The Evolution of Economic Thought PDF
Preview The Evolution of Economic Thought
Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. The Evolution of Economic Thought EIGHTH EDITION S L. B R R. G TANLEY RUE ANDY RANT Pacific Lutheran University Linfield College Australia(cid:129)Brazil(cid:129)Japan(cid:129)Korea(cid:129)Mexico(cid:129)Singapore(cid:129)Spain(cid:129)UnitedKingdom(cid:129)UnitedStates Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. TheEvolutionofEconomicThought, ©2013,2007South-Western,CengageLearning EighthEdition ALLRIGHTSRESERVED.Nopartofthisworkcoveredbythecopyright StanleyL.BrueandRandyR.Grant hereinmaybereproduced,transmitted,stored,orusedinanyformorby VicePresidentofEditorial,Business: anymeansgraphic,electronic,ormechanical,includingbutnotlimitedto JackW.Calhoun photocopying,recording,scanning,digitizing,taping,Webdistribution, informationnetworks,orinformationstorageandretrievalsystems, Editor-in-Chief:JosephSabatino exceptaspermittedunderSection107or108ofthe1976UnitedStates SeniorAcquisitionsEditor:StevenScoble CopyrightAct,withoutthepriorwrittenpermissionofthepublisher. DevelopmentalEditor:TheodoreKnight Forproductinformationandtechnologyassistance,contactusat EditorialAssistant:ElizabethBeiting-Lipps CengageLearningCustomer&SalesSupport,1-800-354-9706. 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Foryourcourseandlearningsolutions,visitwww.cengage.com Purchaseanyofourproductsatyourlocalcollegestoreoratourpreferred onlinestorewww.cengagebrain.com. Printed in the United States of America 1 2 3 4 5 6 7 16 15 14 13 12 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Brief Contents Preface xiii Chapter 1 Introduction and Overview 1 Chapter 2 The Mercantilist School 13 Chapter 3 The Physiocratic School 35 — Chapter 4 The Classical School Forerunners 49 — Chapter 5 The Classical School Adam Smith 67 — Chapter 6 The Classical School Thomas Robert Malthus 91 — Chapter 7 The Classical School David Ricardo 107 — Chapter 8 The Classical School Bentham, Say, Senior, and Mill 131 Chapter 9 The Rise of Socialist Thought 161 Chapter 10 Marxian Socialism 183 Chapter 11 The German Historical School 205 — Chapter 12 The Marginalist School Forerunners 223 — Chapter 13 The Marginalist School Jevons, Menger, von Wieser, and von Böhm-Bawerk 245 — Chapter 14 The Marginalist School Edgeworth and Clark 271 — Chapter 15 The Neoclassical School Alfred Marshall 293 v Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. vi BRIEFCONTENTS — Chapter 16 The Neoclassical School Monetary Economics 321 — Chapter 17 The Neoclassical School The Departure from Pure Competition 343 Chapter 18 Mathematical Economics 365 Chapter 19 The Institutionalist School 395 Chapter 20 Welfare Economics 425 — Chapter 21 The Keynesian School John Maynard Keynes 455 — Chapter 22 The Keynesian School Developments since Keynes 477 Chapter 23 Theories of Economic Growth and Development 505 — Chapter 24 The Chicago School The New Classicism 529 Chapter 25 Concluding Thoughts 557 Name Index 567 Subject Index 571 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Contents Preface xiii Chapter 1 Introduction and Overview 1 A Time Scale of Economic Ideas 2 The Five Major Questions 3 The Value of Studying Economics and Its History 7 Appendix History of Economic Thought: Information Sources 9 Chapter 2 The Mercantilist School 13 Overview of Mercantilism 13 Past as Prologue 2-1 Mercantilism and the Supply of Labor 17 Thomas Mun 20 Past as Prologue 2-2 Lingering Mercantilism 21 Gerard Malynes 24 Charles Davenant 25 Jean Baptiste Colbert 26 Sir William Petty 28 Chapter 3 The Physiocratic School 35 Overview of the Physiocrats 35 François Quesnay 39 Anne Robert Jacques Turgot 42 Past as Prologue 3-1 Quesnay and the Circular Flow Diagram 43 — Chapter 4 The Classical School Forerunners 49 Overview of the Classical School 49 Sir Dudley North 54 Richard Cantillon 56 David Hume 58 Past as Prologue 4-1 Hume and Cooperation 62 — Chapter 5 The Classical School Adam Smith 67 Biographical Details 67 Important Influences 68 The Theory of Moral Sentiments 69 Wealth of Nations 72 The Economic Laws of a Competitive Economy 77 Past as Prologue 5-1 Adam Smith and Efficiency Wages 82 vii Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. viii CONTENTS — Chapter 6 The Classical School Thomas Robert Malthus 91 Historical and Intellectual Setting 91 Malthus’s Population Theory 94 The Theory of Market Gluts 97 Past as Prologue 6-1 Malthus, Carlyle, and the Dismal Science 98 Assessment of Malthus’s Contributions 100 Past as Prologue 6-2 Malthus, Sen, and Modern-Day Famine 102 — Chapter 7 The Classical School David Ricardo 107 Biographical Details 107 The Currency Question 109 The Theory of Diminishing Returns and Rent 110 The Theory of Exchange Value and Relative Prices 114 The Distribution of Income 117 Past as Prologue 7-1 The Ricardian Equivalence Theorem 118 Policy Implications 122 Past as Prologue 7-2 Trade Theory Since Ricardo 125 Ricardo on Unemployment 126 Assessment 128 — Chapter 8 The Classical School Bentham, Say, Senior, and Mill 131 Jeremy Bentham 131 Past as Prologue 8-1 Aquinas, Bentham, and Fisher on Usury 135 Jean-Baptiste Say 138 Past as Prologue 8-2 Say and Rent Seeking 139 Nassau William Senior 142 John Stuart Mill 145 Past as Prologue 8-3 Mill, Taylor, and the Rights of Women 147 Chapter 9 The Rise of Socialist Thought 161 Overview of Socialism 161 Henri Comte de Saint-Simon 167 Charles Fourier 170 Simonde de Sismondi 172 Robert Owen 174 Louis Blanc 178 Charles Kingsley 179 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CONTENTS ix Chapter 10 Marxian Socialism 183 Biographical Details and Intellectual Influences 183 Marx’s Theory of History 185 The “Law of Motion” of Capitalist Society 187 The Law of Motion of Capitalism: A Summary 197 Assessment of Marx’s Economics 197 Past as Prologue 10-1 The Collapse of Marxism 201 Chapter 11 The German Historical School 205 Overview of the German Historical School 205 Friedrich List 209 Past as Prologue 11-1 List and Strategic Trade Theory 212 Wilhelm Roscher 214 Gustav Schmoller 215 Max Weber 218 A Postscript 220 — Chapter 12 The Marginalist School Forerunners 223 Overview of the Marginalist School 223 Antoine Augustin Cournot 227 Past as Prologue 12-1 Extensions of Cournot’s Duopoly Theory 233 Jules Dupuit 234 Past as Prologue 12-2 Gossen: Utility and Belated Fame 237 Johann Heinrich von Thünen 238 — Chapter 13 The Marginalist School Jevons, Menger, von Wieser, and von Böhm-Bawerk 245 William Stanley Jevons 245 Past as Prologue 13-1 Jevons: Is Gambling Rational? 252 Carl Menger 254 Friedrich von Wieser 259 Eugen von Böhm-Bawerk 262 Past as Prologue 13-2 Franklin and Bastiat on Opportunity Cost 263 — Chapter 14 The Marginalist School Edgeworth and Clark 271 Francis Y. Edgeworth 271 Past as Prologue 14-1 Jacob Viner’s Cost Curves 279 John Bates Clark 281 Past as Prologue 14-2 Clark, Marginal Productivity, and Executive Salaries 288 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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