We analyze Milton Friedman’s two visits to Chile, in March 1975 and November 1981. We rely on a number of sources, including Friedman’s archives, press archives in Chile and the rest of the world, interviews, and the papers and recollections of some of those who accompanied Friedman during his meeting with Pinochet. Although Friedman’s 1975 visit has been widely discussed, his 1981 visit has been largely neglected. However, this visit was particularly important as it preceded a severe currency and banking crisis, stemming from an overvalued fixed exchange rate. The crisis put at risk the influence of the “Chicago Boys” and the political and economic liberalization process. We analyze Friedman’s views regarding Chile’s pegged exchange rate strategy followed between 1979 and 1982, and his position on economic and political freedom.

One of the most significant statements in Joseph Schumpeter's discussion of Adam Smith in the History of Economic Analysis highlights the impact of scholastic thought upon Smith's economic analysis. Speaking of The 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).

To this day, the so-called Arrow–Debreu model represents a trademark of rigorous economic research—be it as a benchmark for extending the model, for weakening its assumptions, for structuring data sets, or for providing alternative models. But who should earn the credit? Arrow or Debreu? This essay presents “the making of” Arrow’s and Debreu’s joint article of 1954 as documented in their extensive letter exchange between their first contact in February 1952 and submission in May 1953. I show, pivotally, that Arrow and Debreu did not share the same interest in their work, that they played different roles, and drew different lessons from it. Moreover, neither Arrow nor Debreu can be identified with the way the profession would later refer to the Arrow–Debreu model. To the contrary, both, in their own ways, sought to counter what others perceived as limitations when placing their hopes in the model.

John Maurice Clark (1936) described original institutional economics (OIE) as an “elusive movement” and observed, “doubt has arisen whether it has any definable meaning at all” (p. 426). Many subsequent books and articles, with Malcolm Rutherford (2011) being the latest, have addressed this conundrum and sought to identify and describe the animating ideas behind OIE, the people who were the key contributors, and the extent to which they developed a common paradigm vision and theoretical statement. However, widely divergent narratives and non-commensurable interpretations remain. This paper, using a new research strategy, provides another examination of the early OIE story. Rather than beginning with Thorstein Veblen about 1900 (the traditional approach), the paper starts with the founding of OIE in 1918 and examines what the four leading OIE scholars—Walton Hamilton, Clark, Wesley Mitchell, and John Commons—say on OIE’s origins, paradigm vision, and role of Veblen. The conclusions are considerably revisionist.

This article is part of a wider historical research program in which I seek to examine the origins of past methodological debates. It is my opinion that economists ignore methodological and philosophical issues until either the doctrinal conclusions of the school to which they belong are challenged or they themselves contest the doctrinal conclusions of an alternative school. Once this occurs, economists select, reinterpret or construct methodological precepts in order to gain the maximum support for their position. Under this hypothesis the formation and articulation of methodological beliefs are largely endogenous to matters relating to economics; that is, the traditional causal process of methodology to theory to policy is turned on its head and becomes policy to theory to methodology. The aim of what follows is to illustrate this research program by examining the methodological framework expounded by T. E. Cliffe Leslie in the early stages of the English economic Methodenstreit or “battle of methods.”

This paper examines the use of the medical metaphor in the early theories of crises. It first considers the borrowing of medical terminology and generic references to disease, which, notwithstanding their relatively trivial character, illustrate how crises were originally conceived as disturbances (often of a political nature) to a naturally healthy system. Then it shows how a more specific metaphor, the fever of speculation, shifted the emphasis by treating prosperity as the diseased phase, to which crises are a remedy. The metaphor of the epidemic spreading of the disease introduced the theme of the cumulative character of both upswing and downswing, while the similitude with intermittent fevers accounted for the recurring nature of crises. Finally, the paper examines how the medical reflections on the causality of diseases contributed to the epistemology of crises theory, and reflects on the metaphysical shift accompanying the transition from the theories of crises to the theories of cycles.

In 1899, MIT chemist Ellen H. Richards (1842–1911) instigated a series of annual “Lake Placid Conferences” (1899–1908) that became known as the foundation of the home economics movement. Richards’s first interest was in improving the household’s well-being by using sanitary and nutrition sciences, an objective that was passed on to the movement. However, by the 1920s, home economists rather identified their field of expertise as the “science of consumption,” emphasizing the idea of “rational consumption.” My aim in this article is to give an account of how this shift in focus came about, by telling the story of the home economics movement founded by Richards. I examine how the movement problematized consumption by highlighting its relationship, and perception of itself, regarding economics. I argue that the concept of consumption was central to the structuring of the movement from its beginning and allowed home economists to claim it as their field of expertise because, as they believed, economists were not addressing the issue.

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.).

None of the existing scholarly literature has explored or appreciated Director’s great respect for Hayek or their relationship. This paper explores the relationship of Hayek and Director, and argues that Director should be viewed as a disciple of Hayek in the immediate post-war period. Newly available archival material in the Director Papers at the University of Chicago as well as material in the Hayek Papers allow for a deeper appreciation of their relationship than was previously possible. The archival record indicates that the central arc of their relationship occurred from 1945 to roughly 1950, when they heavily corresponded, and primarily focuses on this pivotal time period. Through exploring the relationship of Hayek and Director, this paper challenges the frequent claim that Hayek did not influence the post-war Chicago School, and argues that, starting in 1946, Hayek, even though he was not yet at Chicago, influenced the initial intellectual trajectory of the post-war Chicago School through his disciple Director.

It is an unusual and memorable privilege to address so international a gathering here in North Carolina on the Fourth of July. American nationalism in recent times has not been very broad-minded, and I'm envious of a society that can attract so many participants from all over the world. But the issue of cosmopolitanism and parochialism pertains to academic discipline as well as to nationality. Historians and economists do not always understand one another very well, and while economists are able to bring in bigger incomes and to maintain a higher public profile, historians maintain a certain authority in regard to scholarly writing about the past. Practitioners of history of economics have often been upbraided for failing to write “real” history, and I have been known to write in this vein. At least I am among those who have tried to persuade members of this society of the merits of history, history of science, and science studies as models for writing history of economics. At the same time I have been seduced by the fascination of this field to devote much of my own research to it, and in these efforts I have come to admire and to draw inspiration from what is distinctive in historical writing on economics, as well as what seems most familiar from the standpoint of the historical discipline.

The paper critically discusses some recent contributions to the literature that argue that Smith incorporated the needs of the poor within his account of justice. Three specific claims are examined and rejected: that Smith blurred the traditional distinction between perfect and imperfect rights; that he endorsed the doctrine of the right of necessity; and that he maintained that all people have a natural right to subsistence.

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.

It is now easy to see, in the light of Adam Smith's Lectures on Jurisprudence, that The Theory of Moral Sentiments and The Wealth of Nations were parts of a grand system. Nonetheless, TMS and WN are not tightly linked. This paper pursues the following strategy: knowing that Smith wrote both works, one can go back to westigate Smith's handling of the virtues, and see how that work implicitly defended the acquisitive, commercial society analyzed so thoroughly in WN. In doing so, it will be shown that Smith has a distinctive, key, narrow handling of the virtue justice which is based upon the passion resentment. Smith's treatment of justice explains why there can be no concept of just price in Smith's work. It serves to support market, flexible, or negotiated prices as ethically legitimate because it effectively removes market prices from the domain of government control or responsibility, at least insofar as government is enforcing justice.

John Neville Keynes is best known for being the father of John Maynard Keynes and for writing The Scope and Method of Political Economy (1891). The lesser of these achievements was widely accepted as the definitive methodological tract in the field of political economy in the late-Victorian period. In this publication Keynes shed new light on many of the pressing methodological and epistemological problems of the day; he supplied the methodological underpinnings to Alfred Marshall's majestic synthesis of late-Victorian theoretical opinion, as articulated in his Principles of Economics (1890); and, whatis of paramount concern to me in this paper, he employed some deft rhetoric to hasten the end of the long and acrimonious methodological debate between the orthodox and historical economists that is now generally referred to as the English Methodenstreit or “battle of methods.” Keynes consciously strove to provide a solution to the “battle of methods” that would be acceptable to both the orthodox and historical economists and, for this reason, The Scope and Method is understandably characterized by a conciliatory tone and repeated, almost desperate, attempts to see value in arguments from both sides of the conceptual divide. Keynes nonetheless failed in his quest to be even-handed. He was a logician of the first order who was extremely impressed by the neat logical lines of the orthodox framework, and hence, for all his intellectual honesty and obvious good will, he could not help but interpret the debate through orthodox spectacles. The chief rhetorical ploy he drew upon to achieve this orthodox-leaning settlement between the principal antagonists was the unconscious one of the “passive-aggressive” in which the advocate repeatedly makes the outward motions of conceding ground while, in effect, conceding little. The specific mechanics of this strategy entailed reformulating each precept from the historicist conceptual framework so that it would not be in conflict with its nearest orthodox opposite (itself carefully reinterpreted by Keynes), either by showing that it was identical to this orthodox opposite or by arguing that different precepts were appropriate in different situations, and then dismissing the entire methodological debate—which was then in its third decade—as one long and lamentable misunderstanding. Keynes was ably assisted in executing this strategy by his Cambridge colleagues and, for this reason, the quest to settle the debate by providing orthodox interpretations of the precepts then at stake may be termed the “Cambridge solution.” Marshall and Henry Sidgwick played particularly important roles in carrying this rhetorical assault, as the former's more genuine sympathy for many of the historicist ideas and the latter's celebrated honesty made the Cambridge quest appear sincere.

This paper, in a roundabout way, deals with Alfred Marshall's views on method, examining the metaphors, similes, and analogies by which they were expressed; or, conversely, it investigates his use of metaphors as a means to convey methodological reflections. Marshall's biological analogy has aroused much controversy in the past; it is to be hoped that a more comprehensive investigation will allow us to place the metaphors/method relationship in a wider context.

The history of economics can be compared to a calm sea that once in a while happens to be shaken by heavy storms. This arises when works come out aimed at turning upside down the received interpretation of a great bygone economist's views. Professor Donald A. Walker's recent book, Walras's Market Models (1996), is likely to be among them. Its main thrust is that the view present-day economists have of Léon Walras is incorrect. The basic reason, he claims, is that to date all interpretations of Walras have been based on the last (posthumous) edition of the Eléments d' économie pure (henceforth the Elements), itself a slightly amended version of its fourth edition. To him this is a pity because Walras's most interesting theoretical ideas are to be found in its second and third editions—the embodiment of what he calls Walras's mature phase of theoretical activity—yet were abandoned by him when he revised his work for the fourth edition. The aim of Walker's book, then, is to bring to the fore the picture of what he considers to be the real Walras: an economist interested in the functioning of real-world markets and abiding by a realistic methodology who is attentive to the institutional set-up underlying his system of equations, and who is keen to provide his readers with disequilibrium models. In other words, Walker is trying to make the same claim apropos Walras as Axel Leijonhufvud (1968) did thirty years ago about Keynes when defending the view of a breach between the economics of Keynes and Keynesian economics. To Walker, modern Walrasian economics, or neo-Walrasian theory as it is more often called, is a betrayal of Walras's economics.

Although Cournot’s mathematical economics was generally neglected until the mid-1870s, he was taken up and carefully studied by the Scientific Club of Cambridge, Massachusetts, even before his “discovery” by Walras and Jevons. The episode is reconstructed from fragmentary manuscripts of the pragmatist philosopher Charles S. Peirce, a sophisticated mathematician. Peirce provides a subtle interpretation and anticipates Bertrand’s criticisms.

John Dewey (1859-1952) is easily the most influential philosopher America has produced and Thorstein Veblen (1857-1929) is arguably the most influential American heterodox economist. Although scholars have often pondered both their intellectual and personal relationship, until recently no firm conclusions could accurately be drawn. Due to the lack of correspondence between the two men and the brevity of Veblen's comments on and citations of Dewey, it is difficult to know what the former thought of the latter both in terms of personality and economic ideas. But, fortunately, Dewey cited Veblen and commented on his economic thought on many occasions so it is possible to at least partly reconstruct one-half of the relationship. This reconstruction will be the focus of this article, emphasizing: (1) their biographical intersections and convergences; (2) Dewey's ideas about economics and the economy; (3) Dewey's explicit use of Veblen's economic ideas in his own published work; and (4) Dewey's critical comments in his correspondence regarding Veblen's interpretation of pragmatism and his development as a social theorist.

In his 1989 Cambridge doctoral dissertation, The Concept of Equilibrium in Neoclassical Theory, Franco Donzelli observed that, “The history of the neoclassical approach over the last one hundred and twenty years can be interpreted as a history of the relationship between instantaneous and stationary equilibrium models, on the one hand, and of the developments internal to either class of models, on the other” (Donzelli 1989, p. 31).