Monday, July 1, 2013

Jul 1 (1926) Economist Robert Fogel born in New York City: "You must go back to understand the process of change"

Robert Fogel with his wife Enid in 2005

On this day in 1926, revolutionary economist and Nobel laureate Robert W. Fogel was born in New York City. Fogel is best known for introducing economic analysis-- cost/benefit, depreciation, and value added considerations--into the study of history, a technique he dubbed "cliometrics."

In his 1964 classic Railroads and American Economic Growth, Fogel attacked the commonly-held belief that railroad transportation was the driver of post-Civil War growth in the United States. His analysis challenged what he called the "Axiom of Indispensability," writing "no single invention was vital for economic growth in the nineteenth century." Alternatives to rail transportation existed--namely wagons and canals. When considering all the costs, his data showed the "iron horse" probably contributed around 5% of GDP.

His figures have been debated, but the wisdom of his underlying critique remains;  so long as alternatives exist to fulfill material wants, can a single alternative truly be indispensable? Or as Ryan Avent wrote in the Economist "the broader lesson—that one has to think critically about the counterfactual in trying to assess technologies or shocks or economic policy—has been an indispensable one for me."

In a 2004 interview with Marika Griehsel, Fogel explained that with the study of economics "it's impossible not to be historical, you have to go back and look at the record, at least 30 or 40 years, sometimes 100 years, in order to understand the process of change."

Robert Fogel died on June 11, 2013. The image is from the University of Chicago: Robert Fogel with his wife Enid.

Further Reading
The Economic History Review (1969) Article by Paul David "Prof. Fogel on and off the rails"

Interview with Robert Fogel from Nobelprize.org

Robert Fogel NYT Obituary

Robert Fogel WSJ Obituary

Robert Fogel Economist Obituary

Cliometric Society.org
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Flannery O'Connor

You shall know the truth and the truth shall make you odd.