The Suntory and Toyota International Centres for Economics and Related Disciplines

Origins of Academic Economics in the United States by Michael J. L. O'Connor

Review by: Alexander Gray
Economica, New Series, Vol. 12, No. 45 (Feb., 1945), pp. 41-42
Published by: Wiley on behalf of The London School of Economics and Political Science and The
Suntory and Toyota International Centres for Economics and Related Disciplines

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1945]

41

BOOK REVIEWS

labour practices,among other things, are revitalised. Whetherthe host of pitfalls

confronting the resurgenceof private enterprisecan be successfullysurmounted
remainsto be seen."
It is to the problemhere indicatedthat Dr. Fine chieflyaddresseshimself, but
neither its practicabilitynor the prospect of its success emerges very clearly from
his pages. A considerablepart of his argumentis, in fact, devotedto a reconsideration, from this standpoint,of the effects of the fiscal policies of the New Deal; on
which he reaches the conclusionthat they were vitiated by a lack of appreciation
of the real mechanismof the multiplier,complicatedby undue sensitivitytowards
the economy-complexof Congress. This, however,has been better done elsewhere
-notably

in Professor Villard's Deficit Spending and the National Income-and the

ideas which Dr. Fine contributes do not receive sufficientlyacute and detailed
examinationto leave any very clearimpression. But the r6le of pioneerin economic
thoughtis an ungratefulone, and a later and clearerinsight may come to attach to
this book a greatersignificanceas a pilot light towardsthe problemsof the new world
than it appearsto-day to have to a perhapsratherblase reviewer.
J. K.

HORSEFIELD.

The Shifting and Incidence of Taxation. By OTTOVON MERING. The Blakiston

Company,Philadelphia. 1942. xiii + 262 pp. $3.25.

This is a book in the Seligmantradition; the search(as stated)is for the " locale
of the finalburdenof a tax ". It sets out fromthe point wherethe revenueauthorities
pitch on a particulargroup of producersand extracta tax from them. These then
proceedto throwthe tax, as it might be a tennisball, at the consumers. If the latter
hang on to the ball then our searchis at an end; the tax has " come to rest " in
Seligman'sphrase. But the consumersmay throw it back again, or, alternatively,
in the firstinstancethe producersmay have thrownit not to the consumers(a forward
shift) but to anothergroup of producers(a backwardshift); and so the rally goes
on, always conceived in terms of a definitepiece of tax, whose presencecan be
detectedby an equivalentprice rise.
This type of analysismay possibly be illuminatingwhen it is applied to some
taxes on particularforms of outlay, but it is quite unnecessarilycomplicated,and
even where it is reasonablyappropriateit is open to serious objection,not least the
unreal dichotomybetween the initial stages of the operationof a tax (the shifting
process)and the later stages (its effects). Both Cannanand Edgeworthpointed this
out in the nineties. When applied to generalincome and capital taxes the tennis
ball approachbreaks down hopelessly, and Dr. von Mering finds himself groping
about (in companywith several of the Colwyn Committeewitnesses)in the search
for prices that have risen as a result of an increasein income tax. It never strikes
him to look first at the generalphenomenaof spending,saving and investing.
Dr. von Mering'smain interestappearsto be in diagrammaticexposition, and
he has made an exceptionallycomplete collection of the diagrammaticarguments
which have been put forwardat one time or another. So far as he seeks to draw
any conclusionsfrom his diagramsthey run in terms of the extent to which " production will be affected" in particularindustries,accordingto the respectiveslope
and curvatureof the supply and demandcurves. Dr. von Meringdoes not believe
that incidenceanalysiscan assist directlyin the choice of taxes; so far as he advances
any criterionof choice,it would seem to lie in the avoidanceof those taxes which
reduce saving.
URSULA K. HICKS.

Origins of Academic Economics in the United States.

By MICHAELJ. L. O'CONNOR.

Columbia University Press. Humphrey Milford. 1944. 367 pp. English

price: 28s.
There is high authorityfor the reminderthat we do well to look to the hole of
the pit whencewe are digged; it may be, however,that only the professionalgeologist
should examine it with the over-conscientiouscare displayedin this volume. Mr.
O'Connor'swork is a study in origins,a contributionto economic palkontology in
which many fossils, some more interestingthan others, are disinterred,catalogued
and described,

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[FEBRUARY

ECONOMICA

42

Mr. O'Connoris throughoutconcernedwith the teachingof Economicsrather

than with the substanceof Economics; and indeed his subject is primarilythe
teachingof economicsin the North-easterncollegesand schools of the United States,
as embodiedin what he calls 'the ClericalSchool'. On his way to his main subject
he disposesof other rival schools, of which three are distinguished. There is firstly
the JeffersonianSchool, relyinglargelyon Destutt de Tracy,with a somewhatradical
philosophyand a considerableanimosityagainstBanks; secondly there is the protectionist school representedby MatthewCarey,father of the better-knownH. C.
Carey; and thirdly, a school identifiedwith Cooper, with anti-clericaltendencies
and an unbecomingfranknessregardinglabour conditions. As against these tendencies, " the acquisition of conservativeassociations by political economy was
requisitefor the acceptanceof the subjectin the academichalls of the north-eastern
states". Political Economy had to become a sedative, rather than a stimulant.
Inevitablyin the early days of the teachingof PoliticalEconomy, reliancehad to be
placed on Europeanbooks, but, as Mr. O'Connor remarks, " the clerical school
found much of the foreign political economy lacking in sufficientreferenceto the
power of the Deity

".

A survey of the books used is in some respects not without interest. Adam
Smithwas not muchused; and indeedno one would claim for The Wealthof Nations
that it is, or ever was, a satisfactorytext-book. Mrs. Marcet'smasterpiecewas a
very considerableinfluence-" though puerile in its form, and from a femalepen,"
in the condescendingwords of one Americancommentator. The chief foreign text,
however,was Say; and it is a revealingfact that in 1880 Say was still going strong,
and that (as here recorded)his book had attainedby that time twenty-sixAmerican
printings as against eight in France. McCulloch, as edited and annotated by
McVickar,was another of the leading Europeaninfluences.
Naturallyin the fullness of time the ClericalSchool producedtheir own interpretations,more suitable (as was supposed)to Americanconditions. Two somewhat ponderouschapterssurveythe ' ClericalVersions' and the ' ClericalPrimers'
designed for use at lower educational levels. What was desired was a Political
Economy which would illustrate divine wisdom. Some of the quotations given
by Mr. O'Connorare calculatedto bring a blush to the hardenedbrow of the modern
economist. PoliticalEconomy,we learnin one place, is " that philanthropicscience
which, next to the gospel, whose legitimateoffspringit is, will do more than anything
else for the elevationand fraternisationof our race". In thesesectionsMr. O'Connor
gives more than all anyoneneed know about Newman,and Sedgwick,andVethake,
and Wayland(probablythe most successfulof them all), and about many more.
Although there are gleams of interest, and although there is an admirable
Bibliographyand a somewhatoverwhelminglist of text-books,no one would contend
that this is a book whichcan be readwith ease or pleasure,or even with muchultimate
profit. Mr. O'Connor has been over-conscientious; he has done his task too
thoroughly. He presents, at considerablelength, all his chief exhibits, and after
the lapse of approximatelya hundredyears, this procedureproducesin the minds
of all but the most attentivereadersan impressionof repetition. This impression
is accentuatedby Mr. O'Connor'spracticein adding, to each chapter,a Summary
somewhat over-generousin its amplitude. Nor is any detail too small for Mr.
O'Connor. He can tell the readerthe relativeamountof spacedevotedto the various
parts of the subject in the text-books under discussion. It is somewhat disconcerting to be informed, for example, that in the smaller Wayland the proportions
are: " Introduction,4 per cent.; Production,35 per cent.; Exchange,31 per cent.;
Distribution,18 per cent.; Consumption,12 per cent." He must indeedbe a morbid
text-book fan to whom such details make an appeal.
ALEXANDER GRAY.

New York: The

ROBERT G. RODKEY.
Ronald Press Company. 1944. xiv + 224 pp. $4.00.
This book offers to the American small-town banker of the nineteen-forties
somethingcomparablein content, though not in plan, to that classic handbook of
earlier banking generations,George Rae's The CountryBanker. It is instructive
to comparethe two and to notice how much the emphasishas shiftedin sixty years:
fromjudgmentof men to scientificanalysisof accounts; from the duty of the banker
towardshis communityto his duty vis-a'-vishis depositors; from the tacit assumption
SotundPolicies for Bank Management. By

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