Slutsky's 1915 Article: How It Came to Be Found and Interpreted

In 1915 the Russian statistician and economist Eugen Slutsky sent off from Kiev an article to the Giornale degli economisti that was translated and published in the July issue of that journal: "Sulla teoria del bilancio del consumatore." This article passed unnoticed. As is now well known, Slutsky's article is one of the most famous examples of those neglected and ignored works whose originality and importance are recognized only after similar results have been obtained by others.¹ Many causes can account for such oblivion. As R. G. D. Allen (1936, 120 n. 3) puts it, "It is interesting to note the existence of a long time-lag between the publication of a highly mathematical theory, such as those of Johnson and Slutsky, and the general recognition of the main results achieved in the theory. When it is remembered, in addition, that Slutsky's article appeared in a journal of a country actively preparing for war, it cannot be considered as surprising that the work has remained completely unknown to English-speaking economists." Indeed, the fact that Slutsky's paper was published in an Italian journal may appear as the most natural explanation for passing unnoticed. As J. R. Hicks (1981, 3) later stated, "How Slutsky, a Russian, came to publish his paper in an Italian journal does not seem to be known; neither in Italy, nor in Russia, nor anywhere else, did it make any impact. It had to be rediscovered after our [Hicks and Allen 1934] work had come out." Actually, that Slutsky published his paper in the Giornale degli economisti is not at all surprising in view of the fact that, as Slutsky himself pointed out, he was completing the work of Vilfredo Pareto on utility and demand which was published in that very journal (1892-93).² Noteworthily, he commented on the fundamental equation of value in the following way (Slutsky 1915, 12 n; 1952, 39 n): "The formulas in the text were deduced by Pareto, and published in this Giornale, August 1892 (see also the Manuel d'économie politique, 1909, p. 581). The differences in notation and form between our formulas and Pareto's are so unimportant that they may be considered identical."

The most widely cited tribute to Slutsky's article was that of Allen (1936).³ But it is well established that Allen was not in fact the first author to mention it. As far as we are able to ascertain on the basis of published information, the discovery and full appreciation of Slutsky's article was made first by Valentino Dominedò, and subsequently—and independently of each other (but possibly not of Dominedò)—by Henry Schultz, and by Hicks and Allen. Although it is not possible to dispel the obscure circumstances of those separate rediscoveries, it is quite possible to suggest some.⁴ In the first part, we shall provide a brief commentary on each of those three separate rediscoveries, focusing mainly on factual information. In view also of the rather evasive information from the protagonists themselves, it may be interesting to go a bit further and comment on the methodological context of the discovery in the theory of utility and demand. Thus, in the second part, we shall focus on the way Slutsky's paper was interpreted by the protagonists themselves. By comparing Schultz's and Allen's interpretations of Slutsky's contribution, it is shown that Slutsky's paper in the thirties soon became the subject of a theoretical controversy.

1. Three Separate Rediscoveries

Three distinctive "teams" of protagonists can be identified in this story. The last two came across Slutsky's article quite independently of each other, if not of the first. We shall take things up, as far as possible, in chronological order.

The Ricci-Dominedò Team

The first appreciation of Slutsky's work in the economic literature was Dominedò's long 1933 paper on the theory of demand. Dominedò (1933, 789-805) devoted the last pages of this article to Slutsky's mathematical and theoretical exposition, "a writing of remarkable...