At Various Times In The Past

'At various times in the past and in various different ways', Heb. 1:1
'Increase and multily fill the world and subdue it', Gen. 1:28
'By the sweat of your brow shall you eat your bread', Gen. 3:19

When there is a realistic call for social and economic change those changes must come. There have already been industrial and agrarian revolutions, revolutionary changes that meant great social upheavals and difficult social problems when things were happening that were repugnant in the extreme. In cottage industry and factories and mines, in town and country, the evils of capitalism and communism confronted philosophers, economists and politicians. There is a great history of ground breaking ideas and they often have a universality of application. The ideas once established by the prime movers are developed by those that follow. Without going into any great details a list of economic ideas follows.

Economic theories and ideas go back to antiquity. One of the earliest is Henry of Ghent in the early 13th century. He lived, studied and worked in the region of Tournai and Paris and lectured and wrote on the perennial problems of philosophy and religion. Henry of Langenstein (b. 1325) was very influential and wrote a very important work on the political and economic views of his times published in a work by Gerson in 15th century. Another 14th century economist, also a mathematician and physicist, was Nicole Oresme of Normandy. He is best known as an economist and one of the founders of modern science. His economic views are writtem in Commentaries on Aristotle's Ethics, Commentaries on the Politics and Economics of Aristotle and a treatise on coins. They show him to be a precursor of the modern science of political economy. Bishop St. Antoninus was a friend of the poor. He also wrote famously on moral theology and divine providence. St Bernadine of Siena wrote against usury and the economic evils of his day.

The Physiocrats (nature, rule) were the economists of 17th century and they were called 'economistes' by their contemporaries. Francois Quesnay was the leading exponent. Mirabeau was his first disciple. The term 'laissez-faire' comes from a physiocrat called Legendre. The term was also used by Bois-Guillebont in a response to Colbert in addressing a gathering of merchants on the subject of the needs of industry. They were apropos to a need for a reaction in the 17th century. Gournay has been called the co-founder of physiocracy. The phrase 'laissez faire et laissez passer' comes from him. Physiocracy provides for the rule of natural law. Quesnay borrowed the mathematical method for his 'tableau economique' from Descartes and emphasised the difference between the natural and positive orders, the God-made and the man-made. He also emphasised the importance of agriculture as being the most productive part of the economy. His belief in individual property rights and views on government interference brought him into conflict with the social contract ideas of Rousseau though the views of the Physiocrats were broadly acceptable to the Revolutionaries. Other influences on the Physoctrats were David Hume and his dislike of the balance of trade theory and Castillon and his recognition of the importance of agriculture and his development of the doctrine of net product. They were particularly influential in France but also found some support in Switzerland and Baden, Germany. The term 'physiocrat' was not used until the 19th century.

The sources of economic wealth as described by Adam Smith (1723-1790) the Scottish economist and moral philosopher, were the division of labour and free markets. We were helped to understand human economic behaviour by Jeremy Bentham (1748-1832), William Stanley Jevons (1835-1882) and our contemporary Gary Becker who explained human behaviour in the family, workplace and the markets as a response to scarcity in order to maximise utility subject to the constraints of resources and technology. Thomas Malthus (1766-1834) and Harold Hotelling (1895-1923) had different responses to the problem of running out of resources. Hotelling suggested the limits to economic growth can be overcome through the expansion of production and population. Malthus was more concerned with exhaustible natural resources and population control. Hotelling said that as the prices of natural resources rises there is a decrease in the use of those resources and an increase in use of substitutes. Since then Julian Simon has gone further and challenged that suggesting that people are the ultimate resource and population growth lessens pressure on natural resources. A growing population provides a larger number of intelligent people who are better qualified and can work out better ways of using scarce resources.

Social reformers have contributed a lot to social and economic ideas. Von Kettler, who became a Catholic Bishop, is one whose fight against economic and social evils led to the creation of a number of labour unions and worker co-operatives in Germany in the 19th century. His ideas can be found in his writings including the work on the labour question and Christianity. Karl Barth was another great German social reformer.

The people who have helped most significantly in studying the problem of economic growth are Jospeh Schumpeter (1883-1950), Robert Solow and Paul Romer. These theories are all to do with innovation and successful new ideas. Schumpeter taught that progress comes through the development and diffusion of new technologies by profit seeking entrepreneurs but that it takes place in a process of 'creative destruction'. Robert Solow who was a student of Schumpeter put forward the neo-classical theory that population and technological growth influence economic growth with an important feature being the productivity function. Savings, investment and economic growth respond to population and technological growth. Paul Romer says that competition among firms produces long term economic growth, new products and processes.

Davis Hume and Milton Friedman have given us theories of money and inflation. Hume observed that increases in the quantity of money causes an increase in prices. Friedman, a member of the Chicago School, said that persistent demand stimulation did not increase output, but caused inflation. His policy of monetarism, the tightening of money supply, became very popular as a result.

Many economists past and present have advanced theories for understanding the business cycle. One of those who stands out above the others is Robert E Lucas. He challenged Keynes theory of fluctuations and in reply put forward two principles: people make rational decisions based on rational expectations; and markets reconcile individual decisions by balancing supply and demand, even in recessions.

David Ricardo (1772-1823) developed the doctrine of comparative advantage from studying the work of Adam Smith. The theory that countries have a comparative advantage that can be used to stimulate trade with trade partners and other countries or blocs to the benfit of both is the theory on which modern international trade theory is based.

Other names that could be mentioned include Le Play (1806-1882) a French economist who eventually came into conflict with Rousseau's state intervention and social contract theories. Jean Bodin (1530-1596) was more a jurist than an economist and countered the Machiavellian influence in moral and political science but who believed in the necessity of free trade. Charles Stanton Devas (1828-1906) added his theories of political economy and family economics and wrote a textbook on political economy which became a standard work.

The list is not exhaustive. There are many more in history and many more even now still actively affecting our lives and developing new and existing theories to meet the social and economic problems we face today. Economists often disagree and there is often consensus. It is important that theories are tested and discussed and people put forward their thoughts and concerns. The people who disagree with an economic theory or policy may be more important than those who put it forward.