Tuesday, May 19, 2009

Wall Street Journal Book Review Is Wrong About The Beard Thesis

It was in a review of David S. Brown's book Beyond the Frontier. (April 29). Here is the link:

A Heartland View of History.

Here is the relevant passage:

"The big idea in Beard's (Charles Beard) masterwork, "An Economic Interpretation of the Constitution of the United States" (1913), was that the Founding Fathers were, in his words, "with a few exceptions, immediately, directly, and personally interested in, and derived economic advantage from, the establishment of the new system." At first violently attacked, his thesis came to be widely accepted in the 1930s. "By introducing the idea that self-interest influenced the framers," Mr. Brown writes, "Beard forced students of the American past to consider the Constitution as an economic rather than a merely legal, let alone divinely inspired, text." Nevertheless, Beard's thesis was thoroughly demolished in the 1950s by the Texas-born historian Forrest McDonald and several other scholars -- an accomplishment that Mr. Brown, strangely, neglects to mention. Mr. McDonald argued, for instance, that on close examination, there was "virtually no correlation" between the Framers' actual economic interests and their votes at the Constitutional Convention."

But more recent scholarship (mainly by economist Robert McGuire, whom we will hear from below) using modern statistical techniques supports the Beard thesis. The WSJ actually had a book review which said something similar a few years ago. I wrote a letter to the editor explaining what McGuire had done and that he had published research in many top journals (not to mention a book). But the WSJ did not print it.

McGuire's book is called To Form a More Perfect Union: A New Economic Interpretation of the United States Constitution. New York: Oxford University Press, 2003. xii +395 pp. $24.95 (hardback), ISBN: 0-19-513970-4.

It has received some good reviews which you can read
here and here and here.

McGuire has published several articles on this in The American Economic Review and the Journal of Economic History over the last 20 years. His findings are summarized in his book. To truly understand the data (and the voting behavior of convention delegates), McGuire used a multivariate statistical approach. This allows us to see that slave owners truly were less likely to favor the Constitution than merchants. Simple tallies of votes are not sophisticated enough. All other factors must be held constant when trying to discover the true relationship between two variables.

Here is what professor McGuire wrote to me in an email:

"... an economic interpretation that supports Beard in the broad general sense that economic interests mattered (not necessarily all of Beard's specifics mattered as he claimed) has been the prevailing view among economic historians for nearly three decades. ... these studies used the data that McDonald collected (as well as a host of other data on economic and ideological interests); but these are data that McDonald did not formally analyze in his book according to any modern standard. ... a likely reason that I and others have been ignored by traditional historians is because of the general nature of their methodology; it is quantitative and statistical. (See my reference to John Murray's essay below.) (Farley Grubb has several papers on bankers' rent seeking and the monetary powers included in the Constitution and Heckelman and Dougherty have a couple or so papers that re-examine my work).

McDonald himself never said that economic intetrests did not matter at all; he said they did not matter along Beard's specific dichotomy of realty versus personalty and that the specific interests of the founders could not be aligned on one side of an issue with other specific interests on another side. He felt the interests were too varied and dispersed across supporters and opponents of the Constitution so that patterns could not be indicated. Moreover, McDonald has really been misinterpreted by most of his own supporters to claim that economic interets did NOT matter at all.

John Murray, University of Toledo, ...tried to explain why historians have ignored my work, basically arguing that traditional historians ignore economic historians unless they are forced to pay attention because of a media/publicity

Monday, May 04, 2009

Who Was Alex P. Keaton's Favorite Economist? Milton Friedman

Click on the following video link to find out:

Who Was Alex P. Keaton's Favorite Economist?

You will only have to watch a few minutes to find out. It is from the 1980s sitcom "Family Ties." Michael J. Fox played Alex Keaton. In this episode he tells another character that Milton Friedman was his favorite economist.