Customer Reviews

A History of Economic Theory: Classic Contributions, 1720-1980 (Softshell Books)

5 star:		(1)
4 star:		(0)
3 star:		(1)
2 star:		(0)
1 star:		(0)

 

 

Niehans appears to be unable to offer an objective assessment of many of the economists that he covers in a series of short essays in this book.Basically,Niehans views the history of economic thought as if it were composed of two different kinds of economists,the good guys who believe in Say's Law as a general covering law,which Niehans defines as the postulate that in the long run price adjustments alone will always guarantee the full employment of all resources(resource scarcity) excluding necessary slack and down time for repair,maintenance, retooling,rest,etc.,and the bad guys,who don't accept Say's law as the general case,but only as a special case operating only when economies are on the boundaries of both their static(short run)and dynamic(long run)production possibilities curves with an optimal stock of capital goods.The bad guys are the mercantilists,Sir James Steuart,Sismondi,Malthus,Marx,the laterJohn S Mills, the later Marshall,Veblen,and Keynes.The good guys are Smith,Bentham,James Mills,Say,Ricardo,Senior,Pigou,Robertson,Kalecki,Friedman and Modigliani.I will concentrate on covering some of the errors of ommission and commission made, with respect to the work of Keynes in the General Theory(1936),by Niehans throughout his book.The first incorrect assessment of Keynes's work is the claim that Keynes based his model in the GT on the assumption of rigid money wages(See Niehans,pp.114,350,353,355,356,471 for a few examples).Nowhere in the GT does Keynes assume money wages are rigid except as a simplification in the early chapters of the GT.Keynes assumed that short run money wages were held constant.Note also that prices are fully flexible in all chapters of the GT.Since a firms economic decision to hire labor in the labor market is a function of the real wage,and the real wage is completely flexible,I have no idea about the point Niehans is trying to make,since A C Pigou made the same identical assumption as Keynes did about money wages in the short run-they were held constant in the short run in his 1933 book,The Theory of Unemployment.In chapters 19,20,21,and the appendix to chapter 19 of the GT,money wages are assumed to be fully flexible in both the upward and downward direction.Keynes concludes in chapter 19 ,as a result of his analysis, that money wages that are sticky in a monetary economy are to be preferred to fully flexible money wages because, dynamically, sticky money wages are a necessary condition for the stability of money values over time.Niehans offers no evidence for his claim that Keynes's model in the GT was not fully articulated and left many confusions to be cleared up(Niehans,p.355).Niehans offers no textual evidence for his claim that Kalecki far exceeded Keynes in economic substance,analytic rigor and in lucidity of exposition.(Niehans,p.376).He offers no support for his claim that Keynes was neither a strong nor original theorist on page 444.I do not recommend this book for the novice reader.However,an experienced reader can overlook these deficiencies and profit from reading some of these essays.

The only book I've seen, outside the Palgrave reference book, that gives brief vignettes on different economists and their schools. Author does not mince words, writes strong, and gets to the point. A nice one-volume tome. Also includes some mathematics, which is nice.