You may have noticed my lack of regard for modern economic theory which the following might help you understand more clearly. This is the draft of the cover text for the book I have just completed and sent off to the publisher. Comments, thoughts and suggestions would be welcome. My disdain for Keynesian economics I have discussed on many occasions. My attitude to “marginal” analysis I mention far less often which is why certain passages below are highlighted in bold.
‘Classical Economic Theory and the Modern Economy’
The book starts with two premises: First, that economic theory reached its deepest level of understanding in the writings of John Stuart Mill and the classical economists of his time, and then, secondly, the author of this book has understood Mill and has accurately explained what the classical school of the late nineteenth century wrote. From these premises, this then follows.
If you are to have any hope of understanding how an economy works, and how modern economic theory became the dead end it has become, you will need to read this book.
The classical economists, and John Stuart Mill in particular, lived through the Industrial Revolution, saw its astonishing economic transformation before their eyes, and explained, so others could understand for themselves, how their prosperity had been created through the emergence of the market economy.
Mill, the greatest utilitarian philosopher of his age, refused to use utility as part of his theory of value. Mill explicitly and emphatically denied any role for aggregate demand in the creation of employment. In reaching these conclusions, there was no disagreement among the entire mainstream economics community of his time.
First through the Marginal Revolution of the 1870s, and then through the Keynesian Revolution of the 1930s, the entire edifice of classical theory has been obliterated. From a classical perspective, modern economic theory is Mercantilist
trashnonsense. If you are interested in how economic theory became the wasteland it has become, and wish to understand the classical theory no one any longer has the slightest clue about, this is the book you must read.
If you are interested in understanding all this more completely, you will have to read the entire book when it is finally published sometime this year.