Global Economy

Today is the first summer day. My congratulations!!!

All who have economic education study economics. But what do you know about the history of economics?

So, in the 1500s there were few universities. Those that existed taught religion, Latin, Greek, philosophy, history, and mathematics. No econom­ics. Then came the Enlightenment (about 1700) in which reasoning re­placed God as the explanation of why things were the way they were. Pre­Enlightenment thinkers would answer the question, “Why am I poor?” with, “Because God wills it.” Enlightenment scholars looked for a differ­ent explanation. “Because of the nature of land ownership” is one answer they found.

Such reasoned explanations required more knowledge of the way things were, and the amount of information expanded so rapidly that it had to be divided or categorized for an individual to have hope of knowing a subject. Soon philosophy was subdivided into science and philos­ophy. In the 1700s, the sciences were split into natural sciences and so­cial sciences. The amount of knowledge kept increasing, and in the late 1800s and early 1900s social science itself split into subdivisions: economics, political science, history, geography, sociology, anthropology, and psychology. Many of the insights how the economic system worked were codified in Adam Smith’s The Wealth of Nations, written in 1776. Notice that this is before economics as a sub discipline developed, and Adam Smith could also be classified as an anthropologist, a sociologist, a political scientist, and a social philosopher.

Throughout the l8th and 19t centuries economists such as Adam Smith, Thomas Malthus, John Stuart Mill, David Ricardo, and Karl Marx were more than economists; they were social philosophers who covered all aspects of social science. These writers were subsequently called Clas­sical economists. Alfred Marshall continued in that classical tradition, and his book, Principles of Economics, published in the late 1800s, was written with the other social sciences in evidence. But Marshall also changed the question economists ask; he focused on the questions that could be asked in a graphical supply-demand framework. In doing so he began what is called neo-classical economics…

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