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Steve, I am sure that you will receive many conflicting answers to this 
question. Let me give a  brief opinion, which will undoubtedly be 
controversial. I think that there are two important facts which go far 
to explaining the early development of neoclassical economics in the 
U.S. The first was the return to the U.S. of foreign-trained U.S. 
scholars in the late 19th century and their growing desire to create a 
professional association. The second was the progressive political 
movement that aimed to expand the role of the state in society, in this 
case through government-supported higher education. The second factor 
was more important in the second half of the 20th century than in the 
first half. 
 
Although some of the returning scholars (and as time went by their 
students) were institutionalists, the dominant view was based on the 
marginal productivity theory combined with the Austrian approach to 
interdependence which stressed subjective opportunity cost. This is what 
neoclassical economics meant at the beginning. Neoclassical ideas were 
manifest in the work of people like J. B. Clark, Frank Fetter, Irving 
Fisher, and Herbert Davenport. Much of this work arose as a response to 
Marx and to the 19th century socialist challenge to classical economics. 
 
A more political interpretation might stress that the returning 
Americans in general were turned off by the assumption of rigid and 
self-conscious social classes, opting instead for what they perceived as 
an economics more suitable for the property rights and freedom to gain 
from exchange that they perceived in a capitalist democracy like the 
U.S. 
 
This form of neoclassicism remained the dominant view throughout the 
first half of the 20th century, although the rise of mathematical 
modeling and particularly the use of national statistics to describe the 
economy diluted the original, less specific form of neoclassicism. 
Wesley Mitchell was a pivotal figure. The University of Chicago played a 
key role in the development of neoclassical economics beginning around 
the turn of the century. 
 
With the rise of Keynesianism, formalism, and increasingly 
institutionalized education under government influence, the 1950s 
brought a demand for and supply of easy-to-teach-from university 
textbooks that compartmentalized economics. Given the times, the easiest 
way to produce such textbooks was to build on the primitive mathematical 
models of Alfred Marshall for a one semester course in "microeconomics" 
and on John Hicks's formalization of Keynes's ideas for a one semester 
course in "macroeconomics." Paul Samuelson's _Economics_ set the 
standard. The great expansion of American higher education (particularly 
public higher education) in the 1960s was supported by new Ph.D.s, who 
were trained during the 50s and 60s with the new textbooks. As a result, 
Samuelson's economics became the standard and efforts to replace its 
successors have, ever since, been met with stiff institutionalized 
resistance. 
 
During this time, the character of the economics that emerged from the 
marginal revolution of the late 19th century itself changed. Clarkian 
and Austrian subjectivist economics was crowded out by Walrasian 
formalism. And the more speculative and insightful economics of people 
like Clark, Davenport and Knight was crowded out by formal 
model-building and scientistic testing of econometrically-based 
hypotheses, usually by means of the analysis of aggregate statistics. As 
a result, what economists call neoclassical economics today bears little 
resemblance to the neoclassical economics that people like Veblen wrote 
about. 
 
Regarding research on the issue, all of it is speculative, like my 
essay. Here are some references, although I am sure that others on the 
list could provide a more complete set. 
 
 
Andrews, P. W. S. (1952) "The Legacy of the 1930s in Economics." Chapter 
4 in P. W. S. Andrews. (1993) The Economies of Competitive Enterprise: 
Selected Essays of P. W. S. Andrews. Edited by Frederic S. Lee and Peter 
E. Earl. Brrokfield, Vermont: Edward Elgar. 
 
Barber, William J. (ed.) (1988) Breaking the Academic Mold. Scranton, 
PA: Harper and Row. 
 
Black, Coats, and Goodwin, The Marginal Revolution in Economics: 
Interpretation and Evaluation, Durham, North Carolina: Duke University 
Press, 1973. 
 
Coats, A.W. (1964) "The American Economic Association." American 
Economic Review. 54 (4): 281-5. 
 
Coats, A. W., "Economics as a Profession," chapter 8 in Greenaway, 
David, M. F. Bleaney III, and Ian Stewart (ed.), Companion to 
Contemporary Economic Thought, London: Routledge, 1991. 
 
Coats, A.W., (?) On the History of Economic Thought: British and 
American Essays. Volume 1. London: Routledge. 
 
Feiwel, George R. (ed.) (1982) Samuelson and Neoclassical Economics. 
Boston: Kluwer. 
 
Hennings, , K. H., "The Transition from Classical to Neoclassical 
Economic Theory: Hans von Mangoldt," Kyklos, No. 4, 1980. 
 
Klaus Hennings and Warren J. Samuels.(1990) Neoclassical Economic 
Theory, 1870 to 1930. Kluwer Academic, Boston. 
 
 Howey, R.S., The Rise of the Marginal Utility School, 1870-1889, 
Lawrence, Kansas: University of Kansas Press, 1960.  HB203/.H6 1989 
 
Schumpeter, J. A. (1982) The Crisis in Economics. American Economic 
Review. September. 
 
Pat Gunning, Sultan Qaboos University, Oman 
 
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