Economics 101 (#35) History of Economic Thought

February 7, 2012

Theres an awful lot of revisionism going on lately as governments across the world attempt to battle the economic crisis with competing left and right wing approaches. Conservatives (generally) favour austerity; slashing public spending to get your fiscal house in order (balancing the books) while lowering taxation to promote business growth, entrepreneurship and consumer spending. Liberals (generally) favour government spending or stimuli packages while maintaining (or increasing) tax levels to bring in additional revenue to balance the books while squeezing efficiency out of the current public service, without cutting too deeply (or ‘freezing’ employment). Of course, many countries have adopted a bit of both.

This isn’t a huge surprise. Historically, both doctrines and many halfway house hybrids have had their day, in various forms –  from mercantilism and the classical school to Keynesianism and monetarism, from the 16th century to the 21st. And yes, history tends to repeat itself. Turns out that economics isn’t as predictable  and tamable as some would like to think.

We left the best chapter till last. PIIGSty highly recommends reading it regularly…you’ll definitely need this one (and its a handy conversation starter, at the very least).

Heres the PDF PIIGSty Econ 101 #35 History of Eco Thought