CHAPTER 5 - J.S. MILL AND THE CLOSE OF CLASSICAL ECONOMICS

Abstract

This chapter focuses on J. S. Mill and the close of classical economics. It discusses equilibrium of demand and supply. John Stuart Mill published Essays on some Unsettled Questions of Political Economy in 1844. In the same year, On the Measurement of the Utility of Public Works by Jules Dupuit appeared. Dupuit was an important pioneer of the marginal revolution. Similarly, 1848 was the year of Mill's Principles of Political Economy and that of The Communist Manifesto of Marx and Engels. New paradigms began to be developed to replace that of classical economics. Mill played the role of rear guard in the retreat of classical economics. As the history of armies shows, to bring up the rear is the most difficult task. Whether Mill played the role successfully or not depends on how the essence of classical economics is interpreted. Currently there are two different interpretations, both emphasizing the significance of classical economics to contemporary economics, that is, those of the neo-Ricardians and the new classical economics. Neo-Ricardians and post-Keynesians insist on linking Keynesian economics with classical economics rather than synthesizing it with neo-classical economics.