The History of Economics

Economics is a social science that studies how individuals, businesses, governments, and nations allocate resources to satisfy their needs and wants. The history of economics can be traced back to ancient civilizations like those of Mesopotamia, Greece, and Rome, where ideas on trade, money, and wealth were recorded. However, modern economic thought evolved in the 18th century with the works of prominent figures like Adam Smith, David Ricardo, and Karl Marx.

Classical Economics

The classical economists believed in the idea of a self-regulating market where prices and production levels are determined by competition and consumer demand. Adam Smith's "The Wealth of Nations" in 1776 laid the foundation for classical economics by emphasizing the benefits of free markets and specialization.

Neoclassical Economics

In the late 19th century, neoclassical economics emerged, focusing on the role of individuals and their rational decision-making in economic transactions. Figures like Alfred Marshall and Leon Walras contributed to this school of thought.

Keynesian Economics

During the Great Depression of the 1930s, John Maynard Keynes introduced Keynesian economics, which advocated for government intervention in the economy to address unemployment and stimulate growth. This marked a shift from classical and neoclassical views on market self-regulation.

Today, economics continues to evolve with new theories and approaches, incorporating insights from various disciplines like psychology, sociology, and political science.