• DOI:10.1086/256962
• Corpus ID: 153732595

The Development of Utility Theory. I

@article{Stigler1950TheDO,
  title={The Development of Utility Theory. I},
  author={George Joseph Stigler},
  journal={Journal of Political Economy},
  year={1950},
  volume={58},
  pages={307 - 327}
}

• G. Stigler
• Published 1 August 1950
• Economics
• Journal of Political Economy

T HE history of economic thought can be studied with many purposes. One may trace the effects of contemporary economic and social conditions on economic theory orrather more bravely-the effects of economic theories on economic and social developments. One may study the history to find the original discoverers of theories, spurred on by the dream of new Cantillons; or one may compare the economics of the great economists with that of the rank and file, as a contribution to the structure and process of intellectual change. Or one may, and most often does, simply set forth the major steps in the development of a branch of economic theory, hoping that it can be justified by its contribution to the understanding of modern economics. This history of utility theory is offered primarily with this last purpose, although in the final section I review the history to answer the question, "Why do economists change their theories?" The scope of this study is limited in several respects. First, it covers primarily the period from Smith to Slutsky, that is, from I776 to I9I5. Second, the study is limited to certain important topics and to the treatment of these topics by economists of the first rank. The application of utility theory to welfare economics is the most important topic omitted. An estimate of the part played by utility theory in forming economists' views of desirable social policy is too large a task, in the complexity of issues and volume of literature involved, to be treated incidentally. The omission is justified by the fact that most economists of the period used utility theory primarily to explain economic behavior (particularly demand behavior) and only secondarily (when at all) to amend or justify economic policy.'