Search

John Maynard Keynes, through his landmark book entitled 'General Theory,' influenced succeeding generations of economic thinkers. Keynes' assumptions and conclusions about macroeconomics in that book may no longer hold true in the 1990s but this and other works of his are avidly read by economists interested in the history of economic thought. Keynes foresaw the problem of business cycles and unemployment although he did not have anything to say on inflation. His followers elaborated on his findings, which were based on empirical tests.

John Maynard Keynes' macroeconomic thought has been misinterpreted by many including those who call themselves mainstream Keynesians. Keynes' explanation for unemployment did not point at supply and consequent price imperfections and inflexibility. On the contrary, Keynes focused on the demand side of the equation which, in the case of liquidity, is zero. For him, unemployment will still occur even when prices immediately respond to changes in other determinants.

Economist Thomas Sargent's emphasis of rational expectations in his economic thought arose from his desire to simplify and his use of engineering concepts to describe his theory. Sargent resorted to convenience to explain economic phenomenon which, unfortunately, destroyed the rational aspect of his work. His resort to an engineering frame of mind was also misguided as engineers are implementors and not theorists.

Amartya Sen rightly points at the political connection between equality and justice and the need to devise a principle for a moral or basal equality. But the Aristotelian view of proportionality fails to correspond to egalitarian rules. While equal treatment of equal cases matches with inegalitarian views of humanity, basal inequality of people can be assumed before constructing the principles of justice. Social Darwinism, which qualified the equality of humans according to might or fitness, offered a solution. The substance of moral equality must be assessed before devising a formal system.

Nineteenth-century business cycle theorists blamed speculations and risks for the fluctuations in the money market. John Mills emphasized mistaken expectations of the market operators, such as merchants, agents and bankers, as the cause of money market failures at regular intervals. Lack of proper knowledge about the functioning of business cycle and short-term profit motive stalled long-term sound investments. Mills' arguments support the 20th century analysis of cyclical fluctuations, suggesting that business cycle mechanisms are consistent, irrespective of time period and place.

Hicks claim that early 18th-century economic theorist Henry Thornton was a precursor of John Keynes in terms of ideas on monetary theory is wrong. Hicks claim was based on Thornton's views on the demand for money and the temporary nominal wage rate rigidity. However, the issue of rate of interest should rightly be regarded as the yardstick for comparing Thornton and Keynes. Both economists differed on that issue.

Novel laureate Gary Becker's 'A Treatise on the Family' contains ridiculous assertions because it uses theoretical econometrics to analyze family issues. This is especially evident in Becker's treatment of polygamy versus monogamy where he concludes that polygamy enhances women's position despite evidence that women in societies that practice polygamy are seen as inferior. Other examples of Becker's unrealistic analysis are the definition of altruism and explanation of fertility.

Economists do not like to define their discipline as shaped by the social construction of economic knowledge. As a result, they assume an authoritative position in presenting information as 'conclusions of scientific, detached research' using their own style of 'acceptable rhetoric.' In truth, however, economists' work are not objective because they are built upon their social, personal and political values.

The second chapter of John Maynard Keynes's 'General Theory of Employment, Interest, and Money' is one of the most debated topics in the field of economics. Upon close reading, the chapter, entitled 'The Postulates of the Classical Economy,' actually considers workers' concern for relative wages as a fundamental matter and not secondary as some interpreters argue. A rational reconstruction of Keynes' argument, which is a modification of the efficiency-wage model, shows that his perception of the labor market is not inconsistent with his analysis of wage and price behavior.

John Pullen has argued that textual evidence does not support the contention that Thomas Malthus changed his views concerning agricultural protection and recanted his arguments in favor of England's 19th-century Corn Laws. Pullen's argument, which is ultimately unconvincing, is critiqued.

Jean Magnan de Bornier, in his 1992 article 'The 'Cournot-Bertrand Debate': A Historical Perspective,' corrects misunderstandings concerning Augustin Cournot and Joseph Bertrand's review of Cournot and Leon Walras' works. The article failed to mention, however, John Bradford Cherriman's 1857 review of Cournot's 'Recherches sur les principes Mathematiques de la Theorie des Richesses.'

Samuel Hollander's argument that Thomas Malthus changed his views on agricultural protection and, after his publication of 'Principles of Political Economy,' recanted his arguments in favor of England's Corn Laws is not sustainable. The textual evidence offered by Hollander is analyzed, and it is argued that Malthus continued to support agricultural protection.

Adam Smith was a pioneer in the use of institutional individualism as a means of explaining social phenomena. For Smith, institutional forces and the principles of human nature are both important independent variables in the generation of social phenomena. Institutional individualism helped Smith grasp complex social processes better than his contemporaries.

Philosophical cosmology provided the unifying principles for Adam Smith's economic and moral theories, and he believed society to be part of a grand mechanical system. But unlike philosophers who thought that mechanistic cosmology provided a complete picture of reality, Smith believed that reality embodied a God-set plan that provided for mankind's temporal happiness. Smith's theories embodied both the individualistic drive for self-betterment and individuals' civic spirit.

In September 1954, I arrived at the University of Wisconsin to commence graduate studies in economics. I had taken a course on institutional economics at the University of Miami and [...]

ON THE EVENING OF SATURDAY, SEPTEMBER 22, human rights lawyer Antonio Trejo stepped outside a wedding ceremony to take a phone call. Standing in the church parking lot of a [...]

Luigi Amoroso was a distinguished and accomplished Italian economist but his scholarly work contrasts curiously with his proclaimed support for the fascist state's economic theory and policies. Beginning in the 1920s and with apparent sincerity, he advocated corporatist economic thought without any apparent consideration of its contradictions internal and external. He was not forced into this attitude, as other economists freely differed, and never tried to reconcile totalitarianism with the free market.

Economist Adam Smith did not believe in the invisible hand theory and in fact regarded it as an ironic joke. His refutation of the invisible hand theory is of continuing and increasing interest among scholars. As an advocate of individual rights, Smith was naturally opposed to the theory, which was contemptuous of individuals. His criticism of the invisible hand appears in three of his studies: 'History of Astronomy,' 'The theory of Moral Sentiments' (1759), and the Wealth of Nations' (1776).

Friedrich A. von Hayek advanced the understanding of business cycles with his analyses of monetary expansion causing a boom which leads to a slump. He explored the effect of interest rates, bank credit money, cumulative investment processes, the effect of relative prices, new saving and new credit. He combined price raises with capital investment to show how a complete system of production can have a business cycle.

John Maynard Keynes' 1935 book 'The General Theory of Employment, Interest and Money' mistakenly criticized A.C. Pigou's theories of unemployment. Keynes found Pigou inconsistent for holding to classical positions while recommending public works, but Pigou only held to classical positions for the long run. Pigou's 1933 book 'The Theory of Unemployment' was intended for short run problems rather than long run, and Keynes failed to recognize that.

John Maynard Keynes' 'Collected Writings' reveal that he did believe that economic stagnation was inevitable and used that idea as a basis of his 1935 book 'The General Theory of Employment, Interest and Money.' By 1919 he saw a historical break in economic patterns and by 1925 he saw structural change due to a decline in economic growth. Modern scholars have overlooked Keynes' views on stagnation due to the economic boom of the 1950s and 1960s.

Thomas Malthus was familiar with the ideas of the Physiocrat school of economics and used some of their ideas. In his book 'Essay on Population' he makes a reference to the Physiocrat Dupont de Nemours with an example concerning the money price of corn. Another Physiocrat reference in the book is made to 'the author of L'Ami des Hommes' who was Victor Riquetti, the Marquis de Mirabeau.

Adam Smith did not convert a majority of the merchants of Glasgow to his ideas about free trade. Smith lived in Glasgow, Scotland until 1764 and was inspired by its economy for some of his ideas. The town relied upon a monopoly for tobacco trade, protected by the Navigation Acts, yet many of the merchants did accept Smith's ideas about free trade and his book 'The Wealth of Nations' was popular there.

A response to Khandakar Quadrat-I Elahi's critique of the author's defense of economist Sen Amartya's entitlement approach, which was criticized by Elahi, is presented.