A Remembrance of Edward C. Harwood
[Reprinted from the American Journal of Economics
and Sociology, July 1982]
EDWARD CROSBY HARWOOD, economist, military engineer and founder of
the American Institute for Economic Research in Great Barrington,
Mass., was a participant in the work of the American Journal of
Economics and Sociology since its founding. First as a reader and
kindly critic, then as a contributor and member of the editorial
board serving as a referee, he helped to assure the success of the
effort. No matter how busy he was with his own enterprises -- he was
a leading investment counselor, establishing an agency that served
the investment needs of those with the lowest as well as the highest
incomes -- he was always ready to help a younger scholar bring a
research project to completion.
E. C. Harwood was born in Cliftondale, Mass., October 28, 1900. He
was graduated from the United States Military Academy at West Point
in 1920 and commissioned a second lieutenant. The army sent him to
Rensselaer Polytechnic institute for further study of civil
engineering and he was graduated in 1922, later taking master's
degrees there in engineering and in business administration.
Colonel Harwood spent the rest of the 1920s in the Engineer Corps,
advancing through the ranks. In 1930 he became associate professor
of military science at the Massachusetts Institute of Technology.
After two years he was appointed executive U.S. district engineer in
Boston in charge of the Cape Cod Canal Improvement Program and in
1936 of flood control surveys in the northeast. He retired from the
army for the first time in 1937.
He founded the American institute of Economic Research in 1933 to
achieve several purposes. One was to inform the general public of
the significance of national economic policies to create an informed
electorate. Another was to provide investment advice based on
unbiased economic research to persons in all income brackets. Later
he founded American Institute Counselors, Inc., to carry on the
When the second world war impended, Colonel Harwood returned to
active duty in 1940. He served at first at M.I.T., training ofhcers.
In 1942 he was appointed executive of the engineering services of
the European Theatre of Operations. Recalled to Washington in 1943
to serve for a time as chief of the mobilization division of the War
Department, he was assigned later that year as corps engineer of the
Army's XI Corps, and then in 1944 he was named chief of staff of the
Army Service Command in the Southwest Pacific Theatre. For his
services he was decorated with the Legion of Merit and the Bronze
Retiring from the army for the second time in 1946, he resumed
his work at the Great Barrington, Mass., institute that he had
founded. He became a trustee of the Henry George School of Social
Science and of the Progress Foundation, and treasurer of the
Behavioral Research Council. But mainly he resumed the career in
economic research interrupted by war.
In 1932 he had published a book, Cause and Control of the
Business Cycle, which established his reputation as an economist
contributing original ideas to the discipline even though his theory
of the business cycle was found by his peers no more acceptable than
any other. He published several books at that time critical of
national economic policy or advising consumers on economic problems.
One, What Will inflation and Devaluation Mean to You (1934),
presaged his later activity as one of the first hard money
advocates. He first advised his clients to buy South African gold
mining shares in 1958. In 1979 advocates of the gold standard minted
a one-ounce gold piece bearing his profile and his institute's
motto, "For integrity there is no substitute."
His books in the period from 1955 to 1973 sought to develop a
science of economics based on mathematical and philosophical
analysis. This research was interrupted when he found it advisable
to go to Switzerland to make arrangements for gold investments by
his clients. Then the Securities and Exchange Commission and the
Internal Revenue Service began efforts to prosecute him for his
activities. For a time he was handicapped by injunctions and
government efforts to avoid trial. When the cases came to trial the
charges were dismissed with prejudice to the government.
His interest in the Reconstruction of Economics (the title of a
book he published in 1955) went beyond the development of the
theory. In one period he collaborated with the Robert Schalkenbach
Foundation in a program to develop what he considered fully trained
economists. The program took selected high school seniors through
college and graduate school and postgraduate study for two years
beyond the doctorate. Besides the usual training in economics, the
participants received wide training in the social sciences, in
philosophy, particularly the philosophy of science, and in
mathematics and statistics. From one point of view -- the
government's -- the program was highly successful: it produced
individuals who were badly needed to fill jobs as the scientific
members of research teams devoted to developing new weapons systems.
Few who completed most of the program were willing to take jobs at
much less pay in the field of economics.
I met Ed only a few times but they were enough to make us lifelong
friends. When I founded this JOURNAL in 1941, Ed came down from
Cambridge to ask how he could help. He took me to dinner at the old
Vanderbilt Hotel in New York and when I outlined the project he gave
his cordial approval. He served unofficially as a referee and,
though he was up to his ears in work helping to win the war, he
managed to turn out a classical article, "The Full Significance
of Freedom," which we published in the January, 1945 issue.
He always had time for our concerns and our problems, even though
our communication had to be limited to correspondence. Soon after
his return to civilian life he joined our editorial board and though
his enterprises in Great Barrington and in Switzerland had first
claim upon him, he always managed to serve our readers, too. We have
lost a good friend, an erudite collaborator, and a courageous
crusader for justice and liberty. To his wife and his family, who
are carrying on his work, we extend our deepest condolences.