Grand Pursuit: The Story of the People Who Made Modern Economics

"Yes, Marx , Keynes , Fisher, Alfred Marshall—but also less well-known figures, like Beatrice Webb. I had no idea who Beatrice Webb was when I was studying economics, but she co-founded the London School of Economics and coined the term ‘collective bargaining.’ One of the things that’s interesting about Sylvia Nasar’s work is that she is trying to take some of the undisputed big players in economics and put them in a social context, describe how they’re related to each other but, also, focus the spotlight on less well-known thinkers. This book was very educational for me. As an undergraduate, I learnt economics as ahistorical, a kind of maths. This is a book that talks about the history of economic thought and makes it very personal. It talks about economic thinkers and their hopes and dreams and their personal failings. It also connects the thoughts they were having with the economic situation at the time. In the late 19th century, in the United States, people were starving to death because of the recession of 1897. Then there was the Great Depression . Then there was the post-war period and Bretton Woods. All these different experiences were shaping how economists thought about the world. It’s all in this book and I would say 99.9% of it was missing from at least my study as an undergraduate. So it was a great thing for me to read. I think knowing where these ideas come from makes you a better economist, but it’s also really interesting to read about people. Yes, Irving Fisher is the character who has captured me. He really was one of the founders of modern economic thought, but was basically completely disgraced by his failure to predict the Wall Street Crash of 1929. It was a very public failure because he was an enormously famous economic commentator and forecaster at the time. Not only that, but he was a multimillionaire and he lost everything—literally everything—in the crash. So he’s a fascinating and tragic figure. He was truly a genius and, yet, utterly failed in one of these central roles of what we expect from economists. John Kay says, ‘This stuff is nothing to do with economics,’ but for Fisher it was, definitely, to do with economics. He was very actively involved as an economic and financial forecaster and investor. What kind of economist were you if you couldn’t make profitable investments, and forecast economic fluctuations? As it turned out, he was the greatest economist on the planet, but he couldn’t forecast economic fluctuations, so there you go. Draw whatever modern-day lessons you like from that. “He was the greatest economist on the planet, but he couldn’t forecast economic fluctuations. Draw whatever modern-day lessons you like from that” People say Marx forecast the crisis of capitalism and Keynes was a successful investor so perhaps you’re not always doomed. It is. The early economists were also philosophers —people like Adam Smith and Karl Marx. Irving Fisher did the first ever PhD in economics at Yale. That was in the early 1890s. So just over a hundred years ago, the subject didn’t even exist. But I think it was Alfred Marshall who described economics as, “a study of mankind in the ordinary business of life.” Having said that economics defies easy definitions, you could do worse than that one."