Expectations and crises in Auguste Ott’s Dictionnaire des sciences politiques et sociales (1854), Ch. 10 of Crises and cycles in economic dictionaries and encyclopedias, edited by Daniele Besomi, London: Routledge.
In his Dictionnaire des sciences politiques et sociales (1854), Auguste Ott (an otherwise obscure systematizer of Philippe Buchez’s theory of social economic) contributed one of the few French criticisms of Say’s law, and formulated a theory of crises based on the systematic disappointment of expectations. These are formed on the grounds of limited information as to the the state of demand and supply, and are driven by the movement of prices. High prices are taken by entrepreneurs to indicate thriving demand, which indices them to increase production without realizing that other entrepreneurs are doing the same, thus causing an excess of production. Such emphasis on expectations was sixty years ahead of the modern treatment of this subject by the Swedes in the interwar years.
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