American dominance of the discipline of economics in the present century is beyond dispute. In terms of Nobel prizes and the creative ideas that spawned them, academic economists working in the United States have an incomparable record. As all who study the history of economic thought know, this was not always the case. Indeed, most histories of thought, when dealing with the nineteenth century, leave the impression that little of merit was done outside the British Isles. But Alfred Marshall's Principles was not the only “basic book” of merit to be published at the crest of nineteenth-century neoclassicism. It was possibly not even the most prescient work.

The first part of the paper, “The Freeze,” restates the simplified Keynesian framework of fiscal activism pioneered by Jargen Pedersen (1937) and Alvin H. Hansen (1941). The framework is a macroeconomic model in which investment, the bond supply, price, the money wage rate, and the rate of interest are all frozen. Using government purchase and the tax rate as its policy instruments the paper solves the model and finds its fiscal multipliers.

This paper explores C. F. W. Launhardt's (1885) model of exchange and his associated welfare analysis. Launhardt's analysis, starting from the exchange models of W. S. Jevons and Leon Walras, is noteworthy for his derivation from explicit utility functions of algebraic forms of general equilibrium supply and demand curves expressed as functions of relative prices. Whereas Jevons and Walras concentrated on the pricetaking equilibrium properties of their exchange models, Launhardt explored a process of disequilibrium trading in which successive trades take place at the “short end” of the market, that is, the minimum of supply and demand at a price. His main concern was, however, to examine the welfare aspects of exchange, comparing the gains from trade under competitive and monopolistic behavior. Launhardt has been criticized for suggesting that aggregate utility, and thus the aggregate gain from trade, is maximized at the price-taking equilibrium (see for example, Wicksell 1954, p. 76, n. 2; 1934, p. 81, n. 1). He nevertheless showed that a process of disequilibrium trading, in which the price initially favors the relatively poorer individual, can improve the aggregate gains from trade as compared with the equilibrium with no disequilibrium transactions, subsequently called a price-taking equilibrium.

The prevailing opinion among John Maynard Keynes's interpreters is that, in writing The General Theory, Keynes ignored the other “revolution” which was taking place in Cambridge at the time, the critique of Marshallian microeconomics which led to the development of the notion of imperfect competition.

François Quesnay and the Physiocrats are probably best remembered for three things: the Tableau Economique, their view that only agriculture was productive, and for advocating a single tax on landowners. Over the years, attention has focused on the first two doctrines. Numerous studies of the Tableau have attempted to explain how it operates (Eagly 1974; Eltis 1975; Meek 1963; Pressman 1994; Woog 1950). Adam Smith's (1937, p. 638 f.) critique of the assumption that manufacturing is sterile is well-known. In contrast, there have been few analyses of the single tax proposal. Previous studies have either reported the views of Quesnay and the Physiocrats on taxation (Einaudi 1967) or compared the tax policies of Quesnay to other economists (Buurman 1991).

The standard view on John Bates Clark is that his The Philosophy of Wealth (hereafter Philosophy) written in 1886, was simply a reproduction of articles originally appearing in The New Englander (hereafter TNE), the journal that eventually evolved into The Yale Review. This view also holds that Philosophy represents Clark's so-called (Christian) socialist period that he abandoned sometime after 1886, and that he then began the process of development that resulted in his marginal productivity theory of distribution and a more generally conservative or precapitalist position.

Liang Chi-chao (1873–1929) was a major figure in Chinese intellectual history around the turn of the century. Although he never learned to read any western language, Liang took on the role of an intellectual intermediary, reading voraciously in Chinese or Japanese renderings of western ideas and then writing about them to a wide audience in China. Prior to 1900, China was intellectually very insulated from western ideas. According to Andrew Nathan, “for Chinese in the first years of this century, Liang's writings were the window on all that was modern and foreign and might be used to save China. He introduced new ways of thinking about literature, history, international relations, science, religion, language, the races of mankind, and the meaning of life” (Nathan 1985, p. 48). Liang was an incredibly prolific writer—one authority estimated his output at 14 million words (Wang 1965, p. 167), but very little of his writing has been translated into English. There is a vast literature of commentaries on his life and work, but these materials generally do not devote much attention to his economic ideas

In a little book entitled A Treatise on the Circumstances which Determine the Rate of Wages and the Condition of the Labouring Classes (1826), remembered principally for its formulation of the wages-fund doctrine, John Ramsay McCulloch set out some of the essential ingredients of certain popular contemporary approaches to the theory of labor contracts which accord priority to informational asymmetries surrounding the purchase and sale of labor. In view of the widely held opinion that this approach to the analysis of labor contracts constitutes a significant theoretical step forward, the details of McCulloch's argument, together with the manner in which that argument prefigures recent claims as to the causes and consequences of hidden actions and hidden information in labor markets, is worth recovering.