We examine various, sometimes divergent, conceptions of capital and its structure in the Austrian tradition from Menger (1871) to Lachmann (1956). We outline Menger’s methodological and philosophical position that recommends investigating the morphology of capital—its shape, form, and structure; it also recommends maintaining some “realisticness” in the treatment of capital in economics. Prominent Austrian contributions are examined and compared along various dimensions: the existence or otherwise of “original” factors of production; time conceptions; analytical domain assumptions; real and money capital doctrines; the causal role of the entrepreneur in creating capital; and the fundamental question of capital aggregation into a stock or fund. We consider the extent to which Menger’s avowed followers and successors diverged from his original vision of capital, subsequent consequences for the development of Austrian capital theory, and implications of Mengerian structural analysis for the study of capital more generally.

Development economics in its early years created the image of a fierce fight between advocates of contrasting theories or approaches—“balanced growth” vs. “unbalanced growth,” or “program loans” vs. “project loans.” This view has the merit of highlighting such conflicts in great detail; yet, it fails to take into account the reality of development economics as it was practiced in the field. This paper reassesses these old conflicts by complementing the traditional focus on theoretical debates with an emphasis on the practice of development economics.

A particularly interesting example is the debate between Albert Hirschman, one of the fathers of the “unbalanced growth” approach, and Lauchlin Currie, among the advocates of “balanced growth,” on how to foster iron and steel production in Colombia in the 1950s. An analysis of the positions held by these two economists shows that they were, in fact, much less antithetical than is usually held, and, indeed, were in some fundamental aspects surprisingly similar.

Debates among development economists during the 1950s thus must be explained—at least partially—as the natural dynamics of an emerging discipline that took shape when different groups tried to achieve supremacy—or at least legitimacy—through the creation of mutually delegitimizing systemic theories.

The usual internalization of externality ‘by the market’ can be thought of through two different exchange modes: competitive markets, with Kenneth J. Arrow (1969); or bargaining, with Ronald H. Coase (1960). Although, in both cases, ‘externality’ refers to a non-exchanged effect that produces suboptimalities, these authors are working with two different, implicit conceptions of externality, rooted in different analytical worlds and calling for different institutions—parametric prices for the former but not for the latter. Moreover, while both start out with different theoretical frameworks, the authors share a concern for realism and unite when they introduce transaction costs, both advocating a policy design that calls for taking into account the costs of the different solutions. Nevertheless, this introduction of transaction costs does not itself escape consistency problems, since they do both maintain a reference to their respective ideal worlds.

It is surely Israel M. Kirzner who has promoted the role of the entrepreneur more than any other author in the second half of the twentieth century. His description of the market process and entrepreneurship in his Competition and the Market Process (1973) represents a seminal contribution to Austrian thinking, although it has been slow to catch on in broader circles. As Humberto Barreto argues above, for example, an entrepreneurial role seems to have disappeared from mainstream economics as the theory of the firm progressed (1989, pp. 95–98). The standard core of microeconomics allows little room for entrepreneurial elements, particularly if the latter are defined in terms of uncertainty, intuition, ignorance, and disequilibrium. In light of this intellectual discord and given his recent retirement, it is timely to reconsider Kirzner's unceasing efforts to resurrect the role of the entrepreneur, and especially his effort to reconcile this role with conventional neoclassical approaches.

Variations and disparities between von Hayek and Ordoliberalism can be detected on diverse levels: 1. philosophy of science; 2. setting dissimilar priorities; 3. social philosophy; 4. genesis of norms; and, 5. notion of freedom. Therefore, it is possible to make an important distinction within neoliberalism itself, which contains at least two factions: von Hayek’s evolutionary liberalism, and German Ordoliberalism. The following essay not only takes the neoliberal separation of different varieties as granted; it proceeds further. It focuses on the topic of justice and elaborates the (slightly) differing conceptions of justice within neoliberalism. Thus, the specific contribution of the paper is that it adds a sixth dimension of difference (which is highly interconnected with the differing conceptions of genesis of norms). In this paper, I emphasize the (often neglected) subtle differences between von Hayek, Eucken, Röpke, and Rüstow, with special emphasis on their theories of justice. In this regard, I focus not only on Eucken and von Hayek; in addition, I include the concepts of justice developed by Rüstow and Röpke, as well, and, in consequence, broaden the perspective incorporating Eucken as a member of the Freiburg School of Law and Economics, and Rüstow and Röpke as representatives of Ordoliberalism in the wider sense. The paper tackles these topics in three steps. After briefly examining and discussing the existing literature and providing a literature overview on the decade-long debate on von Hayek and Ordoliberalism, I then describe von Hayek’s conception of commutative justice; particularly, justice of rules and procedures (rather than end-state justice). Then, I examine Eucken’s, Rüstow’s, and Röpke’s theories of justice, which consist of a mixture of commutative and distributive justice. Then, I draw a comparison between the ideas of justice developed by Eucken, Röpke, Rüstow, and von Hayek. The essay ends with a summary of my main findings.

Mikhail Ivanovich Tugan-Baranovsky (1865–1919) has not unjustly been calle the greatest Russian economist of all time (Jasny 1972, p. 159). This neglecte the fact that he was born near Kharkov and towards the end of his life came to see the Ukraine as his homeland, but the evaluation itself is not so far from the truth. However, opinion about the precise importance of Tugan-Baranovsky work to the development of trade cycle analysis has varied widely. J. M. Keynes and A. H. Hansen were both highly respectful of Tugan's contribution. For example, in the Treatise on Money, Keynes wrote in regards to business cycle theory that he was “in strong sympathy with the school of writers … of which Tugan-Baranovski was the first and most original” (Keynes 1930, vol. 2, p. 100 In his 1951 work, Business Cycles and National Income, Hansen was enthusiastic describing Tugan as “cutting his way though the jungle to a new outlook” (Hansen 1951, p. 281). This suggests that some aspects of both British an American Keynesianism might have originated in Tugan's work, or at least bee influenced by it. W. W. Rostow was also impressed by Tugan's approach, statin that it “took business cycle analysis some distance beyond Juglar and Marx” (Rostow 1990, p. 261).

It is a matter of fact that happiness is once again one of the foci of interest for economists, the “professors of the dismal science” (Carlyle 1850, p. 43). This is also the conviction of the editor of the “Controversy” on Economics and Happiness in The Economic Journal in 1997: “Economists from different backgrounds … all believe that happiness must play a more central role in economic science once again” (Dixon 1997, p. 1812). Dixon's thesis is twofold: (a) “Once again”: the reference is to the Neapolitan pubblica felicita (public happiness), developedby Genovesi andothers in the mid-1700s. In fact, Dixon sees a link between the new interest on happiness by contemporary economists andthe XVIII century debate on “public happiness” in the Latin countries, and in Italy in particular, as he explicitly says in a footnote; (b) “More central role” according to Dixon, is that happiness nowadays does not play a central role in economics.

The Econometric Society was founded in December 1930. Invitations for a meeting to establish “an international society for the advancement of economic theory in its relation to statistics and mathematics” had been distributed by Irving Fisher, Ragnar Frisch, and Charles F. Roos, together with a draft constitution. In June 1930, the same instigators had sent a form letter to a list of thirty-one scholars from ten different countries to solicit advice on establishing an international association “to help in gradually converting economics into a genuine and recognized science.” The hitherto unpublished responses are set out in the paper. The impact of the solicited advice, not least from François Divisia and Joseph Schumpeter, on the formation of the Econometric Society is discussed in some detail.

From 1816 through to the end of the Civil War, the colonization of emancipated slaves in Africa and the American tropics occupied a prominent place in federal policy discussions. Although colonization has traditionally been interpreted as an aberration in anti-slavery thought on account of its dubious racial legacy and discounted for its impracticality, its political persistence remains a challenge for historians of the antebellum era. This article offers an explanation by identifying a distinctive economic strain of colonization in the moderate anti-slavery advocacy of Mathew Carey, Henry Clay, and Abraham Lincoln. From the nullification crisis until the Civil War, adherents of this strain effectively integrated colonization into the American System of political economy. Their efforts were undertaken to both reconcile their respective anti-slavery views with a raw-material-dependent domestic industrialization program, and to adapt American System insights to an intended program of gradual, compensated emancipation.

This essay seeks to trace the many—and often conflicting—economic ideological interpretations of the transatlantic abolitionist impulse. In particular, it explores the contested relationship between free-trade ideology and transatlantic abolitionism, and highlights the understudied influence of Victorian free-trade ideology within the American abolitionist movement. By bringing together historiographical controversies from the American and British side, the essay calls into question long-standing conceptions regarding the relationship between free trade and abolitionism, and suggests new avenues for research.

At one level or another, economic processes make it possible for diverse individuals to coordinate their activities. Although microeconomists have long recognized this insight, and purport to explain it with their tools, macroeconomists often seem to lose sight of the centrality of coordination when they focus on the movements of, and relationships among, aggregate variables. One problem with emphasizing aggregates is that, in reality, economic coordination ultimately takes place at the microeconomic level, which poses the issue of microfoundations. However, recognizing that micro issues are the fundamental ones does not deny a role for distinctly macroeconomic analysis. Macroeconomic analysis should show how movements in markets for goods that are pervasive (i.e., affect some very large number of microeconomic markets simultaneously), help or harm the coordination processes taking place in those individual markets and thus influence the determination of aggregate measures such as total income and employment.

The first half of the nineteenth century in Great Britain was one of nearly continuous controversy over monetary issues. The Restriction of Cash Payments and the Bullion Controversy dominated the first two decades. After Resumption in 1821, a series of banking crises kept monetary issues on the front burner, until they boiled over again in the Currency-Banking Controversy of the 1840s. Of the many writers contributing to the monetary literature during the period, few contributed so much as Thomas Tooke. Long recognized as a collector of economic data without peer in his era, Tooke's reputation as an economic theorist has grown in recent years (cf. Laidler 1972; Arnon 1991; M. Smith 2001). Readers of Tooke's works have long known that his views on monetary theory changed radically from the 1820s to the 1840s, when he adopted a starkly anti-quantity theory approach. In his early years as a collector of economic data, Tooke allied himself with David Ricardo in the effort to return Great Britain to the gold standard. But though both subscribed to the quantity-theory/price-specie-flow-mechanism (QT-PSFM) framework for analyzing the economy's adjustment to monetary disturbances, their theoretical approaches differed in important respects. The differences were great enough to lead Arnon (1989, 1991) to conclude that Tooke and Ricardo should be viewed primarily as political, not theoretical, allies and to suggest that Tooke's approach shared greater affinities with the work of moderate bullionists than with Ricardo (Arnon 1991, pp. 48, 58, 108).

There are four main approaches to bilateral index number theory: the fixed basket, stochastic, test, and economic approaches. The paper reviews the contributions of Irving Fisher to these approaches to index number theory, which are still in use today. The paper also reviews Fisher’s contributions to multilateral index number theory. The main themes of the paper are developed in the context of a review of the early history of index number theory: a history that conveys a wealth of information and insight into the making and use of index numbers today.

From the 1880s until after the creation of the Federal Reserve System in 1913 the United States was a hotbed of monetary controversy. The secular price deflation that began in 1865 prompted a host of efforts to increase the money supply, in the belief that more money would check the decline of prices. The agitation for free coinage of silver that arose in the 1870s and carried into the 1880s and 1890s generated a maelstrom of arguments and counterarguments. Such theoretical support as the “cheap money advocates” provided was in the form of a crude application of the quantity theory of money. Not surprisingly, using the quantity theory in such a manner brought the theory itself under fire.

The ideal of Political Economy is not unrestricted competition, but competition that is truly free, because controlled by justice and by law. The distinction between freedom and license needs to be preserved in this department of political philosophy. With that distinction clearly maintained, we may still retain, in economics as in politics, our beautiful watchword, liberty (John Bates Clark 1879, p. 167).

John Bates Clark has had a formidable impact on the development of economic theory and the theory of income distribution. In addition, Clark's marginal product theory of distribution has often played an instrumental role in the defense of laissez-faire policies. His theory has been used to criticize a wide variety of market interventions, including minimum wage legislation. As a result it is not surprising that Clark's theory of income distribution, and Clark himself, have drawn more than a few critics.

John Stuart Mill’s Fourth Fundamental Proposition Respecting Capital, first stated in 1848, had become an enigma well before the nineteenth century had come to an end. Never challenged in Mill’s own lifetime and described in 1876 as “the best test of a sound economist,” it has become a statement that not only fails to find others in agreement, but fails even to find an internally consistent interpretation that would make clear why Mill found it of such fundamental importance. Yet the fourth proposition should be easily understood as a continuation of the general glut debate. Economists led by Malthus had argued that demand deficiency was the cause of recession and a body of unproductive consumers was needed to raise the level of demand if everyone who wished to work was to find employment. Mill’s answer was that to buy goods and services would not increase employment, or, in Mill’s own words, “demand for commodities is not demand for labour.”

Keynes was viewed by himself, Schumpeter, and most others as the most highly esteemed economist of the twentieth century. However, Schumpeter is receiving increasing attention from mainstream economists. A few specific examples are discussed, and the citation time series for Keynes and Schumpeter are compared for the period 1956 through 2006. Generally, Keynes receives more citations than Schumpeter from 1956 through roughly the mid-1990s. But subsequently until 2006, Schumpeter received more citations than Keynes.

This paper examines the influence of Irving Fisher’s writings on Milton Friedman’s work in monetary economics. We focus first on Fisher’s influences in monetary theory (the quantity theory of money, the Fisher effect, Gibson’s Paradox, the monetary theory of business cycles, and the Phillips Curve), and empirics (e.g., distributed lags.). Then we discuss Fisher and Friedman’s views on monetary policy and various schemes for monetary reform (the k% rule, freezing the monetary base, the compensated dollar, a mandate for price stability, 100% reserve money, and stamped money). Assessing the influence of an earlier economist’s writings on that of later scholars is a challenge. As a science progresses, the views of its earlier pioneers are absorbed in the weltanschauung. Fisher’s The Purchasing Power of Money as well as the work of Pigou and Marshall were the basic building blocks for later students of monetary economics. Thus, the Chicago School of the 1930s absorbed Fisher’s approach, and Friedman learned from them. However, in some salient aspects of Friedman’s work, we can clearly detect a major direct influence of Fisher’s writings on Friedman’s. Thus, for example, with the buildup of inflation in the 1960s, Friedman adopted the Fisher effect and Fisher’s empirical approach to inflationary expectations into his analysis. Therefore, Fisher’s influence on Friedman was both indirect through the Chicago School and direct. Regardless of the weight attached to the two influences, Fisher’s impact on Friedman was profound.

Morris A. Copeland's work and career as an institutional economist has been the subject of only one significant paper (Millar 1980) and is not well known today, even among institutionalists. The standard histories of institutional economics have tended to focus on a few leading figures, notably Thorstein Veblen, Wesley C. Mitchell, John R. Commons, and Clarence Ayres, and have largely ignored the many others (some of whom had outstanding careers) associated with the movement. This narrow focus has given a misleading impression both of the institutionalist movement itself and also of the nature of the institutionalist contribution to economics. The examination of Copeland's career, treated as a case study in the history of institutional economics, can help correct this problem. Copeland is a perfect candidate for such a case study due to his central place within the interwar institutionalist movement, his teachers, the contacts he maintained, his work in both academic economics and in public service, and his professional standing within economics more generally.

In the early years of the twentieth century, two outspoken and brilliant American economists, Thorstein Veblen and Irving Fisher, offered sharply-contrasting visions of how the discipline of economics should be transformed. Each taught at a leading university and had added prominence as a journal editor, but pursued economic inquiry in ways alien to senior colleagues at his university and in the profession at large. Despite the gulf separating their approaches to economics, they had been doctoral students of the same mentor, William Graham Sumner of Yale, and had each been deeply influenced by Sumner. This paper uses the exchange on neoclassical capital theory between Veblen and Fisher in the Political Science Quarterly in 1908 and 1909 to illuminate their approaches to economics and to question why the American economics profession came to follow Fisher's path–even though Veblen, unlike Fisher, attracted devoted disciples and was considered in American social thought (excepting academic economists) as the standard-bearer of “the New Economics.” Despite Veblen's antipathy to those aspects of Fisher's work that became dominant in mainstream economics, there was a close affinity between Veblen's Theory of Business Enterprise (1904) and Fisher's debt-deflation theory of depressions, which remained (until very recently) outside the mainstream and has been taken up by such heterodox economists as Hyman Minsky.