Jacob Viner (May 3, 1892 - September 12, 1970), was a Canadian-born American economist. Together with Frank Hyneman Knight he was one of the leading figures at the Chicago School of the inter-war period. However, his views were quite different from those of Knight, favoring the Marshallian "real cost" theory and was generally not in favor of free markets. His commentary on Adam Smith and his theory of international trade stand as classics.
He made significant contributions to the theories of cost and production and international economics, but it was his work on the history of economic thought and the criticism of Keynes that made him famous. Viner is known for his belief, contrary to the analyses of Keynes, that it is the long-term that really matters. Viner believed in justice, liberty, and individual freedom for all. He worked hard and expected hard work from others. He respected those who showed integrity in their work, even if they were in disagreement. While he did not have the answers to making an ideal society, he believed that advances could be made and worked diligently for such improvements.
Viner graduated with a B.A. from McGill University in 1914, where he studied economics under Stephen Leacock. He then moved to the United States and enrolled in graduate studies at Harvard University. He earned his M.A. in 1915 and his Ph.D. in 1922, studying under Frank W. Taussig, the international trade economist. Viner’s doctoral dissertation, Canada's Balance of International Indebtedness, was written under the supervision of Taussig.
Viner married Frances V. Klein of West Virginia in 1919, with whom he had two children: a son, Arthur, and a daughter, Ellen.
He was an adviser to the United States Tariff Commission from 1917 to 1919, and an adviser to the Shipping Board in 1918.
Viner served as an instructor at the University of Chicago from 1916 to 1917, and became an assistant professor of economics in 1919. In 1923, he was promoted to associate professor, and in 1925 to full professor. He first taught public finance and international economic policy, but later started teaching value and distribution theory, international economic theory, and the history of economic thought. During his time in Chicago, Viner elevated the level of the economics department, making it one of the top schools of economics in the nation.
At various times he taught also at other universities, including Stanford (1937), Yale (1942-43), and the University of California (1945). He taught at the Institut Universitaire de Hautes Etudes Internationales in Geneva, Switzerland twice (1930-1931 and 1933-1934), and at the National University of Brazil (1950).
Viner served as an American representative to the Economic Committee of the League of Nations at Geneva in 1933. From 1934 to 1942, he periodically served as special assistant to the United States Secretary of the Treasury, Henry Morgenthau, Jr.. Through his work, he influenced the economic policies of the Roosevelt administration, especially in the planning of the Social Security Program. He also served as president of the American Economic Association in 1939.
In 1946 Viner left for Princeton University, where he served as the Walker Professor of Economics and International Finance from 1950 to 1960. He taught theory of international trade and the history of economic thought. He also served as a member of the Editorial Board of the University Press from 1950 to 1953, and as an elective Trustee of the University Press from 1959 to 1961. He was also a member of the Institute for Advanced Study in Princeton from 1946 to 1970.
Viner retired in 1960 but continued to research and write. From 1961 to 1962 he spent a year at Harvard University as the Taussig Research Professor. He was awarded Francis A. Walker Medal in 1962, and was elected a distinguished fellow of the American Economic Association in 1965.
Viner died on September 12, 1970, in Princeton, New Jersey.
Viner’s early works were preoccupied with the problems of methodology in political economic theory. In them he defended the inductive method. In 1923 he published his Dumping: A problem in International Trade, which marked his turn to trade theory, which he continued to work on throughout his whole career.
Viner was a noted opponent of John Maynard Keynes. While he agreed with the policies of government spending that Keynes pushed for during the Great Depression, Viner argued that Keynes's analysis was flawed and would not stand in the long run. He held that the Great Depression was sustained by deflation in output prices dropping faster than the collapse in costs. He believed that recovery of the economy could be achieved by government-induced inflation, not by monetary expansion but rather by deficit spending. He was much in favor of fiscal policy, in opposition to fixed rules.
Viner criticized Keynes’ analysis of Great Depression over liquidity preference and over, as Viner saw it, oversimplified theory of effective demand. He characterized Keynes’ theory as "short-run" while seeing neoclassical theory better fitting crisis-handling in the "long-run." In his book The Long View and the Short (1958), Viner wrote:
No matter how refined and how elaborate the analysis, if it rests solely on the short view it will still be... a structure built on shifting sands.
In the history of economic thought, Viner was most famous for his work on Adam Smith and his magnum opus, Studies in the Theory of International Trade (1937). In it he explained in great detail the Bullionist Controversy of nineteenth-century Britain.
Viner was, together with Frank H. Knight, one of the leaders of the Chicago School in the inter-war period. He however disagreed with Knight over cost theory—Knight supporting the Austrian doctrine of opportunity cost, while Viner the Marshallian "real cost" theory. They however had great respect for each other and frequently collaborated on various projects.
Viner is noted for a wide range of contributions to many areas of economics. He developed the long- and short-run cost curves that are still in use. He also introduced the terms trade creation and trade diversion in 1950. It is, however, for his work on the history of economic thought and international trade theory that he remains most remembered.
At both Chicago and Princeton, Viner had a reputation as being one of the toughest professors, and many students were terrified by the prospect of studying under him. All of them, however, respected him and had great admiration for his work, and thus he also had lasting impact on economic thought through his students. He deeply influenced Milton Friedman, who was his graduate student in 1933.
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