The London Economist of June 14, 1997, carried an article by Jeffrey Sachs (1997) entitled “The Limits of Convergence: Nature, Nurture and Growth,” which explores the relationship between geography, economic policies and institutions, and economic growth on the basis of recent econometric work. Four principal groups of factors were found to account for the sizable difference in per capita income growth between the South-East Asian countries and other less successful developing countries: initial economic conditions (such as the income gap separating poor countries from rich ones), policy variables, demographic factors, and resources and geography. One of the most significant conclusions (Sachs, 1997, p. 20) is that “openness was decisive for rapid growth. Open economies grew 1.2 percentage points per year faster than closed economies, controlling for everything else.”

John Dewey (1859-1952) is easily the most influential philosopher America has produced and Thorstein Veblen (1857-1929) is arguably the most influential American heterodox economist. Although scholars have often pondered both their intellectual and personal relationship, until recently no firm conclusions could accurately be drawn. Due to the lack of correspondence between the two men and the brevity of Veblen's comments on and citations of Dewey, it is difficult to know what the former thought of the latter both in terms of personality and economic ideas. But, fortunately, Dewey cited Veblen and commented on his economic thought on many occasions so it is possible to at least partly reconstruct one-half of the relationship. This reconstruction will be the focus of this article, emphasizing: (1) their biographical intersections and convergences; (2) Dewey's ideas about economics and the economy; (3) Dewey's explicit use of Veblen's economic ideas in his own published work; and (4) Dewey's critical comments in his correspondence regarding Veblen's interpretation of pragmatism and his development as a social theorist.

Several recent studies, such as that by David Card and Alan Krueger (1995), have led the economics profession to reconsider the theoretical and empirical arguments for and against minimum wage legislation. Most noteworthy was the fact that two respected members of the mainstream economics profession claimed to have found that an increased minimum wage did not lead to increases in unemployment. Moreover, their result was derived from the market for unskilled labor.

Academic economists tend to come in two varieties. One type identifies a substantive specialism at the outset of a career and continues to cultivate it. A second type is more likely to respond to the American Economic Association's twice-a-decade requests for information about sub-specialties by providing a number of differing answers over the course of a professional lifetime. I accept Adam Smith's arguments about the gains from specialization arising from a widened division of labor, but I am also conscious that Smith held that excessive specialization could contribute to boredom in the workplace. In any event, I am temperamentally a Type II economist who has greatly enjoyed working on diverse scholarly topics. I am also aware of a number of turning points that have conditioned my world with consequences that I could not have foreseen.

The history of economics provides many examples of economists, such as A. A. Cournot, and J. H. Von Thunen, whose work became influential only long after it was written. Others, like Francis A. Walker, loomed large during their careers, only to fade in the discipline's memory. Irving Fisher's reputation has followed a much less common trajectory. Once the most cited monetary economist, the subject of major review articles and the center of controversies over theory and policy, Fisher lost the profession's attention, vanished from citation lists in macroeconomics, and was regarded as an embarrassment by colleagues in his university and his discipline. Then, after his death, his contributions to macroeconomics became increasingly cited and influential, as macroeconomics developed in ways that brought it closer to Fisher's approach. New approaches have been found prefigured in Fisher's work, as when a 1926 article of his was reprinted in the Journal of Political Economy in 1973 as “I Discovered the Phillips Curve” (Fisher, 1997, 8). Fisher was once caricatured in introductory textbooks as the supposed exponent of a constant-velocity version of the quantity theory of money, the exemplar of simplistic pre- Keynesian economics swept away in the Keynesian Revolution, but recently there has been attention to Fisher as, in Keynes's phrase, “the great grandparent” of The General Theory, “who first influenced me strongly towards regarding money as a ‘real’ factor” (Keynes, 1971-89, 14, pp. 203 n.; Dimand, 1995; Kregel, 1988).

It is understood that Charles Cobb and Paul Douglas (1928) were not the first to use the production function named after them. Joseph Schumpeter (1954, p. 1042), Carl-Axel Olsson (1971), and Henry Spiegel (1991, p. 816) all note that the production function Y = AKαL1-α had been used by Knut Wicksell (1901, 1906) more than twenty years before Cobb and Douglas published their study. While it is quite possible that Wicksell was the first to use the Cobb-Douglas functional form to study production, he was not the first to apply it to economic analysis in general. Vilfredo Pareto had worked out several implications of a specific version of the Cobb-Douglas utility function as early as 1892. Later, he repeated and extended this analysis in the mathematical appendix to the French translation of his Manual of Political Economy (1909).

In Christian Weber's opinion in the preceding article in this journal, although Vilfredo Pareto never wrote his utility function in the Cobb-Douglas form U = rβbrγc, he did present an early, if incomplete, discussion of a Cobb-Douglas utility function. Weber's sections II and III try to document his opinion.

Weber's section II examines Pareto's “Considerazioni” (1892) on the assumption that the marginal utility πi, of good i depends only on the level ri, of consumption of that good. Section III examines Pareto's Manual (1909) on the assumption of “additive separable” utility functions.

My response to Brems's comment on my paper is, I hope, obvious and straightforward.

First, it should be noted that in his section II, Brems is correct with one important exception. He is correct to note that the particular additive utility function in his equation (1) is not Cobb-Douglas. However, this correct conclusion does not imply, as Brems appears to believe it does, that it is impossible to write down an additive utility function which would generate the same indifference map, first-order conditions, and demand functions as a multiplicative Cobb-Douglas utility function

The subject of this essay is best introduced by two statements written many years apart. One is by J. S. Mill:

[Adam Smith] speaks as if labour were intrinsically the most proper measure of value, on the ground that one day's ordinary muscular exertion of one man, may be looked upon as always, to him, the same amount of effort or sacrifice. But this proposition, whether in itself admissible or not, discards the idea of exchange value altogether, substituting a totally different idea, more analogous to value in use. If a day's labour will purchase in America twice as much of ordinary consumable articles as in England, it seems a vain subtlety to insist on saying that labour is of the same value in both countries, and that it is the value of the other things which is different. Labour, in this case, may be correctly said to be twice as valuable, both in the market and to the labourer himself, in America as in England (Mill, 1909, p. 567).