This paper examines Douglass North’s evolving recommendations for economic development policy. Using archival material, it traces how North’s historical analysis of economic growth shaped his policy prescriptions from the start of his career through the 1990s. In the 1950s and 1960s, North attributed US economic growth primarily to trade and productivity gains driven by the United States’s competitive market system and international trade, leading him to advocate market-oriented reforms. But from the 1970s onward, recognizing the critical role of institutions through his study of institutional history, he emphasized reducing transaction costs through extensive reforms in property rights and political systems. His archives reveal how his historical understanding of development made him increasingly skeptical of simplistic, market-oriented reforms, and underscore the originality of his policy proposals for Latin America and Eastern Europe in the 1980s and 1990s.

David Hume and Adam Smith were friends, but their friendship does not imply that the two authors shared the same ideas, or should have shared the same ideas. Money is an example of a subject of disagreement between David Hume and Adam Smith that has either been ignored or interpreted as a puzzle, given their friendship. I suggest that Smith did not replicate or cite Hume’s exposition of the quantity of money in his Wealth of Nations because Smith thought Hume was wrong. For Smith, Hume fell into the mercantilist fallacy of considering the accumulation of money as wealth. Rather than accumulating money through market restrictions, as other mercantilists would, Hume advocated the accumulation of money through commerce and hoarding, but Hume’s goal was still the accumulation of gold and silver. Smith saw through Hume’s mistakes and addressed each of them, thus rejecting Hume’s theory of money, while maintaining their friendship.

Abolition of slavery in British colonies led to the facilitation of Indian indentured migration by the British government. This form of migration came about when the discourse of economic freedom and individual liberty strongly resonated in British political economy circles, following the work of Adam Smith and John Stuart Mill. We analyze how unfreedom in indentured labor was rationalized when the rhetoric of freedom was essential to the dominant intellectual milieu. We consider why free labor was deemed unfeasible in the plantation colonies. We also consider the constraints that asymmetric information and unequal bargaining posed to freedom within the institution of indenture. We conclude that indenture represented an uneasy compromise between the problems of slavery and the unattainable goal of free labor.

This paper examines the writings of socialist scholars who played a pivotal role in shaping Friedrich Hayek’s perspective in The Road to Serfdom, including William Beveridge, Stuart Chase, Henry Dickinson, Hugh Dalton, Evan Durbin, Oskar Lange, Harold Laski, Abba Lerner, Barbara Wootton, and the contributing authors in Findlay MacKenzie’s Planned Society (1937). Many of these socialist thinkers held two main hypotheses. First, industrial concentration was inevitable under capitalism. Second, they argued, government ownership or control of key economic sectors was necessary to protect democracy from industrial consolidation in the capitalist system and to reduce political opposition to complete state ownership or control over the means of production. Despite sharing Hayek’s concern for socialism’s potential erosion of democratic freedoms, these socialist hypotheses have received much less scholarly attention than Hayek’s The Road to Serfdom. We conclude that Hayek formalized socialist scholars’ fears and developed a well-defined hypothesis that central planning could threaten democratic freedoms.

This paper examines the household economics of Tomoko Matsudaira, a Japanese female economist, with a specific focus on the issue of wise consumption within Matsudaira’s expenditure theory. The exploration includes Matsudaira’s definition and criteria for wise consumption, her perspectives on consumer cooperatives guiding wise consumption within the household, her views on the influence of the consumer environment outside the household, and consumer awareness of wise consumption. This paper is the first ever investigation of Matsudaira’s views on wise consumption in English, and it primarily relies on Matsudaira’s debut work, Household Economics (1925a), but also references her later works to discern whether Matsudaira’s perspectives on wise consumption changed or developed over her more than forty years of research in household economics. This paper aims to provide theoretical insights into wise consumption by exploring Matsudaira’s discussions on household economics.

Standard models of the price specie flow do not consider credit. Yet Hume and preceding authors were reacting to the implosion of Law’s financial bubble. We delineate the anti-credit thesis contained within the evolution of eighteenth-century balance of payments analyses. A string of eighteenth-century authors argued over whether the balance of payments constituted a binding constraint on credit creation. As part of their analysis they considered how changes in the money supply might alter output, prices, employment, capital, and population. How new money entered the economy was often critical. We start with Law and then consider Melon, Gervaise, Vanderlint, Cantillon, Montesquieu, Hume, Steuart, Forbonnais, and Smith. In closing we pay particular attention to the idea that Hume and Smith effectively displaced preceding, often “mercantilist,” analyses of credit and the balance of payments.

Recent studies have revalued Hazel Kyrk for her original works on consumption and the critique of neoclassical demand theory. Kyrk’s A Theory of Consumption (1923) opened up new perspectives for understanding the nature of consumption and revalued home economics as a central part of the economist agenda, taking distance from the first generation of home economists. This paper focuses on Kyrk’s post-1923 scientific production and professional activities. Our main purpose is to show her contributions to the quantitative foundations of consumption together with her attempt to feed contemporary research on consumers’ behavior with pragmatism, policy advice, and field knowledge. We selected specific issues: the education of consumers through information and a strategy of “critical consumption”; the analysis of strategic industries; the well-being of American families; and the importance of “invisible” objects (non-market activities) and their statistical processing.

During his life, Friedrich Hayek drastically changed his evaluation of Aristotle’s role in the history of political and economic thought. Initially considering Aristotle as one of the forerunners of the liberal tradition, he then came to consider Aristotle’s philosophy as the source of collectivist thought. By examining both published and unpublished materials, this article shows that Hayek’s attack on Aristotle in The Fatal Conceit is authentic and puts Hayek’s affirmations on Aristotle in the context of his intellectual development. Hayek’s rejection of Aristotle can be related to his increasing emphasis on the abstract nature of the rules governing complex phenomena. However, this does not explain why Hayek felt compelled to take such a stance on an ancient philosopher who was highly esteemed in the school he belonged to. Hayek’s abandonment of the established view on the Aristotelian roots of the Austrian school can be better understood by considering the intellectual environment of his time. His eventual adoption of Karl Popper’s point of view on Aristotle meant taking a stance against Karl Polanyi’s democratic socialism and distancing himself from Wilhelm Röpke’s Catholic conservatism.

The origin of modern financial economics can be traced to early discounted expected value solutions for the price of life annuities. In contrast to the single life annuity valuations attributed to Jan de Witt and Edmond Halley, the computational complexity of joint life annuity valuation posed difficulties. Following a brief review of various joint life annuity specifications, a history of joint life annuity issuance and valuation in northern Europe from the thirteenth to the mid-eighteenth centuries is provided. With this background, the 1671 correspondence from de Witt to Jan Hudde on possible methods for valuing joint life annuities is detailed. These methods are contrasted with the geometric method described in Halley (1693), providing impetus for examination of the analytical approximations developed by Abraham de Moivre and Thomas Simpson.

Classical political economists developed several different explanations for what they saw as an inherent tendency for the rate of profit to decline over time. In the second quarter of the nineteenth century, some British advocates of colonization developed a corollary to those theories, suggesting that exporting capital to colonies could help arrest and reverse the decline. That argument was championed by the English political economist and promoter of colonization projects Edward Gibbon Wakefield, and it was systematized by John Stuart Mill. Ironically, the view that capital export and colonization played crucial roles in sustaining the rate of profit in advanced economies was later adopted by some Marxist theorists. Parallels between Karl Marx and J. S. Mill may help explain the remarkable theoretical continuity on this topic between nineteenth-century British advocates of colonization and early twentieth-century Marxist critics of colonialism.

Carl Snyder was one of the most prominent US monetary economists of the 1920s and 1930s. His pioneering work on constructing the empirical counterparts of the terms in the equation of exchange led him to formulate a 4% monetary growth rule. Snyder is especially apposite because he was on the staff of the New York Federal Reserve Bank. Why, despite his pioneering empirical work and his position as an insider, did Snyder fail to effectively challenge the dominant real bills views of the Federal Reserve (Fed)? A short answer is that he did not possess a convincing version of the quantity theory that attributed the Great Depression to a contraction in the money stock produced by the Fed, as opposed to the dominant real bills view attributing it to the collapse of speculative excess.

By exploring Adam Smith’s considerations of arts, this paper stresses that the philosopher establishes a profound connection between music and sympathy. In his essay “Of the Nature of that Imitation which takes place in what are called The Imitative Arts,” Smith delves into esthetic theory, dedicating a significant portion of the text to music and its role in eliciting pleasure and emotions. While previous studies have acknowledged the presence of art-related vocabulary and an esthetic dimension in The Theory of Moral Sentiments, they have not comprehensively mobilized his art essay to illuminate his moral theory. Following this unexplored path, this paper rallies the parallel Smith creates between emotions and musical aspects, such as rhythm and melody, to find a connection between his esthetic and moral ideas. In essence, it reveals how the human esthetic sensibility to look for regularities and order serves as a foundational element in Smith’s understanding of sympathy and social harmony.

The Methodenstreit dominated economic discourse in the late nineteenth-century Germany. In this context, one author stood out amongst the rest: Heinrich Dietzel. Dietzel proposed a theory and method, his Sozialökonomik (social economics), as a solution for the Methodenstreit. This reformulation was based in correcting what he perceived as mistakes of classical political economy that created confusion by not explaining what they saw as self-evident. His intention was to detach from the latest developments (both in British and German political economy) as well as from what he saw as erroneous criticism that, at the time, existed in German-speaking countries. This paper presents Dietzel’s perspective on the reformulation of classical political economy, focusing on the definition of an economic science, the proper method for theoretical statements, and the theory of value.

In this paper I analyze the work on exchange rates and external imbalances by University of Chicago faculty members during the university’s first 100 years, 1892 to 1992. Many people associate Chicago’s views with Milton Friedman’s advocacy for flexible exchange rates. But, of course, there was much more than that, including the work of J. Laurence Laughlin on bimetallism, Jacob Viner on the balance of payments, Lloyd Metzler on transfers, Harry Johnson on trade and currencies, Lloyd Mints on exchange rate regimes, Robert Mundell on optimal currency areas, and Arnold Harberger on shadow exchange rates, among others. The analysis shows that, although different scholars emphasized different issues, there was a common thread in this research, anchored on the role of relative prices’ changes during the adjustment process.

Warren Nutter’s work as director of the National Bureau of Economic Research’s (NBER) Soviet growth project is his best-known contribution to economics and public affairs. Many histories of Sovietology note the oddity of Nutter’s selection as project director, given his apparent lack of prior experience studying the Soviet Union. This paper provides new context for Nutter’s selection to lead the NBER effort. From 1951 to 1952 Nutter was the acting chief of the Economic Capabilities Branch of the CIA’s Office of Research and Reports (ORR), and chairman of the Economic Analysis Subcommittee of the interagency Economic Intelligence Committee. In this capacity he managed at least three major research efforts, including an input-output analysis of the Soviet Union and contributions to two national intelligence estimates. Nutter may have been proposed as director of the NBER project by Robert Amory, the Deputy Director of Intelligence, in 1953. Nutter’s research for the CIA cultivated new analytic capacities for the agency and provided a foundation for his own work on the Soviet Union.

Frank H. Knight is rightly regarded as having identified the distinction between risk and uncertainty and their respective roles in the entrepreneurial process in his 1921 Risk, Uncertainty, and Profit. Less well appreciated is his recognition of the work of Fred Manville Taylor in this work, even though throughout Knight made several laudatory references to Taylor’s Principles. This article will examine through the various editions of Taylor’s textbook parallels between Taylor and Knight in their respective understandings of the risk-uncertainty distinction and the emphasis each placed on the role of the entrepreneur.

Franklin H. Giddings can be considered one of the founding fathers of sociology in the United States. With many of his contemporaries, Giddings shared a firm commitment to eugenics, scientific racism, and race-conscious imperialism—a biologically rooted impetus that recent literature has placed at the core of the Progressive Era reform agenda, and which was particularly strong among the most sociologically inclined figures of the period. The aim of this article is to present a discussion of Giddings’s views on race, immigration, eugenics, and American imperialism, and how these views evolved over time. What follows adds to our general understanding of the extent to which racial and eugenic considerations permeated American social thought during the first decades of the last century and how, in the specific case of Giddings, this influence found expression in an inherently ambiguous and often contradictory fashion.

This article traces the evolution of Sidney Weintraub’s Post-Keynesian identity during the four decades following WW II, as seen through the eyes of his son E. Roy Weintraub. I explore Roy’s notion that Sidney’s career can be seen as the result of defense mechanisms associated with those of a borderline personality, such as splitting and projection. As Sidney transformed from an aspiring mainstream macroeconomist into a reclusive warrior for ideas, developing a polarized view of the economics profession, his work eventually became subsumed as a branch of Post-Keynesian economics. At the same time, he nudged his son into a symbiotic dependency, standing in for his career as a mathematical economist and coauthor, while also being made complicit in his adultery. Roy’s eventual distancing from this role ultimately led to a rupture prior to Sidney’s death in 1983. It was only then that Roy was able to establish a scholarly profile as a historian of economics and gain the understanding of his father that informs this text.

According to Adam Smith, the “wretched spirit of monopoly” dogged the East Indies trade. The regulations that governed the East Indies trade established legal barriers or restrictions to entry and sustained a mercantile community whose interests were “the opposite to that of the great body of the people” (WN IV, ch. iii, p. 494). The East Indies charter conferred a special privilege that shielded the English East India Company from all domestic competition in Asian trade. The East India Company was the complete incarnation of a mercantile system against which Smith had determined to launch “a very violent attack” in Wealth of Nations (Smith 1987, p. 251). Smith’s mistrust of trading bodies like the East India Company was compounded by its having assumed political powers commensurate with the sovereign while still in possession of its monopolistic franchise. Smith’s proposal was, first, to abolish the monopolistic franchise to rid society of “the unfortunate effects of all the regulations of the mercantile system” (WN IV, ch. vii, p. 606), and, second, to reform the East India Company’s administrative duties and functions in the Indian territories. The contention of this paper is that Smith’s call to abolish the East Indies monopoly was inseparable from his appeal for reform of the English East India Company.

Ludwig von Mises’s methodological apriorism is often attributed to the broader Austrian School of economics. However, there is considerable controversy concerning the meaning of Mises’s justification of his apriorism. There are inconsistencies within and across Mises’s methodological writings that engender confusion in the secondary literature. This confusion is aggravated by the fact that his apriorism cannot be interpreted as an artifact of his historical milieu. The two prevailing families of interpretation both treat Mises’s apriorism as anachronistic, albeit in divergent senses. I conclude that the primary and secondary literatures on Mises’s apriorism indicate its inconsistency and incoherence. We have no idea what justification Mises intended when he asserted the a priori nature of the fundamental propositions of economics. If this is right, then, whatever method(s) they follow, Austrian economists cannot (deliberately) follow Mises’s apriorism, because no one knows well enough how Mises meant to justify it to follow it purposefully.