A prestigious award that the American Economic Association awards every year is the John Bates Clark Medal. But who was John Bates Clark and what is he known for? I answered those two questions in my bio of Clark that was recently added to the online Concise Encyclopedia of Economics.
As I say in the bio:
John Bates Clark was one of the leading American economists of the late 19th and early 20thcenturies. He made contributions in the areas of utility theory, marginal productivity theory, capital theory, and competition and antitrust. In his later years, he focused on how to end war.
Much of Clark’s early work was collected in The Philosophy of Wealth (1886). In that collection is Clark’s statement of the idea of marginal utility, which he called “effective utility.” He was not the first economist to adopt the concept of “marginal utility.” That distinction goes to the three founders of marginal utility theory, William Stanley Jevons of England, Carl Menger of Austria, and Leon Walras of Switzerland. But, according to George J. Stigler, Clark independently discovered it.
Here’s one of my favorite quotes from his work:
Give to a man one unit of the article A, and then another and another, till he has ten of them. While each of the articles in the series may do him some good, the amount of the benefit will Steadily diminish, as the number of the articles grows larger, and the tenth one will benefit him least of all. In order to add to his stock of A, the man will never sacrifice more than what is, in his view, a fair offset for the benefit that he will get from the tenth and last unit of it. In order that an article may be wealth at all, each unit of the supply of it must, as we have seen, be of some importance to its owner. The law that we have just cited marks the last unit of the supply as the least important unit. This is one of the universal laws of economics. (Distribution of Wealth, p. 42.)
Read the whole thing.
Thanks to Tyler Cowen for some helpful suggestions.
