The New Palgrave Dictionary of Economics

Living Edition
| Editors: Palgrave Macmillan

Hadley, Arthur Twining (1856–1930)

  • Robert B. EkelundJr.
Living reference work entry

Latest version View entry history

DOI: https://doi.org/10.1057/978-1-349-95121-5_1221-2

Abstract

American economist, educator and public servant, Hadley was educated at Yale and at the University of Berlin, where he studied under German historicists. In a remarkable career, Hadley was, in turn, a freelance writer and lecturer on railway economics, a professor of political economy at Yale (1891–9), president of the American Economic Association, president of Yale University (1899–1921), chairman of the Railroad Securities Commission providing the Hadley Report on Railway finances in 1911, and was widely sought after as a political candidate for high political office in the United States. An inveterate traveller, Hadley died aboard ship in Kobe harbour in 1930.

Keywords

American Economic Association Cartels Economic evolution Exhaustible resources Hadley, A. T. Monopoly Period analysis Price discrimination Profit maximization Property rights State capture Transport markets 

JEL Classifications

B31 

American economist, educator and public servant, Hadley was educated at Yale and at the University of Berlin, where he studied under German historicists. In a remarkable career, Hadley was, in turn, a freelance writer and lecturer on railway economics, a professor of political economy at Yale (1891–9), president of the American Economic Association, president of Yale University (1899–1921), chairman of the Railroad Securities Commission providing the Hadley Report on Railway finances in 1911, and was widely sought after as a political candidate for high political office in the United States. An inveterate traveller, Hadley died aboard ship in Kobe harbour in 1930.

Hadley was an extremely prolific and eclectic writer, but the bulk of his important work in economics was completed before the turn of the 20th century. His reputation rests essentially on two works, Railway Transportation (1885) and a basic text, Economics: An Account of the Relations between Private Property and Public Welfare (1896), which received high praise from his friend and colleague, Irving Fisher.

In Railway Transportation Hadley revealed himself as the most creative railway economist of the day through an integration of sophisticated (certainly for the time) economic analysis with the problems of railway organization. Among other theoretical insights Hadley formalized a theory of monopoly and price discrimination; developed, in the mathematical terms of Cournot, a marginal rule for profit maximization; and anticipated the period analysis of Marshall’s Principles. More importantly, perhaps, he developed a modern and complete theory of cartels, showing that, in the presence of open competition, such unsanctioned behaviour on the part of railroads, would lead to the benefits of competition without the attendant disadvantages. In another perspicacious insight Hadley correctly characterized railway regulation as resulting from the capture, by the industry, of legal sanctions to obtain rate stability. In the main, Hadley viewed regulation as representing a low-cost cartel enforcement device.

In Economics Hadley went further than Marshall by explicitly developing the interrelations between property rights, economic evolution and economic efficiency. Hadley utilized the real world examples of the fisheries and mining to demonstrate the impact of ill-defined property rights on depletable resources, emphasizing the necessity of altered systems to obtain optimal resource use and allocation. This contribution, along with his prophetic analyses of transport market structure, establishes Hadley as one of the most inventive pre–20th-century American economists.

Selected Works

  • 1885. Railway transportation: Its history and its laws. New York.

  • 1890. The prohibition of railroad pools. Quarterly Journal of Economics 4: 158–171.

  • 1896. Economics: An account of the relations between private property and public welfare. New York.

Bibliography

  1. Cross, M.L., and R.B. Ekelund Jr. 1980. A.T. Hadley on monopoly theory and railway regulation: An American contribution to economic analysis and policy. History of Political Economy 12: 214–233.CrossRefGoogle Scholar
  2. Cross, M.L., and R.B. Ekelund Jr. 1981. A.T. Hadley: The American invention of the economics of property rights and public goods. Review of Social Economy 39: 37–50.CrossRefGoogle Scholar
  3. Fisher, I. 1930. Obituary: Arthur Twining Hadley. Economic Journal 40: 526–533.Google Scholar
  4. Locklin, D.P. 1933. The literature on railway rate theory. Quarterly Journal of Economics 47: 167–230.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2008

Authors and Affiliations

  • Robert B. EkelundJr.
    • 1
  1. 1.