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Frank Fetter

Frank Albert Fetter
Born (1863-03-08)8 March 1863
Peru, Indiana, U.S.
Died 21 March 1949(1949-03-21) (aged 86)
Princeton, New Jersey, U.S.[1]
Nationality American
Field Economics, history, political economy, distribution theory, imputation
School or tradition
Austrian School
Influences Henry George
Influenced Ludwig von Mises, F.A. Hayek, Murray Rothbard, Richard Ebeling, Jeffrey Herbener

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 theories of Eugen von Böhm-Bawerk, Friedrich von Wieser, Ludwig von Mises and Friedrich Hayek.

Fetter notably debated [2] A proponent of the subjective theory of value, Fetter emphasized the importance of time preference and rebuffed Irving Fisher for abandoning the pure time preference theory of interest that Fisher had earlier espoused in his 1907 book, The Rate of Interest.[3]


  • Early life and education 1
  • Professional life 2
  • Theoretical contributions in economics 3
    • Land as capital 3.1
    • Applications of subjective value theory 3.2
    • Criticism of Fisher's theory of interest 3.3
  • Reception in academia 4
  • Books 5
  • 6 Articles
  • References 7
  • External links 8

Early life and education

Frank Fetter was born in

External links

  1. ^ Frank Albert Fetter (American economist) – Encyclopedia Britannica
  2. ^ a b Blaug, Mark. Interview in Andelson, Robert V. Critics of Henry George: An Appraisal of Their Strictures on Progress and Poverty. Blackwell Publishing. 1979. p. 686.
  3. ^ a b c Rothbard, Murray N. Capital, Interest, and Rent"Fetter the Radical." Introduction to . Institute for Humane Studies. Kansas City: Sheed Andrews and McMeel, Inc., 1977.
  4. ^ a b c d e Brown, J. Douglas. "Fetter, Frank A." A Princeton Companion. (Alexander Leitch, ed.). Princeton University Press, 1978.
  5. ^ "Beta Chapter of Indiana." Grand catalogue of the Phi kappa psi fraternity, 1922. Hilburn & West. [5]
  6. ^ a b c d e f Mises.orgHerbener, Jeffrey. "Frank A. Fetter: A Forgotten Giant."
  7. ^ "Frank A. Fetter, 1863–1949." The New School.
  8. ^ Israel M. Kirzner (1987). "Austrian School of Economics," The New Palgrave: A Dictionary of Economics, v. 1, pp. 145–51.
  9. ^ Raico, Ralph. "FDR—The Man, the Leader, the Legacy." Freedom Daily. July 2000. Future of Freedom Foundation.
  10. ^ "Land as a factor of production." The American Journal of Economics and Sociology. December 1, 2002.
  11. ^ Fetter, Frank. Capital, Interest, and Rent. Murray N. Rothbard, Ed. Kansas City: Sheed, Andrews, and McMeel, Inc. 1977. Part 2, Essay 2, para. 13.
  12. ^ Ebeling, Richard. ."15 Great Austrian Economists"Book Review: Freedom Daily. June 2000. Future of Freedom Foundation.
  13. ^ "Past AEA Officers." American Economic Association
  14. ^ Howard, Stanley E. and E. W. Kemmerer. "A Birthday Note." American Economic Review, Vol. 33, No. 1, Part 1 (March 1943), pp. 230–235. JSTOR.
  15. ^ Brown, J. Douglas. "Memorial: Frank Albert Fetter, 1863–1949." American Economic Review. Vol. 39, No. 5 (September 1949), p. 979.


  • "Recent Discussion of the Capital Concept" by Frank A. Fetter, Quarterly Journal of Economics, (1900)


  • Versuch einer Bevolkerungslehre ausgehen von einer Kritic des Malthus'schen Bevolkerungsprincips (Translation: "An Essay on Population Doctrine based on a Critique of the Population Principles of Malthus"). Jena: Gustav Fischer, 1894.
  • The Principles of Economics. [1] New York: The Century Co., 1905
  • Source Book in Economics. New York: The Century Company., 1912.
  • Economics, Volume 1: Economic Principles. [2] New York: The Century Co., 1915.
  • Manual of References and Exercises in Economics for Use with, Vol. 1: Economic Principles. New York: The Century Co., 1916.
  • Economics, Vol. 2: Modern Economic Problems. [3] New York: The Century Co., 1916. Revised 2nd edition, 1922.
  • Manual of References and Exercises in Economics for Use with, Vol. 2: Modern Economics. New York: The Century Co., 1917.
  • Masquerade of Monopoly. New York: Harcourt, Brace & Co., 1931.
  • Capital, Interest and Rent: Essays in the theory of distribution. [4] Institute for Humane Studies. Kansas City: Sheed Andrews and McMeel, Inc., 1977.


Upon Fetter's death in 1949, J. Douglas Brown, who would later be named Provost of Princeton University, wrote a "Memorial" to Fetter for the American Economic Review. He opened the tribute with the announcement that "with the death of Frank Albert Fetter the great company of American economists has suffered an irreparable loss."[15]

...while reading Fetter's oeuvre in the course of writing my Man, Economy, and State... I was struck by the brilliance and consistency of his integrated theory of distribution and by the neglect of Fetter in current histories of economic thought, even by those that are Austrian oriented. For Fetter's systematic theory, while challenging and original (particularly his theories of interest and rent), was emphatically in the Austrian school tradition.[3]

Fetter's treatise, Principles of Economics (1904), has been described by Herbener as "unsurpassed until Ludwig von Mises's treatise of 1940, Nationaloekonomie."[6] In Rothbard's preface to the 1977 edition of Fetter's Capital, Interest, and Rent, he notes that he was first introduced to Fetter's work via a citation in Mises' Human Action and describes Fetter's views on interest and rent as being "Austrian" and influential on his own views.

In 1909, at the age of forty-six, Fetter was awarded an honorary LL.D. from Colgate University,[4] and he was made president of the American Economic Association in 1913.[13] Additional honorary doctoral degrees were conferred on Fetter by Occidental College in 1930 and Indiana University in 1934.[14] He was a fellow of the American Academy of Arts and Sciences and a member of the American Philosophical Society. In 1927, he was awarded the Karl Menger Medal by the Austrian Economic Society.[4]

Reception in academia

...Fetter discovered that the seeds of error were in Fisher's publication of 1907. Fisher had stated that valuations of present and future goods imply a preexisting money rate of interest, thereby suggesting that a pure time-preference explanation of interest involves circular reasoning. By way of contrast, and in the course of explaining his own pure time-preference, or "capitalization," theory of interest, Fetter showed that time valuation is prerequisite to the determination of the market rate of interest.[3]

In "Interest Theories, Old and New" (1914), Fetter criticized Irving Fisher for abandoning the pure time preference theory of interest that Fisher had earlier espoused in his 1907 book, The Rate of Interest, a tome which had heavily influenced Fetter. As Murray Rothbard recounts, upon further review of Fisher's earlier work,

Criticism of Fisher's theory of interest

Irving Fisher (1867–1947)

Likewise, Herbener explains, this led Fetter to also conclude that "[t]he rental price of each producer good is imputed to it by entrepreneurial demand and is equal to its discounted marginal value product. The capital value of each durable good is equal to the discounted value of its future rents." Fetter's contribution to the Austrian subjectivist tradition, then, is that he "showed how this uniform, subjective theory of value implies the demise of socialist theories of labor exploitation, Ricardian theories of rent, and productivity theories of interest."[6]

Fetter believed in the subjective theory of value, and thus supported a pure time preference theory of interest. Richard Ebeling wrote that Fetter "constructed a consistent theory of value, price, cost, and production in the context of emphasizing the time-valuational element in all consumption and production choices."[12] According to Jeffrey Herbener, Fetter asserted that "just as the price of each consumer good is determined solely by subjective value, the rate of interest is determined solely by time preference."[6]

Henry George (1839–1897)

Applications of subjective value theory

Fetter's stand on this issue further led him to oppose [2]

The notion that it is a simple matter to distinguish between the yield of natural agents and that of improvements is fanciful and confusing.... The objective classification of land and capital as natural and artificial agents is a task that always must transcend the human power of discrimination.[11]

Fetter participated in a notable debate with English economist Alfred Marshall, both through his 1904 Principles of Economics and a number of journal articles in the American Economic Association's journals and in the Quarterly Journal of Economics. He contested Marshall's position that land is theoretically distinct from capital.[10] Fetter argued that such a distinction was impractical, stating that,

Alfred Marshall (1842–1924)

Land as capital

Theoretical contributions in economics

In January 1933, a letter was sent to the president-elect, urging him not only to lower tariff barriers to revive international trade, but to maintain the gold standard "unflinchingly." The letter was signed by a number of prominent "traditional" economists, headed by the American "Austrian," Frank A. Fetter, of Princeton.[9]

Fetter was a staunch opponent of Franklin D. Roosevelt's plan to end the gold standard and worked with other economists in lobbying against the move to a fiat currency. As some indication of Fetter's role in these efforts,

Despite his ideological proximity and personal rapport with eminent Austrian School economists such as Eugen von Böhm-Bawerk and Friedrich von Wieser, as well as his favorable reviews of works by Ludwig von Mises and F.A. Hayek, Fetter referred to himself, Thorstein Veblen, and Herbert J. Davenport more specifically as being members of the "American Psychological School."[7] The appellation "Psychological School" is now generally considered to be synonymous with "Austrian School."[8]

After earning his doctoral degree, Fetter accepted an instructorship at Cornell, but quickly left after being offered a position as a professor at Indiana University. In 1898, Stanford University lured him away from Indiana, but Fetter resigned from Stanford three years later over a dispute regarding academic freedom. After leaving Stanford in 1901, Fetter went back to Cornell, where he remained for ten years.[4] In 1911, he again found himself in professional transition, accepting the position of chairman in an interdisciplinary department at Princeton University which incorporated history, politics, and economics.[6] Fetter was the first chairman of Princeton University's Department of Economics and Social institutions.[4]

Frank Fetter as a young man, pictured in The American Economic Review

Professional life

After eight years, Fetter returned to academia and finally completed his B.A. in 1891. In 1892, Jeremiah W. Jenks—who had taught Fetter at Indiana University—acquired a teaching position at Cornell University at the new President White School of History and Political Science and subsequently secured a fellowship for Fetter at that institution. Fetter completed his Master of Philosophy degree the same year. Jenks then convinced Fetter to study, as Jenks himself had, under Johannes Conrad at the Sorbonne in Paris, France. Fetter earned his Ph.D. in 1894 from the University of Halle in Germany, where he wrote his doctoral dissertation, a critique of Malthusian population theory.[6]


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