What is economics about? It describes from one angle what people do all day. Jesus (of all people) once noted that since the days of Noah and Lot and until the end of the world, humans have been doing and will be doing four kinds of things. He gave these examples: “planting and building,” “buying and selling,” “marrying and being given in marriage,” and “eating and drinking” : in other words, we produce, exchange, distribute and use (or consume) our human and nonhuman goods. That’s the usual order in action. But in planning, first we choose For Whom we intend to provide, which we will express by the distribution of our goods; next What goods to provide as means for those persons; and finally How to provide these means, through production and (usually) exchange. So we might say that economics is essentially a theory of providence: it describes how we provide for ourselves and the other persons we love, using scarce means that have alternate uses. Scholastic economics began in the mid-13th century when Thomas Aquinas first integrated these four elements, all drawn from Aristotle and Augustine, to describe personal, domestic and political economy. The scholastic economic system is comprehensive, logically complete, mathematical, and empirically verifiable.
Classical economics (1776-1871) began when Adam Smith tried to chop the four scholastic elements to two: dropping Augustine’s theory of utility (which describes consumption) and replacing Augustine’s theory of personal distribution and Aristotle’s theory of social distribution with the mere assumption that everyone is motivated by self-love. This is how classical economics began with only two elements, production and exchange.
Today’s neoclassical economics (1871-c.2000) began when three economists dissatisfied with the failure of classical predictions independently but almost simultaneously reinvented the theory of utility, starting its reintegration with the theories of production and exchange.
I predict that in coming decades Neoscholastic or “AAA” economics (Aristotle, Augustine, Aquinas) will revolutionize economics once again by replacing its lost cornerstone – the theory of personal and social distribution.
John D Mueller The Development of Economics
There are two longer versions of the same argument in The Economist as Preacher, The Preacher as Economist (2008) and (2003).
