In the aftermath of World War I, thousands of young officers were faced with limited prospects for advancement. In that inauspicious moment, then–Second Lieutenant Edward Crosby Harwood carved out opportunity and meaning for himself. In doing so, he turned a quiet philosophical moment into the start of an extraordinary career and an enduring legacy.
He began reading economics in the library, teaching himself through voracious study. He started with texts by authors whose names began with “A” and exhausted a library in less than three years. While he was already a distinguished graduate of West Point and a military engineer, stationed at Rensselaer Polytechnic Institute (RPI) for further engineering studies, his self-instructed approach embodied not just his intellectual curiosity but his extraordinary determination. By 1923, leading economic journals were accepting articles from this young lieutenant earning just $125 a month while supporting a growing family. This remarkable achievement demonstrated both his analytical gifts and his dedication.
Intellectual Conviction, Professional Devotion
What Harwood discovered in his studies alarmed him. He became concerned about credit overexpansion, believing that changes to gold reserve accounting after the Geneva Conference of 1922 could lead to serious adverse consequences. His warnings proved prophetic. Articles he published in 1928 and 1929 predicted economic trouble ahead, and when he published Cause and Control of the Business Cycle (PDF) in 1932, it earned a favorable mention by the Book-of-the-Month Club.
The magnitude of the Great Depression convinced Harwood that America needed a research organization dedicated to understanding economic cycles and preventing future catastrophes. On the advice of Dr. Vannevar Bush, then vice-president of the Massachusetts Institute of Technology, Harwood founded the American Institute for Economic Research (AIER) in 1933. This institution, which continues its work today in Great Barrington, Massachusetts, is now one of the oldest nonprofit research organizations in the United States.
Harwood’s academic career flourished alongside his economic research. He earned three degrees from RPI: a Bachelor’s of Science, Master’s in engineering, and Master’s in business administration (MBA). In the early 1930s, he was appointed assistant professor of military science and tactics at MIT. Yet even as AIER grew and his reputation as an economic forecaster spread, Harwood never forgot his military obligations.
When World War II loomed, he re-enlisted in 1940, serving two years in England and two more in the Pacific on the islands of Leyte and Luzon under General “Pat” Casey and General Douglas MacArthur. He advanced to the rank of colonel and earned the Legion of Merit and a Bronze Star Medal, recognitions that spoke to his leadership and dedication during some of the war’s most challenging campaigns. One story captures his character: during his early Army career in North Carolina, the recruits he commanded were so won over by his fair leadership and horsemanship that they bought him an Elgin watch as a gift at the end of their term together. He kept it among his prized possessions until the end of his life.
After the war, Harwood devoted himself entirely to AIER’s mission. He became a leading voice in the hard-money movement, touring the country to speak before bankers’ associations and professional groups about the dangers of monetary inflation. His newsletters and publications made complex economic concepts accessible to an everyman audience, democratizing economic understanding in an era when such knowledge was often confined to academic circles.
Harwood’s intellectual approach was distinctive. He found chaos among economists’ views and turned to philosophy and logic, finding inspiration in American pragmatists like Charles S. Peirce and William James, who had incorporated scientific procedures into their work. This commitment to scientific methodology in economic research became a hallmark of AIER’s work.
One Man’s Legacy Lives On
Born on October 28, 1900, in Cliftondale, Massachusetts, Harwood would become one of America’s most prescient economic thinkers and the founder of an institution that continues to influence policy and thought nearly a century after its creation.
Harwood was married twice, first to Harriet Haynes, with whom he had three children, and then to Helen Fowle, with whom he had four more children. When he died in Montecito, California, on December 16, 1980, he left behind thirteen grandchildren and ten great-grandchildren, a family legacy that matched his institutional one.
As we mark 125 years since his birth, Colonel Edward Harwood’s legacy endures not just in the institution he founded but in his example of intellectual courage, practical wisdom, and dedication to public service. He demonstrated that military discipline and economic insight could combine to serve the greater good, and that one person’s determination to understand and explain complex problems could make a lasting difference. His life reminds us that true leadership requires both the courage to warn of dangers ahead and the commitment to build institutions to help future generations navigate them.