GERRIT GORTER
The present study of economics did not, of course, come out of thin air. Although thinkers in classical Greece already reflected on what we now call economics, it was largely in the eighteenth century that systematic thought on the subject began.
Two conceptual tools—the economic cycle and the idea of the invisible hand—date from that century and are still in use today, both in academic research and in education.
This site contains twenty-five portraits of important economists. Each offers a biographical sketch together with an indication of his (and, in one case, her) significance for the development of economic thought. They claim no more than to provide a first introduction to the lives and works of these pioneers.
These articles originally appeared in Dutch in the Tijdschrift voor het Economisch Onderwijs and were later published on the website of Gerrit Gorter. The English translations are by Folkert Gorter.
Index
François Quesnay
Adam Smith
Thomas Robert Malthus
Jean-Baptiste Say
David Ricardo
Antoine Augustin Cournot
John Stuart Mill
Karl Marx
Walras
Carl Menger
Alfred Marshall
Vilfredo Pareto Eugen von Böhm-Bawerk
Knut Wicksell
Max Weber
Irving Fisher
Sam de Wolff
John Maynard Keynes
Joseph Alois Schumpeter
Joan Robinson
Jan Tinbergen
John Hicks
John Kenneth Galbraith
Milton Friedman
Paul Samuelson
Antoine Augustin Cournot
France 1801–1877
You may know the French economist Cournot from the point named after him — the point on a monopolist’s demand curve that indicates the price-quantity combination at which maximum profit is achieved. But he was also the first economist to draw a demand curve and to provide an analysis of price formation under duopoly. In addition, when it came to the application of mathematics in economics, he was well ahead of his time.
Antoine Augustin Cournot was born near Dijon in 1801. He attended the best French schools, including the École Nationale Supérieure in Paris, studied astronomy, mechanics, and mathematics, and was appointed professor in the latter two subjects at the University of Lyon. It was only later that he developed an interest in economics. All of this culminated in his main work, Recherches sur les Principes Mathématiques de la Théorie des Richesses. Published in 1838, the book was remarkably progressive for its time in its application of mathematical techniques. It is filled with algebra and does not shy away from differential and integral calculus. Unsurprisingly, it went entirely unnoticed. According to some caustic remarks, this was because economists at the time had little grasp of mathematics and simply didn’t understand the book.
Cournot is one of the most underrated figures in the history of economic thought. Later luminaries such as Léon Walras, Stanley Jevons, and Alfred Marshall thankfully fully acknowledged this — though, for Cournot himself, it came rather too late. Many concepts that would later be widely used — and reinvented — can already be found in Cournot’s work. For example, he was the first to distinguish between fixed and variable costs. In making decisions, a French wine producer must take into account the fact that costs differ in nature. For example, when expanding wine production on a given plot of land, the rent will remain constant, while the amount of labor required will increase.
Another concept — only later to become widely adopted — can already be found in Cournot’s work: the idea that producers are guided by the additional costs and additional revenues associated with expanding production. A small increase in output leads to certain marginal costs and, upon sale, to certain marginal revenues. A wine producer will continue to expand production and sales until marginal costs and marginal revenues are equal. It was only with the emergence of the Austrian School (after 1870) that marginal analysis became common practice.
Cournot also made contributions in other areas. His now-famous analysis of decision-making under duopoly has already been mentioned. He showed how the decisions of one producer influence the behavior of the other, and how an equilibrium ultimately emerges. Finally, he also concerned himself with the theory of exchange rates. But he kept returning to his main work from 1838, unable to believe that it had gone unnoticed. He made several attempts (in 1863 and 1877) to present his theory in a simplified form — that is, without mathematics — but to no avail. His bitterness over this was somewhat alleviated by Walras, who in 1877 finally gave Cournot the recognition he deserved. Cournot died that same year.