Macroeconomic Analysis and Individual Economic Rationality: Some Lessons from Wicksell, von Mises and Schumpeter

The purpose of this contribution is to investigate the problem of the room attributed to individual economic rationality by circulation approaches. The expression ‘circulation approaches’ here refers to an analytical framework in which income distribution, production and exchange activities cannot be simultaneously implemented on interdependent markets but are organized according to a given logical and chronological order which implies the preeminence of the production of commodities and of the existence of the means of payment that permit the circulation of these commodities (Arena, 1985, p. 47; see also Deleplace and Nell, 1996). Our investigation will not privilege however the modern versions of these approaches (see Graziani 2003a, ch.1). We will instead utilise the works of some economists of the past, namely, Knut Wicksell, Josef Schumpeter and Ludwig von Mises. The reason of the choice of these three authors is that their respective contributions to economic analysis belong to what Leijonhufvud called the ‘Wicksell Connection theories’ (Leijonhufvud, 1981, p. 132). In this context, Schumpeter’s and von Mises’s theories of money and economic progress appear to be two possible extensions of Wicksell’s original work. Our view is that, by contrast with Wicksell’s economic theory, they both give an essential role to individual economic rationality.