Grand Pursuit

by Sylvia Nasar

  When George Fisher continued his journey, father and son were separated for only the second time in their lives. They had expected to visit each other, but the distance between Cameron and St. Louis, three hundred or so miles, proved much too far in sleet, snow, and bitter cold. By the end of the first winter in Cameron, George Fisher was complaining of a strange lassitude, perpetual fever, and sinking spirits. These, it was quickly determined, were the classic symptoms of tuberculosis. In May, George, who was now very ill, made the long journey back east. He rejoined his wife and younger son in New Jersey at the home of a second brother-in-law, a physician who took the family in and cared for the dying man. Irving stayed behind. George Fisher insisted that he finish high school in St. Louis and take his college entrance examinations. By the time Irving graduated with honors, won a scholarship to Yale, and was reunited with his parents and younger brother in July 1884, his father was near death. He left behind a penniless widow, a ten-year-old, and seventeen-year-old Irving.

  Fisher’s grief was compounded by his disappointment at almost certainly having to postpone college, if not give it up altogether. The only prospect he could think of was to return to Missouri and look for a job on a farm that belonged to a classmate’s family, where he had worked the previous summer.

  • • •

  A $500 legacy that his father had invested with a friend in Peace Dale and designated for Irving’s education was discovered. If Fisher lived with his mother and brother in a three-room apartment near Yale, his mother could rent out the second bedroom to another student and he could tutor. Together with his scholarship and the legacy from his father, this measure would just suffice to allow him to enroll at Yale as planned in the fall of 1884.

  J. Willard Gibbs, one of Yale’s “great men,” had observed that if the masses were going to run the world, they would need a lot of instruction. Few pursuits in that era required a university education, and the sacrifice of four years’ wages was beyond the means of all but 1 to 2 percent of young men. But by the 1880s, a growing number of small-town American boys “longing to escape from the inferiorities of childhood” began to view college as a promising exit strategy. In America’s new industrial and urban economy, opportunities for engineers, accountants, lawyers, and teachers, not to mention managers in the new corporate concerns, were multiplying fast enough to become a means other than the usual “grind of moneymaking”—that path being a long, uncertain, and arduous affair—to achieve distinction.23

  A poor but ambitious boy like Fisher was lucky that family money was so commonplace an asset among Yale undergraduates that its social value was greatly depreciated. Popularity and fame required prowess as an athlete, an orator, a debater, a wit, or even a scholar. Fisher rowed for college, dazzled the faculty in the Junior Exhibition debating competition, won coveted prizes in mathematics and other subjects, and graduated first in his class of 124.24 But the acme of his college career came the day he was tapped to become a member of the elite secret society Skull and Bones.

  Muriel Rukeyser, the poet, observes in her biography of Gibbs that this was “the season for the young sciences” in America.25 The 1880s saw an explosion of scientific activity in the United States and rising popular interest in science. Charles Darwin, Herbert Spencer, and Alfred Russel Wallace, the independent discoverer of evolution by natural selection, became household names; zoos and natural history museums proliferated; and the science-fiction novel was born. Edward Bellamy’s Looking Backward: 2000–1887, which fast-forwarded readers to Boston in the year 2000, depicted a golden age of phonographs, credit cards, and radios.26 New professional societies, scientific publications, and laboratories were popping up like mushrooms after a rain, while universities shifted their focus from training young men in the classics to turning out scientific and technical workers. The Brooklyn Bridge, which opened in Fisher’s senior year in high school, symbolized the power of science to transform society. The rise of huge enterprises and entrepreneurial fortunes and the role of railroads in economic growth stimulated interest in finding new “instruments of mastery.”27 In the popular imagination, science was increasingly being seen as a way to get rich and, at the same time, a vehicle for solving the myriad social ills of poverty, disease, and ignorance.

  Gibbs was a physicist, chemist, and mathematician, who was the first to apply the second law of thermodynamics to chemistry. The function of the scientist, he once said, was “to find the point of view from which the subject appears in its greatest simplicity.”28 He was a great champion of the mathematization of science. Mathematics was a lingua franca as well as a tool of analysis, so mathematics could promote the global exchange of ideas among scientists, just as Latin had done for centuries among botanists and anatomists. Gibbs almost never spoke at faculty meetings. But at the end of a fractious debate over whether mathematics could substitute for Greek or Latin to fulfill Yale’s classical language requirement, he rose, coughed politely, and was heard to murmur as he left the room: “Mathematics is a language.”29

  By the time Fisher was a senior, he considered himself a mathematician but longed for more. “I want to know the truth about philosophy and religion.”30 He had rejected the idea of becoming a minister like his best friend from St. Louis, Will Eliot. At different times, he thought of the law, railways, public service, and science. “How much there is I want to do! I always feel that I haven’t time to accomplish what I wish. I want to read much,” he wrote in a letter to Eliot. “I want to write a great deal. I want to make money.”31 Ultimately, Fisher chose the “science of wealth.”

  American economics of the Progressive Era is typically described as utterly divorced from the British evolution toward collectivism and the welfare state. Except for a few so-called institutionalists such as Thorstein Veblen who were critical of commercial society, academic economics is supposed to have been dominated by Social Darwinists who defended laissez-faire and the rich and wanted to trample the poor.

  It simply wasn’t so. Virtually every founding member of the American Economic Association got his training and worldview at Berlin, Göttingen, or Munich and shared the values of the German “historical school,” which, in opposition to English economics, explicitly condemned unfettered competition and championed the welfare state. Arthur Hadley, who held a chair in political economy at Yale, once referred snidely to American economists as “a large and influential body of men who are engaged in extending the functions of government.”32 The economics department at Yale was no exception, but for its most notorious member, William Graham Sumner. Warning that contemporary political labels—conservative versus liberal, left versus right—fit nineteenth-century intellectuals poorly if at all, the historian Richard Hofstadter once asked rhetorically about Sumner “whether, in the entire history of thought, there was ever a conservatism so utterly progressive?”33 The son of an English immigrant laborer and an Episcopalian minister, Sumner was both a political economist and America’s first sociologist. Austere and satirical with clipped, grizzled hair, Sumner taught himself “two Scandinavian tongues, Dutch, Spanish, Portuguese, Italian, Russian, and Polish” when he was in his late forties and turned “New Haven into a kind of Social-Darwinian pulpit” for his libertarian views. His lectures were described by contemporaries as “dogmatic,” his manner “frigid,” and his voice like “iron.”34 But his passionate delivery and fearless espousal of contrarian views made him the most popular lecturer at Yale.

  Sumner was a great admirer of Charles Darwin and Herbert Spencer. He objected not only to bigger government but also to the activities of most private charities. His economics were thoroughly Malthusian, that is to say, deeply pessimistic, and, like Malthus, Ricardo, and Mill, he dismissed all schemes to speed up society’s evolution as snake oil, stupidity, special pleading, or “jobbery.” Yet, like the economic thinkers he admired, he was by no means a defender of the status quo. Trained as a minister, Sumner was as likely to condemn war as welfare, to defend striking unions as well as the banker Andrew
Mellon’s right to his millions, and to praise working women in the same breath as free trade. When Yale’s president tried to forbid, on theological grounds, his use of Spencer’s Principles of Sociology as a text, Sumner threatened to resign. Around the time of the Webbs’ visit, Sumner enraged Yale’s Republican alumni into calling for his dismissal, by publicly condemning the Monroe Doctrine and the Spanish-American War.

  According to his son, Irving Norton Fisher, Fisher signed up for every course Sumner gave. He approached economics as a mathematician or an experimental scientist, describing himself to Eliot at one point as “your cold analytical mathematical friend.”35 Not long after Sumner introduced him to the subject, he concluded that a great deal might be accomplished by someone trained to think like a scientist—that is, coldly, analytically, mathematically.

  When Fisher consulted Sumner about a dissertation topic in the spring of 1890, the latter’s personal interests were shifting away from classical political economy to “the science of society.” Already deep into his extraordinary spurt of late-life language acquisition, and busy collecting ethnographic data, Sumner wished to put sociology on a more rigorous footing. In this spirit, he suggested that Fisher write his doctoral thesis on mathematical economics, a subject that was both new and beyond the technical capability of most older economists, including himself. He lent Fisher a volume by William Stanley Jevons, one of the pioneers of a new method involving calculus for analyzing consumer choice by focusing on marginal changes.

  The impulse to make their respective fields more scientific was spurring ambitious young humanists to seize scientific knowledge as their special tool. The psychologist and philosopher William James, just back from Europe, wrote to a friend that year, “It seems to me that perhaps the time has come for psychology to begin to be a science.”36 Fisher already considered mathematics an ideal global currency that encouraged trade in ideas. He was intrigued by the prospect of strengthening the theoretical foundation of political economy, as Gibbs had done for that of chemistry:

  Before an engineer is fit to build the Brooklyn Bridge or to pronounce on it after it is built it is necessary to study mathematics, mechanics, the theory of stress and of the natural curve of a hanging rope, etc., etc. So also before applying political economy to railway rates, to the problems of trusts, to the explanation of some current crisis, it is best to develop the theory of political economy in general.37

  Crude social Darwinists and their Socialist opponents identified competition as the distinctive feature of the modern economy, comparing the operation of markets to the laws of the jungle. But, like Marshall, Fisher was more impressed by the high degree of interdependence and cooperation among economic agents—households, firms, governments—and the large number of channels through which a given cause produced its ultimate effect.

  Fisher occasionally went into New York City from New Haven, and on several occasions he visited the stock exchange. The operations of the market for securities were very much on his mind when he read the books Sumner had given him. He was struck that economists had evidently borrowed much of their vocabulary from the older science of physics; they spoke of “forces,” “flows,” “inflations,” “expansions,” and “contractions.” But, as far as he knew, no one had actually tried to construct an actual model of the process that resulted in “that beautiful and intricate equilibrium which manifests itself on the exchanges of a great city but of which the causes and effects lie far outside.”38

  Marshall had conceived of modern economics as an “engine of analysis” and used graphs to trace the effects of external influences on individual markets. Fisher decided to construct a mathematical model of an entire economy. He wanted to be able to trace how a market “calculated” the prices that equated supply and demand. A practical Yankee, he wanted a model that could spit out numerical solutions, not just mathematical symbols. Almost as soon as he started working on his model, Fisher decided to take his project a step further and build a physical analog of the equations in the form of a hydraulic machine. That is something that probably would only have occurred to a tinkerer who had spent hundreds of hours in a laboratory performing tedious and repetitive physical experiments. Fisher asked Gibbs, who was far more able than Sumner to grasp what he was trying to accomplish, to read his manuscript.

  In Fisher’s model, everything depends on everything else. How much of a commodity each consumer wants depends on how much of every other commodity he wants. Fisher acknowledged that the bulky contraption, with its cisterns, valves, levers, balances, and cams applied “imperfectly at best” to the exchanges of “New York or Chicago” but he was in no way apologetic. “Ideal suppositions are unavoidable in any science,” wrote the doctoral candidate in his thesis. “The physicist has never fully explained a single fact in the universe. He approximates only. The economist cannot hope to do better.”39

  The marvelous physical contraption let someone visualize the elements whose interplay produced prices. It also permitted someone to “employ the mechanism as an instrument of investigation” of complicated and distant interconnections. For example, one could see how an external shock to demand or supply in one market affected all the prices and amounts produced in ten interrelated markets, altered prices and quantities in all markets, and changed the incomes and choice of products purchased by various consumers. Fisher’s hydraulic machine was the precursor of the simulation and forecasting models with thousands of equations that were developed in the 1960s to run on huge mainframe computers and that today’s undergraduates can use to calculate a country’s GDP on a notebook computer. Alas, both Fisher’s original model and a replacement constructed in 1925 when the first was destroyed en route to an exhibition have been lost to posterity.

  Fisher wrote his thesis over the summer of 1890. He showed his enthusiasm for mathematical methods by including an exhaustive survey and bibliography of applications. The economist Paul Samuelson called “Mathematical Investigations in the Theory of Value and Prices” “the greatest doctoral dissertation in economics ever written.”40 When it was published, the Economic Journal, founded by Alfred Marshall and other members of the newly inaugurated British Economic Association, greeted it as a work of genius. The reviewer, Francis Ysidro Edgeworth, an Oxford professor and one of the founders of mathematical economics, wrote, “We may at least predict to Dr. Fisher the degree of immortality which belongs to one who has deepened the foundations of the pure theory of Economics.”41 In the third edition of his Principles, Marshall, who could be stingy when acknowledging the contributions of other scholars, included not one but three highly flattering references to Fisher’s “Investigations,” referring to it as “brilliant,” classing Fisher with “some of the profoundest thinkers in Germany and England.”42

  Fisher’s picture of economic reality—especially his awareness of interdependence and mutual causation—affected how he thought on a great many other subjects. Just before he received his doctorate, he read a paper to the Yale Political Science Club proposing an international body representing all the nations of the world and dedicated to the peaceful settlement of international conflicts. According to the historian Barbara Tuchman, this paper later inspired the formation of the League to Enforce Peace, which, in turn, is credited with stimulating President Wilson’s interest in forming a League of Nations.43

  • • •

  By the early 1890s in America, the post–Civil War railway, mining, and land boom had stalled, exposing the shaky nature of much of the finance. The panic of 1893 and the collapse of the stock market was followed by the worst depression in American history to date. Fisher’s letters to his friend Will Eliot are as free of any mention of these calamities as Jane Austen’s novels are of references to the Napoleonic Wars. Possibly his reason was similar to the author’s: his mind was on love, courtship, and marriage.

  Characteristically, Fisher deferred a return to Peace Dale, the scene of childhood happiness, until he could ride into town decked in a hero’s laurels. Whe
n he left, he had been thirteen and deeply unhappy. When he returned, he was wrapped in the cloak of a “brilliant career at Yale, as prizeman, valedictorian, instructor and now professor of mathematics.”44 Like the hero of a Victorian three-decker novel, his object was to claim the heiress—or, since this was America, the boss’s daughter. The way it happened was purely providential. It took little more than a glance for Irving to fall in love with a former childhood playmate; Margaret Hazard, or Margie, as she was called.

  Margie Hazard was blessed with a sheltered upbringing, a serene temperament, and an unusually sweet nature. Her sister was the intellectual, Margie the creative, maternal one. Her faith in Irving was complete and unwavering. She was a wealthy heiress while he was penniless, yet she was convinced that she was the luckiest of women. They married in June 1893 with the entire population of Peace Dale there to witness the ceremony and take part in the festivities. The vows were read by no fewer than three ministers, and the wedding cake weighed fifty pounds. At a time when every day brought news of a fresh bankruptcy or bank run, some were scandalized by this display of conspicuous consumption. So it was just as well that the bridegroom and bride slipped away to New York, boarded an ocean liner, and sailed to Europe for a yearlong honeymoon.45

  • • •

  “All educated Americans, first or last, go to Europe,” Ralph Waldo Emerson noted sourly. The rich went on the obligatory “grand tour” of capitals; the intellectually ambitious, on a “grand tour” of universities.46 Zigzagging across England and the Continent by rail in 1893 and 1894, Fisher found it possible to exchange ideas with virtually every prominent member of the small, if growing, economics fraternity. His “little book . . . made a small path” for him through Europe, giving him instant entree to a cosmopolitan fraternity of economic thinkers. Fisher lunched in Vienna with Carl Menger, the founder of Austrian economics. He dined in Lausanne, Switzerland, with Leon Walras. Walras’s brilliant student Vilfredo Pareto joined them, and Pareto’s wife shocked Fisher by lighting up at tea. He stopped in Oxford to confer with the tongue-tied and absentminded Ysidro Edgeworth, and made a pilgrimage to Cambridge to pay his respects to Alfred Marshall, whose recently published Principles had cemented his stature as the world leader of theoretical economics.