As you start your tour through the greatest economic empires in the world, you will probably encounter some things you might not understand. Therefore, we thought that you might need some tour guides who are experts in economics.
Therefore, we have selected six main economists of all times since the science of economics begun to develop. They will each tell you certain interesting things about a particular aspect of a nation’s economy. Our selection of economists is particularly interesting, because we tried to select economists from different eras, and very controversial and revolutionary ideas. You will see how their ideas could still be applied to the economies of earlier or later time periods than the era when the theories were made out.
Please understand that we are not actually quoting the economist. We are trying to reproduce what each of them would say in a particular situation, according to the economist’s ideas and beliefs.
In the text, you will see an economist’s portrait, so you will be able to recognize him. The economist’s words could also be heard, if you click on the microphone below the economist’s portrait.
Now, the only problem for you is to recognize the economists. Below, we include their brief autobiographies and portraits, so that you will be able to match names with faces. So, let’s go and meet your tour guides.
ADAM SMITH
Born: Scotland
Known as: Founding father of economics
Ideas:
-division of labor (specialization)
-invisible hand – the prices are dictated by the forces of supply & demand.
i.e. if demand is high and supply is short, prices go up
-laissez-faire – “hands off” – government should let the markets to whatever they want and should not intervene.
Famous Work: Inquiry into the Nature and Causes of the Wealth of Nations
DAVID RICARDO
Born: England
Ideas:
-free trade gives countries great advantages
-eliminate trade barriers between countries
-iron law of wages
i.e. we should give workers just enough wages to survive. Otherwise, they will reproduce and that will create more workers, leading to high unemployment (pretty sad, eh?)
Famous Work: Principles of Political Economy and Taxation
THOMAS MALTHUS
Born: England
Known as: Calling the science of economics “The Dismal Science”.
Ideas:
-humanity is doomed to misery due to a vast increase of population and slow supply of food (even sadder, eh?)
-let’s not support the poor. If poor are helped, they will reproduce
Famous Work: Essay on Population
KARL MARX
Born: Germany
Known as: The last of classical economists; the father of socialism
Ideas:
-there will always be struggles between classes
-classless society is the best
-profit should not be kept by owners but distributed to workers
-rich will get richer, the poorer will get poorer
Famous Work: Das Kapital; Communist Manifesto (co-writer with Engels)
JOHN MAYNARD KEYNES
Born: England
Known as: The founder of Keynesian economics
Ideas:
-market forces could not balance the economy
-laissez-faire (no government intervention) does not work
-unemployment will persist unless government steps in
-little government intervention was the reason for the Great Depression
Famous Work: General Theory of Employment, Interest and Money
ALAN GREENSPAN
Born: United States
Known as: The Chairman of Federal Reserve Board in the United States till 2004
Ideas:
-lower interest rates when the economy is slow
-increase interest rates when the economy is expanding too much
Famous Work: n/a
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