This article explores the interactions between the disciplines of economics and psychology as they emerged from the mother discipline of philosophy and moved into the twentieth century. Some of the early contributors who are examined include Simon Nelson Patten, William McDougall, William James, Thorstein Veblen, and Rexford Tugwell. Vigorous controversies took place over instinct theory, marginal utility, and behaviorism. Attention to the confluence of the two disciplines was stimulated by concerns over human relations during World War I, the success of propaganda, and mounting political instability. Among economists, American institutionalists were most attracted to psychology, notably Wesley Clair Mitchell and John Maurice Clark. Herbert Davenport, Thomas Nixon Carver, and Frank Knight were among the critics. It is suggested that the cultural context of America may explain some of the resistance to psychology in economics. Tensions were reduced when psychology moved to the subdisciplines of economics, especially those in business schools.

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