History of economic thought

The history of economic thought deals with different thinkers and theories in the field of political economy and economics from the ancient world to the present day. Although British philosopher Adam Smith is cited by many as the father of modern economics, his ideas built upon a considerable body of work from predecessors in the eighteenth century. They in turn were grappling with ideas received from centuries before and attempting to apply them to a modern setting. In this sense, Smith was an interpreter to his day of ages-old information.

Economics was not considered a separate discipline until the nineteenth century. In his works on politics and ethics, the ancient Greek philosopher Aristotle grappled with the "art" of wealth acquisition and the question of whether property is best left in private or public hands. In medieval times, scholars like Thomas Aquinas argued that it was a moral obligation of businesses to sell goods at a just price. Economic thought evolved from feudalism in the Middle Ages to mercantilist theory in the renaissance, when the prevailing wisdom advocated that trade policy be structured in order to further the national interest. The modern political economy of Adam Smith appeared during the industrial revolution, when technological advancement, global exploration, and material opulence that had previously been unimaginable was becoming a reality. Changes in economic thought have always accompanied changes in the economy, just as changes in economic thought can propel change in economic policy.

Following Adam Smith's Wealth of Nations, classical economists such as David Ricardo and John Stuart Mill examined the ways the landed, capitalist and labouring classes produced and distributed national riches. In London, Karl Marx castigated the capitalist system he saw around him which he thought was exploitative and alienating, before neo-classical economics in a new era sought to erect a positive, mathematical and scientifically grounded field above normative policies.

After the wars of the early twentieth century, John Maynard Keynes led a reaction against governmental abstention from economic affairs, advocating interventionist fiscal policy to stimulate economic demand, growth and prosperity. But with a world divided between the capitalist first world, the communist second world, and the poor of the third world, the post-war consensus broke down. Men like Milton Friedman and Friedrich von Hayek warned of The Road to Serfdom and socialism, focusing their theory on what could be achieved through better monetary policy and deregulation. As Keynesian policies seemed to falter in the 70's there emerged the so called New Classical school, with prominent theorists such as Robert Lucas and Edward Prescott. Their revival of laissez-faire ideas caught the imagination of some western leaders. However, the policies of governments through the 1980s have been challenged, and development economists like Amartya Sen and information economists like Joseph Stiglitz have brought new ideas to economic thought in the twenty first century.

Notes

• Aquinas, Thomas (1274) Summa Theologica
• Aristotle (c.a. 350BC) Nicomachean Ethics
• Aristotle (c.a. 350BC) Politics
• Arrow, Kenneth J (1951) Social Choice and Individual Values, 2nd Ed. 1963, Wiley, New York, ISBN 0300013647
• Arrow, Kenneth J. and Frank Hahn (1971) General Competitive Analysis, Holden-Day, San Francisco, ISBN 0816202753
• Bentham, Jeremy (1776) Fragment on Government
• Bentham, Jeremy (1789) An Introduction to the Principles of Morals and Legislation
• Burke, Edmund (1790) Reflections on the Revolution in France
• Burke, Edmund (1795) Thoughts and Details on Scarcity
• Cantillon, Richard (1732) Essay on the Nature of Commerce in General
• Coase, Ronald H. (1937) The Nature of the Firm Economica, Vol.4, Issue 16, pp.386-405
• Coase, Ronald H. (1960) The Problem of Social Cost (this online version excludes some parts) Journal of Law and Economics, Vol.3, pp.1–44
• Commons, John R. (1934) Institutional Economics New York: Macmillan
• Engels, Friedrich (1845) Condition of the Working Class in England in 1844
• Friedman, Milton (1953) Essays in Positive Economics: Part I - The Methodology of Positive Economics, University of Chicago
• Galbraith, J.K. (1958) The Affluent Society, 3rd Ed. reprinted 1991, Penguin Books, ISBN 014013610
• Galbraith, J.K. (1967) The New Industrial State
• Galbraith, J.K. (1973) Economics and the Public Purpose
• Hobbes, Thomas (1651) Leviathan
• Hume, David (1777) Essays, Moral, Political, Literary
• Jevons, William (1871) The Theory of Political Economy
• Jevons, William (1878) The Periodicity of Commercial Crises
• Keynes, John Maynard (1919) The Economic Consequences of the Peace
• Keynes, John Maynard (1936) The General Theory of Employment, Interest and Money
• Locke, John (1689) Second Treatise on Civil Government
• Locke, John (1691) Some Considerations on the consequences of the Lowering of Interest and the Raising of the Value of Money
• Marshall, Alfred (1890) Principles of Economics
• Marx, Karl (1871) Das Kapital
• Mill, John Stuart (1871) Principles of Political Economy
• Mun, Thomas (1621) A Discourse of Trade from England unto the East Indies
• North, Dudley (1691) Discourses upon trade
• Quesnay, François (1758) Tableau économique
• Ricardo, David (1827) Principles of Political Economy and Taxation
• Robinson, Joan (1953) The Production Function and the Theory of Capital
• Scotus, Duns (1295) Sententiae
• Sen, Amartya (1985) "The Moral Standing of the Market," in Ethics and Economics, ed. Ellen Frankel Paul, Fred D. Miller, Jr and Jeffrey Paul, Oxford, Basil Blackwell, pp. 1-19
• Sen, Amartya (1976-7) "Rational Fools: A Critique of the Behavioural Foundations of Economic Theory," Philosophy and Public Affairs, 6, pp.317-44
• Sen, Amartya (1987) On Ethics and Economics Oxford, Basil Blackwell
• Smith, Adam (1759) The Theory of Moral Sentiments
• Smith, Adam (1776) An Inquiry Into The Wealth of Nations
• Sraffa, Piero (1960) Production of Commodities by Means of Commodities
• Stigler, George J (1965) "The Nature and Role of Originality in Scientific Progress", in Essays in the History of Economics, University of Chicago Press, pp. 1-15
• Stiglitz, Joseph E. (1996) Whither Socialism?
• Thornton, Henry (1802) The Paper Credit of Great Britain
• Turgot, Jacques (1766) Réflexions sur la formation et la distribution des richesses in French and English
• Veblen, Thorsten, The Theory of the Leisure Class: an economic study of institutions (1899)
• Veblen, Thorsten (1904) Theory of Business Enterprise
• Von Hörnigk, Philip (1684) Österreich Über Alles, Wenn Sie Nur Will

Secondary Notes

• Buchholz, Todd G. (1989) New Ideas from Dead Economists, New York Penguin Group. p. 151
• Danbom, David B. (1997) Why Americans Value Rural Life, Rural Development Perspectives, vol. 12, no. 1, pp. 15-18
• Fusfeld, Daniel R. (1994) The Age of the Economist, Harper Collins, 7th Ed.
• Hague, William (2004) William Pitt the Younger Harper Perennial.
• Heilbroner, Robert (1953) The Worldly Philosophers, Simon & Schuster 7th Ed. 1999.
• Markwell, Donald (2006) John Maynard Keynes and International Relations: Economic Paths to War and Peace, Oxford University Press.
• Mochrie, Robert (2005) Justice in Exchange: The Economic Philosophy of John Duns Scotus
• Pressman, Steven (2006) Fifty Major Economists, Routledge.
• Schumpeter, Joseph (1954) History of economic analysis, Routledge Ed. 1994.
• Spiegel, Henry William (1971) The Growth of Economic Thought, Duke University Press, 3rd Ed. 1991.
• Stephen, Lesley & Lee, Sidney (1949) Dictionary of National Biography: from the earliest times to 1900, Oxford University Press
• Nicola, PierCarlo (2000). Mainstream Mathermatical Economics in the 20th Century.