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John Bates Clark brought a new approach to economics to the United States. Having studied in Germany, his ideas were different from those of the classical school and also the Institutional economics of Thorstein Veblen. Together with Richard T. Ely and Henry Carter Adams, Clark was cofounder of the organization that later became the American Economic Association. The purposes of their association were, and continue to be:
The encouragement of economic research, especially the historical and statistical study of the actual conditions of industrial life.
The issue of publications on economic subjects.
The encouragement of perfect freedom of economic discussion.
Clark was one of few American economists who supported the marginalist school, opposing Institutional economics, which dominated American economics at the time. Clark was thus one of Veblen's favorite targets, the two engaging in numerous debates. Clark’s own son, John Maurice Clark, who became a famous economist himself, did not follow his father’s steps and instead became one of the leaders of the Institutional school.
In his later career, Clark became a fierce opponent of war, claiming that war was the greatest threat to humanity. He led a group of economists from the Carnegie Foundation to assess the costs of World War I. In his 1935 A Tender of Peace, he proposed a strong League of Nations that would promulgate world peace.
In The Philosophy of Wealth (1886), Clark discussed the phenomenon of anomalous distribution of wealth as the consequence of rapid industrial development in America at the turn of the century. He attacked the hedonistic assumptions of classical economics, which emphasized personal interest as the ultimate motivator behind any economic theory. He claimed that people were as much motivated by their social interest as by their self-centered interest. He thus criticized classical theory that pure economic competition can be an effective means through which products could be equitably distributed. He believed that his "marginal productivity theory of income distribution" scientifically proved that market systems could generate a just distribution of income.
