Irrationality and intertemporal choice in early neoclassical thought SANDRA J. PEART Baldwin-Wallace College Abstract. Early neoclassical economists presumed an element of irrationality in the context of intertemporal decision making. W.S. Jevons, Irving Fisher, Alfred Marshall, and A.C. Pigou observed a preference for present over future consumption, and each took this as evidence that consumer ‘foresight’ or ‘will power’ was defective. The labouring classes were said to discount future consumption to reflect uncertainty, and such discounting is regarded as ‘rational.’ But each of these economists focused on an additional, and purportedly ‘irra- tional,’ reason for discounting: ‘impatience.’ Consumers are thus said to make persistent miscalculations when it comes to decisions involving time. Irrationalite ´ et choix intertemporel dans les de ´buts de la pense ´e ne ´o-classique. Les premiers e ´conomistes ne ´o-classiques pre ´sumaient qu’il y avait un brin d’irrationalite ´ dans le processus de de ´cision intertemporel. W.S. Jevons, Irving Fisher, Alfred Marshall et A.C. Pigou ont observe ´ une certaine pre ´fe ´rence de la consommation pre ´sente par rapport a ` la consommation future et en ont de ´duit que le consommateur manquait de ‘pre ´voyance’ et de ‘volonte ´.’ On sugge ´rait que les classes travailleuses escomptaient leur consommation future a ` cause de l’incertitude – ce qui e ´tait conside ´ comme rationnel. Mais chacun de ces e ´conomistes faisait aussi appel a ` une raison additionnelle pour escompter la consommation future – l’impatience – un motif juge ´ irrationnel. On en concluait que les consommateurs faisaient des erreurs persistantes de calcul quand ils prenaient des de ´cisions intertemporelles. Education must be made more thorough. The schoolmaster must learn that his main duty is not to impart knowledge, for a few shillings will buy more printed This research was made possible by a reduction in teaching responsibilities funded by the Gigax Foundation and a grant from Baldwin-Wallace College. This journal’s referees provided very use- ful comments on the paper. I am grateful to Bob Dimand for helpful comments when the paper was presented at the 1996 CEA Annual Meeting, and to participants in the 1996 annual HES meeting for lively discussion and helpful comments. Sam Bostaph and Craig Heinicke also pro- vided helpful comments on drafts of the paper. The usual caveat applies. Email: speart@bw.edu Canadian Journal of Economics / Revue canadienne d’Economique, Vol. 33, No. 1 February / fe ´vrier 2000. Printed in Canada / Imprime ´ au Canada 0008-4085 / 00 / 175–89 $1.50  Canadian Economics Association