I am writing a book on why economists need to study the history of economics which is due at the publisher on New Year’s Eve. It has certainly kept me busy, but it has also kept me vastly entertained. Whenever I listen to the shallow maunderings of economists educated from some Samuelson clone, I can only laugh. But to the point at hand. In doing this research, I have been reading Arthur Latham Perry’s Political Economy, the 19th edition (!) published in 1887. He has a section on money and banking that is as long as some entire texts. Chapter XI deals with credit and there, in the summary (p 460), is this:
Good bankers are great benefactors
As it happens this is something I believe myself but the likelihood of such a sentiment appearing in an economics book today must be vanishingly low. I’m not even entirely sure that someone taking a course in economics that bypassed monetary theory would end up being guided through much in the way of a discussion of credit markets, their operation and their value. There is also this from that same chapter, which I am certain is not taught any more. And with this we have an overlap between economics and morals.
Here the vexed question arises, how far has one generation the right to throw upon succeeding ones the burdens of national debt? The true answer is, that it has a very limited right indeed. The opposite doctrine tacitly implies succeeding generations will have no occasion for extraordinary expenses of their own, and therefore may rightfully be made to contribute to the extraordinary expenses of this generation. But it is pure assumption to take for granted that the next generation will not have, of some kind or other, as much occasion for an extrordinary effort in the way of defence or of improvement as the present generation has had. It is an illusion to estimate what has now to be done as of much more importance than what will have to be done. Therefore to throw our burden forward on another generation that may have its own peculiar effort to make, just as great and just as imperatively called for, is an unwarranted procedure. (Perry 1887: 458-59)
If he could only see us now, bankrupting the future and laying waste to our potential. Economics was once part of the moral sciences. It is now for the most part a handbook for bureaucratic control and socialist predation.