A History of Economic Theory and Method

Title Page
About the Authors
Contents
Preface
Chapter 1 - Economics and Its History
	What Is the Value of Studying the History of Economics?
	Aim, Scope, and Method
	Suggestions on How to Use This Book
	Other Useful Resources and Information
Part I: Preclassical Economics
	Chapter 2 - Ancient and Medieval Economic Thought and Institutions
		Contributions of the Ancient Greeks
			Xenophon on Organization, Value, and the Division of Labor
			Plato and the Administrative Tradition
			Plato on Democracy and “Public Choice”
			Protagoras and the Hedonic Calculus
			Aristotle and Two-Party Exchange
			Aristotle on Money and Interest
		Roman and Early Christian Contributions
		Chinese Economics in the First Millennium
			Confucius and His Followers
			The Legalists
			The Moists
		Medieval Arab-Islamic Economics
		Medieval European Economic Thought
			Economics in a Feudal Society
			Scholastic Economic Analysis
			The Doctrine of Usury
		Theory Meets History: Economic Impact of Christianity and the Medieval Church
			Church Organization
			Maintenance of the Church Monopoly and Doctrinal Manipulations
		Conclusion
		References
		Notes for Further Reading
	Chapter 3 - Mercantilism
		Mercantilism as Doctrine: The Economics of Nationalism
			The Mercantilists and Real-World Ideas
			International Trade
			The Nation-State: Mercantilism as Domestic Policy
			Labor and the “Utility of Poverty”
		Mercantilism as an Economic Process
			Some Basic Concepts in the Modern Theory of Regulation
			Entrepreneurship: Productive and Unproductive
			Internal Regulation in English Mercantilism
			The Enforcement of Local Economic Regulation
			The Mercantilist Judiciary and the Breakdown of National Monopolies
			Effects of Judicial Competition on the Durability of Monopoly Rights
			The Decline of Mercantilism and the Rise of Parliament
		Transition to Liberalism
			The Doctrinal Transition: Mandeville
			The Institutional Transition
		Conclusion
		References
		Notes for Further Reading
	Chapter 4 - The Dawn of Capitalism
		Sir William Petty
			Economic Method
			On Money
			On Value
		Nascent Liberalism in France: Boisguilbert, Cantillon, and the Physiocrats
			Boisguilbert (1646–1714)
		Richard Cantillon
			The Market System
			Competition and Entrepreneurship
			The Effect of Money on Prices and Production
			Physiocracy: “The Rule of Nature”
			Physiocratic Economics
			Criticisms of Physiocracy
		The Spanish Enlightenment: Iberian Economics
			Liberalism and Free Trade
			Economic Societies and Economic Education
		Capitalism at the Junction of Ideas and History
		The Decline of Catholicism and the Rise of Protestantism
			Weber’s Thesis
			Medieval Science and the Emergence of Capitalism
			Preconditions of Market Exchange
		Conclusion
		References
		Notes for Further Reading
Part II: The Classical Period
	Chapter 5 - Adam Smith: System Builder
		The Nature of Smith’s Economic System
			Natural Law and Property Rights
			Human Nature
			A Theory of History: Self-Interest and Economic Growth
		Microeconomic Foundations of The Wealth of Nations
			The Theory of Value
			Factors and Their Shares
			The Critical Role of the Entrepreneur
		Smith’s Macroeconomics: Blueprint for Economic Development
			Division of Labor
			Wealth, Income, and Productive and Unproductive Labor
			The Role of Capital
		Conclusion
		References
		Notes for Further Reading
	Chapter 6 - Classical Economics (I): Utility, Population, and Money
		Jeremy Bentham and Utilitarianism
			The Felicific Calculus
			An Evaluation of Utilitarianism
		Thomas Robert Malthus and Population
			An Outline of the Theory
		Early Monetary Issues
			Preclassical Monetary Theory
			Classical Monetary Theory
		Classical Economics and the Generators of Trade and Value
		Conclusion
		References
		Notes for Further Reading
	Chapter 7 - Classical Economics (II): The Ricardian System and Its Critics
		The Classical Doctrine of Land Rent
		The Ricardian System
			The Labor Theory of Value: Empirical or Analytical?
			The Nature of Economic Progress: Toward the Stationary State
		The Ricardo–Malthus Correspondence
			The Corn Laws Controversy
			Economic Method
			Say’s Law and Underconsumption
			Ricardo and Entrepreneurship
		Nassau Senior and the Emergence of “Scientific” Economics
			Senior on Economic Method
			Value and Costs
		The Supremacy of Ricardian Economics
		The Elegant Dynamics of the Classical System
		Conclusion
		References
		Notes for Further Reading
	Chapter 8 - Classical Economics (III): John Stuart Mill
		Mill’s Intellectual Transition
			Exposure to the Romantics
			Mill and Comte
		The Structure of Mill’s Economic Inquiry
			The Character and Aim of Principles
			Mill on Production
			Mill on Economic Growth
		Mill’s Theoretical Advances
			Supply and Demand
			Joint Supply
			The Doctrine of Alternative Costs
			The Economics of the Firm
			The Theory of Noncompeting Labor Groups
			The Theory of Market Gluts
			Mill’s “Neoclassical” Contributions
		Mill’s Normative Economics
			The Stationary State Revisited
			Wealth Redistribution
			Government and Laissez-Faire
		Mill and the Decline of Classical Economics
			The Wages-Fund Revisited
			Mill’s Recantation
		Entrepreneurism at the Classical Summit
		Conclusion
		References
		Notes for Further Reading
Part III: Responses to the Industrial Revolution--Orthodox and Heterodox
	Chapter 9 - Economic Policy in the Classical Period: Technology, Labor, and Poverty
		The “Real World” of Classical Economics
		Income Distribution in England
		Early Reforms: The Poor Laws and Factory Acts
		Labor as a Utilitarian Policy Issue
		The Big Question: Can the Poor Be Lifted out of Poverty?
		Technology, Labor, and Poverty: Classical Perspectives
			Labor Conditions and the Business Cycle
			Labor, Technology, and Human Capital
		Conclusion
		References
		Notes for Further Reading
	Chapter 10 - J. S. Mill and Edwin Chadwick on Taxation and Public Economics
		Social and Economic Policies of J. S. Mill
			Nature and Scope of Economic Policy
			Taxation and Poverty
			Income Redistribution in Theory and Practice
			A Brief Summary of Mill’s Approach
		The Political Economy of Sir Edwin Chadwick
			Law, Economics, and the Artificial Identity of Interests
			Economics of Crime and the “Preventive Principle”
			Disease, Sanitation, and Living Conditions of the Poor
			Changing Economic Constraints
			Sanitation and the Economy
			Public Goods and Institutional Forms of Competition
			A Brief Summary of Chadwick’s Approach
		Conclusion
		References
		Notes for Further Reading
	Chapter 11 - Nineteenth-Century Heterodox Economic Thought
		Romanticism
		European Evolutionary Thought
			Condorcet and the Laws of History
			Saint-Simon: Pixilated Prophet of Industrialism
			Simonde de Sismondi Rejects Say’s Law
			List and National Political Economy
		The Utopian Socialists
			Owen’s Grand Experiment
			Fourier’s Shattered Dream
			Proudhon: “Scholastic Anarchist”
		German Historicism
			Wilhelm Roscher
			Gustav Schmoller
		Heterodoxy and Entrepreneurism
		Conclusion
		References
		Notes for Further Reading
	Chapter 12 - Karl Marx: Historical Determinism vs. Utopian Socialism
		Overview of the Marxian System
			Hegel, Feuerbach, and German Philosophy
			Marx’s Economic Interpretation of History
			Static versus Dynamic Forces in Society
		Marx’s Early Writings on Capitalist Production
			The Economic and Philosophical Manuscripts of 1844
			The Grundrisse (1857–1858)
		The Nature of Capitalism
			The Labor Theory of Value
			The Laws of Capitalist Motion
			The End of Capitalism and Beyond
		Conclusion
		References
		Notes for Further Reading
Part IV: The Neoclassical Era
	Chapter 13 - Proto-Neoclassical Economics in France: Cournot and Dupuit
		A. A. Cournot (1801–1877)
			Cournot on Method
			Cournot’s Micro Models
			Cournot: An Evaluation
		Jules Dupuit (1804–1866)
			Dupuit’s Unique View of Economics
			Marginal Utility and Demand
			Consumer Surplus, Monopoly, and Price Discrimination
			Price Discrimination and Welfare: Numerical Analysis
			Discrimination: Dupuit’s Graphics
			Dupuit and Entrepreneurship
			Benefit-Cost Analysis: The Early Application of Price Theory to Public Goods
		Engineers and Cross-Fertilization of Economic Ideas
		Conclusion
		References
		Notes for Further Reading
	Chapter 14 - Microeconomics in Germany and Austria: Menger, Wieser, and Böhm-Bawerk
		German Proto-Neoclassicists
			J. H. von Thünen
			H. H. Gossen
			H. K. von Mangoldt
		Carl Menger (1840–1921)
			Menger and Economizing Man
			Economic Goods and the Valuation Process
			The Equimarginal Principle
			Imputation and Factor Values
		Friedrich von Wieser (1851–1926)
			Value Theory
			Factor Valuation: Wieser’s Theory of Imputation
		Eugen Böhm-Bawerk (1851–1914)
			Subjective Value and Exchange
			Capital Theory
		Entrepreneurism in German and Austrian Economics
		Conclusion
		References
		Notes for Further Reading
	Chapter 15 - Microeconomics in England and America: W. S. Jevons and J. B. Clark
		W. S. Jevons
		Jevons’s Theory of Value
			Utility Theory
			Theory of Exchange
			Theory of Labor Supply
		Jevons as a Pure Theorist
		Jevons and Statistical Science
			Price Series and Index Numbers
			Sunspots and Commercial Activity
		Jevons and the International Spread of Economic Ideas
		John Bates Clark and Marginalism in America
			The Marginal-Utility Theory of Value
			The Marginal-Productivity Theory of Distribution
		Assessing Clark’s Contribution
		Clark on Entrepreneurship
		Conclusion
		References
		Notes for Further Reading
	Chapter 16 - Alfred Marshall and the Neoclassical Synthesis
		Marshall and His Method
			Marshall’s Definition of Economics
			Time and Ceteris Paribus
			Time and Markets
		Industry Supply and the Economics of Production
			Increasing and Decreasing Costs
			Long-Period Supply: Analytical Difficulties
		Demand and Consumer Surplus
			Marshall’s Demand Curve Specification
			Consumer Surplus
		Marshall on Optimum Pricing and Monopoly
			The Increasing-Cost Case
			Subsidies and Decreasing Costs
			Monopoly and Economic Welfare
			The Case of Externalities
		Marshall on Elasticity, Factor Demand, and Optimal Resource Allocation
			Elasticity
			Factor Demand
			Resource Allocation and the Distribution of Product
		Marshall on Capital and Entrepreneurship
		Conclusion
		References
		Notes for Further Reading
	Chapter 17 - The Mantle of Léon Walras
		Contrasts between Marshall’s and Walras’s Approaches
			Partial Equilibrium versus General Equilibrium
			Doctrinal Antagonism over Method
		Léon Walras: Sketch of His Life and Work
		Walras and Marshall on the Market Adjustment Mechanism
			Price Adjustments versus Quantity Adjustments
			Backward-Bending Supply
			How Important Is Market Stability?
		The Role of the Entrepreneur in Walrasian Economics
		Pareto, General Equilibrium, and Welfare Economics
			A Pareto Maximum in Consumption
			Paretian Factor Substitution
			Welfare and Competition
		Walras’s Correspondence and Its Impact on Economics
		Conclusion
		References
		Notes for Further Reading
	Chapter 18 - Hegemony of Neoclassical Economics
		The Proto-Neoclassicists before 1870
		Lessons to Be Learned
		What Did Marshall Know and Where Did He Learn It?
		Conclusion
		References
		Notes for Further Reading
Part V: Twentieth-Century Paradigms
	Chapter 19 - British Historicism, Thorstein Veblen, and American Institutional Economics
		Nineteenth-Century British Historicism
			Bagehot, Spencer, and Darwin
			Comte, Ingram, and Cliffe-Leslie
			The Impact of British Historicism
		Thorstein Veblen and American Institutionalism
			The Critic’s Life and Preconceptions
			Human Nature and Economic Method
			“Matter of Fact” versus Animistic Preconceptions
			The Interaction of Ceremony and Technology
			Economics Meets Sociology: Conspicuous Consumption
			Economic Change and the Future of Capitalism
			A Brief Assessment of Veblen’s Economics
		Second-Generation Veblenians
			John Rogers Commons (1862–1945)
			Wesley Clair Mitchell (1874–1948)
			Clarence Edwin Ayres (1892–1972)
		John Kenneth Galbraith: The Institutionalists’ Popularizer
			Countervailing Power
			Social Imbalance
			Some Comments on Galbraith’s System
		Conclusion
		References
		Notes for Further Reading
	Chapter 20 - Competition Revised: Chamberlin and Robinson
		Duopoly Analysis
			Sraffa and Imperfect Competition
			Taussig and Pigou on Railway Rates
		Chamberlin’s Quest for a New Theory
			Product Differentiation
			Advertising as a Means of Differentiation
			Chamberlin’s Two Demand Curves
			Long-Run Equilibrium in a Chamberlin Regime
			Monopolistic Competition: A Waste of Resources?
			Chamberlin: A Tentative Evaluation
		Joan Robinson and Imperfect Competition
			Pigou, Robinson, and the Theory of Price Discrimination
			Output Effects: Robinson’s Contribution
		Knight, Chamberlin, Robinson, and Entrepreneurism
		Conclusion
		References
		Notes for Further Reading
	Chapter 21 - John Maynard Keynes and the Development of Modern Macroeconomics
		Overview of Keynes and His Economics
		J. M. Keynes, Dilettante and Economic Theorist
		Theoretical Outline of the General Theory
			Keynes’s Reaction to the Classics
			Aggregate Demand
			The Role of Investment
			Unemployment Equilibrium
			Liquidity Preference and the Role of Money in the Keynesian System
			Prices: Flexible or Inflexible?
			Fiscal versus Monetary Policy
		Paradigm Shift or Paradigm Realignment?
		Conclusion
		References
		Notes for Further Reading
	Chapter 22 - Contemporary Macroeconomics: Monetarism and Rational Expectations
		Monetary Theory Goes Neoclassical
			Irving Fisher and the Equation of Exchange
			Knut Wicksell and Modern Monetary Theory
			The Cambridge Equation
		Modern Monetarism: Theory and Policy
			Friedman’s Theory of the Demand for Money
			A Simplified Monetarist Explanation of Inflation
			Inflation and Unemployment: The Monetarist Reaction
			Monetarist Economic Policy
		Conclusion
		References
		Notes for Further Reading
	Chapter 23 - Austrian Economics
		The Gestalt of Austrian Economics
		Ludwig von Mises: The Theory of Money and Credit
			Subjective Use Value versus Objective Exchange Value
			The Effect of Changes in Money on Relative Prices
		F. A. Hayek and the Theory of Business Cycles
		Joseph Schumpeter on Competition, Dynamics, and Growth
			Entrepreneurs and Innovation
			Business Cycles
		Competition and the Market Process
		Advertising and Demand Discovery
		The Socialist Calculation Debate
		Conclusion
		References
		Notes for Further Reading
	Chapter 24 - The New Political Economy: Public Choice and Regulation
		Public Choice
			Public-Goods Demand and the Median-Voter Model
			Lindahl Tax Prices and Wicksellian Public Finance
			Bureaucracy, the Supply Side, and Empirical Public Choice
		The New Political Economy of Regulation
			Rents, Politics, and Regulation
		Conclusion
		References
		Notes for Further Reading
Part VI: Back to the Future: The Twenty-First Century
	Chapter 25 - Mathematical and Empirical Economics: A Method Revolution
		History and Development of Mathematical Economics
		Common Mathematical Tools Used in Economics
			Calculus
			Linear Systems and Algebra
		Cournot’s Heirs: Applications of Mathematics to Economic Ideas
			Linear Mathematical Relations
			Game Theory
			Experimental Economics, Mathematics, and Game Theory
		Empiricism in Economics: Testing Economic Theory
			Descriptive Statistics and Economic Theory
			Getting (Tentative) Answers: The Method of Neoclassical Theory and Empiricism
			Regression Analysis
			The Quest for Knowledge: Modern Econometrics
		Conclusion
		References
		Notes for Further Reading
	Chapter 26 - Changing the Boundaries of Microeconomics: Demand, Consumption, and "Rationality"
		Modern Consumption Technology
			The Household as a Factory
			The Economics of Information
			Issues Concerning the Quality of Goods and Services
			Innovations in Demand Theory
		Newer Theories of the Firm
			Why Firms? The Coasian Perspective
			Team Production and Shirking in the Firm
			Entrepreneurship Redux
			Markets, Information, and “Lemons”
		Nontraditional Approaches: Prospect Theory, Happiness Theory, and Neuroscience
			Prospect Theory
			Happiness Theory
			Neuroscience
		Conclusion
		References
		Notes for Further Reading
	Chapter 27 - The Resurgence of Economics as a Social Science
		Economics and Sociology
			The Economics of Dating and Mating
			Marriage as an Economic Contract
		Economics and Art
		Economics and Religion
			Cult Behavior
			Industrial Organization and Religion
		Economics and Archeology
		Economics and Politics
			Voting
			Interest Groups
		Conclusion
		References
		Notes for Further Reading
	Chapter 28 - Quo Vadis? Economics in the Twenty-First Century
		Nobel Laureates and Economics
		The Transmission of Ideas and the New “Technology” of Economics
		Ideas, Ideology, and History
		Does Method Matter?
		Is Schism in the Cards for Economics?
		References
Name Index
Subject Index