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General Introduction: Why Should We Study the History of Economic Theory? Read chapter Read first chapter

2020 | OriginalPaper | Chapter

2. Introduction

Author : Roberto Marchionatti

Published in: Economic Theory in the Twentieth Century, An Intellectual History - Volume I

Publisher: Springer International Publishing

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Abstract

The introduction to Volume I deals, first, with the historical scenario of the twenty-five years preceding the Great War, the final period of the epoch of classical liberal capitalism. Then, the background of the economic theory of the period is analyzed: the crisis of classical political economy, the Historical School’s criticism, and the legacy of the marginalist and neoclassical Revolution. Lastly, the map of economic theory from the last decade of the nineteenth century to the First World War is sketched, when the economic theory that arose with the marginalist-neoclassical revolution of the 1870s took definitive form through the efforts of economists like Marshall, Pareto, von Böhm-Bawerk, Wicksell, Wicksteed, and Fisher and the group of scholars who collaborated with them in their intellectual communities.

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previous chapter General Introduction: Why Should We Study the History of Economic Theory?
next chapter Economics in Cambridge: Alfred Marshall, the Old Cambridge School, and Their Opponents in England
Footnotes
1
A chronological distinction between two generations, the older and the younger, is generally accepted. However, it should be noted that the term ‘school’ applies, above all, to the second generation.
 
2
Marshall was more aware of his precursors than Jevons. He had read the French philosopher and mathematician Antoine Augustin Cournot (1801–1877) and the German proto-marginalists Johann H. von Thunen (1783–1850), Hans von Mangoldt (1824–1868), and Hermann Gossen (1810–1858) between the end of the 1860s and the early 1870s. Edgeworth discovered political economy in 1879 thanks to his encounter with Jevons. He built on the works of Jevons, Marshall, Walras, and Cournot. Walras built on the work of his father Auguste and Cournot. It was only later that they discovered other forerunners. The changes in the bibliography of Jevons’ Theory between 1871 and 1879 are indicative of this progressive increase in awareness.
 
3
This type of criticism was a leit-motiv at that time. The old John Stuart Mill was similarly ill-disposed: in a letter to Cairnes of December 5, 1871, he wrote: “I have not seen Mr. Jevons’s book, but as far as I can judge from such notices of it as have reached me, I do not expect that I shall think favourably of it. He is a man of some ability, but he seems to have a mania for encumbering questions with useless complications, and with a notation implying the existence of greater precision in the data than the questions admit of” (quoted in Maas 2005, p. 2). As Maas (2005) shows, many other English economists, whether late classical or members of the Historical School, maintained a critical attitude or had reservations. Only in the 1880s did the younger generation of economists begin to appreciate Jevons’s ideas (see Schabas 1990).
 
4
The graphical method of curves in the analysis of exchange—in a form very similar to that set out by Marshall—was also used in the United Kingdom by a contemporary of Jevons and Marshall, H. C. F. Jenkin, a professor of engineering at the University of Edinburgh. His paper, ‘The Graphic Representation of the Laws of Supply and Demand, and Their Application to Labour’ (1868), also seems to have afforded the stimulus, which led Jevons to publish his Theory.
 
5
Shubik (1959) was the first to make the connection between Edgeworth’s contract theory, coalition, and game theory.
 
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———. 1879. The Pure Theory of Foreign Trade. The Pure Theory of Domestic Values privately printed at Cambridge. Reprinted by the London School of Economics and Political Science as No. 1 in Series of reprints of Scarce Tracts in Economic and Political Science, 1930. Then reprinted in Whitaker 1975, vol. II.
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Metadata
Title
Introduction
Author
Roberto Marchionatti
Copyright Year
2020
Book
Economic Theory in the Twentieth Century, An Intellectual History - Volume I

Print ISBN: 978-3-030-40296-9

Electronic ISBN: 978-3-030-40297-6

Copyright Year: 2020

DOI
https://doi.org/10.1007/978-3-030-40297-6_2