Introduction

Economic ideas and theories are generally the products of existing conditions. Difference in time and
place usually has different situations, and therefore ideas and theories are not the same. There are also
ideas and theories which are considered as impossible dreams, but in the future they may not be
impossible anymore. In te same manner, there were many ideas in the past that were publicly ridiculed.
But at the present these are now realities, and they benefit mankind.

Ideas and theories may be intended to change or improve existing conditions. Keynes became famous
because he was able to offer good theories on how to solve the Great Depression. They prefer to imitate
ideas, manners, products, technology, and economic models of the rich countries, especially the United
States.

This chapter presents the various important economic ideas and theories of development from the
ancient times to the present.

Ancient Economics Ideas

Ancient economic ideas were based on the Holy Scriptures and codes of laws. Such ideas centered on
the ways of making a living. The Bible and the Holy Men regulated exonomic practices and relationships.

The famous Greek philosopher Plato was also against the accumulatiom of wealth through lucraticve
trade or commerce. In his book " The Republic", he explained an ideal state. There is no gap between the
rulers and the ruled because the former are not allowed to own properties, except for what is necessary
to support them.

Another Greek philosopher Aristotle likewise stressed the value of management of agriculture. Like
Plato, he was not in favor too much wealth. However, he disagreed with Plato about communal property.
On the other hand, Xenophon, classmate of Plato when they had been the students of Socrates, was in
favor of capitalism. Just like the other ancient intellectuals, Xenophon considered agriculture as the basis
of wealth.

Medieval Economic Thoughts

Feudalism reached its peak during the Middle Ages in Europe. Agriculture was tge source of livelihood.
Ideas of cooperation developed among the merchants to protect their own interests, and to attain their
common objectives. As a result, merchant guils were organized.
During the later part of the medieval period, the church became very powerful. It was an active
participant not only in religious affairs but also in political and economic activities. The most admired of
them was St. Thomas Aquinas. He preached distributive justice and compensatory justice. The former
refers to fair distribution of goods among the members of society. Tge latter means just wage and price.

The Economic Doctrines of Mercantilism

The great thinkers of Europe, like Machiavelli, Bodin, and Serra, influenced much the growth of
capitalism. They asserted the supremacy of the state over all other sources of powers, including the
church. Economic ideas then were focused on the vital role of the state in economic development.

Wealth came from gold and silver. And a wealthy nation was considered prowerful and prestigious.
Countries with gold and silver mines could acquire such precious metals through favorable international
trade, and colonies with gold and silver mines.

To achieve the objectives of mercantilism, manufacturing was given top priority. Agriculture was no
longer appreciated because of its natural shortcomings. Serra claimed that manufactured products could
be sold readily abroad than agricultural products.

It was Thomas Mun, who provided the ways of achieving favorable foreign trade. Being an experienced
foreign trader himself, he was a real expert. Foreign trade is favorable if exports are greater than
imports. The writings of Mun, an Englishman, dominated the whole concept of mercantilism in Europe.

Physiocracy- Rule of Nature

Many significant changes took place in Europe, especially in England and France, during the 18th
century. Such developments included the growth of cities, the increase of wealth, the creation of
science, and the search for better ideas. The enlightenment in England and France greatly stimulated
thinkers and philosiphers to question the old doctrines and thoughts.

The expansion of science and the increasing number of various inventions opened up some realities of
life and the world. People started to rayionalize human behaviour and the existence of institutions. They
concluded that its was not the will of God that created the conditions in the world. Rather, it was the
product of causes and effects which conformed to the laws of nature.

Philosophers claimed that people are poor because they violated the laws of nature. A man who
neglects his health has a greater chance of getting sick. On the other hand, those who obey and follow
the laws of nature were believed to promote their own good. In the same manner, an economy or
society that conforms to such laws would be successful, according to the thinkers.