The Genesis of Neoclassical Economics

The Disquieting Muses by Giorgio de Chirico
An illustration of The oracle of Delphi

It is believed that Pythia informed a gem trader that soon his wife would give birth to a boy who would change the world, therefore, predicting the birth of the Ancient Greek cult leader and Mathematician, Pythagoras.

Pythagoras (c. 570–495 BC) is mostly remembered as a mathematician, famous for the Pythagorean Theorem (a2 + b2 = c2) and is probably the most influential ancient Greek to have left his mark on western civilization. Pythagoras traveled the world, learning from sages and mystics before he became the leader of the pseudo-religious cult that worshipped numbers, known as Pythagoreanism. His followers, known as the Pythagoreans, gave up material possessions, became vegetarian ascetics, and studied under a vow of silence.

A painting of the Pythagoreans — a math cult.

To connect the dots, Newton was a great Pythagorean, and his insights about the law of gravity were as astounding as Pythagoras's insight into music and maths.

This gave rise to the famous 16th-century doctrine of Newtonianism. It is a philosophical and scientific doctrine inspired by the beliefs and methods of natural philosopher Isaac Newton. As the Pythagoreans always said: ‘Spread the truth — one set of laws work everywhere’, The Newtonian approach known as rational mechanics, was a parallel of Pythagorean philosophy and has an enormously powerful effect in all fields, from electromagnetism to chemistry to geology. Expanding on the Newtonian approach, it followed that the motion of anything could be predicted using mechanics. This served as a blueprint for numerical prediction — reduce a system to its components, discover the physical laws that govern them, express the equations and then solve.

Neoclassical Economics is based on an explicit association with Newtonian physics. How? Well, just as Newton believed that minute particles knock off one another but are unchanged, similarly Neoclassical theory assumes that the economy is made up of unconnected individuals who interact or ‘knock off each other by exchanging goods and services but are otherwise unchanged. Their behavior can be predicted using economic laws, which are as universal as the laws that govern the cosmos.

This brings us to the end of this historical and intellectually stimulating journey of how Neoclassical economics came to be. It continues to form the basis of orthodox economic theory and is a part of the core curriculum taught to future economists and business leaders. When understood in such depth and detail, it might be the most powerful tool in modern history.



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Aditi Solanki

A 19 year old undergraduate economics student who writes about multidisciplinary explorative ideas