Articles
"Progressivism in Academic Public Finance, 1880 to 1930," by Marianne Johnson
This article examines the institutionalization of public finance as a subfield of economics in American universities from the founding of professional academic economics departments in the 1880s through the eve of the Great Depression. It is argued that what became identified as the accepted domain of public finance was fundamentally shaped by the Progressivism of leading practitioners, in particular Richard T. Ely, H. C. Adams, and E. R. A. Seligman. Considered is the development of a community of scholars recognized as specialists in public finance and the professionalization of public finance as a distinct field within economics. This includes examination of the subject’s definition, its boundaries, and the types of analyses undertaken. Academic training, including courses and readings, at Columbia, Chicago, Harvard, and Wisconsin is compared.
"A Tale of Two Destinies: Georgescu-Roegen on Gossen," by Paola Tubaro
Nicholas Georgescu-Roegen edited the English translation of Hermann Heinrich Gossen’s 1854 book The Laws of Human Relations and wrote a lengthy introduction to it. His highly appreciative, thoroughly documented study has become a major reference on an otherwise little-known early writer. It suggests that Gossen was unjustly ignored by his contemporaries, just as Georgescu-Roegen felt that his own contributions to economics were insufficiently recognized. Yet it was not only a personal motive that inspired Georgescu-Roegen’s editorial enterprise: I show that his original plan was to build a model of consumer choice, drawing on Gossen, to address what he saw as essential theoretical issues. The completion of the book project took almost twenty years (it was not published until 1983), during which external circumstances and analytical difficulties gradually eroded the initial theoretical interests, while a sense of self-identification with Gossen gained prominence. As a result, major issues remained ultimately unsolved. The history of economics, originally intended to aid economic theory-building, became the key for sublimating personal feelings into a broader reflection on science in society, beyond time and space differences.
"Adam Smith's 'Optimistic Deism,' the Invisible Hand of Providence, and the Unhappiness of Nations," by Terry Peach
This article questions Adam Smith’s commitment to the notion of a beneficent Deity, or “all-perfect Being,” whose purpose is to promote the “real happiness” of humankind. It is argued that Smith conceals his true position in The Theory of Moral Sentiments by emphasizing the deceptive “love of system” (the fascination with well-crafted contrivances) as the main spur to material acquisitiveness; by using the empty formulation that “all the different ranks of life are nearly upon a level” without specifying which level they are “nearly upon”; and by introducing a contented beggar, who, with his identity as Diogenes the Cynic cloaked in anonymity, could be tendentiously misconstrued as a representative of the poor and lowly. It is concluded that Smith’s commitment to what I call “optimistic deism” must be regarded as deeply suspect and more probably nonexistent, and that as far as “real happiness” is concerned his position was one of pessimism of almost Cynic proportions, albeit a pessimism partially obscured by a veiled reference to the greatest Cynic of them all.
"Paul Samuelson and Revealed Preference Theory," by D. Wade Hands
Revealed preference theory is not a specific theory; it is a broad programmatic framework for analyzing choice behavior. Within this broad framework there are a number of different revealed preference theories (different versions of the program)—they all share common features, but there are also sharp differences. The diversity of revealed preference theory is not well understood, and one purpose of this article is to improve our historical understanding of the field by examining this historical diversity. This history is valuable for its own sake, but also because it is relevant to recent debates about the methodological foundations of rational choice theory among experimental psychologists, behavioral economists, neuroeconomists, and others. The second purpose of this article is to use material from the Paul Samuelson archives to help us understand how Samuelson, the originator of revealed preference theory, viewed his contribution to the program and how he evaluated the different versions of revealed preference theory. The article will examine Das Paul Samuelson Problem: the question of whether Paul Samuelson changed his mind about the foundations (the nature, significance, and purpose) of revealed preference theory over time.
"Are There Important Differences between Classical and Twenty-First-Century Monetary Theories? Did the Keynesian and Monetarist Revolutions Matter?," by John H. Wood
Abstract: It is not generally realized how little changed monetary theory and the theory and practice of monetary policy are from the time before Keynes’s General Theory. Explanations of business fluctuations by Keynes’s predecessors closely resemble the current literature, notwithstanding significant changes in the economic structure and several vaunted revolutions in theory in the meantime. Monetary policy is similarly unchanged from its dominant focus on financial stability and its atheoretic responses to shocks. The ambitious attempts of Keynes and the monetarists to account for money and uncertainty have been rejected by the mainstream of their fellow economists.
"Rigor versus Relevance in Economic Theory: A Plea for a Different Methodological Perspective," by Andrea Salanti
A recent exchange between the late Mark Blaug and Heinz Kurz and Neri Salvadori on the relevance of Sraffian economics (and a significant amount of more orthodox approaches, for that matter) does not seem to offer conclusive arguments, mainly because both contenders share some outmoded approaches to the philosophy of science. If we instead adopt the perspective of the so-called semantic view of theories, the trade-off between rigor and relevance naturally comes out as a possible characteristic of models we encounter in many scientific disciplines, with economics not being an exception. Thus, those who argue in favor of an economic analysis both rigorous and relevant should at least have to bear the burden of the proof of its possibility.
Book Reviews
The Great Persuasion: Reinventing Free Markets since the Depression, by Angus Burgin (Harvard University Press, 2012); and Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics, by Daniel Stedman Jones (Princeton University Press, 2012). Reviewed by Roger E. Backhouse
The Social Economics of Thorstein Veblen, by David Reisman (Edward Elgar, 2012). Reviewed by Anne Mayhew
Handbook of Knowledge and Economics, edited by Richard Arena, Agnès Festré, and Nathalie Lazaric (Edward Elgar, 2012). Reviewed by Tiziano Raffaelli