Remembrance

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Michael Bordo
Michael Bordo

I could go on forever about Anna Schwartz. She made major contributions, not just in monetary history, but in monetary economics in general. The top money and macroeconomics people hold her in the highest regard, as do monetary and financial historians.

Her career began in the 1940s, when she started doing research at the National Bureau of Economic Research (NBER). Her first book, Growth and Fluctuations of the British Economy 1790–1850, written with Arthur Gayer and Walt Rostow, was published in 1953. Anna and her co-authors applied the NBER methodology to business cycles in the first half of the 19th century; she was instru­mental in putting the data together. This was a major book and a vital piece of economics history.

Of course, the things we remember best today are her works with Milton Friedman, with whom she co-authored three major NBER books. The first was the monumental Monetary History of the United States 1867–1960, which revolutionized our thinking on U.S. monetary history. The part of the book that is best remembered is chapter seven, “The Great Contraction, 1929–1933.” The message of that chapter is that the Great Contraction was not caused by a collapse of investment or a long-lagged response to the imbalances of World War I. It resulted from a collapse of the money supply, which in turn was largely explained by the Federal Reserve’s mistakes in the 1930–33 period. During that time, the Fed failed to act as lender of last resort to offset a series of banking panics.

The other two NBER books with Friedman, Monetary Statistics of the United States (1970) and Monetary Trends in the United States and United Kingdom (1982) have less resonance today but became key building blocks of modern monetary economics. In addition to those three books, Anna wrote a number of seminal articles. “Money and Business Cycles,” written with Friedman in 1963, was important in showing the link between mon­etary shocks and economic recessions and recoveries.

Besides her work with Friedman, Anna wrote a number of seminal articles and books, including a 1973 paper on the history of inflation; an NBER book, The International Transmission of Inflation with Michael Darby, James Lothian, and Alan Stockman (1983); and, in 1986, a thought-provoking paper on real versus pseudo-financial crises. She served as director of the U.S. Gold Commission (to study the feasibility of returning to the gold standard) in 1982 and was among the founding members of the Shadow Open Market Committee (an independent group that examines Fed policy). She was one of the prime monetarists, after Friedman retired, right in the thick of it with Karl Brunner and Allan Meltzer in critiquing Fed policies.

Many people think that Anna should have received a Nobel Prize, and maybe she would have if times had been different. When Friedman got the prize in 1976, she wasn’t mentioned, though she was a powerful force in monetary history and in the major books they wrote together. Of course, Friedman didn’t get the prize just for monetary history. But in terms of her contributions to monetary economics, I think she has many of the markers of a Nobel laureate.

Anna Schwartz
Anna Schwartz
Credit: David Shankbone

What I remember most about Anna is how much she loved her work. Her whole life was organized around going to the office. She officially retired from NBER when she was 65, but she didn’t stop working until she was 93. She went into NBER every day when she was in her 80s and 90s, and she still put in a full eight-hour day.

She just didn’t stop. She loved being involved in economic research and the policy game. It was her passion—it drove her, even in her later years. Without that extreme intellectual vitality, I don’t think she would have lived as long. In her later years, she went to a lot of trouble to come into the office and work there for hours, answering her correspondence and working on papers and the book with Owen and me. She was involved in the deliberations of the Shadow Open Market Committee up until she couldn’t travel any more.

Yet she was a balanced person. She had a great family—four kids, many grandchildren and great grandchildren, and they used to come into New York to see her often. She had season tickets to the Metropolitan Opera, which she loved; she rarely missed a performance. She was a very active person in other dimensions as well. She always had a few novels going, and especially liked Anthony Trollope. She was on top of what was going on in politics and economic policy everywhere in the world. She read the Wall Street Journal and the New York Times each day, picking up every little detail. She never missed a beat.

—as told to Doug Campbell
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