Saturday, August 8, 2020

"...A ‘pithy’ guide to history’s most influential economists"

From Spears' Magazine:

A study of 20 of history’s most influential economic thinkers reveals a broad range of iconoclasts
‘Why bother to learn about the history of economic thought?’ asks Callum Williams in his conclusion to this pithy and amusing guide to 20 thinkers, some of them obvious names, some obscure. One reason is that these thinkers were either important or influential or both, and that we might gain a better understanding of their arguments, which are often misrepresented.

Another is that it helps us to understand history in general, since these thinkers were invariably shaped by events. And the third reason is to appreciate that modern economists, despite their mathematical formulae, are just as fallible as their predecessors. Williams calls these thinkers members of the classical school because, unlike modern economists, they didn’t use mathematics to expound their theories and they tended to ask similar philosophical questions.

This tradition starts with Jean-Baptiste Colbert (1619–83), who was Louis XIV’s finance minister and created the ‘mercantile system’ with its pursuit of trade surpluses – and presided over economic decline. Williams describes Sir William Petty (1623–87) as the inventor of economics because he was the first person to attempt to measure national output, and Bernard Mandeville (1670–1733) as the first moral critic of capitalism.

The chapter on Richard Cantillon (1680–1734) starts with a bang: ‘Of all the people profi led in this book, none had a more eventful life than Richard Cantillon. His was full of sex, fraud and murder. Though he is barely known today, some regard him as the true founder of economics.’
Was he murdered in Mayfair by a disgruntled cook whom he had fired? Or did he stage his own death in order to evade those he had defrauded?

Williams teases us with these questions, but he is more interested in Cantillon because he recognised the role of geography in economics, came up with the concept of trade-offs, and developed the ideas of opportunity costs and ceteris paribus. The ‘first attempt to view the economy as a scientific, mathematical system’ came with François Quesnay (1694–1774) and his Tableau Economique, in which he demonstrated that ‘spending begets other spending’.

Although he had to wait until the 20th century to enjoy influence as an economist as opposed to a philosopher, David Hume (1711–76) has been described as an early monetarist. Williams says that ‘not everything he wrote was super-smart’. His views on population, banks and value are ‘outside the economic mainstream today’, and he had a terror of public debt....