Ancient economic thought
Economics in the classical age is defined in the modern analysis as a factor of ethics and politics, only becoming an object of study as a separate discipline during the 18th century.
[1][2][3][4] Economic organization 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 homes to earliest examples of codified measurements written in base 60 and Egyptian fractions.
Historians of this period note that the major tool of accounting for agrarian societies, the scales used to measure grain inventory, reflected dual religious and ethical symbolic meanings.
[6] The early law codes from Sumer could be considered the first (written) economic formula, and had many attributes still in use in the current price system today: codified amounts of money for business deals (interest rates), fines in money for 'wrongdoing', inheritance rules, laws concerning how private property is to be taxed or divided, etc.
In the opinion of the Austrian school of economics the first economist is thought to be Hesiod, by the fact of his having written on the fundamental subject of the scarcity of resources, in Works and Days.
Ways and Means is a short treatise on economic development, and showed an understanding of the importance of taking advantage of economies of scale and advocated laws promoting foreign merchants.
[20] Later in the biography, Xenophon discusses the concept of division of labor, referencing specialized cooks and workers in a shoemaking shop.
[1][26][27][28][29] Plato promoted the exercise of temperance in respect to the pursuit of material wealth such that by strengthening moderation a person there-by preserves the order of their psyche.
In The Republic he gives an account of the manner by which a state is to be formed with the skills (techne) of individuals supporting economic sustainability.
350 BCE) was mainly concerned to analyze different forms of a state (monarchy, aristocracy, constitutional government, tyranny, oligarchy, democracy) as a critique of Plato's advocacy of a ruling class of philosopher-kings.
In Politics, Book II, Part V, he argued that: "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.
Later, in book VII Chapter 1 of Politics, Aristotle asserts external goods have a limit, like any other instrument, and all things useful are of such a nature that where there is too much of them they must either do harm, or at any rate be of no use, to their possessors and some interpret this as capturing a concept of diminishing marginal utility, though there has been marked disagreement about the development and role of marginal utility considerations in Aristotle's value theory.
Aristotle suggested three different proportions to analyze distributive, corrective, and reciprocal or exchange transactions: the arithmetic, the geometric, and the harmonic.
[41] 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.
The large body of law was unified as the Corpus Juris Civilis in the 530s by Justinian who was emperor of the Eastern Roman Empire from 526 to 565.
He was a teacher of political science at the Takshashila University of ancient India, and later the prime minister of the Mauryan emperor Chandragupta Maurya.
Chanakya also focuses on issues of welfare (for instance, redistribution of wealth during a famine) and the collective ethics that hold a society together.
The scope of Arthaśāstra is, however, far wider than statecraft, and it offers an outline of an entire civil and criminal code and bureaucratic framework for administering a kingdom, with a wealth of descriptive cultural detail on topics such as mineralogy, mining and metals, agriculture, animal husbandry and medicine.
Chanakya says that artha (sound economies) is the most important quality and discipline required for a Rajarshi, and that dharma and kama are both dependent on it.
[49] This view has been challenged by Thomas Trautmann, who asserts that a free market and individual rights, albeit a regulated system, are proposed by Arthashastra.
[50] Boesche is not summarily critical and adds: Kautilya's Arthashastra depicts a bureaucratic welfare state, in fact some kind of socialized monarchy, in which the central government administers the details of the economy for the common good...In addition, Kautilya offers a work of genius in matters of foreign policy and welfare, including key principles of international relations from a realist perspective and a discussion of when an army must use cruel violence and when it is more advantageous to be humane.
Fan Li (later Tao Zhu Gong; 517 BC – ),[54] Chinese businessman, politician and strategist, wrote on economic issues.
[citation needed] 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.
Economic reforms introduced included low-cost loans for farmers (whom 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 producing tea, salt, and wine, introduction of a local militia to ease the budget spending on the official standing army of 1 million troops, and the establishment of a Finance Planning Commission staffed largely by political loyals so that his reforms could pass quickly with less time for conservatives to oppose it in court.
To some degree, the early Muslims based their economic analyses on the Qur'an (such as opposition to riba, interest), and from sunnah, the sayings and doings of Muhammad.
[56] Persian philosopher Nasir al-Din al-Tusi (1201–1274) presents an early definition of economics (what he calls hekmat-e-madani, the science of city life) in discourse three of his Ethics: "the study of universal laws governing the public interest (welfare?)
[59] Persian philosopher Ibn Miskawayh (born 1030) notes: "The creditor desires the well-being of the debtor in order to get his money back rather than because of his love for him.
But already by that time numerous Muslim scholars had written on economic issues, and early Muslim leaders had shown sophisticated attempts to enforce fiscal and monetary financing, use deficit financing, use taxes to encourage production, the use of credit instruments for banking, including rudimentary savings and checking accounts, and contract law.
Abu Yusuf was chief jurist for Abbasid Caliph Harun al-Rashid, for whom he wrote the Book of Taxation (Kitab al-Kharaj).
