"To get a sense of the important neglected works in classical political economy that remain relevant for us today, it will be useful for modern students to give Robbins’s The Theory of Economic Policy a fresh read. Robbins will introduce the modern reader not only to a philosophical appreciation of the Scottish moral philosophers of the 18th century, but the analytical utilitarians of the 19th century, and what bonds these two traditions in the development of political economy. The key idea that I read in the work is the twin development of classical economics with the evolution and establishment of liberal institutions of law and political organization. The institutional framework was a critical aspect of classical political economy. And a critical lesson for understanding them, and for reasoning about economic problems today, is that economists and social scientists ignore the institutional infrastructure within which social interactions takes place at their own intellectual peril. Economic life never exists in a vacuum, and as such the legal, political and social context must always be accounted for in a direct, transparent, and serious way.
What modern students will learn from reading Robbins’s The Theory of Economic Policy is that the classical political economists had already developed the rudimentary tools of analysis which in the post-WWII era had to be rediscovered in the form of property rights economics (Armen Alchian), law-and-economics (Ronald Coase), public choice economics (James Buchanan) and market process economics (Israel Kirzner). One will also learn that the theorists in the first half of the 20th century, such as Frank Knight, Joseph Schumpeter, Ludwig von Mises, and F. A. Hayek were far closer to the classical political economists than say Paul Samuelson or Kenneth Arrow."