B.A. (Hons), M.A (Econ). Ph.D., Hon. D.Sc Europe).

distinguished Indian Economist


  • Overview
  • Foreword
  • Preface
  • Index
  • Review





- Foreword by Professor Warren Hogan 

The array of Contributions offered in this volume on the growth of economics, is comprehensive. There are sufficient number of ideas and perspectives about economic theories to whet the appetite of the most scholars or readers. 

Others, more inclined to welcome efforts to explain economic phenomena, will find a diversity of interpretations of events which should be sufficient to stimulate the imagination as well as the understanding of policy choices.
The book offers insights about developments in economic theory and modes of analysis during the twentieth century and earlier.         


- Foreword by Prof. Warren Hogan

The array of contributions offered in this volume on the growth of Economics is comprehensive. In the thirty-one chapters there should a sufficient number of ideas and perspectives about economic themes to whet the appetite of the most scholarly of readers. Others, more inclined to welcome efforts to explain economic phenomena, will find a diversity of interpretations of events which should be sufficient to stimulate the imagination as well as the understanding of policy choices.

The early chapters should be understood as giving a rich preparation for the ideas which influenced the twentieth century work in Economics as well as revealing what, in some measure, brought about new directions contrary to these past experiences. These were the foundations which lead into the immediately adjacent chapters treating the ideas and frameworks advanced by Alfred Marshall and John Maynard Keynes.

The elaboration of Keynes‘ ideas and theoretical constructs are developed in a number of chapters in the middle and later sections of this volume. Given the dominating influence of this most influential of economic thinkers during the twentieth century, the weight of these contributions with their many different views, is thoroughly warranted.

There is a balance engendered by contributions drawing upon other broad themes, most importantly the interpretation of general equilibrium in the Japanese setting offered by Professor Negishi. This balance is canvassed further in a few contributions such as one reflecting biological interests, always a contentious theme for the understanding of economic processes.

In what approximates as the third quarter of the volume, there is a more diverse offering. This segment has the attraction of bringing a range of views about the more recent developments, especially the latter part of the twentieth century. This is most welcome because the contributions from Milton Friedman and the Chicago School in general would otherwise be overlooked. The importance of Friedman‘s interpretations and analyses of economic events from the causes of the great depression of the 'thirties to the impact of financial markets, might have warranted some further attention to the influence of his intellectual legacy.

Nonetheless some broad understandings of the major themes in the closing decades of the century are well conveyed in the chapter provided by Professor John Lodewijks. Other chapters flow on with more specific topics such as the contemporary relevance of political economy exponents from earlier generations such as Karl Marx. Then there are no less specific but nevertheless broad themes tied to class and monopoly.

Professors Bitros and Panas examine the challenges posed by the inflation-productivity trade-off. They see this as more important than linking inflation to employment and real growth. They could well argue how without productivity the other two would languish in stagflation. Hence what they have to contribute is very compelling in the international economic setting as this Foreword is written.

The final quarter of the book turns to dominating men of ideas and practice such as Paul Samuelson and Ronald Coase. These two are joined with contributions about two other towering figures of twentieth century economics, Lawrence Klein and John Kenneth Galbraith. Writing about these people rounds out a quite comprehensive offering on events and ideas in the twentieth century and what this means of the new century on which we are now embarked. But the final chapter harks back to the immediate past with a nostalgic offering being an individual account of experiences during that immediate past century.

In general the book offers some fascinating insights about developments in economic theory and modes of analysis during the twentieth century and earlier. Less clear are the directions to be taken in future decades bt tat may be no more than a welcome recognition of the difficulties with any forecasting let alone a discipline which experiences its fashions not always for the betterment of the discipline. The relative balance of contributions might have gained from something more on general equilibrium applications and their shortcomings, and the contributions of distinguished writers on banking and finance themes which are no less a part of Economics than other aspects incorporated in the volume. Yet, even with these modest caveats, what the volume offers is a comprehensive and rewarding appraisal of where we have been and where perhaps we may be going.

The presentation of Growth of Economics in the Twentieth Century is a fascinating exercise. In this book, an attempt is made to present it in all comprehensiveness. The period may be divided into classical, neo-classical and the modern economics. While the first half of the twentieth century was dominated by the contributions of classical and neo-classical economists, the second half was dominated by the contributions of economists, mainly Nobel Laureates.

"The economic history is broadly concerned with the performance of the economics in the past. The issues that are relevant to an economic historian varies widely as an interest in the growth, stagnation, are decline of economies; the well-being of individual groups in the economy during the course of economic change and the interrelationship between economic organization and performance. This last issue necessarily focuses on the institutional structure of the society. As a result, economic history frequently spills over into the allied fields of social and political history", so says Douglas C. North the Nobel Laureate in economic history. (Encyclopedia of Social Sciences, Asian Edition, Volumes 5 and 6 combined, 1968, P. 468.) Keeping this in view, we now present the overview of the book in all brevity.

This volume consists of 35 chapters through which the saga of economic history of the 20th century is presented. Of these 35 chapters, a few chapters relate to the 19th century as a setting or prelude to the twentieth Century History of Economic Thought. Let us see chapter-wise summaries briefly.

Neil T. Skaggs, Professor of economics, Illinois State University, has presented in all comprehensiveness The Development of Nineteenth – Century British Monetary Orthodoxy which serves the purpose of background to our theme of the book. Similarly, the next two chapters-Mechanical Analogies in Adam Smith by James E. Alvey, Professor, Massey University, Early Response to Adam Smith by Hiroshi Mizuta, Professor, Nagoya University, Japan, provides background to the 20th century economics by presenting Adam Smith‘s thoughts who was one of the earliest economists. These chapters are briefly summarized as below: James E. Alvey investigates the analogies used by economists dates back before Marshall‘s Principles of Economics. In recent times, there has been a lot of work done on rhetoric and analogies in the history of economic thought. In light of this recent research, it is timely to re-examine Adam Smith‘s use of analogies which play a significant part in his scientific method. In order to understand his method, the author investigates and represents his views on science which are spelt out in several early works, especially his Essays on Philosophical Subjects. Next, he investigates his use of analogies in The Theory of Moral Sentiments. Then he looks at the use of analogies in his economic works: the Lectures on Jurisprudence and the Wealth of Nations. In particular, he looks at Smith‘s terminology, his value and allocation theory, his monetary theory, and his growth theory. Smith‘s long-standing reputation as a devotee of the mechanical analogy is deserved. In this chapter, he shows what has not been shown before: that a particular mechanical metaphor (water acting under the influence of gravity, either in a dam or flowing in a channel) unifies a lot of his economic work.

Hiroshi Mizuta has similarly analyzed. He investigates the analogies put forth by the present day economists and dwells on Adam smith adequately.

The next chapter The Instrumental Political Economy of Adolph Lowe by James Ronald Stanfield, Professor, Colorado State University, USA and Michael C. Carroll, Assistant Professor, West Virginia State College, examines the work of Adolph Lowe. A few biographical details of Lowe are provided, followed by an overview of his work and a discussion of its relation to American institutional economics. The conclusion is that, semantics aside, Lowe‘s work is very compatible with the instrumental reasoning and cultural emphasis of the American institutionalists.

Some Unpublished Correspondence of William Thomas Thornton, 1866-1872 by Mark Donoghue, Professor, National University of Singapore is a new literature in economics. There are a few other chapters relating to Quesnay and Malthus which form part of the 19th century economics. Then comes the Karl Marx. These works are described briefly below.

The chapter Some Unpublished Correspondence of William Thomas Thornton, 1866-1872 by Mark Donoghue is a collection letters conveniently assembled all of the unpublished correspondence of W.T. Thornton to J.S. Mill and J.E. Cairnes. Although this cache of letters is by no means large, it is nonetheless significant. Firstly, Thornton‘s letters to Mill and Cairnes provide material for a reassessment of his relationship with both men. Secondly, it is apparent from these letters that Thornton‘s intellectual preoccupations ranged widely. Hence, they constitute the best supplement presently available to Thornton‘s published writings on political economy and philosophy. Thirdly, the letters are an important "literary source in recovering aspects of Thornton‘s illustrious Company career at East India House (1836-1880). In this context, they form an invaluable companion to his published writings on India. They may even afford some clues about the role he played in the formation of policy in India in the period after the 1857 mutiny. In short, they cast important light on the social, moral and intellectual milieu in which he lived.

The chapter by Gilles Dostaler, Professor, Université du Québec á Montreal, Canada, on Natural Laws in Economics Quesnay, His Predecessors and Contemporaries explains how the concept of natural law place a fundamental role in the work of François Quesnay (1694-1774), founder and leader of the school known as the ?physiocrats‘, who were also the first to be called ?les économistes?. For Quesnay, society and the economy, like nature, are subject to universal laws, which apply in all times and all places. This paper first examines the evolution of this notion before the physiocrats, beginning with the Chinese and Greek thought, which influenced Quesnay. Then, the author has analysed Quesnay‘s own position on natural law, which first appeared in his early writings on medecine and surgery. His ideas on this theme are both complex and contradictory. The next section shows how, as is usual in the history of economics, as in other disciplines, Quesnay‘s disciples - mainly Dupont de Nemours and Le Mercier de la Rivière - were mainly responsible for the dogmatic interpretation of the concept of natural laws. Finally, it is examined the very harsh criticisms directed against the physiocratic notion. The formulations of Hume, Galiani, Grimm, Voltaire, Mably and James Steuart are considered. The debate between the Universalist position of the physiocrats and the relativist position of their critics concerning how society functions still divide economists, but it is the position of the physiocrats that dominates contemporary economic thought, as argued in conclusion.

The chapter on 'Marx' by MC Howard, Professor, University of Waterloo, Canada, and J.E. King, Professor, La Trobe University, Australia, Crises in Marx's Analysis of the Market is a rare piece of literature in economic history. This is summarized as below.

"Crisis" has typically been a term loosely used, and its employment today in covering a multitude of problematic events suggests that little theorisation of the concept has occurred or been absorbed. This is true even if one limits attention to the malfunctioning of economies, or narrows the focus still further to cover market processes. The history of economic thought ought to be able to enhance conceptual precision, and as a contribution to this endeavour, it is analysed the idea of crisis as it appears in Marx‘s Political Economy. Section one considers ?the market‘ in the context of historical materialism, and the following three sections elucidate the different types of crisis Marx believed to characterise market economics as they developed, operated and were transcended. Sections five and six conclude with some remarks on the relevance of Marx‘s analysis for contemporary market systems, and it is attempted to reconstruct the essential components common to all of his accounts of crises.

These above chapters provide a necessary background to get into the 20th century economics, which we start from Alfred Marshall. Neil Hart, Professor, University of Western Sydney, Australia, in his chapter on Marshall and neo-classical economics has presented Marshall under the title Marshall and the Development of 'Neoclassical' Economics have considered.

Alfred Marshall as one of the key figures in what has come to be known as 'neoclassical economics'. However, Marshall's analysis departs significantly from many of the prominent 'neoclassical cofounders', and consequently his contributions need to be considered separately from other 'neoclassicals'. His departures from purist 'neoclassical'; analysis can be most clearly illustrated in his treatment of increasing returns, where the limitations of the "neoclassical" tools of analysis are clearly exposed.

There are three more chapters on Marshall by Jesus M. Zaratiegui, Professor, University of Navarra, Spain; Marshall's contributions are a landmark and almost a starting point to the 20th century economics.

These chapters by Professor Jesus M. Zaratiegui have presented Marshall in three chapters and they are summarized below:

1. Marshallian Demand Function and the Adjustment of Competitive Markets: Leon Walras (1874) was the first author who derives the demand function from a utility function, which should be maximized under a budgetary restriction. It is only a piece in a complete model of competitive equilibrium model. That is the ?modern approach‘ of the theory of demand. Alfred Marshall followed suit but avoided to settle the issue as a constrained maximization
   problem. This way, he provided a more handy and realistic tool for solving the question of the adjustment of competitive markets.
Marshall built its demand theory based on two assumptions: 1) the individual assigns a different utility function to each good consumes; 2) the marginal utility of money is constant. That makes it easy to build demand functions because the Marshallian utility functions are not ?perfect‘ representations of the individual preferences, in contrast with that of the modern economic theory.

Besides the fact that the Marshallian demand function neither depends on income nor on the prices of the other goods, an important difference remains, which is stressed in this chapter: In contrast with the Walrasian one, reflects the individual marginal valuation, or societal marginal valuation, if speaking in aggregate terms, of every additional unit of good ÔxÕ. The ordinary demand function (Walrasian) only gives information about demanded quantities along the whole range of prices, provided that all the units are paid at the same price.

2. What Does Profit Mean For Alfred Marshall?: The chapter intents to justify that Alfred Marshall (1842-1924) is the foremost economist in the elaboration of a complete and analytically coherent theory of the entrepreneurial profit. The central issue which needs to be addressed is to ÔmeasureÕ the contribution of the businessman to the productive process which justifies the receiving of profits, a rent with a residual character (what remains after every single factor of production has already received its share).

The contention is that the ingredients for a correct analysis of business gains are fully developed in his thought despite the fact that he mixed a number of elements of profit in relation to capital, management and entrepreneurship. For him the main sources of profit can be assigned to the third block of elements: bearing non-insurable uncertainty; new findings and innovation; creation of market power; and good luck. The question that is begging is whether or not Marshall was a Schumpeterian avant la letter. And, connected to it, what are the analogies and the differences of the two theories.
The second conclusion is that the businessman can combine efficiency (profit search) and equality (ethical behavior that Marshall names as Ôeconomic chivalryÕ.).

3. Manager versus Entrepreneur in Alfred Marshall‘s Economics: In this chapter, the distinction between two types of businessmen —manager and entrepreneur— has become widely accepted within economic theory after Schumpeter‘s academic contributions, with his ?creative destruction‘. Nevertheless it is noticed in the writings of Alfred Marshall sufficient elements to confirm that he made complete use of this distinction in his attempt to reflect the reality of business of his time and what these businessmen did. He was the first author to separate the capitalist-entrepreneur or owner (who runs the business and assumes the risks), and the salaried manager. The manager is paid a salary for the monitoring of the ordinary day-to-day affairs in the firm, but the entrepreneur looks for windfall profits, of uncertain nature, because he bears the risks and embarks on innovative ventures.

This process accelerated in large industries, whereas many small businesses — with less need for access to capital— remained in the hands of the captains of industry behind the second Industrial Revolution. The control of the business was left in the hands of the new managerial class. The criterion of who ran the risks ceased to be valid as the only characteristic of the entrepreneurial function.

In the next stand point, the contributions of John Maynard Keynes are prominent and his is a major landmark in the History of Economics in the Twentieth Century. Keynes has contributed a lot, but his General Theory publishes in 1936 is a major event to the economics as a whole. This major work became instrumental to a large number of economists and gave shelter by providing themes for further research. It is my personal view that if Keynes had not brought out the General theory, the economists later had to struggle for finding areas for research and thousands of research pieces have rolled on after the birth of the General Theory. Keynes is still living and continued to be so to the economists of the 21st century also.

Probably, Professor, J. R. Hicks would not have thought of the Value and Capital but for his reactions on General Theory. I consider Value and Capital which is a jewel in economics would not have come but for the General Theory.

In consideration of this importance of Keynes in the annals of economic history, I have elaborated Keynes‘s ideas though a few chapters. Most importantly, the General Equilibrium in the Japanese setting in the 20th century as offered by Takashi Negishi, Professor, Aoyama Gakuin University, Japan, under the title ?The General Equilibrium Theory in the 20th Century Japan‘, is included.

Professor Takashi Negishi, has concentrated on the contributions of J. M. Keynes after the Second World War with reference to Japan. It is said that the contributions to Japan to the General Equilibrium Theory after the birth of the Growth of Economic Thought was remarkable. In this chapter, Negishi has made an attempt to analize these contributions which would not have been possible but for the foundation lay by pioneers like Yasuma Takata Ichiro Nakayama and Eiichi Sugimoto during the pre-war period. Works of three scholars in economics in Japan, namely, Kei Shibata, Takuma Yasui and Hideo Aoyama are follow up of the contributions of earlier scholars and stand out paramount in the growth of the general equilibrium theory in Japan. These publications are in the Japanese Language and are reviewed in this paper. It is notable that Hideo Aoyama suggested in 1938 the concept of temporary equilibrium as a direction of the dynamization of Walrasian equilibrium before the publication of Value and Capital by J.R. Hicks (1939). As for the post war contributions, it is not necessary to review, since they are mostly published in English and well known internationally.

There are three chapters by Michael Emmett Brady, Professor, University of California, USA, relating to Keynes.

Professor Michael Emmett Brady has the following three chapters. The summaries of the chapters are given briefly below:

1. Further Applications of J.M. Keynes‘ Approach to Decision-making under Risk and Uncertainty: This paper provides further evidence of the applicability of J.M. Keynes‘ c coefficient. Finally, the use of Keynes‘ weight of the evidence variable, w, is shown to be useful in comparing and contrasting the different approaches to uncertainty taken in economics by the Post-Keynesian and rational expectationist schools of thought.

2. J.M. Keynes‘s Decision Theory and Preference Reversals: J.M. Keynes‘s weighted monetary value approach is used to analyze the preference reversal phenomenon. Keynes‘s approach gives a logical, rational answer as to why the major type of preference reversal occurs as well as precise numerical answers.

3. A Mathematical Proof of Keynes‘ General Case W/P = Mpn/(Mpc+Mpi) Incorporating the Neoclassical Special Case W/P = Mpn: The Neoclassical (Special) Theory assumes that all expected results are realized in the long run. This requires the labor market optimizing condition w/p = MPN. The Keynesian (General) Theory generalizes this result by incorporating the case that all expected (optimal) results are not realized. This requires that the labor market be constrained by spending conditions in the nominal goods market. This requires the condition w/p = MPN/ (MPC + MPI). Neoclassical Theory is a special case of Keynesian Theory for the case MPC + MPI = 1 only.

In between there is a chapter by Craig Freedman, Professor, Macquarie University, Sydney, Australia, on The Invisible Mr. Keynes - Empirical Versus Theoretical Arguments: Empirical arguments by themselves rarely convince economists of their validity. A recent paper by Akerlof, Dickens and Perry demonstrates this point. Based on extensive data analysis, they make a strong case that nominal wages are seldom cut. They then draw out the implications of this empirical given. Though downwardly rigid wages are most commonly associated with the work of Keynes, the three authors fail to mention his work. This is an indication of the authors‘ overall reluctance to tackle theoretical controversies concerning labour markets. However this reluctance to approach the problem on a theoretical as well as empirical level only leaves them open to otherwise avoidable criticism according to Freedman.

There is an interesting chapter by Robert C. Merton, Professor, Harvard University, USA, and a Nobel Laureate in economics. He is also a Member of the Advisory Committee of the International Journal of Applied Economics and Econometrics. This chapter is entitled: - Applications of Option-Pricing Theory: Twenty-Five Years Later, Professor Robert C. Merton received Nobel Prize (1997) for Option Prizing Theory and therefore we are lucky to include this chapter with his permission. In summary, Professor Merton states that the news from Stockholm that the prize in economic sciences had been given for option-pricing theory provided unique and signal recognition to the rapidly advancing, but still relatively new discipline, within economics which relates mathematical finance theory and finance practice. The special sphere of finance within economics is the study of allocation and deployment of economic resources, both spatially and across time, in an uncertain environment. To capture the influence and interaction of time and uncertainty effectively requires sophisticated mathematical and computational tools. Indeed, mathematical models of modern finance contain some truly elegant applications of probability and optimization theory. These applications challenge the most powerful computational technologies. But, of course, all that is elegant and challenging in science need not also be practical; and surely, not all that is practical in science is elegant and challenging. Here we have both. In the time since publication of early work on the option-pricing model, the mathematically complex models of finance theory have had a direct and wide-ranging influence on finance practice. This conjoining of intrinsic intellectual interest with extrinsic application is central to research in modern finance.

In the next phase of the volume, other subjects relevant for the 20th century economics are depicted. In chapter the History of Economic Thought of the last 200 Years through its Schools and its Canons, O.F. Hamouda, Professor, York University, Canada, has well presented the subject matter and has viewed through the lens of the formation of canons the development of economic ideas in the last two hundred years. Given the controversial nature of the discipline of economics, diversity is found at all levels of investigation: ontology, epistemology, and pedagogy. Defining a specific canon is nonetheless not an easy task. One can identify various forms which have arisen: from canons sustained by followers of a substantive body of knowledge to canons created by the cultish worship of a body of followers. It is explained how canons can just come into being on their own or be created on demand. While in the case of the substantive canon, one can often identify a set of rules that a group of economists has accepted as the basic framework within which their tradition started, the cohesion of a canon as cult is, however, more difficult to pinpoint. The study of economics is sometimes overshadowed and complicated by the emphasis on the merits and demerits of schools of thought and their members, which makes it cumbersome for the new generation to grasp the essence of the discipline. An exercise, such as this, on canons, might therefore help to weed out controversies and ideologies and facilitate focusing on the substance.

In the chapter on Recent Developments in the History of Economics, John Lodewijks, Professor and Head, School of Economics and Finance, University of Western Sydney, Australia, has analysed the development of history of Economics. He examines recent impressive growth of research, societies and journals in the history of economics. In providing an overview of developments now taking place in North America, Europe, Japan and Australia, it alerts readers to the information resources and organizations prominent in this sub-discipline of economics.

Philip Anthony O’Hara, Professor, Curtin University, Australia, in his chapter, The Contemporary Relevance of the ?Critical Economic Systems Approach‘ to Political Economy in the Tradition of Marx, Veblen, Keynes and Schumpeter studies the contemporary relevance of the critical economic systems approach to political economy in the tradition of Marx, Veblen, Keynes and Schumpeter. Three elements of the systems approach are explored in the light of modern research programs. The first is a historical and institutional view of economic systems, in which a critical analysis is made of the institutional structure and evolution of capitalism through long historical time. The second is a circular and cumulative view of systemic processes and problems. There are two complementary dimensions to this circular and cumulative perspective, one of which is Kaldorian (Keynesian) in spirit and scrutinises the importance of demand impacting on investment, productivity, innovation and exports in a symbiotic fashion; while the other follows Veblen and Myrdal and seeks to examine the qualitative nature of social problems such as poverty, development and conspicuous consumption. And the third element of the systems approach is the ?multiple capital approach‘ to economic systems which explores the interaction between different forms of capital. It is critical to have a general view of capital in its many forms - ecological, social, cultural, organisational, human and fixed capitals - since an expansion of one may be at the expense of another, or, alternatively, may promote the expansion of the other forms of capital. This multiple capital approach is appropriate for examining the causes of environmental destruction, social decay and socioeconomic growth and development. These three dimensions illustrate that the critical systems approach to political economy is in a healthy state with a fruitful and exciting research agenda pushing forward the frontiers of science.

Robert Leeson, Professor of Economics, Stanford University, USA, in the chapter, The Chicago Counter-revolution and the Sociology of Economic Knowledge, has presented how in the late 1990‘s, Chicago economists successfully engaged the Keynesian in a macroeconomic statistical race; but simultaneously, Milton Friedman (1963) and George Stigler (1963) declined invitations from Edward Chamberlin (1957) and Christopher Archibald (1961) to participate in a statistical race over the comparative merits of monopolistic and perfect competition. Subsequently, faith in competition rose, while faith in Keynesian economics fell. This paper explores the ?internal‘ logic of these developments by examining Stigler‘s model of the sociology of economic knowledge construction and destruction. In this light, the successful Chicago agenda can be seen, in part, as the product of superior sociological perceptiveness.

Steven Kates, Professor, RMIT University, Australia, in chapter Economic Management and the Keynesian Revolution: The Policy Consequences of the Disappearance of Say‘s Law, explains the say‘s Law with reference to the General theory. This chapter may be summarized as below:

One of the most notable shifts in textbook theory directly attributable to the Keynesian Revolution is the absolute disappearance of statements denying the possibility of overproduction or demand deficiency. Prior to the publication of the General Theory, virtually every discussion of the business cycle provided an explicit denial that recessions were caused by producing more than the economy was either capable of absorbing or its members were willing to buy. Explanations of recession along such lines were considered totally without proper foundation. It was, of course, the specific role of Say‘s Law to deny the possibility of overproduction.

Since the publication of the General Theory, whose expressed aim was to deny the validity of Say‘s Law, such statements have entirely disappeared. Instead, concerns that aggregate supply might outrun aggregate demand are now incorporated into the very fabric of macroeconomic theory. All economists are taught that demand deficiency is a probable cause of recession and that demand stimulation is often a necessary counterweight to the forces of contraction. This shift in theory has had a profound effect on economic policy formation.

This chapter looks at the change in the nature of the theory of the cycle with the disappearance of Say‘s Law and discusses the effect its loss has had on the structure of economic policy.

The chapter on Class and Monopoly by Stephen Resnick, Professor, University of California, USA, and Richard Wolff, Professor, University of Massachusetts, USA, has discussed monopoly. This chapter offers a class-based analysis of monopoly that respects the irreducible difference between class and monopoly. We use (1) the definition of monopoly as a political or power process and (2) Marx‘s definition of class as the set of processes whereby surplus labor is performed and surplus product appropriated and distributed to demonstrate how the interaction of monopoly and class changes both. We develop a simple model for the capital and wage goods sectors to show how the presence of monopoly power in each entails contradictory consequences for the class structure of each sector and for the economy generally. The model indicates that no necessary effects follow from the presence of monopoly in a capitalist economy and that no necessary tendency for monopoly to replace competition characterizes that economy. Contradictory consequences for the class structure of each sector and for the economy generally. The model indicates that no necessary effects follow from the presence of monopoly in a capitalist economy and that no necessary tendency for monopoly to replace competition characterizes that economy.

There are two chapters worthy to mention. They are by John Herz, Professor, The City University of New York. USA. (1). Some Observations on Engaging in "Survival Research" and (2). Reflections on My Century. In the chapter on Survival research author has said that the chapter entitles a slightly revised and detailed version of the paper presented by him at a Conference held at the Graduate Center of the City University of New York in March 1988 under the auspices of its Ralph Bunche Institute on the United Nations. Authors from various disciplines discussed threats to the very future existence on mankind, such as the threat of extinction through all-out nuclear as well as that to the planetary human habitat through the confluence of overpopulation with overuse and destruction of vital resources and environmental deterioration. In the author‘s view, it is not only necessary that experts in their own various disciplines and areas of research become aware of these problems but that they deal with them in cooperation with each other. In the author‘s opinion, such inter disciplinary research, and ensuing international action, has become even more urgent in the intervening period, even where, after the end of the cold war, the threat of nuclear extinction seems to have diminished. See, for instance, the threats inherent in the nuclear proliferation (such as regionally, to India and Pakistan) as well as ongoing population explosion, with countries like India, approaching one billion inhabitants.

In the second chapter by Herz on Reflections on My Century, the author has started with apologizing for what will probably be not too perfect a presentation because I am reading—blind and therefore have to talk without notes. Also, I would like to forewarn you not to expect from me what one sometimes refers to as the wisdom of old age. That wisdom is a myth. At my age, one can be glad if one has not become completely senile. But there may be one advantage in having grown so old — that one has lived through almost a whole century — and there are perhaps certain long gone events and developments which are worth recalling because they have disappeared from the collective memory of younger generations. I would like to start with some of these recollections under the heading of missed opportunities, question mark.

What strikes me more about Herz is a fact that these two chapter given to me at his mid nineties in age. It shows the enthusiasm he had in thinking and writing at that age.

The other important chapter is by George C. Bitros, Professor, Center for Economic Research, Greece, Epaminondas J. Panas, Professor, Athens University of Economics and Business, Greece, the chapter entitled Another Look at The Inflation- Productivity Trade-Off aims to test the robustness of the relation between total factor productivity growth and inflation to the specification of the model adopted for its identification. In doing so we estimate a generalized Box-Box cost function using data from the two-digit Standard Industrial Classification of manufacturing industries in Greece during the period 1964-1980. The results confirm that the acceleration of inflation from 1964-1972 to 1973-1980 reduced total factor productivity growth in a way that was both statistically significant and sizeable. In addition, they reveal that, even when the effect of inflation is separated from the effects of technical change and economies of scale, the choice of functional form is most crucial. The reason being that cost functions such as the translog, the generalized Leontief, and the generalized square root quadratic are not general enough to account for the sensitivity of estimates to model specification. On these grounds then we conclude that, for a precise estimation of the adverse impact of inflation on total factor productivity growth, it is imperative both to sort out the three effects involved and do so by adopting function the most general flexible functional form available for the cost.

The chapter by Gaston Gaudard, Professor, University of Fribourg, Switzerland, on The Revival of the Comparative Costs, the Space and the Proximity in Year 2000, is an important chapter which has not only influenced the 20th century economics and will continue to dominate later.

The final part of the book, however contains contributions of the Nobel Laureates in economics. As I had said earlier the second half of the 20th century economics is dominated by the contributions of the Nobel Laureates. The prize which was instituted in 1969 has seen the Awards upto 2008. The four decades after the Award was started, has made the Nobel Foundation to recognize the economists as Laureates upto 62. Of these 62 Laureates 22 Laureates have received the full prize and they are Professors Paul A. Samuelson (1970), Simon Kuznets (1971), Wassily Leontief (1973), Milton Friedman (1976), Herbert A. Simon (1978), Lawrence R. Klein (1980), James Tobin (1981), George J. Stigler (1982), Gerard Debreu (1983), Sir Richard Stone (1984), Franco Modigliani (1985), James Buchanan (1986), Robert M. Solow (1987), Maurice Allais (1988), Trygve Haavelmo (1989), Ronald H. Coase (1991), Gary S. Becker (1992), Robert E. Lucas Jr. (1995), Amartya Sen (1998), Robert A. Mundell (1999), Edmund S. Phelps (2006), and Paul Krugman (2008). In 14 years two have shared, that is 28 Laureates. It is unthinkable that senior economists like Professors, Jan Tinbergen and Ragnar Frisch have shared in 1969 and similarly, Sir John R. Hicks and Professor, Kenneth J. Arrow have shared in 1972. These Laureates deserved full prizes. There are many such examples. It has to be reckoned that in the initial years of prize awards there were many senior economists and it was a hard task for the Nobel Foundation to chose hence probably, the sharing. Three economists have shared in four years.

In a volume of this kind, it is difficult to cover 62 laureates which require a separate volume. I am happy I had made an attempt very early with the blessings of Professor, Jan Tinbergen to present Lives and Contributions of 37 laureates which was published with ?Foreword‘ by the respected Professor in three volumes in 1995. It is my wish that I revise these volumes and bring them up to date.

However, in this volume we have included chapters on Professor, Paul A. Samuelson, Ronal Coase, and Lawrence R. Klein. These three chapters are representative chapters only authored by D. P. O’Brien, Emeritus Professor, University of Durham, UK, on Samuelson. Professor, Steven G. Medema, Chairman, University of Colorado, USA, on Ronald Coase and Anastassios Karayiannis, Professor, Karaoli and Dimitrious, Piraeus, Greece, on Lawrence R. Klein.

Professor D.P. O’Brien has developed chapter very well on Samuelson and it is to his credit that chapter is seen by Professor Samuelson himself before publication in the International Journal of Applied Economics and Econometrics, which is reproduced here. O‘Brien discusses in brevity the astounding contributions of Paul A. Samuelson to the science of economics, both as a theorist and as historian of economic thought during the twentieth Century. Samuelson‘s output even in the history of economic thought is enormous and the paper is an effort to present, though briefly, most of his innovative thoughts which have contributed enormously to the growth of economics. Professor Samuelson‘s personality - as an economist and as an affectionate person to co-economists is brought out.

Similarly Professor Ronald Coase is well described by Professor Steven G. Medema. The chapter on A Synopsis of Lawrence R. Klein‘s Thoughts and Contributors to Economics, by Professor Anastassios Karayiannis, has paid a special tribute on Klein‘s various thoughts and contributions to economics. The chapter concentrates primarily on Klein‘s scientific achievements. These are analysed with respect to the following issues the development of the Keynesian macroeconomic model; the advancement of special econometric projects and techniques; the specific suggestions toward economic policy; and the methodology and history of economics. The paper will conclude with an evaluation of Klein‘s place in the ?future? history of economics.

In a work of this magnitude we will have received assistance and co-operation from a large number of Professional economists. It is too difficult to acknowledge everyone individually.

Firstly, I would like to express my gratitude for Professor Warren Hogan, Emeritus Professor in the University of Sydney, Australia, for readily accepting my request to provide a "Foreword" for this volume which he has done admirably. I am grateful to him for the very kind words he has used about the work and myself. Secondly, the authors who have contributed have readily agreed to the subject given to them for contributing to this volume. Their help and co-operation is gratefully acknowledged. Each one of the chapters has been referred more than once and those referees who have done the referee work eminently. Their help and assistance is also gratefully acknowledged.

In particular I would like to express my gratitude to Professor Rathiram, Distinguished Professor in economics, Illinois State University, USA, for his contribution by refereeing many hard papers which he has done in many cases in consultation with his colleagues in the University. His objective nature of refereeing is to be well recognized.

Professor Lodewijks, Professor and Head, School of Economics and Finance, University of Western Sydney, Australia, has been very helpful not only by his contributions and in many other ways in which I desire him to co-operate. I acknowledge with grateful thanks.

Professor, Vittorangelo Orati, Rector, International Institute for Advanced Economics and Social Studies, Italy, and Professor, Gilbert Abraham-Frois, Emeritus Professor of Economics, University Paris-X-Nanterre, France, have also been very helpful in my work. This is acknowledged with gratitude.

The enthusiasm of Professor, D. P. O’Brien: Emeritus Professor of Economics, University of Durham, UK, and John H. Herz: Professor, City College and Graduate School, The City University, Scarsdale, NY, USA, who have contributed two papers at his very elderly age is an inspiration to others. His enthusiasm is something very great.

All Members of Editorial Advisory Committee have inspired me when I took up the task of finalizing this book. Professor Paul A. Samuelson, the first American Nobel Laureate in Economics who is also Member of the Editorial Advisory Committee of the International Journal of Applied Economics and Econometrics have inspired me through his letters and I am grateful to him for his encouragements, inspirations and blessings. Similarly, Professors Robert M. Solow and Lawrence R. Klein, Nobel Laureates and who are also Members, Advisory Committee, IJAEE have inspired me and co-operated in my work which is grafully acknowledged.

A large number of chapters were published earlier in the International Journal of Applied Economics and Econometrics from which I have included and edited for the book. The authors, a large number of them sent their papters with the understanding that after publication in the Journal they will be included by me in the book. I have retained the copyright. I am grateful for this understanding with authors who have co-operated with me excellently.

With the above, I now place this book on development of economic history in the twentieth century before all the Economists, Professors, Students, and all those interested in the subject. I hope, this volume will provide lots of unknown facts in economic history and all chapters are research oriented.

06-05-2009                                                                         Dr. K. Puttaswamaiah

1. The Development of Nineteenth-Century British Monetary  Orthodoxy   Neil.T.Skaggs


2. Mechanical Analogies in Adam Smith James E. Alvey


3. Early Response to Adam Smith  Hiroshi Mizuta


4. The Instrumental Political Economy of Adolph Lowe  James Ronald Stanfield & Michael C. Carroll


5. Some Unpublished Correspondence of William Thomas Thornton, 1866-1872 Mark Donoghue


6. Natural Laws in Economics: Quesnay his Predecessors  and Contemporaries Gilles Dostaler


7. The Formation of Maltus‘s First Essay  Yoshio Nagai


8. Crises in Marx‘s Analysis of the Market  MC Howard & J.E. King


9. Marshall and the Development of Neoclassical Economics  Neil Hart


10. Marshallian Demand Function and the Adjustment of  Competitive Markets Jesus M. Zaratiegui


11. Wicksell‘s Cumulative Process: A Vindication to  Modern Eyes William Coleman


12. What Does Profit Mean for Alfred Marshall?  Jesus M. Zaratiegui


13. Further Applications of J.M. Keynes Approach to  Decision – Making Under Risk and Uncertainty Michael Emmett Brady


14. Applications of Option – Pricing Theory :  Twenty – Five Years Later Robert C. Merton


15. Manager Versus Entrepreneur in Alfred Marshall‘s  Economics Jesus M. Zaratiegui


16. The Invisible Mr. Keynes-Empirical Versus Theoretical  Arguments Craig Freedman


17. J. M. Keynes‘s Decision Theory and Preference Reversals  Michael        Emmett Brady


18. A Mathematical Proof of Keynes‘ General Case  Michael Emmett Brady


19. The History of Economics thought of the Last 200  Years through its Schools and its Canons O.F.Hamouda


20. The General Equilibrium Theory in The 20th Century Japan  Takashi Negishi


21. History of Economics the Origin of Economic Thoughts in  Ecology and Molecular Biology Lillemor Lewan


22. Recent Developments in The History of Economics  John Lodewijks


23. The Chicago Counter-Revolution and The Sociology of  Economic Knowledge Robert Leeson


24. Economic Management and The Keynesian Revolution :  The Policy Consequences of The Disappearance of Say‘s Law Steven Kates


25. The Contemporary Relevance of The ? Critical Economic  Systems Approach‘ to Political Economy in The Tradition of Marx, Veblen, Keynes and Schumpeter Philip Anthony O’Hara


26. Some Observations on Engaging in ?Survival Research?  John H. Herz


27. Class and Monopoly  Stephen Resnick & Richard Wolff


28. Another Look at The Inflation- Productivity Trade-Off  George C. Bitros & Epaminondas J. Panas


29. The Revival of The Comparative Costs, The Space and  The Proximity in Year 2000 Gaston Gaudard


30. Paul Samulson-The Theorist as Historian of  Economic Thought D. P. O’Brien


31. Ronald Coase as A Dissenting Economist  Steven G. Medema


32. A Synopsis of Lawrence R. Klein‘s Thoughts and  Contributors to Economics. Anastassios D. Karayiannis


33. The Galbraithian Contribution to Political Economy  James Ronald Stanfield


34. Reflections on Colin Simkin  Warren P.Hogan


35. Reflections on My Century  John Herz




Rarely in one place has such an eminent group of prolific scholars explored the twists and turns of the development of the discipline known as the ?Queen of the social sciences‘. From Quesnay we move to Smith, Malthus and Marx, catch our breath with four chapters on Marshall and five on Keynes, before ending with Samuelson, Coase, Klein and the recently departed Galbraith. Along the journey we meander through Adolph Lowe, general equilibrium analysis and the Chicago School. These essays reveal the passion and insight of our leading practitioners and demonstrate clearly the value of the history of economic ideas.
            -John Lodewijks, Professor & Head, University of Western Sydney.
This monumental work edited by K.Puttaswamaiah contains more than thirty contributions coming from the whole world on nearly 700 pages, developing original presentation of economic analysis, history of economic thought from Adam Smith ?mechanical analogies? to Galbraith contribution to economic policy, passing by Marx, Keynes decision theory, option pricing, recent developments in history of economics and history of economic thought... An outstanding realization.
            -Gilbert Abraham-Frois, Professor, University Paris-X-Nanterre.

"On the essential theme of growth the book edited by Dr. Puttaswamaiah suggests central aspects of the matter that represent the core of the theoretic and applied problems on which the immense literature on the development phenomenon have accumulated since the birth of economic science. All the scholars have to save this book near the writing-desk."            
            -Vittorangelo Orati,Professor and Rector, IIAESS.