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A Critical Evaluation of Emile Cheysson's Contributions to Economic Analysis

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A Critical Evaluation of Emile Cheysson's Contributions to Economic Analysis Louisiana State University LSU Digital Commons LSU Historical Dissertations and Theses Graduate School 1970 A Critical Evaluation of Emile Cheysson's Contributions to Economic Analysis. Robert Francis Hebert Louisiana State University and Agricultural & Mechanical College Follow this and additional works at: https://digitalcommons.lsu.edu/gradschool_disstheses Recommended Citation Hebert, Robert Francis, "A Critical Evaluation of Emile Cheysson's Contributions to Economic Analysis." (1970). LSU Historical Dissertations and Theses. 1857. https://digitalcommons.lsu.edu/gradschool_disstheses/1857 This Dissertation is brought to you for free and open access by the Graduate School at LSU Digital Commons. It has been accepted for inclusion in LSU Historical Dissertations and Theses by an authorized administrator of LSU Digital Commons. For more information, please contact [email protected]. 71-6577 HEBERT, Robert Francis, 19M-3- A CRITICAL EVALUATION OF EMILE CHEYSSON'S CONTRIBUTIONS TO ECONOMIC ANALYSIS. The Louisiana State University and Agricultural and Mechanical College, Ph.D., 1970 Economics, history University Microfilms, Inc., Ann Arbor, Michigan A CRITICAL EVALUATION OF 1SMILE CHEYSSON1 S CONTRIBUTIONS TO ECONOMIC ANALYSIS A Dissertation Submitted to the Graduate Faculty of the Louisiana State University and Agricultural and Mechanical College in partial fulfillment of the requirements for the degree of Doctor of Philosophy in The Department of Economics by > ( 0-' Robert F; Hebert B.S., Louisiana State University, 1965 M.S., Louisiana State University, 1966 August, 1970 "Economists . achieve immortality by accident, i f a t a ll ." LORD KEYNES ACKNOWLEDGMENTS This writer would like to thank his dissertation director, Dr. William F. Campbell, and his co-director, Dr. James P. Payne, Jr., for their encouragement, evaluations, and helpful criticisms during the pre­ paration of this dissertation. Appreciation is also expressed to the other members of his committee: Dr. T. R. Beard, Dr. Jan Duggar, and Dr. Rent? Williamson for their respective roles in seeing this disserta­ tion through to its present form. A special debt of gratitude is due Dr. R. B. Ekelund, Jr., for hav­ ing suggested research on Cheysson and for constant encouragement and constructive criticism s offered along the way, and to Sidney L. Carroll for having generously contributed his time and effort to the development of certain analytical points in this dissertation. Only the writer re­ mains responsible for the final results, however. Of those others who have had a hand in the development of this dis­ sertation, appreciation is extended to Dr. William Ross, Dean of the College of Business Administration, and to the L. S. U. Foundation for having made the translation of Cheysson1s works possible; to Mrs. Eleanor Evans for having performed the task of translation in a profes­ sional manner, and to Gerhard Falk for having assisted this writer in the translation of certain German sources. Finally, the writer would like to thank Mrs. Norma Duffy, who produced the excellent graphic illus­ trations in the text of this manuscript, and Maxine Weldman, who typed the final copy. Most of all, this writer is grateful for the patience and encourage­ ment of his wife and family who somehow managed to survive the writing of this dissertation. table of contents CHAPTER Page ACKNOWLEDGEMENTS.....................................................................................................i i LIST OF FIG URES.....................................................................................................v i ABSTRACT ........................................................................................................................v i i I. INTRODUCTION.......................................................................................................... 1 Purpose and Scope of Study .................................................................. 1 Bibliographical Orientation ................................ ....... 10 Biographical Sketch .... .............................................................. 15 II. CHEYSSON AND THE INTELLECTUAL M IL IE U ..................................................... 25 r The S tate of Economics in Nineteenth-Century France . 25 The Performance of Classical Liberalism ........................... 26 Exclusiveness of French Economics After 1850 .... 28 Politics of the Paris Group ..................... 31 Beginnings of Dissent: LePlay and his School .... 32 The Social Economy of Cheysson and LePlay ................................ 37 Methodology, Family, and Society ........................................ 38 The Nature of Economic Production and R elationships between F acto rs ................................................................. 42 The Nature of Economic and Social Reform .................. 48 I I I . GEOMETRIC STATISTICS: THE CASE FOR ECONOMETRICS........................... 51 Nature and Scope of Cheysson's Method ........................................ 52 Nineteenth-Century Forerunners of the Modern Theory of the F i r m ............................................................................................ 59 Cournot and Cheysson on Demand and P ro fit Maximiza­ tion ........................................................................................ 59 The Question of P r i o r i t y ......................................................... 72 i i i CHAPTER Page The Mathematical Foundation of Geometric Sta- 78 t i s t i c s ........................................................................... Evaluation of Cheysson1s Statistical Model .......................... 83 The Spirit of Inquiry .............................................................. 83 Nature of the Data .................................................................. 84 Cheysson and the S ta tis tic a l Law ofDemand .................... 86 IV. CHEYSSON'S CONTRIBUTIONS TO RAILWAY RATE THEORY AND SPATIAL ECONOMICS.............................................................................................................. 92 The Historical Development of the Law of Market Areas in Relation to Transport Costs ................................................ 93 Early Progress in S patial Economics ............................... 94 Von Thiinen, Lardner and L aunhardt ................................... 95 Cheysson's Performance .................................................. 105 Competitive Rate-Making and the Market Area of the F i r m ............................................................................................ 107 Competitive Rate-Making and the Carrier's Ability to Attract T raffic ............................................................. I l l The Supply of Raw M aterials ................................................ 116 Importance of Cheysson's Analysis for the Theory of Rail­ way Rates and S patial E c o n o m ic s........................................ 120 V. THE NATURE OF PRODUCTION COSTS AND EQUILIBRIUM OF THE FIRM . 124 The Determinateness of Static Equilibrium in a Competi­ tive Labor M arket .......................................................................... 125 A Reconstruction of Cheysson's Wage Model in Light of Recent Theoretical Developments .......................... 129 Cheysson on Factor Proportions and Technological Unem­ ployment ............................................................................................ 139 Anticipations, Internal Rate of Return, and the Theory of a Single Investment ................................................................. 152 Cheysson on Product Variation and Quality Competition . 160 iv CHAPTER Page VI. AN OVERALL VIEW OF CHEYSSON AND HIS CONTRIBUTIONS...................... 170 Cheysson as Economist and Engineer ............................................ 170 Cheysson and Economic Policy ......................................................... 177 Cheysson and the Polemics of his P e rio d ......................... 178 Cheysson's Influence on the Progress of Economic Analysis 181 BIBLIOGRAPHY..................................................................................................... 184 APPENDIX I ......................................................................................................... 192 APPENDIX I I .......................................................................................................... 195 APPENDIX I I I ..................................................................................................... 202 VITA ....................................................................................................................... 206 v LIST OF FIGURES Page Cheysson1s "Markets" Curve 62 Gross Revenue Derived from Average Revenue 64 Total and Average Costs of Austrian Railway System in 1886 67 Profit Maximization in a Statistical Case 68 Launhardt's Spatial Model 103 Cheysson1s Spatial Model 108 Rate-Indifference Curves and the Routing of Goods Ship­ ments 114 Choice of Supply Source 118 Supply and Demand for Labor 126 Cheysson1 s Wage Model with "Cobweb" Lag 131 Cheysson1s Wage Model with Converging Equilibrium Adjust­ ments 136 Hicks' Input-Substitution Model 142 Optimum Factor Proportions and Production Period 144 An Investment-Decision Model 154 Product Differentiation and Product Equilibrium 165 v i ABSTRACT The mathematical in v estig atio n of certain economic problems under­ taken by the nineteenth-century French engineer, ifmile Cheysson, has attracted little attention
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