Ricardo “and his chief followers … did not express their meaning with sufficient clearness, and they have been misunderstood by all but the most careful readers” (Marshall, 1920, p. 84).

“Ricardo … has not been fortunate in finding careful students” (Cairnes, 1874, p. 237).

Although the ground I cover in this address is familiar, I approach it as a novice (Clower, 1973). I have written some history of economic thought papers over the past fifty years, but the bulk of my work has been theoretical; and I have known too many good historians of thought to imagine I belong in that class. As W. J. Ashley (1891) observed, “The economic historian … is apt to be confused in theory; [and] the … theorist runs the risk of being unhistorical” (compare Wicksell, 1904, p. 61). Unhistorical or not, I shall discuss some major vicissitudes of economic inquiry over the past three centuries.

In the second volume of his Cours, published a hundred years ago, Vilfredo Pareto (1897, section 928) put forward what was probably the first mathematical model of the business cycle. Apart from Knut Wicksell's (1899) review of Pareto's book and Jess Benhabib's (1979) short article (partly based on Wicksell's comments), Pareto's model has gone unnoticed. According to the view advanced by Pareto in the 1890s, concepts from physics are essential, not only in the realm of static equilibrium, but also in the investigation of economic dynamics. The model follows a new presentation by Pareto of his equations of general equilibrium, where he attempted to take into account the influence of “inertia” (habit) by applying d'Alembert's principle of mechanics. He concludes that the solution to the consumption equations has a cyclical pattern and uses that to explain business cycles as oscillations in aggregate production driven by changes in consumption.

The London Economist of June 14, 1997, carried an article by Jeffrey Sachs (1997) entitled “The Limits of Convergence: Nature, Nurture and Growth,” which explores the relationship between geography, economic policies and institutions, and economic growth on the basis of recent econometric work. Four principal groups of factors were found to account for the sizable difference in per capita income growth between the South-East Asian countries and other less successful developing countries: initial economic conditions (such as the income gap separating poor countries from rich ones), policy variables, demographic factors, and resources and geography. One of the most significant conclusions (Sachs, 1997, p. 20) is that “openness was decisive for rapid growth. Open economies grew 1.2 percentage points per year faster than closed economies, controlling for everything else.”

The dominant metaphor of conceptual relativism, that of differing points of view, seems to betray an underlying paradox. Different points of view make sense, but only if there is a common co-ordinate system on which to plot them; yet the existence of a common system belies dramatic incomparability (Davidson, 1984, p. 184).

Nicholas Kaldor (1908-86) and Joan Robinson (1903-83) were almost exact contemporaries and enjoyed very similar careers. Both began as innovative but fundamentally orthodox microeconomists, soon turning (very early, in the case of Robinson) to the defense and development of Keynesian macroeconomics. They were both lifelong socialists and, during the Second World War, energetic propagandists for the fledgling British welfare state. In the 1950s each published a series of penetrating critiques of neoclassical distribution and growth theory, subsequently extending the attack to mainstream analyses of value, international trade, development, and the very foundations of equilibrium methodology. By 1975 Kaldor and Robinson were generally recognized as the founding parents of Post Keynesian economics in Britain, or what its U.S. progenitor Sidney Weintraub described as the “Kaldor-Kalecki-Robinson revolution in distribution theory” (Eichner and Kregel, 1975; Weintraub, 1972, p. 45). For some years they were close personal friends. They spent decades–indeed, Robinson spent her entire working life–in Cambridge, where they were belatedly appointed to chairs in 1966.

History, if viewed as a repository for more than anecdote or chronology, could produce a decisive transformation in the image of science by which we are now possessed (Kuhn, 1962a, p. 1).

Certain types of experimental findings serve as benchmarks, permanent facts about phenomena which any future theory must accommodate, and which in conjunction with comparable theoretical benchmarks, pretty permanently force us in one direction. … The remarkable fact about recent physical science is that it creates a new, collective, human artifact, by giving full range to three fundamental human interests, speculation, calculation, and experiment. By engaging in collaboration between the three, it enriches each in a way that would be impossible otherwise (Hacking, 1983, p. 248).

John Dewey (1859-1952) is easily the most influential philosopher America has produced and Thorstein Veblen (1857-1929) is arguably the most influential American heterodox economist. Although scholars have often pondered both their intellectual and personal relationship, until recently no firm conclusions could accurately be drawn. Due to the lack of correspondence between the two men and the brevity of Veblen's comments on and citations of Dewey, it is difficult to know what the former thought of the latter both in terms of personality and economic ideas. But, fortunately, Dewey cited Veblen and commented on his economic thought on many occasions so it is possible to at least partly reconstruct one-half of the relationship. This reconstruction will be the focus of this article, emphasizing: (1) their biographical intersections and convergences; (2) Dewey's ideas about economics and the economy; (3) Dewey's explicit use of Veblen's economic ideas in his own published work; and (4) Dewey's critical comments in his correspondence regarding Veblen's interpretation of pragmatism and his development as a social theorist.

Don Patinkin (1922-95) was a co-author of the Keynesian neoclassical synthesis, and became engaged in several important controversies. One of them involved Milton Friedman's (1956) assertion about a supposed Chicago quantity theory “oral tradition.” From 1968 until his death, Patinkin hardly seemed to miss an opportunity of denigrating what he regarded as Friedman's “invention.” This controversy was taken to the 1970 American Economic Association (AEA) meeting by Harry Johnson (1971), and divided at least two economics departments, Chicago and the University of Western Ontario, where Patinkin and Johnson were frequent visitors, and where two influential monetarists, David Laidler and Michael Parkin, had migrated from Britain (Parkin, 1986; Patinkin, 1986).

This paper addresses the question: How did the promising program set out in Leon Walras' mature writings come to be taken as laying the ground for a totally different line of problems in his later writings and in modern microeconomic theory? The study of Walras' mature work (see Walker, 1996) offers an instructive object lesson in the way in which an interesting line of enquiry leads gradually to analytical difficulties and then to “solutions” that evade issues and constitute a major diversion of analysis down roads not initially contemplated by its originator. This paper attempts to trace the development of that detour from the main road of economic analysis in Walras' mature work to the side road of abstract exercises in contemporary neowalrasian literature.

Several recent studies, such as that by David Card and Alan Krueger (1995), have led the economics profession to reconsider the theoretical and empirical arguments for and against minimum wage legislation. Most noteworthy was the fact that two respected members of the mainstream economics profession claimed to have found that an increased minimum wage did not lead to increases in unemployment. Moreover, their result was derived from the market for unskilled labor.

In chapter 5 of his book More Heat Than Light (1989), Philip Mirowski mentions that the first neoclassical (W. S. Jevons, Leon Walras, Vilfredo Pareto, and Irving Fisher, but with the notable exception of Carl Menger) all referred to the analogy between their formulations and those of the physics of their day. Then he asserts, going beyond their statements on this matter, that the early neoclassical model was purely an analogical transposition of the model of the field theory of physics of the 1860s, which he calls “protoenergetics.” The latter implies a subject matter that is a mechanics of equilibrium and of reversible phenomena, and in which there is no question of the appearance of the notion of entropy.

Academic economists tend to come in two varieties. One type identifies a substantive specialism at the outset of a career and continues to cultivate it. A second type is more likely to respond to the American Economic Association's twice-a-decade requests for information about sub-specialties by providing a number of differing answers over the course of a professional lifetime. I accept Adam Smith's arguments about the gains from specialization arising from a widened division of labor, but I am also conscious that Smith held that excessive specialization could contribute to boredom in the workplace. In any event, I am temperamentally a Type II economist who has greatly enjoyed working on diverse scholarly topics. I am also aware of a number of turning points that have conditioned my world with consequences that I could not have foreseen.

The invitation to reflect for a wide audience upon my professional life and work is simultaneously flattering, daunting and dismaying: daunting because the shield of privacy normally surrounding personal and family matters can hardly avoid being breached; dismaying because the called-for reimmersion in one's past so strongly evokes unfulfilled hopes and ambitions. Not, I should add, that I have any cause for complaints. My life has been fortunate and fulfilling, yet with the clarity of hindsight, roads not taken become visible more clearly than they were when choices were made.

In The General Theory, John Maynard Keynes broke with the quantity theory of money, not just in working out a monetary theory of production but, as he says, in arguing the case for a monetary theory of value. Keynes writes (CW, 7, pp. xxii-xxiii):

A monetary economy, we shall find, is essentially one in which changing views about the future are capable of influencing the quantity of employment and not merely its direction. But our method of analyzing the economic behaviour of the present under the influence of changing ideas about the future is one which depends on the interaction of supply and demand, and is in this way linked up with our fundamental theory of value. We are thus led to a more general theory, which includes the classical theory with which we are familiar, as a special case.

In the early years of the twentieth century, two outspoken and brilliant American economists, Thorstein Veblen and Irving Fisher, offered sharply-contrasting visions of how the discipline of economics should be transformed. Each taught at a leading university and had added prominence as a journal editor, but pursued economic inquiry in ways alien to senior colleagues at his university and in the profession at large. Despite the gulf separating their approaches to economics, they had been doctoral students of the same mentor, William Graham Sumner of Yale, and had each been deeply influenced by Sumner. This paper uses the exchange on neoclassical capital theory between Veblen and Fisher in the Political Science Quarterly in 1908 and 1909 to illuminate their approaches to economics and to question why the American economics profession came to follow Fisher's path–even though Veblen, unlike Fisher, attracted devoted disciples and was considered in American social thought (excepting academic economists) as the standard-bearer of “the New Economics.” Despite Veblen's antipathy to those aspects of Fisher's work that became dominant in mainstream economics, there was a close affinity between Veblen's Theory of Business Enterprise (1904) and Fisher's debt-deflation theory of depressions, which remained (until very recently) outside the mainstream and has been taken up by such heterodox economists as Hyman Minsky.

The language of graphical analysis has an immediacy which has proven potent in the dissemination of economic ideas (Solow, 1987, p. 186). J. M. Keynes' General Theory of Employment, Interest and Money contained only one diagram (Keynes, 1936, p. 180), but J. R. Hicks' graphical IS/LM analysis contributed to the popularization of one interpretation of Keynes' message. Paul Samuelson's textbook used many graphs, which may account, in part, for its pedagogical irresistibility (Elzinga, 1992, p. 863). Two graphs, named after A. W. H. Phillips and Arthur Laffer respectively, became particularly influential in post-1960 policy debates. The “theoretical Phillips curve” (Phillips, 1953, p. 31; 1954, p. 308) was of interest mainly to specialists in optimal control theory; and Phillips' second empirical curve (Phillips, 1959) remained unpublished for almost four decades. Yet his first empirical curve (1958) led to policy implications which were accepted by virtually an entire scientific profession almost instantaneously, “with alacrity” (Friedman, 1977, p. 469). It appeared to fill a gap in the Keynesian neoclassical synthesis, and was rapidly adopted by the textbook writers (Samuelson, 1961, p. 383; Lipsey, 1963, p. 438). During the 1960s, it became widely accepted that ongoing inflation would be accompanied by a sustained reduction in unemployment. When inflation came to be associated with increasing rates of unemployment, this reflected adversely on the economics profession in general, and Keynesian economics in particular.

John Rae is best known for his contribution to capital theory, particularly to Austrian capital theory. J. A. Schumpeter's (1954) assessment is typical in the literature: “two cornerstones of [Böhm-Bawerk]'s structure–one of them also a cornerstone of [Nassau] Senior's–are in fact there” (Schumpeter, 1954, pp. 468-69). Although this seems to have been the standard perception (see also Dorfman, 1995, p. 21), there is growing appreciation that Rae had a theory of economic development, rather than only a theory of capital. As Klaus Hennings put it: “Rae ascribes to inventions a more important role for economic progress … than capital accumulation” (Hennings, 1987, p. 40). Spengler (1959) saw Rae's contribution as “his recognition of the importance of the role of technical knowledge and invention in economic development” (ibid., 1959, p. 406; see Deans and Deans, 1972; Birchler, 1980). Syed Ahmad (1996a, 1996b) and Anthony Brewer (1990, 1991, 1996) agree on the central role of innovation in the economics of Rae.

The history of economics provides many examples of economists, such as A. A. Cournot, and J. H. Von Thunen, whose work became influential only long after it was written. Others, like Francis A. Walker, loomed large during their careers, only to fade in the discipline's memory. Irving Fisher's reputation has followed a much less common trajectory. Once the most cited monetary economist, the subject of major review articles and the center of controversies over theory and policy, Fisher lost the profession's attention, vanished from citation lists in macroeconomics, and was regarded as an embarrassment by colleagues in his university and his discipline. Then, after his death, his contributions to macroeconomics became increasingly cited and influential, as macroeconomics developed in ways that brought it closer to Fisher's approach. New approaches have been found prefigured in Fisher's work, as when a 1926 article of his was reprinted in the Journal of Political Economy in 1973 as “I Discovered the Phillips Curve” (Fisher, 1997, 8). Fisher was once caricatured in introductory textbooks as the supposed exponent of a constant-velocity version of the quantity theory of money, the exemplar of simplistic pre- Keynesian economics swept away in the Keynesian Revolution, but recently there has been attention to Fisher as, in Keynes's phrase, “the great grandparent” of The General Theory, “who first influenced me strongly towards regarding money as a ‘real’ factor” (Keynes, 1971-89, 14, pp. 203 n.; Dimand, 1995; Kregel, 1988).

Economic justice in the labor market is an abiding issue of economic policy. Concerns regarding fair pay or just compensation were addressed in classical political economy and continue to be the objects of policy discussion. What constitutes a fair wage? How is a fair wage to be determined? Will competition in the labor market ensure that a fair wage is established? Should employers be required by the State, or persuaded on a voluntary basis, to pay wages that maintain a family's dignity and honor?