A historical synopsis of economic thinking



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  • Pedro F. Pellet
  • Nova Southeastern University
  • Dr. Francois Quesnay
  • Born: 16 June 1694
  • Birthplace: Near Paris, France
  • Died: 16 December 1774
  • Location of death: Versailles
  • French economist and intellectual leader of the physiocrats, the first systematic school of political economy.
  • Quesnay served as the consulting physician to King Louis XV at Versailles.
  • With the support of Madame de Pompadour, he and fellow physiocrat Jean de Gournay became influential in the Secte des Économistes
  • Tableau économique (1758), diagrammed the relationship between the different economic classes and sectors of society and the flow of payments between them.
  • The first explanations of economic interdependence were examined by François Quesnay´s Tableau Économique, published in 1758.
  • The recognition of Quesnay as pioneer of inter-industrial analysis was made by whom many years later became one of the greatest modern exponents of this type of analysis: Wassily W. Leontief. In his book The Structure of the American Economy.
  • Anne Robert Jacques Turgot 1727-1781
  • Born: 10 May 1727
  • Birthplace: Paris Died: 18 March 1781
  • Perhaps the leading economist of 18th Century France.
  • His contributions were quite distinct and advanced considerably upon Physiocratic theories. 
  • Turgot exercised a deep influence upon Adam Smith, who was living in France in the 1760s and was on intimate terms with Turgot.  Many of the concepts and ideas in Smith's Wealth of Nations are drawn directly from Turgot.  
  • Adam Smith
  • Born: 1723 Birthplace: Kirkcaldy, Scotland
  • Died: 1790
  • “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”... Adam Smith
  • Laissez-faire – Origins of the Phrase
  • According to historical legend, the phrase stems from a meeting in about 1680 between the powerful French finance minister Jean-Baptiste Colbert and a group of French businessmen led by a certain M. Le Gendre.
  • When the eager mercantilist minister asked how the French state could be of service to the merchants and help promote their commerce, Le Gendre replied simply "Laissez-nous faire" ("Leave us be", lit. "Let us do").
  • Laissez faire – Origins of the Phrase
  • Laissez-faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé ... Détestable principe que celui de ne vouloir grandir que par l'abaissement de nos voisins! Il n'y a que la méchanceté et la malignité du coeur de satisfaites dans ce principe, et l’intérêt y est opposé. Laissez-faire, morbleu! Laissez-faire!! [2]
  • (Trans: "Leave it be, that should be the motto of all public powers, as the world is civilized ... That we cannot grow except by lowering our neighbors is a detestable notion! Only malice and malignity of heart is satisfied with such a principle and our (national) interest is opposed to it. Leave it be, for heaven's sake! Leave it be!)
  • Jeremy Bentham
  • (1748-1832 )
  • “It is the greatest happiness of the greatest number that is the measure of right and wrong.”
  • British economist Jeremy Bentham is most often associated with his theory of utilitarianism, the idea that all social actions should be evaluated by the axiom :
  • Counter to Adam Smith’s vision of “natural rights,” Bentham believed that there were no natural rights to be interfered with.
  • Jean-Baptiste Say
  • Born: 5 January 1767
  • Birthplace: Lyon
  • Died: 15 November 1832
  • Location of death: Paris
  • Treatise on Political Economy
  • Say’s Law, states that supply creates its own demand
  • "It is worth while to remark, that a product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. Thus the mere circumstance of creation of one product immediately opens a vent for other products." (J.B. Say, 1803: p.138-9)
  • Thomas Robert Malthus
  • Born: 13 February 1766
  • Birthplace: Surrey (South of London)
  • Died: 23 December 1834
  • The Malthusian doctrine, as stated in "Essay on the Principle of Population," :
  • "population increases in a geometric ratio, while the means of subsistence increases in an arithmetic ratio."
  • David Ricardo
  • Born: 19 April 1772
  • Birthplace: London
  • Died: 1823
  • He articulated and rigorously formulated the "Classical" system of political economy.
  • He had an uncanny ability to arrive at complex conclusions without any of the mathematical tools now deemed essential
  • Law of diminishing marginal returns (Law of Variable Proportions): as more and more resources are combined in production with a fixed resource—for example, as more labor and machinery are used on a fixed amount of land—the additions to output will diminish.
  • Comparative costs or comparative advantage: a country that trades for products it can get at lower cost from another country is better off than if it had made the products at home.
  • Karl Marx
  • Born: 5 May 1818
  • Birthplace: Trier, Germany
  • Died: 14 March 1883
  • Location of death: London
  • Highgate Cemetery,
  • North London
  • The Communist Manifesto,
  • published in 1848:
  • “The history of all hitherto existing society is the history of class struggles.”
  • “From each according to his abilities, to each according to his needs”
  • “Sell a man a fish, he eats for a day, teach a man how to fish, you ruin a wonderful business opportunity”
  • William Stanley Jevons
  • Born: Liverpool on September 1, 1835
  • Died: Drowned near Hastings in 1882
  • He is one of the main contributors to the ‘marginal revolution’.
  • Developed the theory of marginal utility to understand and explain consumer behavior.
  • First economist to construct index numbers, and he had a tremendous influence on the development of empirical methods and the use of statistics and econometrics in the social sciences.
  • Began the modern period of economic thought and provided the foundation for the Austrian School of Economics.
  • He created the system of value and price theory “prices are no more and no less than the objective manifestation of causal processes purposefully initiated and directed to satisfying human wants”.
  • consistently applied the correct, praxeological method for pursuing theoretical research in economics.
  • Carl Menger
  • Born: 28 February 1840
  • Birthplace: Galicia, Austria (area now in Poland)
  • Died: 26 February 1921
  • Léon Walras
  • Born: 16 December 1834 Birthplace: Evreux, France Died: 5 January 1910 Location of death: Clarens, Switzerland
  • He set forth the new "marginalist" or "Neoclassical" theory in a formal general equilibrium setting.
  • He is widely and rightfully regarded as the father of general equilibrium theory
  • Vilfredo Pareto
  • Born: 1848 Birthplace: Paris
  • Died: 1923
  • Italian economist and sociologist who is known for his theory on mass and elite interaction as well as for his application of mathematics to economic analysis
  • In 1893 he was chosen to succeed Léon Walras in the chair of political economy at the University of Lausanne, Switzerland.
  • Alfred Marshall
  • Born: 26 July 1842
  • Birthplace: Bermondsey, London
  • Died: 13 July 1924
  • Location of Death: Balliol Croft, Cambridge
  • Principles of Economics
  • Marshall emphasized that the price and output of a good are determined by both supply and demand: the two curves are like scissor blades that intersect at equilibrium.
  • John Maynard Keynes
  • Born: 5 June 1883 Birthplace: Cambridge
  • Died: 21 April 1946
  • Location of Death: Tilton, East Sussex, England
  • "There are also, I should admit, forces which one might fairly well call automatic which operate under any normal monetary system in the direction of restoring a long-run equilibrium between saving and investment. The point which I cast into doubt - though the contrary is generally believed - is whether these `automatic' forces will... tend to bring about not only an equilibrium between saving and investment but also an optimum level of production."
  • (John Maynard Keynes, Collected Writings, Vol. 13, 1973: p.395)
  • The Sveriges Riksbank Prize in Economic Sciences in
  • Memory of Alfred Nobel 1970
  • "for the scientific work through which he has developed static and dynamic economic theory and actively contributed to raising the level of analysis in economic science"
  • Paul A. Samuelson
  • Born: 15 May 1915 Birthplace: Gary, Indiana, U.S.A.
  • Died: 13 December 2009
  • Milton Friedman
  • (1912 - 2006)
  • Nobel Prize in Economics 1976
  • The 20th century’s most prominent advocate of free markets was born to Jewish immigrants in New York City.
  • MONETARISM. Friedman presented evidence to resurrect the quantity theory of money—the idea that the price level depends on the MONEY SUPPLY.
  • In Studies in the Quantity Theory of Money (1956), he stated that in the long run, increased monetary growth increases prices but has little or no effect on output. In the short run, he argued, increases in money supply growth cause employment and output to increase, and decreases in money supply growth have the opposite effect.
  • The Sveriges Riksbank Prize in Economic Sciences in
  • Memory of Alfred Nobel 1973
  • Leontief is primarily associated with:
  • development of the linear activity model of General equilibrium and the use of input-output analysis that results from it.
  • Contributions in other areas of economics such as international trade where he documented the famous Leontief paradox.
  • He was also one of the first to establish the composite commodity theorem.
  • Wassily Leontief
  • Born: 5 August 1906 Birthplace: Munich, Germany
  • Raised: St. Petersburg (Leningrad)
  • Died: 5 February 1999
  • Location of Death: New York City
  • Leontief Input-Output Model
  • Linear model of an economy with several sectors
  • Each sector uses some of the output of other sectors
  • An excess is produced to meet outside demand
  • Each sector must produce enough to meet both the demand from the market and the demand from other sectors
  • Leontief wrote that the statistical study presented in his Introduction to Part I could be better defined as an attempt to produce a “Tableau Économique” of the United States for 1919 and 1929.
  • Leontief´s input-output model was originally intended to functionalize Léon Walras´ general equilibrium and interdependence model.
  • That is why Leontief defined Input-output as an adaptation of Neoclassical theory of general equilibrium to the empirical study of the quantitative interdependence among interrelated economic activities.
  • Amartya Sen
  • (1933- )
  • A skeptic about utilitarianism, Sen also pointed out that the standard measure of poverty in a society, the proportion of people who are below a poverty line, leaves out an important datum: the degree of poverty among the poor. He came up with a more complicated index to measure not only poverty but also its degree.
  • Amartya Sen is Lamont University Professor, and Professor of Economics and Philosophy, at Harvard University and was from 1998 until January 2004, the Master of Trinity College, Cambridge. 
  • Nobel Laureate 1998 for his contributions to welfare economics


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