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Modern economics was founded sometime in the early 18th century, and since a vast and dramatic body of literature has developed around the subject - but not to develop in a unified pattern, a number of heretics quickly arose from the church of classical economics; from the Marxians to the Keynesians and everything in between, a beautifully impressive body of competitive works has defined, redefined and reredefined what economics is, and all of its basic tenets.

Before “modern” economics, which we say started sometime in the 1700s - often placed at the publication of Adam Smith’s canonical text; we had a number of movements that resembled economic thought, particularly European Mercantilism, and French Physiocraticism. Of which, neither fall in to the classification of formal economics, and both lack the structural and systematic processes required for formal knowledge creation.

Mercantilists - the dominant group of economists in Europe during the Pre-classical era starting after 1500. Mercantilism can be summed up quite simply: every available section of land should be used for agriculture, mining and manufacturing; all available workers should be employed; export of monetary items such as gold and silver should be prohibited, such that all currency or mechanisms of trade stay within the country; imports should be grossly frowned upon, and when necessary should be traded for other goods, rather than monetary goods. Mercantilism ended with Adam Smith’s publication of the Wealth of Nations, but in the interim had a strong effect on England and a number of other European economic giants. It’s interesting to note that Mercantilism brought the beginning of double-entry accounting, our primary form of bookkeeping for accountants today.

The Physiocrats, French Enlightenment thinkers of the 1760s including Mirabeau, Mercier de la Rivière, Nemours, and Trosne, believed in a rather radical (and even further misinformed) idea that the only process which yields a net product is agriculture, in that something is being produced that literally did not exist before. This on its premise, makes Physiocraticism a zero-sum game in modern game theory; where an input or modification in one place will only reallocate wealth, rather than build more. A total rejection of modern growth theory - if modern growth theory had existed at this point in time - the Physiocrats came up with a set of guidelines for political policy based on this premise. Namely, their suggestions to the political establishment were that all market interventions, if there were any at all (many Physiocrats took a laissez-faire approach to politics) should be directed at improving agriculture for any other induced distortions were guaranteed to be negative, since general commerce did not produce wealth in Physiocratic theory.

1. Pre-Classical Economics (before 1776)
2. The Classical Era (1776 - 1870)
3. Karl Marx and Rejections of Classical Economics (1870s)
4. Neoclassical Economics and Beyond (1871 - today)
5. View all pages.

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