John Maurice Clark

John Maurice Clark (November 30, 1884 – June 27, 1963) was an American economist, the son of John Bates Clark. He was one of the most famous American economists of the first half of the twentieth century that belonged to the Institutional school of economics. He developed the acceleration principle and the concept of workable competition.

Life

John Maurice Clark was born on November 30, 1884 in Northampton, Massachusetts, the son of famous neo-classical economist John Bates Clark. He graduated from Amherst College in 1905 and received his Ph.D. from Columbia University in 1910. His father, who was professor at Columbia at the time, significantly influenced his son’s life and his early views. He was a mentor of his son’s doctoral dissertation, entitled Standards of Reasonableness in Local Freight Discriminations (1910).

After graduating, John Maurice Clark worked as an instructor at Colorado College from 1908 to 1910, and at Amherst College from 1910 to 1915.

In 1915, Clark received appointment as the Associate Professor of Political Economy at the University of Chicago, and in 1922 he became a full-time professor. His colleagues at the University included famous economists Jacob Viner and Frank Hyneman Knight. In 1826, Clark left Chicago and accepted a position at Columbia University, where he stayed for the rest of his career.

In 1923 Clark published his highly praised Studies in the Economics of Overhead Costs, which he dedicated to his father. From 1934 to 1935 he worked as the consultant for the National Recovery Administration, which tried to mend the effects of the Great Depression. In 1935 he received an honorary doctorate from Amherst College, and in the same year served as the thirty-seventh president of the American Economics Association (AEA).

From 1939 to 1940 he was the consultant at the National Resources Planning Board, and from 1940 to 1943 the consultant at the Office of Price Administration. In 1951 he was appointed the John Bates Clark chair, at Columbia University, the position established in his father's honor. In 1952 he was awarded by AEA the Francis A. Walker Medal for his service in economics, the highest honor in the field at that time (prior to the establishment of the Nobel Memorial Prize in Economics).

Clark retired from teaching in 1957, and died in Westport, Connecticut, on June 27, 1963.

Work

In his early career, Clark was greatly influenced by the economic theories of his father. He coauthored the revised edition of The Control of Trusts (1914) with him. He also dedicated his famous Studies in the Economics of Overhead Costs (1923) to his father, and in his last major work Competition as a Dynamic Process (1961), he connected his interest in dynamic economics with his father’s belief that static equilibrium analysis should be only the first step in the analysis of the dynamic economical processes.

Throughout most of his life Clark focused on the clarification of theories already postulated by other economists. He was able to analyze and explain the complex economical models that others developed, building upon them and forming his own views and theorems. He first analyzed marginalists, and later Edward Chamberlin and Joan Robinson. Clark tried to create real-life, dynamic models of economic activity based on their static models.

Clark spent lot of time in analyzing cost of production. He held that cost was not a simple category, and that the allocation of total cost into the categories of fixed and variable was a complex question, especially on the level of large enterprises. On a small company level it is rather simple to separate fixed and variable costs, however on the large level it becomes mostly a legal and institutional problem. In his Studies in the Economics of Overhead Costs (1923) Clark applied his knowledge of costs to a whole variety of theories. Clark gradually shifted toward the Institutional school of economics.

In 1940 he published his famous Towards a Concept of Workable Competition in which he developed the concept of workable competition. Workable competition is an economic model of a market in which competition is less than perfect, but adequate enough to give buyers genuine alternatives. Clark concluded that monopolistic arrangements and trust formation, as well as price discrimination and cutthroat competition, were an essential part of modern capitalism. The business cycles, including times of depression and prosperity, which are often caused by monopolistic behavior, were also normal economical phenomena. In Studies in the Economics of Overhead Costs, Clark developed his theory of the acceleration effect, which stated that investment demand can fluctuate widely when consumer demand fluctuates. In this he anticipated key Keynesian theories of investment and business cycles.

In his later career Clark completely diverged from the neoclassical economics of his father. He believed that neoclassicism was not sufficient to explain human economic behavior, and thus to be the leading paradigm of modern economics. He was keenly interested in psychology and social sciences, and thought that they would create basis for the new economic theories which would expound more on human behavior in economics.

With his study on the role of institutions and the turn away from neoclassical theory, Clark became of the leading Institutionalists in the United Stares. He published his The Costs of the World War to the American People (1931) and Economics of Planning Public Works (1935), in which he developed his multiplier and accelerator concepts, and through which he supported the Keynesian "income-flow analysis." He later criticized Keynes’ models of economical stabilization and suggested numerous changes.

Legacy

Clark lived and worked in a period of American economics that is rather poorly understood and little appreciated by most modern economists. He witnessed World War I and the Great Depression and saw the inability of the economy to recover on its own. He developed the theory of workable competition, which described the functioning of an economy in neither pure competition nor pure monopoly. His theory of the acceleration principle was a sort of an overture into Keynesian theories of investment and business cycles.

Publications

• Clark, John M. 1931. The Costs of the World War to the American People. Augustus M Kelley Pubs. ISBN 0678006628
• Clark, John M. 1934. Strategic Factors in Business Cycles. Augustus M Kelley Pubs. ISBN 0678000166
• Clark, John M. 1935. The Economics of Planning Public Works. U.S. Government. printing office
• Clark, John M. 1936. Preface to Social Economics: Essays on economic theory and social problems. Farrar & Rinehart, Inc.
• Clark, John M. 1939 (original work published in 1926). Social Control of Business. Augustus M Kelley Pubs. ISBN 0678005265
• Clark, John M. 1944. Demobilization of wartime economic controls. McGraw-Hill Book Company.
• Clark, John M. 1948. An Alternative to Serfdom. A.A. Knopf
• Clark, John M. 1955. The Ethical Basis of Economic Freedom. C.K. Kazanjian Economics Foundation
• Clark, John M. 1968 (original work published in 1910). Standards and Reasonableness in Local Freight Discriminations. AMS Press Inc. ISBN 0404510973
• Clark, John M. 1978 (original work published in 1957). Economic Institutions and Human Welfare. Greenwood Press Reprint. ISBN 0313201846
• Clark, John M. 1980 (original work published in 1961). Competition as a Dynamic Process. Greenwood Press Reprint. ISBN 0313223009
• Clark, John M. 1981 (original work published in 1923). Studies in the Economics of Overhead Costs. University of Chicago Press. ISBN 0226108511

References

ISBN links support NWE through referral fees

• BookRags.com. Encyclopedia of World Biography on John Maurice Clark. Retrieved on February 7, 2007, <http://www.bookrags.com/biography/john-maurice-clark/>
• Clark, John B. 1916. Control of Trusts. A. M. Kelley. ISBN 0678006067
• Dell, Champlin P. 2004. J. M. Clark and the economics of responsibility. Journal of Economic Issues, 38(2), 545-553
• Dobb, Maurice. 2002. Theories of Value and Distribution since Adam Smith. Cambridge University Press. ISBN 0521099366
• Hickman, Charles A. 1975. J. M. Clark. Columbia University Press. ISBN 0231031874
• Mayhew, Anne. 1997. Review of Laurence Shute's "John Maurice Clark: A Social Economics for the Twenty-First Century". EH.Net. Retrieved on February 9, 2007, <http://www.h-net.msu.edu/reviews/showrev.cgi?path=11011881622041>
• Shute, Laurence. 1997. John Maurice Clark: A Social Economics for the Twenty-First Century. St. Martin's Press. ISBN 0333536452
• Seligman, Ben. 1990. Main Currents in Modern Economics. Transaction Publishers. ISBN 0887388116

External links

• John Maurice Clark – Biography on Encyclopedia Britannica
• Bibliography – Major work of Clark
• John Maurice Clark on Marginal Productivity Theory. A note with some unpublished correspondence – Article by Luca Fiorito
• The costs of the World War to the American people – Full text online edition of Clark’s work
• Clark’s photo – Clark’s photography at Duke University website

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