The popular view among many contemporary economists is that our predecessors were literate but not numerate. Their myopia is curious to those who have the benefit of greater historical perspective. Many early practitioners of political economy can be credited with recognizing that, by their very nature, the problems in which they were interested required them to measure, quantify and enumerate. From the seventeenth century onwards, inquiring minds had already learned to distrust information and ideas that derived from the then traditional qualitative approach to science, which described the sensations associated with objects and events. William Petty's Political Arithmetic is a case in point; it aimed not simply to record and describe reality in terms of

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.

Positive Theory of Capital (1889) is a classic which contains Eugen von Böhm-Bawerk's 1889 correct vision of how the interest rate might be determined by the interplay of systematic time preference (“impatience”) and time-phased technology's productivity. But he was not quite able to formulate his intuitive vision in terms that would satisfy today's persnickety jury of theorists. And indeed the classic Rate of Interest (1907) by his younger contemporary, Irving Fisher, seemed to be disagreeing with Böhm-Bawerk's treatment of time's net productivity; but, as Fisher was unable to make clear until 1930, he was objecting only to Böhm-Bawerk's formulation of the role of productivity in interest determination. In point of fact, Fisher, who was so long identified (wrongly, but understandably) as an “impatience theorist,” considered his own main contribution to interest theory to be his clarification of how the technological superiority of time-consuming processes cooperated in the determination of the equilibrium interest rate.

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.

Kenneth J. Arrow's recent article on Ricardian theory (Arrow 1991) represents the occasion for a renewed discussion of the basic building blocks of the classics' analytical scheme and of the role of demand conditions in this context. Arrow's argument pivots around two ideas: that Ricardo's theory is built without any reference to demand, and that the role of demand can be conceived of only within the logical context of neoclassical demand functions, which are absent in Ricardo, thus making his theoretical scheme irremediably weak. These ideas form the basis of a drastically dichotomized representation on the part of Arrow of current interpretations of Ricardo. On the one hand are the neoclassical-type views, epitomized by his own position, with their emphasis on the allocation problem; on the other hand are the purely cost-oriented neo-Ricardian interpretations, with their strongly Marxist ideological bias.

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.

Debate over the interpretation of David Ricardo's economics has assumed special relevance since the publication of Piero Sraffa's Production of Commodities by Means of Commodities (1960). Sraffa sought to revive and reconstruct a nearly lost classical tradition whose main elements, he believed, had been given their first coherent expression by Ricardo (Sraffa 1951, Garegnani 1984). On this interpretation, Ricardo's analysis, far from being a fumbling step toward the modern theory of supply and demand, as Marshall (1920) would have it, or a misguided detour as Jevons believed (1879), instead constitutes a logically consistent alternative to the marginalist theory that emerged after 1870.

Recent scholarship has noted differences and even discrepancies among the members of the so-called Austrian school. It has been possible to identify discontinuities between generations (Hayek 1968), along methodological lines (Caldwell 1988, Hutchison 1981), among the various threads of the “Austrian revival” (Vaughn 1990), and between heterogeneous intellectual systems (Dufourt and Garrouste 1993). Brian Loasby (1989) has remarked that Friedrich Hayek was one of the few scholars to develop one of Carl Menger's outstanding contributions to economics, his theory of social institutions (Langlois 1989). The purpose of this paper is to appraise the continuities and discontinuities between the two authors' conceptions of institutions. In what follows, I shall present successively Menger's and Hayek's conceptions of institutions, and then I shall compare them.

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.

It is clear from the enormous literature on the subject that Karl Marx believed that his law of the tendency of the rate of profit to fall is applicable only to the capitalist mode of production. Is there, however, really anything in the law which confines it specifically to capitalist production? This is an important question which is not asked in an explicit manner in the literature on Marx's economics. His most important law or tendency about the internal contradictions of capitalist production might turn out to be a characteristic of production per se—including socialist production in its ideal form.

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

Between 1928 and 1968, a common information environment in the Soviet Union, the United Kingdom, and the United States with respect to the role of industrial capital in the economy produced theories of economic growth in all three countries. Emerging from different stages of development and different institutional circumstances in each country, the content of the theory of growth was different in each country. The different stages of development were defined by industrial structure and levels of capital accumulation, not by technological sophistication. In the 1920s and 1930s, all three countries experienced the obsolescence of the steam locomotive and the telegraph, and the emergence of new economic activities related to the internal combustion engine, electricity, radio and the telephone. With respect to technology, as such, there was a fairly common information environment. Differences lay in institutions, rates of investment, and levels of accumulation.

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.