Neoclassical

Abstract

The term ‘neoclassical’ was first used by Veblen (1900, pp. 242, 260–62, 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 usage, 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 understanding of the continuity between his own economics and the classical tradition. Keynes (1936, pp. 177–8) also employed the term, though in an idiosyncratic manner, derivative from his notion of classical economics.