On Lionel McKenzie's 1957 intrusion into 20th‐century demand theory

Abstract

In this essay, we read McKenzie's 17 paragraphs of 1957 on “Demand Theory Without a Utility Index” as an opening to the narrative of 20th‐century demand theory and as a lever for the understanding of what has now reached culmination as the neoclassical theory of demand. In tracking the influence of these paragraphs on both theoretical and applied work, we also use them as a foothold for reflection on the process of theorizing to argue for the view that one cannot neglect the (changing) problematic that the theory is adduced to address, that the historical narrative behind a particular theorem is indispensable in understanding the theorem itself. This implicit theorizing of the process of theorizing then forces us to consider Stigler's distinction between textual and scientific exegesis and confront it to a second‐order level of theorizing, and thereby bring out the continuity, possibly not quite seamless, between a theorem and its history.