The Making of Modern Economics: The Lives and Ideas of the Great Thinkers

Features

• Cover Type: Paperback with 487 pages
• Published by: M.E. Sharpe April 2001
• Written in: English
• ISBN 10 Number: 0765604809
• ISBN 13 Number: 978-0765604804
• Book Dimensions: 9.2 x 6.7 x 0.8 inches
• Weighs: 1.7 pounds

From Booklist
Skousen, author, editor, and academic, tells the story of the development of economic thought, describing his approach as " . . . a candid, irreverent, passionate, sometimes humorous and often highly opinionated account of the lives and theories of famous economists from Adam Smith and Karl Marx to John Maynard Keynes and Milton Friedman." The author's unique view compares the development of economic thought to the construction of a building, designating Adam Smith's 1776 Wealth of Nations as the foundation. He contends that Smith's philosophy of natural liberty and the invisible hand was a sound foundation that created a new era of wealth and economic growth spanning two centuries. With the inclusion of photographs, diagrams, commentaries, and even appropriate music selections, each chapter is devoted to a major economist and his theories, showing how he added to or detracted from Smith's positions. Skousen ends on an optimistic note even as fighting continues over which economic policies to pursue in times of crisis, uncertainty, and globalization. Mary Whaley
Copyright © American Library Association. All rights reserved --This text refers to the Hardcover edition.

Product Review
"A reference biblewhat an absolutely ideal gift for college students." -- National Review, June 3, 2002

"One of the most original books ever published in economics." -- Richerd Swedberg, University of Stockholm, author of 'Schumpeter: A Biography

"Skousen tells a good story rarely told, and tells it well. The book is unputdownable - try it and see." -- Mark Blaug, University of Amsterdam, author of

"Skousen's provocative and engaging book demonstrates with style that economics is anything but the dismal science." -- N. Gregory Mankiw, Harvard University

Reader Reviews
There's a saying in the economics department of academia that the answers to the test are always the same, only the questions change. Mark Skousen does a masterful job in telling us why this is true. Skousen begins this marvelous book with a quote by J.M. Keynes. I'll paraphrase it as follows: "the ideas of economists and political philosophers are more powerful than commonly understood; indeed the world is ruled by little else". A quote on the same page by J.M. Ferguson avers, "Economics concerns itself with the greatest of all human dramas... the struggle of humanity to escape from want". These two quotes suggest that one: the "follow the money" theory of history has credence, particularly over the Hegalian master-slave theory, and its Marxist class oppression version. And, two: that the study of economics has essentially revolved around how to alleviate poverty, and to create a greater surplus for all people. Skousen begins this tome with a salute to Adam Smith whose "invisible hand" thesis explains the counter intuitive concept that "individual self interest attains for the greatest common good." This idea supports Tom Sowell's assertion that social policy should consist of ways to incentivize industrious, commercially competent, ambitious, self centered men; a push for the idea that greed is good. Skousen compares Smith's "Harmony of interest" model, which asserts that workers, landlords and capitalists work together to provide goods and services", with Ricardo's "Class conflict" model, one that suggests that the same parties compete with one another for a share of those goods and services." What's good about this book is that Skousen gives both sides an equal hearing, and he tells it as a storyteller might. He makes it readable and engaging. He wends his way thru the stories of French economists Alex de Tocqueville, Frederic Bastiat, and Jean Baptiste Say as they relate to the study of economics in the period following the printing of Adam Smith's opus, "the Wealth of Nations". This continuing study weaves forward thru Hegal's dialectic and its influence on Marx's "Communist Manifesto." We're then treated to Skousen's insights into the thinking of Thomas Carlyle, a critic of capitalism; John Stuart Mill; Jeremy Bentham; E.B-Bawerk who wrote a devastating critique of Marx's "labor theory of value", where a mud pie was said to be worth as much as an apple pie; W.S. Jevons who led the revolution in the concept of "marginal utility" along with Leon Walrus, also known for his use of mathematical equations and his work on economic equilibriums; and the brilliant Italian Vilfredo Pareto, the fellow who decided that all human behavior could be classified in 80-20 terms; Pareto's Law. As we mosey thru the rise of the Fabian Socialists in the 1870's, George Bernard Shaw et al, we're introduced to the greatest economist of the late 19th century; the neo-classicist in the Adam Smith tradition, Alfred Marshall. His chore was to rescue free-market capitalism back from the big-government socialists. But, Socialist-Leftist-Communist-progressive thinking began to gain traction, J.M. Keynes and his Bloomsbury group helped its furtherance by seizing control of the intellectual ferment of Western civilization in the early 20th century. As England weakened economically after WWI the idea of big government, with its command and control model, began to seem efficacious as a way to run society, at least in the mind of Keynes. After all, government control of the economy seemed to be working just fine in Japan, Italy, Germany and Russia in the early 1930's. Keynes felt that, much in the image of Plato's Republic, a small group of individuals, gifted with superior intellect and judgment, should make public policy for all of those not their equal. Alas, he like Marx missed having a firm grip on the concept of the "Law of Unintended Consequences." Like Marx, he failed to discern that the most important factor in the means of production was the human initiative of those upon whom he cast his snidest of intellectual aspersions. Keynes, though academically brilliant, got many things wrong in his set of assumptions about the economic workings of the world. A group of Austrian economists (L. Von Mises, Frederic Von Hayek, and Joseph Schumpeter), known as the "Austrian School", took exception with the Keynesian theories. Hayek engaged Keynes in fierce academic debates in the early 1930's, but Keynes won out and became the most influential economist of the early and mid-20th century. However, with the rise of the microchip and the ability of ever more powerful computers to crunch the numbers, the jury is in and the Austrians, represented by the University of Chicago, have dominated the Nobel Prize in the last 25 years. Hayek, who wrote "the Road to Serfdom" predicting the failure of socialist communism, has been vindicated. To continue the irony, his flag bearer, Milton Friedman, the Monetarist extraordinaire, has been the named the most influential economist of the last 40-50 years. Skousen tells this story in a page turning fashion that makes me wish he had been my econ prof back in the early 60's at Michigan State. It's odd that even today, freshly minted MBA's everywhere know little about Alfred Marshall and Frederic Von Hayek. It's a stain on academia that they have failed so in their mission to compare and contrast the great thinking done about "the business of life", which is what economics is all about. Read this book and give it to your children. Discuss it with them; you'll be a better man because of it.