Early history of demand theory : anti-psychologist thesis reconsidered

According to a widely shared view, the development of demand theory in the first half of the twentieth century was heavily influenced by the anti-psychological attitudes of economists. I call this view 'anti-psychologist thesis,' and I criticize it on several grounds. I propose an alternative account, according to which the development of demand theory is best characterized as a process aiming towards greater generality. I provide evidence in favor of this 'generalization thesis' and trace the cause of disagreements between advocates of these two alternative accounts. I argue that this cause lies in misunderstandings regarding the aim of the demand theory as well as in the divergent understanding of what it means to abstract from psychological assumptions.