Economics and the Public Interest: The Emergence of Economics as an Academic Subject during the 18th Century

Abstract

I. Contrary to a common belief, Economics as a specific academic subject was not a child of the liberal breakthrough which, in particular, affected the British and French debates on economic matters in the 18th century. Nor were the first chairs in this new subject established in these more progressive countries which during the later part of the same century saw the emergence, first, of the Physiocratic school, and later on the special brand of economics forever associated with the name of Adam Smith. Rather, economics as an academic field of study emerged and thrived within a quite different societal frame: inside the dirigiste and mercantilist states of Continental Europe. It was here that the first chairs were inaugurated with the special purpose of teaching General Householding (the contemporary term for what we would define as economics), economic legislation and commerce: first in Prussia (Halle in 1727 which appointed Simon Peter Gasser; Frankfurt and der Oder in 1727 with Dithmar; and Rinteln in 1730 with Furstenau), then subsequently in Sweden (Uppsala in 1741: Anders Berch; Abo in 1747: Per Kalm and Lund in 1750: Burmeister) and Italy (Naples in 1754: Genovesi). In economic policy terms Prussia, Sweden and Naples - as well as many other states during most of the 18th century - should be characterized as followers of the rather doctrinaire mercantilist gospel emphasizing the beneficial role of a net export surplus, the famous theory of the favorable balance of trade. However, this did not at all mean that its statesmen were bullionists and shared the illusion that gold and wealth were the same thing. This unjustified accusation was first addressed by the fierce French critic of mercantilism, Boisguilbert, and later on uncritically taken over by Adam Smith. Rather, first and foremost, mercantilists who followed this doctrine saw an export surplus as positive evidence of economic well-being. It showed that manufactures and industry were well