Impact
Why does nobody during two decades after its publication take notice of Gossen’s book? The publisher has little incentive to promote it, the book’s title is not very attractive, the author’s preface, bristling with self-praise, is off-putting, the text lacks any subdivision, the reader is swiftly immersed in tedious mathematical formulas and numerical examples - not an easy fare, especially for Germans brought up with the Historical School.
Spiegel (1968: 210) calls the Entwickelung “fundamentally unGerman”, Schumpeter (1954: 463) opines that the book was far ahead of its time and therefore bound to founder, Georgescu-Roegen (1983: lviii) maintains that Gossen “only happened to write in the wrong country”. (Gossen’s Entwickelung, published in 1927, may thus be compared to Antoine Augustin Cournot’s Recherches of 1838.) All of these reasons certainly contribute to explaining the book’s lack of early success, but they do not get us very far. First, at the time when Gossen wrote, German was still a widely spoken language in the economics profession. Secondly, some of the ideas Gossen advocated were not new, but had been put forward by representatives of the German so-called “use value school” with Karl Heinrich Rau as one of its leading protagonists (Chipman 2005: 159). Also, mathematics had been introduced in the profession by authors such as Johann Heinrich von Thunen and Friedrich Benedict Wilhelm Hermann in the first half of the nineteenth century.Thirty years after Gossen’s death, in 1889 his nephew brought out the unsold copies of the book with a new front page and preface as a “new edition”. Apart from Jevons and Walras, Maffeo Pantaleoni (1889 [1898]) was particularly effective in propagating the book. By the turn of the twentieth century Gossen’s contribution was well known to, and highly regarded by, the majority of economists.
“Gossen’s Laws” found their way into microeconomic textbooks and several essays were devoted to the man and his work; see, for example, Kraus (1910), Liefmann (1910, 1927) and Beyerhaus (1926). In 1927 a “third edition” of his book was published; however, it was nothing but a reprint of the 1889 edition, enriched by an introduction written by Friedrich August von Hayek. Yet only a small number of Gossen’s propositions are picked up and then frequently reproduced in a distorted way. Its religious exaltations are set aside. Gossen’s concern with consumption as a process that takes time and the optimal allocation of scarce time to alternative activities is almost entirely ignored and never makes it into microeconomics. Authors that took seriously the time aspect of consumption did so without any reference to Gossen; see, for example, Linder (1970) and Winston (1982). Only in more recent times have we seen attempts to make good the lacuna. Georgescu-Roegen (1983, 1985) was the first, followed by Steedman (2001), who, starting from Gossen, investigated in detail how the presence of two constraints rather than one - time and income - affects the agent’s behaviour not just quantitatively, but also qualitatively, compared with the behaviour typically assumed in microeconomic textbooks. This is shown to have important implications for the theory of consumption and welfare economics.It is a remarkable fact that while, on the one hand, the many insights contained in Gossen’s important contribution have been only gradually rediscovered and developed further, on the other hand, the man and his message seem to fall into oblivion. Gossen is no longer even mentioned in some of the most widely used contemporary microeconomics textbooks; see, for example, Varian (1978) and Mas-Colell et al. (1995). A subject that forgets its history runs the danger of forgetting some of its major findings and is bound to reinvent the proverbial wheel. Economics without its history is not a very efficient undertaking.
Heinz D. Kurz
See also:
German and Austrian schools (II); William Stanley Jevons (I); Karl Heinrich Marx (I); Adam Smith (I); Johann Heinrich von Thunen (I); Marie-Esprit-Leon Walras (I).