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The question under discussion - the rise of neoclassicism to dominance in 
US universities - seems to me to be an American question. In Britain, for 
exmple, neoclassical (Marshallian) economics dominated from before 1900. 
In America, institutionalism was a real alternative until WW2, but faded 
very fast. An important factor must be that US universities expanded so 
fast after 1945. It is not that institutionalists vanished, but that they 
had a near-zero share of the new entry in the 1940s and 1950s. Why? Here 
are some thoughts.  
 
(1) Incomers from Europe may be a factor. Institutionalism was almost 
exclusively American so incomers weren't institutionalists, but numbers 
were surely too small to be significant overall. 
 
(2) The mathematization of (neoclassical) economics was a good way for 
the new generation to elbow out the old, who were mostly no good at math. 
Important when you are young and need to make your mark. This attracted 
young economists to neoclassical theory, weakened the institutionalists. 
 
(3) Kenesian economics - we can argue whether Keynesian economics is 
neoclassical (in this context I think it is - remember that Samuelson led 
the introduction of Keynes into US undergraduate teaching with his 
textbook) but it must have attracted many who might otherwise have been 
institutionalists, and it was soon absorbed into the neoclassical 
mainstream. 
 
(4) Most important - neoclassical economics must have been exciting at 
that time (1940-60), with Hicks' Value and Capital, Samuelson's 
Foundations, monopolistic competition and so on, all to be absorbed and 
developed, as well as Keynes. Institutionalism must have looked 
old-fashioned and boring. 
 
(5) (Obviously) the war and Cold War. American capitalism had triumphed 
over fascism, but remained under threat from communism. This doesn't 
logically entail neoclassical economics, of course, but it surely set a 
context in which pro-market, anti-state arguments thrived. 
 
 
Tony Brewer ([log in to unmask]) 
 
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