Jacob Viner & Price Theory
There’s no doubt that Chicago was distinctive, and has been ever since. The
real distinction was not making price theory the focal point of the graduate
curriculum. That isn’t the real distinction at all. The fundamental distinction
is treating economics as a serious subject versus treating it as a branch of
mathematics, and treating it as a scientific subject as opposed to an
aesthetic subject, if I might put it that way (Milton Friedman, 1988).
Jacob Viner
Born May 3, 1892, Montreal
B.A., McGill University, 1914
Ph.D., Harvard University, 1922
Canada’s Balance of International
Indebtedness, 1900-1913 under direction of
Frank W. Taussig
UChicago Instructor to Professor of
Economics, 1916-17 & 1919-1946
Princeton Professor of Economics, 19461960
Died September 12, 1970, Princeton
In his UChicago office, 1944
Jacob Viner watching the Maroon, Big Ten power?
Jacob Viner & Theodore Schultz
Viner was recruited to UChicago by J. Laurence Laughlin, the first chair of
the Department of Economics. His “primary” field was international trade,
but he made major scholarly contributions in price theory and history of
economic thought.
He is best known as a teacher for his graduate course Price and Distribution
Theory, ECN 301, which he taught from the 1920s until his departure in
1946. He also taught Modern Tendencies in Economics, ECN 303, and
International Trade and Finance, ECN 370.
Citation for the AEA Francis A. Walker Medal, 1962
He represents the greatest combination of theoretical keenness (with no need
for fancy techniques), alertness to policy issues, and historical scholarship in
both economic institutions and economic ideas. In all fields to which he has
contributed, including his specialty, international economics, his name will
survive brightly as a deflator of pretentious nonsense as well as an original
creator.
What students learned from Jacob Viner …
… that they should be scholars:
* that they should take ideas seriously
* that they should take history seriously
* that they should be humble about what and how much they
know
“A Modest Proposal for Some Stress on Scholarship in Graduate Training,”
Brown University Graduate Convocation, June 3,1950
My proposal is both sincere and modest. I give also only an old-fashioned
and modest meaning to the term “scholarship.” I mean by it nothing more
than the pursuit of broad and exact knowledge of the history of the working
of the human mind as revealed in written records. … What I shall propose,
stated briefly and simply, is that our graduate schools shall assume more
responsibility than they ordinarily do, so that the philosophers, economists,
mathematicians, physicists, and theologians they turn out as finished
teachers, technicians, and practitioners shall have been put under some
pressure or seduction to be also scholars. Scholarship is a commitment to
the pursuit of knowledge and understanding, but it can never provide
guarantees that these have been attained. A great part of true learning, in
fact, takes the form of negative knowledge, of increasing awareness of the
range and depth of our unconquered ignorance … . Learned ignorance,
therefore, is often praiseworthy, although ignorant learning, about which I
will say something later, never is.
M. Friedman and G. Stigler in J. Viner’s Courses
Friedman
Stigler
301, Price and Distribution Theory, Autumn 1932, S
301, Price and Distribution Theory, Autumn 1933, S
370, International Trade and Finance, Winter 1933, S
301, Price and Distribution Theory, Winter 1935, R
303, Modern Tendencies in Economics, Spring 1933, S
303, Modern Tendencies in Economics, Spring 1934, S
370, International Trade and Finance, Winter 1936, A
Milton Friedman’s class notes, ECN 301, fall qtr 1932
Milton Friedman’s class notes, ECN 301, fall qtr 1932
J. Viner, ECN 301, fall qtr 1932
M. Friedman, ECN UB-171, Structure of Neo-classical Econ, Columbia, 1939-40
M. Friedman’s Notebooks, ECN 370 & ECN 303
J. Viner’s ECN 303 Exams, Spring 1933
Viner’s Commentary in ECN 303
Lionel Robbins’s definition – Economics is
the relationship between ends and scarce
means with alternatives uses.
Viner thinks that if you changed this to –
studying economizing of means to obtain
ends where they have a market phase.
Distinguish between technology and
economics. How about law of diminishing
returns. Purely technological but is in
economic discipline because economists
discovered it.
Viner would say economics social study =
study of mass social phenomena. V doesn’t
think it would apply to individual men (Rob
Crusoe) (Robbins does)
MF to GS, Aug. 12, 1946 – As you know, I have been
reading Stigler to prepare tor teaching: I have also
been reading Marshall. And this noontime I was
comparing what Marshall and Stigler had to say on
the law of diminishing returns. … Stigler says, in
effect, that Marshall is guilty of “question-begging,”
that his “and similar proofs are essentially
tautological”; yet Marshall sounds anything but
tautological, he sounds realistic and as if he were
basing his results on sound observation.
GS to MF, Aug. 19, 1946 – My dear collaborator:
… You say that economic empirical evidence is
intellectually far more satisfying than technological
evidence. I cannot claim even an intuitive
understanding of this statement. Diminishing returns
is technological, so you prefer an indirect proof to a
direct proof [-- Because?]
Viner’s Commentary in ECN 303
On Classical Economics and Its Critics
Laissez-Faire in Classical Economics
Very few of the critics of the classical theory
understand it. They aren’t interested in it since
they think it is no good; but they often are
prejudiced before they have learned the classical
tradition. No sharp break at all between
classical and neo-classical economics. Better
use of statistical and mathematical methods
developed. Less emphasis placed on labor-pain
in value theory and better discussion of
marginalism on cost and utility sides by neoclassical writers.
Not so easy to find example in leading
writers of 19th century of this doctrine stated
universally. Have to go to Continental
liberals (rather reactionary) to get bold
statement. Doctrine of complete natural
harmony not the doctrine of any leading
economists in classical tradition, even Smith.
Dominant attitude of major writers toward
laissez-faire is not of natural harmony, but
that, bad as laissez-faire may be, gov’t
interference would be still worse.
General impression most economists of today
have about economics of 19th century is based
largely on a general treatise of some sort.
Characteristic of treatise is that it generalizes
more rapidly and makes fewer qualifications.
Should read their other writings.
Institutionalist Critiques of NeoClassical Economics
To Walton H. Hamilton value theory –
economic theory. Says V. this is partly
an historical accident. Another reason
is that value theory has had more
survival value. Also, value problems
are more pervasive. Finally, in sense in
which Ham[ilton] thinks of value
theory, it isn’t true. Certainly not job of
economist to deal with everything that
has economic significance – because
what phenomena don’t have economic
significance?
Scholarship
* take ideas seriously
* take history seriously
* be humble about what and how much one knows
There’s no doubt that Chicago was distinctive, and
has been ever since. The real distinction was not
making price theory the focal point of the graduate
curriculum. That isn’t the real distinction at all. The
fundamental distinction is treating economics as a
serious subject versus treating it as a branch of
mathematics, and treating it as a scientific subject as
opposed to an aesthetic subject, if I might put it that
way (Milton Friedman, 1988).