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Central European University
History of Economic Thought
Instructor:
Professor Julius Horvath, Ph.D.
Department of Economics Central European University
Spring 2015, MA level Course, 2 credit,
Course e-learning site: http://ceulearning.ceu.hu/
Office hours: after the class
Course Description
Master level class; no special pre-requisites are required; this course is accessible to anyone with an
under-graduate background in social sciences or economics; this course presents review of the history of
economic thinking and economic analysis; course covers the following topics: Introduction, Great
Religions and the Origins of Economic Thought; Greek and Medieval Thought ; Transformation Period;
Western Europe before Smith; Smith, Ricardo, Marx; Emergence of Macro-economics, Veblen, Keynes,
Schumpeter; Friedman, Hayek; Non-Mainstream Thought
Learning Outcomes
The main goal of this course is to provide students with understanding of historical evolution of economic
thought. In other words, this course tries to explain how economic thinking got to be where it is today. In
addition students are also led to formulate their own research question in the topic of their interest.
We will discuss to a certain extent economic history, since understanding what was going on in the
economy in past helps to understand how people conceptualized the economy.
The syllabus covers wide ranging areas. In this course students are able to understand some historically
important articles and concepts of the political economy and economics. They acquire a broad
understanding of the evolution of economic thinking in the period of more than two thousand years. The
emphasis is on societal milieu however issues relevant to policy are also considered.
By the end of this course student will be able to evaluate different streams of economic thinking as well
some personalities who had an impact of history of economic thought.
Course Requirements
- 15% of the final grade; presence in the course
- 20% of the final grade: a position paper on the article chosen by the instructor; not more than 1 page;
position paper analyzes the article, evaluates the most important issue(s) in the article
- 65% of the final grade; final paper, maximum 6 pages; 1.5 space, topic approved by the instructor
COURSE SCHEDULE
Introduction
On Power of Ideas; Robbins-Schumpeter-Stigler on Teaching History of Thought; History of the Terms
Oikonomike, Economics, Political Economy; To Whom Economists Speak To; Stories of Economists; History
of Economic Thought as an Intellectual Discipline; How Important are Biographical and Context Elements
in History of Economic Thought; Simplifications and Pedagogy; Collective Work and Individuals;
Literature
Robbins, Lionel, A History of Economic Thought, The LSE Lectures, edited by Steven G. Medema and
Warren J. Samuels, Princeton University Press1998, Chapter 1-2
Spiegel, Henri William, The Growth of Economic Thought, Duke University Press, Durham and London
1991, Third edition, Chapter 1
Backhouse, Roger, E. “Lives in Synopsis: The Production and Use of Short Biographies by Historians of
Economics,” History of Political Economy, 39, 2007, pp. 51-75
2
O’Brien, D. P., History of Economic Thought as an Intellectual Discipline, Edward Elgar, 2007
Schumpeter, Joseph Alois "Science and Ideology", American Economic Review 39, 2, March, 1949
Dimand, Robert W., The Creation of Heroes and Villains as a Problem in the History of Economics, History
of Political Economy, 2007, 39, 76-95
Economic Aspects in Traditional Religions
Rise of Civilization; Ancient Thought; Old Testament and New Testament on Work Ethics; Old Testament
and New Testament on Ownership; Early Christian Attack on Wealth and Money; Old Testament and New
Testament on Care for Poor; Old Testament and New Testament on Right and Just Price, On
Specialization, On Interest;
Literature
Price, B. B. ed., Ancient Economic Thought, 1997
Gordon, Barry, The Economic Problem in Biblical and Patristic Thought, E. J. Brill, 1989,
Henri William Spiegel The Growth of Economic Thought, Duke University Press, Durham and London 1991
Finley, M.I. The Ancient Economy, University of California Press, Berkeley and Los Angeles 1973
Greeks, Plato, Aristotle
Greek Thinkers: Homer, Hesiod, Xenophon, Socrates; Plato’s Blueprint for an Ideal State; Plato’s
Economics; Aristotle’s Economic Writings; Use and Exchange Value; Aristotle on Private Property; Natural
and Just; Aristotle On Money, On Commerce and Justice; Aristotle on Acquisition of Wealth;
Literature
Schumpeter, Joseph A., History of Economic Analysis, Edited from Manuscript by Elizabeth Boody
Schumpeter , New York, Oxford University Press, 1954, Fifth printing 1963, Chapter 1, Graeco-
Roman Economics,
Aristotle, Politics, Book I, Parts I-XI, Book II Part V, in History of Economic Thought: A Reader, edited by
Steven G. Medema and Warren J. Samuels, Routledge, 2003, pp. 5-13
Aristotle, Nicomachian Ethics, Book V, Part 5, in History of Economic Thought: A Reader, edited by Steven
G. Medema and Warren J. Samuels, Routledge, 2003, pp. 14-15
Gordon, Barry, Aristotle and Hesiod: the Economic Problem in Greek Thought, Review of Social Economy,
Vol LXIII, September 2005, 395-404
Meikle, Aristotle’s Economic Thought, 1995, Clarendon Press, Oxford
Petrochilos, George A., Kalokagathia: The Ethical Basis of Hellenic Political Economy and Its Influence from
Plato to Ruskin and Sen, History of Political Economy, 34:4, 2008
Soudek, J. ‘Aristotle’s Theory of Exchange: an Inquiry into the Origin of Economic Analysis,” Proceedings of
the American Philosophical Society, 96, 1952,
Finley, M. I., Aristotle and Economic Analysis, Past and Present, No. 47, 1970, May pp. 3-25
Medieval Economic Thinking
The Early Christianity; Wealth, Beggary and Sufficiency: the Mendicant Solutions; Help the Poor: Get Rid
of Superfluities; Private Property versus Communal Property; Scholastic Thought; Just Price in Scholastic
Economics; St. Thomas Acquinas on Commerce, Property, Fraudulent Behavior, and Usury;
Literature
Schumpeter, Joseph A., History of Economic Analysis, Edited from Manuscript by Elizabeth Boody
Schumpeter , New York, Oxford University Press, 1954, Fifth printing 1963, Chapter 2, The
Scholastic Doctors and the Philosophers of Natural Law,
Aquinas, Thomas, Summa Theologica, Second Part of the Second Part, Questions 77 and 78, 1267-1273,
in History of Economic Thought: A Reader, edited by Steven G. Medema and Warren J. Samuels,
Routledge, 2003, pp. 18-29
3
Grice-Hutchinson, Majorie, Economic Thought in Spain, Edward Elgar, 1993; Chapter One: Contributions
of the School of Salamanca to Monetary Theory as a Result of the Discovery of the New World,
pp. 1-23
Murray, Gilbert, Stoic, Christian and Humanist, London: C.A. Watts & Co. , George Allen & Unwin, First
published in 1940, Second edition 1950
Neves des, Joao Cesar, Aquinas and Aristotle’s Distinction on Wealth, History of Political Economy, 2000,
32:3,
Wood, Diana, Medieval Economic Thought, Cambridge University Press 2002
Ghazanfar, S.M. ed., Medieval Islamic Economic Thought, Routledge/Curzon, 2003
Lowrey, S.T. and B. Gordon eds. Ancient and Medieval Economic Ideas and Concepts of Social Justice,
1997
das Neves, Joao Cesar, Aquinas and Aristotle’s Distinction on Wealth, Historical of Political Economy,
2000, 32:3, 649-657
The Transformation Period
Modernity Begins; The Principle of Countervailing Passions; Money Making and Commerce; The Role of
Providence in Social and Economic Matters before Adam Smith; XVII-XVIII Century Providential Elements
in Economics; Whether Providence Favors Trade among Nations; Providence and Observed Inequality;
Literature:
Hirschman, Albert, The Passions and the Interests, Political Arguments for Capitalism before Its Triump,
Princeton University Press 1977, Third printing with corrections 1981
Viner, Jacob, The Role of Providence in the Social Order, An Essay in Intellectual History, Jayne Lectures
for 1966, the American Philosophical Society, Princeton, New Jersey, Princeton University Press
Mercantilists
Political Economy Emerges; Eminent Mercantilists; Mercantilist Wage Theory; Jean Bodin; Mercantilist’
Monetary Theories; Reasons for Wanting More Bullion;
Literature
Viner, Jacob, Studies in the Theory of International Trade, 1937
Munn, Thomas, England’s Treasures by Forraign Trade or the Ballance of our Forraign Trade is the Rule of
our Treasure, 1664, in History of Economic Thought: A Reader, edited by Steven G. Medema and
Warren J. Samuels, Routledge, 2003, pp. 32-44
Locke, John, Of Civil Government, 1690, in History of Economic Thought: A Reader, edited by Steven G.
Medema and Warren J. Samuels, Routledge, 2003, pp. 59-77
Birth of Macroeconomics: Petty, Law, Cantillon, Hume, Turgot, Quesnay
Petty’s Medical Beginnings; Idea of the Royal Society, Petty’s Work; Petty’s National Income Concept;
John Law’s Life; Law’s Contribution to Macroeconomics; John Law and the Mississippi System; Cantillon’s
Life; Beginning of Modeling; Cantillon’ Effect;
Literature
Murphy, Antoin E. The Genesis of Macroeconomics New Ideas from Sir William Petty to Henry Thornton
Oxford University Press 2009
Quesnay, Francois, Tableau Economique, in History of Economic Thought: A Reader, edited by Steven G.
Medema and Warren J. Samuels, Routledge, 2003, pp. 97-101
Turgot, Anne Robert Jacques, Reflections on the Formation and Distribution of Wealth, 1770, in History of
Economic Thought: A Reader, edited by Steven G. Medema and Warren J. Samuels, Routledge,
2003, pp. 104-116
4
Petty, William, A Treatise of Taxes and Contributions, 1662, in History of Economic Thought: A Reader,
edited by Steven G. Medema and Warren J. Samuels, Routledge, 2003, pp. 47-56
Cantillon, Richard, Essay on the Nature of Commerce in General, 1755, in History of Economic Thought: A
Reader, edited by Steven G. Medema and Warren J. Samuels, Routledge, 2003, pp. 79-94
Hume, David, Political Discources, 1752, in History of Economic Thought: A Reader, edited by Steven G.
Medema and Warren J. Samuels, Routledge, 2003, pp. 135-152
Adam Smith
Life; Hume-Smith Friendship; Smith on Market; Smith on Government; Contribution to Political
Philosophy; Smith on Value, Market and Competition; Productive and Unproductive Labor; Books of
Wealth of Nations;
Literature
Heilbroner, Robert, The Worldly Philosophers, Sixth edition, Penguin Books, chapter 3
Butler, Eamonn, Adam Smith – a Primer, The Institute of Economic Affairs, 2007
Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776, in History of
Economic Thought: A Reader, edited by Steven G. Medema and Warren J. Samuels, Routledge,
2003, pp. 156-179
Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I; Book II, especially
chapters I, III, and V
Nathan Rosenberg, “Some Institutional Aspects of the Wealth of Nations,” Journal of Political Economy
68(6): 557-570 (December 1960)
Richardson, G.B. "Adam Smith on Competition and Increasing Returns," in Andrew S. Skinner and Thomas
Wilson, eds., Essays on Adam Smith. Oxford: Clarendon Press, 1975
R.H. Campbell and A.S. Skinner, Adam Smith, Croom Helm, London and Canberra, 1982
Classical Economists, Ricardo, Malthus, Hume
Ricardo’s Principles of Political Economy; Ricardo on Rent; Malthus on Population; Ricardo and Malthus
on Under-Consumption; Hume’s Specie Flow Mechanism; Bullion Controversy; Say’s Law,
Literature
Malthus, Thomas Robert, An Essay on the Principle of Population, 1798, in History of Economic Thought: A
Reader, edited by Steven G. Medema and Warren J. Samuels, Routledge, 2003, pp. 196-207
Ricardo, David, The High Price of Bullion, 1810, in History of Economic Thought: A Reader, edited by
Steven G. Medema and Warren J. Samuels, Routledge, 2003, pp. 237-244
Ricardo, David, On the Principles of Political Economy and Taxation, 1817, in History of Economic Thought:
A Reader, edited by Steven G. Medema and Warren J. Samuels, Routledge, 2003, pp. 259-290
Rostow, W.W., Theorists of Economic Growth from David Hume to the Present Oxford University Press,
New York, Oxford 1990
David Ricardo, The Principles of Political Economy and Taxation, esp. chapters 1-8, 19-21, 26, 30-31.
Dorfman, Robert, "Thomas Robert Malthus and David Ricardo," Journal of Economic Perspectives 3(3):
153-164 (1989)
Baumol, William, J. Say’s Law, Journal of Economic Perspectives—Volume 13, Number 1—Winter 1999—
Pages 195–204
Utopians, Marx and Radicals
Utopian Socialists; Marx’ Life; Communist Manifesto; Dialectical Materialism; Marx on Classical
Economists; Struggle between Classes; Marx’ Tone of Writing; Das Kapital; Marx on Movement of the
Capitalist Economy; Schumpeter’s Interpretation of Marx; Marx’ Interpretation of History;
Literature
Heilbroner, Robert, The Worldly Philosophers, Sixth edition, Penguin Books, chapter 5
5
Blaug, Marc, Economic Theory in Retrospect, Fifth edition, 1997, Cambridge University Press, Chapter 7
Marxian Economics
Heilbroner, Robert, The Worldly Philosophers, Sixth edition, Penguin Books, chapter 6
Marx, Karl, A Contribution to the Critique of Political Economy, 1859, in History of Economic Thought: A
Reader, edited by Steven G. Medema and Warren J. Samuels, Routledge, 2003, pp. 375-377
Marx, Karl, Das Kapital, 1867, in History of Economic Thought: A Reader, edited by Steven G. Medema and
Warren J. Samuels, Routledge, 2003, pp. 378-407
Schumpeter, Joseph A., Capitalism, Socialism and Democracy, Harper and Row Publishers, New York,
1942, third edition in 1950
Marx, Karl and Friedrich Engels, Communist Manifesto (1848), Sections 1 and 2
Lerner, A. P., Economic Theory and Socialist Economy, Review of Economic Studies, 1943, 51-61
Lerner, A.P. Economics of Control: Principles of Welfare Economics, New York, Macmillan, 1944
Dobb, Maurice, Economic Theory and Socialist Economy: a Reply, Review of Economic Studies, 2, 1943,
144-51
Dobb, Maurice, Economic Theory and the Problems of a Socialist Economy, Economic Journal, 43,
December 1933, 585-598
Lerner, A.P., A Rejoinder, Review of Economic Studies, 2, 1943, 152-154
Boyer, George R., The Historical Background of the Communist Manifesto, Journal of Economic
Perspectives—Volume 12, Number 4—Fall 1998—Pages 151–174
German Historical Thinking
Johann Gottlieb Fichte, Friedrich List, Goethe’s Faust, Wilhelm Roscher; Older Historical school Karl Knies
and Bruno Hildebrand; Gustav Schmoller;
Caldwell, Bruce, Chapter 2 The German Historical School , in Bruce Caldwell, An Intellectual Biography of
F.A. Hayek, The University of Chicago Press, 2004
Gilles Campagnolo Criticism of Classical Political Economy, Menger, Austrian economics and the German
Historical School Routledge Studies in the History of Economics, 2010, Routledge
Balabkins, N. 1988. Schmoller in Tsarist Russia. Journal of Institutional and Theoretical
Economics 144, 581–90.
Barnett, V. 2004. Historical political economy in Russia, 1870–1913. European Journal of the History of
Economic Thought 11, 231–53.
Dorfman, J. 1955. The role of the German Historical School in American economic thought. American
Economic Review 45, 17–28.
Heinonen, V. 2002. The Influence of the German Historical School in Finnish economic thought around the
turn of the century. In Economic Thought and Policy in Less Developed Europe: The Nineteenth
Century, ed. M. Psalidopoulos and M. Mata. London: Routledge.
Herbst, J. 1965. The German Historical School in American Scholarship: A Study in the Transfer of
Culture. Ithaca: Cornell University Press.
Menger, Carl, “On the Origin of Money,” The Economic Journal 2(6): 239-255, June 1892
Arena, Richard and Sandye Gloria-Palermo, Menger and Walras on Money: A Comparative View, History
of Political Economy 40:2, 317-343, 2008
Hicks, John, “Revolutions” in Economics, in Method and Appraisal in Economics, edited by S. Latsis,
Cambridge University Press, 1976
Campagnolo, Gilles, Criticism of Classical Political Economy, Menger, Austrian Economics and the German
Historical School Routledge Studies in the History of Economics, 2010, Routledge
Keynes
Keynes Life; On Communist Russia; On Depression; Intellectual and Human Characterization; Cambridge
Civilization;
Literature
6
Marshall, Alfred, Principles of Economics, eighth edition, esp. Book I, chapters I and II; Book III; and Book
IV; skim Book V., in History of Economic Thought: A Reader, edited by Steven G. Medema and
Warren J. Samuels, Routledge, 2003, pp. 504-521
Heilbroner, Robert, The Worldly Philosophers, Sixth edition, Penguin Books, chapter 9.
Keynes, John Maynard, "The General Theory of Employment," Quarterly Journal of Economics 51, May
1937
Eichengreen, Barry, “Still Fettered After All These Years,” Working Paper No. w9276, National Bureau of
Economic Research, October 2002.
Hayek, Friedrich August, "The Keynes Centenary: The Austrian Critique," The Economist, June 11, 1983,
pp. 45-48, reprinted in Bruce J. Caldwell, ed., The Collected Works of F. A. Hayek: Volume IX:
Contra Keynes and Cambridge: Essays, Correspondence. Chicago: Univesity of Chicago Press,
1995, pp. 247-255
Skidelsky, Robert, John Maynard Keynes, Volume One 1883-1920, Penguin Books 1994; First Published By
MacMillan 1983
Internet Quotations from Bradford de Long Homepage
Schumpeter
Life; First Books; Schumpeter and Keynes; Capitalism, Socialism and Democracy; Methodology;
Literature:
Swedberg, Richard, Joseph A. Schumpeter, His Life and Work , Polity Press 1991
Heilbroner, Robert, The Worldly Philosophers, Sixth edition, Penguin Books, chapter 8 and 10
Schumpeter, Joseph A. Capitalism, Socialism, and Democracy, London, Allen and Unwin 1943
Schumpeter, Joseph A., Science and Ideology, the American Economic Review, March 1949, Volume 39,
Number 2, pp. 345-59
Hayek
Family Background; Vienna, England in the 1930s; Anti-Socialist; Main Contribution; Money;
Literature
F. A. Hayek, "The Use of Knowledge in Society," American Economic Review 35(4): 519-530, 1945.
Bruce Caldwell, “Hayek and Socialism,” Journal of Economic Literature 35: 1856-1890 December 1997
Ebenstein, Alan, Friedrich Hayek, A Biography, Palgrave, 2001
Ebeling, Richard, M. “The Life and Works of Ludwig von Mises,” The Independent Review, XIII, 1, Summer
20
Silk, Leonard, The Economists, Avon Books, New York, Basic Books 1976
Veblen
Life, Teacher, Reformer, Theory of Leisure Class,
Literature
Veblen, Thorstein B., The Theory of the Leisure Class, 1899, in History of Economic Thought: A Reader,
edited by Steven G. Medema and Warren J. Samuels, Routledge, 2003, pp. 613-645
Silk, Leonard, The Economists, Avon Books, New York, Basic Books 1976
Riesman, David, Thorstein Veblen, A Critical Study of an American Thinker of Wide Influence The Scribner
Library, 1953, Charles Scribner’s Sons
Friedman, Samuelson
Literature
Silk, Leonard, The Economists, Avon Books, New York, Basic Books 1976
Overtveldt, Johan van, The Chicago School, Agate Chicago, 2007
Hammond, J.D. 1999. The Legacy of Milton Friedman as Teacher. Cheltenham: Edward Elgar.
Hammond, J.D. 2005. Theory and Measurement: Causality Issues in Milton Friedman's Monetary
Economics. Cambridge: Cambridge University Press.
7
Wood, J. 1990. Milton Friedman; Critical Assessments. London: Routledge.
Walters, Alan. "Friedman, Milton (1912–2006)." The New Palgrave Dictionary of Economics. Second
Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New
Palgrave Dictionary of Economics Online. Palgrave Macmillan 2012
Fischer, Stanley. "Samuelson, Paul Anthony (1915–2009) ." The New Palgrave Dictionary of Economics.
Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The
New Palgrave Dictionary of Economics Online. Palgrave Macmillan.
Non-Mainstream Economic Thought
Boulding, Dobb, Georgeschu-Roegen, Michael Polanyi, Kornai, Catholic Social Thought
Literature
Screpanti, Ernesto and Stefano Zamagni, An Outline of the History of Economic Thought, Clarendon Press,
Oxford 1993, translated by David Field, original title Profilo di storia del pensiero economico,
chapter 11
Silk, Leonard, The Economists, Avon Books, New York, Basic Books 1976
Kornai, Janos, By Force of Thought, Irregular Memoirs of an Intellectual Journey, The MIT Press 2006
Almodovar, António and Pedro Teixeira, The Ascent and Decline of Catholic Economic Thought 1830-1950,
History of Political Economy 40 (annual suppl.) 63-87
Arestis, P., and M. Sawyer. 2001. A Biographical Dictionary of Dissenting Economists. 2nd ed. Cheltenham,
U.K.: Elgar
Lee, Frederic S. "Heterodox Economics." The New Palgrave Dictionary of Economics. Second Edition. Eds.
Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave
Dictionary of Economics Online. Palgrave Macmillan 2012
Stanford Philosophy of Economics (2008), First published Fri Sep 12, 2003, revisions Tue Feb 26 2008
Rosenberg, Alexander (1992), Economics – Mathematical Politics or Science of Diminishing Returns? The
University of Chicago Press 1992
Uhlig, Harald, How Empirical Evidence Does or Does Not Influence Economic Thinking and Theory, 2010,
INET Conference Paper,
Lawson, Tony, Really Reorienting Modern Economics, INET Conference, King’s College, April 8-11, 2010
Fooley, Duncan K., “Mathematical Formalism and Political-Economic Content,” INET Conference, King’s
College, April 8-11, 2010
Thinking about Socialist Economies
Socialist Calculation Debate, Interpretation of Socialist Economies; Interpretation of Transition
Kornai, Janos, By Force of Thought, Irregular Memoirs of an Intellectual Journey, The MIT Press 2006
Stiglitz, Joseph E., Whither Socialism? The MIT Press 1994; second edition 1995, The Wicksell Lectures
Rothbard, Murray N. Mises, Ludwig Edler von (1881–1973), The New Palgrave Dictionary of
Economics, Second Edition, 2008, Edited by Steven N. Durlauf and Lawrence E. Blume
