Common Legacy Commons at Legacy

Common Legacy, Legacy Common Problems

Commons at Legacy: Commons has been described as "the intellectual origin of the movement toward the welfare state."23 The year after his arrival in Madison in 1904, he drafted a civil service law for Governor La Follette; in subsequent years he influenced social legislation in the following areas: regulation of public utilities, industrial safety laws, workers' compensation, child labor laws, minimum wage laws for women, and unemployment compensation laws. The unemployment compensa­tion legislation was possibly Commons's greatest achievement in social legisla­tion. His reaction to the depression of 1920 and his study of European unemployment compensation programs led him to draft a bill for the Wisconsin legislature. Versions of this bill were introduced again and again, until finally in 1932 a former student of Commons, Harold Groves, then both a senator and a professor of economics specializing in public finance at the university, introduced the bill that finally passed. In 1934, when Roosevelt urged Congress to pass an unemployment compensation law, he formed a Committee on Economic Security to propose legislation; its director was a student of Commons, E. E. Witte, then a professor of economics at Wisconsin.

Commons's efforts in these areas of social legislation proceeded from his conviction that the modern industrial economy required government interven­tion if it were to function properly and if social justice were to be achieved. Much of the legislation originating in Wisconsin would not strike modern readers as particularly radical, visionary, or even socialistic. Yet in Commons's time these ideas for social reform were not generally accepted in the United States. Commons represents, on this score, an unusual type of heterodox economist. He did more than merely object to the orthodox theory that for the most part the market was best left alone to allocate resources; he was interested in changing the situation through social legislation and participated actively in the endeavor to do so. Not all his efforts were successful; for example, he did not succeed in achieving a national health insurance program.

A second contribution of Commons is related to his endeavors in the area of social reform. The economics department of the University of Wisconsin became known as a major graduate training center for economists throughout the world. At one time more Ph.D. degrees in economics were being granted by Wisconsin than by any other university. More important, Commons's particular approach to economics became embedded in the fabric of the department; thus, until the 1980s, a "Wisconsin school" approach was maintained. This legacy is in sharp contrast to that of Veblen or Mitchell, who had no lasting impact on any graduate program.

The economics departments of the University of Texas at Austin under the leadership of C. E. Ayres and of the University of Maryland under Allan Gruchy also sustained particular heterodox approaches for short periods of time, but the number of Ph.D. degrees granted by those institutions and their influence were small compared to Wisconsin's. Greater historical perspective will be needed to understand the demise of the Wisconsin school approach and, more generally, the end of the concentration of graduate education in heterodox economics in particular departments. With the exception of a few members of their faculties, Wisconsin, Texas, and Maryland seem safely back in the orthodox fold.
In any event, it appears that Commons's approach was not sustained or carried to other universities by its graduates because the economists trained at Wisconsin were, for the most part, oriented toward applied fields of economics rather than toward economic theory. Legions of them went out to serve in government, in research agencies, and in universities. But being interested in issues such as labor, public finance, and public utilities, they took little interest in orthodox theory, which was then almost exclusively microeconomic. Commons, as we will see, criticized orthodox theory but spent most of his time in applied fields and in social reform.

The Wisconsin school approach, which was heavily indebted to Commons, is dead in the sense that the Ph.D. program at Madison is now in the same tradition as programs at other universities in the United States. During the Commons period, however, and even for a time after World War II, it was possible to earn a Ph.D. at Wisconsin with less training in orthodox economic theory than the average undergraduate economics major receives today in standard intermediate theory courses. This is no longer true. Nevertheless, the influence of Commons resulted in Wisconsin's turning out a large number of economists over a period of nearly fifty years who carried their predilection for applied economics and social reform into research agencies, government, and other universities.

A third major contribution of Commons was to the field of labor economics. When his teacher, Richard T. Ely, a labor economist, moved from Johns Hopkins to Wisconsin, he brought Commons with him. Because Ely was interested in the history of the labor movement, he began to collect documents in labor history. He wanted Commons to produce from these materials a definitive history of labor in the United States, a work that was to occupy a good part of Commons's academic time at Wisconsin. Aided extensively by his graduate students, in 1910 Commons published A Documentary History of American Industrial Society, a ten-volume collection of major documents pertaining to labor history. This was followed by two volumes in 1918 and two in 1935 of the four-volume History of Labor in the United States. Commons became a recognized authority on labor in the United States, and Wisconsin became the leading university for producing labor economists. Its most notable graduate may be Selig Perlman, whose Theory of the Labor Movement (1928) is still a classic.