Consumer economics. The household's own scholars, a journal and $7,000

Three economists who studied the buyer

Between the wars, a handful of economists made the household's spending their subject. Hazel Kyrk's A Theory of Consumption was published in 1923 from a Chicago dissertation accepted in 1920 and won a prize.¹ Elizabeth Hoyt published The Consumption of Wealth in 1928 at Iowa State.² Margaret Reid, Kyrk's student, published Economics of Household Production in 1934.³ Reid went on to a Chicago professorship, and her distinction between a household's permanent and passing income was taken up by the economists who built the modern theory of consumption.³

These were economists on the household's side, studying what it bought and why, at a time when the discipline studied producers. They were also, all three, women working in or beside home-economics departments, which is where the university had put the subject.

A council founded on $7,000

After the Second World War their successors wanted a professional home. In November 1952 Colston Warne, the president of Consumers Union, wrote to propose one. A planning meeting followed at the University of Minnesota, and in 1953 the Council on Consumer Information was formed. Consumers Union gave it $7,000 in June 1953 to recruit members and hold a first conference, which took place in Dayton in 1955. In 1969 it renamed itself the American Council on Consumer Interests.⁴

Its founding statement of purpose is worth reading twice. The council existed for the exchange of ideas "and to be non-political, taking no stand on issues of public policy".⁴ The one scholarly body founded to study money from the consumer's side declared at birth that it would not advocate for the consumer.

In 1967 it founded the Journal of Consumer Affairs, with a rule that "topics must be addressed from the consumers' point of view".⁴ That journal is still published.

Scale

Set the two sides beside each other. In 1953 the lenders' trade association had existed for thirty-seven years, had drafted the law that governed its own industry, and had renamed itself for the fourth time. The bankers' association had run school savings banks for sixty years and had beaten a public savings system in Congress. The consumer's side had a council, a rule against taking a stand, and $7,000.

What the consumer's side produced

It produced good work. The household budget studies, the standard family budget that Kyrk's committee built for the government in 1945 and 1946, the theory of household production, and a journal that has run for nearly sixty years.¹ What it did not produce was a measurement of what the household's counterparties kept. Its subject was how the consumer chose. The seller's take was not in the frame, and the council's founding rule kept it out.

What $7,000 bought, and what it could not

When people say personal finance has a consumer-interest tradition, this is what they mean, and it is real. It is also the smallest, poorest and least political of the field's founding institutions. The household's own advocates were funded at $7,000 and pledged to neutrality. Its lenders were funded by the loans.