Schools in question: an elaborate
summary on the course History
of Economics
Author: Billy den Otter
Note: the order of schools can vary a bit chronologically speaking. This is because a few
schools occurred closely after or at the same time as each other. Similarly, not all economists
will be in their correct school as they fit well in multiple schools.
This document covers all lectures and group sessions from the course History of economics.
At the end of the document there are some smaller things that didn’t really fit into one
particular school or was significant enough to mention somewhere else as well. At the very
end there is also a small test version of how the exam will look like. You can use this to test
your current knowledge of the course and where you need to pay some more attention.
This document is an updated version of the 2018 course, fit for the 2019/2020 year. Because
of that, it might occur that some small things are still included in the document which are no
longer relevant. However, all things you need to know for the 2019/2020 course are present
in this document.
,Table of contents
Introduction to the History of Economics...................................................................................3
School in Question: Mercantilism...............................................................................................5
School in Question: Physiocrats..................................................................................................8
School in Question: Classical school.........................................................................................10
School in Question: Socialism...................................................................................................22
School in Question: German Historical school..........................................................................30
School in Question: Marginal School........................................................................................33
School in Question: Neoclassical school...................................................................................40
School in Question: Mathematical school / Econometrics.......................................................44
School in Question: Institutional school...................................................................................48
School in Question: Welfare economics...................................................................................52
School in Question: Keynesian school......................................................................................53
School in Question: Chicago school / new classicism...............................................................60
School in Question: Behavioural and Experimental economics...............................................65
Stuff that doesn’t belong to a particular school.......................................................................68
Different theories of value used over time...............................................................................75
Test yourself: a test version of the exam..................................................................................77
,Introduction to the History of Economics
Figure 1 shows the entire course
Figure 1: the entire course
I could end the summary here, but let’s go into a ‘bit’ more detail. History of economics also
means History of science, math, economics and in some cases social science and philosophy.
It is about telling a story, and that story includes the broader picture.
The history of economics is difficult because of a few reasons:
- people specialize, which leads to cognitive limitations. In order to get more out of
economy, they don’t study biology for example.
- Lack of historicity in standard economics
- interpretation difficulties: with which period do you compare?
- Mercantilists (we will see them later) are nothing compared with nowadays
economics, but how about for their time?
- in the more recent parts, it hasn’t been decided what goes in the history books yet.
- From normal big events, you can mostly identify whether they will hit the history
books or not. Think of the meeting between Kim Jong-Un and Donald Trump or, at
the time of writing this, the very recent verdict on Suriname’s president Bouterse.
- however, for economics that is more difficult. Whose theories will become the
mainstream economics in a hundred years? It is unknown yet.
, Joseph Schumpeter makes a distinction between the history of thought, which is history as
important for its own sake, and history of analysis, which is important only as anticipating
today’s knowledge. History of thought focusses on historical context and schools or
individuals, while history of analysis focusses on logic and concepts or problems.
Economic thoughts and theories can be found as early as Egyptian and Greek civilizations.
However, because of a limited timeframe we simply cannot discuss all that. We have to draw
a border somewhere, and so this course starts with Mercantilism.
summary on the course History
of Economics
Author: Billy den Otter
Note: the order of schools can vary a bit chronologically speaking. This is because a few
schools occurred closely after or at the same time as each other. Similarly, not all economists
will be in their correct school as they fit well in multiple schools.
This document covers all lectures and group sessions from the course History of economics.
At the end of the document there are some smaller things that didn’t really fit into one
particular school or was significant enough to mention somewhere else as well. At the very
end there is also a small test version of how the exam will look like. You can use this to test
your current knowledge of the course and where you need to pay some more attention.
This document is an updated version of the 2018 course, fit for the 2019/2020 year. Because
of that, it might occur that some small things are still included in the document which are no
longer relevant. However, all things you need to know for the 2019/2020 course are present
in this document.
,Table of contents
Introduction to the History of Economics...................................................................................3
School in Question: Mercantilism...............................................................................................5
School in Question: Physiocrats..................................................................................................8
School in Question: Classical school.........................................................................................10
School in Question: Socialism...................................................................................................22
School in Question: German Historical school..........................................................................30
School in Question: Marginal School........................................................................................33
School in Question: Neoclassical school...................................................................................40
School in Question: Mathematical school / Econometrics.......................................................44
School in Question: Institutional school...................................................................................48
School in Question: Welfare economics...................................................................................52
School in Question: Keynesian school......................................................................................53
School in Question: Chicago school / new classicism...............................................................60
School in Question: Behavioural and Experimental economics...............................................65
Stuff that doesn’t belong to a particular school.......................................................................68
Different theories of value used over time...............................................................................75
Test yourself: a test version of the exam..................................................................................77
,Introduction to the History of Economics
Figure 1 shows the entire course
Figure 1: the entire course
I could end the summary here, but let’s go into a ‘bit’ more detail. History of economics also
means History of science, math, economics and in some cases social science and philosophy.
It is about telling a story, and that story includes the broader picture.
The history of economics is difficult because of a few reasons:
- people specialize, which leads to cognitive limitations. In order to get more out of
economy, they don’t study biology for example.
- Lack of historicity in standard economics
- interpretation difficulties: with which period do you compare?
- Mercantilists (we will see them later) are nothing compared with nowadays
economics, but how about for their time?
- in the more recent parts, it hasn’t been decided what goes in the history books yet.
- From normal big events, you can mostly identify whether they will hit the history
books or not. Think of the meeting between Kim Jong-Un and Donald Trump or, at
the time of writing this, the very recent verdict on Suriname’s president Bouterse.
- however, for economics that is more difficult. Whose theories will become the
mainstream economics in a hundred years? It is unknown yet.
, Joseph Schumpeter makes a distinction between the history of thought, which is history as
important for its own sake, and history of analysis, which is important only as anticipating
today’s knowledge. History of thought focusses on historical context and schools or
individuals, while history of analysis focusses on logic and concepts or problems.
Economic thoughts and theories can be found as early as Egyptian and Greek civilizations.
However, because of a limited timeframe we simply cannot discuss all that. We have to draw
a border somewhere, and so this course starts with Mercantilism.
