There is an old joke that is often told about economists: Three economists are hunting ducks. The first shoots 20 meters ahead of the ducks, the second shoots 20 meters behind the ducks, and the third says, "Great job! We got them!"
All jokes aside, there are many economists that do incredible jobs and there are some who have made contributions in financial history that crossed over into many aspects of social history as well. In this article, we'll show you five of these economists and explain their impact on society.
1. Adam Smith (1723 to 1790)
Adam Smith was a Scottish philosopher who became a political economist in the midst of the Scottish Enlightenment. He is best known for writing "The Theory of Moral Sentiments" (1759) and "An Inquiry into the Nature and Causes of the Wealth of Nations" (1776). The latter, mostly known now as "The Wealth of Nations", is one of the earliest and the most famous pieces that discussed industry and commerce, and this is believed to be one of the major contributors to modern academic discipline economics.
Smith's arguments against mercantilism and in favor of free trade were a stark challenge to much of the protectionism, tariffs and gold-hoarding that prevailed at the time. He entered the University of Glasgow at the age of 15, and studied moral philosophy. His original interest in Christianity has been recorded as one that was ultimately rejected as that of a Deist, although this has been challenged. Adam Smith is sometimes called the father of modern trade in a world gone global. Imagine how much slower life would be had free trade not been encouraged and if hoarding of hard assets was the theme: economic life would be fairly bleak. At the end of his life, Smith had most of his manuscripts destroyed, and while some survived, the world never learned of all his final notes. (For related reading, see What Are Economies Of Scale? and Economics Basics.)
2. David Ricardo (1772 to 1823)
A large family could have contributed to Ricardo's drive - he was the third child of seventeen children from a Portuguese Jewish family.
His contributions to the study of economics were more hands-on than Adam Smith's; Ricardo joined his father to work on the London Stock Exchange at the age of 14, and quickly became successful at speculating on stocks and real estate.
After reading Smith's "The Wealth of Nations" in 1799 he took an interest in economics, although his first economics article was published nearly 10 years later. Ricardo was best known for the belief that nations should specialize for the greater good. He was also vocal in carrying forward the argument against protectionism, but he may have made his greatest mark on rents, taxation, wages and profits by showing that landlords seizing wealth at the expense of labor and renting were not good for the greater society.
He became a member of British Parliament representing a borough of Ireland in 1819, but he is one of the shorter-lived of the great economists because he died at age 51 in 1823. His greatest work "Essay on the Influence of a Low Price of Corn on the Profits of Stock" (1815) argued to repeal the corn laws at the time to better spread the wealth, and he followed it with "Principles of Political Economy and Taxation" (1817).
3. Alfred Marshall (1842 to 1924)
Marshall was born in London, and while he originally wanted to be in the clergy, his success at Cambridge led him into academia. Marshall may be the least recognized of the great economists, as he did not champion any radical theories, but he is credited with attempting to apply rigorous mathematics to economics in an attempt to turn economics into more of a science than a philosophy.
Despite his emphasis on math, Marshall strove to make his work accessible to regular people; his "Economics of Industry" (1879) became widely used in England as curriculum. He also spent almost 10 years working on the more scientific "Principles of Economics" (1890), which proved to be his most important work. He is most credited with perpetuating supply and demand curves, marginal utility and marginal production costs into a unified model.
4. John Maynard Keynes (1883 to 1946)
Historians sometimes refer to John Maynard Keynes as the "giant economist". The six-foot-six Brit accepted a lectureship at Cambridge that was personally funded by Alfred Marshall, whose supply and demand curves were the basis for much of Keynes' work. He is particularly remembered for advocating government intervention and monetary policy to mitigate the adverse effects of economic recessions, depressions and booms. During World War I he worked on the credit terms between Britain and its allies, and was a representative at the peace treaty signed in Versailles. (To read more about his theories, see Understanding Supply-Side Economics and Formulating Monetary Policy.)
Keynes was almost wiped out by the crash of 1929, but he was able to reaffirm his personal fortune. Keynes wrote the "General Theory of Employment, Interest and Money" in 1936 as the answer to the Great Depression to encourage government spending to promote consumption and investing. This has been deemed as the launch of modern macroeconomics. (To read more, see Macroeconomic Analysis.)
5. Milton Friedman (1912 to 2006)
Milton Friedman was the last of four children born to Jewish immigrants from Austria-Hungary. After getting his Bachelor of Arts degree at Rutgers and his master's at the University of Chicago, he went to work for the New Deal, a series of programs designed by U.S. President Franklin D. Roosevelt to provide relief to and recovery from the effects of the Great Depression. While Friedman was in favor of the New Deal overall, he was opposed to most government programs and price controls.
Milton Friedman was more of a laissez faire economist. He was for minimizing the role of government in a free market as the means of creating political and social freedom. These ideas formed the basis of his book "Capitalism and Freedom" (1962). He is perhaps best known for promoting free markets and credited with modern currency markets. His flotation in unregulated and unpegged markets was to the tune of "money is worth what people think it is worth." His works were even circulated underground during the Cold War, and were the basis for a consumption-tax based economy rather than an income tax or wealth tax. (To find out more about Friedman's ideas, see What Is the Quantity Theory of Money?)
Friedman believed that introducing capitalism to totalitarian countries would lead to the betterment of society and increased political freedom. Friedman won the Nobel Memorial Prize in Economic Sciences in 1976, and was adamant about the link between money supply and inflation. He gave a speech in 1988 to Chinese students and scholars in San Francisco that was deemed to be part of the Chinese economic reform in which he referred to Hong Kong as the best example of laissez-faire policies.
From Here On
Many economists work very hard to produce theories and ideas that they feel will help create a better society for all involved. Where these ideas are picked up and adopted into the everyday is how you divide the wheat from the chaff.
All of the men we covered had a profound effect on the world, but only time will tell how they impacted our current economists as they develop and shape where we head next.
To continue reading on this subject, see Hairline Fractures: Exploring The Dismal Science.