American Institute for Economic Research

Col. Edward C. Harwood, a graduate of the United States Military Academy, was serving in the Army Corps of Engineers in the 1920s when he undertook an intensive study of economics, with particular emphasis on money-credit problems. He began writing freelance magazine articles on this subject, and in 1926, he was transferred to Hawaii where he read nearly one thousand books that had been collected during World War I. This allowed him to further develop his ability to critically analyze financial data.[6]

Between 1928 and 1929, Harwood wrote articles that accurately predicted the impending depression, which he blamed on the inordinate issuances of corporate securities and loans by financial institutions to investors and speculators that fueled the stock-market boom.[6]

Following the stock market crash, Harwood continued to write articles on the excesses of inflation, which drew the attention of influential businessmen and academicians. In 1933, Dr. Vannevar Bush, then vice-president and dean of engineering at Massachusetts Institute of Technology, encouraged Harwood to found a research institution that would provide valuable financial advice to ordinary citizens. With two hundred dollars saved from selling his articles, Harwood founded AIER to conduct research into the wide range of economic, social, and monetary developments that had contributed to the catastrophic economic contraction of the Great Depression.[6]

AIER was initially housed in an office at the Massachusetts Institute of Technology, but the institution soon moved to other facilities in Cambridge, Massachusetts.[7] However, America's entrance into World War II affected the institution greatly, and by 1941, only four faculty members remained. Harwood himself returned to the army, but he was given a medical discharge in April 1945. While idled in New Guinea, Harwood was reading a real estate catalogue, which featured an abandoned estate in Great Barrington, located in western Massachusetts, that included over 500 acres of land, a small lake, a trout stream, and twelve miles of bridle paths. Following the end of the war, Harwood and his wife Helen purchased 103 of the 500 acres and relocated to the "white elephant" manor house.[6]

After recovering from the war, AIER continued to expand its operations, and in 1956, a print shop annex and warehouse were built, and in 1963, the E.C. Harwood Research Library was added to the hillside below the annex, whose workspace was later doubled in 2002 up to 20,000 square feet. In 1968, further housing was added for staff members, graduate students, and fellows. The print shop closed in 2008, as AIER transitioned from print to digital dissemination of its research.[8]

AIER promotes the ideas of individual sovereignty, a limited government, and "a society based on property rights and open markets."[3] It is critical of socialism and of what it refers to as "coercive government intervention in economic affairs."[3] In a 1950 publication, the institute called "the struggle against communism ... crucial to the survival of Western Civilization."[9]

The institute continually publishes articles that are against fascism, communism, and socialism, and it believes that totalitarianism results in the absence of freedom and a loss of individual rights. AIER sees political power as detrimental to society, creating a "them" vs. "us" mentality and a loss of individual power.[10] In addition, AIER strives to recognize a difference between democracy and freedom.[11]

AIER is critical of tariffs and trade wars, including the Trump administration's China–United States trade war.[12][13] Scott A. Burns, writing for AIER, has written that if "we are stuck in a suboptimal world where tariffs and trade wars are here to stay, an NGDP-targeting regime would do a better job of minimizing fluctuations in real output than an inflation-targeting regime."[13][14]

AIER routinely comments on the Fed's monetary policy, particularly its low interest rates and quantitative easing, since the 2008 recession. The institute believes that the Federal Reserve is cautious and it questions the role that their expansionary policies have played since the financial crisis.[15][16] AIER believes that the Fed is largely to blame for the sluggish recovery of the US economy and attributes much of this slow recovery to the floor system, which discourages banks from lending.[17] The Institute believes that the inability of private banks to allocate credit has resulted in a less productive economy.[16]

The institute regularly writes articles about other current issues, such as energy,[18] the minimum wage,[19] and regulation.[20] AIER writes several articles on the American presidency, and is known for criticizing President Donald Trump for his policies.[21][22]

The aim of AIER is to distribute its publications to the widest range of individuals possible and focuses on keeping its publishing costs low.[8] AIER has two serials which are distributed to sustaining members, a monthly Economic Education Bulletin and the twice-monthly Research Report. These writings discuss current issues on personal finance and public policy.[8]

In addition, AIER also publishes Business Conditions Monthly, which discusses business cycles, and a Harwood Economic Review. Several works by AIER have been quoted in newspapers and magazines such as The Wall Street Journal, The New York Times, and Business Week.[7]

AIER hosts the Harwood Graduate Colloquium, a four day event intended for graduate students that takes place three times a year. Students visit from around the world are invited to participate in a combination of discussions based on pre-assigned readings and lectures given by prominent scholars who are affiliated with AIER.[23] Previous conversation topics include The Theory and History of Monetary Institutions, Economic Freedom and Trade, and Private Governance.[24]

The AIER sponsors the Bastiat Society, a network of business professionals who favor principles supported by the AIER.[25]

The AIER's Sound Money Project was founded in January 2009, promotes the Institute's views on monetary policy, monetary stability, financial markets regulation, and cryptocurrencies, and published research.[7][26] The Project hosts an annual essay contest.[24]

AIER also hosts Free Teaching Enterprise, which provides curricular materials and lesson plans to middle and high teachers, in partnership with the state departments of education, public and charter school districts, and others; the lesson plans promote the AIER's economic views.[27]