On Lionel Mckenzie's 1957 Intrusion into 20th-Century Demand Theory
37 Pages Posted: 17 Sep 2013 Last revised: 30 Jul 2014
Date Written: July 2014
In this essay, we read McKenzie’s seventeen paragraphs of 1957 on “demand theory without a utility index” as an opening to the narrative of 20th-century demand theory, and as a lever for the understanding of what has now reached culmination as the neoclassical theory of demand. In tracking the influence of these paragraphs on both theoretical and applied work, we also use them as a foothold for reflection on the process of theorizing, to argue for the view that one cannot neglect the problematic that the theory is adduced to address, that the historical narrative behind a particular theorem is indispensable in understanding the theorem itself. This implicit theorizing of the process of theorizing then forces us to consider Stigler’s distinction between textual and scientific exegesis, and confront it to a second-order level of theorizing, and thereby bring out the continuity, possibly not quite seamless, between a theorem and its history.
Keywords: Minimum income function, consumer’s surplus, index numbers, complementarity, general equilibrium theory, indivisibilities, non-transitivites, incompleteness, duality, adjoint, money-metric, expenditure function, indirect utility function, exegesis
JEL Classification: B31, B21, C61, D11
Suggested Citation: Suggested Citation