It is not news that the history of economics is disesteemed by most economists. There have been almost annual discussions at professional meetings about the institutional role of the history of economics. Indeed, a conference in 2001 documented the precarious state of the field in North America, and its even more perilous position in the United Kingdom and the Antipodes (Weintraub 2002b). With the exception of Duke University there are no longer any regularly scheduled graduate courses, let alone programs, in the history of economics at any “top” university in North America (Gayer 2002).

This paper, in a roundabout way, deals with Alfred Marshall's views on method, examining the metaphors, similes, and analogies by which they were expressed; or, conversely, it investigates his use of metaphors as a means to convey methodological reflections. Marshall's biological analogy has aroused much controversy in the past; it is to be hoped that a more comprehensive investigation will allow us to place the metaphors/method relationship in a wider context.

E. E. Slutsky's enduring but enigmatic fame as an economist far outweighs the limited understanding of most interested scholars as to his very productive life and unusually wide range of research interests. To begin to compensate for this deficit a previousJHET article entitled “E.E. Slutsky: Mathematical Statistician, Economist, and Political Economist?” provided some biographical information on Slutsky's life, together with an account of a few of his little-known contributions to political economy (see Barnett, 2004b). In this current article the inception and immediate influence of Slutsky's two most famous papers in economics written in 1915 and 1927 are considered directly, in addition to further discussion of relevant aspects of Slutsky's life and times. The full significance of the content of the two groundbreaking papers will not be discussed in detail, as this has been adequately covered elsewhere (see for example Barnett 2006, Weber 1999, and Klein 1999). Rather, an attempt will be made to provide a historical and intellectual context for Slutsky's two most important contributions in economics, given that the circumstances surrounding their composition are not sufficiently well known among economists in the West.

HES Presidential addresses often attempt to answer a substantive question (or number of related questions) in the history of economic thought. The answers provided are not “answers” in the sense that one finds an answer to a simple numerical problem; rather they are historical narratives, stories, that bring the listener/reader to a new, and hopefully deeper, understanding of a particular author, piece of economic literature, or episode in the history of economic thought.

Richard Cantillon is considered by many to be the first economic theorist. His contributions span such diverse topics as methodology, value and price theory, population, money, international trade, business cycles, the circular-flow model of the economy, and the price-specie-flow mechanism. His only known book, Essai sur la Nature du Commerce en Général (hereafter, the Essai), may represent one of the single largest steps forward in the social sciences. Many attempts have been made to classify Richard Cantillon into a well-defined school of thought and he has been claimed as a forerunner by many schools of economic thought, but for purposes of categorization, he is most often placed with the mercantilists. Cantillon lived and wrote before the Physiocrats. He was involved in John Law's Mississippi Bubble, one of the grandest attempts to actualize the mercantilist dream of increasing the supply of money, and he was involved in the merchant trade and merchant banking business, so it would be natural to consider him a mercantilist writer. Those who have classified him as a mercantilist, however, base their categorization mainly on excerpts from the Essai where Cantillon seems to display sympathy with mercantilist policy objectives in such areas as international trade, monetary policy, and economic development.

Irving Fisher is renowned as the pundit who declared in October 1929 that stock prices appeared to have reached a permanently high plateau and who, having amassed a net worth of ten million dollars in the boom of the 1920s, proceeded to lose eleven million dollars of that fortune in the crash, which, as John Kenneth Galbraith (1977, p. 192) remarked, “was a substantial sum, even for an economics professor.” Along with the Dow-Jones index, Fisher's reputation for understanding financial markets declined relative to that of Roger Babson, the stock forecaster, amateur economist, and founder of Babson College, who presciently predicted the stock market crash of autumn 1929 (and, with less prescience, the stock market crashes of 1926, 1927, and 1928, and the stock market recovery of 1930). An editorial in The Commercial and Financial Chronicle (November 9, 1929) declared of Fisher: “The learned professor is wrong as he usually is when he talks about the stock market” (quoted by Galbraith 1972, p. 151).

Many historians of economic theory have studied how John Maynard Keynes developed his theory from A Tract on Monetary Reform through A Treatise on Money (hereafter the Treatise) to The General Theory of Employment, Interest and Money (hereafter the General Theory or GT). After the pioneering studies by Moggridge (1973) and Patinkin (1976, 1982), there followed Dimand (1988), Amdeo (1989), Clarke (1988, 1998), Meltzer (1988), Moggridge (1992), Skidelsky (1992), Laidler (1999), and others. This is no wonder, for the Keynesian Revolution remains the most singular phenomenon that economic theory and policy have ever seen. Although the objective of our entire project has been to shed new light on this important and interesting phenomenon, examining and analyzing the processes of theory-building and rebuilding which constitute Keynes's intellectual journey (see Hirai 1997–99), the present paper focuses solely on one chapter in the long story of the transition through his three major works. The very fact of addressing the questions, “How did Keynes maintain the theory developed in the Treatise after its publication (October 1930), and for how long?” narrows the period under study to approximately two years which span roughly from October 1930 through October 1932. Our scrutiny will range over the original texts and primary material such as manuscripts, lecture notes, and correspondence produced over this period, and our findings will rest on the meticulous analysis of material of crucial importance for a clear understanding of Keynes's theoretical situation. We will also offer our comments on the earlier efforts insofar as they relate to the period in question.

Thus spake Edwin Cannan, professor of economics at the London School of Economics (LSE) and member of the Council of the Royal Economic Society, publisher of The Economic Journal (EJ). From 1911 to 1945, Keynes was editor of the EJ, arguably the most prestigious journal in British economics. At the time of Cannan's remark in February 1934, when the early drafts of The General Theory of Employment, Interest, and Money were taking shape and Keynes had assumed leadership of a movement to reconceptualize economic theory, he not only had ideas of his own but an uncommonly robust sense of their importance. Although Keynes's conception of the ultimate purpose of economic theory remained true to the Marshallian tradition in which he was trained— forging scientific tools to improve the lot of humankind—his immediate objective was less pacific: the destruction of classical economics (Keynes 1935, p. 36). In his metaphor, classicism was a citadel fortified by an invincible superstructure constructed over generations by economists of great theoretical power and ingenuity, from David Ricardo and John Stuart Mill to Alfred Marshall and his own contemporary, Arthur Cecil Pigou. Because the citadel was vulnerable only in its “fundamental groundwork,” an assault would succeed only by undermining this foundation (Keynes 1973a, p. 533).

The lingering economic problem for economists in the 1920s and 1930s was unemployment. What caused it? More importantly, what could cure it? John Maynard Keynes's work offered new insights regarding both the reasons for, and the cures of, lingering and massive unemployment—what Keynes called “involuntary unemployment.” Keynes's definition of the term evolved as he gradually came to realize the role of the fallacy of composition in explaining why nominal wage rate adjustments might not induce full employment. I argue that it was Richard Kahn's multiplier article, more than anything, which guided Keynes's own understanding of the phenomenon. This paper, then, is a narrative history of how Keynes came to grips with the unprecedented level of unemployment in the 1920s and '30s interpreted through the lens of the Kahnian multiplier.

In The General Theory, John Maynard Keynes lumped together the marginalist and neoclassical economics of the late nineteenth and twentieth centuries and the more narrowly defined “classical” economics of Adam Smith, David Ricardo, J. R. McCulloch, James and John Stuart Mill and other mainstream economists of the late eighteenth and early nineteenth into what he called the “classical theory of employment,” which he reduced to two “fundamental postulates”:

(a) The wage is equal to the marginal product of labour…

(b) The utility of the wage when a given volume of labour is employed is equal to the marginal disutility ofthat amount of employment…(Keynes 1936, p. 5).

In recent years, water utilities have received increasing attention. Issues of ownership and market structure have been the focus of academic research, policy debates and grassroots activism. These recent concerns echo the contentious debate that raged over water supply in nineteenth century London from 1810 to 1902. Nassau W. Senior and John Stuart Mill were major players in the debates, as both theorists and policy makers.

A few years ago, an article by Arnold Heertje and Peter Heemeijer (2002) triggered an articulate and stimulating debate among scholars on the intellectual origins of Paul Samuelson's multiplier-accelerator model (1939a, 1939b). The discussion, which involved the participation of Samuelson himself, centered on whether, and to what extent, Samuelson's 1939 seminal contributions were inspired by Roy Harrod's The Trade Cycle (1936). Heertje and Heemeijer argue that “there is little factual support for Samuelson's suggestion ascribing the model mainly to Alvin Hansen, his mentor in the days of the creation of the model” (Heertje and Heemeijer 2002, p. 207). Instead, they provide convincing evidence indicating that it was Roy Harrod who actually played the major role in developing the ideas leading to the multiplier-accelerator interaction. “Theoretically speaking,” they assert, “it was Harrod who provided the most important contribution to the model. His interesting 1936 work The Trade Cycle contained valuable ideas regarding the combination of the multiplier and accelerator” (p. 217).

Since its publication in 1955, Almarin Phillips' article “The Tableau Économique as a Simple Leontief Model” has inspired an interesting line of interpretation of the arithmetical schemes presented two centuries earlier by François Quesnay. Subsequent attempts to represent the Tableaux économiques in the form of Input-Output transcriptions by Shlomo Maital (1972), Bernhard Korte (1972), Tibor Barna (1975), and Paul Samuelson (1986), among others, have underlined the brilliance of the French doctor's formal conception of the economy as a reproductive system.

Frequent reference is made to the Alonso-Muth model of the urban land and housing markets, and the creation of this model often is considered to be the founding act in the field of urban economics. One purpose of this paper is to examine closely the original writings of these two distinguished authors, William Alonso and Richard Muth, and to show that their contributions to the development of the model were not identical. Both authors focused on the idea that there is a trade-off between access to a central point (for employment) and the price of residential land or housing, but their models were designed to serve somewhat different purposes. A second objective of this paper is to evaluate the proposition that theirs was indeed the founding act in the field by concentrating on the earliest versions of their work on the model, rather than on the enormous literature that followed. See Masahisa Fujita (1989) for a comprehensive treatment of the subsequent theoretical literature that was stimulated by Alonso and Muth.

Since Moses Abramovitz's “classic” paper on “Catching-Up, Forging Ahead, and Falling Behind” (1986) economists have become increasingly aware again of the significance of “social capability” for processes of economic change. During the past twenty years much research has been done on “soft” determinants of development and growth. Especially some of the so-called new institutionalists and evolutionary economists have now returned to the roots of the institutional research program by acknowledging that “ideas matter” in the process of institutional change. However, it is still often overlooked in the literature that the cognition of social reality is deeply intertwined with the general world-view prevailing in a given society. Certainly, such general world-views are partly determined by the level of economic and technological development, but they are also a reflection of deeply rooted cultural traditions. In particular, the highly divergent outcomes of economic and political transition in the formerly socialist countries of Central and Eastern Europe have brought the connection between culture, ideas, and institutions to the fore again (see, for example, Winiecki 2004). Therefore it is all but an accident that it is one of the leading transition experts who has recently called on economists to “seek a better understanding of the role of values and norms in shaping both ideas and institutions” (Roland 2004, p. 128).

The association of the equilibrium real rate of interest with the marginal product of capital is a staple of modern mainstream economics. Indeed, when graduate students are asked to find a typical model's equilibrium values of the real wage and interest rate, there is apparently nothing more natural than calculating the derivative of the production function with respect to labor and capital, respectively. This seems to make perfect economic sense, because under competitive conditions, the laborer gets paid the marginal product of his labor, while the capitalist gets paid the marginal product of his capital. Students can even derive the “factor-price frontier” (developed in, for example, Samuelson 1953) to show the inverse relationship between real wages and the real rate of interest, where the “factors” are, of course, labor and capital.

The history of economic thought remembers António Horta Osório for Schumpeter's reference to him in the History of Economic Analysis, in the context of a general appraisal of available works using mathematical instruments and language. This, however, does not do him justice, as he should also be praised for his pioneering interpretation of Pareto's general equilibrium. According to Stigler (1965), the definitive substitution of the cardinal utility hypothesis for the ordinal utility perspective was achieved by Johnson (1913) and Slutsky (1915). Weber (2001) discusses how far Pareto used cardinality, elects Slutsky (1915) as a pioneer of demand theory and prefers to reserve to R. G. Allen (1932–34), L. R. Klein and H. Rubin (1947–48), Samuelson (1947–48), R. C. Geary (1950–51), and Richard Stone (1954) the role of establishing ordinal utility in studying the utility function. This paper shows that Osório (1911) considered the subject of ordinalism before Johnson and Slutsky addressed the issue, as he had rejected the possibility of measuring utility and clearly stated that general equilibrium is not affected if cardinality is replaced by the ordinal conception for utility, according to Pareto's last formulation. Upon reading his book it becomes clear that not only was he perfectly aware of Edgeworth's contribution on the utility indifference curves, but also of Pareto's attempts to preserve general equilibrium from Fisher's criticism against cardinalism. Historians of economic thought have forgotten one of the early twentieth-century neoclassical economists. In this way the History of Economics has neglected an interesting proof of the consolidation of the Paretian ideas on ordinality, an issue that was an exciting and uncharted territory at that moment.

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).

Vishnugupta Chanakya Kautilya wrote a treatise called The Arthashastra, which means “science of wealth.” It contains three parts, which deal with issues related to economic development, administration of justice, and foreign relations. It has 150 chapters, which are distributed into fifteen books. Book three, which has twenty chapters and book four, which has thirteen chapters, are devoted to the administration of justice. Kautilya's Judicial System called “Dandaniti,” “the science of law enforcement” is an important part of The Arthashastra. Kautilya codified, modified, and created new laws related to: loans, deposits, pledges, mortgages etc., sale and purchase of property, inheritance and partition of ancestral property, labor contracts, partnership, defamation and assault, theft and violent robbery, and sexual offenses. He dealt with law and justice issues relating to both the civil law and the criminal law. He offered a truly comprehensive system of justice, which not only incorporated all the salient elements of a twenty-first century system but also contained a few additional invaluable insights.

James Maitland, Lord Lauderdale published his An Inquiry into the Nature and Origin of Public Wealth and into the Means and Causes of its Increase (1804) only twentyeight years after the publication of the “Inquiry”: An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith. A comparison of the titles strongly suggests some relationship, and indeed even glancing through the first few pages of Lauderdale's book confirms this conjecture. The book takes off as a critique of Smith's, and by-and-large remains so till the end. Many of the elements of his criticism can be seen in the difference in the wording of the titles of the two books. Except for “Nations” all the significant words in Smith's title are included in Lauderdale's, but he adds three more: “Origin,” “Means” and “Public” (which is not a substitute for the omitted “Nation”). As we shall see, in his view, ignoring these led to major deficiencies in Smith's work, and Lauderdale set out to point them out, and if possible, to correct them.