Intellectual Tour de Force

From the late 1950s, the economic theories that gradually rose to dominance were largely concerned with the esoteric task of finding abstract answers to abstract intellec­tual questions following a rigorous mathematical route.

The general equilibrium theory turned out to be the height of mathematical rigour with its strong seductive appeal. In the idealised frictionless world of impersonal markets, where buyers knew fully well what they were buying, and sellers had no reason to do mischief with prices, things could be put in elegant mathematical language. But, as Paul Samuelson puts it later, “the fine garments sometimes achieved fit only by chopping off some real arms and legs”. More down-to-earth thinkers, concerned with what we then called the “underdeveloped economies”, carried on their difficult struggle to seek an alternative route. They refused to give too much weight to mainstream economists’ intellectual play things, and chose to remain outside of the so-called mainstream.