In article <[log in to unmask]>, Mises Daily Article <[log in to unmask]> writes > > >Visit the Mises Economics Blog. >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