Some of the Lesser known economist of the world are: 1. Calvin, John 2. Cantillon, Richard 3. Edgeworth, Francis Ysidro 4. Jevons, William Stanley 5. Lassalle, Ferdinand
6. Viner Jacob 7. Saint-Simon, Claude Henri 8. Pareto, Vilfredo 9. Quesnay, Francois 10. Schmoller, Gustav and Others.
Lessor Known Economist # 1. Calvin, John (1509 – 64):
Early Protestantism believed that it was God’s will that man should improve his own lot on earth by his own work.
While Martin Luther said that work was “the base and key to life”, Calvin said that work was punishment for sin and a rational form of activity following God’s will and that austere work, saving, and reinvestment rather than lustful use of the gains of work would ease guilt.
In the Calvinist doctrine there was little use in seeking salvation and the best that could be done was to “prove by one’s works that he is saved”. Sanctification of work by Luther and Calvin led to making virtues of industry, thrift, and self-denial, and here was the basis for success in worldly affairs in a new kind of social goal system.
John Calvin, a Frenchman and a Protestant leader with overwhelming influence, was a resident of Switzerland for most of his life as the Swiss leader of the Reformation.
He was Governor of Geneva more than once and was not opposed to the right of resistance to tyrannical rulers in an orderly manner, and it was Calvinism allied with the National Movement for Liberation that helped Holland come out of Spanish dominance and also shape the social and economic thought and practices of England, Scotland and the North American English colonies.
A religious and intellectual leader of Reformation, he called ‘work’ a moral force, cautioning, however, that none should choose a ‘calling” because of riches to be gained, but once in a ‘calling’, none should be unmindful of the wealth to be gained by a close devotion to duty, since increase in wealth could be used for ‘Christian’ purposes. Success, he meant, was a mark of God’s favour and a confirmation that one had already been ‘called’ by God.
Calvin said, “God not only foresaw the fall of the first man … but also arranged all by the determination of his will”, and, most important, he preached St. Paul’s dictum: “If a man will not work, neither shall he eat” condemning thereby, as he did, indiscriminate alms-giving and urging that the “ecclesiastical authorities should regularly visit every family to ascertain whether the members were idle or drunken or otherwise undesirable.”
Max Weber, a German economist, sociologist and philosopher, described Calvinism as a powerful stimulus to the evolution of modern capitalism, if not its cause, while R. H. Tawney, the reputed English historian and Warner Sombart, the distinguished economist, viewed that the rise of modern capitalism in Northern Europe was the cause of the Reformation and the reason for its acceptance.
William Ebenstein wrote in his ‘Political Thought in Perspective’ that “Early Calvinism … has its own rule, and a rigorous rule, for the conduct of economic affairs no longer suspects economic motives as alien to the life of the spirit, or distrusts the capitalist as one who has necessarily grown rich on the misfortunes of his neighbours, or as regards poverty as in itself meritorious, and it is perhaps the first systematic body of religious teaching which can be said to recognize and applaud the economic virtues…. Its enemy is not the accumulation of riches, but their misuse for purposes of self-indulgence or ostentation. Its idea is a society which seeks wealth with the sober gravity of men who are conscious at once of disciplining their own character by patient labour, and of devoting themselves to a service acceptable to God.”
‘Institutes of the Christian Religion’ was written by Calvin.
Lessor Known Economist # 2. Cantillon, Richard (1680 – 1734):
Born in Ireland but French by birth, Cantillon was a banker and a stock-trader in Paris, having earned a huge fortune. He left France owing to his difference of opinion with John Law, a Scottish financier, for his highly speculative monetary theories and practices, and later, met his end in London in tragic circumstances.
His study and analysis of economics and his reputation as an economist came to be acknowledged with his publication of ‘An Essay upon the Nature of Commerce in General’ in the mid-fifties of the eighteenth century which was applauded by Jevons as the best planned treatise on economics well in advance of Smith’s ‘Wealth of Nations’ and as the ‘first’ synoptic description and analysis of the ‘economic process.’
It was Hayek who said that “The importance of Cantillon seems to lie in the fact that he was the first to succeed in permeating and describing almost the whole of what we call political economy.” His views on the importance of agriculture and his analysis of wealth had overshadowed the ‘Tableau Economique’ of Quesnay, and he was quoted by Quesnay and Smith both.
As regards ‘distribution’, he started from the social product and showed how it was measured out to the different classes of producers, and anticipating the theory of physiocracy, he identified the produce of the soil as national income, distribution whereof, he held, was mainly confined to farmers and landlords, the ratio being two to one, the other contributing factors, specially those in trade and commerce, having their share as derived earnings.
He investigated into how money and merchandise circulation could take place when, as he presumed, the population of a state lived one half in urban, and the other half in rural areas. Unlike the Mercantilists whose analysis was confined to a single section or projected a partial picture, Cantillon’s analysis covered the aggregate national system as a whole.
Cantillon’s analysis did include wages, population, money problems, exchange and interest, overseas trade, exchange rate, banking and credit etc.
His anticipation of the classical ‘cost theory of value’, distinction between ‘intrinsic value’ and ‘market value’, law of ‘supply and demand’, inflation and its effects upon prices and distribution etc. were contributory to subsequent development and elaboration of the science of economics.
It was about two decades later that Smith distinguished between ‘value in use’ and ‘value in exchange’ corresponding to Cantillon’s ‘intrinsic value’ and ‘market value’, and held that they could not be regarded as equal.
While asserting that market value was the result of supply-demand interaction, intrinsic value remaining unchanged, Cantillon foretold presumably the classical ‘subsistence theory’ of wages, for which he drew illustration from practical life, namely, the areas of demand, production, supply and prices.
Cantillon’s definition of wealth included, inter alia, comforts and conveniences of living, and his forecast of the quantity of money, prices and analysis of foreign trade, highlighting merchandise trade and movement of valuable metals and causes of exchange rate fluctuations was, and still is, worth studying with interest.
Cantillon laid, so to say, the foundation for the classical theory of value, which Smith acknowledged from time to time. He held that over- or under-supply of money would influence the price level, and that the farmer, in case of over-supply, would be unfortunate to find his income inadequate to pay rent.
As regards interest, he viewed that interest must be such as would compensate the lender undertaking the risk of lending, but not disproportional to the borrower’s need.
In his analysis of international trade, inflow of bullion was regarded as a major contributory factor in causing and heightening inflationary spiral disturbing prices and income distribution. Another very worth-mentioning contribution of Cantillon was his brilliant exposition of the automatic adjustment system in international trade transactions.
‘Easai sur la Nature du Commerce en General’ (An Essay upon the Nature of Commerce in General) was his most important contribution to the science of economics.
Lessor Known Economist # 3. Edgeworth, Francis Ysidro (1845 – 1926):
A distinguished economist and an academician, Edgeworth was Professor of Political Economy at Oxford for more than three decades (1891-1922), and, besides, he was the editor of the Economic Journal and also the Secretary of the Committee of the Study of Index Number set up by the British Association for the Advancement of Science.
He was among the “most original…, most technical of the marginalists, the most mathematical, and the closest to the economics of the mid-1950s”, sharing the credit for “independent invention of the indifference curve.”
Beginning his intellectual life as Jevons’ disciple, he transferred his ‘allegiance’ to Marshall, but while “Marshall’s interest was intellectual and moral, Edgeworth’s intellectual and aesthetic.”
He reached “economics … through Mathematics and Ethics” and although “application of Mathematics to the Moral Sciences … became perhaps his favorite study,” the “centre of his interest gradually passed from Probability to the Theory of Statistics, and from Utilitarianism to the Marginal Theory of Economics.”
Edgeworth’s ‘Mathematical Psychics’ (1881) was his first contribution to Economics and also a representative account of the views as regards “measurement of Utility or Ethical value,” “algebraic or diagrammatic determination of economic equilibrium,” “measurement of Belief or Probability,” “measurement of Evidence or Statistics,” and “measurement of economic value or Index Numbers … with their extensions and illustrations.”
He was a “mathematical utilitarian,” who, starting with the hope of “measuring utility”, made light of the “difficulty of inter-personal comparison” by his inimitable “poetic prose”: “We cannot count the golden sands of life; we cannot number the ‘innumerable smiles’ of the seas of love; but we seem to be capable of observing that there is here a greater, there a less, multitude of pleasure-units, mass of happiness; and that is enough”. (Mathematical Psychics: Edgeworth).
His use of statistical method in economic analysis, invention of analytical tools in demonstrating “indifference curves” and “contract curves” was a visible exposition of “technical ingenuity,” and, further, his definition of “index number” as “The general principle according to which the weights are to be assigned is that they should represent the importance of the commodity to the consumer” and of income as “Income may be defined as the wealth, measured in money, which is at the disposal of an individual or a community per year or unit of time” are succinct and easily intelligible.
Edgeworth’s concept of “true equilibrium” demanded, in his words, the privilege of “re-contract,” meaning that transactions at “false or non-equilibrium prices” were to be regarded as provisional and subject to confirmation at the “true” price, which might be logical but was hardly real.
Apart from his being an economist of repute, he was a “good linguist… and his Irish- Spanish-French origin may have contributed to the markedly international sympathies of his mind,” and further that “… He had a strong feeling for the solidarity of economic science throughout the world and sought to encourage talent wherever he found it …” (Essays in Biography: Keynes).
His works are:
Mathematical Psychics, 1881; Theory of Monopoly, 1897; Theology of Distribution, 1904; and Papers relating to Political Economy, 1926.
Lessor Known Economist # 4. Jevons, William Stanley (1835 – 82):
A top-most British economist, Jevons’ principal endeavour was to convert economics to a ‘pure science’ by use of methods and techniques applicable to ‘scientific’ reasoning. Born in Liverpool and son of an iron merchant, he began studying Chemistry and Botany at the University College, London, but the failure of his father’s business made him accept the job of an assayer of the mint in Sydney, Australia.
He came back a few years later, and became, after completion of his education, first a tutor and then, Professor at Owens College.
It was during this period that his interest shifted from natural sciences, through morals and philosophy, to economics, and he became Professor of Economics at the University College, London. Failing health caused him to resign his post, and he devoted himself to writing, but before he could finish what was to be his principal contribution to economic thought, he unfortunately drowned while swimming.
“Economics,” he declared in his ‘Theory of Political Economy,’ “if it is to be a science at all, must be a mathematical one,” and since it” deals throughout with quantities, it must be mathematical in matter, if not in language.”
His knowledge of mathematics and command of the techniques applicable in scientific reasoning helped him make endeavour to convert economics as a ‘pure science’, and his effort turned to be a “fruitful blend of logic, statistics and economics.” His consideration of the “problems of measurement” and “development of index number” earned him general appreciation.
A mathematician, logician with command of inductive techniques, and at the same time a Benthamite, Jevons was critical of Mill, Ricardo and Marshall but not as much of Malthus and Senior, who, he felt, had a better comprehension of the doctrines of economics, although not without a comment that they were ‘outvoted’ by the “unholy unity and influence of the Marshall-Mill School.”
He treated economics as a “calculus of pleasure and pain,” and attended to re-interpret consumption, production, exchange and distribution from the psychological viewpoint.
Jevons held that “value depends upon utility,” and by utility, he meant the “pleasure derived from the use of a commodity,” which, he said, was an “abstract quality whereby an object serves our purpose and becomes entitled to rank as a commodity,” and he concluded that “Whatever can produce pleasure or prevent pain possess utility.”
Since, he observed, the most significant law of economics was the “tendency towards satiety,” utility — which has two dimensions, namely, “quantity of a commodity and the intensity of the effect upon the consumer—” tends to decrease as the amount increases, and this made him distinguish between the “utility of all the amount” used and the “utility of any one unit” of the supply. He called the utility of the last unit used “final degree of utility” which term came to be known as ‘marginal utility.’ He asserted that the ‘mechanics of utility’ was measurable in terms of ‘exchange value.’
Jevons said that “…. cost of production determines supply, supply determines final degree of utility, final degree of utility determines value …,” and that “… labour is found to determine value but only in an indirect manner by varying the utility of a commodity through an increase or limitation of supply,” adding that “… though labour is never the cause of value, it is in a large proportion of cases the determining circumstance,” which he explained as follows: “Value depends solely on the final degree of utility. How can we vary this degree of utility? By having more or less of the commodity to consume. And how shall we get more or less of it? By spending more or less labour in obtaining a supply …”
Jevons stressed upon the relation between price and ‘subjective utility,’ and could claim credit for the discovery of the ‘law of indifference,’ meaning that in that presence of two or more similar articles on sale at the same time, it was a matter of ‘indifference to the buyer as regards his choice, and such being the case, there could be only one price at a given time for similar articles.’
His ‘residual claimant’ theory of wages as against Mill’s ‘wage-fund’ hypothesis meant in essence that portions of the product were first deducted for rent, interest and profit, the remainder being the property of labour, the validity of which rested upon the independent determination of—and limitations —upon the shares of the prior claimants, which were, however, difficult to establish.
Keynes said that Jevons’ “… theory of solar variations (‘sun-spot’ theory) as the explanation of the period of the Trade Cycle, although not a complete explanation, is “immortally associated with his name,” that he was no less interested in the history of economic thought and theory as proved by his “discovery of the work and significance of Cantillon,” and further that, although “on the side of morals and sentiments,” Jevons was an ‘individualist,’ he was nevertheless an advocate of “public expenditure on education …” etc.
It is Keynes again from whom we can have a summary position of Jevons’ endeavour and achievement, for example, Jevons was “born in the year after Malthus’ death,” and the circle in which he grew up was “interested in social and economic problems,” and “even though educated … in mathematics and in biology, chemistry and metallurgy …”, he gave us a “long series of inductive studies of commercial fluctuations and of prices” which made the “beginning of a new stage in economic science,” and it was Jevons who “compiled and arranged economic statistics for a new purpose and pondered them in a new way,” and the “significance of his method may be expressed by saying that he approached the complex economic facts of the real world, both literally and metaphorically, as a meteorologist.” (Essays in Biography: Keynes).
Schumpeter also paid him (Jevons) glorious tribute by saying that he was one of the “most genuinely original economists who ever lived.” (History of Economic Analysis: Schumpeter).
His works include:
Pure Logic, 1863 ; The Coal Question, 1865 ; Theory of Political Economy, 1871 ; The Principles of Science, 1874 ; Money and the Mechanism of Exchange, 1875 ; The State in Relation to Labour, 1882 ; and Methods of Social Reform (a posthumous publication).
Lessor Known Economist # 5. Lassalle, Ferdinand (1825 – 64):
Lassalle was a leader of the German socialist movement, having identified himself with the cause of the German working men and decided to counteract, during Bismarck’s leadership of the German government, the influence of the middle class liberals, by the creation of a strong political movement among the working class.
He was the son of a German-Jewish merchant and was naturally destined for a commercial career, but the situation turned otherwise. He left his ‘commercial’ school and took up the study of philology and philosophy at the Berlin University. After a “stormy life ending in a stormy death”, Lassalle became a ‘legend,’ “embalmed in one of George Meredith’s novels.” (The Development of Economic Doctrine: Gray).
He came under the virtual influence of Marx at the age of twenty three, but preferred, unlike Marx (and Engels), “transition to socialism” by “parliamentary methods,” and was, so to say, a ‘Marxist Social Democrat’ rather than a Communist, the difference between them lying in the identification from the viewpoint of strategy as regards ‘transition to socialism.’
His organizational ability and activities helped him develop the first Social Democratic Party in Germany.
Lassalle called Ricardo’s Wage Theory as ‘Iron Law of Wages’ and while he was critical of his ‘bourgeois economy’, he made use, nevertheless, of his findings in this regard as a viable instrument to propagate his own ‘social economy’ concept as against its capitalist counterpart.
As regards the difference between the eighteenth century liberalism and the nineteenth century socialism, Lassalle held that the former considered ‘equality’ of men on the basis of natural and philosophical principle while the latter on the socio-economic and pragmatic analysis.
He was critical of Smith’s optimism stating that “if we were all equally strong, equally clever, equally educated, and equally rich,” the “ethical idea of the bourgeoisie” as regards equality of men “could be regarded as sufficient and moral”, but this was not true.
The worker of 1760 could not be compared with his unhappy descendant of 1860, or, in other words, the 18th century workman was mostly the free master of his own tools, while his counterpart of the following century was an ‘un- free’ worker of another man’s factory.
The capitalists’ ‘labour division’ formula necessitated exchange mechanism bringing in its way middlemen and generating “social and economic maladjustments and miseries”, all of which, Lassalle held, could be avoided by “state ownership and control of distribution”, independent of the “conjectural and sometimes actual” market conditions in a ‘market economy’.
He had no faith in ‘self-help’ cooperatives nor in state-supported associations, and preferred state intervention in the ‘laissez-faire’ system, declaring that “This is the consideration that has weighed with me, and there lies the whole issue of the battle which I am about to wage.”
He was the ‘Louis Blanc of German Socialism,’ unique and practical, as evidenced by his campaigning and fighting for establishing equality among individuals through operative ‘state machination’ (ownership and control rather than simple support) without which, he stressed, the weak would ever remain weak at the mercy of the strong.
Lassalle was more an activist than a theorist, and, according to Alexander Gray,”… nothing but fire, and in the last two years of his life, … a whirlwind, an ascending tornado leading up to the final climax or anti-climax.”
His works include:
The System of Acquired Rights (1855) and a number of Pamphlets.
Lessor Known Economist # 6. Viner Jacob (1892 – 1970):
A distinguished economist and a specialist on international trade, Viner was born in Montreal and had his education first at McGill University and then at Harvard. He became Professor of Economics at Chicago and later at Princeton. Besides, he was a visiting lecturer at other universities, a Consulting Expert at the U.S. Treasury and State Departments, and also the President of the American Economic Association (1939).
Viner was all praise for Dudley North as a pioneer of free trade and commended Mill’s “equation of international trade” or “law of international values”, stating that “Mill’s discussion of the relationship between reciprocal demand and the commodity terms of trade was in the main a pioneering achievement, and probably constitutes his ‘chief claim to originality’ in the field of economics.” (Studies in the Theory of International Trade).
As regards the post-World War II economic relation between ‘state-controlled’ and the ‘private-enterprise’ economies, he said that”… extension of state control over national economies would … make international economic intercourse, and the national restrictions on such intercourse, a breeding ground for deep and dangerous international friction … economic factors can be prevented from breeding war if, and only if, private enterprise is freed from extensive state control other than state control intended to keep enterprise private and competitive. This is my conviction for a world of autonomous nation-states …,” and it was his belief that “Only… in a world political order in which some form of world authority will have the power and the will to restrain the activities of nation-states whether economic or not, when they are such as to threaten the maintenance of peace, and perhaps also to enforce upon the nation-states’ positive action conducive to international collaboration, will mankind have any reasonable prospect of freedom from the recurrent threat of war …” and he supported his argument by quoting the English socialist, Barbara Wootton (Socialism and Federation, 1941) that “… the notion that you must get socialism first, after which all things international will be added unto you, is a notion which ignores the lessons of experience.” (International Relationship between State- controlled National Economies).
His comment on the British Mercantilist reasoning for protection on “infant-industry” ground was that it failed to satisfy the crucial question why the policy-maker should consider it efficient to use resources for very slowly maturing projects which individual decision-makers did not regard as possible.
On the ‘Custom Union Issue’, he indicated two effects, namely, ‘trade-creating’ and ‘trade-diversion’ effects, of which the former would apparently result in gain, while the latter losses in comparison, and he came to the conclusion that the ‘overall gain’ from shifts in the location of production would depend upon the superiority of the former to the latter, in “addition to other factors.” (Studies in the Theory of International Trade).
As regards underdeveloped countries, his comment was that the countries, more favorably situated, could make major contributions, for instance, general reduction in trade barriers, freer international movement of capital on reasonable terms, general diffusion of technical knowledge and skills compared to those less advanced and less prosperous, but he was firm in his hold that despite all these contributions of importance, the “problem will not even begin to have a practical solution unless the underdeveloped countries dedicate their own resources — human, physical and financial — to a sound, large-scale and persistent attack on those basic internal causes of mass poverty …”
Viner was appreciative of Keynes’s ‘General Theory’ when he said in his review (Quarterly Journal of Economics, 1936-37) that the book “deals with almost everything, but the causes of and the future prospects of unemployment, cyclical and secular, are its central theme ..,” that it “… breaks with traditional modes of approach … at a number of points,” that “no old term for an old concept is used when a new one can be coined, and if old terms are used new meanings are generally assigned to them,” that the “only clash between Keynes’s position and the orthodox one is in his denial that reduction of money wage rates is a remedy for unemployment,” and furthermore, that “he (Keynes) finds fault with the classical economists for their alleged neglect of the gulf between the desire to save and the desire to invest, i.e., for their neglect of ‘liquidity preference’ …”, adding, however, that “We have no reliable information about the strength of liquidity preference under varying circumstances, and in the absence of statistical information of a genuinely relevant character, discussion must be based upon conjecture.” (The Critics of Keynesian Economics: ed. Hazlitt).
Of his works, ‘Studies in the Theory of International Trade” (1937) is worth noting.
Lessor Known Economist # 7. Saint-Simon, Claude Henri (1760 – 1825):
Born in an aristocratic French family claiming to have descended from Charlemagne, Saint-Simon who could have been a prominent figure in the Court of Louis XVI, had to alienate himself from his famous heritage and the corresponding honour for his radical ideas and action for the sake of democracy.
He left for America, took part in the War of Independence (1775-76), and became a ‘passionate disciple of the new ideas of freedom and equality.’ It is said that while in Mexico from Louisiana, he suggested a canal which could have preceded Panama but it was turned down since it was “nine-tenths idea and one-tenth plan.”
He returned to France, a ‘revolutionary noble’ joined the French Revolution (1789), and was chosen for the National Assembly where he proposed abolition of titles, after having renounced his own, but he was unfortunately viewed with suspicion and had to court imprisonment.
After his release, he spent whatever fortune he had accumulated, in frantic pursuits of knowledge for science, economics, philosophy and politics.
His later life was so miserable, financially and otherwise, that he was led to attempt suicide, but providence saved him at the cost of one eye, and he had to continue for a couple of years more, ill and impoverished, but nevertheless dedicated and proud, telling his followers when the end came: “Remember that in order to do great things, one must be impassioned”.
His presumption was that the society was a “gigantic factory”, that according to the logical principle “man must work,” and that the workers, ‘les industries,’ irrespective of ranks and hierarchies, would get the highest rewards and the idlers, the least. It was not a revolution as such but a new industrial process and a protest that in a society of toil, idlers must not be allowed a lion’s share of the wealth because it would amount to grave injustices in the distribution of society’s wealth.
He was opposed to private property, but his followers (Saint-Simonians) went further, urging the end of private property at all. Simon held that industry was the basis of life and living for which he called for a parliamentary government as a step in the direction of ‘industrialism’ and other economic activities like agriculture, artisanship, manufacture, banking etc.
He even endeavored to establish a bank for public utility service in order to ensure peace and public confidence, and this he did after his release from prison following the suspicion against him after the Revolution.
He was not in favour of any class distinction, and was not as much against capitalists as against the landed aristocracy. Production maximization and elimination of idlers were what he was after, and he asked for government’s active response for organizing the system in a manner beneficial to all.
Saint-Simon was regarded as a ‘transitional socialist’, not an ‘out-and-out’ socialist, but nevertheless as a path-finder to real socialism in future. His major contribution to economic thought comprised his antagonism to private property ownership, from the viewpoints of history, utility and justice, and its replacement by what might be called ‘collectivism.’
His works are:
De la Reorganization de la Societs European, 1814; Industries 1817-18; La Politique, 1819; and De Noveaux Christianism, 1825.
Lessor Known Economist # 8. Pareto, Vilfredo (1848 – 1923):
An Italian nobleman and successor to Leon Walras as Professor of Political Economy at the Lausanne University (‘home’ of the Lausanne School of Economic Thought), Pareto was an economist in the mathematical tradition, having given an elegant version of the “equilibrium theory” of which Walras was the exponent.
His definition of economics as a “natural science like psychology and chemistry” was comparable to those of Menger and Jevons, and his work revealed, like Edgeworth’s, things “as they were in replacement of what they were not.”
Pareto held that the general equilibrium theory could be constructed without the assumption of a “quantitatively measureable utility,” claiming that “consumer equilibrium can no longer be expressed by saying that price ratios are equal to the ratios of marginal utilities,” and shaping the modern concept as “price ratios are equal to the relevant marginal rates of substitution,” which refers to the “amount of one commodity which must be given to the consumer to reduce the one of another commodity in order that the consumer shall be as well-off as before.”
He translated “marginal utility into indifference curves, dropping along the way the assumption that consumers knew by how much they preferred one item to another, and retaining the less stringent requirement that they simply knew that they preferred one collection of items to another.” (A History of Economic Ideas: Robert Lekachman).
His application of “mathematical methodology” to the analysis of utility, and his study of the inter-relation between demand, price and income and his presentation of the “production equilibrium” with the theory of “variable coefficients” were also none the less remarkable.
Although, however, his approach to “experimental economics” was pioneering, his abstraction from actual institutional arrangements and his “feat” of forming a “school” was, as commented by Schumpeter, “on the basis of a theoretical structure that was inaccessible not only to the general reader but, in some of the most original parts, also to students of economics.”
Pareto, as observed in his emphasis on the “unity of society”, was not an economist alone. He said that history contained a “series of repetitive cycles, involving hostility and conflict in social affairs,” and his “sociological investigations” were an “attempt” to systematize them.
He observed that “political history was a circulation of elites” in which new vigorous forces “condition the mass movements” with the object of gaining power, and he described the mechanism of this process as “Revolutions come about through accumulations in the higher strata of society, either because of a slowing- down in class circulation, or from other causes, of decadent elements no longer possessing the residues suitable for keeping them in power, and shrinking from the use of force; while meantime in the lower strata of society elements of superior quality are coming to the fore, possessing residues suitable for exercising the functions of government and willing to use force,” and in the same vein he argued in his discussion of utility that when income disparities were reduced, individuals sought to increase the inequalities in status and power.
Pareto — who was an early teacher of Mussolini — was called, not un-often, the “Prophet of Fascism” and none the less the “Karl Marx of the Bourgeoisie.”
His works include:
Cours d’ Economic Politique, 2 Vols., 1896-97; Manual d’ Econimia Political, 1906; and Les Systems and Trattato di Sociologia Generael.
Lessor Known Economist # 9. Quesnay, Francois (1694 – 1774):
Francis Quesnay is called the father of ‘Physiocracy.’ He was born in a peasant family in France, and was originally the physician of Louis XV, having devoted himself to the study of economics after 1756.
Fond of rural atmosphere, village economy, agriculture, life and living of the peasantry in preference to urban civilization, he gave expression to his ideas in the ‘Encyclopedic’ and various other journals and periodicals of his time.
His pioneering endeavour in bringing about a new discipline in the socio-economic conditions emerging from the disintegration of feudalism found form in his magnum opus ‘The Tableau Economique and Maximes’ (Tableau Economique) in which he pleaded for giving priority to agriculture for perfection, failing which there would be “Poor peasant; poor kingdom; poor king.”
The term ‘Physiocrat,’ said to have been coined and used by Du Pont (an enthusiastic disciple of Quesnay), represented the ideas having originated from the thinking of Quesnay and culminated in the formation of the ‘Physiocratic School’, a school of discipline which, according to Marshall (‘Principle of Economics’), was a “policy of obedience to Nature” for the “greatest degree of prosperity possible for the society.” (The Economics of Physiocracy: R. L. Meek).
Haney described ‘Physiocracy’ as a ‘French revolt’ against Mercantilism, but it was nevertheless a landmark in the history of economic science during the intervening period between ‘Colbertism’ (Mercantilism) and Smith’s ‘Classicism.’
According to Mirabeau (belonging to the Physiocratic school of economics), Quesnay’s ‘Tableau Economique’ was the greatest contribution to human civilization, since the ideas consisted therein were original and aimed at tracing the flow of income, considering economics as a “unified whole” recognizing it as a system as to how things “hung together.”
Quesnay’s doctrine was that “soil is the only source of wealth,” or, in other words, “Nature is the only true source of wealth,” pinpointing agriculture, and commenting on “manufacturing” and “trade” as being “sterile” or at best “artificial wealth.”
The Physiocrats led by Quesnay believed in “natural order”— meaning “laissez-faire, laissez-passer”, that is, “let things proceed” without ecclesiastical and/or political “coercion” or “interference,” which would bring the best possible prosperity to each individual and the society, and they used the term “product net” (net product) to mean production of wealth from land over the cost of production whereas “production” in other areas—say, industry, trade etc.—was considered by them as “replacement or transfer of products already made” and “sterile”, throwing, in fact, an open challenge to the then Mercantilist doctrine believing in wealth through trade and commerce.
The concept of Physiocracy could be better understood against the background of the pre-Revolution (1789) social structure of France, which, as Quesnay observed, was a society of productive class (agriculturists), the proprietary class (King and the landowners) and the “sterile” class (merchants, manufacturers, domestic servants and the liberal professionals), all drawing necessities of life from production and productivity of agriculture.
Quesnay’s ‘Tableau’ made some assumptions as regards identification of economic classes, their inter-economic relationships, their expenditure decisions, neutrality of money etc., but maintained that it was the income from the first investment in agricultural pursuits that actually circulated among all the classes.
Quesnay hinted that wages earners who turned out usable materials from the soil were deprived of their legitimate dues and paid only “subsistence” wages owing to pressure of competition (population increases), and his suggestion, in the circumstance, was imposition of a “single tax” (d’impo unique) on land income, which “echoed through economic thinking ever since,” for example, “American Henry George’s suggestion of similar tax (Progress and Poverty) although for somewhat different reasons.”
Chronologically as well as ideologically, Quesnay and his followers could claim having laid down, even though preceded by “Mercantilism,” the foundation of economic science in their concepts of “net product” and “circulation of wealth,” “natural order,” “beneficent Providence, ‘individual liberty” etc. for which Adam Smith—of whom they were historically ahead—had a high opinion of them.
Tableau Economique and Maximes, 1758, and Essays and Articles, 1756-57, 1765 and 1767, are his chief works.
Lessor Known Economist # 10. Schmoller, Gustav (1838 – 1917):
Schmoller had a brilliant academic career, having served as Professor of Economics in a number of universities, for instance, Halle, Strasbourg and Berlin. A firm believer in ‘economic historicism’ for its far-reaching conclusions, he enriched the ‘German Historical School’ which had its origin during the mid-nineteenth century, and was the virtual leader of the ‘younger school,’ insisting upon more historical research because of the limitations of the abstract and deductive methods of the ‘mainstream economics’.
He said that “…historical education showed that human beings are not always the same and they do not always live under the same typical economic arrangements and social institutions….’ and that as a result “… what had been empty abstraction and dead mechanism again took on blood and life”.
He set in motion the tide of historical research in economics possibly much more than his predecessors, advocating such research to include implementation of theory into practice, and he was convinced that”… laborious special investigations on economic history … can afford the right basis to give to the economic theory a sufficient empirical structure…” His own works included accordingly a number of empirical studies, demonstrating inductive reasoning as the correct method of study of the evolution of the economic system.
Schmoller explained “Whether the future judgement will be that I failed as a historian because I was at the same time an economist, and as economist because I could not cease to be a historian, I must leave undecided. I can only be both at once and imagine that I owe the best of what I am capable of achieving to this combination.” (The History of Economics: W. Stark).
He admitted the significance of statistics, expressing that “… both these sciences (statistics and history) are related to political economy in a similar manner: as far as political economy is concerned, both history and statistics are primarily auxiliary sciences which provide it with selected, examined and properly organized empirical data …,” but gave preference to ‘historical science’ as the ‘most universal of all social sciences’, which provided “empirical material and data which transform the scholar from a beggar to a rich man as far as knowledge of reality is concerned,” while statistics had its limitations in revealing the “complicated causes and combination of causes.”
Schmoller’s concept of historical investigation was well-balanced and opened up a battle between the theorists and the historians, leading to, incidentally, the development of institutionalism, particularly in the United States, which appeared to be more radical and did, in fact, throw a challenge to the ‘universality’ of economic laws, causing it to be verified by research and inductive reasoning as against deductive and abstract inference.
He was presumably influenced by Hegel in his dispassionate favour for history in the study of economic science, say, the genesis of economic institutions, their current mode of behaviour and the class psychology etc. in the matter of economic analysis, instead of accepting the Classicists’ views as granted.
As Edgeworth’s and Pareto’s disciples believed in ‘marginal utility and equilibrium’, Ricardo’s disciples in ‘Classicism,’ so–did Schmoller’s disciples in ‘historism.’ (The History of Economics: W. Stark). His criticism of Classicism and advocacy for use of historical method and also statistical materials, study of human nature, inductive reasoning on the analogy of using both feet, right and left, for walking seemed to be an ‘epitome of German historical scholarship’ (History of Economic Thought: J. F. Bell).
Karl Menger was the ‘most prominent opponent of the historical school’ to whom Schmoller wrote in 1883 that “There is a new future before political economy, thanks to the use that will be made of the historical matter, both descriptive and statistical, that is slowly accumulating. It will not come by further distillation of the abstract propositions of the old dogmatism that have already been distilled a hundred times”, and even Menger, Schmoller said, “… admits that the most important economic institutions…. have both an individual nature and a historical side to their existence; consequently he who knows the essence of these phenomena only in one phase of their existence does not know them at all.” (‘Political Economy and the Method’ in ‘Essays in Economic Method’: ed. R. L. Smyth).
Although a leader of the Historical School, he was nevertheless a social reformer, functioning through ‘The Verein fur Sozialpolitik’ (Union for Social Policy), an organization of the ‘socialists of the chair,’ mild and moderate but opposing ‘Manchesterism’ (a ‘caricature’ version of Mill and Ricardo), and calling for a study of the working conditions and natural reforms, say, social insurance, factory legislations etc. He proclaimed that “Economics is today a science only in so far as it expands into sociology… Its observations must involve investigations into the social forms of economic life.”
His chief and massive work is:
Grundriss (An Outline of General Economic Theory), Vols. I & II
Lessor Known Economist # 11. Engels, Friedrich (1820 – 95):
An associate of Marx in his intellectual leadership of the socialist movement of the 19th century, Engels was the co-author of the ‘Communist Manifesto’ (1848), a historic document describing the process of class struggle between the bourgeoisie (haves) and the proletariat (have-not’s) and stating unambiguously that “The history of all hitherto existing society is the history of class struggle.”
The Manifesto ‘erupted’ from a series of discontent in Europe during the mid-19th century containing the major themes of what came to be known as Marxism and declaring, inter alia, in support of revolt that “The proletarians have nothing to lose but their chains. They have a world to win.”
Born in a rich family, Engels was naturally destined for a business career for which he joined a Bremen business house. He had also been in Manchester as an emissary of his father’s business, but, surprisingly enough, while in Bremen he published under an assumed name some pamphlets on economic and political matters with a view to drawing public attention.
In England he participated in the social movement programmes and wrote ‘The Conditions of the Working Classes in England’ attacking capitalism as being the cause of unbearable economic and political conditions of the workers.
A left-wing Hegelian, Engels was critical of Hegel’s idealistic dialectics, opposing academic or Utopian socialism, and also Schelling’s ‘mysticism’. His first meeting with Marx took place in Paris in 1844, and the movement for emancipation of the proletariat from the capitalist enslavement was established.
Engels was undoubtedly the most original and intimate collaborator of Marx, and it was mostly on his bounty that Marx could make his ideological concept — economic as well as political — universally recognized and acclaimed as ‘Marxism’ in respect of which both of them produced an impressive series of books, individually as well as collaboratively.
His collaboration and co-authorship of the ‘Communist Manifesto’ proved that his views and ideas were no less original, although overshadowed by the ‘giant’ figure and ‘dominating personality’ of Marx.
Engels was a participant in the ‘First International’ in the struggle against petty-bourgeois opportunism and anarchism, substantiating dialectical and historical materialism and contributing fruitfully to Marxist philosophy.
His suggestion of the “application of dialectical materialism to natural sciences” in effecting an “orientation” of the fundamental questions of philosophy, disclosing its “class” character, his knowledge and criticism of antagonism, elaboration of certain problems of dialectical logic, critique of “vulgar conception of materialistic understanding of history,” strong opposition to the “mechanistic” views of the interconnections between the economic basis and the superstructure etc. were his distinct contributions.
These apart, his participation in the political life of many European countries along with Marx, and also his taking interest in the Russian revolutionary movement made him an acclaimed figure in the working class movement. It was Engels who edited and published Marx’s sketchy notes as ‘Capital’, Vol. II & Vol. III.
Apart from the joint work of ‘The Communist Manifesto’, his individual contributions include Schelling and the Revolution (1842), A Contribution to the Critique of Political Economy, 1844; The Condition of Working Class in England, 1845; The Holy Family and the German Ideology, 1844-45; Principles of Communism, 1847; Ludwig Feuerbach and the Classical Philosophy; The Origin of the Family, Private Property and the State, etc.
Lessor Known Economist # 12. Malthus, Thomas Robert (1766 – 1834):
Malthus came of a respectable family in Rookery, Surrey; his father, Daniel Malthus, was a friend of Rousseau and a correspondent of Voltaire. Young Robert studied at Cambridge (1788) and was made a Fellow of Jesus College, Cambridge (1794) where-after he took Holy Order and the charge of a small Parish in Surrey, but this could not keep him engaged for long. He left for the Continent, travelled widely and became later Professor of History and Political Economy at Halleysbury College, a Training Institute of the East India Company (1805).
He was an ‘amicable antagonist’ of Ricardo, an original member of the Political Economy Club (1821), and also an elected member of the Royal Society. His ‘Principles of Political Economy’ (1827) was a sort of ‘attack’ on Ricardo, and elicited wide applause. His knowledge and experience made him think of population growth and its impact upon the society, and it was in 1798 that his first work ‘An Essay on the Principle of Population as it Affects the Future Improvement of Society’ (shortly ‘An Essay on the Principle of Population’) was published; it was a rousing success and was followed by a series of revised and modified editions.
Although his essays were admittedly influenced by the earlier and his contemporary economists, his exposition of the concept of population growth, compared to means of subsistence, was acclaimed as unique for its orderly arrangement and presentation in a convincing manner.
The problem as originally presented by him consisted in a contrast between two ratios, for example, while “Population, when unchecked, increases in geometrical ratio,” subsistence “increases only in arithmetical ratio,” which implies a “strong and constantly operating check on population from the difficulty of subsistence.”
The operation of these two progressions (population growth at geometrical progression and food production for subsistence at arithmetical progression), he held, would produce an untenable situation, in which the ‘superior power of population’ would be ‘repressed and the actual population’ would be kept “equal to the means of subsistence by misery and vice,” as positive checks, to which he added later ‘moral restraint’ as a preventive check, and he concluded that, in the absence of preventive check, the positive checks would bring down the living standard of the population to subsistence level.
Population increase owing to a fall of mortality and the operation of the law of diminishing returns, both taken together, formed the basis of Malthus’s theory of population as understood in his time, and although his theory more or less coincided with the classical economists’ findings on rent, wages, etc., and although, further, his precision could not have ‘as inevitable an impact’ on industrialized and cultured nations as he thought, it did, nevertheless, have a visible proof in non-developed or less developed countries where population explosion had its full swing compared to production and availability.
Malthus’s views on population were rooted in the doctrines of ‘agricultural system’ as opposed to Mercantilism and associated ideas of ‘foreign adventures and colonialism.’ He upheld the Physiocrats’ view of wealth (coming exclusively from land) in contrast to the Classicists’ view, maintaining that “… manufactures, strictly speaking, are no production, no new creation, but merely modification of an old one, and when sold must be paid for out of a revenue already in existence, and consequently the gain of the seller is the loss of the buyer. A revenue is transferred, but not created …” and declaring land as “incontrovertibly the sole source of all revenue.”
Malthus was initially opposed to commerce as being largely ‘exploitative in character’ where the “value is extracted rather than given,” and declared that “our commerce has not done much for our agriculture,” but “our agriculture has done a great deal for our commerce.” Later, however, he was moderate in his views and called for a ‘balanced development’ of agriculture and commerce, arguing that “It is the union of agricultural and commercial systems, not either of them separately, that is calculated to produce the greatest national prosperity.”
He was a realist and rendered yeoman service to society, for which Nassau Senior called him a “benefactor to mankind, on a level with Adam Smith.”
Darwin acknowledged that the “doctrine of Malthus applied with manifold force to the whole animal kingdom,” and Marshall said that Malthus could be designated as the founder of ‘Historical Economics,’ having provided a clue to understand the social problem of reformation.
It was Keynes who remarked that even if he (Malthus) had never written on population problem, his “analysis of the role of demand on the flow of wealth through the economic system,” and his contribution to trade cycles were adequate enough to give him a high place in economics, and added “I have long claimed Robert as the first of the Cambridge economists.”
Malthus will remain ever remembered as the founder of the demographic science in the history of economic thought, having established a “new, distinct, definite and orderly shaped” idea on the problem of population.
His works include:
Essay on the Principle of Population etc., 1798 (modified and revised in all later editions); The Poor Law, 1817; Principles of Political Economy, 1827; An Enquiry into the Nature and Progress of Rent, 1875, etc.
Lessor Known Economist # 13. Senior, Nassau William (1790 – 1864):
Senior belonged to the ‘laissez-faire’ group of economists comprising Smith, Ricardo, Malthus and the Mills (father and son). He was a good logician and narrowed the scope of economics to complete objectivity, asserting that the whole truth of the matter could be deduced from premises known to almost everybody.
Nassau was the son of a clergyman and had an excellent education at Eton and Oxford. He also studied law and was called to the Bar but he gave up the legal profession since it gave him little interest, and took to academic career, becoming the first Drummond Professor of Political Economy at Oxford from 1825 to ’32 and again from 1847 to ’62, engaging himself during the intervening period in conducting a ‘poor law’ investigation for Parliament and a research work on the contemporary economic conditions for the government.
Marian Bowley gave a lucid picture of his calibre as a reputed economist of his time (‘Nassau Senior and Classical Economics’) and Cossa, an Italian writer, called him one of the ablest economists from Ricardo to the younger Mill, supporting the classical ideas on competition, supply and demand, and price.
Senior was a writer of repute and his article on Political Economy was a remarkable contribution to Encyclopedia Britannica (1836), which was subsequently published in book form. To him political economy was a purely deductive science, and he said, “The general facts on which the science of Political Economy rests are comprised in a few general propositions”, and as the first and foremost of them was the axiom “that every man desires to obtain additional wealth with as little sacrifice as possible,” which assumption, he declared, “is in Political Economy what gravitation is in Physics: the ultimate fact beyond which reasoning cannot go and of which almost every other proposition is merely an illustration.”
Summarily, his views were based upon four basic principles, namely, self- interest (maximum pleasure with minimum pain), population (for which he called Malthus “a benefactor to mankind, on a level with Adam Smith”), increasing returns to industry, and diminishing returns to agriculture. Nassau Senior could claim credit for his ‘abstinence theory’ of capital accumulation, and for his treatment of rent as a difference in natural advantage, not necessarily in agricultural land but as a normal economic phenomenon.
He felt that the ‘supply-cost’ aspect was more important than the ‘demand-utility’ aspect of price, and in this regard, he was in agreement with Ricardo, adducing, however, that limitation of supply was vital. He lipid that production cost was affected by labour, capital and natural forces, and that, in the circumstances, supply of a commodity was “limited by the difficulty of finding persons ready to submit to the labour and abstinence necessary” for its production.
It was his view that “supply-demand and the cost-production equalization could not be instantaneous but only gradual, barring some interference, in a competitive market.”
He recognized the existence of a variety of monopolies, holding control over production and price-fixing.
Senior’s study was dispassionate and provided a realistic explanation of the Smithian and Ricardian principles.
‘Absolute Theory of Capital Accumulation’ is his unique contribution to the science of economics.
Lessor Known Economist # 14. Lenin, Vladimir Ilyich (1870 – 1924):
Born in Simbirsk (Ulyanovsk), Lenin had his early education at Gymnasium, a secondary school, and thereafter at the Law Faculty of the Kazan University, but owing to his active participation in student movement activities, he had to graduate from the St. Petersburg University as an external candidate. He studied Marxism while at Kazan (1888-89) and at Sumara (1889-95) and organized the first Marxist Circle in Sumara.
On his return to St. Petersburg, he became the leader of the local Marxists and formed a League for Emancipation of the Working Class, for which he had to court arrest, imprisonment and exile to Siberia. His energy, creative faculty and devotion to his ‘mission’ were so serious and sincere that no impediment could restrain him from his determination to achieve his objective.
He founded ‘The Iskra’ (‘The Spark’), an all-Russian Marxist newspaper, formed a new type of Marxist Party, worked out a programme for struggle against the so-called ‘reformists and opportunists,’ inaugurated the Bolshevik Party, leading the proletariat and the toiling peasantry to overthrow the Czarist aristocracy and establish a ‘Socialist System’ (October Revolution, 1917).
A top-ranking intellectual of remarkable creative faculty, Lenin gave Marxism a concrete shape in all its areas, distinguishing himself in building a ‘proletarian State’ under ‘Proletariat dictatorship’ and organizing the Communist Party in the then USSR, highlighting the emancipation of the ‘have-not’s from the subjugation of the ‘haves’ and also giving it a turn toward international revolutionary movement. He enriched ‘Marxism’ by giving it a new dimension, bringing unity in dialectics, logic, knowledge and theories.
He did consider historical materialism as the ‘scientific basis’ for knowledge of social development and revolutionary struggle for a “socialist transformation” of society. His penetrating assessment of the works of past philosophers, materialists and German idealists widened his outlook and generated in him, in the context of Marxism, an absorbing interest in the problems of classes, class conflicts, the state, revolution etc., making him virtually the founder of a new ideology, called “Leninism”, rather a continuation of “Marxism”, the two together fusing into an indissoluble entity, namely, “Marxism-Leninism” all over the world for practical socialism meaning a “classless society” enjoying political and economic emancipation irrespective of discrimination.
Lenin was pragmatic enough in having created a disciplined party and cadre and when power had been fully secured, he became attentive to reformation and reconstruction of the ‘war-torn’ and ‘broken’ country, and stressed upon electrification and adequate power supply for “getting things done.” Improved efficiency and greater production was given priority for which his attention was drawn to Taylor’s (F. W. Taylor) formula of “scientific management.” His address 011 “Scientific Management and Dictatorship of the Proletariat,” June, 1919, was:
“The possibility of socialism will be determined by our success in combining Soviet rule and Soviet organization or management with the latest progressive measures of capitalism. We must introduce in Russia the study and teaching of the Taylor system and its systematic trial and adoption.”‘
Although a revolutionary in theory and practice and otherwise a hard task-master. Lenin tended toward an “orderly life, free from excesses, which would have appeared to any observer as the most sober, balanced and well- disciplined life of men, without passion … He was fond of literature subject to exercise of discretion as regards what he needed, and what he did not need …”
His works, books and articles, were extensive, a few of which are:
What the Friends of the People Are, and How they Fight the Social Democrats (1894), Materialism and Empirio-Criticism, Philosophical Notebooks, Imperialism — the Highest Stage of Capitalism (1916), 011 the Significance of Militant Materialism (1922), and The State and Revolution.
Lessor Known Economist # 15. Locke, John (1632 – 1704):
Locke was the son of a small landowner with ‘puritanical leanings’, but had his education at Christ Church, Oxford, along the ‘liberal tradition’, where he also served as a tutor. ‘Church work’ did give him little interest, and he availed himself of an opportunity to serve the Earl of Shaftsbury as his secretary and adviser, following a ‘hectic career.’
After Shaftsbury’s death, the opposition to his policies made him leave the country for Holland where he engaged himself in an ‘uninterrupted study’ for some years, and took, following the change of the government, a small official assignment. His life ended in a country estate, studying and writing, which earned him a worldwide eminence and reputation, primarily as a great philosopher.
It might appear from his writings on economics that he was a ‘mercantilist’ favouring possession by a nation of an abundant quantity of precious metals, but it was hardly so, since he was opposed to the mercantilists’ basic assumption of an “arbitrary authority impeding individual liberty.”
Although preceded by Hugo Grotius (1583-1645), a Dutch jurist and diplomat and also founder of international law, and Thomas Hobbes, Locke was, nevertheless, an ardent advocate of “individually owned” property, free from external control, which has since become a dominant and important issue of modern society.
He seriously objected to any control by the king, arguing that labour was responsible for the “first private ownership,” and claimed that private property was a condition of the earliest existence and became a matter of “social contract” when societies were formed, Physiocrats had support from Locke’s views, although not under identical interpretations.
A contemporary of Sir William Petty, Locke held that land, as such, was valueless, yielding value only by use of labour, and further, that capital was “stored up value in tools and equipment,” which concept, incidentally, reappeared in Ricardo’s socialists’ thought, nearly a century later. While admitting the ‘supply-demand’ impact upon price in the short-run, he viewed that it was labour as the principal factor cost which determined value in the long-run.
His remarks that “Things absolutely necessary for life must be had,” and that”… things convenient will be had only as they would stand in preference with other conveniences …” initiated the concept of elasticity and inelasticity of demand, but he seemed to have been unfamiliar with the concept of competition from ‘substitutes’.
Interest, to Locke, was the result, and not the cause, of the amount seeking employment, and that it would be determined by the “ratio of ready money to the total trade of the kingdom,” meaning, presumably, “business transactions.”
That prices were reflections of the quantity of money was the view of Locke and later of Hume, but it was possibly Locke who said that the value of any commodity, money included, was the result of relative supply-demand interaction, which concept formed the basis of formulating the quantity theory of money and analyzing the process of inflation.
He was in favour of a sound monetary policy indicating, inter alia, that devaluation, if any, would undermine public confidence. Locke’s philosophical views of economic thought were well in advance of his time and creates an absorbing interest even today, three centuries later, in the evolution of economic thought.
His principal works include:
Some Considerations of the Consequences of the Lowering of the Interest and Raising the Value of Money; Treatises Concerning Government; and Essay Concerning Raising the Value of Money.