A Concise History of Economic Thought : From Mercantilism to Monetarism

Gianni Vaggi and Peter Groenewegen present a brief history of economic thought in two parts dealing respectively with classical economics and modern developments. Each of the 18 chapters looks at the contributions of a major economist, from Thomas Mun in the early 17th century through to Keynes and Harrod and the foundations of modern macroeconomics in the 20th century. Suggestions are given for further reading on each economist featured. Contents......Page 8 List of Figures......Page 11 Prologue......Page 12 Organisation of the material: an overview......Page 13 Foreword......Page 18 PART I CLASSICAL POLITICAL ECONOMY, 1600–1870......Page 21 Notions and their mutual relationships......Page 23 Value and distribution, and wealth......Page 24 Surplus and reproduction......Page 26 An overview of Part I......Page 28 Notes on further readings......Page 30 Section I Seventeenth-century Pioneers......Page 33 2 Thomas Mun, 1571–1641: from Bullion to Foreign Trade......Page 35 First period: bullionism......Page 36 Second period: the balance of trade......Page 37 Value and distribution......Page 39 Further developments in mercantilist thought......Page 41 Notes on further readings......Page 42 3 Dudley North, 1641–91 and John Locke, 1632–1704: Early Critical Reactions to Mercantilism......Page 43 Dudley North: markets......Page 44 John Locke: value......Page 45 Mercantilism at the turn of the century......Page 47 Notes on further readings......Page 48 Petty’s method......Page 49 Division of labour and surplus......Page 50 Value and prices......Page 52 Land and labour as the ultimate determinant of value......Page 53 Notes on further readings......Page 55 Section II Developments in French Economics......Page 57 5 Pierre le Pesant Sieur de Boisguilbert, 1646–1714: France at the turn of the century......Page 59 The recommendations of Vauban and Law......Page 60 Boisguilbert and the proper exchange value of corn......Page 61 A system of orderly exchanges......Page 63 Disorders in the circulation of commodities......Page 64 Notes on further reading......Page 65 6 Richard Cantillon, 1697–1734: the Entrepreneur in Agriculture and Trade......Page 66 Wealth and the division of labour......Page 67 Intrinsic value and the ‘land theory of value’......Page 68 The farmer and the ‘three rents’......Page 69 Profits and capital......Page 70 Cantillon’s economics straddles classical political economy and mercantilism......Page 71 Notes on further readings......Page 72 Section III Towards a Mature Classical Political Economy......Page 75 7 François Quesnay, 1694–1774: Reproduction and Capital......Page 77 The France of the ancien régime and the Physiocrats......Page 78 Farmers and increased agricultural productivity through the accumulation of capital......Page 79 The sterility of trade and manufacture......Page 80 Value and prices......Page 81 The Tableau Economique......Page 83 The political views of physiocracy......Page 88 Notes on further readings......Page 89 The ‘four stages theory’......Page 91 The scholastic tradition and the Scottish Enlightenment......Page 94 Hume on men, money and trade......Page 97 Notes on further readings......Page 101 Ferdinando Galiani, money and methodology......Page 102 The Dialogues sur le commerce des blés......Page 106 Sir James Steuart......Page 107 Notes on further readings......Page 110 Social classes: some revisions of physiocracy......Page 112 The distribution of output, profits and interest......Page 114 Returns and investments......Page 115 Value and prices......Page 117 Notes on further readings......Page 119 Section IV The First Full Systems of Classical Political Economy......Page 121 11 Adam Smith 1723–90: National Wealth and the Productivity of Labour......Page 123 Before WN: with special reference to Theory of Moral Sentiments......Page 124 The Lectures on Jurisprudence......Page 126 An Inquiry into the Nature and Causes of the Wealth of Nation (1776)......Page 127 The division of labour......Page 128 Value theory and the notion of natural price......Page 129 Distribution and the rate of profit......Page 130 The accumulation of capital and productive labour......Page 131 Extension of the market and of international trade......Page 132 Concluding comments......Page 134 Notes on further readings......Page 135 12 Jean-Baptiste Say, 1767–1832 and Jean-Charles Simonde de Sismondi, 1773–1842: Value, Revenues and Crises......Page 137 Jeremy Bentham, 1748–1832 and the principle of utility......Page 138 Say on exchange value and utility......Page 139 Say’s law and income distribution......Page 140 Jean-Charles Léonard Simonde de Sismondi, 1773–1842, and the possibility of crises......Page 142 The debate on productive and unproductive labour......Page 144 Notes on further readings......Page 145 Section V The ‘Golden Age’ of Classical Political Economy......Page 147 13 Thomas Robert Malthus, 1766–1834: Population and Effectual Demand......Page 149 Malthus on population......Page 150 The notion of a general glut and unproductive consumption......Page 151 Malthus on value......Page 153 Rent and wages......Page 154 Notes on further readings......Page 155 14 David Ricardo, 1772–1823: the Rate of Profit......Page 157 The Essay on Profits and the theory of rent......Page 158 The rate of profit of agriculture determines that for the whole economy......Page 159 The rate of profit with different types of land......Page 160 The Principles and the ‘labour-theory’ of value......Page 162 Comparative advantage......Page 165 Value and machines in the third edition of the Principles......Page 167 Notes on further readings......Page 168 Robert Torrens, 1780–1864, and the structure of capital......Page 169 Other reactions to Ricardo......Page 172 Nassau William Senior, 1790–1864: value and abstinence......Page 173 Senior on the Poor Laws and the working class......Page 176 Notes on further readings......Page 177 16 Karl Marx, 1818–83: the Critique of Political Economy......Page 179 The ‘modes of production’ and the laws of social movement......Page 180 The capitalist mode of production and the labour theory of value......Page 183 The reproduction schemes and crises......Page 186 The accumulation of capital and the fall of the rate of profit......Page 188 The transformation of values into prices of production......Page 189 Marx’s followers......Page 192 Smith, Ricardo, Marx and political economy......Page 193 Notes on further readings......Page 194 Part II MODERN DEVELOPMENTS, 1870–1960......Page 197 The marginal revolution......Page 199 What was the difference between the new and the old?......Page 200 Continuity or discontinuity in the development of economics......Page 204 The Keynesian revolution and the rise of macro-economics......Page 205 Notes for further reading......Page 207 Section I The First Generation......Page 209 18 John Stuart Mill, 1806–73: a Figure of Transition......Page 211 Reader’s guide to the Principles......Page 212 The development of Mill’s theory of value in the Principles......Page 213 The static theory of distribution from Book II......Page 216 The dynamic theory of distribution......Page 218 Conclusions......Page 221 Notes for further reading......Page 222 19 William Stanley Jevons, 1835–82: Utilitarianism and Economics......Page 223 Utilitarianism and economics......Page 224 The mathematical theory of value......Page 225 The theory of exchange......Page 227 The theory of labour......Page 228 Notes for further reading......Page 230 20 Carl Menger, 1840–1921: the Importance of Marginal Utility and the Economics of Scarcity......Page 231 Economy and economic goods......Page 232 The nature and origin of value......Page 233 The theory of price formation......Page 234 Notes for further reading......Page 236 21 Léon Walras, 1834–1910: the Notion of General Equilibrium......Page 237 The market and competition: exchange of two commodities......Page 239 Solution to the problem of exchange of more than two commodities: general equilibrium in the goods market......Page 241 Factor markets and the equations of production......Page 243 Notes for further reading......Page 245 22 Alfred Marshall, 1842–1924: Partial Equilibrium and Useful Economics......Page 247 Utility theory and the derivation of demand curves......Page 248 Dependent and independent variables: Marshall versus Walras......Page 249 The derivation of the Marshallian supply curve......Page 250 Some aspects of Marshall’s theory of progress......Page 252 Notes for further reading......Page 254 Section II The Development of Marginalist Economics: Distribution and Capital Theory......Page 255 J.B. Clark, 1847–1938......Page 257 P.H. Wicksteed, 1844–1927......Page 260 Notes for further reading......Page 263 F. von Wieser, 1851–1926......Page 264 E. von Böhm-Bawerk, 1851–1914......Page 266 Section III Pioneers of Macro-economics......Page 273 Some fundamental definitions of money......Page 275 The velocity of circulation, banking and credit......Page 276 Wicksell’s cumulative process......Page 277 Notes for further reading......Page 279 26 Irving Fisher, 1867–1947: Appreciation and Interest......Page 280 Appreciation and Interest......Page 281 Notes for further reading......Page 283 27 Joseph Alois Schumpeter, 1883–1950: Economic Development......Page 285 Innovations and economic development......Page 286 Banking and credit......Page 288 Notes for further reading......Page 289 Section IV Further Developments in Micro-economics......Page 291 A.C. Pigou, 1877–1959......Page 293 J.H. Clapham, 1872–1946......Page 297 Piero Sraffa, 1898–1983......Page 298 Notes for further reading......Page 301 29 Joan Robinson, 1903–83 and Edward Chamberlin, 1899–1967: Theory of the Firm......Page 303 Problems with the theory......Page 306 Notes for further reading......Page 307 30 Vilfredo Pareto, 1848–1923 and Lionel Robbins, 1898–1984: Critique and Decline of Utility theory......Page 308 Pareto’s critique of utility theory in the Manuale......Page 309 Lionel Robbins and the economic problem......Page 311 Developing a new welfare economics......Page 312 Notes for further reading......Page 313 Section V The Foundations of Modern Macro-economics......Page 315 31 John Maynard Keynes, 1883–1946: a New General Theory of Employment, Interest and Money......Page 317 From the Treatise to the General Theory......Page 318 Putting it all together: the basic model of the General Theory......Page 321 A system of equations of the causal type......Page 324 Back to the supply function......Page 325 Notes for further reading......Page 327 32 Michal Kalecki, 1898–1970: a New Macro-economics......Page 328 The business cycle model......Page 329 The Kaleckian investment function......Page 330 Kalecki and Keynes......Page 332 Notes for further reading......Page 333 33 R.F. Harrod, 1900–78 and E.D. Domar, 1914–99: Cycles and Growth......Page 334 An essay in dynamic theory......Page 335 Some reactions to the Harrod/Domar analysis......Page 337 Notes for further reading......Page 338 34 Milton Friedman (1912– ): Monetarism and its Critics......Page 339 Money and equilibrium......Page 341 The micro-foundations of macro-economics......Page 342 Notes for further reading......Page 344 Epilogue......Page 345 Bibliography......Page 347 Index......Page 351 This book presents a brief history of economic thought from the 17th century to the present day. Each chapter examines the key contributions of a major economist or group of economists and includes suggestions for further reading. Economists covered include Keynes, Marshall, Petty and Jevons, and less familiar theorists such as Galiani and Turgot. Gianni Vaggi and Peter Groenewegen present a brief history of economic thought over three centuries. They sketch the history form the seventeenth century to the present day. Each chapter examines the key contributions of a major economist, or group of economists, and concludes with brief suggestions for further reading. The economists covered include Keynes, Marshall, Petty and Jevons, as well as less familiar theorists such as Galiani and Turgot "A Concise History of Economic Thought is exactly the book I have always wanted to prescribe for undergraduate classes in the history of economic thought. Written by two eminent scholars, it provides a clear convincing outline of the principal developments in our discipline combined with clear, absorbing accounts of the major episodes, contributors and their contributions on the way. It is an authoritative and definitive text, a wonderful read, an example of mature scholarship at its best, backed up by well chosen additional readings in each chapter."--G.C. Harcourt, Jesus College, Cambridge, UK "Gianni Vaggi and Peter Groenewegen present a brief history of economic thought over three centuries. They sketch the history from the seventeenth century to the present day. Each chapter examines the key contributions of a major economist, or group of economists, and concludes with brief suggestions for further reading. The economists covered include Keynes, Marshall, Petty and Jevons, as well as less familiar theorists such as Galiani and Turgot."--Jacket "Gianni Vaggi and Peter Groenewegen present a brief history of economic thought over three centuries. They sketch the history from the seventeenth century to the present day. Each chapter examines the key contributions of a major economist, or group of economists, and concludes with brief suggestions for further reading. The economists covered include Keynes, Marshall, Petty and Jevons, as well as less familiar theorists such as Galiani and Turgot."--Cover