Tomoyuki Arai
Graduate School of Economics
Chuo University, Tokyo

Dugald Stewart on Free Trade of Corn and Poverty in the Early Nineteenth Century Britain

Dugald Stewart (1753­–1828)’s Lectures on Political Economy (1800­–1810), which was the first university course on economics in Britain, offered an attractive curriculum to his students, who included the founders of the Edinburgh Review. It also continued to be widely influential in Britain after his death. His lectures covered the following topics: population, national wealth, poor relief, and education.

This paper aims to reinterpret Stewart’s economic thought, which introduced a new perspective on the political economy of the early nineteenth century. First, the paper discusses Stewart’s economic thought on contemporary corn trade. Stewart emphasized the necessity of freeing corn trade, cogently expressing his view on the subject. Second, the paper highlights the significance of his thought on poor relief, especially his proposed short-term remedies, in his political economy. Thus, this paper will show how Stewart’s economic thought was effective during the food crises after 1790s.

Tony Aspromourgos
University of Sydney

The Machine in Adam Smith's Economic and Wider Thought

Abstract. This paper exhaustively examines all Adam Smith's references to 'machines', including machine metaphors or analogies, with a view to a comprehensive interpretation of the significance of the machine in his thought as a whole. By bringing together all Smith's references to machines (and variants of that term), as well as his references to related phenomena, mechanics and engines (and variants), the totality of the various different kinds of uses of these terms assists in clarifying the meaning of each of them. However, this exercise is undertaken particularly with a view to the significance of machines in Smith's political economy.

Komine Atsush
Ryukoku University

Why did Keynes promote Grace I in 1921?
A Cambridge University Officer’s Attitude towards Conferring Degrees on Women

From 1920 to 1926, Keynes, who was middle-aged at that time, worked for the Council of the Senate of the University of Cambridge. The Council was virtually the apex legislative body and the commander of the other administrative bodies. In the early 1920s, Cambridge confronted a serious challenge regarding status of women: Unlike other universities (including Oxford), Cambridge had denied women formal membership, which the central government did not appreciate, when establishing a Royal Commission vis-à-vis a huge state subsidy. Then, Keynes, as a University Officer, pressed for Grace I, a compromised proposal that was, however, oriented towards gender equality. This paper deals with the backgrounds, reasons, and lessons of Keynes’s intentions and action. I point out tentative three reasons behind this action: First, Keynes was convinced of women’s excellent potentiality of learning and leadership because he had observed these in numerous models close to him, such as Mrs Marshall, his mother, and his students. Second, he attempted to abolish such absurd conventions in Cambridge. He believed that the new centre of academia were research faculties and laboratories, not closed communities like those in college. Establishing such faculties would require the optimum use of human resources (including able women) within limited funds. Third, Keynes ultimately wished to protect the colleges’ autonomy. However, given the new situations of limited funds and academic specialization, he advocated semi-autonomous bodies (middle unites between colleges and the Council), in which a central authority would expropriate surplus funds from rich colleges and redistribute this money among faculties. In conclusion, Keynes’s engagement in women’s issues was rather motivated by his desire to reform Cambridge University and preserve the balance between autonomy and external control there, not by an inclination towards radical feminism per se or a belief in gender equality.

John Ballantyne
National Civic Council

Keynesian economics at the crossroads

Keynesian economics reached a crisis point in the 1970s as “stagflation” intensified across the Western world. The continued use of orthodox Keynesian pump-priming techniques exacerbated both inflation and unemployment — as Britain’s Labour Prime Minister James Callaghan famously observed in his keynote speech at the 1976 Labour Party Conference (three years before Margaret Thatcher’s Conservatives came to power).
The Nobel Prize-winning Chicago economist Milton Friedman’s drastic remedy (subsequently adopted by Thatcher’s Conservatives) of slower money supply growth, combined with market deregulation, succeeded in bringing down Britain’s inflation rate, but at huge social cost in the short term.

The Nobel Prize-winning Cambridge economist James E. Meade (1907-1995) offered a radical alternative “new Keynesian” strategy to tackle stagflation. (In the 1930s, Meade was one of Keynes’s most distinguished intellectual collaborators. During World War II, Meade became a high-level adviser to Churchill’s wartime coalition government. After the war, he was a senior adviser to Clement Attlee’s Labour government (and was the unacknowledged father of GATT), but became disillusioned with Labour’s anti-market policies and eventually resigned.

In his 1977 Nobel lecture, Meade addressed the seemingly intractable phenomenon of stagflation and proposed an ambitious program of interlocking policies that aimed to achieve, simultaneously, the three objectives of price stability, high and stable employment, and external balance. (As early as World War II, Meade had pioneered the “insider-outsider” theory of employment, usually credited to Sweden’s Assar Lindbeck).

In a series of books he wrote in the 1980s, Meade advocated:

1) Using a combination of fiscal and monetary policies to ensure a steady non-inflationary expansion of aggregate demand (which was not all that different from Friedman’s objective, but, unlike Friedman’s money-supply rule, did not rely exclusively on monetary policy).
2) Instead of the government resorting to centralised pay controls to fight inflation (these had spectacularly failed in Britain in 1973-74 and 1978-79), pay disputes would be referred to decentralised tribunals which would grant pay rises or impose pay restraint according to which outcome would better ensure sustainable output and employment in a given industry, sector or region. In other words, pay outcomes would be more market-oriented. (Distributive justice, said Meade, should be pursued through progressive taxation, social benefits and family allowances, rather than through wage-fixing).
3) The adoption of Martin Weitzman’s famous “share economy” scheme, but also incorporating some important technical modifications, which, Meade hoped, would make the economy both inflation-proof and recession-proof.

Jerry Courvisanos and Stuart Mackenzie
School of Business, University of Ballarat

Role of History in Economic Theory: Critical Realism and Joseph Schumpeter’s Plea for Entrepreneurial History

Economic history has been sidelined in economic theory research. It is now the preserve of a small and declining number of economic historians seen by the economics mainstream as merely descriptive anecdotes of the past. There is one interesting case where one of the leading economists of the 20th Century attempted to incorporate history directly into economic theory. This paper discusses the case of Joseph Schumpeter’s attempt in the 1940s to stimulate the study of entrepreneurial history to enrich the economics discipline. The entrepreneurship function sits at the heart of Schumpeter’s economic theory, in particular his account of endogenous economic growth and development, and throughout his life he advocated a vital role for history in understanding the role of the entrepreneur in economic development. In his last years, Schumpeter wrote specifically on the role of entrepreneurial history in economic theory. This paper argues that Schumpeter’s vision has not been realised and that a critical realist methodological framework offers a suitable approach to addressing this lacuna between history and theory. Schumpeter’s own words in this late period can be seen as a prototype of the critical realism methodology. Critical realism allows the researcher to dig deeper into the lower stratums of entrepreneurial activity in order to understand the structures, powers and mechanisms underlying the observable results of entrepreneurial action within a defined historical period. This potentially explains the phenomena of economic development by exposing the causal factors of innovation and entrepreneurship and its impact on structural change. The paper argues that Schumpeter would agree that critical realism offers the most suitable research framework for addressing dynamic complex issues of economic development.

William Dixon

London Metropolitan University

From Ricardo to Keynes; a history of economic thought as a laboratory for understanding the interaction between economics and economy

A simple presentation of the history of economic thought could summarize two different approaches, the first a history of ideas, looking for progress in ideas, the second locates those ideas in context in which we can discuss issues of appropriateness. We could have an ideas/context divide in the history of thought. It may be that neither possibility presents a pressing case for any history at all, if it is progress then why study a past of wrong ideas? If it is a matter of context why is this relevant to today? Evidently people do the history of thought because they do have an interest in where we are now and how we got there. In addition people may use that history for a critical examination of today. The performativity programme appears to offer some way forward from this by opening out the challenge of producing what Callon called a ‘social history of economics’ here the concern is in how economics formed the economy.

This possibility is not an adequate move away from the context/idea since it merely reverses the orthodox view of economics as studying a pre-existing reality. Inadvertently, we escape one methodology only to turn to another. We can avoid this by considering the full interaction of economy and economic theorizing; for this to be meaningful it must be in terms of a content. That content is the independent labourer. This allows us to examine an interaction between economic theorizing and economy in which the purpose of economic theorizing is to form the economy as the condition adequate for the independent labourer. The content provides a point of sensitivity between economic theorizing and economy that allows a proper social history. a social process. We are clear of the ideas/context divide; our history of economic thought becomes a laboratory for the investigation of the nature of economic theorizing. By following a focussed history through Ricardo, Marshall and Keynes it is possible not only to show the development of economic theorizing in relation to economy but also to reflect on the nature of modern economics.

Geoffrey Fishburn
University of New South Wales

Marx, Marshall, and ‘the good water-nymphs’

Recognition of a simple typographical error in the name of a Greek poet quoted by Alfred Marshall leads us, first, to identification of the source of the error (Karl Marx’s Das Kapital) and the correct identity of the poet; and second, to comparison of the uses to which the verse in question was put by the two writers. Marx, it is argued, expresses a better grasp than did Marshall of the reality to which the poem refers.

Craig Freedman – University of New South Wales
David Colander – Middlebury College

The Chicago Counter-revolution and the Loss of the Classical Liberal Tradition

The Chicago School when staging its counter-revolution against the mainstream Keynesianism of the 1950s claimed to be a direct continuation of the Chicago tradition and the upholder of the classical liberal tradition in economics. We demonstrate in this paper that the perceived, more urgent need to counter the acceptance of creeping collectivism in policy measures led the founders of the school (Friedman, Stigler and Director) to sacrifice the very liberal values they claimed to be defending. By doing so, they introduced a more partisan element to the economics discipline where successfully marketing one’s position gained paramount importance.

Peter Groenewegen
University of Sydney

A Sign of the Times: J.S. Nicholson on the Revival of Marxism

J.S. Nicholson’s critique of Marx, Marxism, and Marxist socialism is explicity a re-reading of Marx by the Scottish economist after World War I. It was published in 1920 as a succinct monograph of less than 150 pages. Its twelve chapters review essential topics related to Marxism in the post-war period, including communism and the Leninist revolution in Russia or, what Nicholson names concisely, ‘Marxism in practice’. The tone of the work in question is well illustrated by Nicholson’s reference in his preface to ‘Marx [as]… the Mad Mullah of socialists’, a non-reformist socialist unlike Robert Owen whose ‘Utopianism’ had stimulated much thought and suggested many practical reforms. (Nicholson 1920, p. iii). This paper examines aspects of Nicholson’s booklet concentrating on the opinions he expressed on Marx, on Marxian socialism and on the nature of communism as seen by Marx, and by Lenin. It is clearly a work inspired by the time it was written, though it draws as well on Nicholson’s earlier critical work on Marx as an economic writer.

Hashad Dave

Re-evaluating Value

Generally it is an experience of every intellectual that while thinking on any social or economic issues it is difficult to arrive on a concrete conclusion. It is because of the reason that one finds immediately controversial examples against his conclusion. An analytical study might reveal the root cause of this fact.

The social problems are influenced by many parameters. When we have to discuss any subject matter that is influenced by so many parameters, it is mandatory to make something (i.e. some of the parameters touching to the subject matter) definite, settled or certain for the aspects of the discussion. If we make anything certain by way of giving definition, putting clauses of limits or describing something specific, the conclusion automatically becomes conditional, otherwise, it raises many contradictions as well as controversy might also emerge to surface. Somehow, when we make something certain/settled and because of that "same" is influenced by so many parameters, we will come across an immediate need to compromise or to redefine the clauses to avoid controversy. Ultimately the discussion gets trapped into confusion instead of arriving on any definite outcome from the same. As a result discussion limits to personal opinions and views. A reliable conclusion may be arrived on the summarization of such independent and personal thinking and thoughts. It is advisable to remain out of controversy or contradiction while discussing such matter within the prescribed region of our subject matter only. This will lead us to the essence of our discussion. Under signed has tried to concentrate on some of the key words of economics in the attached papers/article.

The words like value, ability, need etc are very important while explaining the sensitive issues of economics. Though substantial debate, writings and discussion are held on the same, it (work done on such words) seems inadequate. Undersigned has tried to re-valuate the word "value" in the subject papers with title "Re-valuation of Value". It is tried to define value with four preconditions. Other all sense/feeling of value (not fulfilling the subject four conditions) are the particular form/type of value but not the value as defined. However, the types of value might be recognized as the raw form of value.. but not as the value as per the definition. If issues of economics are reviewed with this concept in mind, one might face minimum controversy while arriving on conclusion for any issue of economics.

Peter Jonson

Great Crises of Capitalism – what are the lessons?

Those of us who lived through the Global Financial Crisis of 2007-08, and in particular the global financial freeze of 2008, have been privileged to have been involved in one of the great crises of capitalism. Broadly ‘Keynesian’ policies of great fiscal expansion and zero official rates of interest were implemented with enthusiasm. Major financial institutions were bailed out except for one (Lehman Brothers)
Whether these policies will succeed in limiting the damage is uncertain. Governments of ‘western, or ‘North Atlantic’, economies have discovered that great fiscal stimulus increases government debt to uncomfortable levels – seemingly however without feeling embarrassed at relearning this old lesson. There are plausible concerns about the possibility of sovereign debt defaults, further bank failures, a ‘lost decade’ like that in Japan in the 1990s (extending well into the 2000s) and extreme market volatility doing great damage to the financial wealth of a generation and to the confidence of households and companies.

There is a rich field of relevant study for economic historians. These questions and many others are involved in the great crises of capitalism. I have provided an analytically motivated account of a number of the greatest crises and attempt to draw the lessons. We are living in an age of asset bubbles. There is a real risk of an asset boom and bust that overwhelms national and global policy makers and advisors. I propose antidotes in the form of less ’inspired’ acts of policy activism and more use of stable, well understood policies designed to limit the madder episodes of boom so that subsequent busts are less toxic.

Steven Kates
RMIT University

The Role of HET in the Development of Economic Theory: The Example of Keynesian Economics

This paper will discuss the role of HET in the Keynesian Revolution and then in the development of economic theory following Keynes. Since the Keynesian Revolution began because Keynes was reading Malthus, an economist dead a century by the time the General Theory was published, there is not enough appreciation of the importance of Keynes’s own researches into the past for the direction of economic theory right up to this day. Nor is there much appreciation of the role of HET both in defending and criticising Keynesian theory. So powerful was the influence of Keynes that even the very history of economics was distorted to conform to his own vision of classical economic theory.

Richard Kent
Kent State University

Keynes’s Investment Activities while in the Treasury during World War I

In Old Friends, a book of reminiscences about some of his friends, Clive Bell commented that Keynes “took to speculating” in the summer of 1914 or a little earlier. Roy Harrod, in a review of Old Friends, vigorously disagreed with Bell, arguing that Keynes did not start speculating until September 1919. Occasionally rumors had circulated that Keynes, in his investing, had taken advantage of inside information while in the Treasury during World War I. Harrod was concerned that Bell’s comment would lend credence to these rumors. He strenuously defended Keynes against this accusation. In this paper Keynes’s investment activities while in the Treasury during World War I are analyzed to see if it is possible to determine whether he speculated before 1919 and/or whether he took advantage of his position in the Treasury. Keynes kept very extensive financial records. Using these data it is possible to analyze Keynes’s investments, beginning with the first investments he made upon graduation from King’s College, Cambridge University through the investments he made while serving in the Treasury during World War I.

J.E. King
La Trobe University

The ‘Cambridge Keynesians’: Some Unanswered Questions.

In this paper I discuss some of the important issues raised by Luigi Pasinetti in his Keynes and the Cambridge Keynesians (2007). After summarising the contents of the book, I comment on the intriguing but enigmatic intellectual relationship between Keynes and Sraffa, questioning Pasinetti’s interpretation of Sraffa as a ‘Cambridge Keynesian’ and Keynes as a potential Sraffian. I then criticise Pasinetti’s treatment of the other Cambridge Keynesians (Goodwin, Kahn, Kaldor and Robinson) and his explanation of their failure to reproduce themselves as a major school of thought. After considering the reasons why Pasinetti’s own system has made so few converts, I conclude that theoretical pluralism is the only position on which heterodox economists are likely to agree.

Karen Knight

The economics of Marshall, Pigou and Keynes as a Scientific/Intellectual Movement (SIM): Methodological considerations in the history of economic thought

This paper discusses the historiographical issues associated with undertaking a PhD research project on the thesis considering the question of whether or not the economics of Alfred Marshall, A. C. Pigou and J. M. Keynes on the issues of ethics, evolution and equilibrium constitutes a single Scientific/Intellectual Movement (SIM). As the specific objectives of the study attempt to nest a rational history within a broad sociological study based on Scott Frickel’s and Neil Gross’s (2005) framework for the study of SIMs, this paper considers the methodological issues related to rational and sociological studies in the history of economics and highlights the potential limiting factors associated with these historiographies for the overall project. The main contribution of the paper is to show how limitations associated with rational HET, such as the hermeneutic circle, and the sociological approach to HET, such as realism versus relativism and reflexivity, are to be managed in the project.

Bruce Littleboy
University of Queensland

GLS Shackle: Can we reconcile the irreconcilable?

George Shackle suggested a "scheme" based on different, and often inconsistent, conceptions of time to try to fit one's mind around the diverse array of standard models in economics. His scheme is discussed. Does it help answer the real question, which is why even individuals hold views simultaneously that outsiders regard irreconcilable? Shackle regards Keynes as attempting to wed a mechanical vision to one permitting autonomous shifts in expectations. Others, including Hayek and Schumpeter, each accept ideas that appear to be oil and water. Is devising a scheme the only option, or can we instead distinguish between statements that authors "merely" regard as heuristic and those that are posited as epistemic?

Michael McLure
University of Western Australia

A Note on A. C. Pigou’s Rationale for Rejecting Pareto’s Law

In Pigou’s Wealth and Welfare (1912), as well as in each of the four editions of his The Economics of Welfare (1921, 1924, 1929, 1932), one chapter is dedicated entirely to the critical assessment, and ultimate rejection, of ‘Pareto’s Law’ of income distribution. In the historical literature, Pigou’s assessment is typically considered from the perspective of the critical insights that it brings to our understanding of Pareto’s Law. But the rather vigorous mode of his criticism, together with an erroneous assertion in the relevant Chapter in Wealth and Welfare, suggest that Pigou’s purpose was not only to discredit another approach to distribution, but, also to provide additional justification for his own approach to distribution in a welfare context. The (very) provisional hypothesis of this paper is that Pigou’s extremely critical assessment of Pareto’s Law was, in part, published for a pre-emptive purpose: to fortify use of the marginal theory of distribution in his welfare economics.

Alex Millmow
University of Ballarat

The green and gold revolution: the making of the Australian adaption of Paul Samuelson’s economics principles textbook

On a March evening in 1973 the ABC television compere Robert Moore of the Monday Conference programme introduced his guest Paul Samuelson by holding aloft a copy of his economics textbook. It presented as a strikingly patriotic green and gold cover. Moore joked that Samuelson had taught people economics more than anyone else. This proposed paper will discuss how the Australian adaption of Paul Samuelson’s Economics: an introductory analysis came about. Extensively adapted to fit Australian conditions, the two Australian authors, Keith Hancock and Bob Wallace, came up with a publishing success that was to take university instruction in economics by storm. It was also the first attempt at adapting an overseas text to suit Australian institutions and conventions. The paper assesses how well was it was received and how it spawned imitators.

To write the paper I need some information from you about whether your economics dept used the text. If so, how did you and the students feel about it?

Were there any reviews of the text bar the one appearing in the Economic Record 1970?

Gregory C. G. Moore
University of Notre Dame Australia

Teaching Economics within John Henry Cardinal Newman’s Ideal University: A Nineteenth Century Vision for the Twenty-first Century Scholar

In this paper I examine the implications of John Henry Newman’s vision of a Catholic university, as explicated in The Idea of a University (1852-8) and other tracts, for the teaching of economics. Newman, though not an economist himself, was one of the first educators to consider the place of economics within the university structure. This focus on economics was, in part, due to his acquaintance with members of an Oriel set who pre-occupied themselves with economics in the 1820s; namely, Richard Whately (who was one of Newman’s mentors), Edward Copleston and Nassau Senior. I show that to shift the focus from Newman’s famous account of the “place” of economics within the Catholic university structure to the way it, or any disciplinary subject matter, should be taught, one needs to look beyond The Idea of a University and undertake a more complex exegesis of his religious and philosophical writings. Such an exegesis shows that Newman’s preferred teaching methods were governed by a conservative philosophy—which itself is allied to the way Catholic doctrine should be interpreted—in which knowledge is sufficiently ineffable that it can only be conveyed within a tradition that is maintained through personal contact between master and student.

Magaret Moussa
University of Western Sydney

Keynes’s The General Theory, Epistemology and the Philosophy of Science.

This paper examines starkly conflicting interpretations of Keynes’s method in The General Theory. One group of scholars posits Keynes as a Humean sceptic while a second upholds him as the exemplary Critical Realist economist. Yet a third group emphasises the vein of nineteenth century Cambridge Idealism running throughout Keynes’s work.

This paper firstly shows that The General Theory cannot be either Humean or Critical Realist and that arguments to the contrary have taken elements of these respective epistemological and ontological positions out of context. The paper secondly explores the claim that Keynes is idealist, positing an affinity between The General Theory and post-Kantian conventionalism, rather than with nineteenth century Cambridge idealism.

This paper is part of an ongoing attempt to determine whether contradictions in The General Theory are manifestations of contradictions in Kantian idealism and in its contemporary conventionalist counterpart.

Rod O’Donnell
University of Technology, Sydney

Keynes and The General Theory after 75 Years

This paper provides an overview of Keynes’s contributions in the General Theory and related writings. The related writings are crucial sources of understanding the GT because they instructively illuminate several of its central themes from different perspectives. To understand this path-breaking work fully, it is not sufficient to read it in isolation as a self-contained work.

The overview surveys three areas – philosophy, economics and politics. In philosophy, over the period 1907 to 1921, Keynes advanced a general theory of rationality under uncertainty. Later, in the GT, one significant but less developed part of this theory was expanded and further elaborated into an essential component. This was the topic of behavior under non-probabilistic, radical or fundamental uncertainty, such uncertainty being one side of the risk/uncertainty distinction that Keynes developed almost a decade ahead of Knight. His philosophy also reflected on methodology in the social sciences, and on ends and means in ethics.

In economics, Keynes made major contributions to theory, policy and methodology. Theoretically, the GT advanced a new conceptual framework based on two key elements – the principle of effective demand, and behavior under radical uncertainty – and incorporated new categories of analysis and chains of causation. The conclusion was that unemployment equilibrium, in both the short and long periods, was the normal state of affairs in capitalist economies, rather than full employment equilibria. The policy of greater state involvement, via countercyclical policies (fiscal and monetary) and with fiscal policy including public investment and inequality-reducing taxation policies, followed naturally. Methodologically, the analysis is notable for being general rather than particular, open rather than closed (partly as a result of radical uncertainty), based on realistic assumptions rather than those impossible of attainment, and consistent as between disequilibrium transition processes and equilibrium outcomes.

In politics, Keynes advocated, from at least the 1920s onward, a philosophy of what he later called ‘liberal socialism’. This was a non-Marxist form of socialism aimed at combining the best of liberalism and socialism and discarding the worst. What had to be amalgamated and balanced were the emphases that liberalism placed on individuality, efficiency and variety, and the emphases that socialism placed on system control, humanity and social justice. Ultimately, Keynes’s goal was not to save capitalism, but gradually to transform it into an ethically-based system devoted to increases in intrinsic goodness. To this end, in the absence of ongoing conflicts and significant population increase, two main features were envisaged – a decent standard of material comfort via economic activity, and increased time for non-economic pursuits such as better relationships and communities and the proliferation of arts and aesthetic appreciation.

Hiroyuki OKON
Faculty of Economics
Kokugakuin University, Tokyo

Ludwig von Mises as a Pure Subjectivist

The hallmark of Austrian tradition from Carl Menger through Boehm-Bawerk to the present-day Austrian economists is subjectivism. However, economists of Austrian school differed as for the degree of thoroughness to pursue subjectivist position. Among them, the most consistent and complete subjectivist is Ludwig von Mises. Indeed, he pointed out some shortcomings of Menger’s and Boehm-Bawerk’s subjectivism, and tried to make it complete with the fundamental insight that there is no such thing as value calculation. As a matter of fact, for Mises himself, subjectivism is the driving force of his scholarship. The result is a theoretical edifice of human action where his subjective theory of value, theory of economic calculation, theory of market and pricing process, theory of money or indirect exchange, and applications of those theories to various fields including socialism and welfare state are systematically explained. In this article, Mises’s extended endeavor to complete subjectivism of Menger and Boehm-Bawerk will be traced. As it finished up with his theory of economic calculation, its logical relationship with subjectivist theory of value will be elucidated. On the basis of these considerations, the author will argue that Ludwig von Mises is the pure subjectivist in the sense that, along with Austrian tradition, he completed subjectivism in the history of economics.

Naoki Matsuyama
Graduate School of Economics, Hokkaido University

The Source of Marshall’s Thoughts on Economic Progress with a Focus on his Study of American Industry

The purpose of this paper is to show that Marshall’s thoughts on economic progress were greatly influenced by his detailed consideration of industry. His study of American industry was one of the sources for his economic growth theory, generally called the Organic Growth Theory. His study provides an interpretation of the mutual progress of human ability and economic society. Marshall attached greater importance to personal experiences. In really, he visited Germany twice and the United States once. Here, I focus on the latter. The core aspects of his economic growth theory, for instance, improving production efficiency, reducing working hours, and increasing wages, can be clearly derived from his studies on the American industry.

The main motive for Marshall’s work was that England should become a predominant industrial power much as it was in the mid-Victorian era. In order to clarifying this belief, it is important to examine his study of the American industry in order to make use of the rich repository of knowledge on economic progress in his major works. The following three aspects can be understood from Marshall’s study of the American industry. First, in his major works, a consistency exists with regard to the concept of ‘mobility’, which is an American characteristic. Second, Marshall explained the idea of ‘localization of industry’ to bring ‘mobility’ into the English economy. Lastly, he analyzed ‘Scientific Management’, which was suggested by Frederick Winslow Taylor in 1911, as a concrete countermeasure to England’s depression in the late nineteenth century and at the beginning of the twentieth century.

In conclusion, his study of American industry, which began with his research trip to America in 1875, indicates that ‘mobility’ plays an important role in economic progress. ‘Localization of industry’ promotes the expansion of the economic sphere dominated by small and mid-sized firms, as does the ‘mobility’ and ‘standardization.’ Moreover, his view that the restoration of England’s economy required ‘Scientific Management’ has its roots in the works of the English scientist Charles Babbage.

Jeremy Sheamur

Hayek, Keynes, Robbins and the State

Abstract: During the 1930s, Hayek and Robbins took a distinctive view of trade cycles - based on Hayek's theoretical analysis. As Susan Howson and Donald Winch have documented, Robbins championed such a view against Keynes on the Economic Advisory Council. Hayek and Robbins were also attracted to a view of the rule of law, on the basis of which government should act only using general rules - to do otherwise was to embark upon the Road to Serfdom. However, during the Second World War, Robbins' views changed - such that, at the first meeting of the Mont Pelerin Society, he declared himself to be a Keynesian. This paper looks at the inter-relationship between these developments, with a particular eye on how they related to Hayek's views about the relationship between government policy in this area, and his views about the proper scope and form of government action.

Matthew Smith
University of Sydney

William Blake on the Economic Effects of Government Fiscal Policy

In 1823 William Blake (1774-1852) published the pamphlet Observations on the Effects Produced by Government Expenditure during the Restriction of Cash Payments, which made an important contribution to debate about the role of government fiscal policy in response to the economic recession in Britain that followed the end of the French Wars in 1815. Besides this economic recession, Blake’s pamphlet is more broadly concerned with the effects of British government war policy on the foreign exchange rate and price inflation during the course of the restriction period 1797-1821. This paper is concerned with examining Blake’s (1823) arguments on the economic effects of fiscal policy and their reception by his classical contemporaries. In this connection the paper will deal with central aspects of the controversy over Says Law among the classical economists.

Toomas Truuvert
Macquarie University

Irving Fisher's Pioneering Roles in the Marginalist Quality of Life Movement and the Economics of Health: Implications for Present Day Societal Quality.

It appears from a first look through the history of economic thought, economics of health, quality of life and social quality literature, that the American economist Irving Fisher’s pioneering role in the Marginalist Quality of Life Movement has received scant or no attention. This situation, while curious, is undeservedly so, as Fisher’s quest to improve the quality of life for inhabitants of society has social or distributive justice implications - one hundred years on.

While Fisher’s quest to improve the welfare for inhabitants of society is a lesser known part of his extensive body of work, I propose in this paper that the quest is particularly relevant for socio-economic security - one of four preconditions for social quality. Recently included in the European Union socio-economic reporting, social quality is a theoretical construct that seeks to explain economic and social progress – as a lagging indicator of the degree of social or distributive justice.

Societal quality implications stemming from Fisher’s quest are proposed and valuated
against the backdrop of events that influenced Fisher’s thinking about his role of society. The perspectives of evaluation are: Fisher’s quest as a reformer of society, his time preference or impatience theory of interest, and present day social quality theory.

Gianfranco Tusset
University of Padua

Social Heterogeneity in Vilfredo Pareto

Vilfredo Pareto has been depicted as a scholar of economics, sociology, and political science because his interests touched on all these disciplines. Pasquale Jannaccone, an Italian economist, summed up Pareto’s attitude to a broad stock of knowledge thus: “Pareto was always an insatiable collector of observations on all aspects concerning social life. From this material he sought to build a general theory of human societies, which, integrated by the economic theory, might lead to the establishment of laws on social equilibrium and its changes. (Jannaccone 1949, p. 21)

It is precisely the social equilibrium that has been considered Pareto’s most controversial notion, the topic on which critics have raised the most doubts. This study will deal with social equilibrium but will investigated it from a specific point of view. It has been decided not to start with the most famous Paretian topics, such as ophelimity, indifference curve, and general economic equilibrium. Instead, it has been decided to assume that heterogeneity of agents is the linking theme in Pareto’s theory, from the inquiry into wealth distribution contained in the Cours d’économie politique (1896-97) to the analysis of social equilibrium set out in the Trattato di Sociologia Generale (1916) and his last works.

The literature on Pareto usually emphasizes the treatment of both logical and non-logical actions as the main contribution by Pareto the sociologist, while his analysis of heterogeneity has attracted much less attention. This is on the one hand because Pareto’s massive work has been mainly viewed as a treatise on human choices, and on the other because heterogeneity obliges us to move in a direction opposed to the deepening of specific topics and towards a unified social theory postulating the interdependence among political, economic and social features. This is the perspective from which Pareto’s controversial analysis on social equilibrium will be conducted.
By discussing heterogeneity, the aim in what follows is to develop a related aspect of Pareto’s thought, one more touched upon than explored: his statistical reading of economic phenomena, which in his case occurred years before the shift towards statistical physics. Pareto’s statement that social heterogeneity influences social equilibrium explains his concern with observations of phenomena aimed at obtaining empirical uniformities. The latter could be analyzed statistically; and, moreover, the aggregates established should be considered as autonomous entities whose behavior is not always explainable in light of the individuals involved.

Toomas Truuvert
Macquarie University

Irving Fisher's Pioneering Roles in the Marginalist Quality of Life Movement and the Economics of Health: Implications for Present Day Societal Quality.

It appears from a first look through the history of economic thought, economics of health, quality of life and social quality literature, that the American economist Irving Fisher’s pioneering role in the Marginalist Quality of Life Movement has received scant or no attention.

This situation, while curious, is undeservedly so, as Fisher’s quest to improve the quality of life for inhabitants of society has social or distributive justice implications - one hundred years on.

While Fisher’s quest to improve the welfare for inhabitants of society is a lesser known part of his extensive body of work, I propose in this paper that the quest is particularly relevant for socio-economic security - one of four preconditions for social quality. Recently included in the European Union socio-economic reporting, social quality is a theoretical construct that seeks to explain economic and social progress – as a lagging indicator of the degree of social or distributive justice.

Societal quality implications stemming from Fisher’s quest are proposed and evaluated against the backdrop of events that influenced Fisher’s thinking about his role in society. The perspectives of evaluation are: Fisher’s quest as a reformer of society, his time preference or impatience theory of interest, and present day social quality theory.

Mike White