the table is an invention, but the economics is not; here, for each element, the real idea it dramatizes and the canonical works and minds that built it
Why it points outward A frame points beyond itself, to the thing it frames. Where the table gave you a symbol and an engraving, this companion gives you the book to read instead — not to dispel the conceit but to complete it, and to return the reader to the genuine and unfinished science the whole table was always pointing at.
A scholarly work ends with its sources — the books it leaned on, set down for the reader who wishes to go further. This one owes that note more than most, because its frame is a fiction. There is no periodic table of economic life; the elements, the groups, the engravings are an invention, a way of seeing. But the economics is not invented. Behind every element on the table stands a real and serious literature, argued into being by real minds over the better part of three centuries.
What follows is that literature, element by element: for each, the real idea the fiction dramatizes, and the canonical works and thinkers who built it. The wage’s long quarrel runs from Smith to the minimum-wage economists of our own day; the asymmetry is Akerlof’s lemons; the commons is Hardin’s tragedy and Ostrom’s answer to it. Where the table gave you a symbol and an engraving, here is the book to read instead.
This is not an apology for the conceit but a completion of it. The table was only ever a frame — a device to make the familiar strange again, to denaturalize quantities that long acquaintance had flattened into facts. Search the sources below by element, by thinker, or by work; the same names recur across the table, and to trace one — Coase through the firm and the externality, Stiglitz through the asymmetry and the wage — is its own kind of map.
The Prices
The price of labor, and the long quarrel over what sets it.
The classical labor theory of value in Adam Smith’s The Wealth of Nations (1776) and David Ricardo; the marginal-productivity account of John Bates Clark, The Distribution of Wealth (1899); efficiency-wage theory after Carl Shapiro and Joseph Stiglitz; and the empirical minimum-wage debate reopened by David Card and Alan Krueger.
The return to a fixed factor, earned for ownership rather than for effort.
David Ricardo’s theory of rent in his Principles of Political Economy and Taxation (1817); Henry George’s case against the private capture of land in Progress and Poverty (1879); and the theory of rent-seeking developed by Gordon Tullock and Anne Krueger.
The price of time, and the premium the present charges the future.
The time-preference theory of interest in Eugen von Böhm-Bawerk and Irving Fisher’s The Theory of Interest (1930); Knut Wicksell’s natural rate; and the liquidity-preference account in Keynes.
The price of bearing risk, and the reward for holding what might fall.
Frank Knight’s distinction between measurable risk and true uncertainty in Risk, Uncertainty and Profit (1921); Harry Markowitz’s portfolio theory (1952); and the Capital Asset Pricing Model of William Sharpe and others.
The intermediary’s price — the gap between buying and selling, bid and ask.
Harold Demsetz on the cost of transacting (1968); the market-microstructure tradition that followed him; and the no-arbitrage principle at the center of modern finance.
The Quantities
The increment on which every economic decision is, in truth, made.
The marginal revolution of the 1870s, arrived at independently by William Stanley Jevons (The Theory of Political Economy, 1871), Carl Menger (Principles of Economics, 1871), and Léon Walras.
The gain above cost — read by the mainstream as welfare, by Marx as extraction.
Consumer surplus in Jules Dupuit (1844) and Alfred Marshall’s Principles of Economics (1890); and surplus value, the unpaid labor at the heart of profit, in Karl Marx’s Capital (1867).
The measure of satisfaction the whole edifice is built to maximize.
Jeremy Bentham’s utilitarian calculus; the ordinal turn and revealed preference of Paul Samuelson (1938); and the expected-utility theory of John von Neumann and Oskar Morgenstern (1944).
The accumulated quantity — capital, the standing pool behind every flow.
The capital theory of Böhm-Bawerk; and the Cambridge capital controversy between Joan Robinson, Piero Sraffa (Production of Commodities by Means of Commodities, 1960), and their opponents in Cambridge, Massachusetts.
The Failures
The ability to set the terms that others can only take or leave.
Antoine Augustin Cournot’s analysis of monopoly (1838); and the theories of imperfect and monopolistic competition published in the same year by Joan Robinson (The Economics of Imperfect Competition, 1933) and Edward Chamberlin.
The cost or the benefit that falls on a third party, outside the price.
Arthur Pigou’s The Economics of Welfare (1920), the source of the corrective tax; and Ronald Coase’s rejoinder, The Problem of Social Cost (1960).
The contest in which one side can see the cards and the other cannot.
George Akerlof’s The Market for Lemons (1970); Michael Spence’s theory of signaling (1973); Michael Rothschild and Joseph Stiglitz on screening (1976); and Kenneth Arrow on medical care (1963).
The shared resource that private incentive, left alone, tends to exhaust.
Garrett Hardin’s The Tragedy of the Commons (1968); and Elinor Ostrom’s great rebuttal, Governing the Commons (1990), showing how communities sustain what the theory said they could not.
The Institutions
The island of planning in the sea of the market, and why it exists at all.
Ronald Coase’s The Nature of the Firm (1937) and its transaction-cost answer; Oliver Williamson’s elaboration of it; and the principal-agent theory of Michael Jensen and William Meckling (1976).
The binding of a future, and what to do when it cannot be written whole.
The theory of incomplete contracts developed by Sanford Grossman, Oliver Hart, and John Moore; and the contract theory of Bengt Holmström, on which much of modern organizational economics rests.
The promise everyone agrees to accept, and the quarrel over what governs it.
Carl Menger’s account of money’s spontaneous origin (1892); Irving Fisher’s quantity theory; and the monetarism of Milton Friedman and Anna Schwartz’s A Monetary History of the United States (1963).
The state’s claim, and the search for the least-damaging way to levy it.
Frank Ramsey’s optimal-taxation problem (1927); James Mirrlees’s theory of optimal income taxation (1971); and Paul Samuelson’s theory of public goods (1954).
The rules of the game, the deep variable beneath every functioning market.
Douglass North’s Institutions, Institutional Change and Economic Performance (1990); the constitutional economics of James Buchanan; and Daron Acemoglu and James Robinson’s Why Nations Fail (2012).
The Aggregates
The recurring slump, and the deepest disagreement in all of macroeconomics.
John Maynard Keynes’s The General Theory of Employment, Interest and Money (1936); the real-business-cycle theory of Finn Kydland and Edward Prescott (1982); and Hyman Minsky’s financial-instability hypothesis.
The slow miracle of more, and the engine no one fully commands.
Robert Solow’s growth model (1956) and its mysterious residual; the endogenous-growth theory of Paul Romer (1990); and Joseph Schumpeter’s creative destruction in Capitalism, Socialism and Democracy (1942).
The general price level, and the contested trade-off behind inflation.
A. W. Phillips’s curve (1958); its expectations-augmented correction by Milton Friedman and Edmund Phelps (1968); and the rational-expectations revolution of Robert Lucas.
The division of the whole, and the question of who gets what, and why.
Simon Kuznets’s inverted-U hypothesis (1955); Anthony Atkinson’s lifelong study of inequality; Thomas Piketty’s Capital in the Twenty-First Century (2014); and the measure devised by Corrado Gini (1912).
The Behaviors
The rational agent at the very center of the standard model.
Paul Samuelson’s revealed preference (1938); the expected-utility axioms of von Neumann and Morgenstern (1944); and Gary Becker’s extension of rational choice to all of human behavior in The Economic Approach to Human Behavior (1976).
The systematic departures of the real mind from the rational ideal.
Herbert Simon’s bounded rationality (1955); the prospect theory of Daniel Kahneman and Amos Tversky (1979); and the behavioral economics of Richard Thaler.
Strategy among the interdependent, where each choice anticipates the rest.
John von Neumann and Oskar Morgenstern’s Theory of Games and Economic Behavior (1944); John Nash’s equilibrium (1950); and Thomas Schelling’s The Strategy of Conflict (1960).
The rule no one wrote and everyone enforces, holding the market in place.
David Lewis’s Convention (1969); Jon Elster on social norms; and the economics of identity of George Akerlof and Rachel Kranton (2000).
It should be said plainly, at the very end, what this whole elaborate table has been for. It is not a contribution to economics; it invents no theory and settles no dispute. It is a way of reading the economics that already exists — a lens ground to a single prescription, which holds that no economic quantity is a natural fact, and that every one of them repays being looked at as the outcome of a contest. The lens is the book’s; the light it gathers comes from the works named above.
And those works are not closed. The reader who arrives here, at the sources, stands not at an ending but before a set of doors, each opening on an argument still live. The quarrel over what sets the wage is not over; the disagreement about the cycle has, if anything, sharpened; the question of how the surplus should be divided is as open in the legislature as on the page. The literature this table points toward is not a settled deposit of findings but a conversation still in progress, and the table’s whole hope is to return the reader to that conversation able to hear, in any price, the contest it has learned to listen for.
So the table is a door, not a room. It was built to be walked through and left behind — its symbols traded back for the real names, its engravings for the real books, its careful fictions for the genuine and unfinished science they were always pointing at. If it has done its work, you will not stay. You will go on to Smith and Marx and Keynes and Ostrom, to the journals and the arguments of the present, where the verdicts are still being handed down and still, every one of them, open to appeal. The table ends here. The argument it was made to reveal does not.
Return to the atlas for the elements in their order, the chronology for the thinkers set in time and the schools for the traditions they founded; the objections for the case against the book, the gaps for what it leaves out and the priceless for where it stops; the cases for the table at work, the first person for how it is lived, and the measures for the numbers; the compounds and constellation for how the elements join, the properties and diagonals to read across them, the laboratory for the models, the preface for the argument entire, the guided tour for a path, the index to find any element by name, or the unsettled for the contests our own moment reopens. The table is the door; the works above are the room. The argument remains open.