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Could Science Cure the Economy?

By Philip Scranton
January 14, 2013 11:06 AM EST
Technocrats' Magazine
Technocrats' Magazine

On New Year’s Day in 1933, Joseph Barker, the dean of the Columbia University School of Engineering, announced the "formation of a research group of unparalleled magnitude" to come up with solutions to the economic crisis.

Widely publicized "cure-alls" for the Great Depression based on "unsound, unscientific reasoning" had multiplied as the crisis deepened. Barker said his team would undertake the "scholarly study of the cold, factual data relating to the causes of this depression."

But Barker had been mesmerized by one of those cure-alls: technocracy, a concept that would trigger an intense debate about science, economics and politics in the 1930s, and then flame out spectacularly.

Technocrats believed neither businessmen nor politicians could be trusted with making sweeping changes in market and price systems. They argued that Americans should transfer authority over the economy to scientists and engineers whose objective research would optimize the allocation and use of materials, transportation and energy.

The U.S. already had enough capacity to meet the nation’s needs and create full employment, but many resources were unused or underused, they said. Increasing efficiency would decrease Americans' annual workload and spread work more fairly -- without decreasing wages.

Howard Scott, a Columbia professor and leader of the technocracy movement, also said machinery advances had destroyed jobs, and he claimed to have the data to prove it.

Not everyone was swayed by technocracy as an answer to the economic crisis. Many economists thought technocrats' promises of increased efficiency were impossible without extreme technological advances. John Van Deventer, editor of the Iron Age, an industrial weekly, urged Columbia’s president to have the National Industrial Conference Board verify the data that technocracy advocates were circulating, as he doubted its accuracy, the New York Times reported.

Viewing technocracy as a Depression-born delusion, he added: "If there had been a malignant social germ in the machine tending to cause unemployment, there should have been some evidence of its ravages in the half century prior to the sudden collapse of 1929." Instead, industrial employment had risen until the crash.

Essayist Simeon Strunsky, who analyzed the movement’s publications in the New York Times Sunday magazine, said he detected "a reckless use of figures" to support arguments, gross distortions of historical data and an eagerness to hand over the nation’s future to unnamed (and unelected) experts. Technocracy would profoundly subvert democracy, he said.

In response, Scott invited 400 businessmen and public figures to the Pierre Hotel in New York on Jan. 13. Broadcast nationwide, his address was pessimistic. Unemployment would rise to 20 million from 12 million by mid-1934, social upheavals would increase and the economy would grind to a halt, he said. Unless, of course, the U.S. adopted the principles supported by technocracy’s advocates. "His audience sat in dead silence, gazing at Mr. Scott, and when he ended the applause was moderate," the New York Times reported.

Soon, the truth came out. The American Engineering Council said technocracy was "the cleverest pseudo-scientific hoax yet perpetrated." Scott, who had claimed he had a heroic football career at Notre Dame University and supervised the construction of the Muscle Shoals hydroelectric dam, turned out to be a fraud from New Jersey who once ran a tiny floor-polish factory. Columbia quickly cut all ties with Scott and closed his office.

But technocracy was far from the last grand scheme proposed to "fix" the Depression.

(Philip Scranton is a Board of Governors professor of the history of industry and technology at Rutgers University, Camden, and the editor-in-chief of Enterprise and Society. He writes "This Week in the Great Depression" for the Echoes blog. The opinions expressed are his own.)

Read more from Echoes, Bloomberg View's economic history blog.

To contact the writer of this blog post: Philip Scranton at scranton@camden.rutgers.edu.

To contact the editor responsible for this blog post: Kirsten Salyer at ksalyer@bloomberg.net.

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