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Long time no see! I said a while ago that I wasn’t going to write for the sake of writing, and here we are a month and a half later and I finally have something that I want to write about. Recently, I finished reading The Classical School by Callum Williams. It’s an interesting book that surveys 20 economic thinkers from around 1700 up to the early 20th century. There are the big thinkers that a lot of people have probably heard of from news articles or some such like Adam Smith, Karl Marx, and John Stuart Mills. However, there are many more that people are likely not familiar with like Harriet Martineau and Dadabhai Naoroji.

Take that list as you will. It’s a very broad look at early economic thinkers meant more as an introduction, especially in a world where journalists and online personas will make mention of some of these people to add more gravitas to their arguments. One of the express goals of the author when writing this book was to arm readers with enough information to quickly tell when someone is misrepresenting these thinkers in order to push their agenda. In that regard, he did a very good job and it’s extremely good at informing readers that these thinkers weren’t necessarily the arch capitalists that the average Bloomberg article would have one believe.

I’m not going to delve into every last thing that is discussed regarding these thinkers here. You can read the book yourself for that, or hunt down online resources where available. There were a few interesting themes that kept coming up when looking at how they tried to make sense of economics (or “political economy” as many of them would have called it back then).

One that stuck out a lot was the notion of value. Nowadays, most people take this idea for granted. We look at a price and assume that the store took all the usual things into consideration when coming up with that number: materials, labour, shipping, supply and demand, etc. Back then, prices fluctuated wildly from one trip to the next to the local market. There wasn’t as much rhyme or reason behind prices back then, and it could make shopping trips a tad confusing. As such, many of these thinkers tried to come up with ideas for how value could be discerned.

One of the big ones that gained traction early on was labour input. The idea that it was the workers that were in fact creating the product and therefore were the most important piece when defining value had been popular for some time. Callum points out how Ricardo was arguably the biggest proponent of this idea in the 1800s, even more so than Marx during the latter half of that century. It could actually be argued that Marx in more of a late post-Ricardian than anything else, as he used much of those ideas to support his own. Interestingly, the book describes how Marx went out of his way to use the ideas of Ricardo and others to support his argument that workers should be the key component when talking about value. By that time, John Stuart Mill’s idea of supply and demand dictating value was really beginning to gain traction, pushing out the Ricardian approach, so Marx found himself fighting tooth and nail to keep his idea relevant during that time.

The book also talks a lot about just how much Adam Smith is misrepresented today. His name seems to get brought up every time a hardcore capitalist wants to justify their ideas. For instance, they like to bring up the idea of the invisible hand constantly when talking about Smith. I read his stuff years ago and it was a slog and a half. However, one thing I don’t remember seeing much of was this hand that modern writings love to wax poetic about. Callum emphasizes this on his chapter about Smith, mentioning that he very rarely used the term and it was meant as more of a subtle Shakespeare reference (MacBeth) for fun that readers of the time would have quickly noticed. This isn’t to say he didn’t think that markets would find ways to adapt to change, but this wasn’t necessarily front and center with his theories.

The same can be said about his view on laissez-faire economics. This shouldn’t be used as fuel to give pro free trade camps blank cheques to indulge in the practice to their hearts’ content. Rather, Smith was reacting to mercantilism, which was quite popular in certain parts of the world during his life, France being a prime example. Mercantilism was a protectionist approach to economics where a country would try to produce everything it needed internally on top of their usual exports, then place tariffs on foreign goods coming in. The logic was that this would force their populace to buy domestic. It’s something that will certainly sound familiar to anyone following economics today.

Smith’s argument was that this is nonsense and that countries should always go with the cheapest option when purchasing goods. If that meant importing certain goods from abroad in order to save money, so be it. This was why he was in favour of free trade. He didn’t like the artificial price adjustments forced by mercantilism and simply wanted the cheapest goods possible for people to buy. That being said, I do wonder how he would look at modern free trade where jobs have been shipped abroad and structural unemployment has taken root.

One thing that gets glossed over today is just how aware people like Smith and other economic thinkers were of the grinding poverty all around them. Nowadays discussion of the history of economics seems to be dominated by policy wonks that are trying to justify various pro-business / pro-corporate legislation. They completely ignore just how concerned these thinkers were with the lot of the average person during their time, especially in places like England were the industrial revolution was underway and it was as clear as day that a lot of people were toiling through atrocious poverty their whole life.

This is why people like Ricardo were looking at things like defining value from a worker input perspective, or how Sismondi was deeply concerned with the lot of the average person. Conversely, the book talks about people like Thomas Malthus and how he worried that as workers made more money, they would simply have larger families which would consume their increased income and drive them back into poverty. Oddly, this argument gained traction in the 1800s and contributed to government treating the working class even worse.

One other interesting thing that the book covered at length that I wanted to touch on was just how few of these people used math or empirical data to shape their theories. Callum actually highlights a few major thinkers who were instrumental in shifting economics to the calculus-intensive, chart-centric realm it is much more known for today. The chapters on Condorcet, Jevons, and Marshall talk quite a lot about how these people put a lot more emphasis on crunching numbers and creating statistical data to give a solid understanding of how an economy was behaving. Others of that time preferred to simply look at what was going on around them, and base their theories on what they saw.

I could go on a lot longer about the book, but I don’t want to turn this into a rehash of everything in it. It was quite interesting to learn about all of these people that were trying to make sense of how economies functioned then see how this evolved. Callum did a good job of doing what he set out to accomplish: arming readers with enough basic knowledge about these people for them to have a hunch that some parties on the internet are trying to mislead them when discussing these economic thinkers. In a world full of lazy learning as people pour over a few wiki pages and a free Bloomberg article, then think themselves experts, The Classical School is actually a useful tool that would help prevent a lot of people from being taken for a ride by parties trying to shift public thought on the economy in dishonest ways.