The Economics of Irving Fisher: Reviewing the Scientific Work of a Great Economist (review)

The Economics of Irving Fisher: Reviewing the Scientific Work of a Great Economist. Edited by Hans-E. Loef and Hans G. Monissen. Cheltenham, U.K., and Northampton, Mass.: Edward Elgar, 1999. xv; 343 pp. £59.95; $95.00

This useful collection’s subtitle is a little misleading, for some essays are more concerned with current work on Fisherian topics than with Irving Fisher’s own work, appropriate enough in a conference volume marking the fiftieth anniversary of his death, but not perhaps of immediate interest to readers of this journal. This book also reprints one or two papers, including William Barber’s introductory essay to Pickering and Chatto’s 1997 collection of Fisher’s Works, albeit supplemented here with a new note on working with Fisher’s papers.

There are, however, interesting new essays here, not least on Fisher’s monetary economics, which, along with Robert Dimand’s reprinted paper on debt deflation and a reworked piece by Frank Steindl titled “Fisher, the Quantity Theory, and the Great Depression,” amount to a comprehensive reading list on this topic. Dimand’s new offering surveys Fisher’s monetary macroeconomics, placing his work firmly in the context of the contemporary literature. His discussion of Fisher’s cycle theory is notable for facing up to its rather slapdash quantitative element and for an appreciative discussion of the criticism it drew from the unjustly neglected Minnie England. Dimand also finds more continuity in Fisher’s adherence to the quantity theory into the 1930s than does Steindl, although this debate is not explicitly joined here.

Thomas Humphrey compares Fisher and Knut Wicksell as quantity theorists and argues, with his usual exemplary clarity, that the similarities between them are far more important than the differences. I am not quite convinced: suffice it here to note that Axel Leijonhufvud uncovered a “Wicksell connection,” not a “Fisher-Wicksell connection,” in interwar macroeconomics; but let me also concede to Humphrey that the sharp distinctions some of us make between Fisher and Wicksell owe much to what others would later do with their ideas.

The editors of this collection contribute a wide-ranging discussion of Fisher’s work on monetary policy and of its relationship to the modern literature on monetary rules. This is organized around an algebraic formulation of a modern Fisherian macromodel. While Dimand and Humphrey do present some algebraic arguments, these are much more subservient to their discussion of the original texts. One can do the history of thought in either way, but this contrast in styles makes this group of essays less well integrated overall than it might have been.

Fisher’s econometric and statistical work receives a thorough and admiring treatment from John Chipman, perhaps a bit too admiring when he says that Fisher “took care to confront his theories with facts in a way that no economist had done before.” What about Sir William Petty, Thomas Tooke, and William Stanley Jevons, among others, as earlier pioneers of empirical economics? Chipman concedes Fisher’s frequent carelessness, but forgives it as the mark of a great economist who “stuck his neck out.” He pays careful attention to the work of Fisher’s contemporaries, so this absolution is a well-informed one, but David Hendry and Mary Morgan’s (1995, 45–50) less charitable verdict is not explicitly discussed. Chipman also debunks the idea that Fisher invented the Phillips curve, pointing out that, for him, causation ran from inflation to unemployment, and not vice versa; to which I cannot resist adding that Milton Friedman (1975) also noted this difference and endorsed Fisher’s “truth” as opposed to Bill Phillips’s “error,” thus helping to lead macroeconomics up the neoclassical garden path. Horst Entorf here uses postwar U.S. and German evidence to show that Phillips was right on this point.

This collection also contains worthwhile interpretive essays on Fisher’s work by Bertram...