Richard Theodore Ely
Richard Theodore Ely was a prominent American economist known for his influential contributions to the field of institutional economics. Born into a family that valued education, he graduated at the top of his class from Columbia University in 1876 and later earned a doctorate in economics from a European university. Upon returning to the U.S. in 1881, he began teaching at The Johns Hopkins University and later took on a leading role at the University of Wisconsin in Madison, where he established the School of Economics, Political Science, and History.
Ely was a prolific writer whose work reflected a strong concern for labor issues, which led to controversies during his career. In 1894, he faced accusations of promoting socialism due to his advocacy for workers’ rights, although an investigation by the university ultimately cleared him of these charges, affirming the principle of academic freedom. He significantly contributed to the establishment of institutional economics, focusing on empirical observations of economic conditions, and authored the widely-used textbook, "Outlines of Economics." Ely's legacy includes his role as a founding member and early president of the American Economic Association, highlighting his lasting impact on the discipline of economics.
Subject Terms
Richard Theodore Ely
- Born: April 13, 1854
- Birthplace: Ripley, New York
- Died: October 4, 1943
- Place of death: Old Lyme, Connecticut
Identification: American university educator
Significance: Ely’s trial by his university on charges of advocating socialism led to a celebrated affirmation of academic freedom
Ely was the son of a self-taught civil engineer and a gifted art and music teacher. After graduating first in his class at Columbia University in 1876, he earned a doctorate in economics in Europe. On returning to the United States in 1881, he joined the faculty at The Johns Hopkins University. Eleven years later he was invited to head the School of Economics, Political Science and History at the University of Wisconsin in Madison.
A prolific writer on economics, Ely early expressed sympathy for working men and women. His concern for labor led to his being accused of promoting socialism to his university students by Wisconsin’s recently elected state superintendent of education, Oliver E. Wells, in 1894. Published in The Nation—then a bastion of conservatism—these charges received national publicity. Wells accused Ely of actively supporting efforts to unionize printers at a printing company that had a state contract. A committee appointed by the university to investigate the charges concluded that Wells had based his accusations on isolated comments taken out of context, and that Ely had no connection whatever with efforts to unionize employees.
The committee’s report contained an affirmation of academic freedom afterward put on a bronze plaque affixed to the university’s main administration building:
Whatever may be the limitations which trammel inquiry elsewhere we believe the great state University of Wisconsin should ever encourage that fearless sifting and winnowing by which alone the truth can be found.
During his distinguished career in economics, Ely helped to found the school of institutional economics, which drew general principles from conditions actually observed in the economy—what Ely called the “look and see” method. He also was a founder and early president of the American Economic Association. His college textbook, Outlines ofEconomics, was widely used.