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Why Study the History of Economics?

Understand the evolution of economic ideas, intellectual developments, and critical attitudes in economics. Explore key periods in economic history and their connection to political philosophy, revolutions, and global events.

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Why Study the History of Economics?

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  1. Why Study the History of Economics? • Aids in the understanding of economics • Provides an introduction to part of intellectual history • Helps illustrate how ideas develop and change within academic disciplines • Helps create more critical attitudes and abilities

  2. The Evolution of Economic Ideas • Economics is a critical discourse • This discourse takes place within generally agreed standards of “scientific” procedure, which themselves change over time • This discourse takes place within a context of intellectual developments in other disciplines • This discourse takes place within a context of events • The history of this discourse is not predetermined or predictable, but is contingent

  3. Main Periods in the History of Economics • Pre-Classical (up to 1776) • Classical (1776-1870s) • Marginal Revolution (1870s-1890s) • Neoclassical Economics (1890s-to date) • Keynesian revolution (1936-1960s) • Formalist Economics (1945 to date) • Econ 337 covers some of the pre-Classical period and the Classical period • Some background to this period

  4. Intellectual Background • Middle Ages (fall of Rome until mid- 15th C) - Limited trade, manorial system - Economic discussion linked to Church doctrine - Thomas Aquinas (1225 – 1274) and Nicolas Oresme (1320 – 1382) - Doctrines of Usury and the Just Price - Suspicion of the ethics of profit through trade

  5. Intellectual Background • Renaissance (15th and 16th C) - Growth of trade, markets, and towns - Decline of the manorial system - Growth of science (Leonardo da Vinci 1452-1519; Galileo Galilei 1564-1642; Francis Bacon 1561-1626; Rene Descartes 1596-1650) • Provided the foundation for Issac Newton’s (1642-1727) linkage of rational thought and empirical observation

  6. Early Applications of “Science” to Political Philosophy • Thomas Hobbes, 1588-1679 - Leviathan 1651 - Hobbes attempting to apply science (as he understood it from Galileo) to politics - Social phenomena must first be reduced to individual behavior - Individuals are both rational and self-interested - In the original “state of nature” this leads to a war of all against all - Rational individuals will agree to a government - Argues for a strong Monarchy

  7. Early Applications of “Science” to Political Philosophy • John Locke (dates) - Two Treatises of Government (1689) - An Essay Concerning Human Understanding (1689) - State of nature not as Hobbes thought, but subject to natural laws - Reason indicates all people are equal and independent and that no one should harm another in life, health, liberty or property - Labour is the origin and justification of property

  8. Locke (Continued) - Free and rational people will form a political society for the better protecting of natural rights - State does not have unlimited authority - Contract or consent is the basis of government and fixes its limits - influenced the American constitution

  9. Economic and Political Background • Agricultural revolution (1730-1830) • Industrial revolution (1730-1830) • Political unrest in Europe, wars, French revolution (1789), Napoleonic Wars, Battle of Waterloo 1815 • Colonies and empire building by European states • Issues of the franchise, free trade, population, poor laws, factory acts, Ireland, slave trade

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