The Progress Foundation was established in 1973 in Lugano by Edward C. Harwood (1900 – 1980), a charismatic figure who, unperturbed by the prevailing opinions of the day, promoted the vision of a free society and a free economy.
Harwood was a graduate of West Point, the United States Military Academy, and served as an officer in the Army Corps of Engineers in the 1920s. Soon thereafter, however, he developed a passionate interest in economic problems. He recognized before many others the detrimental effects of an expansive credit policy. In 1928 and 1929 he warned, in articles in financial journals, that the boom on the equity and commodity markets was attributable primarily to an excessive expansion in the money supply. Failure to stop the inflationary process would lead to a catastrophe. With these words, Harwood prophesied the stock market crash of 1929 and the subsequent Great Depression.
After this experience, Harwood founded the American Institute for Economic Research (AIER) in 1933 in Great Barrington, Massachusetts, and armed with scientific approaches, devoted himself to opposing the use of an inflating money supply to finance growing government debt. He saw this practice as defrauding citizens whose savings were eaten up by inflation. In contrast, he considered gold and the gold backing of paper currency as a safeguard for the value of money and a defense against the state's financing rapacity. The global economic crisis strengthened Harwood’s conviction that the general knowledge of economic correlations was inadequate. In his view, this was largely due to the methodology of economic science. Consequently, he intensified his focus on improving scientific research methods. In 1973, he and Rollo Handy of the Behavioral Research Council published the theoretical work “Useful procedures of inquiry”, which expanded upon the philosophical writings of Charles S. Peirce, John Dewey and Arthur F. Bentley.
Harwood was a great admirer of Switzerland and the orientation of its monetary policy towards stability. The purpose of the Progress Foundation was to ascertain the beneficial and detrimental influences in the progress of civilization, and offer these insights directly to the public. The foundation’s capital of around CHF 8 million (2017) was raised in the 1970s and 1980s. It stems from donations by numerous, mainly American, citizens who believed in Harwood's ideas and were able to increase their wealth by following his investment recommendations. In its early years, the foundation concentrated on awarding stipends to students at Swiss universities to fund their studies at the AIER. It also organized lectures and panel discussions in Ticino. Over time, its activities migrated increasingly to Zurich, and the foundation moved its headquarters there in 2002.