Introduction

The premise of the book: economic theory reached its peak level of analytical understanding with the nineteenth-century classical school, and in particular, with the economic theory presented in John Stuart Mill’s Principles of Political Economy, whose first edition was published in 1848. The introduction includes a brief discussion of why classical economic theory has been the only occasion when the actual circumstances of the time – the beginning of the Industrial Revolution – meant that the presuppositions that assume the certainty of strong rates of growth and rising living standards were not at the time in operation. The description of the operation of an economy was precisely the kind of economy in which entrepreneurial-driven businesses create value under the pressures applied by a market economy. The introduction includes a broad summary of the arguments that underpinned classical economic theory which are amplified across the remainder of this book.