Lesson 2/55 min
Economists and their theories
Five key economists
| Name | Who and what |
|---|---|
| Adam Smith | British; known as the father of modern economics; The Wealth of Nations (1776); champion of classical and laissez-faire (free market) thought; the phrase ‘invisible hand’ is his. Followers: Ricardo, John Stuart Mill, J. B. Say, Walker and others |
| Alfred Marshall | British; champion of ‘neo-classical thought’; Principles of Economics (1890); called economics a social science |
| Vilfredo Pareto | Italian economist and philosopher; famous for the ‘Pareto equilibrium’ idea; saying: History is a graveyard of aristocracies |
| Lionel Robbins | British; called the father of the ‘modern school’; his 1932 book defines economics as balancing wants and scarce means |
| Sir John Hicks | British economist; Nobel Prize in Economics, 1972 |
Paul Samuelson
- American economist; the first American to win the Nobel Prize in Economics, in 1970
- The historian Randall E. Parker called him the Father of Modern Economics
Watch out: The book gives two answers for “father of modern economics”: Adam Smith in bank and Chittagong University questions, but Paul Samuelson in one job-exam question. If both are options, read the wording: “father of economics” means Adam Smith.
Theory and who proposed it
| Theory | Proposed by |
|---|---|
| Theory of rent | David Ricardo |
| Theory of comparative cost | David Ricardo |
| Theory of division of labour | Adam Smith |
| Consumer surplus | Alfred Marshall |
| Normal profit; quasi-rent | Alfred Marshall |
| Theory of surplus value | Karl Marx |
| Malthusian theory of population | Thomas Malthus |
| Theory of optimum population | Dalton |
| Wages fund theory | J. S. Mill |
| Iron law of wages | Lassalle |
| Gresham's law | Sir Thomas Gresham |
| Liquidity preference theory of interest | John Maynard Keynes |
| Quantity theory of money | Irving Fisher |
| Vicious circle of poverty | Nurkse |
| Social choice theory | Amartya Sen |
Check yourself
Who was the first American to win the Nobel Prize in Economics?
At a glance
- 1
Adam Smith: The Wealth of Nations (1776); called economics the science of wealth; champion of classical and laissez-faire thought.
- 2
Alfred Marshall: Principles of Economics (1890); champion of neo-classical thought.
- 3
First American Nobel laureate in economics: Paul Samuelson (1970); John Hicks won in 1972.
- 4
Rent and comparative cost: Ricardo; surplus value: Marx; consumer surplus: Marshall; division of labour: Smith.
- 5
Liquidity preference: Keynes; quantity theory of money: Fisher; vicious circle of poverty: Nurkse.