Note: This is a guest post by Neil Kay. It is part of a chapter that he is writing for a book that I am editing with David Rooney and Greg Hearn called Handbook of the Knowledge Economy, volume 2. We’ll post Neil’s chapter as he writes it over the next few weeks. He explains the overall theme of the chapter here. I’ll do the same with mine, which is seriously overdue too. – Tim
I have a nice addendum for my blog “The World is getting more complex – or is it” Professor John Foster (UQ Economics) sent me some useful comments on my other blog on Mankiw and mentioned Alfred Marshall (widely regarded as the first modern economist) and whose “Principles of Economics” was first published in 1890.
John’s mention of Marshall prompted me to go back to original sources and I found this gem in Marshall which really is an interesting addition to the question of whether the world is more (or less complex) than say 100 years ago:
The conditions of industry change so fast that long experience is in some trades almost a disadvantage, and in many it is of far less value than a quickness in taking hold of new ideas and adapting one’s habits to new conditions. A man is likely to earn less after he is fifty years old than before he is thirty; and the knowledge of this is tempting artisans to follow the example of unskilled labourers, whose natural inclination to marry early has always been encouraged by the desire that their family expenses may begin to fall off before their own wages begin to shrink. (“Principles” VI.XII.38)
That is a remarkable paragraph which raises so many questions when it is set against modern experience (and not just about complexity, but also rate of innovation, distribution of income, demographics, amongst other things) that it is best just to let it percolate.
Mind you, Marshall was not always right, I also found this other gem “Adam Smith was not indeed the only great English economist of his time”. (“Principles” App.B.9)
Indeed (said the Scot through gritted teeth), and Adam Smith was not even an English economist.