Frank D. Graham (1890–1949) presented an innovative multi-country, multi-commodity trade model that attached great importance to link commodities and quantity adjustments, not perfect specializations and price adjustments as emphasized by John Stuart Mill and Alfred Marshall. However, due to some shortcomings, this model was not sufficiently understood and has been forgotten. This study reconstructs Graham’s theory of international values by rectifying the shortcomings. Through this reconstruction, the following is clarified. First, in multi-country, multi-commodity trade models, the existence of link commodities is general and perfect specializations seldom appear; therefore, quantity adjustments are normally performed in the face of demand shifts. Second, notwithstanding unchanging sectoral productivity at a national level, national wage rates can vary greatly according to the patterns of the international division of labor. Third, while the domestic relative wage rate increases with an increase in a home country’s productivity of link commodities, it does not increase with an increase in the productivity of commodities produced only in the home country.

This paper examines James Steuart’s explanation of the emergence of commercial nations. Unlike other Scottish thinkers of the time, Steuart argues that artifice is necessary for the rise of commercial societies. He uses the term “artificial” to refer to a devised process, one that is an alternative to the supposedly natural process arising from innate propensities. The system of trade and commerce is an “artifice” created by merchants to obtain benefits, and established by the sovereign for his ostentation and personal prestige, until it became generalized as a commercial nation. Steuart’s explanation of the emergence of commercial nations accounts for how individuals become dependent on and subordinate to the public market. This paper concludes that Steuart’s Political Œconomy promotes a science of the artificial that seeks to understand the functioning of non-natural mechanisms and to create instruments that the statesman adapts to the needs and objectives of individuals.

Michael Woodford's 2003 Interest and Prices has been regarded as the most important contribution to monetary economics since the publication of Don Patinkin's Money, Interest and Prices fifty years ago. Like Patinkin, Woodford sought inspiration in Knut Wicksell's 1898 Interest and Prices. But, while Patinkin built on Wicksell's incipient formulation of the real balance effect and stability analysis of the price level (see Boianovsky 1998), Woodford has elaborated on Wicksell's concept of a pure credit economy (called “cashless economy” in the 2003 version), a theme largely disregarded by Patinkin. This difference in perspective is in part related to the fact that Patinkin's concern was mainly monetary theory, whereas Woodford has focused on monetary policy instead. In early 2004 I invited a group of scholars to discuss Wood-ford's book from the point of view of the history of thought and methodology in a session at the History of Economics Society meetings, held in June of that year at Victoria University, Toronto. Michael Woodford was also invited to participate in the session and reply to the comments. The revised papers are published here as a mini-symposium.

This paper discusses the Sonnenschein–Mantel–Debreu (SMD) theorems in general equilibrium theory. It argues that the SMD results were related to the previous literature on the integrability of demand. The integrability question involved rationalizing individual demand functions, and the SMD theorems asked the same question about aggregate (market) excess demand functions. The paper’s two goals are to demonstrate how the SMD results followed naturally from the earlier work on integrability, and to point out that the profession’s reception was quite different; the integrability results were considered a success story, while the SMD results were quite negative.

Mandeville and Hume advance similar framings for their political economy, using emergentist and proto-sociological lines of analysis. They are less aligned with liberalism (political, economic, or metaphysical) than mercantilism, insofar as they favor balance-of-trade arguments and urbanization. They are both methodological holists, not individualists. It is the group, not individual agents, that figures at the core of their thought.

The interdisciplinary project to unite the field of mathematics with the social and biological sciences marks the work of Vito Volterra, one of Italy’s most prominent mathematicians of the twentieth century. This paper explores the connections between Volterra’s 1901 inaugural address at the Accademia dei Lincei in Rome and the work of two of his contemporaries, Léon Walras and Irving Fisher. All three thinkers were ardent advocates of the mathematical turn in economic thinking. This paper argues, however, that it is the previously unexplored relationship between Volterra and Fisher that sheds the most light on the way in which mechanical physics contributed to the project of mathematization within economics more generally. Furthermore, it explores the way in which mathematical inquiry postulated a new and coherent abstraction of the economy, at the same time that it gave epistemological authority to the economist.

The paper offers the first interpretation of David Ricardo’s famous numerical example fully compatible with the primary source. It claims that the sole purpose of the four numbers was to illustrate that the relative value of commodities made in different countries is not determined by the respective quantities of labor devoted to their production. This exception results from unequal ordinary profit rates between countries because capital does not move across national borders as easily as it does within the same country. Likewise, the paper also debunks some entrenched myths about the numerical example. It shows that Ricardo did not leave the terms of trade indeterminate, that the purpose of the four numbers was not about measuring the gains from trade, and that Portugal had no productivity advantage over England. All of this contradicts the way scholars have interpreted Ricardo’s numerical example since the mid-nineteenth century.

At times economists seem to treat research into the history of their profession as a guilty pleasure, equating it with “the love that dares not speak its name,” to steal an expression from Oscar Wilde. As a field of research it retains at best an equivocal position. Should real economists waste their time amusing themselves with such a completely irrelevant and non-applicable field? This, at best, ambivalent attitude by a clear majority of the profession meant that the establishment of the first journal dedicated to this area of endeavor (History of Political Economy) served as the eagerly awaited signal for the most prestigious general journals to stop publishing articles of this nature. By the 1970s, the subject's relegation to the backwaters of the discipline translated into a generalized move to drop history of economic thought (as well as economic history) as a requirement of graduate education:

the history of thought, like all other fields, is well enough served by its own specialists. These were the reasons why Stigler proposed and supported the decision of the Economics Department at the University of Chicago to abandon its history of thought requirement in 1972, before many other departments did (Rosen 1993, p. 811).

James Mill’s account of the decision process is part of his theory of the human mind, which in turn is the cornerstone of his theory of education. Mill believed the end of education was to produce happiness, and that this happiness required action by the individual. A problem, as Mill saw it, was that intemperance might interfere with the decision process, causing individuals to take actions that do not promote their greatest happiness. This paper provides an interpretation of this process from a formal perspective, in the light of Mill’s view on intemperance.

Paolo Sylos Labini’s Oligopoly Theory and Technical Progress (1957) is considered one of the major contributions to entry-prevention models, especially after Franco Modigliani’s formalization. Nonetheless, Modigliani neglected Sylos Labini’s aim when reviewing his work (1958), particularly his demonstration of the dynamic relation between industrial concentration and economic development. Modigliani addressed only Sylos Labini’s microeconomic analysis and the determination of the long-run equilibrium price and output, concentrating on the role played by firms’ anticipations. By doing so he shifted attention from Sylos Labini’s objective analysis to a subjective approach to the oligopoly problem. This paper discusses Sylos Labini’s and Modigliani’s differing approaches, derives the origin of the Sylos postulate, and sets Modigliani’s interpretation of Sylos Labini’s oligopoly theory in the context of his 1950s research into firms’ behavior under uncertainty.

This essay serves as the introduction to the authors’ translation of Karl Knies’ essay “Die nationaloekonomische Lehre vom Werth” (1855). Knies is one of the acknowledged founders of the Older German Historical School, and yet in recent years several writers have described his 1855 essay as seminal in the evolution of marginal utility analysis. The authors examine how Knies develops his nascent theory of marginal reasoning in his essay, arguing that rather than cling to his earlier historicist programmatic, Knies attempts to discover general laws; however, not by strict causal analysis but by a typical ‘German art’ of taxonomy and classification that resembles juridical argumentations. This results in an ambiguous text, which influenced several marginalist pioneers who studied under Knies at Heidelberg (including Eugen von Böhm-Bawerk, Friedrich von Wieser, and John Bates Clark), as well as several members of the Younger German Historical School (including Gustav von Schmoller).

Historians of economic thought have long debated about the methodological position adopted by Alfred Marshall (1842–1924) concerning the mathematization of economics. While Francis Y. Edgeworth and Marshall's pupils, most notably A. C. Pigou and J. M. Keynes, agreed that it was mainly through him that mathematical economics has since become respectable (see Pigou 1925, p. 66) and proclaimed him the founder of modern diagrammatic economics (ibid., p. 24), more recent commentators have criticized his failure to give proper credit to mathematics, and have even depicted him as an enemy of such an approach (see, for example, Schumpeter 1951, p. 97; Coase 1975; Brems 1975; Creedy 1986, p. 126; Schabas 1989; Huriot 1994, p. 17).

Professor Kenneth Arrow has now added his views to the current Ricardian controversy in a provocative survey of alternative judgments regarding David Ricardo's contribution (Arrow 1991). Arrow's primary thesis appears to be that “the main thrust of Ricardo's system is a bold attempt to determine values independent of demand considerations” (Arrow 1991, p. 75), a position which has already come under attack (Caravale 1991; Hollander 1991). Our aim, however, is not to examine Ricardo's treatment of demand directly, but to question the fundamental suppositions upon which Arrow's analysis rests and the resulting conclusion that emerges.