The History of Economic Thought (Economic Ideas and Thinkers)

hey everybody this is Alex mered from Alex merced.com and this is my presentation of the history of economic thought the ideas that change the world now the purpose of this presentation is to want introduce you uh to many of the names and ideas that permeated throughout the history of Economics now I'm going to go over almost a hundred different economists and philosophers and other important economic thinkers throughout this presentation so in that case I'm not going to have much time to really dedicate to every single idea that each of these people contributed and to dedicate as much time as I'd like to the ideas that really uh make up this economic timeline more so the purpose of this presentation is to make sure that you're aware of these names what some of their U main contributions were and if you find any of these names interesting to go learn about their other contributions to other areas such as philosophy mathematics Etc um and they get you interested in a subject of economic thought okay now there's several books that talk about the history of economic thought and here's a list of many of those books so if you want you can pause it write down some of these um actually if you go to learn economics now.com I actually go when I read 50 major Economist by Steven prman I actually literally did a video for each chapter as I read through the book so if you want I would recommend reading that book and you can watch those videos as sort of a a guide uh to get my take on a lot of those chapters and pretty much all the rest of these books are all great books many of them I've read or going to read I'm especially looking forward to at some point getting to the Clash of economic ideas by Lawrence h r white and KES versus hyek by Nicholas wapshot which both I haven't read yet but I'm definitely looking forward to it okay so we're going to start off with ancient Athens and some of the thinkers back in the Athenian era of things okay we're going to start off with a name a guy by the name of xenop okay now xenophone was a philosopher one of the earliest philosophers um but mainly what I talk about here is that he wrote one of the earliest economic texts in existence and the focus of that text was mainly household management a lot of the earlier economic ideas were always about sort of how to manage your economic household to pay the bills save money and manage your life dayto day okay and basically the premise of xenophon's work which becomes a heavily taught tax up to a certain Point um talks about moderation and hard work so the idea is you work hard get what you can and make sure not to use all of it um because if not then your household will fall apart and all Athenians and these are also famous philosophers that philosophies on all sorts of things far as the structure of society Etc include PL Plato okay and particularly his book The Republic that really talked about how uh Society should be organized and it's in this book where he really starts to talk about the initial ideas about Democratic and Republican forms of government um and in the heart of Economics talk one of the earliest texts that talk about the idea of specialization which is the idea that if people specialize in what they're good at and everybody does what they're good at will actually have more stuff because the person who's good at making shoes will be able to make more shoes than someone who isn't and the person who's better at painting will be able to paint more than someone who isn't so that way everyone should specialize in different tasks instead of everyone having to learn how to do everything in response to that there was politics by Aristotle okay and this this is a work by Aristotle where he criticized many of Plato's ideas especially regarding how Society should be run and the different forms of government okay and in this is one of the earlier text to talk about private property rights and the incentives and being very sort of pro private property and and recognizing the the role of private property in a society functioning then we bring ourselves to the middle uh the Middle Ages and the thought of the Middle Ages there was a lot of philosophers CU at this point economics is really isn't isn't in its own idea or its own Branch per se or own line of academic thought it's really at this point still a branch within philosophy so in the sense of people philosophizing about the way the world works and how life should be lived Etc economic ideas are sort of tied up in there at this point in time okay now Thomas aquinus who was a theologian and and did a lot to talk about sort of ethics and religion and whatnot one of the things that he talked about in an economic sense was the idea of ajust price which is still an idea that permeates um a lot of thinkers today in the sense that there's a price that necessarily isn't the profit maximizing price but a price where you're maximizing the value to everybody that's also just um and ethical okay and B basically basic idea is you take the cost of whatever it takes to make the good plus whatever it takes to pay the people who made the good and that's pretty much it okay so this is sort of a very um this is the kind of ideas that later on would take a marxy intake in the sense where basically uh Surplus profit stuff like that but here they call it the just price and anything you priced above that just price even if it was more profitable and you were able to charge that price and people would be willing to pay it you are acting in unjust way now response to that was dun scotus who made the counter argument they say one arguing that determining what a just price is is a difficult matter and in that if a person is willing to transact with you at a higher price it's just by the mere fact that it was voluntary cuz both parties are better off because the only reason you would enter a voluntary transaction is if what you got in return was better than what you were giving up or else you would have just kept what you had and chose not to participate in that transaction action so in that case he was making the argument that Merchants were sort of benefiting the people that were trading with them and that the merchant class was gener a good thing and not um something to be necessarily chastised in the same way that uh Thomas Aquin has did with his ideas of a just price then we get to mercantilism now mercantilism is a branch uh an early School of economics and a school think of it as like a branch of where different economists think of a similar idea in mercantilism the idea is to require money okay so the idea is that you want for a country to be strong you need to make stuff and sell it to everybody else people in the country shouldn't necessarily really be eating the stuff because we need to sell to everybody else so that we can accumulate a lot of money in these days it was gold so ladias if you can accumulate a lot of gold then you can a country can become very powerful okay so you got Thomas mun one of the earliest merkal list okay okay and basically as I mentioned before theorizes that a country must export more than it Imports to remain prosperous and advocat is advocated for policy pushing frugality and land utilization meaning basically he wanted governments to make sure that people within the country didn't necessarily use as much stuff so that we could sell more to other countries and acquire more gold and said that you know policy should also push to make sure that every piece of land is being used all the time so that way there's more stuff to sell other countries then there's Philip Von horik okay you see I couldn't pronounce it as well as I'd like but he was a German supporter of mercantilism and he outlined in his work nine principles of sound economy okay which included things like being against Imports so basically preventing uh people from selling Goods to your country but selling Goods to other countries okay again Cult of voting all land just because we saw with Thomas mun Hing gold and other recommendations so again the big theme here with merism is sell a bunch of stuff to everybody else but then whatever you get don't use it to buy anything else so it's all about hoarding Jean Baptist Colbert okay or colar advocated the hoarding of gold okay again common theme here with the meran list except he went a step farther and this is in France formed guilds to run many of France's major industries which stood in place until the French Revolution so to help control industry he formed sort of these um think of gilds as sort of uh the unions of the Middle Ages so they'd be organizations that would help a a particular industry sort of organize itself and prevent outside competition so they can charge higher prices and and whatnot now what happens that a guy by the name a very mysterious guy by the name of Richard Canon or Calon he mysteriously writes the first economic treaties now the life of Richard canalon is a very interesting one one because we don't know much about it and there's even uh theories about that he faked his death and the thing is that there's nothing else written by Richard Calon because technically he supposedly died in his fire well all of his work got burn now copies of uh Richard kenton's text would float around and influence many of the E economic thinkers going forward and this was really the first time that you really have a body of Tex that summarizes the entire economy as a whole and talks about how everything works from bottom to top from bottom to top okay and he also talks about things like you know when there's an influx of money that you don't really know where it's going to go and this becomes known as a cantelon effect the idea is that if new money enters an economy that it'll begin to increase prices but which prices go up first you don't know you'll learn that along the way and um one of the things that that text expires is the British Enlightenment okay among one of the the many different movements so here you have a lot of philosophers who not only talk about economic ideas but ideas of Liberty and freedom and this will lead to again a lot of the ideas that lead to things like the physiocrats um Adam Smith Etc okay here you have John Lock who critiqued much of absolutism uh of Tom Hobbs so Thomas H said like there objective reality and truth and whatnot and John Lock would criticize some of that those ideas okay develop the idea of the social contract so TOS uh and lock were both sort of in this debate about what is a social cont contract and different definitions of social contract and John lock the way he kind of theorized it is people will enter this sort of social contract not for some sort of social order but more for like common defense of property so the purpose of the government should be to defend one's property and this is where he came up with ideas for uh that would later end up with different ideas of Taxation so if remember John Lock said the idea was you should have progressive taxation the reason is is if government's rol is to protect property those with the most property should pay the most taxes um because they getting the most service but that's essentially the the role that government plays or a state plays that of protecting property of those who've sort of delegated it that Authority and it's one of the considered one of the grandest fathers of Classical liberalism liberalism and nowadays usually would refer to Classical liberalism as libertarianism then there's Dudley North who argued against mercant toist ideas um and basically saying that constantly having a trade surplus wasn't necessarily a good thing meaning constantly selling stuff to other people isn't a good thing because if you're not also getting stuff then the people in the country aren't necessarily better off and talked about the benefits of free trade and government non interfering in trade to allow everybody to get the things that they want because if everyone gets the things that they want and they're better off so yes you want to sell stuff but you also want to buy stuff to make your life better off and at the end of the day that's really the end goal to make your life better off and this is kind of where Dudley North was going then there's David Hume he agreed with North that trade should not be interfered with but he also argued that a trade surplus would lead to an increase in gold in S silver resulting in price inflation so the idea is if you're selling a lot of goods to other countries you'll end up having a lot of gold entering the country and that'll cause prices to push up because you have an influx of money okay um so th is not necessarily a good thing because you don't want to necessarily cause that inflation so again you want balanced trade so that way there aren't necessarily a uh you don't want to trade deficit but you don't want to trade surplus you want balance trade so that way um prices aren't necessarily being messed up along the way now Hume was also a major contributor probably more well known for a lot of his work regarding morality ethics Etc then there's Francis Hutchinson who was a teacher of an Smith one of the f um who will be going into next and also he was one of the last few Scholars to really teach Xena Fan's work from earlier so about household management and managing your household and hard work and moderation and all that stuff after at this point a lot of that earlier economic ideas what's going to happen is that Adam Smith will come out with like The Wealth of Nations and the theory of mul sentiments and a lot of those will begin to become the center of economic thinking and economic ideas going forward because everything up to this point really kind of gets summarized in Adam Smith's work but before we get to Adam Smith we'll get to the physiocrats um which is a French School of economics and one of the earliest like real formal schools where you really had a formal group of economists that sort of associated themselves with one particular person's work and really built upon it and that person was uh Frank W he wrote the Tableau aonik and the thing that made the physiocrats of physiocrats is that they had a huge thing for land okay they B that land was the only productive asset and basically um everything else was just a transformation of what land created so basically a table all you did is you took stuff that land created you know the trees That Grew From the land the crops Etc and transformed it into other Goods so the only thing that really makes new stuff is land thus you know economic ideas should be centered around land okay and basically the arise about the productivity of land and the net product of land and said it's only that net product of land basically the profit or the extra um profit you get after on the final goods should be taxed okay so this is not you don't tax it when you take the wood and sell to the wood maker and then and then tax it again when the wood maker sells the plings of wood to the uh Carpenter who then takes the car takes the wood and then builds a cabinet out of it he attacks it after the wood the C the uh Carpenter sells a cabinet cuz that would be the net product of the land um and Robert Jax turo okay he developed many of the ideas of frankw K so he took what K was doing and kind of went further with it he divided in his work he divided people into three classes it was the land owners who owned that productive asset the agricultural class who would um cultivate that productive asset and the salar class who basically got paid all along the rest of the way uh in production and said only the new product of land should be taxed okay or the net product of land and argued for economic freedom so again the the um physiocrat school was also a very early proponent of Classical liberalism for Freedom less government Etc now we get to the classical Economist so again you know you had the work of Richard Calon you have the works of the physiocrats and at this point they all influence ad Smith and Adam Smith writes two books The Wealth of Nations and the theory of moral sentiments Now The Wealth of Nations focus more on the benefits of trade okay and why when people are free to trade with each other um people are better off while the theory of moral sentiments was more about ethics and how we develop our moral sentiments the way we look at the world and decide what's wrong and good and really to understand M Smith you really need to look at both works cuz they both are complimentary in seeing Adam Smith's uh point of view of the world now he had other work he wrote all sorts of stuff but most people never got to see that work because before he died he asked someone when he dies just burn it because he didn't want people to see unfinished work it took him years to write the works he did put out okay he was he was quite um reclusive then you have Walter badget okay who basically he wrote about the UK Constitution so the United Kingdom has kind of at this point when Walter badget was alive had establish um its Constitution and he would write about the teach detentions between social institutions and Innovations in the sense that Innovations would outpace social institutions and this would cause tension and this was kind of would be it Innovation that would force Society to move forward in a sense okay and he also wrote a lot about central banks which is probably what he's best known for um the idea that you know he wasn't necessarily a big proponent of Central Banking or he was um a lot of his ideas is what influences a lot of what you call free Bankers people who believe that the banking system should just be free of government intervention and basically said um well in that case if you have a central bank the what you should do is that during a time of Crisis central banks should lend freely on good cap C uh collateral so that means that the collateral Banks can put up decent assets like good quality assets up as collateral the Central Bank should lend to them but they should lend to them at interest rates that are punitive meaning that that hurt okay so that way next time around they don't make the same mistakes again now how we've kept up with that sense and Central Bankers have they actually lent on good collateral or at punitive rates that is Up For Debate but it was badges ideas that sort of really set what central Bankers should be doing okay helping institutions with good collateral that are just having a rough time get through but with some pain then there's Jeremy Bentham now Jeremy benam is probably most famous for developing the idea of utilitarianism meaning that the ethical choice is whatever provides the most good for the most people okay it was also so an atheist a prison reformer an animal rights activist okay he did not like suffering okay um and utilitarian ideas are still very popular um to an extent um but there's still a lot of philosophical controvers uh controversiality over utilitarianism because for example uh common dilemma presented in philosophies like you have 10 people on a boat okay but the boat will sink if all 10 people stay on the boat okay um now basically one person needs to be thrown off now how do you decide who that person is now yes throwing that one person off is the utilitarian decision it maximizes the most good for most people because if all 10 people stay in the boat they all die um but if one of them is thrown off then the nine survive and one dies so in that scenario you've maximized good for the most amount of people but again for that individual who's being thrown off the boat does that mean it's necessarily uh unethical for him to prevent himself from being thrown off the boat okay so these are the kind of ethical quandaries that are brought up through the idea of utilitarianism that are constantly being hashed out by philosophers and overall Jeremy benam was what you would well a lot of if you ever hear someone call them themselves a uh technocrat or a pragmatist they would probably be very big into use totalitarianism uh meaning they're not necessarily stuck on any particular set of policies or way the world has to work they just want the world to work whatever way it takes to make it the best work for the most amount of people most of the time that would be sort of um your typical technocrat or pragmatist trying to just make it work for everybody as much as possible despite any ethical conflicts otherwise then there's Jean Baptist Baptist say he developed se's law the IDE is a production equals demand so there cannot be a GL of Supply what it really means is that Supply creates his own demand so if I make something people will eventually want it I just got to find the price that someone will want it at um so in that case there can never be too much stuff it's just maybe there's too much stuff at too high a price okay and belied in the neutrality of money so this is one of the first people to really talk about the neutrality of money the idea behind the neutrality of money is that the quantity of money doesn't matter if there's more money prices will just go up if there's less money prices will just go down so in itself the quantity of money doesn't matter at least to anyone who believes the neutrality of money um again that's still to this day one of those ideas that economists uh argue heavily about Thomas Maus now Thomas malus was an economist who was very pessimistic let's put it that way what he believed is that the economy can never or Human Condition can never approve why because even when Humanity can figure out a way to become prosperous what will happen is that this will lead to more Leisure Time and more leisure time will lead to more child rearing so then there'll be more people and then the extra stuff that you got from being more prosperous is now gone because you get so many extra people and this made more sense during Thomas malus's time because technology wasn't advancing as quick as it is now so in this case it was very visible to see that people would always stay with cold subsistence which means making just enough to get by okay and things would only improve for short periods of time and then go back to where they were now as time has gone on the growth of innovation and technology has now uh for the most part heavily outpaced um population growth and the trend back to subsistence so a lot of mala's ideas are a lot more In Contention but because of that he at that time he advocated basically he was against welfare because he felt that if the government assisted um the poor then they would have more kids so he didn't want them this is the poor but he also thought he also believed in protectionism that the government should try to make sure that people within that country are doing well even if it's at the cost of other people's countries because again either the people in your country do well or everybody suffers okay so you might as well at least do the best you can for the people within your borders okay and he critiques say okay and it was his critique of say's law that would be the impetus for people like canes and and lots of others down the road like Thomas malus was a one of the many big thinkers that influenced canes in the way he thinks as when we talk about John mayard kanes on the road David Ricardo he developed the idea of the theory of comparative advantage okay this is the idea of not um absolute Advantage so absolute Advantage would be the person who who who H who absolutely has the best ability to build X good should build it comparative advantages every country should or everyone should always focus on making what they can make the best okay because if you can make it the best then you can make it you can make a little bit more which means it'll be more available for everybody and if all countries traded with each other and they freely traded with each other and made what they were best at there'd be more for everybody he also developed the theory of rents um which is the idea that as land gets cultivated rents will be pushed up and that'll C create an incentive to cultivate the lower yielding land so basically land that's not so good will begin the rent on it will be so low compared to the raising rents on developed land that people will then pay to develop the the the the lower yielding land so overall as rents go up the rents of all lands go up because as rent rents go up on the top land people will cultivate the lower land raising that rent as well John Stewart Mill okay for the most part he wrote one of the textbooks that was really used um as the primary economic introductory economic textbook up until Paul Samuelson wrote his textbook uh I think he his textbook was called principles of economics most economic intro economics textbooks are called principles of economics but particularly Paul Samuel Paul samuelson's textbook becomes the new primary textbook but up before then John Stewart Mills textbook was the primary one he was one of the first people to talk about supply and demand as ideas and opportunity costs okay so again Supply meaning the amount of goods that are available demand um the amount that people want those goods and opportunity costs which you give up by making a decision so for example if I choose to go right if I have a choice between going right and left and and I choose to go right my opportunity cost is anything I would have gotten if I had went left okay so the cost of the choice you didn't make okay then there's Marxism now what happens that Carl Marx is up ends up on the scene and he ends up talking about well economic ideas and criticizing what's known as capital well he terms is capitalism the term capitalism was actually made by Marx and it was actually a pejorative term meaning a negative term uh for free markets per se and he would argue that yes free markets and free trade does increase the speed of innovation and will improve people's quality of lives for a period of time but over time that there would be people who would sort of own all capital like who would own all the factories own all the companies own everything worth owning okay and they'll be to the point where where basically people who work for them have to work for a lot less than necessarily what they're contributing to the process of production and this difference would be called exp exploitation so he's saying if they're basically if people are being paid less in their contribution they're being exploited now how do you actually really come up with that how much that contribution really is that's an economic debate as long as the day long of the day but he was also a big fan of Hegel who was a philosopher and Hegel will always talk about conflicts and how change is brought in through conflict so as time goes on conflicts arise and from that conflict something new so he would talk about how eventually capitalism would lead to two classes the the capitalist class which are the people who own the factories who own business the titans of industry and the labor class which are the people who worked for them and eventually the exploitation would get so bad that there would be a conflict between these two classes and the resulting Society that that that quiles that conflict is socialism okay and again Marx went into some detail but didn't go into didn't fill in all the blanks about what he meant by communism and socialism and all that stuff this would be a lot of people would end up trying to fill those blanks like Lenin ma uh Stalin Etc uh Castro later on okay and to this day there's people who are still trying to sort of take the ideas that laid out and take them further okay and at this point you're still using What's called the labor the or he established What's called the labor theory of value the idea is that um labor is a pretty big component if not most of what the value of a good okay and it's later on you'll see that we kind of get away from that it's really at the marginal marginal Revolution later on when you start com up coming up with Carl minger subjective value theory that you really really begin moving away from that labor theory of value okay which what happens next okay now the marginal Revolution um what happened here is you had three different economists all come up with the idea of marginal analysis at the same time okay now the idea behind marginal analysis is that you don't treat all units as uniform Goods so for example uh the value of every slice of pizza of one piece of pizza is not the same I'm going to enjoy the first slice of pizza a lot the second slice of pizza I'm still going to enjoy it but probably not as much as the first slice of pizza so even though they're The Identical good the value to provide me is different okay and then maybe the third slice of pizza I will very I'll enjoy but and in the fourth pizza I've now eaten too much and now I have a negative utility or negative benefit from eating that slice of pizza so that would be sort of a basic margin analysis but anytime you take any sort of economic concept and sit there and say okay well if we add one more is that a good is that still a good thing or is that now a bad thing that's marginal analysis so three again three economists came up with this whole idea of marginal analysis at the same time it was LE Leon Vos okay was one of three Economist that discovered theory of marginal utility at the same period of time he was father of What's called the Lan school of thought okay and basically this is a very math matics Focus School of Economics okay and he was the originator of what's called General equilibrium Theory this is the idea that prices Trend towards a equilibrium price so the way this would work is for example if I'm selling bananas and I said the bananas at a X price okay if if the price is too high what's going to happen is that no one's going to buy the bananas so we end up with too many bananas I'll have a surplus so next time I'll lower the price now if I lower the price too much I'll still all out of the bananas too fast and I'll still have a bunch of people who want bananas I'll have a shortage so through this sort of trial and error process the economy gets to um equilibrium the other way you can get there is to an auction because you'll have people who are breing high people are breing low and eventually you'll find the the clearing price which which an auction clears okay but either way prices Trend towards equilibrium okay and he got into a lot of trying to mathematically figure out how you get there then there was K merer who was sort of the founder of the Austrian School of Economics now his major contribution is probably to me one of the most important contributions in all of Economics is the idea of subjective value the idea that there is like a slice of pizza has no objective value it's what I think it's worth it's What It's Worth to me okay so for you might think that pizza is worth five bucks I think it's only worth three bucks okay so when I try to sell it to you for 350 you're more than glad to pay it and I'm more than glad to sell it to you because I'm selling it to you for more than I think it's worth and you're buying it for less than I than you think it's worth so we both win okay and that's an important idea because that solves a lot of the conundrums about why things like diamonds which have no real practical use would be worth more than something like bread which has you know you need it to survive for the most part okay so so that was a major major breakthrough then there was Stanley jevans okay who again also developed marginal ideas and again same thing uh he was the father of the Cambridge School of Economics again many economists also developing on the ideas of Stanley jevans in particular and he developed What's called the jevans Paradox okay the idea that increased efficiency leads to increased use this is an idea that's very important to environmental economics in the sense that um for example you develop a more fuele efficient car well that means you don't you won't use as much gas to travel a farther distance so people actually end up driving more because they can drive they'll go on more road trips since it's cheaper to go on a road trip okay and you'll actually end up with much more car use or at the same time it'll be much more affordable to have a car so people will who wouldn't have had a car otherwise will begin having cars and basically increased efficiency actually results in increased use of the good that's what's the jeevan's Paradox he also created one of the first or the first business cycle Theory which is based on sunspots the idea that the sun moves around it will affect crop yields and that's sort of what affects the business cycle so when the sun is in the right place and you have huge crop yields that'll lead to the boom but then when the sun's in the other a different place and crop yields are low you end up with a bust so now we'll take a look at the three each of these economists of the marginal revolution of V Ros manger and jevans each of them sort of started a school of economic thought that came out after them so we'll discuss each of these a little bit so the first was a Lou sand school again after Leon valos these ideas and they again a lot of these economists really focus on math and developing mathematical ideas Etc there was V vredo paredo okay he developed the idea of Paro optimality this is the idea that when the economy is in a condition where no person okay can be made worse off without making somebody else worse off that's P optimal so if you're in a situation and you can make someone better off and everybody's better off then you're not a p optimality yet okay you're a Paro optimality once again you're as good as you can get the only way I can make X person better by making why person worse he criticized democracy and argu for a minimal state to limit the power of any emergent ruling class he was very afraid that you know the Democratic process would get usurped corrupted Etc um and a lot of people thought of him as a totalitarian for criticizing democracy um but he didn't but again more he was criticizing the ability for democracy to stay uh to maintain its Integrity over time okay and uh those are generally things that pan out far as so for the most part I think that's panned out the Vienna Austrian School okay what I'm for those who know me as a Libertarian and economics junkie I am a big fan of the Austrian school but let's talk about this again they this developed on carer's work now the next Economist online is a guy by the name of Y yugan bonor and this guy is extremely important cuz there's really two things that he really um contributes one is the capital Theory um basically idea here is is mostly focusing on the roundabout of the structure of production so the idea is as Innovation happens people get further and further away so for example if I wanted to create a chair okay if I had to actually cut down the tree take make the wood and then make a chair that would be much more difficult okay it would take me that's a much simpler process of production but it's much more difficult and uh it's a lot less efficient now as the produ the production process gets more complex it actually gets more efficient okay the longer the chain goes because what if you had this process instead of someone just cutting down wood turning and then just turning the wood into a chair if someone had to cut down the wood send it to a plant to get processed and they said where where they sat down and chopped to the you know uniform size blocks and then they had to ship it over to a warehouse and where the manufacturer would then sell it in different stores called Home Depot and you would go there You' actually you actually able to buy the wood for a lot cheaper it's a much more efficient process so as the more roundabout the production process gets the the more efficient it gets and the more yield you get okay also uh he the idea of inmoral thinking so we're talk talking about how the economy doesn't necessarily it's not always talking about what's the economy doing now so a lot of times economists will talk about if something's not being used now then that's a problem but you take the way yugan B work and how austrians would think from here on out if someone decides not to use something right now maybe it's because they want to use it sometime in the future and you start thinking about how the economy allocates those resources over time and that's a very important contribution to the way we think about economics he also criticized a lot of the ideas of Marx okay so bombar extremely made Extreme contributions to the field of economics and um sometimes a lot of people feel that his work is very underappreciated if you're an economic student you should definitely go back and read some of his work it's some pretty insightful stuff then there was uh Friedrich Von viser okay and he began the economic ulation debate this was the debate with socialist or Marxist about can socialism work but instead of making the incentive debate which was the argument that in a communist World there wasn't an incentive for people to work they were making the argument that a capitalist a communist Society since they don't have market prices because everything is sort of centrally planned that they won't have the information to figure out how much of X and Y and Z good to make so thus socialism couldn't work now also particip ipating in this debate was Lu Von Mees and Fa Hayek who made important contributions in this debate with socialism and again the focus of this debate is the importance of prices and how prices act as a transmission mechanism so that way people in the economy know how much to make what to make Etc he also stressed the importance of entrepreneurs and it was a lot of his work on entrepreneurs that Joseph Schumer would take on and sort of developed from there and he coined the term opportunity cost so the first time the actual term opportunity cost was used was really by Fedrick Von viser then there's Joseph Schumer now Joseph Schumer is probably the most famous of the Vienna school um and basically he continued the work of entrepreneurs and talking about how entrepreneurs really drive the economy and this is where you get the term creative destruction he talked about Innovation as a dise equilibri uh disequilibrating force me meaning in the sense that an economy Trends towards equilibrium as we talked about before but eventually once it hits equilibrium the economy kind of stagnates it doesn't go any further because it's at equilibrium so an innovation or some sort of technological innovation process Innovation something of that sort what it does it throws a whole thing out of whack okay and what happens now the economy has to find a new equilibrium so this is which means certain businesses can't exist new businesses have to arise and this is what's called the creative destruction as we create new technologies they destroy old businesses and new businesses are getting their wake and that's how Society actually progresses okay so the society transs towards the equilibrium but you need to disturb that equilibrium through Innovation to sort of move forward and then he had some interesting ideas on uh business Cycles he took a lot of different ideas uh that other people have done on business cycles and started saying you know what maybe there isn't one business cycle maybe there's a lot of several different cycles that occur at different frequencies for different reasons and created a taxonomy saying there's like shortterm um I think the short-term ones were the juglar cycles and the really really long ones that were the KR of w what they would call a KR of wave and this had to do with technology and huge spurts of innovation uh he was a Critic of canes pretty much everyone in the Vienna school all were big fans of critiquing marks and canes and he theorized Schumer that capital would also die in the same way that Marx did the difference is it wasn't because it was a conflict Schumer theorized that what happened that capitalism would be so successful that people would have so much leisure time that you would have a bunch of academics sitting around who would find ways to complain about capitalism and um that would be the end of it because they people would sit there and consume their work and they would be convinced that capitalism is a bad idea and they'll try something else to everyone's detriment oh okay that's Joseph Schumer he's a fairly interesting guy he's had some funny quotes there's one about a about him and a horse that I can't really remember right now it's pretty funny look it up luig vanon Mees okay another really really fascinating Economist who contributed a whole lot he helped develop What's called the Austrian business cycle Theory basic idea is this you expand credit so usually through an expansion of the money supply but now there's more credit than naturally would be cuz usually credit meaning being able to borrow money from the bank would usually come from people saving but if it comes from because you just gave the banks free money because you printed more money what happens is that the interest rate or the level of credit in the economy doesn't reflect the actual amount of savings in the economy and this causes entrepreneurs and investors to put or to allocate their funds so they misallocate or malinvestment projects something like putting putting on an expansion to a restaurant or building a house or starting a whole new sort of chain of business and they put the money towards a wrong investment now since they're long-term Investments it'll take a long time before you realize it's the wrong place to put it meanwhile you're in the moment that you're employing those assets you're you're employing people Etc and this causes a boom in the economy and the economy seems a lot bigger than it is but when it turns out a lot of those projects that fueled that growth weren't sustainable you end up having a bust on the other side okay he also wrote The Economic treaties another book that sort of explained the economy from head to toe called Human Action okay it's a pretty big Tome and it's a pretty intense read since it was translated um but it's it's definitely worth your time if you ever want to give it a shot he was a major critic of socialism okay and he contributed to the economic calculation debate as we mentioned earlier he also founded the Mont Pellerin Society with Hayek poer Steeler men Milton fredman okay which is basically the Society of like economists that really try to push the ideas of free markets and Free People um you know Classical liberalism then there's fa Hayek friederich Von Hayek now he helped develop even further the week uh the work of the Austrian business cycle theory that Misa started and his what he did he would discuss the natural rate of interest and its effect on the structure of production and basically the idea is that if government policy pushed the prevailing interest rates below what would natur would naturally be there the natural interest rate this would create the same phenomenon of Mal investment that we discussed in the previous section some of the important terms that were really contributed by Hayek were terms like spontaneous order or emergent order the idea that you don't need people to centrally plan a society or to make Society work work to have order that order just naturally emerges people just naturally organize themselves okay and this is um visible in the way free markets and you take take a look at any industry and how things have occurred like no one had to organize the cell phone industry for it to turn out the way it did in most Industries how the way it did and other examples is like in England uh they took out all the road signs in some town somewhere and um what happened is that you instead of having more access you had less accidents people because people just started coordinating with each other more and he developed a lot of Li um philosophical work on liberalism and on Choice like the constitution of Liberty um he did a lot of work on the legal system and law and how law should be so he was a very prolific writer wrote a lot of good stuff and again if you have the time you should definitely check out his work then there's the Cambridge School okay you have Alfred Marshall he was a first first person to really create a um supply and demand curve chart so those little charts that you learn when you first get into economics you can think Alfred Marshall for that um so basically all the graphing and all that stuff was really sort of thanks to Alfred Marshall he's the kind of guy who got that all started and um and again his books are pretty important when it comes to General equilibrium analysis so again that came from V Ross and jevans and all that stuff okay then you had Cecil pigu Now pigu is really famous for his ideas regarding externalities now externalities if you're not familiar with them are the effects on third parties of Your Action so for example a negative externality would be like if I decided not to take a shower and I go on the train and everyone has a much worse ride because of my choice that would be a negative externality they out of no choice of their own suffer a positive externality is if I took a good a really good thorough shower and everyone enjoyed that I smelt very good while I was on the train and I made their trip much more pleasant for it okay and basic Cil pagu was uh the government should penalize negative externalities by taxing them and should subsidize positive externalities by either subsidies or or tax cuts or Etc okay and this is these are very popular ideas and lot of his work is extremely instrumental in the ideas of like welfare and environmental economics where externalities play a big role so the idea is that you know you have a positive externality out of helping the poor because um if the poor don't get so desperate there'll be less crime okay or there's a positive externality out of uh helping the environment because then people have less health problems due to the environment so you have those positive externalities and the government should subsidize those that's sort of the um argument in welfare and environmental e economics later on an economist by Ronald Co who I'll mention much further on he sort of criticized his idea saying it's not necessarily always um the best choice to for government to get involved by subsidizing and penalizing maybe it's good to just let the negative and positive externalities work themselves out naturally because then people will come up with sort of interesting new ways that we might not have thought of to deal with those things okay now here's a couple other Economist that you should be aware of during this period of time such as Irving Fischer now Irving Fischer probably most famous for for his theory of debt deflation okay this is the idea that the reason the economy falls down or has a bust is because it's accumulated too much debt and what happens is that as people decide to start paying down that debt that causes less activity which causes drops in asset prices which causes more debt problems and you end up with What's called the deflationary spiral he was also the originator of the equation of exchange which is MV equals PQ which stands for the money supply times the velocity of money meaning the amount of times that the money kind of moves around equals the price of all goods sold times the quantity of all goods sold okay and this really didn't go anywhere with Irving Fisher but later on Milton Freedman kind of brings it back and it becomes uh mainly associated with Milton Freedman and monetarism John mayard Kane is probably one of the most influential if not the most influential Economist of the last 100 years okay and probably there's two economists that every undergraduate will learn about before they graduate it'll be Adam Smith and John mayard canes those will probably the two names they walk away from he is what's the he is the father of What's called the kezan school of economics ICS he coined terms like the Paradox of thrift which is the idea not that it's bad to save I think that's a misconception but the idea is that if everybody saved at the same time that that would be a bad thing if everybody was prudent at the same time uh was basically his point um it would be a bad thing because if all of us were stop spending money then there would be no one to uh there would be no transactions the economy would literally just halt the economy depends on there being Savers and Spenders because for people to save there has to be someone spending money with them and they also talk about liquidity traps these were times when um if you were to print money to get the economy out of a glut so the idea is that if people the economy was uncompetitive because people were getting paid too much it's kind of hard to give them a pay cut so one way you can give them a pay cut without asking them is to print more money and cause inflation so then their pay is worth less and that can make the economy competitive again the problem is if people don't spend that money that you print to push prices up then you don't get the inflation you need to get the economy competitive again so when you have a situation like that that's what canes would refer to as a liquidity trap and argue that government should be sort of actively spending in all of that then there's Simon kets uh Simon kets came up with some pretty interesting things such as he's the guy who actually developed uh national income accounting so numbers like GDP G&P that we use today in economics were designed by him originally in 1934 he was also the originator of an idea called the kits curve and basically the kits curve as he originally formulated it was more about inequality in the sense that a country will develop at first uh inequality will will increase as as the as the economy develops um because you have a lot of more risk- taking um and you have a lot more institutions that are just developing and people have access to those institutions but as the economy develops um it the inequality will begin to decrease because then people will have much more power to start asking for more and it'll just naturally you know go around people have tried to apply this to like environmental economics and and the same idea saying that you know the the um the environment will get worse before it gets better so when the economy develops you'll have a worse uh environment but then as the economy really developed people will begin to buy things that are much more environmentally safer and you'll have sort of the opposite turn around then there's GF canap or nape he was a father of What's called the charless school of Economics which is know not now commonly known as the modern monetary Theory and he wrote a book called the state theory of money so if you're not familiar with what modern monetary theory is basically if you ever hear someone say deficits don't matter I mean I mean really hardcore really think that printing money is just not a problem it's these guys basic idea is they were did not like the idea of a gold standard because they what they wrote about was paper money in the sense that government printing money and saying this is the money this is what you have to use and as long as people use it and the reason they will use it is because you're taxing them so as long as you tax them and so they have to use that money to pay their taxes then they're going to be a demand for that pieces of paper as long as that's the case um you can print as much paper as you want to make sure that the government can spend all the money that it wants and Def aren't a problem instead um if if inflation starts to become a problem you just tax more because then there'll be a increase in the demand for those pieces of paper to offset the increase in supply of those pieces of paper um so that's the basic idea of modern monetary Theory okay I'm not an expert in that field but that should give you a a sample of what people like GF canap here was saying now first let's talk about Thea the the first round of keynesians you have Joan Robinson uh one of the earliest developers of what is called post keian economics she's also uh the mother of a field called feminist economics a lot of her work is uh used by a lot of econ people who are focusing on developing economic ideas about the role of sort of women in the economy and what reduces that role increases that role Etc uh she coined the term monopsony to describe a market with a single buyer so instead of a the term Monopoly which is a single seller so if there's only one cell phone seller they'll be able to raise the price well then you have the opposite a monopsony if you only have a single buyer they can force the price to be lower okay because they're the only person who will buy who can buy from you and she helped develop a lot of the long run and growth theories based on the work of Kane so basically taking Kane's work which was mainly focused on sort of that how to get employment going on in the short run and and imposing those on more long run theories then there was Piero Safra okay who critique the Val who critiqued the value um a value Theory back in the day so again remember value theory was um the main theory of back in the classical Economist Economist and marks that focused a lot on Labor's contribution and the work put in and the value of it um and he critiqued that and and also synopsis um helped rethink a lot of the work of David Ricardo and created a school of omics called Neo cardians okay but he is mainly considered to be a post keian now he was an early collaborator with canes in the general theory but he withdrew because there was a lot of stuff that in there that he he didn't necessarily agree with canes on but it was KES who really brought him to um Cambridge okay because kees was uh impressed because he corresponded with grami who is a philosopher and um one wanted him to have him around Pier saffra also critiqued Hayek and his theory of the business cycle basically critiquing the idea of the natural interest rate saying that if there really was a natural interest rate that there wouldn't just be one natural interest rate that there would be many for different goods and services Etc so in that case how would you know if the government's necessarily pushing it pushing interest rates below every industry's natural interest rate it may only be pushing it down below some etc etc etc okay but mainly for his uh rethinking of the work of Ricardo is what pi saffra is mainly known for then there's Michael Ki okay and again h a lot of like people like Michael Ki and himman Minsky who I'll be mentioning later on these people have suddenly made sort of resurgence in economic thought after the crisis among much more like sort of leftwing economists but Michael Ki was very um focused on the political process and how it affected economic uh calculation he also did a lot of math um to illustrate ideas of sort of income inequality and income distributions and stuff like that and a lot of his ideas actually preceded K's in many ways a lot of stuff that Kan said Michael Ki kind of said first the problem is he was a Polish Economist and he wrote in Polish while Kan wrote in English which was a much more used language so can's became much more Associated it's kind of like the difference between why uh luig Von Mei became not as famous as hyek because Hayek's work was translated much earlier than luig Von me's work okay cool then there's Heyman Minsky most of his work this was an American Economist most of his work focused on financial instability and crisis he basically theorized the economy would always be fluctuating between uh robustness meaning very good strength you know nothing could hurt it and then something will change and now it'll become instable so would focus be would be fluctuating between robustness and instability and mainly the reason this happened was because of debt okay there'd be a huge accumulation of private debt um because what happen as debt begins to grow it becomes more profitable to carry more debt and private firms and private households will begin to carry more debt to buy things and this will cause such an overhang of debt that the economy kind of hits sort of this gridlock period and to hit this period where they have to pay that down and that's sort of the period of instability okay and that moment when you switch over from a very strong economy to that really weak debt ridden economy is what's called a Minsky moment okay when 2008 and the economy collaps a lot of people referred to that as a Minsky moment and because of that Minsky said you know what the government needs to regulate the accumulation of debt make sure that private households and Private Industry doesn't never accumulate too much debt so you don't have these Minsky moments and there Nicholas calor he developed all sorts of contributions economics like the calor Hicks efficiency model it's basically PTO efficiency light which means that instead of saying the point where everyone you can't make someone better off uh you can't make to the so protto efficiency was the point where you can't make anyone better off without making someone worse off um calor Hicks efficiency is to the point where you where you can't make people better off more than you would make someone else worse off okay so long as you if you had to make someone else worse off long as you made everyone else better off more it was still effic Kor Hicks efficient okay and he developed calor's growth laws which basically the summarizes this is more manufacturing is good okay um develop circular cumulative causation this is the idea that um trying to mathematically model uh when one thing changes another which causes a changing in something else and you have and then that causes a change in the original thing and you just end up having the sort of uh cumulative effect of change so in the sense of CH a doesn't just change B but then because a changed B it also changes C which changes D and then D changes a again that kind of thing okay he worked with that with an eon named by gunar m mdal which if I remember right I think he won the Nobel Prize Gunner mall at the same time uh Hayak did and he also coined the term convenience yal this was referring the Futures markets and the amount you would pay extra to pay buy something in the future and the the yield of it then there Paul Davidson he was the founder of the Journal of post Keynesian economics and this is sort of the publication sort of theine who the postans were the people who wrote for that were well the postans who are pro considered sort of the more closest to keynes's original work of all the different schools of keynesians and there's three of them Neo kanian new keynesians and postans okay I think I in this presentation I only mention the post keian by name even though I will go over some Neo keian and new keynesians throughout the presentation and I just don't Point them out uh but I'll Point them out if I remember which ones they were okay and he was a leading he's still a leading proponent of postc zenas in America he's still out there interviewing teaching Etc so he's still around then there's John Hicks John Hicks developed the islm model which is very po which is very heavily used in Keynesian macroeconomics to this day which is sort of the investment minus savings um divided by liquidity preference minus money supply okay and you would create this curve where you'd have one line that represented investment and savings and you'd have another line that represented liquidity preference and money supply and you'd see where they would cross okay it would also be referred to as a Keynesian cross so if you ever heard a lecture by an economist name Roger Garrison he always talks about Keynesian crosses and hyak and triangles referring to all these different curves and stuff um you can probably find that lecture by Roger Garrison somewhere on YouTube so just look up Roger Garrison on YouTube okay he also developed the theory of consumer demand Theory or he developed consumer demand theory in microeconomics basically taking a lot of the theand macro ideas that Kane's put out and started looking at sort of micro uh changes of consumer demand and how to start creating micro foundations or or uh micro level of ideas to explain why on the macro level things happen then there's institutional economics okay and what institutional economics did instead of looking at like government policy and the overall economy start focusing on different institutions okay and then at this point the term institutions being used very fuzzy it's just kind of like abstractions that are part of society that sort of have an effect on how Society works okay so such as corporations churches schools Etc and these economist would focus on these different institutions and focus more on them than focusing on government and private business P um in a more macroeconomic kind of way now sort of the father of institutional econom e economics was Thorston Vin or thorstein velin because he wrote a book called the theory of the Leisure Class and he also wrote uh he coined the term conspicuous consumption this is the idea that uh people buy stuff not cuz they need it or want it or whatever but because because they want to show it off so people who buy really expensive cars to show off okay and he said this was sort of a sign of inefficiency and proof that the economy is not necessarily always working efficient and generally he was sort of against that kind of thing he also wrote a theory of business Enterprise which discussed how um business will you know attempt to monopolize and expand credit uh for their own protection so that way you know the idea is if they owe more money they're more likely to be protected by financial institutions um also they can borrow to prevent to grow faster than their competitors so that way they have a stronger foothold on the market and this will lead to expanding militarism in War uh for a variety different reasons W because some of these businesses will try to develop military contracts to get more market share all the different reasons but the idea is his argument was if if if you will allow this trend to just or this circle to continue you'll just end up in a a war State then there's ad Burl okay he's very fascinating in the sense that he is the first guy to really sit there and talk about how a corporation is structured and talk about the idea of corporate governance saying you know how a corporation works or how is it defined by the law has an effect on how well it serves the economy okay and he would talk about you know a lot of reforms that should be made to corporations in order to make sure corporations don't uh become a parasite to the economy as a whole this has become a whole field of academic research and discussing you know if a CEO is paid this much what what are the incentives of the CEO and how does it change their behavior and their success rates Etc the board of directors has these abilities if um if you structure Securities in this way basically idea is depending on how you structure the chain of command of a corporation how do you end up with uh different levels of risk taking by the corporation or or a lack of risk taking by the corporation Etc okay and that all started with Adolf Burl then there's John Dewey John Dey was actually a philosopher not an economist but what it's important here when it comes to institutional economics is his work on education he was a big proponent of democracy and basically believe that only way a democracy can work is if people were more educated because more educated people will mean a much more they'll be more active politically which will mean democracy can work better if people were they get stupid well then democracy doesn't work if you have a bunch of stupid people voting you don't get the same sort of accountability so he was a very big on public education for the sake of trying to make sure that the a the average level of intelligence of the population was higher so that way politicians would be held more accountable uh to the media intellect of people okay which would lead to a less oppressive government which is good for the economy and people as a whole okay and a lot of that work would influence uh a lot of uh institutional Economist then there's Clarence IR um he was developed what's known as the Texas school of institutional economics and he didn't Focus so much institutions more than he focused on the role of technology and you can kind of think of Technology as an institution but as I mentioned earlier the idea that technology progressed faster than social change so kind of how we talked about badget talking about sort of social tensions caused by technology Clarence iers really took that a step further and really talked about you know it's technology that pushes Society forward and really formalized that idea John Kenneth galbreth okay this guy was a fire brand um basically his deal was that big business um that we don't live in a world where you have sort of small businesses to use the old economic ideas you you don't have a world of big multinational corporations and at this point they no PE the consumer is no longer in the drive in the driver's seat that corporations can now control through their massive amount of marking dollars and political influence how can consumers behave because they can put together enough marketing and marketing messages to get people to consume their goods even if it's in their best interest they don't value it and change your behavior and also to prevent their competition by using government to protect themselves okay so he started arguing for something called social democracy or basically you start using government to to limit the power of these big businesses more so that way they can't so these are things like you would be a proponent of things like campaign Finance reform so corporations can't uh directly financially corrupt the political system also limitations on advertising and marketing so that way the the messages that are sent out to the average person are limited to think so that way to limit the direct influence of Corporations on how Society works and this is is still a very very popular idea in politics among the left um and he's still a major thought even though and his son James Kenneth calbra is still a major thought leader among sort of leftwing thinking okay now that we've kind of gone through the history of Economics for the most part again there's a lot of economists that I wish I could have spent more time on something that I didn't even give a slide to because I just we're you know this presentation sper end up being over an hour um but now we're going to go over modern Economist economists who are working now some of them might have recently passed away but who are working now that have important ideas and you should be aware of and probably check out their work so you have Milton fredman um he passed away in the '90s um he was a father of a school called monetarism and basically the focus here is the money supply and how the money supplies affect on prices in the economy okay and he was the found of the mant school of Economics he was also one of the major libertarian thinkers of 20th century um constantly promoting the ideas of Liberty and sort of freedom and free markets and all that stuff he wasn't he was against central banks but he was also against the gold standard um he basically wanted a a a world of floating exchange rates where basically the values of a country's currency would be valued in markets for that currency and far as money supply growth he wanted a rule-based money supply growth so that way you didn't have people uh using with political influence making decisions about money supply that the money supply would grow at a set rate that would somehow be keyed into productivity then you had Robert Mandell who's probably the father of what's called supply side economics okay which really focuses on Lower taxes the idea being lower taxes equals more capital for investment which would lead to more and more investment leads to more businesses which leads to more stuff um better prices and also will lead to Innovations and and a progress of society mainly in particular the top tax rate and the reason why Supply Siders focus on the top tax rate is because the idea is that investment comes from capital and that Capital technically comes from savings because a bankes lends you out the money that people saved and the people most likely to save are the richest people if you were lower taxes on the poor people per se um they're not going to save that money they're probably going to spend it right away because they haven't necessarily bought everything they need this year but if you lift taxes let's say 1% on someone who's fabulously wealthy they they aren't really going to change their behavior that year they probably bought what they were going to buy anyways um that extra money instead will just go be invested and go into the capital markets which means it'll be used to help start more businesses okay he also is a big uh proponent of optimal currency zone so basically talking about how big a space and politically would you need for this would be best for just one single currency and it was a lot of this work that led to the creation of the Euro and the Euro Zone okay and he also predicted before it actually happened this actually happened that leaving the Breton Woods system which was a monetary system that we had sort of in the mid 20th century that we went off with went off during the Nixon era that it would lead to stagflation and stagflation just means High inflation and high unemployment at the same time okay art lafer was probably the most popular supply side Economist he was very famous under Reagan and also very famous for creating something called The laugher Curve which was a sort of an illustration saying that at 0% taxes government will collect no Revenue at 100% tax rate the government will collect no Revenue because no one will work so that means the ideal tax rate where the government will derive the most Revenue has to be somewhere in between and the idea of the point of making this observation was that they were making the argument at the time because this is before Reagan Reagan was making the argument to lower taxes so this is in the mid 80s early 80s that if you can lower the tax rate just a little bit more the government could generate more Revenue okay Paul Krugman now we're getting to some of the more modern keynesians he was a Nobel Prize winner New York Times calling this probably the most well-known keyan today okay and he recently wrote the book end this depression now um he's won prizes for a lot of his work on recessions and depressions particularly like on the Japanese what's referred to as the Lost decade and things like that then there's Joseph SX also a Nobel Prize winner for his ideas of information and symmetries this is the idea that um when you're taking a look at perfect or thinking about economics in the abstract we're always kind of assuming that everybody has access to information about their buying decisions okay so we'll say well the person if they knew you know if they don't like this then they just won't buy that but what if they don't know that that's a problem okay and if one person knows has more access to information than the other person can they take advantage of that and that's sort of the idea behind information symmetries where basically what CET was saying is that the government should get involved in trying to make sure there's more information available for people so that way they can less they're less likely to be taken advantage of because they can access that information he worked on the clan Administration recently wrote the book the price of inequality while I'm technically on the opposing point of view of keynesians and whatnot personally I did think that the price of inequality was actually a really good book and I really enjoyed it and he made some really thought-provoking arguments in that book and um I did videos on that and Paul krugman's book uh just going over the different chapters and my thoughts on them so if I would recommend reading the books but you can also watch my videos as sort of a companion to reading the books John Kenneth GTH he's also a modern Keynesian he's the son of John Kenneth Galbraith but he's also a big proponent of modern monetary Theory formerly was known as charism okay and you'll hear him on TV talking about how basically government can spend as much money as it wants and uh usually with my jaw drop down to the ground okay he's also a big proponent of actually lowering the retirement age so while most economists are saying that it's time to make sure that the social security system doesn't go bankrupt that we should raise the retirement age he makes the opposite argument making me argument that if you lower the retirement age there will be more people who retire which will free up uh demand for labor because those people will need people to replace their jobs and um at the same time more people spending the money from their social security would also create more buyers of stuff and uh a a new new buyers which will get the economy going so his argument that lowering the retirement age would actually help more than it would hurt okay and that even if there's says he doesn't have to worry because again government can just print out as much money as it wants long as they tax enough basically the mmt point of view Mark Toma another Keynesian he's a fellow of the century Foundation he's an econometrician he puts out a lot of he puts out all his classes I think on YouTube I've watched him a couple times and uh you'll learn a lot of stuff um you know a lot of math stuff so he shows you how the formulas work with with monetary Theory and stuff like that he's a popular economic blogger so he blogs all over the place and again you can check him out on YouTube he's always posting on there you can follow him on Twitter always pointing out interesting economic articles but he's a fairly well-regarded Keynesian in the modern day Steve Keane from Australia he's an Australian postan Economist who's become sort of a very big figure among uh leftwing keynesians uh basically what he's done is that he's taken a lot of the work of himman Minsky and Irving Fisher that we've talked about earlier and help to try to combine that work into a a theory of you know sort of how dead that creates business cycles and stuff like that okay and he wrote a book called debunking economics where he critiqued the neoclassical School of Economics now the neoc classical school why I won't mention it um directly throughout the presentation is just basically what's considered mainstream economics nowadays it's just basically classical economics except you replace sort of it's like Adam Smith but you throw in all the stuff from the marginal Revolution some of the math stuff the general equilibrium analysis stuff and then you just kind of take the best of all world and um with the assumption that all people are rational and you get neoclassical economics okay and people have different thoughts on that and they'll go different ways on that Murray rothbart one of my favorites now Murray rothbart was an extremely prolific writer this guy wrote a lot especially since he I think he died at like around 50 okay um he died at was 1995 but he made huge contributions to economics history philosophy all over the place place he was a father of an idea called anarcho capitalism this is the idea that there should be no government at all there's nothing uh he argued with the idea that there's public goods that Goods that the market will not provide he would say no there's ways that the market can provide them and he would make these arguments in his writings and his books um and get published in journals and whatnot and was a huge fire brand for the most part where there's sort of a whole branch of Austrian economics that's sort of built around him especially character by a lot of the fellows over there at the mees Institute um which he helped found with Lou Rockwell okay if you're looking for an economist whose writing will sort of like light a fire under you and be like man that's some pretty hard-hitting work Murray Roth B's work is in there is is there okay he's just sort of very in yourr face and uh not willing to I mean very willing to just make an argument and kind of go with it so um whether you're sympathetic to sort of less or more government definitely read some of his work it's it's it's it's they it's quite a fascinating read Israel Kerner okay he contribut to the body of economic work through the ideas of focusing on building up on a lot of the ideas that Hayek made on knowledge talking about how like price prices communicate knowledge and knowledge helps the economy coordinate so you want a free market of prices how entrepreneurs so again going back to to scheder and and Von viser uh the ideas of Entrepreneurship driving the economy and ethics Etc um okay and he was a leading um Authority on the work of lud V so when people need to know like about L VES and what did he mean by things that he wrote in his work and stuff like that they go to Israel kers since he studied under Amis for a very long time Walter block another one of my favorites okay another really in-your-face Economist basically he's really well known for writing really good economic work on why things that people think are bad or good okay uh most famously for his book defending the undefendable where he will describe things and why like the pimp is actually doing a favor to the economy why the prostitute is doing a favor to the economy why the Gambler is doing a good thing for the economy and all these different things it's it's a you know it's one of those books that really makes you really expand the way you look at economics he also recently wrote the case for discrimination okay which I haven't yet read yet but I'm definitely looking forward to reading one of these one one of these days he's written he's made a lot of contribution he's written a lot of published academic articles so his contributions are many but one of the more interesting ones is negative homesteading Theory um this is the idea that something can be negatively homesteaded so first let's talk about what hom setting is the idea is that most of us can can kind of exemplify how do you transfer property from one person to the other in the sense that if I have a computer and I say here this my computer is now yours that would be a just transfer of ownership of something but what happens if something is not owned by somebody yet how do you establish the first claim of ownership and that's where homesteading Theory comes in that if you're the person who transforms something it's yours first so for example if there's a bunch of land that's unclaimed and I go in there and I build a fence I've transformed the land and the land that I fenced in is my land it's a land that I've transformed I was the first person to do it it's mine someone else can come transform it after me but I did it first so I still have the prior claim now what Walter block was saying with negative homesteading theory was what if someone forced you to Homestead something against your will in the sense that like what if I treated you really badly okay and you started developing negative feelings well technically those feelings you created they're your feelings they're your ownership but I forced you to to create them and thus I am doing something bad and that's unethical and something that's not good so bullying would be sort of an example of negative homesteading okay so if someone were to bully you and cause you to be depressed or something like that that would be they would have negatively negatively homesteaded those negative feelings Robert P Murphy okay a very young uh uh Uprising or fast quick Rising upstart in the Austrian Community um he wrote a critique of Austrian time preference Theory I'm not quite as articulate about his argument on that yet so I'll recommend that you read his dissertation he's also written a lot of work on anarcho capitalism and a lot of the work of Murray rothbart he also written like study guides for um the treaties by Murray rothbart which is man economy and state and Human Action by L Von me's and he's also written a textbook for high school and introductory college called lessons for the young Economist Joseph solo has done a lot of work on money he a teacher at Pace University his most recent book is money sound and unsound and he's a fellow at the me Institute Peter kleene another one of my favorites he does a lot of work on organizational economics and Austrian from an Austrian perspective and uh I'm become a big fan of like in of governance and organizational economics and institutional economics basically getting out of the realm of you know government versus the people and getting more into how these other things we deal with on a daily basis the stores that we deal with the religions that we deal with the businesses that we deal with the way they structure the rules that they set the the the culture that they create all these kind of things to me are extremely interesting and Peter Klein Works within that realm so I find his work very interesting um he also uh runs the organization and Marcus blog with Nikolai Foss okay online so definitely check out that blog and subscribe to it if you don't George guo Holman also written a lot of work on monetary issues uh most probably most famous for his biography of L VES called the last night of liberalism just talking about the life and work of Lou V is a very very thick book he also wrote the ethics of money production where he talked about um the ethical issues with increasing the money supply and decreasing the money supply and deflation Liberty talking about how um deflation can actually protect Liberty and things like that okay so very interesting work very interesting Economist where to doto okay a leading Spanish econom ad Jun scholar for the me Institute he's one of the member of The Mont Pellerin society's board of directors remember I mentioned them earlier lud v m was one of the founding members he's also on the editorial board of the quarterly Journal of Austrian e economics now if I remember right I think he was all he contributed the idea of I want to say it's adaptive efficiency okay um and I don't remember exactly what that idea is I think it has something to do with um like free markets and institutions ability to adapt um but it's not coming to me at the moment so I apologize but again look up where the so look up his work look up the idea of adaptive efficiency and uh you can clear all that up Steve Horwitz okay uh another very popular Austrian appears a lot on TV nowadays okay he's contributed a lot of uh to monetary Theory history of EC thought social theory of the family talking about the role of a family in economic behavior and what happens when you don't have a very strong family what happens when you have a weak family a lot of work like that uh he also participates in the blog bleeding heart Libertarians which are sort of it's it's a new movement of Libertarians who do care more about sort of social issues like social tolerance social justice Etc they just want to solve those issues without using government Force Etc so uh he blogs for the bleeding heart Libertarians blog Peter betki another really uh fast rising star in the Austrian Community he just wrote a book recently called living economics which is more about how to make teaching economics exciting for the students and they get people excited about economics a book that I is definitely on my list of things I want to read uh he also wrote another book with Paul dragos called institutional analysis and development um basically a lot of people like Peter bkey Lawrence white uh Steve San they take a lot of the work of the institutional economists or the new institutional Economist like Douglas C North and Ronald Coast we talk about a little bit later on and have mixed them a lot with Austrian ideas and have been really doing some fascinating work in my opinion same thing with like Arnold clling and Nicholas Schultz Etc okay and he's a professor at George Mason University Lawrence H Wright who I'm becoming a much a very big growing fan of uh he does a lot of work on and a big proponent of something called Free banking so I mentioned earlier this is the idea that um the bank banking system should just be free of government intervention that what bank Banks should just be free to compete with each other to succeed and fail against each other and use the practices that they they want within you know of course within sound property rights Etc he wrote the book The Theory of monetary institutions wrote the book free banking Britain where he's done a lot of work on the history of Free banking Britain and the good and the bad and recently he wrote the book The Clash of economic ideas which talks about different economic debates in in history and illustrates both sides and it's uh a book that's a high on my uh to get to list George San another proponent of Free banking has done research in private coinage in Britain uh proponent of a productivity norm and monetary policy again he's he's a free Banker so he's against central banks um against government involvement in banking in general but in general if you're going to have a central bank you want um the the money supply or the interest rate to have something to do with productivity and cause a predictable level of deflation if uh if I read it right okay then there's Richard wolf who's uh probably not too far from where I am right now in the sense of physically cuz uh he teaches at the new school in Manhattan and I'm located right now in Staten Island so not too far away from here and basically he's started uh with his students a journal for marxan economics called rethinking marks basically he does a lot of work and taking a lot of those old marks and ideas and taking a lot of the work since then in economics and reconciling all of it and still basically making a argument against capitalism as marks Did back in the day Daniel canaman or Conan he was a psychologist and uh basically a founding father of the IDE of the field of Behavioral economics where basically here you're taking a look at how people actually behave you put them in situations where they have to make decisions and You observe the behaviors to sit there and say well we know what a quot unquote rational person would do what do people actually do when we put them into a situation and what does the reality of it tell us about how we can help people make the uh quote unquote rational decision okay assum again when you're thinking rational you're thinking what would the person who had all the available information and somehow objectively know what's in their best self-interest would do okay based on the information that is available assuming they had access to all of it okay that's probably the best way I can explain it okay he's also again he started this behavioral economics with along with the likes of Richard Taylor and uh Amos tersi and he's done a lot of work on honic psychology contributed a lot of psychology Behavioral Sciences uh Etc so this he's he's he's contributed 20 times over um he's very interesting fellow I don't necessarily agree with certain assumptions but his work is definitely absolutely fascinating and stuff that you should be familiar with um like for example Richard tlor recently wrote a book called nudge with um a guy by the name of Cass suin which was actually a really good read I recommend reading it I did videos on that giving my take on that book as well Dan arieli he wrote the books predictably irrational upsite of irrational ity the honest truth of dishonest and he works at Duke University he's become sort of one of the leading faces of um behavioral economics mainly because he's a really funny guy he's really good at taking a lot of these ideas and putting them in a way that's exciting and I'm looking forward to I have all three of his books haven't read them yet looking forward to it I'll be putting out videos when I do read them but he's definitely uh you can see he has probably one of the most watched TED Talks um out there and overall just a very fascinating guy Paul Zach another book that I need to get to as you can see I have a huge well you can see it but I have a huge stack of books right behind me that I'm been slowly working my way through so I'll get through him but he's a leading neuroeconomist he pretty much created the field of neuro economics which is the idea of taking a look at brain patterns particularly the release of oxytocin and what it tells you about economic behavior so the idea is that he puts people in economic situations seees what happens with the release of oxytocin and uh what does it do with the way they participate in economics and he wrote a book recently that came out called the moral molecule where he talks about the findings of his work Ronald Co the dude's still alive he's over 100 years old and still writing this this this dude is Hardcore um but he's uh developed his work has developed the field of new institutional economics and also the field of Law and economics okay um there's something called the coast theorem which coast Ronald Coast here is not a big fan of his own theorem it's not really his theorem they just called it that what he was making a statement in an essay saying that in a world without transaction costs that it wouldn't matter who you allocate property rights to things will sort of work themselves out the same way okay but in the real world transaction costs do exist so for example um if I'm A lender and you're the person borrowing from me I probably have more access to information it's probably easier for me to get information the cost of getting information is probably less for me than it is for you so in that case it's not equal as we would sort of in an abstract economic sense so in that case when writing how a law should be upheld that should be taken into consideration um and in the sense that you should distribute externalities and property rights to to the party who has at least transactional cost in a sense okay and I'm kind of going a little further with the theory than I or with what he said than I should but that's basically you get at and that's sort of how the whole field of Law and economics built up and sense how can you take laws and not just write laws but how do you as a judge enforce a law and and it's and how does the legal system affect economic behavior and since law is considered an institution it this also was part his work was very instrumental in what became new institutional economics okay um okay oh and I realized I didn't change the text here for Ronald Coast so here you still see the text for um John Kenneth goth so I already told you who Ronald Coos is but the text here that's from John Kenneth goth so I apologize for that okay along with dougl Douglas C North who is also one of the founding fathers of the new institutional economics okay he helped develop CLE metrics which is a mathematical way of taking a look at at historical information and looking at the history of um of economic Trends and data to um come up with new stories and narratives he helped to find and help Define what is an institution versus an organization so to kind of illustrate this difference an in organization would be like the structure of power so like the people who's in charge who's below them when do they report to them how does the organization structure itself how do the individuals working towards a common goal structure each other but the effects of that like the rules that they impose on people and whatnot that' be the institution so for example if I'm a student at a university the rules that the university imposes on me the marketing and the culture that's created by that University um and the things that it represents that's the institution okay so the organization would be like the dean whatnot and how they're structured with each other um to run the university and the effect and the rule rols and formal and informal that are created by the university that affects the students economic and social behavior that would be the institution and these are the kind of things that were studied in the new institutional economics how those rules formally and informally get formed how do they affect economic behavior and going from there and then there's James Buchanan okay from the public CH he developed what's called public Choice economics which is the idea of looking at economics from a political point of view and saying um politicians don't necessarily make the choices best for the people but they have their own interest and understanding how Pol how political inst organizations are formed and institutions are formed and how it shapes each individual political actor's influence particularly an idea called rent seeking where basically people seek to go to the political process to get profits that are not due to an increase in productivity or an increase in production of value but just because of political favors uh you have um all sorts of weird manifestations in politics so basically idea is politics are corrupt okay and public Choice theory was a big um tool in stting trying to make the argument that you don't want government making decisions why because the politicians don't really have the best incentives and that's what really what public choice is looking at what those incentives are what makes them worse what makes them better Etc okay and I think that's where this ends yep U my name is Alex mered from Alex merced.com check out my website Alex merced.com or check out libertarian 101.com or learn economics now.com to learn more uh please comment on this video If there's other economists that you would like to other people to be aware of comment put them in mention them in the comments and hopefully you guys enjoyed this video and you guys have a great day and enjoy

Channel: The Loveatrian

Views: 108,974

Keywords: History, Economic, Thought, Adam Smith, Ricardo, Keynes, Hayek, Mises, Friedman, Bagehot, Sraffa, Economist, Education, Locke, Dudley

Id: 3_lmd4XH-a4

Length: 96min 48sec (5808 seconds)

Published: Mon Aug 20 2012