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Davenport, Herbert J.

Davenport, Herbert J.



Herbert Joseph Davenport, American economist, was born in Wilmington, Vermont, in 1861 and died in New York City in 1931. His father, a leading lawyer, had been a Democrat in Republican Vermont, and the father and son shared a good measure of rugged individualism. Davenport’s forebears on both sides were members of old New England families that included the founders of New Haven, Connecticut, and Salem, Massachusetts.

While in his twenties Davenport went to South Dakota, invested his parental legacy in real estate, and made and lost a fortune. He studied successively at the University of South Dakota, Harvard Law School, the University of Leipzig, the Ecole des Sciences Politiques at Paris, and eventually at the University of Chicago, where he obtained his doctorate in economics in 1898. After serving as a high school principal in the Midwest, he taught at the University of Chicago from 1902 to 1908, then at the University of Missouri, where he was head of the department of economics and from 1914 to 1916 dean of the School of Commerce, and finally, from 1916 to 1929, at Cornell University.

Davenport was a man of strong personal loyalties that correspond to the complex nature of his position in American economic thought. When he published Value and Distribution in 1908, he dedicated it to J. Laurence Laughlin, soundest of economists, who had served as the first chairman of the department of economics at the newly founded University of Chicago. When, a dozen or so years later, Davenport was under consideration for the presidency of the American Economic Association, his loyalty to Laughlin was strong enough to cause him misgivings about accepting the post, because Laughlin had never held this high office. No less durable was the attachment that connected Davenport with the unorthodox and scintillating Thorstein Veblen, who was first his teacher and later his colleague at Chicago. Veblen considered Davenport one of his outstanding pupils, second only to Wesley Clair Mitchell. Davenport, in turn, stood by Veblen on many occasions when Veblen was in difficulties, securing employment for him at the University of Missouri in 1910, taking him into his home, and in later years more than once trying to find a place for him at Cornell.

Davenport claimed, half in jest, that he was drawn to the study of economics because he was sure that something was wrong with socialism and he wanted to find out what it was. As a young man at Chicago, he had sought out Veblen after class, eager to hear his frank opinion on this subject, but the great skeptic never gave him a direct answer. Again, in 1920, in his presidential address (1921), Davenport touched on the subject of socialism, saying that he was not a socialist because he was unable to predict what the socialist ideal would concretely turn out to be. He did not doubt, however, that political democracy was as readily possible in a collective as in a competitive economic order.

In his own way Davenport was as bitter a critic of business civilization as his master Veblen. He was convinced of the relative character of most economic doctrines, but his bent was not an institutional one. Rather than tracing changes in institutions, he set out to develop a theory that was to shed light on the economic environment in which he found himself. This theory was to be purged of the moralizing and psychologizing tendencies characteristic of the thought of Alfred Marshall and of the Austrians. It was to have no place for such concepts as utility, real costs, and the “social organism.” Instead, it was to be, more narrowly, “the science which treats phenomena from the standpoint of price” (1913, p. 25). On this basis, Davenport developed his economic theory in a “sound,” although not entirely conventional, manner, with such occasional shockers as the inclusion of abortionists and prostitutes among the ranks of producers and of burglars’ jimmies among wealth. At the end of this work, he stated the need for a new economics that is not “a system of apologetics, the creed of the reactionary, a defense of privilege, a social soothing sirup, a smug pronouncement of the righteousness of whatever is” (1913, p. 528). Economists, he claimed, have wrongly identified private gain with social welfare. There are echoes of John A. Hobson here as well as of Thorstein Veblen. It was no wonder that Davenport advised his students to take Veblen’s course, to which he considered his own work a prelude. Although Davenport’s views did not prevent his election as president of the American Economic Association in 1920, they scandalized not a few of his colleagues.

Davenport is remembered best as an early exponent of the concept of opportunity cost, which defines cost in terms of opportunities foregone. Underlying his system is the notion of a general interdependence of all prices, but this idea was not connected with the general-equilibrium approach of the mathematical school of Lausanne. Davenport’s critical view of utility, which, of course, he shared with others, prepared the ground for the acceptance of the indifference-curve approach, a theory developed by mathematical economists. In still other ways he was ahead of his time—for example, when he considered the problem of unemployment as “the most important practically and perhaps the most difficult theoretically” (1896, p. 355), when he developed what was then one of the best explanations of the multiple expansion of credit through the banking system (1913, chapter 17, pp. 260–266), or when he related the interest rate to the operations of the commercial banks rather than to psychological factors (1913, chapter 8, pp. 349 ff.).

Henry W. Spiegel

[For the historical context of Davenport’s work, see the biographies ofHobsonandVeblen.]


For a list of Davenport’s contributions to economic periodicals, see American Economic Association 1961.

1896 Outlines of Economic Theory. New York: Macmillan.

1908 Value and Distribution. Univ. of Chicago Press.

(1913) 1943 The Economics of Enterprise. New York: Macmillan.

1921 The Post-war Outlook. American Economic Review 11:1–15.

1935 The Economics of Alfred Marshall. Ithaca, N.Y.: Cornell Univ. Press; Oxford Univ. Press.


American Economic Association 1961 Herbert Joseph Davenport. Volume 1, page 185, and Volume 2, page 302 in Index of Economic Journals. Homewood, III.: Irwin. → Volume 1 contains 30 items by Davenport published from 1894 to 1921. Volume 2 contains 3 items published from 1925 to 1930.

Copeland, Morris A. 1931 Herbert Joseph Davenport (obituary). Economic Journal 41:496–500.

Dorfman, Joseph (1934) 1961 Thorstein Veblen and His America. New York: Viking; Kelley Reprints.

Dorfman, Joseph 1949 Herbert Joseph Davenport: Conflict of Loyalties. Volume 3, pages 375–390 in Joseph Dorfman, The Economic Mind in American Civilization. New York: Viking.

Homan, Paul T. 1931 Herbert Joseph Davenport 1861–1931 (obituary). American Economic Review 21:696–700.

Hutchison, Terence W. (1953) 1962 A Review of Economic Doctrines, 1870–1929. 2d ed. Oxford: Clarendon.

Kendrick, M. Slade 1944 Herbert Joseph Davenport. Volume 21, page 224 in Dictionary of American Biography. New York: Scribner.

Knight, Frank H. 1931 Herbert Joseph Davenport. Volume 5, pages 8–9 in Encyclopaedia of the Social Sciences. New York: Macmillan.

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