Schools of economics
Encyclopedia
Schools of economic thought describes the variety of approaches in the history
of economic theory noteworthy enough to be described as a 'school of thought'. While economist
s do not always fit into particular schools, particularly in modern times, classifying economists into schools of thought is common. Economic thought may be roughly divided into three phases: premodern (Greco-Roman, Indian
, Persian, Arab
, and Chinese), early modern (mercantilist, physiocrats
) and modern (beginning with Adam Smith
and classical economics
in the late 18th century). Systematic economic theory has been developed mainly since the beginning of what is termed the modern era.
Currently, the great majority of economists follow an approach referred to as mainstream economics
(sometimes called 'orthodox economics'). Within the mainstream, distinctions can be made between the Saltwater school
(associated with Berkeley
, Harvard, MIT, Pennsylvania
, Princeton
, and Yale
), and the more laissez-faire
ideas of the Freshwater school (represented by the Chicago school of economics, Carnegie Mellon University
, the University of Rochester
and the University of Minnesota
). Both of these schools of thought are associated with the neoclassical synthesis
. Some influential approaches of the past, such as the historical school of economics
and institutional economics
, have become defunct or have declined in influence, and are now considered heterodox approaches
.
. The origins can be traced back to the Caliphate
, where an early market economy
and some of the earliest forms of merchant capitalism
took root between the 8th–12th centuries, which some refer to as "Islamic capitalism".
Islamic economics seeks to enforce Islamic regulations not only on personal issues, but to implement broader economic goals and policies of an Islamic society, based on uplifting the deprived masses. It was founded on free and unhindered circulation of wealth so as to handsomely reach even the lowest echelons of society. One distinguishing feature is the tax on wealth (in the form of both Zakat and Jizya), and bans levying taxes on all kinds of trade and transactions (Income/Sales/Excise/Import/Export duties etc.).
Another distinguishing feature is prohibition of interest in the form of excess charged while trading in money. Its pronouncement on
use of paper currency also stands out. Though promissory notes are recognized, they must be fully backed by reserves. Fractional-reserve banking
is disallowed as a form of breach of trust
.
It saw innovations such as trading companies
, big business
es, contract
s, bills of exchange, long-distance international trade
, the first forms of partnership
(mufawada) such as limited partnership
s (mudaraba), and the earliest forms of credit
, debt
, profit
, loss
, capital
(al-mal), capital accumulation
(nama al-mal), circulating capital
, capital expenditure
, revenue
, cheque
s, promissory note
s, trusts
(see Waqf
), startup companies, savings account
s, transactional accounts, pawning
, loan
ing, exchange rate
s, bank
ers, money changer
s, ledger
s, deposits
, assignments
, the double-entry bookkeeping system
, lawsuit
s, and agency
institution.
This school has seen a revived interest in development and understanding since the later part of 20th century.
treated economic activity as a good which was to be tax
ed to raise revenues for the nobility
and the church
. Economic exchanges were regulated by feudal
rights, such as the right to collect a toll
or hold a fair
e, as well as guild
restrictions and religious restrictions on lending
. Economic policy, such as it was, was designed to encourage trade through a particular area. Because of the importance of social class
, sumptuary laws were enacted, regulating dress and housing, including allowable styles, materials and frequency of purchase for different classes. Niccolò Machiavelli
in his book The Prince
was one of the first authors to theorize economic policy in the form of advice. He did so by stating that princes and republic
s should limit their expenditures, and prevent either the wealthy or the populace from despoiling the other. In this way a state would be seen as "generous" because it was not a heavy burden on its citizens.
, Murray Rothbard
argued that the modern history of economics should properly begin with the physiocrats rather than with Adam Smith.
, was the original form of mainstream economics of the 18th and 19th centuries. Classical economics focuses on the tendency of markets to move to equilibrium and on objective theories of value. Neo-classical economics differs from classical economics primarily in being utilitarian in its value theory and using marginal theory as the basis of its models and equations. Marxist economics also descends from classical theory. Anders Chydenius
(1729–1803) was the leading classical liberal
of Nordic
history. A Finnish
priest and member of parliament
, he published a book called The National Gain
in 1765, in which he proposes ideas of freedom of trade and industry and explores the relationship between economy and society and lays out the principles of liberalism
, all of this eleven years before Adam Smith
published a similar and more comprehensive book, The Wealth of Nations. According to Chydenius, democracy, equality and a respect for human rights were the only way towards progress and happiness for the whole of society.
, the first Treasury Secretary of the United States. It emphasized high tariffs on imports to help develop the fledgling American manufacturing base and to finance infrastructure projects, as well as National Banking
, Public Credit
, and government investment
into advanced scientific and technological research and development. Friedrich List
, one of the most famous proponents of the economic system, named it the National System, and was the main impetus behind the development of the German Zollverein
and the economic policies of Germany under Chancellor Otto Von Bismarck
beginning in 1879.
was an approach to academic economics and to public administration that emerged in 19th century in Germany, and held sway there until well into the 20th century. The Historical school held that history was the key source of knowledge about human actions and economic matters, since economics was culture-specific, and hence not generalizable over space and time. The School rejected the universal validity of economic theorems. They saw economics as resulting from careful empirical and historical analysis instead of from logic and mathematics. The School preferred historical, political, and social studies to self-referential mathematical modelling. Most members of the school were also Kathedersozialisten, i.e. concerned with social reform and improved conditions for the common man during a period of heavy industrialization. The Historical School can be divided into three tendencies: the Older, led by Wilhelm Roscher, Karl Knies
, and Bruno Hildebrand
; the Younger, led by Gustav von Schmoller
, and also including Etienne Laspeyres, Karl Bücher
, Adolph Wagner
, and to some extent Lujo Brentano
; the Youngest, led by Werner Sombart
and including, to a very large extent, Max Weber
.
Predecessors included Friedrich List
. The Historical school largely controlled appointments to Chairs of Economics in German universities, as many of the advisors of Friedrich Althoff, head of the university department in the Prussian Ministry of Education 1882-1907, had studied under members of the School. Moreover, Prussia was the intellectual powerhouse of Germany and so dominated academia, not only in central Europe, but also in the United States until about 1900, because the American economics profession was led by holders of German Ph.Ds. The Historical school was involved in the Methodenstreit ("strife over method") with the Austrian School, whose orientation was more theoretical and a prioristic. In English speaking countries, the Historical school is perhaps the least known and least understood approach to the study of economics, because it differs radically from the now-dominant Anglo-American analytical point of view. Yet the Historical school forms the basis - both in theory and in practice - of the social market economy, for many decades the dominant economic paradigm in most countries of continental Europe. The Historical school is also a source of Joseph Schumpeter
's dynamic, change-oriented, and innovation-based economics. Although his writings could be critical of the School, Schumpeter's work on the role of innovation and entrepreneurship can be seen as a continuation of ideas originated by the Historical School, especially the work of von Schmoller and Sombart. Although not nearly as famous as its German counterpart, there was also an English Historical School, whose figures included Francis Bacon
, Auguste Comte
, and Herbert Spencer
. It was this school that heavily critiqued the deductive approach of the classical economists, especially the writings of David Ricardo
. This school revered the inductive process and called for the merging of historical fact with those of the present period. Included in this school are: William Whewell, Richard Jones, Walter Bagehot
, Thorold Rogers, Arnold Toynbee, and William Cunningham just to name a few.
and Friedrich Engels. This school focuses on the labor theory of value
and what Marx considered to be the exploitation of labour by capital. Thus, in Marxian economics, the labour theory of value is a method for measuring the exploitation of labour in a capitalist society, rather than simply a theory of price.
desire a society where the dynamics of competitive free markets are allowed to operate free of compulsory state control; many other anarchist economists, on the other hand, believe economies cannot be truly free unless capitalist property and the capitalist mode of production
are abolished.
in 1932
: "the science which studies human behavior as a relation between scarce means having alternative uses." Scarcity means that available resources are insufficient to satisfy all wants and needs; if there is no scarcity and no alternative uses of available resources, then there is no economic problem
.
in interpreting economic developments, the subjective theory of value
, that money
is non-neutral
, and emphasize the organizing power
of the price mechanism (see economic calculation debate). Austrian economists generally advocate a laissez faire approach to the economy.
and focused on macroeconomics in the short-run, particularly the rigidities caused when prices are fixed. It has two successors. Post-Keynesian economics
is an alternative school - one of the successors to the Keynesian tradition with a focus on macroeconomics
. They concentrate on macroeconomic rigidities and adjustment processes, and research micro foundations for their models based on real-life practices rather than simple optimizing models. Generally associated with Cambridge, England and the work of Joan Robinson
(see Post-Keynesian economics
). New-Keynesian economics is the other school associated with developments in the Keynesian fashion. These researchers tend to share with other Neoclassical
economists the emphasis on models based on micro foundations and optimizing behavior, but focus more narrowly on standard Keynesian themes such as price and wage rigidity. These are usually made to be endogenous features of these models, rather than simply assumed as in older style Keynesian ones (see New-Keynesian economics).
school that arose following the marginal revolution
. Most survive to the present day as self-consciously dissident schools, but with greatly diminished size and influence relative to mainstream economics
. The most significant are Institutional economics
, Marxian economics
and the Austrian School
.
The development of Keynesian economics
was a substantial challenge to the dominant neoclassical school of economics. Keynesian views eventually entered the mainstream as a result of the Keynesian-neoclassical synthesis
developed by John Hicks
. The rise of Keynesianism, and its incorporation into mainstream economics, reduced the appeal of heterodox schools. However, advocates of a more fundamental critique of orthodox economics formed a school of Post-Keynesian economics
.
More recent heterodox developments include evolutionary economics
(though this term is also used to describe institutional economics
), feminist
, Green economics, Post-autistic economics
, and Thermoeconomics
Most heterodox views are politically left-wing and critical of capitalism
. The most notable exception is Austrian economics, which is politically aligned with libertarianism
.
Georgescu-Roegen reintroduced into economics, the concept of entropy
from thermodynamics
(as distinguished from what, in his view, is the mechanistic foundation of neoclassical economics drawn from Newtonian physics) and did foundational work which later developed into evolutionary economics
. His work contributed significantly to Thermoeconomics
and to ecological economics
.
In the late 20th Century, three of the areas of study which are producing change in economic thinking are: risk-based, rather than price-based models; imperfect economic actors; and treating economics as a biological science
, based on evolution
ary norms rather than abstract exchange.
The study of risk
has been influential, in viewing variations in price over time as more important than actual price. This applies particularly to financial economics, where risk/return tradeoffs are the crucial decisions to be made.
The most important area of growth has been in the study of information and decision. Examples of this school include the work of Joseph Stiglitz. Problems of asymmetric information and moral hazard
, both based around information economics, profoundly affect modern economic dilemmas like executive stock options, insurance
markets, and Third-World
debt relief
.
Finally, there are a series of economic ideas rooted in the conception of economics as a branch of biology, including the idea that energy relationships, rather than price relationships, determine economic structure, and the use of fractal
geometry
to create economic models. (See Energy Economics
.) In its infancy is the application of non-linear dynamics to economic theory, as well as the application of evolutionary psychology
. So far, the most visible work has been in the area of applying fractals to market analysis, particularly arbitrage
. (See Complexity economics
.) Another infant branch of economics is neuroeconomics
. The latter combines neuroscience
, economics, and psychology
to study how we make choices.
to modern liberalism. There are also divergent views on particular issues within economics, such as the effectiveness and desirability of Keynesian macroeconomic policy. Although, historically, few mainstream economists have regarded themselves as members of a "school", many would identify with one or more of neoclassical economics
, monetarism
, Keynesian economics
, new classical economics, Austrian School
, or behavioral economics.
and world systems theory
. An example of another economic system
which has recently been advocated is the participatory economics
model. This uses neither market methods nor centralised methods for allocation, but incorporates many local positive and negative feedback loops in order to respond to the most positive human values. One example of this school of thought is the Post Autistic Economics movement.
History of economic thought
The history of economic thought deals with different thinkers and theories in the subject that became political economy and economics from the ancient world to the present day...
of economic theory noteworthy enough to be described as a 'school of thought'. While economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
s do not always fit into particular schools, particularly in modern times, classifying economists into schools of thought is common. Economic thought may be roughly divided into three phases: premodern (Greco-Roman, Indian
History of India
The history of India begins with evidence of human activity of Homo sapiens as long as 75,000 years ago, or with earlier hominids including Homo erectus from about 500,000 years ago. The Indus Valley Civilization, which spread and flourished in the northwestern part of the Indian subcontinent from...
, Persian, Arab
Caliphate
The term caliphate, "dominion of a caliph " , refers to the first system of government established in Islam and represented the political unity of the Muslim Ummah...
, and Chinese), early modern (mercantilist, physiocrats
Physiocrats
Physiocracy is an economic theory developed by the Physiocrats, a group of economists who believed that the wealth of nations was derived solely from the value of "land agriculture" or "land development." Their theories originated in France and were most popular during the second half of the 18th...
) and modern (beginning with Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
and classical economics
Classical economics
Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill....
in the late 18th century). Systematic economic theory has been developed mainly since the beginning of what is termed the modern era.
Currently, the great majority of economists follow an approach referred to as mainstream economics
Mainstream economics
Mainstream economics is a loose term used to refer to widely-accepted economics as taught in prominent universities and in contrast to heterodox economics...
(sometimes called 'orthodox economics'). Within the mainstream, distinctions can be made between the Saltwater school
Saltwater school (economics)
In economics, the freshwater school comprises macroeconomists who, in the early 1970s, challenged the prevailing consensus in macroeconomics research. Key elements of their approach was that macroeconomics had to be dynamic, quantitative, and based on how individuals and institutions make...
(associated with Berkeley
University of California, Berkeley
The University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...
, Harvard, MIT, Pennsylvania
University of Pennsylvania
The University of Pennsylvania is a private, Ivy League university located in Philadelphia, Pennsylvania, United States. Penn is the fourth-oldest institution of higher education in the United States,Penn is the fourth-oldest using the founding dates claimed by each institution...
, Princeton
Princeton University
Princeton University is a private research university located in Princeton, New Jersey, United States. The school is one of the eight universities of the Ivy League, and is one of the nine Colonial Colleges founded before the American Revolution....
, and Yale
YALE
RapidMiner, formerly YALE , is an environment for machine learning, data mining, text mining, predictive analytics, and business analytics. It is used for research, education, training, rapid prototyping, application development, and industrial applications...
), and the more laissez-faire
Laissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....
ideas of the Freshwater school (represented by the Chicago school of economics, Carnegie Mellon University
Carnegie Mellon University
Carnegie Mellon University is a private research university in Pittsburgh, Pennsylvania, United States....
, the University of Rochester
University of Rochester
The University of Rochester is a private, nonsectarian, research university in Rochester, New York, United States. The university grants undergraduate and graduate degrees, including doctoral and professional degrees. The university has six schools and various interdisciplinary programs.The...
and the University of Minnesota
University of Minnesota
The University of Minnesota, Twin Cities is a public research university located in Minneapolis and St. Paul, Minnesota, United States. It is the oldest and largest part of the University of Minnesota system and has the fourth-largest main campus student body in the United States, with 52,557...
). Both of these schools of thought are associated with the neoclassical synthesis
Neoclassical synthesis
Neoclassical synthesis is a postwar academic movement in economics that attempts to absorb the macroeconomic thought of John Maynard Keynes into the thought of neoclassical economics...
. Some influential approaches of the past, such as the historical school of economics
Historical school of economics
The Historical school of economics was an approach to academic economics and to public administration that emerged in 19th century in Germany, and held sway there until well into the 20th century....
and institutional economics
Institutional economics
Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the...
, have become defunct or have declined in influence, and are now considered heterodox approaches
Heterodox economics
"Heterodox economics" refers to approaches or to schools of economic thought that are considered outside of "mainstream economics". Mainstream economists sometimes assert that it has little or no influence on the vast majority of academic economists in the English speaking world. "Mainstream...
.
Ancient economic thought
- ChanakyaChanakyaChānakya was a teacher to the first Maurya Emperor Chandragupta , and the first Indian emperor generally considered to be the architect of his rise to power. Traditionally, Chanakya is also identified by the names Kautilya and VishnuGupta, who authored the ancient Indian political treatise...
(Kautilya) - XenophonOeconomicus (Xenophon)The Oeconomicus by Xenophon is a Socratic dialogue principally about household management and agriculture. It is one of the earliest works on economics in its original sense of household management, and a significant source for the social and intellectual history of classic Athens...
- AristotlePolitics (Aristotle)Aristotle's Politics is a work of political philosophy. The end of the Nicomachean Ethics declared that the inquiry into ethics necessarily follows into politics, and the two works are frequently considered to be parts of a larger treatise, or perhaps connected lectures, dealing with the...
- Qin Shi HuangQin Shi HuangQin Shi Huang , personal name Ying Zheng , was king of the Chinese State of Qin from 246 BC to 221 BC during the Warring States Period. He became the first emperor of a unified China in 221 BC...
- Wang AnshiWang AnshiWang Anshi was a Chinese economist, statesman, chancellor and poet of the Song Dynasty who attempted controversial, major socioeconomic reforms...
Islamic economics
Islamic economics is the practice of economics in accordance with Islamic lawSharia
Sharia law, is the moral code and religious law of Islam. Sharia is derived from two primary sources of Islamic law: the precepts set forth in the Quran, and the example set by the Islamic prophet Muhammad in the Sunnah. Fiqh jurisprudence interprets and extends the application of sharia to...
. The origins can be traced back to the Caliphate
Caliphate
The term caliphate, "dominion of a caliph " , refers to the first system of government established in Islam and represented the political unity of the Muslim Ummah...
, where an early market economy
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...
and some of the earliest forms of merchant capitalism
Merchant capitalism
Merchant capitalism is a term used by economic historians to refer to the earliest phase in the development of capitalism as an economic and social system. Early forms of merchant capitalism were developed in the medieval Islamic world from the 9th century, and in medieval Europe from the 12th...
took root between the 8th–12th centuries, which some refer to as "Islamic capitalism".
Islamic economics seeks to enforce Islamic regulations not only on personal issues, but to implement broader economic goals and policies of an Islamic society, based on uplifting the deprived masses. It was founded on free and unhindered circulation of wealth so as to handsomely reach even the lowest echelons of society. One distinguishing feature is the tax on wealth (in the form of both Zakat and Jizya), and bans levying taxes on all kinds of trade and transactions (Income/Sales/Excise/Import/Export duties etc.).
Another distinguishing feature is prohibition of interest in the form of excess charged while trading in money. Its pronouncement on
use of paper currency also stands out. Though promissory notes are recognized, they must be fully backed by reserves. Fractional-reserve banking
Fractional-reserve banking
Fractional-reserve banking is a form of banking where banks maintain reserves that are only a fraction of the customer's deposits. Funds deposited into a bank are mostly lent out, and a bank keeps only a fraction of the quantity of deposits as reserves...
is disallowed as a form of breach of trust
Trust law
In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another...
.
It saw innovations such as trading companies
Trading company
Trading companies are businesses working with different kinds of products which are sold for consumer, business or government purposes. Trading companies buy a specialized range of products, maintain a stock or a shop, and deliver products to customers....
, big business
Big Business
Big business is a term used to describe large corporations, in either an individual or collective sense. The term first came into use in a symbolic sense subsequent to the American Civil War, particularly after 1880, in connection with the combination movement that began in American business at...
es, contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
s, bills of exchange, long-distance international trade
International trade
International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...
, the first forms of partnership
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
(mufawada) such as limited partnership
Limited partnership
A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners . It is a partnership in which only one partner is required to be a general partner.The GPs are, in all major respects,...
s (mudaraba), and the earliest forms of credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
, debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
, profit
Profit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
, loss
Income statement
Income statement is a company's financial statement that indicates how the revenue Income statement (also referred to as profit and loss statement (P&L), statement of financial performance, earnings statement, operating statement or statement of operations) is a company's financial statement that...
, capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
(al-mal), capital accumulation
Capital accumulation
The accumulation of capital refers to the gathering or amassing of objects of value; the increase in wealth through concentration; or the creation of wealth. Capital is money or a financial asset invested for the purpose of making more money...
(nama al-mal), circulating capital
Circulating capital
Circulating capital refers to physical capital and operating expenses, i.e., short-lived items that are used in production and used up in the process of creating other goods or services. This is roughly equal to Intermediate consumption. It includes raw materials, intermediate goods, inventories,...
, capital expenditure
Capital expenditure
Capital expenditures are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset with a useful life extending beyond the taxable year...
, revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
, cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
s, promissory note
Promissory note
A promissory note is a negotiable instrument, wherein one party makes an unconditional promise in writing to pay a determinate sum of money to the other , either at a fixed or determinable future time or on demand of the payee, under specific terms.Referred to as a note payable in accounting, or...
s, trusts
Trust law
In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another...
(see Waqf
Waqf
A waqf also spelled wakf formally known as wakf-alal-aulad is an inalienable religious endowment in Islamic law, typically denoting a building or plot of land for Muslim religious or charitable purposes. The donated assets are held by a charitable trust...
), startup companies, savings account
Savings account
Savings accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money . These accounts let customers set aside a portion of their liquid assets while earning a monetary return...
s, transactional accounts, pawning
Pawnbroker
A pawnbroker is an individual or business that offers secured loans to people, with items of personal property used as collateral...
, loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
ing, exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...
s, bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
ers, money changer
Money changer
A money changer is a person who exchanges the coins or currency of one country for that of another. This trade is thought generally to be the origin of modern banking in Europe....
s, ledger
Ledger
A ledger is the principal book or computer file for recording and totaling monetary transactions by account, with debits and credits in separate columns and a beginning balance and ending balance for each account. The ledger is a permanent summary of all amounts entered in supporting journals which...
s, deposits
Deposit account
A deposit account is a current account, savings account, or other type of bank account, at a banking institution that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank's books, and the resulting balance is recorded as a liability for the...
, assignments
Assignment (law)
An assignment is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee...
, the double-entry bookkeeping system
Double-entry bookkeeping system
A double-entry bookkeeping system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts....
, lawsuit
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
s, and agency
Agency (law)
The law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another to create a legal relationship with a third party...
institution.
This school has seen a revived interest in development and understanding since the later part of 20th century.
- Muhammad
- Abu Hanifa an-Nu‘manAbu Hanifa an-Nu‘manNuʿmān ibn Thābit ibn Zūṭā ibn Marzubān , better known as Imām Abū Ḥanīfah, was the founder of the Sunni Hanafi school of fiqh ....
- Abu YusufAbu YusufYaqub ibn Ibrahim al-Ansari, better known as Abu Yusuf was a student of legist Abu Hanifah who helped spread the influence of the Hanafi school of Islamic law through his writings and the government positions he held.-Biography:...
- Al-FarabiAl-Farabi' known in the West as Alpharabius , was a scientist and philosopher of the Islamic world...
(Alpharabius) - Shams al-Mo'ali Abol-hasan Ghaboos ibn WushmgirShams al-Mo'ali Abol-hasan Ghaboos ibn WushmgirQabus ibn Wushmagir Qabus ibn Wushmagir Qabus ibn Wushmagir (full name and honorific abol-ḥasan qābūs ben wušmagīr ibn ziyar šams al-maʿālī, ; (r. 977–981; 997–1012, d. 1012) was the Ziyarid ruler of Gurgan and Tabaristan in medieval Iran...
(Qabus) - Ibn SinaAvicennaAbū ʿAlī al-Ḥusayn ibn ʿAbd Allāh ibn Sīnā , commonly known as Ibn Sīnā or by his Latinized name Avicenna, was a Persian polymath, who wrote almost 450 treatises on a wide range of subjects, of which around 240 have survived...
(Avicenna) - Ibn MiskawayhIbn MiskawayhAbu 'Ali Ahmad ibn Muhammad ibn Ya'qub Ibn Miskawayh, also known as Ibn Miskawayh or Ebn Meskavayh was a Persian chancery official of the Buwayhid era, and philosopher and historian from Rey, Iran...
- Al-GhazaliAl-GhazaliAbu Hāmed Mohammad ibn Mohammad al-Ghazzālī , known as Algazel to the western medieval world, born and died in Tus, in the Khorasan province of Persia was a Persian Muslim theologian, jurist, philosopher, and mystic....
(Algazel) - Al-MawardiAl-MawardiAbu al-Hasan Ali Ibn Muhammad Ibn Habib al-Mawardi , known in Latin as Alboacen , was an Arab Muslim jurist of the Shafi'i school most remembered for his works on religion, government, the caliphate, and public and constitutional law during a time of political turmoil...
- Nasīr al-Dīn al-TūsīNasir al-Din al-TusiKhawaja Muḥammad ibn Muḥammad ibn Ḥasan Ṭūsī , better known as Naṣīr al-Dīn al-Ṭūsī , was a Persian polymath and prolific writer: an astronomer, biologist, chemist, mathematician, philosopher, physician, physicist, scientist, theologian and Marja Taqleed...
(Tusi) - Ibn Taymiyyah
- Ibn KhaldunIbn KhaldunIbn Khaldūn or Ibn Khaldoun was an Arab Tunisian historiographer and historian who is often viewed as one of the forerunners of modern historiography, sociology and economics...
- Al-MaqriziAl-MaqriziTaqi al-Din Ahmad ibn 'Ali ibn 'Abd al-Qadir ibn Muhammad al-Maqrizi ; Arabic: , was an Egyptian historian more commonly known as al-Maqrizi or Makrizi...
Scholasticism
- Nicole Oresme
- Thomas AquinasThomas AquinasThomas Aquinas, O.P. , also Thomas of Aquin or Aquino, was an Italian Dominican priest of the Catholic Church, and an immensely influential philosopher and theologian in the tradition of scholasticism, known as Doctor Angelicus, Doctor Communis, or Doctor Universalis...
- School of SalamancaSchool of SalamancaThe School of Salamanca is the renaissance of thought in diverse intellectual areas by Spanish and Portuguese theologians, rooted in the intellectual and pedagogical work of Francisco de Vitoria...
- Leonardus LessiusLeonardus LessiusLeonardus Lessius was a Jesuit moral theologian and a pioneer in business ethics.-Life:...
Mercantilism
Economic policy in Europe during the late Middle Ages and early RenaissanceRenaissance
The Renaissance was a cultural movement that spanned roughly the 14th to the 17th century, beginning in Italy in the Late Middle Ages and later spreading to the rest of Europe. The term is also used more loosely to refer to the historical era, but since the changes of the Renaissance were not...
treated economic activity as a good which was to be tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
ed to raise revenues for the nobility
Nobility
Nobility is a social class which possesses more acknowledged privileges or eminence than members of most other classes in a society, membership therein typically being hereditary. The privileges associated with nobility may constitute substantial advantages over or relative to non-nobles, or may be...
and the church
Roman Catholic Church
The Catholic Church, also known as the Roman Catholic Church, is the world's largest Christian church, with over a billion members. Led by the Pope, it defines its mission as spreading the gospel of Jesus Christ, administering the sacraments and exercising charity...
. Economic exchanges were regulated by feudal
Feudalism
Feudalism was a set of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries, which, broadly defined, was a system for ordering society around relationships derived from the holding of land in exchange for service or labour.Although derived from the...
rights, such as the right to collect a toll
Toll road
A toll road is a privately or publicly built road for which a driver pays a toll for use. Structures for which tolls are charged include toll bridges and toll tunnels. Non-toll roads are financed using other sources of revenue, most typically fuel tax or general tax funds...
or hold a fair
Fair
A fair or fayre is a gathering of people to display or trade produce or other goods, to parade or display animals and often to enjoy associated carnival or funfair entertainment. It is normally of the essence of a fair that it is temporary; some last only an afternoon while others may ten weeks. ...
e, as well as guild
Guild
A guild is an association of craftsmen in a particular trade. The earliest types of guild were formed as confraternities of workers. They were organized in a manner something between a trade union, a cartel, and a secret society...
restrictions and religious restrictions on lending
Usury
Usury Originally, when the charging of interest was still banned by Christian churches, usury simply meant the charging of interest at any rate . In countries where the charging of interest became acceptable, the term came to be used for interest above the rate allowed by law...
. Economic policy, such as it was, was designed to encourage trade through a particular area. Because of the importance of social class
Social class
Social classes are economic or cultural arrangements of groups in society. Class is an essential object of analysis for sociologists, political scientists, economists, anthropologists and social historians. In the social sciences, social class is often discussed in terms of 'social stratification'...
, sumptuary laws were enacted, regulating dress and housing, including allowable styles, materials and frequency of purchase for different classes. Niccolò Machiavelli
Niccolò Machiavelli
Niccolò di Bernardo dei Machiavelli was an Italian historian, philosopher, humanist, and writer based in Florence during the Renaissance. He is one of the main founders of modern political science. He was a diplomat, political philosopher, playwright, and a civil servant of the Florentine Republic...
in his book The Prince
The Prince
The Prince is a political treatise by the Italian diplomat, historian and political theorist Niccolò Machiavelli. From correspondence a version appears to have been distributed in 1513, using a Latin title, De Principatibus . But the printed version was not published until 1532, five years after...
was one of the first authors to theorize economic policy in the form of advice. He did so by stating that princes and republic
Republic
A republic is a form of government in which the people, or some significant portion of them, have supreme control over the government and where offices of state are elected or chosen by elected people. In modern times, a common simplified definition of a republic is a government where the head of...
s should limit their expenditures, and prevent either the wealthy or the populace from despoiling the other. In this way a state would be seen as "generous" because it was not a heavy burden on its citizens.
- Gerard de MalynesGerard de MalynesGerard de Malynes was an independent merchant in foreign trade, an English commissioner in the Spanish Netherlands, a government advisor on trade matters, assay master of the mint, and commissioner of mint affairs.-Books:...
- Edward MisseldenEdward MisseldenEdward Misselden was an English merchant, and leading member of the writers in the Mercantilist group of economic thought. He argued that international movements of specie and fluctuations in the exchange rate depended upon the international trade flows and not the manipulations of the bankers,...
- Thomas MunThomas MunThomas Mun was an English writer on economics who has been called the last of the early mercantilists. He was among the first to recognize the exportation of service, or invisible items, as valuable trade, and made early statements strongly in support of capitalism.Mun began his career by engaging...
- Jean BodinJean BodinJean Bodin was a French jurist and political philosopher, member of the Parlement of Paris and professor of law in Toulouse. He is best known for his theory of sovereignty; he was also an influential writer on demonology....
- Jean Baptiste Colbert
- Josiah ChildJosiah ChildSir Josiah Child of Wanstead, 1st Baronet , English merchant, economist proponent of mercantilism and governor of the East India Company, was born in London, the second son of Richard Child, a London merchant of old family.-Family:...
- William PettyWilliam PettySir William Petty FRS was an English economist, scientist and philosopher. He first became prominent serving Oliver Cromwell and Commonwealth in Ireland. He developed efficient methods to survey the land that was to be confiscated and given to Cromwell's soldiers...
- John LockeJohn LockeJohn Locke FRS , widely known as the Father of Liberalism, was an English philosopher and physician regarded as one of the most influential of Enlightenment thinkers. Considered one of the first of the British empiricists, following the tradition of Francis Bacon, he is equally important to social...
- Charles DavenantCharles DavenantCharles Davenant , English economist, eldest son of Sir William Davenant, the poet, was born in London.-Overview:He was educated at Cheam grammar school and Balliol College, Oxford, but left the university without taking a degree...
- Dudley North
- Ferdinando GalianiFerdinando GalianiFerdinando Galiani was an Italian economist, a leading Italian figure of the Enlightenment. Friedrich Nietzsche called him the "most fastidious and refined intelligence" of the 18th century....
- James Denham-SteuartJames Denham-SteuartSir James Steuart, 3rd Baronet of Goodtrees and eventually 7th Baronet of Coltness; late in life Sir James Steuart Denham, also called Sir James Denham Steuart was a prominent Jacobite, who wrote one of the first noteworthy books in English about economics...
Physiocrats
In his Austrian Perspective on the History of Economic ThoughtAn Austrian Perspective on the History of Economic Thought
An Austrian Perspective on the History of Economic Thought is a work of economic history written by Murray N. Rothbard. Rothbard notes in the introduction that the book was originally conceived as a "standard Adam Smith-to-the-present moderately sized book"; however, in the process of writing it,...
, Murray Rothbard
Murray Rothbard
Murray Newton Rothbard was an American author and economist of the Austrian School who helped define capitalist libertarianism and popularized a form of free-market anarchism he termed "anarcho-capitalism." Rothbard wrote over twenty books and is considered a centrally important figure in the...
argued that the modern history of economics should properly begin with the physiocrats rather than with Adam Smith.
- Anne Robert Jacques Turgot
- François QuesnayFrançois QuesnayFrançois Quesnay was a French economist of the Physiocratic school. He is known for publishing the "Tableau économique" in 1758, which provided the foundations of the ideas of the Physiocrats...
- John LawJohn Law (economist)John Law was a Scottish economist who believed that money was only a means of exchange that did not constitute wealth in itself and that national wealth depended on trade...
- Pierre le Pesant de Boisguilbert
- Richard CantillonRichard CantillonRichard Cantillon was an Irish-French economist and author of Essai sur la Nature du Commerce en Général , a book considered by William Stanley Jevons to be the "cradle of political economy". Although little information exists on Cantillon's life, it is known that he became a successful banker and...
Classical political economy
Classical economics, also called classical political economyPolitical economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
, was the original form of mainstream economics of the 18th and 19th centuries. Classical economics focuses on the tendency of markets to move to equilibrium and on objective theories of value. Neo-classical economics differs from classical economics primarily in being utilitarian in its value theory and using marginal theory as the basis of its models and equations. Marxist economics also descends from classical theory. Anders Chydenius
Anders Chydenius
Anders Chydenius was the leading classical liberal of Nordic history. Born in Sotkamo, Ostrobothnia, Sweden and having studied under Pehr Kalm at the Royal Academy of Åbo, Chydenius became a priest, Enlightenment philosopher and member of the Swedish Riksdag of the Estates.The world's first...
(1729–1803) was the leading classical liberal
Classical liberalism
Classical liberalism is the philosophy committed to the ideal of limited government, constitutionalism, rule of law, due process, and liberty of individuals including freedom of religion, speech, press, assembly, and free markets....
of Nordic
Nordic countries
The Nordic countries make up a region in Northern Europe and the North Atlantic which consists of Denmark, Finland, Iceland, Norway and Sweden and their associated territories, the Faroe Islands, Greenland and Åland...
history. A Finnish
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...
priest and member of parliament
Riksdag of the Estates
The Riksdag of the Estates , was the name used for the Estates of the Swedish realm when they were assembled. Until its dissolution in 1866, the institution was the highest authority in Sweden next to the King...
, he published a book called The National Gain
The National Gain
The National Gain is the main work of the Finnish scientist, philosopher and politician Anders Chydenius, published in 1765...
in 1765, in which he proposes ideas of freedom of trade and industry and explores the relationship between economy and society and lays out the principles of liberalism
Liberalism
Liberalism is the belief in the importance of liberty and equal rights. Liberals espouse a wide array of views depending on their understanding of these principles, but generally, liberals support ideas such as constitutionalism, liberal democracy, free and fair elections, human rights,...
, all of this eleven years before Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
published a similar and more comprehensive book, The Wealth of Nations. According to Chydenius, democracy, equality and a respect for human rights were the only way towards progress and happiness for the whole of society.
- Francis HutchesonFrancis Hutcheson (philosopher)Francis Hutcheson was a philosopher born in Ireland to a family of Scottish Presbyterians who became one of the founding fathers of the Scottish Enlightenment....
- Bernard de MandevilleBernard de MandevilleBernard Mandeville, or Bernard de Mandeville , was a philosopher, political economist and satirist. Born in the Netherlands, he lived most of his life in England and used English for most of his published works...
- David HumeDavid HumeDavid Hume was a Scottish philosopher, historian, economist, and essayist, known especially for his philosophical empiricism and skepticism. He was one of the most important figures in the history of Western philosophy and the Scottish Enlightenment...
- Adam SmithAdam SmithAdam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
- Thomas MalthusThomas MalthusThe Reverend Thomas Robert Malthus FRS was an English scholar, influential in political economy and demography. Malthus popularized the economic theory of rent....
- James MillJames MillJames Mill was a Scottish historian, economist, political theorist, and philosopher. He was a founder of classical economics, together with David Ricardo, and the father of influential philosopher of classical liberalism, John Stuart Mill.-Life:Mill was born at Northwater Bridge, in the parish of...
- Francis PlaceFrancis PlaceFrancis Place was an English social reformer.-Early career and influence:Born in the debtor's prison which his father oversaw near Drury Lane, Place was schooled for ten years before being apprenticed to a leather-breeches maker. At eighteen he was an independent journeyman, and in 1790 was...
- David RicardoDavid RicardoDavid Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...
- Henry ThorntonHenry Thornton (abolitionist)Henry Thornton was an English economist, banker, philanthropist and parliamentarian.-Early life:He was the son of John Thornton of Clapham, London, who had been one of the early patrons of the evangelical movement in Britain...
- John Ramsay McCullochJohn Ramsay McCullochJohn Ramsey McCulloch , a Scottish economist, author and editor, is widely regarded as the leader of the Ricardian school of economists after the death of David Ricardo in 1823. He was appointed the first professor of political economy at University College London in 1828...
- James Maitland, 8th Earl of LauderdaleJames Maitland, 8th Earl of LauderdaleJames Maitland, 8th Earl of Lauderdale KT PC was Keeper of the Great Seal of Scotland, and a representative peer for Scotland in the House of Lords.-Early years:...
- Jeremy BenthamJeremy BenthamJeremy Bentham was an English jurist, philosopher, and legal and social reformer. He became a leading theorist in Anglo-American philosophy of law, and a political radical whose ideas influenced the development of welfarism...
- Jean Charles Léonard de SismondiJean Charles Léonard de SismondiJean Charles Léonard de Sismondi , whose real name was Simonde, was a writer born at Geneva. He is best known for his works on French and Italian history, and his economic ideas.-Early life:...
- Johann Heinrich von ThünenJohann Heinrich von ThünenJohann Heinrich von Thünen was a prominent nineteenth century economist. Von Thünen was a Mecklenburg landowner, who in the first volume of his treatise, The Isolated State , developed the first serious treatment of spatial economics, connecting it with the theory of rent...
- John Stuart MillJohn Stuart MillJohn Stuart Mill was a British philosopher, economist and civil servant. An influential contributor to social theory, political theory, and political economy, his conception of liberty justified the freedom of the individual in opposition to unlimited state control. He was a proponent of...
- Karl MarxKarl MarxKarl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
- Henry GeorgeHenry GeorgeHenry George was an American writer, politician and political economist, who was the most influential proponent of the land value tax, also known as the "single tax" on land...
- Nassau William SeniorNassau William SeniorNassau William Senior , English economist, was born at Compton, Berkshire, the eldest son of the Rev. JR Senior, vicar of Durnford, Wiltshire.-Biography:...
- Edward Gibbon WakefieldEdward Gibbon WakefieldEdward Gibbon Wakefield was a British politician, the driving force behind much of the early colonisation of South Australia, and later New Zealand....
- John RaeJohn Rae (economist)John Rae , was a Scottish/Canadian economist. His most famous work was the Statement of Some New Principles on the Subject of Political Economy.-Sources:...
- Thomas Tooke
- Robert TorrensRobert Torrens (economist)Colonel Robert Torrens was a Royal Marines officer, political economist, MP, owner of the influential Globe newspaper and prolific writer.Born in Ireland, son of Protestant Robert Torrens of Hervey Hill....
American (National) School
The American School owes its origin to the writings and economic policies of Alexander HamiltonAlexander Hamilton
Alexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...
, the first Treasury Secretary of the United States. It emphasized high tariffs on imports to help develop the fledgling American manufacturing base and to finance infrastructure projects, as well as National Banking
Second Report on Public Credit
The Second Report on Public Credit was the second report of three major reports on economic policy issued by Founding Father of the United States and first United States Treasury Secretary Alexander Hamilton on the request of Congress for consideration on establishing a national banking system with...
, Public Credit
First Report on the Public Credit
The First Report on Public Credit was the first of three major reports on economic policy issued by American Founding Father and first United States Treasury Secretary Alexander Hamilton on the request of Congress. The report analyzed the financial standing of the United States of America and made...
, and government investment
Report on Manufactures
The Report on Manufactures is the third report, and magnum opus, of American Founding Father and 1st U.S. Treasury Secretary Alexander Hamilton...
into advanced scientific and technological research and development. Friedrich List
Friedrich List
Georg Friedrich List was a leading 19th century German economist who developed the "National System" or what some would call today the National System of Innovation...
, one of the most famous proponents of the economic system, named it the National System, and was the main impetus behind the development of the German Zollverein
Zollverein
thumb|upright=1.2|The German Zollverein 1834–1919blue = Prussia in 1834 grey= Included region until 1866yellow= Excluded after 1866red = Borders of the German Union of 1828 pink= Relevant others until 1834...
and the economic policies of Germany under Chancellor Otto Von Bismarck
Otto von Bismarck
Otto Eduard Leopold, Prince of Bismarck, Duke of Lauenburg , simply known as Otto von Bismarck, was a Prussian-German statesman whose actions unified Germany, made it a major player in world affairs, and created a balance of power that kept Europe at peace after 1871.As Minister President of...
beginning in 1879.
- Alexander HamiltonAlexander HamiltonAlexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...
- John Quincy AdamsJohn Quincy AdamsJohn Quincy Adams was the sixth President of the United States . He served as an American diplomat, Senator, and Congressional representative. He was a member of the Federalist, Democratic-Republican, National Republican, and later Anti-Masonic and Whig parties. Adams was the son of former...
- Henry ClayHenry ClayHenry Clay, Sr. , was a lawyer, politician and skilled orator who represented Kentucky separately in both the Senate and in the House of Representatives...
- Mathew CareyMathew CareyMathew Carey was an Irish-born American publisher and economist.-Early days:Carey came from a middle-class family and was born in Dublin in 1760. He entered the bookselling and printing business in 1775, and when still only seventeen published a pamphlet criticizing dueling...
- Henry Charles CareyHenry Charles CareyHenry Charles Carey , a leading 19th century economist of the American School of capitalism. He is now best known for the book The Harmony of Interests, to compare and contrast what he called the "British System" of laissez faire free trade capitalism with the "American System" of developmental...
- Abraham LincolnAbraham LincolnAbraham Lincoln was the 16th President of the United States, serving from March 1861 until his assassination in April 1865. He successfully led his country through a great constitutional, military and moral crisis – the American Civil War – preserving the Union, while ending slavery, and...
- Friedrich ListFriedrich ListGeorg Friedrich List was a leading 19th century German economist who developed the "National System" or what some would call today the National System of Innovation...
- Otto Von BismarckOtto von BismarckOtto Eduard Leopold, Prince of Bismarck, Duke of Lauenburg , simply known as Otto von Bismarck, was a Prussian-German statesman whose actions unified Germany, made it a major player in world affairs, and created a balance of power that kept Europe at peace after 1871.As Minister President of...
- Arthur GriffithArthur GriffithArthur Griffith was the founder and third leader of Sinn Féin. He served as President of Dáil Éireann from January to August 1922, and was head of the Irish delegation at the negotiations in London that produced the Anglo-Irish Treaty of 1921.-Early life:...
- William McKinleyWilliam McKinleyWilliam McKinley, Jr. was the 25th President of the United States . He is best known for winning fiercely fought elections, while supporting the gold standard and high tariffs; he succeeded in forging a Republican coalition that for the most part dominated national politics until the 1930s...
French liberal school
- Frédéric BastiatFrédéric BastiatClaude Frédéric Bastiat was a French classical liberal theorist, political economist, and member of the French assembly. He was notable for developing the important economic concept of opportunity cost.-Biography:...
- Maurice BlockMaurice BlockMaurice Block was a German-French statistician and economist.He was born in Berlin of Jewish parents. He studied at Bonn and Giessen, but settled in Paris, becoming naturalized there. In 1844 he entered the French ministry of agriculture, becoming in 1852 one of the heads of the statistical...
- Pierre Paul Leroy-BeaulieuPierre Paul Leroy-BeaulieuPierre Paul Leroy-Beaulieu was a French economist, brother of Henri Jean Baptiste Anatole Leroy-Beaulieu, born at Saumur, Maine-et-Loire on the 9th of December 1843, and educated in Paris at the Lycée Bonaparte and the École de Droit...
- Gustave de MolinariGustave de MolinariGustave de Molinari was an economist born in Belgium associated with French laissez-faire liberal economists such as Frédéric Bastiat and Hippolyte Castille. Living in Paris, in the 1840s, he took part in the "Ligue pour la Liberté des Échanges" , animated by Frédéric Bastiat...
- Yves GuyotYves GuyotYves Guyot was a French politician and economist.He was born at Dinan. Educated al Rennes, he took up the profession of journalism, coming to Paris in 1867...
- Jean-Baptiste SayJean-Baptiste SayJean-Baptiste Say was a French economist and businessman. He had classically liberal views and argued in favor of competition, free trade, and lifting restraints on business...
- Léon SayLéon SayJean-Baptiste Léon Say , French statesman and economist, was born in Paris.-Biography:The family was a most remarkable one. His grandfather Jean-Baptiste Say was a well-known economist. His brother Louis Auguste Say , director of a sugar refinery at Nantes, wrote several books against his theories...
German historical school
The Historical school of economicsHistorical school of economics
The Historical school of economics was an approach to academic economics and to public administration that emerged in 19th century in Germany, and held sway there until well into the 20th century....
was an approach to academic economics and to public administration that emerged in 19th century in Germany, and held sway there until well into the 20th century. The Historical school held that history was the key source of knowledge about human actions and economic matters, since economics was culture-specific, and hence not generalizable over space and time. The School rejected the universal validity of economic theorems. They saw economics as resulting from careful empirical and historical analysis instead of from logic and mathematics. The School preferred historical, political, and social studies to self-referential mathematical modelling. Most members of the school were also Kathedersozialisten, i.e. concerned with social reform and improved conditions for the common man during a period of heavy industrialization. The Historical School can be divided into three tendencies: the Older, led by Wilhelm Roscher, Karl Knies
Karl Knies
Karl Gustav Adolf Knies was a German economist.He is known as the author of Political Economy from the Standpoint of the Historical Method, one of the 19th century methodological treatises on German historical school of economics...
, and Bruno Hildebrand
Bruno Hildebrand
Bruno Hildebrand was a German economist representing the "older" historical school of economics. His economic thinking was highly critical of classical economists, especially of David Ricardo. His magnum opus was Economics of the Present and the Future . The basic aim of this work was to...
; the Younger, led by Gustav von Schmoller
Gustav von Schmoller
Gustav von Schmoller was the leader of the "younger" German historical school of economics.-Life:Schmoller was born in Heilbronn. His father was a Württemberg civil servant. Young Schmoller studied Staatswissenschaften at the University of Tübingen...
, and also including Etienne Laspeyres, Karl Bücher
Karl Bücher
Karl Wilhelm Bücher was an economist, one of the founders of non-market economics, and the founder of journalism as an academic discipline.- Early life :...
, Adolph Wagner
Adolph Wagner
Adolph Wagner was a German economist and politician, a leading Kathedersozialist and public finance scholar and advocate of Agrarianism...
, and to some extent Lujo Brentano
Lujo Brentano
Lujo Brentano was an eminent German economist and social reformer.Lujo Brentano, born in Aschaffenburg into one of the most distinguished German-Catholic intellectual families , attended school in Augsburg and Aschaffenburg...
; the Youngest, led by Werner Sombart
Werner Sombart
Werner Sombart was a German economist and sociologist, the head of the “Youngest Historical School” and one of the leading Continental European social scientists during the first quarter of the 20th century....
and including, to a very large extent, Max Weber
Max Weber
Karl Emil Maximilian "Max" Weber was a German sociologist and political economist who profoundly influenced social theory, social research, and the discipline of sociology itself...
.
Predecessors included Friedrich List
Friedrich List
Georg Friedrich List was a leading 19th century German economist who developed the "National System" or what some would call today the National System of Innovation...
. The Historical school largely controlled appointments to Chairs of Economics in German universities, as many of the advisors of Friedrich Althoff, head of the university department in the Prussian Ministry of Education 1882-1907, had studied under members of the School. Moreover, Prussia was the intellectual powerhouse of Germany and so dominated academia, not only in central Europe, but also in the United States until about 1900, because the American economics profession was led by holders of German Ph.Ds. The Historical school was involved in the Methodenstreit ("strife over method") with the Austrian School, whose orientation was more theoretical and a prioristic. In English speaking countries, the Historical school is perhaps the least known and least understood approach to the study of economics, because it differs radically from the now-dominant Anglo-American analytical point of view. Yet the Historical school forms the basis - both in theory and in practice - of the social market economy, for many decades the dominant economic paradigm in most countries of continental Europe. The Historical school is also a source of Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
's dynamic, change-oriented, and innovation-based economics. Although his writings could be critical of the School, Schumpeter's work on the role of innovation and entrepreneurship can be seen as a continuation of ideas originated by the Historical School, especially the work of von Schmoller and Sombart. Although not nearly as famous as its German counterpart, there was also an English Historical School, whose figures included Francis Bacon
Francis Bacon
Francis Bacon, 1st Viscount St Albans, KC was an English philosopher, statesman, scientist, lawyer, jurist, author and pioneer of the scientific method. He served both as Attorney General and Lord Chancellor of England...
, Auguste Comte
Auguste Comte
Isidore Auguste Marie François Xavier Comte , better known as Auguste Comte , was a French philosopher, a founder of the discipline of sociology and of the doctrine of positivism...
, and Herbert Spencer
Herbert Spencer
Herbert Spencer was an English philosopher, biologist, sociologist, and prominent classical liberal political theorist of the Victorian era....
. It was this school that heavily critiqued the deductive approach of the classical economists, especially the writings of David Ricardo
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...
. This school revered the inductive process and called for the merging of historical fact with those of the present period. Included in this school are: William Whewell, Richard Jones, Walter Bagehot
Walter Bagehot
Walter Bagehot was an English businessman, essayist, and journalist who wrote extensively about literature, government, and economic affairs.-Early years:...
, Thorold Rogers, Arnold Toynbee, and William Cunningham just to name a few.
- Wilhelm Roscher
- Gustav von SchmollerGustav von SchmollerGustav von Schmoller was the leader of the "younger" German historical school of economics.-Life:Schmoller was born in Heilbronn. His father was a Württemberg civil servant. Young Schmoller studied Staatswissenschaften at the University of Tübingen...
- Werner SombartWerner SombartWerner Sombart was a German economist and sociologist, the head of the “Youngest Historical School” and one of the leading Continental European social scientists during the first quarter of the 20th century....
- Max WeberMax WeberKarl Emil Maximilian "Max" Weber was a German sociologist and political economist who profoundly influenced social theory, social research, and the discipline of sociology itself...
- Joseph SchumpeterJoseph SchumpeterJoseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
- Karl PolanyiKarl PolanyiKarl Paul Polanyi was a Hungarian philosopher, political economist and economic anthropologist known for his opposition to traditional economic thought and his book The Great Transformation...
English historical school
- Edmund BurkeEdmund BurkeEdmund Burke PC was an Irish statesman, author, orator, political theorist and philosopher who, after moving to England, served for many years in the House of Commons of Great Britain as a member of the Whig party....
- Richard JonesRichard Jones (economist)Richard Jones was an English economist who criticised the theoretical views of David Ricardo and T. R. Malthus on economic rent and population....
- Thomas Edward Cliffe LeslieThomas Edward Cliffe LeslieThomas Edward Cliffe Leslie , Irish economist. He was professor of jurisprudence and political economy in Queen's College, Belfast, noted for debunking the Wages-Fund doctrine and for addressing contemporary agrarian policy questions. A critic of Ricardian orthodoxy, he said that it had...
- Walter BagehotWalter BagehotWalter Bagehot was an English businessman, essayist, and journalist who wrote extensively about literature, government, and economic affairs.-Early years:...
- Thorold RogersJames Edwin Thorold RogersJames Edwin Thorold Rogers , known as Thorold Rogers, was an English economist, historian and Liberal politician who sat in the House of Commons from 1880 to 1886. He deployed historical and statistical methods to analyze some of the key economic and social questions in Victorian England...
- William J. Ashley
- William Cunningham
French historical school
- Clement JuglarClement JuglarClément Juglar was a French doctor and statistician.-Juglar Cycles:He was one of the first to develop an economic theory of business cycles. He identified the 7-11 year fixed investment cycle that is now associated with his name...
- Charles GideCharles GideCharles Gide was a leading French economist and historian of economic thought. He was a professor at the University of Bordeaux, at Montpellier, at Université de Paris and finally at Collège de France.- Academic work :...
- Albert AftalionAlbert AftalionAlbert Abram Aftalion was a French Jewish economist.He taught at the Paris University . He co-founded the academic journal Revue économique in 1950 and presided over its board of directors....
- Émile Levasseur
- François SimiandFrançois SimiandFrançois Simiand was a French sociologist and economist best known as a participant in the Année Sociologique. As a member of the French Historical School of economics, Simiand predicated a rigorous factual and statistical basis for theoretical models and policies...
Utopian economics
- William GodwinWilliam GodwinWilliam Godwin was an English journalist, political philosopher and novelist. He is considered one of the first exponents of utilitarianism, and the first modern proponent of anarchism...
- Charles FourierCharles FourierFrançois Marie Charles Fourier was a French philosopher. An influential thinker, some of Fourier's social and moral views, held to be radical in his lifetime, have become main currents in modern society...
- Robert OwenRobert OwenRobert Owen was a Welsh social reformer and one of the founders of utopian socialism and the cooperative movement.Owen's philosophy was based on three intellectual pillars:...
- Saint-SimonClaude Henri de Rouvroy, comte de Saint-SimonClaude Henri de Rouvroy, comte de Saint-Simon, often referred to as Henri de Saint-Simon was a French early socialist theorist whose thought influenced the foundations of various 19th century philosophies; perhaps most notably Marxism, positivism and the discipline of sociology...
Marxian economics
Marxian economics descended from the work of Karl MarxKarl Marx
Karl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
and Friedrich Engels. This school focuses on the labor theory of value
Labor theory of value
The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...
and what Marx considered to be the exploitation of labour by capital. Thus, in Marxian economics, the labour theory of value is a method for measuring the exploitation of labour in a capitalist society, rather than simply a theory of price.
- Eduard Berstein
- Karl MarxKarl MarxKarl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
- Friedrich EngelsFriedrich EngelsFriedrich Engels was a German industrialist, social scientist, author, political theorist, philosopher, and father of Marxist theory, alongside Karl Marx. In 1845 he published The Condition of the Working Class in England, based on personal observations and research...
State socialism
- Henri de Saint-SimonClaude Henri de Rouvroy, comte de Saint-SimonClaude Henri de Rouvroy, comte de Saint-Simon, often referred to as Henri de Saint-Simon was a French early socialist theorist whose thought influenced the foundations of various 19th century philosophies; perhaps most notably Marxism, positivism and the discipline of sociology...
- Ferdinand LassalleFerdinand LassalleFerdinand Lassalle was a German-Jewish jurist and socialist political activist.-Early life:Ferdinand Lassalle was born on 11 April 1825 in Breslau , Silesia to a prosperous Jewish family descending from Upper Silesian Loslau...
- Johann Karl RodbertusJohann Karl RodbertusJohann Karl Rodbertus , also known as Karl Rodbertus-Jagetzow, was a German economist and socialist from Greifswald...
- Fabian SocietyFabian SocietyThe Fabian Society is a British socialist movement, whose purpose is to advance the principles of democratic socialism via gradualist and reformist, rather than revolutionary, means. It is best known for its initial ground-breaking work beginning late in the 19th century and continuing up to World...
Ricardian socialism
- John Francis BrayJohn Francis BrayJohn Francis Bray was a radical, Chartist, writer on socialist economics and activist in both Britain and hisnative America in the 19th century. He was hailed in later life as the 'Benjamin Franklin' of American labor.- Life :...
- John GrayJohn Gray (19th century socialist)John Gray was a British socialist economist.-Life and views:Very little personal information about John Gray is available. He lived mostly in Edinburgh. According to his own account, he was a poor student who dropped out of school early, went to London and took up factory work as a youngster...
- Thomas HodgskinThomas HodgskinThomas Hodgskin was an Englishsocialist writer on political economy, critic of capitalism, free-market anarchist and defender of free trade and early trade unions...
Anarchist economics
Anarchist economics is a set of theories which seeks to outline modes of production and exchange that are not governed by coercive social institutions. Anarcho-capitalistsAnarcho-capitalism
Anarcho-capitalism is a libertarian and individualist anarchist political philosophy that advocates the elimination of the state in favour of individual sovereignty in a free market...
desire a society where the dynamics of competitive free markets are allowed to operate free of compulsory state control; many other anarchist economists, on the other hand, believe economies cannot be truly free unless capitalist property and the capitalist mode of production
Capitalist mode of production
In Marx's critique of political economy, the capitalist mode of production is the production system of capitalist societies, which began in Europe in the 16th century, grew rapidly in Western Europe from the end of the 18th century, and later extended to most of the world...
are abolished.
- Charles FourierCharles FourierFrançois Marie Charles Fourier was a French philosopher. An influential thinker, some of Fourier's social and moral views, held to be radical in his lifetime, have become main currents in modern society...
- Pierre-Joseph ProudhonPierre-Joseph ProudhonPierre-Joseph Proudhon was a French politician, mutualist philosopher and socialist. He was a member of the French Parliament, and he was the first person to call himself an "anarchist". He is considered among the most influential theorists and organisers of anarchism...
- Peter KropotkinPeter KropotkinPrince Pyotr Alexeyevich Kropotkin was a Russian zoologist, evolutionary theorist, philosopher, economist, geographer, author and one of the world's foremost anarcho-communists. Kropotkin advocated a communist society free from central government and based on voluntary associations between...
- Mikhail BakuninMikhail BakuninMikhail Alexandrovich Bakunin was a well-known Russian revolutionary and theorist of collectivist anarchism. He has also often been called the father of anarchist theory in general. Bakunin grew up near Moscow, where he moved to study philosophy and began to read the French Encyclopedists,...
Distributism
Distributism is an economic philosophy that was originally formulated in the late 19th century and early 20th century by Catholic thinkers to reflect the teachings of Pope Leo XIII's encyclical Rerum Novarum, and Pope Pius's XI encyclical Quadragesimo Anno. It seeks to pursue a third way between capitalism and socialism, desiring to order society according to Christian principles of justice while still preserving private property.- G. K. ChestertonG. K. ChestertonGilbert Keith Chesterton, KC*SG was an English writer. His prolific and diverse output included philosophy, ontology, poetry, plays, journalism, public lectures and debates, literary and art criticism, biography, Christian apologetics, and fiction, including fantasy and detective fiction....
- Hilaire BellocHilaire BellocJoseph Hilaire Pierre René Belloc was an Anglo-French writer and historian who became a naturalised British subject in 1902. He was one of the most prolific writers in England during the early twentieth century. He was known as a writer, orator, poet, satirist, man of letters and political activist...
Institutional economics
- Gunnar MyrdalGunnar MyrdalKarl Gunnar Myrdal was a Swedish Nobel Laureate economist, sociologist, and politician. In 1974, he received the Nobel Memorial Prize in Economic Sciences with Friedrich Hayek for "their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the...
- Thorstein VeblenThorstein VeblenThorstein Bunde Veblen, born Torsten Bunde Veblen was an American economist and sociologist, and a leader of the so-called institutional economics movement...
- John Rogers CommonsJohn R. CommonsJohn Rogers Commons was an American institutional economist and labor historian at the University of Wisconsin–Madison.-Biography:Born in Hollansburg, Ohio, John R. Commons had a religious upbringing which led him to be an advocate for social justice early in life...
- Wesley Clair MitchellWesley Clair MitchellWesley Clair Mitchell was an American economist known for his empirical work on business cycles and for guiding the National Bureau of Economic Research in its first decades....
- John Maurice ClarkJohn Maurice ClarkJohn Maurice Clark was an American economist whose work combined the rigor of traditional economic analysis with an "institutionalist" attitude.- Academic career :...
- Robert A. BradyRobert A. Brady (economist)Robert Alexander Brady was an American economist who analyzed the dynamics of technological change and the structure of business enterprise. Brady developed a potent analysis of fascism and other emerging authoritarian economic and cultural practices...
- Clarence Edwin AyresClarence Edwin AyresClarence Edwin Ayres was the principal thinker in the Texas school of Institutional Economics, during the middle of the 20th century.-Life:...
- Romesh Dutt
- John Kenneth GalbraithJohn Kenneth GalbraithJohn Kenneth "Ken" Galbraith , OC was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism...
- Geoffrey HodgsonGeoffrey HodgsonGeoffrey M. Hodgson is a Research Professor of Business Studies in the University of Hertfordshire, and also the editor-in-chief of the Journal of Institutional Economics.Prof...
- Ha-Joon ChangHa-Joon ChangHa-Joon Chang is one of the leading heterodox economists and institutional economists specialising in development economics...
New institutional economics
- Douglass NorthDouglass NorthDouglass Cecil North is an American economist known for his work in economic history. He is the co-recipient of the 1993 Nobel Memorial Prize in Economic Sciences...
- Oliver E. WilliamsonOliver E. WilliamsonOliver Eaton Williamson is an American economist, professor at the University of California, Berkeley and recipient of the Nobel Memorial Prize in Economic Sciences....
- Ronald CoaseRonald CoaseRonald Harry Coase is a British-born, American-based economist and the Clifton R. Musser Professor Emeritus of Economics at the University of Chicago Law School. After studying with the University of London External Programme in 1927–29, Coase entered the London School of Economics, where he took...
- Daron AcemoğluDaron AcemogluKamer Daron Acemoğlu is a Turkish-American economist of Armenian origin. He is currently the Elizabeth and James Killian Professor of Economics at Massachusetts Institute of Technology and winner of the 2005 John Bates Clark Medal. He is among the in the world according to IDEAS/RePEc...
Neoclassical economics
Neoclassical economics is the dominant form of economics used today and has the highest amount of adherents among economists. It is often referred to by its critics as Orthodox Economics. The more specific definition this approach implies was captured by Lionel RobbinsLionel Robbins
Lionel Charles Robbins, Baron Robbins, FBA was a British economist and head of the economics department at the London School of Economics...
in 1932
An Essay on the Nature and Significance of Economic Science
Lionel Robbins' Essay sought to define more precisely economics as a science and to derive substantive implications. Analysis is relative to "accepted solutions of particular problems" based on best modern practice as referenced, especially including the works of Philip Wicksteed, Ludwig von...
: "the science which studies human behavior as a relation between scarce means having alternative uses." Scarcity means that available resources are insufficient to satisfy all wants and needs; if there is no scarcity and no alternative uses of available resources, then there is no economic problem
Economic problem
The economic problem, sometimes called the basic, central or fundamental economic problem, is one of the fundamental economic theories in the operation of any economy. It asserts that there is scarcity, or that the finite resources available are insufficient to satisfy all human wants and needs...
.
- William Stanley JevonsWilliam Stanley JevonsWilliam Stanley Jevons was a British economist and logician.Irving Fisher described his book The Theory of Political Economy as beginning the mathematical method in economics. It made the case that economics as a science concerned with quantities is necessarily mathematical...
- Francis Ysidro EdgeworthFrancis Ysidro EdgeworthFrancis Ysidro Edgeworth FBA was an Irish philosopher and political economist who made significant contributions to the methods of statistics during the 1880s...
- Alfred MarshallAlfred MarshallAlfred Marshall was an Englishman and one of the most influential economists of his time. His book, Principles of Economics , was the dominant economic textbook in England for many years...
- John Bates ClarkJohn Bates ClarkJohn Bates Clark was an American neoclassical economist. He was one of the pioneers of the marginalist revolution and opponent to the Institutionalist school of economics, and spent most of his career teaching at Columbia University.-Biography:Clark was born and raised in Providence, Rhode...
- Irving FisherIrving FisherIrving Fisher was an American economist, inventor, and health campaigner, and one of the earliest American neoclassical economists, though his later work on debt deflation often regarded as belonging instead to the Post-Keynesian school.Fisher made important contributions to utility theory and...
- Knut WicksellKnut WicksellJohan Gustaf Knut Wicksell was a leading Swedish economist of the Stockholm school. His economic contributions would influence both the Keynesian and Austrian schools of economic thought....
- Market socialismMarket socialismMarket socialism refers to various economic systems where the means of production are either publicly owned or cooperatively owned and operated for a profit in a market economy. The profit generated by the firms system would be used to directly remunerate employees or would be the source of public...
Lausanne school
- Antoine Augustin CournotAntoine Augustin CournotAntoine Augustin Cournot was a French philosopher and mathematician.Antoine Augustin Cournot was born at Gray, Haute-Saone. In 1821 he entered one of the most prestigious Grande École, the École Normale Supérieure, and in 1829 he had earned a doctoral degree in mathematics, with mechanics as his...
- Léon WalrasLéon WalrasMarie-Esprit-Léon Walras was a French mathematical economist associated with the creation of the general equilibrium theory.-Life and career:...
- Vilfredo ParetoVilfredo ParetoVilfredo Federico Damaso Pareto , born Wilfried Fritz Pareto, was an Italian engineer, sociologist, economist, political scientist and philosopher. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices....
Austrian school
Austrian economists advocate methodological individualismMethodological individualism
Methodological individualism is the theory that social phenomena can only be accurately explained by showing how they result from the intentional states that motivate the individual actors. The idea has been used to criticize historicism, structural functionalism, and the roles of social class,...
in interpreting economic developments, the subjective theory of value
Subjective theory of value
The subjective theory of value is an economic theory of value that identifies worth as being based on the wants and needs of the members of a society, as opposed to value being inherent to an object....
, that money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
is non-neutral
Neutrality of money
Neutrality of money is the idea that a change in the stock of money affects only nominal variables in the economy such as prices, wages and exchange rates, with no effect on real variables, like employment, real GDP, and real consumption....
, and emphasize the organizing power
Spontaneous order
Spontaneous order, also known as "self-organization", is the spontaneous emergence of order out of seeming chaos. It is a process found in physical, biological, and social networks, as well as economics, though the term "self-organization" is more often used for physical and biological processes,...
of the price mechanism (see economic calculation debate). Austrian economists generally advocate a laissez faire approach to the economy.
- Carl MengerCarl MengerCarl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
- Eugen von Böhm-BawerkEugen von Böhm-BawerkEugen Ritter von Böhm-Bawerk was an Austrian economist who made important contributions to the development of the Austrian School of economics.-Biography:...
- Ludwig von MisesLudwig von MisesLudwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
- Freidrich Hayek
- Henry HazlittHenry HazlittHenry Stuart Hazlitt was an American economist, philosopher, literary critic and journalist for such publications as The Wall Street Journal, The Nation, The American Mercury, Newsweek, and The New York Times...
Stockholm school
- Gunnar MyrdalGunnar MyrdalKarl Gunnar Myrdal was a Swedish Nobel Laureate economist, sociologist, and politician. In 1974, he received the Nobel Memorial Prize in Economic Sciences with Friedrich Hayek for "their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the...
- Bertil OhlinBertil OhlinBertil Gotthard Ohlin was a Swedish economist and politician. He was a professor of economics at the Stockholm School of Economics from 1929 to 1965. He was also leader of the People's Party, a social-liberal party which at the time was the largest party in opposition to the governing Social...
Keynesian economics
Keynesian economics has developed from the work of John Maynard KeynesJohn Maynard Keynes
John Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...
and focused on macroeconomics in the short-run, particularly the rigidities caused when prices are fixed. It has two successors. Post-Keynesian economics
Post-Keynesian economics
Post Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor and Paul Davidson...
is an alternative school - one of the successors to the Keynesian tradition with a focus on macroeconomics
Macroeconomics
Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...
. They concentrate on macroeconomic rigidities and adjustment processes, and research micro foundations for their models based on real-life practices rather than simple optimizing models. Generally associated with Cambridge, England and the work of Joan Robinson
Joan Robinson
Joan Violet Robinson FBA was a post-Keynesian economist who was well known for her knowledge of monetary economics and wide-ranging contributions to economic theory...
(see Post-Keynesian economics
Post-Keynesian economics
Post Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor and Paul Davidson...
). New-Keynesian economics is the other school associated with developments in the Keynesian fashion. These researchers tend to share with other Neoclassical
Neoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
economists the emphasis on models based on micro foundations and optimizing behavior, but focus more narrowly on standard Keynesian themes such as price and wage rigidity. These are usually made to be endogenous features of these models, rather than simply assumed as in older style Keynesian ones (see New-Keynesian economics).
- John Maynard KeynesJohn Maynard KeynesJohn Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...
- Joan RobinsonJoan RobinsonJoan Violet Robinson FBA was a post-Keynesian economist who was well known for her knowledge of monetary economics and wide-ranging contributions to economic theory...
- Paul KrugmanPaul KrugmanPaul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
- Peter BofingerPeter BofingerPeter Bofinger is a German economist and member of the German Council of Economic Experts. He is the only proponent of Keynesian economics in this council....
- Joseph Stiglitz
Chicago school
- Frank H. KnightFrank KnightFrank Hyneman Knight was an American economist who spent most of his career at the University of Chicago, where he became one of the founders of the Chicago school. Nobel laureates James M. Buchanan, Milton Friedman and George Stigler were all students of Knight at Chicago. Knight supervised...
- Jacob VinerJacob VinerJacob Viner was a Canadian economist and is considered with Frank Knight and Henry Simons one of the "inspiring" mentors of the early Chicago School of Economics in the 1930s: he was one of the leading figures of the Chicago faculty.- Biography :Viner was born in 1892 in Montreal, Quebec to...
- Milton FriedmanMilton FriedmanMilton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
- George StiglerGeorge StiglerGeorge Joseph Stigler was a U.S. economist. He won the Nobel Memorial Prize in Economic Sciences in 1982, and was a key leader of the Chicago School of Economics, along with his close friend Milton Friedman....
- Harry MarkowitzHarry MarkowitzHarry Max Markowitz is an American economist and a recipient of the John von Neumann Theory Prize and the Nobel Memorial Prize in Economic Sciences....
- Merton MillerMerton MillerMerton Howard Miller was the co-author of the Modigliani-Miller theorem which proposed the irrelevance of debt-equity structure. He shared the Nobel Memorial Prize in Economic Sciences in 1990, along with Harry Markowitz and William Sharpe...
- Robert Lucas, Jr.Robert Lucas, Jr.Robert Emerson Lucas, Jr. is an American economist at the University of Chicago. He received the Nobel Prize in Economics in 1995 and is consistently indexed among the top 10 economists in the Research Papers in Economics rankings. He is married to economist Nancy Stokey.He received his B.A. in...
- Eugene FamaEugene FamaEugene Francis "Gene" Fama is an American economist, known for his work on portfolio theory and asset pricing, both theoretical and empirical. He is currently Robert R...
- Myron ScholesMyron ScholesMyron Samuel Scholes is a Canadian-born American financial economist who is best known as one of the authors of the Black–Scholes equation. In 1997 he was awarded the Nobel Memorial Prize in Economic Sciences for a method to determine the value of derivatives...
- Gary BeckerGary BeckerGary Stanley Becker is an American economist. He is a professor of economics, sociology at the University of Chicago and a professor at the Booth School of Business. He was awarded the Nobel Memorial Prize in Economic Sciences in 1992, and received the United States' Presidential Medal of Freedom...
- Edward C. PrescottEdward C. PrescottEdward Christian Prescott is an American economist. He received the Nobel Memorial Prize in Economics in 2004, sharing the award with Finn E. Kydland, "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles"...
- James HeckmanJames HeckmanJames Joseph Heckman is an American economist and Nobel laureate. He is the Henry Schultz Distinguished Service Professor of Economics at the University of Chicago, Professor of Science and Society at University College Dublin and a Senior Research Fellow at the American Bar Foundation.Heckman...
Carnegie school
- Herbert SimonHerbert SimonHerbert Alexander Simon was an American political scientist, economist, sociologist, and psychologist, and professor—most notably at Carnegie Mellon University—whose research ranged across the fields of cognitive psychology, cognitive science, computer science, public administration, economics,...
- Richard CyertRichard CyertRichard Michael Cyert was an American economist and statistician who served as the sixth President of Carnegie Mellon University in Pittsburgh, Pennsylvania, United States.-Early life:...
- James March
- Victor VroomVictor VroomVictor H. Vroom is a business school professor at the Yale School of Management, who was born on 9 August 1932 in Montreal, Canada. He holds a PhD from University of Michigan....
- Oliver E. WilliamsonOliver E. WilliamsonOliver Eaton Williamson is an American economist, professor at the University of California, Berkeley and recipient of the Nobel Memorial Prize in Economic Sciences....
Neo-Ricardianism
- John von NeumannJohn von NeumannJohn von Neumann was a Hungarian-American mathematician and polymath who made major contributions to a vast number of fields, including set theory, functional analysis, quantum mechanics, ergodic theory, geometry, fluid dynamics, economics and game theory, computer science, numerical analysis,...
- Piero SraffaPiero SraffaPiero Sraffa was an influential Italian economist whose book Production of Commodities by Means of Commodities is taken as founding the Neo-Ricardian school of Economics.- Early life :...
- Luigi L. Pasinetti
- Vladimir Karpovich DmitrievVladimir Karpovich DmitrievVladimir Karpovich Dmitriev was a Russian mathematical economist and statistician. Dmitriev was born in Smolensk and completed his studies in Moscow.-Major works:...
Modern schools
- Mainstream economicsMainstream economicsMainstream economics is a loose term used to refer to widely-accepted economics as taught in prominent universities and in contrast to heterodox economics...
is a term used to distinguish economics in general from heterodoxHeterodox economics"Heterodox economics" refers to approaches or to schools of economic thought that are considered outside of "mainstream economics". Mainstream economists sometimes assert that it has little or no influence on the vast majority of academic economists in the English speaking world. "Mainstream...
approaches and schools within economics. It begins with the premise that resources are scarce and that it is necessary to choose between competing alternatives. That is, economics deals with tradeoffs. With scarcity, choosing one alternative implies forgoing another alternative—the opportunity costOpportunity costOpportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
. The opportunity cost expresses an implicit relationship between competing alternatives. Such costs, considered as prices in a market economy, are used for analysis of economic efficiency or for predicting responses to disturbances in a market. In a planned economyPlanned economyA planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...
comparable shadow priceShadow priceIn constrained optimization in economics, the shadow price is the instantaneous change per unit of the constraint in the objective value of the optimal solution of an optimization problem obtained by relaxing the constraint...
relations must be satisfied for the efficient use of resources, as first demonstrated by the Italian economist Enrico BaroneEnrico BaroneEnrico Barone was a soldier, military historian, and economist.Barone studied the classics and mathematics before becoming an army officer. He taught military history for eight years from 1894 at the Officers' Training School. There he wrote a series of influential historical military works...
. Economists represent incentives and costs as playing a pervasive role in shaping decision makingDecision makingDecision making can be regarded as the mental processes resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice. The output can be an action or an opinion of choice.- Overview :Human performance in decision terms...
. An immediate example of this is the consumer theoryConsumer theoryConsumer choice is a theory of microeconomics that relates preferences for consumption goods and services to consumption expenditures and ultimately to consumer demand curves. The link between personal preferences, consumption, and the demand curve is one of the most closely studied relations in...
of individual demand, which isolates how prices (as costs) and income affect quantity demanded. Modern mainstream economics builds primarily on neoclassical economicsNeoclassical economicsNeoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
, which began to develop in the late 19th century. Mainstream economics also acknowledges the existence of market failureMarket failureMarket failure is a concept within economic theory wherein the allocation of goods and services by a free market is not efficient. That is, there exists another conceivable outcome where a market participant may be made better-off without making someone else worse-off...
and insights from Keynesian economicsKeynesian economicsKeynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...
. It uses models of economic growthEconomic growthIn economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
for analyzing long-run variables affecting national income. It employs game theoryGame theoryGame theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
for modeling market or non-market behavior. Some important insights on collective behavior (for example, emergenceEmergenceIn philosophy, systems theory, science, and art, emergence is the way complex systems and patterns arise out of a multiplicity of relatively simple interactions. Emergence is central to the theories of integrative levels and of complex systems....
of organizationOrganizationAn organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...
s) have been incorporated through the new institutional economicsNew institutional economicsNew institutional economics is an economic perspective that attempts to extend economics by focusing on the social and legal norms and rules that underlie economic activity.-Overview:...
. A definition that captures much of modern economics is that of Lionel RobbinsLionel RobbinsLionel Charles Robbins, Baron Robbins, FBA was a British economist and head of the economics department at the London School of Economics...
in a 1932 essay: "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." ScarcityScarcityScarcity is the fundamental economic problem of having humans who have unlimited wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals can be...
means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problemEconomic problemThe economic problem, sometimes called the basic, central or fundamental economic problem, is one of the fundamental economic theories in the operation of any economy. It asserts that there is scarcity, or that the finite resources available are insufficient to satisfy all human wants and needs...
. The subject thus defined involves the study of choiceRational choice theoryRational choice theory, also known as choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior. It is the main theoretical paradigm in the currently-dominant school of microeconomics...
, as affected by incentives and resources. Economics generally is the study of how people allocate scarce resources among alternative uses.
- Heterodox economicsHeterodox economics"Heterodox economics" refers to approaches or to schools of economic thought that are considered outside of "mainstream economics". Mainstream economists sometimes assert that it has little or no influence on the vast majority of academic economists in the English speaking world. "Mainstream...
: Some schools of thought at variance with the microeconomic formalism of neoclassical economics are listed here, and include: institutional economicsInstitutional economicsInstitutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the...
, Marxist economics, feminist economicsFeminist economicsFeminist economics broadly refers to a developing branch of economics that applies feminist lenses to economics. Research under this heading is often interdisciplinary or heterodox...
, socialist economicsSocialist economicsSocialist economics are the economic theories and practices of hypothetical and existing socialist economic systems.A socialist economy is based on public ownership or independent cooperative ownership of the means of production, wherein production is carried out to directly produce use-value,...
, binary economicsBinary EconomicsBinary economics is a heterodox theory of economics that endorses both private property and a free market but proposes significant reforms to the banking system. The aim of binary economics is to ensure that all individuals receive income from their own independent capital estate, using...
, ecological economicsEcological economicsImage:Sustainable development.svg|right|The three pillars of sustainability. Clickable.|275px|thumbpoly 138 194 148 219 164 240 182 257 219 277 263 291 261 311 264 331 272 351 283 366 300 383 316 394 287 408 261 417 224 424 182 426 154 423 119 415 87 403 58 385 40 368 24 347 17 328 13 309 16 286 26...
, bioeconomicsBioeconomicsBioeconomics is closely related to the early development of theories in fisheries economics, initially in the mid 1950s by Canadian economists Scott Gordon and Anthony Scott...
and thermoeconomicsThermoeconomicsThermoeconomics, also referred to as biophysical economics, is a school of heterodox economics that applies the laws of thermodynamics to economic theory. The term "thermoeconomics" was coined in 1962 by American engineer Myron Tribus, and developed by the statistician and economist Nicholas...
.
Current heterodox schools
In the late 19th century, a number of heterodox schools contended with the neoclassicalNeoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
school that arose following the marginal revolution
Marginalism
Marginalism refers to the use of marginal concepts in economic theory. Marginalism is associated with arguments concerning changes in the quantity used of a good or service, as opposed to some notion of the over-all significance of that class of good or service, or of some total quantity...
. Most survive to the present day as self-consciously dissident schools, but with greatly diminished size and influence relative to mainstream economics
Mainstream economics
Mainstream economics is a loose term used to refer to widely-accepted economics as taught in prominent universities and in contrast to heterodox economics...
. The most significant are Institutional economics
Institutional economics
Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the...
, Marxian economics
Marxian economics
Marxian economics refers to economic theories on the functioning of capitalism based on the works of Karl Marx. Adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology and sociological theory, arguing that Marx's approach to understanding the...
and the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
.
The development of Keynesian economics
Keynesian economics
Keynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...
was a substantial challenge to the dominant neoclassical school of economics. Keynesian views eventually entered the mainstream as a result of the Keynesian-neoclassical synthesis
Neoclassical synthesis
Neoclassical synthesis is a postwar academic movement in economics that attempts to absorb the macroeconomic thought of John Maynard Keynes into the thought of neoclassical economics...
developed by John Hicks
John Hicks
Sir John Richard Hicks was a British economist and one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model , which...
. The rise of Keynesianism, and its incorporation into mainstream economics, reduced the appeal of heterodox schools. However, advocates of a more fundamental critique of orthodox economics formed a school of Post-Keynesian economics
Post-Keynesian economics
Post Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor and Paul Davidson...
.
More recent heterodox developments include evolutionary economics
Evolutionary economics
Evolutionary economics is part of mainstream economics as well as heterodox school of economic thought that is inspired by evolutionary biology...
(though this term is also used to describe institutional economics
Institutional economics
Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the...
), feminist
Feminist economics
Feminist economics broadly refers to a developing branch of economics that applies feminist lenses to economics. Research under this heading is often interdisciplinary or heterodox...
, Green economics, Post-autistic economics
Post-autistic economics
The movement for Post-Autistic Economics was born through the work of Sorbonne economist Bernard Guerrien. The movement is best seen as a forum of different groups critical of the current mainstream: from behavioral and heterodox to feminist, green economics and econo-physics...
, and Thermoeconomics
Thermoeconomics
Thermoeconomics, also referred to as biophysical economics, is a school of heterodox economics that applies the laws of thermodynamics to economic theory. The term "thermoeconomics" was coined in 1962 by American engineer Myron Tribus, and developed by the statistician and economist Nicholas...
Most heterodox views are politically left-wing and critical of capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
. The most notable exception is Austrian economics, which is politically aligned with libertarianism
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...
.
Georgescu-Roegen reintroduced into economics, the concept of entropy
Entropy
Entropy is a thermodynamic property that can be used to determine the energy available for useful work in a thermodynamic process, such as in energy conversion devices, engines, or machines. Such devices can only be driven by convertible energy, and have a theoretical maximum efficiency when...
from thermodynamics
Thermodynamics
Thermodynamics is a physical science that studies the effects on material bodies, and on radiation in regions of space, of transfer of heat and of work done on or by the bodies or radiation...
(as distinguished from what, in his view, is the mechanistic foundation of neoclassical economics drawn from Newtonian physics) and did foundational work which later developed into evolutionary economics
Evolutionary economics
Evolutionary economics is part of mainstream economics as well as heterodox school of economic thought that is inspired by evolutionary biology...
. His work contributed significantly to Thermoeconomics
Thermoeconomics
Thermoeconomics, also referred to as biophysical economics, is a school of heterodox economics that applies the laws of thermodynamics to economic theory. The term "thermoeconomics" was coined in 1962 by American engineer Myron Tribus, and developed by the statistician and economist Nicholas...
and to ecological economics
Ecological economics
Image:Sustainable development.svg|right|The three pillars of sustainability. Clickable.|275px|thumbpoly 138 194 148 219 164 240 182 257 219 277 263 291 261 311 264 331 272 351 283 366 300 383 316 394 287 408 261 417 224 424 182 426 154 423 119 415 87 403 58 385 40 368 24 347 17 328 13 309 16 286 26...
.
Other 20th century schools
Notable schools or trends of thought referring to a particular style of economics advocated by and disseminated from well-defined groups of academicians that have become known worldwide, may be generally summarized as follows:- Public Choice schoolPublic choice theoryIn economics, public choice theory is the use of modern economic tools to study problems that traditionally are in the province of political science...
- Marxian (Marxist) and neo-Marxist economicsMarxian economicsMarxian economics refers to economic theories on the functioning of capitalism based on the works of Karl Marx. Adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology and sociological theory, arguing that Marx's approach to understanding the...
- Keynesian economicsKeynesian economicsKeynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...
- New Keynesian economicsNew Keynesian economicsNew Keynesian economics is a school of contemporary macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of New Classical macroeconomics.Two main assumptions define the New...
- Post-Keynesian economicsPost-Keynesian economicsPost Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor and Paul Davidson...
- New classical macroeconomicsNew classical macroeconomicsNew classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of rigorous foundations based on microeconomics...
- Austrian SchoolAustrian SchoolThe Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
- Neo-RicardianismNeo-RicardianismThe neo-Ricardian school is an economic schoolthat derives from the close reading and interpretation of David Ricardo by Piero Sraffa, and from Sraffa's critique of Neoclassical economics as presented in his The Production of Commodities by Means of Commodities, and further developed by the...
- Chicago SchoolChicago school (economics)The Chicago school of economics describes a neoclassical school of thought within the academic community of economists, with a strong focus around the faculty of The University of Chicago, some of whom have constructed and popularized its principles...
- Freiburg SchoolFreiburg SchoolThe Freiburg School is a school of economic thought founded in the 1930s at the University of Freiburg.It builds somewhat on the earlier Historical school of economics but stresses that only some forms of competition are good, while others may require oversight. This is considered a lawful and...
- School of Lausanne
- Stockholm schoolStockholm school (economics)The Stockholm school, or Stockholmsskolan, is a school of economic thought whose antithesis is the gold standard centered Austrian School of Economics. It refers to a loosely organized group of Swedish economists that worked together, in Stockholm, Sweden primarily in the 1930s...
- Institutional economicsInstitutional economicsInstitutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the...
- Evolutionary economicsEvolutionary economicsEvolutionary economics is part of mainstream economics as well as heterodox school of economic thought that is inspired by evolutionary biology...
- Constitutional economicsConstitutional economicsConstitutional economics is a research program in economics and constitutionalism that has been described as extending beyond the definition of 'the economic analysis of constitutional law' in explaining the choice "of alternative sets of legal-institutional-constitutional rules that constrain the...
In the late 20th Century, three of the areas of study which are producing change in economic thinking are: risk-based, rather than price-based models; imperfect economic actors; and treating economics as a biological science
Biology
Biology is a natural science concerned with the study of life and living organisms, including their structure, function, growth, origin, evolution, distribution, and taxonomy. Biology is a vast subject containing many subdivisions, topics, and disciplines...
, based on evolution
Evolution
Evolution is any change across successive generations in the heritable characteristics of biological populations. Evolutionary processes give rise to diversity at every level of biological organisation, including species, individual organisms and molecules such as DNA and proteins.Life on Earth...
ary norms rather than abstract exchange.
The study of risk
Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
has been influential, in viewing variations in price over time as more important than actual price. This applies particularly to financial economics, where risk/return tradeoffs are the crucial decisions to be made.
The most important area of growth has been in the study of information and decision. Examples of this school include the work of Joseph Stiglitz. Problems of asymmetric information and moral hazard
Moral hazard
In economic theory, moral hazard refers to a situation in which a party makes a decision about how much risk to take, while another party bears the costs if things go badly, and the party insulated from risk behaves differently from how it would if it were fully exposed to the risk.Moral hazard...
, both based around information economics, profoundly affect modern economic dilemmas like executive stock options, insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
markets, and Third-World
Third World
The term Third World arose during the Cold War to define countries that remained non-aligned with either capitalism and NATO , or communism and the Soviet Union...
debt relief
Debt relief
Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves...
.
Finally, there are a series of economic ideas rooted in the conception of economics as a branch of biology, including the idea that energy relationships, rather than price relationships, determine economic structure, and the use of fractal
Fractal
A fractal has been defined as "a rough or fragmented geometric shape that can be split into parts, each of which is a reduced-size copy of the whole," a property called self-similarity...
geometry
Geometry
Geometry arose as the field of knowledge dealing with spatial relationships. Geometry was one of the two fields of pre-modern mathematics, the other being the study of numbers ....
to create economic models. (See Energy Economics
Energy economics
Energy economics is a broad scientific subject area which includes topics related to supply and use of energy in societies. Due to diversity of issues and methods applied and shared with a number of academic disciplines, energy economics does not present itself as a self contained academic...
.) In its infancy is the application of non-linear dynamics to economic theory, as well as the application of evolutionary psychology
Evolutionary psychology
Evolutionary psychology is an approach in the social and natural sciences that examines psychological traits such as memory, perception, and language from a modern evolutionary perspective. It seeks to identify which human psychological traits are evolved adaptations, that is, the functional...
. So far, the most visible work has been in the area of applying fractals to market analysis, particularly arbitrage
Arbitrage
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
. (See Complexity economics
Complexity economics
Complexity economics is the application of complexity science to the problems of economics. It studies computer simulations to gain insight into economic dynamics, and avoids the assumption that the economy is a system in equilibrium.- Models :...
.) Another infant branch of economics is neuroeconomics
Neuroeconomics
Neuroeconomics is an interdisciplinary field that seeks to explain human decision making, the ability to process multiple alternatives and to choose an optimal course of action. It studies how economic behavior can shape our understanding of the brain, and how neuroscientific discoveries can...
. The latter combines neuroscience
Neuroscience
Neuroscience is the scientific study of the nervous system. Traditionally, neuroscience has been seen as a branch of biology. However, it is currently an interdisciplinary science that collaborates with other fields such as chemistry, computer science, engineering, linguistics, mathematics,...
, economics, and psychology
Psychology
Psychology is the study of the mind and behavior. Its immediate goal is to understand individuals and groups by both establishing general principles and researching specific cases. For many, the ultimate goal of psychology is to benefit society...
to study how we make choices.
Viewpoints within mainstream economics
Mainstream economics encompasses a wide (but not unbounded) range of views. Politically, most mainstream economists hold views ranging from laissez-faireLaissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....
to modern liberalism. There are also divergent views on particular issues within economics, such as the effectiveness and desirability of Keynesian macroeconomic policy. Although, historically, few mainstream economists have regarded themselves as members of a "school", many would identify with one or more of neoclassical economics
Neoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
, monetarism
Monetarism
Monetarism is a tendency in economic thought that emphasizes the role of governments in controlling the amount of money in circulation. It is the view within monetary economics that variation in the money supply has major influences on national output in the short run and the price level over...
, Keynesian economics
Keynesian economics
Keynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...
, new classical economics, Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
, or behavioral economics.
Viewpoints outside economics
Other viewpoints on economic issues from outside economics include dependency theoryDependency theory
Dependency theory or dependencia theory is a body of social science theories predicated on the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former...
and world systems theory
World Systems Theory
The world-systems theory is a multidisciplinary, macro-scale approach to world history and social change....
. An example of another economic system
Economic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
which has recently been advocated is the participatory economics
Participatory economics
Participatory economics, often abbreviated parecon, is an economic system proposed primarily by activist and political theorist Michael Albert and radical economist Robin Hahnel, among others. It uses participatory decision making as an economic mechanism to guide the production, consumption and...
model. This uses neither market methods nor centralised methods for allocation, but incorporates many local positive and negative feedback loops in order to respond to the most positive human values. One example of this school of thought is the Post Autistic Economics movement.
See also
- History of economic thoughtHistory of economic thoughtThe history of economic thought deals with different thinkers and theories in the subject that became political economy and economics from the ancient world to the present day...
- Schools of economic thought and methodology JEL: B Subcategories of the JEL classification codesJEL classification codesArticles in economics journals are usually classified according to the JEL classification codes, a system originated by the Journal of Economic Literature. The JEL is published quarterly by the American Economic Association and contains survey articles and information on recently published books...
- KameralismKameralismCameralism was a German science of administration. According to Lindenfeld, it was divided into three: public finance, Oeconomie and Polizei. Here Oeconomie did not mean exactly 'economics', nor Polizei 'public policy' in the modern senses...
- Manchester schoolManchester capitalismManchester Capitalism, Manchester School, Manchester Liberalism, and Manchesterism are terms for the political, economic, and social movements of the 19th century that originated in Manchester, England....
- School of SalamancaSchool of SalamancaThe School of Salamanca is the renaissance of thought in diverse intellectual areas by Spanish and Portuguese theologians, rooted in the intellectual and pedagogical work of Francisco de Vitoria...
- Constitutional economicsConstitutional economicsConstitutional economics is a research program in economics and constitutionalism that has been described as extending beyond the definition of 'the economic analysis of constitutional law' in explaining the choice "of alternative sets of legal-institutional-constitutional rules that constrain the...