This paper explores archival material concerning the reception of Leonard J. Savage’s foundational work of rational choice theory in its subjective-Bayesian form. The focus is on the criticism raised in the early 1960s by Daniel Ellsberg, William Fellner, and Cedric Smith, who were supporters of the newly developed subjective approach but could not understand Savage’s insistence on the strict version he shared with Bruno de Finetti. The episode is well known, thanks to the so-called Ellsberg Paradox and the extensive reference made to it in current decision theory. But Savage’s reaction to his critics has never been examined. Although Savage never really engaged with the issue in his published writings, the private exchange with Ellsberg and Fellner, and with de Finetti about how to deal with Smith, shows that Savage’s attention to the generalization advocated by his correspondents was substantive. In particular, Savage’s defense of the normative value of rational choice theory against counterexamples such as Ellsberg’s did not prevent him from admitting that he would give careful consideration to a more realistic axiomatic system, should the critics be able to provide one.

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.

Scholarship on the American Slave South generally agrees that John Eliot Cairnes’s The Slave Power provided a highly biased interpretation of the functioning and long-term viability of the southern slave economy. Published shortly after the outbreak of the Civil War, its partisanship is partly attributed to its clearly stated goal to shift British support from the secession states to the states of the Union. Thus, it is generally agreed, Cairnes sifted his sources to obtain the desired outcome. A more balanced use of the sources at his possession would have provided a very different outcome. This paper will challenge this general assessment of Cairnes’s book by examining in some detail two of Cairnes’s most important sources: Frederic Law Olmsted’s travelogues on the American Slave South and James D. B. De Bow's compilation of statistical data and essays in his Industrial Resources, etc., of the Southern and Western States (1852–53). By contrasting De Bow's use of statistical evidence with Olmsted's travelogues, my final purpose is to question the weight of evidence on the American Slave South. Cairnes aimed, I will argue, much more to balance the evidence than is generally acknowledged, but it is misleading to think that balancing a wide range of evidence washes out bias if this evidence itself is politically skewed, as is the rule rather than the exception.

Since Moses Abramovitz's “classic” paper on “Catching-Up, Forging Ahead, and Falling Behind” (1986) economists have become increasingly aware again of the significance of “social capability” for processes of economic change. During the past twenty years much research has been done on “soft” determinants of development and growth. Especially some of the so-called new institutionalists and evolutionary economists have now returned to the roots of the institutional research program by acknowledging that “ideas matter” in the process of institutional change. However, it is still often overlooked in the literature that the cognition of social reality is deeply intertwined with the general world-view prevailing in a given society. Certainly, such general world-views are partly determined by the level of economic and technological development, but they are also a reflection of deeply rooted cultural traditions. In particular, the highly divergent outcomes of economic and political transition in the formerly socialist countries of Central and Eastern Europe have brought the connection between culture, ideas, and institutions to the fore again (see, for example, Winiecki 2004). Therefore it is all but an accident that it is one of the leading transition experts who has recently called on economists to “seek a better understanding of the role of values and norms in shaping both ideas and institutions” (Roland 2004, p. 128).

Many historians of economic theory have studied how John Maynard Keynes developed his theory from A Tract on Monetary Reform through A Treatise on Money (hereafter the Treatise) to The General Theory of Employment, Interest and Money (hereafter the General Theory or GT). After the pioneering studies by Moggridge (1973) and Patinkin (1976, 1982), there followed Dimand (1988), Amdeo (1989), Clarke (1988, 1998), Meltzer (1988), Moggridge (1992), Skidelsky (1992), Laidler (1999), and others. This is no wonder, for the Keynesian Revolution remains the most singular phenomenon that economic theory and policy have ever seen. Although the objective of our entire project has been to shed new light on this important and interesting phenomenon, examining and analyzing the processes of theory-building and rebuilding which constitute Keynes's intellectual journey (see Hirai 1997–99), the present paper focuses solely on one chapter in the long story of the transition through his three major works. The very fact of addressing the questions, “How did Keynes maintain the theory developed in the Treatise after its publication (October 1930), and for how long?” narrows the period under study to approximately two years which span roughly from October 1930 through October 1932. Our scrutiny will range over the original texts and primary material such as manuscripts, lecture notes, and correspondence produced over this period, and our findings will rest on the meticulous analysis of material of crucial importance for a clear understanding of Keynes's theoretical situation. We will also offer our comments on the earlier efforts insofar as they relate to the period in question.

“The stimulation given by the General Theory to the construction and testing of aggregative models may well prove to be Keynes's chief contribution to economics in the longer perspective of historical judgement.”

In a recent paper (1994) in this journal, Elias L. Khalil makes two claims. First, he contends, the law of the tendency of the rate of profit to fall is not unique to the capitalist mode of production but it is equally valid in a socialist economy. Second, a decline in the rate of profit in a socialist economy would engender crises as would be the case in a capitalist economy. Even more, he argues that crises would be necessary in any social form if there is a secular tendency of the organic composition of capital to rise.

The aim of this article is to explore whether there is a relevant impact of the Russian case and of Russian economic thought on the twentieth-century Western debate on economic development. It is argued that things Russian continued to have an impact on this notion, similar to the one we have found for the late eighteenth and nineteenth centuries. Russia’s historical experience provided an important standpoint from which to think and rethink the meaning of economic development. As in the previous centuries, Russia’s paradoxical presence—between Europe and Asia, backward but also modern, an “apprentice” who now claimed the position of a teacher—helped to spark new thinking. The resistance of some of her intellectuals and policy makers to accept the certainties of the mainstream of the economic science contributed to raise doubts regarding the validity of Western conceptual frameworks.

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).

We explore disciplinary boundary-making in geographical economics or “the new economic geography” with attention to the approaches taken by, and attempts at communication among, scholars with primary affiliations in economics, geography, and regional science. The Dixit-Stiglitz general equilibrium approach to monopolistic competition and increasing returns was applied to agglomeration and location by Paul Krugman, who had previously pioneered the “new trade theory” building on the Dixit-Stiglitz model, and, independently and slightly earlier, by Masahisa Fujita and his student Heshem Abdel-Rahman, starting from regional science, a tradition with its own departments, doctorates, conferences, and journals distinct from economics and geography. Economic geography, as studied by geographers, had already taken a quantitative and theoretical turn in the 1960s, reviving an earlier tradition of German location theory overshadowed within geography after World War II by areal differentiation. Another strand of economic geography pursued by geographers was influenced by economic theory but by non-neoclassical Marxian and Sraffian economics. Debates between these scholars raised questions whether these analyses were multidisciplinary, drawing on distinct disciplines, or crossed disciplinary boundaries (as when geographical economics in the style of economists is undertaken in geography departments) or transcends disciplinary boundaries, or involved the emergence of a new discipline.

The London Economist of June 14, 1997, carried an article by Jeffrey Sachs (1997) entitled “The Limits of Convergence: Nature, Nurture and Growth,” which explores the relationship between geography, economic policies and institutions, and economic growth on the basis of recent econometric work. Four principal groups of factors were found to account for the sizable difference in per capita income growth between the South-East Asian countries and other less successful developing countries: initial economic conditions (such as the income gap separating poor countries from rich ones), policy variables, demographic factors, and resources and geography. One of the most significant conclusions (Sachs, 1997, p. 20) is that “openness was decisive for rapid growth. Open economies grew 1.2 percentage points per year faster than closed economies, controlling for everything else.”

The abolition of slavery in the nineteenth and twentieth centuries was a long process. In terms of the economic views of abolitionists, there has been an excessive focus on the economic ideas of liberal abolitionists and their approach to “Civilization, Christianity, and Commerce.” However, there was a “developmental abolitionism” that has received little attention. Afro-American Martin R. Delany and Liberian James S. Payne were writers who approached abolitionism through this developmentalism. They favored more interventionist measures aimed at building the material power and national autonomy of Black nations to undercut the power of slave-using African chiefs, to provide indigenous Africans with employment, and to undermine the profitability of slave-based cotton production in the Americas. They also implicitly and indirectly approached labor scarcity with solutions ranging from promoting labor-saving technology to cultivating national prosperity that would improve emigration to Africa or increase birth rates.