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'''Irving FISHER'''

b. 27 February 1867 - d. 29 April 1947

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'''Summary.''' With his crusades for health, the League of 
Nations etc., Irving Fisher lost about half of his working time as
professor of economics. Otherwise, his "pillars and arches", as
Schumpeter called his contributions to theoretical economics,
may have grown to a kind of temple of economics/econometrics.

When mathematical statisticians hear the name of Fisher, they think
of Irving's namesake [[Fisher, Ronald Aylmer|Ronald A. Fisher]].  For economic statisticians it is
clear that Irving Fisher is meant.

As with Ronald A., Irving Fisher is famous for introducing tests into
statistics.  A test in Irving Fisher's sense is a desired property
of a price index.  He introduced several tests into price index
theory.  His investigations in this field inspired many workers in
this field till nowadays.  Today, in the framework of axiomatic
price index theory, it is well known which of the subsystems of
Fisher's system of tests are consistent.  Furthermore, finding a
definitive axiom system for price indices accepted by all
scientists concerned remains a field of research and debate 
(cf. Vogt and Barta 1997).

The following is a short synopsis of the life of Fisher. He was
born in Saugerties, New York, USA. In 1884 he
entered Yale University, where
he earned his Ph.D in 1891, and was appointed as Assistant Professor
of Mathematics in 1892. 
In 1893 he married Margaret Hazard and they spent the following year in Europe.
He transferred from the Mathematics Department to the Political
Economy Department at Yale in 1895 and was promoted to Full Professor
in 1898.
But he fell ill with tuberculosis and
took leave for the following three years.
He became President of the American Economic Association in 1918 and finally
retired from Yale in 1935. He remained active until his 80th birthday
and finally died, of cancer, on April 29, 1947.

At the age of 78, Fisher went to see the movie "Wilson" (about the
former US President).  He recorded in his diary a list of all the
characters in the movie that he had known personally, practically a
who's who of the epoch.  In the same sense Fisher's Biography is a
who's who of the worldwide economic science between 1891 when
Fisher's thesis "Mathematical Investigations in the Theory of
Value and Price'' was published, and 1947 when he passed away.
Fisher could be called the first econometrician.  In fact, at the
beginning of the century, he proposed to found such a society but -
ahead of his time - he did not find followers.  Finally, in 1930 he
was involved in founding the Econometric Society.  The group of 30
economists elected Fisher unanimously as their first president.

One scientific inspiration suddenly occurred to Fisher on a mountain trip
he made in Switzerland in July 1894 while looking at a watering
trough, and its inflow and outflow:  The basic distinction needed
in order to distinguish capital and income was substantially the
same as the distinction between the water in that trough and the
flow into or out of it.  That was the very moment when the
distinction between flows and funds (i.e. stocks) was introduced in
the economic science, a distinction which was traditionally made
before by bookkeepers!  However, Fisher mentioned that already
[[Newcomb, Simon|Newcomb]] showed clearly the distinction between flows and funds.

Early in this century, Fisher played a seminal role in suggesting
the use of double-entry bookkeeping techniques for national income
and product estimates.  He is even regarded as the intellectual
organisor and founding father of all national economic accounting
systems (Kenessey 1997).  In 1913 Fisher founded the Life Extension
Institute to endeavour to improve public health through publicity
and by promoting periodic health examinations.  He tried to
convince insurance companies that it would be to their advantage to
provide low-cost medical checkups.  In 1916 Fisher was among the
first to recognise the importance of insurance against large
medical expenditures, coupling, as it does, his interest in
maintaining and improving people's health with his interest in
financial matters.  He strongly favoured health insurance and
foresaw the day when insurance would cover most medical costs.

In 1923 Fisher established his Index Number Institute, a business
to prepare and sell index numbers and other economic data for
publication.  The Index Number Institute became the first
organization to provide systematic economic data in index number
form to the public, long before governments even began to think
about it.  By 1929 Fisher's wholesale price index reached 5 million
newspaper readers.

Another contribution of Fisher to statistics was the investigation
of distributed lags when determining the correlation between two
time series.  In a publication in ''Extrait du Bulletin 
de ISI'' of
1937 Fisher referred to several of his publications on the subject
going back to 1925.  Irving Fisher was also involved in the
measurement of marginal utility.  Fisher (1922:xiii) expressed his
practical and theoretical ideas about index numbers:
<blockquote>
One incidental result of this study is to show that many precise
and interesting relations or laws exist connecting the various
magnitudes studied - index numbers, dispersions,..., correlation
coefficient, etc.  Thus this field of study... may truly be called
an exact science - if it be permissible to designate as a science
the theoretical foundations of a useful art....  Most writers on
index numbers have been either exclusively theoretical or
exclusively practical, and each of these two classes of writers has
been very little acquainted with the other.  By bringing these two
worlds into closer contact I hope that, in some measure, I may have
helped forward, both the science and the art of index numbers.
</blockquote>

Up to 1929 Fisher made a fortune of <nowiki>\$</nowiki>10 million, mainly with one
of his inventions, the index card system (and subsequent stock
market gains).  His firm producing it, later became Remington Rand
Corp. After the stock market crash (October 1929), his fortune
melted to about minus half a million going down further to nearly
minus one million.  Fisher's personal financial failure was a
double burden for him as a great economist because he had
recommended investment in stocks privately and in public.  However,
he remained an optimist throughout his life.  After the crash he
kept on seeing the economic recovery "round the corner".  Already
in December 1929 he had finished his book "The Stock Market Crash
- and After?''.

Fisher was not a scientist living in an ivory tower but he
enthusiastically tried to educate people.  In an agreement with the
Worker's Education Bureau, Fisher wrote simple explanations of
elementary principles of economics suitable for reading by union
members.  He called them ''Short Stories of Wealth''.  The bureau
issued them monthly for publication in any union publication that
desired to print them.  They appeared in the ''Brotherhood of
Locomotive Fireman and Engineers Magazine'', ''Trade Union News'',
''Labour Herald'', etc., and are currently on the way to being
reprinted (Fisher 1998).  

As Fisher was known for his scientific contributions in the world
of economic science, he was known to the US public for his struggle
for health (motivated by his own experience), prohibition and the
League of Nations - for the betterment of mankind quite generally.
His health book sold more than a million copies in 21 editions
while Fisher was alive and then went on to 90 editions and 4
millions sold.  It already promoted the idea of "biological
living".  With the quantity theory of money he made a cursade
connected with his scientific work.  Fisher was the first
monetarist.  A talk he gave on this subject can still be listened
to (Fisher 1941). 

Tobin writes that Fisher is widely regarded as the greatest
economist America has ever produced.  His main economic subjects
were: theory of indices, theory of interest, theory of capital and
income as well as taxation theory.  He was prouder of his
relatively unimportant book "The Money Illusion'' (1928) than he
was of ''The Making of Index Numbers'' (1922).  He did not see
that in the latter new contributions are building blocks that
accumulate and form a long-lasting structure, whereas in policy
matters, advocacy and even research are ephemeral.

Biographies of Fisher have been written by his son 
(I.N. Fisher 1956) and by Allen (1993). The former is a personal
account. It records his father's publications in the
different fields, 2000 altogether.  The secret of Fisher's working
power was best expressed by H. Cohrssen who worked from 1932 to 1942
for Fisher and died in Frankfurt in 1997 in a radio talk given at
the occasion of Fisher's 80th birthday.
<blockquote>
It was in 1896 in a tuberculosis sanatorium, high in the Mountains
of Arizona, where the air is pure and clear.  A young man of 19 was
sitting in his invalid-chair waiting for death.  The doctors had
given him only a very short time to live.  Behind him were years of
the most intensive work as an economist at a university and
exceptional academic recognition.  This man, marked by death,
looked at his young wife, his child playing before him in the sand
... and he made up his mind: ''I'd rather work to death than rust
to death idly."  He left the mountains and returned to his work....
He took up the battle against his sickness and packed into each and
every day so much work that in the race against his death he might
leave at least the maximum of creative work of which he was
capable.  Week after week, month after month, year after year this
feverish race continued....  One book after another appeared, basic
contributions to the science of economics, also notes recording his
experiences in the field of health and hygiene which he made in
quest for life extention....  He has been adviser to several
presidents of USA; he was one of the founders of the Peace
Society from which later developed the League of Nations....  Today
he is 80.  He is still tirelessly active and one of the happiest
men I've ever met.  His name is Irving Fisher, Professor of Yale
University....
</blockquote>

In 1995 an Irving Fisher Committee was founded within ISI.  In 1997
there appeared the first issue of the ifc Bulletin (cf. Fisher 1998).


====References====
{|
|-
|valign="top"|{{Ref|1}}||valign="top"|   Allen, R.L. (1993). ''Irving Fisher. A Biography''. Blackwell, Cambridge. 
|-
|valign="top"|{{Ref|2}}||valign="top"|   Fisher, I. (1922). ''The Making of Index Numbers. A Study of Their Varieties, Tests, and Reliability''. Reprint of 1967 by Augustus M. Kelley of the third edition of 1927. Vol.4 in Fisher (1997). 
|-
|valign="top"|{{Ref|3}}||valign="top"|   Fisher, I. (1941). ''Depressions and Money Problems'', Speech delivered in Los Angeles on April 4, Historical Sound Recording at Yale University. 
|-
|valign="top"|{{Ref|4}}||valign="top"|   Fisher, I.N. (1956). ''My Father Irving Fisher''. Comet Press, New York. 
|-
|valign="top"|{{Ref|5}}||valign="top"|   Fisher, I. (1997). ''The Works of Irving Fisher'', General Editor W.J. Barber, Consulting Editor J. Tobin. Pickering &amp; Chatto Publishers, London. 
|-
|valign="top"|{{Ref|6}}||valign="top"|   Fisher, I. (1998). Fisher's Short Stories on Wealth, 1926-1933, Irving Fisher Committee Bulletin, 17-34 containing the first 7 of the 86 stories in Vol. 2. The  stories 8 to 12 appeared in Vol. 3, 23 - 38, and the series is to be continued. 
|-
|valign="top"|{{Ref|7}}||valign="top"|   ifc Bulletin: Bulletin of the Irving Fisher Committee on Central-Bank Statistics. 
|-
|valign="top"|{{Ref|8}}||valign="top"|   Kenessey, Z. (1997). The significance of Fisher's ideas for National Accounts, in ifc Bulletin, No. 1, November 1997. 
|-
|valign="top"|{{Ref|9}}||valign="top"|   Vogt, A. and Barta, B. (1997). ''The Making of Tests for Index Numbers.  Mathematical Methods of Descriptive Statistics'', Published in Honour of the 50th Anniversary of the Death of Irving Fisher, Physica-Verlag, Heidelberg.
|-
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Reprinted with permission from
Christopher Charles Heyde and Eugene William Seneta (Editors),
Statisticians of the Centuries, Springer-Verlag Inc., New York, USA.

[[Category:Statprob]]
[[Category:Biographical]]