Anna Jacobson Schwartz: in memoriam.

• Author: Tavlas, George S.

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This issue of the Cato Journal is dedicated to Anna Jacobson Schwartz, who passed away on June 21, 2012, at the age of 96. Anna was an economic historian whose scholarship was marked by, among other things, dedication, tenacity, and perseverance. Her career spanned three quarters of a century. When Anna was about 90, her son Jonathan complained (somewhat tongue-in-check) that he had thought about retiring, but did not feel comfortable doing so while his mother was still working. In 1936, she began collaborating with A. D. Gayer and W. W. Rostow on a study of fluctuations in the British economy between 1790 and 1850. The study was not published until 1953, although most of the work on the study had been completed by the early 1940s. Anna joined the National Bureau of Economic Research in 1941 and remained there for the rest of her life, continuing to go to her office until shortly before her death. She published her first NBER paper in 1947 with Elma Oliver, and her last with Michael Bordo and Owen Humpage in 2012. Her collaboration with Milton Friedman on A Monetary History of the United States, 1867-1960 began in 1948 and was not completed until 1963. The underlying objective of Anna's scholarship throughout her career was to use historical evidence, which she assembled with meticulous attention to accuracy, to understand the workings of the economy better.

Anna was born on November 11, 1915, in the Bronx, the third of five children of Hillel Jacobson and the former Pauline Shainmark, both of whom were Jewish immigrants from Eastern Europe. She was drawn into economics while still in high school: "I found it more exciting than literature or foreign languages," she said. She graduated from Barnard College at the age of 18 and received an MA in economics from Columbia University at the age of 19. In another display of her tenacity, she earned her PhD from Columbia University at the age of 48.

Collaboration with Gayer and Rostow

After working for the U.S. Department of Agriculture in 1936, the year in which she married Isaac Schwartz, she spent five years at Columbia University's Social Science Research Council, where she began collaborating with Gayer and Rostow on what would become Growth and Fluctuation of the British Economy, 1790-1850. This two-volume work, which runs to over 1,000 pages, is considered a classic investigation of the British economy in the first half of the 19th century (Capie and Wood 1989). It used NBER techniques to identify cycles and trends in key time series. The authors gathered and collated existing data, and constructed new data on some 200 variables, including output, prices, labor-market indicators, trade, and finance. They used these data to provide historical narratives and assessments of the key forces underlying the dynamics of the British economy during the period under investigation.

Essentially, Gayer, Rostow, and Schwartz posited an over-investment theory of the cycle along Keynesian lines and a cost-push theory of inflation. The business cycle, they argued, is generated by changes in the demand for consumer goods, which give rise to greater changes in the production of producer goods through an accelerator-type mechanism. The authors attributed movements in the general level of prices to changes in costs caused by changes in supply conditions. They assigned money a passive role in both cyclical and inflation dynamics. Although the book drew enthusiastic reviews, it was criticized for its lack of consideration of monetary forces (Capie and Wood 1989: 81). For Anna, the view that money plays a passive role in both the business cycle and inflation generation would subsequently undergo a profound change.

Milton Friedman's Influence

That change came after Anna joined the National Bureau of Economic Research and began collaborating with Milton Friedman. Arthur Burns, the NBER president (and a future chairman of the Federal Reserve), suggested that Anna and Milton collaborate on a historical study of the relationship between money and other variables in the United States. The authors did not envisage that the proposed research project would turn out to be anything like the massive study that would eventually be published in 1963. At the time that they started their work on A Monetary History in 1948, Friedman estimated that the project would be completed within three years. At that time, Friedman, having made important contributions to statistical analysis, "was regarded as a statistician, and not particularly as an up-and-coming economist" (Schwartz, quoted in Nelson 2004: 401). Although he had published several papers on macroeconomic policies by the late-1940s, Friedman, like Schwartz in her work with Gayer and Rostow, downplayed the role of money and monetary policy in his early work. He advocated a Keynesian-type policy centered on the use of fiscal measures aimed at attaining both full employment and price-level stability.

In some ways, the two scholars were very different. Milton felt at home whether in a classroom, a professional conference, or the public spotlight, giving testimony before a congressional committee, writing a column for Newsweek, or hosting the popular TV series, Free to Choose. Anna seemed satisfied to spend most of her professional time at her NBER office, actively participating in academic conferences and occasionally holding a teaching position--in the 1960s she taught at both New York University and the City University of New York. Milton assigned low priority to cultural activities...