THE THIRD STEP FROM THE IVORY TOWER
In founding one of the world’s first economic consulting firms, Robert Nathan took what he called the “third step” from the ivory tower of academic economics.
He took the first step when he surveyed the unemployed during the Great Depression for one of his professors at Wharton. Of that experience, he said “Once I saw [how] the widening depression ground into the dust ... lives and enterprises as though they were cigarette butts, I could no longer continue to distance myself from damaging problems and policies."
He took the second step as deputy director of the Office of War Mobilization and Reconversion (OWMR) and chairman of the Planning Committee of the War Production Board. Drawing on that experience in Mobilizing for Abundance (1943), he reasoned that the same economic principles applied to achieve wartime victory could be applied to get the peacetime economy rolling again. Economists, he believed, could be effective in all spheres, from postwar recovery at home to advising developing countries.
He then took the third step in January 1946 when he established Robert R. Nathan Associates, Inc., within walking distance of the White House.
For one of its first clients, the Congress of Industrial Organizations, the firm produced a wage report concluding that "[management’s] profits were so excessive that wages could be increased without raising prices" and incurred the wrath of the National Association of Manufacturers and the Chamber of Commerce. The CIO report, and another on the steel industry also advocating wage hikes, ignited months-long national debate in newspapers and on radio programs.
After achieving independence in 1948, Burma (now Myanmar) sought help formulating an economic development plan. A team of Nathan Associates’ economists worked in Rangoon from 1951 to 1957 helping the government devise economic and social development plans, establish a tax system, and institute efficient public services.
The United Nations Korean Reconstruction Agency asked the firm to develop a plan for the reconstruction of Korea after the Korean War. In 1954, the firm produced a 400-page report outlining what the shattered Korean economy needed to become self sustaining.
In 1957, the City of Philadelphia wanted to know whether it would be worthwhile to invest in a new stadium. The firm, along with engineers and architects, evaluated existing facilities in the light of expected attendance, examined technical and economic aspects of alternatives, and recommended a stadium location and design.
By the 1960s, the firm had emerged as a leader in developing master plans for economic growth, sometimes spending years in a country. In Afghanistan from 1961 to 1976, the firm helped the Ministry of Planning evaluate economic and social development plans and coordinate economic policies, eventually receiving an award for outstanding service from the king of Afghanistan. In Malaysia from 1976 to 1981, Nathan Associates advised on a scheme to resettle 500,000 people in new or expanded urban centers, each with a full range of public services and infrastructure.
By the mid to late 1970s, the firm had consulted in most sectors of the U.S. economy—estimating the local economic impact of the Green Bay Packers, conducting major studies on deepwater ports for the U.S. Army Corp of Engineers, designing use surveys for ASCAP to ensure fair distribution of license fees to songwriters and music publishers, and representing corporate clients before regulatory agencies. The firm also began shaping landmark antitrust cases, testifying on behalf of players in Curt Flood v. Owners of Baseball Franchises. Robert Nathan told the court "the reserve clause was unfair to the player because it tended to hold down the player's salary because he is not able to offer his services to the highest bidder."
In 1978, when John Beyer became President of the firm, the firm’s work was evenly divided between domestic and international work and about half of the firm’s employees were working in 35 countries.
In the 1980s employment and taxation captured the nation’s attention. Nathan Associates shaped the policy debate by analyzing and estimating the private and public costs of four bills before the U.S. Congress that would require employers to provide and pay for additional employee benefits. When deregulation in the airline, railroad, telecommunications, and energy sectors led to an explosion of litigation, the firm honed its expertise in litigation analysis and expert testimony. Notable among these cases is the airline price fixing case, one of the largest class action suits ever certified in the United States, and the U.S. Postal Rate Commission proposal to reclassify mail services.
At the same time that we were advising decision makers on U.S. policy at home, we were assisting small businesses through the Assistance to Resource Institutions for Enterprise Support (ARIES) project. This 5-year program helped strengthen institutions—banks, chambers of commerce, and professional organizations in developing countries worldwide. The centerpiece of Nathan Associates’ work overseas in the 1990s was the Financial Sector Reform Project aimed at strengthening Bangladesh’s financial sector, and the Panama Canal Reverted Lands study to determine the best use for former military bases and related facilities that reverted to the Panamanian government in 1999.
Entering its sixth decade, Nathan Associates wraps up long-term development projects in Egypt, Indonesia, South Africa, and Sri Lanka; begins a new era of support for regional development in Asia through projects with ASEAN and APEC; trademarks FastPath, a proprietary system of transport and logistics diagnostics; and continues to provide expert testimony and analysis in high profile, high stakes litigation involving agriculture, transport, and manufacturing.
The firm also begins a phase of corporate expansion—acquiring Emerging Market Economics, an economic consultancy headquartered in London in 2005; expanding expertise in intellectual property and employment litigation, opening offices in Tennessee, Southern California, and Southern New England in 2006 and 2007; and establishing Nathan India in Chennai in 2008 to serve private businesses in India and elsewhere. That same year Nathan Associates’ new board of directors selects Lakhbir Singh to succeed John Beyer as President.
Far from its humble beginnings in a townhouse in Washington D.C.—and far from the Ivory Tower—Nathan Associates has now worked in nearly 140 countries putting applied economics to the test in the give and take of markets around the world.