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• 1 2017-07-20T09:13:01-07:00 Political Economy to Economics 11 plain 2017-10-07T09:17:55-07:00 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 an 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 in potentially predictable ways.
  
  Consider the vision of economic activity that one finds in W. T. Foster’s "The Circuit Flow of Money" (1922) and how it compares with that found in early account ledgers. Instead of presenting economic data as a series of isolated exchanges gathered in a chart, Foster offers readers a fluid pipeline of financial flows, suggesting the natural and continuous movement of economic activity.
  
  
  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 processes 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 was little room for human choice in this model, nor could the economy be forced to behave contrary to its nature by either God or government. Instead, Fisher offered a predictable cycle of actions and reactions that could be made to work better by building knowledge of the underlying mechanisms.