American economic association finances; legacy of Mark Perlman

An article in the Chronicle of Higher Education about the finances of academic professional societies brings back fond memories of my late Pittsburgh colleague Mark Perlman: Scholarly Groups' Choices Yield Diverging Fortunes.

""When new executive-committee members come on, I say, 'Let me explain the finances of the association,'" says John J. Siegfried, secretary-treasurer of the American Economic Association. "We have two products that subsidize everything else."
Most of that subsidy comes from the association's online database, EconLit; the other source is the association's jobs listings, which employers pay to post and which appear chiefly online. "It radically changes our business model," Mr. Siegfried says of EconLit, "though that's flattering it."
His breezy description of the association's economic model acknowledges how the quirks of history and personality can produce long-term consequences. Indeed, the economists' group owes much of its present fiscal strength to choices made decades ago. When asked how his scholarly association went about developing EconLit, Mr. Siegfried answered simply, "You have Mark Perlman."
Mr. Perlman, who died in 2006, was hailed for his encyclopedic knowledge of the discipline's philosophy, history, and institutions. He was an economist at the University of Pittsburgh in 1969, when the Journal of Economic Literature, which he founded, started publishing articles, book reviews, and a bibliography of scholarship in economics.
For several years, Mr. Perlman and association staff collected journals and manuscripts, piling them in eight-foot-high stacks in the narrow corridors of a dark, cramped space next to a beauty parlor on Forbes Avenue, near Pitt and Carnegie Mellon University.
"An earthquake in Pittsburgh would likely have led to our employees being crushed under economics journals," Mr. Siegfried wrote earlier this year in toasting the retirement of Dru Ekwurzel, who served as the association's director of publications.
In the early 1980s, Ms. Ekwurzel was instrumental in transferring tapes of journal citations, abstracts, and bibliographic material to an online information-retrieval service. Scholars would gain access to this database through a terminal and dial-up service at a subscribing library. In 1984 that database, named EconLit, made its debut at the association's annual meeting.
By the time the World Wide Web was born, the association was well positioned. In 2010, EconLit generated nearly $3.9-million in revenue from subscribing libraries and universities, or more than 40 percent of the association's budget.
The group's seven journals, available in print and online, are agenda setters for the field, but they also cost far more to produce than the income they generate. The group's annual meeting breaks even.
With a surplus of more than $1.2-million and income from EconLit and the job listings, the association chose recently to slash by more than half, to as little as $20, its fees for membership, in hopes of stemming a 13-percent decline in members since 2003.
"We have a strange situation of not hanging on by our fingernails," Mr. Siegfried says, "and I know others are."
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Mark passed away in May 2006.
Obituary: Mark Perlman / Prominent economist of post-World War II era

Professor Mark Perlman: Historian of economic thought