When I first began the serious study of the history of economic thought, my presumption was that one should always start at the beginning. This was some thirty-five years ago and I have been finding so much interesting material that I have had a hard time getting past Adam Smith. The search for the beginning, of course, led me to the question of what do we mean by economic thought and how do we define it for the purpose of identifying its origin?.

The term revolution is normally used to indicate a sharp change in the direction of evolution of a given phenomenon, a catastrophe, in the jargon of modern dynamic theory. In this sense we often talk of the Newtonian revolution in physics or of a Neoclassical revolution in economics.

I read your “…Historiography…” (Blaug 1990) with interest and profit. You were kind to me—probably too kind. But let me explore a point. Let's accept for the sake of the argument that in some instances a “rational reconstruction” can deviate from a “historical reconstruction.” Query: When I attributed to Smith the “canonical classical model” (Samuelson 1978), did I provide your readers with such an instance of deviation? No, I say. And your text does not adduce otherwise. Nor does Hollander's rhetoric (1980) in reaction to me. Actually, Hollander said: Yes, that model is in Smith but one has to work hard not to overlook it (particularly because its pieces are in scattered and unlikely places).

Alfred Marshall, who once proclaimed that the Mecca of the economist lies in Economic Biology, is remembered more for the mechanical analogies contained in the appendices of his Principles of Economics. Subsequent revisions of Marshall based on the mechanical principles he incorporated into the theory of the firm (Robbins 1928; Pigou 1928), the theory of competition (Robinson 1933; Chamberlin 1933), and the theory of value (Hicks and Allen 1934), succeeded in completely removing the corpus of economic theory from the domain of biology.

As Kenneth Arrow has pointed out in a recent paper, “David Ricardo was a peaceful man” (Arrow 1991, p. 70). Indeed he was—during his lifetime. I am not so sure he is resting peacefully given the further assertion that his system was “a bold attempt to determine values independent of demand considerations” (ibid., p. 75). Arrow adds, byway of qualification, that he does “not think, as some neo-Ricardians seem to, that there was in any sense an intended repudiation of the demand schedule”; rather Ricardo did not conceive of such a schedule even though “some of [his] analysis can only be made sensible on the basis of such a concept.”

Alfred Marshalls monetary theory presents itself as fragmentary and without internal coherence. Coherence can be given to it by developing the implied theoretical linkages between the money market, the securities market, and their respective interest rates, while noting the importance in interest- rate determination of the real forces of productivity and thrift.Marshalls development of a theory of money and securities markets arises from his dissatisfaction with the quantity theory of price-level determination as an explanation of the monetary transmission mechanism

Adam Smiths adding up theory (Sraffa 1951, p. xxxv) has generally been interpreted as an expression of the harmonious view of the mechanisms governing exchange ratios and distribution In two preceding works (Nistico 1988,1991) I tried to show that Smith's theory of prices is instead fully compatible with the classical approach to the theory of value and distribution based on the essential role played by class antagonism in a capitalist system.

The present note is a development of a paper I presented some four years ago at the 1987 meeting of the History of Economics Society (Caravale 1987), and that was later published in Rivista di Politico Economica in an expanded version (Caravale 1988). The aim of these two writings was to emphasize that—contrary to what is often maintained—demand conditions play a fundamental role in classical and classical-type theories. This role is different from that played by demand in neoclassical theories (where equilibrium prices are determined by demand and supply functions), and is so to speak “internal” to the theory of natural equilibrium since it is connected with the definition, for each situation, of the Smithian “point of effectual demand.” Before turning to the specific object of this note, let me recall very briefly the main points of the general thesis developed in the above-mentioned papers.

David Ricardo was a peaceful man, well liked and admired for both his intellectual and his personal traits by his colleagues and rivals whether on the Stock Exchange, in the nascent field of political economy, or among the members of Parliament. He could maintain personal friendship and wellbehaved exchange of ideas with someone as far removed from him in both religion and economic doctrine as Thomas Malthus. The intellectual strength of his written work could dominate the thought of such a great mind as that of John Stuart Mill and rouse the writer Thomas de Quincey from his opiumriddled state to renewed mental vigor.

Historians of economics and philosophy have noted Georg Wilhelm Fredrich Hegel's debt to Adam Smith and have suggested that Hegel's analysis of civil society rests on a Smithian foundation. Laurence Dickey recognized that “Hegel's interest in the Scots coincided with the late eighteenth-century German interest in the relationship between socioeconomic processes in history and the development of civil institutions” (Dickey 1987, p. 194). Georg Lukacs emphasized that “it is highly probable that the study of Adam Smith was a turning-point in Hegel's evolution” (Lukacs 1976, p. 172). In his study of The Formation of the Economic Thought of Karl Marx, Ernest Mandel maintained that Marx discovered political economy and its importance to philosophy in his reading of Hegel. Says Mandel:

The resurgence of neo-Schumpeterian theories and models of technological innovation and development1 is an enduring sign of the historical significance of Joseph A. Schumpeters theoretical works on the dynamics of economic change as a result of long-term technological change.

William Thornton's On Labour, Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future was a contribution to the social debate of the 1860s. In the context of an attack on the vulgar wage-fund theory, which was wielded in popular discourse to emphasize the futility of trade unions, Thornton offered a more general assault on what he labelled “demand and supply.” John Stuart Mill had expected Thornton's book to play an important role in furthering his own campaign in support of trade union legalization, but the book received mixed reviews. Most critics missed the opportunity to respond to Thornton's social commentary, and focused instead on his analysis of demand and supply. The negative reviews found the theory wanting and, to John Stuart Mill's chagrin, dismissed the entire book. But the positive reviews were even more devastating from Mill's perspective. Not only did they ignore the social analysis, with which Mill was in agreement, but they seemed convinced that Thornton had demolished the demand and supply theory. Since Mill was then trying to consolidate the intellectual basis of the Liberal party on the foundation of classical political economy, this was hardly an outcome he could accept. The recantation article, which combined a sympathetic treatment of Thornton's social analysis with a criticism of his economic analysis, was the inevitable result (see Forget 1992).

“…a remarkably clever book, the result of close thought, much observation, and some research. Yet, after having read the book with attention, we are disposed to ask, why has it been written?” (The Athenaeum, May 1865).

Henry George has many admirers, but only a few scholarly economists would regard him as one of their own. In this paper, I wish to argue not only that Henry George made a sound contribution to political economy; I also claim that his analysis is eminently significant for environmental economics today.

Hans Karl Emil von Mangoldt (1824-1868) is often cited as making an important contribution to German economic theory in his major work, Grundriss der Volkswirtschaftslehre (1863), which was written as a text for further discussion in classes. Yet the details of his compressed analysis have rarely been given close attention.

W. Stanley Jevons's statistical study of periodicity has received much scrutiny (Aldrich 1987), but less attention has been given to his theoretical position on economic fluctuations, a circumstance which T. W. Hutchison justly finds surprising considering that “Jevons maintained that aggregate instability, and the distress it caused, presented profoundly serious problems, and devoted some of his most strenuous economic research to their explanation” (Hutchison 1988, p. 6). This paper takes up the challenge to examine the development of Jevons's thought on economic fluctuations from the early 1860s until his death in 1882.