An early version of this paper was presented at the 8th European Social Science History Conference (ESSHC), 13–16 April 2010, Ghent, Belgium, with the title The Contributions of a Factory-Visiting Mathematician to Political Economy.
Babbage's Legacy: The Origins of Microeconomics in On the Economy of Machinery and Manufactures†
Article first published online: 5 MAY 2014
© 2014 Scottish Economic Society
Scottish Journal of Political Economy
Volume 61, Issue 3, pages 322–339, July 2014
How to Cite
Ozgur, M. E. (2014), Babbage's Legacy: The Origins of Microeconomics in On the Economy of Machinery and Manufactures. Scottish Journal of Political Economy, 61: 322–339. doi: 10.1111/sjpe.12047
- Issue published online: 10 JUN 2014
- Article first published online: 5 MAY 2014
- Manuscript Received: 5 SEP 2013
British mathematician Charles Babbage (1791–1871) spent immense energy to build mechanical calculating engines. Hoping that it might help him in designing and building his engines, he visited numerous workshops and factories in both England and Continental Europe. One of the consequences of these visits was his On the Economy of Machinery and Manufactures, published in 1832. Through his observations, Babbage grasped the advantages of machinery and economies of scale. In micro terms, he acknowledged the cost-reducing features of economies of location, vertical integration, and division of labor – beyond Adam Smith's analysis – as well as the efficacy of clustering. He also pointed out the relationship between firm size, economic crisis, and innovation.