Irving Fisher Quotes

At present the United States has the unenviable distinction of being the only great industrial nation without compulsory health insurance,” the Yale economist Irving Fisher pointed out in 1916.

As a matter of fact, what investment can we find which offers real fixity or certainty of income? ... As every reader of this book will clearly see, the man or woman who invests in bonds is speculating in the general level of prices, or the purchasing power of money

The world did remain on a pseudo gold standard for decades; foreign governments could still trade dollars for gold (at a rate of $35 per ounce, as set by Roosevelt in 1934), but ordinary people could no longer do so. Finally, in 1971, the United States broke the link to gold entirely. It became the job of the Federal Reserve to manage the value of the dollar—not in terms of gold, but in terms of the stuff ordinary Americans buy. In other words, America (and every other country) finally started thinking of money the way Irving Fisher wanted us to.

A bond price, for example, will grow with accrued interest between two coupon cuttings. That growth in its value is not income but increase of capital. Only when the coupon is detached does the bond render, or give off, a service, and so yield income. The income consists in the event of such off-giving, the yielding or separation, to use the language of the United States Supreme Court. If the coupon thus given off is reinvested in another bond, that event is outgo, and offsets the simultaneous income realized from the first bond. There is then no net income from the group but only growth of capital. If the final large payment of the principal is commonly thought of not as income (which it is if not reinvested) but as capital it is because it is usually and normally so reinvested.

In 2013, on the auspicious date of April 1, I received an email from Tetlock inviting me to join what he described as “a major new research program funded in part by Intelligence Advanced Research Projects Activity, an agency within the U.S. intelligence community.” The core of the program, which had been running since 2011, was a collection of quantifiable forecasts much like Tetlock’s long-running study. The forecasts would be of economic and geopolitical events, “real and pressing matters of the sort that concern the intelligence community—whether Greece will default, whether there will be a military strike on Iran, etc.” These forecasts took the form of a tournament with thousands of contestants; the tournament ran for four annual seasons. “You would simply log on to a website,” Tetlock’s email continued, “give your best judgment about matters you may be following anyway, and update that judgment if and when you feel it should be. When time passes and forecasts are judged, you could compare your results with those of others.” I did not participate. I told myself I was too busy; perhaps I was too much of a coward as well. But the truth is that I did not participate because, largely thanks to Tetlock’s work, I had concluded that the forecasting task was impossible. Still, more than 20,000 people embraced the idea. Some could reasonably be described as having some professional standing, with experience in intelligence analysis, think tanks, or academia. Others were pure amateurs. Tetlock and two other psychologists, Barbara Mellers (Mellers and Tetlock are married) and Don Moore, ran experiments with the cooperation of this army of volunteers. Some were given training in some basic statistical techniques (more on this in a moment); some were assembled into teams; some were given information about other forecasts; and others operated in isolation. The entire exercise was given the name Good Judgment Project, and the aim was to find better ways to see into the future. This vast project has produced a number of insights, but the most striking is that there was a select group of people whose forecasts, while they were by no means perfect, were vastly better than the dart-throwing-chimp standard reached by the typical prognosticator. What is more, they got better over time rather than fading away as their luck changed. Tetlock, with an uncharacteristic touch of hyperbole, called this group “superforecasters.” The cynics were too hasty: it is possible to see into the future after all. What makes a superforecaster? Not subject-matter expertise: professors were no better than well-informed amateurs. Nor was it a matter of intelligence; otherwise Irving Fisher would have been just fine. But there were a few common traits among the better forecasters.

very often we make mistakes not because the data aren’t available, but because we refuse to accept what they are telling us. For Irving Fisher, and for many others, the refusal to accept the data was rooted in a refusal to acknowledge that the world had changed.

History, it is said, is written by the victors. In the late 1920s, Hayek claimed that monetary policy had taken the wrong course and predicted a deflationary bust. Irving Fisher, on the other hand, saw nothing wrong at the time with either America’s economy or its monetary policy, famously opining in the summer of 1929 that US stocks had reached a ‘permanently high plateau’. If accuracy of prediction is what matters for economic theory, as Milton Friedman later claimed, then Hayek’s interpretation should have become the received wisdom of his profession. Yet the Austrian’s interpretation of the 1920s and its aftermath has been more or less air-brushed from the history books, while Fisher’s monetarist view has become received wisdom.

How much there is I want to do! I always feel that I haven't time to accomplish what I wish. I want to read much... I want to write a great deal. I want to make money!