More on the demise of Pigovian economics.

• Author: Aslanbeigui, Nahid
• Position: Response to Pieter Hennipman, Southern Economic Journal, vol. 59, p. 88, July 1992

1. Introduction

   In what he calls a more adequate account, Hennipman tries to both amplify and rectify my narrative of the demise of Pigovian economics. Due to the imposed space limitation, I have no choice but to respond to those issues that are more important in the context of my article.(1) Section II reflects my reservations about the proposed amplifications. More critical for me, however, are the suggested rectifications. In sections Ill to V, therefore, I address material welfare, ordinalism, and interpersonal comparisons as value judgments.

2. Amplifications

   I do not object to Hennipman's amplifications as much as I show reservations about them. A comparison of Hicks and Robbins on the issues of methodology, ordinalism, and welfare economics in detail and over many decades is not only interesting but useful. I fail, however, to see its relevance to my study. I have focused on the Robbinsian Circle as a group, deliberately glossing over the differences among the individual members. I have also limited myself to the period between late 1920s to mid 1930s during which the group was much more homogeneous in terms of its worldview as well as its interest in reformulating Pigovian economics.(2)

   In this light, Hennipman's remark that I have given "pride of place to Robbins" and not to Hicks on ordinalism is to misunderstand the rationale behind my work; the purpose is not to expose differences but rather to show similarities. However, if I were to pay attention to individual variations, I would still assign a high rank to Robbins. To play up Hicks as a saint-hero is to downgrade Robbins's constructive role significantly (Hicks's genius is not being questioned here). All accounts of LSE in the inter-war period emphasize Robbins's role as a mentor. Did Hicks himself not pay tribute to Robbins who had encouraged him to read Pareto [7, 26-27]? Was Hicks not an unsuccessful undergraduate lecturer until Robbins's instigation that he teach "advanced economic theory" with Allen [6, 32]?

   I also have a problem with the extension of the time period beyond the mid-1930s. People change over time and so do their views. If not handled carefully, these changes may lead to anachronism. Allow me to elaborate. The olive branch offered to Robertson was not Robbins's last. He changed his mind about the dispute with Keynes over the appropriateness of public expenditure, calling it "the greatest mistake of [his] professional career" [23, 154]. Robbins's methodology as expressed in his Essay on the Nature and Significance of Economic Science[26, hereafter ENSES] also changed over time. The book, confessed Robbins, was written "before the star of Karl Popper had risen above our horizon. If I had known then of his path-breaking exhibition of scientific method as the attempt to test for falsity to reality the models of the imagination, this part of my book [the chapter on economic generalizations] would have been phrased very differently" [23, 149-50; 13].(3)

   The same is true of Hicks. By 1935 he had separated himself "from the faith in the free market which had been dominant" among his colleagues at LSE [9, 285]. By 1939, Hicks had also started to show interest in welfare economics, a position very much against his original one: "In the first phase, I was a disbeliever in welfare economics: I was aware of the weakness of Pigou's foundations, but had nothing to put in their place"[10, xii]. In the same year, Hicks was also defending welfare economics "against the still dominant positivism, to which I had myself formerly adhered" [emphasis mine, 10, 59]. His growing appreciation of Pigovian welfare economics is properly recorded by Hennipman himself.

   In sum, both Robbins and Hicks changed many of their views after 1935. To use their later theories to shed light on their early beliefs is to explain history as it did not happen.

3. Material Welfare

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