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52-544: He viewed the ancient economy as largely stagnant since, among other things, the scope of economic action was not directed to economic or productive growth as is so often the case in modern times: technological innovations therefore went without adoption, large projects were executed for prestige rather than practical benefit, and economic development, or profit maximisation. Such views, and the uncritical acceptance of elite ancient writers' economic mentalités , have been challenged and overturned by archaeological discoveries through

104-449: A Boeotian who wrote the earliest known work concerning the basic origins of economic thought, contemporary with Homer . Of the 828 verses in his poem Works and Days , the first 383 centered on the fundamental economic problem of scarce resources for the pursuit of numerous and abundant human ends and desires. Fan Li (also known as Tao Zhu Gong) (born 517 BCE), an adviser to King Goujian of Yue, wrote on economic issues and developed

156-457: A Greek word, οἰκονόμος , "one who manages a household". The household was the most important economic unit. Of course, they mined, taxed, and traded, but what the ancients did not do was to combine all their commercial activities into an overarching sub-system of society, a giant marketplace where the means of production and distribution responded to market forces such as the cost of labour, supply and demand, trade routes, etc. Moreover, Finley takes

208-725: A bale of linen brought overland from Brittany at great expense be worth more than one which is transported cheaply by sea?... Why should a book written out by hand be worth more than one which is printed, when the latter is better though it costs less to produce?... The just price is found not by counting the cost but by the common estimation. However, as Friedrich Hayek has written, the school rarely followed this idea through systematically. His members thought that authories were sometimes required to intervene and to control prices , especially in monopoly cases or for staples. The opportunity of an economic interventionnism , called arbitrism , wasn't unanimously accepted : if somes thought that

260-533: A bandwidth of more or less just prices. Mercantilism dominated Europe from the 16th to the 18th century. Despite the localism of the Middle Ages, the waning of feudalism saw new national economic frameworks begin to strengthen. After the 15th century voyages of Christopher Columbus and other explorers opened up new opportunities for trade with the New World and Asia, newly-powerful monarchies wanted

312-417: A blueprint of a society based on common ownership of resources. Aristotle viewed this model as an oligarchical anathema . Though Aristotle did certainly advocate holding many things in common, he argued that not everything could be, simply because of the "wickedness of human nature". "It is clearly better that property should be private", wrote Aristotle, "but the use of it common; and the special business of

364-409: A certain point higher taxes discourage production and actually cause revenues to fall. French philosopher and priest Nicolas d'Oresme (1320–1382) wrote De origine, natura, jure et mutationibus monetarum , about the origin, nature, law, and alterations of money. It is one of the earliest manuscripts on the concept of money. His treatise argues how money or currency belongs to the public, and that

416-457: A just price, emphasizing the costs of labor and expenses, although he recognized that the latter might be inflated by exaggeration, because buyer and seller usually have different ideas of a just price. If people did not benefit from a transaction, in Scotus' view, they would not trade. Scotus said merchants perform a necessary and useful social role by transporting goods and making them available to

468-576: A more powerful military state to boost their status. Mercantilism was a political movement and an economic theory that advocated the use of the state's military power to ensure that local markets and supply sources were protected, spawning protectionism . Mercantile theorists held that international trade could not benefit all countries at the same time. Money and precious metals were the only source of riches in their view, and limited resources must be allocated between countries, therefore tariffs should be used to encourage exports, which bring money into

520-511: A piece of land for the Ancient Greeks and Romans was not seen as a capital investment where profits could be obtained from the growing and selling of crops, but used as showpieces to enhance one's status as well as something that was inherently desirable from a traditional standpoint where economics played no part. To illustrate this, Finley turns to one of Pliny's letters where he writes that he will have to borrow money to buy more land. In

572-606: A set of "golden" business rules. Discourses on Salt and Iron in 81 BCE was one of the first recorded debates of state intervention and laissez faire . Hindu texts Vedas (1700–1100 BC) contain economic ideas but Atharvaveda (1200 BC) is most vocal about such ideas. Chanakya (born 350 BC) of the Maurya Empire , authored the Arthashastra along with several Indian sages, a treatise on statecraft, economic policy and military strategy. The Arthashastra posits

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624-644: A surprising extent." There was also the development of an early form of monetarism in response to the introduction of New World gold into the Spanish economy With their reflexions on Contract law and fairness in exchange, the members of the School of Salamanca were often confronted with the concept of value. Thus observing the effect of American silver and gold arrivals in Spain, namely lessening of their values and augmentation of prices, Martín de Azpilcueta established

676-446: Is a dialogue principally about household management and agriculture. Plato 's dialogue The Republic (c. 380–360 BC) describing an ideal city-state run by philosopher-kings contained references to specialization of labor and to production . According to Joseph Schumpeter , Plato was the first known advocate of a credit theory of money that is, money as a unit of account for debt. Plato also argued that collective ownership

728-533: Is best left in private or public hands. In the Middle Ages , Thomas Aquinas argued that it was a moral obligation of businesses to sell goods at a just price . In the Western world, economics was not a separate discipline, but part of philosophy until the 18th–19th century Industrial Revolution and the 19th century Great Divergence , which accelerated economic growth. Hesiod active 750 to 650 BC,

780-629: Is owned in common and there is universal education and religious tolerance, inspiring the English Poor Laws (1587) and the communism-socialism movement. Nicolaus Copernicus In 1517 Polish astronomer Nicolaus Copernicus (1473–1543) published the first known argument for the quantity theory of money . In 1519 he also published the first known form of Gresham's law : "Bad money drives out good". Jean Bodin In 1568 Jean Bodin (1530–1596) of France published Reply to Malestroit , containing

832-400: Is the study of the philosophies of the different thinkers and theories in the subjects that later became political economy and economics , from the ancient world to the present day. This field encompasses many disparate schools of economic thought . Ancient Greek writers such as the philosopher Aristotle examined ideas about the art of wealth acquisition, and questioned whether property

884-537: Is willing to pay. Until Joseph J. Spengler 's 1964 work "Economic Thought of Islam: Ibn Khaldun", Adam Smith (1723–1790) was considered the "Father of Economics". Spengler highlighted the work of Arab scholar Ibn Khaldun (1332–1406) of Tunisia, though what influence Khaldun had in the West is unclear. Arnold Toynbee called Ibn Khaldun a "genius" who "appears to have been inspired by no predecessors and to have found no kindred souls among his contemporaries...and yet, in

936-484: Is worthless, and because it is not useful as a means to any of the necessities of life, and, indeed, he who is rich in coin may often be in want of necessary food. But how can that be wealth of which a man may have a great abundance and yet perish with hunger, like Midas in the fable, whose insatiable prayer turned everything that was set before him into gold?. Thomas Aquinas (1225–74) was an Italian theologian and economic writer. He taught in both Cologne and Paris, and

988-528: The East India Company , he wrote about his experiences in A Discourse of Trade from England unto the East Indies (1621). Sir William Petty In 1662 English economist Sir William Petty (1623–1687) began publishing short works applying the rational scientific tradition of Francis Bacon to economics, requiring that it only use measurable phenomena and seek quantitative precision, coining

1040-421: The costs of production , including the maintenance of a worker and his family. Aquinas argued it was immoral for sellers to raise their prices simply because buyers had a pressing need for a product. Aquinas discusses a number of topics in the format of questions and replies, substantial tracts dealing with Aristotle's theory. Questions 77 and 78 concern economic issues, primarily what a just price might be, and

1092-438: The "primitivists", who argued that the economies of ancient Greece and Rome were dominated by subsistence farming and household-level development; this was in contrast to the "modernists" who viewed economic activities in the ancient world to be highly analogous to modern levels of specialisation and trade. However, Finley rejected placement in this primitivist-modernist debate, instead arguing on different dimensions: whether or not

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1144-475: The 16th and 17th centuries the School of Salamanca in Spain developed economic theory, one of the earliest forms of a study in the economic tradition of the field of economics. Even if his doctrin was influenced by the philosophy of Thomas Aquinas , it sometimes renew the economic thought as such an extent that it was defined as "pro-market, pro-hard money, anti-state in many ways, pro-property, and pro-merchant to

1196-578: The Prolegomena ( Muqaddimat ) to his Universal History he has conceived and formulated a philosophy of history which is undoubtedly the greatest work of its kind that has ever yet been created by any mind in any time or place." Ibn Khaldoun expressed a theory of the lifecycle of civilizations, the specialization of labor, and the value of money as a means of exchange rather than as a store of inherent value. His ideas on taxes were similar to supply-side economics ' Laffer curve , which posits that beyond

1248-468: The ancient economy could be understood in terms of formalist unchanging economic laws (as is argued by neoclassical economics ) or needed to be understood in terms of embedded social values. To show how the economies of Ancient Greece and Rome differed from our times, he first examines how the Ancients lacked even the concept of an "economy" in the way we refer to it in our own times. Economy derives from

1300-403: The clearest statements of mercantile policy, listing nine principal rules of national economy: To inspect the country's soil with the greatest care, and not to leave the agricultural possibilities of a single corner or clod of earth unconsidered... All commodities found in a country, which cannot be used in their natural state, should be worked up within the country... Attention should be given to

1352-407: The country, and discourage imports which send it abroad. In other words, a positive balance of trade ought to be maintained through a surplus of exports, often backed by military might. Despite the prevalence of the model, the term mercantilism was not coined until 1763, by Victor de Riqueti, marquis de Mirabeau (1715–1789), and popularized by Adam Smith in 1776, who vigorously opposed it. In

1404-441: The country... Opportunities should be sought night and day for selling the country's superfluous goods to these foreigners in manufactured form... No importation should be allowed under any circumstances of which there is a sufficient supply of suitable quality at home. Nationalism , self-sufficiency and national power were the basic policies proposed. Ancient economic thought Too Many Requests If you report this error to

1456-406: The exchange rate depend upon international trade and not bankers, and that the state should regulate trade to insure export surpluses. Thomas Mun English economist Thomas Mun (1571–1641) describes early mercantilist policy in his book England's Treasure by Foreign Trade , which was not published until 1664, although it was widely circulated in manuscript form during his lifetime. A member of

1508-483: The fact that the Ancient Greeks and Romans did not have a sophisticated accounting system as well as how imprecise or carefree they are about numerical data to imply the lack of an economy resembling Western modern ones that place exorbitant demands on numerical computations and precise accounting records. He also deals with the roles of orders and status. He argues that because the ancients placed so much emphasis on status, which heavily regulated what commercial activities

1560-586: The fairness of a seller dispensing faulty goods. Aquinas argued against any form of cheating and recommended always paying compensation in lieu of service obtained as it utilized resources. Whilst human laws might not impose sanctions for unfair dealing, divine law did, in his opinion. One of Aquinas' main critics was Duns Scotus (1265–1308), originally from Duns Scotland, who taught in Oxford, Cologne, and Paris. In his work Sententiae (1295), he thought it possible to be more precise than Aquinas in calculating

1612-401: The first known analysis of inflation , which he claimed was caused by importation of gold and silver from South America , backing the quantity theory of money . Barthélemy de Laffemas In 1598 French mercantilist economist Barthélemy de Laffemas (1545–1612) published Les Trésors et richesses pour mettre l'Estat en splendeur , which blasted those who frowned on French silks because

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1664-437: The government or sovereign of the economy has no right to control the value of the currency just so that they can profit from it. Saint Antoninus of Florence (1389–1459), O.P. , was an Italian Dominican friar , who became Archbishop of Florence . Antoninus' writings address social and economic development and argued that the state has a duty to intervene in mercantile affairs for the common good, and an obligation to help

1716-456: The idea of a value-scarcity, first form of the quantity theory of money . They also renewed the aquilian concept of just price , which respects the principle of commutative justice but depends on many factors. The just price have a certain latitude because it's not the result of God's will or of labor but of the common estimation of the people (communis aestimatio hominum). On this Luis Saravia de la Calle wrote in 1544: Those who measure

1768-444: The industry created employment for the poor, the first known mention of underconsumption theory , which was later refined by John Maynard Keynes . Leonardus Lessius In 1605 Flemish Jesuit theologian Leonardus Lessius (1554–1623) published On Justice and Law , the deepest moral-theological study of economics since Aquinas, whose just price approach he claimed was no longer workable. After comparing money's growth via avarice to

1820-413: The just price by the labour, costs, and risk incurred by the person who deals in the merchandise or produces it, or by the cost of transport or the expense of traveling...or by what he has to pay the factors for their industry, risk, and labour, are greatly in error.... For the just price arises from the abundance or scarcity of goods, merchants, and money...and not from costs, labour, and risk.... Why should

1872-552: The late 20th century. Finley argued that ancient economic activity was embedded in a society of political and social values which made it substantively different from modern economies. He argued that the ancient well-to-do were disinterested in production or productivity improvements. Instead, they focused on socially prestigious consumption goods and self-sufficiency. This implied limited trade in all but necessities (mainly food) and luxury goods as well as stagnation in technology and economic thought . Many scholars identified Finley with

1924-402: The legislator is to create in men this benevolent disposition." In Politics Book I, Aristotle discusses the general nature of households and market exchanges. For him there is a certain "art of acquisition" or "wealth-getting", which is necessary and honourable for one's household, while exchange on the retail trade for simply accumulation is "justly censured, for it is dishonorable". Writing of

1976-490: The letter, Pliny does not discuss if this new purchase is an economically wise one in terms of the profits that can be derived from it. The last part of the book, Finley discusses the discrepancies between life in the urban and rural settings. He also writes about how government forces did not play a role in managing the economy and treasury in the same ways modern governments are expected to do in most Western economies. The book has had such an impact on classical scholarship that

2028-432: The native artisans. Slavery heavily influenced the value placed on labour and certain jobs. Thus, the distribution of labour as well as the means of production that one sees in the ancient economy was different from how modern economies function where human capital plays a role in determinant of price as well as on supply. Another relationship Finley discusses is the way the Ancients viewed the value of land. The ownership of

2080-461: The people, Aristotle stated that they as a whole thought acquisition of wealth ( chrematistike ) as being either the same as, or a principle of oikonomia ("household management" – oikonomos ), with oikos meaning "house" and with ( themis meaning "custom") nomos meaning "law". Aristotle himself highly disapproved of usury and cast scorn on making money through a monopoly . Aristotle discarded Plato's credit theory of money for metallism ,

2132-442: The poor and needy. In his primary work, "summa theologica" he was mainly concerned about price, justice and capital theory. Like Duns Scotus , he distinguishes between the natural value of a good and its practical value. The latter is determined by its suitability to satisfy needs (virtuositas), its rarity (raritas) and its subjective value (complacibilitas). Due to this subjective component, there cannot only be one just price, but

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2184-426: The population, that it may be as large as the country can support... gold and silver once in the country are under no circumstances to be taken out for any purpose... The inhabitants should make every effort to get along with their domestic products... [Foreign commodities] should be obtained not for gold or silver, but in exchange for other domestic wares... and should be imported in unfinished form, and worked up within

2236-470: The prince concerned of public interest is more trustable that greedy merchants, like Domingo de Soto and Tomás de Mercado , others like Luis de Molina , Leonardus Lessius or Juan de Lugo considered that any intervention of the authorities is inopportune owing to the corruption and the clientelism that it'll created. Sir Thomas More In 1516 English humanist Sir Thomas More (1478–1535) published Utopia , which describes an ideal society where land

2288-467: The propagation of hares, he made the first statement of the price of insurance as being based on risk. Edward Misselden and Gerard Malynes In 1622 English merchants Edward Misselden and Gerard Malynes began a dispute over free trade and the desirability of government regulation of companies, with Malynes arguing against foreign exchange as under the control of bankers , and Misselden arguing that international money exchange and fluctuations in

2340-505: The public. Jean Buridan ( French: [byʁidɑ̃] ; Latin Johannes Buridanus ; c. 1300 – after 1358) was a French priest . Buridanus looked at money from two angles: its metal value and its purchasing power, which he acknowledged can vary. He argued that aggregated, not individual, demand and supply determine market prices. Hence, for him a just price was what the society collectively and not just one individual

2392-527: The term "political arithmetic", introducing statistical mathematics, and becoming the first scientific economist. Philipp von Hörnigk Philipp von Hörnigk (1640–1712, sometimes spelt Hornick or Horneck ) was born in Frankfurt and became an Austrian civil servant writing in a time when his country was constantly threatened by Ottoman invasion . In Österreich Über Alles, Wann es Nur Will (1684, Austria Over All, If She Only Will ) he laid out one of

2444-406: The theory that money derives its value from the purchasing power of the commodity upon which it is based: Indeed, riches is assumed by many to be only a quantity of coin, because the arts of getting wealth and retail trade are concerned with coin. Others maintain that coined money is a mere sham, a thing not natural, but conventional only, because, if the users substitute another commodity for it, it

2496-618: The theory that there are four necessary fields of knowledge: the Vedas, the Anvikshaki (philosophy of Samkhya, Yoga and Lokayata ), the science of government, and the science of economics (Varta of agriculture, cattle, and trade). It is from these four that all other knowledge, wealth, and human prosperity is derived. Ancient Athens , an advanced city-state civilisation and progressive society, developed an embryonic model of democracy. Xenophon 's (c. 430–354 BC) Oeconomicus (c. 360 BC)

2548-634: The views brought forward in The Ancient Economy has been labeled "the Finley/Polanyi orthodoxy". Finley covers both ancient economic thought , wealth, the role of a government, the use of slavery, and the tax system. "Indeed, no individual writer ... has attempted [as of 2000] a comprehensive economic overview of the entire classical world since Finley, though period specific, regional or thematic work has abounded". History of economic thought The history of economic thought

2600-563: Was acceptable for those in the upper orders and well as the lower ones, their economy differed from any modern economy where everyone was free and able to participate in whatever legal commercial enterprise. Finley also discusses the institution of slavery which was very prominent in the ancient world. The relationship between master and slave was complex and even among slaves, there was a diversity of societal rankings. Yet despite this complexity, Finley shows how slavery provided free labour that at times had to be curtailed in order to provide work for

2652-484: Was necessary to promote common pursuit of the common interest, and to avoid the social divisiveness that would occur "when some grieve exceedingly and others rejoice at the same happenings." Aristotle 's Politics (c. 350 BC) analyzed different forms of the state ( monarchy , aristocracy , constitutional government , tyranny , oligarchy , and democracy ) as a critique of Plato's model of rule by philosopher-kings. Of particular interest for economists, Plato provided

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2704-476: Was part of a group of Catholic scholars known as the Schoolmen , who moved their enquiries beyond theology to philosophical and scientific debates. In the treatise Summa Theologica Aquinas dealt with the concept of a just price , which he considered necessary for the reproduction of the social order. Similar in many ways to the modern concept of long-run equilibrium , a just price was just sufficient to cover

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