A Few Short Readings in the History of Economic Thought

Too many of our entering graduate students know too little about the history of economic thought. So I am going to see if I can do a little painless supercharging to my graduate history of economic thought reading list for the second quarter. I think I have settled on:

Thomas R. Malthus (1795), "An Essay on the Principle of Population," Book 3 http://www.econlib.org/library/Malthus/malPlong.html

Adam Smith (1776), The Wealth of Nations, Book I and Book V http://www.econlib.org/library/Smith/smWNtoc.html

David Hume (1752), "Of the Balance of Trade" http://www.econlib.org/library/LFBooks/Hume/hmMPL28.html

Karl Marx and Friedrich Engels (1848), "Manifesto of the Communist Party" http://www.marxists.org/archive/marx/works/1848/communist-manifesto/

Karl Marx (1849), "Wage Labor and Capital" http://www.marxists.org/archive/marx/works/download/Marx_Wage_Labour_and_Capital.pdf

Karl Marx (1867), "The Working Day," chapter 10 of Capital, vol. I http://www.marxists.org/archive/marx/works/1867-c1/ch10.htm

But additions and alternatives would be welcome... And kudos to econlib.org, and to marxists.org...

Comments

[mark]

I think as far as Marx's political economy is concerned, the introduction to the Grundrisse is better to include than either of your latter choices.

Just 2 cents.

[William Polley]

Great idea! I would add Smith's Theory of Moral Sentiments. (Part VII if you want a shorter reading)

http://www.econlib.org/library/Smith/smMSContents.html

You don't really understand Smith until you've read both WN and TMS.

And let me add Ricardo's On the Principles of Political Economy and Taxation.

http://www.econlib.org/library/Ricardo/ricPContents.html

Makes a good companion piece to Malthus.

Hume, especially the chapter you chose, is an excellent pick. Anyone who has taught international macro probably knows it well.

And yes, let us all give kudos to econlib.org and marxists.org for putting these classics on-line.

[your mom]

Are you really suggesting that graduate students entering Berkeley in economics are unfamiliar with Malthus, Marx, Smith and Hume? I didn't realize the world was in such a sorry state. That's like an English major who somehow missed reading any Shakespeare.

[ogmb]

"Are you really suggesting that graduate students entering Berkeley in economics are unfamiliar with Malthus, Marx, Smith and Hume?"

Not that many econ grad students have econ undergrads.

"That's like an English major who somehow missed reading any Shakespeare."

A poor comparison. Math majors don't necessarily need to read the works of Augustin Cauchy and Hermann Schwarz to understand and apply the Cauchy-Schwarz inequality. The comprehensiveness that is pertinent in the humanities is only of second importance in science.

PS I would add Ken Arrow to the list.

[Joerg Wenck]

Assuming that the texts shouldn´t be contemporary Arrow would have to be left out (otherwise he is in, of course). Ricardo needs to be included. The Austrians aren´t represented: that must be corrected by picking a text from either Mises or Menger or Hayek - probably Menger on choice and the principle of marginality plus a passage on the gold standard from Mises (although there is no simpler summary available than early Alan Greenspan, but that doesn´t count as anything but fossilized economic thought...)

In fact, if we let modern economics begin with Arrow/Debreu and the diverse reformulations of the basic Keynesian model, then Keynes would have to be on the list as well.
Fisher´s famous article would definitely fit the bill, too. It set the stage for Friedman and the monetarist school, yet it is self-contained.
There are many more possibilities, of course.

[DuckedApe]

To not forget game theory (the Nobel committee didn't), I note (quite arbitrarily) that a number of Martin Shubik's papers are available at:

http://cepa.newschool.edu/het/profiles/shubik.htm

Also, Shubik's & cie. museumofmoney.org does have "Silver Slippers on a Golden Road: An interactive explication of L Frank Baum's Wizard of Oz as Allegory for the Gold Standard", by Rohit Malik, and "A Brief HIstory of Money and Religion", by Constance Drayton Old, among other resources (http://museumofmoney.org/exhibitions.htm#). Still being built, this virtual museum (web site) is not yet fully furnished (notably, the "ideas" page is just a statement of intention).

For controversy, I would also suggest
Heterodox Economics Web : http://www.orgs.bucknell.edu/afee/HetAssns.htm

and/or PAEcon : www.paecon.net

Finally, what about Forrester, Club of Rome, Ecological Economics, multi-criteria modeling and optimization?

[Roger Albin]

The relevant sections of Locke's Second Treatise where he discusses value and money.

[david]

Why not "Of commerce?" You can't get any more painless than that.

[Barkley Rosser]

Arrow? Which one? The guy has written a lot of stuff.

On the theory that this is about older writings by dead economists (that does not count Shubik, but something out of von Neumann and Morgenstern might be appropriate for game theory), I would agree that the middle zone is missing. The obvious candidates on the macro side are Keynes' General Theory and Schumpeter's Theory of Economic Development. For micro, there's always Walras or Marshall.

He is still alive, but Samuelson's Foundations of Economic Anaylsis is now a nearly fossilized culmination of neoclassical econ, one which all those math majors at Berkeley can relate to in terms of "how did we get to here"?

[david]

My background is early modern, so this is prejudice, but it'd be nice to give people something 16-17th century so you don't get too pat an account of disciplinary birth. My choice would be Botero "On the greatness of cities" rather than one of the English -- it's easy and fun and gets at a political economy that explains a lot about Hume but looks a lot different than anything else you'd have them read. Of course, I just googled Botero for the hell of it and got a bunch of foreshadowing, precursoring, and early pioneering, so I guess the whigs always win out, at least on the internets.

[steve kyle]

Keynes' "Economic Consequences of the War" is a classic and still relevant piece.

[supersaurus]

how about a list for economics illiterates who would like to know more in order to more intelligently read your blog? I'm not talking about "10 pages and you can get a doctorate in economics", just a short list to raise us ignorami out of the mud a bit.

for example I can read http://www.cepr.net/publications/social_security_2005_03.htm, including the "computing the return on equities" section, but when I'm all done it seems to me I can follow it step by step, but I don't feel as if I really understand what I'm reading in some sections. it's like the blind men and the elephant.

of course this may be a little like asking for a short list of mechanical engineering books...

[satchmo]

This strikes me as a good introductory list that would be appropriate for entering grad students in many disciplines. The comments suggesting Grundrisse and more Smith, Ricardo, etc., are well taken, but this is a good succinct start. The history of major positions in many areas of cultural, political, and economic theory is not generally known by undergrads, so I agree that starting with basics like this is a valuable thing to do on the grad level.

[Greg]

Progress and Poverty by Henry George may still rank as the best selling book on economics ever written... sold 2 million copies between 1879 and 1914.

http://www.econlib.org/library/YPDBooks/George/grgPPtoc.html

There's an abridged (by A. W. Madsen) version at
http://www.henrygeorge.org/pplink.htm

I've read the full and abridged versions and I think the abridgement is very well done, so I would assign that version.

[Robert Bell]

"The Pricing of Options and Corporate Liabilities" by Myron Scholes and Fischer Black?

Just kidding.

[Matt]

I'd include some Bentham, since his work is foundational for much of modern economic thought. (He's also fun to read, to my mind.)

[paul]

Re Keynes: The GT is pretty long, and I cannot imagine anyone getting much out of it if it is only 1 part of a much longer course. His QJE 1937 piece is probably better in this context than the GT itself.

[Bill Sundstrom]

Ricardo's "Essay on Profits" presents a general equilibrium model of growth in an open economy and a brilliant defense of free trade, without a single equation. It is absolutely a tour de force. http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/ricardo/profits.txt
Some of the early marginalists are quite interesting to read. My favorites are Jevons and Bohm-Bawerk.
Modern economists reading Marx will get the most value added from Capital v. I chapters 13-15 on the evolution of technology.

[Scott]

At least a bit of Veblen, who is underrepresented in discussions here anyway (all I hear is Marx, Marx, Marx!). How about "Pecuniary Emulation" from _Theory of the Leisure Class_?

[Jim Dandy]

I just love slink's seemingly comedic but serious comment on Samuelson's "Foundations". It reminds me so much of my first reaction upon reading that treatise in graduate school(way back when).

The core ideas of the "Foundations" struck me even then as a "reductio ad absurdum" (to use a phrase much abused around here): (a)the idea that the motion of the economy can be described by a differential equation system, and(b)that the comparative statics can tell us all we need to know about how the economy behaves when displaced from equilibrium.

[Leah Platt Boustan]

I would add Becker and Stigler's "De Gustibus Non Est Disputandum" as a manifesto of modern rational choice.

As a current economics graduate student, I can attest to the fact that the history of economic thought is thoroughly ignored in most curricula. Furthermore, many history of thought courses focus on the classical economists, especially the big three: Smith-Ricardo-Marx. However, the history of thought is constantly evolving, and should include topics like the development of marginal thinking, game theory, behavioral economics, the adoption of statistics to test economic propositions, etc.

With this goal in mind, I taught an undergraduate course at Harvard on the History of Economic Thought in the 20th Century. Here's a link to the syllabus: (I am a micro-economist, so you will see the bias in the topics covered).
http://www.people.fas.harvard.edu/~platt/papers/20thcentury_syllabus.pdf
Any comments from the fray would be much appreciated for improving the course.

[Colin Danby]

To mom and ogmb: (1) "History of thought" courses are increasingly optional or disappearing altogether from undergrad and grad econ curricula. I would guess that most people now receiving Ph.D.s in the field have never read a single work by Malthus, Marx, Smith or Hume. But (2), while the analogy with Shakespeare is indeed inexact, let's not be quite so complacently ready, ogmb, to analogize contemporary econ to natural science. One reason to read Smith and Marx in particular is that in many ways we are *not* now smarter then they were and still have much to learn from them. Contemporary neoclassical econ has achieved a much greater depth of insight into a much narrower range of issues than those investigated by classical economists.

Putting on airs about science is also a way for economists to avoid reading other key social scientists like Weber.

[Lord]

The Worldly Philosophers for its succinct review of economic thought.

[DWG]

As a PEIS undergrad, I must say I have found reading Ricardo very well worthwhile, as the simple beauty of his comparative advantage insight is worth reading in the original. This also reminds me to ask your opinion of Meghnad Desai's "Marx's Revenge" as a companion to the primary classical literature (and even up through contemporary thought). Out of morbid curiosity, will Sraffa (or any discussion of the Cambridge capital controversy) be included in the latter part of this syllabus?

[liberal]

Why have them read Marx, who got so much wrong, when they could read George, who got so much right?

[Barkley Rosser]

Well, I did not mean to suggest that entire books should be read, but selected chapters. For Keynes's GT, Chapter 12, "The State of Long-Term Expectation," is virtually current and far more relevant and brilliant than the overwhelming majority of what comes out of the computers of current financial economists (and macroeconomists as well).

In the much derided Foundations of PAS, Part II is both the more interesting and the more controversial part, with perhaps Chapter 10, where he introduces the Correspondence Principle, being the piece de resistance.

There is also certainly a strong case for some part of Adam Smith's Theory of Moral Sentiments, as someone suggested. I would note that it has become a new fad for behavioral economists to cite passages from it to give their papers a patina of classical gravitas. It is almost becoming like how the old Soviet economists used to always provide a suitable quote from Lenin somewhere in their papers...

I'm also a fan of Veblen, but there are limits here.

Despite his best selling status, I do not think George is appropriate for this particular assignment. Hey, John Kenneth Galbraith has outsold nearly all living economists, but I do not see anybody suggesting him for this list (well, he is still alive at 97 or so as of 10/15).

Also, Heilbroner is a great read, but I think the issue is actually to have them read some original texts.

BTW, the problem of history of economics is much broader and more serious than just the disappearance of it from nearly all grad econ programs. It seems to be in danger of entirely disappearing from undergrad programs and more generally from the discipline entirely. A sign of this is that the ultimate Mecca of history of economics, Duke University, home of the leading journal in the sub-discipline, History of Political Economy (which just got dumped from the SSCI, a major sign of what is up), no longer will allow a student to write a thesis that is just history of economics. It is OK to stick it into part of one on something else, but the students must have another field as their lead. Their last Ph.D purely in hes was Robert Leonard over a decade ago, who wrote an excellent dissertation on the history of game theory. The discipline is in danger of ending up in history of science or philosophy departments.

[Kimmitt]

Yeah, I'm a Ph.D. student now, and my history of econ is more or less self-taught at this point. I got a little bit here and there on the side during my core courses, but anything before 1920 or so is just not part of my background.

[Barkley Rosser]

Leah Platt Boustan,

I attempted to access the address you provided. I got a "you cannot access this site from your server." Is this one of these Harvard in crowd sites? Do you have an alternative available that is not so under lock and key?

[dearieme]

As background to Smith and Hume, how about:-
"An Essay on the History of Civil Society"
by Adam Ferguson, 1767? [often spelled Fergusson]

Part 1: Of the General Characteristics of Human Nature
Part 2: Of the History of Rude Nations
Part 3: Of the History of Policy and Arts
Part 4: Of the Consequences that result from the Advancement of Civil and Commercial Arts
Part 5: Of the Decline of Nations
Part 6: Of Corruption and Political Slavery

[AllenM]

Hmmm, okay.
Pick and choose early stuff. How about some early Von Thunen? Great for understanding a spatial quality that is currently totally ignored outside of development. Doctrine of market failure developed in A. C. Pigou's 1920 book The Economics of Welfare, followed by the famous guy Irving Fisher to get the flavor of the great depression with a selection from the debt deflation. Add some Frank Knight for cynicism. Follow with Keynes, Friedman, and Hayek. One must think broadly, and while the shock therapy of marxism has it's appeal, I find that the subtlety of more legitimate thought has greater appeal.

[csn]

Second the Walras - how did we get here, again? Any why physics? And what about those other two, suspiciously normative volumes?

If you have time you could start with aristotle, on okonomia, slaves, and all the rest.

And part of the fun of history of thought is the fights - Cambridge v Cambridge, for example, is ancient history to most grad students but still stirs up a fuss once explained. I mean really, aggregate supply? You can make a case that who was right and who won don't match up as well as one might hope.

Sraffa - no one reads him anymore in school, but a smart thoughtful guy who was a giant.

All my HoT books are at work, or I'd come up with more--that class as an undergrad was why I went to get the phd, and there wasn't a single class offered at the graduate level once I got there. I think it's excellent you're doing this one.

[lfs]

Everbody should read Schumpeter's History of Economic Thought/Theory(?)". This monumental study will ground you all. It's only 1,200 plus pages (my edition, small print).

And do not forget ("My Keynes"), Richard Cantillon. (18th Century)..liquidity preference, quantity theory of money, fundamental determinants of interest rates, aggregate demand, rent theory, international trade theory etc.).

[Lorenzo]

Fret not, economists! Historical economic thought, i.e. political economy, is not disapearing entirely! While universities in the U.S. do not usually teach it, and it has become marginalized in economics departments everywhere, the study of Political Economy is alive and well in Canada, the U.K. and other parts of the world.

Hell, at my Canadian Uni we have a whole subsection in the political science department, and thus I've read as a part of my studies:

Smith, Riccardo, Malthus, Say, Bentham, Marx, Gramsci, Schumpeter, Veblen, Weber, Polanyi, etc.

Of course, now that political economy has become mostly the province of political science, there has been a strong resergence of radical perspectives.

In any case I wanted to strongly critique your choice of Marxist material. That PDF, presented in isolation, is nothing but a butchery of Marx's ideas. I would strongly second the suggestion of using the introduction to the Grundisse instead as they give a much fuller representation of his ideas. (Though, despite its dificulty, I like the 1844 manuscripts best, personally).

Now as to why economics has generally trended to shun political economy and distanced itself from Smith et. all...well my answer would be shrill so I wont give it. Heh.

[theogon]

"Teachings of the Worldly Philosophers" is a reader edited by Heilbroner that gives a pretty wide overview. Too sparse on its own, but might count as a supplement to cover economists that don't get their own Big Readings.

[your mom]

Ok, somewhere along the way I missed the part where economics became a science. Considering the way wall street, et al, read meaning into the intonation of Greenspan's vowel movements, I'd assumed it was still more of an art form at this point. My apologies. However, aren't even most scientists interested in how we got to where we are?

I mean, if you're a theoretical physicist, don't you read Feynmann? or a biologist Darwin? How can you game the system if you don't know the materials used to construct the system's foundations?

Anyway, may I suggest Thomas Paine, the Rights of Man, Applying Principle to Practice, Chapter 5 — Ways and Means of Improving the Condition of Europe Interspersed with Miscellaneous Observations.
And Common Sense for that matter.

And, Emma Goldman, My Dissillusionment in Russia.

http://www.ushistory.org/paine/rights/c2-05.htm
http://www.ushistory.org/paine/commonsense/
http://sunsite3.berkeley.edu/Goldman/Writings/Russia/chapter1.html

[DuckedApe]

The New Theories of Economics
by Vilfredo Pareto

Journal of Political Economy
volume 5, 189?

http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/pareto/theories
----------
Barkley Rosser: Leah Platt Boustan's links worked for me.

[mike]

Come on, now. Why would your students have read the classics in economics? Math is better undergrad preparation for graduate study in economics than is economics. Why should you be surprised? Economics is about incentives and the incentives in place are what have created the knowledge gaps of your students.

[stickler]

Why no mention of Friedrich List? His ideas on the "national economy" had a lot of influence in Prussia. Plus he makes for a useful counterweight to Ricardian free-tradeism in the 19th century.

[liberal]

Barkley Rosser wrote, "Despite his best selling status, I do not think George is appropriate for this particular assignment."

Yeah, I guess the treatise laying out the cause of both poverty and one of the causes of economic inefficiency isn't very important.

[Joerg Wenck]

Are the U.S. about to be prussianized? Hear Chris Dialynas, managing director of PIMCO: "List’s ideas are of great importance today. The global trade imbalances and wealth transfers that concerned List are most prevalent today. Subsequent to List’s writings, there have been numerous large-scale military conflicts. Military conflict and war is the political state today. So, the post-Adam Smith world has continuously violated one of Smith’s most basis assumptions-a peaceful globe. Yet, today, just as was the case during List’s life, economists adopt their thinking and economic theories based upon the flawed theoretical foundations espoused by Adam Smith."
http://www.pimco.com/LeftNav/Latest+Publications/2004/Dialynas+Paper.htm