January 10, 2024


Investing and Stocks News

Remembering James Gwartney, 1940-2024

James (Jim) Gwartney, 83, died peacefully in his home in Tallahassee, Florida on January 7, 2024. Gwartney was a professor of economics at Florida State University (FSU) for 53 years. He will be remembered as a prolific scholar, economic educator, and public intellectual.

Gwartney was born in rural Kansas and worked on his family’s farm; his early education took place in a one-room schoolhouse. In later years, he would say that his passion for teaching began there because the older students were expected to help teach the younger ones. He then attended Ottawa College in Kansas where he studied under future Federal Reserve Governor Wayne Angell.

He earned his PhD at the University of Washington writing his dissertation on the economics of labor market discrimination, which led to his first publication in the prestigious American Economic Review. At Washington, Jim took numerous courses from future Nobel Laureate Douglass North, and his interest in institutional economics began at this time. He learned his microeconomics from greats like Walter Oi (who was blind and thus would become an inspiration for Jim in later years) and Yoram Barzel, and he took a course in public choice economics from Tom Borcherding, who had been a student of future Nobel Laureate James Buchanan.

After graduation, Jim was hired in 1969 as a professor at Florida State University in Tallahassee, where he remained until his retirement in 2022. In the early years, Jim paid his dues by publishing in numerous top journals thus earning his tenure and promotions. Although he will be remembered more for his public-facing accomplishments, he continued writing and publishing in scholarly journals until the very end of his life. Gwartney’s enduring legacy will come in three areas:

First, he was a master economic educator. His textbook, Economics: Private and Public Choice, initially published in 1976, will soon enter its 18th edition. He was joined over the years in this effort by coauthors Richard Stroup, Russell Sobel, and David Macpherson. One of the most important themes of the textbook is that any realistic understanding of the economy requires us to understand not only how markets may fail but also, by applying the insights of public choice economics, how governments may fail. The idea of government failure has slowly percolated into many, though by no means all, of the economics textbooks on the market, but it was Gwartney’s textbook that showed it for the first time. The textbook also took a stand against the prevailing Keynesian macroeconomic view that the economy needed to be steered by omniscient and omnipotent central planners to stay on track. In 1993-94, Gwartney took a leave from FSU to teach using his textbook at the Central European University in Prague; this was right after the fall of the Iron Curtain, and he was keen to teach free-market economics to the students who had come from a central planning background.

In more recent years, Gwartney, with coauthors Richard Stroup, Dwight Lee, Tawni Farrarini, and Joseph Calhoun, came out with Common Sense Economics: What Everyone Should Know about Wealth and Prosperity. The book and the accompanying teaching materials are designed to be a more accessible introduction to economics and personal finance. Finally, he ended his career as the director of the Gus A. Stavros Center for the Advancement of Free Enterprise and Economic Education at FSU, where he worked to improve the state of K-12 economic education in Florida and beyond.

Second, Gwartney will be remembered as a founder of the Economic Freedom of the World (EFW) index, which is published by Canada’s Fraser Institute. The index was the brainchild of Rose and Milton Friedman and the Fraser Institute’s founder Michael Walker, who organized a series of conferences beginning in the late 1980s to investigate the feasibility of creating a quantitative measurement of economic freedom by country. Gwartney frequently told the story about how he received his invitation to attend the second such meeting in Vancouver in 1988. He was going to decline it (thinking to himself: How can you possibly measure economic freedom?) until he saw the invitation came from Milton Friedman himself, so he fired off his acceptance. After a third meeting in Banff, Gwartney and Walter Block (along with his graduate assistant at the time Robert Lawson) hatched a plan to create an economic freedom index based on a small but gettable number of indicators for a large number of countries. Prototypes of this index were presented at the fourth and sixth meetings in the series, and the final product was published in 1996. The EFW index has been released annually ever since and now presents an economic freedom rating for 165 nations based on several dozen indicators.

The EFW index is covered by a wide array of media outlets annually, and government officials are frequently forced to answer embarrassing questions from the media about why economic freedom is lower than in other nations or is falling. The EFW index has also had a tremendous impact in academic circles. To date, over 1,300 peer-reviewed journal articles have been written citing the EFW index, with most finding that economic freedom corresponds to higher incomes, faster growth, and a whole range of beneficial outcomes in other areas such as health, civil rights, and peace.

In 2009, Gwartney summarized much of his own work on economic freedom:

“During the past 15 years, economists have become increasingly aware that institutional factors exert a strong impact on both the level and productivity of investment, the rate of economic growth, and the variation in income levels across countries. Some even argue that ‘institutions rule.’ I am not willing to defend that position, but I do think it is clear that institutions matter and that they matter a great deal.”

Third, Gwartney will be remembered as a public intellectual. As his work on the textbook and with the EFW index demonstrate, Gwartney was never content just to publish journal articles for other economists to read. He wanted to reach the general public and influence policy. After conducting a study with Randy Holcombe and Robert Lawson about the optimal size and scope of government for the Joint Economic Committee (JEC) of Congress in 1998, Gwartney served as Chief Economist for the JEC in 1999-2000. This experience led to his trip with a small team of free-market-oriented economists to meet Putin in Russia at the invitation of his economic advisor Andreǐ Illarionov. It may be hard to remember now, but in Putin’s early years in office, he was seen as a supporter of market-liberal reforms. In fact, shortly after Gwartney’s visit, Russia lowered its top marginal income tax rate from Soviet-like levels as high as 80 percent to a flat, low 13 percent. Russia’s economy initially boomed before Putin reneged on the liberal reforms he had started and returned Russia to its kleptocratic ways. Though a failure in the end, Gwartney’s experience in Russia shows his long-standing willingness to get out of the Ivory Tower and actually engage the wider world.

Gwartney was a member of the Mont Pelerin Society. He served as president of the Southern Economic Association in 2007-2008. He had a long-time affiliation with the Association of Private Enterprise Education (APEE). He was APEE’s president, received its prestigious Adam Smith Award, and was awarded APEE’s Clark-Kent-Aronoff Service Award (jointly with his wife, Amy). The Gwartney Institute with the mission to study economic freedom, social justice, and human flourishing was established in his honor at his alma mater Ottawa College in 2018. Upon his retirement in 2022, FSU established the James and Amy Gwartney Scholarship Endowment (donate here).

Jim Gwartney was more than a great economist. His enduring faith in God and his devotion to Amy, his wife of 61 years, were an example to many. Everyone who knew him knows he was one of the kindest and most generous people they had ever met. Gwartney faced life’s many challenges with an inspirational amount of grace and dignity. He survived a life-threatening cancer in the late 1970s, and then battled eye problems that led to blindness for the last 30 years of his life. Despite it all, he was working on textbook revisions and conducting economic freedom research right up until his final days.