Abstract
This chapter considers the underrated and neglected ‘common sense’ approach to economics that was pioneered at the London School of Economics from the time of William Stanley Jevons in the 1870s to Lionel Robbins in the 1930s. It comprises five sections. The first concerns Jevons’s contributions to the Marginal Revolution, and how his thought differs from that of Carl Menger. The second focuses on Edwin Cannan, who pioneered ‘welfare economics’ and exposed many of the errors of the classical economists, especially those who followed David Ricardo and John Stuart Mill. The third looks at Phillip Wicksteed and his contributions to cost and production theory, especially the idea of marginal productivity. The fourth considers Lionel Robbins and defends his ‘scarcity definition’ of economics. The fifth outlines W.H. Hutt’s contributions to the theory of collective bargaining and the efficacy of strike action by labour unions.
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Notes
- 1.
William Stanley Jevons, The Theory of Political Economy, 5th edn (1871; New York and London: Palgrave Macmillan, 2013), pp. 19–21.
- 2.
Ibid., p. 22.
- 3.
Ibid., p. 22.
- 4.
Ibid., p. 18.
- 5.
Ibid., pp. 38, 40.
- 6.
Lionel Robbins, ‘The Place of Jevons in the History of Economic Thought’ (1936), in The Evolution of Modern Economic Theory and Other Papers on the History of Economic Thought (Chicago, IL: Aldine Publishing Company, 1970), p. 174.
- 7.
Jevons, The Theory of Political Economy, pp. 38, 42.
- 8.
Carl Menger, The Principles of Economics, trans James Dingwell and Bert F. Hoselitz (1871; Auburn, AL: Ludwig von Mises Institute, 2007), p. 48.
- 9.
Jevons, The Theory of Political Economy, pp. iv, 168, 37, 161.
- 10.
See Maurice Lagueux, ‘Menger and Jevons on Value: A Crucial Difference,’ Cahiers du département de philosophie de l’Université de Montréal, No. 97-06 (1997), pp. 1–14.
- 11.
Jevons, The Theory of Political Economy, p. 78.
- 12.
Lionel Robbins, A History of Economic Thought: The LSE Lectures, ed. Steven G. Medema and Warren J. Samuels (Princeton, NJ: Princeton University Press, 1998), p. 262.
- 13.
Jevons, The Theory of Political Economy, p. 86.
- 14.
William Stanley Jevons, The Coal Question; An Inquiry concerning the Progress of the Nation, and the Probable Exhaustion of our Coal-mines, 2nd edn (London: Macmillan, 1866).
- 15.
Edwin Cannan, The History of Local Rates in England: In Relation to the Proper Distribution of the Burden of Taxation, 2nd edn (1896; London: P.S. King & Son, 1912).
- 16.
Jevons, The Theory of Political Economy, p. 165.
- 17.
Alfred Marshall, Principles of Economics, 8th edn (1890; London: Palgrave Macmillan, 2013), p. 674.
- 18.
Lionel Robbins, ‘A Biographical Note on Edwin Cannan’ (1949), in The Evolution of Modern Economic Theory, p. 231.
- 19.
Ibid., p. 230.
- 20.
Edwin Cannan, A History of the Theories of Production and Distribution (1893; New York: August M. Kelley, 1967), pp. 300, 302.
- 21.
Ibid., pp. 309–10.
- 22.
Ibid., p. 314.
- 23.
Ibid., p. 311.
- 24.
Ibid., p. 311.
- 25.
See Joseph T. Salerno, ‘Mises’s Favorite Anglo-American Economists’, Mises Daily (28 August 2019), available at: https://mises.org/library/misess-favorite-anglo-american-economists
- 26.
Edwin Cannan, Wealth: A Brief Explanation of the Causes of Economic Welfare, 3rd edn (1914; New York and London: P.S. King and Staples Limited, 1946), pp. 4, 3, 4–5.
- 27.
James M. Buchanan, Cost and Choice (Chicago, IL: Markham, 1969), p. 16.
- 28.
Philip Wicksteed, The Common Sense of Political Economy, ed. Lionel Robbins, 2 vols (1910; London: Routledge & Kegan Paul, 1949), vol 1, p. 37.
- 29.
Ibid., p. 38.
- 30.
Jevons, The Theory of Political Economy, pp. 164–5.
- 31.
Wicksteed, The Common Sense of Political Economy, vol 1, p. 358.
- 32.
Ibid., p. 368.
- 33.
G.F. Thirlby, ‘Economists’ Cost Rules and Equilibrium Theory’, (eds), L.S.E. Essays on Cost, ed. James M. Buchanan and G.F. Thirlby (New York: Littlehampton Book Services, 1973), p. 278.
- 34.
Douglas Ernst, ‘Gillette’s “Toxic masculinity” Ad Haunts P&G as Shaving Giant takes $8B Writedown’, Washington Times (31 July 2019), available at: https://www.washingtontimes.com/news/2019/jul/31/gillettes-toxic-masculinity-ad-haunts-pg-as-shavin/.
- 35.
John Gage, ‘Gillette CEO: Losing Customers over #MeToo campaign is “Price Worth Paying”’, Washington Examiner (1 August 2019), available at: https://www.washingtonexaminer.com/news/gillette-ceo-losing-customers-over-metoo-campaign-is-price-worth-paying.
- 36.
Murray N. Rothbard, ‘In Defence of “Extreme Apriorism”’ (1957), in Economic Controversies (Auburn, AL: Ludwig von Mises Institute, 2011), p. 107.
- 37.
See Daniel Kahneman, Thinking Fast and Slow (New York and London: Penguin, 2011), p. 343.
- 38.
Wicksteed, The Common Sense of Political Economy, pp. 118, 387–8.
- 39.
Ibid., p. 386.
- 40.
Ibid., p. 387.
- 41.
Lionel Robbins, An Essay on the Nature and Significance of Economic Science, 2nd edn (1932; London: Macmillan & Co., 1945), p. 15.
- 42.
Lionel Robbins, The Great Depression (London: Macmillan & Co., 1934).
- 43.
Murray N. Rothbard, America’s Great Depression (Princeton, NJ: D. Van Nostrand, 1963).
- 44.
Robbins, An Essay on the Nature and Significance of Economic Science, p. 21.
- 45.
Ibid., pp. 24–5.
- 46.
Thiago Dumont Oliveira and Carlos Eduardo Suprinyak, ‘The Nature and Significance of Lionel Robbins’, EconomiA, 19:1 (January–April 2018), pp. 24–37.
- 47.
Quoted in James M. Buchanan, What Should Economists Do? (Indianapolis, IN: Liberty Fund, 1979), p. 18.
- 48.
Alain Marciano, ‘Buchanan’s Catallactic Critique of Robbins’s Definition of Economics’, Journal of Economic Methodology, 16:2 (June 2009), p. 133.
- 49.
Ludwig von Mises, Human Action: A Treatise on Economics (New Haven, CT: Yale University Press, 1949), p. 233.
- 50.
Roger E. Backhouse and Steven G. Medema, ‘Defining Economics: The Long Road to Acceptance of the Robbins Definition’, Economica, 76 (August 2008), p. 813.
- 51.
Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy, 5th edn (2001; New York: Basic Books, 2014), p. 2.
- 52.
Steven E. Landsburg, The Armchair Economist: Economics and Everyday Life (1993; New York and London: Pocket Books, 2009), p. 3.
- 53.
See A.C. Pigou, Wealth and Welfare (London: Macmillan & Co., 1912).
- 54.
Lionel Robbins, A History of Economic Thought: The LSE Lectures, ed. Steven G. Medema and Warren J. Samuels (Princeton, NJ: Princeton University Press, 1998), p. 284.
- 55.
W.H. Hutt, The Theory of Idle Resources (London: Jonathan Cape, 1939).
- 56.
W.H. Hutt, The Economics of the Colour Bar (London: The Institute of Economic Affairs, 1964).
- 57.
W.H. Hutt, The Theory of Collective Bargaining (London: P.S. King & Son, 1930), p. 30.
- 58.
Ibid., p. 39.
- 59.
George Stigler, ‘The Economics of Minimum Wage Legislation’ (1946), in The Essence of Stigler, ed. Kurt R. Leube and Thomas Gale Moore (Stanford, CA: Hoover Institution Press, 1986), p. 4
- 60.
Ibid., p. 5.
- 61.
F.A. Hayek, 1980s Unemployment and the Unions: The Distortion of the Relative Prices by Monopoly in the Labour Market, 2nd edn (1980; London: The Institute of Economic Affairs, 1984).
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Parvini, N. (2020). The London School. In: The Defenders of Liberty. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-39452-3_7
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