Newcomb, Simon
Newcomb, Simon
Internationally known during his lifetime as one of America’s greatest scientists and one of the world’s leading astronomers, Simon Newcomb (1835-1909) has only recently been recognized as the first major American mathematical economist. His four books and numerous articles on economics represent only a small part of an extraordinarily rich and varied intellectual contribution, but, as he remarked in his autobiography, economics was only his avocation.
Newcomb’s early experiences directly influenced his approach to economic and social questions. Born in Nova Scotia in humble circumstances, he received little formal education, but after a brief period as a country schoolmaster he obtained his first degree at the Lawrence Scientific School of Harvard in 1858, while employed as a computer on the Nautical Almanac. From 1861 until his retirement in 1897, he was professor of mathematics in the U.S. Navy and was superintendent of the American Ephemeris and the Nautical Almanac from 1877. His prodigious lunar investigations earned him innumerable awards and distinctions, including 17 honorary degrees from leading universities in 10 different countries. He occasionally lectured in political economy at Harvard and examined in economics at Johns Hopkins, where he was professor of mathematics and astronomy, and his bibliography includes many works on politics, education, theology, psychic research, and fictional topics, as well as his contributions to various scientific disciplines.
Having overcome his early difficulties by sheer ability, will power, and unceasing toil, Newcomb took a ruggedly individualistic view of current economic and social problems. A vigorous critic of labor unions, he wrote an unsigned review of Richard T. Ely’s sympathetic study The Labor Movement in America (1886c), denouncing his Johns Hopkins colleague as unfit to occupy a university chair. Newcomb’s first book on economics, A Critical Examination of Our Financial Policy During the Southern Rebellion (1865), attacked inconvertible paper money as immoral and inexpedient. This book, like his popular works The ABC of Finance (1878) and A Plain Man’s Talk on the Labor Question (1886a), was designed to expose the fallacies prevalent among “practical” businessmen and the general public and to show that elementary economic principles were directly applicable to current affairs. But although his lucid prose made him an effective expositor, Newcomb’s scientific training blinded him to the complexities of social processes.
During the controversy of the mid-1880s, which marks the beginning of modern American economics, Newcomb was prominent among those who defended the “orthodox,” or “old,” school of Ricardian political economy against the attacks of the “new,” German-inspired school of historical economists. His influence as president of the Political Economy Club, a small but important group of conservative economists and publicists, was enhanced by his scientific reputation, which lent additional authority to his claim that no essential methodological difference existed between the “old” and the “new” viewpoints. But although the “old” school emerged victorious in the 1890s, Newcomb became increasingly dissatisfied with the trends of academic economics, protesting that the professional economists were retreating before the rising tide of popular nostrums.
Newcomb’s enthusiasm for economics began in 1854, when he rejoiced at finding “human affairs treated by scientific method” in J. B. Say’s Political Economy. But although he was primarily interested in the practical applications of economic principles to public policy, twentieth-century economists esteem him as a mathematical theorist. Before he published his favorable review of Jevons’ Theory of Political Economy in 1872, Newcomb had discussed the theory of competitive price with the pragmatist philosopher C. S. Peirce, and unpublished manuscripts reveal his familiarity with the concept of demand elasticity and the principle of substitution. Newcomb may, however, have learned both of these ideas from reading Cournot, whereas his Principles of Political Economy (1886b) was strikingly original. In Book 4 of the Principles, entitled “The Societary Circulation,” he elaborated the crucial distinction between “fund” and “flow” concepts, tracing the interactions between currency and commodity flows. A few pages later he presented an “equation of societary circulation,” VR = KP (where V = number of dollars; R = average velocity of circulation; K = number of transactions; and P = scale of prices), which formed the basis of Irving Fisher’s well-known “equation of exchange,” MV = PT. Newcomb also anticipated Fisher’s proposal for a “compensated dollar,” the gold content of which could be varied to compensate for price changes; and his discussion of the interest rate, his distinction between prospective and actual demand, and his analysis of income and hoarding all represent significant steps toward modern macroeconomic and monetary analysis.
Unfortunately, Newcomb’s Principles was too far ahead of its time to exert much influence upon the economists of his day. Yet despite his disappointment, Newcomb’s confidence was unshaken, and in 1904 he unsuccessfully endeavored to obtain support for an ambitious systematic investigation of the “practical” operation of economic causes that was somewhat akin to a present-day econometric study. Also in that year Newcomb presided at the Congress of Arts and Science, a great international gathering of scholars at the Louisiana Purchase Exposition of 1904 at St. Louis. He remained active until his death in 1909.
A. W. Coats
[For the historical context of Newcomb’s work, see the biographies ofCournot; Ely; for discussion of the subsequent development of his ideas, seeMoney, article onQuantity Theory; and the biography ofFisher, Irving.]
works by newcomb
1865 A Critical Examination of Our Financial Policy During the Southern Rebellion. New York: Appleton.
1872 Jevons’ Theory of Political Economy. North American Review 114:435-440.
1873 A Mechanical Representation of a Familiar Problem. Royal Astronomical Society, Monthly Notices 33: 573-574.
1878 The ABC of Finance: Or, the Money and Labor Questions Familiarly Explained to Common People, in Short and Easy Lessons. New York: Harper.
1886a A Plain Man’s Talk on the Labor Question. New York: Harper.
1886b Principles of Political Economy. New York: Harper.
1886c Dr. Ely on the Labor Movement. Nation 43:293-294.
1893 The Problem of Economic Education. Quarterly Journal of Economics 7:375-399.
1903 The Reminiscences of an Astronomer. Boston: Houghton Mifflin.
supplementary bibliography
Abbot, Charles G. 1934 Simon Newcomb. Volume 13, pages 452-455 in Dictionary of American Biography. Edited by Dumas Malone. New York: Scribner.
Campbell, W. W. 1924 Biographical Memoir; Simon Newcomb: 1835-1909. National Academy of Sciences,Memoirs 17:1-69. ? Contains a bibliography of Newcomb’s writings prepared by R. C. Archibald.
Coats, A. W. 1961a The Political Economy Club: A Neglected Episode in American Economic Thought.American Economic Review 51:624-637.
Coats, A. W. 1961b American Scholarship Comes of Age: The Louisiana Purchase Exposition, 1904. Journal of the History of Ideas 22:404-417.
Dorfman, Joseph 1946-1949 The Economic Mind in American Civilization. Vols. 2-3. New York: Viking.
Eisele, Carolyn 1957 The Charles S. Peirce-Simon Newcomb Correspondence. American Philosophical Society, Proceedings 101:409-433.
Hutchison, Terence W. (1953) 1962 A Review of Economic Doctrines: 1870-1929. 2d ed. Oxford: Clarendon.