Clark Warburton: A much overlooked monetarist pioneer
When I started this blog it was my plan to write a lot about Clark Warburton. I must admit I have failed to do this, but I still hope to be able to give Clark Warburton the attention he deserves. Nearly no economists know of Clark Warburton and everybody knows about Milton Friedman. However, the fact is that a lot of what Milton Friedman said about monetary policy had been said by Clark Warburton 10-20 years earlier. Unfortunately nobody wanted to listen to Warburton. In the introduction to Milton Friedman's and Anna Schwartz's "Monetary History" they wrote: “We owe especially heavy debt to Clark Warburton. His detailed and valuable comments on several drafts have importantly affected the final version. In addition, time and again, as we came to some conclusion that seemed to us novel and original, we found he had been there before.” Said in another way - Warburton might has well have written "Monetary History" - and to some extent he did. In the articles "The Volume of Money and The Price Level Between the World Wars" (1944) and "Monetary Theory, Full Production and the Great Depression" (1945) Warburton basically presented the monetarist explanation of the Great Depression - almost 20 years before Friedman and Schwartz (1963). Scott Sumner has recently tried to argue why the fiscal multiplier is zero if the central bank is targeting any nominal target. For those interested in this discussion should read Warburton's 1945 article on "The Monetary Theory of Deficit Spending". Read it and you should pretty fast become convinced that Scott is right - of course Warburton knew that in 1945. My own view that there is no such thing as fiscal policy (and everything is monetary policy) is also clearly inspired by Warburton. Warburton's main contribution to American monetary history and theory are collected in the book "Depression, Inflation and Monetary Policy" (including the above mentioned articles). Anyone who wants to understand monetary theory should read this book. The book, along with Leland Yeagers "The Fluttering Veil" are the two most important books in relation to the understanding of the monetarist branch, we could call disequilibrium monetarism (DM). DM is in many ways between the Austrian school and more traditional monetarists like Milton Friedman, Karl Brunner and Allan Meltzer. DM has undoubtedly had a major influence on Free Banking theorist such as George Selgin, but also on modern Austrian economists like Steven Horwitz. As such DM pioneers like Leland Yeager and Clark Warburton are also important from Market Monetarist perspective. I hope to write more on Warburton in the future. He work surely deserves a lot more attention. For a good introduction to Warburton's work see Michael Bordo's and Anna Schwartz's article "Clark Warburton: Pioneer Monetarist"