Ancient Economic Thought

References

• Ancient Economic Thought Wikipedia Article

Notes

In the history of modern economic thought, ancient economic thought refers to the ideas from people before the Middle Ages.
Economics in the classical age is defined in the modern analysis ad a factor of ethics or politics, only becoming an object of study as a separate discipline during the 18th century.

Ancient Near East

• Economic organizations in the earliest civilizations of the Fertile Crescent was driven by the need to efficiently grow crops in river basins. The Euphrates and Nile valleys were home to the earliest examples of codified measurements written in base 60 and Egyptian fractions.

• Sumerians around 2000BC understood the relationship between grain and labor inputs.
• Egyptians measured work output in man-days.
• Egyptian fraction and base 60 monetary units were extended in use and diversity to Greek, early Islamic culture, and medieval cultures.
• The city-states of Sumer developed a trade and market economy based originally on the commodity money of the Shekel which was a certain money of the Shekel which was a certain weight measure of barley, while the Babylonians and their city-state neighbors later developed the earliest system of economics using a metric of various commodities.
• Early Law Codes from Sumer which could be considered the first economic policy, which still is in use:
• • Codified amounts of money for business deals
  • Fines in money
  • Inheritance rules
  • Laws concerning how private property is taxed or divided

Ancient Greco-Roman World

Some scholars assert economic thought similar to the modern understanding occurred during the 18th century of the Enlightenment, as early economic thought was based on metaphysical principles which are incommensurate with contemporary dominant economic theories such as neo-classical economics.

• Hesiod
• • Through work men grow rich in flocks and substance - Hesiod
  • The Austrian School of Economics considers Hesiod to be the first economist, by the fact of him writing about the fundamental subject of the scarcity of resources.

• Xenophon
• • Discussion of economic principles are present in his Oeconomicus, Cryopaedia, Hiero, and Ways and Means.
  • He discussed:
  • • stimulating private production through public recognition and prizes
    • taking advantage of economies of scale
    • promoting foreign merchants
    • the comparison between the personal value of goods with the exchange value
    • the division of labor
    • mutual advantage
  • Both Marx and Adam Smith discussed Xenophon.
• Plato
• • He makes a distinction between necessities and luxuries.
  • He promoted the exercise of temperance in respect to the pursuit of material wealth.
  • He discusses the specialization of skills and the division of labor.
• Aristotle
• • Aristotle on property in Politics:

Property should be in a certain sense common, but, as a general rule, private; for, when everyone has a distinct interest, men will not complain of one another, and they will make more progress, because every one will be attending to his own business... And further, there is the greatest pleasure in doing a kindness or service to friends or guests or companions, which can only be rendered when a man has private property. These advantages are lost by excessive unification of the state.

• • He has a moral rejection of usury.

• Roman Law
• • Early Greek and Judaic law follow a voluntaristic principle of just exchange; a party was only held to an agreement after the point of sale. Roman law developed the contract recognizing that planning and commitments over time are necessary for efficient production and trade.

Ancient India

Chanakya

• Chanakya considered economic issues. He wrote the Arthashastra (Science of Material Gain or Science of political economy in Sanskrit). Many of the topics written here are still prevalent in modern economics, including its discussions on the management of an efficient and solid economy, and the ethics of economics. He also focused on issues of welfare and the collective ethics that hold a society together.
• The Arthashastra discussed a mixed economy, where private enterprise and state enterprise frequently competed side by side, in agriculture, animal husbandry, forest produce, mining, manufacturing and trade.
• He discusses law and order in relation to the economy.
• He discussed economic laws and suggests having a court system to oversee and resolve economic, contracts, and market related disputes.

Mahavira

• There are two core political-economic system of the society recognized by the Mahavira. One if Communism and the other Capitalism.
• He found no difference in both these systems because they were both driven by materialism.

Ancient China

Fan Li

• Chinese businessman, politician and strategist, wrote on economic issues.
• Developed gold rules for doing business.
• Discussed the seasonality of businesses

Confucianism and Legalism

• In ancient China, Chinese scholar-officials would often debate about the role government should have in the economy, such as setting monopolies in lucrative industries and instating price controls.
• Confucian factions tended to oppose extensive government controls, while Reform or legalist factions favored intervention.
• The Confucians' rationale for opposing government intervention was that the government should not compete for profit with the people as it would tend to exploit the population whenever it was involved in mercantile activity.
• The Confucian laissez faire was dominant throughout China's history, except in times of war.

Wang Anshi

• One of China's most prominent reformers
• He enacted low-cost loans for farmers (who he considered the backbone of the Chinese economy in terms of production of goods and greatest source of the land tax), replacing the corvee labor service with a tax instead, enacting government monopolies on crucial industries, and the establishment of a Finance planning commission staffed largely by political loyalists so that reforms could pass quickly with less time for conservatives to oppose.

Medieval Islamic World

• The early Muslims based their economic analyses on the Qur'an, and from the sunnah, the sayings and doings of Muhammad.

Early Muslim Thinkers

• Al-Ghazali classified economics as one of the sciences connected with religion, along with metaphysics, ethics, and psychology.

Many scholars trace the history of economic thought through the Muslim world, which was in a Golden Age from the 8th to 13th century and whose philosophy continued the work of the Greek and Hellenistic thinkers and came to influence Aquinas when Europe "rediscovered" Greek philosophy through Arabic translation. A common theme among these scholars was the praise of economic activity and even self-interested accumulation of wealth.