HOPE 47.1, March 2015


"A Book, the Applications, and the Outcomes: How Right Was Alfred Kahn in The Economics of Regulation about the Effects of the Deregulation of the US Domestic Airline Market?," by Kenneth Button

  • This article is concerned with the foresights that Alfred Kahn had when he led the deregulation of the US passenger airline industry, and in particular with the role the ideas in his Economics of Regulation played in his actions. Kahn was a reluctant deregulator of the US interstate airline industry. The 1978 Airline Deregulation Act, which he “fathered,” however, not only ushered in a wave of other similar actions both within and outside of transportation in the United States, but also provided a demonstration effect that resulted in a more general rolling back of microeconomic regulation across the globe. Kahn was head of the US Civil Aeronautics Board for only eighteen months or so, but he brought about considerable changes to the airline industry and, through its spread effects, to all other modes of transportation. Here we focus on the degree to which he actually foresaw, or at least generally predicted, what the outcome of airline deregulation would be. While Kahn himself acknowledged that market outcomes are, almost by definition, unpredictable, he clearly had some ideas of what the results of his would be. Here we look at what he thought would happen, what did happen, and at whether his own short term ex post assessment of outcomes has been of durable accuracy.

"On Robinson, Robertson, and the Industrial Organization View," by Lowell R. Jacobsen

  • This article offers a contextualization of strategy in the intellectual history of the early twentieth century. In particular, the Marshall-inspired contributions of Austin Robinson and Dennis Robertson are examined as possible precursors of strategy, with special attention to the industrial organization view as principally developed by Michael Porter, notably with his seminal Competitive Strategy. The aim of this examination, which includes a comparative analysis, is to deepen the historical roots of strategy, an interdisciplinary field that emerged in the 1960s. Marshall’s Principles and Industry and Trade are obviously and significantly influential for Robinson and Robertson. Marshall’s memorable, if not definitive, phrase “tendency to variation” not only reflects the dynamic nature of business reality but the essence of strategy, which Porter aptly stated is firms “being different.”

"Economics and Anti-Semitism: The Case of Maffeo Pantaleoni," by Luca Michelini and Terenzio Maccabelli

  • The relationship between economics and anti-Semitism has always been a controversial subject. The question is complex by nature: to describe an author as an anti-Semite means to cast a shadow over his thought, with consequences that are much more serious when there is a limited amount of documentation and firsthand accounts. In this article we examine the case of Maffeo Pantaleoni, one of the most influential Italian economists of the nineteenth century and at the same time an intellectual who was among those most closely involved in anti-Semitic propaganda. In the case of Pantaleoni, it is not necessary to ask the question of whether and to what extent his anti-Semitism could be defined as “mild” or “ambivalent” and therefore in line with that expressed by a large part of Western culture during the first half of the twentieth century. In this study we document a clear and open anti-Semitic attitude that, however, has remained ignored up to now by economic historiography. In this article we discuss the possible relationship between Pantaleoni’s anti-Semitism and his work as a theoretical economist, within a methodological framework inspired by Pierre Bourdieu’s philosophy and sociology of science.

"The Legacy of Mathématique Sociale in Italy and Ricardian Economics: The Case of Francesco Fuoco," by Rosario Patalano

  • This article discusses the contribution made by Francesco Fuoco (1774–1841) to the methodological debate in the early nineteenth century. In opposition to Say’s view, Fuoco defended the validity of the deductive method in economic analysis, upholding the mathématique sociale tradition. This perspective characterizes his main work, Saggi economici (1825–27), in which he expounded a systematic view of economic theory and synthesized, within the framework of deductive methodology, a typical subjectivist theory of value, drawn from Condillac, with the new Ricardian theory of distribution. As he engaged in defense of the deductive nature of economic analysis, Fuoco found confirmation of the validity of the mathématique sociale tradition in the Ricardian “new theory” of rent. In this analytical context, Fuoco’s original contribution lay in the importance that he assigned to the money function in the capitalist economy.

"Defense versus Opulence? An Appraisal of the Malthus-Ricardo 1815 Controversy on the Corn Laws," by Neri Salvadori and Rodolfo Signorino

  • This article proposes a rational reconstruction of the arguments of Malthus and Ricardo in their 1815 essays, Grounds of an Opinion and An Essay on Profits, whereby a policy of free corn trade was repudiated and endorsed, respectively. Malthus envisaged defense and (trade-induced) opulence as two mutually alternative options and, if required to make a choice, he had no hesitation in choosing the former. By contrast, Ricardo excluded any such trade-off, arguing that even in the case of war or poor domestic harvest, foreign agricultural countries would be seriously damaged if they opted for restrictions on their corn exports to Great Britain.

"The First Translator in English of Turgot's Réflexions sur la formation et la distribution des richesses: Benjamin Vaughan," by Giancarlo de Vivo and Gabriel Sabbagh

  • The main aim of this article is to identify the first translator in English of Turgot’s Réflexions sur la formation et la distribution des richesses, one of the most important economic works of all time. The translation, which appeared in book form in 1793, was first serialized in 1791–92 in an obscure English periodical. We show that the translator was Benjamin Vaughan (1751–1835), an interesting figure of the Enlightenment, previously known mostly for his role in the negotiations that led to the independence of the American colonies, and for his publication of Benjamin Franklin’s works in 1779. Vaughan deserves to be better known for many reasons: he was also an economist, influenced both by the Wealth of Nations and by the physiocrats, who wrote his own book on free trade (1788), which he also translated into French. He founded two London periodicals, supported religious tolerance, and published translations of other works by Turgot besides Réflexions (these translations have remained virtually unknown until now). He was also the translator of Condorcet’s Vie de Turgot. After a rather turbulent life, in 1797 Vaughan settled in the United States.

Book Reviews

Fortune Tellers: The Story of America's First Economic Forecasters (2014), by Walter A. Friedman. Reviewed by Robert W. Dimand.

Economic Methodology: A Historical Introduction (2014), by Harro Maas. Translated by Liz Waters. Reviewed by Ross B. Emmett