Chicago Economics in the Making, 1926–1940: A Further Look at United States Interwar Pluralism

  • Luca Fiorito
  • Sebastiano Nerozzi
Part of the Archival Insights into the Evolution of Economics book series (AIEE)


This chapter unfolds a rich body of archival material—the 1926–1940 Ph.D. qualifying exams in Economic Theory at the University of Chicago—that sheds new light on the nature and evolution of interwar Chicago economics. The qualifying tests (supplemented by the courses’ programmes) show the existence of two important turning points in the shaping of the Chicago training. The first in 1927, when John M. Clark (the undisputed leader of the Chicago Department of Economics during the heyday of institutionalism) moved to Columbia University, which allowed the courses to be restructured according to a different and more analytical approach already represented in the Department by Jacob Viner and, in a narrower field, by Paul Douglas. The arrival at Chicago of figures such as Frank Knight, Henry Schultz and Henry Simons definitely shifted the balance towards neoclassical theory. A second turning point occurred in 1933 when the qualifying test in Economic Theory was divided into two major fields: price and distribution theory on the one side and money and business cycles on the other. The ‘Chicago monetary tradition’ began to emerge.


‘Chicago monetary tradition’ Douglas Price and distribution theory Viner 


  1. Ahiakpor, J. C. W. (2010). On the Similarities Between the 1932 Harvard Memorandum and the Chicago Antidepression Recommendations. History of Political Economy, 42(3), 547–571.CrossRefGoogle Scholar
  2. Asso, P. F., & Fiorito, L. (2004a). Human Nature and Economic Institutions: Instinct Psychology, Behaviorism, and the Development of American Institutionalism. Journal of the History of Economic Thought, 26(4), 445–477.CrossRefGoogle Scholar
  3. Asso, P. F., & Fiorito, L. (2004b). Curiosities from the Columbia University Archives. Storia del Pensiero Economico, 2(2), 149–163.Google Scholar
  4. Asso, P. F., & Fiorito, L. (2008). Was Frank Knight an Institutionalist? Review of Political Economy, 20(1), 59–77.CrossRefGoogle Scholar
  5. Asso, P. F., & Fiorito, L. (2013). Studying Institutional Economics at Chicago in the 1930s: The Case of Arthur Bloomfield. Research in the History of Economic Thought and Methodology, 31B, 57–77.CrossRefGoogle Scholar
  6. Bowen, H. R. (1953). Graduate Education in Economics. American Economic Review, 43(4), 1–223.Google Scholar
  7. Cain, G. (1979). Paul H. Douglas. In D. L. Sills (Ed.), International Encyclopedia of the Social Sciences (Vol. 18, Biographical Supplement, pp. 153–156). New York: Free Press.Google Scholar
  8. Clark, J. M. (1918a). Economics and Modern Psychology: I. Journal of Political Economy 26(1), 1–30.CrossRefGoogle Scholar
  9. Clark, J. M. (1918b). Economics and Modern Psychology: II. Journal of Political Economy, 26(2), 136–166.CrossRefGoogle Scholar
  10. Davenport, H. J. (1935). The Economics of Alfred Marshall. Ithaca, NY: Cornell University Press.Google Scholar
  11. Davis, J. R. (1971). The New Economics and the Old Economics. Ames: Iowa State University Press.Google Scholar
  12. Friedman, M. (1956). The Quantity Theory of Money: A Restatement. In M. Friedman (Ed.), Studies in the Quantity Theory of Money (pp. 3–21). Chicago: University of Chicago Press.Google Scholar
  13. Groenewegen, P. (1994). Jacob Viner and the History of Economic Thought. Contributions to Political Economy, 13(1), 69–86.CrossRefGoogle Scholar
  14. Hamilton, W. H. (1919). The Institutional Approach to Economic Theory. American Economic Review, 9(1), 309–318.Google Scholar
  15. Hansen, A. H. (1927). Business Cycle Theory, Its Development and Present Status. Boston: Ginn.Google Scholar
  16. Irving, D. A., & Medema, S. G. (Eds.). (2013). Jacob Viner Lectures in Economics 301. New Brunswick, NJ and London: Transaction Publishers.Google Scholar
  17. Kaufman, B. E. (2010). Chicago and the Development of Twentieth Century Labor Economics. In R. B. Emmett (Ed.), The Elgar Companion to the Chicago School of Economics (pp. 128–151). Cheltenham, UK: Edward Elgar.Google Scholar
  18. Keynes, J. M. (1930). A Treatise on Money (2 vols.). London: Macmillan.Google Scholar
  19. Knight, F. H. (1921). Cost of Production and Price Over Long and Short Periods. Journal of Political Economy, 29(4), 304–335.CrossRefGoogle Scholar
  20. Knight, F. H. (1935). Statics and Dynamics: Some Queries Regarding the Mechanical Analogy in Economics. The Ethics of Competition and Other Essays (pp. 161–185). New York: Harper & Bros.Google Scholar
  21. Knight, F. H. (1937). Unemployment: And Mr. Keynes’s Revolution in Economic Theory. Canadian Journal of Economics and Political Science, 3(1), 100–123.CrossRefGoogle Scholar
  22. Knight, F. H. (1944). Realism and Relevance in the Theory of Demand. Journal of Political Economy, 52(4), 289–318.CrossRefGoogle Scholar
  23. Laidler, D., & Sandilands, R. (2010). Harvard, the Chicago Tradition and the Quantity Theory. A Reply to James Ahiakpor. History of Political Economy, 34(3), 515–532.CrossRefGoogle Scholar
  24. Leeson, R. (Ed.). (2003). Keynes, Chicago and Friedman (2 vols.). London: Pickering and Chatto.Google Scholar
  25. Morgan, M. S., & Rutherford, M. (Eds.). (1998). From Interwar Pluralism to Postwar Neoclassicism. Durham, NC: Duke University Press.Google Scholar
  26. Nerozzi, S. (2009). Jacob Viner and the Chicago Monetary Tradition. History of Political Economy, 41(3), 575–604.CrossRefGoogle Scholar
  27. Patinkin, D. (1973). Frank Knight as Teacher. American Economic Review, 63(5), 787–810.Google Scholar
  28. Peterson, R. D., & Phillips, R. J. (1991). In Memoriam: Lloyd W. Mints, 1888–1989: Pioneer Monetary Economist. American Economist, 35(1), 89–91.Google Scholar
  29. Reder, M. W. (1982). Chicago Economics: Permanence and Change. Journal of Economic Literature, 20(1), 1–38.Google Scholar
  30. Rutherford, M. (1997). American Institutionalism and the History of Economics. Journal of the History of Economic Thought, 19(2, Fall), 178–195.CrossRefGoogle Scholar
  31. Rutherford, M. (Ed.). (1998). The Economic Mind in America: Essays in the History of American Economics. New York: Routledge.Google Scholar
  32. Rutherford, M. (2010). Chicago Economics and Institutionalism. In R. B. Emmett (Ed.), Elgar Companion to the Chicago School of Economics (pp. 25–39). Cheltenham: Edward Elgar.Google Scholar
  33. Rutherford, M. (2011). The Institutional Movement in American Economics, 1918–1947. Cambridge, MA: Cambridge University Press.CrossRefGoogle Scholar
  34. Samuels, W. J. (1977). The Knight-Ayres Correspondence: The Grounds of Knowledge and Social Action. Journal of Economic Issues, 11(3), 485–525.CrossRefGoogle Scholar
  35. Samuels, W. J. (2000). Introduction to the Problem of the History of the Interwar Period. Research in the History of Economic Thought and Methodology, 18A, 139–147.Google Scholar
  36. Samuels, W. J. (2005). Notes and Other Materials from Frank H. Knight’s Course, Economics from an Institutional Standpoint, 1933–1934. Research in the History of Economic Thought and Methodology, 23B, 141–192.Google Scholar
  37. Samuelson, P. A. (1972). Jacob Viner, 1892–1970. Journal of Political Economy, 80(1), 5–11.CrossRefGoogle Scholar
  38. Simons, H. C. (1936, July). Keynes’ Comments on Money. The Christian Century, 2, 1016–1017.Google Scholar
  39. Simons, H. C. et al. (1933). Banking and Currency Reform. Unpublished Memorandum. Papers of Henry Simons, Box 11, File 1, Special Collections, Joseph Regenstein Library, University of Chicago.Google Scholar
  40. Viner, J. (1931). Cost Curves and Supply Curves. Zeitschrift für Nationalökonomie, 3(1), 23–46. Reprinted with the Supplementary Note in The Long View and the Short (pp. 50–84). Glencoe, IL: The Free Press, 1958.Google Scholar
  41. Viner, J. (1936). Mr. Keynes on the Causes of Unemployment: The General Theory of Employment Interest and Money by John Maynard Keynes. Quarterly Journal of Economics, 51(1), 147–167.CrossRefGoogle Scholar
  42. Yonay, Y. P. (1998). The Struggle Over the Soul of Economics: Institutionalist and Neoclassical Economists in America Between the Wars. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
  43. Winch, D. (1983). Viner as Intellectual Historian. Research in the History of Economic Thought and Methodology, 1, 1–17.Google Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Luca Fiorito
    • 1
  • Sebastiano Nerozzi
    • 2
  1. 1.University of PalermoPalermoItaly
  2. 2.Docente Università Cattolica del Sacro CuoreMilanItaly

Personalised recommendations