Frank Albert Fetter

Background

He was born in Peru, Indiana, the second of three children and only son of Harry George and Ellen (Cole) Fetter. His father, a photographer, was a native of Pennsylvania; his mother, of Indiana.

Education

After graduating from the Peru high school, Fetter entered Indiana University in 1879, but left after his junior year when the illness of his father made it necessary for him to help support the family.

Fetter returned to Indiana University in 1890 and received the A. B. degree the following year. He then pursued graduate studies in political economy at Cornell University (Ph. M. 1892), at the Sorbonne and the Ecole de Droit in Paris (1892 - 1893), and at the University of Halle in Germany, where he studied under Johannes Conrad and received a Ph. D. in 1894, summa cum laude. His doctoral dissertation outlined a population theory based on a critique of the Malthusian principle.

Career

For seven years he operated a bookstore in Peru and informally continued his education by reading many of the works he kept in stock.

Upon his return to the United States, Fetter taught economics at Cornell (1894 - 1895), Indiana University (1895 - 1898), Stanford (1898 - 1900), and again at Cornell (1901 - 1911).

In 1911 he became professor of political economy at Princeton, where he remained until his retirement in 1931, serving until 1922 as chairman of the department.

Fetter's economic thought--contained in six books and more than sixty articles--was distinguished by a devotion to simplicity and a creative skepticism toward established economic doctrines.

Focusing on the practical elements of modern economic problems, he sought a revision of the whole theory of economic distribution. Although in his Principles of Economics (1904), he accepted the traditional concept of the "economic man, " motivated by a pleasure-pain psychology, he grew increasingly critical of this approach and came to stress instead the mechanics of the market.

Similarly, Fetter subjected to critical reexamination the prevailing theories of wages, interest, capital, rent, and value. In his Economic Principles (1915)--the first volume of a revision of his earlier work--he propounded a new statement of the theory of value which adopted modern volitional psychology and eliminated Benthamite utilitarianism and hedonism.

The basis of value, he argued, was a "simple act of choice and not a calculation of utility. "

In 1923 Fetter attacked "Pittsburgh plus" in testimony before the Federal Trade Commission, which the following year ordered U. S. Steel to abandon the practice. His numerous articles on base pricing in general and his role as adviser to the FTC (1938 - 1939) laid the groundwork for court and commission decisions in the late 1940's declaring the system an unlawful price-fixing arrangement.

In The Masquerade of Monopoly (1931), Fetter took to task both the antitrust agencies and the courts for their failure to exorcise from the economy base pricing and other flagrant excesses of monopoly.

In his last commentary on the monopoly problem, published nearly two decades later, Fetter found no reason to change his earlier views. "In the tug of war between competition and monopoly in the United States, " he concluded, " 'the free competitive system' has on the whole, I fear, lost ground" (American Economic Review, June 1949, p. 695).

On other matters as well Fetter extended his personal commitment far beyond that of the detached scholar.

An interest in social welfare found expression as early as 1900-1901 when, on leave from Stanford, he participated in a study of low-grade housing in Chicago.

Fetter was vitally concerned with the issue of academic freedom and tenure, and participated actively in the deliberations and proceedings of the American Association of University Professors virtually from its founding.

Fetter died at his Princeton home of cardiovascular disease two weeks after his eighty-sixth birthday, and was buried in the Princeton Cemetery.

Achievements

• He was among the first of the professional economists to recognize the basing-point system of pricing as a price conspiracy at variance with the workings of the competitive marketplace. This system was epitomized by the famous "Pittsburgh plus" policy of the United States Steel Corporation, under which the manufacturer charged users of rolled steel products the Pittsburgh base price plus the freight from Pittsburgh, even if the steel were in fact produced at plants nearer the consumer. While at Princeton he was president of the New Jersey Conference for Social Welfare (1918 - 1919) and, during a year's leave of absence, manager of the National War Camp Community Service during World War I. Fetter earned the respect of his colleagues and students as a devoted teacher-scholar. Among the honors that came to him were the presidency of the American Economic Association (1912) and degrees from Occidental College and Colgate and Indiana universities.

Works

More photos

• book

  • Source Book in Economics: Selected and Ed. for the Use of College Classes

    (This book was originally published prior to 1923, and rep...)

  • Economic Principles ...

    (This book was originally published prior to 1923, and rep...)

  • The Principles of Economics: With Applications to Practical Problems

    (This book was originally published prior to 1923, and rep...)

  • The Principles of Economics, with Applications to Practical Problems

    ( This work has been selected by scholars as being cultura...)

  • Manual of References and Exercises in Economics For Use with Volume II. Modern Economic Problems

    (HardPress Classic Books Series)

  • The Essay of Malthus: a Centennial Review .: -1898

    (Originally published in 1898. This volume from the Cornel...)

  • The Principles of Economics, With Applications to Practical Problems 1904

    (Originally published in 1904. This volume from the Cornel...)

  • Modern Economic Problems
  • Modern Economic Problems Economics Volume II

Views

In his Economic Principles (1915)--the first volume of a revision of his earlier work--he propounded a new statement of the theory of value which adopted modern volitional psychology and eliminated Benthamite utilitarianism and hedonism.

Fetter's writings also anticipated by several decades two important later economic issues: consumerism, and the interaction between population growth and economic welfare. Fetter's major works, however, were concerned with the monopoly problem in the United States, the problem that dominated his writings during the last quarter-century of his life. In time, his style became more akin to that of Ida Tarbell and John Kenneth Galbraith than to that of the neoclassicists of his day.

He reviewed forty years of antitrust law enforcement and concluded that while millions of farmers and small businesses were subject to laws of competition, the giant combinations reaped the rewards of monopoly with immunity. Thus there was one law of the marketplace for the small and the poor, another for the big and the rich.

Quotations: Fetter's treatise, Principles of Economics (1904), has been described by Herbener as "unsurpassed until Ludwig von Mises's treatise of 1940, Nationaloekonomie. " In Rothbard's preface to the 1977 edition of Fetter's Capital, Interest, and Rent, he notes that he was first introduced to Fetter's work via a citation in Mises' Human Action and describes Fetter's views on interest and rent as being "Austrian" and influential on his own views.

. .. while reading Fetter's oeuvre in the course of writing my Man, Economy, and State. .. I was struck by the brilliance and consistency of his integrated theory of distribution and by the neglect of Fetter in current histories of economic thought, even by those that are Austrian oriented. For Fetter's systematic theory, while challenging and original (particularly his theories of interest and rent), was emphatically in the Austrian school tradition.

Membership

He was a fellow of the American Academy of Arts and Sciences and a member of the American Philosophical Society.

While at Cornell he was president of the Social Service League of Ithaca (1904 - 1911) and a member of the New York State Board of Charities (1910 - 1911).

Connections

He married Martha Whitson of Atglen, Pennsylvania, on July 16, 1896. Of their three children--Frank Whitson, Ellen Cole, and Theodore Henry--the eldest followed his father in becoming a professor of economics.

Father:

Harry George Fetter

mother Ellen (Cole) Fetter

Wife:

Martha Whitson

son Frank Whitson Fetter daughter Ellen Cole Fetter son Theodore Henry Fetter

References

• Frank Albert Fetter, a birthday note,