Bruce Caldwell mentions Lionel Robbins's view (in _The Nature and Significance of Economic
Science_, 1932) that economics is the science of choice _under conditions of scarcity_,
and that "scarcity is what gives rise to the notions of opportunity cost, of economizing
activity and the related notion of economic value, and of gains from trade."  David
Colander further notes that Robbins differentiated the "science of choice" (Economics)
from applied policy analysis ("Political Economy").
   
  
Ramesh Chandra and I contend, in an article in the current issue of the Cambridge Journal
of Economics ("Does modern endogenous growth theory adequately represent Allyn Young"),
that Lionel Robbins, with his focus on a static "economics of choice in conditions of
scarcity", disastrously led economics away from a dynamic economic science of growth and
opportunity.
   
  
Robbins (1932, pp.68-69) wrote that although  Adam Smith's great work "professed to deal
with the causes of  the wealth of nations, and did in fact make many remarks on the
general question of the conditions of opulence which are of great importance in any
history of applied Economics, the central achievement of his book was his demonstration of
the mode in which the division of labour tended to be kept in equilibrium by the mechanism
of relative prices - a demonstration which, as Allyn Young has shown, is in harmony with
the most refined apparatus of the modern School of Lausanne. The theory of value and
distribution was really the central core of the analysis of the Classics, try as they
might to conceal their objects under other names'
   
  
On the contrary, the central core of Smith was indeed to demonstrate the causes of the
wealth of nations and how this wealth grew - by abolishing restraints on trade. Allyn
Young took up his insights on the way that specialisation and the division of labour (in
its rich and varied modern forms) is limited by, but also defines, the size of the market.
Hence "change breeds change and every new adjustment paves the way for another."
   
  
This has nothing to do with how "the division of labour tended to be kept in equilibrium
by the mechanism of relative prices", but rather it is an analysis of how absolute costs
and prices tend to fall continuously via Young's macroeconomic conception of "Increasing
returns and economic progress" -- the title of his presidential address to the British
Association in 1928.
   
  
Likewise, the central core of Smith and Young was not a theory of value and distribution,
but a theory of a self-sustaining disequilibrium growth process that forever widens
choice, rather than a self-exhausting equilibrium allocation of scarce resources.
  
  
Roger Sandilands