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).

Copyright (c) 2018 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (August 2018). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Historia do pensamento economico - livro Sylvia Nasar

EH.NET BOOK REVIEW ------

Title: Grand Pursuit: The Story of Economic Genius

Published by EH.Net (July 2012)

Sylvia Nasar, Grand Pursuit: The Story of Economic Genius. New York: Simon & Schuster, 2011. xv + 559 pp. $35 (hardcover), ISBN: 978-0-684-87298-8.

Reviewed for EH.Net by Robert E. Prasch, Department of Economics, Middlebury College.

Sylvia Nasar, the author of A Beautiful Mind, has undertaken another ambitious project, this time a larger survey of economic thought. The result is a colorful and fast-moving narrative, brimming with fascinating characters and lively anecdotes. In a word, this book is a pleasure to read. Nasar’s experiences as a successful writer and professor of journalism enable her to bring a distinct talent for story-telling along with an outsider’s perspective to a field too often overlooked within and without the citadels of academe.

Though this book is a history of economic thought, it is far from comprehensive. Why certain figures or subjects are included and others neglected is, it must be said, something of a mystery. As far as I can tell, the answer seems to be how well they fit the larger project, which is to present an unabashedly Whig history of economics. However, that said, I was pleased that she elected to devote several pages to figures such as Henry Mayhew (pp. 18-22 and 28-32) and a full chapter to Beatrice Webb (Chapter 3). As Nasar correctly points out, each of them made substantial contributions to popular and elite discussions of poverty and what might be done to alleviate it. Unmentioned, but as important, was that they set an example of engaged empirical work that would lead to improved methods of data collection and analysis. Over time, these efforts would greatly improve our understanding of what we know, or think we know, about the actual economic condition of our fellow citizens. Again, Nasar is to be commended for this inclusion because, as readers of EH.Net are probably aware, books on the history of economic thought generally stress the development of economic theory to the neglect of other pursuits.

Now, that said, historians of economic thought will find much to criticize. As mentioned, this history is far from comprehensive. With its whiggish perspective providing a powerful filter, some important movements and writers are treated at length, others mentioned only briefly (and too-often inaccurately), and others neglected altogether. For example, the German Historicists are summarized and then dismissed as if they all merely echoed Gustav Schmoller on matters of economic theory and policy. Elsewhere, Nasar makes a passing reference to “so-called institutionalists” without suggesting why she wishes to downplay their role, although in another place Wesley C. Mitchell is referred to as a leader in business cycle research. John Commons makes no appearance whatsoever despite the prominence of the Wisconsin School in policy discussions throughout the Progressive Era. Another peculiar omission, since she so clearly appreciates the empirical studies conducted by Mayhew and Webb, is that the several prominent figures of the English Historical School fail to appear at all.

With regard to the subjects covered, the weakest link is her treatment of Karl Marx. She clearly dislikes him, which in itself is not objectionable, except insofar as it constitutes a barrier to her analysis. For example, the Labor Theory of Value is dismissed in a cavalier manner before any serious effort is made to present or understand it. She then suggests that things might have gone better if Marx had “engaged brilliant contemporaries such as John Stuart Mill” (p. 89). She appears not to notice that John Stuart Mill dutifully followed his mentor David Ricardo in adhering to the Labor Theory of Value. If Marx was confused on the theory of value, he was in excellent company.

The treatment of the post-World War II scene is also idiosyncratic. She begins with an extended and highly compelling treatment of Paul Samuelson. Few would doubt rationale for this emphasis. However, the discussion then moves on to a lengthy discussion of Joan Robinson followed by a similarly in-depth review of the life and work of Amartya Sen. Now, I have read and learned from the work of both of these prominent scholars. However, economists and historians of economic thought would likely agree that even a passing discussion of the past fifty years of economic analysis must include more than a brief reference to the work of John Hicks, Kenneth Arrow, the Chicago School, the rise and decline of Monetarism, and the Rational Expectations “revolution” of the 1970s and 1980s. Finally, the most mysterious lacuna of all, in light of Nasar’s wonderfully successful book on John Nash, may be the absence of any discussion of how Game Theory evolved from a fringe subject to its now-central place in contemporary microeconomics, Organizational Theory, and Industrial Organization.

But let us set these objections aside so that we may emphasize the most important aspect of this book. For too long the history of economic thought has not had an accessible, fun, and potentially popular book that we can recommend to our friends, colleagues, and students who are not members of our “guild.” While Nasar’s political commitments are very different, her entertaining style and captivating narrative suggests that her book has the potential to occupy the several niches once dominated by Robert Heilbroner’s The Worldly Philosophers. Should this occur, and her work contribute to a revival of interest in the history of economic thought, we will all be in debt to Professor Nasar.

Robert Prasch is the co-editor of Thorstein Veblen and the Revival of Free Market Capitalism (2007).

Copyright (c) 2012 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (July 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.