The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers

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Unlike Thomas Malthus and Karl Marx in the previous century, John Maynard Keynes looked forward to better times for capitalism in the twenty-first century. In his Economic Possibilities for Our Grandchildren, he predicted that by the year 2030, the age-old problem of equal distribution of wealth might be solved. Even though Keynes did not foresee the panacea immediately after World War I, in later years he deduced that capitalism would continue its upward climb. Certainly he could not attribute the easing of hard times to the bounties of nature, since the supply of raw materials was quite obviously finite and dwindling. Instead he lauded the ability of factory workers to utilize technology, thereby making each succeeding generation more productive. For example, in the 1960s, American workers turned out over five times the goods per hour in comparison with their forebears a century earlier. In like manner, Keynes envisioned a rosy future for his native England, calculating that by the year 2060, the nation would produce seven and one half times the wealth of the past century. The replacement of mercantilism with the doctrine of laissez faire did not come immediately with the publication of Smith's views. It was not until the nineteenth century that the Wealth of Nations made its full impact. Then Great Britain discarded mercantilism completely to become the world's wealthiest nation. Unfortunately, the rising industrial capitalists managed to disregard certain stinging accusations in Smith's philosophy, such as "People of the same trade seldom meet together but the conversation ends in a conspiracy against the public, or in some diversion to raise prices . . ."

So the metaphor I want to use is of two teams of dismal scientists examining a life form which they know only to be a Caterpillar. As it turns out, the dispute is about the ball. Not what you do with the ball, but the composition of the ball.He also came up with a way of classifying economies, as either Traditional (primarily agriculturally-based, perhaps subsistence economy), Command (centrally planned economy, often involving the state), Market (capitalism), or Mixed.

The planned economy under central authoritarian rule differs from tradition in that the means of production and the authority to make economic decisions belong to the state. Examples existed in ancient Egypt and Babylonia, where massive work projects were organized at the whim of the ruling class. In more recent times, the communist nations which were formed after the Russian Revolution in 1917 have attempted the same large-scale operations as an outgrowth of a centralized authority. In neither instance did individuals actualize their own ideas or goals. Economic System: The rules, laws, customs, and principles which govern the operation of an economy. Each economic system has its own peculiar problems and therefore produces its own solutions. The modern economy, not unlike the Biblical moment of creation, began with Adam. In this case, with Adam Smith, an eccentric Scottish professor known as the father of modern economics. Modern economics or ‘political economy’, he said was radically different from the historical methods of organizing society because of the introduction of a new motivation: self-interest or the profit motive. But the key to the operation of the laws of the market is that the market is "its own guardian." It is self-regulating if left alone (laissez faire) so that competition can operate freely without government control and without monopolies. He starts the book off with one essential question: what makes the modern economy so radically different from medieval and ancient economies so as to necessitate the invention of an entirely new branch of knowledge, namely ‘economics’, or a study of the ‘political economy’?What emerges from this is a principle that profit itself is not intrinsically bad, at least if it is generated in the name of the State, which is presumably representative of the Workers’ interests. In the rest of this review, I want to summarise the main concepts and explain what I got out of the book. Economic Activity All action concerned with the creation of goods and services to be in some way consumed.

The Emergence of Nation-States (l5th-l7th centuries) — a period giving rise to royal patronage for favored industries, maritime trade, common laws, standard measures, and common currencies. Age of Enlightenment A period (roughly 1700-89) when political, economic, and social thought was dominated by an optimistic faith in reason and in the progress of the human race.The canny student of economy, however, cannot accept this cheerful prognostication without further delving, for a complete analysis of modern times requires a thorough study of more than Marx and Keynes. A third spokesman is necessary: the brilliant gadfly Joseph Alois Schumpeter (1883-1950), a spirited, histrionic Viennese aristocrat and Harvard professor, who saw capitalism in the twentieth century in terms of dynamic growth, yet he relegated it to destruction in the long run. I have never formally studied economics for any extended period of time. Although I originally wanted to be a chemical engineer, I am terrified by any book that contains mathematical formulae. To the extent that the Caterpillarist has any capital, it reflects the profit previously made from other Workers’ labor.