Name of the Contributors of Economics

From the father of Economic History who developed theories to explain why capitalist economies
have fluctuations and crises - to the greatest economic thinker of the 20th century
1. ADAM SMITH (1723-1790)
A key figure of the Scottish Enlightenment, Smith is the giant on whose
shoulders subsequent economists have stood. He is best known
for The Wealth Of Nations, his 1776 landmark book on economics,
published at the dawn of the Industrial Revolution - and was even
consulted on economic matters by Pitt The Elder, the Whig politician
and Prime Minister. His arguments for free trade, market competition
and the morality of private enterprise remain as fresh and influential
as when written over 200 years ago. That said, Smith - who studied
and later taught at Glasgow University - saw only a limited role for
government and was hostile to economic nationalism. However, his
arguments have at times been misinterpreted by free marketeers in recent decades. The fact is that
he did not believe in 'laissezfaire' (an earlier French doctrine opposing any government intervention
in economic matters) - he saw government's sole job as to establish law and justice, and provide for
the nation's education and basic infrastructure.
2. DAVID RICARDO (1772-1823)
British political economist - the third of 17 children from a Sephardic Jewish
family of Portuguese origin - Ricardo was a huge influence on 19th-century
economics. After making a fortune as a stockbroker, he became fascinated
by economics - and wrote the influential The Principles Of Political Economy
And Taxation (1817). In it, he dealt with questions of distribution (worker
and landlord rewards, etc) and the link with the value of production: in
particular, the idea of economic 'rent', where rewards are greater than the
cost of production. This foreshadowed today's debate about 'fair' pay and
rewards. Crucially, he developed Adam Smith's thinking on free trade, and
his work helped the Anti-Corn Law League win the battle over the Corn Laws
(protective duties on corn, designed to protect the landed gentry, which were repealed in 1846) which
established Britain as a free-trading nation.

3. FUKUZAWA YUKICHI (1834-1901)

An author, entrepreneur and political theorist, Yukichi's ideas made a lasting

impact on Japan following the 1868 Meiji Revolution, which saw the
restoration of imperial rule in Japan and set in train its economic
modernisation. Widely regarded as one of Japan's founding fathers, Yukichi
tried to understand how modern systems and organisations worked and
how 'civilisation', including business enterprise and new technology, could
be transplanted to Japan to create economic development. He was an
educator rather than an economist but wrote many books that influenced a
generation of Japanese to embrace a rational and scientific approach to
economic, and wider, policy. If it hadn't been for Yukichi, I suspect the
modernisation and industrialisation of Japan, and subsequently the rest of
east Asia, would have probably been longer in coming.
4. KARL MARX
OK, Marx might now be remembered as a revolutionary advocate of
communism - he co-wrote The Communist Manifesto - but he was a leading
19th-century economist in the 'classical' tradition. Indeed, in many ways he
is the father of Economic History, having developed explanations for the
evolution of the economic structure from feudalism to capitalism. The
German philosopher, sociologist and economist, who spent much of his life
in London (and is buried in Highgate Cemetery), developed theories to
explain why capitalist economies - which he opposed - have fluctuations and
crises. However, despite his belief in capitalism's self-destructive tendencies,
much of his economic thinking stands up to scrutiny. Had it not been for The
Communist Manifesto, I think Western commentators would recognise more readily today his role in
advancing economic thinking.
5. AMARTYA SEN (1933-)
Among the most important events of my lifetime has been the economic
emergence through rapid growth of major developing countries - most
notably China and India, but also Korea, Brazil and Mexico among others. A
variety of fine economists have contributed to understanding growth and
development in the late 20th century: among them Sen, the Indian Nobel
Laureate (he was awarded the 1998 Nobel Prize in Economic Sciences). One
of the Bengal-born economist's key contributions was a book on famine
whose essential point was that it originates in a shortage of income rather
than food. More recently he has sought to inject an ethical dimension into
economic thinking. It's interesting to note that not only are nations like India
now making their mark economically, so are their economists.
6. JOHN MAYNARD KEYNES (1883-1946)
The greatest economic thinker of the 20th century, Keynes (a Liberal incidentally) challenged
fundamentally the idea that market economies will automatically adjust to create full employment.
After working at the Treasury during World War I, he was its chief representative at the post-war Paris
peace conference, but resigned in protest at the harshness of the planned reparations. In the Twenties
he developed radical plans for dealing with unemployment through deficit financing and state

intervention. His insistence on the central role that uncertainty plays in

economic decisions foreshadows much of the current interest in
behavioural economics. While his basic economic framework - in which
short-term economic growth (and employment) depends on 'aggregate
demand' (consumption, investment and net exports) is built into many of
our forecasting models today. Later on, he participated in the Bretton
Woods conference (which looked at how to establish a post-war monetary
system that would avoid further economic crises) that led to the creation
of the International Monetary Fund and the World Bank. Admittedly, he
went out of fashion in recent decades when inflation was a bigger worry
than unemployment. However, the present crisis has led to something of a revival in Keynesian
thinking, and his insights into how international imbalances should be tackled remain highly relevant.
7. MILTON FRIEDMAN (1912-2006)
Wrongly described as the antithesis and an opponent of Keynes, Friedman is
associated essentially with two big ideas which have inspired the Chicago
School of Economics. One is an uncompromising restatement and
development of Adam Smith's views on the merits of free markets. He made
the case for floating exchange rates (as Britain has had since Black
Wednesday in 1992) - but the translation of this idea into a belief in 'efficient'
financial markets has been severely tested (perhaps to destruction) in the
recent financial crisis. His other major contribution, the quantity theory of
money - given its first clear statement by the great Scottish thinker David
Hume - linking money supply to inflation, was embraced in the Eighties by
Mrs Thatcher's government with mixed results. It has, however, moved back
to centre stage in the current crisis as central banks have fought recession (and the risks of deflation)
by means of aggressive monetary policy: minimal interest rates and expanding money supply via
quantitative easing.
8. JOSEPH SCHUMPETER (1883-1950)
The Austrian-American economist and political scientist is responsible for
the idea of capitalism as a (positive) source of 'creative destruction'.
Technology and capitalism together drive change and growth - but
traditional freemarket thinking would worry about monopolies (albeit
temporary) such as Microsoft's software platforms, which are based on
intellectual property protection of an innovation. However, Schumpeter,
who moved to the USA in 1932, saw the process as benign. He believed that
such 'monopoly rents' encouraged innovation and investment, which are
essential to growth. Modern capitalism - often based on competition
between innovative giant companies - is somewhat closer to the Schumpeter
model than Adam Smith's. Incidentally, Schumpeter's followers are a part of
the so-called Austrian School, which is highly critical of the orthodox (Keynesian and Friedmanite)
attempt to fight the current crisis through reflationary fiscal and monetary policy. They believe banks,
governments and individuals have no alternative but to learn from their mistakes, not be rescued from
them.

9. DANIEL KAHNEMAN (1934-)

Daniel Kahneman, an Israeli-American psychologist - not an
economist - did much of the pioneering work in the fascinating field
of 'behavioural economics'
Perhaps the most radical change in direction in economics in recent
decades has been the emergence of 'behavioural economics'. And
Kahneman, an Israeli-American psychologist - not an economist did much of the pioneering work in this fascinating field. Traditional
economics, from Smith and Ricardo to Marx, Keynes and Friedman,
has been based on general theories which treat it as a branch of natural science. But people are not
like atoms, or plants, or rats in mazes. They learn and adapt (or we hope they do), invalidating models
based on past behaviour. However, people also hang on to irrational habits and seemingly perverse
ways of evaluating choices, confounding those economists who premise their models on 'rational
economic man'. Some economists have retaliated by applying economic rationality to explain noneconomic problems such as crime and punishment, prostitution and marriage patterns.
10. HYMAN MINSKY(1919-1996)
The Western world has been painfully reminded over the past three years of the way capitalist
economies - especially their banks - can be caught in speculative financial bubbles which burst with
disastrous effects.
The South Sea Bubble (which saw shares in an 18th-century British company soar before crashing) was
an early example of such an event. The philosopher John Stuart Mill wrote about cycles leading to
bank collapses and ensuing 'credit crunches' in the 19th century - and Minsky was the best analyst of
the problem in recent times.
Sometimes described as a post-Keynesian economist (because he supports some government
intervention), the American described with uncanny accuracy the seven stages of a boom and bust
cycle which we have now seen enacted in our own country.
The Coalition Government is now seeking to manage the consequences and to stop another Minsky
cycle developing.