History of economic thoughts

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The history of economic thought is the part of economic science that studies the evolution of ideas and theories that economists have developed over the years since the birth of economics.

The history of economic thought begins its study back in the 16th and 17th centuries with the birth of mercantilism. Although it is true, everything is said, that in the purest sense, the economy began to develop back in the 6th century BC until the Middle Ages. In this period the first businesses proliferated and with them the first debates regarding the economic world. Ideas relating to economic theories were very rare. Thus, the discussions focused primarily on the difference between rich and poor, and the morality or ethics of getting rich and making a profit from trade.

The birth of economics

The birth of economics as a field of study, as we have said previously, would emerge from the sixteenth century. Beginning with mercantilism and ending today with neoclassicism. Currently, new theories have emerged from the point of view of microeconomics and macroeconomics. Chronologically we could order the periods in a simplified way as follows:

  • Origin of the economy (VI BC - XVI): Greece, Rome and the Middle Ages
  • Mercantilism (XVI - XVII)
  • Physiocrats (XVIII)
  • Classics (XVIII - XIX)
  • Marxists (XIX - XXI)
  • Neoclassical (XIX-XXI)
  • Keynesians (XX -XXI)
  • Liberalism (XX-XXI)

It is important to understand that some of these streams of thought coexisted and coexist. Economics is not an exact science. And since it is not an exact science, there are many different philosophies regarding what economics is or should be like. Studying the history of economic thought is important as it helps to develop a critical attitude towards different economic approaches. In addition, it improves understanding of current economic theories.

Schools of economic thought

Difference between economic history and history of economic thought

A reasonable doubt that we must address is the difference between these two fields of study. Economic history and the history of economic thought are similar and even complementary but not the same disciplines. Economic history tries to describe how the events happened. For its part, the history of economic thought tells how the ideas of different economists have evolved throughout history. So economic history can help us understand why some schools of thought emerged. And vice versa, the history of economic thought can facilitate our understanding of the development of economic events.

For example, Marxist economics emerged at a time in history when there was a lot of exploitation. The workers spent many hours in the factories in very poor conditions for an unfair salary. As if that were not enough, that salary barely gave them to eat and support themselves. On the contrary, the economic policies that were used after the crash of 1929 (back in 1940) were those proposed by Keynes.

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