Steven Pressman’s 50 Major Economists is a fantastic introduction to the lives of the men and women who have shaped and continue to shape our world. As a subject that overlaps with sociology and psychology, it has as much in common with their softness as it does with mathematical concreteness.
Thorstein Veblen is as enlightening as the latest paper on computational econometrics. Economics is vast and deceptively simple, and everyone has a fleeting and superficial familiarity with its major problems. Perhaps this is why everyone and their uncle believes they can solve them by propounding on credit, interest, supply, and demand while stupidly waving a can of Bud Lite.
Adam Smith is rightfully revered as the discipline’s father, but even he was not without his predecessors. The men who came before him not only shaped his thought and framed the controversies, but introduced topics that are still matters of heated debate.
Adam Smith’s predecessors
Thomas Munn’s thoughts on India laid the foundations for British imperialism. It is not uncommon for the sciences, even hard sciences, to subordinate themselves to the prevailing ideologies of the day. The blending of Social Darwinism and laissez faire with Christianity during America’s Gilded Age should convince even the most idealistic among us that the desire for wealth, even if the quest itself leaves noble achievements behind, either subdues or destroys any belief that stands in its way. Although mercantilism has gone out of fashion and Munn was active in the early 1600’s, his advocacy for trade surpluses as a mechanism for economic growth influenced John Maynard Keynes, arguably the most important economist of the twentieth century.
William Petty, however, was a more direct ancestor since he saw surpluses as a way of increasing employment as well as growth. Petty also looked at government spending as a way of creating jobs and energizing economies.
Cantillon Effects, and classical monetary theory as a whole, also predate Smith. Again, while we tend to think of money supply debates in terms of our own century, one dominated by the growing power of central banks, the issue itself is quite old. Richard Cantillon, who made a fortune investing in John Law’s infamous Mississippi Company, had hands on understanding of prices and was the first to view the economy as an “interrelated system.”
He is better known as an influence on Francois Quesnay, who is, somewhat unfairly, greatly overshadowed by his Scottish contemporary. As a physiocrat Quesnay emphasized the importance of land and agriculture. His Tableaux was an early attempt at modelling, which makes him the first true econometrician. Like Smith Quesnay saw the power of the invisible hand, and is thus held in high esteem by Neoclassicists and Austrians. Keynesians can identify with his prescription for spending to facilitate the flow of goods and services. Smith sharply disagreed. It seems, as it so often happens in intellectual history, one figure can bury another, even if their ideas were similar, or if the one casting the shadow was influenced by the one upon whom the shadow was cast.
History, as the sum of lives, is no more equitable than its parts.
Discourses around the narrative
John Locke, David Hume, and John Stuart Mill, although better remembered today as philosophers, were also economists. Let us stop the narrative here, and move beyond the summary of the book. The way in which ideas are born and develop is as important as their intended form. This is not Plato’s heaven; we work with shoddy imitations of perfect forms. Yet the Neoclassicists seemed to think general equilibrium was something towards which economies strived and could, realistically, reach. Physics envy coupled with a blindness to chaos and complexity drove Jevons and Walras, both still widely respected within the profession, to draw conclusions being disputed more and more by Austrians, Post-Keynesians, and other sensible academics who want to discard these infantile models. Once again context shows us how these erroneous conclusions became so popular and widely accepted.
The explosion in complexity, connectivity, conflict, and crisis paves way for new thinkers with more nuanced perspectives.
The plot thickens as we enter the twentieth century. At this point, one is overwhelmed by the information presented in the book. Interest, credit, unemployment, inflation, supply, and demand continue to plague humanity. Any misunderstanding of what they are, how they function, or who stands to gain by knowingly or unknowingly misrepresenting them, will have dire consequences. Those who do not peer into the past are doomed to repeat it.
Throughout the book, Dr. Pressman remains impartial and allows his readers to draw conclusions and make conceptual connections for themselves. Books that do this instead of hammering away at a thesis are welcome additions to any library. Historical literacy is increasingly recognized as a key component to a genuine understanding of the field.
Adam Alonzi is a writer, documentary maker, futurist, inventor, and programmer. He is the founder of Prometheus Biotechnologies and serves as an analyst for the Millennium Project. He is the author of A Plank in Reason and Praying for Death: A Zombie Apocalypse. His personal blog can be found at adamalonzi.wordpress.com and his podcast at adamalonzi.libsyn.com–