Harry Gunnison Brown: Economist

Harry Gunnison Brown: Economist About the Book and Author "For decades, [his] work was neglected as the profession pursued one fad after another, but now, as economists have returned, more or less, to their mainstream, they are seeing once again the brilliance and insight of people like H.G. Brown." -Arnold Harberger, University of Chicago "A valuable addition to scholarship. Leaves no doubt that this professor at Missouri was intellectually top-rank. The author shows why and in doing so illuminates issues of continuing importance." -C. Lowell Harriss, Columbia University and Executive Director, Academy of Political Science Harry Gunnison Brown (1880-1975) was one of the greatest U.S. economists of this century. Although his work was widely known and respected throughout his long life, his reputation has suffered in our time. Partly this decline was a result of his fiercely independent mind, which often led him to dissent from the mainstream of his profession. Most notably, his life-long support for Henry George's controversial views on the taxation of land and his later opposition to Keynesian orthodoxy put him in opposition to his peers. But whether he was arguing for Georgian tax programs, for monetarist macroeconomic policy, for free trade, or for his views on any of the issues of his time, his acute intelligence and modem tum of thought were always evident, as was his insistence upon combining clarity of economic thought with a concern for the common welfare. The story of Brown's career is an important chapter in the history of U.S. economic thought, a chapter that was in danger of being lost. Christopher Ryan has preserved this story for us and in doing so has provided a case study in the value of careful work in the history of thought for the illumination of contemporary debates. Christopher K. Ryan is instructor of economics at Coe and Cornell Colleges. Harry Gunnison Brown: Economist Christopher K. Ryan First published 1987 by Westview Press, Inc. Published 2018 by Routledge 52 Vanderbilt Avenue, New York, NY 10017 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © 1987 Taylor & Francis All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Ryan, Christopher K. Harry Gunnison Brown, economist. Bibliography: p. Includes index. 1. Brown, Harry Gunnison, 1880- . 2. Economists--United States--Biography. I. Title. HB119. B65R93 1987 330 I. 092 I 4 [B] 86-28994 ISBN 13: 978-0-367-01378-3 (hbk) In memory of my father, W.B. Ryan, and for my mother, Ruth Ryan Sherwood Contents Foreword, Alfred E. Kahn. xiii Acknowledgments • • XV 1 IIITROOUCTIOR 1 Brown's Work ••••• 2 Harry Gunnison Brown: A Biography. 4 2 LAID AS 1 FACTOR OF PRODUCTIOR 7 Views of English and Continental Political Economists •••••••••• 8 Views of American Economists. 9 Concluding Comments • • • • • • • 16 3 CAPITAL AID IITBRBST TIIBORIES 22 The Fisher-Seager Exchange. 22 Brown ' s Views • • • • • • • • • • • • • 24 Fetter and Brown. • • • • • • • • • • • 27 Brown's "Capital Valuation and the 'Psychological School'" •••••• 29 Fisher and Brown. • • • • • • • • • 31 ix Later Articles. • 33 Conclusion. • 34 4 MONETARY ECONOMICS 38 Early Articles •••• 39 The Business Cycle •• 40 The Great Depression. 43 100% Money. • • • • • • • • • • • 47 Comments on Macroeconomic Policies ••• 48 Views on Keynesianism 50 Conclusion. • • • • • • • 52 5 TAXATION 57 The Economics of Taxation • • • • • • . • 57 "The Incidence of a General Output or a General Sales Tax". • • • • • • • • • • • • 72 Conclusion. • • • • • • • • • • • • • • 76 6 LARD VALUE TAXATION 80 Brown's Position ••••••••••••• 82 Earned and Unearned Incomes • • • • • • • 84 To Tax Current Rent or Future Increments Only? . 86 Brown's Criticisms of Clark, Johnson, Adams, Ely, and Knight ••••••• 88 Problems of Assessment and Revenue Adequacy. • • • • • • • • • • • • • • • • • 91 Brown's Special Considerations •••••••• 93 "The Single-Tax Complex of Some Contemporary Economists" •••• 94 Economic Arguments on the Effects of Land Value Taxation •••••• 95 Brown's Later Articles and Advocacy of Land Value Taxation • • •••• 99 Conclusion ••••••••• 101 7 REGULATION AND RATE MAI:IIG 108 Early Articles. • • • • • • • • • • • • • 109 Transportation Rates and Their Regulation 111 "Railroad Valuation and Rate Regulation". 116 X Response of the Profession and Brown's Replies • • • • • • • 119 Comments and Conclusion • • • • 124 8 IITERNATIORAL TRADE OD FIIUICE 129 International Trade and Exchange. • • • • • • 129 Exchange with Thomas Nixon Carver • 132 Book Reviews. • • • • • • • • • 133 Conclusion. • • • • • • • • • 134 9 COITRIBOTIONS AS AN EDUCATOR 137 Methods and Concepts. 138 Principles Text • • • 140 Students and Legacy • • 142 10 CONCLUSION 144 Reaction to Marxist, Institutionalist, and Georgist Claims in Political Economy •• 145 Brown's Position in the Profession •• 146 Comments and Conclusion • 148 References . • . 152 Books, Articles, and Letters by Harry Gunnison Brown ••••••••••• 152 Books and Articles Co-authored by Harry Gunnison Brown. • • • • • 156 Secondary Sources • 156 Index. 169 xi Foreword I am delighted that Harry Gunnison Brown at last has the biography that he so clearly deserves. My close acquaintance with Professor Brown was limited to the one short academic year, 1937-38, I spent at the University of Missouri as his teaching assistant and graduate student. I think what impressed me more than anything else about his economic thinking was its coherence, its thorough inter- nal consistency, and its apparent sufficiency; his trust in the functioning of competitive markets wherever competition is feasible; his painstakingly analytical elaboration of the consistent economic principles for regulating markets in which competition is infeasible (a glance at my own two- volume Economics of Regulation will quickly show how very heavily, a full half-century later, I drew on his Principles of Commerce and his historic exchanges with John Bauer); his unswerving espousal of free trade; his belief in the sufficiency of monetary policy to solve the problem of macroeco- nomics instability; and, of course, his espousal of the tax on land values as the only method of financing government revenues most fully consistent with economic efficiency, distributive justice, and--especially considering its corollary, the removal of taxes on capital improvements and investment generally--with economic progress. xiii Of course all this was thoroughly classical (except for the reference to the emphasis on land value taxation--but even this was beautifully compatible with the classical model) and is subject to whatever reservations one may have about the sufficiency of that approach; but it is an admirable system of economic thinking, still highly relevant today, and Professor Brown expounded it with grace, persistence, intellectual incisiveness, and verve. I must add that I came to have enormous affection and respect for him. He was a superb teacher and a delightful human being. Alfred E. Kahn Ithaca, New York September 29, 1986 xiv Acknowledgments I am gratefUl to Elizabeth Read Brown tor her assistance in this work. I would like to acknowledge the encouragement ot Dudley Luckett and Charles Meyer of Iowa State University and Bobbie Horn ot Tulsa University. To the many economists who responded to my inquiries about Dr. Brown, I extend my thanks. For her vital support, I must recognize my wife, Helen. XV 1 Introduction Paul Samuelson once formulated a l;pt of early prominent American economists born after 1860. To the list con- sisting of W.C. Mitchell, Allyn Young, H.L. Moore, Frank Knight, Jacob Viner, and Henry Schultz he added the name of Harry Gunnison Brown. It is improbable that Brown's name has a familiar ring for contemporary students. It is possible, however, that some student may recall that the library catalog card for Irving Fisher's classic work The Purchasing Power of Money lists Brown as assisting Fisher in this work. Harry Gunnison Brown was roughly of the second generation of American economists who followed the pioneering generation that included John Bates Clark, E.R.A. Seligman, Frank Taussig, Francis Walker, Simon Patten, Richard Ely, Thomas Hixon Carver, Herbert Davenport, and Irving Fisher, among others. Brown studied under and taught with Fisher at Yale until 1915. He and James Harvey Ro~rs were said to be Fisher's favorite and ablest students. Brown became a monetarist in the tradition of Fisher. Although on several occasions they differed, Brown demonstrated enduring respect for his mentor and colleague. · Another economist, Herbert J. Davenport, was held in particular regard by Brown. He joined Davenport at the University of Missouri for a year before Davenport left for Cornell. Davenport's work in refining and, at times, de- fending classical economic doctrine was admired by Brown. The discipline at that time struggled with the question of how much of the classical thought of the British School was to be retained as sound. Brown's position in

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