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A Companion To The History Of Economic Thought, http://www.nd-warez.info/ http://www.directtextbook.com/prices/9781405134590 http://www.nd-warez.info/ A COMPANION TO THE HISTORY OF ECONOMIC THOUGHT Blackwell Companions to Contemporary Economics The Blackwell Companions to Contemporary Economics are reference volumes accessible to serious students and yet also containing up-to-date material from recognized experts in their particular ﬁelds. These volumes focus on basic bread-and-butter issues in economics as well as popular contemporary topics often not covered in textbooks. Coverage avoids the overly technical, is concise, clear, and comprehensive. Each Companion features an introductory essay by the editor, extensive bibliographical reference sections, and an index. 1 A Companion to Theoretical Econometrics edited by Badi H. Baltagi 2 A Companion to Economic Forecasting edited by Michael P. Clements and David F. Hendry 3 A Companion to the History of Economic Thought edited by Warren J. Samuels, Jeff E. Biddle, and John B. Davis A Companion to the History of Economic Thought http://www.nd-warez.info/ Edited by WARREN J. SAMUELS, Michigan State University Marquette University, Wisconsin © 2003 by Blackwell Publishing Ltd except for editorial material and organization © 2003 by Warren J. Samuels, Jeff E. Biddle, and John B. Davis 350 Main Street, Malden, MA 02148-5018, USA 108 Cowley Road, Oxford OX4 1JF, UK 550 Swanston Street, Carlton South, Melbourne, Victoria 3053, Australia Kurfürstendamm 57, 10707 Berlin, Germany The right of Warren J. Samuels, Jeff E. Biddle, and John B. Davis to be identiﬁed as the Authors of the Editorial Material in this Work has been asserted in accordance with the UK Copyright, Designs, and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs, and Patents Act 1988, without the prior permission of the publisher. First published 2003 by Blackwell Publishing Ltd Library of Congress Cataloging-in-Publicoation Data Samuels, Warren J., 1933– A companion to the history of economic thought / edited by Warren J. Samuels, Jeff E. Biddle and John B. Davis. p. cm. Includes bibliographical references and index. ISBN 0-631-22573-0 (hbk : alk. paper) 1. Economics–History. 2. Economics–Historiograpvhy. I. Biddle, Jeff. II. Davis, John Bryan. III. Title. HB75 .S29 2003 330.1–dc21 2002151895 A catalogue record for this title is available from the British Library. Set in 10/12pt Book Antique by Graphicraft Limited, Hong Kong Printed and bound in the United Kingdom by TJ International, Padstow, Cornwall For further information on Blackwell Publishing, visit our website: http://www.blackwellpublishivng.com Contents List of Figures ix List of Tables x List of Contributors xi Preface xv 1 Research Styles in the History of Economic Thought 1 Jeff E. Biddle PART I HISTORICAL SURVEYS 2 Ancient and Medieval Economics 11 S. Todd Lowry 3 Contributions of Medieval Muslim Scholars to the History of Economics and their Impact: A Refutation of the Schumpeterian Great Gap 28 Hamid S. Hosseini 4 Mercantilism 46 Lars G. Magnusson 5 Physiocracy and French Pre-Classical Political Economy 61 Philippe Steiner 6 Pre-Classical Economics in Britain 78 Anthony Brewer 7 Adam Smith (1723–1790): Theories of Political Economy 94 Andrew S. Skinner 8 Classical Economics 112 Denis P. O’Brien 9 Post-Ricardian British Economics, 1830 –1870 130 Sandra J. Peart and David M. Levy 10 Karl Marx: His Work and the Major Changes in its Interpretation 148 Geert Reuten 11 The Surplus Interpretation of the Classical Economists 167 Heinz D. Kurz 12 Non-Marxian Socialism 184 J. E. King 13 Utopian Economics 201 Warren J. Samuels 14 Historical Schools of Economics: German and English 215 Keith Tribe 15 American Economics to 1900 231 William J. Barber 16 English Marginalism: Jevons, Marshall, and Pigou 246 Peter Groenewegen 17 The Austrian Marginalists: Menger, B öhm-Bawerk, and Wieser 262 Steven Horwitz 18 Early General Equilibrium Economics: Walras, Pareto, and Cassel 278 Donald A. Walker 19 The “First” Imperfect Competition Revolution 294 Maria Cristina Marcuzzo 20 The Stabilization of Price Theory, 1920 –1955 308 Roger E. Backhouse 21 Interwar Monetary and Business Cycle Theory: Macroeconomics before Keynes 325 Robert W. Dimand 22 Keynes and the Cambridge School 343 G. C. Harcourt and Prue Kerr 23 American Institutional Economics in the Interwar Period 360 Malcolm Rutherford 24 Postwar Neoclassical Microeconomics 377 S. Abu Turab Rizvi 25 The Formalist Revolution of the 1950s 395 Mark Blaug 26 A History of Postwar Monetary Economics and Macroeconomics 411 Kevin D. Hoover 27 The Economic Role of Government in the History of Economic Thought 428 Steven G. Medema 28 Postwar Heterodox Economics 445 A The Austrian School of Economics: 1950–2000 445 Peter J. Boettke and Peter T. Leeson B Feminist Economics 454 Janet A. Seiz C Institutional Economics 462 Geoffrey M. Hodgson D Post Keynesian Economics 471 Sheila C. Dow E Radical Political Economy 479 Bruce Pietrykowski PART II HISTORIOGRAPHY 29 Historiography 491 Matthias Klaes 30 The Sociology of Economics and Scienti ﬁc Knowledge, and the History of Economic Thought 507 A. W. Bob Coats 31 Exegesis, Hermeneutics, and Interpretation 523 Ross B. Emmett 32 Textuality and the History of Economics: Intention and Meaning 538 Vivienne Brown 33 Mathematical Modeling as an Exegetical Tool: Rational Reconstruction 553 A. M. C. Waterman 34 Economic Methodology since Kuhn 571 John B. Davis 35 Biography and the History of Economics 588 D. E. Moggridge 36 Economics and Economists in the Policy Process 606 Craufurd D. W. Goodwin 37 The International Diffusion of Economic Thought 622 José Luís Cardoso 38 The History of Ideas and Economics 634 Mark Perlman 39 Research in the History of Economic Thought as a Vehicle for the Defense and Criticism of Orthodox Economics 655 John Lodewijks Name Index 669 Subject Index 688 http://www.nd-warez.info/ List of Figures 31.1 Stigler’s hermeneutic approach 525 33.1 The relations among mathematical modeling (MM), rational reconstruction (RR), intellectual history (IH), and the history of economic thought (HET) 559 List of Tables 5.1 Ten-yearly movements in economic publications, 1700–1789 62 5.2 Economic government: autarky and free trade compared 65 5.3 Two economic tables: the zig-zag (1758–9) and the formula (1765)68 10.1 “Many Marxes”: dates of publication of some major works 150 10.2 The systematic of Capital 158 38.1 Selected schools of economic thought: issues, methods, foci, authority-statements, rand systems 650 List of Contributors Roger E. Backhouse is Professor of theh HistoryandPhilosophyofEconomics at the University of Birmingham, England. He specializes in the history of economics and economic methodology. William J. Barber is Andrews Professor of Economics, Emeritus, at the Wesleyan University, Connecticut. He specializes in the history of American economics. Jeff E. Biddle is Professor of Economics at Michigan State University. He special- izes in the history of economic thought, labor economics, and econometrics. Mark Blaug is Visiting Professor of Economics at the University of Amsterdam and Erasmus University, Rotterdam, The Netherlands. He specializes in meth- odology and the history of economic thought. Peter J. Boettke is Deputy Director, The James M. Buchanan Center for Political Economy, and Associate Professor of Economics at George Mason University, Virginia. He specialihzes in comparative pohlitical economy, markeht process theory, the history of economic thought, and methodology. Anthony Brewer is Professor of the History of Economics at the University of Bristol, England. He specializes in the history of economics. Vivienne Brown is Senior Lecturer in the Faculty of Social Sciences at The Open University, England.h She specializes in inhtellectual history, inhcluding the history of economics. José Luís Cardoso is Professor of Echonomics at the Technicahl University of Lisbohn, Portugal. He specializes in the history of economic thought, economic history, and economic methodology. A. W. Bob Coats is Emeritus Professor of Economic and Social History at the University of Nottingham, England. He specializes in the methodology and history of economic thought. John B. Davis is Professor of Economics at Marquette University, Wisconsin. He specializes in the history of economic thought and methodology. Robert W. Dimand is Professor of Economics at Brock University, St. Catharines, Ontario, Canada. He specializes in macroeconomics and the history of eco- nomic thought. Sheila C. Dow is Professor of Economics at the University of Stirling, Scotland. She specializes in the methodology and history of economic thought, monetary theory, and regional ﬁnance. Ross B. Emmett is John P. Tandberg Chair and Associate Professor of Economics at Augustana University College, Camrose, Alberta, Canada. He specializes in twentieth-century history of economic thought, Chicago economics, and Frank H. Knight. Craufurd D. W. Goodwin is James B. Duke Professor of Economics, Duke Univer- sity, North Carolina. He specializes in the history of economic thought and international education. Peter Groenewegen is Professor of Economics, University of Sydney. He spe- cializes in the history of economic thought. G. C. Harcourt is Emeritus Reader in the History of Economic Theory, Univer- sity of Cambridge (1998); Emeritus Fellow, Jesus College, Cambridge (1998); and Professor Emeritus, University of Adelaide (1988). He specializes in post-Keynesian theory applications and policy, intellectual biography, and the history of economic theory. Geoffrey M. Hodgson is Research Professor, The Business School, University of Hertfordshire, England. He specializes in institutional economics, evolutionary economics, methodology of economics, history of economic thought, and busi- ness economics. Kevin D. Hoover is Professor of Economics at the University of California at Davis. He specializes in monetary and macroeconomics, economic methodo- logy, and the history of economic thought. Steven Horwitz is Professor of Economics at St. Lawrence University, Canton, New York. He specializes in monetary theory and macroeconomics. Hamid S. Hosseini is John Davis Distinguished Professor of Economics, King’s College, Pennsylvania. He specializes in economic development, international economics, the history of economic analysis, and Islamic economics. Prue Kerr is Fellow, Centro Richherche Studi e Documentahzione Piero Sraffa, Rohme. She specializes in the history of economic thought, classical political economy, and post-Keynesian economics. J. E. King is Professor of Economics at La Trobe University, Victoria, Australia. He specializes in the history of economic thought, with special reference to heterodox schools of thought, Marxian political economy, and post-Keynesian economics. Matthias Klaes is Lecturer at the University of Stirling, Scotland. He specializes in economic methodology,h historiography, econhomy of knowledge and hsocial epis- temology, and transaction cost theory. Heinz D. Kurz is Full Professor of Economics at the University of Graz, Austria. He specializes in economic theory (production, income distribution, technical change, growth) and the history of economic thought (classical political eco- nomy, marginalist economics, German–Austrian school). Peter T. Leeson is a graduate student in the Department of Economics at George Mason University, Virginia. He is specializing in Austrian economics and methodology. David M. Levy is Professor of Economics at George Mason University, Virginia. He specializes in metaeconomics, the history of economics, statistical ethics, robust regression, and economics and language. John Lodewijks is Associate Professor of Economics at the University of New South Wales, Australia. He specializes in the history and methodology of mod- ern economics. S. Todd Lowry is Professor of Economics Emeritus at Washington and Lee Uni- versity, Virginia. He specializes in the history of economic thought, law and economics, and environmental studies. Lars G. Magnussonis Professor of Echonomic History at Uphpsala University, Sweden. He specializes in the hhistory of economic hthought and general ecohnomic history. Maria Cristina Marcuzzo is Professor of the History of Economic Thought at the Università degli Studi di Roma “La Sapienza,” Rome, Italy. She specializes in classical monetary theory and the Cambridge school of economics. Steven G. Medema is Professor of Economics at the University of Colorado at Denver. He specializes in the history of economic thought, law and economics, and public economics. D. E. Moggridgeis Professor of Echonomics at the Univerhsity of Toronto, Canadha. He specializes in twentieth-century economic thought and international economic history. Denis P. O’Brien is Professor of Echonomics, Emeritus, hat the University of Durham, England. He specializes in the history of economic thought, industrial eco- nomics, and international economics. Sandra J. Peart is Professor of Economics at Baldwin-Wallace College, Ohio. She specializes in nineteenth-century history of economic thought. Mark Perlman is University Profehssor of Economics h(Emeritus) at the Univerhsity of Pittsburgh, Pennsylvania. He specializes in the history of economic thought and demographic economics. Bruce Pietrykowski is Associate Professor of Economics at the University of Michigan–Dearborn. His research specializes in labor economics, the methodo- logy and history of economic thought, and economic geography. Geert Reuten is Associate Professor in the history and methodology of economics at the University of Amsterdam, The Netherlands. He specializes in the history and methodology of Marx’s and Marxian theory, and dialectical research methods. S. Abu Turab Rizviis Associate Profeshsor of Economics ath the University of Vermont. He specializes in microeconomic theory and the history of economic thought. Malcolm Rutherfordis Professor of Echonomics at the Univerhsity of Victoria, Canadha. He specializes in the history of economics, institutional economics, and the history of American economics. Warren J. Samuels is Professor Emeritus of Economics at Michigan State Univer- sity. He specializes in the history of economic thought, methodology, and the economic role of government. Janet A. Seiz is Associate Professor of Economics at Grinnell College, Iowa. She specializes in the history of economic thought, methodology, and feminist economics. Andrew S. Skinner is Adam Smith Professor of Economics Emeritus at the Uni- versity of Glasgow, Scotland. He specializes in eighteenth-century economic thought. Philippe Steiner is Professor of Sociology at the Université de Lille 3, France. He specializes in the history of economic thought and economic sociology. Keith Tribe is presently an unafﬁliated scholar. He specializes in the history of European economics, 1600–1950; Max Weber and German economics; and the formation of economics as a university discipline. Donald A. Walker is University Professor and Professor of Economics, Emeritus, at the Indiana University of Pennsylvania. He specializes in microeconomic theory and history. A. M. C. Waterman is Professor of Economics at the University of Manitoba, Canada. He specializes in the history of economic thought, eighteenth- and early nineteenth-century economic thought, Malthus, political economy, and Christian theology. Preface The purpose of this Companion is threefold: to introduce the history of economic thought, the interpfretive problems facinfg historians of economifc thought, and the work of historians of economic thought to interested and competent nonspeci- alists, including other economists, graduate students, advanced undergraduate students, and lay pefople (including nonecfonomists), as well as sfpecialists seeking a review of a topic. The design strategy for this Companion is simple and straightforward. The chapters comprising part I are historical surveys of major topics in the history of economic thought. Their purpose is to report on the present state of understand- ing and interpretation of those topics. That there is a history of understanding and interpretation for each topic is an important point, one that leads to several of the topics of part II. These topics reﬂect a situation – much more evident in the work of historians of economics since, roughly, the early 1960s – in which it is recognized that the history of economic thought is laden with interpretation and is not, in important matters, self-evident. That history is socially constructed, embodying interpretive strategies that are either explicit or implicit in how his- torians of economic thought pursue their work. The result is that we have the history of economicthought(thehistoryofideas),thehistoryofeconomicsas a dis- cipline (the sociology fof economics and econofmists), and the histofry of the history of economic thought. Something of the latter two is presented in the chapters comprising the second part. All of the foregoing is preceded by an introduction to the variety of research styles of historians of economic thought (originally prepared as a regular essay). Wm. Roger Louis writes that “historiography is, in a sense, the art of explaining why historians wrote as they did,” that “[i]n still another sense, historiography is the art of depicting historical controversy,” and that [h]istoriography may also be regarded as the way certain historians have left a mark on the subject” (Louis, 1999, pp. vii–ix). These considerations surely apply to the present Companion. [Different research styles of historians of economic thought aref presented and intefrpreted in Samuels (f1983) and in Medema and Samuels (2001).] All individual essays are, not surprisingly, in light of the themes of the chap- ters of part II, a product of the negotiations among the co-editors and between them and prospectivef contributors. The cfontributors were chosfen because of their mastery of the materials on which they were invited to write, and their relative willingness to transcend their own perspectives in order to prepare texts that the editors felt would provide meaningful starting points for scholars. So long as their individual chapters served such purpose, the individual authors were given complete discretion, subject to the suggestions of the co-editors and to the man- datory limits of 8,000 words for all essays other than the group comprising Post- war Heterodox Economics, each of which has a limit of 4,000 words (reference lists included in both groups). No single model was imposed on the authors, although the genre itself conveys some elements of design, and no attempt was made to enforce the editors’ own views – although such inevitably entered the design of the volume.f Accordingly, some degfree of idiosyncracy wfill be found, as well as differences of interpretation. One feature of the collection is the attempt to include aspects of the period fol- lowing World War II. Indeed, a substantial interpretive literature already exists. We envision, in the not too distant future, a Companion dealing more or less exclusively with that period. Yet, as several chapters in this collection reveal, we are only now achieving meaningful insight into the interwar period. And surely, by the time a sequel is contemplated, new interpretations of the entire history of economic thought and new research strategies will have arisen. One consideration shoulfd be understood, thaft of multiplicity. Cleafrly, not all his- torians of economic thought agree with and practice their discipline in the light of all the positions surveyed in the historiographic chapters of part II. Similarly, not all historians of economic thought agree with the particular interpretations necessarily expressed in the chapters of part I. Historians of economic thought and of economics are much more diverse in their modes of work at the start of the twenty-ﬁrst century than their counterparts were at either the beginning of the twentieth century or during the early postwar period. The reader should treat these chapters as suggestive, not complete; general, not fully nuanced; and so on. Every topic is much more complex once you get into it. One chapter can do only so much. Each is best treated by the reader as a series of pointers and not a treatise. As deﬁnitive as one would prefer the chap- ters to be, they are best seen as sophisticated introductions – as companions to, not substitutes for, serious further intellectual effort. We are appreciative of the hard work and cooperative spirit of the contributors to this Companion and of the staff of Blackwell Publishing. W ARREN J. AMUELS , EFF E. BIDDLE Michigan State University JOHN B. DAVIS Marquette University, Wisconsin References Louis, W. R. 1999: Foreword. In R. Winks (ed.), Historiography, vol. V, The Oxford History of the British Empire. New York: Oxford University Press, vii–vi. Medema, S. G. and Samfuels, W. J. (eds.) 2001:Hf istorians of Economiccs and Economic Thoughtc: The Construction of Disciplinary Memory. New York: Routledge. Samuels, W. J. (ed.) 1983: Research in the History of Economic Thought and Methodology, vol. 1, The Craft of the Historian of Economic Thought. Greenwich, CN: JAI Press. This page intentionally left blank CHAPTER ONE Research Styles in the History of Economic Thought Jeff E. Biddle What is the history of economic thought? One could answer, paraphrasing Jacob Viner’s answer to the question “What is economics?,” that the history of thought is “what historians of economic thought do.” One purpose of this Companion is to acquaint those unfamiliar with the ﬁeld with what historians of economic thought do. The ﬁrst part of the Companion does this by surveying the body of knowledge that has been built up by historians of economic thought. It consists of a series of individual essays that partition that body of knowledge along several lines, such as time period, school of thought, and nation of origin. Other ways of dividing the ﬁeld could have been chosen, but the one employed here is broadly consistent with the way in which the ﬁeld is currently comprehended by practitioners. In most of the chapters of this ﬁrst part, readers will ﬁnd evidence that the his- tory of economic thoughrt as a body of knowledrge is not settled; thrat although there are many areas of consensus, the ﬁeld is also home to numerous controversies and open questions. This is perhaps even more apparent when one compares essays that overlap irn terms of coverage. Differrent authors may have rsurprisingly different ideas about the central themes or the most signiﬁcant ideas of a par- ticular school, national tradition, or time period. A comparison of the several contributions dealing with aspects of or contributors to classical economics will amply illustrate this point. The second part of the Companion, with which this introduction is mainly concerned, explores more explicitly the question of “what historians of thought do” with a group of essays designed to offer readers an introduction to the varieties of research styles employed by historians of economic thought. These essays make it clear that there is, in fact, a fair amount of methodological diver- sity to be found in the ﬁeld of the history of economic thought, a diversity that is in no small part responsible for the unsettled nature of the ﬁeld referred to above. [Samuels (1983) and Medema and Samuels (2001) reveal in more detail the variety of approaches employed by historians of economic thought, through examinations of the work of notable practitioners.] Those who have contributed to writing the history of economic thought over the decades have been motivated by a variety of questions and purposes, and have used a variety of research strategies and source materials. This variety stems in part from the fact that historians of economic thought have had differ- ent interests and thus different ideas about what types of historical phenomena are most intriguing. But it also results from the fact that they have explicitly or implicitly adoptedr different answers to rfundamental historiogrraphic questions, questions about the purposes for which history is written and about the best methods for accomplishing those purposes. A number of the chapters of part II, in particular those of Matthias Klaes and Anthony Waterman, deal with the basic historiographic issuers that have generated rand are revealed by thre many research styles found in the literature of the history of economic thought. Research in the history of economics has for the most part been research in intellectual history; that is, an attempt to understand the ideas of past thinkers and how and why those ideas have developed and changed through time. In particular, research in the history of economics has been concerned with discov- ering what people in the past have believed about phenomena that either they or the researcher regard as economic activity, and why they have believed it. Notwithstanding the above-mentioned diversity of research approaches that can be observed among the srcholars engaged in thris task of discovery, hrowever, there has traditionally been one task that has dominated the work in the ﬁeld: that of developing a more complete and more correct understanding of the theoret- ical creations of those whom history has identiﬁed as great and/or inﬂuential economists. So, a central question that has motivated most research efforts in the history of economic thought has rbeen of the form “Whatr was Adam Smith’s (orr Karl Marx’s, or John Maynard Keynes’rs) theory ofX?” And by far the mosrt commonly adopted approach to answering questions of this type has been to examine the published works of the economist in question. This means that most research in the history of economic thought has involved textual exegesis or interpretation; that in a sense the work of most historians of economic thought has been similar to the work of theologians seeking the true interpretations of scriptural writings, or legal scholars and judges seeking the true intent of legislators. And while it may be argued that the material with which the historians of economics work is of less signiﬁcance, the intellectual problems that they face in the task of interpreta- tion are much the same. As is clear from a number of the contributions to the ﬁrst part of this Companion, many of the debates in the ﬁeld arise from differences over the correct interpretation of a particular text or texts and, by implication, the exegetical or interpretive guidelines that one should follow in interpreting texts. The essays of Ross Emmett and Vivienne Brown deal with some of the basic (and rather perplexing) issues that face the historian of economic thought in the pro- cess of textual exegesisr. Waterman’s essay alrso discusses the usesr of and problems associated with a form of interpretation that emerged as important in the second half of the last century, that of translating theories presented in literary form into mathematical models. The search for clues and insights into what an economist really believed, or for the correct interpretation of his or her theories, will sometimes take the historian of economic thought beyond the published works of his or her subjects. Archival material, such as letters or unpublished manuscripts and lectures, has been used to clarify vague statements or sketchy concepts found in the published works of economists, or to offer evidence that resolves apparent contradictions in those works. Recent decades have seen a signiﬁcant increase the use of archival mater- ial by historians ofr economics, as well ars greater efforts by thre research community to assemble and to make such material more accessible to scholars. With the increasing use of archival material has come controversy over the weights to be assigned in the interpretive task to evidence from unpublished versus published writings. A related argument concerns the relative value of more broadly bio- graphical evidence, material that may not explicate or even mention economic theories and ideas, but sheds light on other aspects of the economist’s life, such as upbringing, social interactions, hobbies, or political views. Does such material also help to contribute to understanding the ideas of a past economist, or to explaining the theoretical choices made by that economist? The various views on this matter and the roles played by biography in understanding the history of economic thought are explored in Don Moggridge’s essay. Historians often seek a deeper understanding of an economist’s ideas by searching for possible intellectual inﬂuences on the thought of the subject, perhaps by reading books that the subject read or might have read, or familiariz- ing him- or herself with the philosophical systems and political ideologies that dominated intelrlectual discourse durirng the subject’s life.r Such research may, for example, reveal parallels between the subject’s conceptual framework or theoretical assumptions and some contemporary philosophical system. The argument that a particular interpretation of an ambiguous passage would rep- resent a similar parallel can then be offered as evidence for that interpretation. Or, if interpretive differences arise because a key assumption was left unstated or unclear in the published work, an understanding of the preconceptions or ideological beliefs thrat prevailed in the srubject’s social or intrellectual circles mighrt provide the foundation for reasonable conjectures about what the subject was assuming. Although explications and interpretations of the work of those that current opinion regards as great economists dominate the literature of the history of economic thought, the ideas of others have also received attention. One ﬁnds studies of “neglected” economists, for example, those whose ideas the researcher does not feel have achieved the attention they deserved. Sometimes the ideas of people whom history has not identiﬁed as economists, but remembers for some other reason – political ﬁgures, philosophers, scientists, novelists, and so on – have been the object of research. Instead of the conventional question “What did Y really think about X?” a scholar may ask “What did the general public (or the typical businessman, or inﬂuential policy-makers) think that Y was saying about X?” Such information is of interest for its own sake, and because it may provide an understanding of rthe impact of the econromic thought of a parrticular author on the public discourse and perhaps on public policy. Of course, whether the object of research is the Wealth of Nations or a little known work by an American legal scholar, the difﬁculties of determining the author’s intended meaning, and the many alternative approaches to overcoming these difﬁculties, remain. It is also worth noting that the concept of “the author’s intended meaning” is not an unproblematic one – some historians of thought have argued that the true meaning intended by a writer either does not exist or cannot be deﬁnitively established; others that the author’s intended meaning, even if it could be estrablished, is of no grreater signiﬁcance thanr what the researcher or anyone else thinks rthe author meant. Suchr assertions do not gor uncontested, of course, and the arguments to which they give rise make for thought-provoking reading. Brown’s essay provides an introduction to this area of controversy. It is not uncommon that an article in a journal devoted to the history of eco- nomic thought will have as its sole purpose a careful and well documented explication of some aspect of a past economist’s ideas, but often such exegetical work is a means to a larger purpose. It may be a prelude to the identiﬁcation of the economist or one of his or her theories with some larger movement in economics – a certain school of economic thought, for example, or a particular approach to economic theorizing that has persisted through time. Historians of economic thought also rattempt to reveal the rlinks between economic rtheories and aspects of the world of ideas beyond economic thought, including philosophical movements, theological traditions, political ideologies, and developments in the natural sciences. Such links have been found to run both ways, as economists’ ideas and theories have both reﬂected and inﬂuenced the ideas of those writing in other ﬁelds. Historians of economic thought frequently give accounts of the theories of past economists or the general approaches of schools of economic thought in order to evaluate them. The goal may be to critique the work of past economists (and perhaps, by implication, the work of later economists who have built upon it) or to show the superiority of past theories or approaches to some modern alternat- ive, be it heterodox or orthodox. Related to this type of work is that which seeks to provide an historical pedigree for a novel theory of, or approach to explaining, some phenomenon. In the process of recounting the ideas of the past the author may attempt, as it rwere, to portray him- orr herself, or some admirred colleague, as one who is working within an established and respected intellectual tradition. The general value of history written for such purposes is a matter of disagree- ment among historians of economic thought, but be that as it may, a great deal of it has been written. rJohn Lodewijks’s contribrution discusses the rgeneral approach and some of the literature that has resulted from applying it. The history of economic thought is concerned not only with what people believed in the past, but why they believed it; not just how beliefs changed over time, but also why the changes occurred. These “why” questions are both fascinating and difﬁcult, and proposed answers have been yet another source of controversy in the ﬁeld. For example, a researcher’s attempt to place economic theories and ideas in the context of the philosophical, theological, or ideological systems of their day may be, as mentioned above, an exegetical strategy, but it may also be part of arn effort to explain whyr an economist made parrticular theoret- ical or methodological choices in attempting to explain economic phenomena, and why the intended audiences either believed or did not believe the explana- tions that the economist offered. The justiﬁcation for this is that what people (i.e., both economists and their audiences) consider plausible is a function of their economic or class interests, the ethical or philosophical systems they learned in their youths, and so on. Marx’s notion of the intellectual superstructure of a society being derivative of its economic base and system of class relations is one inﬂuential version of this argument; another version of this argument underlies Mark Perlman’s essay and its attention to the role of a few key authority-systems in shaping the development of economic thought. A third rationale for studying the times in which an economist lived is associated most notably with Wesley Mitchell, who argued that the economic theories proposed and accepted at a particular time are best understood as responses to what are seen at the time as the most pressing political and economic problems (Mitchell, 1967, ch. 1). Such arguments about what causes people to propose or believe a particular explana- tion of economic activity at a moment in time can also be applied to explaining changes over time in economic theories, in the fortunes of particular schools of or approaches to economic thought, and so on; that is, they are held to be due to changes over time in philosophical fashion, ideology, religious beliefs, or events in political and economic history. These sorts of arguments do not go unchallenged. An alternative view is that economists’ choices of rtheoretical problems tro solve and methods of rsolving them have, at least for the past 200 years, been driven mainly by a desire to improve or expand the theoretical corpus created by their predecessors and contemporaries with respect to such things as descriptive accuracy, logical coherence, or range of applicability. As it has sometimes been expressed, theoretical choices of eco- nomists are best explained by factors internal to the activity of economic thought. Similarly, the main factors that govern whether a theory comes to be widely believed (at least within the community of economists and among the more thoughtful members of their audiences) are things such as the logical coherence and generality of a theory, and the extent to which, in one sense or another, it ﬁts the facts (which are held to be perceived in an objective fashion). Theories that perform better in these respects eventually drive out inferior theories. Factors “external” to the realm of economic thought – such as current events, political ideologies, or class irnterests – play only ra minor role in determrining changes over time in orthodox economic thought. A careful analysis of the debate concerning the relative importance of internal versus external factors in governing what economic theories people believe can be found in Klaes’s essay, but it is clear that a historian’s own opinion as to which factors are more important will inﬂuence the historical questions that he or she chooses to explore, and the sources and methods that he or she uses in exploring them. During the 1960s and 1970s, historians of economic thought become more aware of the work of historians and philosophers of science in trying to explain why scientiﬁc theories changed over time and how the scientiﬁc community chose between competingr theories of the same rphenomena, along witrh the associ- ated normative questions of how scientists should seek to improve their theories and what criteria should be used to choose between competing theories. This work teemed with ideasr, arguments, and conrceptual frameworks thatr could argu- ably be applied in attempts to explain and evaluate the historical development of economic theory, and such attempts were made in a number of inﬂuential studies. References to Thomas Kuhn, Karl Popper, and Imre Lakatos, and atten- tion to developments in the literature of the history and philosophy of science, have since become standard features of the literature on the history of economic thought. A number of the part II essays, in particular that of John Davis, discuss details of this phenomenon. As noted earlier in this introduction, the majority of published research in the history of economic thought is devoted to explicating the theories and ideas of famous economists, mainly through careful readings of their published works. Furthermore, discussions of the impact or inﬂuence of the theories and ideas of famous economists have largely been limited to their impact on other famous economists. It has been suggested from time to time, and with more or less forcefulness, that such activity might have reached the point of diminishing re- turns, or at the very least that the understanding of the history of economics provided by this traditional research approach could be enriched considerably through the application of alternative research strategies. These sorts of sug- gestion have not gone unheeded, and several of the part II essays describe and survey the results of alternative approaches. Whereas the modal research approach in the history of economics has implicitly begun with the concept of economic theories being produced by individual economists armed only with books and intellect, these alternative approaches begin with other pictures of the process through which knowledge is produced, and/or attempt to follow more carefully the processes through which this knowledge is transferred within and beyond the community of economists. Just as the basic concepts of and ongoing developments in the history and philosophy of science have become part of the working knowledge of many historians of economic thought, so too have many of the fundamental ideas and methods employed by sociologists of scientiﬁc knowledge. Those attracted to the research approaches of the sociology of knowledge have argued that it is fruitful to conceptualize economic knowledge as something that is produced in a group setting, through cooperative activity structured by social institutions. So, for example, in trying to understand the choices made by economists at a certain moment in time about what questions to pursue and how best to pursue them, and the choices made by members of their audiences about what to believe, the historian might study the reward structures inherent in the academic setting in which the economists worked, the editorial processes through which books and journal articles containing research ﬁndings were published, or the structure and functioning of professional societies in which the economists interacted. Some, following the work of Robert Merton in the sociology of science, have argued that economic thoughtr since the start of trhe twentieth century rhas been embodied or reﬂected in the output of large numbers of workers whose research is stand- ardized in many ways by a shared institutional framework. As such, it becomes possible and worthwhile to portray certain aspects of economic thought with statistical measures, and to test hypotheses about changes in economic thought with statistical methods. A. W. Bob Coats’s contribution to this Companion pro- vides more detail on how concepts from sociology have been applied to the study of the history of economics. A sociological view of the activities of the eco- nomic profession and the processes that govern the transmission and acceptance of ideas has also motivated much of the work on the transmission of ideas across international boundaries, work that is surveyed by José Luís Cardoso. Economists write to inﬂuence other economists, and historians of thought have rightly given a great deal of attention to the success, or lack of success, that they have experienced in that effort, looking into matters such as how Adam Smith was inﬂuenced by William Petty, or how the models and methods of Alfred Marshall reﬂected the inﬂuence of Augustin Cournot. But the economists them- selves from before the time of Adam Smith have been very much concerned with another audience as well: those who make economic policy. In light of that, it seems obvious that the study of the history of economic thought should include attention to the ideas of all those who, directly or indirectly, play a role in mak- ing economic policy, and research on the processes through which their actions and decisions have been inﬂuenced by, and perhaps have inﬂuenced, eco- nomists. Craufurd Goodwin’s essay shows that this has indeed become a rich research vein for historians of economics. Scholars have gone into the archives of governmental agencies and the personal papers of governmental ofﬁcials, from which they have emerged with stories of economists acting directly as policy-makers or as advisors to policy-makers, participating with more or less effectiveness in an environment governed by very different rules than those that prevail in the world of scientiﬁc discourse. Historians have followed the ideas of economists as they passed into and through the hands of – and were often trans- formed by – popularizers, intellectuals-at-larger, literary ﬁgures, and others who inﬂuence the course of prolicy, from presidentsr and cabinet members rto the people in the street who make up the electorate. The ﬁrst paragraphs of this introduction made reference to the diversity of research styles in the history of thought. Klaes offers some evidence that this diversity is increasing. I am not at this point going to join the argument over which of these research methods are more fruitful or productive. I am, however, willing to argue that within the history of economic thought the increase in methodological pluralism has been a good thing. In particular, the impression that a wider array of research topics and methods are coming to be accepted within the ﬁeld has attracted people with a wider array of intellectual interests and aptitudes to the study of the general questions with which the ﬁeld has traditionally been corncerned. At the same tirme, the literature of rthe ﬁeld is becom- ing more interesting, as previously unappreciated or under-researched aspects of those questions are being explored in new ways. Bibliography Medema, S. G. and Samuelrs, W. G. (eds.) 2001H: istorians of Econo mics and Economic Th ought: The Construction of Disciplinary Memory. London and New York: Routledge. Mitchell, W. C. 1967: Types of Economic Theory from Mercantilism to Institutionalism, ed. J. Dorfman, 2 vols. New York: Augustus M. Kelley. Samuels, W. J. (ed.) 1983: The Craft of the Historian of Economic Thought. Vol. 1 of Research in the History of Economic Thought and Methodology. Greenwich, CN: JAI Press. PART I Historical Surveys This page intentionally left blank CHAPTER TWO Ancient and Medieval Economics S. Todd Lowry 2.1 NTRODUCTION When dealing with the economic thought of antiquity, we must give primary attention to the ancient Greeks, whose writings have been preserved and form an integral part of our European intellectual heritage. Unfortunately, the two most prominent contemporary classical scholars who deal with the issue, M. I. Finley and Scott Meikle, emphatically deny that the Greeks had any relevant economic thought (Finley, 1970; Meikle, 1995). The problem is, however, deﬁnitional. These writers insist on deﬁning economics in terms of Marx’s “bourgeois exchange,” characterized by late-eighteenth-centuray international markets. They ignore the broader conceptual perspective of most modern economists and of the earlier political economistsa such as Marx with his inateraction between the “raelations” and the “factors” of producation; paralleled by Vebalen, the interaction baetween “institu- tions” and “technology,” and Lionel Robbins, the interaction between “unlimited wants” and “limited resources.” This survey focuses oan the concepts reﬂectead in policies and instaitutions applied to economic processes. Outright analyses framed in jurisprudential and political terms have also contributed to modern formulations of economic problems. We can best organize the discussion in terms of three categories – the administrative, the moral, and the analytic – that are frequently intertwined. 2.2 T HE A DMINISTRATIVTRADITION Ancient administration emphasized personal leadership and decision-making involving labor, materials, and efﬁcient organization. In retrospect, the best evidence shows that primitive human beings and their hominid ancestors evolved in East Africa as hunter–gatherers in simple extended family groups. In sucah a system, anthropoloagical studies indicatea that social bond- ing and informal leadearship roles provideda the organizational cohaesion necessary for survival (Reader, 1998 ). The ﬁrst records of formal economic organization and accompanying intel- lectual frameworks come from the ancient river basin economies where grain was produced in coordination with the annual ﬂooding that left raw mudﬂats as a seedbed. In the Nile and Euphrates Valleys, high yields and dry conditions for storage resulted in staable populations that raequired land measuremaent (geometry) and public regulation. The population concentrations and cultural accumula- tion made possible by this form of agriculture are reﬂected in the Old Testament account of Joseph, in the role of an economic advisor, administering the storage of surplus grain to withstand future famines (Paris, 1998). Egyptian literature documents the annual accounting of keepers of the royal granaries, whose inventory was measured with giant scales that acquired the status of symbols of justice. Note that the “scales of justice” were an administrat- ive tool for annual accounting, achieving a role as a religious symbol, not as a symbol of exchange (Brandon, 1969). In the Euphrates Valley, some recently studied clay tablets dating from about 2,200–2,100 B.C. give a clear picture of the administrative thought and practices of a Sumerian city–state. The Erlenmeyer aTablets, which became aavailable for study in 1988, constitute a collection of 88 tablets found in a large jar. These tablets provide a set of written records of production for a three-year period (Nissen et al., 1994). The recordsa show yields from abouat 75,000 acres, with targeat amounts and shortfalls in yield from year to year. Average yields were about 12.5 bushels per acre, with three-quarters of a bushel retained for seed (6 percent!). In addition, records for a milling operation show grain and labor inputs, with product valued in “female labor days.” The shortfall from the target efﬁciency for one year was carried over as a deﬁcit to the next year and was measured at 7,420 female labor days (Nissen et al., 1994, p. 54). These records show thea precision of adminisatrative organization anda the origins of both writing and arithmetic for identifying stored produce and its quantity. Marx called this administrative tradition that dominated Near Eastern economic organization “the Asiatiac mode of production”(Kraader, 1975). Silver, who saearches for expressions of natural market forces, ﬁnds that political and economic instab- ilities resulted in nonmarket institutions dominating the economies of antiquity (Silver, 1995). Most important are these mathematical, graphic, and administrative skills that passed from the Sumerians to the Babylonian culture, whose sexigesimal system has inﬂuenced modern measurement of degrees, minutes, and seconds (Nugebauer, 1969). This administrative and mathematically sophisticated tradi- tion continued in the Near East into the Islamic culture. Note that since adminis- tration and mathematical procedures are products of human understanding and policy, they are clear repositories of the level of economic thought. Note as well that the development of the zero, or cipher, was irrelevant to arithmetic as long as a placement system with columns was used, crystallized in the abacus or counting board. The zerao only became importaant in Europe when norathern African Arabic arithmetic and baookkeeping were brouaght into northern Italya from Algiers by Leonardo of Pisa (Fibonacci) in the early thirteenth century. When cumulative written records were kept, Roman numerals proved too cumbersome for running accounts in neat columns. It has also been argued that increasingly varied Arabic commerce led to the development of algebra and gave rise to the mechanistic generalization of economic processes in the late Middle Ages (Hadden, 1994). In addition, the thirteenth century saw the shift from tally sticks to account books, and from the itinerant trader to the sedentary merchant who used credit instru- ments such as bills of exchange. The best record of the tradition of training in administrative economics is found in Xenophon’s treatise, the Oeconomicus, written in the mid-fourth century B.C. (Pomeroy, 1994). He also draws on the Babylonian and Persian tradition in his biography of Cyrus the Great, the Cyropaedia, that emphasizes the training of Cyrus for administration and military leadership. Xenophon’s Hiero con- tains discussions of the administrative stimulus of private production and tech- nology through public recognition and prizes. His Ways and Means was a treatise on economic development, emphasizing economies of scale, programming, and promotion. The Oeconomicus is a systematic treatment of the organization and administration of the agricultural estate, emphasizing human capital and organ- izational efﬁciency (Lowry, 1965; 1987, ch. 3). The family farm was the backbone of the economy and booty from military operations was the prime source of sur- plus for farm and city (Hanson, 1995). The details of many of Xenophon’s ideas must be treated under the heading of analysis. The tradition of an efﬁciently managed agrarian estate surfaced in the twelfth century in the Cistercian monasteries that spread across Europe. This order, initiated in 1084 and dedicated to prayer and work, specialized in developing new land with a rational integration of crafts and agriculture (Baeck, 1994, ch. V). Baeck documents some indications of Muslim correlations with the Cistercian movement through Spanish Islam. The managerial uniqueness of the Cistercians might well be studied along with E. E. Cohen’s work on Athenian banking to question Polanyi’s theasis that early economiacactivitieswere“embedded” in broader social structures, and not in dominant forces (Cohen, 1992). Plato’s contribution to administration acquires signiﬁcance because he incor- porated the Pythagorean mathematical tradition into a near-mystical formulation of ideal models. This view of a rational perfectible administration is elaborated below in the discussion of analysis. The Platonic theory of the “Ideas,” clearly expounded in Adam Smith’s inaugural lecture for his professorship in logic at Glasgow (The History of the Ancient Logics and Metaphysics) has its parallels in modern economic theory. Plato’s theoretical perspective produced the concept of a perfectible efﬁcient state directed toward optimality through specialization and training. His concept of “justice” was colored by his premise of order and efﬁciency supervised by the prime intellect with a single value criterion. His fam- ous image of the “shipa of state” directed by thae technically skillead pilot or captain (the philosopher king) was properly questioned by one authority, who pointed out that some of the passengers might want to have some inﬂuence on where they were going (Lowry, 1987, pp. 111–14). The concept of plural values introduced a dynamic into political economy. When irrational numbers were demonstrated in the Pythagorean societies in the late ﬁfth or early fourth century B.C., Platonic absolutism was shaken to the core. It was partially salvaged by Eudoxus’ importation from Chaldea of a dialectical approach to irrationals that became a mathematical image for judicial, legislative, and bargaining processes, to be discussed under analyses. The pseudo-Platonic dialogue Alcibiades Major (ca. 340 B.C.) discusses the need for formal training of those who presume to be “politicos” or “oikonomicos”; that is, politicians or economists in the city–state. This document inﬂuenced the Greco-Roman educationala tradition for 900 years.a The dialogue emphasizeas Plato’s concept of individualistic authoritarian virtue, but it also discusses an apparently broader tradition that prescribed “looking into the eyes of others” to get a reﬂec- tion or social criterion for managing one’s conduct as administrator. The concept became known as “the mirror for princes,” naming a rich body of literature on political and economic administration (Lowry, 2001). A famous example was the Arabic pseudo-Aristotealian advice to Alexandera the Great, heecretum Secretorum, dating from the eighth century A.D. It reached England in Latin translation after the Crusades. Erasmus’saThe Education of a Chmristian Prie edicated to the younga Emperor Charles V in 1518, was also an inﬂuential example of the genre (Born, 1936). These tracts emphasized leadership, human capital, personnel policy, taxa- tion, trade, and control of the military. 2.3 T HE M ORAL T RADITION The Eden story in Genesis provides basic imagery in the Judeo-Christian tradi- tion. As with most cultural myths, it is a collage of concepts, including a parallel with the female blame tradition of the Greek Pandora myth (Norris, 1999). The dominant thesis is, hoawever, the challenge ato divine authority bya the beneﬁciaries of the abundance of the Garden of Eden. When Adam and Eve ate the forbidden fruit of the tree of knowledge and asserted the right to choose for themselves, they were cast out of the world of abundance into scarcity; to “eat bread in the sweat of their faces.” The moral theme is that knowledge and the exercise of choice are burdens in a world of divinely imposed or natural scarcity. This pic- ture of economics is usually found in the introductory chapter of sophisticated introductory economics textbooks, although contradicted by subjective relativ- ism in later chapters. An unfortunate spinoff of the Eden story is the “curse of work” with its simplistic tension between work and leisure, in a world in which most people ﬁnd fulﬁllment and self-deﬁnition in their work. In contrast to the bounty of the Nile and Euphrates, the near-subsistence level in the small agrarian communities in Greece gave rise to a moral emphasis on allocation that is the real issue behind the more superﬁcial concept of objective scarcity. Aristotle framed this issue very carefully in book I of his Politics. Con- sumption was the objective of production and the surplus should be allocated to rearing children (Lowry, 1995). Aristotle found this natural moral commitment illustrated by the yolk in eggs that sustained the embryo. This was a real issue in eastern Mediterranean saocieties, where newboarns were not named untial the eighth day, when the family patriarch evaluated sex, health, and food supply before ceremonially accepting them into the family circle. Unwanted children were set adrift in baskets or left on the mountainside. Exchange within the village and the use of money facilitated distribution, but satiation provided a natural limit on consumption that left surpluses for the “offspring.” By contrast, foreign merchants who accumulated money were not subject to this natural limit of physical satiation. Therefore, this kind of trade fell outside the natural regulatory process. In book VII of the Politics, Aristotle clearly formulated the concept of diminish- ing marginal utility and an ordinal hierarchy of values, an inﬂuential conceptual framework that has beena attributed to Maslow in caontemporary motivatioan theory (Maslow, 1943; Lowry, 1998, p. 32). The importance of Aristotle’s distinction is its basis for the moral repudiation of usury, in which money loans are condemned as immoral and extortionate. As in Judaic doctrine, money cannot breed, and should not be expected to grow when a consumption loan is made to a needy person within the community. The moral validity of a aclaim for subsistencae grew into a natural riaght of appro- priation in the writings of Thomas Aquinas and John Locke (Lowry, 1995). In addition, the usury issue is largely a retrospective emphasis. Medieval Muslims developed the justiﬁcation for charging borrowers for the sacriﬁce suffered by the lender, adopted by aScholastics as “lucruma cessans.” The moral isasue persisted when considering the extortion implicit in subsistence loans to the starving. In commerce, however, tahe institution of the acommendam partnershipa demonstrates the irrelevance of the usury issue and the sharing of surpluses generated by capital advances for trade. The “commendam” was a commercial partnership in which one party advanced the capital for a trading venture and the other pro- vided the personal service. As in modern partnership law, proﬁts were divided equally between the partners after the voyage. The commendam contract, of Arabian origin, neutraalized the usury issuea in commerce througha the Middle Ages. It also provided a mechanism for limiting liability to achieve economies of scale – a device that fueled the development of the modern corporation. Several persons could invest money in a commendam partnership with a broker, who would then advance the sum to a trader in another commendam partnership. The initial investors were insulated from personal liability for losses beyond their speciﬁc investment (Udovitch, 1970). The moral reinforcement of this system was provided by the “unwritten law,” an ancient Near Eastern custom that guaranteed hospitality to strangers, the honoring of parents, and respect for gods (Lowry, 1987, pp. 142–3). In his Memorabilia (IV, 4, 19–20), Xenophon argues that the unwritten law must have come from the gods, since it was universal among all peoples, who could not have met together and agreed on it. The point emphasizes that the rule of hos- pitality made merchant travelers safe and gave people a source of news, trade goods, and entertainmeant provided by itineraan
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