Henry Thornton and the Development of Classical Monetary Economics

Abstract

Students of nineteenth-century economics have held Henry Thornton in high esteem since his 'rediscovery' by Jacob Viner and Friedrich Hayek in the 1920s. Thornton has been praised for the sophistication of his macroeconomic thinking a for the extent to which he developed ideas later associated with giants such as Knut Wicksell and J. M. Keynes. However, the consensus has been that he had little effect on the development of British classical monetary economics. I show that the consensus is wrong by demonstrating that Thornton affected the course of classical thinking in important ways, particularly through his influence on members of the Banking School. Thornton was not simply a precursor of modern thought but was one of the dominant figures of classical monetary economics.