bluuebunny/crossref_metadata_2025 huggingface dataset:
Why Teach the History of Economics?
Authors: Vaughn Karen I.
Published: June 2009

1993 is an auspicious year for the History of Economics Society. Almost exactly twenty years and one month ago the first gathering of historians of economic thought took place in Chicago. It was not exactly the first meeting of the Society since it was officially formed only in 1974 and the first official meeting took place that year in Chapel Hill, North Carolina. However, the 1973 meeting demonstrated that there was sufficient interest in the subject to form a society. Hence, this is both the twentieth annual meeting of the History of Economics Society and the twentieth anniversary of its inception.
The Early History of Experimental Economics
Authors: Roth Alvin E.
Published: June 2009

In the course of coediting theHandbook of Experimental Economics(forthcoming) it became clear to me that contemporary experimental economists tend to carry around with them different and very partial accounts of the history of this still emerging field. This project began as an attempt to merge these “folk histories” of the origins of what I am confident will eventually be seen as an important chapter in the history and sociology of economics.
Pareto on International Trade Theory and Policy
Authors: Maneschi Andrea
Published: June 2009

Although in the past some of the best-known trade specialists have lavished praise on Vilfredo Pareto's theory of international trade, this aspect of his writings has been neglected for many years. Pareto's name figures in trade-theoretic articles only combined with the word “optimum,” as if the concept of a “Pareto optimum” constituted the beall and end-all of Pareto's contribution. This parallels Pareto's fame as a general economic theorist, of which it has recently been said that “it is disappointing that this reputation should be constructed on the basis of such a small part of his work” (Kirman 1986, p. 808).
Evolving Financial Institutions in Veblen's Business Enterprise System
Authors: Patrick Raines J. , Leathers Charles G.
Published: June 2009

Thorstein Veblen's theory of institutions has often been interpreted as explaining that institutions (social habits) are formed in previous time periods under the influence of earlier states of technology. Accordingly, in the modern era institutions are “static, backward looking, and resistant to change, alterations…occurring only under pressure from the dynamic of technological progress” (Rutherford 1984, p. 331). As a recent case in point, R. W. Ault and R. B. Ekelund (1988, p. 438; see also p. 435) stated that Veblen's “view of habits was an inert and exogenous view.” Malcolm Rutherford (1984) has noted that Veblen described several processes of internal development of institutions within a system governed by a given logic, e.g., the business enterprise system under the logic of pecuniary values.
The Turning Point in Marx's Monetary Theory and its Relation to his Political Positions
Authors: Cohen Avner
Published: June 2009

Karl Marx's work “Reflections” is to be found in Notebook 7, one of the twenty-four notebooks in which he made entries between September 1850 and August 1853. Although never published in his lifetime and undiscovered until long after his death, the essay is not insignificant. It illuminates one of the more obscure aspects of the development of Marx's thought: his change of view on paper money.
The Misinterpretation of Marx's Theory of Value
Authors: Keen Steve
Published: June 2009

The “technical” interpretation of Karl Marx's theory of value, which asserted that the concept of use-value played no role in his economics, has in recent years been shown to be ill-founded. In particular, R. Rosdolsky (1977) and S. Groll (1980) have established the importance that Marx attached to the concept of use-value in his theory of value, while I have shown that the use-value is an essential component of his analysis of the commodity, and that when properly applied, that analysis invalidates the labor theory of value (Keen 1993). This modern re-evaluation of Marx raises the question of how the traditional view developed in the first place. R. Hilferding aside, the answer does not paint a complimentary picture of the scholarship of either friend or foe of Marx in the debate over his theory of value.
Derailing Value Theory: Adam Smith and the Aristotelian Tradition
Authors: Winfrey John C.
Published: June 2009

The word VALUE, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called ‘value in use;’ the other, ‘value in exchange.’ The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it (Smith 1776, I, iv, p. 42).
America's Alternative to Marshall: Property, Competition, and Capitalism in Hadley's Economics of 1896
Authors: Davidson Audrey B. , Ekelund Robert B.
Published: June 2009

American dominance of the discipline of economics in the present century is beyond dispute. In terms of Nobel prizes and the creative ideas that spawned them, academic economists working in the United States have an incomparable record. As all who study the history of economic thought know, this was not always the case. Indeed, most histories of thought, when dealing with the nineteenth century, leave the impression that little of merit was done outside the British Isles. But Alfred Marshall's Principles was not the only “basic book” of merit to be published at the crest of nineteenth-century neoclassicism. It was possibly not even the most prescient work.
The Origins of Keynesian Fiscal Activism
Authors: Brems Hans
Published: June 2009

The first part of the paper, “The Freeze,” restates the simplified Keynesian framework of fiscal activism pioneered by Jargen Pedersen (1937) and Alvin H. Hansen (1941). The framework is a macroeconomic model in which investment, the bond supply, price, the money wage rate, and the rate of interest are all frozen. Using government purchase and the tax rate as its policy instruments the paper solves the model and finds its fiscal multipliers.
The General Theory and the Critique of Decreasing Returns
Authors: Sardoni Claudio
Published: June 2009

The prevailing opinion among John Maynard Keynes's interpreters is that, in writing The General Theory, Keynes ignored the other “revolution” which was taking place in Cambridge at the time, the critique of Marshallian microeconomics which led to the development of the notion of imperfect competition.
Quesnay's Theory of Taxation
Authors: Pressman Steven
Published: June 2009

François Quesnay and the Physiocrats are probably best remembered for three things: the Tableau Economique, their view that only agriculture was productive, and for advocating a single tax on landowners. Over the years, attention has focused on the first two doctrines. Numerous studies of the Tableau have attempted to explain how it operates (Eagly 1974; Eltis 1975; Meek 1963; Pressman 1994; Woog 1950). Adam Smith's (1937, p. 638 f.) critique of the assumption that manufacturing is sterile is well-known. In contrast, there have been few analyses of the single tax proposal. Previous studies have either reported the views of Quesnay and the Physiocrats on taxation (Einaudi 1967) or compared the tax policies of Quesnay to other economists (Buurman 1991).
Liang Chi-Chao and the Introduction of Western Economic Ideas into China
Authors: Trescott Paul B. , Wang Zhaoping
Published: June 2009

Liang Chi-chao (1873–1929) was a major figure in Chinese intellectual history around the turn of the century. Although he never learned to read any western language, Liang took on the role of an intellectual intermediary, reading voraciously in Chinese or Japanese renderings of western ideas and then writing about them to a wide audience in China. Prior to 1900, China was intellectually very insulated from western ideas. According to Andrew Nathan, “for Chinese in the first years of this century, Liang's writings were the window on all that was modern and foreign and might be used to save China. He introduced new ways of thinking about literature, history, international relations, science, religion, language, the races of mankind, and the meaning of life” (Nathan 1985, p. 48). Liang was an incredibly prolific writer—one authority estimated his output at 14 million words (Wang 1965, p. 167), but very little of his writing has been translated into English. There is a vast literature of commentaries on his life and work, but these materials generally do not devote much attention to his economic ideas
The Emergence of the Neoclassical Consumption Function: The Formative Years, 1940–1952
Authors: Hynes J. Allan
Published: June 2009

History, if viewed as a repository for more than anecdote or chronology, could produce a decisive transformation in the image of science by which we are now possessed (Kuhn, 1962a, p. 1).

Certain types of experimental findings serve as benchmarks, permanent facts about phenomena which any future theory must accommodate, and which in conjunction with comparable theoretical benchmarks, pretty permanently force us in one direction. … The remarkable fact about recent physical science is that it creates a new, collective, human artifact, by giving full range to three fundamental human interests, speculation, calculation, and experiment. By engaging in collaboration between the three, it enriches each in a way that would be impossible otherwise (Hacking, 1983, p. 248).
Walras and the NeoWalrasian Diversion
Authors: Costa Manuel Luís
Published: June 2009

This paper addresses the question: How did the promising program set out in Leon Walras' mature writings come to be taken as laying the ground for a totally different line of problems in his later writings and in modern microeconomic theory? The study of Walras' mature work (see Walker, 1996) offers an instructive object lesson in the way in which an interesting line of enquiry leads gradually to analytical difficulties and then to “solutions” that evade issues and constitute a major diversion of analysis down roads not initially contemplated by its originator. This paper attempts to trace the development of that detour from the main road of economic analysis in Walras' mature work to the side road of abstract exercises in contemporary neowalrasian literature.
Keynes and Anchorless Banking
Authors: Rymes Thomas K.
Published: June 2009

In The General Theory, John Maynard Keynes broke with the quantity theory of money, not just in working out a monetary theory of production but, as he says, in arguing the case for a monetary theory of value. Keynes writes (CW, 7, pp. xxii-xxiii):

A monetary economy, we shall find, is essentially one in which changing views about the future are capable of influencing the quantity of employment and not merely its direction. But our method of analyzing the economic behaviour of the present under the influence of changing ideas about the future is one which depends on the interaction of supply and demand, and is in this way linked up with our fundamental theory of value. We are thus led to a more general theory, which includes the classical theory with which we are familiar, as a special case.
Early Doubts about the Phillips Curve Trade-Off
Authors: Leeson Robert
Published: June 2009

The language of graphical analysis has an immediacy which has proven potent in the dissemination of economic ideas (Solow, 1987, p. 186). J. M. Keynes' General Theory of Employment, Interest and Money contained only one diagram (Keynes, 1936, p. 180), but J. R. Hicks' graphical IS/LM analysis contributed to the popularization of one interpretation of Keynes' message. Paul Samuelson's textbook used many graphs, which may account, in part, for its pedagogical irresistibility (Elzinga, 1992, p. 863). Two graphs, named after A. W. H. Phillips and Arthur Laffer respectively, became particularly influential in post-1960 policy debates. The “theoretical Phillips curve” (Phillips, 1953, p. 31; 1954, p. 308) was of interest mainly to specialists in optimal control theory; and Phillips' second empirical curve (Phillips, 1959) remained unpublished for almost four decades. Yet his first empirical curve (1958) led to policy implications which were accepted by virtually an entire scientific profession almost instantaneously, “with alacrity” (Friedman, 1977, p. 469). It appeared to fill a gap in the Keynesian neoclassical synthesis, and was rapidly adopted by the textbook writers (Samuelson, 1961, p. 383; Lipsey, 1963, p. 438). During the 1960s, it became widely accepted that ongoing inflation would be accompanied by a sustained reduction in unemployment. When inflation came to be associated with increasing rates of unemployment, this reflected adversely on the economics profession in general, and Keynesian economics in particular.
Class Conflict and Adam Smith's “Stages of Social History”
Authors: Rima Ingrid H.
Published: June 2009

The Wealth of Nations (WN) is not a book from which we expect much enlightenment about class conflict. In spite of well-known passages referring to the diverging interests of workers, landlords and capitalists, the impression most have of WN is one of relative harmony among the classes. Nevertheless, Book III, “Of the different Progress of Opulence in different Nations,” which is the briefest and also the least studied of the five books comprising WN, provides considerable insight into the historical origin of conflict among social classes that derive from economic causes, and the circumstances under which conflict promises to become a characteristic feature of the economic process in any society.1 A re-examination of Adam Smith's theory of natural price in the context of the “stages of social history” developed in Book III, leads to interpreting the prospect for class conflict as a more integral and substantive part of WN than is generally recognized by historians of economic thought.
The Birth of Concepts of the Trading Space in the Seventeenth and Eighteenth Centuries
Authors: Dockès Pierre
Published: June 2009

In the middle of the eighteenth century, in less than fifteen years,1 there occurred, principally in France, a veritable transformation in the conceptions of space and its elements. Up to that time, space had been thought of primarily as social and political.
Ricardo and Morishima on Machinery
Authors: Negishi Takashi
Published: June 2009

Following the appearance of John Barton Condition of the Labouring Classes of Society (1817), David Ricardo admitted, in the third edition (1821) of his Principles, that the process of mechanization may prove injurious to the working class.1 Michio Morishima claims, however, that he carefully investigates Ricardos chapter on machinery and shows that the introduction of machinery does not create unemployment (Morishima 1989, p. 14). In view of the importance of Ricardos machinery problemin the history of economic thought,2 aS well as its applicability in past and current cases of rapid industrialization,3 it is worthwhile to scrutinize Morishimas criticism of Ricardo carefully.
Veblen and Hayek on Instincts and Evolution
Authors: Leathers Charles G.
Published: June 2009

In his 1898 article Why is Economics Not An Evolutionary Science ,Thorstein Veblen criticized the Austrian School (as represented by Carl Menger) for being unable to break with the classical tradition that economics is a taxonomic science(Veblen 1898, p. 73). The Austrian failure was attributed to a "faulty conception of human nature (ibid.).
The Transformation Problem: Exposition and Appraisal
Authors: Wolfson Murray
Published: June 2009

Every theory of value has to perform certain tasks. In the narrowest sense, it must explain ratios of exchange on the market. But it must also give an account of social costs and benefits, and their distribution among individuals and groups. Value theory must relate human beings to the physical and biological realities. It must explain the relations between persons and groups. In fulfilling all these tasks, value theory reflects philosophical beliefs about how human beings perceive and react to nature and to each other.
An Assessment of Gunnar Myrdal's Early Work in Economics
Authors: Dostaler Gilles
Published: June 2009

Spanning sixty years, from 1927 to 1987, Gunnar Myrdals work is both extensive and diversified. Aside from theoretical economics, it embraces many other fields such as sociology,
Erik Lundberg and Dynamic Economics a Review Article
Authors: Uhr Carl G.
Published: June 2009

Erik Lundberg, 1907 to 1987, was the last and one of the best of the 1930s vintage of Stockholm School economists. His Studies in the Theory of Economic Expansion, hereafter cited as Studies, represented a significant advance in dynamic theorizing but has scarcely received any attention outside Sweden. The purpose of this essay is acquaint modern economists with Lundbergs achievement.
American Economists and Minimum Wage Legislation During the Progressive Era: 1912–1923
Authors: Prasch Robert E.
Published: June 2009

Several recent studies, such as that by David Card and Alan Krueger (1995), have led the economics profession to reconsider the theoretical and empirical arguments for and against minimum wage legislation. Most noteworthy was the fact that two respected members of the mainstream economics profession claimed to have found that an increased minimum wage did not lead to increases in unemployment. Moreover, their result was derived from the market for unskilled labor.
The Fall and Rise of Irving Fisher's Macroeconomics
Authors: Dimand Robert W.
Published: June 2009

The history of economics provides many examples of economists, such as A. A. Cournot, and J. H. Von Thunen, whose work became influential only long after it was written. Others, like Francis A. Walker, loomed large during their careers, only to fade in the discipline's memory. Irving Fisher's reputation has followed a much less common trajectory. Once the most cited monetary economist, the subject of major review articles and the center of controversies over theory and policy, Fisher lost the profession's attention, vanished from citation lists in macroeconomics, and was regarded as an embarrassment by colleagues in his university and his discipline. Then, after his death, his contributions to macroeconomics became increasingly cited and influential, as macroeconomics developed in ways that brought it closer to Fisher's approach. New approaches have been found prefigured in Fisher's work, as when a 1926 article of his was reprinted in the Journal of Political Economy in 1973 as “I Discovered the Phillips Curve” (Fisher, 1997, 8). Fisher was once caricatured in introductory textbooks as the supposed exponent of a constant-velocity version of the quantity theory of money, the exemplar of simplistic pre- Keynesian economics swept away in the Keynesian Revolution, but recently there has been attention to Fisher as, in Keynes's phrase, “the great grandparent” of The General Theory, “who first influenced me strongly towards regarding money as a ‘real’ factor” (Keynes, 1971-89, 14, pp. 203 n.; Dimand, 1995; Kregel, 1988).
Pareto and the Wicksell–Cobb–Douglas Functional Form
Authors: Weber Christian E.
Published: June 2009

It is understood that Charles Cobb and Paul Douglas (1928) were not the first to use the production function named after them. Joseph Schumpeter (1954, p. 1042), Carl-Axel Olsson (1971), and Henry Spiegel (1991, p. 816) all note that the production function Y = AKαL1-α had been used by Knut Wicksell (1901, 1906) more than twenty years before Cobb and Douglas published their study. While it is quite possible that Wicksell was the first to use the Cobb-Douglas functional form to study production, he was not the first to apply it to economic analysis in general. Vilfredo Pareto had worked out several implications of a specific version of the Cobb-Douglas utility function as early as 1892. Later, he repeated and extended this analysis in the mathematical appendix to the French translation of his Manual of Political Economy (1909).
Comment on Weber: Did Pareto Have a Cobb–Douglas Utility Function?
Authors: Brems Hans
Published: June 2009

In Christian Weber's opinion in the preceding article in this journal, although Vilfredo Pareto never wrote his utility function in the Cobb-Douglas form U = rβbrγc, he did present an early, if incomplete, discussion of a Cobb-Douglas utility function. Weber's sections II and III try to document his opinion.

Weber's section II examines Pareto's “Considerazioni” (1892) on the assumption that the marginal utility πi, of good i depends only on the level ri, of consumption of that good. Section III examines Pareto's Manual (1909) on the assumption of “additive separable” utility functions.
Two Classics: Böhm-Bawerk's Positive Theory and Fisher's Rate of Interest Through Modern Prisms
Authors: Samuelson Paul A.
Published: June 2009

Positive Theory of Capital (1889) is a classic which contains Eugen von Böhm-Bawerk's 1889 correct vision of how the interest rate might be determined by the interplay of systematic time preference (“impatience”) and time-phased technology's productivity. But he was not quite able to formulate his intuitive vision in terms that would satisfy today's persnickety jury of theorists. And indeed the classic Rate of Interest (1907) by his younger contemporary, Irving Fisher, seemed to be disagreeing with Böhm-Bawerk's treatment of time's net productivity; but, as Fisher was unable to make clear until 1930, he was objecting only to Böhm-Bawerk's formulation of the role of productivity in interest determination. In point of fact, Fisher, who was so long identified (wrongly, but understandably) as an “impatience theorist,” considered his own main contribution to interest theory to be his clarification of how the technological superiority of time-consuming processes cooperated in the determination of the equilibrium interest rate.
Demand Conditions and the Interpretation of Ricardo
Authors: Caravale Giovanni A.
Published: June 2009

Kenneth J. Arrow's recent article on Ricardian theory (Arrow 1991) represents the occasion for a renewed discussion of the basic building blocks of the classics' analytical scheme and of the role of demand conditions in this context. Arrow's argument pivots around two ideas: that Ricardo's theory is built without any reference to demand, and that the role of demand can be conceived of only within the logical context of neoclassical demand functions, which are absent in Ricardo, thus making his theoretical scheme irremediably weak. These ideas form the basis of a drastically dichotomized representation on the part of Arrow of current interpretations of Ricardo. On the one hand are the neoclassical-type views, epitomized by his own position, with their emphasis on the allocation problem; on the other hand are the purely cost-oriented neo-Ricardian interpretations, with their strongly Marxist ideological bias.
Misinterpreting Ricardo: A Review Essay
Authors: Mongiovi Gary
Published: June 2009

Debate over the interpretation of David Ricardo's economics has assumed special relevance since the publication of Piero Sraffa's Production of Commodities by Means of Commodities (1960). Sraffa sought to revive and reconstruct a nearly lost classical tradition whose main elements, he believed, had been given their first coherent expression by Ricardo (Sraffa 1951, Garegnani 1984). On this interpretation, Ricardo's analysis, far from being a fumbling step toward the modern theory of supply and demand, as Marshall (1920) would have it, or a misguided detour as Jevons believed (1879), instead constitutes a logically consistent alternative to the marginalist theory that emerged after 1870.
Menger and Hayek on Institutions: Continuity and Discontinuity
Authors: Garrouste Pierre
Published: June 2009

Recent scholarship has noted differences and even discrepancies among the members of the so-called Austrian school. It has been possible to identify discontinuities between generations (Hayek 1968), along methodological lines (Caldwell 1988, Hutchison 1981), among the various threads of the “Austrian revival” (Vaughn 1990), and between heterogeneous intellectual systems (Dufourt and Garrouste 1993). Brian Loasby (1989) has remarked that Friedrich Hayek was one of the few scholars to develop one of Carl Menger's outstanding contributions to economics, his theory of social institutions (Langlois 1989). The purpose of this paper is to appraise the continuities and discontinuities between the two authors' conceptions of institutions. In what follows, I shall present successively Menger's and Hayek's conceptions of institutions, and then I shall compare them.
The Implication for Socialism of Marx's Theory of the Tendency of the Rate of Profit to Fall
Authors: Khalil Elias L.
Published: June 2009

It is clear from the enormous literature on the subject that Karl Marx believed that his law of the tendency of the rate of profit to fall is applicable only to the capitalist mode of production. Is there, however, really anything in the law which confines it specifically to capitalist production? This is an important question which is not asked in an explicit manner in the literature on Marx's economics. His most important law or tendency about the internal contradictions of capitalist production might turn out to be a characteristic of production per se—including socialist production in its ideal form.
The Technological and Institutional Context of Cold War Growth Theory
Authors: Neill Robin
Published: June 2009

Between 1928 and 1968, a common information environment in the Soviet Union, the United Kingdom, and the United States with respect to the role of industrial capital in the economy produced theories of economic growth in all three countries. Emerging from different stages of development and different institutional circumstances in each country, the content of the theory of growth was different in each country. The different stages of development were defined by industrial structure and levels of capital accumulation, not by technological sophistication. In the 1920s and 1930s, all three countries experienced the obsolescence of the steam locomotive and the telegraph, and the emergence of new economic activities related to the internal combustion engine, electricity, radio and the telephone. With respect to technology, as such, there was a fairly common information environment. Differences lay in institutions, rates of investment, and levels of accumulation.
The Canonical Classical Growth Model: Content, Adherence and Priority
Authors: Hollander Samuel
Published: June 2009

Ricardo “and his chief followers … did not express their meaning with sufficient clearness, and they have been misunderstood by all but the most careful readers” (Marshall, 1920, p. 84).

“Ricardo … has not been fortunate in finding careful students” (Cairnes, 1874, p. 237).
Rummaging in the Attic: A Chapter of Accidents
Authors: Whitaker John K.
Published: June 2009

The invitation to reflect for a wide audience upon my professional life and work is simultaneously flattering, daunting and dismaying: daunting because the shield of privacy normally surrounding personal and family matters can hardly avoid being breached; dismaying because the called-for reimmersion in one's past so strongly evokes unfulfilled hopes and ambitions. Not, I should add, that I have any cause for complaints. My life has been fortunate and fulfilling, yet with the clarity of hindsight, roads not taken become visible more clearly than they were when choices were made.
“The Creation of Wealth”: John Rae's Knowledge-Based Growth Theory
Authors: Wakatabe Masazumi
Published: June 2009

John Rae is best known for his contribution to capital theory, particularly to Austrian capital theory. J. A. Schumpeter's (1954) assessment is typical in the literature: “two cornerstones of [Böhm-Bawerk]'s structure–one of them also a cornerstone of [Nassau] Senior's–are in fact there” (Schumpeter, 1954, pp. 468-69). Although this seems to have been the standard perception (see also Dorfman, 1995, p. 21), there is growing appreciation that Rae had a theory of economic development, rather than only a theory of capital. As Klaus Hennings put it: “Rae ascribes to inventions a more important role for economic progress … than capital accumulation” (Hennings, 1987, p. 40). Spengler (1959) saw Rae's contribution as “his recognition of the importance of the role of technical knowledge and invention in economic development” (ibid., 1959, p. 406; see Deans and Deans, 1972; Birchler, 1980). Syed Ahmad (1996a, 1996b) and Anthony Brewer (1990, 1991, 1996) agree on the central role of innovation in the economics of Rae.
Reply to White
Authors: Ekelund Robert B.
Published: June 2009

Some might argue that William T. Thornton, whatever his ultimate place in social history, has received far too much attention from economists. Yet, I welcome Michael White's comments on a recent paper of mine (1997) and even note that, in a small way, his earlier comments on my paper written with Sven Thommesen (1989) led me to reread Thornton's writings in depth. Nevertheless, and after augmented reflection, White's comments do not cause me to alter any of my arguments concerning Thornton's worth as an economic theorist. Indeed, rereading Thornton in light of White's comments strengthens my belief that his analysis was as flawed as I initially thought it to be. While Thornton's critique of supply and demand (read “of economic analysis”) and others like it raise issues far broader and of more critical moment than those suggested by White, I confine my remarks to the issues he raises in his comment on my most recent paper.
The Methodological Roots of J. Laurence Laughlin's Anti-quantity Theory of Money and Prices
Authors: Skaggs Neil T.
Published: June 2009

From the 1880s until after the creation of the Federal Reserve System in 1913 the United States was a hotbed of monetary controversy. The secular price deflation that began in 1865 prompted a host of efforts to increase the money supply, in the belief that more money would check the decline of prices. The agitation for free coinage of silver that arose in the 1870s and carried into the 1880s and 1890s generated a maelstrom of arguments and counterarguments. Such theoretical support as the “cheap money advocates” provided was in the form of a crude application of the quantity theory of money. Not surprisingly, using the quantity theory in such a manner brought the theory itself under fire.
Austrian and American Capital Theories: A Contrast of Cultures
Authors: Dorfman Robert
Published: June 2009

Controversies about capital, its role in the economy, and its claims for reward are still very much with us. Though the exchanges are often heated, all the contestants' are descended from either of two monumental works of about a century ago: Eugen von Bohm-Bawerk'sPositive Theory of Capital(1889) and Irving Fisher'sThe Rate of Interest(1907). This essay inquires: in what respects are these two theories the same? In what respects do they differ? And why?
Why are There No Austrian Socialists? Ideology, Science and the Austrian School
Authors: Boettke Peter J.
Published: June 2009

The Austrian School of Economics has long been branded as a sort of radical laissez-faire wing within the economics profession, even much more “right-wing,” in fact, than Milton Friedman, the profession;'s most recognized “preacher” of the free-market. The economic journalist Alfred Malabre, Jr., for example, in his recent critical book on modern economics, Lost Prophets, argues that “the monetarism that Friedman and his followers were preaching was not quite as conservative as advertised. In fact, the University of Chicago professor was treading not far from the middle of the economic road, flanked on the left by the likes of Galbraith and Leontief and on the right by Hayek, along with such other Austrian-school luminaries as Hans Sennholz, chairman of the economics department at Grove City College in western Pennsylvania, and Ludwig von Mises, transplanted from Austria and finishing out a distinguished academic and writing career at New York University” (Malabre 1994, p. 144).
Adam Smith's Advisory Style as Illustrated by his Trade Policy Prescriptions
Authors: Endres A. M.
Published: June 2009

The purpose of this paper is to recover Adam Smith's conception of the appropriate rules of argumentation for the political economist in public policy discussion. Our interest will be in Smith's attempt to model the advisory style which he thought appropriate for an economist writing on public policy issues, advising the legislature and debating constitutional problems. Inferences will be drawn from the scope and tone of Smith's work on some selected issues of economic policy reform discussed in The Wealth of Nations (hereafter WN). Extensive reference will be made to Smith's admission of the vital role of rhetoric in human affairs in his Lectures on Rhetoric and Belles Lettres, and to Smith's view of the legislator's perspective on policy as enunciated in the Theory of Moral Sentiments.
Smith's Legacy and the Definitions of the Natural Wage in Ricardo
Authors: Stirati Antonella
Published: June 2009

There is an on-going controversy on the interpretation of David Ricardo's wage theory, which has undoubtedly been fueled by the existence of contradictions and difficulties in Ricardo's own treatment of wages. The aim of this paper is to clarify the sources of these difficulties, and to trace their possible historical and analytical reasons. To this end, Ricardo's contribution is put in historical context, and compared with the received doctrine of his time, that is, with Adam Smith's wage theory. This comparison shows that there are many Smithian elements in Ricardo, and that the problems emerge when Ricardo departs from Smith. These problems are essentially the coexistence of Smithian and Ricardian notions of the natural wage in Ricardo's work and the difficulties in reconciling the latter with the distinction drawn by Ricardo between natural and market variables. The reason.for Ricardo's partial departure from Smith, it will be argued, may have been his wish to render more clear-cut his conclusions concerning the tendency of the profit rate to fall in consequence of a rising price of corn. The effort to clarify the difficulties in Ricardo's theory and the comparison with Smith also entail an interpretation that differs in important respects from those found on both the main sides of the controversy over his wage theory.
Three Centuries of Demand and Supply
Authors: Clower Robert W.
Published: June 2009

Although the ground I cover in this address is familiar, I approach it as a novice (Clower, 1973). I have written some history of economic thought papers over the past fifty years, but the bulk of my work has been theoretical; and I have known too many good historians of thought to imagine I belong in that class. As W. J. Ashley (1891) observed, “The economic historian … is apt to be confused in theory; [and] the … theorist runs the risk of being unhistorical” (compare Wicksell, 1904, p. 61). Unhistorical or not, I shall discuss some major vicissitudes of economic inquiry over the past three centuries.
The Early Patinkin—Friedman Correspondence
Authors: Leeson Robert
Published: June 2009

Don Patinkin (1922-95) was a co-author of the Keynesian neoclassical synthesis, and became engaged in several important controversies. One of them involved Milton Friedman's (1956) assertion about a supposed Chicago quantity theory “oral tradition.” From 1968 until his death, Patinkin hardly seemed to miss an opportunity of denigrating what he regarded as Friedman's “invention.” This controversy was taken to the 1970 American Economic Association (AEA) meeting by Harry Johnson (1971), and divided at least two economics departments, Chicago and the University of Western Ontario, where Patinkin and Johnson were frequent visitors, and where two influential monetarists, David Laidler and Michael Parkin, had migrated from Britain (Parkin, 1986; Patinkin, 1986).
Fisher and Veblen: Two Paths for American Economics
Authors: Dimand Robert W.
Published: June 2009

In the early years of the twentieth century, two outspoken and brilliant American economists, Thorstein Veblen and Irving Fisher, offered sharply-contrasting visions of how the discipline of economics should be transformed. Each taught at a leading university and had added prominence as a journal editor, but pursued economic inquiry in ways alien to senior colleagues at his university and in the profession at large. Despite the gulf separating their approaches to economics, they had been doctoral students of the same mentor, William Graham Sumner of Yale, and had each been deeply influenced by Sumner. This paper uses the exchange on neoclassical capital theory between Veblen and Fisher in the Political Science Quarterly in 1908 and 1909 to illuminate their approaches to economics and to question why the American economics profession came to follow Fisher's path–even though Veblen, unlike Fisher, attracted devoted disciples and was considered in American social thought (excepting academic economists) as the standard-bearer of “the New Economics.” Despite Veblen's antipathy to those aspects of Fisher's work that became dominant in mainstream economics, there was a close affinity between Veblen's Theory of Business Enterprise (1904) and Fisher's debt-deflation theory of depressions, which remained (until very recently) outside the mainstream and has been taken up by such heterodox economists as Hyman Minsky.
Bargaining, Consent and the Just Wage in the Sources of Scholastic Economic Thought
Authors: Noell Edd S.
Published: June 2009

Economic justice in the labor market is an abiding issue of economic policy. Concerns regarding fair pay or just compensation were addressed in classical political economy and continue to be the objects of policy discussion. What constitutes a fair wage? How is a fair wage to be determined? Will competition in the labor market ensure that a fair wage is established? Should employers be required by the State, or persuaded on a voluntary basis, to pay wages that maintain a family's dignity and honor?
Robert Torrens and the Evolution of the Real Bills Doctrine
Authors: Poitras Geoffrey
Published: June 2009

In the current era of quantity theorists and inconvertible currencies, the real bills doctrine has received a surprising amount of recent attention (e.g., Sargent and Wallace, 1982; Smith, 1988; Selgin, 1989; Cunningham, 1992). While the real bills doctrine has a long history, the doctrine underwent considerable evolution during the period from the Bullionist debates of the Restriction Period, 1797–1819, to the Banking School versus Currency School debates surrounding the introduction of Peel's Act in 1844. The debates of the Restriction period are significant for being directly concerned with the workings of an inconvertible, real-bills-based paper currency while the later debates involved the real bills doctrine under convertibility. A primary objective of this paper is to explore the views that Robert Torrens held concerning the inconvertible and convertible versions of the real bills doctrine as a rule for central bank policy. Torrens's contributions as an anti-bullionist and, later, as a leading member of the Currency School reflect the importance that both convertibility and bank lending practices have for interpreting the real bills doctrine and the related law of reflux. The apparently paradoxical evolution of Torrens's monetary thought identified by Lionel Robbins (1958) is attributed primarily to the evolution of his views on bank lending practices.
In Praise of Dead Men: A Memoir
Authors: Clower Robert W.
Published: June 2009

Among my happiest memories is a 1948 lecture on Adam Smith by a teacher who often read from and commented on primary texts. On the day in question, he arrived with a stack of books, from which he proceeded to read, one after another, for some 40 minutes. Finally he came to the last book in the stack, Smith's Wealth of Nations, from which he read the following:
Schumpeter on Entrepreneurs and Innovation: A Reappraisal
Authors: Frank Mark W.
Published: June 2009

Over the past two decades, technology and innovation have become common themes within the economic growth and economic development literatures. This renewed emphasis is highlighted by the developments in endogenous growth theory (Romer, 1986, 1990; Barro and Sala-I-Martin, 1995), but many have noted that its roots can, in part, be traced to the works of Joseph A. Schumpeter (Nelson and Winter, 1982; Blaug, 1986; Rostow, 1990; Cheng and Dinopoulos, 1992; Freeman 1994; Thanawala, 1994). Schumpeter's principal contributions include his theory that the creative response of entrepreneurs and entrepreneurial innovation are the primary determinants of economic change. However, most argue that his vision of entrepreneurs is dichotomous, with one part corresponding to his European period, and the other to his American period (see, for example, Phillips, 1971; Klein, 1977; Nelson, 1977; Freeman, 1982, 1994; Swedberg, 1991; Scherer, 1992; Thanawala, 1994; Malerbaand Orsenigo, 1995). The initial part of his work, it is argued, focuses not on large firms and market structures, but on small firms and individual entrepreneurs. Here Schumpeter presents entrepreneurs as isolated, romanticized individuals who challenge the social system and indirectly propel society to greater economic heights. This period, it is argued, reflects the European half of his life. Schumpeter's American period begins with his stays at Harvard for the academic year of 1927-28, and for a greater part of the year 1930. It is generally argued that in this American period, Schumpeter altered his vision of economic development to accentuate the advantages of monopolistic competition, and to include large established corporations and government agencies as agglomerations capable of fulfilling the entrepreneurial function.
Finding New Wine In Old Bottles: What Historians Must Do When Leontief Coefficients are no Longer the Designated Drivers of Economics
Authors: Moss Laurence S.
Published: June 2009

In 1951, Nobel Laureate Wassily Leontief put his finger on what was wrong with economics. It had remained a “deductive system resting upon a static set of premises,” when what was needed was an economics that would “combine economic facts and theory.” The new economics would be called “interindustry” or “input-output” analysis (Leontief 1966, p. 14). According to Leontief it is easy to “compute the complete table of input requirements at any given level of output, provided we know its input ratios.” These input ratios could be calculated from “engineering data on process design and operating procedure” (ibid., pp. 24–26). For Leontief and, I suspect, a large number of economists in 1951, the technological facts dependent only on the chemical and physical laws of nature—what I shall call “Leontief coefficients”—were indisputable. It would take so many units of coke to produce a ton of pig iron whether or not there was a human being alive on earth to witness that transformation. The Leontief coefficients were the bedrock of subsequent economic analysis. They were analogous to what the philosopher John R. Searle has termed “brute facts” (Searle 1995, p. 27).
Adam Smith on Economic Justice in the Labor Market
Authors: Noell Edd S.
Published: June 2009

One of the most significant statements in Joseph Schumpeter's discussion of Adam Smith in theHistory of Economic Analysishighlights the impact of scholastic thought upon Smith's economic analysis. Speaking ofThe Wealth of Nations, Schumpeter claimed that “the skeleton of Smith's analysis hails from the scholastics and natural-law philosophers” (Schumpeter 1954, p. 182). Though not the first to make this connection, Schumpeter's affirmation, alongside his treatment (ibid., part II, ch. 2) of the literature produced by these two groups, has been a stimulus to further exploration with respect to both the Protestant scholastics Hugo Grotius and Samuel Pufendorf and the medieval theologians (De Roover 1957; Bowley 1973). More recent studies which have followed in this vein have focused on the significance of the scholastic and natural law traditions for Smith's treatment of economic justice (Hont and Ignatieff 1983; Young and Gordon 1992).
Marshall and the Mathematization of Economics
Authors: Vazquez Andres
Published: June 2009

Historians of economic thought have long debated about the methodological position adopted by Alfred Marshall (1842–1924) concerning the mathematization of economics. While Francis Y. Edgeworth and Marshall's pupils, most notably A. C. Pigou and J. M. Keynes, agreed that it was mainly through him that mathematical economics has since become respectable (see Pigou 1925, p. 66) and proclaimed him the founder of modern diagrammatic economics (ibid., p. 24), more recent commentators have criticized his failure to give proper credit to mathematics, and have even depicted him as an enemy of such an approach (see, for example, Schumpeter 1951, p. 97; Coase 1975; Brems 1975; Creedy 1986, p. 126; Schabas 1989; Huriot 1994, p. 17).
“It's an Ill Wind…”: A Memoir
Authors: Hollander Samuel
Published: June 2009

I can conceive of few academics presumptuous or foolhardy enough to write an “intellectual autobiography” unless invited to do so. It is no easy assignment. One seeks to protect a core of privacy; there is a residual subjectivity regarding events and persons that cannot be eliminated; one is obliged to tone things down for practical reasons. Even if one can hope to tell the “truth” it will not be the whole truth—certainly not in twenty-two pages. It must also be said that any linkages that might be suggested between character or experience and professional contribution (and an intellectual autobiography of course seeks out such linkages) can never progress beyond the stages of hypothesis; neither necessary nor sufficient causation is at issue. Yet I myself have learned something from this exercise; perhaps my readers will too.
A Reply to Lianos's Critique
Authors: Khalil Elias L.
Published: June 2009

Theodore P. Lianos (1995) agrees with the primary thesis of my paper (Khalil 1994), namely, if Karl Marx's theory is correct about the tendency of the rate of profit to fall in capitalist production, it should imply that all modes of production (including socialist production) also suffer from the tendency. Lianos raises two issues. One is secondary and the other is irrelevant.
Rothbard's Austrian Perspective: A Review Article
Authors: Trescott Paul B.
Published: June 2009

Murray Rothbard's untimely death has deprived the economics profession of one of its most colorful, iconoclastic and therapeutic personalities. He helped to inspire a legion of dedicated followers to make Austrian economics a significant element in the intellectual and moral spectrum of economics. The Austrians never wavered in their criticism of Soviet-style economic organization, correctly arguing that such systems were working badly. Even so, can a sub-set of economists who eschew mathematics and econometrics win respect from the mainstream? The volumes under review (Rothbard 1995) certainly make a valiant effort in that direction. Rothbard's survey of economic thought extends from “the beginning” to Karl Marx and C. F. Bastiat. Occasional references indicate more was intended. Rothbard is critical of the “Great Man” focus of much of mainstream history of economic thought, and even more critical of the “Whig interpretation,” which sees the evolution of economic thought as progress toward the current near-perfect ideas and practices of our leading graduate schools.