An Introduction to Schools of Economic Thought

Should economists be concerned with questions of morality? Can economic ideas be applied to social phenomena like divorce rates and crime? What even is economics? Ask an economist these questions and his answer will differ greatly depending on the school of economic thought to which he belongs. Yet too many textbooks ignore the fascinating debates and history that have shaped the modern discipline. In this book, award-winning author Eamonn Butler provides a clear, jargon-free guide to the schools of thought that have had the greatest impact on the world today, for both better and worse. It shows how and why thinkers have come up with different explanations of how economic life operates and how we might improve its workings to boost human prosperity and welfare. This is a story that stretches over two and a half millennia, from Aristotle coining the term ‘economics’ in ancient Greece, to the classical economics of Adam Smith, to Marxism and Keynesianism, to more modern ideas such as Behavioural Economics and Public Choice Theory. Butler’s concise and well-researched work provides an essential introduction to the ideas, debates and people that have shaped and continue to shape economics.

Table of Contents:
1 Introduction The role of this book What is a school of thought? Why study the schools of economics? What this book covers 2 Preclassical economics The first economists Commerce versus authority The mercantilist era 3 The Classical School Overview Adam Smith Thomas Malthus David Ricardo James and John Stuart Mill The French Laissez-Faire economists Relevance today 4 Karl Marx The critique of capitalism Criticism and legacy 5 Marginalism and the Neoclassical synthesis The Marginal Revolution The Neoclassical School Key figures of the Neoclassical School Criticism and contemporary extension 6 Keynes and the Keynesians Keynes’s contribution Background to Keynes’s ideas Keynes’s analysis and prescriptions Neo-Keynesians 7 The Chicago School Principles Origins Monetarism Rational Expectations Theory Human Capital Theory Supply-Side Economics Criticisms Conclusion 8 The Austrian School Origin and principles Subjectivism versus Keynesianism Time, uncertainty and ignorance Doubts on interventionism Criticisms and responses The fruitfulness of Austrian insights 9 The Public Choice School Origins The peculiarity of the political ‘market’ Self-interest in the political system Decisions and constitutions The impact of the Public Choice School 10 Behavioural Economics Biases in human decision-making Implications of thought biases General criticism and legacy 11 The future and the past Future schools of thought? Conclusion: strength through diversity References Further reading

About the Author :
Eamonn Butler is Director of the Adam Smith Institute, one of the world’s leading policy think tanks. He holds degrees in economics and psychology, a PhD in philosophy and an honorary DLitt. In the 1970s he worked in Washington, DC, for the US House of Representatives, and taught philosophy at Hillsdale College, Michigan, before returning to the UK to co-found the Adam Smith Institute. He has won the Freedom Medal of Freedoms Foundation at Valley Forge, the UK National Free Enterprise Award and the Hayek Institute Lifetime Achievement Award; his film Secrets of the Magna Carta won an award at the Anthem Film Festival; and his book Foundations of a Free Society won the Fisher Prize. Eamonn’s other books include introductions to the pioneering economists Adam Smith, Milton Friedman, F. A. Hayek and Ludwig von Mises, and primers on a wide range of topics, including capitalism, classical liberalism, democracy, economic inequality, public choice, taxation, trade, the Austrian School of Economics and great liberal thinkers. He has also published The Condensed Wealth of Nations and The Best Book on the Market, and is co­author of Forty Centuries of Wage and Price Controls and a series of books on IQ. He is a frequent contributor to print, broadcast and online media.