Introduction: In this unit we will study the history of economic ideas. We will do so by reading about people such as Adam Smith, David Ricardo, Thomas Malthus, Karl Marx, John Maynard Keynes, Friedrich Von Hayek, and Milton Friedman. We will read about these economists and their ideas in chronogical order, starting with Smith in the 18th century and ending with Friedman in the 20th, and discuss them in class.

Essential Question: What is economics and why do we study it?


January 3: The Economic Revolution


  • Homework Due: Read Chapter 2 ("The Economic Revolution") in The Worldly Philosophers.

  • Discussion: What events and forces caused the shift from an agrarian economy to one based on industrial capitalism?


January 5: The Wonderful World of Adam Smith



  • Discussion: Adam Smith was "interested in laying bare the the mechanism by which society hangs together".

    1. "How is it possible for a community in which everyone is busily following his self-interest not to fly apart"?
    2. "What is it that guides each individual's private business so that it conforms to the needs of the group"?
    3. "With no central planning authority and no steadying influence of age-old tradition, how does society manage to get those tasks done which are necessary for survival"?


January 9: The Gloomy Presentiments of Parson Malthus and David Ricardo


  • Homework Due: Read Chapter 4 ("The Gloomy Presentiments of Parson Malthus and David Ricardo") in The Worldly Philosophers.

  • Discussion: Why was the analysis of Malthus and Ricardo so much more pessimistic about the fate of society than Adam Smith's?


January 11: The Inexorable System of Karl Marx



  • Discussion: Why did Karl Marx believe that capitalism would ultimately collapse?


January 15: The Heresies of John Maynard Keynes


  • Homework Due: Read Chapter 9 ("The Heresies of John Maynard Keynes") in The Worldly Philosophers.

  • Discussion: How did Keynes revolutionize our understanding of the economy?

  • Related Readings



January 17: Friedrich Von Hayek and the Austrian School


  • Homework Due: Reading on Hayek

  • Discussion: How and why did Hayek believe that Keynes was wrong about the economy?


January 19: Milton Friedman and the Chicago School


  • Homework Due: Reading on Friedman

  • Discussion: How did Friedman's analysis of the economy differ from both Keynes and Hayek?