Competing Schools of Economic Thought

Citation

Michaelides, P.G. (2011), "Competing Schools of Economic Thought", International Journal of Social Economics, Vol. 38 No. 8, pp. 742-744. https://doi.org/10.1108/03068291111143938

I personally found this book well done in the form of a reader‐friendly analysis of some of the most interesting topics in contemporary macroeconomics and the history of economic thought. The book consists of 17 chapters, including an introduction about its aim and scope and some brief conclusions to highlight the core characteristics of the major schools of economic thought exposed therein. Most chapters are also enriched by boxes with notes for further reading. I found these boxes quite useful, especially for their concise character. The author attempts to focus upon the main ideas of each and every scholar or school of economic thought examined – without necessarily following a strictly historical approach – and relates them to present‐day situations by avoiding sterile reproductions and clichés.

Analytically, there are chapters on mercantilism and physiocracy, Adam Smith, David Ricardo, Karl Marx, John Maynard Keynes and, of course, neoclassical economics (i.e. “marginalism”). Also, separate chapters are included on the classical school of economics, disequilibrium macroeconomics, monetarism, the neo‐classical synthesis, new classical economics, real business cycles, and (new) Keynesian economics. Furthermore, the author even included separate chapters on the microeconomic revolution, the theory of capital, and neoclassical theory of the firm. A probable advantage of this book, in comparison to the bulk of the books with a similar focus, is that each chapter is self contained and can be read in isolation and according to one's interests and needs.

The author is a well‐known political economist and historian of economic thought and often uses examples and explanations which place economics closer to real‐world issues. However, he is also a known scholar in the field of input‐output (IO) economics (Tsoulfidis and Mariolis, 2007). In this context, he often uses the IO methodological framework to provide good pedagogical examples.

Undoubtedly, the author is fond of non‐conventional approaches. This implies that under the label of “non‐conventional” or “non‐mainstream” economics, this book discusses issues and topics that are of great interest to a variety of non‐dominant traditions, such as those embraced by Marxists, Sraffians, and others. However, despite the fact that the author includes, in his book, some major scholars and recognizes that some other economists or schools of economic thought have also provided interesting contributions in the field (e.g. Malthus, J.S. Mill, Marshall, Walras, Veblen, Schumpeter, Kalecki, Kaldor, or German historicism, evolutionism, institutionalism, Post‐Keynesianism and so forth) he does not examine them separately, if at all. For instance, Joseph Alois Schumpeter is considered by some authors as “one of the greatest economists of all time” (Haberler, 1950, p. 1)[1]. Furthermore, some alternative interpretations of Marxist theory could be further examined in the main text[2]. Also, the separation of monetarists from neo‐classical economists could be further discussed based on the so‐called “endogeneity versus exogeneity of money” debate that has forced most contemporary economists to shape views on either side[3]. Finally, the popular models of economic growth and the so‐called new growth theory could also be further explored.

To sum up, the book under review provides a very good exposition of the major scholars and schools in the history of economic thought and macroeconomics. It is particularly useful because the various theories are presented so as to explain thereality of economic systems. In the meantime, it makes clear that economics, as a discipline, has taken the form of various schools of thought which are often based on contradictory theoretical principles. This is not common for similar books, especially in the field of contemporary macroeconomics.

In conclusion, this is an easy‐to‐read book and the aforementioned characteristics make it worth reading for anyone interested in taking a closer look at what modern economics is all about.

Notes

In fact, several well‐known theoreticians and historians such as Morgenstern (1951, p. 203), Kessler (1961, p. 334), Chandler (1962, p. 284) and Scitovsky (1980, p. 1) have famously placed Schumpeter at the top of economic thought. Moreover, the research programmes of numerous esteemed economists around the world are deeply influenced by Schumpeter's oeuvre (for instance see, among others, Rosenberg, 1982, Lazonick, 1990, Scherer, 1992, Porter, 1985, etc.). It is in this spirit that Giersch (1984, p. 107) argued: “[T]he present quarter of the twentieth century is likely to become Schumpeter's age”.

As we know, Marxism has since its beginnings taken the form of various trends and strands of thought, based on different theses and positions (Howard and King, 1992).

For example, the question of “money endogeneity” was posited and discussed in the framework of nearly all major Schools of economic thought: The Classic (Rubin, 1989), the Keynesian and Post‐Keynesian (Moore, 1988), and the Marxist School (Milios, 2004).