Notwithstanding considerable efforts by at least two generations of economic theorists, the state of art of general equilibrium theory in the Arrow-Debreu framework is still extremely unsatisfactory, especially with respect to the treatment of the time dimension. Indeed, it is now taken for granted even among general equilibrium theorists that, to play a significant role, equilibrium analysis must account for individual agents' expectations about the uncertain future, and that the Arrow-Debreu procedure of collapsing the entire decision process at an initial date is to be interpreted, at most, as a counterfactual argument, the main message of the Arrow-Debreu approach being that “one cannot argue that markets co-ordinate activity if there are many of them missing” (Hahn 1995, p. 12).

The Physiocrats “New Science” of Political Economy is often represented as unrelated to the pursuit of national power. A recent study (Fourquet 1989), which rests on the approaches of Fernand Braudel (1979) and Immanuel Wallerstein (1980), has radicalized the thesis already propounded by Edmond Silberner (1939) who claimed that Quesnay was profoundly ignorant of military matters and failed to understand the power struggles being played out on the seas and in the colonies. Did not Quesnay propose turning back to an agricultural economy, banishing industry, trade, and the navy—in short, all the active forces thanks to which Great Britain had snatched domination of the world economy from Holland and thanks to which she would prevent France from obtaining it?

Yet this thesis is weak. It must be remembered that Quesnay's first economic writings date from 1756–57, that is to say a period when confrontation between France and England was at a peak, with the start of the Seven Years' War. How could an author who claims to de ne the economic government ofan agricultural nation ignore the military problems which were so crucial in this period? Even if he wanted to, how could he succeed in doing so once he came to deal with taxes and the highly sensitive question of finance? How could he make himself understood by his contemporaries with a political theory that set aside all the burning issues of the day? How could he find an audience among those developing the science of commerce who always accorded great importance to the pursuit of power?

Under scrutiny the traditional thesis appears inaccurate. After recalling the writings of some of his contemporaries, whom Quesnay knew and read (section 1), I shall show that articles drafted between 1756 and 1757, like published or unpublished works which Mirabeau and Quesnay elaborated between 1757 and 1760, give significant room to the nation's military power, particularly when the economic government is in question (section 2). From the years 1763–64 the idea of a natural order does not lead Quesnay to neglect the pursuit of power (section 3). These links between power and wealth in the work of the founder of Physiocracy will lead finally to some remarks on political economy as a form of rationalization of politics.

In recent years, water utilities have received increasing attention. Issues of ownership and market structure have been the focus of academic research, policy debates and grassroots activism. These recent concerns echo the contentious debate that raged over water supply in nineteenth century London from 1810 to 1902. Nassau W. Senior and John Stuart Mill were major players in the debates, as both theorists and policy makers.

The central theme of this session is the changing relationship between “orthodox” (i.e., mainstream, neoclassical) and “heterodox” economics, especially in the USA, during the past two or three decades. Economics is such a large and heterogeneous discipline that it cannot be characterized both briefly and accurately. Alongside the growth of formalization and mathematization, and the high degree of uniformity in the undergraduate and graduate curricula and in the leading textbooks, there are also within the subject a number of dissenting or deviant doctrinal schools, rival methodological approaches, and innovative developments designed to remedy its defects and/or overcome its limitations. Moreover, many of the outspoken criticisms of the status quo, proposed remedies, and innovations, originate with or are endorsed by prominent economists with impeccable professional credentials. Indeed, in some cases their contributions threaten the discipline's foundations and can, therefore, be considered a species of “orthodox subversion.”

This paper reconsiders the supposed agreement of David Ricardo and William Nassau Senior on the question of the method of political economy. The first part shows that Senior was very critical about Ricardo’s approach to economic phenomena and considered that this question of method had important consequences on theoretical points. The second part analyzes the way Ricardo was dealing with economics. It shows that though Senior was right in considering that their respective methods were different and led to important analytical divergences, he nevertheless misunderstood Ricardo’s method with a hypothetico-deductive one. The consequence is that Senior’s criticisms on Ricardo’s theories of rent, natural wages, and of the tendencies of agricultural returns to decrease and of profit to fall are ill-founded, being based on a misunderstanding of the way they were established.

During August and September 1938, Harrod discussed a first draft of his “Essay in Dynamic Theory” with Keynes and Marschak. The aim of this paper is to discuss Harrod’s correspondence with Marschak in the light of the subsequent interpretations of the “Essay.” Firstly, we show how Marschak focused on some of the features of Harrod’s theory that would later give rise to widely different interpretations and some misunderstandings. Three issues in particular have been broadly debated in the literature: the concept of warranted rate of growth; instability; and non-linearity. Secondly, we show that a possible reason why Harrod neglected Marschak’s remarks lies in their respective methodological approaches. While Marschak tried to frame Harrod’s theory by means of a closed model, Harrod thought that the analysis of equilibrium and of the succession of states belonged to separate stages; this made building a complete model difficult at this stage, when he was presenting a “new tool of analysis.” In spite of their respective conflicting approaches, Marschak’s comments remain of great importance, and if Harrod had followed some of his advice, his theory would probably have improved in several respects, and certainly it would have been clearer and less ambiguous.

Before the John Bates Clark Medal (JBCM) had become a widely acknowledged professional and public marker of excellence in economics research, in the first twenty years since its inception more than seventy years ago in 1947, it was almost discontinued three times and once even not conferred. These controversies derived from the fact that the medal was originally established to showcase the expertise of economists to other scientists, policy-makers, and the wider public. While earlier awards were given to theorists, in later years empirical and policy-oriented economists gained ground, reflecting how such research became more prestigious in economics. Based on a quantitative analysis of the forty medalists so far, we show that this empirical shift was concomitant with a decrease in the diversity and an increase in concentration of laureates: twenty-four or twenty-five out of forty awardees received their PhD degree or worked at Harvard, MIT, or Chicago at the time of being awarded.

The paper discusses the interpretation of the Great Depression and the policy decision making by four Harvard economists: Lauchlin B. Currie, Jacob Viner, John H. Williams, and Harry D. White. All were eminent scholars in the field of monetary and international economics, and were deeply involved in policy decisions during the New Deal. We will discuss how their Harvard training provided them with a common methodological and analytical perspective, and how this common perspective translated into specific policies when they moved from the academia to public service in the US administration. Their interpretation of the causes of the Great Depression and their policy proposals show the eclectic approach that these four economists had to monetary, fiscal, and economic analysis, and the points of contact with both the US monetarist tradition and the work of John Maynard Keynes. At the same time, this very eclecticism, far from making them part of the monetarist or the Keynesian schools, characterized them as a group of their own: a network of scholars who, by virtue of their studies and the evolution of their professional careers, developed a style of analysis and policy prescriptions that deeply influenced the nature of the New Deal.

The year 1966 was central to the history of the Coase theorem debates, featuring the entry of the idea of a ‘Coase theorem’ into economic discourse and the eruption of the controversy over the the correctness of Coase’s negotiation result. This paper examines economists’ treatments of Coase’s result in 1966 and through the remainder of the decade, a period during which its place in the professional discourse began to solidify and three ‘camps’ began to develop around it: those who believed Coase’s result correct but of limited real-world applicability, those who found it relevant for explaining and devising policy with regard to a wide swath of externality-related phenomena, and those who argued and purported to demonstrate that this result was simply incorrect or wrong-headed on one or another grounds.

The paper uses the data from François Quesnay's writings to derive a social table for pre-revolutionary France and estimate the level and distribution of income. It formalizes Quesnay’s thinking about the process of production and situates it within the modern national accounting framework. Quesnay’s estimates are compared with some contemporary and recent estimates of eighteenth-century French incomes and inequality.

Students of economic thought have long associated with the fifteenth and sixteenth centuries the spread of attitudes in Europe more tolerant of market processes. New economic attitudes appear in a variety of literary forms during the fifteenth century (McGovern 1970). As compared to the pronouncements of a number of Patristic figures, relatively greater tolerance of commerce is expressed by medieval theologians. In fact, recent scholarly efforts suggest that by the late thirteenth century, suspicions of economic activity remained, but Scholastic thinkers increasingly recognized the importance of an impersonal market process in everyday life and sought to find ways to understand it in light of their concern with natural order (Kaye 1998a). While condemning avarice, Scholastic writers such as San Antonino of Florence and San Bernadino of Sienna explicitly endorsed trade as legitimate when practiced for the common good and when associated with modest profit (Origo 1962; De Roover 1967). Recognition of this movement in thought, especially as it applied the concerns of economic justice to trade in commodities, is explicit in the literature of preclassical economics. But until recently, less attention has been paid to more specific developments in scholastic thinking on justice in the labor market.

There has long been a presumption that the price-level stabilization frameworks of Irving Fisher and Chicagoans Henry Simons and Lloyd Mints were essentially equivalent. I show that there were subtle, but important, differences in the rationales underlying the policies of Fisher and the Chicagoans. Fisher’s framework involved substantial discretion in the setting of the policy instruments; for the Chicagoans the objective of a policy rule was to tie the hands of the authorities in order to reduce discretion and, thus, monetary policy uncertainty. In contrast to Fisher, the Chicagoans provided assessments of the workings of alternative rules, assessed various criteria—including simplicity and reduction of political pressures—in the specification of rules, and concluded that rules would provide superior performance compared with discretion. Each of these characteristics provided a direct link to the rules-based framework of Milton Friedman. Like Friedman’s framework, Simons’s preferred rule targeted a policy instrument.

In a study of pre-classical monopoly theory published in 1951, Raymond de Roo ver started by briefly examining the doctrines held by the medieval scholastics. His analysis met with favorable response and was confirmed and further developed by later historians. The most satisfactory statement may still be that of Barry Gordon in his monograph on early economics. The consensus of these scholars can be summarized as follows. Medieval authors looked askance at the attempts by the guilds to establish minimum prices. They recognized the expediency of government grants of monopoly and regulation of prices of certain commodities. They strongly condemned private monopolies established for personal gain, as well as collusion among sellers for that purpose, price discrimination, engrossing, forestalling, regrating, and other forms of speculation. The just price was the current, competitive market price, free of all irregularities of these kinds and free of fraud and duress. Gordon adds that the schoolmen also sometimes referred to labor and cost factors, rather than the market, as estimates of the just price. These estimates were not necessarily contradictive but mutually supportive. They applied when the market was not working smoothly and when there was no market in operation at the time and place of the sale. When an exchange is concluded in a competitive market under normal circumstances, the going price can hardly be said to be unjust. It may sometimes seem uncharitable. There will always be some who cannot afford to pay the competitive price. Poor relief in medieval society, however, was mainly a matter of almsgiving. Unlike commutative justice, charity is not a workable ethical norm in the marketplace.

Once one recognizes that many prices (and wages) are fairly sticky over short time intervals, the arbitrariness of the path of nominal prices (in the sense of their under-determination by real factors alone) implies that the path of real activity and the associated path of equilibrium real interest rates are equally arbitrary. It is equally possible, from a logical standpoint, to imagine allowing the central bank to determine, by arbitrary fiat, the path of aggregate real activity, or the path of real interest rates, as it is to imagine allowing it to determine the path of nominal interest rates. In practice, it is easiest for central banks to exert relatively direct control over overnight nominal interest rates, and so they generally formulate their short-run objectives (their operating target) in terms of the effect that they seek to bring about in this variable rather than in one of the others.

This article investigates John Maynard Keynes’s understanding and use of the concept of ‘animal spirits’ by tracing how he conceived of related ideas such as human nature, instinct, and intuition, and how they connect to the rational economic agent usually assumed by mainstream economic theory. It also considers the notion of Money-of-Account as proposed in A Treatise on Money in relation to the concept of reciprocal altruism as developed in the field of evolutionary biology, and documents Keynes’s knowledge of Charles Darwin on natural selection and sexual selection. It then uses these threads of analysis to evaluate how Keynes conceived of mental reasoning processes more widely, and deduces his own answer to the question of whether the human mind is formed as a ‘blank slate.’ It concludes by suggesting that Keynes should be regarded as one of the first contributors to the field of evolutionary economic psychology.

“Iwas born in 1902 in Görlitz, a small provincial town in Germany, and raised in Vienna, the great city of the multinational Austro-Hungarian empire. On my father's side, my family goes back to about 1530 in Saxony, my Lutheran forebears having been farmers, church wardens, judges, and businessmen. My mother was a natural daughter of Frederick III of Germany …”

Yet another account of myself, for yet another encyclopaedia. Italian, this time. Once again, I put pen to paper and collapse the events of fifty years ago to a few familiar milestones. Now what shall I tell these Italians?

“I finished the Gymnasium and took my Dr. Rer. Pol. at the University of Vienna in 1925. Awarded a Rockefeller Memorial Fellowship, I spent the next three years in England, the United States, France and Italy. Returning to Vienna, I soon became Docent, later Professor, at the University, and Director of the Austrian Institute for Business Cycle Research …”

And then there will be the doctoral thesis, Wirtschaftsprognose, the other Institute, Princeton, and so on. It is remarkable really, the rehearsed inevitability of it all … So often have I gone through exercises of this kind that there are times when I even begin to believe them myself.