Journal of the History of Economic Thought

Opportunities should be sought night and day for selling the country’s superfluous goods to these foreigners in manufactured form… No importation should be allowed under any circumstances of which there is a sufficient supply of suitable quality at home. Other viewpoints on economic issues from outside mainstream economics include dependency theory and world systems theory in the study of international relations.

Like Duns Scotus, he distinguishes between the natural value of a good and its practical value. The latter is determined by its suitability to satisfy needs (virtuositas), its rarity (raritas) and its subjective value (complacibilitas). Due to this subjective component, there cannot only be one just price, but a bandwidth of more or less just prices. Problems of asymmetric information and moral hazard, both based around information economics, profoundly affected modern economic dilemmas like executive stock options, insurance markets, and Third-World debt relief.

New institutional economics

The upheaval was accompanied by a number of major scientific advances, including Robert Boyle’s discovery of the gas pressure constant (1660) and Sir Isaac Newton’s publication of Philosophiae Naturalis Principia Mathematica (1687), which described Newton’s laws of motion and his universal law of gravitation.

The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities. The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. Bernard Mandeville (1670–1733) was an Anglo-Dutch philosopher, political economist and satirist. His main thesis is that the actions of men cannot be divided into lower and higher.

Classical political economy

1. Burke was an established political economist himself, known for his book Thoughts and Details on Scarcity.
2. There is a revival of interest in the history of economic thought that we at Palgrave are very well placed to home.
3. However, current economists such as Richard Thaler and Daniel Kahneman, the late Gary Becker, and Amos Tversky have shown that people often do not act in their own best material interests but allow themselves to be swayed by non-material psychological factors and biases.
4. The increase in health, wealth and population was perceived as a simple path of progress.
5. At the outbreak of World War I (1914 –1918), Alfred Marshall was still working on his last revisions of his Principles of Economics.

In 1960 he published a small book called Production of Commodities by Means of Commodities, which explained how technological relationships are the basis for production of goods and services. Prices result from wage-profit tradeoffs, collective bargaining, labour and management conflict and the intervention of government planning. Like Robinson, Sraffa was showing how the major force for price setting in the economy was not necessarily market adjustments. But Keynes believed in the 1930s, conditions necessitated public sector action. The New Deal programme in the U.S. had been well underway by the publication of the General Theory. Keynes also believed in a more egalitarian distribution of income, and taxation on unearned income arguing that high rates of savings (to which richer folk are prone) are not desirable in a developed economy.

A Revolution in Economic Theory: The Economics of Piero Sraffa

1. Bernard Mandeville (1670–1733) was an Anglo-Dutch philosopher, political economist and satirist.
2. He believed that while their theories might apply to individual choices and goods markets, they did not adequately describe the operation of the economy as a whole.
3. Keynes also believed in a more egalitarian distribution of income, and taxation on unearned income arguing that high rates of savings (to which richer folk are prone) are not desirable in a developed economy.
4. Keynes died little more than a year later, but his ideas had already shaped a new global economic order, and all Western governments followed the Keynesian economics program of deficit spending to avert crises and maintain full employment.
5. His treatise argues how money or currency belongs to the public, and that the government or sovereign of the economy has no right to control the value of the currency just so that they can profit from it.
6. Because of the importance of social class, sumptuary laws were enacted, regulating dress and housing, including allowable styles, materials and frequency of purchase for different classes.

Government, thought Commons, ought to be the mediator between the conflicting groups. Commons himself devoted much of his time to advisory and mediation work on government boards and industrial commissions. A notable current within classical economics was underconsumption theory, as advanced by the Birmingham School and Thomas Robert Malthus in the early 19th century. These argued for government action to mitigate unemployment and economic downturns, and were an intellectual predecessor of what later became Keynesian economics in the 1930s. Another notable school was Manchester capitalism, which advocated free trade, against the previous policy of mercantilism.

The Cambridge School was founded with the 1871 publication of Jevons’ Theory of Political Economy, developing theories of partial equilibrium and focusing on market failures. Its main representatives were Stanley Jevons, Alfred Marshall, and Arthur Pigou. The Austrian School of Economics was made up of Austrian economists Carl Menger, Eugen von Böhm-Bawerk, and Friedrich von Wieser, who developed the theory of capital and tried to explain economic crises. The Lausanne School, led by Léon Walras and Vilfredo Pareto, developed the theories of general equilibrium and Pareto efficiency. It was founded with the 1874 publication of Walras’ Elements of Pure Economics.

The just price is found not by counting the cost but by the common estimation. French philosopher and priest Nicolas d’Oresme (1320–1382) wrote De origine, natura, jure et mutationibus monetarum, about the origin, nature, law, and alterations of money. His treatise argues how money or currency belongs to the public, and that the government or sovereign of the economy has no right to control the value of the currency just so that they can profit from it. The study of risk was influential, in viewing variations in price over time as more important than actual price. This applied particularly to financial economics, where risk/return tradeoffs were the crucial decisions to be made.

As societies grew wealthier and trade grew more complex, economic theory turned to the mathematics, statistics, and computational modeling that economists use to help guide policymakers. The business cycle, booms and busts, anti-inflation measures, and mortgage interest rates are outgrowths of economics. This school includes economists like Michel Aglietta (1938), André Orléan (1950), Robert Boyer fr (1943), Benjamin Coriat (1948) and Alain Lipietz (1947). It is one of the two heterodox schools in France, the other being l’école des conventions. Their interests revolves around accounting for the regime of regulation of specific historic stage of capitalism. They have mainly analysed the fordist mode of regulation, who corresponds to the after war period.

Businesses, on the other hand, are induced to invest by the expected rate of return on new investments (the benefit) and the rate of interest paid (the cost). So, said Keynes, if business expectations remained the same, and government reduces interest rates (the costs of borrowing), investment would increase, and would have a multiplied effect on total spending. Interest rates, in turn, depend on the quantity of money and the desire to hold money in bank accounts (as opposed to investing). If not enough money is available to match how much people want to hold, interest rates rise until enough people are put off. So if the quantity of money were increased, while the desire to hold money remained stable, interest rates would fall, leading to increased investment, output and employment. For both these reasons, Keynes therefore advocated low interest rates and easy credit, to combat unemployment.

Islamic economics

This school has seen a revived interest in development and understanding since the later part of the 20th century. There is a revival of interest in the history of economic thought that we at Palgrave are very well placed to home. Browse our curated list of author insights, featured titles, series and journal articles. Now in its fourth edition, A Short History of Economic Thought provides an elementary overview of the history of economic thought. Economics is the science and study of a society’s ability to produce goods and services, buy and sell them, and consume them. Also highly regarded and noteworthy is Amartya Sen, a professor of economics and philosophy at Harvard University, whose work on global inequality won him the Nobel Prize for Economics in 1998.

Instead of marginal units or even specific goods markets and prices, Keynesian macroeconomics presents the economy in terms of large-scale aggregates that represent the rate of unemployment, aggregate demand, or average price-level inflation for all goods. Moreover, Keynes’s theory says that governments can be influential players in the economy—saving it from recession by implementing expansionary fiscal and monetary policy to increase economic output and stability. In 1958 American economists Alfred H. Conrad (1924–1970) and John R. Meyer (1927–2009) founded New Economic History, which in 1960 was called Cliometrics by American economist Stanley Reiter (1925–2014) after Clio, the muse of history.

Unlike the mercantilist thinkers however, wealth was found not in trade but in human labor. The first person to tie these ideas into a political framework was John Locke. In the 16th and 17th centuries the School of Salamanca in Spain developed economic theory, one of the earliest forms of a study in the history of economic thought economic tradition of the field of economics. Economic policy in Europe during the late Middle Ages and early Renaissance treated economic activity as a good which was to be taxed to raise revenues for the nobility and the church.