...A Short History of Economic Thought Hans-Walter Lorenz FSU Jena Winter 2012/13 Hans-Walter Lorenz (FSU Jena) A Short History of Economic Thought Winter 2012/13 1 / 93 Outline, Relevance, and Contents Outline, Relevance, and Contents Outline Very brief overview of a few dominant authors (starting around 1700 and ending in our times) Due to time restrictions: selection is to some extent arbitrary Emphasis on authors with a major influence on the development of economics Note: Empty entries are open for students’ presentations Hans-Walter Lorenz (FSU Jena) A Short History of Economic Thought Winter 2012/13 2 / 93 Outline, Relevance, and Contents Outline, Relevance, and Contents Relevance: Reasons for concentrating on the history of thought General historic interest (assumed!) Developing a sense for connections between political/technical history and the emergence of new economic ideas Many recently discussed topics in economics have ancestors in previous decades and centuries; many ‘brand-new’ approaches actually possess long beards (however often forgotten). Hans-Walter Lorenz (FSU Jena) A Short History of Economic Thought Winter 2012/13 3 / 93 Outline, Relevance, and Contents Outline, Relevance, and Contents Contents The Classics – Quesnay, Smith, Ricardo, Say, Malthus, Marx The Neoclassics – Marshall, Walras, Menger, Gossen The Keynesian Revolution The Neoclassical Synthesis and the New Classical School Strategic...
Words: 6274 - Pages: 26
...of the history of economics. As early as man learnt how to socialize with the advancement in reasoning and writing, a clear formation of economic structures started. The discipline of economics, as we understand it today, emerged in the 17th and 18th centuries as the western world began its transformation from an agrarian to an industrial society. The word “economics” is derived from the Greek word “okionomia”, which means “household management “or “management of household affairs”. The study of economics became necessary because due to the fact that resources were scarce as well as limited and that not all human wants and desires can be met. How to distribute these resources in the most efficient and “equitable” way is a principal concern of economists. There are three (3) different branches of study in economics that depicts the word “History and Economics”, they are Economic History, History of Economics and The History of Economic Thought. Therefore the History of Economics can be defined as a science of the body of classified knowledge based upon the establishment of certain uniformity in economic life. The body of this work is divided broadly into two parts; * A brief history of economics as a discipline * Some historical positions regarding the history of economics, which include; Mercantilism, Physiocracy, Classicals, Neoclassicals, Marxism, Keynesians, Current theories, and the significance of studying the history of economics SECTION I A Brief History of Economics...
Words: 1484 - Pages: 6
...(1883-1950) encyclopedic History of Economic Analysis, Schumpeter began by proclaiming that histories of economics should confine themselves to economic analysis, which he defined as “the analytic or scientific aspects of economic thought" (1954: 1). Schumpeter then proceeded to ignore his own edict, for over 1000 small-print pages. Having preached analysis-only Schumpeter practiced more ecumenically, weaving together intellectual history, biography, and economic sociology. Indeed, Schumpeter spent most of his last decade writing the 800,000 words of the ferociously erudite History, and thereby failing to complete a long-planned work of economic analysis. Thomas McCraw’s splendid new book brilliantly illuminates this Schumpeterian paradox, and the many others that made Schumpeter, as Phillip Mirowski put it, “a living, breathing contradiction” (1994: 5). Prophet of Innovation is not just a beautifully drawn portrait of Schumpeter’s life and times, it is also a distinguished business historian’s meditation on the two opposed cultures of political economy post-1870: history and theory. The Prophet of Innovation, among its other accomplishments, tells the story of how a great and productive intellect wrestled with the two-cultures problem in political economy. In the work of Schumpeter, McCraw finds the very personification of political economy’s struggle between history and theory. Just as Schumpeter’s work personifies the roles for history and theory in economics, so too does McCraw...
Words: 2820 - Pages: 12
...tempered optimism about the economics profession, with which have been associated by occupation for more than 20 years. Historically, economic theory originated in the happy union of Athens and Jerusalem known as “the natural law,” and has always returned to the sanity of its roots—after exhausting the alternatives. As I read its history, economic theory has nearly completed its last great detour away from sanity, and is rapidly running out of alternatives to a renewal of “natural-law economics.” If such a renewal occurs, it won’t be because economists have decided to sit down and learn from philosophers (or, God forbid, theologians)—nothing could be farther from their minds—but for the same reason as the last seismic shift in economics, which began in the 1870s: a growing number of economists are finding the current state of economic theory a professional embarrassment. Of course, I may be underestimating the average economist’s threshold of embarrassment. But let me explain the nature of that * John D. Mueller is Associate Scholar of the Ethics and Public Policy Center and president of LBMC LLC, a financial-markets forecasting firm. For most of the 1980s he was Economic Counsel to the House Republican Conference (caucus) under chairman Jack Kemp. The research on which this article is based was made possible by The Lehrman Institute and the James Madison Program at Princeton University. 2 embarrassment, why only a renewed “natural law economics” will relieve it, and ...
Words: 10147 - Pages: 41
...reviews the work of different authors and their perceptions about the evolution of development. A brief summary of the developed economic models has also been included, as most journals have mentioned these theories in their reviews. Development has come a long way over the last sixty years as both a scholarly discipline and as an enterprise. It became very significant after the Second World War and was considered the same as industrialization. Its objective was very clear: to raise incomes and offer goods and services to poor people, who couldn’t have access to them before (Rapely, 2007, p. 1). Evolution can be defined as the self-transformation of a system under study (Witt, 2002, p. 9). Six decades ago, depression and political developments had made first world countries rely on Keynesian models in political and economic circles. This further influenced third world countries whose confidence was supported by the emergence of structural economics in a bid to enter the industrial age. Since the beginning of the twentieth century, those involved with development studies tried to answer the question relating to what it means for the economy to be developed. In a bid to answer this question, many economic models were developed to explain this phenomenon (Onyeka, 2014). These development theories mainly focused on analysing the social-economic phenomenon of development, and they offered opportunities for development strategies (Mallick, 2005, p. 4). The 1960’s...
Words: 2643 - Pages: 11
...INTRODUCTION "In the Marxian view, human history is like a river. From any given vantage point, a river looks much the same day after day. But actually it is constantly flowing and changing, crumbling its banks, widening and deepening its channel. The water seen one day is never the same as that seen the next. Some of it is constantly being evaporated and drawn up, to return as rain. From year to year these changes may be scarcely perceptible. But one day, when the banks are thoroughly weakened and the rains long and heavy, the river floods, bursts its banks, and may take a new course. This represents the dialectical part of Marx’s famous theory of dialectical (or historical) materialism." Historical materialism is a methodological approach to the study of society, economics, and history first articulated by Karl Marx (1818–1883) as the materialist conception of history. It is a theory of socioeconomic development according to which changes in material conditions (technology and productive capacity) are the primary influence on how society and the economy are organised. Historical materialism looks for the causes of developments and changes in human society in the means by which humans collectively produce the necessities of life. Social classes and the relationship between them, plus the political structures and ways of thinking in society, are founded on and reflect contemporary economic activity. Since Marx's time, the theory has been modified and expanded by thousands...
Words: 3080 - Pages: 13
...GRADUATE DIPLOMA IN INTERNATIONAL RELATIONS AND DIPLOMACY STUDENT GUIDELINE NOTES GLOBAL POLITICAL ECONOMY MODULE Paste the notes here… Political economy originally was the term for studying production, buying and selling, and their relations with law, custom, and government. Political economy originated in moral philosophy (e.g. Adam Smith was Professor of Moral Philosophy at the University of Glasgow), it developed in the 18th century as the study of the economies of states — polities, hence political economy. In late nineteenth century, the term "political economy" was generally replaced by the term economics, used by those seeking to place the study of economy upon mathematical and axiomatic bases, rather than the structural relationships of production and consumption (cf. marginalism, Alfred Marshall). History of the term Originally, political economy meant the study of the conditions under which production was organized in the nation-states. The phrase économie politique (translated in English as political economy) first appeared in France in 1615 with the well known book by Antoyne de Montchrétien: Traicté de l’oeconomie politique. French physiocrats, Adam Smith, David Ricardo and Karl Marx were some of the exponents of political economy. In 1805, Thomas Malthus became England's first professor of political economy, at the East India Company College, Haileybury, Hertfordshire. The world's first professorship in political economy was established...
Words: 39122 - Pages: 157
...– ‘What is the Marxist theory of the state and how might it be criticised?’ Introduction Marxism first arose in 1987 when Marx and Engels were commissioned to write the manifesto for the political party of radical workers, The Communist League; this political party was formed in order to create a unity of the ‘working men’, in favour of the creation of a classless society. The purpose of The Communist Manifesto, and much of Marx’s early writings on the state, was to promote social change, in refutation to Hegel’s theory of the dialetic. This is achieved through the construction of a materialist interpretation of the state as ‘the active, conscious and official expression (of) the present structure of society' (Collected Works, 3, p. 199). Marx’s ultimate aim was to “lay bare the economic law of motion of modern society.” (Marx, Capital [1867] 1965, p10), which is to… This essay will explain and analyse Marx’s theory of state, a nd assess the legitimacy of the theory through criticisms. Marx’s theory of history/state: History is a study of past events in human affairs; Marx believes that historical events are driven forward by changing economic factors within the ‘base’ of society. According to Marx, human society is made up of two measures: a base and a superstructure. The superstructure is the set of 'non-economic institutions whose character is explained by the nature of the economic structure (the base).' (G. A. Cohen Karl Marx's Theory of History: A Defence pp 216.) The...
Words: 1749 - Pages: 7
...Ivan Moscati How cardinal utility entered economic analysis during the Ordinal Revolution 2012/5 UNIVERSITÀ DELL'INSUBRIA FACOLTÀ DI ECONOMIA http://eco.uninsubria.it In questi quaderni vengono pubblicati i lavori dei docenti della Facoltà di Economia dell’Università dell’Insubria. La pubblicazione di contributi di altri studiosi, che abbiano un rapporto didattico o scientifico stabile con la Facoltà, può essere proposta da un professore della Facoltà, dopo che il contributo sia stato discusso pubblicamente. Il nome del proponente è riportato in nota all'articolo. I punti di vista espressi nei quaderni della Facoltà di Economia riflettono unicamente le opinioni degli autori, e non rispecchiano necessariamente quelli della Facoltà di Economia dell'Università dell'Insubria. These Working papers collect the work of the Faculty of Economics of the University of Insubria. The publication of work by other Authors can be proposed by a member of the Faculty, provided that the paper has been presented in public. The name of the proposer is reported in a footnote. The views expressed in the Working papers reflect the opinions of the Authors only, and not necessarily the ones of the Economics Faculty of the University of Insubria. © Copyright Ivan Moscati Printed in Italy in december 2012 Università degli Studi dell'Insubria Via Monte Generoso, 71, 21100 Varese, Italy All rights reserved. No part of this paper may be reproduced in any form without permission of the Author...
Words: 11439 - Pages: 46
...Week 3: Dependency and Modernization Theory Key Concepts: Political decay/ failed state: Definition: A failed state is a state perceived as having failed at some of the basic conditions and responsibilities of a sovereign government. In order to make this definition more precise, the following attributes, proposed by the Fund for Peace, are often used to characterize a failed state: * loss of control of its territory, or of the monopoly on the legitimate use of physical force therein, * erosion of legitimate authority to make collective decisions, * an inability to provide public services, and * an inability to interact with other states as a full member of the international community. * Often a failed state is characterized by social, political, and/or economic failure. Common characteristics of a failing state include a central government so weak or ineffective that it has little practical control over much of its territory; non-provision of public services; widespread corruption and criminality; refugees and involuntary movement of populations; and sharp economic decline. The level of government control required to avoid being considered a failed state varies considerably amongst authorities. Furthermore, the declaration that a state has "failed" is generally controversial and, when made authoritatively, may carry significant geopolitical consequences. Example: Modernization theory Discussion Question:In what ways has the first world...
Words: 1143 - Pages: 5
...industrialized society, our world economical growth was fast. Many scholars and researchers have been trying to understand why the developing nations are still under developed. The modernization and Dependency theories will explain some of our world socio-economic differences between the developing and developed countries. This essay discussed about the major differences between Modernization and Dependency theories, and their impact on the developing nations. Modernization Theory A theory designed to explain the process of modernizing societies. The theory considers the internal factors of development of any country, based on the installation, that the "traditional" countries may be involved in the development the same way as are the developed countries. According to Gavrov (2005), modernization theory endeavors to recognize the social variables, which add to social development and expansion of society, and will attempt to elucidate the procedure of social development. At the same time Gavrov (2005) stated that none of the scientists does not deny the process of modernization of society (the transition from traditional to industrial society), the theory itself has undergone considerable criticism from both Marxists and the representatives of free-market ideas, and supporters of the theory depend on the reason that is a simplified representation of the historical process. According to Tipps (2003) the basic structural changes in this phase of modernity clear four elements: a. Differentiation...
Words: 1654 - Pages: 7
...Page » * Historical Events Economic Development: a Comparison of Rostow and Gerschenkron In: Historical Events Economic Development: a Comparison of Rostow and Gerschenkron “Rostow’s pattern of thought of economic development is often compared and contrasted with that of Alexander Gerschenkron, though the two are more or less compatible and complementary.” Critically discuss this statement. The theory of economic development throughout history has been of significant discussion especially in regard to the works of Rostow and Gerschenkron. The differentiation between the pattern of thoughts and ideals is a hotly debated topic within economics. The ideals the two theorists create, each substantially creditable in their own right, entail degrees of correlation and variation. Leaving the conclusion, do the to patterns of economic thought complement one another or is there distinct disparity between the two. Applied examples will be used below to analyse the extent of segregation or association between the works of Rostow and Gerschenkron. The two theories of work are mainly discussed with Asian development as it is more relevant, timely and there is significantly more information available than previous developed countries such as Great Britain. Walt Whitman Rostow developed one of the major historical models of economic growth in 1960, The Stages of Economic Growth: A non-communist manifesto. This piece portrays the process of economic development in a previously unseen...
Words: 2849 - Pages: 12
...Adam Smith Adam Smith is known for his vast knowledge of economics, he is considered to be the father. We may recognize him from his book The Wealth of Nations. The Wealth of Nations informs us that if we maximize the markets behavior than a free trade environment could be made available. In this essay I will discuss the importance of Smith’s theory, along with how he would develop plans to help the economy. Adam Smith grew up in a market environment in which Mercantilism was thought to be the best theory to help build a countries capital. Mercantilism “is a system in which a country attempts to amass wealth through trade with other countries, exporting more than it imports and increasing stores of gold and precious metals. It is often considered an outdated system.”(Vocabulary .com Retrieved April 13, 2013) Smith expressed his thoughts about the mercantile system, he thought the system had inconsistencies, and a countries wealth was not based upon its prosperity. He also thought that production should increase in the free market. The division of labor was a suggested policy. The division of labor theory is the “separation of manufacturing process into distinct and simple operations which are then delegated to specific hands or machines to perform”(Division of Labor Retrieved on April 13, 2013). He thought that this would increase the number of productive workers against the number of unproductive workers. Smith was...
Words: 1176 - Pages: 5
...Of the economists we’ve studied, rank the three that you believe are the most important to the history of economic thought. For each individual, explain why you put him/her on your list. In the history of economics, I believe the three most important economists are Adam Smith, Karl Marx, and John Maynard Keynes. After learning about so many different influences of economics, it is difficult to choose only three however the three that I chose seem to have the biggest impact. They all had different theories and ideas of economic thinking. Some ideas were developed off of the predecessors principles, while other beliefs were opposing the ideas completely. Overall, it is important to study and learn from their methods to help understand how an economy works and how to attain their goals. The first economists I found the most important to the history of economics was Adam Smith. Adam Smith was not only a founder of the classical school but he had many influential ideas of moral values and political economy. The two books he wrote that were very important to economic thinking were The Theory of Moral Sentiments and Wealth of Nations. They complimented it each and demonstrate his way of thinking. Smith believed in a free market and that this idea is best for society. He developed the idea of the “invisible hand”, meaning if people went after their own self-interests that it would also benefit society. The division of labor was another idea that Smith was noted on discovering...
Words: 590 - Pages: 3
...“Rostow’s pattern of thought of economic development is often compared and contrasted with that of Alexander Gerschenkron, though the two are more or less compatible and complementary.” Critically discuss this statement. The theory of economic development throughout history has been of significant discussion especially in regard to the works of Rostow and Gerschenkron. The differentiation between the pattern of thoughts and ideals is a hotly debated topic within economics. The ideals the two theorists create, each substantially creditable in their own right, entail degrees of correlation and variation. Leaving the conclusion, do the to patterns of economic thought complement one another or is there distinct disparity between the two. Applied examples will be used below to analyse the extent of segregation or association between the works of Rostow and Gerschenkron. The two theories of work are mainly discussed with Asian development as it is more relevant, timely and there is significantly more information available than previous developed countries such as Great Britain. Walt Whitman Rostow developed one of the major historical models of economic growth in 1960, The Stages of Economic Growth: A non-communist manifesto. This piece portrays the process of economic development in a previously unseen approach, evidently forging it as a milestone in economic literature. Rostow's Stages of Growth model, The five stages are (1) the traditional society, (2) the preconditions...
Words: 2883 - Pages: 12