chapter  3
17 Pages

Neoclassical economics: shedding “psychologism”

The theoretical problematic of neoclassical humanism is one of reconciling the autonomously and rationally defined demands of the centered economic agents at a societal level. Under the influence of various forms of positivism, and in reaction to the accusations of psychologism, neoclassical economists of the inter-war years strongly desired to purge their theoretical models of unobservable assumptions regarding the human psyche that rely on the pre-scientific notions of the eighteenth-century utilitarian psychology. Any genealogy of neoclassical economics, however, would be far from complete if the utilitarian lineage that stretches from Jeremy Bentham to William Stanley Jevons and then to Alfred Marshall were not also traced. On the one hand, there was the Walrasian tradition, mainly consisting of socialist-leaning migr economists who viewed society as an object of social engineering and represented the economy as an interdependent system of general competitive equilibrium. Among the institutional supports for the Walrasian tradition was the Cowles Commission.