Herbert J. Davenport

Herbert J. Davenport, USA Economic Histor

Professor H. J. Davenport (1861-1931) had a distinct influence in the United States and England. Davenport's theory is char­acterized by its adoption of the "entrepreneur point of view" and the related notion of "opportunity cost." His theory assumes prices, and makes marginal utilities and disutilities depend upon them. The dependence works out through the voluntaristic acquisitive choices made by enterprisers among the price-determined "opportunities" which present them­selves in markets. While the idea of opportunity cost is found in the Austrian School, and Davenport had this phase of sub­jectivism in common with them, he rejected both hedonism and the idea that marginal utility is causal. Thus his economics was in important respects more closely related to the mathe­matical "price economics," or to the narrow exchange-value tendency. But his training was in Classical doctrine, so that real costs and social welfare were always specters; and he was not a mathematician. After much groping, he seems to have fallen back upon a non-causal entrepreneur standpoint as being the easiest way to something definite, if not final. He made his economics consistent and "realistic" by reducing it to the private pursuit of pecuniary gain.

In addition to the foregoing leaders in American economic thought prior to World War I, are to be mentioned such men as F. M. Taylor (1855-1932) whose work in general theory and in money were of high quality, and F. B. Hawley whose discus­sions of profits had considerable influence. H. L. Moore's work in economic cycles, wages, and supply and demand schedules .shows originality. This may be called the period of marginal-equilibrium eco­nomics. Marginal-utility and marginal-productivity theories grew up. Abstraction of the other-things-being-equal type abounded. The influence of J. B. Clark, the Austrian School, and Marshall was paramount by 1900. Thereafter, for nearly twenty years Neo-Classicism reigned supreme in America.