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Forgotten or Neglected Classics in Economics that Modern Students Should Be Reading

Summary:
Many years ago I wrote an essay for Liberty Fund entitled “Why Read the Classics in Economics?” and I explained that besides the aesthetic value of working through old ideas, there was a very real pragmatic value because these older works can improve our contemporary theorizing.  Yes, there is beauty in philosophy, art, and science, and we must appreciate that beauty. I would even argue we should be in awe of the achievements of past thinkers.  But philosophy, art, and science don’t progress in a simple linear fashion from darkness to light.  We also don’t simply repeat ourselves in an endless cycling through ideas, concepts and depictions.  There are enduring themes of truth and beauty, but our statements about them are subject to continual refinement.  So,

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Many years ago I wrote an essay for Liberty Fund entitled “Why Read the Classics in Economics?” and I explained that besides the aesthetic value of working through old ideas, there was a very real pragmatic value because these older works can improve our contemporary theorizing.  Yes, there is beauty in philosophy, art, and science, and we must appreciate that beauty. I would even argue we should be in awe of the achievements of past thinkers.  But philosophy, art, and science don’t progress in a simple linear fashion from darkness to light.  We also don’t simply repeat ourselves in an endless cycling through ideas, concepts and depictions.  There are enduring themes of truth and beauty, but our statements about them are subject to continual refinement.  So, through the years from Adam Smith to Vernon Smith, economists have continually refined the presentation of their core teachings.  Economists have also re-envisioned their purpose as a science, and the methodological tools they utilize in pursuing that purpose.

In that refinement and re-purposing there are gains and losses.  The recognition that there are losses is a precondition for my argument that there are gains for contemporary science by wrestling with works written 25, 50, 100, 200, etc., years ago.  There is “left luggage” as ideas move from one historical context to another, and recovering what was lost is never easy. But it is necessary if we hope to learn from the past.  To help us on this endeavor, let me start with a secondary work about the past that has its own interesting history.  Lionel Robbins’s The Theory of Economic Policy in English Classical Political Economy owes its origins to a series of lectures given at the London School of Economics and Political Science (LSE) in 1939. Due to Robbins’s commitments to the government during the 1940s, the work was never completed in published form.  As Robbins returned to academic life in the post-war period, he set out to publish the lectures and the book was released in 1952.  It was subsequently reprinted in 1953, 1961, 1965 and a 2nd edition was published in 1978.  Robbins passed away in 1984.

Among the 20th century figures in economic theory and public policy, I personally believe Robbins is currently woefully underrated. His major scientific work was accomplished during the decade of the 1930s.  His famous definition of economics — “Economics is the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses” — was so widely accepted that Robbins’s authorship is not often remembered. And, the application of that definition of economizing behavior of the individual to the economic problem that society must solve followed all too naturally.  This was not, I would contend, Robbins’s fault, but a consequence of changes in the purpose of the economic profession and the methods used in its practice to satisfy the new purpose.  Crucial to my purpose here, however, is just to acknowledge what I see as the wide ranging impact Robbins had as an economic thinker during the 1930s and beyond.  All his books from this period should be on the shelves of serious students of economics. And, one unique component of Robbins’s thinking is that the history of economic ideas and their evolution was an essential tool for economic theorizing.  In this sense, he was a master of the discipline in the same way that his teacher Edwin Cannan was, or a thinker in the generation between Cannan and Robbins such as Jacob Viner was.  For Robbins, this mastery included the English Classical Political Economists from Adam Smith (and before) and onward to John Stuart Mill.

To get a sense of the important neglected works in classical political economy that remain relevant for us today, it will be useful for modern students to give Robbins’s The Theory of Economic Policy a fresh read. Robbins will introduce the modern reader not only to a philosophical appreciation of the Scottish moral philosophers of the 18th century, but the analytical utilitarians of the 19th century, and what bonds these two traditions in the development of political economy.  The key idea that I read in the work is the twin development of classical economics with the evolution and establishment of liberal institutions of law and political organization.  The institutional framework was a critical aspect of classical political economy. And a critical lesson for understanding them, and for reasoning about economic problems today, is that economists and social scientists ignore the institutional infrastructure within which social interactions takes place at their own intellectual peril.  Economic life never exists in a vacuum, and as such the legal, political and social context must always be accounted for in a direct, transparent, and serious way.

What modern students will learn from reading Robbins’s The Theory of Economic Policy is that the classical political economists had already developed the rudimentary tools of analysis which in the post-WWII era had to be rediscovered in the form of property rights economics (Armen Alchian), law-and-economics (Ronald Coase), public choice economics (James Buchanan) and market process economics (Israel Kirzner).  One will also learn that the theorists in the first half of the 20th century, such as Frank Knight, Joseph Schumpeter, Ludwig von Mises, and F. A. Hayek were far closer to the classical political economists than say Paul Samuelson or Kenneth Arrow.

In Richard Wagner’s recent book on Buchanan, James M. Buchanan and Liberal Political Economy, he argues that Buchanan and those working along similar lines to reincorporate institutions back into economics during the second half of the 20th century were less neoclassical economists as that term came to be understood than classical political economists with improved tools of analysis.  This assessment I believe is 100% correct, but it only will appear that way to most modern readers I contend if they truly grasp what was going on in the work from Smith to Mill.  And that task is to examine the impact of alternative institutional arrangements of the ability of individuals to pursue productive specialization and realize peaceful social cooperation through exchange.


Peter J. Boettke is University Professor of Economics & Philosophy, George Mason University, Fairfax, VA 22030.


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Peter Boettke
Peter Joseph Boettke (January 3, 1960) is an American economist of the Austrian School. He is currently a University Professor of Economics and Philosophy at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU.

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