A Concise History of Economists' Assumptions about Markets: From Adam Smith to Joseph Schumpeter

192 Pages·2014·1.219 MB·English

by  Robert Edward Mitchell

A CONCISE HISTORY
OF ECONOMISTS’
ASSUMPTIONS
ABOUT MARKETS
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A CONCISE HISTORY
OF ECONOMISTS’
ASSUMPTIONS
ABOUT MARKETS
From Adam Smith to Joseph
Schumpeter
Robert Edward Mitchell
Copyright2014byRobertEdwardMitchell
Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrieval
system,ortransmitted,inanyformorbyanymeans,electronic,mechanical,photocopying,
recording,orotherwise,exceptfortheinclusionofbriefquotationsinareview,without
priorpermissioninwritingfromthepublisher.
LibraryofCongressCataloging-in-PublicationData
Mitchell,RobertEdward.
Aconcisehistoryofeconomists’assumptionsaboutmarkets:fromAdamSmithto
JosephSchumpeter/RobertEdwardMitchell.
pagescm
Includesbibliographicalreferencesandindex.
ISBN978–1–4408–3309–0(hardback)—ISBN978–1–4408–3310–6(ebook)
1. Economichistory. I.Title.
HC21.M4958 2014
330.15—dc23 2014013506
ISBN:978–1–4408–3309–0
EISBN:978–1–4408–3310–6
18 17 16 15 14 1 2 3 4 5
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To You, the Reader
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Contents
Acknowledgments ix
Introduction 1
PartI:MainstreamEconomicsfromAdamSmiththrough
Macroeconomics 13
Chapter 1: Adam Smith at the Dawn of Modern Economics 15
Chapter 2: Thomas Malthus and David Ricardo: New Questions and
Analytical Advances 31
Chapter 3: Alfred Marshall: Master Synthesizer, Innovator, and
a Founding Father of Scientific Economics 47
Chapter 4: John Maynard Keynes and the Rise of Macroeconomics 69
Chapter 5: Where Money Fits In: Money, Credit, and Finance 83
PartII:BreakingOutoftheMainstream 95
Chapter 6: Karl Marx’s Grand Theory of Political Economy 97
Chapter 7: Thorstein Veblen and Killing the Goose
That Laid the Golden Egg 119
Chapter 8: Joseph Schumpeter and the Drivers of Markets and
Economies 135
PartIII:TheEndoftheBeginning 149
Chapter 9: Retrospect and Prospect 151
Notes 155
Index 175
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Acknowledgments
Great is work for it honors the workman according to one version of an oft-
quoted passage from the Talmud. This book honors a series of remarkable
thinkers whom Robert Heilbroner, another remarkable workman,
labeledworldlyphilosopherssearchingforthebasisoforderinsociety.
IhadnotreadHeilbroner’saccountofmenworkingtounderstandmarkets
and economies until a few years agoin preparation for a course I led for my
fellowretireesattheHarvardInstituteforLearninginRetirement.Hehelped
me think about my own search for answers over a very long career on my
uncle’s farm,fl oor-level assembly work in automobile factories, studying in
three different universities, heading social science research centers and
government task forces, helping governments and private firms, especially
throughoutSoutheastAsiainthe1960s,andalate-lifecareerwiththeUnited
States Agency for International Development as a Foreign Service Officer
cooperating with counterparts during multi-year postings in the Near East
andAfrica.
Manyindividualsandorganizations,includingfamilyandfriends,encour-
agedmetoalwaysaskthequestion"Why?"Certainlyonedoesnothavetobe
aneconomisttoask“why”and“what”questionsaboutmarketsandtheforces
thatdrivethem.
Itwouldbeanendlesslistofindividualswhoencouragedmetoask"Why?"
andwhoinunknownwayscontributedtothethinkingbehindthisbook.
Onceamanuscriptiscompletedindraftform,thenextchallengeistoseeka
publisher willing to consider the value of exploring the many questions
coveredinthisbookandthenworkingwiththeauthorinthepublicationpro-
cess.Inthisregard,Iwishtothankmyeditor,HilaryClaggett.