In this essay we are going to closely analyze the importance of Allyn A. Young's theory of increasing returns. In truth, we could also discuss his position on economies of scale, in that the analytical definitions suggested by the theory, as we shall shortly see, are not that helpful in understanding exactly what this writer meant by (the principle of) increasing returns: in fact, the latter are always linked to the more general, all-pervasive concept of economic progress, as is evident from the title of his most famous work. Young's contribution to the debate (one only has to think of the cost controversy of the 1920s) over returns and economies (and diseconomies) of scale, was in truth somewhat marginal. His only work that dealt with these questions, besides his 1928 celebrated paper (Young 1928), dates back to 1913, when in an important critical note (Young 1913), which we shall briefly analyze in section 2, he criticized a number of economic policy rules deriving from Arthur C. Pigou's (1912) famous work. To put it more precisely, Young did not have any substantial role to play in the construction and perfection of the neoclassical theoretical paradigm; in fact, as we argue in section 3, there is significant evidence to suggest that he was probably moving increasingly further away from such a position. The essence of Young's work, summarized in the article written in 1928, would seem to consist in the request for a theoretical redirection, in the analysis of the dynamics of capitalist economies, along the lines of some of the classical economists, thus carrying the various suggestions on this matter already present in Alfred Marshall's theoretical contribution to extremes. In sections 4 and 5, dedicated to the discussion of this article and of its appendix respectively, we maintain that the logic of Young's analysis is based on a multi-sectoral model subject to qualitative and quantitative transformations, i.e., to structural change. Such a view enables us to understand: (1) the author's emphasis on the proportionality among different productive branches needed in order to ensure balanced economic expansion; (2) the attempt (made by the author in the appendix to his 1928 article) to explain the dynamics of the economic system in the presence of different intersectoral growth rates. In the concluding section we maintain that it is the alternative nature of his position compared with the “standard theory”—the reference here is particularly to Pigou's transcription of Marshall's economics—that represents the main feature of Young's work.

In this article, I argue that looking at lesser known intellectuals can help the history of economics to uncover new ways of seeing the world. My focus is the beginnings of “Indian economics” and its conceptualization of development. The Indian economists, despite their elite status in India, were from an imperial context where they were never considered economists. Studies throughout the twentieth century continued to treat them only as nationalists, rarely as contributors to economic knowledge. My research gives agency to these economists. I show how the position of Indian economics from the margins of discursive space offered a unique perspective that enabled it to innovate at the margins of development discourse. Indian economics redefined the concept of universality in the existing nineteenth-century idea of development by rejecting the widely accepted comparative advantage model and assertion that progress originated in Europe. Moreover, the economists pushed for universal industrialization, even for imperial territories, arguing that universal progress was beneficial to all.

The work of Walter Eucken (1891–1950), founder of German ordoliberalism, is often described as being in direct opposition to that of John Maynard Keynes. Our paper challenges this claim by making two main arguments. First, we show that Eucken supported a proto-Keynesian stimulus program at the height of the Great Depression, the so-called Lautenbach plan of 1931. Second, we analyze his critique of full employment policy, which reveals that Eucken’s approach to solving macroeconomic problems is fundamentally different from, if not necessarily contrary to, that of Keynes.

It has been almost fifteen years since Arjo Klamer and I published “The Making of an Economist” (1987), which described the graduate school experience of economics students at six top graduate schools. The students who responded to that survey are now in their late thirties and early forties, and hence are in the prime of their careers. This paper follows up on our earlier study; it reports the results of a survey that was sent to those respondents who voluntarily listed their names on the previous survey and said that they would be open to further contact. It is meant to capture the respondents' reflective views of the profession and their graduate school experience, along with how they have changed over the past fifteen years. To encourage participation, the survey was relatively short. To facilitate comparisons, it repeated a number of the questions asked in the previous survey. (Appendix A reproduces the survey.)

During several decades and until the end of the 1990s, the theory of structural economic dynamics has been absent in the field of so-called mainstream economic analysis. The literature included only either empirically oriented contributions or developments that were related to so-called critical theoretical approaches of structural change. At the end of the twentieth century, however, mainstream economic theorists changed this situation and began to investigate the field of structural dynamics, often using the Solovian theory of economic growth. During the last two decades, they contributed to change substantially the state of the theory of structural change. This contribution first provides an assessment of the advances realized by these theorists. It then confronts these advances with the so-called alternative or critical theoretical approaches of structural dynamics—namely, Luigi Pasinetti’s contribution and ‘evolutionary’ approaches—in order to provide a more complete picture of structural dynamics in the short and the long run.

In The General Theory, John Maynard Keynes broke with the quantity theory of money, not just in working out a monetary theory of production but, as he says, in arguing the case for a monetary theory of value. Keynes writes (CW, 7, pp. xxii-xxiii):

A monetary economy, we shall find, is essentially one in which changing views about the future are capable of influencing the quantity of employment and not merely its direction. But our method of analyzing the economic behaviour of the present under the influence of changing ideas about the future is one which depends on the interaction of supply and demand, and is in this way linked up with our fundamental theory of value. We are thus led to a more general theory, which includes the classical theory with which we are familiar, as a special case.

In order that this essay may be clear to the reader, some understandings about terminology must be established. First, if we speak of “theories that were formulated in the past,” ordinarily we mean to leave open the question of whether they are still valid, and if we speak of “past theories,” ordinarily we imply that they have been discarded and that implies that they were defective and were supplanted by current theories. Nevertheless, in this essay the latter term, used for the sake of brevity, will have the same meaning as the former expression. If a past theory is considered to be invalid, that will be staled explicitly.

So true is it that, in science as elsewhere, we fight for and against not men and things as they are, but for and against the caricatures we make of them.

(Schumpeter, 1954, p. 90)

The body of enquiry known as economics grew out of the practical needs of economic life and statesmanship, and also out of philosophical speculation on the nature of man and society. Adam Smith reflects both aspects, but I would locate him predominantly in the philosophical wing. When he switched from considering the theory of moral sentiments to dealing with the causes of the wealth of nations, I don't believe that he saw himself as engaging in a fundamentally different mode of enquiry. He was, of course, concerned with practical questions--of ethical behaviour in the one case and of economic policy in the other--but discussion of both was from a broad philosophic viewpoint. Ricardo, on the other hand, seems to me to exemplify, and at a high level, someone who falls predominatly in the other wing. Although his thought was abstract, it was much more an attempt to deal pragmatically with important issues of practice than it was an attempt, in the philosophical tradition, to understand the general nature of men's interaction in society. Indeed, utilitarianism by then offered a strictly philosophic rationale for concern with practice (albeit a piggish one in some eyes) which did much to confound and confuse the dual origins of economics. Mill and Sidgwick, among others, maintained the tradition of a close connection between philosophical and economic enquiry, within the framework of a broadened utilitarianism, and the continuing affinity of the two disciplines has been exemplified more recently in the work of writers such as Rawls and Sen, not to mention the recent upsurge in discussion of economic methodology.

In an episode that reflects tellingly on the state of the economics profession in England circa 1870, John Morley presented himself as a candidate for the London University Chair of Political Economy that John Elliot Cairnes was obliged to vacate because of advancing paralysis. Morley, perhaps the most unswervingly loyal disciple of John Stuart Mill and the editor of the Fortnightly Review, was undeterred by the fact that he had published nothing on the subject, apart from an article on Turgot. Nor, in his letter seeking Mill's endorsement, did Morley feel the need to hint at any prospective scholarly contributions to the discipline. He suggested only that he was “a competent person and likely to discharge the duties of the post industriously” (Morley 1872).

This paper examines the role of the English economist Arthur (A. J.) Brown in the 1950s debate surrounding the wage-rate change/unemployment relationship. While the publication of William (Bill) Phillips’s 1958 paper and the subsequent moniker of the “Phillips Curve” attracted a wealth of attention, Brown’s book on the subject, The Great Inflation, and his later work on inflation have received much less. Here, the focus is on redressing this situation somewhat by looking at Brown’s work to see how much it predates Phillips’s paper, and what differences there are to it. We also consider this within the changing institutional structure of English economic networks in the 1950s that led to a relatively rapid acceptance of Phillips’s analysis and, in many cases, to a strong, ordinal interpretation of the Phillips Curve that overshadowed Brown’s work.

Before the emergence of the field of development economics in the mid-1940s, the mainstream of Western economists had very little to say about the world outside western Europe. However, perhaps due to Russia’s ambivalent location as a nation considered not fully European (nor completely Asiatic) and to her status as a major player in the international arena despite the fact of her modest economic achievements, from the eighteenth century onwards the “Russian case” called the attention of some of the most prominent Western minds, including the first economists. By discussing Russia’s economy, they came to notions and concepts regarding development and backwardness that, to a great extent. informed the twentieth-century debate. The aim of this article is to explore the way in which Russia as a case study affected the evolution of ideas on economic growth or development. The evidence of things Russian, it will be argued, raised doubts about common economic views, thus enabling new thinking that pointed either to criticism of liberal orthodoxy, or to expansion and refinement of its arguments.

More than a century ago, one of the most famous essays ever written in American economics appeared in the Quarterly Journal of Economics: “Why is Economics Not an Evolutionary Science?” There, Thorstein Veblen claimed that economics was too dominated by a mechanistic view to address the problems of economic life. Since the world and the economy had come to be viewed from an evolutionary perspective after Charles Darwin, it was rather straightforward to argue that the increasingly abstract mathematical character of economics was non-evolutionary. However, Veblen had studied with a first-rate intellect, Charles Sanders Peirce, attending his elementary logic class. If Peirce had written about the future of economics in 1898, it would have been very different than Veblen’s essay. Peirce could have written that economics should become an evolutionary mathematical science and that much of classical and neoclassical economics could be interpreted from an evolutionary perspective.

This paper is an exploration of the genesis of Paul Samuelson’s Foundations of Economic Analysis (1947) from the perspective of his commitment to Edwin B. Wilson’s mathematics. The paper sheds new light on Samuelson’s Foundations at two levels. First, Wilson’s foundational ideas, embodied in maxims that abound in Samuelson’s book, such as “Mathematics is a Language” or “operationally meaningful theorems,” unified the chapters of Foundations and gave a sense of unity to Samuelson’s economics. Second, Wilson influenced certain theoretical concerns of Samuelson’s economics. Particularly, Samuelson adopted Wilson’s definition of a stable equilibrium position of a system in terms of discrete inequalities. Following Wilson, Samuelson developed correspondences between the continuous and the discrete in order to translate the mathematics of the continuous of neoclassical economics into formulas of discrete magnitudes. In Foundations, the local and the discrete provided the best way of operationalizing marginal and differential calculus. The discrete resonated intuitively with data; the continuous did not.

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.

This paper reconstructs an important and little-known part of the activity of Richard Kahn in the 1950s, both as researcher and as policy advisor, which centered on the drafting of a book for the FAO (Food and Agriculture Organization of the United Nations). Never actually published by the FAO for reasons clarified in this paper, the book dealt with fluctuations in the prices of primary products and how best to curb them. Offering a novel development of an idea first proposed by John Maynard Keynes, Kahn advocates the creation of buffer stocks managed by a supranational authority endowed with ample discretionary powers. The paper presents a complete reconstruction of Kahn’s views on the advantages of buffer stocks as an instrument to stabilize commodity prices, of the context in which these views took shape, and of the way they tied in with other parts of his economic theory and were reflected in his assessment of the commodity international agreements of the time to limit fluctuations in the prices of primary products. It thus fills a significant gap in our knowledge of one of the great economists of the twentieth century.