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Historians of the social sciences and historians of economics have come to agree that, in the United States, the 1940s transformation of economics from political economy to economic science was associated with economists’ engagements with other disciplines—e.g., mathematics, statistics, operations research, physics, engineering, cybernetics—during and immediately after World War II. More controversially, some historians have also argued that the transformation was accelerated by economists’ desires to be safe, to seek the protective coloration of mathematics and statistics, during the McCarthy period. This paper argues that that particular claim 1) is generally accepted, but 2) is unsupported by good evidence, and 3) what evidence there is suggests that the claim is false.
In the decades following World War II, the Cowles Commission for Research in Economics came to represent new technical standards that informed most advances in economic theory. The public emergence of this community was manifest at a conference held in June 1949 titled Activity Analysis of Production and Allocation. New ideas in optimization theory, linked to linear programming, developed from the conference's papers. The authors’ history of this event situates the Cowles Commission among the institutions of postwar science in-between National Laboratories and the supreme discipline of Cold War academia, mathematics. Although the conference created the conditions under which economics, as a discipline, would transform itself, the participants themselves had little concern for the intellectual battles that had defined prewar university economics departments. The authors argue that the conference signaled the birth of a new intellectual culture in economic science based on shared scientific norms and techniques un-interrogated by conflicting notions of the meaning of either science or economics.
General equilibrium analysis is a theoretical structure which focuses research in economics. On this point economists and philosophers agree. Yet studies in general equilibrium analyses are not well understood in the sense that, though their importance is recognized, their role in the growth of economic knowledge is a subject of some controversy. Several questions organize an appraisal of general equilibrium analysis. These questions have been variously posed by philosophers of science, economic methodologists, and historians of economic thought. Is general equilibrium analysis a theory, a paradigm, a scientific research program, or a set of interrelated theories? Is it not any of these but rather a branch of applied mathematics? Is GE analysis associated with the growth of knowledge, or does it waste intellectual resources? How is it related to other work in economics? Is it connected to, or is it apart from, the concerns of applied economists?
Rosenberg (1986) argues that economists have embraced the methodology of scientific research programs, and the writings of Imre Lakatos (1978), at the same time that philosophers have been abandoning that approach. According to Rosenberg, the methodology of scientific research programs (MSRP) appears to allow some work in economics, which is neither tested nor testable, to be “scientific” nonetheless. That is, MSRP justifies some current practices which look hard to justify on strict falsificationist, or dogmatic positivist, grounds.
It is not news that the history of economics is disesteemed by most economists. There have been almost annual discussions at professional meetings about the institutional role of the history of economics. Indeed, a conference in 2001 documented the precarious state of the field in North America, and its even more perilous position in the United Kingdom and the Antipodes (Weintraub 2002b). With the exception of Duke University there are no longer any regularly scheduled graduate courses, let alone programs, in the history of economics at any “top” university in North America (Gayer 2002).
In his autobiographical piece, “A Jevonian Seditionist,” Sidney Weintraub (1989, p. 50) recalled that in 1957 he sent an offprint of his paper on the micro-foundations of aggregate supply to D. H. Robertson. He remembered that “Robertson generously wrote me that it was ‘lucid and definitive,’ and that thenceforth he would not return to the subject again. I confess that I have lost or misplaced his letter, along with the one by [Alan] Sproul, in my move to Canada, though they were prized possessions.” And I have my own memory of a conversation with Sidney in which he told me that Robertson had written in that letter “If this is not what Keynes meant, it is what he should have meant.”
Each year, new economics Ph.D. students learn the proof of the existence of a competitive equilibrium as if it were a rite of passage. From the utility-maximizing behavior of consumers and the profit-maximizing behavior of firms, neophyte economists soon can demonstrate that under certain conditions there exists a competitive market-clearing general equilibrium price vector. While there are a number of proofs that establish the existence of such an equilibrium, the validity of these proofs is indubitable. Indeed, economists with even scant knowledge of the history of economics can identify Kenneth J. Arrow and Gerard Debreu's Econometrica paper as having provided the proof that settled the issue.
While most scientists and philosophers of science privilege scientific knowledge, and have sought demarcations of science from non-science to justify the privilege, sociologists of science, small numbers of philosophers of science, anthropologists, and some scientists themselves have been attracted to a new way of talking about science. Prefigured by Ludwik Fleck (1935/1979) and Gaston Bachelard (1934/1984), nurtured by the controversies over Thomas Kuhn's work, and instantiated in the Edinburgh School's Strong Program, the naturalistic turn portrays science as a human activity, part of the woof and warp of culture itself. Yet curiously historians of science have been less involved in this recent reconceptualization of both science and scientific knowledge.
In the minds of many, the Bourbakist trend in mathematics was characterized by pursuit of rigor to the detriment of concern for applications or didactic concessions to the nonmathematician, which would seem to render the concept of a Bourbakist incursion into a field of applied mathematices an oxymoron. We argue that such a conjuncture did in fact happen in postwar mathematical economics, and describe the career of Gérard Debreu to illustrate how it happened. Using the work of Leo Corry on the fate of the Bourbakist program in mathematics, we demonstrate that many of the same problems of the search for a formal structure with which to ground mathematical practice also happened in the case of Debreu. We view this case study as an alternative exemplar to conventional discussions concerning the “unreasonable effectiveness” of mathematics in science.
The literature on the stability of the competitive equilibrium that came to fruition in the late 1950s was woven of three specific skeins in earlier work. First, there was the 1930s literature that had attempted to untangle statics from dynamics, and equilibrium from disequilibrium; that analysis had been done by Frisch, Tinbergen, Hicks, and others, though later writers would claim that the issues had finally been framed by Hicks's Value and Capital (1939). That book directed economists to the microfoundations-of-macroeconomics “problem” and suggested that the stable-unstable distinction could make sense of the dissimilar Keynesian and classical positions on unemployment. Second, there was a 1930s literature on equilibrium and stability whose lineage traced back to Pareto, social-systems analysis, and the social application of mechanical ideas. That tradition, with roots in physics, the physical chemistry of Willard Gibbs, and the evolutionary biology/ecology of A. J. Lotka, found expression in Paul Samuelson's writings in the late 1930s and early 1940s and provided the basis for his Foundations of Economic Analysis (1947). Third, the story of the introduction of modern stability theory into economics featured the interrelationship of two disciplines, mathematics and economics, that were linked in serendipitous ways in the 1940s. In this chapter I intend to tell this last story.
The tale is complex, however, and many seemingly peripheral issues take on special meaning. For instance, there have been conflicting priority claims regarding the first uses of certain mathematical techniques in economics.