Economics &

The Economists

Robert M. Hayes

2005

Overview

Why should a library manager think about economics? Why look at economists? What is economics? Brief review of history The contexts for economics

Personal Economics Microeconomics Macroeconomics

The economists Crucial persons before the Nobel Prize Nobel Prize Winners

Why think about economics? Economics is both a powerful tool and a basis for political decisions. The

theories and conflicts that it embodies are central to what is happening today and to what has happened in the past and will happen in the future.

I think that a library manager needs to have an appreciation of those theories and conflicts, especially in order to deal with the issues involved in strategic management. This appreciation does not require expertise in economics but it does require knowledge of what the theories and conflicts are and, perhaps even more important, of what the methodologies used to deal with them are.

It is for this reason that I have included economic models among the ones presented in this course.

Beyond that, though, I think that in addition to the values in simply understanding what the methodologies are, the library manager may well find them of value in management.

As I discuss various economic issues, I will try to highlight some of their implications for libraries and library management.

Why talk about economists?

I think that one of the ways to learn about the theories, conflicts, and methodologies is to know who the economists were and how they have represented them. At the least, it permits one to deal with them on a personal level rather than merely a conceptual one.

Therefore, later in this presentation, I am going to identify a number of economists, as well as others that seem to me important, and, briefly, to discuss major contributions they have made to the theory, in many cases, to the conflicts, and in all cases to the methodologies.

In doing so, I am going to divide them into two groups. First are those who lived before the Nobel Prize for Economics began to be awarded. Second are those to whom the Nobel Prize in Economics has been awarded (through 2004, the most recent award).

What is economics?

First, let’s look at economics. What is it? To answer that question, I will first briefly review the history of

economics. Then, describe the contexts for economics , the major concerns of economics, and finally the major schools of thought about those concerns.

Brief Review of the History of Economics The discipline of economics, as we understand it today, emerged in the 17th and

18th centuries as the western world began its transformation from an agrarian to an industrial society.

Despite the enormous differences between then and now, the economic problems with which society struggles remain the same:

How do we decide what to produce with limited resources? How do we ensure stable prices and full employment of resources? How do we provide a rising standard of living today and in the future?

Progress in economic thought toward answers to these questions tends to take discrete steps rather than to evolve smoothly over time. A new school of ideas suddenly emerges as changes in the economy yield fresh insights and make existing doctrines obsolete or at least obsolescent. The new school may eventually become a consensus view, then a stimulus for the next wave of new ideas.

This process continues today and its motivating force remains the same as that three centuries ago: to understand the economy so that we may use it wisely to achieve society's goals.

Selected Historical Economic Positions

Mercantilism Physiocrats Classicism Utilitarianism Marginalism Marxism Institutionalism Keynesianism Current Theories

Mercantilists

Mercantilism was the economic philosophy adopted by merchants and statesmen during the 16th and 17th centuries. Mercantilists believed that a nation's wealth came primarily from the accumulation of gold and silver. Nations without mines could obtain gold and silver only by selling more goods than they bought from abroad. Accordingly, the leaders of those nations intervened extensively in the market, imposing tariffs on foreign goods to restrict import trade, and granting subsidies to improve export prospects for domestic goods. Mercantilism represented the elevation of commercial interests to the level of national policy.

Physiocrats

Physiocrats, a group of 18th century French philosophers, developed the idea of the economy as a circular flow of income and output. They opposed the Mercantilist policy of promoting trade at the expense of agriculture because they believed that agriculture was the sole source of wealth in an economy. As a reaction against the Mercantilists' copious trade regulations, the Physiocrats advocated a policy of laissez-faire, which called for minimal government interference in the economy.

Classical Economics

The Classical School of economic theory began with Adam Smith’s work, The Wealth of Nations. In Smith's view, the ideal economy is based on a self-regulating market system. He described it as an "invisible hand" that, if each individual pursues self-interest, results in producing the greatest benefit for society as a whole. Smith incorporated some of the Physiocrats' ideas, including laissez-faire, into his own economic theories, but rejected the idea that only agriculture was productive.

While Adam Smith emphasized the production of income, David Ricardo focused on the distribution of income among landowners, workers, and capitalists.

Thomas Robert Malthus used the idea of diminishing returns to explain low living standards. Population, he argued, tended to increase geometrically, outstripping the production of food, which increased only arithmetically.

Utilitarianism

Coming at the end of the Classical tradition, John Stuart Mill parted company with the classical economists on the inevitability of the distribution of income produced by the market system. Mill pointed to a distinct difference between the market's two roles: allocation of resources and distribution of income. The market might be efficient in allocating resources but not in distributing income, he wrote, making it necessary for society to intervene.

Marginalism

Classical economists theorized that prices are determined by the costs of production. Marginalist economists emphasized that prices also depend upon the level of demand, which in turn depends upon the amount of consumer satisfaction provided by individual goods and services.

Marginalists provided modern macroeconomics with the basic analytic tools of supply and demand, consumer utility, and a mathematical framework for using those tools. Marginalists also showed that in a free market economy, factors of production - land, labor, and capital - receive returns equal to their contributions to production. This principle was sometimes used to justify the existing distribution of income: that people earned exactly what they or their property contributed to production.

Marxism

The Marxist School challenged the foundations of Classical theory. Writing during the mid-19th century, Karl Marx saw capitalism as an evolutionary phase in economic development. He believed that capitalism would ultimately be succeeded by a world without private property.

Advocating a labor theory of value, Marx believed that all production belongs to labor because workers produce all value within society. He believed that the market system allows capitalists, the owners of machinery and factories, to exploit workers by denying them a fair share of what they produce.

Marx predicted that capitalism would result in growing misery for workers as the effort of capitalists to maximize profit would lead them to adopt labor-saving machinery, creating an "army of the unemployed" who would eventually rise up and seize the means of production.

Institutionalism

Institutionalist economists regard individual economic behavior as part of a larger social pattern influenced by current ways of living and modes of thought. They rejected the narrow Classical view that people are primarily motivated by economic self-interest. Opposing the laissez-faire attitude towards government's role in the economy, the Institutionalists called for government controls and social reform to bring about a more equal distribution of income.

Keynesianism

Reacting to the severity of the worldwide depression of the 1930s, John Maynard Keynes in 1936 broke from the Classical tradition with the publication of the General Theory of Employment, Interest, and Money. The Classical view assumed that in a recession, wages and prices would decline to restore full employment. Keynes held that the opposite was true. Falling prices and wages, by depressing people's incomes, would prevent a revival of spending. He insisted that direct government intervention was necessary to increase total spending.

Keynes' arguments provided a rationale for the use of government spending and taxing to stabilize the economy. Government would spend and decrease taxes when private spending was insufficient and threatened a recession; it would reduce spending and increase taxes when private spending was too great and threatened inflation. His analytic framework, focusing on the factors that determine total spending, remains at the core of modern macroeconomic analysis.

Current Theories Keynesian theory, with its emphasis on activist government policies to promote

high employment, dominated economic policymaking in the early post-war period. But, economic theories are constantly changing, and starting in the late 1960s, troubling inflation and lagging productivity prodded economists to look for new approaches. From this search, new theories emerged:

Monetarism, which updates macroeconomic analysis before Keynes. It reemphasizes the critical role of monetary growth in determining inflation.

Rational Expectations Theory provides a contemporary rationale for the pre-Keynesian tradition of limited government involvement in the economy. It argues that the market's ability to anticipate government policy actions limits the effectiveness of government intervention.

Supply-side Economics recalls the Classical School's concern with economic growth as a fundamental prerequisite for improving society's material well-being. It emphasizes the need for incentives to save and invest if the nation's economy is to grow.

Future Theories

It seems to me that we are now in an economic context in which the change is at least as dramatic as that involved in the addition of an industrial economy to the agricultural economy during the 19th century. Of course, it is the addition of an information economy to the industrial and agricultural economies.

This implies to me that there will need to be new economic theories that recognize new facts of life.

Now, the agricultural and industrial economies obviously will continue to function, as did the agricultural when the industrial revolution occurred. But the agricultural economy changed in very important ways as it was affected by the industrial revolution. And, in the same way, there should be changes in both the agricultural and industrial economies as they are impacted by the information revolution.

Since libraries are a significant component of the information sector of the economy, their role in the information revolution, and in the economic theories to deal with it, must be understood.

The Contexts for Economics

There are three major contexts for economics: (1) Personal economics (economics of the person and family) (2) Microeconomics (economics of the firm) (3) Macroeconomics (economics of the society)

Strangely, as far as I can see, most economists pay relatively little attention, in either theory, practice, or position to the economics of the person and the family.

So the major foci of the interests of economists are on micro and macroeconomics. I suppose that is to be expected, since those are the contexts in which reward and power reside.

The library functions as a counterpart of the individual firm, so the issues in microeconomics apply to it. The library community, as a whole, is a significant part of the information sector of the economy. Therefore, the issues of macroeconomics apply to that community.

(1) Personal Economics

As I said, most economists, in the past, have paid little attention to the economics of the individual and the household.

Having said that, recently there has begun to be recognition of the importance of the individual. The Nobel Prize in Economics for 2002 was awarded to Daniel Kahneman and Vernon L. Smith for experimental investigations of individual decision-making.

(2) Microeconomics

Microeconomics, or the economics of the firm, is concerned with the balance between costs and income, especially as determined by the interactions in the marketplace. The costs arise from labor, materials, and investment in and return on capital. The income derives from the customers, based on the prices charged and payments received from the sale of products and services.

In arriving at that balance, the individual firm faces not only the forces of the marketplace but those of competition as well. It must therefore deal with changing costs and demands and changing competitive environments.

Thus, in micro-economics, we are concerned with The Marketplace, as the context for selling and buying The Individual Firm, its product or service production and costs The Customers, their Demands and the Income from sales to them

The Marketplace

What is the Marketplace? In this context, it is the place for “meeting together of people for the purchase and sale of goods, publicly exposed, at a fixed time and place.” (OED definition 1 for Market)

It must be said, though, that a marketplace usually is much more than that and, indeed, is a social institution, a forum in which more than merely economic activities occur.

Having said that, we will now focus on the economic role of the marketplace.

Before doing so, though, I think it is important to recognize a possible confusion in terminology. Economists and businessmen, but especially the latter, both use the term “market” in two quite different ways. One is to refer to what I have called the marketplace and the other is to refer to the customers (i.e., the “market”) for a product of service.

I will try to avoid the possible confusion by identifying the word “market” with marketplace and refer to the customers as customers.

When is openness important?

Markets need to be open when: trust is required in an exchange products are not standardized and need inspection there are information asymmetries between buyer and seller guarantees are difficult to obtain

Markets can be anonymous when: trust is not necessary products are standardized and do not need inspection information is symmetric guarantees are secure

It is of more than passing interest to note that the recent advent of three things – the Internet, the explosion of derivatives, and the consequent growth of hedge funds – is changing the very nature of the marketplace. In both of the latter two contexts but to a major extent in the first as well, it is increasingly NOT publicly exposed but rather is becoming hidden.

Management of a Marketplace

There is, to some degree, the perception that a marketplace functions without management. Adam Smith referred to it as the “invisible hand” as though the processes occur almost without intervention.

The facts, though, are that marketplaces must be managed. One need is to manage the process of agreement on the terms of exchange,

that is, to manage the individual transaction. Price must be agree on. Product or service specification must be agreed on. Terms of delivery must be agreed on.

But the other is to provide oversight on processes and transactions To ensure legality of trade To enforce standards and regulations To assure “fair trading” To determine effects on third parties (called externalities)

Economic Properties of Markets

In economic terms, a market is intended to assure that resources are allocated to the most profitable use and that the “right amount” of any product or service is produced.

There is said to be “market failure” when that objective is not met. When a marketplace for a product or service does not exist, it cannot

function. When events are very dynamic, markets may not respond properly. When there is asymmetric information, markets are likely not to

function properly. When the externalities to transactions are significant and substantial,

markets will not be effective. When there are significant “returns to scale”, markets may not be

effective. When a resource is controlled by a monopoly, markets do not allocate

resources efficiently

Asymmetric Information

Asymmetric information arises when the seller and the buyer have different information related to the transaction.

Typically, the seller knows more about the good (and its defects) than the buyer

Buyers cannot easily distinguish reliable goods from faulty goods The result of asymmetric information is that the decisions by the

buyer and seller will not lead to the best result, for one or the other and therefore for the effectiveness of the market.

In the case of the library, there are usually significant asymmetries between the knowledge of the library and its staff and that of the user. But, interestingly enough, this has been one of the strengths of the relationship between the library and its users, not a deficiency. And this is an issue worth pursuing!

Externalities

Externalities arise when there are effects of a transaction upon others not involved in it. Those effects might be negative (e.g. pollution) or they might be positive (e.g., R&D spillovers).

With negative externalities, the effect of the market is that too much may be produced.

With positive externalities, the effect of the market is that too little may be produced.

For the library, there would appear to be many externalities, with benefits from its existence and use arising in many ways. This is an issue well worth exploring!

Increasing Returns

Increasing returns to scale (what are called “economies of scale”) are in principle a good thing, since they improve the efficiency in use of fixed resources.

But increasing returns to scale are inconsistent with perfect competition and therefore lead to market failure.

Either small firms fail to exploit increasing returns Or increasing returns tends to lead to monopoly

For the library, the issue of whether there are economies of scale has been investigated, but the results to date have been at best equivocal.

Production and its Costs

I turn now to the individual firm, its products and/or services and, in particular, to the costs associated with them. (For the economist, the nature of the particular product or service is almost immaterial.)

Sources of Cost Opportunity Cost vs. Purchase Cost Fixed Cost vs. Sunk Cost Total Cost (i.e., fixed cost plus variable cost) Unit Cost

Marginal Cost vs. Average Cost

Sources of Cost

There are three sources of cost: Labor Capital, as the investment in the tools of production Materials that must be acquired for the substance of production

Usually, economists have focused on the relationship between the first two of those sources of cost and have created “production models” that are intended to represent that relationship. The most basic and, in many respects, simplest of them is the Cobb-Douglas Model.

I have, in the past, applied the Cobb-Douglas Model to libraries and, in doing so, identified “technical processing” as part of the “capital investment” (along with the collection and the facilities), with library services as the labor in production of products and services.

The Role of Labor Labor has several roles to play in the operations of the firm:

The work of production. The marketing or selling of the production. The distribution or delivery of the product or service. The management of the other workers.

For whatever reasons, the wages for these several roles tend to be quite different, usually with the managers receiving substantially more than the others. And perhaps that is warranted since the advancement to management should reflect greater knowledge, skills, and abilities to make decisions.

Increasingly, the roles of labor are becoming mechanized, even those in management, with robots and computers carrying ever greater proportions of the work involved. This raises the issue of what people will do as they are replaced by machines. This first arose in industry, during the 19 th century, but it still looms today.

For the library, many aspects of operations have been and are being supported by the use of computers, so the issue is relevant,

The Role of Capital

Capital is the investment in the tools that support production, indeed including those that directly replace labor. By use of those tools, the individual worker can produce far more than would be possible without them. Indeed, in many cases, it would be impossible to produce without them.

For an individual firm, a management decision must be made between what is called “in-house” investment in capital versus “out-source” investment. Namely, is the acquisition of the tools of production accomplished within the firm or by purchase of them from outside the firm?

In the case of the library, is technical processing (selection, acquisition, processing, and cataloging) done by library staff or by contract to external providers of those services? This is not a hypothetical or rhetorical question!

Two Meanings of “Capital”

There is the potential for confusion in the uses of the word “capital”. One use is to refer to the investment in the tools of production; the other is to refer to the money which represents that investment.

In this presentation, I am limiting it to the former meaning. Therefore, while one may have money to invest, it does not become “capital” until that money is invested in tools of production.

In particular, the money could be spent on many things: on labor, on personal expenditures, on wasted dissipation. Thus, money in itself is not capital but simply the ability to spend.

Of course, having said that, the money could be invested in a variety of ways that will provide income. In doing so, presumably the place of investment will use the money for its own purposes, which might include investment in capital, but it might be for other uses.

For the library, this distinction is relevant when there are funds, such as those derived from a development program, that may be invested, perhaps as an endowment.

The Role of Materials

For the production of physical goods, there almost always is the need to acquire “raw materials” which constitute the substance of the products. Again, as with capital investment, this can be done in-house or out-source, but for most physical products, it will be by out-source. It would only be the largest of firms that would own its own iron mines and steel mills in order to produce automobiles.

But even for the production of non-physical, intangible goods and services, there may be the need for raw materials.

In the case of the library, the collection, represents capital, of course, so it is not raw materials in this sense. However, photocopy paper and toner might be an example of raw materials.

Opportunity Cost vs. Purchase Cost

The purchase cost for a resource is the amount of money or other resources required to use the resource.

Opportunity cost of a resource is the revenue foregone by using money or other resources to acquire the given resource for a particular purpose rather than using them for an alternative.

For under-employed resources, opportunity cost can be quite low. But for scarce or heavily used resources, opportunity cost can be very high.

In the case of the library, choices between collection development and provision of services, between acquiring books or journals, between acquiring print materials or electronic access are each an example of opportunity cost vs. purchase cost.

Fixed Cost vs. Variable Cost Fixed cost is the cost that has to be incurred before any production can

take place. It is likely to be represented by capital investment in the tools of production. It may be represented by infrastructure of the firm, including its management. It is here that “risk capital” is so significant. And return on that risk capital investment surely is necessary if that investment is to be made.

In the case of the library, at any given time the cost of the collection and of the facilities is essentially a fixed cost, not something that is a function of the amount of use made.

Variable costs are the costs incurred as a function of the amount of production. It is likely to be represented by the labor costs in production of the product or service.

In the case of the library, the variable costs are indeed a function of the amount of service provided. They arise from circulation, or use, of the collection and from reference services provided to the users, and from other types of services (such as photocopy and bibliographic instruction).

Fixed Cost and Scale of Operations

It should be noted that there is an underlying relationship between the magnitude of fixed costs and the scale of operations. It reflects the maximum capacity of given fixed costs to handle the workload.

Therefore, one should consider the fixed costs as fixed for an identified maximum scale of operations. If that maximum is exceeded, the fixed costs will increase.

In the case of the library, this is well exhibited by the fixed costs in buildings and facilities. They have a limited capacity in terms of the size of collection that can be stored and the number of users that can be accommodated. If the scale of operations grows, either in the capital investment in the collection or in the number of users to be served, there will need to be additional “fixed costs” in the buildings and facilities needed to accommodate them.

Fixed Cost vs. Sunk Cost

Sunk cost is a fixed cost that cannot subsequently be recovered (e.g. on closure of the firm or in sales of assets for any other reason). Fixed costs other than sunk costs may be recoverable.

Entrants to a market have to meet fixed costs. Those firms that exit a market will forfeit sunk costs, but not other

fixed costs. In the case of a library, the distinction may be irrelevant, unless the

library decides to cease all or some portion of its operation. In such a case, there would be the need to determine what capital investment could be recovered. Presumably the portion of the collection involved might have market value (in some cases even exceeding the purchase costs). The investments in selection, acquisition, processing, and cataloging though, are likely not to be (although the sale price for the collection might include some recognition of those investments). Buildings and facilities may be saleable.

Total Costs

Total costs of production are the sum of fixed and variable costs. If T = Total Cost, F = Fixed Costs and V = Variable Costs, then: TC = FC + VC

Fixed costs have to be incurred whatever the scale of production. They are taken as constant within a pre-determined maximum scale of operation. It should again be noted that there will be dependence of the magnitude of fixed costs on the maximum scale of operation they can handle.

Variable costs depend on the volume of production, the actual scale of operation.

Unit Costs

In economics, there are two measures of unit cost: Marginal cost is the additional cost of producing the next unit

given that the company has already produced a number of units Average cost is the total cost for producing n units divided by n.

That is, A = T/n If there are large fixed costs, then marginal cost will usually fall

below average cost.

Economies of Scale Economies of Scale arise when the average cost declines as the scale of

production increases. This will usually be the case when there are large fixed costs, since those

fixed costs will be divided among a larger number of units. It will sometimes be the case when the “learning curve” results in increased efficiency.

This will usually NOT be the case when the variable costs increase as the number of units increase. This can arise, in particular, when production consumes a scarce resource or results in decreased efficiency.

In principle, one would expect a library to have substantial economies of scale, given the usually large capital investment in collection, building, and facilities. There have been studies made to examine whether that indeed is the case, but the results were at best equivocal.

Customers, Demands, and Income

Let’s now turn to the other side of the economic balance, the customer as the recipient of the production and the source of income to balance the costs incurred in production.

Who are the customers? What are their needs? What are they willing to pay?

The Range of Customers

In most industries, there are three groups of customers: Individuals (persons and households) Other firms Government

For many industries, these groups may be either or both national and international.

For the library, the first two of these groups are clearly present, the second being represented by inter-library loan. For public libraries, there is likely to be a significant level of use by government. For archives, as a closely allied activity, government may well be the primary customers.

What are their needs or demands?

Here I will not try to generalize the issues, but instead I will focus on the needs or demands of the users of the library.

It would appear, on the surface of it, that the most basic of them is the access to the books, journals, and other materials that are the major capital investment of the library. Beyond that is access to the services that the library staff and facilities provide.

And for many if not most libraries, those are probably the only needs that must be met.

But I think that underlying those needs is a more fundamental one. It is the need to assure that access to the information materials is possible. To meet this need means that at least some library must preserve the record, really independent of whether there is an evident, immediate need for it or customer for it.

It is here that the library becomes not so much a means for meeting the needs of the individual user as for meeting the needs of society. It is this that makes the library an institution of public policy.

What are they willing to pay?

Here again, I will not try to deal with the general economic picture of the willingness of customers to pay, but instead will focus on the library.

Most libraries do not function on the payments by individual users (except for specific services, such as photocopying), but rather on funding by the society or institution to which the users belong.

The willingness to pay is therefore a societal or institutional issue. And it probably must be dealt with as a political process rather than a strictly economic process.

In most institutions, the library is treated as a part of “overhead” expense. In some companies, though, it is treated as a cost center or even profit center, and in such cases effectively the users do pay for the library’s services.

Of most interest, though, there are situations in which the library is regarded as part of the institution’s own capital investment, as one of its tools for production. This is clearly the case with an academic library and especially so for a research library.

(3) Macroeconomics Macroeconomics tries to answer questions like the following:

Why do prices change from one time period to another? Why does national employment vary from year to year? Why does average income vary among countries?

The role of macroeconomics is to help in the following areas: Establishing social policy and making social choices Measuring national income Determining national fiscal policy Managing money and banking Dealing with inflation, unemployment, and economic growth Fitting a country into the world economy

The tools of macroeconomics are valuable to library management in Fitting libraries into the national economy Determining the level of resources appropriate for libraries Guiding social and institutional policies with respect to libraries

Measuring National Income

Gross domestic product (GDP) is a measure of the income and the expenditures of an economy. It is the total market value of all final goods and services produced within a country in a given period of time.

Note that it measures only the final products, not intermediate ones, and that it includes both good and services.

For an economy as a whole, income must equal expenditure: Every transaction has a buyer and a seller. Every dollar spent by a buyer is a dollar of income for a seller.

The flow and essential equality of income and expenditure can be illustrated by the following diagram.

In this diagram, I have highlighted, in blue, the flow of taxes, from households and firms to government. And I have highlighted in red the flow of wages, rents, and profits from governments and firm to income to households.

Markets for Goods and Services Markets for Factors of Production

Input to Markets

Output from Markets

Input to Markets

Output from Markets

Order, pay for goods/services

Receive goods/services

Provide Labor, Money, Land

Receive income Individuals, Households Pay taxes Pay taxes

Provide goods and services

Receive revenue

Provide factors of production

Receive revenue

Order, pay for goods/services

Receive goods/services

Order, pay for factors of production

Receive factors of production

Pay income for wages, rents, profit

Firms

Pay taxes Pay taxes

Provide infrastructure

Receive taxes and fees

Provide infrastructure

Receive taxes and fees

Order, pay for goods/services

Receive goods/services

Order, pay for factors of production

Receive factors of production

Governments

Pay income for wages, rents

The Input-Output Matrix

The flow of transactions represented by this chart and especially those involved in the firm to firm transactions, is quantitatively described by what is called the “input-output matrix” of the national economy.

Of course, the national input-output matrix does not show the individual firm-to-firm transactions but instead accumulates them by industry groups. It therefore shows the purchases by each industry group from each industry group.

It also shows the total sales by each industry to governments and to the groups of individuals and households, called “end users”.

Finally it shows the purchases and sales for each industry that involved sources and customers, of whatever kind, outside the country.

Libraries in the Macroeconomy

So what does the macroeconomy mean for libraries? Or, perhaps more to the point, what do libraries mean for the macroeconomy?

To me, the key point is the role of the “information sector” in the macroeconomy and, therefore of the library as a component of the information sector.

Economists

It needs to be recognized that economic positions and theories are not like those about the physical and biological world. The things they deal with reflect the decisions of people, not the laws of the world, which presumably are independent of what people do.

The positions and theories are the result of the work of individuals, called “economists”. They have brought to the process of creating those positions and theories their own views of what is right and what should be social policies., governing what people do.

It is therefore essential to understand who these persons were and what their positions were.

I will review a selected set of economists in two groups Those who lived before the Nobel Prize for Economics Those who have been awarded the Nobel Prize for Economics

In addition, I will review a selected set of non-economists who have, in one way or another, influenced those economists.

Economists before the Nobel Prize

Note that I have listed these persons in three groups: Private Value Oriented Public Value Oriented Methodology Oriented

These represent what I think are the three major approaches to economic practice, analysis, and theory. Of course, each of the persons, to one degree or another, falls into each group. The assignment made here simply reflect my own idiosyncratic view of the major emphasis of each of their objectives.

PRIVATE VALUE ORIENTED PUBLIC VALUE ORIENTED METHODOLOGY ORIENTED Adam Smith 1723-1790 Jeremy Bentham 1748-1832 Thomas Malthus 1766-1834 John Stuart Mill 1806-1873 Leon Walras 1834-1910 David Ricardo 1772-1823 Karl Marx 1818-1883 Francis Edgeworth 1845-1926 Alfred Marshall 1842-1924 Henry George 1839-1897 Irving Fisher 1867-1947 Vilfredo Pareto 1848-1923 Thorstein Veblen 1857-1929 Joseph Schumpeter 1883-1950 John A. Hobson 1858-1940 John Maynard Keynes 1883-1946 John von Neumann 1903-1957

Private-Value Oriented

The next six displays present the economists that I identify as “private-value oriented”.

Please recognize that each of the economists will be concerned with both public and private values, as well as methodology, so this assignment simply represents my own interpretation of the primary focus.

Adam Smith (1723—1790)

Adam Smith was a Scottish social philosopher and political economist best known for An Inquiry into the nature and causes of the Wealth of Nations (1776), the first major work of laissez-faire economics. It covered such concepts as the role of self-interest, the division of labor, the function of markets, and the international implications of a laissez-faire economy. Wealth of Nations established economics as an autonomous subject and launched the economic doctrine of free enterprise.

Smith laid the intellectual framework that explained the free market and still holds true today. He is often accredited with the expression "the invisible hand," which he used to demonstrate how self-interest guides the most efficient use of resources in a nation's economy, with public welfare coming as a by-product. To underscore his laissez-faire convictions, Smith argued that state and personal efforts, to promote social good are ineffectual compared to unbridled market forces.

Thomas Robert Malthus (1766-1834)

In 1798 Malthus published An Essay on the Principle of Population as it affects the Future Improvement of Society, with Remarks on the Speculations of Mr. Godwin, M. Condorcet, and other Writers. It argued that human hopes for continued social happiness must be vain, for population will always tend to outrun the growth of production. The increase of population will take place, if unchecked, in a geometrical progression, while the means of subsistence will increase in only an arithmetical progression. Population will always expand to the limit of subsistence and will be held there only by famine, war, and ill health.

David Ricardo (1772-1823)

Ricardo published Principles of Political Economy and Taxation (1817). He was an English economist who systematized the rising science of economics in the 19th century. In his Iron Law of Wages he argued that attempts to improve the real income of workers were futile since an increase in income of workers results in more children and a larger workforce, and employers then will lower wages as the working population grows exponentially.

Ricardo postulated the concept of “comparative advantage” which argues that a country gains from specializing in what it does best and trading with other nations. As a result, he was an opponent of protectionism for national economies, believing that protectionism led towards economic stagnation. Comparative advantage forms the basis of modern trade theory.

Ricardo, for much the same reasons. also opposed the "corn laws” which were intended to protect British landowners from foreign competition by guaranteeing them a high price for their produce.

Alfred Marshall (1842-1924)

Marshall was one of the chief founders of the school of English neoclassical economics. His magnum opus, Principles of Economics (1890), was his most important contribution to economic literature. It was distinguished by the introduction of a number of new concepts, such as elasticity of demand, consumer's surplus, quasi-rent, and the representative firm, all of which played a major role in the subsequent development of economics. His Industry and Trade (1919) was a study of industrial organization; Money, Credit and Commerce was published in 1923. Writing at a time when the economic world was deeply divided on the theory of value, Marshall succeeded, largely by introducing the element of time as a factor in analysis, in reconciling the classical cost-of-production principle with the marginal-utility principle formulated by William Jevons and the Austrian school. Marshall is often considered to have been in the line of descent of the great English economists—Adam Smith, David Ricardo, and J.S. Mill.

Vilfredo Pareto (1848-1923) Vilfredo Pareto (1848-1923) was an Italian sociologist and economist. His

first work, Cours d'Économie Politique (1896–97), included his famous law of income distribution, a complicated mathematical formulation in which Pareto attempted to prove that the distribution of incomes and wealth in society is not random and that a consistent pattern appears throughout history

He laid the foundation of modern welfare economics with the concept of the Pareto optimum, which states that the optimum allocation of the resources of a society is not attained so long as it is possible to make at least one individual better off in his own estimation while keeping others as well off as before in their own estimation.

A key point about a Pareto optimum is that it essentially preserves the status quo for those who have.

In social choice, Pareto efficient is: If alternative X is preferred to alternative Y by every individual, then the social ordering should also prefer X to Y.

John A. Hobson (1858-1940)

John A. Hobson was an English historian and journalist with an interest in economics. He wrote one the most famous critiques of the economic bases of imperialism in 1902. Although his lack of understanding of markets and marginal analysis led to his being ostracized by his contemporary academic economics circles, his thoughtful critique of the justifications of imperialism and his work taking the topic back to first principles stands today as an example of respect for all peoples throughout the world. He was a member of the Fabian Society, and although he wrote for several socialist journals, he was an independent thinker who argued that capitalist goals had been perverted by special interests and misdirected governments.

Public-Value Oriented

The next six displays present the economists that I identify as “public-value oriented”.

Please recognize that each of the economists will be concerned with both public and private values, as well as methodology, so this assignment simply represents my own interpretation of the primary focus.

Jeremy Bentham (1748-1832)

English philosopher, economist, and theoretical jurist, the earliest and chief expounder of Utilitarianism. He distinguished between maximizing individual utility and aggregate utility as the basis of social organization. He related happiness to the means to obtain it, so the wealthier a person is the greater happiness he can attain.

The critical question for Bentham was whether unhindered pursuit of individual happiness could be reconciled with morality. He believed that morality required that actions be judged on the basis of how their outcomes affect general utility in a society.

But what is general utility in a society? Bentham argued that it was the sum total of individual utilities of all members of a society. He emphasized the need for equal weights in this summation, so no person's utility should count more than another's.

John Stuart Mill (1806-1873) English philosopher, economist, and exponent of Utilitarianism. He was

prominent as a publicist in the reforming age of the 19th century, and remains of lasting interest as a logician and an ethical theorist.

First, Mill argued that society's utility would be maximized if each person was free to make his or her own choices. Second, Mill believed that freedom was required for each person's development as a whole person. In his famous essay On Liberty, Mill enunciated the principle that "the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection." He wrote that we should be "without impediment from our fellow-creatures, so long as what we do does not harm them, even though they should think our conduct foolish, perverse, or wrong."

Mill was not an advocate of economic laissez-faire. He favored inheritance taxation, trade protectionism, and regulation of hours of work of labor.

Karl Marx (1818-1883)

Marx, of course, is the revolutionary economist. He published (with Friedrich Engels) The Communist Manifesto, the most celebrated pamphlet in the history of the socialist movement. He also was the author of the movement's most important book, Das Kapital. These writings and others by Marx and Engels form the basis of the body of thought and belief known as Marxism.

Marx considered his theory of surplus-value as his most important contribution to the progress of economic analysis. Surplus-value is the difference between what labor produces and what labor is paid. Marx argued that the increase in capital (as the tools for production) and in the concentration of that capital during the 19th century was due to the allocation of labor surplus-value to the accumulation of capital.

Henry George (1839-1897)

Henry George was a land reformer and economist who wrote Progress and Poverty (1879) in which he proposed that government should tax only the income from the use of the bare land, but not from improvements, and abolish all other taxes.

George argued that most taxes stifle productive behavior, but a tax on the unimproved value of land was different. The value of land comes from two components, its natural value and the value that is created by improving it (by building on it, for example). Therefore, argued George, because the value of the unimproved land was unearned, neither the land's value nor a tax on the land's value could affect productive behavior.

George was right that other taxes may have stronger disincentives. But economists now recognize that site values are created, not intrinsic, so even a tax on unimproved land reduces incentives.

George's argument also assumes that in setting taxes, government can separate raw value of land from value of improvements—a difficult, if not impossible, task, especially for a politically motivated government.

Thorstein Veblen (1857-1929)

Veblen was a U.S. economist and social scientist who sought to apply an evolutionary, dynamic approach to the study of economic institutions. In The Theory of the Leisure Class (1899) he coined the term "conspicuous consumption” to describe consumption undertaken to make a statement to others about one's class or accomplishments. This term, more than any other, is what Veblen is known for.

Veblen was an economic iconoclast. He did not reject economists' answers to the questions they posed but he thought their questions were too narrow. Veblen wanted economists to try to understand the social and cultural causes and effects of economic changes. What social and cultural causes were responsible for the shift from hunting and fishing to farming, for example, and what were the social and cultural effects of this shift? Veblen was singularly unsuccessful at getting economists to focus on such questions.

John Maynard Keynes (1883-1946) Keynes was an English economist, journalist, and financier, best known

for his revolutionary economic theories (Keynesian economics) on the causes of prolonged unemployment. His most important work, The General Theory of Employment, Interest and Money (1935–36), advocated a government-sponsored policy of full employment, based on beliefs that (a) economic fluctuations significantly reduce economic well-being, (b) government action can improve upon the free market, and (c) unemployment is more important than inflation.

The long and continuing battle between Keynesians and monetarists has been fought primarily over (b) and (c).

In contrast, the recent debate between Keynesians and classical economists has been fought over (a). New classical economists believe that anticipated changes in the money supply do not affect real output; that markets adjust quickly to eliminate shortages and surpluses; and that business cycles may be efficient.

Methodology Oriented

The next five displays present the economists that I identify as “methodology oriented”.

Please recognize that each of the economists is very methodology oriented, so this assignment simply represents my own interpretation of the primary focus.

Leon Walras (1834-1910)

Walrus was a French-born economist whose outstanding work, Éléments d'économie politique pure (1874–77) (Elements of Pure Economics), was one of the first comprehensive mathematical analyses of general economic equilibrium, i.e., the balance between prices and quantities of commodities.

First, he built a system of simultaneous equations to describe the economy, a tremendous task. He then showed that, because the number of equations equaled the number of unknowns, the system could be solved to give economic equilibrium

Second, Walras was aware that, while such a system of equations could be solved in principle, doing so in reality was difficult, so he simulated a market process that would obtain equilibrium. This process was one of trial-and-error in which a price was called out and people in the market said how much they were willing to demand or supply at that price. If there was an excess of supply over demand, then the price would be lowered so that less would be supplied and more would be demanded. Thus would the prices "grope" toward equilibrium.

Francis Edgeworth (1845-1926)

Edgeworth was an economist of formidable mathematical attainments with, however, a rather obscure style of writing. He originally hoped to use mathematics to illuminate ethical questions and his first work, New and Old Methods of Ethics (1877), drew on mathematical techniques, especially the calculus of variations.

His most famous work is Mathematical Psychics (1881), which presented his ideas on the generalized utility function, the indifference curve, and the contract curve, all of which have become standard devices of economic theory.

Edgeworth contributed to the pure theory of international trade and to taxation and monopoly theory. He also made important contributions to the theory of index numbers and to statistical theory, in particular to probability, advocating the use of data of past experience as the basis for estimating future probabilities.

Irving Fisher (1867-1947 )

Irving Fisher was one of America's greatest mathematical economists and one of the clearest economics writers of all time. Fisher’s work on money and prices, with its sophisticated use of statistical techniques, provided the basis for recent theoretical work in economics.

Fisher called interest "an index of a community's preference for a dollar of present [income] over a dollar of future income." Interest rates, Fisher postulated, result from the interaction of two forces: "time preference" people have for capital now, and the investment opportunity principle (that income invested now will yield greater income in the future).

Fisher defined capital as any asset that produces a flow of income over time. Capital and income are linked by the interest rate. Specifically, wrote Fisher, the value of capital is the present value of the flow of (net) income that the asset generates. This still is how economists think about capital and income today.

Joseph Schumpeter (1883-1950)

Schumpeter was a Moravian-born American economist and sociologist known for his theories of capitalist development and business cycles. His influence in the field of economic theory was powerful. In his Capitalism, Socialism, and Democracy (1942), he argued that capitalism would eventually perish of its own success, giving way to some form of public control or socialism. He argued that capitalism would spawn an “information society” (my term, not his) in which the nature of capital investment would change.

His book was much more than a prognosis of capitalism's future. It was also a sparkling defense of capitalism on the grounds that capitalism sparked entrepreneurship. He distinguished between inventions and entrepreneurial innovation, and pointed out that the latter comes not just by using inventions, but also by new means of production, new products, new forms of organization.

His History of Economic Analysis (1954; reprinted 1966) is an exhaustive study of the development of analytic methods in economics.

John von Neumann (1903-1957)

John von Neumann was a brilliant mathematician and physicist who also made three fundamental contributions to economics.

First, a 1928 paper by von Neumann, established him as the father of game theory. Second, a 1937 paper, laid out a mathematical model of an expanding economy, raising the mathematical basis for economics. Third was heory of Games and Economic Behavior, coauthored with his colleague economist Oskar Morgenstern.

In their book, von Neumann and Morgenstern asserted that any economic situation could also be defined as the context of a game between two or more players.

In addition to game theory, their book gave birth to modern utility theory.

Relevant Non-Economists

I think it is important to recognize and to include in this listing a number of persons who, while not economists, are very relevant to the development of economic positions and theories.

Marquis de Condorcet (1743-1794) Count Henri de Saint-Simon (1760-1825) Robert Owen (1771-1858) Charles Fourier (1772-1837) Adolph Lowe (1893-1995)

Marquis de Condorcet (1743-1794)

Marquis de Condorcet (1743-1794) was a French mathematician and philosopher, a liberal and humanitarian who took an active role in the French Revolution. His most famous work was Outline for an Historical Table of the Progress of the Human Spirit (translated title).

In social choice, the Condorcet Principle is: If one alternative is preferred to all other candidates then it should be selected.

Count Henri de Saint-Simon (1760-1825)

French social theorist and one of the chief founders of Christian socialism. In his major work, Nouveau Christianisme (1825), he proclaimed a brotherhood of man that must accompany the scientific organization of industry and society.

Robert Owen (1771-1858)

Welsh manufacturer turned reformer, one of the most influential utopian socialists of the early 19th century. His New Lanark mills in Lanarkshire, with their social and industrial welfare programs, became a place of pilgrimage for statesmen and social reformers. He also sponsored or encouraged many experimental “utopian” communities, including one at New Harmony, Ind., U.S.

Charles Fourier (1772-1837) French social theorist who advocated a reconstruction of society based on

communal associations of producers known as phalanges (phalanxes). His system came to be known as Fourierism. While working as a clerk in Lyon, Fourier wrote his first major work, Théorie des quatre mouvements et des destinées générales (1808; The Social Destiny of Man; or, Theory of the Four Movements, 1857). He argued that a natural social order exists corresponding to Newton's ordering of the physical universe and that both evolved in eight ascending periods. In harmony, the highest stage, man's emotions would be freely expressed. That stage could be created, he contended, by dividing society into phalanges.The phalange, in Fourier's conception, was to be a cooperative agricultural community bearing responsibility for the social welfare of the individual, characterized by continual shifting of roles among its members. He felt that phalanges would distribute wealth more equitably than under capitalism and that they could be introduced into any political system, including a monarchy. The individual member of a phalange was to be rewarded on the basis of the total productivity of the phalange.

Adolph Lowe (1893-1995)

The lifework of Adolph Lowe (1893-1995) was greatly motivated by his struggle with the problem of "freedom and order". Lowe's concern with the socialization function of education related to his notion of "spontaneous conformity", For Lowe, the stronger the commitment to community, the greater is the possibility for individual autonomy without the threat of social disruption

The Nobel Prize for Economics The Nobel Prize for Economics (or, more correctly, The Bank of Sweden Prize in

Economic Sciences in Memory of Alfred Nobel) is the world's most prestigious award for contributions to the field of Economics. It is awarded annually by the Royal Swedish Academy of Sciences. The prize consists of a gold medal, a diploma bearing a citation, and a sum of money (US$1,000,000 in recent years). It represents the ultimate recognition by an economist’s peers.

The Economics prize was not part of Alfred Nobel's original will, but was added in 1969, with the support of the Bank of Sweden, and has since been judged and administered by the Nobel Foundation in a way similar to that for the five original Nobel prizes.

The Economics prize is made on the basis of nominations from selected economists, recommendation from the Prize Committee to the Academy, and a secret ballot of the full Academy.

The prizes are intended to reward specific discoveries that have significant impact on the discipline.

The Nobel laureate is announced each October, and the presentation is made in Stockholm on 10 December. 

Nobel Laureates, 1969 - 2004 1969. Ragnar Frisch and Jan Tinbergen "For having developed and

applied dynamic models for the analysis of economic processes." 1970. Paul Samuelson "For the scientific work through which he has

developed static and dynamic economic theory and actively contributed to raising the level of analysis in economic science." 

1971. Simon Kuznets "For his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development." 

1972. John Hicks and Kenneth Arrow "For their pioneering contributions to general economic equilibrium theory and welfare theory."  

1973. Wassily Leontief "For the development of the input-output method and for its application to important economic problems." 

 

1974. Gunnar Myrdal and Friederich von Hayek "For their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social, and institutional phenomena." 

1975. Leonid Kantovarich and Tjalling Koopmans "For their contributions to the theory of the optimum allocation of resources."

1976. Milton Friedman "For his achievements in the field of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy." 

1977. Bertil Ohlin and James Meade "For their pathbreaking contribution to the theory of international trade and international capital movements." 

1978. Herbert Simon "For his pioneering research into the decision making process within economic organizations." 

1979. Theodore Schultz and Arthur Lewis "For their pioneering research into economic development, with particular consideration of the problems of developing countries." 

1980. Lawrence Klein "For the creation of econometric models and their application to the analysis of economic fluctuations and economic policies." 

1981. James Tobin "For his analysis of financial markets and their relations to expenditure decisions, employment, production and prices." 

1982. George Stigler "For his seminal studies of industrial structure, functioning of markets and causes and effects of public regulation." 

1983. Gerard Debreu "For having incorporated new analytic methods into economic theory and for his rigorous reformulation of the theory of general equilibrium." 

1984. Richard Stone "For having made fundamental contributions to the development of systems of national accounts and hence greatly improved the basis for empirical economic analysis." 

1985. Franco Modigliani "For his pioneering analysis of savings and financial markets."

 1986. James Buchanan "For his development of the contractual and constitutional bases of the theory of economic and political decision making." 

1987. Robert Solow "For his contributions to the theory of economic growth."  1988. Maurice Allais "For his pioneering contributions to the theory of markets

and efficient utilisation of resources."  1989. Trygve Haavelmo "For his clarification of the probability theory

foundation of econometrics and his analysis of simultaneous economic structures." 

1990. Harry Markowitz "For having developed the theory of portfolio choice." William Sharpe "For his contributions to the theory of price formation for financial assets, the so-called Capital Asset Pricing Model (CAPM)." Merton Miller "For his fundamental contributions to the theory of corporate finance."  

1991. Ronald Coase "For his discovery and clarification of the significance of transaction costs and property rights for the traditional structure and functioning of the economy."  

1992. Gary Becker "For having extended the domain of microeconomic analysis to a wide range of human behaviour and interaction, including non-market behaviour."

1993. Robert Fogel and Douglass North "For having renewed research in economic history by applying economic theory and quantitative methods to explain economic and institutional change." 

1994. John Harsanyi, John Nash and Reinhard Selten "For their pioneering analysis of equilibria in the theory of non-cooperative games."  

1995. Robert Lucas "For having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy."  

1996. James Mirrlees and William Vickrey "For their fundamental contributions to the economic theory of incentives under asymmetric information."  

1997. Robert C. Merton and Myron S. Scholes "For a new method to determine the value of derivatives"  

  1998. Amartya Sen "For his contributions to welfare economics." 1999. Robert A. Mundell "For his analysis of monetary and fiscal policy

under different exchange rate regimes and his analysis of optimum currency areas."  

2000. James Heckman "For his development of theory and methods for analyzing selective samples." Daniel McFadden "For his development of theory and methods for analyzing discrete choice." 

2001. George A. Akerlof, A. Michael Spence, and Joseph E. Stiglitz "For their contributions to the analyses of markets with asymmetric information." 

2002. Daniel Kahneman, “For having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty”. Vernon L. Smith, “For having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms”

2003. Robert F. Engle, “For methods of analyzing economic time series with time-varying volatility”. Clive W. J. Granger, “For methods of analyzing economic time series with common trends”

2004. Finn E. Kydland and Edward C. Prescott, jointly “For their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles”

Four aspects of the Nobel Economists

(1) the individuals, their lives and character (2) the conceptual and theoretical constructs with which their

views of economics is concerned (3) their applications of those economic concepts and theories (4) the conflicts, in ideology and application, that are embodied in

the work of these individuals 

The individuals, their lives and character 

Most if not all of these persons are interesting as individuals. The example of John Nash (recall the book and movie, roughly based on that book, A Beautiful Mind”) is perhaps extreme, but it is not unique.

Many of them are academics and, as such, perhaps dull to the usual public, but all of them are intellectual giants with all of the personal idiosyncrasies that go with stature. Their stories cover many geographical regions of the world and time periods of the past century.

Just to cite a few examples:

  Gunnar Myrdal, the Swedish economist, played significant political roles

in formulating and maintaining the socialist character of the Swedish political system. He wrote The American Dilemma, published in 1944, which documented the status of black American at the time. It was instrumental in the Supreme Court's historic 1954 anti-segregation decision. He also wrote Asian Drama, an inquiry into the poverty of nations, published in 1968, which similarly documented the status of underdeveloped Asian countries viz a viz developed Western ones.

Milton Friedman, the American economist, is the champion of the "free enterprise system", to the level of fanaticism. Indeed, from his tutorship at the University of Chicago, has flowed an almost endless stream of economic conservatives that has led the policies, both economic and legal (see especially Richard Posner) of the United States for decades. 

Vasily Leontieff, a Russian-born American economist, who formulated the concept of the "input-output matrix" that measures the inter-dependence of components of the economy and provides probably the most powerful single tool for understanding and managing national economies.

Kenneth J. Arrow (1921-) is a U.S. economist known for his contributions to welfare economics and to general economic equilibrium theory. Arrow’s “impossibility theorem” holds that, under some well defined and presumably rational conditions, it is impossible to guarantee that a ranking of societal preferences will correspond to rankings of individual preferences when more than two persons and alternative choices are involved.

In 1994, John Forbes Nash, Jr. won the Nobel Prize for pioneering work in game theory. Nash was 66. While he was still only 21, he wrote a 27-page doctoral dissertation on game theory -- the mathematics of competition. The great John von Neuman, then at Princeton, had treated win-lose competitions. Now Nash showed how to construct mathematical scenarios in which both sides won. Nash put a whole new face on competition, and he drew the attention of theoretical economists. He had turned game theory into a tool. This young genius brought the field to fruition. He went on to MIT and for eight years dazzled the mathematical world. He worked in economics as well as mathematics. He even invented the game of Hex, marketed by Parker Brothers. Then, disaster! For 25 years, from about 1957, he suffered from paranoid schizophrenia. Mental illness wrapped about him like an evil cloud. Today, though, he is working on novel uses of the computer in a research post at Princeton. Nash has survived what looked like death.

Conceptual and theoretical constructs

 There are conceptual and theoretical constructs that underlie the work of all of the individuals. They embody very fundamental ideas such as "equilibrium" (i.e., the balance between production and consumption and the balance between competing objectives), "utility" (i.e., the measurement of relative value), "optimum" (i.e., the determination of what is "best"), etc. These concepts embody real conflicts in objectives (such as those between management and labor)

Many of the Nobel Prizes were awarded for specific concepts (such as the "input-output matrix" by Leontieff), so it is natural to highlight them in the context of specific individuals.  

Conflicts in ideology and application

The nature of economics is that, theoretical though it may be, it embodies fundamental conflicts in ideology and application. The most evident, of course, is that between capitalism and socialism (or, at the extreme, communism). Indeed, most of the conflicts may be simply components of that one, but perhaps not.

The conflict over the global economy is not only part of the capitalism/socialism conflict but of that between corporate economies and national economies.

Web site for Economics & Economists

The Web site “Library of Economics and Liberty: Home and Main Menu Page” at http://www.econlib.org/ seems to provide a good resource for information about economics.

They include biographies for many, though not all, of the persons identified in this presentation.

Among them are several that I have not included but that are as worth examining as the ones I have highlighted:

Armen Alchian John Kenneth Galbraith Friedrich Hayek David Hume John Locke Fritz Machlup Ludwig von Mises Max Weber

The End