Richard Ely (1854-1943) is considered the dean of American economics for his development of political economic theory. As an instructor at several major universities, he became a popular writer and lecturer. His students included Woodrow Wilson, sociologist Albion W. Small, economists John R.Commons and Edward A. Ross, and historian Frederick Jackson Turner.
Richard Theodore Ely was born on April 13, 1854, in Ripley, New York, the eldest of three children of Ezra Sterling and Harriet Gardner (Mason) Ely. Soon after Ely's birth, his father moved the family to a 90-acre farm near Fredonia, New York, where Ely would spend the next 16 years. The elder Ely was a self-taught engineer and lacked the skills and knowledge to farm successfully, relying too heavily on popular, sometimes erroneous, information he obtained from farm magazines. Although harsh weather and fluctuating market prices provided further hardship to the family, Ely credited his early farm life with instilling in him many valuable qualities. From a young age he had numerous responsibilities in maintaining the farm, including carrying wood, churning butter, picking up rocks out of the fields, and milking the cows.
Family and Education
Ely's father, a devout Presbyterian who strictly observed the rules of a Christian life, was a powerful influence on his eldest son. Because of his beliefs, he would not grow hops, even though the crop suited his land well, because they were used for brewing beer. He disdained tobacco and other vices, and permitted no work or play on Sunday. Academically minded, Ezra Ely would have preferred an academic career, but his parents' poverty forced him to forego his studies. Still, Ely grew up in a home that honored the importance of learning, where his father read poetry, studied Latin, and maintained one of the largest libraries in the area. His father's deeply serious, sometimes gloomy, nature was countered by his mother's gentle kindness. Although Ely inherited his father's work ethic, he was emotionally closer to his mother, to whom he turned for support and advice. Often in fragile health, Harriet Ely nonetheless possessed abundant energy and vitality. As an amateur artist, she won numerous local prizes and added to the family income by teaching art at the Fredonia Normal School. Ely, who stood only five foot five, made up for his slight stature by inheriting his mother's unending energy. From his father he received his Christian values and his resolve to make those values a reality in the world.
Ely's early education at Fredonia's grammar school and later two years at Fredonia Academy were fairly uneventful. Although he was a serious, hard-working student and graduated with a recommendation from the principal to attend college, Ely was never considered an exceptional student. During the year following his graduation, he taught at a country school and continued to help his father with the farm. In the fall of 1872, Ely enrolled in Dartmouth College, which at the time consisted of a scattering of buildings and a very small library that was only open two hours every week. Dissatisfied with his experience at Dartmouth, the following year he moved to New York City to live with an aunt and uncle and began attending Columbia College, where he found a more challenging academic environment. He came under the influence of Charles Murray Nairne, who sparked Ely's interest in philosophy. During his senior year, Ely applied for and won the college's Fellowship in Letters, which provided him with a $500 award to study abroad for three years. After graduating with a B.A. in philosophy from Columbia College, Ely traveled to Germany to pursue his philosophical studies. However, soon after arriving, his attention was forever turned to the field of economics.
Turned to Economics
After spending the summer of 1877 polishing his skills in the German language, 23-year-old Ely went to Halle to begin his studies. Although he had no more than a vague idea of his course of action, Ely encountered several American students, including Simon N. Patten, who helped him settle in and became a life-long friend. Discovering that the professor he had hoped to study under had retired, Ely began his studies with Rudolph Haym. However, Haym's skeptical approach to philosophy disillusioned Ely. Patten introduced his friend to Johannes Conrad, an expert in the German Historical School of economics. Conrad offered Ely his first taste of historical economics, a school of thought that rejected the traditional approach that economics was based on fixed, unchangeable concepts. Instead, historical economics understood economic behavior as an outcome of fluctuating cultural patterns and government behavior. He left Halle in April 1978 to study with leading historical economist Karl Knies at the University of Heidelberg.
Ely enjoyed his time in Heidelberg immensely. Far from his father's strict lifestyle, Ely discovered that life could be enjoyed through the simple pleasures of nature, such as a walk through the countryside. He also thrived in the multi-cultural environment of the university and the open learning atmosphere in which professors allowed students to seek new knowledge through research. This was in stark contrast to the dry American professors who required students to merely recite established truths. Ely thrived under his mentor Knies. Although not the most popular professor, the aging Knies offered Ely a theory of economics that allowed him to harmonize his academic mind with his desire for social reform. The goal of economics was, according to Knies, to make life better. Ely earned his Ph.D. in 1789, graduating summa cum laude.
A Position at Johns Hopkins University
After spending one more year abroad, studying at the universities in Geneva and Berlin, Ely returned to New York and began to look for an academic position. Unfortunately, few American colleges offered programs in political economy at the time, and Ely spent a year writing an occasional article for popular magazines and provided for himself by tutoring students in German. Finally, in 1881 he was offered a six-month appointment as an instructor at Johns Hopkins University in Baltimore, Maryland. He was given a salary of $600 and later was appointed for the remainder of the year for an additional $500. Although his first year of teaching produced no great results, his contract was extended for the following academic year of 1882-1883. While vacationing in 1883, he met Anna Morris Anderson. Two years later the couple married. They had four children: Richard Sterling, Josephine Anderson (who died in infancy), John Thomas Anderson, and Anna Mason.
Initially, Ely only drew a handful of students into his classes. When he presented a public lecture series, it was poorly attended. Several of his graduate students complained that Ely was repetitious, ill tempered, and obsessed with the German Historical School of economics. Ely was, in fact, temperamental in nature. According to Benjamin G. Rader in The Academic Mind and Reform: The Influence of Richard T. Ely in American Life, "The failure of the public to respond instantly to his mission and of his fellow professors to perceive the righteousness of his cause often led to personal bitterness and an attitude of moral superiority. Frequently he confused criticism of his methods with a personal challenge to his sincerity; such criticism almost always meant a ruptured friendship." Nonetheless, Ely's growing reputation as a controversial reformer began to spark interest among the student body. By the mid-1880s, his classes were filled with 30 to 40 students. To his students, he remained loyal, often encouraging their work and writing numerous glowing letters of recommendation. He was also known to acknowledge his students' contributions to his own writings.
In 1885 Ely was instrumental in the formation of the American Economic Association (AEA), writing its statement of purpose and serving as secretary (1885-1892) and later as president (1900-1901). The AEA was formed as a voice for the new progressive economic theorists who found strong opposition to their views from the classic economists. Committed to the political nature of economics that he believed should be for the good of the people, meant that Ely engaged in social reform. This aggressive pursuit of social change stood in contrast to the traditional distance that the academic community maintained from the outside world. During his time at Johns Hopkins, Ely gained national prominence as a proponent of public ownership of utilities, the labor movement, and state taxation policies. He advocated social reforms such as factory regulation, child labor laws, restrictions on the number of hours in a workday, the formation of labor unions, slum cleanup, and immigration restriction.
Unlike other proponents of the "new" economics, Ely applied his Christian convictions to his economic theory. Having given up his father's Presbyterianism to become an Episcopalian, Ely remained a devout layperson throughout his life. Promoting the social responsibility of the Christian community, Ely helped form the Episcopal Church's Christian Social Union and served as its first secretary. At first Ely hoped for a gradual evolution of the economy toward a cooperative commonwealth, but later he stepped back from this lofty goal. Instead, he began to narrow his focus of reform to specific issues, such as governmental ownership of national monopolies, including public utilities, telephones, railroads, and mineral deposits. He objected to being labeled a socialist and by 1890 began referring to himself as a progressive conservative.
Moved to the University of Wisconsin
In 1892 Ely left Johns Hopkins to become the director of the newly formed School of Economics, Political Science, and History at the University of Wisconsin. After two years, Ely was brought before the board of regents on charges by Johns Hopkins colleague Simon Newcombe, who declared Ely unfit to teach because he supported socialist ideas. When the board cleared him and asserted his right to teach free from censorship, it was a celebrated precedent for academic freedom. Spending over three decades at Wisconsin, Ely built the school's economics department into a nationally acclaimed program. He also helped establish the American Association for Labor Legislation in 1906, an organization that later greatly influenced the adoption of the Social Security Act of 1937.
In 1917, Ely helped organize the American Association for Agricultural Legislation. Three years later he founded the Institute for Research in Land Economics and Public Utilities, which incorporated as an independent research institute in 1922. His policies regarding land reform brought bitter opposition, and in 1925 Ely left Wisconsin, accepting an invitation to move his institute to Northwestern University in Evanston, Illinois. There he met Margaret Hale Hahn. In 1931, the 77-year-old Ely (widowed since 1923) married Hahn, his 33-year-old former student. They had two children, William Brewster and Mary Charlotte. While at Northwestern, the institute expanded and began publishing the Journal of Land and Public Utility Economics. However, after eight years, Ely grew tired of interference from the university's board of trustees. In 1933 he moved the institute to New York City, where it operated as an independent organization. Eventually he retired to the town of his ancestors, Old Lyme, Connecticut. He died there on October 4, 1943. His ashes were interned at Forest Hill Cemetery, Madison, Wisconsin.
Over the course of his academic career, Ely wrote 31 books and published over 100 articles. His Outlines of Economics (with Ralph H. Hess, 1893) was used widely in the United States and Japan as a principle classroom text. His other most widely read publications include French and German Socialism in Modern Times (1883), Taxation in American States and Cities (with J.H. Finley, 1889), Introduction to Political Economy (1889), Monopolies and Trusts (1900), Studies in the Evaluation of Industrial Society (1903), Foundations of National Prosperity (1917), Elements of Land Economics (1926), Hard Times-The Way In and the Way Out (1931), and Land Economics (1940). He published his autobiography, titled Ground under Our Feet, in 1938. Books that reflected his Christian foundation and his socialist concepts are related in Recent American Socialism (1885), Social Aspects of Christianity (1889), and Socialism and Social Reform (1894). Through his writing, his teaching, and his personal example, Ely influenced a whole generation of economists and political leaders. In so doing, he initiated reform, generated discussion and controversy, and did his best to fulfill his goal of changing the world for the better.
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