The History of Economics?

“Adam Smith said a bunch of stuff that was mostly right.  Marx said a bunch of stuff that was wrong.  Keynes fixed some things up, messed some others.  Then Lucas broke everything again.  Now we’ve basically got it all worked out, except for money, growth, recessions, banks, bubbles, inflation, unemployment, exchange rates, and what human beings are about.”

That is the potted history of economics according to a post on X [aka Twitter] by Professor Luis Garicano of LSE.

Pretty much sums it up. You can quibble with the detail — as no doubt you all will — but it seems about right.

Perhaps a different entry point would be to use Gunnar Myrdal as our guide as simply say that economics is “complicated opinion”, meaning that is opinion dressed up to look good in formal attire.

Or, perhaps, we should take the wisdom of Herbert Simon seriously when he suggested that someone arriving from outer space to study the economy here on earth would see that most economic activity takes place within odd things called “firms” and involves production, whereas earthly economists confine their analysis to the far less important arena of exchange. You could say the same thing, I assume, about how people engage with economic activity — they work wherever there is work to be done for many more hours than they engage in exchange. So which is the more important to understand?

I leave it to you. I am still enjoying my summer off.