Thomas Sowell’s [amazon_link id=”0300126069″ target=”_blank” ]On Classical Economics[/amazon_link] ends 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, [amazon_link id=”1781951969″ target=”_blank” ]The Rediscovery of Classical Economics[/amazon_link], 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 [amazon_link id=”068486214X” target=”_blank” ]The Worldly Philosophers[/amazon_link], or – a bit less accessible – Sandmo’s [amazon_link id=”0691148422″ target=”_blank” ]Economics Evolving: A History of Economic Thought[/amazon_link]. (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, [amazon_link id=”0691151571″ target=”_blank” ]Masters of the Universe[/amazon_link], 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.

One of the reasons this week has been busy is that I spent yesterday at a fantastic INET-hosted workshop on undergraduate curriculum reform. Regular readers will know I’ve had an interest and involvement in this since organising a conference co-hosted by the Bank of England and Government Economic Service in 2012, which was summed up in [amazon_link id=”1907994041″ target=”_blank” ]What’s The Use of Economics[/amazon_link].

[amazon_image id=”1907994041″ link=”true” target=”_blank” size=”medium” ]What’s the Use of Economics?: Teaching the Dismal Science After the Crisis[/amazon_image]

The workshop had participants from the US, Chile, India and Turkey as well as the UK contingent. In some of the universities represented, curriculum reform is already under way. There is of course an interaction between the content of the curriculum, both in terms of topics covered (eg is economic history in or out?) and the approach to economics involved, and the pedagogy. I think we all got quite inspired by the possibility of improving the way young people are taught economics, although there will be a lot of work in developing materials and working out how to encourage different universities and academics (not to mention students), facing a range of incentives and pressures, to change.

It was interesting to see what textbooks people use and what they think about them. Greg Mankiw’s [amazon_link id=”184480870X” target=”_blank” ]Economics[/amazon_link] is a market leader in many countries, but none of the participants yesterday like it. Many use Hal Varian’s [amazon_link id=”0393935337″ target=”_blank” ]Intermediate Microeconomics[/amazon_link] and think it is a great book but many dislike the approach to economics is has embedded: start with individuals and firms and consider them at length, then after many chapters put them in a perfectly competitive market, and in the last small section consider departures from that ideal – and non-existent – situation.

Two books I didn’t know about that were recommended yesterday were Joel Watson’s [amazon_link id=”0393929345″ target=”_blank” ]Strategy: An Introduction to Game Theory[/amazon_link] and Jonathan Gruber’s [amazon_link id=”1429278455″ target=”_blank” ]Public Finance and Public Policy[/amazon_link].

[amazon_image id=”0393929345″ link=”true” target=”_blank” size=”medium” ]Strategy: An Introduction to Game Theory[/amazon_image]