Prolegomena to a History of Economic Reasoning

The paper argues that the history of economic reasoning is embedded in the broader history of Western thought. It proposes a framework distinguishing two polar patterns of cognition—essentialistic (asserting an identity of thinking and being, with reason grasping essences and eternal truths) and hypothetical (nominalistic, treating abstract notions as mind-made assumptions used to build causal or functional explanations). Mixed modes combining elements of both evolved across countries and periods. The study aims to analyze major schools of economics by the methods of reasoning they adopt, explaining why problems are framed differently across schools and how system concepts (especially equilibrium) serve as indicators of methodological adherence.

The author notes limited recent efforts to link economic doctrines to leading philosophical movements, citing James Bonar’s Philosophy and Political Economy as an early attempt. He contrasts approaches emphasizing the economic interpretation of history with his cognitive-methodological analysis. The survey situates scholastic (Thomistic) universalism and its substance concept; traces hypothetical/nominalistic reasoning via Baconian empiricism and mechanistic concepts in Petty, Locke, Hume, and Cantillon; cartesian essentialism in Malebranche’s influence on the physiocrats; Benthamite utilitarianism and associational psychology informing Ricardo and J. S. Mill; and the persistence of labor-cost value. It reviews German organismic-intuitional traditions (Roscher, Knies, Hildebrand; Schmoller’s historico-ethical school; warnings by Sombart and Max Weber regarding value-free social science and ideal types), and dialectical materialism (Hegel’s method adapted by Marx and Engels). It covers marginal utility innovations by Jevons, Walras, and Menger; Vienna’s Austrian School (Wieser, Böhm-Bawerk; Wicksell’s monetary-real interest distinction); Marshall’s modifications; J. B. Clark’s American developments; and debates on value, opportunity cost, and pricing (Fetter, Taussig, Davenport, Fisher). It also references institutionalists influenced by Veblen (e.g., W. C. Mitchell), and diverse business cycle theories (Juglar, Schumpeter, Mises; socialist variants like Sismondi, Proudhon, Rodbertus; Tugan-Baranowsky; German revisionists).

Conceptual-historical analysis mapping economic doctrines to underlying modes of cognition. The paper classifies reasoning into essentialistic versus hypothetical patterns and identifies mixed modes (intuitional/organismic, dialectical). It uses the system concept—especially the equilibrium construct—as an indicator of methodological allegiance. The approach is comparative and deductive: tracing how philosophical premises shape economic problem-setting (value, distribution, policy), and how logical devices (e.g., labor-cost standards, marginal utility/productivity, numéraire, indifference curves, opportunity cost) structure theories. It analyzes national intellectual contexts (England, France, Germany, Italy, Spain) and links epistemological shifts to changes in economic organization and policy. The study is synthetic rather than empirical, drawing on canonical texts and the evolution of concepts to demonstrate methodological affinities and divergences.

• Economic doctrines reflect prevailing methods of reasoning; shifts from scholastic essentialism to hypothetical/nominalistic thought transformed economic analysis and practice.
• Baconian empiricism and mechanistic equilibrium concepts in 17th–18th century England fostered quantitative reasoning (Petty’s Political Arithmetic), individualism (social contract), utilitarian maximization, and labor-cost value (Locke), influencing monetary theory and self-regulating mechanisms (Hume; Cantillon).
• Cartesian essentialism underpinned physiocracy (Malebranche), with nature as sole creator of value, “productive vs. sterile” classes, and normative natural laws; contrasting English hypothetical approaches.
• Benthamite-Ricardian economics aligned with associational psychology and utilitarian calculus, constructing a mechanistic equilibrium system with labor as value standard and class-based distribution (rent, wages, profits), while struggling with population and technology as exogenous disturbances (Malthus; compensation).
• German intuitional/organismic traditions favored descriptive, national-economy frameworks over hypothetical laws, promoting historico-ethical, policy-oriented research (Schmoller), and later value-free social science and ideal types (Max Weber); eclectic syntheses (e.g., Oppenheimer) lacked firm logical foundations.
• Dialectical materialism (Marx/Engels) merged Hegelian method with Feuerbach’s materialism, positing modes of production/distribution as the base and superstructure as derivative, using labor-cost value and class antagonism to predict capitalist breakdown, though definitions of key constructs and the fusion of mechanical systems with evolutionary processes remained problematic.
• Marginal utility analysis (Jevons, Walras, Menger) shifted value to subjective assessment, enabling opportunity cost and marginal productivity frameworks; Walras-Pareto developed highly abstract mathematical equilibria (numéraire, functional relations, indifference curves), while Menger’s psychological approach emphasized causal laws and avoided measurability of utilities.
• Austrian advances (Böhm-Bawerk’s time-preference/agio theory; strategic role of interest; Wicksell’s natural vs. market interest) reframed the equilibrium conditions, introducing monetary-real distinctions and pointing to systemic disturbances from interest-rate gaps.
• Marshall preserved Ricardian structures (substance concept; real costs; partial equilibria) while incorporating marginal productivity; J. B. Clark’s stationary model with marginal returns and dynamic factors maintained mechanistic structure with new interpretations.
• Diverse equilibrium uses: Ricardian timeless distributions; Walrasian fully equilibrated competitive systems; Marshallian partial equilibria; Clark’s moving equilibria; Austrian monetary-real dual systems; organismic and dialectical frameworks resisting or redefining mechanical equilibrium.
• Business cycle theories split along monetary vs. nonmonetary lines: Juglar’s credit-price-discount chain; Schumpeter’s entrepreneurial-credit dynamics; Mises’s interest-rate distortion; socialist underconsumption variants; institutional and historical pattern-based accounts (Spiethoff, Sombart).

By linking economic doctrines to foundational cognitive methods, the paper explains divergences in problem framing, value theory, distribution, and policy prescriptions across schools and nations. It demonstrates how the equilibrium concept—deployed in varying ways—functioned as a central tool enabling coherent hypothetical systems, shaping both theory and institutions (e.g., gold standard). The analysis clarifies why certain schools emphasized causal-mechanical laws (Ricardian, Walrasian), others normative-natural rules (physiocrats), subjective valuation (marginal utility/Austrian), organismic-national frameworks (German historical), or dialectical evolution (Marxism). This mapping shows the relevance of epistemology for the trajectory of economic thought and for understanding persistent disagreements and policy orientations.

The study establishes that methods of reasoning—essentialistic, hypothetical, and mixed—are decisive in defining the scope, concepts, and systems of economics. The equilibrium idea, though hypothetical, has been pivotal in enabling consistent analysis and influencing economic institutions and policies, particularly in Anglo-Saxon contexts. By cataloging at least six distinct schools and their system concepts up to the early 20th century, the paper highlights deep epistemological divergences that hinder mutual understanding. It concludes that the belief in mechanical economic laws, whether fictitious or not, has shaped capitalist development and regional differences. The author indicates a follow-up article summarizing more recent developments, suggesting future research on the continued epistemological conflicts and the evolution of equilibrium and system concepts.

• No formal abstract; scope limited by space (explicitly noted), with scholastic methods only sketched and a comprehensive history promised elsewhere.
• Focus largely on Western thought and up to the First World War; later developments deferred to a second article.
• Conceptual definitions of key constructs (e.g., modes of production/superstructure; standard labor unit) are noted as problematic or absent in some schools.
• Synthetic, non-empirical approach without quantitative validation; relies on interpretive mapping and canonical texts.
• National contexts emphasize England, France, Germany, Italy, Spain, potentially underrepresenting other regions.