Money, Banks and Finance in Economic Thought

The Normative Foundations of Early Neoclassicism: John Bates Clark

Schroeter Felix, Universität Hamburg

Scholars of the history of economic thought today recognize that Clark’s earlier works bear by far less formal abstraction, but are characterized by a fervent appeal for economic reforms based on Christian ethics and under an apparent influence of the German Historicist Schools. Yet, the literature assumes that after the violent incidents of Haymarket in Chicago in 1886 Clark entirely dismissed his preoccupation with social reforms and the relevance of ethics for the economy. The paper demonstrates that in contrast to this common understanding, all of Clark’s writings after Haymarket bear his former ethical impetus. It traces his theory of value and distribution back to his former reformative claim to found the American economy on the principle of equal and voluntary exchange. This he derives from his republican-congregationalist ideals and forms a sort of counter-project to the materialistic laws of Clas-sical Political Economy. Clark’s alleged turn to positivism solely marks his theoretical re-finement of the former concepts. His application of marginalism does not serve deductive analysis. Instead, it serves him to illustrate the economy as a coherent organism very in analogy to human biology and its habits of consumption. To achieve this per definition intrin-sically legitimate form of social organization, it is inexorable to realize the ideal of equal and voluntary exchanges. Here the circle closes with Clark’s earlier works.

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Keywords: History of Economic Thought, John Bates Clark

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