No. 2, December 1996
(Created by Takutoshi Inoue)
The 2nd Annual Meeting (Nihon University, June 15, 1996)
Takashi NAKAJI (Japan Council for Science Promotion), The Equation of Exchange and Credit Cycles--In the Light of Two Reviews to Irving Fisher's The Purchasing Power of Money by Keynes and Mitchell--
In modern economics,the Equation of Exchange that Irving Fisher present-ed in his 1911 book The Purchasing Power of Money, is regarded as only a tool to verify the validity of the quantity theory of money.This implica- tion of the Equation consists with the homogeneity postulate of the gener-al equilibrium theory, which Fisher studied in his Ph.D.thesis Mathematical Investigations in the Theory of Value and Prices (1892).
However,Fisher recognized the general equilibrium theory is an ideal stationary theory,thus it cannot analyze dynamic phenomena such as crises.It seems Fisher's successive writings after Mathematical Investigations, namely, Appreciation and Interest (1896), Rate of Interest (1907), The Pur- chasing Power of Money (1911), and Theory of Interest (1930) form a dynamic theory to elucidate the causes of credit cycles, hence crises.
As Keynes and Mitchell pointed out in their reviews to The Purchasing Power of Money, political and academic debates on banking and money were focused on the remedy of crises. Fisher should not be indifferent to it.Heexamined credit cycles by causal process of transition periods in which the quantity theory doesn't hold. Transition analysis contains cummulativeprocesses of raising prices and decreasing prices, and the climax,or panic.In this process, imperfect foresight and maladjustment of interest to prices are of importance. Fisher tried to escape from the rigid and prede-termined harmony view.
Kazuo TAKAHASHI (Rikkyo University), Henry C.Carey and "Corporation": Inventing an Associative Institution in the Nineteenth-Century America
In spite of the lingering influence of the legacies of the New Deal, one can not miss associative or collective strands in early American economic thought.
Under such an influence, Henry C. Carey (1793-1879) has long been seen asa staunch exponent of Whiggism and the business interests. But his conceptof "corporation" as voluntary association, first put forward in the second volume of his Principles of Political Economy in 1838, is quite different from what Veblen called "the master institution of the businessworld" based on absentee ownership.Interestingly,it was forged just beforethe appearance of the second volume of Tocqueville's Democracy and a decade earlier than J. S. Mill was to publish his own Principles.These writers, too, appreciated the significant role of cooperative principles played byvoluntary associations for the improvement of economic and political conditions, morals, and manners of working people.
It was only Carey, however, who was able to manage to find "the workablepractice of association" in the form of "corporation with limited-liability", in the age of an upsurge of collectivism in the 1840s. And also it was Carey's very appreciation of the importance of self-government in New England towns that made possible for him to grasp the significance of associative institutions as a means to cause economic development through stock owning by the public, though he owed so much his insights to Tocqueville.
Akira SASAKI (Nihon University), Thorstein Veblen and the Processes of Institutional Change: On the Views of Malcolm Rutherford
Thorstein Veblen is known as the founder of American institutional economics. His thought became one of the precedents for the concept of the New Deal in the 1930s of America. Because his thought brought about an intellectual turning point in the history of the United States, its study offersan important key to understanding later trends in American thought. Studiesof Veblen's work are too numerous to count, and recently a large number of studies have appeared on his methodology of economics.
In this paper, I would like to examine Malcolm Rutherford's "Thorstein Veblen and the Processes of Institutional Change" (1984).
Rutherford pays the greatest attention to Veblen's theories of technol- ogy and institutional change, and he indicates that there is in this a dialectical element reminiscent of Marx. However, Rutherford's explanation of Veblen's method is insufficient.
Basically, Veblen's economics is built on Darwinian principles. But Veblen knew that Darwin's theory of natural selection had certain limitations when applied to man's economic activities. Accordingly, Veblen uniquely applied Hegelianism and the dialectic to his own economics.
Therefore, I would like to emphasize that Veblen's dialectic was different from that of Hegel or Marx, because Veblen's contained the aspect of "blind drift and chance." Unfortunately, this view is not recognized in Rutherford's explanation.
The Third Meeting of The Japanese Society for the History of American Ecomomic Thought
The third meeting of the Society will be held at Kwansei Gakuin University, Nishinomiya, Hyogo on the 21st of June 1997, Call for papers: Papers on any aspect of the History of American Economic Thought will be considered. Proposals to read a paper should be sent to Prof. Toshihiro TANAkA with topic and a short abstract before the end of February 1997.
Reference: Prof. Toshihiro TANAKA
School of Economics Kwansei Gakuin University 1-1-155, Uegahara,Nishinomiya Hyogo, JAPAN 662 Tel.0798-54-6204 Fax.0798-51-0944
To overseas members:
The 1997 membership dues for the Society are US $30.00. Please send them by International Money Order, not by your personal checks, addressed to the Society to the following:
Prof. T. INOUE
Secretary and Treasurer
The Japanese Society for the History of American Economic Thought
School of Economics Kwansei Gakuin Univeristy 1-1-155, Uegahara, Nishinomiya Hyogo, JAPAN 662
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