Publication: A Princeton Companion
Economics, The Department of. The subject matter that came to be called ``political economy'' and still later ``economics'' developed only slowly as a distinct field of study at Princeton. This was partly because of the late development and differentiation of ``the social sciences'' generally, and partly because of Princeton's devotion to her classical curriculum. Although, almost from the beginning in 1746, topics in political economy, along with those in many other fields, received attention in courses entitled ``moral philosophy,'' there was no specific course in political economy until 1819. In that year the College initiated a one-term course that all students were required to take along with seven other courses in various fields. This constituted Princeton's entire curriculum in economics until 1890, and it was taught by men whose primary responsibilities were in such diverse fields as belles lettres, natural philosophy, mathematics, and jurisprudence.
The situation began to change in 1890, when Woodrow Wilson came to Princeton as Professor of Jurisprudence and Political Economy. Wilson moved the required senior course in political economy to junior year and introduced an ``advanced'' course, the History of Political Economy, as a senior elective. But Wilson's primary interests were in jurisprudence, law, and politics, and he was probably happy, therefore, to relinquish his teaching in political economy in 1892 to a newcomer, Winthrop More Daniels, who had been valedictorian of the Class of 1888. Daniels was the first specialized economist on the faculty and for nearly twenty years was the leader in developing economics at Princeton, both quantitatively and qualitatively. Professor Wertenbaker has reported that Daniels ``caused a panic'' by announcing that ``economics would no longer be a snap,'' and only his able teaching and the growing interest in the subject permitted him to survive ``the consternation caused by this bold break with tradition.'' In 1904, when the faculty was divided into departments, Daniels became the first chairman of the new Department of History, Politics, and Economics. By the time he left Princeton in 1911 to accept Wilson's appointment as chairman of the New Jersey Public Utility Commission, economics had grown markedly; there were now six faculty members, five undergraduate courses, most of them extending over two terms, and some graduate seminars. Daniels was succeeded by Frank Albert Fetter, a distinguished economist who came from Cornell and was elected president of the American Economic Association in 1912. When economics was split off from history and politics to form a separate Department of Economics and Social Institutions in 1913, Fetter became its first chairman, and he was a key person in the growth of the department until his retirement in 1933.
Economics at Princeton expanded rapidly in the years between the two world wars. By 1929, its faculty had grown to 22 members. Its undergraduate curriculum included 13 courses and a program for independent work, and in terms of undergraduate majors it was one of the largest departments in the University. Graduate study in economics also rose markedly, although, consistent with University policy at that time, the number of graduate students was kept relatively small. Prior to 1920, the University had awarded only five doctoral degrees in economics; 37 were awarded in the next two decades. Two research sections were established during this period: the Industrial Relations Section, headed first by Robert F. Foerster and then by J. Douglas Brown, who was later to become dean of the faculty; and the International Finance Section, headed by Edwin Walter Kemmerer. Several economists in the department achieved widespread recognition. Perhaps the best known were Fetter, who was widely esteemed as an economic theorist; Kemmerer, who achieved international repute as ``the money doctor'' (missions that he headed played leading roles in monetary reform in many foreign countries) and was president of the American Economic Association in 1926; and Frank Dunstan Graham, a recognized leader in the field of international economics.
Since World War II the department has experienced numerous changes, some stemming from changes in the scope and content of economics, and some from developments within the University. Economics grew at an unprecedented rate during this period, reflecting the rapid accumulation of empirical materials, new analytical techniques, and new fields of study and research. Macroeconomics became a major field, reflecting theoretical developments by Keynes and others as well as new national interest in the behavior of national income, employment, and price levels. New courses in economic development resulted from the rise of international concern for the plight of the less- developed countries. The genesis of urban economics was a response to the growing problems of our cities. Econometrics developed as a useful technique for testing and quantifying economic theories, old and new; and mathematical economics emerged as a powerful technique of analysis. Virtually all branches of economics became more ``scientific'' in that they employed more empirical materials and more precise methods of analysis.
Developments within the University have also had strong impact on the size and role of the department. Undergraduate enrollments were swollen by the increased size of the student body and the continuing popularity of economics as a field of study. Most undergraduates took at least one course in economics -- many still remember such outstanding teachers as William G. Bowen and Burton G. Malkiel -- and a large number of them majored in the department. The expansion of the graduate school was accompanied by a commensurate increase in the number of graduate students in economics and expansion of the graduate curriculum. A heightened interest in economic research was reflected in both the growth of individual investigation and publication, and the creation of four new organizations: the Office of Population Research, headed first by Frank Notestein and then by Ansley J. Coale; the Econometric Research Program, directed first by Oskar Morgenstern and later by Gregory Chow; the Research Program in Economic Development, conducted by W. Arthur Lewis and then by John P. Lewis; and the Center for Financial Research, led by Burton G. Malkiel.
The creation of the graduate program in the Woodrow Wilson School in 1947 and its marked expansion after 1961 have engaged the efforts of many economists. Among those involved were Donald H. Wallace, who created the graduate program; Gardner Patterson, who presided over its expansion; John P. Lewis, who served as dean of the school; and William G. Bowen and Richard A. Lester, who served as associate deans. Many more economists are teachers in the program.
By the end of World War II most of the faculty who had carried the work of the department in the prewar period had retired and had not been replaced. The department had not only to provide for these replacements but also to make large net additions to its staff to meet its mounting responsibilities. To do this and also improve quality proved to be no easy task in an academic market in which able economists were scarce and in great demand. But somehow it was done. By the early 1970s the department had more than 40 members and was generally conceded to be well within the top seven or eight economics departments in the country. Only a few of the many members who contributed to this reputation can be mentioned here: Jacob Viner, one of the most versatile and eminent economists in the English-speaking world; W. Arthur Lewis, a leader in development economics; William J. Baumol, an outstanding economic theorist; Ansley J. Coale, a distinguished demographer; Fritz Machlup, an expert in international economics and president of the American Economic Association in 1966; Oskar Morgenstern, best known for his work in game theory; and Richard A. Lester, Frederick H. Harbison, and Albert Rees in labor and social economics. In the long run, of course, the future of any department depends on the quality of its younger members. On this score the department has ample reasons for optimism.
Lester V. Chandler
From Alexander Leitch, A Princeton Companion, copyright Princeton University Press (1978).