The New School for Social Research was founded in 1919 by a group of progressive intellectuals (mostly from Columbia University and The New Republic) who had grown dissatisfied with the growing bureaucracy and fragmentation of higher education in the United States.

[7] In its earliest manifestation, The New School was an adult education institution that gave night lectures to fee-paying students.

[9] In the ensuing decade, the New School hosted courses by a diverse array of economists, including Leo Wolman, a labor statistician with the Amalgamated Clothing Workers of America, and Frederick Macaulay, who later formalized the financial concept Bond Duration.

[13] In response to the Nazi Germany's 1933 Civil Service Restoration Act, an act that dismissed over 1,200 Jewish or radical academics from German state-run institutions, Alvin Johnson raised $120,000 from Hiram Halle to create a "University in Exile" at The New School consisting of the dismissed European academics.

[9] A second wave of academics fleeing Europe after France fell to the Nazis in 1939 included Adolph Lowe, Jacob Marschak, Abba Lerner, Franco Modigliani, Hans Neisser, and Emil J.

[9] Notable scholars associated with the University in Exile include psychologists Erich Fromm and Max Wertheimer, political philosophers Hannah Arendt and Leo Strauss, social psychologist Everett Dean Martin, philosophers Aron Gurwitsch, Hans Jonas, and Reiner Schürmann, sociologists Alfred Schutz, Peter L. Berger, and Arthur Vidich, economists Adolph Lowe and Robert Heilbroner, and historians Charles Tilly and Louise Tilly.

[20] In order to make the school more conventional and fundable, the administration reorganized the Graduate Faculty into five departments: Economics, Psychology, Sociology, Philosophy, and Political Science.

In the May 1971 press release, Heilbroner emphasized that the goal of the faculty was to give students training in a variety of traditions of economic analysis.

[26] In 1972 and 1973, the faculty hired Anwar Shaikh and David Gordon, two young and radical economists with divergent approaches to economics: Shaikh initially focused on international trade and Marxian economic theory while Gordon focused on labor research and econometric models.

[30] During the 1980's and 1990's, the faculty had many shorter-term appointments and visitors, including Nancy Folbre, Heinz Kurz, Rhonda Williams, Alice Amsden, and Thomas Palley.

[9] In the 1990's, the economics department hired a number of faculty who would remain for decades: William Milberg, Lance Taylor, and Duncan Foley.