28 results in The History of Economics
Introduction
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp vii-xii
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Summary
There is today a resurgence of interest in the history of economics, but students often lack the opportunity of taking a systematic course that introduces them to the ideas, policies and writers who played a part in the development of economic thinking from the seventeenth century up to the present day. This book offers a partial solution to this problem by providing a template for students and teachers seeking orientation in the subject. It is based on the material that we have taught to third-year undergraduates at the University of Birmingham for several years, augmented with some material that one of us has covered with graduate students at the University of Oporto and at Erasmus University Rotterdam, expanding it a little beyond our 20 two-hour lectures. We have structured it in such a way that shorter courses could be based on a selection, and we make some suggestions regarding this below.
That this is not a conventional textbook will be apparent from the formal presentation of each lecture, beginning with aims, then providing an annotated bibliography and the relevant chronology before moving on to the subject matter of the lecture. Each lecture ends with a series of questions for discussion that could provide a framework for class discussion or individual reflection. In scope and presentation, then, there is a clear difference here from Roger Backhouse’s Penguin History of Economic Thought (published in North America by Princeton University Press as The Ordinary Business of Life), the textbook we recommend our students to read for initial orientation and which covers the history of economic thought from the ancient Greeks onwards. Likewise, chapter 2 of Keith Tribe’s Economy of the Word provides an extended overview of the transformation in the use of the word “economy” from the Greeks to the 1960s that provides a more discursive initial orientation.
From the 1920s onwards economic argument rapidly became more formalized and academic, so that what had hitherto largely been public economic debate increasingly becomes debate between academic economists. Before the 1920s economic thinking was both more diverse and less institutionally defined; indeed, part of the story we tell here is the conversion of a broad tradition of political economy into the new university discipline of economics.
Lecture 11 - From Political Economy to Economics
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 169-184
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Summary
Aims of the lecture
1. To demonstrate that, by the later 1880s, there was a broad international consensus that a “modern” economics centred on the choices made by an economic agent, and not on a framework of production and distribution involving land, labour and capital.
2. To emphasize that while Walras pursued a complex algebraic approach to this problem that provided the foundations of general equilibrium analysis, he regarded his work as part of this general line of thinking, not as separate from it.
3. To emphasize that while there was some diversity in approach to economic analysis, there was no imperative to reduce this variety to uniformity.
Bibliography
The reference text for Carl Menger is the four-volume Gesammelte Werke (Tübingen: Mohr Siebeck, 1968–70) edited by Friedrich von Hayek. For Walras the reference text is the fourteen-volume Oeuvres Économiques Complètes of Auguste and Léon Walras, edited by Pierre Dockès et al. (Paris: Economica, 1987–2005).
There are modern English translations of the principal works of Walras and Pareto. For Léon Walras, see Elements of Theoretical Economics: Or, The Theory of Social Wealth, (Cambridge: Cambridge University Press, 2014), and for Vilfredo Pareto see Manual of Political Economy, A Critical and Variorum Edition, Aldo Montesano, Alberto Zanni, Luigino Bruni, John S. Chipman and Michael McLure (eds) (Oxford: Oxford University Press, 2014).
An older but still usable translation of Menger’s Grundsätze published by the Ludwig von Mises Institute (2007) is available, but unfortunately it is marred by introductions by Peter G. Klein and Friedrich von Hayek that are best ignored for our purposes here. Indeed, much of the commentary to be found on the web relating to Menger and Walras is questionable, in terms of both scholarly reliability and judgement. Besides the work of Yagi and Endres noted here, you will generally find that commentary that is contemporary with the immediate reception of Menger’s work is far more illuminating than anything written since. The problem with commentary on Walras is rather different; the development of general equilibrium theory “creatively” modified Walras in a way that obscured the qualifications and reservations that he had made, progressively distorting later understanding of his work.
Index
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 373-386
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Lecture 1 - Commerce, Wealth and Power: The Disputed Foundations of the Strength of a Nation
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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Summary
Aims of the lecture
1. To outline the early history of economic argument and its emergence as a language of “counsel and advice” for the courts and administrations of seventeenth-century Europe.
2. To highlight the way in which the arguments advanced identified varying sources of wealth and power: population, commerce, manufacture, agriculture, mines.
3. To show that well into the eighteenth century comparative assessments of the strength of a nation relied upon empirical, rather than analytical, arguments.
Bibliography
There is no reliable modern survey of seventeenth- and eighteenth-century European economic argument that brings together developments in Western, Central, Northern and Southern Europe in an even-handed manner, although there are a few older sources that provide a useful perspective on some aspects of the early development of political oeconomy. Terence Hutchison’s Before Adam Smith: The Emergence of Political Economy, 1662–1776 (Oxford: Blackwell, 1988) is the most generally useful older work; while it does have the usual Anglo-French bias, it is unusual in the space it gives to German-language and Italian writings. It also offers clear and helpful indexes for both authors and subjects, a chronology (pp. 441–55) and a section “References and Literature” (pp. 419–41) that is divided up by chapter, separately listing within each chapter original writing and commentary upon that writing.
Istvan Hont, “Jealousy of Trade: An Introduction”, in his Jealousy of Trade: International Competition and the Nation-State in Historical Perspective (Cambridge, MA: Harvard University Press, 2005), pp. 1–156, provides the best modern overview of European political economy through the seventeenth and eighteenth centuries.
Ryan Walter, A Critical History of the Economy (Abingdon: Routledge, 2011), provides a brief synthetic overview of the development of economic thinking in Britain from the later-seventeenth to the early-nineteenth century, making use of insights drawn from the history of political thought, where both historiography and range of analysis are far more sophisticated than usually encountered in the history of economic thought.
Jacob Viner, “Power Versus Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries”, World Politics 1:1 (1948), 1–29. Viner was very knowledgeable about seventeenth- and eighteenth-century commercial writing and in this article he identifies the relationship between wealth and the political power of states that characterizes the seventeenth- and early-eighteenth-century literature.
Lecture 20 - Modern Macroeconomics
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 303-318
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Summary
Aims of the lecture
1. To outline the main phases in the development of macroeconomics since the Second World War.
2. To explain how macroeconomists conceived their subject in what was called “the age of Keynes”.
3. To explain how economists responded to the dramatic events of the 1970s.
Bibliography
The reading list for this lecture is fairly short, though two of the items are very substantial. The early history has already been covered in lecture 19, some of the reading for which is relevant here. It leaves out any discussion of the Phillips curve, a major part of modern macroeconomics, on the grounds that this will be discussed in detail in lecture 21.
Starting with the attempts to reinterpret Keynes in the late 1950s and 1960s, R. E. Backhouse and M. Boianovsky’s Transforming Modern Macroeconomics: The Search for Disequilibrium Microfoundations, 1956–2003 (Cambridge: Cambridge University Press, 2013) focuses on attempts to analyse economies in which markets are not in supply-and-demand equilibrium; this is contrasted with the more influential approach of assuming equilibrium, and the authors tell the story of how these two approaches evolved and eventually came together.
M. De Vroey’s A History of Macroeconomics from Keynes to Lucas and Beyond (Cambridge: Cambridge University Press, 2015) looks at the history of macroeconomics from a Lucasian perspective. This means that it shows very clearly how a post-Lucas macroeconomist is likely to view older theories, pointing out their alleged failings in an unsympathetic way. It is, however, the most comprehensive treatment of macroeconomics after Lucas. The nature of the material makes it difficult reading in places, but that is the price paid for covering material that others leave out.
Given the current emphasis on “microfoundations” and the tendency to dismiss earlier work as lacking them, K. D. Hoover’s “Microfoundational Programs” in Microfoundations Reconsidered: The Relationship of Micro and Macroeconomics in Historical Perspective, P. G. Duarte and G. T. Lima (eds) (Cheltenham: Elgar, 2012), argues that since Keynes, economists have sought microfoundations, and that this is overlooked because they approached the problem in a different way from the one that became fashionable in the 1980s.
Lecture 22 - Popular Economics
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 331-344
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Summary
Aims of the lecture
1. To introduce some popular twentieth-century writers on economics.
2. To place these economists in the context of economists’ involvement in public life more broadly.
3. To show how the role of economists in public discourse has changed during the twentieth century.
Note that there is considerable potential overlap between this lecture and lectures 23 and 24 in that, in democracies, there are connections between public discourse and the making of economic policy.
Bibliography
T. Mata and S. G. Medema (eds), The Economist as Public Intellectual, annual supplement to History of Political Economy 45 (Durham, NC: Duke University Press, 2013). This volume contains an introduction that offers a framework for thinking about the role of economists in public life and a series of case studies. The introduction contains an extensive bibliography to which readers should turn to find more elaborate discussions of the issues discussed here.
C. D. W. Goodwin’s Walter Lippmann: Public Economist (Cambridge, MA: Harvard University Press, 2013) gives an account of the economist who was, with little doubt, the leading journalist and interpreter of economics in the United States for much of the twentieth century.
R. Parker’s John Kenneth Galbraith: His Life, His Politics, His Economics (New York: Farrar, Strauss & Giroux, 2005) is an intellectual biography of the economist, political adviser and public figure who was probably the most well-known economist in the 1950s and 1960s.
Lecture summary
Popular economics
Economics has always had its popularizers, but in the late-nineteenth and twentieth centuries, as economics became a specialized academic discipline, and a fortiori as it became more mathematical, the need for popular interpretations increased. Though the boundaries between them are very blurred, it can be useful to distinguish between three types of popular writing. Some popular writers translated academic work into material that non-specialists could understand. This covers both textbook writers, simplifying the subject for students, and writers who simplify in order to reach any interested reader. There are also economists who, though having good academic credentials, choose to develop some of their ideas in works that can be read by the general public.
Lecture 21 - Inflation and the Phillips Curve
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 319-330
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Summary
Aims of the lecture
1. To show how reading what economists actually wrote can sometimes be enough to challenge a history that virtually all economists accept. The fact that economists are near unanimous in what they know about the history of their discipline does not necessarily mean that their history is correct.
2. To tell the story of how economists have analysed the relationship between inflation and unemployment.
3. To speculate on how and why erroneous versions of the history became established.
This lecture is a lesson in the importance of reading original texts carefully and not assuming that commentators, who may not have read the papers they discuss, are necessarily correct.
Bibliography
This lecture is essentially based on one book: J. Forder, Macroeconomics and the Phillips Curve Myth (Oxford: Oxford University Press, 2014). Some of the material can be found in articles Forder wrote en route to the book, and an article on incomes policy serves as a reminder of how differently labour market problems were conceived from the 1950s to the 1970s: J. Forder, “Friedman’s Nobel Lecture and the Phillips Curve Myth”, Journal of the History of Economic Thought 32:3 (2010), 329–48; J. Forder, “The Historical Place of the ‘Friedman–Phelps’ Expectations Critique”, European Journal of the History of Economic Thought 17:3 (2010), 493–511; R. E. Backhouse and J. Forder, “Rationalizing Incomes Policy in Britain, 1948–1979”, History of Economic Thought and Policy 1:1 (2013), 17–35.
The lecture focuses on three papers: A. W. Phillips, “The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957”, Economica 25:100 (1958), 283–99; P. A. Samuelson and R. M. Solow, “Analytical Aspects of Anti-Inflation Policy”, American Economic Review 50:2 (1960), 177–94; and M. Friedman, “The Role of Monetary Policy”, American Economic Review 58:1 (1968), 1–17.
K. D. Hoover’s “The Genesis of Samuelson and Solow’s Price-Inflation Phillips Curve”, History of Economics Review 61 (2015), 1–16, provides a detailed reconstruction of the way in which Samuelson and Solow calculated the Phillips curve in their paper.
Lecture 17 - John Maynard Keynes
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 261-274
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Summary
Aims of the lecture
1. To uncover the “historical” John Maynard Keynes.
2. To illustrate an important approach to the history of ideas: through biography.
3. To explain how Keynes came to his major work, The General Theory of Employment, Interest and Money (1936).
4. To place Keynes’s economic theory in relation to his view of capitalism and a social philosophy that was related to his life and activities.
Recovering the historical Keynes is more difficult than it sounds because, being widely considered the most important economist of the twentieth century, his name has been used by many people – politicians and journalists as well as economists – to represent policy positions that they want to defend or attack, many of which are not informed by facts about Keynes’s life and work.
Bibliography
As is the case with Adam Smith, the enormous volume of literature on Keynes presents a problem for anyone wanting to understand the historical figure. Much of this literature on Keynes is written by people whose main interest lies in developing economic theory or defending a policy position; it deals as much with “Keynesianism”, “Keynesian economics” and “Keynesian policies” as with the ideas of Keynes himself. Such interests are perfectly legitimate but are not always consistent with developing an understanding of Keynes himself and his thinking. When reading material on Keynes it is important to think about what its author is trying to achieve.
The main source for Keynes’s works is the 30-volume Collected Writings of John Maynard Keynes (London: Macmillan, 1971–89), which contains his major economic works, including The Economic Consequences of the Peace (1919, volume II), A Tract on Monetary Reform (1923, volume IV), A Treatise on Money (1930, volumes V and VI) and The General Theory (1936, volume VII) as well as articles and correspondence, usefully grouped according to themes. The Index (volume XXX) is very useful in locating material in the voluminous writings. Of course much of this material is available elsewhere, in other editions and on the Internet.
Lecture 10 - Marginalism and Subjectivism: Jevons and Edgeworth
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 153-168
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Summary
Aims of the lecture
1. To argue that the publication in 1861 of Mill’s critique of Bentham provided a platform for Jevons’s “mathematical political economy” of 1862, extending the argument made in lecture 7 regarding the importance of J. S. Mill’s Principles of Political Economy (1848) for the political economy of the later nineteenth century in Britain.
2. To suggest that during the mid-nineteenth century, English political economy followed a separate but broadly parallel path to German and French political economy, ending up in the 1880s in roughly the same place: a new subjectivist economics.
3. To demonstrate that Edgeworth first developed his understanding of the calculus of economic action from the exposition of the hedonistic calculus in Sidgwick’s Methods of Ethics (1874), and then subsequently learned his economics from Jevons.
Bibliography
Commentary upon the development of political economy in Britain during the last third of the nineteenth century has tended to focus on the work of Alfred Marshall in Cambridge, both during the 1870s and then after he returned there in 1885. As will be suggested below, this has tended to overshadow both the importance of Jevonian economics in Britain during the 1880s and the broader international significance of Edgeworth’s work in the twentieth century.
For Edgeworth, there is one central text that brings together his major writings with a useful introduction and a complete bibliography: Peter Newman (ed.), F. Y. Edgeworth’s Mathematical Psychics and Further Papers on Political Economy (Oxford: Oxford University Press, 2003). The Royal Economic Society gathered many of Edgeworth’s papers into a three-volume collection that remains widely available: Papers Relating to Political Economy (London: Macmillan, 1925). A further useful consideration of Edgeworth’s work is Stephen Stigler, “Francis Ysidro Edgeworth, Statistician”, Journal of the Royal Statistical Society A 141 (1978), 287–322.
Stanley Jevons was a polymath whose writings on political economy were only one part of his interests, albeit an important part. The best place to start is R. D. Collison Black’s entry for Jevons in the Oxford Dictionary of National Biography. Collison Black also edited Jevons’s Papers and Correspondence, 7 volumes (London: Macmillan, 1972–81).
Lecture 4 - Adam Smith II: The Two Texts
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 49-76
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Summary
Aims of the lecture
1. To provide an overview of Theory of Moral Sentiments and Wealth of Nations.
2. To provide in the treatment of Wealth of Nations a model for the reading of complex texts.
3. To shift attention in this way from what Smith “really meant” to what he “actually wrote”.
Bibliography
In the publication history of Wealth of Nations there are many conspectuses, abbreviated versions and summaries, beginning with Jeremiah Joyce’s A Complete Analysis or Abridgement of Dr. Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations (1797), which went through three editions by 1821 and was republished in an Oxford edition in 1877 and 1880. Robert Heilbroner’s The Essential Adam Smith (1986) is a useful modern compendium. Jerry Evensky has published two overviews: Adam Smith’s Moral Philosophy (2005), summarizing Smith’s “moral philosophical vision” (and not directly Theory of Moral Sentiments) in Part I and Wealth of Nations in Part II (the summary of modern economists’ perceptions of Smith in Part III is of no interest here). Evensky has also published Adam Smith’s Wealth of Nations: A Reader’s Guide (2015), but it is marred by the use of inappropriate modern economic preconceptions and terminology.
There is, however, no substitute for reading Theory of Moral Sentiments and Wealth of Nations, preferably in the Glasgow edition since you will then have access to a full editorial apparatus if you should need it. Just skimming these works will give you a clearer idea of their structure and argument than can be gleaned from most of the commentary.
For Theory of Moral Sentiments, useful orientation based on a close reading can be found in Terry Peach, “Adam Smith’s ‘Optimistic Deism,’ the Invisible Hand of Providence, and the Unhappiness of Nations”, History of Political Economy 46 (2014), 55–83.
For Wealth of Nations, Keith Tribe, “Reading ‘Trade’ in the Wealth of Nations”, Economy of the Word, chapter 4 explicitly sets out to provide a close reading of exactly where and what Smith writes about trade, rather than compare some things he wrote with some things others have since written.
Lecture 8 - Popular Political Economy: List, Carey, Bastiat and George
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 123-136
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Summary
Aims of the lecture
1. To draw attention to the impact of “popular” writers who used political economy to further public debate on policy issues relating to free trade, protection and fiscal reform, rather than develop political economy as theory.
2. To emphasize that “free trade” and “protection” were not in the mid-nineteenth century alternative options that could be clearly identified with any one point on the political spectrum; hence many of the popular arguments about national and international economic development made in the nineteenth century resonate with today’s responses to globalization and neoliberalism.
3. To suggest that contemporary popular economics sometimes recycles ideas that were “popular” a very long time ago.
Bibliography
All of the authors dealt with in this lecture wrote for a new reading public; political journalism flourished in the nineteenth century, and it became possible to write popular works on political economy that would sell in significant numbers. These writers are, however, often viewed today as producers of derivative, non-canonical works, and there has been little serious engagement with their writing. Furthermore, this marginal status in the commentary has in turn encouraged low-grade modern commentary from those seeking to recruit these writers as precursors to this or that ideological project. Bastiat, in particular, is very popular today among American libertarians, as any search of the Internet will show; but none of the sources that can be found are especially interested in serious historical evaluation of Bastiat’s significance as a writer in the mid-nineteenth century. The use of Bastiat by libertarians tells us more about libertarians than about Bastiat, and here we are interested in Bastiat – and Carey, and List, and George.
The only account of Friedrich List that fully takes account of the importance of American political economy to his arguments is Keith Tribe, “Die Vernunft des List: National Economy and the Critique of Cosmopolitical Economy”, in Keith Tribe, Strategies of Economic Order: German Economic Discourse 1750–1950 (Cambridge: Cambridge University Press, 1995/2007), chapter 3.
Henry Carey was a major figure and was much written about at the time. A survey of early American political economy can be found in Paul Conkin, Prophets of Prosperity: America’s First Political Economists (Bloomington, IN: Indiana University Press, 1980).
Lecture 3 - Adam Smith I: Outline of a Project
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- 30 November 2017, pp 33-48
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Summary
Aims of the lecture
1. To provide an outline biography of Adam Smith and the development of his work.
2. To show how biography helps us also understand the context for his writings.
3. To outline the reception of these writings, and the various approaches taken to them by modern commentary.
Bibliography
The standard edition of all Adam Smith’s writings and correspondence is the Glasgow edition published by Oxford University Press from 1976 onwards; this is also available in a cheap but well-produced paperback from Liberty Press. Unfortunately, no electronic version of this edition is currently available: this was taken down from the Library of Liberty site in February 2014 and replaced with a digitized version of the 1904 Cannan edition of Wealth of Nations, and there is no ebook version of the Glasgow edition. While Cannan’s edition has been superseded by the Glasgow edition, it does remain usable; since the Liberty Press paperback version is so cheap, however, there is no reason to refer to any of the many other editions of Wealth of Nations that are available. The Glasgow edition numbers paragraphs, and so the standard form of reference is not by page but generally as [Work] [Book].[Chapter].[Paragraph], e.g. WN IV.ix.3.
The Glasgow edition is in six volumes, each referred to below by initials as follows.
I. The Theory of Moral Sentiments (1759, based on the sixth edition of 1790) [TMS].
II. An Inquiry into the Nature and Causes of the Wealth of Nations (1776, based on the third edition of 1784) [WN].
III. Essays on Philosophical Subjects (1795) [EPS].
IV. Lectures on Rhetoric and Belles Lettres (first published 1963) [LRBL].
V. Lectures on Jurisprudence (first part-published 1896) [LJ].
VI. Correspondence of Adam Smith (1977) [Correspondence].
Adam Smith was a reluctant correspondent, and almost all his papers were destroyed on his instruction after his death; the principal source for most of what we know of his life and teaching is Dugald Stewart’s “Account of the Life and Writings of Adam Smith, L.L.D.” (EPS: 263–351). All subsequent biographies have built upon this in one way or another. The most accessible of these is Nicholas Phillipson’s Adam Smith: An Enlightened Life (London: Penguin, 2011).
Lecture 5 - The Political Economy of Malthus and Ricardo
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- The History of Economics
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- 30 November 2017, pp 77-94
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Summary
Aims of the lecture
1. To demonstrate that the English political economy developed by Robert Malthus and David Ricardo in the early 1800s radically truncated the framework laid out by Adam Smith’s Wealth of Nations, reducing political economy to a set of abstract principles about value, price and distribution.
2. To show that the analytical framework constructed in the early 1800s was in part a response to the dual shocks of war and population increase in a predominantly agrarian economy.
3. To show that the more coherent this analytical framework became, the less useful it was as a means of accounting for developments in the contemporary economy; and that attention was increasingly directed to the former rather than the latter.
Bibliography
E. A. Wrigley, Poverty, Progress and Population (Cambridge: Cambridge University Press, 2004), especially chapters 6 and 8, is the most useful starting point for our purposes here in understanding the economic transformation of Britain in the later-eighteenth/early-nineteenth century. Rather than focus on an “Industrial Revolution” that often involves an overestimation of the nature and rate of change from an agrarian to an industrial economy, Wrigley emphasizes developments in population, subsistence and energy use.
Much commentary on English political economy tends to overlook its discontinuity with previous arguments about land, labour and wealth, and sometimes imputes a consistency to it borrowed from twentieth-century economic methodology. The best introduction to English political economy remains therefore Edwin Cannan’s Theories of Production and Distribution in English Political Economy from 1776 to 1848 (London: P. S. King & Son, 1893). Cannan wrote in opposition to Alfred Marshall’s tendency to emphasize the continuity of his thinking with Ricardo; the result is a bracingly sceptical account of political economy, founded on Cannan’s wide reading of French and English economic literature from the eighteenth and early nineteenth centuries.
John Pullen’s Oxford Dictionary of National Biography entry is the most reliable point from which to start with Malthus, while for his various writings, The Works of Thomas Robert Malthus, eight volumes, E. A. Wrigley and David Souden (eds) (London: Pickering, 1986) is the most convenient source.
Lecture 19 - The Keynesian Revolution
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- The History of Economics
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- 30 November 2017, pp 289-302
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Summary
Aims of the lecture
1. To explain how the way economists thought about macroeconomic problems changed in the decade after The General Theory.
2. To show that this question is not the same as assessing what was novel about The General Theory, or what Keynes believed he was doing, and that insofar as Keynes’s book had a big effect, this may have been due to other factors operating at the same time.
3. To point out the complexity of the phenomenon known as the Keynesian revolution.
Bibliography
D. Laidler’s Fabricating the Keynesian Revolution: Studies of the Interwar Literature on Money, the Cycle and Unemployment (Cambridge: Cambridge University Press, 1999) makes the argument that the Keynesian revolution gave economists a model (IS-LM) that summed up key points that had been developed in the preceding years. It is the best available, and most thorough, account of macroeconomic problems in the interwar period.
R. E. Backhouse and D. Laidler’s “What Was Lost with ISLM?” in The IS-LM Model: Its Rise, Fall, and Strange Persistence, M. De Vroey and K. D. Hoover (eds), Annual Supplement to History of Political Economy 36 (Durham, NC: Duke University Press, 2004), argues that important ideas, mostly connected with the role of time, were lost with IS-LM, and hence as a result of the Keynesian revolution. As the volume’s title implies, it contains other papers on the history of the IS-LM model. W. Young’s Interpreting Mr. Keynes (Boulder, CO: Westview, 1987) gives an account of the early history of the IS-LM model.
Different perspectives on the Keynesian revolution are given in the following references: R. E. Backhouse and B. W. Bateman (eds), The Cambridge Companion to Keynes (Cambridge: Cambridge University Press, 2006), which includes chapters by R. E. Backhouse, “The Keynesian Revolution”, D. Laidler, “Keynes and the Birth of Modern Macroeconomics”, and B. W. Bateman, “Keynes and Keynesianism”; and D. Laidler’s “The Keynesian Revolution” and R. E. Backhouse and B. W. Bateman’s “Keynesianism”, both of which appear in The New Palgrave Dictionary of Economics, second edition (London: Macmillan, 2008), available online at www.dictionaryofeconomics.com.
Lecture 13 - Markets and Welfare after Marshall
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- The History of Economics
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- 30 November 2017, pp 199-214
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Summary
Aims of the lecture
1. To explain what happened to ideas about markets, the firm and welfare after Marshall.
2. To distinguish between British and American approaches to problems of markets and industrial structure, relating that discussion to the different histories of the two countries.
3. To provide the context for discussions of Lionel Robbins and the rise of mathematical economics that come in later lectures.
Bibliography
The following books are the key texts discussed in this lecture, in varying levels of detail. The first four deal with the theory of the firm, while the last three deal with welfare economics: F. H. Knight, Risk, Uncertainty and Profit (Boston, MA: Houghton Mifflin, 1921); J. M. Clark, The Economics of Overhead Costs (Chicago, IL: University of Chicago Press, 1923); E. H. Chamberlin, The Theory of Monopolistic Competition (Cambridge, MA: Harvard University Press, 1933); J. Robinson, Economics of Imperfect Competition (London: Macmillan, 1933); A. C. Pigou, Wealth and Welfare (London: Macmillan, 1912); A. C. Pigou, The Economics of Welfare, four editions (London: Macmillan, 1920–32); and J. A. Hobson, Work and Wealth (London: Macmillan, 1914).
M. Morgan’s “Competing Notions of ‘Competition’ in Late Nineteenth-Century American Economics”, History of Political Economy 25 (1993), 563–604, discusses the variety of approaches to competition found in late-nineteenth-century American economics, making clear the contrast with British approaches to the subject.
N. Aslanbeigui and G. Oakes’s Arthur Cecil Pigou (London: Macmillan, 2015) is an account of Pigou’s economics that goes into far greater depth on both his theory of economic policy and his position in the cost controversy than is possible here.
I. Kumekawa’s The First Serious Optimist: A. C. Pigou and the Birth of Welfare Economics (Princeton, NJ: Princeton University Press, 2017) is a very new biography of Pigou (published too late to be taken into account in writing this lecture) that nicely complements the previous account of Pigou’s work.
E. H. Chamberlin’s “The Origin and Early Development of Monopolistic Competition Theory”, Quarterly Journal of Economics 75 (1961), 515–43, is a retrospective account of the origins of Chamberlin’s own theory, making clear the differences between himself on the one hand, and Robinson and participants in the British cost controversy on the other.
Lecture 16 - Robbins’s Essay and the Definition of Economics
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- The History of Economics
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- Agenda Publishing
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- 09 August 2023
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- 30 November 2017, pp 247-260
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Summary
Aims of the lecture
In 1932 Lionel Robbins provided what has become the most commonly cited definition of economics. The aims of this lecture are as follows.
1. To explain the arguments Robbins made in the book in which he provided this definition;
2. To trace the way in which that definition of economics became the standard definition of the subject and the controversies that it elicited on the way.
3. To explore some of the possible consequences of the definition for the problems economists have chosen to tackle and the way that they have chosen to tackle them.
Because Robbins’s definition has connections with several other topics (e.g. welfare economics, microeconomics and mathematical economics), this lecture inevitably refers to material covered later in the course.
Bibliography
L. C. Robbins’s An Essay on the Nature and Significance of Economic Science (London: Macmillan, 1932), available as a free download from https://mises.org/library/essay-nature-and-significance-economic-science (accessed 26 October 2017), provides his now-famous definition of economics, and his explanation of the conclusions he drew from it concerning how economics should be practised. A second edition was published in 1935; though this was revised significantly, the main arguments, including the ones discussed in this lecture, did not change, and either edition could be used.
S. Howson’s Lionel Robbins (Cambridge: Cambridge University Press, 2011) provides a definitive account of the author, although very little of this book is on the Essay. Howson’s “The Origins of Lionel Robbins’s Essay on the Nature and Significance of Economic Science”, History of Political Economy 36:4 (2004), 413–43, however, gives an account of how Robbins came to write the book.
R. E. Backhouse and S. G. Medema’s “Defining Economics: The Long Road to Acceptance of Robbins’s Definition”, Economica 76 (2009), 805–20, analyses reactions to Robbins’s definition of economics and establishes that there were always economists who did not accept it. Backhouse and Medema’s “On the Definition of Economics”, Journal of Economic Perspectives 23:1 (2009), 221–33, is a shorter account, placing the Robbins definition in the context of other definitions.
Lecture 9 - Radical Political Economy: Marx and His Sources
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- The History of Economics
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- Agenda Publishing
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- 09 August 2023
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- 30 November 2017, pp 137-152
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Summary
Aims of the lecture
1. To show how Marx used the political economy of the early nineteenth century to construct a critical history of the capitalist mode of production.
2. To make clear that Capital was not only an unfinished work, it was a work that Marx either could not finish, or no longer wished to finish.
3. To present Marx’s political economy in its contemporary context, and so excluding subsequent interpretations of his writings.
Bibliography
Marx worked by drafting and redrafting, so besides the published work there is a much larger mass of unpublished and disorderly material that has survived and been transferred into print by the editors of the current complete works, the Marx–Engels Gesamtausgabe, a project that began in the German Democratic Republic in the 1970s and is still ongoing in the Federal Republic. The volumes of the new Gesamtausgabe were very expensive when it started, and so very few libraries outside the Soviet bloc subscribed to it. However, the collapse of the GDR and unification flooded the second-hand market with surplus collections, and individual volumes published before 1990 are now therefore available quite cheaply. This edition replaced the earlier Dietz Verlag version, which was always cheap, but marred by editorial prejudice and dogmatism. The English 50-volume Collected Works is for the most part based on the Dietz edition.
There is of course a diverse mass of commentary on Marx, mostly dated and unreliable. The ongoing work of the Gesamtausgabe has breathed new life into old controversies; much of the newer specialist writing fails to engage with current standards in intellectual history. One major exception here is Peter Ghosh, “Constructing Marx in the History of Ideas”, Global Intellectual History (forthcoming), which provides a masterly overview of Marx’s intellectual career and that of his writings. The standard biography is now Gareth Stedman Jones, Karl Marx: Greatness and Illusion (London: Allen Lane, 2016). There is also a vast literature of “Marxist economics” going back to the later nineteenth century. However, most of the issues discussed at great length in such writing are constructions upon Marx’s writings by individuals seeking to develop Marx’s “insights”.
Lecture 7 - Political Economy, Philosophic Radicalism and John Stuart Mill
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- Book:
- The History of Economics
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- Agenda Publishing
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- 09 August 2023
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- 30 November 2017, pp 107-122
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Summary
Aims of the lecture
1. To show how the objective theory of value and price espoused by Malthus and Ricardo in the 1810s and 1820s transformed into a subjective theory of value by the 1870s.
2. To show that this shift was mediated first by James Mill’s Elements of Political Economy (1821) and then by John Stuart Mill’s Principles of Political Economy (1848).
3. To demonstrate that far from Millian political economy being continuous with that of Ricardo, the work of Say and Bentham was influential in detaching Mill from this “classical” framework, and that this detachment laid the foundations for the work of Stanley Jevons, Francis Edgeworth, Alfred Marshall and Philip Wicksteed, which is discussed in lectures 10 and 12.
Bibliography
Donald Winch has collected together James Mill’s principal writings as James Mill: Selected Economic Writings (Edinburgh: Oliver & Boyd, 1966), although this edition is marked by the then-current idea that Mill is a “popular” version of Ricardo, whereas a close reading of Mill reveals that his version of Ricardo is in many regards a more workable version of contemporary political economy.
John Stuart Mill’s writings are available as The Collected Works of John Stuart Mill, 33 volumes, J. M. Robson (ed.) (Toronto: University of Toronto Press, 1963–91); the Liberty Fund have paperbacked some titles, and all of the Toronto edition is available to download from the Library of Liberty website (http://oll.libertyfund.org/titles/mill-collected-works-of-john-stuart-mill-in-33-vols (accessed 26 October 2017)).
William Thomas’s The Philosophic Radicals (Oxford: Oxford University Press, 1979) provides the essential context to the work of the young John Stuart Mill.
Joseph Persky’s The Political Economy of Progress: John Stuart Mill and Modern Radicalism (New York: Oxford University Press, 2016) is a reliable re-evaluation of Mill’s arguments about social and economic progress.
For an overview of discussion of political economy in nineteenth-century periodicals see Frank W. Fetter, “Economic Controversy in the British Reviews, 1802–1850”, Economica 32 (1965), 424–37.
Lecture 6 - Political Economy in Continental Europe and the United States
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- The History of Economics
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- Agenda Publishing
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- 09 August 2023
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- 30 November 2017, pp 95-106
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Summary
Aims of the lecture
1. To broaden the perspective on the development of political economy in Continental Europe and North America during the first half of the nineteenth century.
2. To emphasize the role of the work of Jean-Baptiste Say in these developments.
3. To point up the leading role played by French political economy in the international development of political economy in the first half of the nineteenth century.
Bibliography
Schumpeter’s History of Economic Analysis is the only general text that covers early nineteenth-century Continental European political economy in any detail, although it is notable today for the scope of its coverage rather than the merits of its discussion. A preliminary overview of French and German sources can be found in Keith Tribe, “Continental Political Economy from the Physiocrats to the Marginal Revolution”, in Theodore M. Porter and Dorothy Ross (eds), Cambridge History of Science, volume 7 (Cambridge: Cambridge University Press, 2003), 154–70. Gilbert Faccarello (ed.), Studies in the History of French Political Economy: From Bodin to Walras (London: Routledge, 1998) is the most accessible modern English-language survey of French political economy; while chapters 8 and 9 of Keith Tribe, Governing Economy: The Reformation of German Economic Discourse 1750–1830, second edition (Newbury: Threshold Press, 2017), deal in detail with the early development of Nationalökonomie and the influence of Karl Heinrich Rau through to the later nineteenth century. For the United States, the best general survey remains Joseph Dorfman, The Economic Mind in American Civilization, five volumes (New York: Viking, 1946; new edition 1959).
Central to the story in this and the following lecture are the writings of Jean-Baptiste Say. For his biography see Evert Schoorl, Jean-Baptiste Say: Revolutionary, Entrepreneur, Economist (Abingdon: Routledge, 2013). The political background to his thinking is outlined in Richard Whatmore, Republicanism and the French Revolution: An Intellectual History of Jean-Baptiste Say’s Political Economy (Oxford: Oxford University Press, 2000), while Philippe Steiner, “The Structure of Say’s Economic Writings”, European Journal of the History of Economic Thought 5 (1998), 227–49, gives an overview of his political economy.
Frontmatter
- Roger E. Backhouse, University of Birmingham and Erasmus Universiteit Rotterdam, Keith Tribe
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- Book:
- The History of Economics
- Published by:
- Agenda Publishing
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- 09 August 2023
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- 30 November 2017, pp i-iv
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