Published online: 24 Sep Article. James Steuart and the making of Karl Marx's monetary thought. Gomez Betancourt et al. Published online: 4 Sep The history of economic thought concerns thinkers and theories in the field of political economy and economics from the ancient world right up. History of Economic Ideas is a new international series of Quaderni di storia dell'economia politica, a journal founded in to promote collaboration bet.


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Similar history of economic ideas many ways history of economic ideas the modern concept of long run equilibriuma just price was just sufficient to cover the costs of productionincluding the maintenance of a worker and his family. Aquinas argued it was immoral for sellers to raise their prices simply because buyers had a pressing need for a product.

Aquinas discusses a number of topics in the format of questions and replies, substantial tracts dealing with Aristotle's theory. Questions 77 and 78 concern economic issues, primarily what a just price might be, and the fairness of a seller dispensing faulty goods.

Aquinas argued against any form of cheating and recommended always paying compensation in lieu of good service[ clarification needed ].

His publication of the An Inquiry Into the Nature and Causes of the Wealth of Nations in happened to coincide not only with the American Revolution and shortly before the Europe-wide upheavals of the French Revolutionbut history of economic ideas the dawn of a new industrial revolution that allowed wealth to be created on a larger scale than ever before.

Smith argued for a "system of natural liberty" where individual effort was the producer of social good. He believed even the selfish within society history of economic ideas kept under restraint and worked for the good of all when acting in a competitive market.

He regarded prices not to be necessarily representative of the true value of goods and services.


Following Locke, Smith thought true value of things derived from the amount of labor invested in them. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages" Smith Adam Smith's famous statement on self history of economic ideas Smith believed that a history of economic ideas produced what he dubbed the "progress of opulence.

Both labor division and market widening requires more intensive accumulation of capital by the entrepreneurs and leaders of business and industry. The whole system is underpinned by maintaining the security of property rights.

Smith's vision of a free market economy, based on secure property, capital accumulation, widening markets and a division of labor contrasted with the mercantilist tendency to attempt to "regulate all evil human actions" Smith When the butchers, the brewers, and the bakers acted under the restraint of an open market economy, their pursuit of self interest, thought Smith, paradoxically drives the process to correct real history of economic ideas prices to their just values.

Famously, Smith referred to this ability to self-regulate as an "invisible hand" guiding the marketplace. Say argued that there could never be a general deficiency of demand or a general glut of commodities in the whole economy.

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Production is therefore not a question of supply, but an indication of producers demanding goods. Production is demand, so it is impossible history of economic ideas production history of economic ideas outrun demand, or for there to be a "general glut" of supply.

At most, there will be different economic sectors whose demands are not fulfilled. But over time supplies will shift, businesses will retool for different production and the market will correct itself. This remained a foundation of economic theory until the s.

History of economic thought

David Ricardo is renowned for his history of economic ideas of comparative advantage For London -born David Ricardoeconomics was all about the relationship between the three "factors of production"—land, labor, and capital.

His best known work is his Principles of Political Economy and Taxationwhich contains his critique of barriers to international trade. The Corn Laws of the UK had been passed insetting a fluctuating system of tariffs to stabilize the price of wheat in the domestic market.


Ricardo argued that raising tariffs, despite being intended to benefit the incomes of farmers, would merely produce a rise in the prices of rents that went into the pockets of landowners. Furthermore, extra labor would be employed leading to an increase in the cost of wages across the board, and therefore reducing exports and profits coming from overseas business.

Ricardo demonstrated mathematically that the gains from trade would outweigh the perceived advantages of protectionist policy.

His law of comparative advantage revealed that even if one country is inferior at producing all of its goods than another, it may still benefit from opening its borders since the inflow of goods produced in another country more cheaply than at home results in a gain for domestic consumers.

John Stuart Mill was the dominant figure of political economic thought of his time. Mill's textbook, Principles of Political Economy, first history of economic ideas in was essentially a summary of the economic wisdom of the mid-nineteenth century Pressman It was used as the standard text by most history of economic ideas well into the beginning of the twentieth century.

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