David Colander argued to this Society two years ago that the term “neoclassical economics” ought to be declared dead (Colander 2000). I concur with him on the verdict, but do so for different reasons. Colander's argument was that neoclassicism possessed six primary attributes, and much of mainstream economics cannot be characterized in these terms. My argument is simpler. It is that neoclassical economics was primarily a theory of the human individual in economic life (albeit a flawed one), but contemporary mainstream economics does not possess a theory of the human individual. This conclusion may not surprise those who have reflected on the rise of formalism in economics in the postwar period. But for two reasons I think it important to emphasize the disappearance of a theory of the individual from economics. First, because neoclassicism implemented and defended for nearly a century one particular philosophical conception of the individual central to western thought since the Enlightenment, the abandonment of this commitment by mainstream economics is an important part of our understanding of its evolution and its relation to social thinking generally. Second, the demise of the individual in mainstream economics is also significant because, having abandoned the individual, mainstream economics is no longer capable of offering a defense of the individual in contemporary society. Indeed its project, I will suggest, is in important respects anti-individualist. It may be naïve on my part to think contemporary society still engaged in a defense of the individual. Nonetheless, I hold that thinking about the individual remains fundamental to how many people think about the social world, and that consequently mainstream economics' abandonment of the individual may render it historically irrelevant, perhaps contributing to its fragmentation and dissolution as an identifiable approach in economics. Thus the important conclusion to draw may not be Colander's: that we have seen the death of neoclassical economics. It may be that at issue today is the death of mainstream economics.

Morris A. Copeland's work and career as an institutional economist has been the subject of only one significant paper (Millar 1980) and is not well known today, even among institutionalists. The standard histories of institutional economics have tended to focus on a few leading figures, notably Thorstein Veblen, Wesley C. Mitchell, John R. Commons, and Clarence Ayres, and have largely ignored the many others (some of whom had outstanding careers) associated with the movement. This narrow focus has given a misleading impression both of the institutionalist movement itself and also of the nature of the institutionalist contribution to economics. The examination of Copeland's career, treated as a case study in the history of institutional economics, can help correct this problem. Copeland is a perfect candidate for such a case study due to his central place within the interwar institutionalist movement, his teachers, the contacts he maintained, his work in both academic economics and in public service, and his professional standing within economics more generally.

In the winter of 1934–35, when John Maynard Keynes was beginning to circulate proofs of The General Theory of Employment, Interest, and Money, he indulged in a playful exchange of letters with George Bernard Shaw devoted mainly to the merits of Karl Marx as an economist. At the end of his letter of January 1, 1935, Keynes's observations took a more serious turn, documenting fundamental changes in his theoretical ambitions following the publication of his Treatise on Money in 1930: “To understand my state of mind, however, you have to know that I believe myself to be writing a book on economic theory which will largely revolutionize—not, I suppose, at once but in the course of the next ten years—the way the world thinks about economic problems” (Keynes 1973a, p. 492).

In his 1989 Cambridge doctoral dissertation, The Concept of Equilibrium in Neoclassical Theory, Franco Donzelli observed that, “The history of the neoclassical approach over the last one hundred and twenty years can be interpreted as a history of the relationship between instantaneous and stationary equilibrium models, on the one hand, and of the developments internal to either class of models, on the other” (Donzelli 1989, p. 31).

Over twenty years ago, I had the pleasure of speaking to the Royal Statistical Society about the life and work in statistics of Francis Ysidro Edgeworth. In a preamble to that talk, I commented upon some similarities between Edgeworth and an even earlier scientist, Daniel Bernoulli, who lived from 1700 to 1782. One similarity I mentioned would be so well-known to this audience that it scarcely bears repetition: Both Edgeworth and Bernoulli were important in the histories of both economics and statistics. Of Edgeworth's work in economics I need not comment—I expect that his work on taxation, price theory, international trade, and index numbers is familiar to many in this audience. Edgeworth's work in statistics was no less important in at least four ways: (1) He was an astute and original philosopher of the application of probability and quantitative thinking in social science; (2) he had sufficient mathematical genius to situate Galton's concept of correlation in the framework of the multivariate normal distribution, thereby pointing the way for Karl Pearson to develop correlational analysis—Edgeworth even has a claim on being the inventor of the product moment correlation coefficient; (3) he pioneered the exploration of many topics, such as variance component estimation, the theory of maximum likelihood, and series expansions for sampling distributions; and (4) he had an amazing ability to explore the limits of statistical concepts by constructing subtle and surprising counterexamples to widely accepted truths.

This paper consists of a rhetorical interpretation of two essays published fifty years ago, at the beginning of the so-called “Latin American economic school.” Both were written by the Argentinean economist Raúl Prebisch (1901–1986), who was then working at the United Nations Economic Commission for Latin America (ECLA). As the most prominent Latin American economist, Prebisch fostered the construction of a theoretical framework that heavily influenced Latin American development policies after World War II.

From Jacob Viner (1927) to David A. Reisman (1998), Adam Smith's departures from an advocacy of laissez-faire in The Wealth of Nations have been interpreted by a number of scholars. In this paper, we examine one of the oddest, and perhaps least noticed, of those departures. That was Smith's defense of the civil law of lay patronage in the established Presbyterian Church of Scotland, which appears in his discussion of the social benefits and potential social costs of institutions for religious instruction. A lay patron was a non-cleric individual who held the right under civil law to select the minister of a local parish church. In Smith's time, roughly two-thirds of the lay patrons in Scotland were wealthy landowners and one-third were crown officials. In addition, municipal corporations (cities) and universities held some patronage rights.

When François Quesnay began to publish on economics there were unmistakable indications that fundamental change was required in France. The finances of the State were in perpetual difficulty, and it had to borrow at higher interest rates than the private sector. Paris was the intellectual capital of Europe, and France was unquestionably one of Europe's great powers, but she had difficulty in simultaneously financing the Army and the Navy, which her international ambitions required. In the repeated wars with Great Britain in what has been described as the Second Hundred Years War (dating from 1688 until 1815) military weaknesses under the Bourbons associated with inadequacies of finance hampered France's efforts to match Britain in the colonization and exploitation of the wealth of North America and India. In the absence of representative institutions such as the British Parliament, the wealthy in France would not consent to the taxation required to establish the French State on a financial foundation commensurate with its political aspirations.

John Bates Clark (1847–1938) holds a secure position in the history of American economic thought. Specifically, he is remembered for developing the marginal product theory of distribution, which was presented in its most complete form in The Distribution of Wealth (1899). However, Clark's primary intellectual commitment has been largely overlooked. This was his search for the rules and institutions that would create a prosperous economy featuring a just distribution while maintaining the essential structures of competitive capitalism.

The last twenty-five years of the twentieth century were freighted with important moments for historians of economic thought: the collapse of the Keynesian consensus, the rise (and fall) of monetarism, the collapse of the former Soviet Union and the other Marxist-Leninist states in central and eastern Europe, the rise of neo-liberalism, and arguments over the possible emergence of a “New Economy” following the internet investment boom at the end of the 1990s. Each of these moments will require its own history as we slowly move away from the tumult of the times and begin to weigh them for their own significance. But several of the moments have a common iconic face in Margaret Thatcher, the Prime Minister of Great Britain from 1979 to 1990. Few other individuals so readily embody the sense of the times. Thatcher's election—a full year and a half before Ronald Reagan's—marks for many people the moment when Keynesian policies finally and irretrievably lost their legitimacy. Likewise, the timing of her election, just two months before Paul Volcker's selection as the chair of the Federal Reserve Board of Governors in the United States, also means that for many people Thatcher's is the public face of monetarism's ascendancy. Finally, there is probably no one person whose name is so clearly associated with the rise of free market thinking and neo-liberalism during the end of the twentieth century.

Does neoclassical economic theory embody a specific politics? A century of uneasy bromides have done little to seriously clarify the issue, perhaps because of a tendency to confuse the various levels of specificity at which an answer might be tendered and defended. At its most abstract and general, the response must surely be: a few equations imperfectly cribbed from rational mechanics need have no special affinity with any political position whatsoever, as long as sufficient ingenuity is expended in their interpretation and elaboration. Yet, at a slightly less elevated level, the question as to whether individual neoclassical economists put forth arguments that supported various political programs cannot be answered in any other manner but the airmative. Walras thought it underwrote a limited conception of state ownership of land; Pareto thought it resonated with a sour cynicism about the circulation of elites; Hayek began by thinking it helped explain an anti-statist position; Milton Friedman believed it the economics of Dr. Pangloss. But this raises the further question: Is there anything intrinsic to the doctrine that biases it toward one political orientation or another? This question can only be addressed at the very specific level of individual cultural formations at well-demarcated historical junctures.

Loïc Charles and Philippe Steiner (2000) rightly draw our attention to Quesnay's neglected political views, namely the project of making France strong enough to confront England in economic and in military affairs. Schematically, Quesnay insists more upon wealth than upon population, which makes for a difference with most of the economists of his time, and more upon the navy than upon the army. Walter Eltis (1999) carefully relates the “explanations” of the Tableau économique contained in l'Ami des Hommes and the Philosophie rurale to the policy recommendations of Quesnay. He emphasizes the practical character of these different Tableaux in contrast with the abstract character of the first versions and of the Formule. He also gives a detailed account of the efects of diferent policies, namely the extension of grande culture, free trade of corn (which amounts to a higher price of corn), and tax reform. Gianni Vaggi (2001) insists on the modernization of agriculture as a decisive element of the power of a nation. Such preoccupations seem well in accordance with Quesnay's more general concern—that is, refounding the French monarchy on a natural order in which politics and economics can hardly be distinguished.

“PAUVRES PAYSANS, PAUVRE ROYAUME” (Quesnay's emphasis), this is the synthesis of the evil and damages of France in Extrait des économies royales de M. De Sully (Kuzcynski and Meek 1972, p. 10). This text is made up of twenty-four short maxims that accompany the third edition of the Tableau économique, in the first months of the 1759; the words quoted refer to a note and to maxim fourteen. A similar text, with the emphasis, is in the Maximes générales du gouvernemente économique d'un royaume agricole published in the 1767 in the Physiocratie by Pierre Samuel Du Pont de Nemours, a disciple of Francois Quesnay (INED 1958, vol. II, p. 973). This is no secondary item in the work of the master of Physiocracy; in this brief sentence and in that emphasis there is the synthesis and analysis of the main problem of France in the eighteenth century.

The government of Margaret Thatcher forms a revealing case study of how economic ideas become entwined with the political and economic history of any country where attempts are made to apply them. As each of the papers in this symposium points out, Thatcher and her government became inextricably associated with “monetarism.” They were influenced by a range of economists, including Milton Friedman and Friedrich Hayek, but the policies that went under the label of monetarism ended up being very different from what one would expect from reading the academic literature on monetarism. Though it shared important features, Monetarism came to mean something very diferent from, for example, Friedman's quantity theory. More significantly, the meaning of monetarism and the way it was applied changed signi cantly during the government's period in office. Many of these changes were in response to specific economic problems that the government was forced to confront. To understand the way economic ideas developed, and why monetarism was interpreted in the way it was, therefore, it is important to understand the macroeconomic history of the period. That is the purpose of this paper.

In eighteenth-century Italy a number of interesting efforts were made to apply mathematical methods to economic analysis. Scholars living in the Milan area were especially keen on mathematizing economic issues. R. D. Theocharis identified a common current of thought, which he called the Milanese School, in his pioneering research on early mathematical economics (Theocharis 1983, p. 2).

[First page missing from the archive] … embitterment against society; but anarchism assimilates to itself that hostility to law which naturally results from evil doing. The antipathy of the rogue for the halter reinforces this movement. It gathers to itself disreputable elements, and by its outbreaks moves society to resistance. It is a self-terminating movement.

Socialism appeals to better classes and has far more strength. Attack the state and you excite feelings of loyalty even among the disaffected classes; but attack the industrial system and appeal to the state, and you may have loyalty in your favor.

Francis Wayland (1796–1865) became the president of Brown University at age 31, remaining so for twenty-eight years. According to the custom of that era, the president taught moral philosophy and political economy to the Brown undergraduates. Wayland published his lectures on moral philosophy as a textbook in 1835 (this essay cites the 1837 edition); his notes on political economy followed in 1837 (this essay cites the 1841 edition). The Elements of Moral Science ultimately reached 100,000 copies in print, while The Elements of Political Economy reached approximately 50,000 copies and its abridgment another 12,000 (Wayland and Wayland 1868, p. 389). Paul T. Heyne (1982, p. 126) states that Wayland's Political Economy “was by far the most popular political economy texbook prior to the Civil War,” with ongoing influence “through adaptations and imitations.” A comparison of book sales to college enrollments suggests that Wayland's Political Economy served a greater proportion of the market of its day than Paul Samuelson's Economics did between 1948–1980.

More than sixty-five years have passed since Michal Kalecki (1935) published one of the first formal mathematical models of business cycles. His paper presents a closed-form analytic solution. This characteristic, among others, sets Kalecki's work apart from that of contemporary literary business cycle theorists such as Friedrich A. Hayek (1935) and John Maynard Keynes (1936).

In a world where transitions to democracy are often turbulent, interrupted, and uncertain, it is easy to think of Britain, where an embryonic form of parliamentary democracy emerged in the seventeenth century as an exception because the basic shape of politics has appeared settled for so long. On the contrary, I will argue, since the 1970s Britain has been fundamentally transformed from a consensus-driven, institutionally cohesive, model West European democracy, into a fractious, institutionally rigid, and quite unresponsive political system. I will suggest that these developments in Britain have broader comparative significance for they help identify a critical shift from social democracy or collectivism to what I call a post-collectivist politics of dissonance.

The Physiocrats “New Science” of Political Economy is often represented as unrelated to the pursuit of national power. A recent study (Fourquet 1989), which rests on the approaches of Fernand Braudel (1979) and Immanuel Wallerstein (1980), has radicalized the thesis already propounded by Edmond Silberner (1939) who claimed that Quesnay was profoundly ignorant of military matters and failed to understand the power struggles being played out on the seas and in the colonies. Did not Quesnay propose turning back to an agricultural economy, banishing industry, trade, and the navy—in short, all the active forces thanks to which Great Britain had snatched domination of the world economy from Holland and thanks to which she would prevent France from obtaining it?

Yet this thesis is weak. It must be remembered that Quesnay's first economic writings date from 1756–57, that is to say a period when confrontation between France and England was at a peak, with the start of the Seven Years' War. How could an author who claims to de ne the economic government ofan agricultural nation ignore the military problems which were so crucial in this period? Even if he wanted to, how could he succeed in doing so once he came to deal with taxes and the highly sensitive question of finance? How could he make himself understood by his contemporaries with a political theory that set aside all the burning issues of the day? How could he find an audience among those developing the science of commerce who always accorded great importance to the pursuit of power?

Under scrutiny the traditional thesis appears inaccurate. After recalling the writings of some of his contemporaries, whom Quesnay knew and read (section 1), I shall show that articles drafted between 1756 and 1757, like published or unpublished works which Mirabeau and Quesnay elaborated between 1757 and 1760, give significant room to the nation's military power, particularly when the economic government is in question (section 2). From the years 1763–64 the idea of a natural order does not lead Quesnay to neglect the pursuit of power (section 3). These links between power and wealth in the work of the founder of Physiocracy will lead finally to some remarks on political economy as a form of rationalization of politics.