bluuebunny/crossref_metadata_2025 huggingface dataset:
Editorial Introduction: Turning the Page
Authors: Medema Steven G.
Published: June 2009

This issue of JHET marks the end of one era and the beginning of another. Don Walker, the only editor that JHET has ever had, has stepped aside after 9 years on the job. Under Don's guidance, JHET developed into a highly respected outlet for scholarship in the history of economic thought, to the point where the supply of high quality submissions prompted the move to quarterly publication in 1988. His labors on behalf of the Journal stretched well beyond the standard editorial function: he handled or oversaw all aspects of the physical production of the Journal, the mailing of the Journal, and numerous other messy details that the present editor has the luxury of passing off to Carfax (that, too, largely owing to Don's efforts).
The Relevance for Present Economic Theory of Economic Theory Written in the Past
Authors: Walker Donald A.
Published: June 2009

In order that this essay may be clear to the reader, some understandings about terminology must be established. First, if we speak of “theories that were formulated in the past,” ordinarily we mean to leave open the question of whether they are still valid, and if we speak of “past theories,” ordinarily we imply that they have been discarded and that implies that they were defective and were supplanted by current theories. Nevertheless, in this essay the latter term, used for the sake of brevity, will have the same meaning as the former expression. If a past theory is considered to be invalid, that will be staled explicitly.
The Genesis of the Only Diagram in the General Theory
Authors: O'Donnell Rod
Published: June 2009

It is well known that the General Theory contains only one diagram, this occurring in chapter 14 criticising the orthodox theory of the rate of interest. Attached to the diagram is a footnote containing an acknowledgement: “This diagram was suggested to me by Mr. R.F. Harrod” (CW VII, p. 180). The impression conveyed by this remark is that Harrod drew the diagram and offered it to Keynes, who then accepted and used it. Further enquiry into the diagram's origins reveals the existence of an initial version which grew out of correspondence between Keynes and Harrod in August-September 1935 (CW XIII, pp. 526-63). Two of Harrod's writings–his (1951) Keynes biography and a letter to Hawtrey in 1951–imply that he was the author of the initial version, and that this was essentially the same as the published version. And, in seeming corroboration of Harrod's comments, there is the virtual equivalence of the initial version given in The Collected Writings of John Maynard Keynes (CW XIII, p. 557) and the final version printed in the General Theory (CW VII, p. 180J. Taken individually and collectively, these items of evidence all point in the same direction. They support the reasonable inference that, apart from trivial changes in lettering, Harrod was the sole author and creator of the initial and final versions of the diagram, and that Keynes was merely the recipient.
An Intellectual Autobiography
Authors: Tarascio Vincent J.
Published: June 2009

Although this essay is essentially an intellectual biography, personal experiences have influenced my career as an economist and historian of economic thought. For this reason, I shall devote some space to these experiences before turning to the main topic.

My parents migrated from Sicily to the United States prior to the First World War; met and then married in this country and eventually settled in Hartford, Connecticut. I was conceived in 1929, the year of the Great Crash and born the following year at the onset of the Great Depression. However, for my family our economic depression had begun in 1929, when my father was seriously injured at a construction site and spent the next 8 months hospitalized, leaving my mother, who was pregnant with me, and my two siblings, without any means of support.
The Paradoxical Fate of the Representative Firm
Authors: Schohl Frank
Published: June 2009

More than 100 years have passed since Alfred Marshall introduced the representative firm to economic theory in 1891. During this long period of time, many arguments have been raised giving either support or opposition to the concept. In recent years, macroeconomists have taken an increasing interest in the representative firm. Since the beginning of the modern microfoundations literature in the early 1970s, the representative firm and its big brother, the representative agent, have been made essential analytical tools for linking macroeconomics and microeconomics. Within this debate, the microfoundation of business cycle theory has played a prominent role.
Adam Smith's Katallactic Model of Gambling: Approbation from the Spectator
Authors: Levy David M.
Published: June 2009

Adam Smith starts his account of economic life supposing two trading individuals, and not with Robinson Crusoe alone on an island. It is a consequence of this modeling strategy that, when considering an actor's choice, the model builder automatically has access to the judgment of the spectator. Thus it is that when Smith describes the actor gambling for money, he takes into consideration the fact that the spectator will make note of unusual events. In particular, the winner of a large-number lottery will become famous. To the extent that fame is desired, the actor's decision will be influenced by the spectator's judgment. The gambling model Smith describes is an exchange between the actor–who takes risk–in return for the chance of applause from the spectator. Everything in Smith's account is an exchange; hence, we denote Smith's model as a katallactic model, thus remembering Richard Whately's suggestion to rename political economy as the science of exchange, from the Greek καταλλατειγ–to exchange.
Formalism in Economics
Authors: Golland Louise Ahrndt
Published: June 2009

The transformation of economics through its mathematization has been of interest to historians of economics and economic thought. While considering aspects of this history, Philip Mirowski (1986a, 1992) and Lionel Punzo (1989, 1991) have introduced David Hilbert's work, the Hilbert program, formalism, and Kurt GddePs results into their discussions in a way that is inconsistent with the mathematical community's understanding of mathematical history.
What is Economic Action? From Marshall and Robbins to Polanyi and Becker
Authors: Khalil Elias L.
Published: June 2009

In the past three decades economics has entered a new phase in its development. The new stage did not involve a revolutionary change of basic tools as occurred with the triumph of neoclassical economics at the turn of the twentieth century and Keynesian economics in the post World War II era. Rather the recent mutation involves the introduction of economic tools of analysis into areas which have traditionally been part of contiguous disciplines. The invasion of economics came to be referred to, even by its enthusiasts (e.g., Stigler 1984; Radnitzky and Bernholz 1986), as “economics imperialism.”
The “Alternative” Theories of Knight and Coase, and the Modern Theory of the Firm
Authors: Foss Nicolai J.
Published: June 2009

In his contribution to the 1987 conference that celebrated the fiftieth anniversary of Ronald Coase's “The Nature of the Firm” (1937), Harold Demsetz noted that from the birth of modern economics to 1970, “only two works seem to have been written about the theory of the firm that have altered the perspectives of the profession: Knight's Risk, Uncertainty, and Profit (1921) and Coase's ‘The Nature of the Firm’” (Demsetz 1993, in Williamson and Winter 1993, p. 159). It is easy to feel uncomfortable with this observation. First, Coase's article was ignored for decades. Second, Knight's book did not receive much attention because of its theory of economic organization, but because of its statement of the theory of perfect competition (Stigler 1957; Machovec 1995), its distinction between risk and uncertainty, and its theory of profits (see, e.g., Boulding 1942 and Papandreou 1952).'
Three French Socialist Economists: Leroux, Proudhon, Walras
Authors: Herland Michel
Published: June 2009

Are Pierre Leroux, Pierre-Joseph Proudhon and Leon Walras economists? Certainly, but to a different extent. This alphabetical order, which is also that of chronology, seems to be in inverse order of merit—at least in the opinion of Joseph A. Schumpeter, who praised Walras as “the greatest of all economists…as far as pure theory is concerned” (1954, p. 827), but who briefly described Proudhon as someone who defended “results that are no doubt absurd” (ibid., p. 457). Leroux's name does not even appear in Schumpeter's 1954 book, nor in any other history of economic thought. Although the judgment pronounced by a historian on one or another of our three authors may be contested, there seems no reason to call into question the hierarchy implicitly established by Schumpeter. In a certain way the succession: Leroux, Proudhon, Walras, represents and summarizes the development of political economy, beginning with the embryonic stage (which would be represented by Leroux), passing through the disorders of adolescence (Proudhon), and finally arriving at the stage of scientific maturity (Walras).
Keynes and the Marshall-Walras Divide
Authors: Vroey Michel De
Published: June 2009

This paper is a sequel to De Vroey (1998d) and (1998e). In these papers, I pondered upon the relationship between the Marshallian and the Walrasian research programs and defended the view that a divide should be drawn between them, contrary to the opinion of the majority of economists who see no need for such. I argued that these research programs differ on two scores. First, they are based on different conceptions of equilibrium. Second, they differ on the way in which they broach the issue of the working of the decentralized economy. The hallmark of the Marshallian approach is that it proceeds in two steps. The working of particular markets is analyzed in a first stage whereas the issue of their coordination is assigned to the second stage of the inquiry. Contrarily, the hallmark of the Walrasian approach is to immediately start the analysis at the level of the economy as a whole. Put differently, in the Marshallian approach, partial equilibrium analysis is seen as a first preliminary step to general equilibrium analysis, whereas in the Walrasian approach one immediately proceeds with the latter. The aim of the present paper is to show the incidence of this twofold difference on the interpretation of Keynesian theory.
Herbert Spencer and the Political Economy of Mean-Spiritedness Revived
Authors: Tilman Rick
Published: June 2009

In recent years the reputation of Herbert Spencer (1820-1903) has undergone a transformation. Indeed, until the mid-1970s the answer to the rhetorical question, “Who reads Spencer now?” would surely have been “hardly anyone.” However, since then sociologist Jonathan Turner, intellectual historian Robert Bannister, political scientist Robert Perrin and dozens of economists and humanists have contributed to reconsideration of his role in nineteenth-century thought. They have also reinterpreted the corpus of his work and suggested new ways to utilize his contributions as a social theorist. Most important for our purposes is their effort to demonstrate that his stances on policy issues were not as mean-spirited as his critics have claimed. Indeed, Bannister, for example, forcefully argues that neither Spencer nor his American contemporary, William Graham Summer, were as consistently in favor oflaissez faireor as harsh in their attitudes toward the underprivileged and the lower classes as scholarly convention once had it.
Albert Aftalion on Socialism
Authors: Frobert Ludovic
Published: June 2009

Albert Aftalion introduced Austrian marginalism into France and used it not only to tackle the issue of imputation (1911) but also to build his own theory of business cycles (1913) and of money (1927). Aftalion did not, however, receive the recognition he deserved for his contributions. The reasons are twofold. First, his use of modern analytical tools did not fit well with the dominant bias for the historicist approach that prevailed in France at the time, especially before 1914. Second, the fact that his contributions were available only in French did not help in spreading widely his ideas outside his native country.
The Contributions of Frederick C. Mills
Authors: Woirol Gregory R.
Published: June 2009

Economics in the United States in the 1920s and 1930s was notable for the richness of its methodological and theoretical approaches. Encompassing the peak period of American institutionalism, these years also witnessed a recurrent debate over the proper scope and method of economics which was bracketed by a minor methodenstreit in the 1920s and the measurement-withouttheory dispute of the late 1940s. In retrospect it is apparent which lines of thought would dominate economic discourse in later decades. At the time, however, this future was not as clear. A late 1920s evaluation by Paul Homan of the state of contemporary economics concluded that economists “seem in our own day to be separated by more impassable barriers of thought than at any time in the past” (Homan 1928, p. 10). In looking beyond “the present impasse,” as he called it, Homan concluded that “whether economics in the future shall consist of a body of doctrines, or a body of facts scientifically ascertained, or a technique, or more or less of one and the other, is on the laps of the gods” (ibid., pp. 466-67).
Emerging Learned Societies: Economic Ideas in Context
Authors: Henderson James P.
Published: June 2009

I found preparing this presidential address a much greater challenge than I had anticipated. After much deliberation, I decided to explore the historical roots of what we are doing now. The History of Economics Society, like other learned societies, holds an annual conference in different cities; members present papers which are discussed; and the Society sponsors a specialist journal—The Journal of the History of Economic Thought. Why? Where did this tradition begin? I turned to several historians of science—I. Bernard Cohen, Thomas S. Kuhn, Richard Yeo, and Ian Hacking—for some background.
On John Rae's Controversial Contributions to Economics
Authors: Ahmad Syed
Published: June 2009

John Rae, Scottish by birth, and a Canadian-Hawaiian (i.e. of the Kingdom of Hawaii) by residence, lived in Canada for about twelve years before the publication of his only work of significance in economies' and for nine years before he started writing it (James 1965,). He titled his bookStatement of Some New Principles on the Subject of Political Economy, Exposing the Fallacies of the System of Free Trade and of Some Other Doctrines Maintained in the “Wealth of Nations” (1834) (obviously not a very memorable or popular title). The book was first conceived as an appendix to a statistical study of an aspect of the Canadian economy but, as sometimes happens, took a life of its own, in which references to Canada became merely illustrative and less frequent than to England, France or even China.
The Practical Economics of Walter Bagehot
Authors: Moore Gregory C. G.
Published: June 2009

Walter Bagehot is an excellent example of the mid-Victorian polymath. He was a banker, journalist, editor, biographer, literary critic, economist and political analyst. The educated reader of today remembers him as the author of The English Constitution, which, though published in 1867, remains one of the best introductions to the workings of the Westminster political system. Economists, on the other hand, vaguely recall him as the monetary commentator who wrote Lombard Street (1873b) and edited The Economist (1861–1877). Only a few historians of economic thought cite Bagehot for his participation in the English Methodenstreit. He played a significant role in this largely forgotten Victorian debate between the historical and orthodox economists. He was one of the first orthodox economists to respond to the historicist challenge, and, in doing so, he articulated a highly controversial relativist interpretation of the orthodox doctrines. Specifically, in response to the historicist claims that recent evidence gathered from custom-bound societies falsified the orthodox
Capital Theory, Inflation and Deflation: The Austrians and Monetary Disequilibrium Theory Compared
Authors: Horwitz Steven
Published: June 2009

At one level or another, economic processes make it possible for diverse individuals to coordinate their activities. Although microeconomists have long recognized this insight, and purport to explain it with their tools, macroeconomists often seem to lose sight of the centrality of coordination when they focus on the movements of, and relationships among, aggregate variables. One problem with emphasizing aggregates is that, in reality, economic coordination ultimately takes place at the microeconomic level, which poses the issue of microfoundations. However, recognizing that micro issues are the fundamental ones does not deny a role for distinctly macroeconomic analysis. Macroeconomic analysis should show how movements in markets for goods that are pervasive (i.e., affect some very large number of microeconomic markets simultaneously), help or harm the coordination processes taking place in those individual markets and thus influence the determination of aggregate measures such as total income and employment.
Reply to Cottrell
Authors: Horwitz Steven
Published: June 2009

Allin Cottrell's criticisms of my paper fall into three general categories: criticisms of the paper I did not write, criticisms of the paper I claimed to write, and criticisms of the paper he thinks I was really writing. Let me try to address each of these categories, emphasizing the more substantive points he raises about the paper I claimed to write.
Hayek and Spontaneous Orders
Authors: Sabooglu Müfit
Published: June 2009

Friedrich A. Hayek's work spans over more than forty years and encompasses a number of social disciplines. That work has a single goal, however: the justification of a liberal social order. Apart from the justification of the liberal order, two other elements of his work in particular draw the attention of many economists: his definition of the economic problem as being one of coordination, and his effort to explain certain social phenomena as the result of a spontaneous order.
Biological Analogies in Marshall's Work
Authors: Niman Neil B.
Published: June 2009

Alfred Marshall, who once proclaimed that the Mecca of the economist lies in Economic Biology, is remembered more for the mechanical analogies contained in the appendices of his Principles of Economics. Subsequent revisions of Marshall based on the mechanical principles he incorporated into the theory of the firm (Robbins 1928; Pigou 1928), the theory of competition (Robinson 1933; Chamberlin 1933), and the theory of value (Hicks and Allen 1934), succeeded in completely removing the corpus of economic theory from the domain of biology.
Price Trends and Economic Crises in Marshall's Monetary Theory
Authors: Gaynor W. B.
Published: June 2009

Alfred Marshalls monetary theory presents itself as fragmentary and without internal coherence. Coherence can be given to it by developing the implied theoretical linkages between the money market, the securities market, and their respective interest rates, while noting the importance in interest- rate determination of the real forces of productivity and thrift.Marshalls development of a theory of money and securities markets arises from his dissatisfaction with the quantity theory of price-level determination as an explanation of the monetary transmission mechanism
Prices and Distributive Antagonism in the Work of Smith and Kalecki
Authors: Nisticò Sergio
Published: June 2009

Adam Smiths adding up theory (Sraffa 1951, p. xxxv) has generally been interpreted as an expression of the harmonious view of the mechanisms governing exchange ratios and distribution In two preceding works (Nistico 1988,1991) I tried to show that Smith's theory of prices is instead fully compatible with the classical approach to the theory of value and distribution based on the essential role played by class antagonism in a capitalist system.
Schumpeter on Invention, Innovation and Technological Change
Authors: Parayil Govindan
Published: June 2009

The resurgence of neo-Schumpeterian theories and models of technological innovation and development1 is an enduring sign of the historical significance of Joseph A. Schumpeters theoretical works on the dynamics of economic change as a result of long-term technological change.
Mangoldt and Inter-related Goods
Authors: Creedy John
Published: June 2009

Hans Karl Emil von Mangoldt (1824-1868) is often cited as making an important contribution to German economic theory in his major work, Grundriss der Volkswirtschaftslehre (1863), which was written as a text for further discussion in classes. Yet the details of his compressed analysis have rarely been given close attention.
Are there Limits to the Past in the History of Economic Thought?
Authors: Lowry S. Todd
Published: June 2009

When I first began the serious study of the history of economic thought, my presumption was that one should always start at the beginning. This was some thirty-five years ago and I have been finding so much interesting material that I have had a hard time getting past Adam Smith. The search
for the beginning, of course, led me to the question of what do we mean by economic thought and how do we define it for the purpose of identifying its origin?.
On the Historiography of Economics: A Correspondence
Authors: Samuelson Paul A. , Patinkin Don , Blaug Mark
Published: June 2009

I read your “…Historiography…” (Blaug 1990) with interest and profit. You were kind to me—probably too kind. But let me explore a point. Let's accept for the sake of the argument that in some instances a “rational reconstruction” can deviate from a “historical reconstruction.” Query: When I attributed to Smith the “canonical classical model” (Samuelson 1978), did I provide your readers with such an instance of deviation? No, I say. And your text does not adduce otherwise. Nor does Hollander's rhetoric (1980) in reaction to me. Actually, Hollander said: Yes, that model is in Smith but one has to work hard not to overlook it (particularly because its pieces are in scattered and unlikely places).
Adam Smith's Influence on Hegel's Philosophical Writings
Authors: Henderson James P. , Davis John B.
Published: June 2009

Historians of economics and philosophy have noted Georg Wilhelm Fredrich Hegel's debt to Adam Smith and have suggested that Hegel's analysis of civil society rests on a Smithian foundation. Laurence Dickey recognized that “Hegel's interest in the Scots coincided with the late eighteenth-century German interest in the relationship between socioeconomic processes in history and the development of civil institutions” (Dickey 1987, p. 194). Georg Lukacs emphasized that “it is highly probable that the study of Adam Smith was a turning-point in Hegel's evolution” (Lukacs 1976, p. 172). In his study of The Formation of the Economic Thought of Karl Marx, Ernest Mandel maintained that Marx discovered political economy and its importance to philosophy in his reading of Hegel. Says Mandel:
John Stuart Mill, Francis Longe and William Thornton on Demand and Supply
Authors: Forget Evelyn L.
Published: June 2009

William Thornton's On Labour, Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future was a contribution to the social debate of the 1860s. In the context of an attack on the vulgar wage-fund theory, which was wielded in popular discourse to emphasize the futility of trade unions, Thornton offered a more general assault on what he labelled “demand and supply.” John Stuart Mill had expected Thornton's book to play an important role in furthering his own campaign in support of trade union legalization, but the book received mixed reviews. Most critics missed the opportunity to respond to Thornton's social commentary, and focused instead on his analysis of demand and supply. The negative reviews found the theory wanting and, to John Stuart Mill's chagrin, dismissed the entire book. But the positive reviews were even more devastating from Mill's perspective. Not only did they ignore the social analysis, with which Mill was in agreement, but they seemed convinced that Thornton had demolished the demand and supply theory. Since Mill was then trying to consolidate the intellectual basis of the Liberal party on the foundation of classical political economy, this was hardly an outcome he could accept. The recantation article, which combined a sympathetic treatment of Thornton's social analysis with a criticism of his economic analysis, was the inevitable result (see Forget 1992).
Sunspots and Expectations: W. S. Jevons's Theory of Economic Fluctuations
Authors: Peart Sandra J.
Published: June 2009

W. Stanley Jevons's statistical study of periodicity has received much scrutiny (Aldrich 1987), but less attention has been given to his theoretical position on economic fluctuations, a circumstance which T. W. Hutchison justly finds surprising considering that “Jevons maintained that aggregate instability, and the distress it caused, presented profoundly serious problems, and devoted some of his most strenuous economic research to their explanation” (Hutchison 1988, p. 6). This paper takes up the challenge to examine the development of Jevons's thought on economic fluctuations from the early 1860s until his death in 1882.
The Abbé de Condillac's Critique of French Dirigism
Authors: Walter  , Eltis Shelagh M.
Published: June 2009

In March 1776 when Etienne Bonnot, abbe de Condillac, publishedCommerce and Government, he was sixty-one years old, the same age as Francois Quesnay when he first published on economics. According to Jacqueline Hecht he had been a habitué of Quesnay's entresol (1958, p. 252), and Nicholas Baudeau has referred to Condillac's close friendship with Quesnay (1776/1903, p. 443). A book aimed to present a complete account of political economy from one of France's most distinguished philosophers, a member of the Academie franchise (“the immortals”) and the Royal Academy of Berlin, was bound to arouse great interest.
Marshall's Neo-Classical Labor-Values
Authors: Persky Joseph
Published: June 2009

With the coming of marginal utility theory, the economists of the late nineteenth century were left with a theory of exchange values, but not with a theory of value. For example, William Stanley Jevons suggested that the concept of value be dropped from economics, leaving behind only vectors of exchange ratios (Jevons 1879). Not a few general equilibrium economists today hold much the same view. However, then, as today, there were seemingly fundamental economic questions that required a more general concept of value. Whenever economists turned to describing the movements in the economy over time or comparing the economies of different countries, they inevitably wanted to make statements about changes or differences in the real value of goods.
Wagner's Legacy in America: Re-Opening Farnam's Inquiry
Authors: Carlson Benny
Published: June 2009

The continual interaction between economic change and economic policies designed to manage or guide this change seldom finds such dramatic expression as when one type of economy replaces another, e. g., when the industrial economy replaces the agrarian or is in turn supplanted by the “post-industrial” economy.

Thus, when the American economy was in the thick of its industrial revolution during the decades around the turn of this century, it was subjected to a series of government interventions the lowest common denominator of which has been summarized in the title of a book by Morton Keller, Regulating a New Economy (1996). In the United States as in all other countries, these interventions consisted of a glorious jumble of attempts to solve problems as they arose, of “bespoke jobs” in response to diverse economic interests, and of sundry ideologically-motivated efforts to move events in particular directions.
Economic Justice in The Natural Law Tradition: Thomas Aquinas to Francis Hutcheson
Authors: Young Jeffrey T. , Gordon Barry
Published: June 2009

After three or more decades of mainly positivistic readings of the economics of Adam Smith, there was a decided movement following the bicentennial of the publication of the Wealth of Nations to broaden the agenda of Smithian studies. The publication in 1978 of the Report of 1762–63 of Smith's lectures in jurisprudence added impetus to this movement. In particular, historians of ideas began to pay increased attention to Smith's concern with justice in economic life. That attention has evoked renewed interest in certain of Smith's intellectual antecedents who may have played a part in shaping his ideas, but whose influence has remained a matter of relative neglect in modern scholarship.
How Should We Approach the History of Economic Thought, Fact, Fiction or Moral Tale?
Authors: Backhouse Roger E.
Published: June 2009

This paper reviews the way in which constructivist or anti-representationalist arguments have been used as an argument in favor of changing the way we write the history of economic thought. It is argued that though such arguments provide some important new perspectives on the subject, their use as a comprehensive methodological critique of “traditional” approaches to the subject rests on the theses that a non-foundationalist methodology is impossible, and that we can assume that contemporary economics is in a healthy state. If these theses are not accepted, the case against “traditional” histories collapses.
Kaldor's Growth Theory
Authors: Wulwick Nancy J.
Published: June 2009

The last decade has seen an outburst of growth models designed to replace the conventional Solow growth model, with its exogenous trend of technical progress, by more realistic models that generate increasing returns (to labor, capital and/or scale) as a result of endogenous technical progress. In contrast to the Solow model, the new models suggest that policy interventions can affect the long-run rate of economic growth. Nicholas Kaldor's growth model, designed in the late 1950s and early 1960s to replace the Solow growth model, is a precursor of the new growth models.
Analysis and Vision in Economic Discourse
Authors: Boettke Peter J.
Published: June 2009

Robert Heilbroner (1990) challenges us to re-examine our preconceptions about the development of economic analysis in the twentieth century. John Maynard Keynes (1951, p. 141) once said, in a discussion concerning Alfred Marshall, that the “master economist…must study the present in light of the past for the purposes of the future,” and in this regard Heilbroner's essay is the work of a historian of economics who commands our attention and respect. The purpose of his essay “is to inquire into the successes and failures of economic thought in anticipating the march of actual events” (Heilbroner 1990, p. 1097). The failures, Heilbroner points out, considerably outweigh the successes. But, he conjectures, even in those cases of success, the success is not due to superior analysis. Rather, “the success of the farsighted seem accounted for more by their prescient ‘visions’ than by their superior analyses” (ibid., p. 1098).
J-B. Say and the Political Economy of his Time: A Quantitative Approach
Authors: Steiner Philippe
Published: June 2009

Some years ago, George J. Stigler reminded the community of historians of economic thought that a great thinker of the last century, Adolphe Quetelet, had made a real methodological breakthrough in the social sciences by opening the door to quantification. Stigler himself tried to implement this method in the history of economic thought.
John Stuart Mill's Method In Principle and Practice: A Review of the Evidence
Authors: Hollander Samuel , Peart Sandra
Published: June 2009

Our concern is John Stuart Mill's methodological pronouncements, his actual practice, and the relationship between them. We argue that verification played a key role in Mill's method, both in principle and in practice. Our starting point is the celebrated declaration regarding verification in the essay On the Definition of Political Economy; and on the Method of Investigation Proper to It (1836/ 1967; hereafter Essay): “By the method à priori we mean … reasoning from an assumed hypothesis; which … is the essence of all science which admits of general reasoning at all. To verify the hypothesis itself à posteriori, that is, to examine whether the facts of any actual case are in accordance with it, is no part of the business of science at all, but of the application of science” (Mill 1836/1967, p. 325). The apparent position that the basic economic theory is impervious to predictive failure emerges also in a sharp criticism of the à posteriori method:
W. T. Thornton: Savant, Idiot, or Idiot-Savant?
Authors: Ekelund Robert B.
Published: June 2009

Renewed interest has been kindled in the status and “meaning” of William T. Thornton (1813–1880) in the history of economic thought. Thornton is often credited, rightly or wrongly, with re-orienting J. S. Mill's thought on the wages fund—a critical cornerstone of classical economics. While Thornton's actual influence on Mill in this matter
Among the Most Fascinating of Scholarly Objects: A Memoir
Authors: Moggridge D. E.
Published: June 2009

I was born in Windsor, Ontario on 25 May 1943, the first child of William Robert Moggridge and Doris Livingston Moggridge. The surname Moggridge comes from Celtic Devon. Add in Livingston and my maternal grandmother's Lennox, the Celtic tinge gets stronger. The Hulls on my paternal grandmother's side reduce it, but there were Camerons in that gene pool. Both of my parents were University of Toronto graduates: my father in Metallurgical Engineering (1934) and my mother in Honours Philosophy and English (1933) and Library Science (1934).
Albert Aftalion's Macrodynamic Theory of Endogenous Business Cycles
Authors: Dangel Cecile , Raybaut Alain
Published: June 2009

Albert Aftalion is certainly one of the best known French economists of the first half of the twentieth century. The influence he exerted during his lifetime over the scientific community of his homeland was considerable, and he was promptly acknowledged abroad to be one of the leading theorists of the business cycle. While he is best known as one of the inventors of the acceleration principle (Haberler 1937), we will focus on Aftalion's endogenous explanation of non-monetary business cycles and, more specifically, on the theoretical framework supporting Les crises périodiques de surproduction. Though this work can be seen as a mere “(desperate) attempt” to reconcile the law of markets with general overproduction (Abraham-Frois 1987), we argue instead that Aftalion's failure to construct an equilibrium theory of aggregate overproduction can be traced back to his inadequate treatment of aggregate demand. According to him, long roundabout processes are what generate cyclical fluctuations within a setting in which commodities produced and brought to the market always find an outlet. In other words, the law of markets implies market clearing where declines in prices instead of involuntary stock-building occur in the event of a crisis. How demand behaves in such a setting requires careful specification, which is precisely what is lacking in Aftalion's model.
Ricardo's Capital Levy Proposal: “By-Product of A Visionary”?
Authors: Churchman Nancy
Published: June 2009

The British public debt grew to unprecedented levels during the course of the Napoleonic Wars, and the debt service burden, aggravated by deflation, was reaching alarming heights in the postwar period, absorbing over half of all tax revenue. David Ricardo was prompted by economic analysis and existing circumstances to advocate the rapid redemption of existing public debt by means of a “capital levy,” a one-time tax on the nation's property. In print, he advocated the proposal in “The Funding System,” an entry in a supplementary volume of the Encyclopaedia Britannica published in 1820, in which he wrote that “by one great effort, we should get rid of one of the most terrible scourges which was ever invented to afflict a nation” (Ricardo 1951–73, IV, p. 197).
The Origins of Malthus's Data on Population: The Political and Religious Biases in the American Sources
Authors: Peterson Dean
Published: June 2009

The importance of Thomas Robert Malthus's ratios has long been acknowledged. Combined with his use of population figures from America, they gave his first Essay on the Principle of Population the appearance of a scientific study backed by empirical evidence. Prominent economists such as David Ricardo, Nassau Senior, Alfred Marshall, John Maynard Keynes, and Joseph A. Schumpeter credited the Essay with being a major work of science. Many scholars have claimed that the trappings of science contributed significantly to the persuasiveness of Malthus's view to his intended readers, who believed that human nature operated according to strict mechanical laws (Rashid 1987, p. 22).
Rothbard and Mises on Interest: An Exercise in Theoretical Purity
Authors: Lewin Peter
Published: June 2009

The conventional wisdom in economics holds, with Irving Fisher, that interest is explained jointly by the forces of time preference (thrift) and productivity. One school of thought, however, has held stubbornly to the assertion that interest is best understood as a result of time preference alone, time preference as the essential determinant of interest. This is the pure time preference approach to interest. And while most economists are inclined to dismiss this approach out of hand, the pure time preference approach has proved remarkably resilient. Part of the explanation for the persistence of rival theories can be found, not surprisingly, in terminological confusions and ambiguities, for example in deciding among candidates for essential causation. I hope in this article to improve the case for the pure time preference approach to interest by clarifying the argument. It appears that some of the confusion can be attributed to the approach of two theorists, Ludwig von Mises and Murray Rothbard, and to their connecting the time preference approach to their particular a priori methodology.
Secondary Gains from Professionalization: A French Tale
Authors: Hebert Robert F.
Published: June 2009

From this same rostrum several years ago, outgoing president Bill Barber (1990, p. 110) said that presidential addresses tend to fall into one of two broad categories. Category I speeches typically survey the state of the art, identify promising directions for future research, and attempt to justify our scholarly existence to skeptics who doubt the value of studying the world of dead economists. Category II speeches draw their form and substance from the speaker's particular research interests.
Marx on Rent: A Failure to Transform Correctly
Authors: Samuelson Paul A.
Published: June 2009

Karl Marx's theory of land rent plays a minor role in his overall economic system but provides us with a good opportunity to examine and score his analytic powers and attained understanding. The conclusion arrived at from the present reinvestigation confirms, I fear, the diagnosis that Marx was an autodidact who lacked mastery of the subject matter that he so confidently grappled with. Objective readers of my analysis can form their own judgments of Marx's written logic and empirical contentions.
Heinrich von Stackelberg: Relinking German Economics to the Mainstream
Authors: Niehans Jürg
Published: June 2009

Between 1830 and 1860, Germany provided the world with some of the pioneers of marginalism. Johann Heinrich von Thünen and Hermann Heinrich Gossen are shining examples. Then German theory declined. The center of German-language theory shifted to Vienna, and from 1885 to 1930 the German academic establishment, dominated by the Historical School, was virtually cut off from the progress of mainstream economics. Things began to change around 1930; German economists started again to make original contributions. By the end of the war, they had provided Germany with a solid link to the mainstream. Except for Erich Schneider, nobody contributed as much to this development as Heinrich von Stackelberg.
Knowledge Problems and the Problem of Social Cost
Authors: Cordato Roy E.
Published: June 2009

Ronald Coase's 1960 article, “The Problem of Social Cost,” has been one of the most influential works in the development of welfare economics since A. C. Pigou's The Economics of Welfare. Principally, the article made the definition and distribution of property rights a central issue when discussing the efficiency problems of negative externalities. Coase's approach has given rise to most of the economics of tort law and alternative liability rules. It has also led to the development of the “property rights” approach to environmental economics that has found prominence as an alternative to traditional Pigovian analysis.
The Wealth of Nationsand Historical Facts
Authors: Rashid Salim
Published: June 2009

Though beauty of diction, harmony of periods, and acuteness and singularity of sentiment, may captivate the reader, yet there are other qualifications essentially necessary…. Fidelity, accuracy and impartiality are also requisite (Joseph Towers,Observations on Mr. Hume's History(1778)).
Senior's Abstinence Theory of the Supply of Business Savings
Authors: Gootzeit Michael J.
Published: June 2009

Many authors have interpreted Nassau Senio's ideas on abstinence through the years to mean that a cause/effect relation exists between interest and abstinence and that interest is the reward for abstinence. Some typical examples of this treatment are as follows: “The original abstinence theory of interest for which Senior is famous has long been recognized as the most complete of the classical theories, and under various names has become incorporated in the general corpus of economic theory” (Bowley 1937, p. 137). “Nassau Senior…introduced the ‘abstinence theory’ of interest, and he is criticized both for its one-sidedness and for using it to imply that the ‘pain’ of the capitalist is in some sense proportional to the ‘reward’ he ‘earns’ by abstaining. On page 189 ofPolitical Economy, Senior describes abstinence as the cause of interest in terms which would readily explain this general interpretation, and in his public-policy pronouncements he further supports it” (Conard 1959, p. 26). “Senior's contribution to capital theory was to identify this reward for ‘abstinence’ as interest, or the cost of waiting, during which time capital could be accumulated. Senior's description of interest as a return to abstinence was his most original contribution to economics, and it soon became assimilated into the mainstream of economic theory. In it he surpassed Smith, Malthus and Ricardo and his analysis of capital and interest stood as the most complete in British economics until the time of Jevons” (Ekelund and Hébert 1975, p. 103).
Entrepreneurists and Firmists: Knight vs. The Modern Theory of the Firm
Authors: Gunning J. Patrick
Published: June 2009

Frank Knight was a “grand theorist.” Like other grand theorists from Adam Smith to Friedrich A. Hayek, his interests extended beyond economics. In economics, his major writings focused on the most general problems of the discipline, his goal being to show the merits and limitations of the free enterprise system. He took a special interest in intersubjective uncertainty and the accompanying problem of agency. To benefit from an economic transaction an individual must rely on others (agents, broadly speaking) to perform actions even though he or she cannot be certain that the others will decide to perform the actions. Agency, in the broadest sense, is present in all relationships that are properly defined as economic. Knight apparently recognized that both the classical liberal's trust in free enterprise and the interventionist's distrust stem from their different views of the agency problem and of how best to solve it. Accordingly, he made the problem a centerpiece of his investigation of free enterprise in his celebrated Risk, Uncertainty and Profit (1921). The agency problem also plays an important role in the modern, or new institutionalist, theory of the firm. The new institutionalists aim to show that some observable economic relationship, rule or procedure in an organization, most notably a Coasean firm, is a result of the efforts of individuals to deal with the agency problem.
Professor Arrow's Ricardo
Authors: Johnson L. E.
Published: June 2009

Professor Kenneth Arrow has now added his views to the current Ricardian controversy in a provocative survey of alternative judgments regarding David Ricardo's contribution (Arrow 1991). Arrow's primary thesis appears to be that “the main thrust of Ricardo's system is a bold attempt to determine values independent of demand considerations” (Arrow 1991, p. 75), a position which has already come under attack (Caravale 1991; Hollander 1991). Our aim, however, is not to examine Ricardo's treatment of demand directly, but to question the fundamental suppositions upon which Arrow's analysis rests and the resulting conclusion that emerges.
The Capitalist Entrepreneur In Eighteenth-Century Economic Literature
Authors: Fontaine Philippe
Published: June 2009

Although the capitalist entrepreneur played a significant role in the early classical explanation of capital markets and economic development, mainstream opinion in the history of economic thought merely holds that eighteenth-century economists failed to distinguish the entrepreneurial function from that of supplying financial capital. Accordingly, one considers the conception of the capitalist entrepreneur an erroneous view—characterized by the confusion between profits and interest—that Jean-Baptiste Say corrected at the turn of the century (Schumpeter 1954, p. 555; Koolman 1971, p. 276). Moreover, this conception has been mainly ascribed to British authors (Perroux 1929, p. 1665; Cole 1942, pp. 120–1; Hoselitz 1951, p. 212; Blaug 1985, pp. 459–60), a claim which certainly goes back to Say's opinion that:

The English do not have a word to renderentrepreneur d'Industrie, which has prevented them from distinguishing, among industrial operations, the service provided by the capital from the service provided by one who uses this capital through his ability and talent. Hence…the obscurity in the demonstrations where they [the English] try to go back to the source of profits (Say 1803, pp. 74–75, n. 1; see also p. 357, n. 1).
Ricardo's Theory of Profit and the Third Edition of the Principles
Authors: Davis John B.
Published: June 2009

David Ricardo's “On Machinery” chapter continues to interest theorists and historians of economic thought (Blaug 1958, Hollander 1979, Kurz 1984, Samuelson, 1988, 1989, Morishima 1989, Negishi 1990). Yet the addition of the chapter to the third edition of Ricardo's Principles of Political Economy and Taxation arguably overturns much of the view for which Ricardo is so well known (Davis 1989). In the added chapter Ricardo allows, contrary to his original view in the first two editions, that the introduction of machinery is indeed injurious to the class of laborers. More interestingly, because machinery substitutes for labor, wages cannot rise and profits are no longer threatened by rising rents. Effectively the contest between capitalists and landlords of the first two editions of the Principles is replaced in the final edition by one between capitalists and laborers. However, not only does the “On Machinery“ chapter substantially change the distributional argument customarily attributed to the Principles, but it also permits an examination of Ricardo's thinking about distribution in two distinct, but related frameworks. The discussion here compares the distributional analysis in the first two editions with that of the third to explain the general nature of the Ricardo's theory of profit. It does so by providing a novel interpretation of Ricardo's characterization of profit as a residual, and by emphasizing the historical context in which distribution occurred in the beginning of the nineteenth century.