Meanwhile, Ely’s economics colleagues were moving in the other direction, and not simply under duress, as Adams had been. University presidents seeking stature for their institutions appealed to rich donors among the period’s Robber Barons, and that appeal was unlikely to be successful when rabble-rousers in the economics department were questioning the foundations of American capitalism, in particular the monopolization and labor exploitation that made the Robber Barons rich in the first place. At the same time, some of the more moderate members of the economics old school were making overtures to moderates in the new, recognizing the threat that manifestly improved scholarship posed to their authority in the field. Also in 1886, Charles Dunbar, the chair of the Harvard department, brought out the first issue of the Quarterly Journal of Economics, an alternative peer-reviewed channel to the AEA’s Proceedings (now the American Economic Review, to date the leading journal in the field), which was under Ely’s iron grip. His opening essay welcomed the empirics of the AEA’s cohort but denounced any tendency to political or social reform—a direct challenge to Ely.

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What was lost in the eclipse of radicalism at the AEA? The economic tracts of that era began to enshrine the perfectly competitive market at the center of the intellectual firmament in economics—work then being formalized mathematically overseas by Leon Walras and Alfred Marshall, to be imported to the US by the likes of Clark and Irving Fisher and embellished by their successors in the mid-to-late 20th century. There has always been disagreement within the academic economics establishment, but it has largely adhered to the establishmentarian bent set down in 1892—and won itself great intellectual prestige in so doing. What political involvement there is in the field is almost exclusively on the Right, as attested by recent cases of donor influence on economics departments at Florida State, Kansas, and numerous others, aimed at routing out any challenge to free market orthodoxy. Much more notable than those cases of overt politicization is the broader alliance of economics with the country’s business establishment, in the form of lavishly funded business schools and research programs to the benefit of the field, far and above what’s available to any other discipline.

http://histphil.org/2015/10/19/economics-was-once-radical-then-it-decided-not-to-be/