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Roy Davidson wrote: 
>  
>  It would be interesting to analyze the transition from <b>political 
> economy</b> to <b>economics</b> about the turn of the century. . . .  
> Could a gradual change in the definition of the discipline explain the 
> transition? 
 
Roy, I would answer your question yes, although the "discipline" itself 
nevertheless developed in various ways. Let me explain. 
 
One way to characterize the transition from "political economy" to 
"economics" is to say that those who made it believed that it was possible 
to construct a value-free science. The term "political economy" implied 
the making of value jugments, as if the goal of knowing about the economy 
was to make policy recommendations. The term "economics" did not have that 
connotation. This is pretty clear in Walras' Elements. But to return to 
the the U.S., Frank Fetter describes an "advance in thinking" of this type 
in his 1914 (mistaken) critique of Davenport.(Fetter, Frank A., 
"Davenport's Competitive Economics," Journal of Political Economy, June, 
1914.) 
 
But what happened after professional economists, bye and large, purged 
value judgments from their "science?" Economics in the U.S. seems to have 
developed along two extremes. On the one extreme, economists sought to 
emulate natural science, with hypotheses expressed in precise mathematical 
terms and testable through statistical observation and even 
experimentation. Fisher and Mitchell were important catalysts. And then 
came Keynesianism and Samuelson. Along the other extreme, professional 
economists defined economics as a kind of logic of interaction based on 
the choice axiom (utility maximization and profit-maximization). In the 
early days Hawley, Fetter, and Davenport were promoters of this variant, 
albeit they disagreed with each other. As the latter extreme developed 
later, it seems to have become incorporated partly into the Chicago and 
Virginia (and UCLA) schools which, after Knight, were a mixture of a logic 
of choice and the positive-pragamatism suggested by the notion that 
economics is like a natural science. Professional economists (who were not 
fully enfatuated by the idea of emulating natural science) seem to have 
positioned themselves at various places along this continuum. But no 
consensus seems to have emerged, even today. The best example of the 
extreme logic of choice variant today is the Austrian school, some of whom 
seem to completely reject empiricism and mathematical modelling. 
 
If we could agree on an answer to the question "what is economics?," 
perhaps we would be in a better position to deal with the fundamental 
issue. But as we have discovered from past discussions on this list, 
everyone seems to have his own pet definition. This seems to reflect the 
developments that occurred in the profession; so I guess that it is 
understandable. In any case, insofar as the transition is concerned, I 
suspect that an acceptable way to describe it to modern economists is as a 
shift from normative to (a more) positive economics. 
 
        Finally, it is interesting to observe that the _Journal of Political 
Economy_ retained its name through all this and that modern Public  
Choicers among others are beginning to use the term political economy  
again, even though at least many of them have no desire to return to  
"normative" economics. Then there are the Marxists, who never abandoned  
the term. 
 
-  
Pat Gunning 
http://www.showtower.com.tw/~gunning/welcome 
http://web.nchulc.edu.tw/~gunning/pat/welcome 
 
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