My first class for graduate Macroeconomics II (ECON 607) was on Wednesday and I began, as I always do, with a very brief overview of the history of macroeconomic thought – a history which begins with Keynes’ General Theory of Employment, Interest and Money (1936). Published in the wake of the Great Depression, the General Theory contained many new ideas which still animate a lot of research and policy intuitions today. Virtually all macroeconomics in the 40 years (roughly) following the General Theory was based to some extent on the Keynes’ ideas or on the Hicksian image of Keynes’ ideas in his IS/LM model. Hick’s IS/LM model was introduced in “Mr. Keynes and the Classics: A Suggested Interpretation” published in Econometrica in 1937. (In the interest of full disclosure, there are many economists who did not, and do not, accept that Hick’s IS/LM model captures the core ideas in Keynes – a future post perhaps.)
As I was talking about this material in class and trying to give the first-year students a sense of how these contributions connected with work going on now, I made the off-hand remark that I didn’t think that it was really worth reading the General Theory as a first year graduate student. I didn’t mean that reading the General Theory is a bad thing to do of course. I just wasn’t convinced it was the best use of the students’ time, at least not at this point in their careers.
My guess is that the important insights of these earlier contributions have been, more or less, adequately incorporated into modern textbooks. I’m fairly sure that few modern biologists read Darwin’s original Origin of Species, and even fewer modern mathematicians read Euclid’s Elements. If you want to have a good understanding of modern geometry and number theory, you should simply read a good college-level mathematics text on the subject. The same holds for the study of evolution. As great as Darwin’s contribution was, our modern understanding of evolution now eclipses his. This is the reason behind my casual dismissal of the idea of reading the original General Theory. If you want a good understanding of these ideas, you are better served by consulting say Mankiw’s intermediate-level Macroeconomics than by reading Keynes or Hicks. For a somewhat more advanced treatment, you can take a look at Chapter 10 in Blanchard and Fisher (1989).
I would guess that the same holds for other revered tomes as well. Is there really good reason to read the original Wealth of Nations or Ricardo’s Principles of Political Economy? I doubt it. The contributions of authors like Smith, Ricardo and Keynes (and many others), are so important that, when they aren’t advertised in bold type, they swim through the background of graduate and undergraduate textbooks. Reading a text like Marx’s Capital is of highly dubious value. True, fewer of Marx’s ideas are present in modern texbooks compared with Smith and Co. and so students are exposed to these ideas less frequently. There is a good reason for this however: many of Marx’s ideas simply don’t have much currency in modern economics.
I could of course be completely wrong. I recall Christy Romer saying that her decision to spend one of her summers in graduate school reading Friedman and Schwarz’s A Monetary History of the United States was one of the best decisions she ever made. In a course on the history of thought, or on the rhetoric of economics, I would expect the students to read selections of the originals. And, of course, there are ideas in the earlier works that are poorly understood, underappreciated or simply forgotten. Remember though, there is a probably a reason these ideas were not incorporated into the contemporary narrative of economics.
But for a graduate student today, the best way to get up to speed is by reading standard modern textbooks. David Romer has already gathered together what he thinks of as the essential components of modern macroeconomics. You will learn more and learn faster by reading Romer’s Advanced Macroeconomics than you will by reading the General Theory.