‘Neoclassical’

Abstract

The term ‘neoclassical’ was first used by Veblen (1900, pp. 242, 260–2, 265–8), in order to characterize Marshall and Marshallian economics. Veblen did not appeal to any similarity in theoretical structure between the economics of Marshall and classical economics in order to defend this novel designation. Rather, he perceived Marshall’s Cambridge School to have a continuity with classical economics on the alleged basis of a common utilitarian approach and the common assumption of a hedonistic psychology. Derivative from Veblen’s use, this meaning of the term subsequently gained some currency, particularly in the 1920s and 1930s; for example, in the writings of Wesley Mitchell, J.A. Hobson, Maurice Dobb and Eric Roll. It is evident that the emergence of this notion of Marshallian economics as a ‘neoclassical’ project also involved, at least in part, an acquiescence to Marshall’s portrayal of his own economics as a continuation of the classical tradition, though Marshall’s sense of the continuity is not really that perceived by Veblen. Keynes (1936, pp. 177–8) also employed the term, though in an idiosyncratic matter, derivative from his equally idiosyncratic notion of classical economics.