Randy (and all),

I can accept the thesis that neoclassicism (in the original,  i.e., pre-Samuelsonian sense) was largely an effort to finally eviscerate any economics which focused on social classes and distribution rather than atomistic maximizers and exchange.  In some sense J.B. Clark put the final nail in the coffin of the old greybeard by invoking Euler's Theorem (provided of course that the economy was competitive) while Robinson  (and others) later showed that eternal interment was perhaps a bit premature.   Maybe this neoclassical turn was all in the name of making economics more scientific.  Perhaps it was overt subterfuge.  Perhaps it was some of both.  Maybe it was historical accident.  To say the least, it's an interesting episode in the history of economic thought.   Speaking of HET,  just maybe, it's the fact that economics training these days is almost devoid of it that the discipline limps along in such a sad state of repair.

I'm fairly convinced that many (perhaps most) economists simply have no sense that there could possibly be more than one VALID perspective with respect to "economic science."   Anything other than neoclassical economics (whatever the hell that is but Terry probably hit it out of the park on pragmatic grounds) is simply the equivalent of flat earth economics (and I ain't invoking Thomas Friedman here).  They simply know no better.  Because they were taught that way.  They have no other tools in the box.  There's the old saw that when your only tool is a hammer,  everything in the world tends to look like a nail.   (Suicide MUST be a rational response since there is no other explanation of human behavior allowed by the "rules of the game.")  In short, a fundamental problem (perhaps THE fundamental problem) is ignorance.  I don't mean to rule out that vested interests know quite well that perpetuating the invisible hand serves them (or their benefactors) well even though  "invisible hand" economics is imbecilic in the Veblenian sense.  I also know orthodox economists whom I don't think of as bastards.

It is for these reasons that projects like John's (Harvey in this case) are important; the elementary presentation of contending perspectives.  As I noted earlier (before change of thread title), I had no desire to "dis" his text whilst throwing a bit of petrol on the fire in asking why we should care about whether some perspective did/didn't constitute a "school" of thought.  This interesting exchange has convinced me all the more that John's project is an important one.  However, far more important is that books like John's receive wider readership among  students (and yes, professors).  Unfortunately, I'm not optimistic on this front.  How is that going to happen in an era in which more and more departments excise HET from their curricula?  What proportion of econ programs (graduate and/or undergraduate) REQUIRE HET these days?  (I don't think I want to know the answer.)  I'm fully aware this is not a new concern.  Leontieff was lamenting this a half century ago and was not without predecessors.

As purveyors of "the higher learning" become ever more corporate (in structure and mission), I find it difficult to imagine anything but a further deterioration in the present state of affairs.  Perhaps a rebuke of economic theory by the Senate may provide a catalyst which engenders a different reaction than we have heretofore experienced. 


On Sun, May 5, 2019 at 4:14 PM Wray, Randall <[log in to unmask]> wrote:

I like Terry's definition (or nondefinition as the case may be)

As I've already said, neoclassical economics is not a scientific endeavor. It is fraud. 

And I already responded, I think, adequately to Geoff. He wants a definition that focuses on techniques. Neoclassical will seize on any technique--utility theory, constrained optimization, partial equilibrium, simultaneous equilibrium, adaptive expectations, rational expectations, neutral money, monetary surprises, endogenous money when it suits them--whatever "works" to conceal the true nature of the economy in which we live.

However, if forced to identify what was the main thrust (again, for fraudulent purposes) it was the notion of an invisible hand. I focus on a later period than John, mostly because I know it better than the earlier period, and I really like the Ingrao and Israel book. Of course, that ended in a failure by the 1960s revealing neoclassical theory as a retrograde paradigm.

And I already also answered to the question about neoclassical bastards. It was a play on Robinson--I prefer to focus on the neoclassical rather than the Keynesian in her comment. And then the conversation got off onto who is a bastard in the colloquial sense There are so, so many of them--far too many to name.

Finally, on Geoff's list, I'd say it is pretty clear that Keynes provided a radical critique of both capitalism and what he identified as "classical" economics, and also that he was trying to save a FORM of capitalism, as Wolfram said. (There are 57 varieties, as we all know.) Keynes's vision was spelled out in several of his pieces. Keynes also wrote to Commons to remark that there was no other economist whose approach was closer. Now, we can probably take that with some grains of salt because Keynes did flatter. Of the institutionalists I've read, I'd list Dillard and Foster as the 2 who really "got it", but I know that Eric (and others) have demonstrated a close affinity between Commons and Keynes. Yes, save capitalism but their approach is to actually identify what is wrong with it. Neoclassicals want to HIDE what is wrong with it. There is a difference. Science vs Fraud.

The rest on Geoff's list I cannot comment on. I don't think any of them made tremendous contributions to neoclassical "thought" (I do put that in quotes). But I do not know how critical they were of it.

L. Randall Wray
Senior Scholar, Levy Economics Institute
Papers: www.levyinstitute.org/publications/?auth=287

Co-editor Journal of Post Keynesian Economics
ISSN 0160-3477 (Print), 1557-7821 (Online)


New Book: Why Minsky Matters: An Introduction to the work of a maverick economist, Princeton University Press http://press.princeton.edu/titles/10575.html
New Book: Modern Money Theory: a primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan http://www.palgrave.com/page/detail/modern-money-theory-l-randall-wray/?isb=9781137539908 
Please make note of my new email address as I will be transitioning all email to:

From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Geoff Hodgson <[log in to unmask]>
Sent: Sunday, May 5, 2019 11:56 AM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Neoclassicism, etc.

Hi John and Randy


You made very interesting points. But I missed a clear answer to my question: what do YOU mean by “neoclassical economics”? You’ve both used the phrase. What do you mean by it?


If you have give a clear definition already, I apologise. But I have not found one in your emails. I would appreciate a clear answer.


Best wishes




From: AFEEMAIL Discussion List <[log in to unmask]> On Behalf Of Henry, John
Sent: 04 May 2019 21:25
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Neoclassicism, etc.


Geoff, and all,


I can't speak for Randy, but to say that neoclassical economists defend (and have defended) capitalism, is not to say that others, who are definitely not neoclassical, cannot or do not defend capitalism. Your list, though not exhaustive to be sure, is indicative of such economists--and all are certified institutionalists. One could add Keynes as well. I'd throw in Hyman Minsky. Heck, when I was sent draft chapters of Randy's book on MMT, I phoned him and "accused" him of rescuing capitalism from its own internal contradictions! He didn't disagree. My point is that one not need to look for neoclassical theorists as defenders of  capitalist order. We can find this among politicians (99.9%), preachers (97.3%), movie stars (91.4%), etc. Most post-Keynesians defend capitalism. Many (most these days?) Marxists defend it. But, the issue was/is neoclassicism. Show me one neoclassical theorist who is anti-capitalist in any substantial way. Sure, many object to this or that. Meade is a good example of such. But, as a critic of the social order in general? (Pigou came close in his Socialism Versus Capitalism, but not close enough.) 




John F. Henry

Levy Economics Institute of Bard College



From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Geoff Hodgson <[log in to unmask]>
Sent: Saturday, May 4, 2019 7:38:09 AM
To: [log in to unmask]
Subject: Re: Neoclassicism, etc.


Dear All


If Tony Lawson’s article on neoclassical economics were confined to Veblen’s usage and meaning, then it would be fine, but it is not. Veblen coined the term (I pointed this out to Tony and he did not believe me at first). But Veblen did not use it very often. It was Samuelson in the 1940s that propelled the term to widespread usage, giving it his own meaning. Tony’s article jumps over this. He assumes that what Veblen wrote over 100 years ago is a suitable guide to calibrate usage of the term today. This is unconvincing.


Anyway, I am currently more interested in what Randy and John H mean by the term “neoclassical”, as in “neoclassical bastards”. Based in part on John H’s reading of the history of economic thought, they seem to want to give the term “neoclassical economics” a strong political meaning. They are not entirely clear, and I ask them to correct me if I am wrong, but what they seem to be saying is that “neoclassical” economics is basically pro-capitalist economics.


These are some prominent economists who ultimately defended a capitalist system (while in some cases arguing for strong ameliorative measures, such as a welfare state):


John R Commons

John Maynard Keynes

Wesley C Mitchell

John Maurice Clark (another prominent institutional economist)

Arthur Burns (another prominent institutional economist)

Morris Copeland (another prominent institutional economist).


Are these economists neoclassical, by Randy and John’s definition?


Best wishes




From: AFEEMAIL Discussion List <[log in to unmask]> On Behalf Of Mayhew, Anne
Sent: 03 May 2019 22:29
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Neoclassicism, etc.


All:  Geoff finds Tony Lawson’s article on Veblen’s coinage of the term neoclassical “arcane” and John Henry says that neoclassical economics should more properly be called “anticlassical.”  Lest members of this list be deterred from reading Tony Lawson’s article, let me note that it is an article that should be of particular interest to institutional/evolutionary economists precisely because it takes Veblen and his notion that economics should become an evolutionary science, one in tune with the times, very seriously.  Lawson argues, very cogently and persuasively in my view, that Veblen used the term “neo” because he regarded some of the economists of his day, most notably Marshall and John Neville Keynes, as moving away from the taxonomy of classical economics and toward an evolutionary approach.  But they are “stuck” in between because of a commitment to taxonomy, to classification in respect of deviation from an essentially unchanging “normal” or “natural” state.  Classical economists, as Lawson describes the “school” thus encompasses several schools (Marxist, Smithian, Ricardian, and on through J.S. Mill, and etc.) that remained wedded to the notion that there were fixed relationships among essentially fixed components of any economy. Crucially, this taxonomic approach was amenable, Lawson argues, to mathematical modelling, and more specifically to the kind of mathematical modelling made possible by 20th century changes in mathematics itself.  I am not able to thoroughly evaluate this part of his argument but I do think there is evidence, which I have borrowed from others and offered in my article in the Morgan book cited earlier, that there was a clear allegiance taken in the 1930s to the notion of inviolable principles as central to economics and these principles were the fixed components and relationships that characterized all of the classical economists whatever their views of capitalism and its merits or of its driving forces.  From this it follows that what are deemed satisfactory explanations for deviation from what is taken to be normal can be deduced.  Or, to restate in terms of the examples of explanations offered by neoclassical economists of suicide and water usage, the inviolable assumption is of individuals behaving according to a rationality as defined in terms of commercial calculation. 


I find Lawson’s reading of Veblen to be particularly useful in thinking about several things.  Among, them is the essentially neoclassical nature of what is sometimes called evolutionary economics.  It is also useful in thinking about the structure of a good many articles that are published in orthodox journals.  Good information about tax incidence or avoidance or firm behavior or hiring practices or ….. is presented and then “tamed” by mathematics to be consistent with the principles to which all true economists must pledge allegiance.  It is also useful in thinking about why various modern forms of Marxist economics has been more acceptable to the mainstream than Institutionalism.  And so on.  I do encourage you to read Tony Lawson’s article for a very serious and I think excellent exploration of the term “neoclassical” and for understanding of why that term remains highly relevant.  I would also hope that some of you would find and read the article that I wrote as a follow up.


Let me add that what Tony has to say about Veblen and his term “neoclassical” does not in any way obviate the explanation of some forms of late 19th century classical thought (as Veblen used the term) as an effort to prove Marx wrong.   There are various good and consistent accounts of the evolution of 19th and early 20th century economic thought that emphasize the importance of this effort.  My own favorite remains Wesley Mitchell’s lecture notes but John Henry also provides a good account.  Where Lawson’s account diverges is in finding (following Veblen) a consistency in the thought prior to the break caused by an evolutionary approach. 


Happy Friday everyone.




From: AFEEMAIL Discussion List <[log in to unmask]> On Behalf Of Geoff Hodgson
Sent: Thursday, May 2, 2019 11:25 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Neoclassicism, etc.


Dear All


Just one point in response to John. Lange did not propose the competitive pricing arrangements of a (hypothetical) capitalist order. Capitalism involves private ownership. Lange did not propose private ownership. Instead he (wrongly) suggested that pricing would be possible if a central planning authority simulated the operations of a hypothetical Walrasian market.


Just one response to Anne. Randy used the term “neoclassical”. He did not define it. I’m asking (again) what he means by the term. BTW, I like much of Tony Lawson’s work, but IMHO his “neoclassical” article is arcane and fails to look at post Samuelson usage of the term.


My main point is that I do not think it is appropriate to call neoclassical (however defined) colleagues “bastards”. It has been rightly pointed out that some people deserve that appellation, but that has little to do with the analytical position that they adopt.


Best wishes





From: AFEEMAIL Discussion List <[log in to unmask]> On Behalf Of Henry, John
Sent: 02 May 2019 23:17
To: [log in to unmask]
Subject: [AFEEMAIL] Neoclassicism, etc.


Dear All, 


As I've been brought into this discussion, perhaps an elaboration of my position is needed. Geoff writes: “On page xv of his book John explained that his volume tries to show: "why the neoclassical perspective, resting on a utility theory of value, became increasingly prominent, then dominant, in the nineteenth century. The argument rests on the underlying economic change undergone by capitalist society during the period". Not only does this extract highlight the concept of utility, but it also shows that John's argument is more deep and subtle than Randy suggests.”


I'm not sure that the above reference indicates greater subtlety or depth than that offered by Randy (well, Randy is rarely subtle!), but I don't want to be misunderstood. The UTOV was selected for a couple of reasons. The main reason was that, following Adam Smith, we have two choices to follow in theorizing about a commodity-producing economy--that is, capitalism as we call it. Use value and exchange value. Smith, Ricardo, James Steuart, Petty, et al. chose exchange value. This represents the "classical political economy" approach--correctly so in my estimation. To counter this approach, the "neoclassicals" went the utility route, which they identified--incorrectly--with use value. (As an aside, I think Veblen was wrong to label such economists as NEOclassical. He should have labelled them ANTIclassical.) Jean Baptiste Say, the "father" of neoclassicism starts his Treatise by attacking Smith and the labor theory of value. The attack on the LTOV and emphasis on exchange value continues and culminates in the work of Jevons, Walras, Menger, and, in the next generation, Marshall, Clark, et al. We're off to the races. My position is that there's no better authority in all this than Walras, a notable chap who is sometimes labelled a socialist. Ha! He's no more a socialist than my departed mother. All one has to do is read the first chapter of his Elements. He begins with an examination of "economics" that can be seen as favorable to institutionalists. Society is there, history is there, culture is there, etc. He then proceeds to whittle his definition down to what he terms "pure" economics. And this is utility maximization, equilibrium, etc. but--MORE NOTABLY--the preeminence of a competitive, free exchange, profit-seeking structure. That is, capitalism, though in an idealized, hypothetical form. And this is what matters. 


Classical theory began as an attempt to understand capitalism--and, yes, I accept the "ism." Capitalism is not of a feudal, nor a slave, nor a primitive communist organization. (Speaking of which, these were still hanging around when capitalism was a new-fangled order, and there were those who wanted to revert to such an arrangement--the Diggers during the English civil war.) Early "economists" (as this grouping was something new as well) sought understanding; by the time of Ricardo, such understanding became criticism. We can see the beginning of such criticism in Smith. And then we get the onslaught--Sismondi, St. Simon, Proudhon, and, in particular, Owen. (On all this, see Claeys, Machinery, Money, and the Millennium.) The reaction, and that's what it was, was directed toward the saving of capitalism from its critics. If one reads the proto-neoclassical writers from Say through the post-Ricardian period, one will find overt statements to this effect. If you want quotes, see my book referenced. (And don't get me started on John Stuart Mill!) To "save" capitalism, one needed an alternate theory to that posed by the Classicals. This was based on a UTOV (in the main), but that was merely a theoretical subterfuge. The whole campaign was to move the dominant discourse away from the Classical perspective (which, of course, by the late 19th C had become dominated by a fellow named Marx, who was essentially ignored, though Marshall took a couple of potshots at the old geezer.) But, in this anti-classical discourse, one could not ignore, bypass, whatever, the nature of the commodity--a use value produced for exchange. So, should use value or exchange value dominate? We're back to Smith. For anti-classicals, it's use value, transformed into a generalized UTOV, courtesy of Jevons, Walras, Pareto, et. al (but based on their anti-classical predecessors). But, why dominance in the last third of the 19th C?  This is the period of oligopolization when corporate forms of organization were able to "sabotage" (a la Veblen) the production of use values (in the classical sense). It's also the period when the theory of competition, equilibrium, optimality, etc. was formalized and became increasingly the standard. NOTE WELL: neoclassical theory becomes dominant by erecting a hypothetical economic order just as the real economic order displays characteristics that are the very opposite of the theory supposedly explaining it. Neoclassicism is political and is associated with the defense of capitalism. It has been so since its inception (Say, et al.), and remains so throughout its history. Its main function is to conceal the very nature of a capitalist social order. I'm in fundamental agreement with Randy, though I probably wouldn't have expressed my position so candidly: they're all S.O.B.s! (As a P.S., we’re all political. Ideology or political orientation can’t be eliminated from our theoretical arguments. We’re only human in this regard. Myrdal spoke to this in his The Political Element in the Development of Economic Theory. Heck, this even influences workers in the natural sciences. The various debates on Darwin should be enough to convince, but even physics is not immune.)


Now, if someone wants to take up the issue of Lange, et al., I'll be happy to oblige. Just one thing: in his 1930's article, Lange argued--essentially against Mises--that a socialist order could maintain itself IF it replicated the competitive pricing arrangements of a (hypothetical) capitalist order. This, when capitalism was not only non-competitive, but doing quite badly, and the Soviet Union was actually doing pretty well. So, what, for Lange, et al., did/does socialism mean? 


Sorry to take up so much space,




John F. Henry

Levy Economics Institute of Bard College



Brian Eggleston, Ph.D.
Department of Economics
Augustana University
Sioux Falls, SD 57197

Expose yourself to your deepest fear; after that, fear has no power and the fear of freedom shrinks and vanishes.  You are free.      Jim Morrison (The Doors)