In Memoriam: Simon Kuznets, 1901-1985

Abstract

Kuznets, president of American Statistical Association (ASA) in 1949 and a winner of Nobel Prize in Economic Science in 1971, died on July 9, 1985. As Paul Samuelson, first American Nobel laureate in economics has said of second American to be awarded this Nobel Prize, Simon Kuznets was a giant in 20th century economics. He was founder of national income measurement, and he created quantitative economic history. Kuznets was born in czarist Russia in 1901. He attended University in Kharkov for a two-year period and then worked for two years in Division of Statistics of Central Soviet of Trade Unions. While employed by Division of Statistics, he published his first article, Money Wages of Factory Employees in Kharkov in 1920. Kuznets, together with his older brother, Solomon, migrated to United States in 1921, as he put it, because of the usual economic problems. The two brothers gained entrance to Columbia College with advanced standing, and was awarded a B.S. degree in 1923, an M.S. degree in 1924, and a Ph.D. in economics in 1926. His doctoral dissertation, Cyclical Fluctuations: Retail and Wholesale Trade, United States, 1919-1925, was written under supervision of Wesley C. Mitchell, who invited Kuznets to join National Bureau of Economic Research (NBER). Kuznets gained fame for research that he carried out at NBER, particularly in area of national income and product. He maintained his connection with NBER for more than 30 years. Kuznets was one of pioneers in criticizing state of disarray in collection of macroeconomic statistics, and he made a tremendous contribution to early improvement of U.S. governmental data. He felt that amount and types of data that were available during Depression of 1930s constituted a national scandal. The NBER had made some early estimates of national income that were discontinued in mid-1920s. The federal government made a one-time effort to produce national income estimates in 1923 with no subsequent follow-up. At NBER, Kuznets was given responsibility for research on national income and product accounts. After U.S. Senate decided that official income estimates should be undertaken, Kuznets was retained by Bureau of Foreign and Domestic Commerce to plan and supervise study. He went to Washington, D.C., took charge of work, and was responsible for publication in 1934 of country's first national income estimates for 1929-1932. These figures were published as an official Senate document, revealing among other things that national income had dropped from $89 billion in 1929 to $49 billion in 1932.