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In the
history of economic thought The history of economic thought is the study of the philosophies of the different thinkers and theories in the subjects that later became political economy Political economy is the study of production Production may be: Economics and bus ...
, a school of economic thought is a group of
economic An economy (; ) is an area of the production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products ...

economic
thinkers who share or shared a common perspective on the way
economies An economy (; ) is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services by different ...

economies
work. While
economist An economist is a professional and practitioner in the social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the s ...

economist
s do not always fit into particular schools, particularly in modern times, classifying economists into
schools of thought A school of thought, or intellectual tradition, is the perspective of a group of people who share common characteristics of opinion An opinion is a judgement Judgement (or US spelling judgment) is also known as ''adjudication'' which mea ...
is common. Economic thought may be roughly divided into three phases: premodern (
Greco-Roman The term "Greco-Roman world" (also "Greco-Roman culture" or ; spelled Graeco-Roman in the Commonwealth), as understood by modern scholars and writers, refers to geographical regions and countries that culturally—and so historically—were ...
,
Indian Indian or Indians refers to people or things related to India, or to the indigenous people of the Americas, or Aboriginal Australians until the 19th century. Peoples South Asia * Indian people, people of Indian nationality, or people who hav ...
,
Persian Persian may refer to: * People and things from Iran, historically called ''Persia'' in the English language ** Persians, Persian people, the majority ethnic group in Iran, not to be conflated with the Iranian peoples ** Persian language, an Irania ...
,
Islamic Islam (; ar, اَلْإِسْلَامُ, al-’Islām, "submission
o God Oh God may refer to: * An exclamation; similar to "oh no", "oh yes", "oh my", "aw goodness", "ah gosh", "ah gawd"; see interjection An interjection is a word or expression that occurs as an utterance on its own and expresses a spontaneous feeling ...
) is an Abrahamic religions, Abrahamic monotheistic religion teaching that Muhammad is a Muhammad in Islam, messenger of God.Peters, F. E. 2009. "Allāh." In , ed ...
, and
Imperial Chinese The earliest known written records of the history of China date from as early as 1250 BC, from the Shang dynasty The Shang dynasty (), also historically known as the Yin dynasty (), was a Chinese dynasty Dynasties in Chinese h ...
), early modern (
mercantilist Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce a ...
,
physiocrats Physiocracy (; from the Greek#REDIRECT Greek Greek may refer to: Greece Anything of, from, or related to Greece Greece ( el, Ελλάδα, , ), officially the Hellenic Republic, is a country located in Southeast Europe. Its population i ...
) and modern (beginning with
Adam Smith Adam Smith ( 1723 – 17 July 1790) was a Scottish economist, philosopher as well as a moral philosopher Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and ...

Adam Smith
and
classical economics Classical economics or classical political economy is a school of thought A school of thought, or intellectual tradition, is the perspective of a group of people who share common characteristics of opinion or outlook of a philosophy ...
in the late 18th century, and
Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher A philosopher is someone who practices philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about reason, M ...

Karl Marx
and
Friedrich Engels'
Friedrich Engels'
Marxian economics Marxian economics, or the Marxian school of economics, is a heterodox In religion, heterodoxy (from Ancient Greek Ancient Greek includes the forms of the Greek language used in ancient Greece and the classical antiquity, ancient world f ...
in the mid 19th century). Systematic economic theory has been developed mainly since the beginning of what is termed the
modern era Human history, or world history, is the narrative of humanity Humanity most commonly refers to: * Human Humans (''Homo sapiens'') are the most populous and widespread species of primates, characterized by bipedality, opposable thumbs, ...
. Currently, the great majority of economists follow an approach referred to as
mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), c ...
(sometimes called 'orthodox economics'). Economists generally specialize into either macroeconomics, broadly on the general scope of the economy as a whole, and microeconomics, on specific markets or actors. Within the macroeconomic mainstream in the United States, distinctions can be made between
saltwater Saline water (more commonly known as salt water) is water Water (chemical formula H2O) is an Inorganic compound, inorganic, transparent, tasteless, odorless, and Color of water, nearly colorless chemical substance, which is the main con ...
economists and the more
laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects hav ...
ideas of freshwater economists. However, there is broad agreement on the importance of general equilibrium, the methodology related to models used for certain purposes (e.g. statistical models for forecasting, structural models for counterfactual analysis, etc.), and the importance of partial equilibrium models for analyzing specific factors important to the economy (e.g. banking). Some influential approaches of the past, such as the
historical school of economics The historical school of economics was an approach Approach may refer to: Aviation *Final approach (aeronautics) *Instrument approach *Visual approach Music * Approach (album), ''Approach'' (album), by Von Hertzen Brothers * ''The Approach'', an ...
and
institutional economics Institutional economics focuses on understanding the role of the evolutionary Evolution is change in the Heredity, heritable Phenotypic trait, characteristics of biological populations over successive generations. These characteristics are ...
, have become defunct or have declined in influence, and are now considered heterodox approaches. Other longstanding heterodox schools of economic thought include
Austrian economics The Austrian School is a Heterodox economics, heterodox Schools of economic thought, school of economic thought that is based on methodological individualism—the concept that social phenomena result exclusively from the motivations and actio ...
and
Marxian economics Marxian economics, or the Marxian school of economics, is a heterodox In religion, heterodoxy (from Ancient Greek Ancient Greek includes the forms of the Greek language used in ancient Greece and the classical antiquity, ancient world f ...
. Some more recent developments in economic thought such as
feminist economics Feminist economics is the critical study of economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant ...
and
ecological economics Ecological economics, bioeconomics, ecolonomy, eco-economics, or ecol-econ is both a transdisciplinary Transdisciplinarity connotes a research strategy that crosses many disciplinary boundaries to create a holistic Holism (from Ancient Gre ...
adapt and critique mainstream approaches with an emphasis on particular issues rather than developing as independent schools.


Contemporary economic thought


Mainstream economics

Mainstream economics is distinguished in general economics from
heterodox In religion, heterodoxy (from Ancient Greek Ancient Greek includes the forms of the Greek language Greek ( el, label=Modern Greek Modern Greek (, , or , ''Kiní Neoellinikí Glóssa''), generally referred to by speakers simply a ...
approaches and schools within economics. It begins with the premise that resources are scarce and that it is necessary to choose between competing alternatives. That is, economics deals with
tradeoff A trade-off (or tradeoff) is a situational decision that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects. In simple terms, a tradeoff is where one thing increases, and another ...
s. With scarcity, choosing one alternative implies forgoing another alternative—the
opportunity cost In microeconomic theory Microeconomics (from Greek prefix ''mikro-'' meaning "small" + ''economics'') is a branch of economics Economics () is the social science that studies how people interact with value; in particular, the Produ ...
. The opportunity cost expresses an implicit relationship between competing alternatives. Such costs, considered as prices in a market economy, are used for analysis of
economic efficiency In microeconomics Microeconomics is a branch of mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, that are generally accepted by economists as a basis ...
or for predicting responses to disturbances in a market. In a
planned economy A planned economy is a type of economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. T ...
comparable
shadow price A shadow price is a monetary value assigned to currently unknowable or difficult-to-calculate costs in the absence of correct market prices. It is based on the Willingness to pay, willingness to pay principle – the most accurate measure of the ...
relations must be satisfied for the efficient use of resources, as first demonstrated by the Italian economist
Enrico Barone Enrico Barone (; 22 December 1859, Naples, Kingdom of the Two Sicilies – 14 May 1924, Rome, Italy) was a soldier, military historian, and an economist. Biography Barone studied the classics and mathematics before becoming an army officer. He ta ...
. Economists believe that incentives and costs play a pervasive role in shaping
decision making In psychology Psychology is the scientific Science () is a systematic enterprise that builds and organizes knowledge Knowledge is a familiarity or awareness, of someone or something, such as facts A fact is an occurrence in ...

decision making
. An immediate example of this is the
consumer theory The theory of consumer choice is the branch of microeconomics Microeconomics is a branch of mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, that ar ...
of individual demand, which isolates how prices (as costs) and income affect quantity demanded. Modern mainstream economics has foundations in
neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are driven by the supply and demand In microeconomics, supply and demand is an economic model In econo ...
, which began to develop in the late 19th century. Mainstream economics also acknowledges the existence of
market failure In neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are driven by the supply and demand In microeconomics, supply and demand is ...
and insights from
Keynesian economics Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946) was an English economist, whose ideas fundamentally changed the t ...
, most contemporaneously in the macroeconomic
new neoclassical synthesis The new neoclassical synthesis (NNS), which is now generally referred to as New Keynesian economics, and occasionally as the New Consensus, is the fusion of the major, modern macroeconomic Macroeconomics (from the Greek prefix ''makro-'' meaning ...
. It uses models of
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economics, economy over time. Statisticians conventionally measure such growth as the percent rate of i ...

economic growth
for analyzing long-run variables affecting
national income A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted nati ...

national income
. It employs
game theory Game theory is the study of mathematical model A mathematical model is a description of a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. ...
for modeling market or non-market behavior. Some important insights on collective behavior (for example,
emergence In philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about Metaphysics, existence, reason, Epistemology, knowledge, Ethics, values, Philosophy of mind, mind, and Philosophy of language, la ...

emergence
of
organization An organization, or organisation (Commonwealth English The use of the English language English is a of the , originally spoken by the inhabitants of . It is named after the , one of the ancient that migrated from , a peninsu ...

organization
s) have been incorporated through the
new institutional economics New institutional economics (NIE) is an economic perspective that attempts to extend economics by focusing on the institutions (that is to say the sociology, social and legal Norm (sociology), norms and rules) that underlie economic activity and ...
. A definition that captures much of modern economics is that of
Lionel Robbins Lionel Charles Robbins, Baron Robbins, (22 November 1898 – 15 May 1984) was a British economist An economist is a professional and practitioner in the social science Social science is the Branches of science, branch of science devot ...

Lionel Robbins
in a 1932 essay: "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses."
Scarcity Scarcity as an economic concept "refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each econo ...
means that available
resources Resource refers to all the materials available in our environment which help us to satisfy our needs and wants. Resources can broadly be classified upon their availability — they are classified into renewable A renewable resource, also know ...
are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no
economic problem Economic system An economic system, or economic order, is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influen ...
. The subject thus defined involves the study of
choice A choice is the range of different things from which you can choose. The arrival at a choice may incorporate Motivation, motivators and Choice modelling, models. For example, a traveler might choose a route for a journey based on the preferenc ...
, as affected by incentives and resources. Mainstream economics encompasses a wide (but not unbounded) range of views. Politically, most mainstream economists hold views ranging from
laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects hav ...
to
modern liberalism Modern liberalism may refer to: * Modern liberalism is an American mainstream liberal Liberal or liberalism may refer to: Politics *a supporter of liberalism, a political and moral philosophy **Liberalism by country *an adherent of a Liberal P ...
. There are also differing views on certain empirical claims within macroeconomics, such as the effectiveness of expansionary
fiscal policy In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plan ...

fiscal policy
under certain conditions. Disputes within mainstream macroeconomics tend to be characterised by disagreement over the convincingness of individual empirical claims (such as the predictive power of a specific model) and in this respect differ from the more fundamental conflicts over methodology that characterised previous periods (like those between
Monetarists Monetarism is a school of thought A school of thought, or intellectual tradition, is the perspective of a group of people who share common characteristics of opinion or outlook of a philosophy Philosophy (from , ) is the study of ge ...
and Neo-Keynesians), in which economists of differing schools would disagree on whether a given work was even a legitimate contribution to the field.


Contemporary heterodox economics

In the late 19th century, a number of heterodox schools contended with the
neoclassical Neoclassical or neo-classical may refer to: * Neoclassicism or New Classicism, any of a number of movements in the fine arts, literature, theatre, music, language, and architecture beginning in the 17th century ** Neoclassical architecture, an arc ...
school that arose following the marginal revolution. Most survive to the present day as self-consciously dissident schools, but with greatly diminished size and influence relative to
mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), c ...
. The most significant are
Institutional economics Institutional economics focuses on understanding the role of the evolutionary Evolution is change in the Heredity, heritable Phenotypic trait, characteristics of biological populations over successive generations. These characteristics are ...
,
Marxian economics Marxian economics, or the Marxian school of economics, is a heterodox In religion, heterodoxy (from Ancient Greek Ancient Greek includes the forms of the Greek language used in ancient Greece and the classical antiquity, ancient world f ...
and the
Austrian School The Austrian School is a heterodox In religion, heterodoxy (from Ancient Greek Ancient Greek includes the forms of the Greek language used in ancient Greece and the classical antiquity, ancient world from around 1500 BC to 300 BC. It ...
. The development of
Keynesian economics Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946) was an English economist, whose ideas fundamentally changed the t ...
was a substantial challenge to the dominant neoclassical school of economics. Keynesian views entered the mainstream as a result of the
neoclassical synthesis The neoclassical synthesis (NCS), neoclassical–Keynesian synthesis, or just neo-Keynesianism was a post-World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a global war A world war is "a war ...
developed by
John Hicks Sir John Hicks (8 April 1904 – 20 May 1989) was a British economist An economist is a professional and practitioner in the social science Social science is the Branches of science, branch of science devoted to the study of society, ...

John Hicks
. The rise of Keynesianism, and its incorporation into mainstream economics, reduced the appeal of heterodox schools. However, advocates of a more fundamental critique of neoclassical economics formed a school of
post-Keynesian economics Post-Keynesian economics is a Schools of economic thought, school of economic thought with its origins in ''The General Theory of Employment, Interest and Money, The General Theory'' of John Maynard Keynes, with subsequent development influenced ...
. Heterodox approaches often embody criticisms of perceived "mainstream" approaches. For instance: * feminist economics criticizes the valuation of labor and argues female labor is systemically undervalued; * green economics criticizes instances of externalized and intangible ecosystems and argues for them to be brought into the tangible
capital asset A capital asset is defined to include property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible ...
model as
natural capital Natural capital is the world's stock of natural resource Natural resources are resource Resource refers to all the materials available in our environment which help us to satisfy our needs and wants. Resources can broadly be classifi ...
; and * post-keynesian economics disagrees with the notion of the long-term neutrality of demand, arguing that there is no natural tendency for a competitive market economy to reach
full employment Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural A structure is an arrangement ...
. Other viewpoints on economic issues from outside mainstream economics include
dependency theory Dependency theory is of the notion that resources flow from a "Periphery countries, periphery" of poor and Developing country, underdeveloped states to a "Core countries, core" of Developed country, wealthy states, enriching the latter at the ex ...

dependency theory
and
world systems theory World-systems theory (also known as world-systems analysis or the world-systems perspective)Immanuel Wallerstein, (2004), "World-systems Analysis." In ''World System History'', ed. George Modelski, in ''Encyclopedia of Life Support Systems'' (EO ...
in the study of
international relations International relations (IR), international affairs (IA) or international studies (IS) is the scientific study of interactions between sovereign states. In a broader sense, it concerns all activities between states—such as war, diplomacy ...
.


Historical economic thought

Modern macro- and microeconomics are young sciences. But many in the past have thought on topics ranging from value to production relations. These forays into economic thought contribute to the modern understanding, ranging from ancient Greek conceptions of the role of the household and its choices to mercantilism and its emphasis on the hoarding of precious metals.


Ancient economic thought

*
Chanakya Chanakya (IAST The International Alphabet of Sanskrit Transliteration (IAST) is a transliteration scheme that allows the lossless romanisation Romanization or romanisation, in linguistics Linguistics is the science, scientific ...

Chanakya
(Kautilya) *
Xenophon Xenophon of Athens (; grc, Ξενοφῶν Xenophon of Athens (; grc-gre, Ξενοφῶν, , ''Xenophōn''; – 354 BC) was an Athenian , image_skyline = File:Athens Montage L.png, center, 275px, alt=Athens mont ...
*
Aristotle Aristotle (; grc-gre, Ἀριστοτέλης ''Aristotélēs'', ; 384–322 BC) was a Greek philosopher A philosopher is someone who practices philosophy Philosophy (from , ) is the study of general and fundamental questio ...
*
Qin Shi Huang Qin Shi Huang (, ; 259–210 BCE), or Shihuangdi, was the founder of the Qin dynasty, and first Emperor of China, emperor of a unified China. Rather than maintain the title of "Chinese king, king" ( ''wáng'') borne by the previous Shang dyna ...
*
Wang Anshi Wang Anshi ; ; December 8, 1021 – May 21, 1086), courtesy name A courtesy name (), also known as a style name, is a name bestowed upon one at adulthood in addition to one's given name. This practice is a tradition in the East Asian cultur ...

Wang Anshi


Islamic economics

Islamic economics is the practice of economics in accordance with
Islamic law Sharia (; ar, شريعة, sharīʿa ) is a religious law Religious law includes ethical and moral codes taught by religious traditions. Different religious systems hold sacred law in a greater or lesser degree of importance to their beli ...
. The origins can be traced back to the
Caliphate A caliphate ( ar, خِلَافَة, ) is an Islamic state {{Infobox war faction , name = Islamic State , anthem = '' Dawlat al-Islam Qamat'' {{small, ("My Ummah ' ( ar, أمة ) is an Arabic Arabic (, ' ...
, where an early
market economy A market economy is an economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The ide ...
and some of the earliest forms of
merchant capitalism Some economic historians Economic history is the academic study of economies or economic events of the past. Research is conducted using a combination of historical methods, statistical methods and the Applied economics, application of econom ...
took root between the 8th–12th centuries, which some refer to as "Islamic capitalism". Islamic economics seeks to enforce Islamic regulations not only on personal issues, but to implement broader economic goals and policies of an Islamic society, based on uplifting the deprived masses. It was founded on free and unhindered circulation of wealth so as to handsomely reach even the lowest echelons of society. One distinguishing feature is the tax on wealth (in the form of both
Zakat Zakat ( ar, زكاة; , "that which purifies", also Zakat al-mal , "zakat on wealth", or Zakah) is a form of almsgiving to the Muslim Ummah treated in Islam as a religious obligation, which, by Quranic ranking, is next after prayer (''salat ...

Zakat
and
Jizya Jizya or jizyah ( ar, جِزْيَة; ) is a per capita ''Per capita'' is a Latin phrase literally meaning "by heads" or "for each head", and idiomatically used to mean "per person". The term is used in a wide variety of social sciences and sta ...
), and bans levying taxes on all kinds of trade and transactions (Income/Sales/Excise/Import/Export duties etc.). Another distinguishing feature is prohibition of interest in the form of excess charged while trading in money. Its pronouncement on use of paper currency also stands out. Though promissory notes are recognized, they must be fully backed by reserves.
Fractional-reserve banking Fractional-reserve banking is the system of banking A bank is a financial institution Financial institutions, otherwise known as banking institutions, are corporation A corporation is an organization—usually a group of peo ...
is disallowed as a form of breach of
trust Trust may refer to: * Trust (social science) Trust exists in interpersonal relationship The concept of interpersonal relationship involves social associations, connections, or affiliations between two or more people. Interpersonal rel ...
. It saw innovations such as
trading companies Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of ...
,
big business Big business involves large-scale corporate-controlled financial Finance is a term for the management, creation, and study of money and investments. Pamela Drake and Frank Fabozzi (2009)What Is Finance?/ref> Specifically, it deals with the ...
es,
contract A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview ...

contract
s,
bills of exchange A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a ...
, long-distance
international trade International trade is the exchange of capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscul ...
, the first forms of
partnership A partnership is an arrangement where parties, known as business partner A business partner is a commercial entity with which another commercial entity has some form of Business alliance, alliance. This relationship may be a contractual, exclus ...

partnership
(''mufawada'') such as
limited partnership A limited partnership (LP) is a form of partnership A partnership is an arrangement where parties, known as business partner A business partner is a commercial entity with which another commercial entity has some form of Business alliance, a ...
s (''mudaraba''), and the earliest forms of
credit Credit (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the R ...
,
debt Debt is an obligation that requires one party, the debtor A debtor or debitor is a legal entity (legal person) that owes a debt Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to ...

debt
,
profit Profit may refer to: Business and law * Profit (accounting) Profit, in accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic ...
,
loss Loss may refer to: Arts, entertainment, and media Music *Loss (Bass Communion album), ''Loss'' (Bass Communion album) (2006) *Loss (Mull Historical Society album), ''Loss'' (Mull Historical Society album) (2001) *"Losses", a song by Drake from ...
,
capital Capital most commonly refers to: * Capital letter Letter case is the distinction between the letters Letter, letters, or literature may refer to: Characters typeface * Letter (alphabet) A letter is a segmental symbol A symbol ...
(''al-mal''),
capital accumulation Capital accumulation (also termed the accumulation of capital) is the dynamic that motivates the pursuit of profit, involving the investment Investment is the dedication of an asset to attain an increase in value over a period of time. Inve ...
(''nama al-mal''),Jairus Banaji (2007), "Islam, the Mediterranean and the rise of capitalism", ''
Historical Materialism Historical materialism is a Historical method, methodology to understand human societies and their development throughout history, arguing that historical changes in social structure are ultimately driven by the struggles and conflicts unleashe ...
'' 15 (1), pp. 47–74,
Brill Publishers Brill () (known as E. J. Brill, Koninklijke Brill, Brill Academic Publishers) is a Dutch international academic publisher Publishing is the activity of making information, literature, music, software and other content available to the pu ...
.
circulating capital Circulating capital includes intermediate good Intermediate goods, producer goods or semi-finished products are goods In economics Economics () is the social science that studies how people interact with value; in particular, the Producti ...
,
capital expenditure Capital expenditure or capital expense (capex or CAPEX) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered a capital expenditure ...
,
revenue In accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to comp ...
,
cheque A cheque, or check (American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of variety (linguistics), varieties of the English language native to the Unit ...
s,
promissory note A promissory note, sometimes referred to as a note payable, is a legal instrument ''Legal instrument'' is a legal Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of ...
s,
trusts A trust is a legal relationship in which the holder of a right (eg. title to a chattel) gives it to another person or entity who must keep and use it solely for another's benefit. In common law, English common law, the party who entrusts the ri ...
(see ''
Waqf A waqf ( ar, وَقْف; ), also known as hubous () or ''mortmain Mortmain () is the perpetual, inalienable ownership of real estate Real estate is property consisting of land and the buildings on it, along with its natural resources ...

Waqf
''),
startup companies A startup or start-up is a company or project undertaken by an entrepreneur Entrepreneurship is the creation or extraction of value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally ...
,
savings account A savings account is a bank account A bank account is a financial account maintained by a bank or other financial institution in which the financial transaction A financial transaction is an Contract, agreement, or communication, carried ...
s,
transactional account A transaction account, also called a checking account, chequing account, current account, demand deposit Demand deposits or non-confidential money are funds held in demand account A transaction account, also called a checking account, chequ ...
s,
pawning A pawnbroker is an individual or business (pawnshop or pawn shop) that offers secured loans to people, with items of personal property used as Collateral (finance), collateral. The items having been ''pawned'' to the broker are themselves c ...
,
loan In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money avai ...
ing,
exchange rate In finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, ...
s,
bank A bank is a financial institution Financial institutions, otherwise known as banking institutions, are corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), stat ...

bank
ers,
money changer A money changer is a person or organization whose business is the exchange of coins or currency of one country for that of another. This trade was a predecessor of modern banking. The advent of paper money in the mid-17th century and the developme ...

money changer
s,
ledger A ledger is a book or collection of accounts in which account transactions are recorded. Each account has an opening or carry-forward balance Balance may refer to: Common meanings * Balance (ability) in biomechanics * Balance (accounting) * Ba ...

ledger
s,
deposits A deposit account is a bank account A bank account is a financial account maintained by a bank or other financial institution in which the financial transaction A financial transaction is an agreement Agreement may refer to: Agreements b ...
, assignments, the
double-entry bookkeeping system Double-entry bookkeeping, also known as, double-entry accounting, is a method of bookkeeping Bookkeeping is the recording of financial transactions, and is part of the process of accounting Accounting or Accountancy is the measureme ...
,
lawsuit A lawsuit is a proceeding by a party or parties against another in the civil Civil may refer to: *Civic virtue, or civility *Civil action, or lawsuit *Civil affairs *Civil and political rights *Civil disobedience *Civil engineering *Civil ...
s, and
agency Agency may refer to: * a governmental or other institution * the abstract principle that autonomous beings, agents, are capable of acting by themselves; see autonomy Abstract principle * Agency (law), a person acting on behalf of another perso ...
institution. This school has seen a revived interest in development and understanding since the later part of the 20th century. *
Muhammad Muhammad ibn AbdullahHe is referred to by many appellations, including Messenger of Allah, The Prophet Muhammad, Allah's Apostle, Last Prophet of Islam, and others; there are also many variant spellings of Muhammad, such as Mohamet, Mohammed, ...
*
Abu Hanifa an-Nu‘man Abū Ḥanīfa al-Nuʿmān b. Thābit b. Zūṭā b. Marzubān ( ar, أبو حنيفة نعمان بن ثابت بن زوطا بن مرزبان; – 767 CE), known as Abū Ḥanīfa for short, or reverently as Imam Abū Ḥanīfa by Sunni Musl ...
*
Abu Yusuf Yaqub ibn Ibrahim al-Ansari () better known as Abu Yusuf ( ar, أبو يوسف) (d.798) was a student of jurist A jurist is a person with expert knowledge of law; someone who analyses and comments on law. This person is usually a specialis ...
*
Al-Farabi Abu Nasr Al-Farabi (; '; known in the West 250px, A compass rose with west highlighted in black West or Occident is one of the four cardinal directions or points of the compass The points of the compass are the vectors by which planet-base ...

Al-Farabi
(Alpharabius) *
Shams al-Mo'ali Abol-hasan Ghaboos ibn Wushmgir Qabus ibn Wushmagir (full name: ''Abol-Hasan Qābūs ibn Wušmagīr ibn Ziyar Sams al-maʿālī'', ; (died 1012) (r. 977–981; 997–1012) was the Ziyarid ruler of Gurgan and Tabaristan . The borders represent the traditional geographical boundar ...
(Qabus) *
Ibn Sina Ibn Sina ( fa, ابن سینا), also known as Abu Ali Sina (), Pur Sina (), and often known in the West as Avicenna (;  – June 1037), was a Persian Persian may refer to: * People and things from Iran, historically called ''Persia' ...

Ibn Sina
(Avicenna) *
Ibn Miskawayh Ibn Miskawayh ( fa, مُسْکُـوْيَه Muskūyah, 932–1030), full name Abū ʿAlī Aḥmad ibn Muḥammad ibn Yaʿqūb ibn Miskawayh was a Persian people, Persian chancery official of the Buyid dynasty, Buyid era, and Early Islamic philoso ...
*
Al-Ghazali Al-Ghazali (, ; full name or , ; Latinized Algazelus or Algazel; – 19 December 1111) was a Persian Persian may refer to: * People and things from Iran, historically called ''Persia'' in the English language ** Persians, Persian people, the ...

Al-Ghazali
(Algazel) *
Ibn Taymiyyah Taqī ad-Dīn ʾAḥmad ibn ʿAbd al-Ḥalīm ibn ʿAbd al-Salām Numayrid dynasty, al-Numayrī al-Ḥarrānī ( ar, تقي الدين أحمد بن عبد الحليم بن عبد السلام النميري الحراني , January 22, 1263 – ...
*
Al-Mawardi Abū al-Hasan 'Alī Ibn Muḥammad Ibn Habīb al-Māwardī ( أبو الحسن علي بن محمد بن حبيب البصري الماوردي ), known in Latin as Alboacen (972–1058 CE), was an faqih, Islamic jurist of the Shafi'i madhhab, sch ...
*
Nasīr al-Dīn al-Tūsī Muhammad ibn Muhammad ibn al-Hasan al-Tūsī ( fa, محمد ابن محمد ابن حسن طوسی 18 February 1201 – 26 June 1274), better known as Nasir al-Din al-Tusi ( fa, نصیر الدین طوسی, links=no; or simply Tusi in the ...
(Tusi) *
Ibn Khaldun Ibn Khaldun (; ar, أبو زيد عبد الرحمن بن محمد بن خلدون الحضرمي, ; 27 May 1332 – 17 March 1406) was an Arabs, Arab The Historical Muhammad', Irving M. Zeitlin, (Polity Press, 2007), p. 21; "It is, of course ...
*
Al-Maqrizi Al-Maqrīzī or Makrīzī (Arabic Language, Arabic: ), he was Taqī al-Dīn Abū al-'Abbās Aḥmad ibn 'Alī ibn 'Abd al-Qādir ibn Muḥammad al-Maqrīzī (Arabic Language, Arabic: ) (1364–1442)Franz Rosenthalal-Maḳrīzī Encyclopaedia of ...
*
Muhammad Baqir al-Sadr Muhammad Baqir al-Sadr ( ar, آية الله العظمى السيد محمد باقر الصدر, March 1, 1935 – April 9, 1980), also known as al-Shahīd al-Khāmis, was an Iraqi Shia Islam, Shia, philosopher, and the ideological foun ...


Scholasticism

*
Nicole Oresme Nicole Oresme (; c. 1320–1325 – 11 July 1382), also known as Nicolas Oresme, Nicholas Oresme, or Nicolas d'Oresme, was a French philosopher A philosopher is someone who practices philosophy Philosophy (from , ) is the study of ge ...
*
Thomas Aquinas Thomas Aquinas (; it, Tommaso d'Aquino, lit=Thomas of Aquino, Italy, Aquino; 1225 – 7 March 1274) was an Italian Dominican Order, Dominican friar, Philosophy, philosopher, Catholic priest, and Doctor of the Church. An immensely influential ...

Thomas Aquinas
*
School of Salamanca The School of Salamanca ( es, Escuela de Salamanca) is the Renaissance The Renaissance ( , ) , from , with the same meanings. is a period Period may refer to: Common uses * Era, a length or span of time * Full stop (or period), a punc ...
*
Leonardus Lessius Leonardus Lessius ( nl, Lenaert Leys; 1 October 1554, in Brecht, Belgium, Brecht – 15 January 1623, in Leuven) was a Flemish moral theologian from the Jesuit order. Life At the age of thirteen the young Leonard won the Brecht scholarship to t ...


Mercantilism

Economic policy in Europe during the late Middle Ages and early
Renaissance The Renaissance ( , ) , from , with the same meanings. is a period Period may refer to: Common uses * Era, a length or span of time * Full stop (or period), a punctuation mark Arts, entertainment, and media * Period (music), a concept in ...

Renaissance
treated economic activity as a good which was to be
tax A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act accord ...
ed to raise revenues for the
nobility Nobility is a social class normally ranked immediately below Royal family, royalty and found in some societies that have a formal aristocracy (class), aristocracy. Nobility has often been an Estates of the realm, estate of the realm that p ...
and the
church Church may refer to: Religion * Church (building) A church building, church house, or simply church, is a building used for Christian worship services and other Christian religious activities. The term is usually used to refer to the p ...

church
. Economic exchanges were regulated by
feudal Feudalism, also known as the feudal system, was the combination of the legal, economic, military, and cultural customs that flourished in Medieval Europe between the 9th and 15th centuries. Broadly defined, it was a way of structuring society ...
rights, such as the right to collect a
toll Toll may refer to: Transportation * Toll (fee) a fee charged for the use of a road or waterway ** Road pricing, the modern practice of charging for road use ** Road toll (historic), the historic practice of charging for road use ** Shadow toll, ...

toll
or hold a
fair A fair (archaic: faire or fayre) is a gathering of people for a variety of entertainment or commercial activities. It is normally of the essence of a fair that it is temporary with scheduled times lasting from an afternoon to several weeks. ...

fair
, as well as
guild A guild is an association of artisan Wood carver in Bali An artisan (from french: artisan, it, artigiano) is a skilled craft worker who makes or creates material objects partly or entirely by hand. These objects may be functiona ...
restrictions and religious restrictions on
lending In finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, ...
. Economic policy, such as it was, was designed to encourage trade through a particular area. Because of the importance of
social class A social class is a set of concepts in the social sciences Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among individuals within those soc ...
,
sumptuary laws Sumptuary laws (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of t ...
were enacted, regulating dress and housing, including allowable styles, materials and frequency of purchase for different classes.
Niccolò Machiavelli Niccolò di Bernardo dei Machiavelli (; ; rarely rendered Nicholas Machiavel (see below See or SEE may refer to: Arts, entertainment, and media * Music: ** See (album), ''See'' (album), studio album by rock band The Rascals *** "See", song by ...
in his book ''
The Prince ''The Prince'' ( it, Il Principe ; la, De Principatibus) is a 16th-century political treatise A treatise is a formal Formal, formality, informal or informality imply the complying with, or not complying with, some set theory, set of requirem ...
'' was one of the first authors to theorize economic policy in the form of advice. He did so by stating that princes and
republic A republic () is a form of government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a month ...

republic
s should limit their expenditures and prevent either the wealthy or the populace from despoiling the other. In this way a state would be seen as "generous" because it was not a heavy burden on its citizens. *
Gerard de Malynes Gerard de Malynes (fl. 1585–1627) was an independent merchant A merchant is a person who trades in commodities In economics Economics () is the social science that studies how people interact with value; in particular, the Produc ...
*
Edward Misselden Edward Misselden (fl. ''Floruit'' (), abbreviated fl. (or occasionally flor.), Latin Latin (, or , ) is a classical language A classical language is a language A language is a structured system of communication Communicatio ...
*
Thomas Mun Sir Thomas Mun (17 June 157121 July 1641) was an English writer on economics and is often referred to as the last of the early mercantilism, mercantilists. Most notably, he is known for serving as the director of the East India Company. Due to ...
*
Jean Bodin Jean Bodin (; c. 1530 – 1596) was a French people, French jurist and political philosophy, political philosopher, member of the Parlement of Paris and professor of law in Toulouse. He is best known for his theory of sovereignty; he was also an in ...

Jean Bodin
*
Jean Baptiste Colbert Jean-Baptiste Colbert (; 29 August 1619 – 6 September 1683) was a French people, French statesman who served as Chief minister of France, First Minister of State from 1661 until his death in 1683 under the rule of Louis XIV of France, King Loui ...
*
Josiah Child Sir Josiah Child, 1st Baronet, , (c. 1630/31 – 22 June 1699) was an English economist, merchant and politician. He was an economist proponent of mercantilism and governor of the British East India Company, East India Company. He led the comp ...
*
William Petty Sir William Petty Royal Society, FRS (26 May 1623 – 16 December 1687) was an English economist, physician, scientist and philosopher. He first became prominent serving Oliver Cromwell and the Commonwealth of England, Commonwealth in Ireland. ...

William Petty
*
John Locke John Locke (; 29 August 1632 – 28 October 1704) was an English philosopher and physician, widely regarded as one of the most influential of Enlightenment Enlightenment, enlighten or enlightened may refer to: Age of Enlightenment * ...

John Locke
*
Charles Davenant Charles Davenant (1656–1714) was an English mercantilist Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on t ...
* Dudley North *
Ferdinando Galiani Ferdinando Galiani (2 December 1728, Chieti Chieti (, ; , nap, label=Abruzzese, Chjïétë, ; gr, Θεάτη, Theátē; lat, Theate, ) is a city and ''comune The (; plural: ) is a Administrative division, local administrative division ...
*
James Denham-Steuart Sir James Steuart, 3rd Baronet of Goodtrees and 7th Baronet of Coltness (; 21 October 1712 – 26 November 1780), also known as Sir James Steuart Denham and Sir James Denham Steuart, was a prominent Scottish Jacobite and author of "probably ...


Physiocrats

The Physiocrats were 18th century French economists who emphasized the importance of productive work, and particularly agriculture, to an economy's wealth. Their early support of free trade and deregulation influenced
Adam Smith Adam Smith ( 1723 – 17 July 1790) was a Scottish economist, philosopher as well as a moral philosopher Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and ...

Adam Smith
and the classical economists. *
Anne Robert Jacques Turgot Anne Robert Jacques Turgot, Baron de l'Aulne ( ; ; 10 May 172718 March 1781), commonly known as Turgot, was a French economist and statesman. Originally considered a Physiocracy, physiocrat, he is today best remembered as an early advocate for e ...

Anne Robert Jacques Turgot
*
François Quesnay François Quesnay (; 4 June 1694 – 16 December 1774) was a French economist An economist is a professional and practitioner in the social science Social science is the branch The branches and leaves of a tree. A branch ( or , ...

François Quesnay
* Pierre le Pesant de Boisguilbert *
Richard Cantillon Richard Cantillon (; 1680s – ) was an Irish-French economist and author of ''Essai Sur La Nature Du Commerce En Général'' (''Essay on the Nature of Trade in General''), a book considered by William Stanley Jevons to be the "cradle of po ...


Classical political economy

Classical economics, also called classical
political economy Political economy is the study of production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products ( ...
, was the original form of mainstream economics of the 18th and 19th centuries. Classical economics focuses on the tendency of markets to move to equilibrium and on objective theories of value. Neo-classical economics differs from classical economics primarily in being
utilitarian Utilitarianism is a family of normative Normative generally means relating to an evaluative standard. Normativity is the phenomenon in human societies of designating some actions or outcomes as good or desirable or permissible and others as ba ...
in its value theory and using marginal theory as the basis of its models and equations. Marxian economics also descends from classical theory.
Anders Chydenius Anders Chydenius (; 26 February 1729 – 1 February 1803) was a Finnish Lutheran priest and a member of the Swedish Riksdag The Riksdag (, ; also sv, riksdagen or ''Sveriges riksdag'' ) is the national legislature A legislature is a ...

Anders Chydenius
(1729–1803) was the leading
classical liberal Classical liberalism is a political ideology An ideology () is a set of beliefs or philosophies attributed to a person or group of persons, especially as held for reasons that are not purely epistemic, in which "practical elements are as pr ...
of
Nordic Nordic most commonly refers to: * Nordic countries, written in plural as Nordics, the northwestern European countries, including Scandinavia, Fennoscandia and the List of islands in the Atlantic Ocean#North, North Atlantic * Scandinavia, a cultural ...

Nordic
history. Chydenius, who was a
Finnish Finnish may refer to: * Something or someone from, or related to Finland * Finnish culture * Finnish people or Finns, the primary ethnic group in Finland * Finnish language, the national language of the Finnish people * Finnish cuisine See also

...

Finnish
priest and
member of parliament A member of parliament (MP) is the representative of the people who live in their constituency An electoral district, also known as an election district, legislative district, voting district, constituency, riding, ward, division, (election) ...
, published a book called ''
The National Gain ''The National Gain'' (Swedish Swedish or ' may refer to: * Anything from or related to Sweden, a country in Northern Europe * Swedish language, a North Germanic language spoken primarily in Sweden and Finland * Swedish alphabet, the official ...
'' in 1765, in which he proposes ideas of freedom of trade and industry and explores the relationship between economy and society and lays out the principles of
liberalism Liberalism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals ...

liberalism
, all of this eleven years before
Adam Smith Adam Smith ( 1723 – 17 July 1790) was a Scottish economist, philosopher as well as a moral philosopher Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and ...

Adam Smith
published a similar and more comprehensive book, ''The Wealth of Nations''. According to Chydenius, democracy, equality and a respect for human rights were the only way towards progress and happiness for the whole of society. *
Adam Smith Adam Smith ( 1723 – 17 July 1790) was a Scottish economist, philosopher as well as a moral philosopher Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and ...

Adam Smith
* Francis Hutcheson *
Bernard de Mandeville Bernard Mandeville, or Bernard de Mandeville (; 15 November 1670 – 21 January 1733), was an Anglo-Dutch philosopher, political economist and satirist. Born in Rotterdam Rotterdam (, , ) is the second largest city A city is a large human ...
*
David Hume David Hume (; born David Home; 7 May 1711 NS (26 April 1711 OS) – 25 August 1776) Cranston, Maurice, and Thomas Edmund Jessop. 2020 999999 or triple nine most often refers to: * 999 (emergency telephone number) 250px, A sign on a beach ...

David Hume
*
Henry George Henry George (September 2, 1839 – October 29, 1897) was an American political economist Political economy is the study of Production (economics), production and trade and their relations with law, Custom (law), custom and government; and ...

Henry George
*
Thomas Malthus Thomas Robert Malthus (; 13/14 February 1766 – 23 December 1834) was an English cleric Clergy are formal leaders within established religion Religion is a - of designated and practices, , s, s, , , , , or , that relates humanit ...

Thomas Malthus
*
James Mill James Mill (born James Milne; 6 April 1773 – 23 June 1836) was a Scottish historian ( 484– 425 BC) was a Greek historian who lived in the 5th century BC and one of the earliest historians whose work survives. A historian is a person who st ...

James Mill
*
Francis Place Francis Place (3 November 1771 in London London is the capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or mo ...

Francis Place
*
David Ricardo David Ricardo (18 April 1772 – 11 September 1823) was a British Political economy, political economist, one of the most influential of the Classical economics, classical economists along with Thomas Malthus, Adam Smith and James Mill. He was ...

David Ricardo
*
Henry ThorntonHenry Thornton may refer to: People * Henry Thornton (reformer) (1760–1815), English economist, banker, philanthropist and parliamentarian; one of the founders of the Clapham Sect *Henry Thornton (MP) for Bridgwater (UK Parliament constituency) * ...
*
John Ramsay McCulloch John Ramsay McCulloch (1 March 1789 – 11 November 1864) was a Scottish economist, author and editor, widely regarded as the leader of the Ricardian economics, Ricardian school of economists after the death of David Ricardo in 1823. He was app ...
*
James Maitland, 8th Earl of Lauderdale James Maitland, 8th Earl of Lauderdale (26 January 1759 – 10 September 1839) was Keeper of the Great Seal of Scotland The Great Seal of Scotland ( gd, Seala Mòr na h-Alba) is a principal national symbol of Scotland Scotland ( sco ...
*
Jeremy Bentham Jeremy Bentham (; 15 February 1748 Old_Style_and_New_Style_dates">O.S._4_February_1747.html" ;"title="Old_Style_and_New_Style_dates.html" ;"title="nowiki/>Old Style and New Style dates">O.S. 4 February 1747">Old_Style_and_New_Style_dates.htm ...

Jeremy Bentham
*
Jean Charles Léonard de Sismondi Jean Charles Léonard de Sismondi (also known as Jean Charles Leonard Simonde de Sismondi) (; 9 May 1773 – 25 June 1842), whose real name was Simonde, was a Swiss historian ( 484– 425 BC) was a Greek historian who lived in the 5th century BC ...
*
Johann Heinrich von Thünen Johann Heinrich von Thünen (24 June 1783 – 22 September 1850), sometimes spelled Thuenen, was a prominent nineteenth century economist An economist is a professional and practitioner in the social science Social science is the bra ...

Johann Heinrich von Thünen
*
John Stuart Mill John Stuart Mill (20 May 1806 – 7 May 1873), also cited as J. S. Mill, was an English philosopher, Political economy, political economist, Member of Parliament (United Kingdom), Member of Parliament (MP) and civil servant. One of the most i ...
*
Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher A philosopher is someone who practices philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about reason, M ...

Karl Marx
*
Nassau William Senior Nassau William Senior (; 26 September 1790 – 4 June 1864), was an English lawyer known as an economist An economist is a professional and practitioner in the social science Social science is the branch A branch ( or , ) or t ...

Nassau William Senior
*
Edward Gibbon Wakefield Edward Gibbon Wakefield (20 March 179616 May 1862) is considered a key figure in the establishment of the colonies of European settlement of South Australia, South Australia and History of New Zealand#Colonial period, New Zealand (where he later ...

Edward Gibbon Wakefield
*
John RaeJohn Rae may refer to: Sportsmen *Johnny Rae (rugby league), rugby league footballer of the 1960s for Great Britain and Bradford Northern *John Rae (New Zealand footballer), New Zealand international football (soccer) player *John Rae (footballer, ...
*
Thomas Tooke Thomas Tooke (; 28 February 177426 February 1858) was an English economist known for writing on money and economic statistics Economic statistics is a topic in applied statistics that concerns the collection, processing, compilation, dissem ...
*Robert Torrens (economist), Robert Torrens


American School

The American School owes its origin to the writings and economic policies of Alexander Hamilton, the first Treasury Secretary of the United States. It emphasized high tariffs on imports to help develop the fledgling American manufacturing base and to finance infrastructure projects, as well as Second Report on Public Credit, National Banking, First Report on the Public Credit, Public Credit, and Report on Manufactures, government investment into advanced scientific and technological research and development. Friedrich List, one of the most famous proponents of the economic system, named it the National System, and was the main impetus behind the development of the German Zollverein and the economic policies of Germany under Chancellor Otto Von Bismarck beginning in 1879. *Alexander Hamilton *John Quincy Adams *Henry Clay *Mathew Carey *Henry Charles Carey *Abraham Lincoln *Friedrich List *Otto Von Bismarck *Arthur Griffith *William McKinley


French Liberal School

The French Liberal School (also called the "Optimist School" or "Orthodox School") is a 19th-century school of economic thought that was centered on the Collège de France and the Institut de France. The Journal des Économistes was instrumental in promulgating the ideas of the School. The School voraciously defended free trade and laissez-faire capitalism. They were primary opponents of collectivist, interventionist and protectionist ideas. This made the French School a forerunner of the modern Austrian School. *Frédéric Bastiat *Maurice Block *Pierre Paul Leroy-Beaulieu *Gustave de Molinari *Yves Guyot *Jean-Baptiste Say *Léon Say


Historical school

The
historical school of economics The historical school of economics was an approach Approach may refer to: Aviation *Final approach (aeronautics) *Instrument approach *Visual approach Music * Approach (album), ''Approach'' (album), by Von Hertzen Brothers * ''The Approach'', an ...
was an approach to academic economics and to public administration that emerged in the 19th century in Germany, and held sway there until well into the 20th century. The Historical school held that history was the key source of knowledge about human actions and economic matters, since economics was culture-specific, and hence not generalizable over space and time. The School rejected the universal validity of economic theorems. They saw economics as resulting from careful empirical and historical analysis instead of from logic and mathematics. The School preferred historical, political, and social studies to self-referential mathematical modelling. Most members of the school were also Kathedersozialisten, i.e. concerned with social reform and improved conditions for the common man during a period of heavy industrialization. The Historical School can be divided into three tendencies: the Older, led by Wilhelm Roscher, Karl Knies, and Bruno Hildebrand; the Younger, led by Gustav von Schmoller, and also including Étienne Laspeyres, Karl Bücher, Adolph Wagner, and to some extent Lujo Brentano; the Youngest, led by Werner Sombart and including, to a very large extent, Max Weber. Predecessors included Friedrich List. The Historical school largely controlled appointments to Chairs of Economics in German universities, as many of the advisors of Friedrich Althoff, head of the university department in the Prussian Ministry of Education 1882-1907, had studied under members of the School. Moreover, Prussia was the intellectual powerhouse of Germany and so dominated academia, not only in central Europe, but also in the United States until about 1900, because the American economics profession was led by holders of German Ph.Ds. The Historical school was involved in the ''Methodenstreit'' ("strife over method") with the Austrian School, whose orientation was more theoretical and a prioristic. In English speaking countries, the Historical school is perhaps the least known and least understood approach to the study of economics, because it differs radically from the now-dominant Anglo-American analytical point of view. Yet the Historical school forms the basis—both in theory and in practice—of the social market economy, for many decades the dominant economic paradigm in most countries of continental Europe. The Historical school is also a source of Joseph Schumpeter's dynamic, change-oriented, and innovation-based economics. Although his writings could be critical of the School, Schumpeter's work on the role of innovation and entrepreneurship can be seen as a continuation of ideas originated by the Historical School, especially the work of von Schmoller and Sombart. *Wilhelm Roscher *Gustav von Schmoller *Werner Sombart *Max Weber *Joseph Schumpeter *Karl Polanyi


English historical school

Although not nearly as famous as its German counterpart, there was also an English Historical School, whose figures included William Whewell, Richard Jones (economist), Richard Jones, Thomas Edward Cliffe Leslie, Walter Bagehot, Thorold Rogers, Arnold Toynbee (historian, born 1852), Arnold Toynbee, William Cunningham (economist), William Cunningham, and William Ashley (economic historian), William Ashley. It was this school that heavily critiqued the deductive approach of the classical economists, especially the writings of
David Ricardo David Ricardo (18 April 1772 – 11 September 1823) was a British Political economy, political economist, one of the most influential of the Classical economics, classical economists along with Thomas Malthus, Adam Smith and James Mill. He was ...

David Ricardo
. This school revered the inductive process and called for the merging of historical fact with those of the present period. *Edmund Burke *Richard Jones (economist), Richard Jones *Thomas Edward Cliffe Leslie *Walter Bagehot *Thorold Rogers *William Ashley (economic historian), William J. Ashley *William Cunningham (economist), William Cunningham


French historical school

*Clément Juglar *Charles Gide *Albert Aftalion *Émile Levasseur *François Simiand


Utopian economics

*William Godwin *Charles Fourier *Robert Owen *Claude Henri de Rouvroy, comte de Saint-Simon, Saint-Simon *Josiah Warren


Georgist economics

Georgism or geoism is an economic philosophy proposing that both individual and national economic outcomes would be improved by the utilization of economic rent resulting from control over land and natural resources through levies such as a land value tax. *Harry Gunnison Brown *Raymond Crotty *Ottmar Edenhofer *Fred Foldvary *Mason Gaffney *
Henry George Henry George (September 2, 1839 – October 29, 1897) was an American political economist Political economy is the study of Production (economics), production and trade and their relations with law, Custom (law), custom and government; and ...

Henry George
*Max Hirsch, Max Hirsch (economist) *Wolf Ladejinsky *Philippe Legrain *Donald Shoup *Nicolaus Tideman


Ricardian socialism

Ricardian socialism is a branch of early 19th century classical economic thought based on the theory that labor is the source of all wealth and exchange value, and rent, profit and interest represent distortions to a free market. The pre-Marxian theories of capitalist exploitation they developed are widely regarded as having been heavily influenced by the works of
David Ricardo David Ricardo (18 April 1772 – 11 September 1823) was a British Political economy, political economist, one of the most influential of the Classical economics, classical economists along with Thomas Malthus, Adam Smith and James Mill. He was ...

David Ricardo
, and favoured collective ownership of the means of production. *John Francis Bray *John Gray (19th century socialist), John Gray *Charles Hall (economist), Charles Hall *Thomas Hodgskin *William Thompson (philosopher), William Thompson


Marxian economics

Marxian economics descended from the work of
Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher A philosopher is someone who practices philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about reason, M ...

Karl Marx
and Friedrich Engels. This school focuses on the labor theory of value and what Marx considered to be the exploitation of labour by capital. Thus, in Marxian economics, the labour theory of value is a method for measuring the exploitation of labour in a capitalist society rather than simply a theory of price.John Roemer, Roemer, J.E. (1987). "Marxian Value Analysis". Ernest Mandel, Mandel, Ernest (1987). "Marx, Karl Heinrich". *David Harvey *Eduard Bernstein *Grigory Feldman *Rosa Luxemburg *Richard D. Wolff *Rudolf Hilferding *Karl Kautsky *
Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher A philosopher is someone who practices philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about reason, M ...

Karl Marx
*Nikolai Bukharin *Nobuo Okishio *Paul Sweezy *Samir Amin *Vladimir Lenin *Yevgeni Preobrazhensky


Neo-Marxian economics

*David Gordon (economist), David Gordon *Samuel Bowles (economist), Samuel Bowles *Paul A. Baran *Adam Przeworski *Henryk Grossman


State socialism

*Claude Henri de Rouvroy, comte de Saint-Simon, Henri de Saint-Simon *Ferdinand Lassalle *Johann Karl Rodbertus *Fabian Society


Anarchist economics

Anarchist economics comprises a set of theories which seek to outline modes of production and exchange not governed by coercive social institutions: * Mutualism (economic theory), Mutualists advocate market socialism. * Collectivist anarchists advocate workers cooperatives and salaries based on the amount of time contributed to production. * Anarcho-communists advocate a direct transition from capitalism to libertarian communism and a gift economy with Direct democracy, direct Commune, communal democracy. * Anarcho-syndicalists advocate worker's direct action and the general strike. Thinkers associated with anarchist economics include: * Charles Fourier * Pierre-Joseph Proudhon * Peter Kropotkin * Mikhail Bakunin


Distributism

Distributism is an economic philosophy that was originally formulated in the late 19th century and early 20th century by Catholic thinkers to reflect the teachings of Pope Leo XIII's encyclical ''Rerum Novarum'' and Pope Pius's XI encyclical ''Quadragesimo Anno''. It seeks to pursue a third way between capitalism and socialism, desiring to order society according to Christian principles of justice while still preserving private property. *G. K. Chesterton *Hilaire Belloc


Institutional economics

Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the other. Its name and core elements trace back to a 1919 ''American Economic Review'' article by Walton H. Hamilton. * Gunnar Myrdal * Thorstein Veblen * John R. Commons, John Rogers Commons * Wesley Clair Mitchell * John Maurice Clark * Robert A. Brady (economist), Robert A. Brady * Clarence Edwin Ayres * Romesh Dutt * John Kenneth Galbraith * Geoffrey Hodgson * Ha-Joon Chang


Neoclassical economics

Neoclassical economics is the dominant form of economics used today and has the highest amount of adherents among economists. It is often referred to by its critics as Orthodox Economics. The more specific definition this approach implies was captured by
Lionel Robbins Lionel Charles Robbins, Baron Robbins, (22 November 1898 – 15 May 1984) was a British economist An economist is a professional and practitioner in the social science Social science is the Branches of science, branch of science devot ...

Lionel Robbins
in a An Essay on the Nature and Significance of Economic Science, 1932 essay: "the science which studies human behavior as a relation between scarce means having alternative uses." The definition of scarcity is that available resources are insufficient to satisfy all wants and needs; if there is no scarcity and no alternative uses of available resources, then there is no
economic problem Economic system An economic system, or economic order, is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influen ...
. *William Stanley Jevons *Francis Ysidro Edgeworth *Alfred Marshall *John Bates Clark *Irving Fisher *Knut Wicksell


Lausanne School

The Lausanne School of economics is an extension of the Neoclassical school of economics, neoclassical school of economic thought, named after the University of Lausanne in Switzerland. The school is primarily associated with Léon Walras and Vilfredo Pareto, both of whom held successive professorships in political economy at the university, in the latter half of the 19th century. Beginning with Walras, the school is credited with playing a central role in the development of mathematical economics. For this reason, the school has also been referred to as the Mathematical School. A notable work of the Lausanne School is Walras’ development of the general equilibrium theory as a holistic means of analysing the economy, in contrast to Partial equilibrium, partial equilibrium theory, which only analyses single markets in isolation. The theory shows how a general equilibrium is reached through the interaction between demand and supply in an economy consisting of multiple markets operating simultaneously. The Lausanne School is also largely credited with the foundation of welfare economics, through which Pareto sought to measure the welfare of an economy. Contrary to utilitarianism, Pareto found that the welfare of an economy cannot be measured by aggregating the individual utilities of its inhabitants. Since individual utilities are subjective, their measurements may not be directly comparable. This led Pareto to conclude that if at least one person’s utility increased, while nobody else was any worse off, then the welfare of the economy would increase. Conversely, if a majority of people experienced an increase in utility while at least one person was worse off, there could be no definitive conclusion about the welfare of the economy. These observations formed the basis of Pareto efficiency, which describes a situation or outcome in which nobody can be made better off without also making someone else worse off. Pareto efficiency is still widely used in contemporary welfare economics as well as
game theory Game theory is the study of mathematical model A mathematical model is a description of a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. ...
. *Léon Walras *Vilfredo Pareto


Austrian School

Austrian economists advocate methodological individualism in interpreting economic developments, the subjective theory of value, that money is neutrality of money, non-neutral, and emphasize the spontaneous order, organizing power of the price mechanism (see ''Economic calculation debate'') and a ''laissez faire'' approach to the economy. *Carl Menger *Eugen von Böhm-Bawerk *Ludwig von Mises *Friedrich Hayek *Friedrich von Wieser *Henry Hazlitt *Frank Fetter *Israel Kirzner *Murray Rothbard *Robert P. Murphy *Lew Rockwell *Peter Schiff *Marc Faber *Walter Block *Hans-Hermann Hoppe *Jesús Huerta de Soto *Fritz Machlup


Stockholm School

The Stockholm School is a school of economic thought. It refers to a loosely organized group of Swedish economists that worked together, in Stockholm, Sweden primarily in the 1930s. The Stockholm School had—like John Maynard Keynes—come to the same conclusions in macroeconomics and the theories of demand and supply. Like Keynes, they were inspired by the works of Knut Wicksell, a Swedish economist active in the early years of the twentieth century. *Gunnar Myrdal *Bertil Ohlin


Keynesian economics

Keynesian economics has developed from the work of John Maynard Keynes and focused on macroeconomics in the short-run, particularly the rigidities caused when prices are fixed. It has two successors. Post-Keynesian economics is an alternative school—one of the successors to the Keynesian tradition with a focus on macroeconomics. They concentrate on macroeconomic rigidities and adjustment processes, and research micro foundations for their models based on real-life practices rather than simple optimizing models. Generally associated with Cambridge, England and the work of Joan Robinson (see Post-Keynesian economics). New-Keynesian economics is the other school associated with developments in the Keynesian fashion. These researchers tend to share with other Neoclassical economics, Neoclassical economists the emphasis on models based on micro foundations and optimizing behavior, but focus more narrowly on standard Keynesian themes such as price and wage rigidity. These are usually made to be endogenous features of these models, rather than simply assumed as in older style Keynesian ones (see New-Keynesian economics). *John Maynard Keynes *Joan Robinson *Paul Krugman *Paul Samuelson *Peter Bofinger *Joseph Stiglitz *Nouriel Roubini *Stanley Fischer *Gregory Mankiw *Jason Furman *Huw Dixon


Chicago school

The Chicago School is a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, notable particularly in macroeconomics for developing monetarism as an alternative to Keynesianism and its influence on the use of rational expectations in macroeconomic modelling. *Frank Knight, Frank H. Knight *Jacob Viner *Milton Friedman *Thomas Sowell *George Stigler *Harry Markowitz *Merton Miller *Robert Lucas, Jr. *Eugene Fama *Myron Scholes *Gary Becker *Edward C. Prescott *James Heckman *Robert Z. Aliber


Carnegie School

*Herbert A. Simon *Richard Cyert *James March *Victor Vroom *Oliver E. Williamson *John Muth


Neo-Ricardianism

*Piero Sraffa *Luigi L. Pasinetti *Vladimir Karpovich Dmitriev


New institutional economics

New institutional economics is a perspective that attempts to extend economics by focusing on the sociology, social and legal Norm (sociology), norms and rules (which are institutions) that underlie economic activity and with analysis beyond earlier
institutional economics Institutional economics focuses on understanding the role of the evolutionary Evolution is change in the Heredity, heritable Phenotypic trait, characteristics of biological populations over successive generations. These characteristics are ...
and
neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are driven by the supply and demand In microeconomics, supply and demand is an economic model In econo ...
.Malcolm Rutherford (2001). "Institutional Economics: Then and Now," ''Journal of Economic Perspectives'', 15(3), pp. 185-90
173-194
.
L. J. Alston, (2008). "new institutional economics," ''The New Palgrave Dictionary of Economics'', 2nd Edition
Abstract.
/ref> It can be seen as a broadening step to include aspects excluded in neoclassical economics. It rediscovers aspects of classical
political economy Political economy is the study of production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products ( ...
. * Douglass North * Oliver E. Williamson * Ronald Coase * Daron Acemoglu * Steven N. S. Cheung


20th century schools

Notable schools or trends of thought in economics in the 20th century were as follows. These were advocated by well-defined groups of academics that became widely known: *
Austrian School The Austrian School is a heterodox In religion, heterodoxy (from Ancient Greek Ancient Greek includes the forms of the Greek language used in ancient Greece and the classical antiquity, ancient world from around 1500 BC to 300 BC. It ...
*Biological economics *Chicago school (economics), Chicago School *Constitutional economics *Ecological economics *Evolutionary economics *Free-market anarchism *Freiburg School *Freiwirtschaft *Georgism *
Institutional economics Institutional economics focuses on understanding the role of the evolutionary Evolution is change in the Heredity, heritable Phenotypic trait, characteristics of biological populations over successive generations. These characteristics are ...
*
Keynesian economics Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946) was an English economist, whose ideas fundamentally changed the t ...
*Marxian economics, Marxian (Marxist) and neo-Marxian economics *Neo-Ricardianism *New classical macroeconomics *New Keynesian economics *Post-Keynesian economics *Public Choice Theory, Public Choice school *School of Lausanne *Stockholm school (economics), Stockholm school In the late 20th century, areas of study that produced change in economic thinking were: risk-based (rather than price-based models), imperfect economic actors, and treating economics as a biology, biological science (based on evolutionary norms rather than abstract exchange). The study of risk was influential, in viewing variations in price over time as more important than actual price. This applied particularly to financial economics, where risk/return tradeoffs were the crucial decisions to be made. An important area of growth was the study of information and decision. Examples of this school included the work of Joseph Stiglitz. Problems of asymmetric information and moral hazard, both based around information economics, profoundly affected modern economic dilemmas like executive stock options, insurance markets, and Third World, Third-World debt relief. Finally, there were a series of economic ideas rooted in the conception of economics as a branch of biology, including the idea that energy relationships, rather than price relationships, determine economic structure. The use of fractal geometry to create economic models (see Energy Economics). In its infancy the application of non-linear dynamics to economic theory, as well as the application of evolutionary psychology explored the processes of valuation and the persistence of non-equilibrium conditions. The most visible work was in the area of applying fractals to market analysis, particularly arbitrage (see Complexity economics). Another infant branch of economics was neuroeconomics. The latter combines neuroscience, economics, and psychology to study how we make choices.


See also

* Birmingham School (economics), Birmingham School * Buddhist economics * Economic ideology * History of economic thought * JEL classification codes#History of economic thought, methodology, and heterodox approaches JEL: B Subcategories, Economic thought (category B) (JEL classification codes, JEL code) * Kameralism * Manchester capitalism, Manchester School * Structuralist economics


Notes


References


Sources

* * Spiegel, Henry William. 1991. ''The Growth of Economic Thought.'' Durham & London: Duke University Press. * John Eatwell, Murray Milgate, and Peter Newman, ed. (1987). ''The New Palgrave: A Dictionary of Economics'', v. 4, Appendix IV, History of Economic Thought and Doctrine, "Schools of Thought," p. 980 (list of 23 schools)


External links


History of Economic Thought and Critical Perspectives (NSSR)
{{Authority control Schools of economic thought, History of economic thought,