The Diffusion of Economic Ideas and the Formation of the Market Tradition: Explorations in the Political Economy of the 19th Century

This paper discusses the related processes of diffusion and transformation of classical political economy in the first half of the 19th century. In particular, it examines the process by which mutual (and often asymmetrical) influences acting from one centre of economi c culture to another brought about the convergence to a relatively homogeneous conceptual set up. The paper calls attention to the central role of the concept of 'substitution cost' and of the generalized rent principle as fundamental building blocks in the post-classical synthesis.