The Nobel Prize of Piero Sraffa and Joan Robinson that Stockholm never awarded might have pleased at least one of them. Its citation would have included: “Their investigations uncovered a fatal normative flaw in Böhm-Bawerkian and modern mainstream capital theory.”

Just prior to Alfred Marshall's 1890 ascendancy as leading world economist, Eugen von Böhm-Bawerk (1851–1914) perhaps wore that crown thanks to his three-volume treatise on the history and fundamentals of interest theories. Böhm (1884, 1889, 1909, 1912) somewhat independently followed in the footsteps of Stanley Jevons (1871) and himself strongly stimulated Knut Wicksell (1893), Irving Fisher (1906, 1907, 1930), and Friedrich Hayek (1931, 1941). Pugnacious and somewhat incoherent, Böhm and his disciples battled cogently the competing school of John Bates Clark (1899) and Frank Knight (1934, 1935a, 1935b), which idealized a permanent scalar capital alleged to be virtually permanent and with a marginal productivity determining its interest rate in much the same way that primary labor's marginal productivity determines its real wage rate and primary land's marginal productivity determines its real rent rate(s). The Clark-Knight paradigm—and, for that matter, Frank Ramsey's 1928 mathematical clone—shares the Böhm-Hayek vital normative flaw.

In 1798, Sophie de Grouchy, the marquise de Condorcet, published a translation of the seventh edition of Adam Smith's Theory of Moral Sentiments (1792), along with a series of eight “letters” on the subject of sympathy. These letters are, in fact, substantial essays that allow us to discern how she read Smith. Intellectual historians have a tendency to privilege an author's intent, and to read the Theory of Moral Sentiments in order to determine what Smith actually meant, and how meaning was constructed in the context of a particular intellectual environment. As long ago as 1978, literary theorists such as Wolfgang Iser suggested that a reader's response is at least as interesting a question as an author's intent (Iser 1978). And Sophie de Grouchy is no ordinary reader. Her translation of, and commentary on, Smith's work allow us to see how a theory constructed in the intellectual context of the Scottish Enlightenment would be received by a different intellectual community. While de Grouchy shared much of the background that informed Smith's work, she could not write a commentary on sympathy during the Terror without taking into account recent French political experience and debate. And, I argue, her reading was not merely idiosyncratic, but rather representative of a particular group of intellectuals seized with the problem of adapting Enlightenment theory to the political reality of the Republic.

The one man who has done more than any other to re-establish John Rae's reputation as a political economist of the first rank is R. Warren James. The year 1996 marked the bi-centenary of Rae's birth and coincided with the 500th anniversary celebration of the founding of Aberdeen University, Rae's alma mater. When Omar Hamouda and I discovered that we were independently trying to organize Rae bicentenary conferences in Canada and in Scotland, we felt it made sense to pool our energies and hold a conference in Aberdeen in 1996. In the event, more than thirty Rae scholars attended from around the world and the conference proceedings were published as The Economics of John Rae (1998). Unfortunately, James was unable to attend, but it was the unanimous decision of all assembled that the conference volume be dedicated to him.

Charles Whitney Mixter started a minor controversy when he published an article, “A Forerunner of Böhm-Bawerk,” in the Quarterly Journal of Economics in 1897, in which he suggested that John Rae had anticipated some aspects of Böhm-Bawerk's theory of capital. At this time, not much was known in academic circles about Rae's life in Canada except for the remark in the preface to his 1834 book, Statement of Some New Principles on the Subject of Political Economy …: “I exchanged the literary leisure of Europe for the solitude and labors of the Canadian backwoods.”

One of the significant contributions of the The Wealth of Nations was to bring to the consciousness of economists the centrality of the pursuit of self-interest in economic affairs. Following the publication of the The Wealth of Nations, economists increasingly assumed that the pursuit of self-interest was the prime psychological drive of mankind. As economics developed, modifications of the self-interest postulate occurred. Economists began to formally model the pursuit of self-interest and a specific form of the pursuit of self-interest ultimately came to dominate economists' thinking. Specifically, economists have taken a methodologically individualistic approach to this question. With rare exception, economists presume that the individual pursues self-interest more or less in “isolation.” As Frank Knight pointed out, the purely rational action of the economic man requires the complete absence of personal relations, in effect requiring persons to treat each other as vending machines (Knight 1960, p. 73). Robinson Crusoe alone on his island is thus the epitome of the economic man assumed by neoclassical economic theory.

The question of progress in economic knowledge during its historical development has been thoroughly treated several times in the past by many eminent economists, historians of thought, and philosophers (Stigler 1965, 1983; Worswick 1972; Blaug 1985, 2000; Hausman 1989; Khalil 1995; Backhouse 1997). Although this tenacity in wondering about progress proves that it has a real importance, a growing number of economists suggest that it has no meaning, either because it is useless, or because it is too exigent for economics.