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John Bates Clark was an American economist noted for his theory of marginal productivity, in which he sought to account for the distribution of income from the national output among the owners of the factors of production (labour and capital, including land).
The publication of Clarkâs Philosophy of Wealth (1886) marked his ârevolt against the spirit of the old political economy.â He argued that people were motivated as much by their social interests as by their self-centred personal interests. He therefore rejected pure economic competition as a means by which products could be equitably distributed. In The Distribution of Wealth (1899) Clark developed his distinctive utility theory. He held that commodities contain within them âbundles of utilitiesâ; i.e., they represent varying qualitative degrees of utility. In this work he also developed his marginal productivity theory by first setting up a theoretical model of perfect, âstaticâ competitive equilibrium undisturbed by any dynamic change. From this theoretical model he reached his conclusions on the distribution of the total national product. Here he also advanced the concept of social capital as being a permanent, ongoing stream of future incomes out of which all productive inputs, including capital goods, are temporarily taken for a charge (interest).
Clark was one of the founders of the American Economic Association (AEA), of which he was president from 1893 to 1895. His purpose, along with cofounders Richard Ely and Henry Carter Adams, was to encourage a shift in thinking away from laissez-faire policies. He was editor of the Political Science Quarterly (1895â1911) and served as director of the division of economics and history of the Carnegie Endowment for International Peace (1911â23). In 1947 the AEA established the John Bates Clark Medal, which is awarded annually (biennially until 2009) to a U.S.-based economist under the age of 40 for outstanding contributions to economic thought.
Clark became convinced in his later years that war constituted the greatest threat to human destiny. His last publication, A Tender of Peace (1935), called for a powerful League of Nations to enforce peace.
