If you study economics at university, you mainly learn about those basic economic principles. They’re powerful and useful but you should use them with care. Some people think they’re not really ‘science’ at all. They say that underneath economists’ equations is a conservative political ideal that says that free markets, competition, and individual effort are what matter above all else. A few years ago, students in Britain and America got fed up with their economics teachers and walked out of their classes. They believed that economics was a distortion of reality, and they wanted it to be more about the real world that’s messy and unpredictable and hard to capture in equations.
But remember, too, that over the long sweep of history, thinkers looked at the economy in many different ways and held all sorts of political beliefs. Some were diehard supporters of capitalism, some wanted to fix it, some to destroy it. What tends to get left out of basic economics courses is the ideas of rebellious thinkers like Thorstein Veblen, Karl Marx and Friedrich Hayek, and even of the more accepted ones like Adam Smith and John Maynard Keynes. All of them were interested in the biggest questions of how economies and societies develop, less in the narrow ones about how people and firms weigh up costs and benefits when they’re choosing a fridge or renting new office space.
Economists came up with different ideas in response to the problems of their times. In economics, there isn’t one ‘right’ answer that stays right forever, like in a maths problem. By appreciating the different responses of history’s thinkers we can be inspired to come up with our own, the new ideas we need in order to face today’s economic problems, whether that’s extreme inequality, financial crisis or global warming. Get them right and more of us have a chance of a good life; get them wrong and many will suffer. Some will die if they aren’t able to get the food and medicine they need. It’s a task for all of us, not just for professional economists.
At the start of our story we met the first people to think about economics: the philosophers of ancient Greece. They were concerned with life’s most fundamental questions, ones that we grapple with to this day. What does it take to live well in a human society? What do people need to be happy and fulfilled? What makes them truly thrive? That’s where economics started and, after all the arguments and disagreements, it’s where it must begin from again.
From A Little History of Economics by Niall Kishtainy, published by Yale University Press in 2017. Reproduced with permission.