The Making of Modern Economics: The Lives and Ideas of the Great Thinkers [Paperback]

Mark Skousen (Author)

Book Description

ISBN-10: 0765604809 | ISBN-13: 978-0765604804 | Publication Date: April 2001

Unlike other histories of economics, Mark Skousen's book provides a running plot with a singular heroic figure, Adam Smith, at the center of the discipline. Skousen unites the great thinkers by ranking them for or against Adam Smith and his "system of natural liberty." He shows how Karl Marx, Thorstein Veblen, John Maynard Keynes, and even laissez-faire disciples Robert Malthus and David Ricardo detracted from Smith's classical model of democratic capitalism during periods of economic failure and upheaval, while Alfred Marshall, Irving Fisher, Ludwig von Mises, and Milton Friedman, among others, remodeled and improved upon Smithian economics as the world economy recovered and prospered.

Editorial Reviews

From Booklist

Skousen, author, editor, and academic, tells the story of the development of economic thought, describing his approach as " . . . a candid, irreverent, passionate, sometimes humorous and often highly opinionated account of the lives and theories of famous economists from Adam Smith and Karl Marx to John Maynard Keynes and Milton Friedman." The author's unique view compares the development of economic thought to the construction of a building, designating Adam Smith's 1776 Wealth of Nations as the foundation. He contends that Smith's philosophy of natural liberty and the invisible hand was a sound foundation that created a new era of wealth and economic growth spanning two centuries. With the inclusion of photographs, diagrams, commentaries, and even appropriate music selections, each chapter is devoted to a major economist and his theories, showing how he added to or detracted from Smith's positions. Skousen ends on an optimistic note even as fighting continues over which economic policies to pursue in times of crisis, uncertainty, and globalization. Mary Whaley
Copyright © American Library Association. All rights reserved --This text refers to an out of print or unavailable edition of this title.

Review

"A reference bible...what an absolutely ideal gift for college students." -- National Review, June 3, 2002

"One of the most original books ever published in economics." -- Richerd Swedberg, University of Stockholm, author of 'Schumpeter: A Biography

"Skousen tells a good story... rarely told, and tells it well. The book is unputdownable - try it and see." -- Mark Blaug, University of Amsterdam, author of

"Skousen's provocative and engaging book demonstrates with style that economics is anything but the dismal science." -- N. Gregory Mankiw, Harvard University

See all Editorial Reviews

Product Details

• Paperback: 487 pages
• Publisher: M E Sharpe Inc (April 2001)
• Language: English
• ISBN-10: 0765604809
• ISBN-13: 978-0765604804
• Product Dimensions: 9.2 x 6.7 x 0.8 inches
• Shipping Weight: 1.7 pounds
• Average Customer Review: 4.4 out of 5 stars  See all reviews (38 customer reviews)
• Amazon Best Sellers Rank: #891,953 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

79 of 83 people found the following review helpful:

5.0 out of 5 stars Ol man take a look at my life it's a lot like you, June 18, 2003

By 

Eugene A Jewett "Eugene A Jewett" (Alexandria, Va. United States) - See all my reviews

This review is from: The Making of Modern Economics: The Lives and Ideas of the Great Thinkers (Paperback)

There's a saying in the economics department of academia that the answers to the test are always the same, only the questions change. Mark Skousen does a masterful job in telling us why this is true.

Skousen begins this marvelous book with a quote by J.M. Keynes. I'll paraphrase it as follows: "the ideas of economists and political philosophers are more powerful than commonly understood; indeed the world is ruled by little else". A quote on the same page by J.M. Ferguson avers, "Economics concerns itself with the greatest of all human dramas... the struggle of humanity to escape from want". These two quotes suggest that one: the "follow the money" theory of history has credence, particularly over the Hegalian master-slave theory, and its Marxist class oppression version. And, two: that the study of economics has essentially revolved around how to alleviate poverty, and to create a greater surplus for all people.

Skousen begins this tome with a salute to Adam Smith whose "invisible hand" thesis explains the counter intuitive concept that "individual self interest attains for the greatest common good." This idea supports Tom Sowell's assertion that social policy should consist of ways to incentivize industrious, commercially competent, ambitious, self centered men; a push for the idea that greed is good.

Skousen compares Smith's "Harmony of interest" model, which asserts that workers, landlords and capitalists work together to provide goods and services", with Ricardo's "Class conflict" model, one that suggests that the same parties compete with one another for a share of those goods and services." What's good about this book is that Skousen gives both sides an equal hearing, and he tells it as a storyteller might. He makes it readable and engaging.

He wends his way thru the stories of French economists Alex de Tocqueville, Frederic Bastiat, and Jean Baptiste Say as they relate to the study of economics in the period following the printing of Adam Smith's opus, "the Wealth of Nations". This continuing study weaves forward thru Hegal's dialectic and its influence on Marx's "Communist Manifesto."

We're then treated to Skousen's insights into the thinking of Thomas Carlyle, a critic of capitalism; John Stuart Mill; Jeremy Bentham; E.B-Bawerk who wrote a devastating critique of Marx's "labor theory of value", where a mud pie was said to be worth as much as an apple pie; W.S. Jevons who led the revolution in the concept of "marginal utility" along with Leon Walrus, also known for his use of mathematical equations and his work on economic equilibriums; and the brilliant Italian Vilfredo Pareto, the fellow who decided that all human behavior could be classified in 80-20 terms; Pareto's Law.

As we mosey thru the rise of the Fabian Socialists in the 1870's, George Bernard Shaw et al, we're introduced to the greatest economist of the late 19th century; the neo-classicist in the Adam Smith tradition, Alfred Marshall. His chore was to rescue free-market capitalism back from the big-government socialists.

But, Socialist-Leftist-Communist-progressive thinking began to gain traction, J.M. Keynes and his Bloomsbury group helped its furtherance by seizing control of the intellectual ferment of Western civilization in the early 20th century. As England weakened economically after WWI the idea of big government, with its command and control model, began to seem efficacious as a way to run society, at least in the mind of Keynes. After all, government control of the economy seemed to be working just fine in Japan, Italy, Germany and Russia in the early 1930's.

Keynes felt that, much in the image of Plato's Republic, a small group of individuals, gifted with superior intellect and judgment, should make public policy for all of those not their equal. Alas, he like Marx missed having a firm grip on the concept of the "Law of Unintended Consequences." Like Marx, he failed to discern that the most important factor in the means of production was the human initiative of those upon whom he cast his snidest of intellectual aspersions. Keynes, though academically brilliant, got many things wrong in his set of assumptions about the economic workings of the world.

A group of Austrian economists (L. Von Mises, Frederic Von Hayek, and Joseph Schumpeter), known as the "Austrian School", took exception with the Keynesian theories. Hayek engaged Keynes in fierce academic debates in the early 1930's, but Keynes won out and became the most influential economist of the early and mid-20th century. However, with the rise of the microchip and the ability of ever more powerful computers to crunch the numbers, the jury is in and the Austrians, represented by the University of Chicago, have dominated the Nobel Prize in the last 25 years. Hayek, who wrote "the Road to Serfdom" predicting the failure of socialist communism, has been vindicated. To continue the irony, his flag bearer, Milton Friedman, the Monetarist extraordinaire, has been the named the most influential economist of the last 40-50 years.

Skousen tells this story in a page turning fashion that makes me wish he had been my econ prof back in the early 60's at Michigan State. It's odd that even today, freshly minted MBA's everywhere know little about Alfred Marshall and Frederic Von Hayek. It's a stain on academia that they have failed so in their mission to compare and contrast the great thinking done about "the business of life", which is what economics is all about. Read this book and give it to your children. Discuss it with them; you'll be a better man because of it.

33 of 35 people found the following review helpful:

4.0 out of 5 stars A very readable, non-technical History of Economic thought, September 12, 2003

By 

Patrick Gaughan (Austin, TX United States) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: The Making of Modern Economics: The Lives and Ideas of the Great Thinkers (Paperback)

I found this history of economic thought remarkably refreshing, lively, and informative. It is very readable, Skousen leaving out the technical minutae that turns many people off to economics. In fact, my one criticism is that, being technically-minded I wanted more than he presented (although I understand a technical presentation was not his aim).

Skousen does a good job of bringing out the personal side of the characters in the history. He devotes nearly as much space to items of interest in their lives and personalities as he does to their contributions to economic thought.

Unlike more liberal writers, Skousen does not hide his "personal biases" and presents the history from his perceived "correct perspective". He makes no appologies for this and presents his reasons for writing the book in the introduction. He is a big believer in free markets, small government, and natural liberty (as championed by Adam Smith). He presents all major economic schools of thought and refutes those he believes to be in error. Liberals will call this a polemic. It is hardly that. Skousen presents the side of the argument that has been historically suppressed in academia, but which is making a resurgence in the 21st century.

I found of particular interest the role economic thought played in the rise of socialism, Marxism, and the modern welfare state. It's simply facinating.

If you took ECON from Keynesians like I did, you need to read this book. At the very least, you need to hear the rest of the story.

33 of 37 people found the following review helpful:

5.0 out of 5 stars Skousen's Exceptional History, May 2, 2001

By 

Alan Ebenstein (Santa Barbara, CA United States) - See all my reviews

This review is from: The Making of Modern Economics: The Lives and Ideas of the Great Thinkers (Paperback)

Economist Mark Skousen has written an exceptional history of economic theory. He traces the development of economic thought from Adam Smith to the present from a free market perspective. One of the features of his book I liked the most are the ample biographical anecdotes and pictures of economists. One gains a greater understanding of the economists and their thought through these pedagogical devices. There is much here of value to students at all levels of the history of economic thought. I thoroughly enjoyed The Making of Modern Economics and am confident this will be the response of other readers.