The Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes

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The Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen M. E. Sharpe * 2007 * 256 pages * $25.95

Reviewed by David L. Littmann

It is a rare book that treats readers - even those who've never taken economics - to a comprehensive understanding of the forces and policies that ultimately determine prosperity and liberty for themselves and future generations. The Big Three in Economics by Mark Skousen accomplishes that, supplying essential historical perspective on the best-known names and evolutionary developments in economics.

This fascinating study focuses on the luminaries that have dominated economic conversations and debates since 1776. Adam Smith's eighteenth-century Wealth of Nations inquires into and documents the causes of wealth and prosperity. Karl Marx's nineteenth-century Das Kapital is a treatise on victimization by an economic system rooted in individual property rights and "natural liberty." It calls for centralization of authority in government that would facilitate redistribution of income and wealth. J. M. Keynes's twentieth-century General Theory outlines a framework to justify specific policy prescriptions for reestablishing systemic stability and maintaining economic security during business cycles.

Not only do Skousen 's succinct examinations of the "Big Three" clarify the principles of economics for unsophisticated readers, they also furnish insights into and resonate marvelously with 2008's election-year polemics. The entire book crystallizes basic economic issues and delivers the intellectual tools to differentiate rhetoric from reality. For example, during 2008 alone, we've had the spectacle of one presidential candidate labeling the oil industry's barely average profit margins "egregious," while the other candidate (along with Congress and various regulatory bureaucracies) fingers so-called "oil speculators" for possible criminal investigations. Thanks to Skousen's research and dozens of prescient quotations, the curious investigator - layman or Ph.D. economist - can separate hyperbole and scapegoating from objective analysis.

Equally enlightening, Skousen surrounds Smith, Marx, and Keynes with their contemporary and historical disciples, who served to reinforce the message. An excellent example of this "reinforcement" effect, which helped Adam Smith's economic principles win the day, is the work of Jean-Baptiste Say.

Despite its title, the book isn't exclusively about Smith, Marx, and Keynes. It describes the influence of David Hume and the French Physiocrats on Adam Smith; the impact of Reverend Thomas Robert Malthus, David Ricardo, and Friedrich Engels on Marx; and the works of Alfred Marshall plus the English marginalist school, which provided the broad shoulders on which Keynes stood. …