Essays on economic transition

GREAT economists have always been those who grappled with major issues of policy. It is no accident that the science was originally known as political economy and that its founders, Adam Smith and Ricardo, were referred to as the classical economists; Marx can be regarded as the last in this tradition. There is a long gap between J. S. Mill and the 'thirties, and it is significant that at that time economists again appeared who achieved both greatness and fame. Thus Wicksell and Keynes achieved major theoretical advances while grappling with contemporary problems of public policy.

During the long period of virtual eclipse of political economy, many distinguished economic theorists appeared who transformed the subject into a sophisticated theory of price relationships within a static equilibrium framework. There was little discussion of the determinants of the total volume of economic activity and of growth, which had been the major preoccupation of the classical economists. The economists of this era have been called, with some justice, apologists. Whether or not it was their conscious intention, their theories seemed to provide a justification for the capitalist system as it existed and an argument för non-interference by the State.