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• 1 2017-07-20T09:13:01-07:00 Political Economy to Economics 8 plain 2017-10-07T07:50:53-07:00 In the 1880s, a new discipline emerged in American universities: economics. This field of study took the place of the political economy that earlier generations of students had learned, and it conceived of economic activity differently, as the property of a self-contained, autonomous entity (“the economy”) rather than as appendage of society or the state. One notable aspect of this shift was a new emphasis on continuous economic movement – the notion that change was always afoot in the economic realm, capital was always in motion, and causes were always yielding effects.
  
  Consider the vision of economic activity that one finds in Alfred Marshall’s Principles of Economics (1890) and how it compares with that found in early account ledgers. Instead of presenting economic data in a chart, as a series of isolated exchanges, Marshall offers readers a graph, which suggests that there is a natural pathway that the economy is always following.
  
  
  Look also at the model of the economy developed by Irving Fisher for his 1892 Yale University dissertation. Advised jointly by physicist J. Willard Gibb and sociologist William Graham Sumner, Fisher illustrated the process of production, price-making, and consumption using a hydraulic machine. More resources flowing through one pipe means less flowing through another, creating new incentives for certain kinds of activity and fewer incentives for others. There is little room for human choice in this model, nor can the economy be forced to behave contrary to its nature by either God or government. Instead, Fisher offers only a predictable cycle of actions and reactions, dictated by natural law.