Happy Econ Birthdays

      by Art Woolf

To Adam Smith, the most influential economist in history, baptized today in 1723.  Most of us are aware of his Wealth of Nations, which explained a new phenomenon--why and how England was becoming wealthy.  He was explaining the process of modern economic growth, something that was new in the history of humanity but that we take for granted today.   

(One could do worse than having P.J. O'Rourke explain Adam Smith.)

Most people are unaware of Smith's equally important, but far less read, The Theory of Moral Sentiments.  One quote from the TMS is highly relevant for today:

[The man of system] seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board; he does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single pieces has a principle of motion of its own, altogether different from that which the legislator might choose to impress upon it.

And today is also the birthday of  John Maynard Keynes, probably the most influential economist of the mid 20th century.   Friedman (as in Milton) and Hayek (that would be Friedrich, not Salma) are also contenders for the 20th century's greatest economists).   Keynes was born today in 1883. His influential General Theory of Employment, Interest, and Money, published in 1936, attempted to explain the Great Depression and is having a renewal of interest today, given the economic crisis.  

Less well known than the General Theory is The Economic Consequences of the Peace, where he criticized the Versailles Treaty and argued that its terms would be devastating for Germany.  Keynes was also influential in setting up the postwar economic architecture, including the World Bank, and and IMF at the Bretton Woods (NH) Conference in 1944, shortly before he died.

Keynes was well aware of the power of economic ideas and wrote

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.

Comments

[txgordo]

Wow - if Friedrich looked more like Salma, more people would listen. Wow, Art, that's a great picture!

[txgordo]

However, I'm afraid Salma is more a Keynesian, if not an outright Marxist.