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“Decisions and Dynamics”: An Ad Hoc Exploration of Intellectual and Institutional History January 3, 2015

Posted by Will Thomas in Commentary Track, History of Economic Thought.
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Weintraub, MIT and American Economics

This post offers some background information on my new paper, “Decisions and Dynamics: Postwar Theoretical Problems and the MIT Style of Economics.”

The 2013 “MIT and the Transformation of American Economics” conference was one of those conferences where the invitation arrives years before the event. When I agreed to attend, I thought I would just offer a complement to the conference’s focus on MIT economics with a discussion of the early history of operations research at MIT, a subject I already knew a lot about.

What I didn’t realize until the run-up to the conference was that it was part of the annual series, which results in the publication of the annual supplementary volume to the journal History of Political Economy. I had already published pretty much all my material on MIT in my 2009 Science in Context article on Jay Forrester’s industrial dynamics, and in my 2012 Business History Review article on OR at MIT and Arthur D. Little. So, that scuppered my plans for an easy recycling job.

The obvious direction in which to go was to discuss the intellectual relationship between economics and operations research. The problem with this plan was that, while there are many interesting things to say about that relationship, the relationship at MIT was pretty thin throughout the 1950s, the period I’ve studied carefully. At this point I didn’t have the time to try and suss out any subsequent relationship (if it was even substantial) through the publications record, nor, being based in London at the time, did I have much chance to do new archival research.

What did seem like a good opportunity was to engage with the thinking of the only historian to publish on the relationship between OR and economics, Phil Mirowski.

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Schabas on Economics and the Engineering Mentality June 15, 2011

Posted by Will Thomas in EWP Book Club.
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The central argument of Margaret Schabas’s The Natural Origins of Economics (2005) is that, over the course of the 19th century, economic thought abandoned links to natural science and began to concentrate on the object of “the economy” which was perceived as being purely social in character.  In a previous post, I observed that Schabas makes the argument well, but that it remained unclear that nature was ever central to economic thought, and thus it was unclear why a shift away from nature should be a key concern in assembling a history of economics.

I think the best case to be made is that Enlightenment-era political economy attempted to establish explanations for a diverse set of perceived phenomena, which would attribute them to the interplay of basic processes.  As Chris’s posts on this blog illustrate so nicely, this project continued through the 19th century in literatures spanning political economy, history, ethnography, and biology.  However, the analysis of constrained but precisely defined economic phenomena as products of patterns of human thought and choice branched off from this project in a process playing out from David Ricardo (1772-1823), to the analyses of Léon Walras (1834-1910) and William Stanley Jevons* (1842-1924), to the revolt of the social science of Max Weber and others (1864-1920) against the German “Historical School”.  What Schabas calls the “denaturalization of the economic order” is certainly a part of that process, but it is far from its defining characteristic.

Schabas does not go into great depth about her reasons for placing the question of nature at the center of her story, but she does offer some brief hints.  (more…)

Primer: The Rise of the Austrian School of Economics July 2, 2009

Posted by Will Thomas in EWP Primer, History of the Human Sciences.
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Ludwig von Mises (1881-1973)

Ludwig von Mises (1881-1973)

The “Austrian School” in economics traces its tradition to the work of Carl Menger (1840-1921).  Menger’s theoretical development of the origins of price has grouped him with the contemporary “Lausanne School” (identified with the axiomatic mathematical economics of Leon Walras) and the work of British economist William Stanley Jevons, all as part of the “marginalist revolution” in economics, which grounded the mechanism of price-setting in the value attributed to various quantities of goods by their buyers and sellers—a keystone of neoclassical economic theory and a critical element in the argument against the control of the economy by the state.

Menger developed his theories in opposition to the “German Historical School” headed by Gustav Schmoller (1838-1917), which gave Menger and his followers the label “Austrian”, intending the label as derogatory.  Schmoller insisted that theoretical economics disregarded essential differences in national traditions, and that only detailed historical investigations could arrive at a firm understanding of political and economic activity. The opening of the conflict between Menger and Schmoller occurred following the publication of Menger’s Principles of Economics (1871), a mere four years after Menger had received his law degree.  An anonymous review signed “G. Sch.” in a literary journal criticized the text’s scientific pretensions.  When Schmoller dismissed Menger’s Investigations into the Method of the Social Sciences with Special Reference to Economics (1883) in (more…)