In The History of Economic Analysis, Schumpeter argues that the evolution of economic ideas proceeds in jumps rather than in smooth continuities. Periods of consolidation, stagnation, and simple elaboration are followed by periods of progress and revolution in basic economic concepts and models.

While to many Schumpeter’s claim of discontinuity will seem too stark, it is in fact an accurate characterization of economics during the period between roughly 1780 and 1870. In that relatively short time frame, economics did jump among radically different visions of the nature of markets, society, and human beings. To give one example, which I will discuss later, whereas the classical economists viewed the economy as a system of relationships between social classes with distinct and competing interests, the neoclassical approach was founded on an image of the economy as a set of exchange relations between independent individuals. These alternative visions had far-reaching implications for their respective views of the nature and limits of markets and the justice (or injustice) of many market transactions.

The nineteenth-century political economists gave differing answers based on their distinct underlying visions and assumptions to the following questions: What is the subject of political economy? What is the relationship between the pursuit of private interest and public good? What is the relationship between the production of wealth and human well-being? What is a fair distribution of the social product? What is the place for state intervention into the economy?