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.

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.

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.

The paper argues that Terence Hutchison’s (1981) argument that the young F. A. Hayek maintained a methodological position markedly similar to that of Ludwig von Mises fails to support the relevant conclusion. The first problem with Hutchison’s argument is that it is not clear exactly what conclusion he meant to establish. Mises (in)famously maintained a rather extreme methodological apriorism. However, the concept of a priori knowledge that emerges from Hayek’s epistemology as implied in his work on theoretical psychology is the opposite of Mises’s treatment of a priori knowledge. Thus, it cannot be maintained—if, indeed, Hutchison meant to establish—that Hayek was a Misesian apriorist during the years in question. What’s more, the paper shows that Hutchison’s argument does not support a weaker interpretation of the relevant conclusion. There are alternative interpretations of Hutchison’s evidence, more charitable and more consistent with Hayek’s epistemology, which undermine Hutchison’s conclusion.

It is well known that the General Theory contains only one diagram, this occurring in chapter 14 criticising the orthodox theory of the rate of interest. Attached to the diagram is a footnote containing an acknowledgement: “This diagram was suggested to me by Mr. R.F. Harrod” (CW VII, p. 180). The impression conveyed by this remark is that Harrod drew the diagram and offered it to Keynes, who then accepted and used it. Further enquiry into the diagram's origins reveals the existence of an initial version which grew out of correspondence between Keynes and Harrod in August-September 1935 (CW XIII, pp. 526-63). Two of Harrod's writings–his (1951) Keynes biography and a letter to Hawtrey in 1951–imply that he was the author of the initial version, and that this was essentially the same as the published version. And, in seeming corroboration of Harrod's comments, there is the virtual equivalence of the initial version given in The Collected Writings of John Maynard Keynes (CW XIII, p. 557) and the final version printed in the General Theory (CW VII, p. 180J. Taken individually and collectively, these items of evidence all point in the same direction. They support the reasonable inference that, apart from trivial changes in lettering, Harrod was the sole author and creator of the initial and final versions of the diagram, and that Keynes was merely the recipient.

We analyze Milton Friedman’s two visits to Chile, in March 1975 and November 1981. We rely on a number of sources, including Friedman’s archives, press archives in Chile and the rest of the world, interviews, and the papers and recollections of some of those who accompanied Friedman during his meeting with Pinochet. Although Friedman’s 1975 visit has been widely discussed, his 1981 visit has been largely neglected. However, this visit was particularly important as it preceded a severe currency and banking crisis, stemming from an overvalued fixed exchange rate. The crisis put at risk the influence of the “Chicago Boys” and the political and economic liberalization process. We analyze Friedman’s views regarding Chile’s pegged exchange rate strategy followed between 1979 and 1982, and his position on economic and political freedom.

Market failures, which are usually viewed as a consequence of self-interest, are also supposed to be a major justification for coercive state interventions. This was the view of, among others, Richard Musgrave and Paul Samuelson, but not of James Buchanan. The latter certainly admitted that individuals are self-interested, that markets fail to allocate resources efficiently, but did not believe in the need for coercion. In this paper, we show that, to Buchanan, coercion can be unnecessary if certain post-constitutional conditions are satisfied. We show that he believed that self-interested individuals voluntarily adopt pro-social behavior in small groups. Small groups or small numbers represent a post-constitutional alternative to the veil of ignorance.

The dismissal of academicians from German universities under the Restoration of Civil Service Act (Gesetz zur Wiederherstellung des Berufsbeamtentums), promulgated by the National Socialists on April 7, 1933, and the expulsion of academicians from Germany, Austria, and other European countries interrupted or destroyed promising developments in economics, as well as in physics or other areas. According to this new “law,” which was passed by the Nazis in a short cut immediately after coming to power, “disagreeable” persons could be dislocated from the public service predominantly for racist (section 3) or political (section 4) reasons.

This paper is a sequel to De Vroey (1998d) and (1998e). In these papers, I pondered upon the relationship between the Marshallian and the Walrasian research programs and defended the view that a divide should be drawn between them, contrary to the opinion of the majority of economists who see no need for such. I argued that these research programs differ on two scores. First, they are based on different conceptions of equilibrium. Second, they differ on the way in which they broach the issue of the working of the decentralized economy. The hallmark of the Marshallian approach is that it proceeds in two steps. The working of particular markets is analyzed in a first stage whereas the issue of their coordination is assigned to the second stage of the inquiry. Contrarily, the hallmark of the Walrasian approach is to immediately start the analysis at the level of the economy as a whole. Put differently, in the Marshallian approach, partial equilibrium analysis is seen as a first preliminary step to general equilibrium analysis, whereas in the Walrasian approach one immediately proceeds with the latter. The aim of the present paper is to show the incidence of this twofold difference on the interpretation of Keynesian theory.

This paper describes Gary Becker’s theoretical models of marriage. At the micro level, these are all rational choice models. At the market level, Becker offers two major types of models: partial equilibrium models based on price theory as taught by Marshall and Friedman; and optimal sorting models based on optimal assignment models. This paper examines some of the possible intellectual influences on Becker’s theory of marriage, compares Becker’s research on marriage with that of some scholars interested in intra-marriage distribution, and documents that Becker’s students at Chicago were more interested in Becker’s Friedmanian models of marriage than in his optimal assignment models.

Since its birth in 1944, the World Bank has had a strong focus on development projects. Yet, a project evaluation function was not made operational until the early 1970s. An early attempt to conceptualize project appraisal had been initiated in the 1960s by Albert Hirschman, whose undertaking raised high expectations at the Bank. Yet, Hirschman’s conclusions—published first in internal Bank reports and finally as a book in 1967—disappointed many at the Bank, primarily because they were found impractical. Hirschman attempted to offer the Bank a new Weltanschauung by transforming the Bank’s approach to project design, project management, and project appraisal. Instead, what the Bank expected from Hirschman was not a revolution, but rather an examination of the Bank’s projects and advice on how to make project design and management more measurable, more controllable, and more suitable for replication.

The history of this failed collaboration gives useful insights on the unstable equilibrium between operations and evaluation within the Bank. In addition, it shows that the Bank was active in the development economics debates of the 1960s. These insights should be of interest for those development economists today who reflect on the future of the discipline and emphasize the need for a non-dogmatic approach to the study of development issues. It should also be of interest for the Bank itself, with its renewed attention to the importance of evaluation for effective development policies. The history of the practice of development economics, together with the use of archival material, can bring new perspectives that contribute to a better understanding of the evolution of this discipline.

In the second volume of his Cours, published a hundred years ago, Vilfredo Pareto (1897, section 928) put forward what was probably the first mathematical model of the business cycle. Apart from Knut Wicksell's (1899) review of Pareto's book and Jess Benhabib's (1979) short article (partly based on Wicksell's comments), Pareto's model has gone unnoticed. According to the view advanced by Pareto in the 1890s, concepts from physics are essential, not only in the realm of static equilibrium, but also in the investigation of economic dynamics. The model follows a new presentation by Pareto of his equations of general equilibrium, where he attempted to take into account the influence of “inertia” (habit) by applying d'Alembert's principle of mechanics. He concludes that the solution to the consumption equations has a cyclical pattern and uses that to explain business cycles as oscillations in aggregate production driven by changes in consumption.

Following the publication of The Logic of Collective Action by Mancur Olson in 1965, the notion of free riding gained wide currency in economics. The idea of enjoying the benefits of collective action without incurring the corresponding costs seemed to shed light on a number of major issues in American society at a time when social ills of various kinds prompted policy makers to reconsider the conditions of social cohesion. Gradually, free riding became to be regarded as the standard behavior of people placed in certain circumstances rather than the exception confirming the rule that people pay for what they get.

In this article, after reviewing the various meanings associated with the term free riding (and free rider), I follow the notion from the late 1930s to the early 1970s. I show that though it was used to tackle problems in fields as diverse as finance and labor—the study of which betrays the usual tensions between the free market and government intervention—from the mid-1960s, the notion increasingly conveyed a message about society as a whole. That an economic notion could serve such a purpose is another indication of the permeation of society by economic reasoning.

Adam Smith allegedly offers a model of economic development in both his Lectures on Jurisprudence and the Wealth of Nations—the so-called four stages of development model. The model presents a linear unfolding view of economic development from primitive to advanced stages. But Smith’s own historical examples systematically contradict this model. I thus question whether Adam Smith actually endorses and uses the four stages model of development to illustrate development and suggest that if he does, he does it to discredit it instead. For Smith, history teaches that development is more accidental than fitting deterministic models.

Presidential addresses tend to fall into one of two broad categories. Category I speeches-which I shall refer to as the pastoral style speak to the condition of our sub-discipline. Their central themes typically survey the state of the art offer commentary on promising further directions for fruitful research, and provide arguments useful in justifying our existence to skeptics who doubt the utility of studying the works of dead economists.

Frank Steindl poses a surprising question in the title of his 1997 article, “Was Fisher a Practicing Quantity Theorist?” and reaches the conclusion that, “Clearly, with the decade of the Great Depression, Fisher was no longer a practicing quantity theorist” (Steindl 1997, p. 259). Such a change in Fisher's monetary economics would sharply revise the view of Irving Fisher generally prevailing in the history of monetary economics, which is based primarily on The Purchasing Power of Money (Fisher with Brown 1911). Fisher's photograph (along with photographs of Marshall and Wicksell) appears on the cover of The Golden Age of the Quantity Theory (Laidler 1991). As Mark Blaug (1995, p. 3) put it, “isn't Irving Fisher the quintessential quantity theorist if there ever was one [?]” Perhaps the most striking tribute to Fisher in the quantity theory tradition is from Milton Friedman, who, addressing the American Economic Association on the question “Have Monetary Policies Failed?” and having quoted from Fisher's 1910 exchange with J. L. Laughlin, remarked “And now I must cease quoting from Fisher, with whom I am in full agreement, and proceed instead to plagiarize him—albeit with modifications to bring him down to date” (Friedman 1972, p. 12).

Stephen Stigler's JHET article, “Statisticians and the History of Economics,” rightly suggested that more attention should be given to analyzing the contributions of statisticians in the development of economic theory. It also asked in passing whether E. E. Slutsky should best be regarded as a mathematical statistician oran economist, Stiglerhimself opting forthe former characterization (Stigler 2002, p. 159). This seemingly innocuous question opens up a lively and interesting range of issues, one to which this historian would like to make a small contribution from both a “Russian studies” and a “history of ideas” viewpoint.

In the December 1928 issue of the Economic Journal, Frank Ramsey asked the question “how much of its income should a nation save?” Few of the Cambridge economists of the 1930s were convinced by his highly formalized answer. His contribution sank quickly into oblivion, remaining there for about thirty-five years. In the 1960s, the success of the Hamiltonian formalism and the increasing interest for optimal growth led on the contrary to a quasi “natural” use of Ramsey's former intuitions. These mathematical tools became so widespread that, a few years later, new classical macroeconomics uses a new interpretation of the “à la Ramsey” models, within the setting of representative agent models, in order to bypass the Arrow and Sonnenschein-Mantel-Debreu “impossibility results.” The “à la Ramsey” model is the backbone of modern new classical macroeconomics. It is thus not surprising that these successive moves in macro-economic theory came to foster a slanted interpretation of Ramsey's 1928 article. In this respect, Roger E. A. Farmer's point of view is representative of the retrospective tribute sometimes paid to Ramsey's article:

F. Ramsey was one of the first economists to study how an infinitely lived agent should allocate his resources over time. His work was at the forefront of mathematical economics at the time it was written but his approach has now become a standard part of graduate macroeconomic courses. Many applications of Ramsey's work assume that there is only one agent in the economy and that this representative agent can be thought of as a stand-in for the workings of the market mechanism (Farmer 1993, p. 77).

W. Stanley Jevons's statistical study of periodicity has received much scrutiny (Aldrich 1987), but less attention has been given to his theoretical position on economic fluctuations, a circumstance which T. W. Hutchison justly finds surprising considering that “Jevons maintained that aggregate instability, and the distress it caused, presented profoundly serious problems, and devoted some of his most strenuous economic research to their explanation” (Hutchison 1988, p. 6). This paper takes up the challenge to examine the development of Jevons's thought on economic fluctuations from the early 1860s until his death in 1882.