Critical realism and logical analysis for history of economic theory: a case study on consumer’s surplus

This paper presents a methodology for deepening the study of economic thought history from a critical realist perspective. It proposes a rigorous approach to analyzing historical economic texts, focusing on their inherent theoretical structures while maintaining logical consistency with the textual context. This method aims to uncover the theoretical world that exists as a reality within the text beyond subjective interpretations. The paper applies this methodology to standard microeconomics textbooks’ explanations of consumer’s surplus, a concept traditionally considered unambiguous. Doing so reveals discrepancies in theoretical structures and logical inconsistencies in authors’ assertions, even within standard texts. Using consumer’s surplus analysis as an example, the paper highlights the confusion between Marshall’s original claims and Hicks’ interpretation of Marshall’s work. This confusion stems from overlooking the differences between their logical frameworks: Hicks’ general equilibrium approach versus Marshall’s partial equilibrium model. This approach demonstrates the potential for nuanced interpretations of seemingly straightforward economic concepts. It emphasizes the importance of rigorous methodological Analysis in understanding the evolution and transmission of economic ideas through texts.