Knowledge that Transforms

C ONSUMER S surplus analysis originated with Jules Dupuit and Alfred Marshall in the last century, and ceased long ago being a novelty, but it is fair to say that it is still viewed widely with a certain skepticism. Recently Arnold Harberger has attempted to provide the basis for a concensus on consumer's surplus in the form of several basic postulates that are held to be impelling [5, 1971]. Perhaps he is right in assuming that it is through such a reduction to axiomatic fundamentals that persisting doubts can be resolved one way or the other, but to obtain such a result, I believe it is also necessary for those concerned with consumer's surplus (and who in economics can afford not to be?) to face more squarely than they often seem to have done issues posed long ago by this much quoted passage in Paul Samuelson's Foundations:

This study is part of a larger project that was originally conceived to examine the communications function of economics journals for the period since 1890. Research was begun in 1967 and was continued intermittently in the intervening years. The materialfocusing on the periods 1961-64 and 1970-71 was drafted in preliminary form in 1972 and in final form in early 1974. Work dealing with the earlier years remains still in progress. I wish to give my thanks to the several persons whose research assistance was indispensible over the many years of the project. They include Lawrence Cavanagh, Frederick Garzino, Shirley Chiou, Roslind Diamond, and Robert McDougal. I am especially grateful to the editors and reviewers for their comments on the manuscript. The views expressed are those of the author and not of the Federal Reserve Bank of New York.

Much attention has been devoted to the peculiar behavior of the unemployment rate from 1969 to 1973.

Thomas F. Morrisey, A Model of Federal Home Loan Bank System and Federal National Mortgage Association Behavior--A Comment, The Review of Economics and Statistics, Vol. 57, No. 1 (Feb., 1975), pp. 121-123