Iowa State University Capstones, Theses and Retrospective Theses and Dissertations Dissertations 1985 Harry Gunnison Brown: economist Christopher Keith Ryan Iowa State University Follow this and additional works at: https://lib.dr.iastate.edu/rtd Part of the Economic History Commons, and the History Commons Recommended Citation Ryan, Christopher Keith, "Harry Gunnison Brown: economist " (1985). Retrospective Theses and Dissertations. 12099. https://lib.dr.iastate.edu/rtd/12099 This Dissertation is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Retrospective Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. For more information, please contact [email protected]. INFORMATION TO USERS This reproduction was made from a copy of a document sent to us for microfilming. 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Zeeb Road Ann Arbor, Ml 48106 8524689 Ryan, Christopher Keith HARRY GUNNISON BROWN; ECONOMIST Iowa State University PH.D. 1985 University Microfilms Internâtions! 300 N. Zeeb Road, Ann Arbor, Ml 48106 Harry Gunnison Brown: Economist by Christopher Keith Ryan A Dissertation Submitted to the Graduate Faculty in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY Major: Economics Approved Signature was redacted for privacy. In Charge of l^jor Work Signature was redacted for privacy. For the Major Department Signature was redacted for privacy. For the Graduate College Iowa State University Ames, Iowa 1985 11 TABLE OF CONTENTS Page CHAPTER ONE. INTRODUCTION 1 CHAPTER TWO. LAND AS A FACTOR OF PRODUCTION 9 CHAPTER THREE. CAPITAL AND INTEREST THEORIES 29 CHAPTER FOUR. MONETARY ECONOMICS AND A VIEW OF KEYNESIANISM 50 CHAPTER FIVE. TAXATION 77 CHAPTER SIX. LAND VALUE TAXATION 109 CHAPTER SEVEN. REGULATION AND RATE-MAKING 148 CHAPTER EIGHT. INTERNATIONAL TRADE AND FINANCE 179 CHAPTER NINE. CONTRIBUTIONS AS AN EDUCATOR 190 CHAPTER TEN. CONCLUSION 200 SELECTED BIBLIOGRAPHY 211 ACKNOWLEDGMENTS 231 1 CHAPTER ONE. INTRODUCTION Paul Samuel son once formulated a list of early prominent American economists born after 1860.^ To the list consisting 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 had a familiar ring for contemporary students. It is, however, possible that some student may recall that the library cata­ log 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 which in­ cluded John Bates Clark, E. R. A. Seligman, Frank Taussig, Francis Walker, Simon Patten, Richard Ely, Thomas Nixon Carver, Herbert Daven­ port and Irving Fisher, among others. Brown studied under and taught with Fisher at Yale until 1915. He and James Harvey Rogers were said to be Fisher's favorite and ablest students.2 Brown became a monetarist in the tradition of Fisher. Though on several occasions they differed. Brown demonstrated enduring respect for his mentor and colleague. Another economist, Herbert J. Davenport, was held in particular re­ gard 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, defending 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 2 as sound. Brown's position in this regard was exemplified by his self- description as "an economist unemancipated from the classical tradi­ tion." He inferred by this statement that other economists had gone too far in their rejection of classical doctrine. Brown, who had read J. S. Mill before entering college, would in some regards retain strong 3 elements of the classical approach in his writings. An element in Brown's thought which would make him practically unique among academic economists was his staunch belief in and advocacy of the ideas of Henry George. In particular, he would argue throughout his life for tax reform along the lines of George when the profession tended to dismiss George's thought as utterly fallacious. Most promi­ nent among Brown's areas of specialization was that of taxation and especially that of tax incidence. His text, The Economics of Taxation, stood for a time as a benchmark for texts on the subject of taxation. In his chosen profession. Brown's record was exemplary over five decades of teaching at Yale, Missouri, The New School of Social Research, Mississippi and Franklin and Marshall. He wrote over one hundred arti­ cles and ten books. He was said to be for many years the dominant in- 4 fluence behind Missouri's School of Business and Public Administration. His dedication to teaching has been praised by his students, many of whom were to become prominent in economics and related fields. Although Brown's concerns were diffuse, I would like to emphasize as characteristic of his work the three elements alluded to above. Through Fisher's infuence, he was aware of developments which can be considered "modern" in the sense of anticipating the direction of 3 economics as a field of study. He displayed, if not mathematical rigor, a dedication to a clear, logical approach to economic theory as well as an appreciation of the value of statistical application to the testing of economic theories. Harold Hotel ling once commented that Brown's logic was mathematical in nature. 5 On the other hand. Brown, although by definition a neoclassical economist, tended to retain some elements of the classical approach as seen in his acceptance of Davenport's work, in his rejection of the claims of the "Psychological School" of Frank Fetter and in his later objections to Keynesian economics. Characteristic of Brown's work was a consistent attempt to relate economic questions to what he termed the "common welfare." That he found inspiration in the writings of Henry George was not unusual. His steadfastness in his espousal of George's proposed reform in the face of the hostility, scepticism and indifference of the profession was unusual. As is frequently commented upon, the advance and profusion of a discipline in many regards tends to foster the "bureaucratic" phe­ nomenon of "constructive forgetting." Although certainly not without merit, this process stands subject to Santayana's famous dictum.^ Harry Gunnison Brown's contributions were distinctly positive and worthy of recall. Arnold Harberger made this point in the following manner: . Brown was one of a small group of economists of his era which included Frank Knight, Irving Fisher, A. C. Pigou who really carried the science forward by large steps. For decades, their 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.7 4 Milton Friedman and Kenneth Boulding have commented that they felt that O Brown's work has been overlooked. Thus, my proposition is to examine his work with an even treatment of his efforts always trying to place them in the proper historical context and to render evaluatory comments where relevant. Brown's contributions can best be examined by considering separate­ ly his work in the wide variety of topics which interested him. How­ ever, first, the conclusion of this chapter will present a brief biography abstracted largely from obituary and memorial statements. Chapter Two is an attempt to set the scene of Brown's earlier years in the profession by surveying different views of a key question for Brown in economic theory. Chapter Three treats his views on capital and inter­ est theories. Chapter Four combines macroeconomic considerations of business cycles, monetary policy and Brown's view of Keynesianism.