Simon Nelson Patent – Economic History

Professor Simon Nelson Patten

Economic History Of United States

Professor Simon N. Patten (1852-1922) was one of the most original economists America has produced. His chief economic writings are Premises of Political Economy (1885), The Consumption of Wealth (1889), Dynamic Economics (1892), and The Theory of Prosperity (1902). He was an idealist in philosophy, who believed that under social planning a dynamic society experiences increasing utility, growing popu­lation with higher living standards, and larger profits. To indi­cate briefly some of Patten's characteristic doctrines:2 he developed the importance of consumption, making the changes that adapt it to environment a factor in reducing costs as men progress; he was optimistic, denying a law of diminishing returns; he regarded the shares in distribution as price-deter­mined, costs cutting no figure; and, in order to harmonize the idea of increasing demands with that of increasing returns, he made monopoly normal and gave it a large part. The idea of alternative use and opportunity costs finds frequent expression in his works. Patten pointed out that land will not be aban­doned exactly at the point where returns just fail to cover costs of bringing it under cultivation, but that production will be carried further.

Professors Clark and Patten differ markedly in the place which they give to monopoly. The former gives it scant atten­tion, and its role in his theory is unimportant. With the latter the opposite is true. Accordingly, they also differ in the scope which they would allow to government interference, and, while Professor Clark would emphasize private property rights and minimize government activity, Professor Patten would allow to the government an active policy in maintaining the social interest. In his later thought, Professor Clark perhaps made a larger place for government intervention, but it was for the purpose of maintaining his ideal of competition free from restraint.