Encyclopedia, Difference between revisions of "Frank Fetter" - New World
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'''Frank Albert Fetter''' ([[8 March]] [[1863]]–[[1949]]) was an [[American]] economist of the [[Austrian School]]. | '''Frank Albert Fetter''' ([[8 March]] [[1863]]–[[1949]]) was an [[American]] economist of the [[Austrian School]]. | ||
| − | |||
| − | |||
| − | + | ==Biography== | |
| + | Frank Fetter was born on March 8, 1863, in the farming community of Peru in north-central Indiana [[Indiana]] to a [[Quaker]] family during the height of the [[American Civil War]]. Fetter proved an able student as a youth, as demonstrated by his acceptance to [[Indiana University]] in 1879 when he was only sixteen years old. Fetter was on track to graduate with the class of 1883, but left college to run his family's bookstore upon news of his father's declining health. This proved to be an opportunity for the young man to acquaint himself with some of the economic ideas that would later prove formative. Chief among the intellectual influences Fetter encountered at this time was [[Henry George]]'s ''Progress and Poverty'' (1879). | ||
| − | + | After eight years, Fetter returned to academia and, eventually, earned his [[Ph.D.]] in 1894 from the [[University of Halle]] in Heildeberg, where he wrote his [[doctoral dissertation]] on the subject of population theory. | |
| − | After | ||
| − | + | After earning his doctoral degree, Fetter accepted an instructorship at Cornell, but left to become a professor at Indiana University. After short stay at [[Stanford University]], Fetter went back to Cornell in 1901, where he remained for ten years. In 1911, he accepted the position of chairman in an interdisciplinary department at [[Princeton University]] which incorporated [[history]], [[politics]], and economics. Fetter was the first chairman of Princeton University's Department of Economics and Social institutions. He died in 1949 | |
| + | in Indiana. | ||
| − | == | + | ==Fetter’s work== |
| − | |||
| − | + | In the period between the founders of the Austrian school (Menger, Böhm-Bawerk, and Wieser) and its next generation (led by Mises and Hayek), Frank Albert Fetter was the standard bearer of the Austrian tradition. His 1904 treatise, ''Principles of Economics'', constructed a general theory of economics in the Austrian tradition that went unsurpassed until Ludwig von Mises's treatise of 1940, ''Nationaloekonomie''. | |
| − | == | + | His motto always was: "….''Every theory must ultimately meet two tests: one, that of internal consistency, the other that of consistency with reality…. ( which in his case meant, not to empiricism, but the ) ….rude contact with the world of events [which] is often what tests or betrays theory, and forces thought out of the conventional ruts''…..."( Fetter 1904 ) |
| − | * ''Versuch einer Bevolkerungslehre | + | |
| − | * | + | ===Principles of economics=== |
| + | |||
| + | Fetter began with the "simple" and "almost self-evident" proposition that "the motive force in economics is found in the feelings of men." It is man's wants that urge him to action, first in primitive pursuits, but eventually "wants develop and transform the world" by propelling man to accumulate wealth, and upon wealth, to build civilization. Moreover, wants are not limited to the narrow "self-interest" of man or of merely "material" attainments, but span the full range of man's "social and spiritual" desires. When studying the problem of value, Fetter saw that one must "...''recognize any motive that leads men to attach importance to acts and things''..."… ''because "value is in the closest relation with wants''….." and "….''from the meeting and comparison of the estimates [of value] of individuals, arise market values or prices''..." ( Fetter 1904, pp.17-20 ). | ||
| + | |||
| + | |||
| + | Using the axiomatic-deductive method, he traced economic laws to individual human action, and demonstrated that just as the price of each consumer good is determined solely by subjective value, the rate of interest is determined solely by time preference. The rental price of each producer good is imputed to it by entrepreneurial demand and is equal to its discounted marginal value product. The capital value of each durable good is equal to the discounted value of its future rents. Fetter showed how this uniform, subjective theory of value implies the demise of socialist theories of labor exploitation, Ricardian theories of rent, and productivity theories of interest. Building on his Austrian theory of capital, money, interest, and entrepreneurship, Fetter even developed a rudimentary theory of the trade cycle, arguing that the boom period is characterized by the artificial swelling of capital values as money and credit expand. The crisis follows when the inflation ceases which causes the mistaken capital values of the boom to suddenly correct downward and, in turn, results in the bankruptcy, unemployment, and retrenchment of the depression. | ||
| + | |||
| + | |||
| + | A man's demand for a consumer good is formed from the law of diminishing utility, (a proposition whose truth is found "in the very nature of man") which refers to the "''marginal utility''" or "''gratification afforded by the added portion of the good''." Since the term "marginal utility" expresses "by a single phrase the idea both of demand and supply," prices "are built up on subjective valuations" alone and "correspond closely with the subjective estimates" of the marginal buyer and seller, i.e., "''the least eager buyer and the least eager seller''."( Ibid. pp.22-23 ) | ||
| + | |||
| + | ===Fetter on capital=== | ||
| + | |||
| + | What is the capital? Either the money or the thing whose value is expressed in money. Money is itself a concrete thing, one in which the value of other things is expressed. It is this expression and measurement of market value which is the essence of the capital concept in much business usage, as well as in most economic discussion, no matter what may be the formal definition. This must be recognized in our definition. Capital, in our conception, is an aspect of material things, or, better, it consists of material things considered in one aspect, — their market value. — It is under this aspect that men have come more and more to look at wealth. The growth of a money-economy has made it more and more convenient to compare and measure the value of dissimilar things in terms of dollars. Things are thus capitalized ( Fetter 1900 ) | ||
| + | |||
| + | |||
| + | Capital is economic wealth whose quantity is expressed in a general value unit. It is used as applying to a single thing or to a group of things. There is no place in it for the distinction, the inconsistencies of which have been discussed, between individual and social capital. We do not call the services of thing that minister directly to satisfaction unproductive while calling the personal services of men productive, even where nothing material results. We do not retain the distinction between consumption and production goods as essential in economic discussion. All valuable thing of more than momentary duration are "intermediate goods," are capital, in that they are valuable became designed to satisfy future wants. While the definition thus sweeps away any limitation on the content of capital became of a difference in future me, it likewise sweeps away any limitation because of a difference in the origin or source of its value. Capital is not thought of as made up only of goods whose value is the result of labor. It has been shown that the prevailing distinction between "natural agents" and "produced agents" of production involves radical defects of logic and is practically not maintained. This definition is emancipated from the false labor theory of value. In regard to the contending views, — first, that capital consists of concrete goods, and, second, that it is the value of goods, — the definition harmonizes them by defining capital as consisting of the concrete things, but only when considered as homogeneous and comparable units of value ( Ibid. ). | ||
| + | |||
| + | ====Fetter vs. Bohm-Baverk on private and social capital==== | ||
| + | |||
| + | *The distinction between them rests on a supposed difference in the interest-bearing character of different groups of consumption goods. This difference can be explained in a simple way that makes needless an additional concept. | ||
| + | *The distinction between them rests on legal, not on economic grounds, and involves a confusion of economic and contract interest. | ||
| + | *The distinction rests on an incomplete and illogical view of the nature of income and the services of goods. The income that needs to be explained by economic theory is the flow of objectively created pleasures coming to the individual and the community. | ||
| + | *In these concepts the interest-bearing quality is confined to the conventional production goods and such consumption goods as yield contract interest. Many actions connected with "consumption goods" are left unexplained. The interest phenomenon is found wherever there is abiding value. | ||
| + | |||
| + | ===Fetter on capitalization=== | ||
| + | Fetter defined capital as "….''economic wealth expressed in terms of the general unit of value''….." And while capital, at any moment in time, includes all economic goods in existence, Fetter said that most capital is "''composed of things durable''." For this reason, "……''when interest is defined as the payment for the use of capital, it is connected with all wealth that is expressed in the capital form''……" ( Rothbard 1962 ) | ||
| + | |||
| + | |||
| + | For Fetter, interest permeated all time-consuming action and the determination of its rate was a prerequisite, not a result of, the calculation of capital value. To make a rational account of the market value of anything, including a durable good, "...''its importance must be traced back to 'gratification.'''..." The buyer of durable wealth pays a "...''definite sum in return for the right to enjoy a series of future rents''...." | ||
| + | |||
| + | It then becomes impossible that capital value could precede income, and therefore, "..''the mere mention of a capital sum implies the interest problem, and assumes the interest rate''…."( Ibid. 121-122 ) | ||
| + | |||
| + | ===Fetter on subjective value=== | ||
| + | |||
| + | Prior to the advent of a mature Ludwig von Mises, Fetter was the world's leading subjective-value theorist. While Mises would bring the theory of money within a subjective-value, general theory of economics in 1912, Fetter had by 1904 already extended the principle of subjective value to bring factor prices and the rate of interest into a unified theory. The distinctiveness of his contribution was not lost on the profession at large, and it was widely recognized as an Austrian one. | ||
| + | |||
| + | |||
| + | Fetter had rejected the profession's "..''return towards the objective cost explanation''.." from the "..''purely psychic explanation of economic phenomena in terms of utility''..." | ||
| + | |||
| + | Instead, Fetter held, that the Austrians were, after all, on the way towards a true and consistent interpretation of economic activity. | ||
| + | |||
| + | Fetter saw "…..economics as essentially the study of value, and has viewed all economic phenomena as the concrete expression, under varied circumstances, of one uniform theory of value……." | ||
| + | |||
| + | Fetter himself was so adamant about the subjective nature of value in economic theory that he disdained referring to the watershed of economic thought in the 1870's as the Marginalist Revolution, preferring the adjectives "subjective" or "psychological" to describe the new theory. He even rejected Leon Walras in the standard trilogy of revolutionaries because he thought Walras, unlike the other mathematical marginalist Stanley Jevons, did not agree that the essence of the revolution was the re-introduction of subjective value into value theory. In Fetter's revisionist account, the correct trilogy is Carl Menger (whose "..''Unusual vigor, independence, and originality of his mind seem to have been felt and esteemed by all those who came in contact with him''..."), Jevons , whose "….''versatility, originality, and vigor of thought are evident on every page''... ,", and J.B. Clark, who "…….''is classed by his friendly American critics in the list of the six ablest Anglo-American economists [and] is apparently conceded by all foreign critics the deanship of American theorists''……” ( Hoxie 1905 ). | ||
| + | |||
| + | ===Fetter on theory of wages=== | ||
| + | |||
| + | Fetter also recognized the larger significance of a subjective value theory replacing an objective one in the history of economic thought. He said that, "…..''the labor theory of value had been adopted by Adam Smith after only the most superficial discussion''……" which led him to "……''his confusion of ideas regarding labor embodied and labor commanded, labor as the source and as the measure of value, rent and profits now forming a part and now not a part of price''……." | ||
| + | |||
| + | Fetter concluded, that "……''the resulting confusion was felt by all of the next generation of economists''…..." In particular [[David Ricardo]] because he accepted Smith's concept of embodied labor, exerted "….''a tremendous and evil influence in ways then all unforeseen... Labor is the source of value...; labor is the cause of value; labor produces all wealth. Naturally follows the ethical and political conclusion: if labor produces all wealth then labor should receive all wealth''……" | ||
| + | |||
| + | A conclusion "the Ricardian socialists" were all too eager to embrace and which Karl Marx later used to great effect ( Fetter 1923 ). | ||
| + | |||
| + | I shall maintain that income must be looked upon as a series or group of satisfactions, not as a series or group of material things. Though scattered authority may be found for this view, it is at variance with the views alike of Böhm-Bawerk, of Clark, and of Fisher, as well as those of the great majority of economists, and requires explanation and defence. The thesis is that the economic goods which are "produced" either by human effort or by the material services of goods must, in their last analysis, be looked upon as satisfactions. | ||
| + | |||
| + | ===Fetter on foreign trade=== | ||
| + | |||
| + | “…''The main advantage of foreign trade is the same as that of any other exchange. It is hardly necessary to review the explanation here: the increased efficiency of labor when it is applied in the way for which each country is best fitted; the liberation of productive forces for the best uses: the development of special branches of industry with increasing returns; the larger scale production with resulting greater use of machinery and with increased chance of invention; the destruction of local monopolies... The moral and intellectual gains of foreign commerce were formerly much emphasized... Commerce is an agent of progress; it stimulates the arts and sciences; it creates bonds of common interest; it gives an understanding of foreign peoples and an appreciation of their merits; it raises a commercial and moral barrier to war; and it furthers the ideal of a world federation, the brotherhood of man''. …..” ( Fetter 1904,1905 ) | ||
| + | |||
| + | ==Fetter’s legacy== | ||
| + | Deservedly, Fetter rose to the top of the American economics profession. His work was routinely published in the major journals. He held professorships at several prestigious colleges and universities and was invited to speak at major events held by prominent economic associations and to write commentary for the Encyclopedia of the Social Sciences on the discipline and for European scholars on American economic thought. He was an officer and eventually president of the American Economic Association and a member of the American Philosophical Society. In a rare tribute, he received a note commemorating his 80th birthday in the American Economic Review and a Memorial, in the same publication, upon his death. At the turn of the century, Frank A. Fetter was elevating the Austrian banner to greater heights than any other scholar. He was one of the brightest stars in the golden era of Austrian economics. | ||
| + | |||
| + | ==Bibliography== | ||
| + | *Fetter, F. A., Versuch einer Bevolkerungslehre ausgehend von einer Kritik des Malthus'schen Bevolkerungsprincips [An Essay on Population Doctrine based on a Critique of the Population Principles of Malthus], Gustav Fischer, Jena 1894 | ||
| + | *Fetter, F. A., "Population and Prosperity," American Economic Review, supplement, Vol. 3, March 1913, pp.5-19 | ||
| + | *Fetter, F. A., Principles of Economics, The Century Co., New York 1904, pp. 184-194 | ||
| + | *Fetter, F. A., "Theories of Value in Their Application to the Question of the Standard Deferred Payments," American Economic Association Publications, supplement, Vol.10 ,March 1895, pp. 101-103 | ||
| + | *Fetter, F. A., " The Exploitation of Theories of Value in the Discussion of the Standard of Deferred Payments," Annals of the American Academy of Political and Social Science, Vol. 5, May 1895, pp. 882-896. | ||
| + | *Fetter, F. A., “Recent Discussion of the Capital Concept”, Quarterly Journal of Economics, 1900. | ||
| + | *Fetter, F. A., "Value and the Larger Economics I: Rise of the Marginal Doctrine," Journal of Political Economy, Vol 31, Oct. 1923., p. 594 | ||
| + | *Fetter, F. A., "Price Economics versus Welfare Economics," American Economic Review, Vol. 10, September 1920, pp. 483-486 | ||
| + | *Fetter, F. A., " Economic Systems; Post-War Planning ," American Economic Review, Vol.35, June 1945, pp. 445-446. | ||
| + | *Hoxie, Robert F. "Fetter's Theory of Value," Quarterly Journal of Economics, Vol. 19, February 1905, pp. 210-211 | ||
| + | *Rothbard, M. R., Man, Economy, and State, Nash Publishing Corp., Los Angeles, 1962, pp. 115, 387-409 | ||
* ''Source Book in Economics'' (1912) | * ''Source Book in Economics'' (1912) | ||
* ''Economics, Volume 1: Economic Principles'' (1915) | * ''Economics, Volume 1: Economic Principles'' (1915) | ||
Revision as of 13:25, 11 August 2006
Frank Albert Fetter (8 March 1863–1949) was an American economist of the Austrian School.
Biography
Frank Fetter was born on March 8, 1863, in the farming community of Peru in north-central Indiana Indiana to a Quaker family during the height of the American Civil War. Fetter proved an able student as a youth, as demonstrated by his acceptance to Indiana University in 1879 when he was only sixteen years old. Fetter was on track to graduate with the class of 1883, but left college to run his family's bookstore upon news of his father's declining health. This proved to be an opportunity for the young man to acquaint himself with some of the economic ideas that would later prove formative. Chief among the intellectual influences Fetter encountered at this time was Henry George's Progress and Poverty (1879).
After eight years, Fetter returned to academia and, eventually, earned his Ph.D. in 1894 from the University of Halle in Heildeberg, where he wrote his doctoral dissertation on the subject of population theory.
After earning his doctoral degree, Fetter accepted an instructorship at Cornell, but left to become a professor at Indiana University. After short stay at Stanford University, Fetter went back to Cornell in 1901, where he remained for ten years. In 1911, he accepted the position of chairman in an interdisciplinary department at Princeton University which incorporated history, politics, and economics. Fetter was the first chairman of Princeton University's Department of Economics and Social institutions. He died in 1949 in Indiana.
Fetter’s work
In the period between the founders of the Austrian school (Menger, Böhm-Bawerk, and Wieser) and its next generation (led by Mises and Hayek), Frank Albert Fetter was the standard bearer of the Austrian tradition. His 1904 treatise, Principles of Economics, constructed a general theory of economics in the Austrian tradition that went unsurpassed until Ludwig von Mises's treatise of 1940, Nationaloekonomie.
His motto always was: "….Every theory must ultimately meet two tests: one, that of internal consistency, the other that of consistency with reality…. ( which in his case meant, not to empiricism, but the ) ….rude contact with the world of events [which] is often what tests or betrays theory, and forces thought out of the conventional ruts…..."( Fetter 1904 )
Principles of economics
Fetter began with the "simple" and "almost self-evident" proposition that "the motive force in economics is found in the feelings of men." It is man's wants that urge him to action, first in primitive pursuits, but eventually "wants develop and transform the world" by propelling man to accumulate wealth, and upon wealth, to build civilization. Moreover, wants are not limited to the narrow "self-interest" of man or of merely "material" attainments, but span the full range of man's "social and spiritual" desires. When studying the problem of value, Fetter saw that one must "...recognize any motive that leads men to attach importance to acts and things..."… because "value is in the closest relation with wants….." and "….from the meeting and comparison of the estimates [of value] of individuals, arise market values or prices..." ( Fetter 1904, pp.17-20 ).
Using the axiomatic-deductive method, he traced economic laws to individual human action, and demonstrated that just as the price of each consumer good is determined solely by subjective value, the rate of interest is determined solely by time preference. The rental price of each producer good is imputed to it by entrepreneurial demand and is equal to its discounted marginal value product. The capital value of each durable good is equal to the discounted value of its future rents. Fetter showed how this uniform, subjective theory of value implies the demise of socialist theories of labor exploitation, Ricardian theories of rent, and productivity theories of interest. Building on his Austrian theory of capital, money, interest, and entrepreneurship, Fetter even developed a rudimentary theory of the trade cycle, arguing that the boom period is characterized by the artificial swelling of capital values as money and credit expand. The crisis follows when the inflation ceases which causes the mistaken capital values of the boom to suddenly correct downward and, in turn, results in the bankruptcy, unemployment, and retrenchment of the depression.
A man's demand for a consumer good is formed from the law of diminishing utility, (a proposition whose truth is found "in the very nature of man") which refers to the "marginal utility" or "gratification afforded by the added portion of the good." Since the term "marginal utility" expresses "by a single phrase the idea both of demand and supply," prices "are built up on subjective valuations" alone and "correspond closely with the subjective estimates" of the marginal buyer and seller, i.e., "the least eager buyer and the least eager seller."( Ibid. pp.22-23 )
Fetter on capital
What is the capital? Either the money or the thing whose value is expressed in money. Money is itself a concrete thing, one in which the value of other things is expressed. It is this expression and measurement of market value which is the essence of the capital concept in much business usage, as well as in most economic discussion, no matter what may be the formal definition. This must be recognized in our definition. Capital, in our conception, is an aspect of material things, or, better, it consists of material things considered in one aspect, — their market value. — It is under this aspect that men have come more and more to look at wealth. The growth of a money-economy has made it more and more convenient to compare and measure the value of dissimilar things in terms of dollars. Things are thus capitalized ( Fetter 1900 )
Capital is economic wealth whose quantity is expressed in a general value unit. It is used as applying to a single thing or to a group of things. There is no place in it for the distinction, the inconsistencies of which have been discussed, between individual and social capital. We do not call the services of thing that minister directly to satisfaction unproductive while calling the personal services of men productive, even where nothing material results. We do not retain the distinction between consumption and production goods as essential in economic discussion. All valuable thing of more than momentary duration are "intermediate goods," are capital, in that they are valuable became designed to satisfy future wants. While the definition thus sweeps away any limitation on the content of capital became of a difference in future me, it likewise sweeps away any limitation because of a difference in the origin or source of its value. Capital is not thought of as made up only of goods whose value is the result of labor. It has been shown that the prevailing distinction between "natural agents" and "produced agents" of production involves radical defects of logic and is practically not maintained. This definition is emancipated from the false labor theory of value. In regard to the contending views, — first, that capital consists of concrete goods, and, second, that it is the value of goods, — the definition harmonizes them by defining capital as consisting of the concrete things, but only when considered as homogeneous and comparable units of value ( Ibid. ).
Fetter vs. Bohm-Baverk on private and social capital
- The distinction between them rests on a supposed difference in the interest-bearing character of different groups of consumption goods. This difference can be explained in a simple way that makes needless an additional concept.
- The distinction between them rests on legal, not on economic grounds, and involves a confusion of economic and contract interest.
- The distinction rests on an incomplete and illogical view of the nature of income and the services of goods. The income that needs to be explained by economic theory is the flow of objectively created pleasures coming to the individual and the community.
- In these concepts the interest-bearing quality is confined to the conventional production goods and such consumption goods as yield contract interest. Many actions connected with "consumption goods" are left unexplained. The interest phenomenon is found wherever there is abiding value.
Fetter on capitalization
Fetter defined capital as "….economic wealth expressed in terms of the general unit of value….." And while capital, at any moment in time, includes all economic goods in existence, Fetter said that most capital is "composed of things durable." For this reason, "……when interest is defined as the payment for the use of capital, it is connected with all wealth that is expressed in the capital form……" ( Rothbard 1962 )
For Fetter, interest permeated all time-consuming action and the determination of its rate was a prerequisite, not a result of, the calculation of capital value. To make a rational account of the market value of anything, including a durable good, "...its importance must be traced back to 'gratification.'..." The buyer of durable wealth pays a "...definite sum in return for the right to enjoy a series of future rents...."
It then becomes impossible that capital value could precede income, and therefore, "..the mere mention of a capital sum implies the interest problem, and assumes the interest rate…."( Ibid. 121-122 )
Fetter on subjective value
Prior to the advent of a mature Ludwig von Mises, Fetter was the world's leading subjective-value theorist. While Mises would bring the theory of money within a subjective-value, general theory of economics in 1912, Fetter had by 1904 already extended the principle of subjective value to bring factor prices and the rate of interest into a unified theory. The distinctiveness of his contribution was not lost on the profession at large, and it was widely recognized as an Austrian one.
Fetter had rejected the profession's "..return towards the objective cost explanation.." from the "..purely psychic explanation of economic phenomena in terms of utility..."
Instead, Fetter held, that the Austrians were, after all, on the way towards a true and consistent interpretation of economic activity.
Fetter saw "…..economics as essentially the study of value, and has viewed all economic phenomena as the concrete expression, under varied circumstances, of one uniform theory of value……."
Fetter himself was so adamant about the subjective nature of value in economic theory that he disdained referring to the watershed of economic thought in the 1870's as the Marginalist Revolution, preferring the adjectives "subjective" or "psychological" to describe the new theory. He even rejected Leon Walras in the standard trilogy of revolutionaries because he thought Walras, unlike the other mathematical marginalist Stanley Jevons, did not agree that the essence of the revolution was the re-introduction of subjective value into value theory. In Fetter's revisionist account, the correct trilogy is Carl Menger (whose "..Unusual vigor, independence, and originality of his mind seem to have been felt and esteemed by all those who came in contact with him..."), Jevons , whose "….versatility, originality, and vigor of thought are evident on every page... ,", and J.B. Clark, who "…….is classed by his friendly American critics in the list of the six ablest Anglo-American economists [and] is apparently conceded by all foreign critics the deanship of American theorists……” ( Hoxie 1905 ).
Fetter on theory of wages
Fetter also recognized the larger significance of a subjective value theory replacing an objective one in the history of economic thought. He said that, "…..the labor theory of value had been adopted by Adam Smith after only the most superficial discussion……" which led him to "……his confusion of ideas regarding labor embodied and labor commanded, labor as the source and as the measure of value, rent and profits now forming a part and now not a part of price……."
Fetter concluded, that "……the resulting confusion was felt by all of the next generation of economists…..." In particular David Ricardo because he accepted Smith's concept of embodied labor, exerted "….a tremendous and evil influence in ways then all unforeseen... Labor is the source of value...; labor is the cause of value; labor produces all wealth. Naturally follows the ethical and political conclusion: if labor produces all wealth then labor should receive all wealth……"
A conclusion "the Ricardian socialists" were all too eager to embrace and which Karl Marx later used to great effect ( Fetter 1923 ).
I shall maintain that income must be looked upon as a series or group of satisfactions, not as a series or group of material things. Though scattered authority may be found for this view, it is at variance with the views alike of Böhm-Bawerk, of Clark, and of Fisher, as well as those of the great majority of economists, and requires explanation and defence. The thesis is that the economic goods which are "produced" either by human effort or by the material services of goods must, in their last analysis, be looked upon as satisfactions.
Fetter on foreign trade
“…The main advantage of foreign trade is the same as that of any other exchange. It is hardly necessary to review the explanation here: the increased efficiency of labor when it is applied in the way for which each country is best fitted; the liberation of productive forces for the best uses: the development of special branches of industry with increasing returns; the larger scale production with resulting greater use of machinery and with increased chance of invention; the destruction of local monopolies... The moral and intellectual gains of foreign commerce were formerly much emphasized... Commerce is an agent of progress; it stimulates the arts and sciences; it creates bonds of common interest; it gives an understanding of foreign peoples and an appreciation of their merits; it raises a commercial and moral barrier to war; and it furthers the ideal of a world federation, the brotherhood of man. …..” ( Fetter 1904,1905 )
Fetter’s legacy
Deservedly, Fetter rose to the top of the American economics profession. His work was routinely published in the major journals. He held professorships at several prestigious colleges and universities and was invited to speak at major events held by prominent economic associations and to write commentary for the Encyclopedia of the Social Sciences on the discipline and for European scholars on American economic thought. He was an officer and eventually president of the American Economic Association and a member of the American Philosophical Society. In a rare tribute, he received a note commemorating his 80th birthday in the American Economic Review and a Memorial, in the same publication, upon his death. At the turn of the century, Frank A. Fetter was elevating the Austrian banner to greater heights than any other scholar. He was one of the brightest stars in the golden era of Austrian economics.
Bibliography
- Fetter, F. A., Versuch einer Bevolkerungslehre ausgehend von einer Kritik des Malthus'schen Bevolkerungsprincips [An Essay on Population Doctrine based on a Critique of the Population Principles of Malthus], Gustav Fischer, Jena 1894
- Fetter, F. A., "Population and Prosperity," American Economic Review, supplement, Vol. 3, March 1913, pp.5-19
- Fetter, F. A., Principles of Economics, The Century Co., New York 1904, pp. 184-194
- Fetter, F. A., "Theories of Value in Their Application to the Question of the Standard Deferred Payments," American Economic Association Publications, supplement, Vol.10 ,March 1895, pp. 101-103
- Fetter, F. A., " The Exploitation of Theories of Value in the Discussion of the Standard of Deferred Payments," Annals of the American Academy of Political and Social Science, Vol. 5, May 1895, pp. 882-896.
- Fetter, F. A., “Recent Discussion of the Capital Concept”, Quarterly Journal of Economics, 1900.
- Fetter, F. A., "Value and the Larger Economics I: Rise of the Marginal Doctrine," Journal of Political Economy, Vol 31, Oct. 1923., p. 594
- Fetter, F. A., "Price Economics versus Welfare Economics," American Economic Review, Vol. 10, September 1920, pp. 483-486
- Fetter, F. A., " Economic Systems; Post-War Planning ," American Economic Review, Vol.35, June 1945, pp. 445-446.
- Hoxie, Robert F. "Fetter's Theory of Value," Quarterly Journal of Economics, Vol. 19, February 1905, pp. 210-211
- Rothbard, M. R., Man, Economy, and State, Nash Publishing Corp., Los Angeles, 1962, pp. 115, 387-409
- Source Book in Economics (1912)
- Economics, Volume 1: Economic Principles (1915)
- Manual of References and Exercices in Economics for Use with, Vol. 1: Economic Principles (1916)
- Economics, Vol. 2: Modern Economic Problems (1916; revised 2nd edition, 1922)
- Manual of References and Exercices in Economics for Use with, Vol. 2: Modern Economics (1917)
- Masquerade of Monopoly (1931)
- Capital, Interest and Rent: Essays in the theory of distribution (1977)
External links
- Fetter bibliography at Mises.org.
Notes
Credits
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