From Smith to Schumpeter
ULMER, MELVILLE J.
From Smith to Schumpeter Source Readings in Economic Thought. Ed. by Philip C. Newman, Arthur D. Gayer and Milton H. Spencer. Norton. 774 pp. $5.95. Reviewed by Melville J. Ulmer Chairman,...
...Yet, this school was important for its critique of orthodox thinking and for its positive additions to the totality of economic knowledge...
...The second main stream is the literature of dissent...
...Although new techniques and theoretical frameworks followed upon one another in great profusion, the Smithian school possessed a number of distinctive and enduring traits...
...And one may regret the absence of the more empirical literature (a typical gap in works dealing with economic "thought...
...Building with ingenuity and imagination upon the classical structure, while borrowing liberally from the unorthodox as well, Keynes developed a new theory capable of explaining the operation of the economy as a whole more accurately than any of those which had gone before...
...who believe themselves to be quite exempt from any intellectual influences, are usually the slave of some defunct economist...
...Even so, what the economists have to say is far from inconsequential?politically and historically...
...The most pervasive of these is a steadfast, crusading opposition to Government intervention in economic affairs...
...The writings of Keynes may be said to have rationalized a movement already long in progress, as Smith before him had rationalized the growth of capitalism in industrial England...
...Adapting from Marx, he foresaw socialism's victory over capitalism, though he reached this conclusion with reluctance...
...Perhaps one could carp at some of the writers selected and omitted, especially in the modern period...
...Practical men...
...One may ask how significant—historically—were the writings of economists from Smith...
...Biographical and other background information accompany each selection and establish helpful continuity...
...Indeed, the world is ruled by little else...
...Moreover, for the first time in the history of economic thought a technically sound foundation was laid, within the framework of capitalist institutions, for the extensive participation of Government in the management of economic affairs...
...Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back...
...In general, however, the hook should provide profitable reading for those seeking a reasonably brief introduction to leaders in economic thought through the ages...
...This volume includes classic passages from Smith's Wealth of Nations, to which the modern inheritors of the orthodox tradition have adhered with little deviation...
...On this subject, in a chapter reprinted in this volume...
...Keynes wrote: "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood...
...Of course, many would argue that this is an exaggerated view...
...Nevertheless, his work provided many valuable insights and in one respect went beyond that of Keynes, i.e., in its concern with the capitalist process as a changing complex...
...These two streams—the orthodox and the heretical—have their confluence in the works of the two greatest economists of the twentieth century, to which the final 60 pages of this volume are devoted: John Maynard Keynes and Joseph A. Schumpeter...
...Marshall and the rest to Keynes and Schumpeter...
...This book provides an eminently representative sampling of their writings...
...Witness the worldwide growth of governmental economic activity despite the staunch devotion of virtually all leading economists (prior to Keynes) to the doctrine of laissez-faire...
...Ricardo, Mill, Marx...
...I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas...
...Schumpeter's contributions are much more modest than those of Keynes...
...The connection between economic literature (including that of Marx) and the rise of Fascism and Communism is far from obvious...
...This applies particularly to the works of Karl Marx and Thor-stein Veblen, both of whom are well represented here...
...Two main streams may be discerned in the evolution of ideas represented in this book...
...The first is that running from Adam Smith and his immediate precursors through the later classicists, the marginalists, the Lausanne School, the mathematicians and the neo-classicists...
...In this central body of economic orthodoxy, spanning two centuries, the chief tools of analysis were forged and the structure of the science erected...
...Reviewed by Melville J. Ulmer Chairman, Department of Economics, the American University Within this single volume are to he found illuminating selections from the principal contributors to economic thought from the primitive gropings of the ancient Greeks to the highly polished reasoning of modern practitioners...
...Neither his explanation of the business cycle nor his theory of economic development are considered entirely acceptable...
...The much smaller space accorded the writings of the Socialists, the Historical School ("Socialists of the Chair") and the Institutionalists is full) justified, for their enduring contributions to technical economic theory were relatively minor...
...And, as some practical men have been the slaves of defunct economists, so have some living economists been the slaves of practical men...
Vol. 37 • August 1954 • No. 34
