Dr Jonathan Kenigson, FRSA: Neither First nor Last – Why Keynes Is Not the Only Economist in History

Keynesian thought is not the only vantage by which to view the theory of markets, although policymakers may tacitly behave as if this is the case. Keynesian thought is grounded in Historicism, a movement that requires a brief genealogy. The Historical School of Economics is a school of economic thought developed in Germany during the 19th century. The school was focused on understanding the past and present economic conditions in order to determine the best course of action for the future. The school held that economics should be based on empirical evidence rather than abstract theories.

The Historical School looked at the history of a given industry as well as the current conditions in order to make informed decisions about economic policies. The school also held that economics should consider the moral and cultural values of society. The Historical School’s theories influenced many prominent economists, such as Karl Marx and John Maynard Keynes. The school’s influence is still seen today in economics, particularly in the use of historical data to inform policy decisions. It’s clear that the Historical School of Economics has had a major impact on the way we think about economics today.

Marxian Economics is a school of thought developed by the renowned philosopher and economist, Karl Marx. The basis of Marxian Economics is the labor theory of value, which states that the value of a commodity is determined by the amount of labor required to produce it. This theory has had a tremendous influence on economic thought and has been used to explain many of the economic phenomena that have occurred over the past two centuries. Marxian Economics has been used to explain the capitalist system, the role of the working class, and the differences between various economic systems. It has also been used to analyze the distribution of wealth within a society and the different levels of exploitation that exist between the classes. Marxian Economics has had a lasting impact on the way we view and understand economics, and it remains an important school of thought today. Neoclassical Economics is an economic approach that was developed in the late 19th and early 20th centuries. It is based on the principles of Adam Smith and other classical economists, who believed that the most efficient path to economic prosperity was to focus on the rational decision-making of individuals. Neoclassical Economists take this concept further, arguing that individuals and markets will always act rationally, and that the government should not interfere in the market. They also focus on the long-term effects of economic decisions, rather than short-term solutions. Neoclassical Economics has become an important and influential economic theory, used by governments and businesses alike to make decisions and set policies. While not without its critics, Neoclassical Economics has become an important part of the modern economy.

The Austrian School of Economics is a school of thought in economics that dates to the late 19th century. It is based on the writings of a group of pioneering economists, including Carl Menger and Ludwig von Mises. This school of economics focuses on the power of individuals to make decisions, instead of relying on government intervention. It emphasizes the importance of free markets and economic freedom. The Austrian School of Economics also puts an emphasis on the subjective nature of economic value. This means that the value of a good or service is determined by the individual, rather than by a set of universally accepted standards. This school of thought also emphasizes the idea that a market’s most efficient form is determined by the interactions of individuals in the market.

Finally, the Austrian School of Economics stresses the importance of sound money, or a currency that is backed by a tangible asset. All these ideas have been influential in the development of modern economics. Keynesian Economics is an economic theory developed by British economist John Maynard Keynes in the 1930s. Keynesian Economics states that governments can use fiscal policies, such as taxation and spending, to regulate aggregate demand and economic output. According to this theory, when aggregate demand decreases and economic output is low, governments can stimulate the economy by lowering taxes and increasing government spending. This will lead to an increase in aggregate demand, which will in turn increase economic output and employment. Additionally, Keynesian Economics suggests that if the economy is expanding, the government should increase taxes and reduce spending in order to slow down the economy and avoid inflation. The goal of Keynesian Economics is to maintain full employment and stable prices using fiscal policy. Keynesian Economics is still used today by many governments around the world and is a key part of modern economics.

Sources and Further Reading:

Arnsperger, Christian, and Yanis Varoufakis. “What is neoclassical economics.” Post-autistic  economics review 38.1 (2006).

Blinder, Alan S. “The fall and rise of Keynesian economics.” Economic record 64.4 (1988): 278- 294.

Boettke, Peter J. The Elgar companion to Austrian economics. Edward Elgar Publishing, 1998.

Campagnolo, Gilles. Criticisms of classical political economy: Menger, Austrian economics and the German historical school. Routledge, 2012.

Dugger, William M. “Methodological differences between institutional and neoclassical economics.” Journal of economic issues 13.4 (1979): 899-909.

Eatwell, John, Murray Milgate, and Peter Newman, eds. Marxian economics. Springer, 1990.

Gordon, Robert J. “What is new-Keynesian economics?.” Journal of economic literature 28.3 (1990): 1115-1171.

Henry, John F. The Making of Neoclassical Economics (Routledge Revivals). Routledge, 2012.

Howard, Michael Charles, and John Edward King. “A history of Marxian economics, volume II.” A History of Marxian Economics, Volume II. Princeton University Press, 2014.

Itoh, Makoto. Value and crisis: Essays on Marxian economics in Japan. Monthly Review Press, 2020.

Jahan, Sarwat, Ahmed Saber Mahmud, and Chris Papageorgiou. “What is Keynesian  economics.” International Monetary Fund 51.3 (2014): 53-54.

Littlechild, Stephen. Austrian economics. Edward Elgar Publishing, 1990.

Morgan, Jamie. What is Neoclassical Economics?. Taylor & Francis, 2015.

Pearson, Heath. “Was there really a German historical school of economics?.” History of Political Economy 31.3 (1999): 547-562.

Roemer, John E. Analytical foundations of Marxian economic theory. Cambridge University Press, 1981.

Rothbard, Murray N. “Praxeology: The methodology of Austrian economics.” The foundations of  modern Austrian economics (1976): 19-39.

Shionoya, Yuichi, ed. The German historical school: the historical and ethical approach to economics. Vol. 40. Routledge, 2000.

Taylor, Thomas C. An introduction to Austrian economics. Ludwig von Mises Institute, 1980.

Tribe, Keith. “Historical schools of economics: German and English.” A companion to the history of economic thought (2003): 215.

Vaughn, Karen I. Austrian economics in America: The migration of a tradition. Cambridge University Press, 1998.

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