The History of Economic Thought (Economic Ideas and Thinkers)

hey everybody this is Alex Merced from Alex Merced calm this is my presentation of the history of economic thought the ideas that changed the world now the purpose of this presentation is to one introduce you to many of the names and ideas that permeate throughout the history of economics now I'm going to go over almost a hundred different economists and philosophers and other important economic thinkers throughout this presentation so in that case I'm not going to have much time to really dedicate to every single idea that each of these people contributed and to dedicate as much time as I'd like to the ideas that really make up this economic timeline more so the purpose of this presentation is to make sure that you're aware of these names but some of their main contributions were and if you find any of these names interesting to go learn about their other contributions to other areas such as philosophy mathematics etc and to get you interested in the subject of economic thought ok now there's several books that talk about the history of economic thought and here's a list of many of those books so if you want you can pause it write down some of these actually if you go to learn economics I actually go when I read 50 major economists by Stephen Pressman I actually literally did a video for each chapter as I read through the book so if you want I would recommend reading that book and you can watch those videos sort of a guide on to get my pick on a lot of those chapters and pretty much all the rest of these books are all great books many of them I've read or are going to read I'm especially looking forward to at some point getting to the clash of economic ideas by Lawrence H white and Kings versus Hayek by Nicholas Webb shot which both I haven't read yet but I'm definitely looking forward to it okay so we're set off with ancient Athens and some of the thinkers back in the Athenian era of things okay I'm going to start off but with a name a guy by the name of Zeno phone okay now Xena phone was a philosopher one of the earliest philosophers but mainly want to talk about here is that he wrote one of the earliest economic texts in existence and the focus of that text was mainly household management a lot of the earlier economic ideas were always about sort of how to manage your economic household to pay the bills save money and manage your life day to day okay and basically the premise of Xenophon's work which becomes a heavily taught tax up to a certain point talks about moderation and hard work so the idea is you work hard get what you can and make sure not to use all of it because it's not been your household will fall apart and all their Athenians and these are also famous philosophers that philosophize on all sorts of things far as the structure society et cetera include paid Plato okay and particularly his book the Republic that really talked about how society should be organized and it's in this book we really start to talk about the initial ideas about Democratic and Republican forms of government and in the heart of economics talk one of the earliest texts that talk about the idea of specialization which is the idea that if people specialize and what they're good at and everybody does what they're good at will actually have more stuff because the person who's good at making shoes will be able to make more shoes and someone who isn't and the person is but our painting we'll be able to paint more than someone who isn't so that way everyone should specialize in different tasks instead of everyone having to learn how to do everything in response to that there was politics by Aristotle okay and this this is a work by Aristotle where he criticized me and Plato's ideas especially regarding how society should be run and the different forms of government okay and this is one of the earlier texts to talk about private property rights and the incentives and being very sort of pro private property and and recognizing the role of private property in SSI functioning then we bring ourselves to the middle on the Middle Ages and the thought of the Middle Ages there's a lot of philosophers at this point economics is really isn't isn't and it's an idea where its own branch per se or own line of academic thought it's really at this point still a branch within philosophy so in the sense of people philosophizing about the way the world works and how life should be lived etc economic ideas are sort of tied up in there at this point in time ok now Thomas Aquinas who was a theologian and and did a lot to talk about sort of ethics and religion and whatnot one of the things that he talked about in an economic sense was the idea of a just price which is still an idea that permeates a lot of thinkers today in the sense that there's a price that necessarily isn't the profit-maximizing price but a price where you're maximizing the value to everybody that's also just an ethical okay and basically basic idea is you take the cost of whatever it takes to make the good plus whatever it takes to pay the people who made the good and that's pretty much it okay so this is sort of a very this is the kind of ideas that later on would take a Marxian take in a sense we're basically a surplus profit stuff like that but here they call it the just price and anything you priced above that guy's price even if it was more profitable and you were able to charge that price and people would be willing to pay it you are acting in an unjust way now in response to that was done SCOTUS who made the counter-argument they c1 arguing that determining what adjust prices is a difficult matter and in that if a person is willing to transact with you at a higher price it's just by the mere fact that it was voluntary because both parties are better off because only reason you would enter a voluntary transaction is if what you got in return was better than what you're giving up or else you would have just kept what you're had and chose not to participate in that transaction so in that case is making the argument that merchants we're sort of benefiting the people that were trading with them and at the merge class was generally a good thing and not something to be necessarily a chastise in the same with Thomas Aquinas did with his ideas of a just price then we get to mercantilism now mercantilism is a branch an early School of Economics and a school think of it as like a branch of where different economists think of a similar idea in mercantilism the idea is to acquire money okay so the idea is that you want for a country to be strong you need to make stuff and sell it to everybody else people in the country should necessarily really be eating this stuff because we need to sell to everybody else that we can accumulate a lot of money and these days it was gold so the idea is if you can accumulate up gold then you can a country can become very powerful okay so you got Thomas Mun one of the earliest mercantilist okay and basically as I mentioned before the arise that a country must export more than it imports to remain prosperous an advocate is advocated for policy pushing for gala tea and land utilisation meaning basically he wanted governments to make sure the people within the country that initially use as much stuff so we could sell more to other countries and acquire more gold and said that you know policy should also push to make sure that every piece of land is being used all the time so that way there's more stuff to sell other countries then there's Philipp von horn Nick okay you see I couldn't pronounce it as well as I'd like but he was a German supporter of mercantilism and he outlined in his work nine principles of sound economy okay which include things like being against import so basically preventing people from selling goods to your country but selling goods to other countries okay again close avoiding all and just kind of we sat with Thomas Munn hoarding gold and other recommendations so again the big theme here with mercantilism is sell a bunch of stuffs everybody else but then whatever you get don't use it to buy anything else so it's all about 40 jean-baptiste colder okay or Colbert advocated the hoarding of gold okay common theme here with the market list except he went to step farther and this is in France form gilts run many of France's major industries which stood in place until the French Revolution so the help control industry he formed sort of these think of Gil's as sort of the union's of the Middle Ages so they'd be organizations that would help a particular industry sort of organize itself and prevent outside competition so they can charge higher prices and and whatnot now what happens at a guy by the name a very mysterious guy by the name of Richard Kantian or Cantillon he mysteriously writes the first economic trees now the wife of Richard Cantillon is a very interesting one one because we don't know much about it and there's even theories about that he faked his death and the thing is that there's nothing else written by Richard Cantillon because technically he supposedly died in this fire but all of his work got burned now copies of Richard Cantillon tax would float around and influence many of the economic thinkers going forward and this was really the first time that you really have a body of text that it summarizes the entire economy as a whole and talks about everything works from bottom to top from bottom up okay and he also talks about things like you know when there's an influx of money that you don't really know where it's going to go and this becomes known as a Cantillon effect the idea is that if new money enters an economy that it'll begin to increase prices but which prices go first you don't know you'll learn that along the way and one of the things that that tax expires is the British enlightenment ok among one of the many different movements so here you have a lot of philosophers no one thought about economic ideas but ideas of liberty and freedom and this will lead to again a lot of the ideas that lead to things like the physiocrats Adam Smith etc okay here you have John Locke critique much of absolutism of Tom Hobbes so thomas hobbes said like there's a objective reality and truth and whatnot and john locke would criticize some of that those ideas okay develop the idea of the social contract so Hobbes and Locke we're both sort of in this debate about what is a social contract in different definitions of social contract and John Locke the way he kind of theorized it is people will enter this sort of social contract not for some sort of social order but more for like common defense of property so the purpose of the government should be to defend one's property and this is breaking up with ideas for that would later lend up different ideas of Taxation so remember John Locke said the idea was you should have progressive taxation the reason is if governments rolls over to protect property those with the most property should pay the most taxes because they are getting the most service but that essentially be the role that government plays or a state plays that of protecting property of those who sort of delegated it that authority and one of the considered wouldn't be grandest fathers of classical liberalism liberalism and nowadays usually would refer to classical liberalism as libertarianism vendors Dudley North who argued against mercantilist ideas and basically saying that constantly having a trade surplus wasn't necessarily a good thing meaning constantly selling stuff to other people isn't a good thing because if you're not also getting stuff then the people in the country aren't necessarily better off and talked about the benefits of free trade and government not interfering in trade to allow everybody to get the things that they want because everyone gets the things that they want and they're better off so yes you want to sell stuff but you also want to buy stuff to make your life better off and at the end of the day that's really the end goal to make your life better off and this is kind of where Dudley North was going and there's David Hume he agreed with note that trades should not be interfered with we also argued that a trade surplus would lead to an increasing golden sir-sir silver resulting in price inflation so the idea is if you're selling a lot of goods other countries you'll end up having a lot of gold entering the country and that will cause prices to push up because you have an influx of money okay so this is not necessarily a good thing because you don't want to necessarily cause an inflation so again you want balanced trade so that way there aren't necessarily a you don't want to trade deficit but you don't want to trade surplus you want balance trade so that way prices aren't necessarily being messed up along the way now human was also a major contributor if I'm more well known for a lot of his work regarding morality ethics etc then there's Francis Hutchinson who was a teacher of annasmith one of the farm who will be going into next and also he was one of the last few scholars who really teaches Xenophon's work from earlier so about household management and managing your household and hard work and moderation and all that stuff after at this point a lot of that earlier economic ideas what's gonna happen is that Adam Smith will come out with like The Wealth of Nations and the theory of multicenter sentiments and all of those will begin to become the center of economic thinking and economic is going forward because everything up to this point really kind of gets summarized in am Smith's work but before we get to Adam Smith we'll get to the physiocrats which is a French school of economics and one of the earliest like real formal schools we really had a formal group of economists that sort of associated themselves with one particular person's work and really built upon it and that person was Frank Walken a he wrote the tableau economy and the thing that made the theoretical Prats is that they had a huge thing for land okay they bought that land was the only productive asset and basically everything else was just a transformation of what land created so basically a table all you did is we took stuff that land created you know the trees I grew from the land the crops etc and transformed it into other goods so the only thing that really makes new stuff is land thus you know economic ideas should be centered around land ok and basically theorize about the productivity of land and in that product the land it says only that net product of land basically the profit or the extra profit you get after on the final goods should be taxed okay so this is not you don't tax it when you take the wood inside to the wood maker and then when then tax it again when the wood maker sells the planks of wood to the carpenter who didn't take the car takes the wood and then built a cabinet out of it it would tax it after the wood the cat the carpenter sells a cabinet because that would be the net product of the land and Robert jackster go okay he developed many of the ideas Frank what kinase we took what kanae was doing kind of went further with it he divided in his work he divided people three classes it was the landowners who owned that productive asset the agricultural class would cultivate that productive asset and a salaried class who basically got paid all along rest of the way in production and said only the new product line should be taxed okay or the net product the land and argue for economic freedom so again the the physiocrats school was also a very early proponent of classical liberalism of a freedom less government etc now we get to the classical economist so again you know you had be a work of Richard Cantillon you have the works of the physiocrats and at this point the old influence I'm Smith and M Smith writes two books The Wealth of Nations and the Theory of Moral Sentiments and the wealth of nations focus more on the benefits of trade okay and why when people are free to trade with each other people are better off while the Theory of Moral Sentiments was more about ethics and how we develop our Moral Sentiments the way we look at the world and decide what's wrong and good and really to understand i'm spent you really need to look at both works because they both are complementary and seeing Adam Smith's point of view of the world now he had other work he wrote all sorts of stuff but most people never got to see that work because before he died he asked someone when he dies just burn it because he didn't want people to see unfinished work it took him years to write the works he did put out okay he was it was quite um reclusive then you have Walter Paget okay who basically he wrote about the UK Constitution so the United Kingdom has kind of at this point when Walter Paget was alive had established its Constitution and he would write about to teach the tensions between social institutions and innovations in the sense that innovations would outpace social institutions and this would cause tension and this was kind of would be its innovation that would force society to move forward in a sense okay and he also wrote a lot about central banks which is probably what he's best known for the idea that you know he wasn't necessarily a big proponent of central banking or he was um a lot his ideas is what influence is a lot of which you call free bankers people who believe that the banking system should just be free of government intervention and basically said well in that case if you have a central bank the what you should do is that during a time of crisis central banks should lend freely under cap collateral so that means that the collateral banks can put up decent assets like good quality assets up as collateral the central bank should lend to them but they should lend to them at interest rates that are punitive meaning that that hurt okay so that way next time around you don't make the same mistakes again now how we've kept up with that sense and central bankers have they actually lent on good collateral or at punitive rates that is up for debate but it was badges ideas it sort of really set what central bankers should be doing okay helping institutions with good collateral that are just having a rough time get through but with some pain and this jeremy bentham jeremy bentham is probably most famous for developing the idea of utilitarianism meaning that the ethical choice is whatever provides the most good for the most people ok was also an atheist a prison reformer animal rights activist okay he did not like suffering okay and utilitarian ideas are still very popular and i'm to an extent um but there's still a lot of philosophical controversial controversy ality over utilitarianism because for example a common dilemma presented in philosophies like you have ten people on a boat okay but the boat will sink if all ten people stay on the boat okay now basically one person needs to be thrown off now how do you study who that person is yes during that one person off is the utility decision it maximizes the most good for those people because if all 10 people stay in the boat they all die but if one of them is thrown off then the nine survive one dies so in that scenario you've maximize good for the most amount of people but again for that individual is being thrown off the boat does that mean it's necessarily unethical for him to prevent himself from being thrown off the boat okay so these are the kind of ethical quandaries that are brought up through the idea of utilitarianism that are constantly being hashed out by philosophers and overall Jeremy Bentham was which would a lot if you ever hear someone call them themselves a technocratic mightest they would probably be very big into utilitarianism meaning they're not initially stuck on any particular set of policies or way the world has to work they just want the world to work whatever way it takes to make it the best work for the most amount of people most of the time that would be sort of your typical technocratic pragmatist trying to just make it work for everybody as much as possible despite any ethical conflicts otherwise then there's gene Baptist Baptist say he developed C's law the idea is a production equals a man so there cannot be a clevis apply what it really means is that supply creates his own demand so if I make something people will eventually want it I just gotta find the price that some will wanted that so in that case there can never be too much stuff it's just maybe there's too much stuff at too high a price okay and believe in the neutrality of money so this is one of the first people really talk about the neutrality of money the idea behind the neutrality of money is that the quantity of money doesn't matter if there's more money prices will just go up if there's less money prices will just go down so in itself the quantity of money doesn't matter at least to anyone who believes neutrality of money again that's still to this day one of those ideas that economists argue heavily about Thomas Malthus Thomas Malthus was an economist who was very pessimistic let's put it that way what he believed is that the economy can never or human condition can never approve why because even when humanity can figure out a way to become prosperous what will happen is that this will lead to more leisure time and more leisure time will lead to more child-rearing so then there'll be more people and then the extra stuff that you got from being more prosperous is now gone because you got so many extra people and this made more sense during thomas malthus's time because technology wasn't advancing as quick as it is now so in this case it was very visible to see that people would always stay with this cold subsistence which means making just enough to get by okay and things would only improve for short periods of time and then go back to where they were now as time has gone on the growth of innovation technology has now for the most part heavily outpaced population growth and the trend back to subsistence so a lot of Malthus ideas are a lot more in contention but because of that he at that time he advocated basically it was against welfare because he felt that if the government assisted the poor then they would have more kids so you didn't want them this is the poor but he also thought he also believed the protectionism that the government should try to make sure that people within that country are doing well even if it's at the cost of other people's countries because again either the people in your country do well or everybody suffers okay so you might as well at least do the best you can for the people within your borders okay any critique says law okay and was his critique assay his law that would be the impetus for people like Keynes and and lots of others down the road like Thomas Malthus was a one of the many big fingers that influenced Keynes in the way he thinks as when we talk about John Maynard Keynes on the road David Ricardo he developed the idea of theory of comparative advantage okay this is the idea of not absolute advantage so absolute Vantage would be the person who who had who absolutely has the best ability to build X good should build it comparative advantages every country should or everyone should always focus on making what they can make the best okay because if you can make it the best then you can make it you can make a little bit more which means will be more available for everybody and if all countries traded with each other and they freely traded with each other and made what they were best at there'd be more for everybody he also developed a theory of rents which is the idea that as land gets cultivated rents will be pushed up and that will call create an incentive to cultivate the lower yielding land so basically land that's not so good will begin the rent bond it will be so low compared to the raising rents on developed land that people will then pay the developer the the the lower yielding land so overall as friends go up the rents of all lands go up because as rents go up in the top land people will call the way the lower land low raising that rent as well John Stuart Mill okay for the most part he wrote one of the textbooks that was really used um as the primary economic introductory economic textbook up until Paul Samuelson wrote his textbook I think his sex book was called principles and F economics most economic intro economics textbooks are called principles of economics but particularly Paul Samuel insec Paul Samuelson's textbook becomes a new primary textbook but up it before then John Stuart Mill's textbook was the primary one he's one of the first people to talk about supply and demand his ideas and opportunity costs okay so again supply meaning the amount of goods that are available demand the amount that people want those Goods and opportunity costs which you give up by making a decision so for example if I choose to go right if I have a choice between going right and left and I choose to go right my opportunity cost is anything I would have gone and if I had went left okay so they cost the choice you didn't make okay then there's Marxism now what happens that Karl Marx is up ends up on the scene and he ends up talking about economic ideas and criticizing what's known as capital well he terms is capitalism the term capitalism was actually made by Marx and was actually a pejorative term meaning a negative term for free markets per se and he would argue that yes free markets and free trade does increase the speed of innovation and will improve people's quality of lives for a period of time but over time that there would be people who would sort of own all capital like who would own all the factories on all the company's own everything worth owning okay and they'll be to the point where basically people who work for them have to work for a lot less than necessarily what they're contributing to the process of production and this difference would be called exploitation so he's saying is people their true basically the people are being paid less in their contribution they're being exploited now how do you actually really come up with that how much that contribution really is that's an economic debate as long as the day longer the day but he was also a big fan of Hegel who was a philosopher and Hegel will always talk about conflicts and how change is brought in through conflict so as time goes on conflicts arise and from that conflict something new so he would talk about how eventually capitalism would lead to two classes the the capitalist class to the people who owned the factories who owned business the titans of industry and the labor class which are the people who work for them and eventually the exploitation we get so bad that there'd be a conflict between these two classes and the resulting society that that ban welches that conflict is socialism okay and again Marx went into some detail but I'm going to didn't fill in all the blanks about what he meant by communism and socialism and all that stuff this would be a lot of people would end up trying to fill those blanks like Lenin Mao Stalin etc of Castro later on ok and this day there's people who are still trying to sort of take the ideas that Marx laid out and take them further okay and at this point you're still using what's called the labor or he established was called the labor theory of value the idea is that Labor's a pretty big component it's not most of what the value of a good ok and it's later on you'll see that we kind of get away from that it's really at the marginal marginal revolution later on when you're come up coming up with karl menger subjective value theory they really begin moving away from that labor theory of value ok which what happens next okay now the marginal revolution what happened here is you have three different economists all come up with the idea of marginal analysis at the same time ok now the idea behind marginal analysis is that you don't treat all units as uniform good so for example the value of every slice of pizza or one piece of pizza is not the same I'm going to enjoy the first slice of pizza a lot the second slice of pizza I'm still going to enjoy but probably not as much as the first slice of pizza so even though they're the identical good the value that provide me is different ok and then maybe the third slice of pizza I will very enjoy but and the fourth pizza I've now eaten too much and now I have a negative utility or negative benefit from eating that size of pizza so that would be sort of a basic marginal analysis but anytime you take any sort of economic concept and sit there and say okay well we add one more that a good is that still a good thing or is that now a bad thing that's marginal analysis so three again three economists came up with this whole idea of marginal analysis at the same time it was Li Lian vol Ross okay was ruined three economists that discovered the theory of marginal utility at the same period of time he was father of what's called the loose and school of thought okay and basically this is a very mathematics focused School of Economics okay and he was the originator of what's called general equilibrium theory this is the idea that prices trend towards a equilibrium price so the way this would work is for example if I'm selling bananas and I said the bananas at a X price okay if if the price is too high what's gonna happen is that no one's gonna buy the bananas we'll end up with too many bananas I'll have a surplus so next time I'll lower the price now if I lower the price too much I'll sell out of the bananas too fast and I still have a bunch of people who want bananas I'll have a shortage so through this sort of trial and error process the economy gets to equilibrium the other way you can get there's to an auction because a lot of people who are bringing high people are bidding low and eventually you'll find that the clearing price at which which in auction clears okay but either way prices trend towards equilibrium okay and he got into a lot of trying to mathematically figure out how you get there then those calm anger was sort of the founder of the Austrian School of Economics now his major contribution is probably to me one of the most important contributions in all of economics is the idea of subjective value the idea that there is like a PSI C Pizza has no objective value it's what I think it's worth it's what it's worth to me okay so for you might think that pizzas worth five bucks I think it's only worth three bucks okay so when I try to sell to you for three-fifty you're more than glad to pay it and I'm more than glad to sell it to you because I'm selling it to you for more that I think it's worth and you're buying it for less than I and you think it's worth so we both win okay and that's an important idea because that solves a lot of the conundrums about why things like diamonds which have no real practical use would be worth more than something like bread which has you know you needed to survive the most part okay so that was a major major breakthrough then Louis Stanley Jevons okay well also develop marginal ideas and again same thing he was the father of the Cambridge School of Economics again many economy is also developing on the ideas of Stanley Jevons in particular and he develop what's called the Jevons paradox okay the idea that increased efficiency leads to increased use this is an idea that's very important to environmental economics in the sense that for example you develop a more fuel-efficient car well that means you don't you won't use as much gas to travel a farther distance so people actually end up driving more because they can drive loop they'll go on more road trips since it's cheaper to go on a road trip okay and you'll actually end up with much more car use or at the same time it'll be much more affordable to have a car so people will who wouldn't have had a car otherwise will begin having cars and basically increase efficiency extra results and increase use of the good that's what's the Jevons paradox he also created one of the first or the first business cycle theory which is based on sunspots ad that the Sun moves around and will affect crop yields and that's sort of what affects the business cycle so when the Sun is in the right place and you have huge crop yields that will lead to the boom but then when the sun's on the other a different place and crop yields are low you end up with the bust so now we'll take a look at the three each of these economists of the marginal revolution of all ross Menger and Jevons each of them sort of started at school of economic thought that came out after them so we'll discuss each of these a little bit so first it was a loose and school again after leon walras these ideas and they again a lot of these economists really focus on math and developing mathematical ideas etc those feel fret the fredo Pareto okay he develop the idea of Pareto optimality this is the idea that when the economy's in a condition where no person okay can be made worse off without making somebody else worse off that's Pareto optimal so if you're in a situation and you can make someone better off and everybody's better off then you're not a Pareto optimality yet okay you're a Pareto optimality once again you're as good as you can get the only way I can make X person better by making Y person worse he criticized democracy and argue for a minimal state to limit the power of any emergent ruling class he was very afraid that you know the democratic process would get usurped corrupted etc and a lot of people thought of him as a totalitarian for criticizing democracy wadn't but again more he was criticizing the ability for democracy to stay to maintain its integrity over time okay and those are generally things that pan out bars so if the most part I think that spanned out the vienna austrian school okay one for those who know me as a libertarian and economics junkie i am a big fan of the austrian school let's talk about this again they dis developed on congress work now the next economist online is a guy by the name of you you can buy bought work and this guy is extremely important because there's really two things that he really contributes one is it the capital theory basically the idea here is is mostly focusing on the roundabouts nests at the structure of production so the idea is as innovation happens people get further and further away so for example if i wanted to create a chair okay if I had to actually cut down the tree take make the wood and then make a chair that would be much more difficult okay we take me it's a much simpler process of production but it's much more difficult and it's a lot less efficient now as the product the production process gets more complex it actually gets more efficient okay at the longer the chain goes because what if you had this process instead of someone just cutting down wood turning and then just turn the wood into a chair someone had to cut down the wood send it to a plant they get processed and they said where they sat down on top of the you know uniform size blocks and then they had to ship it over to a warehouse and where the manufacturer then sell it in different stores called Home Depot and you would go there you would actually probably actually a little buy the wood for a lot cheaper it's a much more efficient process so it's the more round about the production process gets the the more efficient it gets and the more yield you get okay also he introduced the idea of into important thinking so we're talking about how the economy doesn't necessarily it's not always talking about what's the economy doing now so a lot of times the condoms will talk about if something is not being used now then that's a problem but you take the way you get my bar work and how Austrians from here on out if someone decides not to use something right now maybe it's because they want to use it sometime in the future if you're thinking about how the economy allocates those resources over time and that's a very important contribution to the way we think about economics you also criticized a lot of the ideas and Marx okay so boom our extremely made extreme contributions to the field of economics and sometimes a lot of people feel that his work is very underappreciated if you're an economic student you should definitely go back and read some of his work it's some pretty insightful stuff and those friedrich von wieser okay and he began the economic calculation debate this was the debate with socialist or Marxist about King socialism work but instead of making the incentive debate which was the argument that in a communist world that wasn't incentive for people to work they were making the argument that a capitalist a communist society since they don't have market prices because everything is sort of centrally planned that they won't have the information to figure out how much of x and y and z good to make so thus socialism couldn't work now also participating in this debate was Ludwig von Mises and FA Hayek who made important contributions in this debate with socialism and again the focus of this debate is the importance of prices and how prices act as a transmission mechanism so that way people in the economy know how much to make what to make etcetera he also stressed the importance of entrepreneurs and was a lot of his work on entrepreneurs at joseph schumpeter would take on and sort of develop from there and he coined the term opportunity cost so the first time the actual term opportunity cost was used really by feed Rick one visa then is Joseph Schumpeter now Joseph Schumpeter is probably with the most famous of the Vienna School and basically he continued the work of entrepreneurs Donna how entrepreneurs really drive the economy and this is where you get the term creative instruction he talked about innovation as a dis equilibria this équilibre ting force meaning in the sense that an economy trends towards equilibrium as we talked about before but eventually once it hits equilibrium it kinda me kind of stagnates it doesn't go any further because it's at equilibrium so an innovation or some sort of technological innovation process innovation something of that sort but it does it throws a whole thing out of whack okay and what happens now the economy has to find a new equilibrium so this is which means certain businesses can't exist new businesses have to arise and this is what's called the creative destruction as we create new technologies they destroy old businesses and new businesses are we in their wake and that's how society actually progresses okay so the society transfers equilibrium but you need to disturb that equilibrium through innovation to sort of move forward and then you get some interesting ideas on business cycles you took a lot of different ideas that other people have done on business cycles and started saying you know what maybe there isn't one business cycle may there's a lot of several different cycles that occur at different frequencies for different reasons and create a taxonomy saying there's like short term I think the short term ones with the jubler cycles and the really really long ones that were the congrat equate what they would call a kondratyev wave and this we have to do with technology and huge spurts of innovation I use a critic of Keynes pretty much everyone in the Vienna school all were big fans of critiquing Marx and Cannes and he theorized Schumpeter that capitalism would also die in the same way that Marx did the difference is it wasn't because it was a conflict should bethe theorize then what happens that capitalism would be so successful that people would have so much leisure time that you'd have a bunch of academics sitting around would find ways to complain about capitalism and that would be the end of it because they people would sit there and consume their work and they would be convinced that capitalism is a bad idea and they'll try something else – everyone's detriment ok that's Joseph Schumpeter he's a fairly interesting guy he's had some funny quotes there's one about about him and a horse that I can't really remember right now but it's pretty funny look it up luis von Mises okay another really really fascinating economists who contribute a whole lot he helped develop what's called the Austrian business cycle theory basic idea is this you expand credit so if usually through an expansion of the money supply but now there's more credit than naturally would be because usually credit meaning being able to borrow money from the bank we just come from people saving but if it comes from because you just gave the bank's free money because you printed more money what happens is that the interest rate or the level of credit the economy doesn't reflect the actual amount of savings in the economy and this causes entrepreneurs and investors to put or to allocate their funds so they'll miss allocate or mal invest their funds in the wrong projects usually taking on sort of a longer term investment project something like putting on an expansion to a restaurant or building a house or starting a whole new sort of chain of business and they put the money towards the wrong investment now since their long-term investments it'll take a long time before you realize it's the wrong place to put it meanwhile you in the moment that you're employing those assets you're in poop you're employing people etc and this causes a boom in the economy and the economy seems a lot bigger than it is but when it turns out a lot of those projects that fuel that growth weren't sustainable you end up having a bust on the other side okay he also wrote the economic treatise another book they sort of explained the economy from head to toe called human action okay it's a pretty big tome and it's a pretty intense read since it was translated but it's it's definitely worth your time if you ever want to give it a shot it was a major critic of socialism okay any contribute to the economic calculation debate as we mentioned earlier he also founded the mounted Pelerin society with Hayek popper Stealer and Milton Friedman okay which is basically the Society of like economists that really try to push the ideas of free markets and free people you know classical liberalism then there's FA Hayek Friedrich von Hayek now he helped develop even further the week of the work of the Austrian business cycle theory that Mesa started and his would he did he would discuss the natural rate of interest and its effect on the structure of production and basically the idea is that if government policy pushed the prevailing interest rates below what would naturally be there the national interest rate this would create the same phenomena of malinvestment that we discussed in the previous section some of the important terms that are really contributed by Hayek with terms like spontaneous order or emergent order the idea that you don't need people to centrally plan a society or to make society work to have order that order just naturally emerging people just naturally organize themselves okay and this is um visible in the way free markets and take a look a look at any industry and how things have occurred like no one had to organize a cell phone industry for it to turn out the way it did most interest is how the way it did and other examples is like in England they took out all the road signs and some towns somewhere and what happened is that you instead of having more access you're she had less accidents because people just started coordinating with each other more and he developed a lot of live um philosophical work on liberalism and on choice like the constitution of Liberty he did a lot of work on legal system and law and how loss should be so he was a very prolific writer wrote a lot of good stuff and again you have the time she's definitely I was work then there's the Cambridge school okay you have Alfred Marshall he was the first person to really create a supply and demand curve chart so those little charts you learn when you first get into economics you can think Alfred Marshall for that so basically all the graphing and all that stuff was really sort of things to Alfred Marshall he's a kind of guy got that all started and and again his books are pretty important when it comes to general equilibrium analysis so again I came from vol Ross and Jevons and all that stuff okay then you had Cecil P GU now pickles really famous for his ideas regarding externalities now externalities if you're not familiar with them or the effects on third parties of your action so for example a negative externality would be like if I decide not to take a shower and I go on the train and everyone has a much worse ride because of my choice that would be a negative externality they have no choice of their own suffered a positive externality is if I took a good a really good thorough shower and everyone enjoyed that I smelled very good while I was on the train and I made their trip much more pleasant for it okay I'm basic Cecil Pegu was the government should penalize negative externalities by taxing them and should subsidize positive externalities by either subsidies or tax cuts or etc okay this is these are very popular ideas and a lot of his work is extremely instrumental natives of like welfare environmental economics where externalities play a big role too the idea is that you know you have a positive externality out of helping the poor because if the poor don't get so desperate there'll be less crime okay or there's a positive externality out of helping the environment because in people who have less health problems due to the environment so you have those positive externalities and the government should subsidize those that's sort of the argument in welfare and environmental economics later on an economist by Ronald Coase who I mentioned much further on he sort of criticizes that you're saying it's not necessarily always the best choice to forgotten to get involved by subsidizing and penalizing maybe it's good to just let the negative and positive externalities work themselves out actually because then people will come up with sort of interesting new ways that we might not have thought of to deal with those things okay now here's a couple other economies that you should be aware of during this period of time such as Irving Fisher now Irving Fisher probably most famous for for his theory of debt deflation okay this is the idea that the reason the economy falls down or has a bust it's because it's accumulated too much debt and what happens is that as people decide to start paying down that debt that causes less activity which causes drops and asset prices which causes more debt problems and you end up with what's called the deflationary spiral it was also the originator of the equation of exchange which is MV equals P Q which stands for the money supply times Volvo the velocity of money meaning the amount of times that the money kind of moves around equals the price of all goods sold times the quantity of all goods sold okay and this really didn't go anywhere with Irving Fisher but later on Milton Friedman kind of brings her back and it becomes a mo mean Li associated with Milton Friedman and monetarism john maynard keynes probably one of the most influential if not the most influential economist the last hundred years okay and probably there's two economists that every undergraduate will learn about before they graduate it'll be adam smith and john maynard keynes so it's probably the two names they walk away from he is what's the fee is the father of what's called the Keynesian school of economics he coined terms like the paradox of thrift which is the idea not that it's bad to save i think it's a misconception but the idea is that if everybody saves at the same time that that would be a bad thing if everybody was prudent at the same time was basically his point it would be a bad thing because if all of us were stopped spending money then there would be no one to there be no transactions it kind of would literally just halt the economy depends on there being savers and spenders because for people to save there has to be someone spending money with them and he also talked about liquidity traps these were times when if you were to print the money to get the economy out of a glut so the idea is that if people the economy was uncompetitive because people were getting paid too much it's kind of hard to give them a pay cut so one way you can give a pay cut without asking them is to print more money and cause inflation so then their pay is worth less and that can make the economy competitive again the problem is if people don't spend that money that you print to push prices up then you don't get the inflation you need to get the economy competitive again so when you have a situation like that that's what Keynes would refer to as a liquidity trap and argue that government should be sort of actively spending in all of that then there's Simon Kuznets Simon Kuznets came up with some pretty interesting things such as he's the guy who actually developed national income accounting so numbers like GDP GNP that we use today in economics were designed by him originally 1934 it was also the originator of an idea called the coos knits curve and basically the Kuznetsov as he originally formulated it was more about inequality in the sense that a country will develop at first inequality will will increase as the cut as the economy develops because you have a lot more risk-taking and you have a lot more institutions that are just developing and people have access to those institutions but as the economy develops it the inequality will begin to decrease because then people have much more power to start asking for more and it'll just naturally you know go around people have tried to apply this to like environmental economics and the same idea saying that you know the environment will get worse before it gets better so in the economy develops you'll have a worse environment but then as the kind of really developed people begin to buy things that are much more environmentally safer and you'll have sort of the opposite turn around then there's GfK map or nape he was a father what's called the Chartists school of economics which is no not now commonly known as the modern monetary theory and he wrote a book called estate theory of money so if you're not familiar with what modern monetary theory is basically if you ever hear someone say deficits don't matter I mean I mean really hardcore really think that printing money is just not a problem it's these guys basic idea is they were did not like the idea of a gold standard because they what they wrote about was paper money in the sense that government printing money and saying this is the money this is what you have to use and as long as people use it and the reason they will use it is because you're taxing them so long as you tax them and say they have to use that money to pay their taxes then they're going to be a demand so that pieces of paper and long as that's the case you can print as much paper as you want to make sure that the government can spend all the money that wants and deficits aren't a problem instead um if if inflation starts become a problem you just tax more because then there'll be a increase in the demand for that those pieces of paper to offset the increase in supply of those pieces of paper so that's the basic idea of modern monetary theory okay I'm not an expert in that field but that should give you a sample what people like gf can app here was saying now first let's talk about the KD the first round of Keynesian you have Joan Robinson one of the earliest developers of what is called post-keynesian economics she's also the mother of a field called feminist economics a lot of her work is used by a lot of economic development economic ideas about the role of sort of woman in the economy and what reduces that role increases that role etc I she coined the term monopsony to describe a market with a single buyer instead of a term monopoly which is a single seller so if there's only one cellphone seller they'll be able to raise a price well then you have the opposite a monopsony if you only have a single buyer they can force the price to be lower okay because the only person will buy you can buy from you and she helped develop a lot of the long run and growth theories based on the work of Kane so basically taking Keynes will work which was mainly focused on sort of that how to get employment going on in the short run and in imposing those are more long-run theories then there was Piero Safra okay who critique the val who could cheat the value about the value theory back today so again remember value theory was the main theory back in the classical economists economists and Marx that focus a lot on Labour's contribution and the work put in and the value of it and he critique that and also synopsis uh helped rethink a lot of the work of David Ricardo and create a school of economics called neo Ricardian z– okay but he's mainly considered to be a post-keynesian now he was an early collaborate with Keynes in the general theory but he withdrew because there was a lot of stuff that in there that he'd miss and he didn't necessarily agree with Keynes on but it was Keynes who really brought him to Cambridge okay because Keynes was uh impressed because he correspondent with Graham she who's a philosopher one of him have him around Pierrot Safra also critiqued Hayek and his theory of the business cycle basically taking the idea of the natural interest rate saying that if there really was a natural interest rate that there wouldn't just be one natural interest rate that there would be many for different goods and services etc so in that case how would you know if the government's necessarily pushing it gift pushing interest rates below every industry's natural interest rate it may only be pushing it down below some etc cetera cetera okay but mainly for his rethinking of the work of Ricardo is what Piero safra's mainly known for then there's Michael kolecki okay and again hit a lot of like people like Michael kolecki and Hyman Minsky who I'll be mentioning later on these people have suddenly made sort of resurgence and economic thought after the crisis among much more like sort of left-wing economists but Michael X was very focused on the political process and how it affected economic calculation he also did a lot of math to illustrate ideas of sort of income inequality and income distribution and stuff like that a lot of his ideas actually preceded Keynes in many ways lot of stuff like Keynes said Michael kolecki kind of said first the problem is he was a Polish economist and he wrote in Polish while came to wrote in English which was a much more used language so Keynes became much more associated it's kinda like the difference between y luego Juan Mises became not as famous as Hayek because Hayek's work was translated much earlier than louie von Mises work okay cool then there's Hyman Minsky most of his work is was an American economist most of his work focus on financial instability in crisis he basically theorized the economy would always be fluctuating between robustness meaning very good strength you know nothing can hurt it and then something will change and now it'll become unstable so we focused would be fluctuating between robustness and instability and mainly the reason this happened was because of that how could it be a huge accumulation of private debt because what happened is that begins to grow it becomes more profitable to carry more debt and private firms and private households will begin to carry more debt to buy things and it will cause such an overhang of debt that the economy kind of hits sort of this gridlock period and has to hit this period where they have to pay that down and that's sort of the period of instability okay and that moment when you switch over from a very strong economy to that really weak that ridden economy is what's called a Minsky moment okay when 2008 and the economy collapse a lot of people refer to that as a Minsky moment and because of that Minsky said you know what the government needs to regulate the accumulation of debt make sure the private households and private industry doesn't ever accumulate too much debt so you don't have these Minsky moments in this Nicholas Kaldor he developed all sorts of contributions in economics like the Caldor Hicks efficiency model it's basically Pareto efficiency light which means that instead of saying the point where everyone you can't make someone better off you can't make so proto efficiency was the point where you can't make anyone better off without making someone worse off from Kaldor Hicks efficiency is the point where you where you can't make people better off more than you would make someone else worse off okay so long as you feel to make someone else worse off long as you made everyone else better off more it was still a fish Kaldor Hicks efficient okay and he developed caldor's growth laws which basically the summarizes this is more manufacturing is good okay developed circular cumulative causation this is the idea that trying to mathematically model when one thing changes another which causes changing and something else and you have and then that causes a change in the original thing you just end up having this sort of a cumulative effect of change so in the sense of a doesn't just change B but then because a changed B it also changes C which changes D and then D changes a again that kind of thing okay you work with that with uh an economist named by Gunnar Myrdal which if I remember I think he won the Nobel Prize gonna read all at the same time Hayek did and he also coined the term conveniency oh this was referring to futures markets and the mount you would pay extra the pay by something in the future and the the yield of it then this paul davidson he was a founder of the Journal of post-keynesian economics and this is sort of the publication sort of define who the post-keynesian is were the people who wrote for that where well the post-keynesian were considered sort of the more closest to Keynes his original work of all the different schools of Keynesian in this area the me okay means New Keynesian and post-keynesian okay I think in this presentation I only mentioned the post-keynesian by name even though I will go over some neo-keynesian and New Keynesian throughout the presentation I just don't point them out but I'll point them out five-member oceans they were okay and he's a leading he's still leading proponent of post-keynesian is in America he still out there interviewing teaching etc so he's still around then does John Hicks John Hicks developed the is-lm model which is very part which is very heavily used in Keynesian macroeconomics to this day which is sort of the investment minus savings divided by liquidity preference – money supply okay you would create this curve where you'd have one line that represented investment and savings and you'd have another line that represented they put any preference and money supply and you'd see what they would cross okay would also be referred to as a Keynesian cross so if you ever heard a lecture by economists may Roger garish anyways talks about Keynesian crosses and Hayekian triangles referring to all these different curves and stuff you could probably find that lecture by Roger garrison somewhere on youtube so just look up roger garrison on youtube okay he also developed a theory of consumer demand theory or he developed consumer demand theory in microeconomics basically taking a lot of that the man macro ideas that Keynes put out and start looking at sort of micro changes of consumer demand and how to share creating micro foundations or or a micro level of ideas explain why on the Mac things happen then there's institutional economics okay and what institutional economics did instead of looking at like government policy and the overall economies are focusing on different institutions okay and then at this point the term institution is being used very fuzzy it's kind of like abstractions that are part of society that sort of have an effect on how society works okay so just as corporations churches schools etc and these economies would focus on these different institutions and focus more on them and focusing on government and private business person um in a more macroeconomic kind of way now sort of the father of institutional economics was Thorstein Veblen or Thorstein Veblen because he wrote a book called the theory of the leisure class and he also wrote he coined the term conspicuous consumption this is the idea that people buy stuff not because they needed or wanted or whatever but because they want to show it off so people who buy really expensive cars to show off okay and he said this was sort of a sign of inefficiency and proved that the economy's not necessarily always working efficient and generally he was sort of against that kind of thing he also wrote a theory of business enterprise which discussed how business will you know attempt to monopolize and expand credit for their own protection so that way you know the ideas if they owe more money they're more likely to be protected by financial institutions also they can borrow to prevent to grow faster than their competitors so that way they have a stronger foothold in the market and this will lead to expanding militarism and war for a variety of reasons well because some of these businesses will try to develop military contracts to get more market share all the different reasons but the idea is this argument was if you allow this trend to Jessore the circle to continue you just end up in a war state then there's a Toph pearl ok he's very fascinating the sense that he was the first guy to really sit there and talk about how a corporation is structured and talk about the idea of corporate governance saying you know how a corporation works or how is it defined by the law has an effect on how well it serves the economy ok and you would talk about you know a lot of reforms that should be made the corporations in order to make career corporations don't become a parasite to the economy as a whole this has become a whole field of academic research and discussing you know if a CEO is paid this much but where the incentive the CEO and how does it change their behavior and their success rates etc the board directors has these abilities if if you structure securities in this way basically idea is depending on how you structure the chain of command of a corporation how do you end up with different levels of risk-taking by the corporation or a lack of risk-taking by the corporation etc ok and that all started with Adolf Berle then this is John Dewey John Dewey was actually a philosopher not an economist but what it's important here when it comes to institutional economics is his work on education he was a big proponent of democracy and basically believed that only way a democracy can work is that people were more educated because more educated people will mean a much more they'll be more active politically which will mean the markets can work better if people were to get stupid well then plot the market doesn't work if you went to stupid people voting you don't get the same sort of accountability so he was a very big on public education to the sake of trying to make sure that the at the average level of intelligence the population was higher so that way politicians would be held more accountable uh to the median ACT intellect of people ok which will lead to a less oppressive government which is good for the economy and people as a whole ok and a lot of that work would influence a lot of institutional economists in this Clarence iers used develop what's known as a Texas school of institutional economics and he didn't focus so much institutions whether they focused on the role of technology and you can kind of think of technology as an institution but as I mentioned earlier the idea that technology progressed faster than social change so and how we talked about Badgett talking about sort of social tensions caused by technology Clarence I really took that a step further and really talked about you know it's technology that pushes society forward and really formalized that idea John Kenneth Galbraith okay this guy was a firebrand um basically his deal was that big business that we don't live in a world where you have sort of small businesses to use the old economic ideas you don't have a world of big multinational corporations and at this point they know peep the consumer is no longer in the dry in the driver's seat that corporations can now control through their massive amount of marketing dollars and political influence how can consumers behave because they can put together enough marketing and marketing messages to get people to consume their goods even if it's in their best interest they don't value it and change your behavior and also to prevent their competition by using government to protect themselves okay so he started arguing for something called social democracy or basically you start using government to limit the power of these big businesses more so that way they can't so these are things like you would prepare proponent things like campaign finance reforms or corporations can't directly financially corrupt the political system also limitations on advertising and marketing so that way the the messages that are sent out to the average person are limited to the ik so that way to limit the direct influence of corporations on how society works this is still a very very popular idea in politics among the left and he's still a major thought even though and his son a James Kenneth Galbraith is still a major thought leader among sort of left-wing thinking okay now that was kind of gone to the history of economics the most part again there's a lot of economists that I wish I could spend more time on some that I didn't even give a slide to because I just were you know this presentations by the end up being over an hour but now we're to go over modern economies economists were working now some of them might have recently passed away but we're working now that I have important ideas and you should be aware of and probably check out their work so you have Milton Friedman he passed away in the 90s he was a father of a school called monetarism and basically focus here is the money supply and how the money supply is effect on prices in the economy okay and he was founder of the mantra School of Economics he's also one of the major libertarian thinkers the 20th century constantly promoting the ideas of Liberty and sort of freedom and free markets and all that stuff he wasn't he was again central banks but he was also against the gold standard he basically wanted a world of floating exchange rates or basically the values of a country's currency would be valued in markets for that currency and far as money supply growth he wanted a rule-based my supply growth so that way you didn't have people using put with political influence making decisions about money supply that the money supply would grow at a set rate that would somehow be keyed into productivity then you had Robert Mandel who's probably the father what's called supply-side economics okay which really focuses on lower taxes idea being lower taxes equals more capital for investment which would lead to more and more investment leads to more businesses which leads to more stuff better prices and also will lead to innovations and and a progress of society mainly in particular top tax rate and the reason why supply siders focus on the top tax rate is because the idea is that investment comes from capital and that capital technically comes from savings because a bank doesn't lends you out the money people saved and the people most likely to save are the richest people if you were lower taxes on the poor people per say they're not going to save them and if I gonna spend it right away because they haven't necessarily bought everything they need this year but if you LIF taxes let's say 1% on someone who's fabulously wealthy they aren't really going to change your behavior that year they probably bought what they were going to buy anyways that extra money instead will just go be invested and go into the capital markets which means it'll be used to help start more businesses okay he also is a big a proponent of optimal currency zone so basically talking about how big a space and politically would you need for this would be best for just one single currency it was a lot of this work that led to the creation of the euro in the euro zone okay and he also predicted before it actually happened this actually happened that leaving the Bretton Woods system which was a monetary system that we had sort of in the mid 20th century that we went off with went off during the Nixon era that it would lead to salvation and salvation just means high inflation and high unemployment at the same time okay to to to to to our laughter was apply the most popular supply-side economist he was very famous under Reagan and also very famous for creating something called the laughs or her which was a sort of an illustration saying that at 0% taxes government will collect no revenue at a hundred percent tax rate the government collect no revenue because no one will work so that means the ideal tax rate where the government will derive the most revenue has to be somewhere in between and the idea of the point of making this observation was that they were making the argument the time because this is before Reagan Reagan was making the argument to lower taxes so this is in the mid 80s early 80s that if you can lower the tax rate just a little bit more the government could generate more revenue okay Paul Krugman now we're getting to some of the more modern Keynesian he was a Nobel Prize winner new york times calling this probably the most well known Keynesian today okay and he recently wrote the book and his depression now he's won prizes for a lot of his work on recessions and oppressions particularly like on the japanese with some referred to as the lost decade and things like that then there's joseph stiglitz also in a Nobel Prize winner for his ideas of information asymmetry this is the idea that when you're taking a look at Perfect's or thinking about economics in the abstract we're always kind of assuming that everybody has access to information about their buying decisions okay so we'll say well the person if they knew you know if they don't like this then they just won't buy that but what if they don't know that that's a problem okay and if one person knows has more access to information than the other person can they take advantage of that and that's sort of the idea behind information asymmetry is where basically what cichlids are saying is that the government you get involved in trying to make sure there's more information available for people so that way you can less they're less likely be taken advantage of because they can access that information he worked on the clean administration recently wrote the book the price of inequality while I'm technically on the opposing point of view of Keynesian and whatnot personally I did think that the price of inequality was actually a really good book and I really enjoyed it he made some really thought-provoking argument in that book and I did videos on that and Paul Krugman's book just going over the different chapters and my thoughts on them so if I would recommend reading the books but you can also watch my videos as sort of a companion to reading the books John Kenneth Galbraith he's also a modern Keynesian he's the son of John Kenneth Galbraith but he's also a big proponent of modern monetary theory but formally was known as journalism okay and you'll hear I wanted to be talking about how basically government can spend as much money as a wants and usually with my jaw dropped down to the ground okay he's also a big proponent of actually lowering the retirement age so while most economists are saying that it's time to make sure that the Social Security system doesn't go bankrupt that we should raise the retirement age he makes the opposite argument making the argument that if you lower the retirement age there will be more people who retire which will free up a demand for labor because those people will need people to replace their jobs and at the same time more people spending the money from the Social Security will also create more buyers of stuff and a more uh new new buyers which will get the economy going so his argument that lowering the retirement age would actually help more than it would hurt okay and that even if there's deficits he doesn't have to worry because again Dharma can just print out as much money as it wants long as a tax off basically the MMT point of view mark Toma another Keynesian the fellow the Century Foundation he's an economy trician he puts a lot of it puts out all his classes I think on YouTube I've watched him a couple times and you'll learn a lot of stuff you know a lot of math stuff so he shows the other formulas work with Ma the monetary theory in stuff like that he's a popular economic blogger see blogs all over the place and again you can check him out on YouTube he's always posting on there you can follow him on Twitter always pointing out interesting economic articles but he's a fairly well regarded Keynesian in the modern day Steve Keen from Australia he's an Australian post-keynesian economists who's become sort of a very big figure among left-wing Keynesian uh basically what he's done is that he's taking a lot of the work of Hyman Minsky and Irving Fisher that we talked about earlier and helped to try to combine that work into a theory of you know sort of how debt creates business cycles and stuff like that Kenny wrote a book called debunking economics where he critiqued the neoclassical school of economics now the neoclassical school I won't mention it directly throughout the presentation it's just basically what's considered mainstream economics nowadays it's just basically classical economics except you replace sort of it's like Adam Smith but you throw in all the stuff in the marginal revolution some of the math stuff the general equilibrium analysis stuff and then you just kind of pick the best of all worlds and with the assumption that all people are rational and you get neoclassical economics okay and people have different thoughts on that and look of different ways on that Murray Rothbard one of my favorites Murray Rothbard was an extremely poorly for a this guy wrote a lot especially since he I think he died at like around 50 okay he died out with the 1995 but he made huge contributions economics history philosophy all over the place he was a father of an idea called anarcho-capitalist and this is the idea that there should be no government at all there's nothing he argued with the idea that there's public goods that goods that the market will not provide we say you know those ways that the market can provide them and he would make these arguments in his writings and his books and get published in journals and whatnot and was a huge firebrand to the most part where there's sort of a whole branch of Austrian economics that sort of built around him especially characterized by a lot of the fellows over there at the Mises Institute which he helped found with Lew Rockwell okay if you're looking for an economist whose writing was sort of like light a fire under you and be like man that's some pretty hard heating work Murray Rothbard work is in there is that is there okay he's just sort of very in-your-face and not willing to I mean very willing to just make an argument and kind of go with it so whether you're sympathetic sort of less or more government definitely read some of his work it's it's it's it's there it's quite a fascinating read is real Kerzner okay you can tribute to the body of economic work through the ideas of focusing on building up a lot of the ideas that Hayek made on knowledge talking about how like price prices communicate knowledge and knowledge helps the economy coordinate so you want a free market prices how entrepreneurs so again going back to shoot Bader and von Wieser that gives an entrepreneurship driving the economy and ethics etc okay and he was a leading authority on the work of Luud von Mises so when people need to know like about blue a von Mises him what did he mean by things that he wrote and his work and stuff like that they go the usual Kerzner since he studied under Mises for a very long time Walter block another one of my favorites okay another really in your face economist basically he's really well known for writing really good economic work on why things that people think are bad or good okay most famously for his book defending the undefendable where he will describe things and why like the pimp is actually doing a favor to the economy why the profit dude is doing a favor the economy why the gambler is doing a good thing for the economy and all these different things it's just a you know it's one of those books that really makes you really expand the way you look at economics he also recently wrote the case for discrimination okay which I haven't yet read yet but I'm definitely looking forward to reading at one of these day when I is ID one of these days he's written he's made a lot of contribution he's written a lot of published academic articles so these contributions are many one of the more interesting ones is negative homesteading theory this is the idea that something can be negatively homesteaded so first let's talk about what homesteading is the idea is that most of us can can kind of exemplify how do you transfer property from one person to the other in the sense that if I have a computer and I say here this my computer is now yours that would be a just transfer of ownership of something but what happens if something is not owned by somebody yet how do you establish the first claim of ownership and that's where homesteading theory comes in that if you're the person who transforms something it's yours first so for example if there's a bunch of land that's unclaimed and I go in there and I build a fence I've transformed the land and the land that I fenced in is my land it's a land that I've transformed I was the first person to do it it's mine someone else income transformed it after me but I did it first so I still have the prior claim now what Walter Bloch was saying with negative homesteading theory was what if someone forced you to homestead something against your will in the sense that like what if I treated you really badly okay and you start developing negative feelings well technically those feelings you created they're your feelings they're your ownership but I forced you to create that and thus I am doing something bad and that's unethical and something that's not good so bullying would be sort of an example of negative homesteading okay so if someone were to bully you and cause you to be depressed or something like that that would be they would have negatively negatively homesteaded those negative feelings Robert P Murphy okay a very young right uprising a fast quick rising up start in the Austrian community he wrote a critique of Austrian time preference theory I'm not quite particular about his argument on that yet so I'll recommend that you read his dissertation he's also written a lot of work on anarcho-capitalism and a lot of the work of Murray Rothbard he's also written like study guides for the treatise by Murray Rothbard which is man economy and state and human action by Ludwig von Mises and he's also written a textbook for high school and introductory college called lessons for the young economist Joseph Salerno has done a lot of work on money teacher at Pace University the most in recent book is money sound and unsound and he's a fellow at the Mises Institute Peter Klein another one of my favorites he does a lot of work in organizational economics and Austrian from an Austrian perspective and I'm become a big fan of like instead of governance and organizational economics and institutional economics basically getting out of the realm of you know government versus the people and getting more into how all these other things we deal with in daily basis the stories that we deal with the religions that we deal with the business that we deal with the way they structure the rules that they set the culture that they create all these kind of things to me are extremely interesting and Peter client works within that realm so I find his work very interesting he also runs the organization and Markus blog with a Nicolai Foss ok online so definitely check out that blog and subscribe to it if you don't Jorge Widow who's been also written a lot of work on monetary issues there most probably most famous for his biography of luis von Mises called the last night liberalism just talking about the life and work of Lewy bodies is a very very thick book he also wrote the ethics of my production where he talked about the ethical issues with increasing my supply and decreasing my supply and deflation Liberty talking about how deflation can actually protect Liberty and things like that okay so a very interesting work very interesting economist where to DeSoto ok a leading Spanish economist adjuncts scholar for the Mises Institute he's one of the member of the Mont Pelerin society's board directors member I mentioned them earlier Ludwig von Mises was one of the founding members so so on the editorial board of the quarterly Journal of Austrian economics now for remember right I think he was all he contributed the idea of I wanna say it's adaptive efficiency okay and I don't remember exactly what that idea is I think has nothing to do with like free markets and institutions ability to adapt but it's not coming to me at the moment so I apologize but again look up where the so look up his work look up the idea of adaptive efficiency and you can clear all that up steve Horwitz okay another very popular Austrian is here's a lot on TV nowadays ok he's contributed a lot of to monetary Theory history of economic thought social theory the family talking about the role of a family and economic behavior and what happens when you don't have a very strong family when you have a weak family a lot of work like that he also participates a bleeding-heart libertarians which are sort of it's it's a new movement of libertarians who do care more about sort of social issues like social tolerance social justice etc they just want to solve those issues without using government force etcetera so he blogs for the bleeding-heart libertarians blog leader bet key another really a fast rising star in the Austrian acuity community he's wrote a book recently called living economics which is more about how to make teaching economics exciting for the students and they get people excited about economics a book that is definitely on my list of things I want to read he also got another book with Paul Drago's called institutional and also development basic a lot of people like Peter Becky Lawrence wides Steve's elegent they take a lot of the work of the institutional economists or the new institutional economists like Douglas Lee north and Ronald Coase will talk about little bit later on and mix them a lot with Austrian ideas and have been really doing some fascinating work in my opinion same thing with like Arnold cling and Nicholas Schultz etc okay and he's a professor at George Mason University Lawrence H Wright who I'm becoming a much a very big growing fan of I did a lot of work on a big proponent of something called free banking so I mentioned earlier this is the idea that the banking system should just be free of government intervention that what bank banks should be to be free to compete with each other to succeed and fail against each other and use the practices that they they want within you know of course within some property rights etc you wrote the book the theory of monetary institutions wrote the book free banking Britain where he's done a lot of work on the history of free banking Britain and the good in the bad and recently wrote a book the clash of economic ideas which talks about different economic debates in in history and illustrates both sides and a book that's a high on my to get to list george Celgene another proponent of free banking is done research in private coinage in Britain proponent of a productivity norm and monetary policy again he's a he's a free banker so he's against central bank's against government involvement and banking in general but in general if you're gonna have a central bank he wants through the money supply or the interest rate that has something to do with productivity and cause a predictable level of deflation if I if I write it right okay then there's Richard Wolfe who's aa probably not too far from where I am right now in the sense of physically because he teaches at the new school in Manhattan I'm located right now in Staten Island so not too far away from here and basically he's started with the students a journal for Marxian economics called rethinking Marx basically he does a lot of work and taking a lot of those old marketing ideas and taking a lot of the work since then in economics and reconciling all of it and still basically make me a argument against capitalism as Mark stood back in the day Daniel Kahneman our economy was a psychologist and basically a founding father of the idea of the field of behavioral economics we're basically here you're taking a look at how people actually behave you put them in situations where they to make decisions and you observe the behaviors this is sit there and say well we know what a quote/unquote rational person would do what do people actually do when we put them into a situation and what does the reality of it tell us about how we can help people make the quote/unquote rational decision okay a suit again when you're thinking rationally assuming what would the person who had all the available information and somehow objectively know what's in their best self-interest would do okay based on the information that is available assuming they had access to all of it okay that's a pie the best way I can explain it okay he's also again he started this behavioral economics with along with the likes of Richard Thaler and Amos Tversky and he's done a lot of work on hedonic psychology contributed lost psychology behavioral sciences etc so this is CCS contributed 20 times over a very interesting fellow I don't necessarily agree with certain assumptions but his work is definitely absolutely fascinating and stuff that you should be from there with like for example Richard Thaler recently wrote a book called nudge with a guy by the name of casts US team which was actually a really good read I recommend reading it I did videos on that giving my cake on that book as well dan Ariely he wrote the books predictably in rational upset of rationality the honest truth dishonesty and he works at Duke University he's become sort of one of the leading faces of behavioral economics mainly because he's a really funny guy he's really good at taking a lot of these ideas and putting them in a way that's exciting and I'm looking forward to I have all three books haven't read them yet looking forward to it I'll be putting out videos when I do read them but he's definitely you can see he is probably the most watched TED Talks out there and overall just a very fascinating guy Paul Zak another book that I'm gonna get to as you can see I have a huge well you can't see it but I have a huge stack of books right behind me that I'm slowly working my way through so I'll get through but he's a leading neuro economist he pretty much created the field of neuro economics which is the idea of taking a look at brain patterns particularly the release of oxytocin and what it tells you about economic behavior so the idea is that he puts people in economic situations sees what happens with the release of oxytocin and what does it do with the way they participate in economics and he wrote a book recently that came out called the moral molecule we talked about the findings of his work Ronald Coase the dude still alive he's over 100 years old and still writing this this is this dude is hardcore but he's a developed his work has developed the field of new institutional economics and also the field of law and economics okay there's something called the coast theorem which coasts Ronald Coase here is not a big fan of his own theorem it's not really his theorem they just called it that what he was making a statement in an essay saying that any world without transaction costs that it wouldn't matter who you allocate property rights to things will sort of work themselves out the same way okay but in the real world transaction costs do exist so for example if I'm a lender and you're the person borrowing for me I probably have more access informations by easier for me to get information the cost of getting information is buy less for me than it is for you so in that case it's not equal as we would is sort of in an abstract economic sense so in that case when writing how a law should be upheld that should be taken to consideration and in a sense that you should distribute extra ala T's and property rights to to the party who has a least transactional cost in a sense okay and I'm kind of going a little further with a theory than I should with what he said then I should but that's basically good and that's sort of how the whole field of law and economics built up and since I can you take laws and not just write laws but how do you as a judge enforce a law and it's and how does the legal system affect economic behavior and since law is considered an institution it this also was part of his work was very instrumental and what became new institutional economics okay okay well and I realized I didn't change the text here for Ronald Coase so here you still see the text for John Kenneth Galbraith sorry told you who Ronald Coase is but the text here that's from John Kenneth Galbraith so I apologize for that okay along with Douglas Douglas C North who's also on the founding fathers of the new institutional economics okay he helped develop clear metrics which is a mathematical way of taking a look at historical information and looking at the history of economic trends and data to come up with new stories and narratives he helped to find and help define what is an institution versus an organization so kind of illustrate this difference and in organization would be like the structure of power so like the people who is in charge who's below them when do they report to them how does organization structure itself how did the individuals working towards a common goal structure each other but the effects of that like the rules that they impose on people and whatnot that be the institution so for example if I'm a student at the University the rules at the University imposes on me the marketing and the culture that's created by that university and the things that it represents that's the institution okay so the organization will be like the Dean not how they're structured with each other to run the university and the effect and the rules and formal and informal that are created by the university that affects the students economic and social behavior that would be the institution and these are the kind of things that were studied in the new institutional economics how those rules formally and informally get formed how do they affect economic behavior and going from there and then there's James Buchanan okay from the public he developed what's called public choice economics which is the idea of looking at economics from a political point of view and saying politicians don't actually make the choices best for the people but they have their own interests and understanding how political organizations are formed and institutions are formed and how it shapes each individual political actors influence particularly an idea called rent-seeking where basically people seek to go to the political process to get profits that are not due to an increase in productivity or an increase in production of value but just because of political favors you have all sorts of weird manifestations in politics so basically ideas politics are corrupt okay and public choice theory was a big tool in sorting trying to make the argument that you don't want government making decisions why because the politicians don't really have the best incentives and that's what believed a public choice is looking at what those incentives are would make some worse what makes it better at cetera okay and I think that's where this ends yep my name is Alex Merced from Alex Merced comm check out my website Alex Merced calm or check out libertarian 101 calm or learn economics now dot-com to learn more please comment on this video if there's other economists that you would like to other people to be aware of comment put them and mention them in the comments and hopefully you guys enjoyed this video and you guys have a great day and enjoy you

  1. Did he mention Robert Lucas I feel that if he didn't then he should as he contributed both rational expectations and the Lucas critique. To a lesser extent he developed a theory of supply and helped in the area of behavioral economics.

    I liked that you explained all their theories but sometimes you mis-characterized their theories/ didn't explain them accurately. I think partly this was due to time and also because a lot of the time their conclusions arises from the math, which is hard to explain in a condensed form.


  3. Great Summary: I added it to

  4. you forgot to mention kautilya arthshastra from india fromwhich aristotle took references and didnt mention

  5. geez… people, STOP looking to youtube videos drenched in ideology to learn stuff!! This isn't some objective truth.. this is a narrative, created to perpetuate a certain friggin story!! You're NOT gonna get smart by listening to other people with THEIR specific agenda telling you how the world works..!! This is NOT knowledge.. and it's fu**ing important that you are aware of that!! Yea, sure, watch this vid, spend an hour or two of your life, but make up your own damn mind about the validity of what you're being told.. especially from a person advertising websites as libertarianism101 and learneconomicsnow.. ffs…

    you want history of economic thought..?!? read ricardo, smith, marx, samuelson, gorz, walras, veblen, heilbroner, schumpeter, keynes, polanyi, etc.. you're NOT gonna learn anything (of value and substance) by watching this dude trying to score cheap votes for his own project.. ffs…

  6. Great video! I enjoyed listening to this while typing out my economics notes. I think in most situations, historical perspective is key to a true understanding and appreciation. I think you did a great job of objectively covering most of the key figures. I was surprised that I didn't hear you talk about Robert Solow. His work has been extremely influential in the "growth" of modern economics and we is quite active today in the discussion of some of our current issues. Nonetheless, you did cover a lot of material and have opened some very intriguing doors for further exploration. I also look forward to checking out more of your videos!

  7. Mark Blaug is missing and he wrote extensively in this area! You need to let your audience know that the History of Economic thought is more involved and extensive than what you could reduce to a 1hr 36 min video.

  8. That was great thank you!! Very good examples for the concepts and thorough examination of the history of economics!

  9. You forgot Robert Shiller and Richard Werner. David Harvey although not an economist is also worth a mention. Thomas Piketty deserves to be on a sequel.

    Overall a very good educational video. Thank you.

  10. At 1:11:03 on Robert Mundell there's this statement "a bank lends you out the money that people save". This statement is false. Banks do not lend out deposited money. When banks lend what they do is that they actually create credit (money) out of nothing. I am in disbelief that Mundell, an economist, would not know how a loan works, and go on developing a theory based on a false assumption. Guess, its just another fine example of how unscientific economics really is.

  11. It is worth noting that absent from his presentation is the American political economist Henry George, the first analyst to develop a sound analysis of business cycles (at a time when statistical data was not collected and made available on a timely basis). George also countered Marx's "labor theory of value" with a "demand theory of value" based on a "labor and capital goods basis for private property." George's importance is, perhaps, best supported by the long list of individuals on whom he had significant influence, within the outside the discipline of economics.

    Among economists there was Scott Nearing, John R. Commons, Harry Gunnison Brown, Glenn Hoover, William Vickrey and Milton Friedman. This list includes living economists such as Mason Gaffney, Nicolaus Tideman, Fred Foldvary, Kris Feder and Joseph Stiglitz.

    George also attracted support from others, including: Leo Tolstoy, Sun Yat-sen, Winston Churchill, John Dewey, Philip Snowden and Paul Douglas.

  12. I teach a course on the history of economic thought  designed for individuals not enrolled in a college or university economic degree program. This course uses PowerPoint technology. I offer the course material free of charge as a public service to anyone interested in teaching the subject . Contact me via email for more information: [email protected]

  13. Wow.  Awesome presentation!  You have a great voice for academia, and if you can succeed in making economics interesting, you can do just about anything.  Congratulations!  You can now fly.


  15. Amazing video!, I always have trouble with names in my lectures, and i get the whole idea of my economic history class, but memorizing names is a challenge and this video just made my studying so much easier. Thank you very much!

  16. Brilliant summary of the history of economic thought. I wish all students studying economics watch this. Thanks for uploading. I am sure it will catch up in popularity.

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