Academic journal article Journal of Economic Issues

Caroline Foley and the Theory of Intersubjective Demand

Academic journal article Journal of Economic Issues

Caroline Foley and the Theory of Intersubjective Demand

Article excerpt

The fashion wears out more apparel than the man.

- William Shakespeare

The bridging of the atomist/holist divide in the social sciences, and in economics especially, heads many contemporary research agendas. Of such projects under way, none is more ontologically rich than the one centered for the past 15 years at l'Ecole Polytechnique in Paris and its Centre de Recherche en Epistemologie Appliquee (CREA). Its successes include the development of a well-defined, non-atomistic homo economicus. This new construct has provided CREA economists with the conceptual means to explore intersubjective dependencies between economic agents. Inspired in part by Chapter 12 of Keynes's General Theory, the "French Intersubjectivists" have brought the analysis of intersubjective interaction in markets to new levels of meaningful sophistication [Dupuy 1989, 1991, 1992a, 1992b; Orlean 1988, 1989a, 1989b, 1990, 1992]. The experience of writing several essays on the French Intersubjectivists [Fullbrook 1996a, 1996b, 1997] led me to inquire into the history of economics' recognition and treatment of intersubjective market phenomena. The history that emerged was unexpected.

In 1893, the Economic Journal published "Fashion" by Caroline Foley. This anodyne title concealed a cache of sharp-edged and deeply subversive insights. Foley, though only in her twenties, was well ahead of her male colleagues, including Thorstein Veblen, in coming to terms with post-subsistence level market phenomena. The present article will survey, in the context of the young British woman's contribution, a century of attempts by economists to accommodate the ever-growing dependence of consumer demands on interpersonal factors. No claims are made for the completeness of the historical overview that follows and that divides into four major sections. The first presents Foley's ideas on consumer demand. This is followed by a section on the attempts, all of them unsuccessful, to assimilate intersubjective demand into neoclassical analysis. These efforts, which include those by A. C. Pigou [1903, 1913] early in the century and by H. Leibenstein [1950] in the middle, are also considered against the background of Oskar Morgenstern's critique [1948], which showed the futility of these neoclassicalist endeavors. The next section covers the institutionalist views of consumer demand, in particular those of Veblen [1899, 1909], Lindley Keasby [1903], and John Galbraith [1958]. This tradition comprises the most direct line of descent of the Foley legacy. Finally, the recent contributions of the Intersubjectivists, especially those of Jean-Pierre Dupuy and Andre Orlean, are surveyed.

One purpose of this article is to give Caroline Foley the position in the history of economic thought that she earned. As such, it may be seen as part of the growing - and just - insistence that women be credited appropriately for their contributions to all areas of cultural production. But the primary motivation behind what follows concerns the future of economics. Foley's brief but formative appearance on the economics stage offers a legacy by which the contributions of her illustrious and diverse successors can be drawn together by a common conceptual framework. Indeed, her ideas are more relevant and, in transmuted forms, more in evidence in innovative economics today than ever before. With a few deft strokes, Foley identified the precise limits of the atomistic ontology of neoclassical economics within the context of a society of increasing affluence.

Caroline Foley

Roger Mason recently noted in these pages that Alfred Marshall, in his Principles of Economics (1890), shies away from discussing interpersonal effects on demand because to do so would call "into question a fundamental assumption of neoclassical theory - that aggregate demand could be derived from the simple compounding of individual demand schedules and that no part of an individual's demand for any product was determined by the consumption of others" [Mason 1995, 871-2]. …

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