A Concise History of Economic Thought

359 Pages·2009·0.9 MB·English

A Concise History of
Economic Thought
From Mercantilism to Monetarism
Gianni Vaggi and Peter Groenewegen
A Concise History of Economic Thought
Also by Gianni Vaggi
FROM THE DEBT CRISIS TO SUSTAINABLE DEVELOPMENT
THE ECONOMICS OF FRANCOIS QUESNAY
Also by Peter Groenewegen
ALFRED MARSHALL: Collected Essays
ALFRED MARSHALL: Critical Responses
AUSTRALIAN TAXATION POLICY: Survey 1965 to 1980
ECONOMICS AND ETHICS?
THE ECONOMICS OF A.R.J. TURGOT
EVERYONE’S GUIDE TO AUSTRALIAN TAXATION
FEMINISM AND POLITICAL ECONOMY IN VICTORIAN ENGLAND
A HISTORY OF AUSTRALIAN ECONOMIC THOUGHT (with Bruce McFarlane)
ITALIAN ECONOMICS PAST AND PRESENT (co-edited with J. Halevi)
OFFICIAL PAPERS OF ALFRED MARSHALL: A Supplement
PHYSICIANS AND POLITICAL ECONOMY
PUBLIC FINANCE IN AUSTRALIA: Theory and Practice
READINGS IN AUSTRALIAN TAX POLICY
A SOARING EAGLE: Alfred Marshall 1842–1924
SOCIALIST THOUGHT IN THE POST COLD WAR ERA (co-edited with Bruce
McFarlane)
THE TAXABLE CAPACITY OF LOCAL GOVERNMENT IN NEW SOUTH
WALES
TAXATION AND FISCAL FEDERALISM: Essays in Honour of Russell
Mathews (co-edited with H.G. Brennan and B.S. Grewel)
THE WHOLESALE SALES TAX IN HISTORICAL PERSPECTIVE
A Concise History of
Economic Thought
From Mercantilism to Monetarism
Gianni Vaggi
Professor of Economics
University of Pavia
Italy
and
Peter Groenewegen
Professor of Economics
University of Sydney
Australia
© Gianni Vaggi and Peter Groenewegen 2003
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First published in hardcover 2003
First published in paperback 2006 by
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ISBN-13: 978–1–4039–0333–99936–3 hardback
ISBN-10: 0–333–99936–3 hardback
ISBN-13: 978–1–4039–8739–6 paperback
ISBN-10: 1–4039–8739–4 paperback
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The Library of Congress has catalogued the hardcover edition as follows:
Vaggi, Gianni.
A concise history of economic thought: from mercantilism to
monetarism/Gianni Vaggi and Peter Groenewegen.
p. cm.
Includes bibliographical references and index.
ISBN 0–333–99936–3 (cloth)
ISBN 1–4039–8739–4 (pbk)
1. Economics–History. I. Groenewegen, Peter D. II. Title.
HB75 .V32 2002
330. 1–dc21 2002073546
10 9 8 7 6 5 4 3 2 1
15 14 13 12 11 10 09 08 07 06
Printed and bound in Great Britain by
Antony Rowe Ltd, Chippenham and Eastbourne
Gianni Vaggi dedicates this book to Paolo, Marco and Anna
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Contents
List of Figures x
Prologue xi
Foreword xvii
PART I CLASSICAL POLITICAL ECONOMY, 1600–1870
1 Introduction: from Mercantilism to Marx 3
Section I Seventeenth-century Pioneers
2 Thomas Mun, 1571–1641: from Bullion to Foreign Trade 15
3 Dudley North, 1641–91 and John Locke, 1632–1704: Early
Critical Reactions to Mercantilism 23
4 Sir William Petty, 1623–87: Division of Labour and Surplus 29
Section II Developments in French Economics
5 Pierre le Pesant Sieur de Boisguilbert, 1646–1714: France at the
Turn of the Century 39
6 Richard Cantillon, 1697–1734: the Entrepreneur in Agriculture
and Trade 46
Section III Towards a Mature Classical Political Economy
7 François Quesnay, 1694–1774: Reproduction and Capital 57
8 David Hume, 1711–76 and the Scottish Enlightenment 71
9 Ferdinando Galiani, 1728–87 and Sir James Steuart, 1713–80:
Real Value and Corn Trade 82
10 Anne Robert Jacques Turgot, 1727–81: Investments and Returns 92
Section IV The First Full Systems of Classical Political
Economy
11 Adam Smith, 1723–90: National Wealth and the Productivity
of Labour 103
12 Jean-Baptiste Say, 1767–1832 and Jean-Charles Simonde de
Sismondi, 1773–1842: Value, Revenues and Crises 117
Section V The ‘Golden Age’ of Classical Political Economy
13 Thomas Robert Malthus, 1766–1834: Population and Effectual
Demand 129
vii
viii Contents
14 David Ricardo, 1772–1823: the Rate of Profit 137
15 Torrens, Senior and the Aftermath of Ricardo 149
16 Karl Marx, 1818–83: the Critique of Political Economy 159
PART II MODERN DEVELOPMENTS, 1870–1960
17 Introduction: the Coming of Marginalism and
Macro-economics 179
Section I The First Generation
18 John Stuart Mill, 1806–73: a Figure of Transition 191
19 William Stanley Jevons, 1835–82: Utilitarianism and Economics 203
20 Carl Menger, 1840–1921: the Importance of Marginal Utility
and the Economics of Scarcity 211
21 Léon Walras, 1834–1910: the Notion of General Equilibrium 217
22 Alfred Marshall, 1842–1924: Partial Equilibrium and Useful
Economics 227
Section II The Development of Marginalist Economics:
Distribution and Capital Theory
23 J.B Clark and P.H. Wicksteed: the Development of Marginal
Productivity Theory 237
24 Von Wieser and Böhm-Bawerk: Austrian Versions of Capital and
Distribution Theory 244
Section III Pioneers of Macro-economics
25 Knut Wicksell, 1851–1926: Interest and Prices 255
26 Irving Fisher, 1867–1947: Appreciation and Interest 260
27 Joseph Alois Schumpeter, 1883–1950: Economic Development 265
Section IV Further Developments in Micro-economics
28 Pigou, Clapham and Scraffa: Wealth, Welfare and Cost
Controversies 273
29 Joan Robinson, 1903–83 and Edward Chamberlin, 1899–1967:
Theory of the Firm 283
30 Vilfredo Pareto, 1848–1923 and Lionel Robbins, 1898–1984:
Critique and Decline of Utility Theory 288
Section V The Foundations of Modern
Macro-economics
31 John Maynard Keynes, 1883–1946: a New General Theory of
Employment, Interest and Money 297
Contents ix
32 Michal Kalecki, 1898–1970: a New Macro-economics 308
33 R.F. Harrod, 1900–78 and E.D. Domar (1914–99): Cycles and
Growth 314
34 Milton Friedman (1912– ): Monetarism and its Critics 319
Epilogue 325
Bibliography 327
Index 331