The Economists Behind the Famous Quotes

Adam Smith and the Butcher, Brewer and Baker

Adam Smith (1723–1790) is the source of two lines every economics student meets. The butcher-brewer-baker passage from The Wealth of Nations (1776) is his most precise statement that a commercial society coordinates strangers through their self-interest rather than their benevolence. The invisible hand is the second. What is worth knowing is how rarely Smith used it — once in each of his two books, and in the Wealth of Nations in a fairly narrow argument about why investors tend to favour domestic over foreign industry. The phrase's modern status as the summary of his entire philosophy is the work of later readers, particularly in the twentieth century. Reading Smith whole, alongside The Theory of Moral Sentiments, produces a thinker far more concerned with sympathy, justice and the abuses of merchants than the single phrase suggests.

Thomas Carlyle and 'the Dismal Science'

Thomas Carlyle (1795–1881) was a Scottish essayist and historian, not an economist, and his coinage of the dismal science in 1849 was a hostile label attached in a genuinely ugly context. His essay argued for restoring slavery in the West Indies, and part of his contempt for political economy was that its practitioners, reasoning from markets and from a universal view of human beings, opposed slavery. The widespread belief that the phrase refers to Malthus's grim population arithmetic is a later and more comfortable story; Carlyle's own target was the discipline's egalitarian and anti-slavery implications. Restoring that context is not pedantry, because the phrase is often deployed as if economists themselves adopted it, when in fact it began as an insult from someone whose position economics helped to discredit.

John Maynard Keynes, the Most Misquoted Economist

John Maynard Keynes (1883–1946) is quoted more than any other economist and misquoted almost as often. His line that in the long run we are all dead is from A Tract on Monetary Reform (1923), routinely and wrongly attached to the General Theory (1936), and routinely stripped of its point — a criticism of economists who offer only the reassurance that storms eventually pass. He coined animal spirits for the confidence behind investment, and wrote that practical men who believe themselves exempt from any intellectual influence are usually the slaves of some defunct economist. The remark often attributed to him about changing his mind when the facts change — when the facts change, I change my mind; what do you do, sir? — is popularly his but not reliably documented in his writings, and careful sources flag it as probably apocryphal.

Milton Friedman and the Free Lunch

Milton Friedman (1912–2006) is credited, correctly, with popularising there's no such thing as a free lunch as an economics slogan, and, incorrectly, with coining it. The phrase is older than his career and comes from the American saloon custom of a free lunch bundled into the price of drinks; Friedman used it as the title of a 1975 book and made it a compact statement of opportunity cost. He is also the source of inflation is always and everywhere a monetary phenomenon, a genuine and characteristic line summarising his monetarism. Friedman was an unusually careful writer, and he did not himself claim authorship of the free-lunch phrase, so the misattribution is entirely the work of later quoters who found it tidier to assign a memorable line to a memorable name.

Alfred Marshall and the Careful Definition

Alfred Marshall (1842–1924) is the source of the definition that still opens many textbooks: economics is the study of mankind in the ordinary business of life, from the first page of his Principles of Economics (1890). He also gave the discipline its most durable teaching image, that supply and demand determine price like the two blades of a pair of scissors, neither of which cuts alone — his rebuke to anyone who claimed that either cost of production or utility alone sets price. Marshall's quotability is of a different kind from the slogan-makers': his lines are definitions and analogies meant to clarify, and they have survived precisely because they are accurate rather than merely striking. He also cautioned that economic reasoning should be an engine of analysis rather than a body of settled doctrine.