ABSTRACT
After 1870 economic theory de-emphasized information as it turned toward the fundamental laws of price formation and resource allocation in individual markets and away from macroeconomic concerns of growth and income distribution. The deterministic models pioneered by neoclassical writers emphasized perfect information and perfect markets. The former trivializes entrepreneurial decision-making and the latter makes the entrepreneur superfluous by eliminating the coordination problem (cf. Baumol 1968). With few exceptions, economic analysis after 1870 became increasingly abstract and mechanistic. The economic problem came to be perceived as the allocation of certain scarce means among given ends, rather than the selection of the ends themselves. In this era, no longer did the great macroeconomic issues of the classical period – such as population, capital supply, and economic growth – dominate economic inquiry.
