The Economic Schools of Thought video posted by CrashCourse on YouTube recently caught my attention since it purportedly provides an historical overview of economic theory over the last 200 plus years. Since it is impossible to cover any “school of thought” in depth in 10 minutes, the video touches on the various schools in a brief, albeit superficial manner.
Starting with the 1798 theory propounded by Thomas Malthus that world population growth would outpace food production, host Jacob Clifford pointed out this was where economics became labelled a “dismal science.” Over time, Malthus’ theory proved wrong due to the advancements made during the industrial revolution – world population reached 7 billion in 2012. The video goes on to touch on the following topics: social Darwinism, Adam Smith’s seminal work The Wealth of Nations, David Ricardo’s theory of comparative advantage, Karl Marx and Friedrich Engel’s theory of conflict between workers and property owners in The Communist Manifesto and Marx’ later work Das Kapital, the rise of Classical Economics and Alfred Marshall’s concepts of supply and demand and marginal demand, John Maynard Keyne’s introduction of macroeconomics and proposal for government intervention, the rise of Socialism and Keynesian economic policies, free market policies advocated by Ludwig von Mises and Friederich Hayek and the Austrian School of economics, a “backlash against government intervention” and a proposal for privatization by Milton Friendman and the Chicago School of Economics, the problem of the 1970s “stagflation”, “monetarism”, “supply-side economics”, “new neoclassical synthesis”, “deficit spending”, and “austerity”.
Near the conclusion of the video, host Adrienne Hill suggests that “strict” communist nations such as China and Cuba have “moved towards capitalism” while “many capitalist countries have adopted socialist-looking programs. It appears the world’s economies are converging towards the middle.” Some would argue this explanation is flawed. Capitalism, at least in terms of the United States’ economy, gave way to participatory fascism decades ago.