Terence Hutchison Special Issue

1 November 2009 at 9:33 am Nicolai Foss 2 comments

| Nicolai Foss |

It is a sad fact that I spent a considerable part of my early 20s browsing the pages of the major economics journals of the interwar period. I was particularly interested in what was then called the “monetary theory of the trade cycle” and the role of expectations in the business cycle (Myrdal, Lindahl, Hawtrey, Robertson — and of course Hayek and his many followers and conversants, such as Lachman, Kaldor, and various UK Labour Party economists who until the advent of Keynes’ GT were surprisingly bent on Hayekian business cycle theory. (Here is one of the results of that work). My forays led to the “discovery” of Terence Hutchison’s 1937 paper, “Expectation and Rational Conduct,” in Zeitschrift für Nationalökonomie, a paper that, while over the top in a number of ways, is also an early anticipation of rational expectations and the problems of RE.

Hutchison (1912-2007) is nowadays best known as an economic methodologist, perhaps the first explicit proponent of logical positivism and later Popper’s falsificationism. His 1938 book, The Significance and Basic Postulates of Economic Theory, is often taken as a response to Lionel Robbins’ strongly Austrian-influenced Essay on the Nature and Significance of Economic Science(1932/1935). Hutchison later engaged in a debate with Fritz Machlup, and Hayek buffs will know that Hutchison coined the notion of “Hayek I” and “Hayek II” (based on Hayek’s acceptance of Misesian praxeology).

The latest issue of the always-interesting Journal of Economic Methodology features a special issue symposium on Hutchison. Among the highlights is the publication of a hitherto unpublished, semi-autobiographical essay by Hutchison, and the reproduction by Bruce Caldwell of some revealing letters by Hayek and Hutchison (Hayek did not agree with Hutchison’s interpretation of his changes in the 1930s).

Entry filed under: - Foss -, Methods/Methodology/Theory of Science, Recommended Reading.

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2 Comments Add your own

1. pj | 1 November 2009 at 3:05 pm

Why a sad fact? Seems like a useful way to acquire perspective. I wouldn’t much respect an economist who knew only the currently fashionable modes of thought.
2. Rafe | 3 November 2009 at 10:06 pm

The obsession with falsificationism in economics turned out to be a dead end, partly because it is a no brainer way to desribe Popper’s contribution. Actually Lakatos, Latsis and Blaug were the main offenders. Interesting story remains to be told.