Unveiling the Economic Debate and Policy Evolution
Understanding our Political Economy
LECTURE 2
Economists Debate Theory and
Policy
Columbia University
E.R.A. Seligman
John Bates Clark
Mason Gaffney
Allen Eaton
“Professor Allen Eaton was fired
from the University of Oregon for
successfully pushing a series of
characteristically [Henry]
Georgist measures: municipal
ownership of the Eugene
waterworks; taxation of
waterpower sites; direct election
of U.S. Senators; keeping valuable
State-owned timberlands from
being given to Southern Pacific.”
Mason Gaffney.
The Corruption of Economics
, 1994, p. 51
Neoclassical Economic Theory
Factors of
Production: Labor
and Capital
LAND
RENT -- the return to the
differential quality of land
and/or its locational advantage
Mason Gaffney
“[John Bates Clark] did not stop at
subsuming land in capital. He
also makes a great point that
wages are rent, too. The policy
implication is that wages would
make a good tax base. Seligman
carried this forward into the
income tax, leading to the present
tax system which raises much
more from payrolls than
property.”
Mason Gaffney.
The Corruption of Economics
,
1994, p. 59
C
A
P
I
T
A
L
Johns Hopkins
Richard Ely
Economics: Science or
Something Else?
“The conclusions reached in
economics may, in case they come to
be widely understood, seriously
affect the interests of various persons
and classes. And if these classes are
numerous or influential, they are
fairly certain to find spokesmen who
can give effective expression to their
dissent. Such expression may not be
scientific but it will often be couched
in forceful rhetoric and be reasonably
plausible.”
Harry Gunnison Brown.
Economic Science and the
Common Welfare
, 1925, p. 5
Glenn E. Hoover
“The failure to distinguish
between land and the products of
labor is not, as many believe an
ancient error, but is a relatively
recent one. …It took a lot of
sophistry and obfuscation to
make men believe that a free gift
of nature should be treated in the
same way as are the products of
their own labor.”
Glenn E. Hoover, Prof. of Economics, Mills College, Oakland, CA.
From a banquet Speech delivered in 1951
“Economics is
extremely
useful as a
form of
employment
for
economists.”
“Studies have shown that
when students are tested
about their knowledge of
basic economic principles six
months after completing an
introductory economics
course, they score no better,
on average, than those who
never took the course.”
Robert H. Frank. “The Dismal Science, Dismally Taught,”
The New York Times
, August 12, 2007
END OF LECTURE 2
Explore the historical context and key figures in the economic debate, including insights into theories from economists such as John Bates Clark and Mason Gaffney. Delve into discussions on factors of production, the concept of rent in economics, and the implications for tax systems. Discover the impact of Professor Allen Eaton's advocacy for Georgist measures and the evolution of economic thought at institutions like Columbia University.
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Presentation Transcript
LECTURE 2 Economists Debate Theory and Policy
Professor Allen Eaton was fired from the University of Oregon for successfully pushing a series of characteristically [Henry] Georgist measures: municipal ownership of the Eugene waterworks; taxation of waterpower sites; direct election of U.S. Senators; keeping valuable State-owned timberlands from being given to Southern Pacific. Mason Gaffney. The Corruption of Economics, 1994, p. 51
Neoclassical Economic Theory Factors of Production: Labor and Capital LAND
RENT -- the return to the differential quality of land and/or its locational advantage
[John Bates Clark] did not stop at subsuming land in capital. He also makes a great point that wages are rent, too. The policy implication is that wages would make a good tax base. Seligman carried this forward into the income tax, leading to the present tax system which raises much more from payrolls than property. Mason Gaffney. The Corruption of Economics, 1994, p. 59
C A P I L T A
File:Hopkinsp.jpg Johns Hopkins
Economics: Science or Something Else?
The conclusions reached in economics may, in case they come to be widely understood, seriously affect the interests of various persons and classes. And if these classes are numerous or influential, they are fairly certain to find spokesmen who can give effective expression to their dissent. Such expression may not be scientific but it will often be couched in forceful rhetoric and be reasonably plausible. Harry Gunnison Brown. Economic Science and the Common Welfare, 1925, p. 5
The failure to distinguish between land and the products of labor is not, as many believe an ancient error, but is a relatively recent one. It took a lot of sophistry and obfuscation to make men believe that a free gift of nature should be treated in the same way as are the products of their own labor. Glenn E. Hoover, Prof. of Economics, Mills College, Oakland, CA. From a banquet Speech delivered in 1951
Economics is extremely useful as a form of employment for economists.
Studies have shown that when students are tested about their knowledge of basic economic principles six months after completing an introductory economics course, they score no better, on average, than those who never took the course. Robert H. Frank Robert H. Frank. The Dismal Science, Dismally Taught, The New York Times, August 12, 2007
