A Research Annual: Volume 27 Part 1


Table of contents

(21 chapters)

Recent work on the theory of teams and team reasoning in game interactive settings is due principally to the late Michael Bacharach (Bacharach, 2006), who offers a conception of the individual as a team member, and also to Martin Hollis (1998) and Robert Sugden and Natalie Gold (Sugden, 2000; Gold & Sugden, 2007), and is motivated by the conflict between what ordinary experience suggests people often to do and what rationality prescribes for them, such as in prisoner's dilemma games where individuals can choose to cooperate or defect. The source of the conflict, they suggest, is an ambiguity in the syntax of standard game theory, which is taken to pose the question individuals in games ask themselves as, “what should I do?,” but which might be taken to pose the question, particularly when individuals are working together with others as, “what should we do?” When taken in the latter way, each individual chooses according to what best promotes the team's objective and then performs the role appropriate as a member of that team or group. Bacharach understood this change in focus in terms of the different possible cognitive frames that individuals use to think about the world and developed a variable frame theory for rational play in games in which the frame adopted for a decision problem determines what counts as rational play (Janssen, 2001; Casajus, 2001).In order to explain how someone acts, we have to take account of the representation or model of her situation that she is using as she thinks what to do. The model varies with the cognitive frame in which she does her thinking. Her frame stands to her thoughts as a set of axes does to a graph; it circumscribes the thoughts that are logically possible for her (not ever, but at that time). (Bacharach, 2006, p. 69)Sugden understands this framing idea in terms of the theory of focal points following Thomas Schelling's emphasis on the role of salience in coordination games (Schelling, 1960), and his theory similarly ties decision-making to the way the game is understood (Sugden, 1995). This all recalls what Tversky and Kahneman (1981, 1986) termed standard's theory's description invariance assumption, whose abandonment makes it possible to bring a variety of the insights from psychology to bear on rationality in economics.

Harrod's interwar papers are the result of the normal activity of an Oxford don, without a secretary and writing by hand, in the first two decades of his professional life, at a time when email did not exist and phone calls were events to be agreed upon in advance.4 They include correspondence (private, professional, political, and administrative), lecture notes, reading notes, drafts of papers (published and unpublished), proceedings of committees and of research groups, cuttings from newspapers, offprints of Harrod's own articles and of writings by others, and preliminary versions of his correspondents’ writings. Harrod was a compulsive hoarder, and his collection includes almost any written piece of papers that passed through his hands (including tailors’ bills and similar items).

This section will explore the macro-organization of the lectures and the way or ways in which Smith actively signals how the lecture series fits together. The starting point is the lecture, and series of lectures, as genre.

According to what is reported by the North America Oral History Association, oral history was established in 1948 as a modern technique for historical documentation when Columbia University historian Allan Nevins began recording the memoirs of people who had played a significant role in American public life. While working on a biography of President Grover Cleveland, Nevins found that Cleveland's associates left few of the kinds of personal records – private correspondences, diaries, and memoirs – that biographers generally rely on for their historical reconstructions. Nevins thus came up then with the idea of filling the gaps in the official records with narratives and anecdotes from living memory. Accordingly, he conducted his first interview in 1948 with New York civic leader George McAneny, and both the Columbia Oral History Research Office – the largest archival collection of oral history interviews in the world – and the contemporary oral history movement were born (Thomson, 1998).

Peter Boettke and I had taken Don Lavoie's graduate Comparative Economic Systems course during the Fall of 1985. Lavoie had just published Rivalry and Central Planning (Lavoie, 1985b) and National Economic Planning: What is left? (Lavoie, 1985a), and was at the cusp of establishing himself as a major player in the comparative systems and contemporary critique of socialist planning literature.1

The previous major biographies of Schumpeter are found in the works by Allen (1991), März (1991), Stolper (1994), and Swedberg (1991). März's biography is a collection of independently written essays, some mainly biographical, and some mainly commenting on aspects of Schumpeter's economic thought. Stolper's signal contribution is to present evidence that explains and defends Schumpeter's activities in government and banking in Austria. Allen focuses extensively on the details of Schumpeter's personal life (see Moss, 1993), while Swedberg focuses more on the events and ideas of Schumpeter's academic life. McCraw also puts primary emphasis on Schumpeter's academic life, although he includes more information about Schumpeter's personal life than did März, Stolper, and Swedberg (often citing Allen's research as his source).

Simply put, this is an important book – for many reasons. Daring to stand in the middle of multiple communities who usually hate one another, Deirdre McCloskey seeks to reconcile them, pointing out to each their actual compatibilities, and in the process, demolishing their fiercely defended disciplinary boundaries, as well as exposing some of their more unpleasant hypocrisies.

There is no shortage of literature concerning the life and times of J. M. Keynes. Distinguished examples over the past couple of decades are Peter Clarke's (1988) account of Keynes's battles with the Treasury in the 1920s and 1930s, a study by Moggridge (1992), and Skidelsky's (1983, 1992, 2000) monumental three-volume biography, reissued in a single, abridged version (2003).

The authors of this book (hereafter BLS) reject the notion that the term “capitalism” denotes a unique type of economic system and distinguish instead among four forms it can take: state-guided capitalism, oligarchic capitalism, big-firm capitalism, and entrepreneurial capitalism. As suggested by the terms “good capitalism, bad capitalism” in the title, they examine both the positive and the normative implications of each type of capitalism and how consistent each type has been, in the various economies that adopted it, with the overall objective of promoting growth and prosperity. This book is thus about economic systems, the principles on which they are built, and economic growth. There are occasional references to authors of the classical, neoclassical, and Keynesian eras such as Richard Cantillon, John M. Keynes, T. Robert Malthus, David Ricardo, Jean-Baptiste Say, Joseph Schumpeter, Adam Smith, and Max Weber. Some of these are accompanied by brief quotations, but (as is to be expected from the very different interests of the authors of this book) no textual analysis of them or speculations about their influence on the history of economic thought. Given the authors’ emphasis on the effects of capitalism on economic growth, they also briefly discuss early theorists of economic growth such as Roy Harrod, Evsey Domar, Nicholas Kaldor, Robert Solow, and Trevor Swan and – in much greater detail – the theoretical, empirical, and historical work on growth theory that followed them, up to and including the “new growth theory” of Arrow, Romer, Lucas, and others. Chapters 2 and 3, titled “Why economic growth matters” and “What drives economic growth?,” introduce the general reader to the importance of economic growth to both developed and developing economies and the essentials of modern growth theory. While these are valuable supplements to the book for readers not familiar with them, these chapters are not discussed here since their main features are found in textbooks on economic development, macroeconomics, and growth theory.

Teixeira devotes the first chapter of his book to a modest-sized personal portrait of Mincer and overview of his professional career. Some of this material is largely of personal interest, although only the most stoic would fail to be moved. Mincer was born into a Jewish family in Poland in 1922. He excelled as a high school student and was in his first year of university studies in Czechoslovakia (chosen largely because other universities rejected him due to his religious background) when Hitler and the Nazis took over the country. Mincer spent three years in German concentration camps and miraculously survived, although his family in Poland was much less fortunate.

Since the early days of Cliometrics (the application of economic theory and quantitative methods to the study of economic history) in the 1960s, Jeffrey Williamson has been one of its most active contributors and his output shows no immediate signs of letting up. Furthermore, he has continued throughout to employ the basic cliometric tools of applied economic theory and quantitative analysis. In contrast, Douglass North and Robert Fogel, recognized with the 1993 Nobel Prize in Economics for their contributions in founding the field of cliometrics, have gone subsequently in more interdisciplinary directions. North has increasingly emphasized the importance of institutions and cultural norms while also incorporating perspectives from cognitive science. Fogel has increasingly incorporated biological approaches in his work and indeed by his own admission has left the field of economic history for an interest in health economics and a field he terms bio-demography. Throughout his career, Williamson has had numerous students and collaborators of considerable distinction in their own right. And this festschrift in his honor incorporates the work of several generations of cliometricians and can thus be regarded as providing an overview of developments in cliometrics over the past 40 years as well as the current state of play in the field.

Schonhardt-Bailey's goal is to explain the repeal of the Corn Laws. This case is of obvious substantive importance. Schonhardt-Bailey also identifies a good historical puzzle in the details of trying to explain legislative voting behavior on Repeal. First, politicians seemed to act against their personal economic and political interests when voting for it. Second, they also acted in a puzzling way when justifying their own behavior. Specifically, Schonhardt-Bailey shows that the politicians voted as delegates of their constituents. Intriguingly, these same politicians justified their votes in terms of a trustee theory of representation in which they acted on behalf of the nation in accordance with their personal best judgment. These votes, though not the justifications, would seem to violate the mandates on which many had been elected, since most had personal mandates and were not sent to the Commons as delegates.

It was with a certain amount of surprise mixed in roughly equal proportions with curiosity that I recently accepted the task of writing a review of a work, published in 2001, on the encounter between the Enlightenment (meaning the French Enlightenment) and postmodernism. Reading in the Scottish Enlightenment suggests a need to know something about the wider European context though the exclusivity of France as the Enlightenment or as the home of Enlightenment is no longer a sustainable proposition. The Scots, in their energetic Universities, were as much involved with applying Newton and developing Locke or extending Shaftesbury or countermanding Mandeville as they were with the continental philosophies. The proposition put to me, to persuade me to the task, was the work was likely to contain ideas that intellectual historians of economics might profit from. A reflection on the significance of two potentially conflicting sets of ideas ought to have significance for the study of 18th-century economics developed within the cultural context of wider Enlightenment thought.

What historical background Van Overtveldt offers, he primarily draws from interviews he personally conducted and memoirs of various Chicago economists, especially Milton Friedman. In the introduction, Van Overtveldt (2007, p. 15) sheds light on his methodology; he states that he based his historical analysis on three layers of sources: “The first layer includes the books, essays, monographs, and articles published in academic journals by Chicago and non-Chicago economists…The second layer consists of material that is available in the archives of the University of Chicago…and in the files of the Communications Department of the University of Chicago. The third layer [draws from]…the more than 100 interviews that were conducted from 1994 to 2003.” Regarding the third, Van Overtveldt has provided a valuable historical contribution by compiling such an extensive oral history. Of the three layers Van Overtveldt mentions, the second is relatively thin. In the endnotes, Van Overtveldt only cites, excluding newspaper citations, seven archival sources from either the Special Collections at the University of Chicago or the files in Chicago's Communications Department. Tellingly, in the endnotes, the ratio of interview citations to archival citations is roughly 120:7≅17:1.1 While adducing interviews per se is not problematic, information in an interview (or a memoir) needs to be checked against archival sources. Historian of economic thought, Bruce Caldwell (2007, pp. 348–349), cautions “[One should] take reminiscences with a grain of salt, and whenever possible to consult multiple archival sources.”2 If a reflection cannot be checked against archival sources, it should be used with guarded skepticism. Van Overtveldt, however, unquestioningly relies on interviews; in fact, a retrospective point made by Friedman sometimes trumps assertions, explicit and implicit, critical of Chicago economics and its history. Van Overtveldt (2007, p. 27) plays the Friedman trump card, for example, in the following context:[Crauford] Goodwin noted that by the end of the 1940s, prominent members of the business community backed economists who preached the advantages of free competition and capitalism and ‘were all associated with the University of Chicago.’ Friedman strongly denies the relevance of this Cold War argument and the implied patronage of economics – especially at the University of Chicago – by business interests in favor of capitalism and the free-market economy.

As Bruce Caldwell (2007, p. 1) notes, Hayek's classic text had a “decidedly inauspicious” beginning. In spring 1933, Hayek wrote a memorandum (Nazi socialism) to Sir William Beveridge – then Director of the London School of Economics – arguing that National Socialism represented the “culmination” (Hayek, [1933] 2007, p. 245) of earlier pro-socialist trends. As Hayek puts it, National Socialism was[The] ultimate and necessary outcome of a process of development in which the other nations have been for a long time steadily following Germany…The gradual extension of the field of state activity, the increase in restrictions on international movements of both men and goods, sympathy with central economic planning and the widespread playing with dictatorship ideas, all tend in this direction. (Hayek, [1933] 2007, p. 248, italics added)

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Research in the History of Economic Thought and Methodology
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Emerald Publishing Limited
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