We don't have the economic thought class Monday, but there's a lot of reading so I'm getting started - moving into the mercantilists and other pre-Smithians - and it's amazing how much they knew at that time.
Quesnay has the multiplier. Malthus has effective demand. The mercantilists knew the importance of scarce money (the American mercantilist Benjamin Franklin even explicitly connected that to the interest rate). Cantillon knew about investment under uncertainty.
All the pieces were there to have a Keynesian revolution in the late 18th and early 19th century, but we didn't. Why?
Of course these questions are always tough to answer. Serendipity and fate is as good an explanation as any for these sort of events. Why did Newton come along when he did? There's no real answer other than "just because".
The short intellectual history answer might be "David Ricardo".
The longer historical answer might be "because the 19th century was a period of high marginal efficiency of capital" (in other words, the interest rate didn't need to be all that low to justify investments given extraordinary technical advances).
Keynes himself offers both of these answers.
It's a futile thing to muse on in a lot of ways, but still good to think about.
Is the "Just Price" an Antiquated Notion?
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