towards increasing control by the state can be understood and studied. This does not mean that in actual practice we should wait with beginning the more specific studies until the synthetic studies are completed. But it does mean that the latter are an indispensable core of the program; should be envisaged, planned, and initiated among the first; and serve throughout the Committee’s activity as the focusing point of the whole range of undertakings.
- The narrower studies should be launched only in so far as they are seen to contribute to the broader picture of trends and fluctuations in this country’s economy: either directly and immediately through their results or because they suggest new types of data, new types of approach, new methods which we wish to encourage because, if multiplied and followed, they will add significantly to the understanding of changes in the past and present. Some such criterion is indispensable if we are to guard against lowering the potential value of our efforts by devoting them to following beaten tracks, and adding to a large body of already existing data another batch, of low marginal utility.
- This memorandum is intended as an amplification of the proposals submitted before; and to serve, if the Committee so wishes, as a basis for discussion at its forthcoming meeting. It need not be added that, strongly as I am inclined to the views presented here, I realize that they may be unduly influenced by past personal experience in economic and statistical research, by ignorance of the literature of economic history, and by a predilection towards broad canvas and general results; and I am therefore looking forward with interest to whatever critical comments the members of the Committee may wish to offer.
Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Earl J. Hamilton Papers, Box 2, Folder “Correspondence—Misc. 1930’s-1960s and n.d.”.