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‘VALUE IS NOT A FACT’: REPRODUCTION COST AND THE TRANSITION FROM CLASSICAL TO NEOCLASSICAL REGULATION IN GILDED AGE AMERICA

Published online by Cambridge University Press:  18 December 2018

Nicola Giocoli
Nicola Giocoli*
Affiliation:
Department of Law, University of Pisa.
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Abstract

The paper draws on Stephen Siegel (1984) to argue that, while paving the way for constitutionalizing the free market in Lochner v. New York (1905), the reproduction cost method that the Supreme Court established in Smyth v. Ames (1898) as the preferred technique for assessing the value of a business for regulatory purposes also exposed the conventional character of any valuation exercise, against the claims of objectivity made by classical economists and mainstream jurists. The inconsistency between recognizing that “value is not a fact” and the classical laissez-faire philosophy underlying the Court’s jurisprudence did not escape progressive critics, who concluded that government could legitimately fine-tune regulation in order to affect a business’s value and pursue alternative socio-economic goals.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 40 , Issue 4 , December 2018 , pp. 445 - 470
Copyright
Copyright © The History of Economics Society 2018 

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Footnotes

Without involving them in any remaining mistakes, I thank Elodie Bertrand, Simon Cook, Luca Fiorito, Tim Leonard, and two anonymous referees for their useful comments. This research has benefitted from the financial support of INET—Institute for New Economic Thinking (grant #INO1200015-033).

References

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