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James Laurence Laughlin

January 01, 1970

This article is about the economist. For the poet, see James Laughlin.

James Laurence Laughlin (April 2, 1850 – November 28, 1933) was an American economist and professor at Cornell University, Harvard University, and the University of Chicago,[1] who helped to found the Federal Reserve System and was "one of the most ardent defenders of the gold standard."[2]

J. Laurence Laughlin
Born(1850-04-02)April 2, 1850
Deerfield, Ohio, U.S.
DiedNovember 28, 1933(1933-11-28) (aged 83)
Jaffrey, New Hampshire, U.S.
NationalityAmerican
Academic career
InstitutionsHarvard University
Cornell University
University of Chicago
Alma materHarvard University
ContributionsAmerican economist
Signature

Biography edit

Laughlin was born in Deerfield, Ohio on April 2, 1850. He received a Ph.D. from Harvard University in history. His thesis regarded "Anglo-Saxon Legal Procedure" and was supervised by Henry Adams. The other members of his program were Henry Cabot Lodge and Ernest Young.

A conservative, he generally subscribed to the economic theories of John Stuart Mill and opposed bimetallism.

Laughlin taught at Harvard University in Boston for five years, at Cornell University for two years, and then became the department-head of the new economics department at the University of Chicago from 1892 to 1916. Notably, he appointed many economists with whom he avidly disagreed, such as Thorstein Veblen, to high positions at the university.

Laughlin was a member of the Indianapolis Monetary Commission, organized in 1897, and prepared its report, one of the important documents in the history of American banking and monetary reform. The presidential election of 1896 and the economic turmoil surrounding it spurred the writing of the 600-page report. This report advocated for the maintenance of a decentralized approach to the banking system, an approach which proposed that banks issue their own notes backed by loans to factories, merchants and farmers. In this way, the amount of currency in circulation would automatically expand or contract with business, in contrast to the then existing system where notes were issued based on the procurement of government bonds. This real bills theory was in line with the aversion to centralized banking of the era, and is considered to be naive from a modern view.[3]

In 1906 Laughlin lectured, by invitation, in Berlin, and in 1909 he served as delegate to the Pan-American Scientific Congress at Santiago, Chile. From 1911 to 1913 he was chairman of the Executive Committee of the National Citizens League for the Promotion of a Sound Banking System. Under his leadership the league promoted banking reform in the United States.

In addition to teaching, he edited the Journal of Political Economy from 1892 to 1933, but refused to become a member of the American Economic Association because of differences in philosophy. He advised various state and national governments on economic matters, including overhauling the monetary system of Santo Domingo. He prepared an abridgment of John Stuart Mill's Political Economy (1884) and wrote many important books on macroeconomics and monetary policy.

He died at his home in Jaffrey, New Hampshire on November 28, 1933.[4]

Reception edit

One of Laughlin's students at the University of Chicago was the American economist Wesley Clair Mitchell (1874–1948), who recalled:

Professor Laughlin's indubitable success as a teacher puzzled many who did not pass through his classroom. He was not an original thinker of great power. He did not enrich economics. He did not even keep abreast of current developments in economic theory. He had a prim and tidy mind, which he kept in perfect order by admitting nothing that did not harmonize with the furnishings installed in the 1880s. Yet he held that a teacher's aim should be "the acquisition of independent power and methods of work, rather than specific beliefs.[5]

According to Milton Friedman (1987) Laughlin's scholarly work "was almost entirely in the field of money and banking."[6] Friedman summarized:

Much of it, notably his History of Bimetallism in the United States (1885), consisted of a thorough and extremely careful presentation of historical evidence on the development of money and monetary institutions. But Laughlin also wrote extensively on monetary and banking theory, and on proposals for monetary reform. His work on these topics was marred by a dogmatic and rigid opposition to the quantity theory of money, an opposition that developed out of his public activities opposing the free silver movement. The proponents of free silver used a crude form of the quantity theory to support their position, which sufficed to render the theory anathema to Laughlin.[6]

And furthermore:

Laughlin's attack on the quantity theory had much in common with recent cost-push or structural or supply-shock theories of inflation, in emphasizing the role of factors affecting specific goods and services rather than general monetary influences. Then, as now, such theories ran against the major stream of monetary analysis as exemplified in Laughlin's time by the work of Irving Fisher. As a result, his writings on theory have had no lasting influence on economic thought.[6]

Selected publication edit

  • The Study of Political Economy (1885)
  • History of Bimetallism in the United States (1886)
  • Elements of Political Economy (1887; revised edition, 1902, 1915)
  • Facts about Money (1895)
  • Credit (1902)
  • Principles of Money (1903)
  • Reciprocity (1903), with H. P. Willis
  • Lectures on Commerce (1904)
  • Industrial America (1906)
  • Latter Day Problems (1909)
  • Banking Reform (1912)
  • Money and Prices (1919)
  • Banking Progress (1920)
  • The Federal Reserve Act: Its Origin and Problems (1933)

References edit

  1. ^ John U. Nef, "James Laurence Laughlin (1850-1933)," in: Journal of Political Economy, Vol. 75, No. 6 (December 1967), pp. 779-781. Published by: The University of Chicago Press
  2. ^ James Laurence Laughlin Answer to Coin Harvey 1895 at let.rug.nl, GWM, University of Groningen, 1994-2012. Accessed September 2015.
  3. ^ Lowenstein, Roger (2015). America's Bank: The Epic Struggle to Create the Federal Reserve. New York: Penguin Press. pp. 24–25. ISBN 9781594205491.
  4. ^ "James L. Laughlin, 83, Economist, Dies in Jaffrey". Fitchburg Sentinel. Jaffrey, New Hampshire. AP. December 1, 1933. p. 6. Retrieved January 6, 2021 – via Newspapers.com.
  5. ^ As quoted in: "Laughlin, James Laurence March 4, 2016, at the Wayback Machine" by Milton Friedman (1987).
  6. ^ a b c Milton Friedman (1987). In The New Palgrave: A Dictionary of Economics, edited by John Eatwell, Murray Milgate, and Peter Newman, vol. 3, pp. 139-140. New York: Stockton.

Further reading edit

External links edit

  • Works by James Laurence Laughlin at Project Gutenberg
  • Works by James Laurence Laughlin at LibriVox (public domain audiobooks)  
  • Works by or about James Laurence Laughlin at Internet Archive
  • Answer to "Coin" Harvey, 1895 July 16, 2012, at the Wayback Machine - the text of a letter Laughlin wrote
  • Guide to the James Laurence Laughlin Papers 1885-1914 at the University of Chicago Special Collections Research Center

January 01, 1970
james, laurence, laughlin, this, article, about, economist, poet, james, laughlin, april, 1850, november, 1933, american, economist, professor, cornell, university, harvard, university, university, chicago, helped, found, federal, reserve, system, most, ardent. This article is about the economist For the poet see James Laughlin James Laurence Laughlin April 2 1850 November 28 1933 was an American economist and professor at Cornell University Harvard University and the University of Chicago 1 who helped to found the Federal Reserve System and was one of the most ardent defenders of the gold standard 2 J Laurence LaughlinBorn 1850 04 02 April 2 1850Deerfield Ohio U S DiedNovember 28 1933 1933 11 28 aged 83 Jaffrey New Hampshire U S NationalityAmericanAcademic careerInstitutionsHarvard UniversityCornell UniversityUniversity of ChicagoAlma materHarvard UniversityContributionsAmerican economistSignature Contents 1 Biography 2 Reception 3 Selected publication 4 References 5 Further reading 6 External linksBiography editLaughlin was born in Deerfield Ohio on April 2 1850 He received a Ph D from Harvard University in history His thesis regarded Anglo Saxon Legal Procedure and was supervised by Henry Adams The other members of his program were Henry Cabot Lodge and Ernest Young A conservative he generally subscribed to the economic theories of John Stuart Mill and opposed bimetallism Laughlin taught at Harvard University in Boston for five years at Cornell University for two years and then became the department head of the new economics department at the University of Chicago from 1892 to 1916 Notably he appointed many economists with whom he avidly disagreed such as Thorstein Veblen to high positions at the university Laughlin was a member of the Indianapolis Monetary Commission organized in 1897 and prepared its report one of the important documents in the history of American banking and monetary reform The presidential election of 1896 and the economic turmoil surrounding it spurred the writing of the 600 page report This report advocated for the maintenance of a decentralized approach to the banking system an approach which proposed that banks issue their own notes backed by loans to factories merchants and farmers In this way the amount of currency in circulation would automatically expand or contract with business in contrast to the then existing system where notes were issued based on the procurement of government bonds This real bills theory was in line with the aversion to centralized banking of the era and is considered to be naive from a modern view 3 In 1906 Laughlin lectured by invitation in Berlin and in 1909 he served as delegate to the Pan American Scientific Congress at Santiago Chile From 1911 to 1913 he was chairman of the Executive Committee of the National Citizens League for the Promotion of a Sound Banking System Under his leadership the league promoted banking reform in the United States In addition to teaching he edited the Journal of Political Economy from 1892 to 1933 but refused to become a member of the American Economic Association because of differences in philosophy He advised various state and national governments on economic matters including overhauling the monetary system of Santo Domingo He prepared an abridgment of John Stuart Mill s Political Economy 1884 and wrote many important books on macroeconomics and monetary policy He died at his home in Jaffrey New Hampshire on November 28 1933 4 Reception editOne of Laughlin s students at the University of Chicago was the American economist Wesley Clair Mitchell 1874 1948 who recalled Professor Laughlin s indubitable success as a teacher puzzled many who did not pass through his classroom He was not an original thinker of great power He did not enrich economics He did not even keep abreast of current developments in economic theory He had a prim and tidy mind which he kept in perfect order by admitting nothing that did not harmonize with the furnishings installed in the 1880s Yet he held that a teacher s aim should be the acquisition of independent power and methods of work rather than specific beliefs 5 According to Milton Friedman 1987 Laughlin s scholarly work was almost entirely in the field of money and banking 6 Friedman summarized Much of it notably his History of Bimetallism in the United States 1885 consisted of a thorough and extremely careful presentation of historical evidence on the development of money and monetary institutions But Laughlin also wrote extensively on monetary and banking theory and on proposals for monetary reform His work on these topics was marred by a dogmatic and rigid opposition to the quantity theory of money an opposition that developed out of his public activities opposing the free silver movement The proponents of free silver used a crude form of the quantity theory to support their position which sufficed to render the theory anathema to Laughlin 6 And furthermore Laughlin s attack on the quantity theory had much in common with recent cost push or structural or supply shock theories of inflation in emphasizing the role of factors affecting specific goods and services rather than general monetary influences Then as now such theories ran against the major stream of monetary analysis as exemplified in Laughlin s time by the work of Irving Fisher As a result his writings on theory have had no lasting influence on economic thought 6 Selected publication editThe Study of Political Economy 1885 History of Bimetallism in the United States 1886 Elements of Political Economy 1887 revised edition 1902 1915 Facts about Money 1895 Credit 1902 Principles of Money 1903 Reciprocity 1903 with H P Willis Lectures on Commerce 1904 Industrial America 1906 Latter Day Problems 1909 Banking Reform 1912 Money and Prices 1919 Banking Progress 1920 The Federal Reserve Act Its Origin and Problems 1933 References edit John U Nef James Laurence Laughlin 1850 1933 in Journal of Political Economy Vol 75 No 6 December 1967 pp 779 781 Published by The University of Chicago Press James Laurence Laughlin Answer to Coin Harvey 1895 at let rug nl GWM University of Groningen 1994 2012 Accessed September 2015 Lowenstein Roger 2015 America s Bank The Epic Struggle to Create the Federal Reserve New York Penguin Press pp 24 25 ISBN 9781594205491 James L Laughlin 83 Economist Dies in Jaffrey Fitchburg Sentinel Jaffrey New Hampshire AP December 1 1933 p 6 Retrieved January 6 2021 via Newspapers com As quoted in Laughlin James Laurence Archived March 4 2016 at the Wayback Machine by Milton Friedman 1987 a b c Milton Friedman 1987 In The New Palgrave A Dictionary of Economics edited by John Eatwell Murray Milgate and Peter Newman vol 3 pp 139 140 New York Stockton Further reading editRobert W Dimand 2020 J Laurence Laughlin versus Irving Fisher on the quantity theory of money 1894 to 1913 Oxford Economic PapersExternal links editWorks by James Laurence Laughlin at Project Gutenberg Works by James Laurence Laughlin at LibriVox public domain audiobooks nbsp Works by or about James Laurence Laughlin at Internet Archive Answer to Coin Harvey 1895 Archived July 16 2012 at the Wayback Machine the text of a letter Laughlin wrote Guide to the James Laurence Laughlin Papers 1885 1914 at the University of Chicago Special Collections Research Center Retrieved from https en wikipedia org w index php title James Laurence Laughlin amp oldid 1201075766, wikipedia, wiki, book, books, library,

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