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>Mises in Defense of Edgeworth   
>by Ludwig von Mises   
  
  
>[Posted on Tuesday, September 20, 2005]   
  
  
>  Introduction by Joseph T. Salerno:  
>  
>  Mises's review of Francis Ysidro Edgeworth's collected papers was published in   
>German in 1926. It was translated by JoAnn Rothbard and appears here in English   
>for the first time.  
>  
>  Despite its brevity, it is an extremely important document for both Mises   
>scholars and Austrian economists generally. For it is in this review that Mises   
>clearly reveals his attitude toward the third branch of the marginalist   
>revolution, whose two other branches comprised the Austrian school pioneered by   
>Carl Menger and Eugen von B�hm-Bawerk and the Lausanne school founded by L�on   
>Walras and Vilfredo Pareto.  
>  
>  Scattered throughout Mises's prodigious writings, one encounters numerous   
>references to the Lausanne school, whose mathematical methods he argued were   
>sterile and misleading in theoretical research in economics. In surprising   
>contrast, Mises referred very sparingly to the British branch of marginalism or   
>"neoclassicism" which has been associated most closely with the work of Alfred   
>Marshall.  
>  
>  There is only one reference to Marshall in Human Action, Mises's 900-page   
>treatise on economic theory, and none in Epistemological Problems of Economics,   
>his pathbreaking collection of essays on economic methodology.  
>  
>  One could, however, infer something of Mises's view of British neoclassicism   
>in an essay critical of Keynes. There he included among a list of Keynes's   
>rhetorical "stratagems": "It is assumed that the evolution of economic science   
>culminated with Alfred Marshall and ended with him. The findings of modern   
>subjective economics are disregarded."  
>  
>  From this statement one might surmise that Mises, first, considered Alfred   
>Marshall the leading British economist of the late nineteenth and early   
>twentieth centuries and, second, in the hands of the followers of Menger and B�  
>hm-Bawerk economic theory had been advanced well beyond the state where it had   
>been left in Marshall's work, which still dominated economic thinking in Great   
>Britain in the mid-1920s. The reader would be incorrect in the first surmise and   
>correct in the second. For in the review below Mises declared, "Edgeworth has   
>been the foremost economist in England during the latter part of the 19th   
>century and the beginning of the 20th century."  
>  
>  Mises's judgment in this matter is utterly unorthodox and flies in the face of   
>the view accepted as a matter of course by practically all post-World War I   
>economists including the most prominent specialists in the intellectual   
>development of the discipline. It is also just one more indication of Mises's   
>fierce independence of thought and his impossibly broad and deep acquaintance   
>with the economic literature of all countries and epochs.  
>  
>  Mises unstintingly praised Edgeworth's contributions in advancing economic   
>science and serving as a stimulus for the research of younger economists in   
>Great Britain. He favorably quoted several statements by Edgeworth - much of   
>whose own work employed mathematical techniques - counseling severe restraint in   
>the use of mathematics in economics and pointing out the limited results yielded   
>by its use. Nevertheless, despite his great respect for Edgeworth's intellect   
>and scholarship, Mises leaves no doubt that British neoclassicism had reached a   
>dead end long before 1926: "Although Edgeworth in the preface justifies much of   
>the work, he must admit that a sizable portion of it is already obsolete. There   
>is scarcely any value in the essays on money, and also in the part about the   
>work on catallactics."  
>  
>  Thus, to our great benefit, in this review we at last have a forthright   
>statement of Mises's attitude toward a major competing school of thought and its   
>neglected master theoretician.  
>  
>  ---Joseph T. Salerno, September 21, 2005  
>  
  
  
  
>Review of F.Y. Edgeworth's Papers Relating to Political Economy, by Ludwig von   
>Mises. (London, 1925). Jahrbuch f�r Gesetzgebung, Verwaltung und Volkswirtschaft   
>(Schmollers Jahrbuch). 49:6(1926)1400-01. (translated by JoAnn B. Rothbard)  
>  
  
>F. Edgeworth has been the foremost economist in England during the latter part   
>of the 19th century and the beginning of the 20th century. As a teacher at   
>Oxford he contributed toward the development of the present type of English   
>economics. For many years editor of the Economic Journal, which is still the   
>most important and the oldest journal of economics, he had a lasting influence   
>on the scientific evolution of his country. His personality was impressed on the   
>organ of the Royal Economic Society. In numerous critiques he has taken the   
>position of scientific literature to the newer economists and in many   
>penetrating essays handled the fundamental problems of our science.  
>  
>Almost all of his scientific activity has been made public through this   
>periodical. Edgeworth had never published an independent book of political   
>economy but his essays and critiques well atone for a number of ponderous books.   
>One must therefore be grateful for the economic fellowship that has now made   
>possible the exhibition of the most important collected works of the venerable   
>scholar.  
>  
>The first volume of this collection contains Edgeworth's contribution to   
>catallactics. It is articulated in three parts: value and distribution, monopoly   
>theory, and theory of money. The second volume contains a discussion of the   
>theory of international trade, then a sketch on theory of taxation, and finally   
>a number of essays on mathematical economy. The third volume brings the work to   
>a close.  
>  
>Edgeworth has made use of mathematical methods in his work. However his notions   
>of the utility and usefulness of the mathematical method in economics are quite   
>restrained. In an abridgement which had been published in a previous collection   
>of his, "On the Application of Mathematics to Political Economy", he says:   
>"Mathematics is ... useful, though not an indispensable adjunct to economic   
>studies; a finish to the training of an economist comparable with a knowledge of   
>the classics as part of a general education" (11, pg. 274). This cautious   
>evaluation of the usefulness of mathematical procedures in economics one agrees   
>with completely without hesitation. However one can better define Edgeworth's   
>understanding of the value of mathematics with another remark. Again in one of   
>the editions' prefatory notices to one of the essays he says of the transference   
>of classroom doctrine into the language of mathematics: "Not much is gained by   
>the translation into mathematical language" (11, pg. 4). It is detrimental that   
>Edgeworth devotes too much time and toil to this work for he must finally   
>acknowledge that it cannot bring any great victories to our science.  
>  
>Naturally, it is not possible, in framing a review of a work of over 1,200   
>difficult pages, to pass on the individuality of 34 individual essays and more   
>than 70 critiques. Although Edgeworth in the preface justifies much of the work,   
>he must admit that a sizable portion of it is already obsolete. There is   
>scarcely any value in the essays on money, and also in the part about the work   
>on catallactics. It is justified, however, in that the obsolete essays have been   
>used by newer economists.  
>  
>The historians of theory will have to pay heed to this work. But even those who   
>do not read history of theory, but seek the explanation of difficult problems,   
>will find much here; at any rate, more than one would expect from a cursory   
>perusal. For Edgeworth is initially a critic; he is better able to discover the   
>insufficiencies in others and to formulate problems, than to find the solution   
>himself.  
>  
>  
>            
>The high point of the collection is a lecture which Edgeworth delivered in 1891   
>upon assuming his teaching post at Oxford. This essay, titled "The Objects and   
>Methods of Political Economy" is in form and content a small masterpiece. And   
>while one can scarcely imagine that this bulky, not too readable, and by German   
>standards, rather expensive book, will find many readers in Germany, it marks a   
>return to the relation of economic research to economic theory:   
>"As the producer of wealth will push his investment in the different agents of   
>production up to a certain limit which has been called 'margin of   
>profitableness'; so, in the manufacture of economic wisdom, each of us should   
>expend his little fund of energy, partly on the fixed capital of the deductive   
>organon and partly on the materials of historical experience. The margin of   
>profitableness in the intellectual as in the external world will differ with the   
>personality of individuals. No general rule is available, except that, like the   
>cultivated Athenian, we should eschew the invidious disparagement of each   
>other's pursuits."  
>  
>________________________________  
>  
>Ludwig von Mises (1881-1973) was dean of the Austrian School. Comment on the   
>blog.  
>  
  
   
Chris R. Tame