A History of Economic Thought facts for kids

A history of economic thought (Istoriya ekonomicheskoi mysli) is an important book by Russian economist Isaak Illich Rubin (1886–1937). It was first published in Russian in 1929. An English translation came out in 1979.

The book explores how economic ideas developed from the 1500s to the mid-1800s. It starts with mercantilism and goes up to the end of the classical school of economics. This includes thinkers like John Stuart Mill.

Rubin looks closely at the ideas of major economists. He also shows how their ideas fit into the economic and social changes of their time. The book uses a Marxist way of thinking to critique these theories. However, it does not discuss Marx's own work in detail. The book ends where Marx began his studies in economics. Rubin's other main book, Essays on Marx's theory of value, covers Marx's contributions.

The book has five main parts. Each part has several chapters. There is also a sixth part that summarizes all the ideas discussed.

Early Economic Ideas: Mercantilism

This part begins by looking at the economy in Western Europe during the later Middle Ages. It talks about old systems like feudal estates and guilds for craftsmen. It also covers the growth of trade between European countries. The important colonial trade is also discussed.

These changes affected different groups of people. A new group of merchants, called the bourgeoisie, became powerful. At the same time, the importance of peasants and craftsmen decreased. The book then explains how mercantilist policy grew in England during the 1500s and 1600s.

Rubin discusses thinkers like Thomas Gresham, Thomas Mun, Dudley North, William Petty, and David Hume. He points out early ideas about the theory of value (from Petty) and the theory of money (from Hume). These ideas would be explored more deeply later by economists like Adam Smith and David Ricardo.

The Physiocrats: Focus on Land

This section sets the scene in France in the mid-1700s. It describes the state of farming, both large and small scale. The Physiocrats were a group of French thinkers. They believed that wealth came mainly from agriculture and land.

One key idea was the early development of a theory of social classes. François Quesnay was a leading Physiocrat. His famous idea was the Tableau Economique. This was a diagram showing how wealth flowed through the economy.

Adam Smith: The Father of Modern Economics

This part looks at the rise of industrial capitalism in England in the mid-1700s. This was a time of big changes in how goods were made.

The book then introduces Adam Smith. He was a key figure in the Scottish Enlightenment. Smith was both an economist and a philosopher. He knew about the French Physiocrats' ideas. His social philosophy was based on ideas of natural rights and unchanging human nature.

Smith's economic ideas are explained using four main topics:

• The division of labour: How breaking down work into smaller tasks makes things more efficient.
• The theory of value: What makes things worth what they are.
• The theory of distribution: How wealth is shared among different groups.
• The theory of capital and productive labour: What makes an economy grow.

David Ricardo: Building on Smith's Ideas

This section describes the Industrial Revolution in England. This period saw huge changes in factories and production. It happened between Adam Smith's time and David Ricardo's time.

The book then covers Ricardo's life and his way of thinking. His theory of value is explained. This includes his ideas on labor value, capital, and surplus value. It also covers how prices are set. The discussion finishes with Ricardo's theories on land rent, wages, and profits.

The Classical School's Decline

Rubin explains how the classical school of economics began to decline. He traces this back to the work of Thomas Robert Malthus and Jean-Baptiste Say.

He discusses how the ideas of value and wages became confused. This happened through the works of thinkers like Robert Torrens, Samuel Bailey, James Mill, and John Ramsay McCulloch.

Rubin argues that economics started to become less of a science. It became more about defending existing economic systems. Theorists like Henry Charles Carey and Frédéric Bastiat ignored the problems and conflicts in the economy. Instead, they claimed that everyone's interests were in harmony. Nassau William Senior's theory of abstinence also separated profits from the theory of value.

However, some thinkers made important advances. Simonde de Sismondi studied capitalist crises. He also criticized Jean-Baptiste Say. Rubin notes that Sismondi's work had a negative side too. He wanted to limit industrial growth and preferred a small-peasant economy.

Thinkers like Piercy Ravenstone, Thomas Hodgskin, and Robert Owen were part of the utopian socialist movement. They changed Ricardo's labor theory of value. They argued that workers had a moral right to the products of their labor.

Finally, John Stuart Mill is presented as the last of the classical school. He said he supported the school. However, Rubin argues that Mill had changed or abandoned many of its main ideas.