Introduction

Abstract

“Let a hundred flowers bloom.” Chairman Mao’s famous phrase is not a bad characterization of economics during the first half of the twentieth century. The disagreements among economists were fundamental. Some economists thought capitalism worked well enough, even during the Depression of the thirties, on the grounds that the alternatives were even worse. Marxists thought a broad revolution was needed to excise the evils of capitalism and create a thoroughgoing socialist society. Some economists created a model of a planned economy that used the Walrasian theory that defended capitalism but with a new socialist interpretation. Other economists claimed to prove that a planned economy was impossible. Still others thought that economic theory was no more than a collection of “empty boxes” and that good old-fashioned economic history was the only way to do economic research.¹