Commodities in Economics: A Brief History
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A review of economic thought in Western Europe since the 15th century reveals two streams of economic thought: interventionist and laissez fairist. The mercantilists saw commodities as complex entities with multiple attributes, some of which are more growth-enhancing than others. Governments intervene to promote commodities with the strongest growth-enhancing attributes. Of necessity, the classical economists built their case for laissez faire by stripping commodities of their complexity so that no commodity could be preferred over another for its growth-enhancing attributes. The neoclassical economists completed this evisceration of commodities in their core competitive paradigm. Almost from the start, however, this evisceration of commodities was challenged by economists from lagging countries eager to catch up with the advanced countries. In the post-War era, the development economists revived the more complex view of commodities to make their case for government intervention in support of economic development in the poorest countries. This period also witnessed a reaction within the neoclassical camp itself against the streamlined view of the economy in the competitive paradigm.