Yale Alumni Magazine: Yale professor Irving Fisher (March 2003)

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An Eccentric Economist
March 2003
by Judith Ann Schiff

Judith Ann Schiff is Chief Research Archivist at the Yale University Library.

In the prophecy business, failures tend to outlive successes. So it is that Yale professor Irving Fisher (1867–1947), a pioneer in mathematical economics, is remembered by many people more for one bad financial prediction than for considerable accomplishments in his academic discipline and in fields as seemingly different as world peace and personal health.

Shortly before the stock market crash of 1929, Fisher proclaimed that stock prices were not over-inflated, but rather at a new stable plateau. While events proved him embarrassingly wrong—he lost a fortune in the ensuing market collapse—Fisher’s intellectual “stock” would eventually rebound.

Fisher entered Yale in 1884. His father had just died, and to make ends meet, he had to live with his young brother and mother in a modest apartment near the campus. In addition, Fisher tutored, competed for academic prize money, and worked on his inventions, such as a device to improve a piano’s performance. As a member of Bob Cook’s crew, he invented an indicator to improve a rower’s stroke.

On car trips, Fisher subsisted on what he considered a complete diet: bananas and peanut butter.

Following graduation in 1888, Fisher entered the Graduate School, studying mathematics under Josiah Willard Gibbs and political economy with William Graham Sumner, who suggested that Fisher combine the fields for his dissertation. The resulting paper, one of the earliest works of mathematical economics by an American, brought Fisher international recognition, and in 1898, Yale appointed him professor of political economy. Living with his wife and growing family in a mansion on upper Prospect Street, Fisher’s future seemed secure.

But later that year he was stricken with tuberculosis. Forced to devote six years of his life to restoring his health, Fisher wrote that the ordeal “greatly changed my point of view from that of an academic . to that of partaker in public movements for the betterment of mankind.” He became an advocate of healthful eating and outdoor living, inventing tents and special beds for tuberculosis patients. Something of an eccentric, Fisher bicycled to classes and meetings and jogged in shorts, even in winter. On car trips he subsisted on what he considered a complete diet, bananas and peanut butter.

In 1907, he formed and chaired “The Committee of One Hundred,” to promote the establishment of a national bureau of health. One of the Committee’s early reports, National Vitality, Its Wastes and Conservation, deemed public health a natural resource. In 1913, Fisher co-founded the Life Extension Institute to persuade insurance companies to provide free health check-ups to their customers. This led to an interest in eugenics, and he was among the first to develop the controversial eugenics movement in the United States. He co-authored How to Live, which became a standard hygiene textbook for schools and colleges. Through 90 editions, the text advised on every aspect of health, including heredity and selecting a mate.

With the advent of World War One, Fisher became a charter member of a group supporting a “League to Enforce Peace,” an idea he had first presented in 1890 to the Yale Political Science Club. In the 1920s he continued to work toward America’s participation in the League of Nations.

Fisher’s most profitable invention, the Index Visible, which in its simplest form became the Rolodex, made him a multimillionaire. In 1925 his firm merged with a competitor to form what later became Remington Rand and then Sperry Rand.

As an economist, Fisher was called “the greatest expert of all time on index numbers” by Yale professor and Nobel Prize-winner James Tobin, and from 1923 to 1936, Fisher’s company, the Index Number Institute, computed price indices from all over the world. To be sure, his assessment of the stock market index was flawed, but after Fisher’s death in 1947, Yale President Charles Seymour received a letter of condolence from the Harvard economics faculty stating their “opinion that no American has contributed more to the advancement of his chosen subject than Fisher.”




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