N ‘Neoclassical’ Tony Aspromourgos Keywords Cambridge School; Classical economics; Dobb, M. H.; Hedonistic psychology; Hobson, J. A.; Marginal productivity theory of distribu- tion; Marginalist theory; Marshall, A.; Meth- odological individualism; Mitchell, W. C.; Neoclassical; Neoclassical economics; Neo- classical synthesis; Roll, E.; Subjective theory of value; Utilitarianism; Veblen, T JEL Classifications B13 The term ‘neoclassical’ was first used by Veblen (1900, pp. 242, 260–2, 265–8), in order to char- acterize Marshall and Marshallian economics. Veblen did not appeal to any similarity in theoret- ical structure between the economics of Marshall and classical economics in order to defend this novel designation. Rather, he perceived Mar- shall’ s Cambridge School to have a continuity with classical economics on the alleged basis of a common utilitarian approach and the common assumption of a hedonistic psychology. Deriva- tive from Veblen’ s use, this meaning of the term subsequently gained some currency, particularly in the 1920s and 1930s; for example, in the writ- ings of Wesley Mitchell, J.A. Hobson, Maurice Dobb and Eric Roll. It is evident that the emer- gence of this notion of Marshallian economics as a ‘neoclassical’ project also involved, at least in part, an acquiescence to Marshall’ s portrayal of his own economics as a continuation of the clas- sical tradition, though Marshall’ s sense of the continuity is not really that perceived by Veblen. Keynes (1936, pp. 177–8) also employed the term, though in an idiosyncratic matter, derivative from his equally idiosyncratic notion of classical economics. The use of the term with the meaning which became the accepted convention after the Second World War, extending it to embrace marginalist theory in general, can be traced to Hicks (1932, p. 84) and Stigler (1941, pp. 8, 13, 297). From what source they derived the term is not certain. It is highly unlikely that either of them coined it independently. Perhaps the likeliest source of Hicks’ s use is Dobb’ s article, published as it was in the London School of Economics’‘house jour- nal’, Economica. Following Hamilton (1923), Dobb (1924, p. 68) writes that ‘neo- classical’ is not an entirely inappropriate term to describe Marshallian economics, ‘for what the Cambridge School has done is to divest Classical Political Economy of its more obvious crudities, to sever This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume # The Author(s) 2008 Palgrave Macmillan (ed.), The New Palgrave Dictionary of Economics, DOI 10.1057/978-1-349-95121-5_723-2