Wilson, Edwin Bidwell (1879–1964)

Abstract

While primarily a mathematician, Wilson’s relatively few contributions to economics in the interwar years, particularly two short papers on demand theory (1935 and 1939) and one on business cycles (1934), were not without their influence in Harvard economic circles of the day. Schumpeter drew on the arguments of Wilson’s paper on the periodicity of US business cycles in his Business Cycles, and Samuelson’s Foundations contains an acknowledgement to Wilson (with Schumpter and Leontief) in its preface, and credits him with the suggestion of utilizing the Le Chatelier principle in economic analysis.

While primarily a mathematician, Wilson’s relatively few contributions to economics in the interwar years, particularly two short papers on demand theory (1935 and 1939) and one on business cycles (1934), were not without their influence in Harvard economic circles of the day. Schumpeter drew on the arguments of Wilson’s paper on the periodicity of US business cycles in his Business Cycles, and Samuelson’s Foundations contains an acknowledgement to Wilson (with Schumpter and Leontief) in its preface, and credits him with the suggestion of utilizing the Le Chatelier principle in economic analysis.

The essay on cyclical fluctuations in business activity was an attempt to make deeper analytical use of the monthly index of US business activity prepared by Leonard Ayers and published in 1931. Using the device of the ‘periodogram’, invented by Arthur Schuster, Wilson is able to extract from Ayers’ data ‘hidden’ cycles of different periodicities. The idea that behind any given aggregative series there might lurk different patterns of cyclical movement was, no doubt, a spur to Schumpeter’s consideration of the simultaneous operation of Juglar, Kitchin and Kondratieff cycles in Business Cycles.

The two short essays on demand theory (1935 and 1939) are concerned with the derivation of the law of demand – that is, the inverse relationship between price and quantity demanded. The first generalizes Pareto’s proof of the proposition, which had assumed additively separable utility functions. Wilson assumes instead only that U_i(x₁ … x_n), may take the form U_i (x₁) + U_i (x₂ … x_n) and derives from this the law of demand. The second paper is designed to show that Marshall’s assumption of a constant marginal utility of money gave only a special case of the law of demand, and that the same result could be obtained without it. As Wilson observed, this ‘forces us over from the “index of ophelimity” to a utility definite except for a linear transformation, i.e., except for scale and origin’ (1939, p. 649). The importance of this result, especially given its relation to the Hicks–Allen theory of demand, for the subsequent debates over cardinal versus ordinal utility is readily apparent.

Wilson was born at Hartford, Connecticut, on 25 April 1879. After graduating from Harvard in 1899, he took his Ph.D. from Yale in 1901. From 1907 until 1922 he was on the faculty at MIT, first as professor of mathematics and later as professor of mathematical physics. From that date until his retirement, he was professor of vital statistics at the Harvard School of Public Health. He served as president of the American Statistical Association (1929), was vice-president of the National Academy of Sciences (1949–53), and was an honorary fellow of the Royal Statistical Society. He died on 28 December 1964.

Selected Works

• 1912. Advanced calculus. Boston/New York: Ginn & Co.

• 1934. The periodogram and American business activity. Quarterly Journal of Economics 48: 375–417.

• 1935. Generalization of Pareto’s demand theorem. Quarterly Journal of Economics 49: 715–717.

• 1939. Pareto versus Marshall. Quarterly Journal of Economics 53: 645–650.