Thomas Sowell’sends with a chapter called ‘Thoughts on the History of Economics’. He writes: “What does classical economics have to say to us today? … Certainly one need not have read a word of Smith or Ricardo in order to get an economics degree, tenure, or an appointment to the Council of Economic Advisers. But if one is still old-fashioned enough to want to be an educated individual, then an understanding of how ideas evolve and how the dynamics of polemics can drive both parties to untenable positions should be part of that education.”
[amazon_image id=”0300126069″ link=”true” target=”_blank” size=”medium” ]On Classical Economics[/amazon_image]
He continues: “While free market economics is regarded by many today as an old conservative idea, it was in fact one of the most revolutionary concepts to emerge in the long history of ideas…. The idea of a spontaneously self-equilibrating system – the market economy – first developed by the physiocrats and later made part of the tradition of classical economics by Adam Smith, represented a radical departure, not only in analysis of causation but also in seeing a reduced role for political, intellectual or other leaders as guides or controllers for the masses.”
I recently reviewed David Simpson’s new book,, which puts recent thinking about the economy as an emergent, self-organising system in the context of the classical tradition – although he emphasises the dynamics and the presence of continual disequilibrium, unlike Sowell, who sees the system as tending towards equilibrium.
As Sowell says, many practising economists have no clue about classical economics. One of the distinguishing – and regrettable – features of economics is its lack of interest in how the prevailing ideas came about. Thinking back to yesterday’s post on introductory economics books, students should all read a book like Heilbronner’s famous, or – a bit less accessible – Sandmo’s . (There was also a recent episode of In Our Time about the physiocrats, which was very good.)
[amazon_image id=”068486214X” link=”true” target=”_blank” size=”medium” ]The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers[/amazon_image]
I was very struck by Daniel Stedman-Jones’s history of the rise of neo-liberal economics,, which explained both the consciousness of themselves as developing a new world view, and the long practical campaign to get politicians to adopt their ideas. The current consensus in economics is the end-product of the history of thought in the subject – and you need to know what you think to start with before you can change.