The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers

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The overwhelming weakness of "the world according to Schumpeter" is that the prognosis is more social and political than economic. In guessing which way the tide of history will direct itself, he lends credence to a belief in a noncapitalist elite, who will form the dynamic core of an otherwise inert society. Unlike Marx's paradigm, which centralizes a disgruntled proletariat in the heart of change, Schumpeter's model places a changing cast of creative movers and shakers at the lead position of capitalistic innovation.

The canny student of economy, however, cannot accept this cheerful prognostication without further delving, for a complete analysis of modern times requires a thorough study of more than Marx and Keynes. A third spokesman is necessary: the brilliant gadfly Joseph Alois Schumpeter (1883-1950), a spirited, histrionic Viennese aristocrat and Harvard professor, who saw capitalism in the twentieth century in terms of dynamic growth, yet he relegated it to destruction in the long run. How can society depend on capitalism, which is an unregulated market system? Smith replies with two laws of the market. The desire for wealth permeates all human activity. Therefore, self-interest, or profit, motivates people to perform necessary tasks for which society is willing to pay. As Smith writes, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from our regard to their self-interest." Thus, the first law of the market is self-interest, or the profit motive. Does it matter who appropriates the profit? Does it matter who subjugates the Worker? As long as the State purports to represent the whole of society, it’s OK? PDF / EPUB File Name: The_Worldly_Philosophers_-_Robert_L_Heilbroner.pdf, The_Worldly_Philosophers_-_Robert_L_Heilbroner.epubIronically, what avoided World Revolution was a rule change that allowed the Referee to influence the play. This is a great book. It still has not been equalled. It’s a run through where the classical economists came from, who they were, what they thought and why they thought what they thought and how they worked as a group to try to produce a more productive and peaceful and prosperous civilization. They regarded themselves as engaged in a holy mission to understand this commercial, and then later industrial, economy in which humanity was increasingly enmeshed and how to properly manage it. The book is truly wonderful. It still saddens me that no one has managed to write anything as good” Readmore... Adam Smith (1723-90), a quiet, nervous, scholarly Scottish bachelor, taught first at Oxford University and then at the University of Glasgow. He gained fame as a moral philosopher, and during his lifetime, his book The Theory of Moral Sentiments earned the critics' appraisal as his best work. Consequently, he was already well known before publishing his enduring masterpiece, An Inquiry into the Nature and Causes of the Wealth of Nations. The treatment of Marx is however too breezy. He does a good job with the surplus value argument against capitalism--Marx's one trump card it seems to me, and still one that has extraordinary power, but only if you overlook Marx's labor theory of value and its weaknesses. Labor power was to Marx a fact of nature to be integrated in his faulty edifice of Hegelian inspired metaphysics-rubbish. But labor power makes no sense in economics unless we say what the labor produces and whether or not it has any social value. I once met a woman who made Goblin head flower vases for a living. They're all different, she said, I never make two alike. While that may be a fascinating fact about the amount of labor power and thought and creativity she put into these Goblin heads, I did not feel inclined to value them for that reason. For the first time, society revolved around the actions of ‘free-thinking agents’ who pursued their own ‘self-interest’, a thought previously heretical to the Catholic medieval elite for whom covetousness was a sin. The rational man was thus born. Rational, in this context, meant that a man would rather have more of a product than less of it. Thus, the age of accumulation began. Increasingly, a

But how can the individual's selfish desires benefit society? What stops greed from overwhelming the public, resulting in ruthless exploitation by profiteers? Smith answers that the individual, in the process of providing for personal interests, unintentionally contributes to the economic wellbeing of society. Therefore, the second law of the market is competition. The individual who overcharges for products soon learns that competitors will take away business by offering more reasonable prices. If wages are too small, workers will hire out to another employer who will pay more for their services. Thus, selfish motives are tempered by interaction, resulting in social harmony. At this point, self-interest becomes a factor. Since there are higher profits in the glove business and a greater need for gloves, new producers begin manufacturing gloves. Workers move from shoe factories to glove factories. The result is that glove production rises and shoe production falls. Before long, the market achieves a balance. As the supply of gloves grows to meet demand, glove prices decrease. As the supply of shoes falls below demand, shoe prices rise. This price increase stimulates shoe production. Therefore, the opposing forces of self-interest and competition balance the market.

He also came up with a way of classifying economies, as either Traditional (primarily agriculturally-based, perhaps subsistence economy), Command (centrally planned economy, often involving the state), Market (capitalism), or Mixed. He believed that Caterpillarism was headed inevitably toward disequilibrium, and one day the Working Class would revolt and overturn Caterpillarism in favour of Communism. A more complete economic vision appears in Schumpeter's Capitalism, Socialism, and Democracy (1942), in which the author mounts an offensive thrust against his arch-enemy, Karl Marx. Departing from his predecessor's obsession with the antagonism between capitalist and worker, Schumpeter fastens onto the bourgeois nature of the capitalist. Crucial to his denouncement of the wearer of the lounging suit is the author's depiction of plausible capitalism, which describes capitalism as an economic success but a sociological failure. The system bogs down in a bureaucratic nightmare of red tape, where entrepreneurial input counts for little. Yet, even though Schumpeter's scenario plays well on the surface, it is riddled by the disease of rationalism, which gobbles up its own reason for being. Economists call these basic agents "factors of production." They include a fourth factor — management, which plans, coordinates, and directs production, although some economists label this factor a specialized high-level form of labor.

The Age of Exploration and Discovery (l5th-l7th centuries) — an era which saw the rise of wealth in gold, silver, and raw resources from colonies in the New World.The greatest single change necessary for the adoption of the market system, or capitalism, was a radical change in the attitude of society toward profit, or self-gain. Without the profit motive, there would be no capitalism, or market system. The introduction and first chapter give an overview of the history of the universe down to the eighteenth century from an economic view point. I think it obscures matters and makes it sound more forbidding and complex than it is, or was. there after coming chapters on individuals or sets of persons as follows plus a conclusion.