The Development of Economic Thought: book review

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Joseph R. Cammarosano:

The Development of Economic Thought: An Overview

Lanham, MD: Rowman and Littlefield, 2018. vii + 223 pp. $95 (hardcover), ISBN: 978-1-4985-7160-9.

Reviewed for EH.Net by Donald E. Frey, Department of Economics, Wake Forest University.

 Joseph Cammarosano has been a professor and administrator at Fordham University in New York City. He also has had a career in fiscal economics with the U.S. and New York state governments. He is a World War II veteran. His book reflects a long familiarity with his subject — and great depth and breadth of reading.

The book, in eleven chapters, spans from ancient times through Alfred Marshall and John Maynard Keynes. The intended audience is students and others with background in social science and philosophy (p. 1). The pre-Smith material displays a richer understanding of early economics than many “overview” books. Much of the book is devoted to the classical economists, their critics within the classical tradition, and their modernizers or synthesizers. Still, a chapter is given to Karl Marx and other socialists, and two chapters cover economists not fitting the classical mold (e.g., Joseph Schumpeter and Thorstein Veblen).

The book’s endpoint with Keynes is justified by affirming the “older and more humanistic treatment” of economics in contrast to the quantitative treatment since World War II, for which Cammarosano seems less than enthusiastic (pp. 1-3). However, even granting that twentieth-century neoclassical economics was not “humanistic,” more recent psychological and experimental economics, or ethical economics (e.g., some works by Amartya Sen), surely are. The book’s cut-off means these latter developments are not considered.

Given the book’s heaviest emphasis on the nineteenth century, much of it is structured around the classic economists’ questions of value (whether, or how, price reflects some deeper intrinsic value), distribution (factor shares), consumption, and how answers to these questions may rationalize business cycles.

Cammarosano overlays this framework with the thesis that social context often shaped economic thought. For example, in his day, Thomas Aquinas “attempted to reconcile theological dogma with the existing conditions of economic life” (p. 16). Or, the ideas of Thomas Malthus and David Ricardo reflected the agricultural economy of their time (p. 64). Once there was a large body of economic theory, existing theory influenced any newer economics (e.g., John Stuart Mill and Marshall modernized existing theory with an eye to the societal realities of their times). Even Marx, who reacted so strongly to social conditions, was still influenced by classical economists (p. 102).

While Cammarosano does not overdo it, he classifies economists, when relevant, according to where they fall in terms of several useful polarities: optimistic/pessimistic, universal-law approach/a particularist (my term) approach, reformist/pro-status quo, static/dynamic, individualistic/social, materialist/idealist. He does not force any economist to fall on one side or the other of these dichotomies if the economist really doesn’t fit. However, I thought that when relevant these polarities added useful interpretive continuity and interest.

Space allows only one illustration of how these polarities influence the book. Consider the major dichotomy between universal economic laws (e.g., utilitarian pleasure-pain calculus, Malthus’s principle of population, the iron law of wages, diminishing returns — see p.63) and particularist theories (e.g., Institutionalists and Historical School thinkers). Roughly speaking, these thinkers believe that economic generalizations, while useful, are contingent on the particular situations in which they emerge, and should not be universalized. (Cammarosano gives a fuller and more nuanced summary of this dichotomy on pp. 164-166.) In any case, he deftly traces universal-law ideas from the ancient Romans, through the physiocrats, and into the early and late classical thinkers.

At the other pole of this dichotomy are the likes of Friedrich List who, accused followers of Adam Smith of “divorcing themselves from the world as it really exists and building on suppositions” (p. 71). Considerably later, Institutionalism included a statistical wing, typified by Wesley Mitchell, who collected data to describe patterns of behavior in capitalist business cycles (not to test pre-existing theories). In something of an oversight, however, Cammarosano barely mentions the German Historical School, which ultimately had significant influence on some American economists in the late nineteenth century.

Cammarosano paints Mill as the personal embodiment of the clash of the universalist/particularist polarity — a man who improbably tried to embrace both poles. For Mill, immutable economic laws governed the production side of the economy; but temporal, changeable man-made laws determined the distribution of income (p. 87). Mill seemed conflicted in his deeper loyalties: his impulse toward reform gravitated to particularist types of theory; while his attraction to classical thought gravitated to universal-laws types of theories, which often rationalized society’s status quo.

Cammarosano shows a willingness to criticize his subjects, as just noted with Mill. But some sharp words season the book throughout. Even the iconic Adam Smith is not spared by Cammarosano, who concludes that Smith’s “analysis of value is full of contradictions . . . which are difficult to reconcile” (p. 39). Also, Cammarosano cites Lord Lauderdale and John Rae questioning of Smith’s debatable value judgment that a nation’s wealth is merely the sum of private wealth (p. 43). Early mathematical economists, such as the American Herbert Davenport, are also subject to sharp criticism (p. 156). Other examples could be cited.

Disproportionate attention is given to some topics. For example, Malthus’s vacillating view of “moral restraint” as a curb on population receives more attention, relative to his other ideas, than this reviewer thought necessary. Similarly, for the Marginalist thinkers, Cammarosano gives detailed, even textbook-like, expositions of some, but not all, of their arguments. That said, occasional overemphasis was not significant enough to mar the main storyline. And, actually, Cammarosano provided, what seemed to me, a deep and thoughtful interdisciplinary context to the sections on marginalism.

A look at the concluding substantive section of the book (on Keynes) gives good insight into Cammarosano’s approach. The section gives summaries of many of Keynes’s works, not just to The General Theory. Many of these lesser works focused specifically on economic problems faced by the U.K. In this Cammarosano shows how Keynes was deeply responsive to his social context: “Keynes was first and foremost a Briton” (p. 189), whose attention was on contemporary economic problems facing his country.
Cammarosano also views Keynes as “eminently practical and when the facts did not conform to theory . . . quick to move on” (p. 189), abandoning both classical orthodoxy and his own past ideas. We find classical doctrines being addressed, albeit to abandon some and reinterpret others (see p. 197). The more recent New Classicals’ critique of Keynes for lacking “microfoundations” would suggest that at least they don’t find enough deference to universal laws in Keynes. In any case, I would be quick to turn to this section if I needed a quick, but coherent, overview of Keynes and his context.

Finally, in a “Conclusion,” Cammarosano produces an exceptional summary his major themes (pp. 203-206). All in all, despite some additional minor blemishes (e.g., sometimes economists’ birth and death years were included, sometimes not), this book exhibits a great breadth and depth of knowledge of the history of economic thought, generally presented in a way appropriate for its intended readers.

Donald E. Frey (Wake Forest University, retired) is author of America’s Economic Moralists: A History of Rival Ethics and Economics (SUNY Press, 2009).

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