GERRIT GORTER
The present study of economics did not, of course, come out of thin air. Although thinkers in classical Greece already reflected on what we now call economics, it was largely in the eighteenth century that systematic thought on the subject began.
Two conceptual tools—the economic cycle and the idea of the invisible hand—date from that century and are still in use today, both in academic research and in education.
This site contains twenty-five portraits of important economists. Each offers a biographical sketch together with an indication of his (and, in one case, her) significance for the development of economic thought. They claim no more than to provide a first introduction to the lives and works of these pioneers.
These articles originally appeared in Dutch in the Tijdschrift voor het Economisch Onderwijs and were later published on the website of Gerrit Gorter. The English translations are by Folkert Gorter.
Index
François Quesnay
Adam Smith
Thomas Robert Malthus
Jean-Baptiste Say
David Ricardo
Antoine Augustin Cournot
John Stuart Mill
Karl Marx
Walras
Carl Menger
Alfred Marshall
Vilfredo Pareto Eugen von Böhm-Bawerk
Knut Wicksell
Max Weber
Irving Fisher
Sam de Wolff
John Maynard Keynes
Joseph Alois Schumpeter
Joan Robinson
Jan Tinbergen
John Hicks
John Kenneth Galbraith
Milton Friedman
Paul Samuelson
Adam Smith
Scotland 1723–1790
Adam Smith is often seen as the high priest of the free market economy. Just let supply and demand do their thing, and everything will work out. A one-sided view, as we’ll see shortly.
Adam Smith was born in 1723 in the Scottish town of Kirkcaldy. He was raised by his mother, who had been widowed early on. At the age of four, he is said to have been kidnapped by gypsies, but, pursued as they fled, the villains left little Adam behind. Economics nearly lost one of its greatest practitioners. At seventeen, he enrolled at the University of Oxford, and at the age of twenty-eight, he was offered a professorship in logic at the University of Glasgow. He was later appointed professor of moral philosophy — a kind of social philosophy.
Smith was the classic absent-minded professor. There are countless anecdotes of wandering the city in pajamas or smiling vaguely at church services. Meanwhile, he made the acquaintance of the wealthy Charles Townshend, who had grown interested in Smith’s work. Smith had published The Theory of Moral Sentiments in 1759, a book that made him famous overnight. Townshend was planning to send his son on a Grand Tour of Europe to complete his education, and asked Smith to accompany the young duke.
It was a very attractive offer financially, and Smith accepted it. This journey, which began in 1764, proved to be of major significance to the field of economics. First of all, Smith met the Physiocrats in France, including the court physician Quesnay, with whom he had many conversations. In many respects, they agreed — particularly on the laissez-faire principle. But the idea that only agriculture could create value didn’t fly with Smith. Secondly, interesting conversation partners were not always easy to find (the young duke is said to have been a rather dull character), and boredom often crept in. To stave this off, Smith began writing what would later become An Inquiry into the Nature and Causes of the Wealth of Nations — the book that marked the beginning of economics as an independent discipline.
In The Wealth of Nations, as Smith’s best-known work is usually referred to, he lays out, among other things, his famous theory of the Invisible Hand. If everyone pursues their own self-interest, all efforts will, as if guided by an invisible hand, ultimately benefit society as a whole. It may seem like a license for unrestrained liberalism. But it wasn’t. Earlier, in The Theory of Moral Sentiments, Smith had shown that he was aware of the fragmenting effects of self-interest inherent in the invisible hand. Fortunately, there is a counterbalance. Everyone possesses certain moral sentiments, which Smith called sympathy: the ability to put yourself in someone else’s shoes and to take an interest in others outside of personal gain. A message that seems to have been forgotten in today’s revival of capitalism.
In 1766 the Grand Tour ended abruptly. The younger brother of Smith’s pupil, who had since joined the party, died suddenly. Even the urgently summoned Quesnay could do nothing. Smith returned to Scotland and moved in with his mother to finish his book, which was eventually published in 1776.
Although Smith lived as a reclusive bachelor until his death in 1790, he became even more famous than he already was. Many statesmen and scholars came to seek his advice. According to one anecdote, his guests stood up at the beginning of one such meeting when Smith entered the room. When the elderly philosopher asked them to sit down, one of them replied: “No, we will remain standing until you are seated, for we are all your pupils.”