Callum Williams - The Classical School: The Birth of Economics in 20 Enlightened Lives

I f you read a quality newspaper, watch historical documentaries or attend public lectures you will often hear passing references to the founders of economics. Appealing to the authority of one of these people remains a useful rhetorical device. What better way to support an argument than to claim that Adam Smith, John Stuart Mill or David Ricardo took the same position?

The Financial Times tells us that the core ideas behind Adam Smiths vision of capitalism are being ignored, and that we need to relearn what Smith wrote if we are going to replace the opaque and exclusive system modern finance has created. An essay in the Wall Street Journal invokes John Stuart Mill in the debate on free speech on campus. The implication of the article is that Mill would have supported an environment in which students are exposed to opinions that they do not like. After all, Mill wrote: He who knows only his own side of the case, knows little of that. Liam Fox, Britains international-trade secretary in 201619, organised an event where he celebrated 200 years of Ricardos comparative-advantage theory. That was intellectual ballast for his view that Britain would be better off outside the European Union, where it can strike its own free-trade deals.

Of course Smith had no idea about the derivatives, futures and options that make up modern finance. Ricardos theory of comparative advantage described a very different international economy from the one that we have today. But none of that matters a jot. If someone can make it seem as though their argument, no matter how arcane, was or would have been supported by one of these thinkers, it carries that bit more weight.

Which makes it essential to get a better sense of what these economists really meant. What did Adam Smith mean by the term invisible hand? Did Karl Marx predict the end of capitalism? Was John Stuart Mill a utilitarian? Did Thomas Malthus believe that famines were desirable?

This book will talk about what the founders of economics actually thought. That involves debunking some popular myths. I will also explain the significance of their ideas in simple language. The book has no equations and hopefully no jargon. After reading this book, you will know a few interesting things about the very famous (Smith, Malthus, Mill) and the much less famous (Harriet Martineau, Bernard Mandeville, Dadabhai Naoroji).

But the book offers more than that. Often people treat Adam Smiths theories as things that just dropped from the sky. On closer inspection, however, it is clear that the political economists were influenced by prevailing economic, social and political conditions. You cannot understand the work of the famous physiocrat school of economics of 18th-century France without a basic understanding of the state of French agriculture at the time. David Hume and Adam Smith were best friendsand possibly loversyet Smith practically ignored Humes writing: why? Ricardos theories mean nothing, meanwhile, without knowing a bit about the Corn Laws. And your understanding of what Thomas Malthus argued will be far better once you know a bit about William Godwin and Mary Wollstonecrafts sex life. Placing the political economists in their proper context has recently become a whole lot easier, as more and more high-quality historical data on the economy are published. My aim is to offer an inevitably partial assessment of what these thinkers wrote, the impact it had, and the worthiness of their contributions. This book is far from the final word on any of these people, but a useful way of understanding what they were all about.

Why these 20 thinkers? There is a certain amount of arbitrariness in choosing such a select list. Many significant namesBoisguillebert, Walras, Lenin, to name a fewdo not feature. I have limited the time period under consideration to roughly three centuries. The oldest thinker in the book is Jean-Baptiste Colbert, an economic adviser to Louis XIV, who was born in 1619. The last of our thinkers to die was Alfred Marshall, in 1924. (The chapters, which deal with one person each, are ordered by year of the persons death.)

Throughout the book I will try to answer basic questions about our 20 people that historians rarely bother to ask. The first one is this: why did economics come into being during the period 16001900? Before that period people did think about economic questions, of course. But not in the way that economics is understood today. Hannah Sewall argued in 1901 that [t]he Greeks, in common with most ancient peoples, had no conception of rational laws governing the phenomena of the distribution of wealth. They were more interested in questions of duty and nobility, questions of right and wrong, rather than to know the ultimate relations of all actions. Very broadly speaking, people thought this up until around 1600. Sewall explains that economic activities were subordinate to political and aesthetic interests, and the study of economic problems therefore was subordinate to the solution of the more important problems of ethics and jurisprudence.