Economic theory in retrospect

THIS BOOK is a study of the logical coherence and explanatory value of what has come to be known as orthodox economic theory. The history of this body of received doctrine goes back at least as far as Adam Smith. I am not concerned, however, with historical antecedents for their own sake. My purpose is to teach contemporary economic theory. But contemporary theory wears the scars of yesterday's problems now resolved, yesterday's blunders now corrected, and cannot be fully under stood except as a legacy handed down from the past. It is for this reason that I have adopted a historical presentation. Nevertheless, the focus is on theoretical analysis, undiluted by entertaining historical digressions or biographical coloring.

Students are often told of the inspiration to be derived from the study of the history of economics. They are not so often reminded of the inspiration which the historian of economic thought derives from a study of contemporary economic theory. In truth, one should no more study modern price theory without knowing Adam Smith than one should read Adam Smith without having learned modern price theory. There is a mutual interaction between past and present economic thinking for, whether we set it down in so many words or not, the history of economic thought is being rewritten every generation.