This book offers a radical revision of modern economic theory. Its starting point is the existing body of both micro and macro economics, as developed in such textbooks as Economics by Begg, Fischer and Dornbusch and Positive Economics by Lipsey and Chrystal. Following a similar framework to these books, it adjusts the whole range of theory by introducing some new concepts and other earlier ones that have been much neglected in the economic thought of the past century. These are related especially to the fundamental part played by land, in it proper sense of all natural resources available on the earth, the significance of credit, especially through the banking system, and the crucial impact of the method of taxation.
The resulting analysis yields a thoroughly revised version of the contemporary model of a capitalist economy, so that a genuine âthird wayâ is revealed. This is not a mere modification of the present system of absentee ownership confronting a market for labour, with all the attendant evils of unemployment, monopoly and maldistribution of wealth and income. Rather it is a system based upon natural law, exhibiting economic security for all, fair distribution of output and, above all, the opportunity for self-fulfilment through work.
The ânew modelâ draws upon the masters of economic thought from Smith and Ricardo to Marshall, Schumpeter and Keynes, by highlighting concepts often omitted from current studies of their works; such as Ricardoâs analysis of scarcity and differential elements of rent, Schumpeterâs view of the role of banking and Keynesâs hints at a labour theory of value. Indeed this far-reaching revision makes bold advances upon the Marshallian theory of the firm and the Keynesian theory of national income determination, thus providing new insights into both micro and macro theory. It remains faithful, however to the tradition of these latter thinkers in explaining matters fully in words, and resorting to mathematics mainly through the use of diagrams intelligible to anyone with an elementary grasp of the subject.
Whilst the book strives to avoid value judgements in the interests of social science, it undoub-tedly carries strong implications about economic policy. These are bound up with the central notions of free land and free credit, which have been singularly ignored by policy-makers since a few valiant attempts to introduce them in the early twentieth century. Hence the ânew modelâ is offered to both theorists and practitioners of economics, to politicians and public servants, but particularly to those who, like the author, truly seek a new vision of the subject.