In 1857, William Stanley Jevons was 22 years old and was working as an assayer for the Sidney Mint. Two eclipses passed over Australia that year, and Jevons enthusiastically tracked both. “After sleepless night got up about 3:30 and started to Bellevue Hill in dark,” he wrote in his diary about one, which must have happened shortly after dawn. “About 5 a.m. commenced observations concerning eclipse.” (After the eclipse, he went to work, wrote a detailed report on it for a local newspaper, had tea with the mint’s chief engineer and in the evening caught a performance of “Much Ado About Nothing.”)
This would be no more than a historical footnote if — well, actually, it is no more than a historical footnote. I think it’s interesting nonetheless, because Jevons went on to become one of the most important economists of his century. What made him a great economist was the same studious, curious habit of mind that got him out of bed at 3:30 in the morning to record that eclipse.
Jevons, a Briton, is one of three economists, along with Léon Walras in Switzerland and Carl Menger in Austria, who are credited with starting the marginal revolution in economics. The three worked independently but arrived at the same idea at roughly the same time.
Marginalism is at the core of modern economics. It’s based on the concept of diminishing benefits. Your first glass of orange juice tastes great, the second less so, and the third you pour down the drain. Everything else you buy also has diminishing benefits. You should arrange your purchases so you get equal amounts of satisfaction from the amount you spend on the last unit of each product you buy. So don’t buy that third glass of orange juice. Maybe spend the money on one more slice of toast, which you still crave.
Jevons wrote that “value depends entirely on utility,” rejecting the doctrine at the time that value came from the labor that went into making something or production costs more generally.
Environmentalists know him today for the Jevons paradox — the discouraging idea that when the production of something becomes more efficient, the cost of it will fall and people will consume more of it than before. “It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption,” he wrote in “The Coal Question” in 1865. “The very contrary is the truth.”
Jevons made contributions to a wide range of scientific fields. He conducted experiments on salt fingers, which form when warm salt water overlays cool fresh water. He studied clouds, railway policy, Brownian motion and gunpowder. He had a fruitful debate over logical symbols with George Boole, a fellow Englishman whose logic is the basis for modern computers. He even designed and had built what he called a “logical piano,” a predecessor of the computer that could be used to solve problems of logic using keys, pulleys and switches.
Jevons saw the analysis of economic data — which even then had begun to pile up — as the key to unlocking economic principles. He wanted economics to be more like the hard sciences and to be equally respected, Margaret Schabas of the University of British Columbia told me. She is the author of “A World Ruled by Number: William Stanley Jevons and the Rise of Mathematical Economics.”
“When an astronomer predicts an eclipse or a comet, when the analytical chemist detects poison or adulterations, when the meteorologist discovers the approach of a gale, they are listened to with almost unquestioning deference,” Jevons said in a lecture to teachers in Manchester, England, in 1866.
Jevons lamented to the teachers that “political economy is not yet an exact science” and that people don’t pay attention anyway. “The worst difficulty” for the political economist, he said, “is the obstinacy, prejudice and incredulity of those he has to convince.”
Jevons wasn’t a cold fish, as marginalists are sometimes accused of being. He spent time in the slums of Manchester and London studying the decisions of the poor, Sandra Peart, another Jevons scholar, told me. Peart, who is the dean of the University of Richmond’s Jepson School of Leadership Studies, said Jevons came to understand that individual human beings can’t be modeled as perfectly foresighted, rational calculators of their self-interest. That led him to move away from a laissez-faire attitude.
He never lost his interest in celestial events. Starting at around age 40, he developed a theory that the movements of the business cycle were connected to sunspots, which come and go over roughly 11 years. He theorized that sunspots affect the weather, which affects agriculture, which in turn affects the investment decisions of businesspeople. That turned out not to be the case, but Peart credits Jevons for seeking to understand the interaction between the physical world and economic activity.
Jevons died at 46. He drowned while swimming in the sea on vacation in Devon, possibly because of a heart attack or stroke. Doctors had told him to avoid strenuous exercise, but he ignored them. “An avid book collector, Jevons left behind a library of several thousand volumes and (anticipating a future worldwide shortage) an enormous stock of blank writing paper,” according to a profile on the History of Economic Thought website.
Society will never function like the heavenly bodies, whose elliptical orbits are almost precisely predictable. But Jevons realized that. His hunger to put economics on a more scientific footing wasn’t misplaced. His thirst for knowledge and his ability to see across a wide range of disciplines are exactly what economics needs today.
Outlook: Robert Kavcic
“On the data front, the U.S. economy continues to stand firm,” Robert Kavcic, a senior economist at BMO Capital Markets, based in Canada, wrote in a client note on Friday. He pointed to, among other things, a government report that the economy gained 303,000 payroll jobs in March. He noted that financial markets now don’t expect the Federal Reserve to cut interest rates until July or September.
Quote of the Day
“The ‘invisible hand.’ The reason it’s invisible is it’s not there.”
— Joseph Stiglitz, presentation at Columbia Law School (Oct. 21, 2022)
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