I'm a little reluctant to get into this debate. But a few points. I always
thought of the classical economists Smith, Ricardo and Marx as dealing more
with growth and stability issues and looked at the role of social and
economic classes and distribution within those classes as a way to
understand long term growth and economic stability outcomes. So everything
was put into context of macro concerns. It was only later with the
marginalists that there was a shift to the "individual" behavior, which
accumulated with Marshall's work. In the General Theory Keynes shifted the
debate from Marshallian use of market supply and demand as "basic tools" of
analysis to aggregate functions in a world of uncertainty for understanding
the economy and the type of policy recommendations needed for economic
stability. This pivotal shift is crucial to understand the Post Keynesian
approach to macro as well as micro policy and the relationship between the
two.
Ric Holt

On Tue, Aug 30, 2011 at 3:11 PM, <[log in to unmask]> wrote:

> A further issue is the modern association of macro with aggregates as
> opposed to individuals.  Historically however the association was just as
> much with public (matters of state) as opposed to private.  Arguably, macro
> was born when familiar phenomena of aggregate fluctuation came to be seen as
> matters of state.  That implies that the question "which came first?" is not
> so much a matter of logical priority, as it is of political economy.
>
> Perhaps this explains the classification of trade vs. international
> finance.  Think also monetary economics (central banks hence macro) vs.
> finance (Wall Street hence micro).
>
> Perry Mehrling
> ------------------------------
> *From: *"Kevin Hoover" <[log in to unmask]>
> *To: *[log in to unmask]
> *Sent: *Tuesday, 30 August, 2011 5:08:13 PM
> *Subject: *Re: [SHOE] is macro prior to micro?
>
> I took the question as one of logical rather than historical priority.  The
> explicit concepts of micro and macro (originally due to Frisch) are
> correlative, so that historically neither is first.  On looking at
> micro/macro before the concepts were explicitly distinguished, for the most
> part, I believe that Gary Mongiovi has made the right points.  Micro and
> macroeconomics are concepts developed in the 1930s.  Of course, many of the
> questions that they address are much older, so we can anachronistically go
> back and label this idea "micro" and that idea "macro" but we do so at our
> peril, since the protagonists did not think that way.  Steve Medema, while
> pointing out some of the difficulties of disentangling these ideas in
> earlier periods, illustrates the pitfalls:  exactly why, for example, is it
> that
>
> Trade analysis is micro-side, international finance is macro-side.?
>
>
> Finance and trade are two sides of the same transaction and the aggregate
> trade between nations, which often concerned earlier economists, has an
> equally good claim to being macro as the aggregate financial flows that
> accompanied them.  I think that the main reason that we find it easy to make
> this assignment is that that this is the way that many economists today talk
> -- perhaps with no better warrant -- and we project back.
>
> Kevin Hoover
>
> On 8/30/2011 12:57 PM, Medema, Steven wrote:
>
>   "I would be very interested to hear a historical answer (along with the
> methodological answer) to the question of what side of the discipline seems
> to be foundational."
>
>  I would argue that there is no historical answer here. One could
> certainly argue that the "economic" analysis that we find in Plato and
> Aristotle was tilted toward the micro side, but they were responding to
> macroeconomic upheaval. Aquinas, too, had a more micro bent in terms of
> topics covered, but his concerns and goals were social/macro. Mercantilism?
> Trade analysis is micro-side, international finance is macro-side. The
> classical analysis had substantial micro and macro elements, and I would
> argue that neither was a priori more important or foundational than the
> other for these authors. Smith was writing a treatise on growth (one could
> argue), but he grounded it in micro-side phenomena such as the division of
> labor and the appropriate structuring of the market environment. Someone
> enamored of micro-foundations of macro might well look at Smith and see
> someone who made micro foundational. But I believe this is to mis-read
> Smith—that for Smith, it was a whole, with one side (if one can even speak
> of such here) no more foundational than the other.
>
>  The idea of dividing economic analysis between micro and macro is a much
> more recent phenomenon, and was by no means universally accepted. Friedman,
> for one, always resisted the attempt to separate the two, and his price
> theory course at Chicago included elements that most would put under the
> "macro" heading. There may or may not be a consensus now (or in recent
> decades) that the micro side is foundational. But if there is such a
> consensus, I would expect that it is the first time in the history of
> economics that there has ever been a consensus on this subject.
>
>  Steve Medema
>
>
>
>
>
> --
> **************************************************************
> KEVIN D. HOOVER
>   Professor of Economics and Philosophy
>   Duke University
>   Editor, History of Political Economy
>
> E-mail [log in to unmask]
> Webpage  www.econ.duke.edu/~kdh9/
>
> Telephone (919) 660-1876
>  Fax (919) 684-8974
>
> Economics:  primary mailing address
>   Department of Economics
>   213 Social Sciences Building
>   Box 90097
>   Duke University
>   Durham, North Carolina 27708-0097
>
> Philosophy
>   Department of Philosophy
>   201 West Duke Building
>   Duke University
>   Box 90743
>   Durham, North Carolina 27708-0743
>
>
>
>
> ***************************************************************
> ***************************************************************
>
>