History of the economic thinking
The economic thinking can be cut out in three great phases: precursors (Greek, Roman, Arab), themodern ones (Mercenary attitude, Physiocracy) and the modern economy (which begins with Adam Smith at the end of the 18th century).
“the ideas, right or false, of the philosophers of economics and politics have more importance than it in general is thought. To tell the truth the world is almost exclusively carried out by them. The men of action who believe themselves perfectly freed from the doctrinal influences are usually the slaves of some last economist. Enlightened capacity which is claimed inspired by celestial ways distill in fact of the Utopias born a few years earlier in the brain of some scribbler of Faculty. ” John Maynard Keynes, general Theory of employment, the interest and the currency , chapter 24,1936
Precursors of the economy
The Code of HammurabiThe Archéologie showed that the economic thought is very old, as testify to them the Loi S and the economic principles exposed in the Code to Hammurabi (king of Babylon with). The State fixes the Salaire S, according to the quality of each work and of the work which it requires (concept of Valeur), it regulates the loan S, the Location S, it establishes the professional Responsabilité…
The economic thinking of Eastern and Greek Antiquity
The word economy comes besides from the Greek (of oikos , the house, in particular as a social and economic unit, and a nomos , the order, the Loi).
Among the philosophical thinkers, often , who were interested in the economy, Plato and his pupil Aristote is probably most known. The Greek philosophers subordinate the economy to the Politique: it is art to manage its well S or its Cité. The economic scene does not exist, contrary to the Political science, which refers to the Cité and is regarded by many Greeks as the first of sciences. The economy, which one only considers centered on the individual, is often seen in a suspect way, and like a servile activity. One can observe the place of the economy in the ancient company and how it was perceived at its beginnings starting from four figures: Thalès, Xénophon, Plato and Aristote.
Thalès de Milet ( circa 625 - 547 front J. - C.) written forever on the economy, but its history shows one of the first examples of economic Spéculation, a corner on the olive pressing. Whereas one reproached him the uselessness of the Philosophie which did not allow any advantageous application and which one scoffed his constant poverty, it was devoted to various calculations Astronomique S. Those enabled him to envisage one particularly hot and sunny period, during which one would make probably an abundant harvest of olives. It thus rented all the presses with olives of the areas of Milet and Chios at low prices, when they did not interest anybody. Its forecasts appeared exact, and when the moment of harvest occurred, the demand for presses was done extremely important. Thalès, which held a regional Monopole, could sub-lease the presses in the conditions which he asked, placing by there at the head of some Fortune.
If this anecdote does not reveal a thorough analysis of the economic mechanisms, it precedes them in what it shows a reflection on finance strategies, resting on diffuse ideas of the law of the offer and request, or Monopole and of its consequences.
Xénophon ( circa 426 - 355 front J. - C.), which as Plato was pupil of Socrate, in connection with the history of the economic thinking: not only because it is the first to be used this term, but still because it will devote to it a whole work, Economic the (which consists of a dialog between Socrate and Ischomaque), around a single topic, that of the administration of an agricultural domain. One can thus realize how much in the Antiquité the term is related to the idea of the domestic administration; however the dialog almost comes from there to relate to strategies of increase in richnesses, the father of Ischomaque buying for example grounds at low prices to resell them much expensive after having cleared them. In truth, that which knows art - or science - economy is de facto a good Gestionnaire, and this in any situation. The good father of family can thus know what is good for the administration of a Cité. It is however with the woman that returns the role of the maintenance of the house ( oikos ), in the same way the Politique is the Affaire men, and the work, reserved with only the Esclave S. In Economic the , Ischomaque teaches this art with his wife: it will be the role of this one which to make the application of it.
On the end of its life, Xénophon will also write the Incomes , work where he proposes to multiply the farms and industrial in the Attique, and in particular to work with full Rendement the money mines. On this occasion, it approaches (but in a not very thorough way) of the Concept S like those of the Demande and the Valeur of the goods, and the report/ratio which they maintain between them. Work is a project Politique and economic for a whole area, and tries to defend a coherent point of view.
Ultimately, the structures of Xénophon support on the manner Gérer an agricultural domain, and on the domestic economy (the expression would be, in Greek, Tautologique); the Incomes watch however although this lesson is applicable elsewhere, and places the economy like art to satisfy the needs for a company. One can for Xénophon extrapolate study of a microentity: isn't this the Prémisse of the Microéconomie?
Plato (427 - 348 front J. - C.) which through its dialog the Republic exposes its vision of the Utopie is involved to approach the economy like Gestion goods and people in the possible way more just in the ideal Cité.
It thus defends the idea of a company divided into three classes (magistrates/philosophical, guards and workers/producing, in decreasing order) where the Property right is reserved only for the lower class of the “producers”: the other classes should not be tried by the lucre and the accumulation of the richnesses. The philosopher knows that the Cité is higher than the individual; to preserve the balance of the city and to arrive at the more high degree of the political virtue, it is necessary to pose a limitation of the Fortune and goods of each one, more especially as for Plato and his time the total quantity of richness is imagined like about fixes. He exposes this way a form of social Organization based on the community of the goods and proposes even in the Laws a levelling division of the Ground. The Platonic economy thus seeks to govern the Répartition Ressources, and this at an end Politique and Philosophique. Less than one art, the economy for Plato would thus approach rather these know-how described in Gorgias ; it does not remain about it less than its attempts at Organization of a perfect Cité often imply concerns which are purely about the economic scene such as one knows it today.
Plato, the first, is interested strictly in the problem of the Cité and the way in which it is necessary that it is governed, and this on all the plans. It draws from its study a social model and economic based on collectivism on several levels (goods, women, grounds) while not calling into question the principle of the State (the city of Plato is thus not Socialiste). In other works, it will confirm the validity of the recourse to the Esclavage like average technique. He criticizes on the other hand in a general way the will of possession, the soft food of the richnesses, the spirit of lucre.
At Aristote ( circa 384 - 322 front J. - C.), one finds a place much more important devoted to the economy: it is about this point of view of a fundamental author in the Antiquité, and which will have a very great influence during all the period Médiévale.
Aristote shows with economic the and the Éthique in Nicomaque the basic difference between the economic one and the Chrématistique. The chrematistic one (of khréma , richness, possession) is art to grow rich, to acquire richnesses. According to Aristote, the accumulation of money for the currency is an activity against Nature and which dehumanizes those which are devoted to it: according to the example of Plato, he thus condemns the taste of the Profit and the accumulation of richnesses. The Commerce substitutes the money for the goods; the Usure creates money starting from the money; the commercial does not produce anything: all are condemnable from a point of view Philosophique. Although Aristote treats Chrématistique like whole of tricks and strategies of acquisition of the richnesses to allow an increase in the political power, he will always condemn it as such.
One finds in the ethical in Nicomaque of the concepts as the Four causes (causes material, causes formal, causes efficient, Final cause), which are, for certain of these Cause S, of the drafts of the concepts of Exchange value and Practical value used in the modern economic theories.
On the contrary, the Agriculture and the “trade” make it possible to found a natural economy where the exchanges and the Monnaie are only used to satisfy the needs for each one, which it develops. Aristote guard always the concern of acting in accordance with the Natural . This one provides “the ground, the sea and the remainder”: the economic one is thus art to manage, use the Natural resources, completely contrary to art to acquire and have. Y is included the idea of a report/ratio of reciprocity: Aristote does not separate the economic one from the Social, establishing the exchange like a “return on equivalence”; it is thus understood that he condemns the Chrématistique, which substitutes the Objet for the social relation then the money with the Objet.
In fact, the exchange, based on the Currency, is always considered at Aristote like making it possible to reinforce the social link: it establishes its inexistence in the tribe (where only barter exists) and its appearance with the Cité, i.e. the company.
- Because if there were no exchanges, it would not know to have social life there;
- it would not have there more exchange without equality,
- nor of equality without common measurement.
- it would not have there more exchange without equality,
Thus, the contribution of Aristote is first of all a fundamental distinction which it establishes between natural economy ( economic ) and saving in money ( Chrématistique ); from there a fine reflection on the role of the exchange in the social link. Another original and remarkable result of the reflections of Aristote is the differentiation which it makes between subjective value and commercial value of a well, that one can easily bring closer to the concepts of and Exchange value Practical value which will appear at Adam Smith at the 18th century.
The economic thinking Judeo-Christian
The Old Testament contains many judgments and economic regulations. It orders the absence of perpetual property on the Earth and founds a periodic redistribution. It prohibits the Prêt S with Intérêt, and finally it treats on a hierarchical basis according to their honor the economic activities, making Agriculture the first and Commerce the last.
The New Testament encourages the man to emphasize his Talent S, while making bear fruit placements (Parabole Talent S). If the Homme works the Ground, it is a means of putting in Valeur its talents in agriculture, and of the same in all the fields of the human activity, the Industrie and the trade for example. But New Testament also prevents against material temptations related on the accumulation and the superfluous use of the richnesses. He insists on a equitable Répartition of the goods (Lazare).
At the 4th century a clear separation between the Christianisme and the Judaïsme occurred on the economic questions: the Judaïsme started to work out a coding of the economy (see Intérêt of the money and religions monotheists), while the Christianisme remained fixed in the prohibition of the loan with interest. This situation had very important consequences thereafter on the relations between the Christians and the Juif S, the latter often providing the function of banker, prohibited with the Christians. That was undoubtedly also one of the major causes of the Antijudaïsme in the Church, the perfidious Jew being qualified of by the Christians.
The economic thinking at the time medieval
The Theologist S
The Moyen-âge sees a revival of the exchanges Commerciaux and a multiplication of the profit appropriatenesses. The Théologien S of the time then do not stick to describe economic mechanisms but seek to define to them Moralité, their licit or illicit character according to the Morale Chrétienne.
For Holy Thomas d' Aquin (1225 - 1274), the merchants must practice a “fair price” rising from the habit and which is supposed to prevent them of an exaggerated enrichment. The activity Commerciale must be legitimated by a real contribution of richness to the produced via its transformation, its transport or in extreme cases by its vital character for the survival of the merchant and of its family. He condemns in addition the Prêt with interest, because according to him the recognition of the borrower should not appear by a financial reward, but by the Estime, gratitude or the Amitié. On this subject, Saint Thomas d' Aquin has a presentiment of well the future argument according to which “ time is money ”, but for him the Temps cannot be a Marchandise: it belongs only to God.
The Eastern economic thinking
At the time Medieval, Arab thinkers thought of the problems economic S. Notamment Ibn Khaldun (1332 - 1406) wrote an economic theory and Politique in showing Prolegomena for example, how the Densité of the Population is related to the division of the labor which leads to the economic growth. The latter contributes to increase the Population, thus forming a virtuous circle. It brings also first explanations as for the formation of the Prix.
The economic thinking of the modern time
The modern time did not bring truly an economic theory . The Renaissance was one period of radical change of the Mentalité S and of vision of the world, due to the appearance of the Imprimerie and the Grandes discoveries. The Nouveau world abruptly offered prospects on the economic plan.
The needs for reform were felt since the 14th century, precisely on these questions. Indeed, certain perverse economic aspects of this time, like the traffic of the Indulgence S, were more and more badly felt by the population, in particular in the countries of the north of the Europe. The Grandes discoveries, which allowed the countries south of the Europe to grow rich by the transatlantic Commerce, did nothing but accentuate this feeling of injustice. The Traité of Tordesillas excluded the countries from the north of Europe.
The Protestant Réforme of Luther was built thus around a reaction against the system of the Indulgence S.
Among the Protestant reformers, Jean Calvin defended the loan with Intérêt, by recommending a moderate rate of 5%. The Crédit could thus develop in the Protestant cities.
The Protestant Reform thus developed in this climate of change of Mentalité, in which the work took more Valeur compared to the pure Commerce. It is celebrates it thesis of max Weber ( Protestant ethics and the spirit of capitalism , 1905). He explains why with the Reform, work became a new virtue: previously intended for the only survival, it became the origin of the richness and its accumulation which, according to logic Protestante of the Prédestination, would be a sign of “divine election”. Work and the richness which it produces contribute to the glory of God; the Temps is invaluable and the saving becomes a virtue. The Protestant thought would as transmit according to him the ethical of the trade, but would ensure especially a rationality larger as that permitted by the thought Catholique. By doing this, it raises many obstacles Moraux to the economic activity.
In 1516, Thomas More made the first criticism of the social consequences of the birth of this new economic system, which marked the Mouvement of the enclosures in England by describing in Utopia an imaginary company or would reign a mode of Community, without any currency. The exchange S were governed there by a system of Troc. However, one cannot regard Utopia as a treaty of economy, and even less to reduce the thought of Thomas More to this only work: Thomas More was not an economist, but rather a Juriste, a Politician, and a Théologien (see work complete in the article Thomas More). It is probable that, considering the little of facility in the impression, the translation, and the diffusion of the works at the time modern, the posterity carried out a Biais on the thought and the work of Thomas More, fascinating Utopia like argument for the Satire of a system of Privilège S in extreme cases, then for the construction of thoughts standardizing, that our contemporaries assimilate quickly, undoubtedly by an effect of Historicisme, with the Communisme.
In parallel, in Spain, the School of Salamanque, starting from the theory of the natural Right , proposes a subjective design of the Valeur and justifies the private Propriété and the freedom of the exchange S. Its principal authors are the Jésuites Francisco de Vitoria (1483 - 1546), Martín de Azpilcueta (1493 - 1586), Domingo de Soto (1494 - 1560), and Luis of Molina (1535 - 1600). This tradition will be taken again by traditional French and the Austrian Ecole.
The Wars of religion following the Réforme made emerge the idea of the Libre-échange which will be formulated later by Hugo de Groot (Grotius).
Birth of the modern economy
The first precursors of the modern economy are Pierre de Boisguilbert and the Irish economist Richard Cantillon. This last lived with Paris. It defines for the first time the total Economic channels, and inspired François Quesnay and the Physiocrates. Adam Smith, in his famous treaty Research on the nature and the causes of the richness of the nations published in 1776, refers to Richard Cantillon (one of the rare quoted authors).
The treaty of Adam Smith is often recognized like the constitutive instrument of the modern economy. The economy is from now on a branch distinct from philosophy and theology. The thinkers in economy do not come any more from the Church nor of the political circles.
The Mercenary attitude and the ideas physiocrats will contribute to the progressive autonomisation of the economy.
See also: Mercenary attitude
In a context of commercial capitalism, marked by the multiplication of transport, the great discoveries and the absolute monarchies of France and Spain develops the current mercantilist, which will dominate the European economic thinking between the 16th century and the middle of the 18th century.
During this period, a burst literature appears, during which the assumptions evolved/moved, returning the idea of a rather vague single current. It will be spread in the majority of the European nations while adapting to national specificities. One distinguishes among the schools mercantilists: the Bullionisme (or “Spanish mercenary attitude”) which recommends the accumulation of noble metals; the Colbertisme (or “French mercenary attitude”) which is turned for its part towards the Industrialization; and the Commercialisme (or “British mercenary attitude”) which sees in the foreign trade the source of the richness of a country.
Until the Middle Ages, the economic questions were treated under the angle of the religion and the theologists were the principal thinkers of the economic questions. This major rupture will be carried out by the advisers of the princes and the merchants. This rupture is marked since 1513 with the publication of the Prince of Machiavel where this last goes until explaining why “in a well organized government, the State must be rich and poor citizens”. In 1615, Antoine de Montchrestien publishes his Traité political economy and uses for the first time the political expression of economy. With him, the most famous mercantilists are French Jean Bodin, Spanish Luis of Ortiz and English William Petty.
The theory worked out by the mercantilists makes accumulation of noble metals (like gold and the money) the source of the richness and preaches a Trade surplus. In addition, it takes for objective the reinforcement of the power of the State, represented by the absolute monarch. In this direction a “commercial war is preached”, being based on the Protectionnisme and the Interventionnisme. The mercantilists want a conquest of the exterior markets (sales outside the manufactured goods) but a safeguarding (or an extension) of the interior market (restriction on the imports).
One in addition owes them (and in particular in William Petty) the development and the use of the statistics and the empirical methods in economy. Those derive from their concern of monitoring the trade balance and flows of noble metals, and sometimes of a kind of obsession of the cash.
The physiocratic theory
See also: Physiocracy
Thereafter, the physiocrats or as they were called between them the sect of the economists, will be opposed to the ideas mercantilists. The term of physiocrat , developed by Pierre Samuel of the Bridge of Nemours, means “government of nature literally” (of the Greek kratos and physio ). The school of the physiocrats is originating in France and had its apogee during second half of the 18th century. Most famous of them is François Quesnay, which publishes in 1758 its famous economic Tableau .
The physiocratic theory sees in the ground the source of any richness, and protests against the policies who forsake it with the profit of the emergent industry. Contrary to the mercantilists, the physiocrats oppose the intervention of the State. They propose the existence of economic laws, as there exist laws in physics. Because of existence of a natural Order controlled by laws which are clean for him, the only role of the economists is “to reveal” these natural laws.
Bernard de Mandeville publishes in 1714, the Fable of the bees where it tends to oppose the virtue and prosperity. According to this author, the collective economic richness rises from the “deprived defects”, in particular from the consumption of goods of luxury condemned by the mercantilists or the physiocrats like a waste. This attempt to separate morals from the effective watch need for breaking with the influence of the values and for refusing the a priori dangerous . Indeed, the provocative conclusion of this author is that the private defects appear in fact being advantageous at the community and are thus “collective virtues”. Its analysis which tends to make consumption an action quite as useful as the saving announces the future theses of John Maynard Keynes.
The philosophers of the Lumières develop also economic analyzes. Montesquieu is greeted by Keynes to have included/understood the first the role of interest rates like instrument of the monetary Création in Of the spirit of the laws (1748). In this work he sees also the trade like source of softening of manners and peace between the nations contrary to the mercantilists who made the “nerve of the war of it”. Jean-Jacques Rousseau describes as for him the social process of the appropriation of the grounds, base of the inequality among the men and origin of the Droit and the civil society. The Scot David Hume contributes the first major share to the theory of the Libre-échange while trying to show that commercial imbalances are naturally corrected by monetary mechanisms.
The traditional school and answers to the classicism
The traditional ones
See also: Traditional (economy)
The traditional school marks really the advent of the modern economy. The traditional period begins with the treaty of Adam Smith on the Richesse of the Nations in 1776 and finishes with the publication in 1848 of the Principes of John Stuart Mill. This thought is historically developed in France and Great Britain. It is Karl Marx which will invent the traditional term by opposing the classical economists to the vulgar economists. The traditional ones being those which sought to determine the origin of the value. Keynes adopts a broader vision when it refers to Traditional because it extends this school until work of Pigou (1930). For him, the whole of the economists who adhere to the Loi of Say belong to the school Classique.
Three generations of authors will follow one another:
- Adam Smith (1723 - 1790, Research on nature and causes of the richness of the nations (1776)), Anne Robert Jacques Turgot (1727 - 1781 Reflections on the formation and the distribution of the richnesses (1766))
- David Ricardo (1772 - 1823 Of the principles of the political economy and the tax (1817)), Thomas Malthus (1776 - 1834 Test on the principle of population (1798)), Jean-Baptiste Say (1767 - 1832 Treated political economy (1803)),
- and John Stuart Mill (1806 - 1873 Principles of political economy (1848)).
The traditional ones are interested mainly in the questions of production, of fixing of the prices of distribution, and consumption. There exists between these authors a great community of thought. Liberals, contemporaries of the Industrial revolution in Great Britain, they attend the birth of the industrial Capitalisme and are the enthusiastic defenders. Several principles and postulates are in the center of the thought of this school.
First of all, there exists a relatively natural order whose laws lead to a relative harmony of the interests private individual. But this order is constantly threatened and it returns to the public power to protect it. Thus for Jean-Baptiste Say, the State must absolutely protect the private property which does not go from oneself. For Adam Smith, it must prevent the conspiracies of the contractors who try by agreements to raise the prices, or deal with the education of the workmen that the division of the labor abrutit. The liberals began again in a physiocrat, Vincent de Gournay, the sentence “Let make the men, let pass the goods”. The competitive market thus replaces the State like regulator of the economy, but the State keeps its capacity like guarantor of the existence of the market. It must limit its other interventions to its functions Régalienne S, as with the supply of collective goods that private initiative could not provide (roads, bridges, education…)
Lastly, the engine of the economic activity is the individual interest: in this direction, the Economic liberalism is a Individualisme. For Adam Smith or Turgot, the interest of the community is carried out by the confrontation of the individual interests. “Thus, the egoistic reasons for the man lead the play of their interaction to most unexpected of the results: the social harmony” (phenomenon that Smith indicates under the term of “invisible Main”).
The essential difference between traditional English and traditional French is in their design of the Valeur. For the English school, work is the only source of the value (theory of the value work). For the French school, the value is the expression of the desire which the men test for the things (theory of the Valeur utility at Say). One finds another cleavage important in the traditional school between “the marvellous world of Adam Smith” and the “disastrous presentiments of Pasteur Malthus and of David Ricardo”. Thus part of traditional describe a world autorégulé by the “invisible hand” where the durable crises are impossible (according to the law known as “of Say”) while others fear to see the excessively high birthrate causing the famine (at Malthus and Ricardo), or that the logical evolution of the distribution of the richnesses in favor of the shareholders involves the economy towards the stagnation (at Ricardo).
First steps of socialism
The traditional ones and their analyzes were quickly criticized. In 1818, Jean de Sismondi publishes his Nouveaux principles of political economy where he criticizes the visible social consequences of industrialization in England of his time: unemployment, inequality, impoverishment… denouncing a liberalism which is done only with one way, getting rights to the contractors and imposing obligations with the workmen. He also seeks to develop an economic theory showing the possibility of total imbalances in the economy, in particular of the major crises of overproduction. With this intention, it introduces the concept of time between the production and consumption (one year in the case of agriculture for example) to refute the law of Say according to which “the products are exchanged against products”. As example the introduction of technological advance does not increase simultaneously supply and demand, because its first effect and to allow the dismissal of the workmen who will be re-employed only in the medium term, provided that by then imbalances of short term do not cause a crisis of overproduction.
This time is also that of the emergence of the socialist thought. Some socialist utopian as Charles Fourier denounce industrial anarchy. This last dream to set up Phalanstery S, community of 1620 people selected for their complementary characters and their aptitudes so that the community is as well as possible organized and can thrive. Many phalansteries for example were created in the United States. Certain industrialists philanthropists as Robert Owen theorizes and puts into practice model factories or develops the courses of the evening, the rise of the productivity by the reduction of the working time, where the families are dealt with and enjoy many approvals: schools, kindergarten, etc To the image of Fourier, he dreams to set up “villages of co-operation”.
In France, Claude Henri of Saint-Simon develops industrial progressionism and wishes to set up a technocratic intervention of the State based on the industrial Planification and whose objective would be the improvement of the conditions of the working class. Around him a true “economic sect is formed”, the Saint-Simonism.
Lastly, in Great Britain, the last of traditional English, John Stuart Mill preaches that liberalism is the best way of producing richnesses but indicates that it is not therefore the best way of distributing them…
See also: the thought of Karl Marx, Marxism, economic Marxism
With the beginning of the year 1840, academics asserting disciples of Hegel and the left, called “ hégéliens of left ”, criticizes the classical economists. Most famous are Karl Marx and Friedrich Engels, which wrote together or separately many economic works, most famous being the Capital.
The Marxisme rests on a philosophical vision of the world, on which the economy is closely dependant. The saving in Marx rests on existing concepts (work, the property, consumption, the production, the capital, money…) that Marx supplemented and especially redefined. It in particular developed the theory of value and the value-work, which it took again with traditional English (in particular Ricardo).
The Marxism remained a theory hétérodoxe fertilizes especially in the fields of philosophy and of sociology, as well as economy where in particular Rosa Luxemburg with the Accumulation of the capital (1913), or more recently Paul Baran or Paul Sweezy continued work of the Marxists.
The historical school
See also: Historicisme (economy)
The historical school appears in the Années 1840 in reaction to the universalism of the traditional ones. It rejects the idea of economic “laws” dissociated from their historical, social and institutional context. Wilhelm Roscher declares that economic research must be multi-field, incorporating methods of historians and sociologists in addition to economists.
The Germany is the country where the thought historicist developed and had the most influence, going even until making this country more or less impermeable to the influences exerted by the current marginalist in Europe at the end of the 19th century and at the beginning of the 20th century.
The German historical school was formed in the years 1840 with the writings of Bruno Hildenbrand (1812-1878), Karl Knies (1821-1898) and especially of Wilhem Roscher (1817-1894). Thereafter, Gustav von Schmoller, Friedrich List and max Weber inter alia will contribute to this school.
The English historical school developed in parallel and independently of its Germanic colleague. Although being pressed on an important tradition empirist and inductivist inherited Bacon and Hume, it will not have the same one will have as the latter. It should nevertheless be noticed that during the transitional period separating the domination from the classical economics ricardienne and the emergence of the marginalism in the years 1870, the English historical school will constitute for a time the orthodoxy of the British political economy. Thus, W.S. Jevons will have all the sorrows of the world to be essential in the academic medium.
Very influenced by the German authors, the French version of the historicism will have only one limited range and a contestable unit. The principal federator element will be a rejection of the school of Lausanne of Leon Walras. Its principal authors will be Charles Gide (1847-1932) and François Simiand (1873-1935).
See School of Annals: Fernand Braudel
The neo-classic school and answers to the neoclassicism
The neo-classic school and its heirs
See also: neo-classic School
The neo-classic School is born from the “revolution marginalist” in the Années 1870. It becomes the principal school of thought until the Crise of 1929 and the advent of the Keynésianisme. It becomes again dominant after the Stagflation of the Années 1970. The neo-classic ones are sometimes called “néolibéraux”.
The marginalism term comes owing to the fact that it is this school which was the first to use calculation with the margin like determinant of the value of the goods. This school was constituted starting from work of Stanley Jevons (1835-1882), Carl Menger (1840-1921) and Leon Walras (1834-1910). One can distinguish three schools resulting from the marginalism: the School of Lausanne, with Leon Walras and Vilfredo Pareto; the School of Vienna, with Carl Menger (see below) and the School of Cambridge, with William Jevons.
The apogee of the neo-classic model is at the beginning of the 20th century with Alfred Marshall and Arthur Cecil Pigou.
Several contemporary neo-classic currents claim the neo-classic ones: Néo-walrasiens (Kenneth Arrow, Gerard Debreu), the School of the public choices (James Mr. Buchanan, Gordon Tullock), New traditional (Robert Lucas Jr, Paul Romer), the School of Chicago (Frank Knight, Jacob To fortify, George Stigler, Gary Becker) or the monetarists (Milton Friedman).
The neo-classic theory will seek to reinforce the liberal conclusions of the traditional thinkers put at evil by other thinkers like Karl Marx, while giving in question or reformulating the basic assumptions of the economic analysis. This new approach passes by the definition of a news Theory of value founded on the Utilité. Indeed traditional English had based their analyzes on the theory of the “value work” opening the way with the Marxist analyzes consequently. Their analysis rested on simple reports: water for example is infinitely useful but is not worth anything. This is why the neo-classic ones introduce the concept of marginal utility: the value depends on the utility which the last consumed unit brings, utility which is itself decreasing. If the example of water is taken again, first glass has a value higher than the tenth. Thus it is all the neo-classic analysis which derives from one study to the margin of the economic phenomena. As example:
According to the neo-classic Theory of the producer, the companies engage as much as the marginal productivity of labor (i.e. production of the last engaged employee) is higher than the wages. They adopt a similar attitude vis-a-vis the investment in capital whose outputs are initially increasing ( to see economy of scale) then decreasing.
- According to the Theory of the consumer, the individual adopts a rational attitude aiming at “maximizing its utility”. With each expenditure it compares the marginal utility of the goods in order to treat on a hierarchical basis its preferences and is directed towards most useful. This study of the individual, as producer or rational and autonomous consumer joined the step of the methodological Individualisme.
- On a market of Pure competition and perfect, each factor of production receives the equal one of what it brings, from where a right factor income of production. This demonstration thus seeks to cancel the theory of appreciation Marxists. Under such conditions, the profit tends to be cancelled.
Beyond these common analyzes, each school develops original ideas. Leon Walras wants to be a Socialist remained liberal ( cf will infra ).
Carl Menger distinguishes the “economic goods”, likely to be bought and sold by the private individuals, of the “free goods” which cannot be the subject of a private appropriation: the Water, the Air…
Eugen von Böhm-Bawerk proposes a theory of the capital ( Capital and interest , 1884) where it describes the investment like a “productive turning”: to dig a bucket in a tree trunk delays the water consumption, but allows a consumption increased in the future. Thanks to this increased control of water, the countryman will gain an invaluable time which will enable him then to dig a drain and so on… has Lausanne, Leon Walras then Vilfredo Pareto develops a mathematical model where by the adjustment of the prices a general stability of the economy is established spontaneously.
Mathematics like new approach of the economy
See also: quantitative Economy
The economists of the neo-classic school develop a mathematical formalization of the economy. Their mathematical analyzes (the Microéconomie) taken again by the majority of the economists for this time, have led in their the most succeeded form to the concept of economic equilibrium: an abstract mathematical formalization presenting models of ideal and optimal economies but resting on theoretical assumptions imperfectly checked in reality. At that time, it thus seems that the economic thinking tries to deviate from the social sciences to be connected, by the methods of formalizations mathematical which it uses, with the exact sciences. It is generally about an incomprehension. One owes for example the concept of general stability (certainly the most abstract concept of the Economic scene) with the economist Leon Walras in his work Traité pure political economy (1874). However it is then advisable to right from the start relativize the finality of these mathematical models.
Indeed, the author, as it indicates it in the title, endeavors to develop a formalization of an ideal economy of which it knows that it cannot exist (from where the use of the word “pure”). Considering the various imperfections of the real economy compared to the ideal model, this author defines a role in the State. From these considerations a “economic policy applied” and a “social economy rise” which diverge from the pure economy. For Leon Walras, there is no superiority of the concept of general stability on two other dimensions of the economy. He explains why “their respective criteria are truth for the pure economy, the useful one or interest for the economy applied, the good or justice for the social economy”. With final, this author whose general stability tries to show the superiority of the scientifically Economic liberalism is paradoxically classified in the economists hétérodoxes because of the proposals that its reflections one brought to advance: nationalization of grounds and the railroads for example (completely revolutionary ideas at its time and very badly seen middle-class company).
The Austrian School
See also: Austrian School of economy
The Austrian School of economy, resulting from Carl Menger in 1871, is distinguished from the neo-classic École by rejecting the application to the economy of the methods employed by the natural science, and while being interested in the relations Causale S between the events and not in balances. In addition to Carl Menger, his most known representatives are Ludwig von Mises and Friedrich von Hayek. It defends the Libéralisme out of economic material and more generally of organization of the company.
The Austrian tradition is attached to the Spanish Scolastique S of the 16th century (École of Salamanque), via the French classical economists.
The Austrian School was opposed to the German historical École (following the Methodenstreit ), then with Leon Walras and the neo-classic , the objective Conception of the value and thus with Karl Marx and with the Socialisme, and finally with Keynes and the macroeconomists. These controversies are still long-lived and put the Austrian tradition in conflict with almost all the other contemporary economic schools of thought.
See also: Institutionalism, New institutional economy
Thorstein Veblen publishes in 1899 Why is Economics not year Evolutionary Science? , the document founder of the School institutionnalist. He rejects many postulates of the neo-classic school, like the individual hedonism justifying the concept of marginal Utilité, or the existence of a steady balance towards which the economy converges naturally. The School institutionnalist includes/understands heritages of the German historical School; it develops mainly in the United States.
Representatives: Arthur R Burns, Simon Kuznets, Robert Heilbroner, Gunnar Myrdal, John Kenneth Galbraith
The theory of the cycles
See also: Business cycle
The Economic growth is not done continuously. It passes by phases of rapid growth and weaker growth, even of temporary decrease or even of Economic crisis.
The evolution of the economic activity over short periods (typically over a few years) is called the economic conjuncture . This concept makes it possible to distinguish these tops and low relatively close to the periods from longer evolutions to development, stagnation, even economic decline being able to be spread out over generations.
Observing a certain regularity in these fluctuations of the growth, of the authors built the “ theory of the cycles ” in order to give an account of the successions of phases, and thus to consider a forecast of the crises and resumptions of the economy.
See also: Keynésianisme
Analysis of KeynesThe crisis of 1929 met forward the limited range of the lesson of the neo-classic theory: this current cannot indeed apprehend and analyze the existence in years 1930 of a phenomenon of mass unemployment. The orthodoxe theorists can explain only the presence of an absenteeism (at the standard of wages fixed by the job market, certain economic agents do not prefer to work). John Maynard Keynes develops on the contrary a “general theory” because it gives an account not only of the situations of balance of under-employment, but also of full employment of all capital and labor forces (whereas the existence of at least a general stability is the single result shown by the neo-classic theory (still today!). Its theoretical approach is regarded as the first macroeconomic theory , which calls in question several of the neo-classic principles: the currency is not a veil of the exchanges, the amount of the saving is not given on the market of the capital, the determination of interest rate is monetary and nonreal.
Keynes shows that an market economy generally arrives to a “balance of durable under-employment” of capital and labor forces. It thus breaks with the neo-classic analysis which analyzed unemployment like “frictional” or “voluntary”, in order to show that the economy can durably suffer from a Chômage of mass that the mechanisms of the market alone cannot solve. Thus Keynes describes a dynamics which prevents very begun again spontaneous of the economy. An initial surplus offer causes dismissals. Keynes denies kind which it will occurera an adjustment by the wages allowing in return according to neo-classic readjustment of the profits and a return of the Investissement, growth and in end of employment. The rise of unemployment means on the contrary the disappearance of the outlets. And this fall of the effective Demande causes the skepticism of the contractors who do not invest any more inducing one aggravation of the crisis. be essential not to forget another part of the analysis: Monetary interest rates determine mainly the level of the economic activity (chapter 17 of the Générale theory).
To leave this nonoptimal situation, it is essential to stimulate the request, which will make it possible to give again confidence with the investors. With this intention, the State has several means. It can first of all redistribute the incomes of richest (which have stronger Propension to save) with poorest (which them has strong a Propension to consume). The State can also stimulate the monetary Création via a fall of interest rates which will encourage people to borrow to consume and especially will make profitable of the investment plans whose the Marginal efficiency of capital was lower than the level of monetary interest rate. Finally the State can increase its public expenditure inducing an increase in total demand while launching programs of great work for example. With this intention, it can even resort to the Budget deficit of which it can hope that it will be filled in the medium term by the economic revival. The financing of this policy interventionist takes place either by additional taxes and social security deduction, or an emission of titles on the markets of the capital. The methods of Keynes which are based on the study of the economic aggregates (undertaken, households, State…) and are distinguished from the neo-classic study from the individualistic behaviors, found the Macroéconomie.
The Beveridgien Welfare state
See also: Welfare state
Whereas the Second world war finally succeeded the crisis, an economist and parliamentary British, William Beveridge, made many proposals aiming at redefining the role of the State of post-war period. In 1942, he recommends in the report/ratio Social Insurance and Allied Services a mode of social security aiming at “ to release the man of the need” by guaranteeing safety for the income, unceasingly threatened by the risks of the life: Maternity, Disease, Death, Unemployment, Industrial accident… With this intention, it proposes the installation of a system completely generalized, uniform and centralized. It is interested more specifically in the problem of unemployment than it regards the main risk in our companies ( Full Employment in has Free Society , 1944), and as the final result of all the other risks (disease, maternity,…). It assimilates the duty of the State to guarantee the full employment with the kingly functions: “ It must be a function of the State to protect its citizens against the Massive unemployment, as definitively as it is now the function of the State which to protect its citizens against the attacks from the outside and the flights and violences from the inside . ” Since, the role of the State in the economy was deeply modified.
KeynésiensThe keynésiens will leave the analysis Keynes of its original context, that of an economic crisis, to make of it a method of permanent regulation of the markets.
The prolongations of the school keynésienne are:
- keynesianism or traditional macroeconomics
- the theory of imbalance Edmond Malinvaud
- the current Post-keynesien Nicholas Kaldor, Joan Robinson, Roy Forbes Harrod, Evsey Domar
- the new economy keynésienne: George Akerlof, Joseph Stiglitz, Janet Yellen, Stanley Fischer
- the school of the regulation
See also: Néo-keynésien
The current Néo-keynésien (also called “balances at fixed prices” or “school of imbalance”) is a synthesis of the theories keynésiennes and neo-classic. The economists of this school are interested in the microeconomic bases of the macroeconomics. On certain points, such rationality, the néokeynésiens are closer to the designs of Friedman than of those of Keynes. But they preserve the nonvoluntary character of unemployment by integrating the systems of neo-classic market to which they add imperfections of the job market as causes not-realization of the full employment (asymmetry of information. moral risk, Theory of the insiders-outsiders…). This current was initiated by John Hicks in the years 1930, which presented a brief model of the general Théorie in neo-classic terms, the Modèle IS/LM. Its representatives comprise: Free Modigliani, Paul Samuelson, Robert Mundell, Robert Solow or Edmond Malinvaud in France.
It is advisable not to confuse this current with that of the new keynésiens and the Post-keynésien S.
See also: Monétarisme
With the beginning of the year 1960, several economists carried out by Milton Friedman (leader of the school of Chicago) try to start again the Quantity theory of money put with evil by the analyzes keynésiennes. Studying the case American (Mr. Friedman and Anna Schwartz, a monetary history of the United States) he notices that any brutal evolution of the money Supply (as well its increase recommended by the keynésiens within the framework of the policies interventionists, that its reduction within the framework of austerity measures) is synonymous with economic imbalances. Joining again with the quantity theory of money, they recommend to a Monetary policy restrictive where the emission of currency would be limited to a fixed proportion of the growth of the GDP, ensuring an expansion parallel with that of the activity. The monetarists also preach the installation of a floating Change allowing the automatic rebalancing of the external balance. These conclusions call into question the base of the policies keynésiennes and cause many debates since.
School of the public choices
See also: Theory of the public choice
The theory of the public choices was essential like a discipline of the economy which describes the role of the State and the behavior of the voters, politicians and civils servant. She thus intends to apply the economic theory to the Political science. The text founder of this current is The Calculus off Authorizes published in 1962 by James Mr. Buchanan (“Nobel Prize” of economy 1986) and Gordon Tullock.
The policy is explained there using the tools developed by the Microéconomie. The politicians and civils servant act as the consumers and producers of the economic theory would do it, in a different institutional context: inter alia differences, the money in question is generally not theirs (cf the Problème main thing-agent). The motivation of the political personnel is to maximize his own interest, which includes the collective interest (at least, such as they can conceive it), but not only. Thus, the politicians wish to maximize their chances to be elected or re-elected, and the civils servant wish to maximize to them Utilité (returned, to be able, etc)
Theory of the human capital
See also: Human capital
The theory of the Human capital is a economic theory/Concept introduces by Theodore W. Schultz, then specified by Gary Becker - in Human Capital , 1964 - aiming at giving an account of the economic consequences of the accumulation of knowledge and aptitudes by an individual or a company. It thus includes/understands not only the knowledge, the experiment and the talents (Capital-knowledge), but also its physical health or its resistance to the diseases.
Theory of the implied contractsThe theory of the implied contracts seeks to explain the following failure of the market: the wages do not vary according to the marginal productivity of the workers. The empirical observations show a constant progression of the wages during the career. That is explained by the aversion with the risk of the workers and by the fear of lacking personnel on behalf of the employers. That led to the establishment of an implied contract signed between these two agents where the employee accepts wages lower than the market in period of full employment/boom conditions and one maintains of its wages in period of under-employment/low economic situation (Azariadis, Implicit contracts and unemployment equilibria , 1975).
According to Bernard Salanié, “ the object of the theory of the contracts is to apprehend the relations of exchange between parts by holding account of the institutional and informational constraints in which they evolve/move . ”
New classical economics
See also: New classical economics
The New economics classical or Nouvelle traditional macroeconomics current of is economic thinking which developed starting from the Années 1970. It rejects the Keynésianisme and is based entirely on neo-classic principles . Its characteristic is to rest on micro-economic foundations rigorous, and to deduce from the macroeconomic models starting from the actions of the agents themselves modelled by micro-economics.
The new traditional ones include/understand Robert Lucas Jr, Finn E. Kydland, Edward C. Prescott, Robert Barro, Neil Wallace, Thomas Sargent
New economy keynésienne
See also: New economy keynésienne
Economic school of thought claiming thought keynésienne for some ideas only and being opposed to the too rigorous intervention of the State each time the market is unable to ensure an effective situation.
This new school is not current of thought not unified, but its principal participants, - George Akerlof, Joseph Eugene Stiglitz, Gregory Mankiw, Stanley Fischer, Bruce Greenwald, Janet Yellen and Paul Romer, are of agreement on two fundamental points: the currency is not neutral and the imperfections of the markets explain the economic fluctuations.
Current diversification of the economic thinking
Since the contributions of John Maynard Keynes (macroeconomics) in the years 1930, one nowadays notes a great diversification of the currents of economic thinking, in particular by the application of technical new approaches:
- quantitative economy, one of the supports of the econometrics, using techniques of modeling derived from physical sciences,
- experimental economy applied in particular to the Microéconomie,
- behavioral economy, born in particular from the study of the anomalies from the financial markets,
- Neuroéconomie study of the mental process of economic decision,
- Game theory, dependant on the problems of coordination of the Economic agents.
In addition, the rise of sciences of Gestion (Management, Marketing, Organization, human relations, Technologies the information) perfusé in economy, leading in particular to the recognition of the To know, the Compétence and the Information like essential Facteur (economy of knowledge) of Production and development, in addition to three the “traditional ones”: Natural resources, Capital work and .
- economic History
- economic Economy
- Chronology of the economic thinking
- Orthodoxy and heterodoxy in economy
- Price of the Bank of Sweden in economic scenes in memory of Alfred Nobel
- Chronology of the economic facts
- History off Economic Thought Website
- History of the economic thinking
- History of the facts and the economic ideas (VIIIème-XXèmes centuries), Course of the University of Western Brittany
- “Islam and Science: Ibn Khaldun”
- “Ibn Jaldun: El Primer Sociplogo of Historia” by R.H. Shamsuddin Elia, Instituto Argentino de Cultura Islamica
- “From the " History off Islamic Political Economy”
- “Ibn Khaldun, father off Economics” Laeeq-ur-Rehman Khan
- “the " just prix" in the Scholastic”, Jean-Pierre Potter
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