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Home , Bruno Hildebrand, Carl Menger, Dudley North (economist), William Stanley Jevons

THE WEALTH OF NOTIONS: IN CONFLICT The Wealth of Notions: Economists in Conflict

An Exhibition from the Hollander Collection of Economica of the Rare Book & Manuscript Library, University of Illinois at Urbana-Champaign, 14 September through 14 December 2012

Curated by Samuel Bostaph

Co-sponsored by the Department of and the College of Business of the University of Illinois at Urbana-Champaign Foreword Peter A. Coclanis noted Economists portrayed opposite title page, left to right & top to acob Harry Hollander (1871-1940) in the January 2010 issue of Perspectives bottom: Jbegan collecting books in the early on History that “it’s been a long time Thomas Gresham, Hollander 3860 1890s while on study trips in . since has been a hot Sir Dudley North, Hollander 3862 He worked in the British Museum field.” He bemoans the plight of this François Quesnay, Hollander 3872 during the day and scoured London particular discipline, which has been A. R. J. Turgot, Hollander 3875 booksellers’ shops in his spare time. “frozen out of most scholarly conversa- David Hume, Hollander 3873 Among his finds were a first edition tions for much of the first decade of , Hollander 3879 of The Wealth of Nations for which he the new millennium,” before looking forward, hopefully, to a new generation Thomas Robert Malthus, Hollander 3897 paid 20 shillings (his weekly living costs were 28 shillings), the famous of economists who might realize that William Godwin, Hollander 3892 Tassie miniature portrait of Adam we can learn from history. We hope this , Hollander 3906 Smith, letters by , exhibition and the magnificent Jacob Robert Owen, Hollander 3910 David Ricardo, Thomas Malthus, H. Hollander Collection will inspire a , Hollander 3913 and other luminaries of the history of few from this new generation to use the , Hollander 3921 economics, and the original manuscript collections to look at economics from a of John Stuart Mill’s Autobiography. His more historical perspective. Special thanks for help with this exhibition go to the Digital collection ranks among the three greatest For this exhibition, we asked a Content Creation Unit of the University Library, and to the economics libraries in America—the historian of economics, Samuel Bostaph, Conservation Unit of the University Library. other two being the Seligman Collection to survey the history of economics at Columbia and the Kress Collection through examples from the Hollander Cataloging-In-Publication Data at Harvard. From sixteenth-century Collection. Professor Bostaph took up Bostaph, Samuel Harvey. tracts on lending practices (or usury) to the challenge with gusto, marveling The wealth of notions : economists in conflict : an exhibition early twentieth-century studies of the at what he found and offering mini- from the Hollander Collection of Economica of the Rare Book & economics of socialism, the Hollander economics lectures to us as he worked Manuscript Library, University of Illinois at Urbana-Champaign, Collection covers many schools of on the exhibition. We hope you, too, 14 September through 14 December 2012 /curated by Samuel economic thought—or a wealth of will enjoy the fruits of his labors in Harvey Bostaph. — Urbana, Ill. : Rare Book & Manuscript Library, notions, to borrow the pun from the title this exhibition. His essay, “Conflicting 2012. of this exhibition. Seventeenth-century Schools of Economic Thought,” offers p. : col. ill. ; cm. mercantilists, French , and an insightful overview of the sometimes Includes bibliographical references. the classical economists of , turbulent history of economics from the seventeenth to the twentieth centuries. ISBN 978-1-937686-03-1 Germany, and America are particularly well represented, in addition to In order to set the stage for 1. Economics—History. 2. Hollander Collection of Economica manuscript material and numerous Professor Bostaph’s essay and this (University of Illinois at Urbana-Champaign Library). 3. Hollander, portraits of important economists. exhibition of rarities from the Jacob Jacob Harry, 1871-1940—Library. Hollander was born in Baltimore Hollander Collection, we have I. University of Illinois at Urbana-Champaign. and had a long and successful career reprinted Hollander’s own account Rare Book & Manuscript Library. II. Title. as a Professor of Political at of his collecting habits. This brief and HB75 the Johns Hopkins University. Thanks charming essay was originally included 330’.09 to aggressive collection development in the 1937 catalogue of his collection on our part, however, his collection of and printed in a limited edition. Copyright © 2012 The Rare Book & Manuscript Library, some 4,500 items came to the Univer- The Board of Trustees of the University of Illinois sity of Illinois at Urbana-Champaign in Valerie Hotchkiss, Director All rights reserved. 1958, and we are grateful to have it. The Rare Book & Manuscript Library Hollander’s Foreword [1937] with its moving vignette. Thence came my first editions of Mun, Child, It was the gracious kindliness Petty, Graunt, Stuart, Adam Smith, of Foxwell in permitting an awed Godwin, Malthus and of the Ricard- novice in the summer of 1895—annus ian tracts. Sprague lived in the same mirabilis as only a first visit to Eng- Bloomsbury boarding house and land can hallow a year—to examine Hull, putting the last touches to his the great collection of Economica Petty, around the corner; and there which then overflowed his cases in was generous rivalry over new finds. St. John’s College, that gave the first An in economic personalia impulse to the present collection. traces back to the same happy sum- His dei majores—Newcomb, Patten mer. Asher Meyers gave me the and Clark—had equipped the young Phillips portrait of Ricardo that ever traveller with introductions, and since has hung as patron saint above with Marshall as philosopher, Edge- my desk; Daniels supplied the Lin- worth as friend, Higgs as guide, and nell mezzotint of Malthus; Hollyer Bonar, many times all three, he was struck off “to order” a copy of the led to George Harding, then easily Watts head of Mill, and the sentimen- the first among English book dealers tal journey of a political economist interested in economic literature. In brought prized souvenirs, from Bath, the little Museum Street cubby-hole, in whose ‘glass house’ Malthus’ body snugly hidden in the shadow of the lies; long after I visited the Priory, British Museum and opposite the near Dorking, his birth-place, and Bookbinders’ Cooperative—they my young daughter took snap-shots, did his Oncken, just acquired, in one of which went properly enough deathless pigskin—this aspirant to Bonar; from Gatcomb Park, where spent happy hours and indiscreet the tradition still lingered that the shillings from a none too well filled four caryatids of Ricardo’s incred- purse. But what purchases! For ible tomb were in reminder of the Harding although a good shopman economist’s four daughters; and was a sound counsellor, and there from Edinburgh—almost! For a fickle grew between us a friendship akin, bicycle played me false on Hadrian’s if small things may be compared Wall,—”humpty-dumpty,” my trav- with great, to that between Quaritch elling companions the John Martin and McCulloch—of which Quaritch Vincents, call me to this day—and himself told me one murky afternoon thence woefully to Bloomsbury and in his Piccadilly office. Harding’s hot applications! But many years parting gift—dolt-like, I wounded later, one of my own students, him by offering payment—was the Broadus Mitchell, mindful of the loss, original membership card (3912, visited Canongate Churchyard and within) of one of his own kinsmen in sent me photographs and post-cards. the National Anti-Corn Law League, And in the meantime back in London

3 I had established relations with Rath- was not sparing of either Time or have rested with Marshall and those Sometimes I have made sad mistakes bone, most prickly of porcupines but ”—were sold in 1760, and whom he fired. This is the terminal of as in breaking up three volumes of master of Wedgwood, that resulted thereafter dispersed, lost or hidden, my devotion. Books of the day mass excise tracts that belonged to George after long waiting in that desirable how and in what manner we have about me, and I pay homage. But it is Rose, in mechanical compliance—de- of desirables—the Tassie medallion no knowledge. But even after he for those who come after to determine spite Stevens’ protest—with the rule of Adam Smith in the original had disposed of the actual collec- which of the new vintages shall be of one imprint, one book. But in the enamel (3877). tion, Massie continued to revise racked. Only as to the work of those main I have made salaam to original If my passion for the classical and extend an admirably compiled who have been and, happily, still are garb and distinguished ownership. economists ‘in the skin’ goes back to finding-list, and this “,” which my close associates in the Department For the binding and rebinding that George Harding, assuredly I owe my by December 1764 had grown to 2377 of of The Johns has been necessary I owe most fondness for the pre-Adamite texts items, still serves as a helpful guide Hopkins University—Barnett, Wey- to Sangorski & Sutcliffe, whom I to Seligman. Who among the young to English economic literature before forth, Mitchell, Evans, Cooper, Bull- learned to know almost at the outset economists of the last generation— Adam Smith. Andrews and I had a ock—work that I have been permitted of their business life through Tur- for he was as he remains, host to transcript (3929, within) made from to follow in the making, has this rule bayne, their teacher and friend—as many and gracious to all—will the original resting among the Lans- been waived. I have not dared extend mine; in later years the good offices ever forget the nobility of that 86th downe MSS. in the British Museum, the license to the long line of students of Stevens have bridged the Atlantic Street library and its contents. In the and I ventured to check off those of who have worked with me in Balti- in this . greater formality of its new setting the items which were on my own more. May Clio be gracious! It is as a souvenir of such good the “Seligman Library” will bring aid shelves. Ever since—partly in the The arrangement has thus been hunting that this compilation has to successive generations of students. fantasy of “reconstructing” a great chronological; but I have not hesi- been prepared. I have not risked May it also bring the old thrill! collection, partly because the reliance tated—when it seemed reasonable— chilling the intimacy of long associa- Form and direction were given is sound—I have been ardent in the to blur the separation by placing in tion by stern devices of cataloguing in 1908 to the growing collection by pursuit of “Massie items.” order the several works of an author and bibliography. The collection has the common interest, reached from An ‘economic library’ may be under the year in which his first grown as part of me, and I cannot at different approaches, which Charles designed for different purposes. composition appeared. I have added this stage play drill master. M. Andrews, then at Johns Hopkins, Mine has been, with a fair degree in separate place as many, as it has I should like to think of myself and I found in Joseph Massie’s “Al- of consistency, to document the been possible in these years to have as one of the company—far below phabetical and Chronological Index doctrinal growth of the science. about me, of the portraits of those the salt!—Massie, McCulloch, Fox- of Commercial Books and Pam- I have included—at least in this whom our craft delights to honor; as well, Seligman, Bell, Wagner, stout phlets.” The particulars of Massie’s catalogue—only those compositions well as the letters, manuscripts and members of the crew of a ‘Stultifera life are hidden in the same irritating which withstood the test, omitting personalia that by circumstance or Navis’—Osier’s coterie of biblio- obscurity that enshrouds other no- legal and political tracts. As Massie, endeavor have come my way. philes, in which I was given unde- table English economic writers of the I have begun with the last quarter of I may not claim Adam Smith’s served place—who have cared for middle eighteenth century; we know the sixteenth century and taken as merit as a beau in my books books not only as tools of their trade, only of his literary from the dividing zone of the longer span —pardonable hyperbole as Bonar’s but as living things to be assembled 1750 to 1765, and of his death in the middle of the eighteenth century, toil has shown. But the state and the for their distinction, to be admired 1784. The “Fifteen Hundred, or more, when tracts gave way to treatises and dress of a book have always stirred for their elegance, to be cherished for Books and Pamphlets” concerning monographs to systems. Malthus’ me. When no mint copy was to be their association. Gilman once said “the Commerce, Coin, and Colonies of “Essay” marks, naturally enough, had, place for the time has been to me that the most delightful avoca- Great Britain” which he had been the close of the “middle period,” and given to a cripple—in extreme case tion of a scholar was to gather and “above Twelve Years in making”— it, in turn, comes to an end with the mended by the wizardry of Pratt, revere the monuments of his science. though he “resided in London; and early years of the twentieth century. I the last of the craftsmen of his kind. I have found it so.

4 5

The Gods keep livelihood hidden from men. Conflicting Schools Otherwise a day’s labor could bring of a man enough to last a whole year with no more work. Economic Thought Then you could hang your oar over the smoke of your fireplace without a thought for the work of oxen by Samuel Bostaph and hardy mules. But Zeus was angered in his heart

and hid the means to life because Prometheus Economic thinking begins with with his crooked schemes had the recognition of . The 1 limitation of the means for secur- cheated him. ing the ends that are the purpose (42-9) of individual or collective action requires choosing among possible Hesiod’s response to limited means. The ends themselves are means was to recommend hard limited by the finitude of human work and the rule of justice in aspirations and of life itself. Choos- all human relations. This would ing rationally among ends, as well establish and support social order as among suitable means, requires and harmony. Later Greek phi- principles of choice. Economics is losophers emphasized the cardinal the science of those principles. His- virtue of temperance as a molder of torically, this has been particularly character and the proper response true with respect to decisions that to limited means. In a world of determine the material conditions scarcity, human excellence was of life. manifested in the curbing of desire. We can trace the beginnings Two millennia later a drastic of economic thought to the Greek change in outlook provided the poet Hesiod (ca. 700 BC). His stimulus for the development of poem Works and Days blames modern economic theory. Scarcity, Prometheus, the Titan who favored and greatly unequal income and humans, for so angering Zeus that wealth among persons throughout man was condemned to toil for his the preceding centuries, had fueled

sustenance ever after: the perennial advocacy of commu-

Exhibit Item 9. Adam Smith. An Inquiry into the and Causes of the Wealth of Nations. (London: 1776). Hollander 1830. 7 nism as one solution. Nevertheless, through trading. Consequently, it was a solution not generally sup- in pamphlets and books, many ported. Even Saint Thomas More businessmen of that age presented famously ridiculed it in his ironic a pre-analytic vision of nation-state novel Utopia. It was not that com- wealth production. munism was undesirable per se. These Mercantilists, as they After all, as nineteenth-century free came to be called, argued that what economist Carl Menger was was true for the individual trader later to point out in his Grundsätze was also broadly applicable to the der Volkswirthschaftslehre (1871) [Item trade between nations. A nation 17], “Men are communists whenever would be politically powerful if possible under existing natural con- it could amass wealth in the form ditions.” The problem was that such of gold by selling a greater conditions—a natural abundance of export than the value of of all goods—were seldom present. goods imported—that is, by achiev- Man almost always faced scarcity. ing a favorable “balance of trade.” If neither temperance nor Mercantilist literature and policies communism were to be taken as abounded in France, Germany, solutions to the problem, what was? Sweden, Spain, Portugal, and Seventeenth-century European England from the sixteenth to the writers argued that scarcity could eighteenth centuries. Its most well- be overcome by the production of known authors were seventeenth- wealth. The question was how to century British nationals. Although produce it. not organized as a formal school, European of that British Mercantilists proposed a age were based on agriculture, doctrine of state intervention to mining and fishing, as well as favor business and thus grow the on trading the results of those power of the state. They took it for activities. Political relations granted that unrestricted individual among the various nation-states activities would harm them and the either involved war or verged community. Five hundred years on war, and the fuel for war was later, their arguments and policies specie—gold and silver with which are again fashionable. to pay armies. Trade itself was Gerard de Malynes (fl. 1586- associated with colonization and 1641) emphasized the hindrance to the subsequent exploitation of a favorable trade balance created by colonies. Members of the trading an “overbalancing” of foreign goods classes used their own experience as compared to British ones. to conclude that wealth was gener- He argued that high foreign goods ated for the successful trader by prices, rather than discouraging Exhibit Item 3. Gerard de Malynes. A Treatise of the Canker of Englands Common accumulating a surplus of specie imports, actually led to the export of Wealth. (London: 1601). Hollander 11.

8 9 specie from England. He blamed the In his . Or, the “To sell more to strangers yearly the pricing of exports with an eye banking community for manipulat- Meanes To Make Trade Florish (1622) than we consume of theirs in val- toward revenue maximization; and, ing the rate of exchange so that it [Item 5] Edward Misselden (fl. ue.” To do so required: that all land governmental regulation of imports was cheaper for British merchants to 1608-54) argued that it was exces- in England be cultivated that can and exports to encourage a favor- ship coin abroad than to buy foreign sive imports and deficient exports be used to produce export goods able balance. bills of exchange. In A Treatise of the that led to the exportation of mon- or import replacements; frugality The Industrial Revolution in Canker of Englands Common Wealth ey, not bankers manipulating the at home to reduce imports; an the late eighteenth century saw the (1601) [Item 3] he presents his argu- exchange rate. As a consequence of emphasis on manufactured goods rise of defenders of free market ments and calls for government to the decreased domestic money sup- for export because they are more exchange and opponents of Mer- set the foreign exchange rate at the ply, domestic trade, government profitable and generate more cantilist policies in France and in specie content ratio of coins. revenues, and the employment; careful attention to England. Members of the French general wealth of the kingdom had aristocracy, who believed that the all declined in the 1620s. His sug- source of wealth lay not in trade but gested remedy was for government in agriculture, opposed the Mer- to raise the value of British coin, cantilist policies of finance minister subsidize exports, and erect barri- Jean-Baptiste Colbert and formed ers to imports in the form of quotas the first school of economic thought. and tariffs. He especially blamed They called their doctrine Physioc- the monopoly East India Company racy (rule of nature) and are conse- for the exportation of coin, but later quently known as the Physiocrats. became a defender of the company (1680s?- after entering its employ. 1734) was an Irish banker who Perhaps the most famous of made a fortune through specula- these practical businessmen was tion in Paris. His posthumously Thomas Mun (1571-1641), whose published Essai sur la nature du A Discourse of Trade, from England commerce en general (1755) [Item 6] unto the East-Indies (1621) [Hol- influenced both British and French lander 28] was devoted mostly to writers, in particular François the defense of the East India Trade, Quesnay (1694-1774), founder of arguing that the East India Com- the Physiocratic School. Cantillon’s pany (of which he was a director) Essai argued that the source of both not only increased British employ- wealth and value lies in land, which ment, but it brought back to Eng- should be intensively cultivated by land much needed goods as well labor and its products circulated as more silver than it exported in throughout society to bring prosper- the course of its trading activities. ity. He saw landowners as the only More general in argument was his independent class, and all others posthumously published England’s as dependent on them and the land Exhibit Item 5. Edward Misselden. Free Treasure by Forraign Trade (1664) Exhibit Item 4. Thomas Mun. England’s for their sustenance. His treatise Trade. Or, The Meanes to Make Trade [Item 4]. Here, the basic principle Treasure by Forraign Trade. (London: 1664). presents a systematic and general Florish. (London: 1622). Hollander 42. Hollander 31. of Mercantilist policy is found at the with a central role very beginning of the work:

10 11 for the entrepreneur, whose profits argued for a governmental policy of are a reward for successfully bear- laissez-faire or non-interference with ing uncertainty. the production and circulation of the In his Tableau oeconomique (1758) product domestically, as well as [Item 7] François Quesnay presented in international trade. a model and diagram of how the Quesnay, Turgot and the other produit net (surplus product) of Physiocrats were natural law theo- agriculture circulated among the rists and argued that Mother Nature classes. Quesnay was first physi- made the of all individuals cian to King Louis XV, as well as a in society naturally harmonious. surgeon who had written a medical If the state would protect prop- treatise on bleeding. He likened the erty rights and leave individuals flow of money through society to the flow of blood through the body. His model was the precursor to the “Keynesian” (named after 1930s economist J. M. Keynes) economic concept and modern textbook diagrams of the circular flow of income and product in a macro-economy, and the model depicts a general equilibrium between production and spending. Anne Robert Jacques Turgot (1727-81), a fellow-traveler of Physiocracy, wrote his Réflexions sur la formation et la distribution des richesses (1788) [Item 8] to provide a basic survey of his and their eco- nomic ideas. In both his writings and his actions as French Minister of Finance, 1774-76, he stressed the dependence of the “sterile” classes (landowners, merchants, artisans, laborers) on the farmer- cultivators or “productive” class, described the circulation of the surplus product among classes, emphasized the importance of capital by the landown- ers, outlined a theory of capital, and Exhibit Item 8. Anne Robert Jacques Turgot. Réflexions sur la formation et la Exhibit Item 7. François Quesnay. Tableau oeconomique. (Reprinted, London: 1894). distribution des richesses. (s.l: 1788). Hollander 1518. Hollander 2169.

13 to the pursuit of their separate and against Mercantilistic restrictions The book includes a general Thomas Robert Malthus (1766- interests, a natural order of peace on international trade. Nevertheless, theory of wealth production, a theory 1834) accepted Smith’s endorsement and wealth would be the result. he argued that the source of national of capital, an economic history of of a policy of laissez-faire; however, Although landowners themselves, wealth lay solely in the productive European civilization, a history of he saw two obstacles to the general the Physiocrats recommended the powers of labor, whether applied economic thought that presents and prosperity of a market economy. replacement of all other taxes by a in the agricultural or the industrial critiques both the Mercantilists and One obstacle was “underconsump- single tax on the only productive sector. Smith most fully presented the Physiocrats, and a handbook on tion.” His Principles of Political sector, agricultural land. his own views in his An Inquiry into public finance. Smith’s theories of Economy (1820) [Hollander 2331] On the British side of the the Nature and Causes of the Wealth of production, of value, of exchange theorized that continuing prosperity English Channel, moral philosopher Nations (1776) [Item 9], which became and pricing, and of capital became would be hindered by a general Adam Smith (1723-90) added his ar- the most influential treatise on an the foundation of the theories of the inadequacy of total spending to guments to those of the Physiocrats in economy of co-operating strangers Classical School of Economics, which purchase all produced. Gluts favor of a severe limit to state action ever published. dominated nineteenth-century eco- would produce production crises nomic thinking and policy debates. and general . His labor theory of value stimulated It was his earlier identification ’s theory of labor exploita- of the second obstacle that made tion under . His rules of Malthus famous—“the population public finance became the basis of all problem.” In An Essay on the nineteenth-century treatises on the Principle of Population (1798) subject. His “” theory [Item 10], Malthus argued that of how each individual peacefully population naturally tends to pursuing his or her personal interests outgrow its means of subsistence produces a natural order of social and the numbers in the lower coordination and general prosperity classes are only checked by for all still undergirds libertarian misery. Poverty was thus the economic and political theory. fault of the poor, and poor relief was ineffective. The historical falsification of Malthus’s argument has not hindered advocates of population restriction to this day.

Exhibit Item 10. Thomas Robert Malthus. An Essay on the Principle of Population. (London: 1798). Exhibit Item 9. Adam Smith. An Inquiry into the Nature and Causes of the Wealth of Hollander 2297. Nations. (London: 1776). Hollander 1830. 15 14 David Ricardo (1772-1823) was philosophy and politics, as well as argued that institutional changes, he thought them “unearned.” His a successful London stockbroker in economics. His broad interests such as providing universal public Système des contradictions économiques, whose On the Principles of Political made his extensions of Smith, education and a system of public ou, Philosophie de la misère (1846) Economy and Taxation (1817) [Item Malthus, Ricardo, and Jeremy employment, prohibiting drink- [Item 21] was an attempt to provide 11] was an attempt to straighten Bentham more those of a social ing and gambling, and abolishing a alternative theory of economy to out what he saw as confusion in philosopher, and he leavened them organized religion could greatly replace that of the Classical School Smith’s book and to extend the with socialism. Mill’s Principles of improve human nature and the as well as of the communists, which analysis to explain the distribu- Political Economy, with Some of Their living conditions of labor. he termed “the religion of misery.” tion of wealth among classes. His Applications to Social Philosophy Anarcho-Socialist Pierre- It most notably stimulated a nega- theoretical approach, which Joseph (1848) [Item 12], confine natural Joseph Proudhon (1809-65), best tive critique by Karl Marx (1818-83) Schumpeter termed “the Ricardian law to the laws of production. The known for his self-contradictory in his Misère de la philosophie (1847). Vice,” was model-building stripped distribution of the resulting output catchphrase “property is theft,” Marx took the Classical School to the essentials of deduction is argued to be one of human was actually condemning rents labor value and class conflict from hypothetical assumptions. design and can be otherwise than and interest payments because theories of Smith and Ricardo It remains the basic approach of property rights would dictate. He mainstream economists. concluded that trade unions and For example, Ricardo applied government could improve , the labor theory of value to the the distribution of accumulated extension of agricultural production wealth, and working conditions. on increasingly less fertile land and He saw voluntary co-operative deduced consequences of rising associations as possibly a desirable grain prices and increased subsis- vanguard of the future, given an tence wages. The resultant inverse improvement in human character. and profit movements, and Opposition to the Classical rising land rents, implied a conflict School arguments supporting a of class interests. Falling profits market capitalist economic regime and decreased investment thus tied was strongest among socialists material progress to a theory of and members of the German distribution, rather than to Smithian Historical School. Socialist Robert production theory. Against Mal- Owen (1771-1858) welcomed thus, Ricardo argued that surpluses Mill’s belief in the perfectibility of production in one market are of man and the concession of the offset by shortages in others and moral high ground to socialism. general overproduction cannot oc- Owen strongly criticized the labor cur. Lastly, Ricardo’s law of com- conditions and wage levels of the parative advantage for determining factories of his day and advocated production specializations among abolishing property rights and the countries remains the central argu- institution of marriage. In his A ment for free trade policy today. New View of Society: Or, Essays on John Stuart Mill (1806-73) is the Principle of the Formation of Hu- Exhibit Item 21. Pierre-Joseph Proudhon. Système des contradictions économiques, ou, known for his contributions in man Character (1813) [Item 20], he Philosophie de la misère. (Paris: 1846). Hollander 3057.

16 17 and logically extended them to George Bernard Shaw (1856- The German Historical from (1863-1941) in produce a theory of Capitalism’s 1950) included an early version School originated with Wilhelm the Third Reich. labor exploitation, imperialism, of his revisionist socialism in Roscher (1817-94) in the 1840s The 1870s ushered in what crisis, and inevitable collapse. Das Fabian Essays in Socialism (1889), and included Bruno Hildebrand economists refer to as “The Marginal Kapital consists of three volumes, the American edition of which (1812-78) and (1821- Revolution,” which most importantly of which only the first (1867) was appeared in 1891 [Item 23]. He had 98) in its founding generation. confuted the labor theory of value published in his lifetime. A prior fallen under the influence of Henry Their books, including Roscher’s with subjective value theories origi- attempt to present his economic George (1839-97), an American Geschichte der National-Oekonomik nated independently by Carl Menger interpretation of history and the advocate of a “single tax” on the in Deutschland (1874) [Item 14] and (1840-1921) in , William analysis that became the first chap- “unearned” rental income of land Knies’ Die politische Oekonomie vom Stanley Jevons (1835-82) in London, ters of Kapital was published as and capital goods. Shaw general- geschichtlichen Standpuncte (1883) and Leon Walras (1834-1910) in Laus- Zur Kritik der Politischen Oekonomie ized the principle to call for the [Item 15], objected to the abstract, anne, Switzerland. This removed the (1859). His disciple Karl Kautsky nationalization of rents and use of deductive reasoning and resulting foundational concept for the theories (1854-1938) edited and published it the proceeds for income equaliza- “universalist” propositions of of members of the Classical School anew in 1897 [Item 22]. tion and public investment. the Classical School. Instead, they as well as of the various factions of argued for the use of an inductive theorists of socialism. “historical method” to produce In his Grundsätze der a summary and description of Volkswirthschaftslehre (1871) [Item the development of nations. 17], Menger argued that the value Contemporary economic laws of any particular unit of a good and institutions were argued to to an individual is determined be relative in space and time. The by the marginal satisfaction that British economy followed the laws would be lost if that unit were of “The Ricardian Age” while the removed. Rather than labor exerted German economy had its own in production determining the laws and its own development value of a good, the value of a path. Bruno Hildebrand (1812-78) good to its demander determines argued in his Die Nationalökonomie whether it is worthwhile exerting der Gegenwart und Zukunft (1848) the labor to produce it. Menger saw [Item 13] that it is the very the production, exchange, pricing purpose of economics to identify and of an entire the progress and perfection of market economy as driven by the humanity in the data of history. evaluations, decisions, and actions With Gustav Schmoller (1838- of consumers—all occurring in a real 1917) and his Zur Litteraturgeschichte time context of changing information. der Staats- und Sozialwissenschaften This meant that economic theorizing (1888) [Item 16], the German Historical required abstracting the essentials School degenerated into detailed his- of that process and deducing their torical monographs on the minutia implications. Purely descriptive Exhibit Item 22. Karl Marx. Zur Kritik der Exhibit Item 23. Fabian Essays in Socialism. of public administration. It ended as historical methods alone could not politischen Oekonomie. (Stuttgart: 1897). George Bernard Shaw, ed. (New York: 1891). a fount of National Socialist dogma produce theory. Hollander 3655. Hollander 3405.

18 19 Menger’s disciple Eugen coined the terms “marginal ” von Böhm-Bawerk (1851-1914) and “opportunity costs” that are extended Menger’s analysis to the ubiquitous in modern economic theory of capital, and in Capital and analysis and commentary. Interest (1890) [Item 18] argued that capitalist production is “round- introduced the about.” The more indirect, the more concept in The Theory of Political time-consuming is the process, the Economy (1871) [Item 24]. In contrast greater will be the final output of to Menger, Jevons embraced Jeremy consumer goods. Another disciple, Bentham’s Utilitarianism and the (1851-1926), “Ricardian Vice” and presented his in his Über den Ursprung und die theories in an algebraic and geometric Hauptgesetze des wirthschaftlichen format, arguing that economics was a Werthes (1884) [Item 19], actually mathematical science.

Exhibit Item 18. Eugen von Böhm-Bawerk. Capital and Interest. (London: 1890). Exhibit Item 24. William Stanley Jevons. The Theory of Political Economy. Hollander 3361. (London: 1871). Hollander 3125.

20 21 theory. Notably, he introduced the (1842-1924) Recommendations for (1845-1926) agreed with Jevons concept of a timeless “indifference accepted the new marginal utility Further Reading concerning the application of both curve,” along which bundles of theory for the determination of utilitarianism and mathematics various quantities of the same two product demand, but kept the Clas- Gide, Charles, and Charles Rist. to economics. In his Mathematical consumer goods would all yield sical School emphasis on the impor- A History of Economic Doctrines: Psychics (1881) [Item 25] he used the same level of utility. This would tance of cost for product supply. From the Time of the Physiocrats to mathematics to formalize both become a mainstay of neoclassical The result is what is known as “the the Present Day. 7th ed. Boston: production and consumption theory. ” and per- D. C. Heath, 1947. vaded Marshall’s Principles of Eco- nomics (1890) [Item 26]. Using the Haney, Lewis H. History of Economic concepts of utility-driven demand Thought. 4th ed. New York: and cost-driven supply, he out- Macmillan, 1949. lined the conditions for a market- clearing equilibrium between the Rothbard, Murray N. Classical two, and the consequent effects Economics. Auburn, Ala.: Ludwig for both individual firm equilibria von , 1995. and industry structure. Marshall’s Principles became the foundational Economic Thought Before Adam Smith. work for the Neoclassical School of Auburn, Ala.: Economics and the standard text- Institute, 1995. book in British universities for the next several decades. Simplified Schumpeter, Joseph A. History of Marshallian economic theory is Economic Analysis. Ed. Elizabeth still the mainstay of undergraduate Boody Schumpeter. London: education in economics. George Allen & Unwin, 1954. Yet, even today, a myriad of conflicting schools do battle over Spiegel, Henry William. The the same question posed by Growth of Economic Thought. 3rd ed. Hesiod: “What decision principles Durham, N.C.: Duke University and public policies best respond Press, 1991. to a scarcity of means to secure human ends?” Notes Whether this modern “Wealth of Notions” is evidence of a need 1. Hesiod. Theogony, Works and Days, for a renewal of interest in, and Shield. Introduction, translation and reconsideration of, the arguments notes by Apostolos N. Athanassakis. of the past is a question that con- Baltimore, Md.: Johns Hopkins Exhibit Item 26. Francis Ysidro Edgeworth. Mathematical Psychics: An Essay on the tinues to preoccupy the University Press, 1983. Application of Mathematics to the Moral Sciences. London: 1881. Hollander 3232. intellectual historian.

22 23 Exhibition Items Réflexions sur la formation et la 16. Schmoller, Gustav von, 1838- 23. Fabian Essays in Socialism. G. distribution es richesses. [s.l.: s.n.], 1788. 1917. Zur Litteraturgeschichte der Bernard Shaw, ed. New York: 1. Hollander, Jacob H. The Economic Hollander 2169. Staats- und Sozialwissenschaften. Humboldt, 1891. Library of Jacob H. Hollander, Ph.D. Leipzig: Duncker & Humblot, 1888. Hollander 3405. Compiled by Elsie A.G. Marsh. 9. Smith, Adam, 1723-1790. An Hollander 3333. Baltimore: [Privately Printed], 1937. Inquiry into the Nature and Causes of 24. Jevons, William Stanley, 1835- Hollander 9999 Wealth of Nations. 2 v. London: W. 17. Menger, Carl, 1840-1921. 1882. The Theory of Political Economy. Strahan, and T. Cadell, 1776. Grundsätze der Volkswirthschaftslehre. London: Macmillan, 1871. 2. Mill, John Stuart, 1806-1873. Hollander 1830. Wien: Braumüller, 1871. Hollander 3125. “Autobiography” [ca. 1853-1854]. Hollander 3172. Hollander 4024 10. Malthus, T. R. (Thomas Robert), 25. Edgeworth, Francis Ysidro, 1845- 1766-1834. An Essay on the Principle of 18. Böhm-Bawerk, Eugen von, 1926. Mathematical Psychics. London: 3. Malynes, Gerard, fl. 1586-1641. Population. London: J. Johnson, 1798. 1851-1914. Capital and Interest. Kegan Paul, 1881. A Treatise of the Canker of Englands Hollander 2297. London: Macmillan, 1890. Hollander 3232. Common Wealth. London: Richard Hollander 3361. Field for William Johnes, 1601. 11. Ricardo, David, 1772-1823. On 26. Marshall, Alfred, 1842-1924. Hollander 11. the Principles of Political Economy and 19. Wieser, Friedrich, Freiherr von, Principles of Economics. v.1. London: Taxation. London: J. Murray, 1817. 1851-1926. Über den Ursprung und Macmillan, 1890. 4. Misselden, Edward, fl. 1608-1654. Hollander 2470. die Hauptgesetze des wirtschaftlichen Hollander 3212. Free Trade, or, The Meanes to Make Werthes. Wien: Hölder, 1884. Trade Florish. 2nd ed. London: John 12. Mill, John Stuart, 1806-1873. Hollander 3284. 27. “Photogravure, from ‘Muir Legatt for Simon Waterson, 1622. Principles of Political Economy. 2 v. Portrait.’” (Photogravure of Adam Hollander 31. London: John W. Parker, 1848. 20. Owen, Robert, 1771-1858. A Smith). [n.d.]. Hollander 2816. New View of Society, or, Essays on Hollander 3885. 5. Mun, Thomas, 1571-1641. England’s the Principle of the Formulation of the Treasure by Forraign Trade. London: 13. Hildebrand, Bruno. Die Human Character, and the Application 28. “Mezzotint, by Linnell.” Printed by J. G. for T. Clark, 1664. Nationalökonomie der Gegenwart of the Principle to Practice. 4v in 1. (Mezzotint of Thomas Robert Hollander 42. und Zukunft. Frankfurt: J. Rütten, London: Cadell and Davies, 1813. Malthus). [n.d.]. 1848. Hollander 2586 Hollander 3893. 6. Cantillon, Richard, d. 1734. Essai Hollander 3070. sur la nature du commerce en général : 21. Proudhon, P.-J. (Pierre-Joseph), 29. “Engraving, by Hodgetts after traduit de l’anglois. London 14. Roscher, Wilhelm, 1817-1894. 1809-1865. Système des contradictions Phillips.” (Engraving of David [i.e. Paris?]: Fletcher Gyles, 1755. Geschichte der National-Oekonomik économiques, ou, Philosophie de la Ricardo). [n.d.]. Hollander 1702. in Deutschland. München: R. misère. 2 v. Paris: Guillaumin et Cie, Hollander 3906. Oldenbourg, 1874. 1846. 7. Quesnay, François, 1694-1774. Hollander 3086. Hollander 3057. 30. “Photograph, by Hollyer after Tableau oeconomique. London: British Watts.” (Photoreproduction, J.S. Economic Association, 1894. 15. Knies, Karl, 1821-1898. 22. Marx, Karl, 1818-1883. Zur Kritik Mill). [n.d.]. Hollander 1518. Die politische Oekonomie vom der Politischen Oekonomie. Stuttgart: Hollander 3914. geschichtlichen Standpuncte. Dietz, 1897. 8. Turgot, Anne-Robert-Jacques, Braunschweig: Schwetschke, 1883. Hollander 3655. baron de l’Aulne, 1727-1781. Hollander 3246.

24 25 Printed in Champaign-Urbana, Illinois by Martin Graphics 400 copies