chapter  12
26 Pages

'The History of Economic Analysis in Perspective'

In the last half century, neglect of the history of economic analysis has progressively increased, together with the diffusion of formal modelling. Mathematical economics has a long tradition, dating back at least to Cournot's pathbreaking Recherches (1838), but it did not become embedded in mainstream economics until the publication of Hicks' Value and Capital and Samuelson's Foundations one hundred years later. Subsequently, the spread of innovative analytical tools accelerated sharply, achieving a critical mass deemed to have given rise to the formalist revolution: 'a revolution that is more profound than the Keynesian' (Ward 1972, 40; Blaug 1999). It reshaped economic theorising in an essential way and fostered momentous contributions.! Using the same tools as the hard sciences, economists felt they were overcoming the inferiority complex of 'physics envy' and achieving their dream of making economics almost like physics. In some fields, such as finance, mathematical methods have actually advanced to match, if not surpass those employed by physicists.2 The evolution of economics was thus regarded as cumulative, made of ever more refined and general theories. Indifference towards the history of economics was a natural consequence of these developments. This paper takes this view to task, arguing that, however paradoxical it may appear, the formalist revolution implies a greater not a lesser role for the history of economic analysis.