Economists and Economic Change

Abstract

In human affairs, power complements authority and is essential to its exercise. All life forms develop and use physical energy in the living process, but only man possesses power to direct his fellows to his bidding. In addition to physical power, he employs economic and moral power for this purpose. Authority-applying physical, economic, and moral sanctions to direct and control activity in utilizing nature's resources and distributing richesestablishes the pattern of the economy and affects the quality of a civilization. This paper examines briefly the role of economists and institutions in three economic periods distinguished by differences in the exercise of authority and power in economic affairs: (1) the feudal and mercantile eras of John Locke and Adam Smith; (2) the classical laissez-faire period of the nineteenth and early twentieth centuries; and (3) the era of concentrated economic authority from the Great Depression to the present. In the seventeenth century, John Locke challenged the structure of feudalism; in the eighteenth, Adam Smith, that of mercantilism; and in the nineteenth, Karl Marx challenged capitalism. Locke's and Smith's orthodox followers have basked in the ideological support the classical framework provides to those wielding economic authority. The same is undoubtedly true of Marxian adherents in communist economies. In the last half-century, however, orthodox theorists have been on the defensive as classical abstractions have failed to provide solutions to public