Cath News: We will soon witness the emergence of a new school of economic thought

Below is an excerpt of an article from CathNews about the emergence of a new school of economic thought.

“With an economic crisis that never seems to end and financial markets ever more volatile, it is an appropriate time to consider if anything is lacking in economic theory.

John D. Mueller did just that in a book published late last year titled: “Redeeming Economics: Rediscovering the Missing Element” (ISI Books). He argued that Adam Smith made a fundamental mistake in his economic theory, rendering it incomplete and unable to properly account for human behavior.

Mueller, currently the director of the Economics and Ethics Program at the Ethics and Public Policy Center, starts by tracing the main developments in economic theory. According to Mueller, Thomas Aquinas brought about a revolution in economics by synthesizing the ideas of Aristotle and St. Augustine.

Aquinas viewed economic activity as falling into four categories: production, exchange, distribution and consumption. It was Aquinas who for the first time in human history provided a complete description of human economic action, noted Mueller.

Centuries later Adam Smith brought about another revolution in economic thought, but he dropped two of the four categories of Aquinas. He eliminated the theory of consumption and of final distribution, in what came to be known as the classical theory of economics, which centered on production and exchange.”

By Father John Flynn LC, from CathNews

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