The American economist Wesley Clair Mitchell (1874-1948) was one of the most prominent contributors to the study of business cycles and was also among those who first recognized the importance of sound empirical research in economics.
Wesley Clair Mitchell
Born on Aug. 5, 1874, in Rushville, III., Wesley C. Mitchell was the eldest son of a Civil War veteran. Despite material difficulties, Mitchell completed his college and graduate education at the University of Chicago, receiving his doctorate in 1899. He married Lucy Sprague in 1912. His main activities, research and teaching, were only briefly interrupted, mainly for government service. During one such interlude, in 1914, Mitchell wrote a highly influential monograph, The Making and Using of Index Numbers, for the U.S. Bureau of Labor Statistics.
Analyzing the Business Cycles
Mitchell's major treatise, Business Cycles (1913), represents a pioneering effort to provide an "analytic description" of the pervasive and recurrent but also complex and changing fluctuations that are observed in the modern, highly developed, and interdependent "money economies." He developed a concept of the business cycle as a self-generating process whose continuity and diffusiveness are due mainly to institutional responses of the economic system to a variety of unpredictable changes. The lags in these responses, for example, the lags of expenditures behind receipts, of selling prices behind buying prices, or of investment expenditures and deliveries behind investment decisions, are of strategic significance in the dynamics of the cycle. A central issue is the dependence of tides in business activity upon the prospects of profits or, as in times of crisis, the quest for solvency.
As cofounder, and from 1920 to 1945 as director, of the National Bureau of Economic Research, a private, nonprofit institution, Mitchell effectively promoted the testing of his ideas and findings, which was essential for understanding and solving many basic economic problems. The first book that resulted from this reexamination was Business Cycles: The Problem and Its Setting (1927), which drew on a much larger mass of evidence than was previously accessible and which confirmed many of Mitchell's earlier impressions about the basic nature of business cycles and the methods appropriate for their study. A full account of these methods was presented in Measuring Business Cycles (1946), a volume written jointly by Mitchell and Arthur F. Burns. In his last major work, What Happens during Business Cycles: A Progress Report (published posthumously in 1951), Mitchell showed how the cycles consist not only of roughly synchronous rises and falls in many activities but also of numerous specific rises (falls) that start while expansion (contraction) is still dominant in the economy at large. This work paved the way for research on uses of cyclical indicators in the analysis of current business conditions and short-term forecasting.
Mitchell served by presidential appointment on national committees on social trends (1929-1933), cost of living (1944), and others. He had strong humanitarian sympathies and believed that advances in economics and other social sciences can and should help to reduce such defects of the economic system as recurrence of depressions and unemployment, inequality of opportunity, concentration of power, and material insecurity. Mitchell died on Oct. 29, 1948.
Further Reading on Wesley Clair Mitchell
The best collection of essays on Mitchell is Arthur F. Burns, ed., Wesley Clair Mitchell: The Economic Scientist (1952), which contains a comprehensive list of Mitchell's publications. Further background on Mitchell's role in economic thought is in Paul T. Homan, Contemporary Economic Thought (1928); Henry W. Spiegel, ed., The Development of Economic Thought: Great Economists in Perspective (1952); and Joseph Dorfman, The Economic Mind in American Civilization, vol. 5 (1959).