Savitri Era of those who adore, Om Sri Aurobindo and The Mother.

Saturday, September 08, 2007

The steam engine helped to shape the modern world at least as much as Napoleon and Adam Smith

History of economic thought From Wikipedia, the free encyclopedia
It has been suggested that History of economics be merged into this article or section. (Discuss) A picture of Wall Street in 1867, a major stock trading centre in New York City
The history of economic thought deals with different thinkers and theories in the field of political economy and economics from the ancient world right up to the present day. Although the British philosopher Adam Smith is generally considered the father of economics, his ideas built upon a considerable body of work from predecessors in the eighteenth century, who in turn were grappling with wisdom received from centuries before and attempting to apply it to a modern setting. Adam Smith wrote at the beginning of unprecedented social upheaval, in what became known as the industrial revolution. For the first time in history inventions such as James Watt's steam engine, Andrew Meikle's threshing machine, new modern cotton mills and advances in coal extraction and iron manufacture meant that people could produce goods beyond those necessary for subsistence. Changes in economic thought have always accompanied changes in the economy, just as changes in economic thought have propelled change in economic policy.
Economic thought has evolved through feudalism in the Middle Ages, through mercantilist theory in the renaissance, through modern political economy during the industrial revolution, to the fractured economic schools of thought that dragged humanity into the twentieth century and a new globalised era of the twenty first. Following Adam Smith's Wealth of Nations, classical economists such as David Ricardo and John Stuart Mill examined the ways the landed, capitalist and labouring classes produced and distributed national riches. Karl Marx was then to castigate the capitalist system of exploitation and alienation he saw around him, before neo-classical economics in a new Imperial era sought to erect a more mathematically and scientifically grounded field above this politics.
After the wars of the early twentieth century, John Maynard Keynes led a reaction against governmental abstention from economic affairs, advocating interventionist fiscal policy to stimulate economic demand, growth and prosperity. But with a world divided between the capitalist first world, the communist second world, and the poor of the third world, the prevailing consensus broke down. Men like Milton Friedman and Friedrich von Hayek caught the imagination of western leaders, warning of The Road to Serfdom and socialism. With the collapse of the Soviet Union, the political scientist Francis Fukuyama proclaimed the victory for liberal democracy and an End of History. Yet the twenty first century begins and the history of economic thought continues in an increasingly globalised economy.

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