Herbert Joseph Davenport (August 10, 1861 – June 15, 1931) was an American

economist An economist is a professional and practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...

and critic of the

Austrian School The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result exclusively from the motivations and actions of individuals. Austrian scho ...

, educator and author.

Biography

Born in

Vermont Vermont () is a state in the northeast New England region of the United States. Vermont is bordered by the states of Massachusetts to the south, New Hampshire to the east, and New York to the west, and the Canadian province of Quebec to the ...

, Davenport studied at the

University of Chicago The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private university, private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park, Chicago, Hyde Park neighborhood. The University of Chic ...

for a year or so under

Thorstein Veblen Thorstein Bunde Veblen (July 30, 1857 – August 3, 1929) was a Norwegian-American economist and sociologist who, during his lifetime, emerged as a well-known critic of capitalism. In his best-known book, '' The Theory of the Leisure Class'' ...

, with whom he formed a lifelong friendship. His studies were apparently motivated, like many other revolutionary political economists of his time, by a desire to find the flaws in socialism. Following his degree at Chicago on 1898, Davenport became a high school principal before returning to Chicago as a faculty member. He began his formal career as assistant professor at the

in 1902. During his previous 41 years, he had attended

Harvard Law School Harvard Law School (Harvard Law or HLS) is the law school of Harvard University, a private research university in Cambridge, Massachusetts. Founded in 1817, it is the oldest continuously operating law school in the United States. Each class ...

, the

University of Leipzig Leipzig University (german: Universität Leipzig), in Leipzig in Saxony, Germany, is one of the world's oldest universities and the second-oldest university (by consecutive years of existence) in Germany. The university was founded on 2 Decemb ...

Ecole Libre des Sciences Politiques , motto_lang = fr , mottoeng = Roots of the Future , type = Public research university''Grande école'' , established = , founder = Émile Boutmy , accreditation ...

Paris Paris () is the capital and most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), making it the 30th most densely populated city in the world in 2020. ...

, the

University of South Dakota The University of South Dakota (USD) is a public research university in Vermillion, South Dakota. Established by the Dakota Territory legislature in 1862, 27 years before the establishment of the state of South Dakota, USD is the flagship univ ...

, and the University of Chicago. He moved to the

University of Missouri The University of Missouri (Mizzou, MU, or Missouri) is a public land-grant research university in Columbia, Missouri. It is Missouri's largest university and the flagship of the four-campus University of Missouri System. MU was founded ...

to become department head and first dean of the College of Business in 1908. In 1916, he transferred to

Cornell Cornell University is a private statutory land-grant research university based in Ithaca, New York. It is a member of the Ivy League. Founded in 1865 by Ezra Cornell and Andrew Dickson White, Cornell was founded with the intention to teac ...

, where he finished his academic career. He also made and lost a fortune in business, largely in land speculation. The Herbert J. Davenport Society is the

College of Business's alumni organization.

Work

General

An admirer of

, Davenport carved a unique niche in the world of academic economics, avoiding the Institutionalist approach inspired by Veblen, and incorporating insights from the Austrian and

Lausanne Lausanne ( , , , ) ; it, Losanna; rm, Losanna. is the capital and largest city of the Swiss French speaking canton of Vaud. It is a hilly city situated on the shores of Lake Geneva, about halfway between the Jura Mountains and the Alps, and fac ...

economists. For Davenport, the entrepreneur was central to market activity. He accepted the Austrian concept of opportunity cost (found in the work of

Friedrich von Wieser Friedrich Freiherr von Wieser (; 10 July 1851 – 22 July 1926) was an early (so-called "first generation") economist of the Austrian School of economics. Born in Vienna, the son of Privy Councillor Leopold von Wieser, a high official in the w ...

) but rejected the neoclassical conception of marginal utility. He was a relentless critic of

Alfred Marshall Alfred Marshall (26 July 1842 – 13 July 1924) was an English economist, and was one of the most influential economists of his time. His book '' Principles of Economics'' (1890) was the dominant economic textbook in England for many years. I ...

, his last book being a critique of ''The Economics of Alfred Marshall'' (1935). In that book, he criticized Marshall as a classical economist who subscribed to the real cost doctrine and his assumption of homogeneity of different costs. Davenport, along with Frank A. Fetter, comprised, as Fetter put it, a distinct, if small, school of economics: the American Psychological School. Frank Knight, a student and admirer of Davenport's, did not succeed in imprinting many of Davenport's ideas onto the Chicago School neoclassical tradition.

Scholarly works

Davenport wrote numerous articles which were published in such prestigious economic journals as the ''Journal of Political Economy'', the ''

Quarterly Journal of Economics ''The Quarterly Journal of Economics'' is a peer-reviewed academic journal published by the Oxford University Press for the Harvard University Department of Economics. Its current editors-in-chief are Robert J. Barro, Lawrence F. Katz, Nathan N ...

'' and the ''

American Economic Review The ''American Economic Review'' is a monthly peer-reviewed academic journal published by the American Economic Association. First published in 1911, it is considered one of the most prestigious and highly distinguished journals in the field of ec ...

''. He also wrote several major books. His first article, written while an undergraduate in South Dakota, was "The Formula of Sacrifice" (1894), an exploration of the concept of subjective opportunity cost. Viewed in retrospect, his "Outlines of Economic Theory" was a preliminary version of his 1908 ''Value and Distribution'' (1908). The latter was a full-fledged critical examination of the major economic doctrines of classical and early neoclassical thought. Among other things, it contained critiques of

marginal utility In economics, utility is the satisfaction or benefit derived by consuming a product. The marginal utility of a good or service describes how much pleasure or satisfaction is gained by consumers as a result of the increase or decrease in consumpti ...

, of the contemporary Austrian theories of

capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used fo ...

and cost, and of

Frank Fetter Frank Albert Fetter (; March 8, 1863 – March 21, 1949) was an American economist of the Austrian School. Fetter's treatise, ''The Principles of Economics'', contributed to an increased American interest in the Austrian School, including the th ...

's theory of market interest. While he had a penchant for criticizing the emerging

neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...

, most of his criticism was leveled at vestiges of classical economics, such as the doctrine of real cost and the tripartite division of factors of production, which had led some classical economists to advocate a tax on land value. Although one biographer and student saw him as a reformer (Homan), another lamented the absence of real reformist ideas and even of the awareness of the need to follow criticism with clear statements about what was right and how it could be achieved (

Frank Knight Frank Hyneman Knight (November 7, 1885 – April 15, 1972) was an American economist who spent most of his career at the University of Chicago, where he became one of the founders of the Chicago School. Nobel laureates Milton Friedman, Georg ...

). His relentless criticism is probably the main reason that his works have, in general, been neglected by historians of economic thought. The extensive citations and treatment of economic others ideas in this book were omitted in his later book ''The Economics of Enterprise'' (1914). This book was a tightly-knit theory of price from the entrepreneur point of view (to be contrasted with the "social" point of view). In that book, he worked out an image of economic interaction in which all phenomena was interpreted through the eyes and minds of entrepreneurs. This theory was complemented by a theory of

credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a de ...

and

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money ar ...

for the era of free enterprise in banking ("loan fund theory of capital").

Reception

As a teacher, he was an artist. "He never lectured in any conservative way. He pitted his students against one another. He subjected them to grilling cross-examination capped by the decisive point and apt illustration, punctuated by satirical amusement toward the inept and the unprepared." Perhaps the best reflection on Davenport as a person comes from the fact that for many years, he used his savings to pay friends in South Dakota who had made real estate investments through him in the early 1890s.(Kendrick: 224)

Selected publications

* Davenport, Herbert J.,
Outlines of Economic Theory
'' New York: Macmillan, 1896. * Davenport, Herbert J.,
Outlines of Elementary Economic Theory
'' 1898. * Davenport, Herbert J., ''Value and Distribution'', Chicago: University of Chicago Press, 1908 * Davenport, Herbert J.,
Capitalization and market value
'' paper 1910. * Davenport, Herbert J.,
Economics of Enterprise
', New York: Macmillan, 1913 * Davenport, Herbert J., ''The Economics of Alfred Marshall''. Ithaca, New York: Cornell University Press, 1935 Articles, a selection: * Davenport, Herbert J. (1894) "The Formula of Sacrifice." ''Journal of Political Economy''. 2 (September): 561–573 * Davenport, Herbert J., 1902, "Proposed Modifications in Austrian Theory and Terminology." Quarterly Journal of Economics, May * Davenport, Herbert J., 1904, "Capital as a Competitive Concept," Journal of Political Economy, December * Davenport, Herbert J., 1905, "Doctrinal Tendencies: Fetter, Flux, Seager and Carver," Yale Review, November * Davenport, Herbert J., "Social Productivity Versus Private Acquisitions", Quarterly Journal of Economics, November, 1910

References

External links

* * {{DEFAULTSORT:Davenport, Herbert J. 1861 births 1931 deaths Economists from Vermont Austrian School economists Harvard Law School alumni Leipzig University alumni University of Chicago alumni University of Chicago faculty University of Missouri faculty University of South Dakota alumni Presidents of the American Economic Association Journal of Political Economy editors