Syllabus and Reading List

History of Economic Thought since 1890

Economics 322

Spring 2000
Tuesdays 1-3:30
HRM 311

R. N. Langlois

About the course:

This is the second half of a two-semester sequence in the history of economic thought. The other course (Economics 320) covers economic ideas from ancient times through the marginalist revolution of the late nineteenth century. This second course will begin again with the marginalist revolution-covering the topic in greater detail-and will proceed through present-day thought and methodology. (The department expects to change this sequence in the future, rolling both periods into one course and making the second course a general "topics" course.)

Although I intend the course to be quite comprehensive, my approach to the material will have some of the flavor of a topics course. The first two or three lectures will be chronological in approach, but most of the lectures won't be. That is to say, many of the lectures will focus on a cross-cutting topic-like utility and demand theory-and trace its development from classical economics to the present day. I also plan to pay some attention to the methodology of economics before the end of the course.

Course requirements:

There will be a midterm, a final exam, and one (roughly 20 pp.) research paper. The exams are intended to encourage breadth and synthesis; and the paper is intended to encourage depth in one area and to give you practice in professional scholarship. The paper will be due on the last day of class, but I will expect you to have selected a topic in consultation with me fairly early in the term. I expect to set a date on which a first draft will be due. Moreover, as this course is listed as a W course, I will insist on attention to writing style - especially for those of you who are native speakers of English (or nearly so). Please consult my online notes on writing. I also encourage you to buy and read Deirdre McCloskey's little book Economical Writing, Second Edition.. I am always willing to review and comment on as many drafts of the paper as you care to show me.

Reading material:

I've asked the bookstore to order the following books.

Mark Blaug, Economic Theory in Retrospect. Cambridge University Press, 5th edition, 1987.

Alfred Marshall, Principles of Economics, 8th edition, 1920 (Porcupine Press paperback).

John Maynard Keynes, The General Theory of Employment, Interest, and Money. New York: Harcourt, Brace, 1964.

The book by Blaug will serve as something like a textbook for the course, even though I will not always (or maybe even often) follow it too closely. One of the best-and certainly the most high-powered-comprehensive treatment of the history of thought, the book is far more a history of theory and technique than an intellectual history or a history of doctrines.

I chose to have the bookstore order the other books not because they represent a large fraction of the course readings but because they will come in handy and - more importantly - because they are worth owning. You should note, however, that the texts of both Marshall and Keynes are also available online. All the material not available in the above books or online will be available (I hope) on reserve or in the bound-periodicals stacks. Remember: if you take a journal out of the stacks, replace it yourself. If you leave it lying around, it may take days for the library staff to reshelve it, which may make it hard for others in the class to use.

Keep in mind that this syllabus is a work in progress. Refer to the online version of the syllabus not only for links to readings but also for changes and additions.

Reading list.

Introduction.

Themes for the course.

·         Blaug, Introduction, pp. 1-9.

·         Schumpeter, History of Economic Analysis. New York: Oxford, 1954, chapters 1-4. (On reserve.)

·         Leijonhufvud, "Schools, Revolutions, and Research Programmes in Economics," in Spiro J. Latsis, ed., Method and Appraisal in Economics, Cambridge: Cambridge University Press, 1976 (on reserve), reprinted in Leijonhufvud, Information and Coordination. New York: Oxford University Press, 1981 (also on reserve). For your amusement and edification, see also "Life Among the Econ," in Information and Coordination.

The conception of economics.

·         Israel Kirzner, The Economic Point of View. Kansas City: Sheed and Ward, second edition, 1976, especially chapters 1, 2, 3, 4, and 6. (On reserve.)

The state of economics around 1870.

·         Blaug, chapter 6. (On John Stuart Mill.)

The "marginal revolution."

Primary sources.

·         W. S. Jevons, Theory of Political Economy. New York: Kelley and Millman, 1951 [1971]. (On reserve.)

·         Carl Menger, Principles of Economics. New York: NYU Press, 1981 [1871]. (On reserve.)

·         Léon Walras, Elements of Pure Economics, trans. William Jaffé, Homewood, Ill.: Richard D. Irwin, 1954 [1874]. (On reserve.)

Recommended secondary sources.

·         Schumpeter, History of Economic Analysis, part IV, chapters 5, 6, and 7. (On reserve.)

·         Blaug, chapter 8.

·         R. D. C. Black, et al., "The Marginal Revolution in Economics," special issue of History of Political Economy, Fall, 1972.

·         William Jaffé, "Menger, Jevons, and Walras De-homogenized," Economic Inquiry 14: 511 (December 1976).

·         J. M. Keynes, "William Stanley Jevons," in Essays in Biography, New York: W. W. Norton, 1951. (On reserve.)

·         Philip Mirowski, “Physics and the ‘Marginalist Revolution,’” Cambridge Journal of Economics  8(4): 361-79 (December 1984).

·         Philip Mirowski, More Heat than Light: Economics as Social Physics, Physics as Nature's Economics.  New York: Cambridge University Press, 1989.

 

Alfred Marshall (and J. B. Clark).

·         Blaug, chapter 10 (Marshallian Economics: Cost and Supply). Also read through chapter 11, Marginal Productivity and Factor Prices.

·         Alfred Marshall, Principles of Economics, eighth edition, esp. Book I, chapters I and II; Book III; Book V, chapters I-IX and XII-XV; Book VI, chapters I-V. Skim Book IV; Book VI, chapters VI-XII; and the appendices.

·         J. M. Keynes, "Alfred Marshall," in Essays in Biography. New York: Norton, 1951. (On reserve.)

·         Brian J. Loasby, "Knowledge and Organization: Marshall's Theory of Economic Progress and Coordination," chapter 4 in Loasby, The Mind and Method of the Economist. Edward Elgar, 1989. (On reserve.)

Utility and demand theory.

·         Blaug, chapter 9.

·         Tapas Majumdar, The Measurement of Utility. London: Macmillan, 1958. (On reserve)

·         George Stigler, "The Development of Utility Theory," Journal of Political Economy 58 (August and October, 1950).

·         John Hicks and R.G.D. Allen, "A Reconsideration of the Theory of Value," Economica 1 (February and May, 1934).

·         Jack High and Howard Bloch, "On the History of Ordinal Utility Theory: 1900-1932," History of Political Economy 21(2): 351-365 (Summer 1989).

·         J. Huston McCulloch, "The Austrian Theory of the Marginal Use and of Ordinal Marginal Utility," Zeitschrift fur Nationalokonomie 34(3-4): 249-280 (1977).

·         Paul A. Samuelson, Foundations of Economic Analysis. Cambridge: Harvard University Press, 1948 (enlarged edition, 1983), esp. chapters V, VII, and VIII.

·         Stanley Wong, The Foundations of Paul Samuelson's Revealed Preference Theory. London: Routledge and Keegan Paul, 1978. (On reserve.)

·         Robert Cooter and Peter Rappoport, "Were the Ordinalists Wrong About Welfare Economics?" Journal of Economic Literature 22(2): 507-530 (June 1984).

·         Pieter Hennipman, "A New Look at the Ordinalist Revolution: Comments on Cooter and Rappoport," Journal of Economic Literature 26(1): 80-91 (March 1988).

Veblen, Schumpeter, and Galbraith.

·         Reading from Thorstein Veblen:

o        "Why is Economics not an Evolutionary Science?" Quarterly Journal of Economics 12(4): 373-397 (1898).

o        "The Instinct of Workmanship and the Irksomeness of Labor," American Journal of Sociology 4(2): 187-201 (Sep., 1898).

o        The Theory of the Business Enterprise. New York: Charles Scribner's Sons, 1904. (Sample.)

o        The Theory of the Leisure Class. New York: W. B. Huebsch, 1912. (Sample.)

·         David Seckler, Thorstein Veblen and the Institutionalists. Boulder: Colorado Associated Universities Press, 1975. (On reserve.)

·         Richard N. Langlois, "What Was Wrong with the Old Institutional Economics? (And What Is Still Wrong with the New?)" Review of Political Economy 1(3): 272-300 (November 1989).

·         Joseph A. Schumpeter, Theory of Economic Development. Harvard, 1934, chapter II. (On reserve.)

·         Joseph A. Schumpeter, Capitalism, Socialism, and Democracy. New York: Harper, 1942, Part II: Can Capitalism Survive? (On reserve.)

·         Richard N. Langlois, "Schumpeter and the Obsolescence of the Entrepreneur," manuscript, 1987.

·         Richard N. Langlois, "Personal Capitalism as Charismatic Authority: the Organizational Economics of a Weberian Concept," Industrial and Corporate Change 7: 195-214 (1998).

·         John Kenneth Galbraith, Economics and the Public Purpose. Boston: Houghton-Mifflin, 1973. [Sample the entire book.] (On reserve.)

Welfare economics and the "socialist calculation debate."

Primary sources.

·         F. A. Hayek, ed., Collectivist Economic Planning. London: George Routledge, 1935. (On reserve.)

·         F. A. Hayek, "The Use of Knowledge in Society," American Economic Review 35(4): 519-530 (1954), reprinted in idem., Individualism and Economic Order. Chicago: University of Chicago Press, 1948, esp. ch. IV. [See also chapters VI, VII, and IX of the latter.] (On reserve.)

·         Oskar Lange and Fred M. Taylor, On the Economic Theory of Socialism. New York: McGraw-Hill, 1938. (Parts by Lange also available in ReStud, 1936 and 1937.)

Secondary sources.

·         Don Lavoie, Rivalry and Central Planning. New York: Cambridge University Press, 1985. (On reserve.)

·         Karen Vaughn, "Economic Calculation under Socialism," Economic Inquiry 18: 535-54 (1980).

·         Richard R. Nelson, "Assessing Private Enterprise: An Exegesis of Tangled Doctrine," Bell Journal 12: 93-111 (Spring 1981).

·         Peter J. Boettke, Why Perestroika Failed: The Politics and Economics of Socialist Transformation. New York : Routledge, 1993.

Competition theory and industrial organization.

·         George Stigler, "Perfect Competition Historically Contemplated," Journal of Political Economy 65(1): 1-17 (February 1957), reprinted in Essays in the History of Economics. Chicago: University of Chicago Press, 1965.

·         Paul J. McNulty, "A Note on the History of Perfect Competition," Journal of Political Economy 75 (August 1967).

·         Paul J. McNulty, "Economic Theory and the Meaning of Competition," Quarterly Journal of Economics 82 (1968).

·         F. A. Hayek, "The Meaning of Competition," in Individualism and Economic Order. Chicago: University of Chicago Press, 1948. (On reserve.)

·         Piero Sraffa, "The Laws of Returns Under Competitive Conditions," Economic Journal, 36(144): 535-550 (1926).

·         E. H. Chamberlin, Theory of Monopolistic Competition. First edition 1933.

·         Joan Robinson, Economics of Imperfect Competition. First edition 1933.

·         Brian J. Loasby, "Joan Robinson's Wrong Turning," in Loasby, The Mind and Method of the Economist. Edward Elgar, 1989. (On reserve.)

·         Scott Moss,. "The History of the Theory of the Firm from Marshall to Robinson and Chamberlin: The Source of Positivism in Economics," Economica 51: 307-318 (1984).

·         G. L. S. Shackle, The Years of High Theory. Cambridge: Cambridge University Press, 1967, chapters 1-6.

"Macroeconomics" before Keynes.

Primary sources.

·         Knut Wicksell, Lectures on Political Economy. London: George Routledge, 1934, volume I, part II.

·         F. A. Hayek, Prices and Production. London: George Routledge, second edition, 1935.

·         F. A. Hayek, Profits, Interest, and Investment. London: George Routledge, 1939, chapter I.

Secondary sources.

·         Blaug, chapters 12 and 15.

·         Axel Leijonhufvud, "The Wicksell Connection," in Information and Coordination. (On reserve.)

·         Carl Uhr, Economic Doctrines of Knut Wicksell. Berkeley: University of California Press, 1960, chapters V, VI, and X.

·         Gerald P. O'Driscoll, Jr., Economics as a Coordination Problem. Kansas City: Sheed and Ward, 1977.

Keynes and the General Theory.

Primary source.

·         J. M. Keynes, The General Theory.

Secondary sources.

·         Blaug, chapter 16.

·         Axel Leijonhufvud, "Keynes and the Keynesians: a Suggested Interpretation," American Economic Review (1967).

·         Leijonhufvud, Information and Coordination, especially chapters 3, 4, 6, and 7.

·         G.L.S. Shackle, The Years of High Theory. Cambridge: Cambridge University Press, 1967, chapters 11-15.

The methodology of economics.

The philosophy of science.

·         Karl Popper, Science: Conjectures and Refutations, in Conjectures and Refutations: The Growth of Scientific Knowledge. New York: Harper, 1965.

·         Thomas Kuhn, The Structure of Scientific Revolutions. Chicago: University of Chicago Press, second edition, 1970.

·         Imre Lakatos and Alan Musgrave, eds., Criticism and the Growth of Knowledge, Cambridge: Cambridge University Press, 1970.

The methodology of economics.

·         Daniel M. Hausman, "Economic Methodology in a Nutshell," Journal of Economic Perspectives 3(2): 115-127 (Spring 1989).

·         Mark Blaug, Economic Theory in Retrospect, chapter 17.

·         Mark Blaug, The Methodology of Economics: How Economists Explain. Cambridge: Cambridge University Press, 1980.

·         Bruce Caldwell, Beyond Positivism: Economic Methodology in the Twentieth Century. London: Allen and Unwin, 1982.

·         F. A. Hayek, The Counter-Revolution of Science, Indianapolis: Liberty Press, second edition, 1979.

·         Spiro J. Latsis, ed., Method and Appraisal in Economics, Cambridge: Cambridge University Press, 1976. (on reserve.)

·         Lawrence A. Boland, The Foundations of Economic Method. London: Allen and Unwin, 1982.

·         Donald McCloskey, "The Rhetoric of Economics," Journal of Economic Literature 21(2): 481-517 (1983).

·         Bruce Caldwell and A. W. Coats, "The Rhetoric of Economics: A Comment on McCloskey," Journal of Economic Literature 22(2): 575-578 (1984).

Rationality and the "marginalist controversy."

·         Richard A. Lester, "Shortcomings of Marginal Analysis for Wage-Employment Problems," American Economic Review 36: 63-82 (1946).

·         Milton Friedman,. "The Methodology of Positive Economics," in Essays on Positive Economics. Chicago: University of Chicago Press, 1953. Reprinted in William Breit and Harold Hochman, eds., Readings in Microeconomics. Hinsdale, Ill: Dryden Press, second edition, 1977.

·         Alchian, Armen. 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy 58(3): 211-221.

·         Fritz Machlup, "Theories of the Firm: Marginalist, Managerial, Behavioral," American Economic Review 57: 1-33 (1967).

·         Richard N. Langlois, "Rationality, Institutions, and Explanation," in R. N. Langlois, ed., Economics as a Process: Essays in the New Institutional Economics. New York: Cambridge University Press, 1986.

·         Richard N. Langlois, "Rule-following, Expertise, and Rationality: a New Behavioral Economics?" in Kenneth Dennis, ed., Rationality in Economics: Alternative Perspectives. Dordrecht: Kluwer Academic Publishers, 1998, pp. 55-78.