Were she still alive, Anna Schwartz, one of the last centuries’ greatest monetary economists, would have celebrated her 100th birthday today.
Alas, we must commemorate the date without her. To do so, I repost here remarks I made upon her death in 2012. In what has become a prolonged era of unconventional monetary policy, the loss of her expertise and wisdom is even more sorely felt than it might have been otherwise. Still all of us, and the economics profession especially, are much better off thanks to her straightforward and uncompromising scholarship.
Happy Birthday, Anna.
She was one of my intellectual heroes, Anna was — together with Milton and Leland, David Laidler, Sir Alan Walters, and Dick Timberlake. Old monetarists all, come to think of it. Now only three are left; and, no, they do not make them like that any more.
I met Anna at NYU. Back then the NBER occupied the 8th floor of 269 Mercer Street. NYU’s economics department was on the 7th floor. Of course I went to meet her. She turned out to be very nice, so I got the bright idea to ask her to serve as an external member of my dissertation committee. I had the impression that I was one of very few NYU Ph.D. candidates to think of doing that, which struck me as odd. But then a lot of things about NYU, and about the economics business generally, struck me (and still strike me) as odd.
Anna gave me some good advice; indeed, apart from Larry White (who was my supervisor, and who I talked to almost daily) she was my most helpful adviser at NYU. Naturally I don’t remember much about the particular advice she gave me. But I do distinctly remember her telling me that, once I got into the business, I had better write about stuff besides free banking if wanted to survive. I took Anna’s advice, and still found it rough going. Had I not listened to her I’m sure I would have had to give up.
I’m also pretty sure that it was only thanks to Anna that some of the the free banking stuff that did make it into the better journals got through: she was one of the few persons who was both greatly respected by the editors of those journals and willing to give the free bankers a hearing. Indeed, Anna was more than sympathetic: she was, or she became, one of us. I am reasonably certain that she played a very large, if not crucial, part in encouraging Milton to revise his thinking on the topic, as he did when he and Anna published their 1986 JME paper “Has Government Any Role in Money?”. That Anna’s views on the proper scope of government interference in banking became progressively more radical I have no doubt. For example, while in a 1995 Cato Journal article she and Mike Bordo took the conventional line that you couldn’t have a stable banking system without some sort of deposit insurance, when I questioned her about this stand a few years ago Anna claimed that she had since rejected that view, having come to believe instead that the moral hazard arising from deposit guarantees ultimately caused such guarantees to do more harm than good.
I was lucky to be able to talk to Anna at length on several occasions during the last few years, thanks to Walker Todd, who arranged for her to visit the American Institute for Economic Research while I was there as a summer fellow. What I remember most about those conversations was how very candid and uncompromising they were: Anna never held a punch, and when she threw one, it landed square on target. Not that Anna wasn’t generous with praise: it’s just that, whatever she thought, she always came right out with it. She’d lived long enough, I suppose, to earn that. In any event it meant that talking to her was really a blast. (If only I could repeat all that I heard!)
Now, with all the dominoes lined-up from Greece to Brussels and beyond, and ready to start toppling at any moment, how I wish that this tough and uncompromising monetarist was still among us! No one can say just what she’d have made of it all; but whatever she made you can bet she would have served it up straight.