History of Economic

Thought

FAMOUS ECONOMISTS AND

THEIR MAIN IDEAS

Outline

Adam Smith and The Wealth of Nations

Classical political economy

Capitalism and Marx

Neoclassical thought

Depression and Reconstruction

The "American Way"

Monetarism and the Chicago school

Global times

Contemporary economic thought

The Athenians

Oeconomicus By Xenephon One of the earliest texts in existence

Mainly focuses on ideas regarding household management

The Republic by Plato

A seminal text in philosophy and the ideas of democratic and

republican forms of government

Included many preliminary ideas regarding specialization

Politics by Aristotle

Aristotles work criticizing many of Platos’s ideas regarding how

society should be run and examining different forms of governments

It began a discussion of private property rights and incentives that private property begins

Mercantilism

Mercantilism is a school of thought that focuses on a nations control of

trade to promote a positive trade balance.

Basically, we should always make sure to sell stuff to other nations to keep the nation prosperous.

Thomas Mun

One of the Earliest Mercantilist

Theorized that a country must export more than it imports to remain

prosperous and advocated for policy pushing frugality and land utilization.

David Hume

Agreed with north that Trade should not be interfered with

Argued that a trade surplus would lead to an increase gold/silver

resulting in price inflation

Hume was a major contributor to thought about morality and ethics.

Physiocrats

A group of economists who believe that the wealth of a country is

solely derived from it’s lands value

François Quesnay

Wrote the Tableau Economique

Theorized about the productivity of land and the net product of

land.

Anne-Robert-Jacques Turgot

Developed many of the ideas of Fracois Quesnay

Divided people into three classes , the land owners, agricultural,

and salaried classes.

Said only the new product of land should be taxed

Argued for economic Freedom

The Classics

Adam Smith

British Philosopher

Scottish Enlightenment

Father of Modern Economics

Wealth of Nations 1776

Industrial Revolution

Division of Labor

Invisible Hand: Individual effort is the producer of social good

Jeremy Bentham

Develop the ideas of Utilitarianism

Believed government should pursue utilitarian policies in regards to

social welfare.

Thomas Malthus

An Essay on the Principle of Population published from 1798 to 1826, observed that sooner or later population gets checked by famine and disease. He wrote in opposition to the popular view in 18th-century Europe that saw society as improving and in principle as perfectible

Malthus thought that the dangers of population growth would preclude endless progress towards a utopian society: "The power of population is indefinitely greater than the power in the earth to produce subsistence for man".

David Ricardo

Member of Parliament

Businessman

Financier

and speculator, who amassed a considerable personal fortune.

Most important contribution was the law of comparative

advantage, a fundamental argument in favor of free trade among

countries and of specialization among individuals

John Stuart Mill

British philosopher

Economist

Civil servant

Member of Parliament

Proponent of utilitarianism, an ethical theory developed by Jeremy

Bentham

Karl Marx

pre-eminent socialist economist

Communist Manifesto

Das Kapital 1867

History of class struggles

Hegalian Dialectic

Neoclassical Thought

Marginal Utility

application and development of Jeremy Bentham's utilitarianism

determination of prices, outputs, and income distributions in markets

through supply and demand

Mathematical Analysis

Austrian School

Alfred Marshall

Attempt to put economics on a more mathematical footing

Marshall's graphical representation is the famous supply and

demand graph

Joseph Schumpeter

Advocate the use of deductive logic instead of mathematics

Works on business cycles and innovation

He insisted on the role of the entrepreneurs in an economy

Creative Destruction

Capitalism goes through long-term cycles, because it is entirely

based upon scientific inventions and innovations. A phase of

expansion is made possible by innovations, because they bring

productivity gains and encourage entrepreneurs to invest. When

investors have no more opportunities to invest, the economy goes into recession

Austrian School

Leon Walras

One of three economics that discovered the theory of marginal

utility at the same period of time

Father of the Lausanne School of thought and General Equilibrium Theory.

Carl Menger

One of three economics that discovered the theory of marginal

utility at the same period of time

Father of Austrian Economics and developed the Subjective Theory

of Value

Keynesian

John Maynard Keynes

1930s: conditions necessitated public sector action

General Theory provided conceptual reinforcement for New Deal

policies of FDR already being pursued to quell the Great Depression.

...this long run is a misleading guide to current affairs. In the long run

we are all dead. Economists set themselves too easy, too useless a

task if in tempestuous seasons they can only tell us that when the

storm is long past the ocean is flat again.

Simon Kuznets

Was the creator of national Income Accounting (GDP/GNP) and how

it’s calculated

Originator of the Kuznets Curve (in a countries development inequality increases then decreases)

Monetarism and the Chicago

school

Milton Friedman

School : Monetarist

Father of Monetarist School of Economics

One of the major libertarian icons of the 20th century

Was against central banks and the gold standard

Believed in the rule based monetary growth (money supply should

grow with productivity and population)

Adolf Berle

One of the first to use legal and economic concepts in conjunction

Was a thought leader in what would be known as the field of

corporate governance

Jean trolee – Winner Nobel Prize in

Economy in 2014

Thomas Pikkety

French economist who works on wealth and income

inequality. He is the author of the best selling

book Capital in the Twenty-First Century (2013) which

emphasizes the themes of his work on wealth

concentrations and distribution over the past 250

years. The book argues that the rate of capital return

in developed countries is persistently greater than

the rate of economic growth, and that this will cause

wealth inequality to increase in the future. To address

this problem, he proposes redistribution through a

global tax on wealth