Exam (elaborations)
ECS3705 Exam pack 2025(History of Economic Thought)
- Course
- History of Economic Thought
- Institution
- University Of South Africa
ECS3705 Exam pack 2025(History of Economic Thought)
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ECS3705 EXAM PACK2025
QUESTIONS AND
ANSWERS
FOR ASSISTANCE CONTACT
EMAIL:gabrielmusyoka940@gmail.com
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Notes for the Lessons ECS3705 History of Economic Thought
Contents
OVERVIEW OF THE MODULE .................................................................................................................. 3
Economic history and economic thought: an introduction to subject matter ....................................... 3
PART 1 PRE-CLASSICAL THOUGHT – MERCANTILISM AND PHYSIOCRACY ................................................ 3
MEANING AND PURPOSE OF MERCANTILISM ..................................................................................... 4
Preface .............................................................................................................................................. 6
Beyond mercantilism: the rise of physiocracy and the classical thought ................................................. 6
PHYSIOCRACY .................................................................................................................................... 7
PART 2 THE CLASSICAL SCHOOL – ADAM SMITH ................................................................................... 12
ADAM SMITH (1723–1790) .............................................................................................................. 12
RELEVANCE FOR SUB-SAHARAN AFRICA ....................................................................... 16
PART 3 THE CLASSICAL SCHOOL: THOMAS ROBERT MALTHUS, DAVID RICARDO AND JOHN STUART MILL
............................................................................................................................................................ 19
Preface......................................................................................................................................... 19
Robert Malthus [Read Roncaglia, 2005 pages 157–164] ................................................................... 20
David Ricardo ................................................................................................................................... 20
Ricardo’s main contributions in economic thought ......................................................... 21
The Industrial Revolution ................................................................................................................ 24
John Stuart Mill ............................................................................................................................... 25
PART 4 SOCIALISM AND MARXISM ....................................................................................................... 27
SOCIALISM ................................................................................................................................... 27
Various forms of socialism ....................................................................................................... 28
MARXISM – KARL MARX (1818–83) ........................................................................................ 33
Profit .......................................................................................................................................... 35
Marx’s influence [also see Roncaglia, 2005 pages 244–272] ................................................. 36
Criticisms of Marx’s economics ............................................................................................... 36
PART 5 MARGINALISM AND THE NEOCLASSICAL SCHOOL..................................................................... 41
MARGINALISM ................................................................................................................................. 41
Introduction .............................................................................................................................. 41
Marginalism and optimisation .............................................................................................. 43
Walras’s contributions ........................................................................................................... 44
THE NEOCLASSICAL SCHOOL ............................................................................................................ 44
Introduction .............................................................................................................................. 44
Alfred Marshall’s influence .................................................................................................... 45
RELEVANCE FOR TODAY ..................................................................................................... 46
PART 6 THE GERMAN HISTORICAL SCHOOL AND THE INSTITUTIONAL SCHOOL ..................................... 48
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The German historical school .................................................................................................. 48
An overview of the German historical school ................................................................... 56
The Institutional school ............................................................................................................. 57
RELEVANCE FOR SUB-SAHARAN AFRICA ...................................................................................... 61
PART 7 KEYNESIANISM AND THE CHICAGO SCHOOL ............................................................................. 62
KEYNESIAN SCHOOL (MAINSTREAM) ................................................................................................ 62
Keynes’s main propositions ................................................................................................. 62
Contributions of Keynes ........................................................................................................ 63
Critiques to Keynes’s theories ............................................................................................. 66
POST-KEYNESIAN SCHOOL ..................................................................................................... 67
NEW KEYNESIAN SCHOOL ....................................................................................................... 69
Preface ...................................................................................................................................... 69
Theoretical foundations of the new Keynesian economics ............................................ 70
RELEVANCE FOR TODAY ..................................................................................................... 72
THE CHICAGO SCHOOL ............................................................................................................ 73
Introduction .............................................................................................................................. 73
Essential elements (tenets) of Friedman’s monetarism .................................................. 74
Contributions of monetarism ................................................................................................ 75
Diversions in monetarism ...................................................................................................... 78
New classical macroeconomics ........................................................................................... 79
RELEVANCE FOR AFRICA – practical application .......................................................................... 86
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OVERVIEW OF THE MODULE
Economic history and economic thought: an introduction to subject matter
Briefly stated, History of Economic Thought is a reflection in people’s minds about economic
processes that occur in economics history in the
context of systems of political economy. In our study
Important terms and of history of economic thought, we shall be more
phrases concerned with economic ideas that characterise
Mercantilism each school of thought. We shall, therefore, be
Manufacturers treating the history of economic thought along the
Merchants following lines:
Trade - Pre-classical economic thought
Fear of goods - Classical economics thought
Value - Socialism and Marxism
Bullionism - Marginalism and Neoclassical schools
- German historical school and the Institutional
Trade-surplus
school
Inflation
- Keynesian school
Interest rate
- Post-Keynesian thought
Price
Physiocracy
Laissez faire
PART 1 PRE-CLASSICAL THOUGHT –
Classical school MERCANTILISM AND PHYSIOCRACY
Labour theory of value
Industrial revolution
After studying this section, you must be able to:
Tableau Economique
- analyse the main elements of the
Single tax
pre-classical thought, namely, mercantilism and
Landlords
physiocracy; and
Social classes
- determine and motivate the relevance of pre-
Sterile classical theory to sub-Saharan Africa.
Surplus
Economic literature has taken different dimensions
and shapes from as early as 300 BC when aristocratic
figures like Plato, Aristotle, Alexander the Great and
so on dominated and influenced the political economy
of the time. However, the systematic works on
economics of that time were few and mostly driven by
3
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