A History of Economic Thought

A History of Economic Thought: The LSE Lectures

STEVEN G. MEDEMA
WARREN J. SAMUELS
Copyright Date: 1998
Pages: 393
https://www.jstor.org/stable/j.ctt7rm04
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  • Book Info
    A History of Economic Thought
    Book Description:

    Lionel Robbins's now famous lectures on the history of economic thought comprise one of the greatest accounts since World War II of the evolution of economic ideas. This volume represents the first time those lectures have been published.

    Lord Robbins (1898-1984) was a remarkably accomplished thinker, writer, and public figure. He made important contributions to economic theory, methodology, and policy analysis, directed the economic section of Winston Churchill's War Cabinet, and served as chairman of theFinancial Times. As a historian of economic ideas, he ranks with Joseph Schumpeter and Jacob Viner as one of the foremost scholars of the century. These lectures, delivered at the London School of Economics between 1979 and 1981 and tape-recorded by Robbins's grandson, display his mastery of the intellectual history of economics, his infectious enthusiasm for the subject, and his eloquence and incisive wit. They cover a broad chronological range, beginning with Plato, Aristotle, and Aquinas, focusing extensively on Adam Smith, Thomas Malthus and the classicals, and finishing with a discussion of moderns and marginalists from Marx to Alfred Marshall. Robbins takes a varied and inclusive approach to intellectual history. As he says in his first lecture: "I shall go my own sweet way--sometimes talk about doctrine, sometimes talk about persons, sometimes talk about periods." The lectures are united by Robbins's conviction that it is impossible to understand adequately contemporary institutions and social sciences without understanding the ideas behind their development.

    Authoritative yet accessible, combining the immediacy of the spoken word with Robbins's exceptional talent for clear, well-organized exposition, this volume will be welcomed by anyone interested in the intellectual origins of the modern world.

    eISBN: 978-1-4008-2279-9
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. LIST OF FIGURES
    (pp. xi-xii)
  4. FOREWORD
    (pp. xiii-xiv)
    WILLIAM J. BAUMOL

    These eloquent lectures speak for themselves, and so does the careful and scholarly accomplishment of the editors. What, then, can I hope to add in a foreword? The answer is that I was there. I, like so many before and after me, had the unduplicable experience of hearing these illuminating lectures delivered by this remarkable man, my teacher, who became my close friend. Anyone reading these lectures can, and surely will, admire their style, the range of material they cover, the dazzling intellectual brilliance, and the stimulation they provide. I can only attempt to convey, although inadequately, the flavor of...

  5. INTRODUCTION
    (pp. xv-2)
    Steven G. Medema and Warren J. Samuels

    These lectures, which are published here for the first time, were given by Lionel Robbins at the London School of Economics during 1979–1980 and 1980–1981.

    Lionel Robbins was one of the giants of university education in general and of economics in particular in the United Kingdom in the twentieth century. He had a distinguished career in public life, as an economic advisor to government, in the management of the arts, in journalism, and in the reform of higher education.¹ Although perhaps best known in economics for his work in economic theory and methodology (notablyAn Essay on the...

  6. A. ANTICIPATIONS
    • LECTURE 1 Introduction—Plato
      (pp. 5-15)

      In general, I don’t intend to begin lecturing until six past the hour. This is partly by reason of the difficulty of passing from one lecture room to another, which some of you have to do, partly by reason of the fact that I think that fifty-five minutes on the history of economic thought is as much as most of you can take at a time, so, if I start just a little early at this moment, it is that I think that sufficient of you are gathered together, and I want to make some preliminary remarks.

      First of all,...

    • LECTURE 2 Plato and Aristotle
      (pp. 16-25)

      I needn’t spend time reminding you of what I said yesterday, at any rate at any length. The first half of the lecture was devoted to general instructions and a certain apologia to the subject. The second half of the lecture, roughly speaking, was devoted to the beginning of lectures on anticipations of economic thought in moral philosophy, beginning with the Greeks. I began in that connection with Plato, in whoseRepublicyou find the outline of the role which division of labour plays in the constitution of any society. Plato was in fact outlining his ideal society with a...

    • LECTURE 3 Aquinas and the Scholastics
      (pp. 26-34)

      At the close of my lecture last Thursday, after a brief discussion of the extraordinary absence of economic speculation in the secular literature of the Roman Empire, save insofar as it occurs in discussions of laws relating to property and contract, and the equal poverty of discussion among the early apostles of Christianity or the theologians of the centuries before the Dark Ages, I leapt forward to the period when the Dark Ages had become less dark, at the revival of the money economy and the development of flourishing commerce and small industry, conspicuously in Italy. And I continued my...

    • LECTURE 4 Pamphleteers—Money (Oresme, Bodin, “W. S.”)
      (pp. 35-45)

      I Have finished, in a disgracefully hurried way, the remarks that I want to make in this course of lectures on the anticipations of economics springing from moral philosophy. At the end of my last lecture I was dilating on the fascinating subject of the French revolution of thought regarding usury.We shall be returning to the development of analysis regarding the rate of interest at a later stage, and it may be possible to link up with the parts that I scamped at that stage. I must not get too behind, and the hints I gave, I think, were sufficient...

    • LECTURE 5 Pamphleteers—Mercantilism (Malynes, Misselden, Mun)
      (pp. 46-54)

      I won’t waste your time recapitulating the subject of my last lecture last week. Suffice it to say that I have passed from general considerations of moral philosophy involving some glance at the main economic relationships of exchange and interest to the contribution made to the anticipations of systematic economic thought by miscellaneous pamphleteers. I explained to you howlegionthis literature is and announced my intention simply of dipping the bucket in the ocean in two respects. And I devoted that lecture to discussing early contributions to the theory of money, debasement, and expositions of the quantity theory of...

    • LECTURE 6 Sir William Petty
      (pp. 55-65)

      This lecture, although I personally find the subject matter of it more interesting than anything that I’ve talked about so far, is betwixt and between.It still falls under the heading “Anticipations,” but is different from anything that I have talked about before and much more high grade. Up to now, in talking about the moral philosophers and the pamphleteers, in a sense one has been trying to get under the skin of the personalities of another age. In some respects their thoughts resemble our thoughts, but their mode is different.

      Now, the seventeenth century is one of the great centuries...

    • LECTURE 7 Child and Locke (Interest)
      (pp. 66-74)

      Today I conclude this section of the lectures which has been dealing with anticipations of the emergence of systematic economics, first in the works of the moral philosophers and then in ad hoc treatises and pamphleteering—of which Petty’s treatise on taxation is, of course, an extremely superior example. The hundreds and hundreds of ad hoc pamphlets and treatises which come under this heading will not bear comparison with Petty’s more or less systematic discussions of public finance.

      But now I must go back to something which is not, I think, on quite the same intellectual plane as Petty, and...

  7. B. EMERGENCE OF SYSTEMS
    • LECTURE 8 Cantillon
      (pp. 77-85)

      I timed my lecture badly yesterday, and in regard to Locke I left undiscussed three points to which I feel that I must draw your attention. I’ll be as brief as I can, because I, as well as the rest of you, am anxious to get on to the really interesting part of this course, and it’s only ten minutes off.

      I said that Locke’s remarks on interest were valuable and deserve to be taken note of in regard to six matters: firstly, his animadversions about Child’s thesis, the direct proposal to lower the rate of interest; secondly, his ambiguous...

    • LECTURE 9 Cantillon (cont.)—Physiocracy
      (pp. 86-94)

      So let me, without undue recapitulation, plunge into the remainder of what I have to say about Cantillon [1755]. I hope that the extracts that I read to you from part 1 were sufficient to make you feel that Cantillon was rather an important chap. Part 1, as you will have gathered, is devoted to a general description of economic organisation—the controlling power of demand, the nature of what he calls intrinsic value and its relation to market prices and incomes, and winding up with a description of the ordinary stuff about money, which I didn’t trouble to recapitulate...

    • LECTURE 10 Physiocrats—Turgot
      (pp. 95-103)

      Yesterday’s lecture was in two parts: first of all, some detailed examination of part 2 of Cantillon’sEssayand a brief indication of the content of part 3. And that was the first half. And the second half was devoted to providing some sort of background to the rise of physiocracy in France, the poverty of the people under Louis XIV, the characteristics of Colbertism and Adam Smith’s opinion on that policy, and then a word or two about Vauban and Boisguilbert, and thenceforward to John Law, his part in the Mississippi catastrophe and the influence it had in restraining...

    • LECTURE 11 Locke and Hume on Property—Hume on Money
      (pp. 104-113)

      I want now to begin a series of lectures which go at greater length than I have been able to go so far into the development, from the point which I reached last week, of what can be called classical economics. I have said inadequate words about the development of systematic economics in France at the hands of the physiocrats, and even less satisfactorily I have drawn your attention to the work of Turgot, who, in my judgement, was in all sorts of ways a very superior type. I should like to go on, and I should even like to...

    • LECTURE 12 Hume on Interest and Trade—Precursors of Adam Smith
      (pp. 114-124)

      Let us get on with Hume. Such is the interest of Hume’s arguments that I lost a little time yesterday. I won’t recapitulate what he said about money, but I will proceed straightaway to what he said about interest, and that can be, as a matter of fact, summarised much more quickly.

      Although he doesn’t mention the monetary interpretation of John Locke’s theory of interest, he does attack, root and branch, the view which some people have attributed to John Locke: that the rate of interest is affected by the quantity of money—a purely monetary theory of interest.Now, all...

    • LECTURE 13 General Survey of Smith’s Intentions—The Wealth of Nations: Analytical (I)
      (pp. 125-132)

      It is time to catch up, just at the point at which these lectures become, I won’t say respectable, but less negatively respectable than they were. That is to say that I am going to lecture to you for two or three lectures on Adam Smith and the beginnings of classical economics.

      I won’t assume, as I did with Hume, that all self-respecting people will know the details of the life of Adam Smith, and I can rehearse the leading events very quickly. Let me get the dates right. He was born at a place north of the Firth of...

    • LECTURE 14 The Wealth of Nations: Analytical (II)
      (pp. 133-142)

      The lecture yesterday was interrupted by the fire alarm, and consequently I had to break off just at the point at which the most interesting developments of theWealth of Nationswere becoming obvious. Let me recapitulate that chapter 2 of book 1 is headed “Of the Principle which gives Occasion to the Division of Labour,” and the famous passage dwells upon the fact that, although if one is closely allied in friendship within one’s family or in one’s circle, one can obtain scarce commodities by way of gift or common use, that in a civilised society most of us...

    • LECTURE 15 The Wealth of Nations: Analytical (III)—Policy I
      (pp. 143-152)

      I recommend to you Professor Samuel Hollander’s [1973] book on Adam Smith. He’s one of our most distinguished academic alumni, and I am now reading his recently published book on Ricardo, and it makes me feel sorry for you that you have to listen to me rather than to Professor Hollander, who is so good. He really surpasses all previous historians of economic thought, especially on Ricardo [1979], but his book on Adam Smith is quite first rate. All of you who are specialising in this subject are recommended to read the relevant chapters of his books, at any rate....

    • LECTURE 16 The Wealth of Nations: Policy II
      (pp. 153-164)

      We have more or less caught up, and at the conclusion of my last lecture I read you Adam Smith’s discussion of the functions of the State under the system of natural liberty, dwelling especially on the third function, which was for the State to carry out branches of enterprise or undertakings which it could never be to the profit of any individual or small collection of individuals to undertake, although it might be to the benefit of a large country.

      The only thing I want to say about that is that I forgot as I was walking out of...

  8. C. NINETEENTH-CENTURY CLASSICISM
    • LECTURE 17 General Review—Malthus on Population
      (pp. 167-175)

      Now, we have finished with Smith, or at any rate with an attempt to have a systematic glance at the various doctrines and attitudes, particularly in theWealth of Nations,and I now therefore enter on a series of lectures, which will slop over into next term, on the nineteenth-century classical period.

      Now, just a word or two about the personalities and derivations. For me, at any rate, it is very difficult to draw a sharp line between Adam Smith and Hume and the position of the early (or the first half of the) nineteenth-century classical writers. For me at...

    • LECTURE 18 Value and Distribution: Historical Origin—Analytical (I)
      (pp. 176-184)

      In this lecture I shall give you a superficial view of the emergence of the nineteenth-century classical view, or views, on value and distribution. I warn you that I shan’t be finished with the subject this time. What I shall do is to is to give you a brief account of how it emerged in the pamphlet literature and in a definite political controversy. And I hope, if I get through, that I shall then have prepared the way for a systematic survey of each of the main theories, which takes some time and will require rather more intricate analysis...

    • LECTURE 19 Value and Distribution: Analytical (II)
      (pp. 185-191)

      Now, in my last lecture last week I tried to explain how broad principles relating to value and distribution were invoked in the course of a specifically political controversy—the controversy relating to the reimposition of limitations on the import of corn. I drew your attention to West’s very precise formulation of the laws of return, but I concentrated chiefly on Ricardo’sEssay on the Influence of a Low Price of Corn on the Profits of Stock,leading up to his triumphant conclusion that the effects of cheap imports were strictly analogous in this connection to the effects of improvement...

    • LECTURE 20 Value and Distribution: Analytical (III)
      (pp. 192-200)

      I am continuing the treatment which I began yesterday of the classical theory of value and distribution, with special reference to Ricardo. You may remember that I began by some general observations concerning the assumptions, the essentially long period relevance of most generalisations, and the mistake of Schumpeter and Malthus in saying that Ricardo ignored supply and demand, and I then stated the area of exchange where the approximation to a labour theory of value was not deemed to be in any way valid, and I went on to discuss the conditions under which a pure labour theory of value,...

    • LECTURE 21 Overall Equilibrium
      (pp. 201-209)

      I have given you a rough ordered summary of the main views of nineteenth-century classical economics on money and banking.¹ I had previously given you a rough history of the controversies of the Napoleonic Wars and what followed, and the last lecture was an attempt to present the results of the controversy in a more or less orderly form. I wound up with a discussion of the famous banking and currency controversy, which centered upon the question of whether a convertible note issue could be left to look after itself, so to speak, guided by the prudence of the Bank,...

    • LECTURE 22 International Trade
      (pp. 210-218)

      The explosion in the west end has disorganised traffic and disorganised my morning program. I want to talk to you today about the classical theory of international trade. Now, you may remember that when I was dealing with Adam Smith’s chapter on the division of labour, I specifically pointed out that among the advantages of the division of labour he did not enumerate the advantages of dividing labour spatially. But of course, whatever the reason for the omission, you mustn’t think that Adam Smith did not give attention to this particular problem. The greater part of book 4 on the...

    • LECTURE 23 John Stuart Mill
      (pp. 219-228)

      I’ll skip the lecture in the program on the theories regarding taxation of the nineteenth-century classical economists, but before quitting that general field, I think that I ought to devote a lecture to talking to you about John Stuart Mill.

      John Stuart Mill, whose Principles ofPolitical Economywas published in 1848, is not the last of the classical economists. The last was J.E. Cairnes, who held a chair at University College, and whose various works are still worth looking at, despite the fact that he didn’t appreciate Jevons’ theory of value—which has earned him a bad name in...

  9. D. OTHER MID-NINETEENTH-CENTURY THOUGHT
    • LECTURE 24 Mill (cont.)—Saint-Simon and Marx
      (pp. 231-237)

      I want to give you some sort of conspectus of the relevance of John Stuart Mill to the history of economic thought. I have nothing further to say on his contributions, particularly as regards thePrinciples,but there is something which remains to be said about his ascendancy and its decline.

      The book was published in 1848, and I would think that it was no exaggeration to say that it wastheinfluential work on political economy for the next forty years or so. Until Marshall published hisPrinciples of Economics[1890], I would guess that Mill was the most...

    • LECTURE 25 Marx (cont.)—List and the Historical School
      (pp. 238-246)

      In the last part of my last lecture I tried to give you a very brief résumé of Marx’s relation to the classical position. I underlined that description of what nature was intended to do. There are other lectures given in this institution which deal with Marxian philosophy in its wider implications, and I certainly was performing a much humbler task than that. So much for the limitations.

      But the clock compelled me to leave off at the point at which Marx himself had left his readers in a state of uncertainty. He had focussed the attention in volume 1...

  10. E. BEGINNINGS OF MODERN ANALYSIS
    • LECTURE 26 The Historical School (cont.)—Precursors of Change: Cournot, von Thünen, and Rae
      (pp. 249-257)

      In today’s lecture, I shall continue with the remarks that I have to make on the historical school. I talked to you yesterday about Richard Jones. I then dwelt on the two stages of the German historical school, mentioning Roscher and Knies as representative of the earlier, more acceptable, attitude, and secondly Schmoller and his school, whose point of view, from my position, is not so acceptable.

      Now the main distillation of the historical attitude can be summarised under three headings. First, they made an awful lot of fuss about the alleged assumptions of the classical school—in particular, the...

    • LECTURE 27 The Marginal Revolution (I): Jevons
      (pp. 258-267)

      Having picked up various bits and pieces with regard to precursors, we come now to the section of my lectures which could be called the marginal revolution. I won’t at this stage discuss whether it was a revolution or whether it was an orderly process of change or whether it was something in between. I think that it will be better for me to deal with that section of history, which will occupy me from now until the end of the lectures, bit by bit.

      And I want for the lectures this week to deal with the innovations in the...

    • LECTURE 28 The Marginal Revolution (II): Jevons and Menger
      (pp. 268-276)

      Last time we began an examination of Jevons and discussed his theories of utility, exchange, and labour. Looking at my notes, I think I will not say anything about his chapter on rent. It is more or less Ricardian. It contains a diagram to represent rent as a curvilinear area after the payment of wages.So far as Jevons on rent is concerned, the most important thing is in the preface to the second edition, in which he points out that John Stuart Mill had realised that, where land has more than one use in agriculture, then the value of one...

    • LECTURE 29 The Marginal Revolution (III): Costs (Wieser)—The Pricing of Factor Services (Wieser, Clark, Wicksteed)
      (pp. 277-284)

      In my last lecture I expatiated at some length on the views of Carl Menger in developing volume 1 of hisPrinciples of Economics.I expatiated at some length because I think that in a great many histories of economic thought the contribution of Carl Menger is insufficiently recognised. Partly that is due to the heaviness, but not obscurity, of his style, and, it might be argued, its undue length. But partly, I think, it is due to the failure of casual readers to appreciate how deeply Menger thought on these very fundamental subjects. I personally would ascribe to Menger...

    • LECTURE 30 Capital Theory: Böhm-Bawerk and Fisher
      (pp. 285-294)

      Now, don’t let me recapitulate what I was doing yesterday, save recalling, for those of you who weren’t present, that I was dealing with the pricing of factor services—labour, quasi rents, rents, and so on. But all that, which is, so to speak, in the second division of Walrasian rows in his ultimate model, does not in the least solve the problem of therateof interest, the capital value of existing instruments—if you like, the capitalisation of aflow of servicesin the future.

      Well now, poor old J. B. Clark regarded this as settled by regarding...

    • LECTURE 31 Walras—Pareto
      (pp. 295-302)

      Now, at last, in discussing the marginal revolution, so called, I reach the subject of Walras. He lived from 1834 to 1910, and he was Professor at Lausanne until 1892. I’ll say a few words about him later on, but unlike Menger, whose original contributions sprang from nowhere, so to speak—all that we know is that he read the standard German texts, but he doesn’t mention von Thünen and he didn’t know about Gossen—Walras had a rather distinguished ancestry. As regards Jevons, there is no doubt about Jevons’ originality, but Jevons was more of a classical economist, outside...

    • LECTURE 32 Marshall
      (pp. 303-311)

      According to my reckoning we are getting to the end of these lectures.There is another lecture on Wednesday, when I shall deal with the semimodern development of monetary theory and fluctuations, but today I want to deal with Alfred Marshall.

      Now, all the other leading participants in the so-called marginal revolution were very unkind to classical political economy as developed from Hume and Adam Smith and the nineteenth-century people. Their complaints were of various degrees of plausibility. Jevons was opposed to that wrong-headed man [i.e., Smith] and his equally wrong-headed disciple, John Stuart Mill, but this was, after all, only...

    • LECTURE 33 Money: Fisher, Marshall, Wicksell
      (pp. 312-320)

      I shall devote the greater part of this lecture, which is the last of the series, to clearing up various ambiguities connected with the place of money in the marginal revolution and in that part of early modern economic theory that I’m concerned with. If there is time, I will say a few bibliographical words on literature on fluctuation theory, but I am not quite sure that I shall reach that point and in any case it is very marginal.

      Now, the main point that I wish to bring out is that, in the course of the development which one...

  11. AFTERWORD The Further Evolution of the Subject
    (pp. 321-336)
    Steven G. Medema and Warren J. Samuels

    Lionel Robbins’ lectures on the history of economic thought were those of a master of the field. Still, they were Robbins’ lectures and not those of someone else. The history of economic thought does not write itself; it is written by historians and others, each of whom have more or less unique perspectives on the subject. These perspectives govern what is included, what is excluded, the weights assigned to various topics, and both the broad outlines and the details of the story told.

    We want, in this supplementary chapter, to give an account of the history of economic thought from...

  12. APPENDIX A ROBBINS’ READING LIST History of Economic Thought Lectures by Lord Robbins
    (pp. 337-346)
  13. APPENDIX B Robbins’ Writings in the History of Economic Thought
    (pp. 347-352)
  14. REFERENCES
    (pp. 353-370)
  15. INDEX
    (pp. 371-375)