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Jacob Viner, the economic theorist and historian of economic thought, was born and raised in Montreal, the son of immigrant parents from eastern Europe. As an undergraduate he attended McGill University, where he was taught economics by Stephen Leacock, the famous humorist. Leacock used texts by Mill and Walker, Milk and Water, as the students referred to them, showing ‘good judgment’ according to an account that Viner gave later in life. For graduate work he went to Harvard, where he earned a Ph.D. in 1922. He was a student and eventually became a close friend of Frank W. Taussig, the well-known authority on economic theory and international economics. At that time and during the earlier part of Viner’s career he and Taussig were rare specimens in what was, except for a very few others, essentially a ‘wasp’ establishment. But in other respects their background was quite different. Viner was a self-made man who had emancipated himself from the immigrant quarter of Montreal, while Taussig was born into a patrician family with wealth and native culture.

Taussig’s specialities were the fields to which Viner himself was drawn and in which he earned great distinction, in addition to his perhaps even more distinguished work in the history of economics, where his accomplishments were almost without rival.

During the two world wars, during the Great Depression, and on and off at other times, Viner did consulting and other work in Washington, but he was foremost an academic, who taught at the University of Chicago in 1916–17 and from 1919 to 1946, when he went to Princeton and taught there until his retirement in 1960. Viner advanced rapidly at Chicago, where the department then was headed by J.M. Clark, and he became a full professor at age 32. A few decades earlier, in the same department, Veblen had risen to the rank of assistant professor only at age 43. But Veblen had defied convention both in his writings and personal life.

Viner’s tenure at Chicago coincided in part with his editorship of the Journal of Political Economy for a period of 18 years. Most of the time the post was held jointly with Frank H. Knight, who, after having earlier spent two years at Chicago, returned to it in 1927. Both men imprinted on the journal the mark of their own great gifts.

Viner’s contributions to economic theory and the history of economic thought are embodied in periodical articles that were reprinted in book form in 1958 under the title The Long View and the Short. His contributions to general theory consist principally of two remarkable articles, one published in 1921 and the other ten years later. Of the two, the second on ‘Cost Curves and Supply Curves’ (Viner 1958, pp. 50–78) made an immediate and powerful impact on the profession. Written, as it was, by a then well-established scholar, it contained virtually the whole of the modern exposition, graphic and otherwise, of the theory of cost, including the envelope curve, about which Viner had a legendary dispute with his mathematically more proficient Chinese draftsman. It also contained, perhaps for the first time in print, the words ‘marginal revenue’. All this matter eventually entered into the elementary textbooks. Viner’s accomplishment paralleled that of Knight, whose graphic portrayal of the theory of production in Risk, Uncertainty and Profit (1921) likewise entered into the mainstream of economic theory and became the basis for the textbook treatment of the matter. Among the two great scholars there was forged a substantial portion of partial equilibrium analysis as it evolved during the first half of the 20th century.

Viner’s earlier article, ‘Price Policies: The Determination of Market Price’, published in 1921 and covering barely five pages in the reprint of 1958, was in some respects an even more dazzling achievement than the later and much better-known one. Five years ahead of Sraffa, six years ahead of the publication of Joan Robinson’s and Chamberlin’s books on the subject, Viner developed here, in a short paragraph, the outlines of the theory of monopolistic competition. He writes of inflexible prices, ‘differentiation’ of products, advertising, non-price competition and other characteristics of markets that are neither fully competitive nor completely monopolistic. In such markets producers may succeed in creating a special demand for their products. They can then to some extent determine prices independently of the prices charged by their competitors and still maintain their sales (Viner 1958, pp. 5–6). In the same context Viner also developed, in a few sentences, the theory of what became later known as the kinky demand curve, 18 years ahead of Sweezy’s article on the subject.

These were indeed path-breaking contributions, but their existence was virtually ignored until Viner’s article was reprinted in 1958. The place of the original contribution – L.C. Marshall, ed., Business Administration, University of Chicago Press, 1921 – was not exactly obscure but elusive nevertheless from the standpoint of a reader looking for innovations in economic theory. Chamberlin did not mention Viner in the bibliographies that he appended to successive editions of his book and which eventually listed around 1,500 items. As regards the kinky demand curve, there is no reference to Viner in Sweezy’s article in the Journal of Political Economy for 1939, of which Viner then was the co-editor, nor in Stigler’s critique published in the same journal in 1947. All this is an unresolved puzzle. No one knows why Viner never developed more fully the ideas sketched in his brief article of 1921 and why he, who in other contexts did not shy away from announcing his priority, remained silent about this one. The ideas surely were his own and not derived from an oral tradition at Harvard, whose only potential fount, Allyn Young, came to Harvard only in 1920, when Viner was already teaching at Chicago. He could not very well have anticipated unfriendly criticism, because the Chicago of the 1920s, where J.M. Clark had a senior position, was not the Chicago of the later so-called Chicago School, all of whose leaders, beginning in the mid-1940s, voiced disapproval of the theory of monopolistic competition.

Viner not only had an analytical mind that was stocked with original ideas, but combined with this a stupendous book learning that within the scope of the humanities and social sciences, and especially their history, was virtually universal and gave special depth to his studies in the history of economics. He was perhaps not as scintillating a writer as Schumpeter, nor did he turn out, as did Schumpeter, a comprehensive treatise on the subject, but his work, scattered in periodical articles, contains far more reliable and judicious interpretations of such matters as utilitarianism, and classical and Marshallian economics. The most important of Viner’s articles on the history of economics were reprinted in Part II of the collection published in 1958. Their coverage extends all the way from the mercantilists to Marshall and Schumpeter. The essay on mercantilist thought shows the mercantilists in pursuit both of power and wealth as ultimate ends of national policy. Another on Adam Smith demonstrates, among other matters, that Smith was not a doctrinaire advocate of laissez-faire, a quality that he shares with Viner. Smith was a favoured subject of Viner’s studies, and in 1965 he contributed an introduction of 145 pages to a new edition of Rae’s Life of Adam Smith, the standard biography. An essay about the utility concept in value theory defends the concept against its critics. Writing about Bentham and J.S. Mill (1949), Viner clarifies the meaning of the former’s hedonic calculus and by restricting it to comparisons between pain and pleasure contributes to the rehabilitation of this concept, for which, he believes, an idea of Benjamin Franklin’s may have been the inspiration. Mill and Marshall are both viewed in their Victorian setting. The former’s Principles, a combination of ‘hard-headed rules and utopian aspirations’, was ‘exactly the doctrine that Victorians of goodwill yearned for’. Marshall fitted into the Victorian age that was complacent about the present and optimistic with respect to future progress.

Except for the collection of his articles published in 1958 and two posthumous publications, all of Viner’s books are about international economics, with a collection of his articles in this field, titled International Economics, published in 1951. His work in international economics covers virtually all its phases – theory, history of thought, and policy – with occasional use of empirical material. His earliest book, Dumping (1923), contained the first comprehensive and systematic study of this subject. It was followed a year later by Viner’s doctoral dissertation on Canada’s Balance of International Indebtedness, 1900–1913, which was written on the suggestion of Taussig, who directed a number of related empirical studies designed to demonstrate the operation of the balance-of-payments adjustment process. In 1937 there was published Viner’s masterwork, Studies in the Theory of International Trade, which blends in an inimitable manner theoretical analysis and erudite doctrinal history. Its aim was to trace the evolution of the modern theory of international trade. It starts out with the mercantilists and continues with the bullionist controversies, the currency school–banking school controversy, the international mechanism of adjustment, and the doctrine of the gains from trade. In Viner’s view, the comparative-cost doctrine is dependent on a real-cost theory of value rather than on opportunity cost. While this view was not in tune with the time, there are many forward-looking sections in the book, including references to a lecture given by Viner in 1931 in which later models of Lerner, Leontief and Hicks were anticipated.

In 1950 Viner published The Customs Union Issue, which contained the distinction between trade creation and trade diversion, the starting point of later discussions of the matter. Viner’s articles on International Economics, collected in 1951, start with one on the most-favoured-nation clause and end with an essay on the economic foundations of international organizations. Many of the articles are indispensable for the study of the policy issues of the time. In 1952 Viner made his contribution to the emerging field of economic development in a book on International Trade and Economic Development. In this work he took a far less favourable view of a number of public policies designed to accelerate economic development than was commonly held at that time. He refused to identify agriculture with poverty, stressed that industrialization was more often a consequence than a cause of prosperity, and placed the main burden of promoting development on the underdeveloped country itself.

Viner had for long been interested in theological ideas, especially of the more remote past, and after his retirement he started out on a project designed to explore the relationship between religious and economic thought. This great project proved open-ended. After Viner’s death only two fragments were published, one on The Role of Providence in the Social Order (1972), and the other on Religious Thought and Economic Society (1978). The first of these works is an original accomplishment that traces the derivation of a number of economic ideas from theological precedents, for example, the theory of international trade that is grounded in differences in factor endowments, Smith’s invisible hand, and the providential origin of social inequality that was claimed in the past. The second work is written along more conventional lines and reviews the economic doctrines of the Fathers of the Church, of the Scholastics, secularizing tendencies in later Catholic social thought, and Protestantism and the rise of capitalism. This last chapter contains a critical analysis of the Weber–Tawney thesis of the Calvinist origin of capitalism.

To place Viner’s work into its proper historical setting, a word is in order about his relation to the Chicago School. A common conception takes his membership or leadership in this school for granted, but this view is mistaken. Viner himself said that much in a remarkable letter to Patinkin written shortly before his death (Patinkin 1981, p. 266; the letter is also reproduced by Reder 1982, p. 7). It must be remembered that at the time when Viner taught at Chicago, the designation ‘Chicago School’ was not yet a commonly used term. To be sure, Viner’s views about laissez-faire, Keynesian economics and government intervention had something in common with the views held by representatives of the Chicago School, but on the whole he was a more pragmatic thinker and more aware of the need for qualification and consideration of circumstances of time and place. Moreover, Viner, from whom stems the definition ‘economics is what economists do’, would not have felt comfortable within the confines of a school, especially of one that at times has come close to defining economics as the study of competitive markets. The early leaders of what later became known as the Chicago School were Henry Simons and Knight, not Viner. Like no one else, Knight had a charismatic appeal that yielded conversions to libertarianism in his classroom – James Buchanan has testified to this – and that made him the more likely founder of a school. It is significant also that Viner, and, for that matter, Knight too, urged deficit spending during the Great Depression. Viner called the plea for an annual balanced budget a mouldy fallacy (Viner 1933, p. 129). He was critical of Hayek’s libertarianism (Viner 1961). He denied that competition was both a norm and normal, pointing out instead that

monopoly is so prevalent in the markets of the western world today that discussions of the merits of the free competitive market as if that were what we are living with or were at all likely to have the good fortune to live with in the future seem to me academic in the only pejorative sense of that adjective.

He also insisted that ‘no modern people will have zeal for the free market unless it operates in a setting of “distributive justice” with which they are tolerably content’ (Viner 1960, pp. 66, 68). (The article in which Viner developed these ideas was ostensibly an exposition on the rhetoric of laissez-faire, an early exercise in an approach that D.N. McCloskey was to apply on a wider scale more than a quarter century later.) Against Friedman Viner supported discretionary monetary management rather than conduct in conformity with a ‘rule’ (Viner 1962). And, last but not least, it was Viner who created the substance of the theory of monopolistic competition, which in a peculiar dialectic was later to become the target of the Chicago School.

See Also

Selected Works

  • 1923. Dumping: A problem in international trade. Chicago: University of Chicago Press.

  • 1924. Canada’s balance of international indebtedness, 1900–1913: An inductive study in the theory of international trade. Cambridge, MA: Harvard University Press.

  • 1930. Lectures in price and distribution theory. Economics 301, University of Chicago, Summer Quarter, 1930; ed. M.D. Ketchum, mimeo, 1931.

  • 1933. Inflation as a remedy for depression. In Proceedings of the Institute of Public Affairs, Seventh Annual Session. Athens: University of Georgia.

  • 1937. Studies in the theory of international trade. New York: Harper.

  • 1949. Bentham and J.S. Mill: The utilitarian background. American Economic Review 39, 360–82.

  • 1950. The customs union issue. New York: Carnegie Endowment for International Peace; London: Stevens.

  • 1951. International economics: Studies. Glencoe: Free Press.

  • 1952. International trade and economic development: Lectures delivered at the National University of Brazil. Glencoe: Free Press; Oxford: Clarendon Press.

  • 1958. The long view and the short: Studies in economic theory and policy. Glencoe: Free Press. (With bibliography).

  • 1960. The intellectual history of laissez faire. Journal of Law and Economics 3: 45–69.

  • 1961. Hayek on freedom and coercion. Southern Economic Journal 2(3): 230–236.

  • 1962. The necessary and the desirable range of discretion to be allowed to a monetary authority. In In search of a monetary constitution, ed. L.B. Yeager. Cambridge, MA: Harvard University Press.

  • 1963. Review article on C.B. Macpherson’s Political Theory of Possessive Individualism: Hobbes to Locke. Canadian Journal of Economics and Political Science 29: 548–559.

  • 1965. Guide to John Rae’s ‘Life of Adam Smith’. Introduction to J. Rae, Life of Adam Smith. New York: Kelley.

  • 1972. The role of providence in the social order: An essay in intellectual history. Philadelphia: American Philosophical Society.

  • 1978. Religious thought and economic society: Four chapters of an unfinished work, ed. J. Melitz and D. Winch. Durham: Duke University Press. Also published in History of Political Economy 10: 9–189.