A Brief Overview of the History of Economic Thought

This article will be a brief overview of the history of economic thought. The list is not meant to be exhaustive, but rather to trace the major trends of thought, and perhaps the origins of my own thought.

A great reference article from Wikipedia here.

  • I’m sure there was thought about trade and so forth before the Greeks, but I am unaware of any record of those thoughts.
  • Greek thought*: ~400 BC – 300 BC. Texts include Oeconomicus by Xenophon (~400BC), Plato’s The Republic, and Aristotle’s Politics.
  • The “Great Gap” – Not many works of economics between 300 BC and 1225 AD. I would argue that, at least in the west, Rome and religion guided economic thought during this time.
  • Ibn Khaldun and the Late Scholastics: ~1265 – 1615. Religious philosophy continued economic scholarship, but now with a documented path. Texts include Aquinis’ Summa Theologica and Ibn Khaldun’s Muqaddimah.
  • Mercantalism: 1539 (Maybe even 1516 or 1517) – 1776
  • Physiocracy: 1615 – 1776
  • Classical Economics: 1776 -1830
  • Ricardian Classical Economics: 1830 – 1870
  • Socialist/Marxian Economics: 1848- 1988. Neo-Marxian Economics were developed in the period from 1970-1988, before quickly fading, and some small trail of marxism, post-marxism, or somehow-marxist economics probably survives somewhere.
  • The Historical School of Economics18431930. There were English and French counterparts, but the German School was by far the most prominent. 1930 was the last great contribution to the school by Weber, and in 1932 Mises proclaimed the death of the school according to Dr. Isreal Kirzner.
  • Keynesian Economics – 1936 – 1976
  • Austrian Economics – 1871 – today.
  • Monetarism – 1963 – today.
  • Neo-Keynesian Economics – 1937 – today. Beginning with John Hicks’ presentation of the IS/LM model, as noted below.
  • Neoclassical Economics1871 – today. Beginning with the so-called marginal revolution, and receiving a big boost with John Hicks’ presentation of the IS/LM model, as noted below.
  • The Modern, Heterdox Age of Economics: 1932 – today. In 1932, a well known economist named Lionel Robins published a well known paper describing the state of the art of economics. The paper included a well known and still cited definition of economics as, “Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.” In the very same year, Ludwig von Mises stated, according to Dr. Israel Kirzner, that, “Today, all modern schools of economic theory are saying virtually the same thing.” Between 1932 and 1952, Kirzner continues, was the Socialist Calculation Debate, which lead to more diverse economic theory and eventually the neoclassical synthesis. In 1937, the modern era really began with John Hicks’ presentation of the IS/LM model.

Lots of “Neo-s” “Post-s” and “New-s” began to appear in the later half of the 20th century. Despite the branching of old schools of thought into multiple descendant varieties, entirely new schools also continued to flower. By the year 2014, today, there are an extremely wide range of schools of economic thought. So many that it might be difficult to review them all. Instead, it might be easier to conceive of Economics in a general sense, then learn to place a particular school of thought within that framework after learning about it, rather than attempting to learn them exhaustively or by memory beforehand.

One popular framework is based on the policy implications of the school of thought. A leftist school of thought implies government action is ideal, a moderate school of thought implies that limited government is either ideal or necessary, and a right-wing school of thought implies that less, little, or no government action is ideal.

*A friend mentioned that in Artistotle’s Nicomachean Ethics, the term “nomisma,” derived from the greek “nomos,” was used to mean law, custom, and money. The idea is that politics, economics, religion, and philosophy were not clearly delineated ideas at this time.

Here is a quote: “…but money has become by convention a sort of representative of demand; and this is why it has the name ‘money’ (nomisma), because it exists not by nature but by law (nomos) and it is in our power to change it and make it useless…” [1133b 1].

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