Schools of Thought in Economics

At the beginning of the reasonable dialog of economics, the leaders of the conversation were the "Classical Political Economists," who extended and followed the ideas of Adam Smith. Most of the ideas in this chapter come to us from the Classical Political Economists. In the next chapter we will review some basic ideas from a more recent, very influential group called the Neoclassical Economists. As the name "Neoclassical" suggests, their ideas have grown out of the "Classical" ideas, but with some important differences of theme and detail. Ideas from the Neoclassical Economists are especially important for microeconomics. However:

Classical and Neoclassical Economists are not the only kinds there are. There are also (at least)
- Keynesian economists (we will talk a lot about them in the Macroeconomics section)
- Austrian economists, who believe economics should be a purely deductive, but nonmathematical study, and
- Marxist economists, who rely on the dialectical method to investigate the world
There are varieties of opinion among neoclassical and classical economists, and some of them might not agree 100% with the descriptions given here.
The major orientation of this book is Classical. We suppose that could seem a bit old-fashioned, but we believe it isn't really. The concept of "classical economics" in this book is not meant to be a "fundamentalist" one, but rather a twenty-first century version of that 200-year old approach. That will include a good deal from the neoclassical and Keynesian schools, and this and that from other schools of thought.

All the same, I believe this chapter is a fair beginning summary of the most important approaches to the field, and (most important) a good start on learning what the various schools of thought agree and disagree on -- the subject matter of economics.

Chapter Summary