Customer Reviews

The Making of Modern Economics, Second Edition: The Lives and Ideas of the Great Thinkers

5 star:		(26)
4 star:		(7)
3 star:		(2)
2 star:		(0)
1 star:		(3)

 

 

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.

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.

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.

This author managed to write an interesting economics book. The book contains the history of economic thought, and details about the quirky lives of famous economists. The author believes in the "no wasted sentences" style of writing.
He writes in a Will Durant type style where every page is a mixture of fact, opinions and wit. After every chapter, a reader can feel that He really learned something. Purists would say it is better to read the original text by the economist, Then use this book to find out what economist to pursue. I really enjoyed this book, that provides a lot of bang for the buck, Knowledge nuggets ripe for the picking.

I strongly second the prior five star comments. If you are taking an economics course this book will help you to understand the primary ideas in economics and help correct for the prevailing Keynesian bias.

I have also read New Ideas from Dead Economists: An Introduction to Modern Economic Thought by Buchholz. Skousen while keeping his presentation interesting goes much deeper and broader into the historical development of economic ideas. Buchholz largely ignores the Austrian contributions. This oversight might be forgiven except that the Austrian model, given recent events, is looking better the more I read.

I shopped very carefully to find a book which would help decode the economic names, ideas and systems which are so important today's world, yet so inaccessible to the non-economist. I was looking to find a book which would discuss the economists and their theories without a heavy liberal slant.

This book scores on every possible point. It would make an excellent college textbook. It is well layed out with many insets, biographical sketches, etc. The text itself is engaging and sometimes humourous, and perhaps most uniquely, it tells a story. It tells the story of economics as a battle for freedom fought in lofty ideas by academics but with deep and real consequeces. I would absolutely recommend this book to any person looking for an intoduction into the story of economics. It will prove invaluable to your understanding of life.

Mark Skousen: The Making of Modern Economics

A book on economics of such extraordinary interest comes along only once in a blue moon. This is a book that ought to be read and read widely. It is lively, intelligent, thoroughly engaging, and even humorous. It tells a story that should be much better known, written from the perspective of Adam Smith's "invisible hand" doctrine of free markets. It puts each of the major economists into their own historical setting, giving not only the answers they provided but also the context to explain why they were interested in the problems they tried to solve. The book also provides an introduction to the controversies each of their theories then stirred up, including Keynesianism, Marxism and other criticisms of Smithian economics. It also tells a good deal about the personal lives of many of the great economic names of the past so that in this book there is an astonishing mix of the personal and the professional.

If you always wanted to understand economics but didn't know where to start, read this book. If you have studied economic theory but were curious how it ended up just this way and not different from what it is, then now you can find out. Economics will never be easy, but who would ever have thought that it could be made entertaining.

I have read four histories of economics this year, and this is the best by far. It is a fascinating, highly readable history. Yet it also provides enough theory to leave the reader with a deeper understanding of current state of economic science and the theoretical milestones that got it where it is today.

Some other reviewers charge the author with bias. The author clearly believes the Austrian school has made significant, underappreciated contributions to economic theory. But, this is not a book about the Austrian school. It is an outstanding, evenhanded, general history of economic thought.

I simply loved this book. Great story line. It's the perfect start for the layman interested in getting a handle on the various schools of economic theory. Without a doubt the most entertaining book on economics I've read. It's hard to put down.

I think the only way you can hate this book is if you are a closet Marxist or are still clinging to Keynesism. If you are of the Keynes mind set, you owe it to yourself to read it anyway. The author traces the changes in philosophy of former leading Keynes supporters to make a strong case that the philosophy is flawed.

Lots of pictures, and fascinating profiles. Juicy stuff.

Mark Skousen has done a great service not only in putting the development of economic theory in perspective but doing so in such an entertaining way. The author contrasts Adam Smith's system of natural liberty and free markets with that of Marxist detractors along with everyone in between.

Better than any work I know of, Skousen brings the Austrian contributions to economic theory to light. It seems the Austrian, marginalist, subjective view saves the day again and again.

Integrated throughout the narrative are the personal curiosities of the major economists. One murdered, another interested in palm reading, the economist with the most investing success, an enthusiast of astrology, one involved in a sibling rivalry, the economist with a fascination for handwriting analysis, etc., etc.

Not only has Skousen made an interesting read of the history of economic theory he has presented a new paridigm of the circular flow model as well. And his "What Could Have Been" section near the end is very thought provoking.

Skousen's book was such a pleasure to read that I'm tempted to immediately return to page one and do it again!