History of Economic Thought

These guided readings trace the development of the theories of value (prices of commodities) and distribution (incomes and wealth) and their relation to the arguments for and against laissez-faire.

The readings will be organized as:

• Adam Smith sets the agenda for economics

• The transition from Classical Economics to the Marginalist Revolution of the 1870’s (Neo-classical Economics)

• Austrian Economics and Market Socialism

• The transition from Neo-Classical Economics to the Incentive Revolution of the 1970’s.

 

As background for Smith, a brief review of:

Mercantilism

Physiocrats

Smith

– Theory of Moral Sentiments

– Lectures on Jurisprudence

– Wealth of Nations

Classical Economics

∗ Malthus
∗ Ricardo
∗ Mill

Pre-cursors of the Marginalist Revolution

∗ Bentham
∗ Gossen
∗ Cournot
∗ Dupuit

Marginalist Revolution

∗ Jevons
∗ Menger (Austrian School) → Weiser, Bohm-Bawerk
∗ Walras (General Equilibrium) → Pareto

Marginal Productivity: Wicksteed, Clark, Edgeworth

Cambridge School: Sidgwick, Marshall, Pigou

• Austrian Economics and Market Socialism

Austrian

∗ Mises, Hayek

Market Socialists

∗ Lange, Lerner

 

• The transition from Neo-Classical Economics to the Incentive Revolution of the
1970’s.

Game Theory and Modern Duality

∗ von Neumann

Incentives

∗ Nash
∗ Vickrey, Hurwicz, Spence, Rothschild-Stiglitz, Alchian-Demsetz, etc., etc.