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Macroeconomic Instability and the “Natural” Processes in early Neoclassical Economics

Published online by Cambridge University Press:  03 March 2009

Philip Mirowski
Philip Mirowski
Affiliation:
Assistant Professor in the Department of Economics, Tufts University, Medford, Massachusetts 02155
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Abstract

It may seem odd to disinter an economic theory—in this instance, William Stanley Jevons's claim that sunspots caused macroeconomic fluctuations—which no one now believes or much cares about. In fact, my purpose is not to scoff at a dead theory, but to use it as a pretext to discuss the following issues: economic historians often have suggested a dichotomy between a premodem and industrial macroeconomy, with the premodern economy largely at the mercy of weather and other natural phenomena; the dichotomy is rooted in early neoclassical economic theory (here restricting ourselves to Jevons); there is little historical evidence that premodern macro fluctuations were caused by natural disturbances, such as the weather (here restricting ourselves to the case of England); and the above three theses have some interesting implications for the way economic policy is conceived, both then and now.

Type
Papers Presented at the Forty-Third Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 44 , Issue 2 , June 1984 , pp. 345 - 354
Copyright
Copyright © The Economic History Association 1984

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References

1 Well, almost no one. Compare Cass, David and Shell, Karl, “Do Sunspots Matter?” Journal of Political Economy, 91 (04 1983), 193–227;CrossRefGoogle Scholar and Garcia-Mata, Carlos and Schaffner, Felix, “Solar and Economic Relationships”, Quarterly Journal of Economics, 49 (11 1934), 1–51.CrossRefGoogle Scholar

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5 One can observe this attitude in some rather harsh comments about “the crowning defects of the poorer classes”, in his address cited in footnote 2. Parenthetically, this very revealing talk is omitted in Jevons's Papers and Correspondence, and is not addressed in Hutchison, T. W., “The Politics and Philosophy in Jevons's Political Economy”, Manchester School, 50 (12 1982), 366–77.CrossRefGoogle Scholar

6 For those who consider it a joke, see Sheehan, R. G. and Grieves, A., “Sunspots and Cycles: A Test of Causation”, Southern Economics Journal (Jan. 1982), 775–77.Google Scholar As a cautionary parable, see Keynes, J. M., Essays in Biography (New York, 1963), pp. 278–79;Google Scholar and Stigler, Stephen M., “Jevons as Statistician”, Manchester School, 50 (12 1982), 363–64.CrossRefGoogle Scholar

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