History of Economic Thought
Economics 310
Fall 2010
Instructor: Mark Lautzenheiser
Office: BC 219
Office Hours: Thursday 10-11, Friday 1:30-2:30, or by appointment (email me the day before)
Phone: 983-1892
Course Description and Objectives
In structuring a one-semester history of economic thought course the instructor is immediately
faced with an important decision: cover a large number of individuals in a necessarily superficial
manner (utilizing a textbook with some passages from the original texts) or cover a smaller
number of individuals in more depth (emphasizing original texts). An argument can be made for
either of the approaches. In this course, I have chosen the latter option partly due to the
introduction of the survey course now required by the economics department. We will cover a
few important figures in the history of economic thought and hope to delve deeper into their
ideas. Along the way, I will draw your attention to other important figures and where they might
fit into the broader history. However, our main emphasis will be on reading and interpreting the
original texts of a few key individuals. In this way, you will find yourself face-to-face with a
few of the great minds in the history of economics without a textbook author supplying their own
interpretation. This structure of the course will require that you keep up with the reading, think
deeply about the readings before class, and come prepared to discuss the material. During the
first part of the course I will provide some direction in the form of written questions and quoted
passages (these will normally be available online prior to our meetings in order to give you
ample opportunity to think). Most of the time, therefore, I will play the role of directing the
discussion and limit (as much as I can keep my mouth shut) my own interpretation – when I do
give ‘lectures’ or provide my own interpretation I will be sure to let you know. All of this is
really getting at the notion that there are great debates when it comes to ‘doing’ history of
economic thought and as long as you have done the reading and thought hard about it, then your
interpretations should be taken as seriously as anyone else (even if it turns out to be wrong –
that’s correct, it is not all subjective or opinion).
In the current course I have chosen the few great thinkers to read with a particular vision in
mind. The vision is the study of classical economics and the later revival of the approach. Thus,
Part I of the course will delve into two of the most important classical economists (Smith and
Ricardo) along with the further critiques and development by Marx. Part II brings in Keynes’s
work. I will be attempting to focus attention on how Keynes’s work constitutes a (failed?)
critique of classical economics, but also an important (successful?) contribution to it. Finally, in
Part III, we will look at the work of modern classical economists and their attempt to reinterpret
classical economics and Marx. We will also need to deal in some depth with the so-called
Cambridge Capital Controversy in order to understand the (failed?) classical revival.
Required Texts*
Adam Smith, Wealth of Nations
David Ricardo, Principles of Political Economy
Karl Marx, Capital (Volume 1)
John Maynard Keynes, The General Theory of Employment, Interest, and Money
* I will be posting additional required readings on our course webpage (or links to them), along
with some optional material
Grading and Assignments
Your grade will be based on 3 take-home exams, weekly summaries of specific readings, and
attendance/participation (since discussion is important for this class). The take-home exams will
be directed essays. The weekly summaries will be cover pre-assigned portions of a reading. The
summaries should be no longer than 2 pages in length (or, about 1,000 words) without any direct
quotations from the text. The point of these is for you to learn how to put ideas in your own
words and condense difficult texts to the essential point(s). Each weekly summary will be worth
2 possible points and will be due on or before the beginning of Friday’s class for the material
covered during that week. In terms of the attendance/participation points, I’ll let you know when
you’ve missed enough classes or have not participated enough that you stand in danger of losing
points. The following weights for assignments will be used in determining your final grade.
Exam 1
20 points
Exam 2
25 points
Exam 3
25 points
Weekly Summaries
20 points
Attendance/Participation
10 points
Grades will be based on the following scale:
93-100%
A
73-76%
C
90-92%
A70-72%
C87-89%
B+
67-69%
D+
83-86%
B
63-66%
D
80-82%
B60-62%
D77-79%
C+
<60%
F
Tentative COURSE OUTLINE
Week 1. 8/25-27
Introductions and Overview
Part I: Theories of Value, Growth, and Distribution
Week 2. 8/30-9/3- Week 3. 9/6-9/10
Adam Smith’s Wealth of Nations
Book I: Chapters 1-10
Book II: Chapters 1-5
Book III: Chapters 1-4
Adam Smith
Week 4. 9/13-9/17- Week 6. 9/27-10/1
David Ricardo’s Principals of Political Economy
Introduction by Sraffa/Dobb
Preface
Chapters 1-7, 19-21, 26-31
David Ricardo
Week 7. 10/4-10/8 – Week 9. 10/18-10/22
Karl Marx
Karl Marx’s Capital
Volume 1, Chapters 1-11, 23-25
Volume 2, Chapters 17-20
Volume 3, Chapters 8-10, 13-15
*Links will be provided to material from Volumes 2 and 3
Part II: Money, Liquidity Preference, and Effective Demand
Week 10. 10/25-10/29 – Week 12. 11/8-11/12
John Maynard Keynes
J.M. Keynes’s The General Theory of Employment, Interest, and Money
Preface
Chapters 1-7, 10-18, 22, 24
Part III: Cambridge Capital Controversy and the Classical Revival
Week 13. 11/15-11/19
Piero Sraffa
Sraffa’s Production of Commodities by Means of Commodities
Preface
Chapters 1-4 (copies of this material will be provided to you)
Piero Sraffa, “The Laws of Returns under Competitive Conditions,” The Economic Journal,
36(144), Dec. 1926
Rodolfo Signorino, “Piero Sraffa’s Lectures on the Advanced Theory of Value 1928-31 and the
Rediscovery of the Classical Approach,” Review of Political Economy, 17(2), July 2005
Week 15. 11/29-12/3
Capital Controversy
G.C. Harcourt, “Some Cambridge Controversies in the Theory of Capital,” Journal of Economic
Literature, 7(2), 1969.
Avi J. Cohen and G.C. Harcourt, “Whatever Happened to the Cambridge Capital Theory
Controversies?,” Journal of Economic Perspectives, Vol. 17 (1), Winter 2003
Joan Robinson, “The Production Function and the Theory of Capital,” Review of Economic
Studies, 21(2), 1953-54.
Joan Robinson, “The Measure of Capital: The End of the Controversy”, The Economic Journal,
Vol. 18 (323), 1971
Joan Robinson, “The Unimportance of Reswitching,” Quarterly Journal of Economics, 89(1),
Feb. 1975
Peirangelo, Garegnani, “Heterogeneous Capital, the Production Function and the Theory of
Distribution,” Review of Economic Studies, 37(3), July 1970
Paul Samuelson, “Paradoxes of Capital Theory: A Summing Up”, Quarterly Journal of
Economics, Nov. 1966
Anwar Shaikh, “Laws of Production and Laws of Algebra: The Humbug Production Function”
Week 16. 12/6-12/10
Classical Revival
Peirangelo, Garegnani, “Value and Distribution in the classical economists and Marx,” Oxford
Economic Papers, 36, 291-325
Mark Blaug, “Misunderstanding Classical Economics: The Sraffian Interpretation of the Surplus
Approach,” HOPE, 31(2), 1999
Heinz Kurz and Neri Salvadori, “Understanding “Classical” Economics: A Reply to Mark
Blaug”
Alessandro Roncaglia, “The Sraffian Schools,” Review of Political Economy, 3(2), 1991