From Bastiat's circumference to Knight's wheel: a newly discovered letter of Mr Sherlock Holmes to Dr Watson

Abstract

This paper continues the investigation of the antecedents of the Wheel of Wealth, initiated by Don Patinkin as a by-product of his 1973 memoir of Frank Knight. A series of partly chance leads pointed to Bastiat as the earliest author to have employed circle or wheel diagram in an associated context, and one with whose writings most later users of it were acquainted. Although Patinkin mistakenly concluded that late-nineteenth century Contitental European literature completely eschewed diagrams, he was right in hypothesizing the wheel diagram to have originated outside the main stream of economic thought.