Gardiner C. Means; Father of Administered Prices Theory

Gardiner C. Means, the New Deal economist and author who was widely regarded as the father of the theory of administered prices, died Monday of complications from a stroke suffered six months ago. He was 91 and died at his home here.

Means was the author with Adolph A. Berle of “The Modern Corporation and Private Property,” a 1932 study of the behavior of major U.S. corporations that influenced much of the economic thinking of the New Deal.

The book said that the economy of the nation was controlled by its 200 largest corporations and that that monopolistic situation was frustrating the spirit of individualism on which the country was founded.

Secretary of Agriculture Aide

Means came to Washington with the New Deal as economics adviser to Secretary of Agriculture Henry A. Wallace. He held a variety of posts and testified before many congressional committees before leaving the government in 1943.

He first published his theories on administered prices during the 1930s, and they gained wide circulation in the 1950s and ‘60s.

According to the theory, certain corporate giants in industries such as oil, steel and automobile manufacturing and some labor unions have wide discretion over prices they set on their products and their members’ labor.

They are able to set and hold--or “administer”--prices without regard to fluctuations in demand. He observed that profit levels were maintained simply by decreasing production and thereby reducing costs when demand fell.

Since 1958 he had been an independent economics consultant, analyst and author specializing in the study of how the corporate economy functions. In 1962 he wrote “Pricing Power and the Public Interest” in which he said that steel prices had risen at six times the rate of labor costs, contributing to inflation. Subsequent government pressure forced steel prices down.