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The Concept of Equilibrium in Different Economic Traditions: An Historical Investigation

Author(s):Tieben, Bert
Reviewer(s):Weintraub, E. Roy

Published by EH.Net (June 2013)

Bert Tieben, The Concept of Equilibrium in Different Economic Traditions: An Historical Investigation. Cheltenham, UK: Edward Elgar, 2012. viii + 682 pp. $210 (hardcover), ISBN: 978-1-84844-993-0.

Reviewed for EH.Net by E. Roy Weintraub, Department of Economics, Duke University.

This very large book constructs a history of economics organized by the idea of equilibrium.? That is to say, Tieben believes that the idea of equilibrium characterizes modern economic analysis, and looks to see how this concept functioned throughout the history of economics broadly considered.? He is methodologically sophisticated enough to understand that our current conception of equilibrium is not necessarily commensurable with, say, Ricardo?s.? Moreover, early authors did not use the word at all.? So after a couple of chapters that ask ?What is equilibrium?? and that provide some kind of methodological assessment of the idea, he concludes that his use of equilibrium will be associated with a vision of economic life. The economists he will examine will be portrayed as constructing analyses of the economy, or economic processes, in which coherence can be discussed and analyzed.?

Such a concept, of course, is a very loose use of equilibrium, but it has some real advantages.? It is a working definition, like Wittgenstein?s ?game,? in the naturalized sense: let us look and see how this kind of concept appears and functions in the economics of past scholars and thinkers. At this point the methodological discussion is transcended and the book gets historically interesting.? From discussion of the origins of economic equilibrium and the chapters on the circular flow and Adam Smith?s system, the author takes us to chapters on statics and dynamics in classical economics and the mathematical transformation in the marginalist period. There is a separate chapter on Leon Walras.? At that point the book moves off to look at particular topics, with a chapter examining the Austrian school followed by a chapter on monetary equilibrium (Wicksell et al.) and then one on monetary theory and dynamics in the first part of the twentieth century.? Subsequent chapters take up the questions of uncertainty and time and how they shape ideas about equilibrium and disequilibrium, entrepreneurship, and evolutionary economics.? The final chapters step back from the material to ask larger questions about the foundations of equilibrium analysis and its role in economics.

The author, who is Head of SEO Economic Research’s Competition and Regulation Cluster in Amsterdam, is not shy about expressing his own views on the historical actors? ideas.? He takes the position that he can put all past thinkers and modern thinkers together in one room, and have them talk with one another and understand each other?s ideas.? This kind of presentist position enables Tieben himself to join in the conversation pointing out A?s errors to B and C?s stupidity to D.? Perhaps not since Don Walker?s presidential address to the History of Economics Society, in which he argued that a primary task of historians of economics should be to identify those who got it right and those who got it wrong, have historians adopted such an approach.? It seems as if Mark Blaug?s Economic Theory in Retrospect or Joseph Schumpeter?s History of Economic Analysis is his model. In any event the reader is given no context for the disembodied ideas that, one after another, construct the various chapters in Tieben?s march through the canon.?

Tieben relies primarily on secondary sources.? There are few extended quotations from the historical actors themselves. Usually we have a sentence or two or three quoting individuals who wrote about the economist?s contributions, be they historians or those who would wish to quarrel with the historical actors.? Tieben?s own reading is extensive and his opinions are strong and clearly articulated.? This reader however is left unconvinced by the summary judgments the author makes about dead economists and other scholars? interpretations of those dead economists? ideas.? ?I?m telling you the truth? is not in the end a persuasive argument.

It is a very long book (approaching 700 pages) and, as we expect from this publisher, a very expensive book.? The author?s project of framing the development of economics in terms of a particular organizing concept is quite similar to many term papers written in survey history of economics classes.? That is, pick a topic, economic justice, or the rate of interest, or selfishness, and for every economist discussed in the survey course, from Aristotle to Arrow, write a couple of pages about the subject?s discussion or use of this topic.? Equilibrium functions in this fashion for Tieben.? The book apparently is an English language version of a Dutch doctoral thesis though it is more sophisticated than the usual dissertation.? Nevertheless the book, as an opinionated march through history, does not engage the historical contingencies of real people struggling with real intellectual and social problems in a complex society.???

E. Roy Weintraub is a Professor of Economics and Fellow of the Center for the History of Political Economy at Duke University. He has written extensively on the interconnection of mathematics and economics in the twentieth century.? In 2014 he will publish, with Till D?ppe, Finding Equilibrium: Arrow, Debreu, McKenzie and the Problem of Scientific Credit, for Princeton University Press. erw@duke.edu

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Subject(s):History of Economic Thought; Methodology
Geographic Area(s):General, International, or Comparative
Time Period(s):18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII