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Course Co-ordinated by IIT Madras
Prof. S.S.SivaKumar
IIT Madras


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Part A:
This syllabus consists of a study of the History of Economic Theory from a perspective of the History of Economy, Society and Ideas. The perspective is that the world of ideas is grounded in the socio-economic mileu, and that economic ideas are a part of such world of ideas.

In Part A, we first outline the relationship between the two central issues of scarcity and uncertainty, with different forms of socio economic organization, such as hunting-gathering, pastoral and agrarian socio economic organization.
We then outline the role of uncertainty in the emergence of faith based universals in the social construction of knowledge. This is contrasted with the role of experience in the social construction of knowledge. The tension between these two approaches is highlighted.

Ancient Greek thought is discussed from the perspective of this tension, and the the existence of the two approaches is detailed from the point of view of ancient Greek thought. We also discuss The historical emergence of Christianity and its effect in the complete domination of faith in the construction of knowledge in the western world, until the end of the middle age.

Part B:
The next historical epoch consists of decline of feudalism, the emergence of the nation state, the mercantile revolution, the Reformation of the Church, the new philosophy and the birth of reason as a driving force in human thought.

Our discussion of ideas in this epoch, commences with Scholasticism, and goes through the emergence of Humanism and renaissance.

The birth of economics in its modern form at this time is discussed, along with the rise o mercantilist ideas. The debate over mercantilism follows. The Hume-Stewart debate is highlighted in this context.

This is followed by a discussion of the emergence of the idea of ‘natural order’ in European thought. The works of the Physiocrats and of Galiani have been taken to show how the market economy was increasingly thought of as the ‘natural order’

Part C:
The economic ideas of Adam Smith and the concept of the ‘invisible hand’ as an economic variant of ‘natural order’ are discussed next. Smith’s ideas are located in the context of the age of enlightenment, in particular in the context of the idea of ‘social contract’.

This followed by the discussion on the positions of Ricardo and Malthus on the political economy of the market economy, Ricardo’s theoretical work, and the equilibrium economics of Say and Walras. Finally variations on the idea economic equilibrium in the works of Dupuit, Gossen and von Thunen are discussed.

Part D:
This part consists of the developments in economics subsequent to classical political economy. Socialism and the works of Marx constitute the chronological and logical sequel to Classical political economy.  The works of Marx, in the areas political economy and revolutionary ideology, are discussed in some detail.

Another sequel was the emergence of neo-classical economics. This too is discussed in some detail, and is followed by the detailing of the coming of Keynesian economics. Discussion of the recent emergence of institutional economics and evolutionary economics follow our discussion of Keynesian economics.

The course concludes with a review of the historical development of the science of economics, from an evolutionary perspective of the social construction of knowledge.

Lecture No.



The Socio-Economic Role of Scarcity and Uncertainty


The Process of Construction of Knowledge


The roles of Faith and Experience


From Orphism to the Milesians in ancient Greece


Pythagoras and Heraclitus


From Parmenides to the atomists


From the ancient Greece to the emergence of Feudalism


Feudalism and the growth of the Church


The age of Faith: Europe until the crusades


The beginnings of modernity


Scholasticism and St.Thomas


Transformation of Europe towards modernity


Birth of political economy: mercantilism


The debate over mercantilism: Hume and Cantillon


A postscript to mercantilism: Hume and James Stewart


‘Natural Order’ and the market: Quesney and Galiani


Smith: the Invisible Hand


Smith: Growth theory, long run equilibrium and Institutions


Ricardo-Malthus debate


Ricardian economics and more


Equilibrium of the market: from Say to Walras


More on Equilibrium: Cournot, Dupuit, Gossen, von Thunen


Socialists and Marx


The economics of Marx


Marx as an ideologue of revolution


Arrival of modern universals in Economics: Neo classical school


Economic Theory at the time arrival of Keynes


The centrality of the idea of efficiency in the study of market


Keynesian Revolution: Macroeconomics


Keynesian economics


Economics of Institutions


Transaction cost and Economic Anthropology approaches


Evolutionary Economics: the idea of change as evolution


From Schumpeter to neo Schumpetarian evolutionism


The social construction of knowledge: Case of Economics


The social construction of knowledge: Adaptation and Revolution

  1. Higher Secondary (plus 2) level education.

  1. C. Gide and C. Rist, A History of Economic Doctrines From the Time of the Physiocrats to the Present Day, D. C. Heath, Boston, 1915.

  2. J.A. Schumpeter, History of Economic Analysis, Allen & Unwin (Publishers) Ltd, Great Britain, 1954.

  3. M. Blaug, Economic Theory in Retrospect, Richard D. Irwin, Homewood, Illinois, 1962.

  4. M. Blaug, Economic History and the History of Economics, New York University Press, New York, 1986.

  5. E. Screpanti and S. Zamagni, An Outline of the History of Economic Thought, Oxford University Press, NewDelhi, 2006

  6. L. Robbins, A History of Economic Thought: The LSE Lectures, Princeton University Press, Princeton, New Jersey, 1998.

  7. E. Roll, A History of Economic Thought, Faber and Faber Limited, London, 1938.

  8. R.L. Heilbroner, The Worldly Philosophers: The Lives, Times and Ideas of the Great Economic Thinkers, Touchstone, New York, 1953.

  9. B. Russell, History of Western Philosophy, George Allen and Unwin Ltd, London, 1946.

  10. H. Heaton, Economic History of Europe, Harper and Brothers, New York and London, 1936.

  11. J. P. McKay, B.D. Hill and J. Buckler, A History of Western Society, Houghton Mifflin, Boston, 1979.

  12. D. MacCulloch, Christianity: The First Three Thousand Years, Allen Lane, London, 2009.

  1. Charles Gide and Charles Rist, A History of Economic Docterines, George Harrap and Co., London.

  2. Marc Blog, Economic Theory in Reteospect.


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