Everything about John Bates Clark totally explained
John Bates Clark (
26 January 1847 –
21 March 1938) was an American
neo-classical economist. He was one of the pioneers of the
marginalist revolution and opponent to the
Institutionalist school of economics, and spent most of his career teaching at
Columbia University.
Clark was born and raised in Providence, R. I. and graduated from
Amherst College in Massachusetts at the age of 25. From 1872 to 1875 he attended the
University of Zurich and the
University of Heidelberg where he studied under
Karl Knies (a leader of the
German Historical School). Early in his career Clark's writings reflected his German
Socialist background and showed him as a critic of
capitalism. Upon his return to the United States, Clark taught economics, history and a whole series of other subjects at
Carleton (where he taught
Thorstein Veblen),
Smith and
Amherst colleges before coming into contact with graduate students at
Johns Hopkins. In 1895, Clark finally won a position at
Columbia University.
In
The Philosophy of Wealth (1886), Clark presented an original version of
marginal utility theory, a decade and a half after the simultaneous discovery of this principle by
Jevons,
Menger, and
Walras. Clark is better known for his use of
marginal productivity to help explain the
distribution of income (
Distribution of Wealth (1899)). In his 1848
Principles of Political Economy,
John Stuart Mill had asserted that production and distribution were two distinct spheres. While production was determined by physical principles, such as the
Law of Diminishing Returns, distribution was the result of social and political choice. Once things were produced they could be divided up however people saw fit. Clark theorized that with homogeneous labor, perfectly competitive firms, and diminishing marginal products of any input working with another fixed input (for example, labor working with a fixed amount of capital), firms would hire labor up to the point where the real wage was equal to the marginal product of labor; thus production and distribution are intimately connected. This idea is enshrined in virtually all modern microeconomics texts as the explanation for the demand for labor.
Clark was in his work primarily inspired by his countryman
Henry George. Clark writes in the preface to The Distribution of Wealth:
“It was the claim advanced by Mr. Henry George, that wages are fixed by the product which a man can create by tilling rentless land, that first led me to seek a method by which the product of labor everywhere may be disentangled from the product of cooperating agents and separately identified."
However, both Clark's son,
John Maurice Clark, and John Henry both contend that Clark developed the theory as a response to
Karl Marx, who claimed that workers were being exploited of the
surplus value that they created. It is possible that Clark had both Henry George and Karl Marx in mind.
The
John Bates Clark Medal, one of the most prestigious awards in the field of economics, is named after him.
J. B. Clark was the father of
John Maurice Clark, who didn't follow his father's conservative footsteps — instead, he became a leading
Institutionalist.
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