History of Economic Thought

preliminary – subject to changes

Course Description

The development of economic thought as related to the changing economic and intellectual environment. Emphasis is on the modern period from Adam Smith to the present, and understanding the origins of contemporary economic concepts.

Course Objectives

  • Understanding the history of economics which is part of modern history. Understanding the history of economic thought gives you another chance to learn economics, and to see it critically.
  • Understanding how economics fits into to the social world, social sciences, and the humanities.
  • Reading non-fiction texts critically. Becoming unafraid to read old and difficult books. You will also learn to read quickly, skipping parts entirely, sometimes. Slowly and carefully at other times, watching for the crucial points, arguing with the author, or agreeing.
  • Talking. Discussing ideas. Making your point on your feet. You will need this in the business world.
  • Writing well. You need that in the business world, too.

Course Materials

The course will not follow any textbook. We are going to read “primary sources” only. The text are available online, see the links below. There are no optional or supplementary readings. Everything is required.

For how to read and write academic texts see: https://economicscience.net/content/readinglist-writing/

Course Prerequisites:

Students should have passed the courses Principles of Microeconomics and Principles of Macroeconomics.

Instructor Information:

Prof. Dr. Dennis A. V. Dittrich

You can always contact me via email. For meetings in my office appointments can be arranged through the my webpage at: http://economicscience.net/content/book-appointment.

Updated information, links to the literature, additional materials, etc. can be found on my webpage as well.

Grading Guidelines:

Grading ComponentWeight
Writing Assignments50%

The writing assignment with the lowest grade will be dropped from the grade calculation. Your writing assignments will be graded for style and substance – sometimes with more care than at other times. Plagiarism leads to automatic failure for the whole course. The writing assignments have to be handed in by email as PDF attachments, that is they have to be typed and spell-checked. Leave ample margins for notes.

Your writing assignments are not book reports, comment on the reading, tell your fellow students and your professor something they might have missed, or some central idea that could use clarification, or some craziness you have spotted. Don’t just summarize. Assume that everyone else has read the material somewhat hurriedly: you are helping them to get more deeply into it. Bring hard copies of your writing assignment for everyone to class. Your texts will be read by others and they will comment on your writing. You will read your fellow students’ writing assignments and comment on them, too.

(Class) participation (at the level of an “A”) requires that you attend class regularly and always contribute to the discussion by raising thoughtful questions, analyzing relevant issues, building on other’s ideas, synthesizing across readings and discussions, expanding the class perspective, and appropriately challenging assumptions and perspectives. You help your fellow students. Contributing in the aforementioned ways only (“B”) sometimes, (“C”) rarely, or (“D”) never diminishes not only your own but your fellow students learning opportunities.


A typical 3 credit course requires 150 hours of your time. The table below identifies how I expect those 150 hours will be allocated. This is a reading and writing intensive course. Make sure to allocate enough time for it.

Class Time (3 hours / week)45 hours
Reading & Writing Assignments (7 hours / week)105 hours

Weekly Topics and Reading Assignments

Topics and reading assignments are subject to changes.

You will receive each week one assignment from the list below.

Session 1

Course Overview

Session 2

Writing assignment (1):

Tell from the evidence what Plato’s attitude towards the getting of money was. Use quotations as evidence, with citations. Does Aristotle regard getting money as a part of happiness? Compare Plato and Aristotle.

Plato, Republic. http://oll.libertyfund.org/titles/plato-dialogues-vol-3-republic-timaeus-critias Search through the entire book for the word “money”.

Aristotle, The Politics, http://oll.libertyfund.org/titles/aristotle-the-politics-vol-1–4 Bk. I , section 8 through section 11 [do not read Jowett’s very long notes on each book, but Book I itself], Bekker page number 1256a (the numbers on the right margins) starting “Let us now inquire property generally, and into the art of money-making.” Section 11 ends with ‘…some public men devote themselves entirely to finance.” on Bekker page 1259.

Aristotle, Nichomachean Ethics, http://oll.libertyfund.org/titles/aristotle-the-nicomachean-ethics Book I, sec. 6 through 11 on happiness; Book II, sections 6 and 7 on virtue as a mean; Book V, section 5 on justice in exchange.

Writing assignment (2):

Write a reaction paper that finds some interesting aspect of Cicero to comment on, to criticize, to delight in, to get angry about, to argue about. What was the attitude of the ancient world towards the economy?

Cicero (Marcus Tullius), de Officiis [On Duties], http://oll.libertyfund.org/titles/cicero-on-moral-duties-de-officiis Bk. I, 42; Book III, 12 through 15 on gain and fraud in markets.

Session 3

Writing assignment:

Write an attack on More’s economics. Show that it is bad economic reasoning. Use quotations as evidence, with citations.

Thomas More, Utopia (1516), http://oll.libertyfund.org/titles/rousseau-ideal-empires-and-republics Read it selectively for its economic content.

Session 4

Writing assignment (1):

Is Locke’s theory of property economically sensible, i. e., would it lead to efficient allocation? Distinguish efficiency from justice.

John Locke, Two Treatises of Government (1689). http://oll.libertyfund.org/titles/locke-the-two-treatises-of-civil-government-hollis-ed Book II, paragraphs 4-51, on the state of nature, on war, etc., and especially “Of property,” chp. v.

Writing assignment (2):

Explain Barbon’s case for free trade to someone who does not know any economics. Work out Barbon’s theory of money. Does he grasp that Mv = PY? Show that he does or does not with quotations.

Nicholas Barbon, A Discourse upon Trade (1690), http://oll.libertyfund.org/titles/barbon-a-discourse-of-trade the whole essay.

Session 5

David Hume, Essays, 1741, 1742, 1758, posthumous 1777: “Of Commerce,” “Of Luxury,” “Of the Jealousy of Trade,” “Of the Balance of Trade,” “Of Money.” http://oll.libertyfund.org/titles/hume-essays-moral-political-literary-lf-ed

Writing assignment (1):

Attack economically Mandeville’s theory of the benefit of luxury and vice. Compare to Hume.

Bernard Mandeville, The Grumbling Hive (1705), http://oll.libertyfund.org/titles/mandeville-the-fable-of-the-bees-or-private-vices-publick-benefits-vol-1 entire.

Writing assignment (2):

What is wrong with Rousseau’s views on private property? Compare to Hume.

Jean-Jacques Rousseau, A Discourse Upon Political Economy (1755), http://oll.libertyfund.org/titles/rousseau-the-social-contract-and-discourses entire.

Session 6

Writing assignment (1):

Adam Smith, The Wealth of Nations. http://oll.libertyfund.org/titles/smith-an-inquiry-into-the-nature-and-causes-of-the-wealth-of-nations-cannan-ed-vol-1 Introduction + Book I, Chaps. 1(i) and 2(ii): Pick a sentence or two and explain it in modern economic terms, using a diagram when possible. Book I, Chp. 3 (iii) and Chp. 10 (x), Part I alone: The division of L is limited by the extent of the market; compensation in total is equalized in different occupations. Explain each of these to your roommate. Book IV, Chp. 2 (ii), entire: To be handed in separately, make a careful list of every argument in favor of free trade (and against “restraints upon the importation”) that Smith makes here.

Writing assignment (2):

Adam Smith, Theory of Moral Sentiments, http://oll.libertyfund.org/titles/smith-the-theory-of-moral-sentiments-and-on-the-origins-of-languages-stewart-ed Part I, Section I entire: Compare Smith’s Impartial Spectator with the Max U character you have been taught in principles of economics; Book VI, pp. 235-249: What is Smith’s theory of virtue?

Session 7

Writing assignment:

Work out an economic model of Malthus’ ideas in the 1798 edition.

Robert Thomas Malthus, Principles of Population, 1798 edition: Chps. 1 and 2. http://oll.libertyfund.org/titles/malthus-an-essay-on-the-principle-of-population-1798-1st-ed

Writing assignment (extra credit):

Compare how Malthus’ ideas have developed after criticism.

Robert Thomas Malthus, Principles, last, 6th edition http://oll.libertyfund.org/titles/malthus-an-essay-on-the-principle-of-population-vol-1-1826-6th-ed http://oll.libertyfund.org/titles/malthus-an-essay-on-the-principle-of-population-vol-2-1826-6th-ed

Session 8

Writing assignment:

Explain comparative advantage to someone who does not know any economics.
Try to devise a diagram to match what is explained in “On Rent”

David Ricardo, Principles of Political Economy and Taxation: Chp. II, “On Rent”; Chp. VII, “On Foreign Trade”. http://oll.libertyfund.org/titles/ricardo-the-works-and-correspondence-of-david-ricardo-vol-1-principles-of-political-economy-and-taxation

Session 9

Writing assignment (1):

To what does Mill attribute progress in the condition of the workers? Is it likely to be as large as the 100% increase about to happen in the late 19th century, or the 1500% to follow?

John Stuart Mill. Principles of Political Economy, 1848, 1871: http://oll.libertyfund.org/titles/mill-the-collected-works-of-john-stuart-mill-volume-iii-principles-of-political-economy-part-ii Bk. IV, Chp. vi. “Of the Stationary State” and Chp. vii, “On the Probable Futurity of Labour.”

Writing assignment (2):

Explain and critically discuss the economics of Bastiat.

Frédéric Bastiat, Economic Sophisms, 1845, http://oll.libertyfund.org/titles/bastiat-economic-sophisms First Series, Chp. 7, “A Petition” and Second Series, Chp. 15, “The Little Arsenal of the Free Trader” and Selected Essays on Political Economy, 1848, http://oll.libertyfund.org/titles/bastiat-selected-essays-on-political-economy “What is Seen and Not Seen” and the example that follows, “The Broken Window.”

Session 10

Writing assignment:

What’s wrong with Marx’ argument, in the light of modern economics?

Karl Marx, Capital, 1867, http://oll.libertyfund.org/titles/marx-capital-a-critique-of-political-economy-volume-i-the-process-of-capitalist-production Vol. 1, Part II, Chp. iv, “The General Formula for Capital” and Part III, Chp. vii, Section 2, “The Production of Surplus Value.”

Session 11

Writing assignment (1+2):

Comment on the reading and tell your fellow students and your professor what is interesting, new, or different, and something they might have missed, or some central idea that could use clarification, or some craziness you have spotted. Don’t just summarize.

Frank Knight, Risk, Uncertainty and Profit (1921), Part III, Chp. vii, “The Meaning of Risk and Uncertainty.” http://oll.libertyfund.org/titles/knight-risk-uncertainty-and-profit or http://mises.org/library/risk-uncertainty-and-profit

Coase, R.H., 1960. The Problem of Social Cost. JL & Econ., 3

Session 12

Writing assignment (1+2):

Comment on the reading and tell your fellow students and your professor what is interesting, new, or different, and something they might have missed, or some central idea that could use clarification, or some craziness you have spotted. Don’t just summarize.

Robert Solow, “Technical Change and the Aggregate Production Function,” Review of Economics and Statistics 39, No. 3 (Aug., 1957): 312-320 http://piketty.pse.ens.fr/files/Solow1957.pdf

Amartya Sen, “The Impossibility of a Paretian Liberal,” Journal of Political Economy, Vol. 78, No. 1. (Jan. - Feb., 1970), pp. 152-157. http://dash.harvard.edu/bitstream/handle/1/3612779/sen_impossibilityparetian.pdf?sequence=4 http://darp.lse.ac.uk/PapersDB/Sen_(JPolE_70).pdf

Session 13

Writing assignment (1+2):

Comment on the reading and tell your fellow students and your professor what is interesting, new, or different, and something they might have missed, or some central idea that could use clarification, or some craziness you have spotted. Don’t just summarize.

F. A. von Hayek, (1937). Economics and knowledge. Economica 4(13), 33-54. Reprinted in The L. S. E. Essays on Cost, ed. J. M. Buchanan and G. F. Thirlby (New York University Press, 1981). http://oll.libertyfund.org/titles/105

Israel Kirzner, “Equilibrium vs. Market Processes,” under “Various Authors,” Edwin Dolan, ed., The Foundations of Modern Austrian Economics. http://oll.libertyfund.org/titles/dolan-the-foundations-of-modern-austrian-economics-1976

Session 14

Writing assignment (1+2):

Comment on the reading and tell your fellow students and your professor what is interesting, new, or different, and something they might have missed, or some central idea that could use clarification, or some craziness you have spotted. Don’t just summarize.

  1. Colin Camerer, Samuel Issacharoff, George Loewenstein, Ted O’Donoghue, Matthew Rabin (2003); Regulation for Conservatives: Behavioral Economics and the Case for “Asymmetric Paternalism”, University of Pennsylvania Law Review, Vol. 151, No. 3, pp. 1211-1254.
    Thaler, R. H., & Sunstein, C. R.. (2003). Libertarian Paternalism. The American Economic Review, 93(2), 175–179. Retrieved from http://www.jstor.org/stable/3132220.

  2. White, Mark D. “Behavioral law and economics: the assault on consent, will, and dignity.” NEW ESSAYS ON PHILOSOPHY, POLITICS AND ECONOMICS: INTEGRATION AND COMMON RESEARCH PROJECTS, Gerald Gaus, Christi Favor, Julian Lamont, eds., Stanford University Press, 2008.

Session 15