History of Economic Thought

ECON 311-001
Boise State University
Fall 2015
Professor D. Allen Dalton
 Syllabus
Texts
Expectations of Students
Grading
Papers
Weekly Problem Sets and Take-home Final
Class participation
On-line Resources
Class Website
Resources
Grading Guidelines (Papers and Participation)
Course Outline and Readings
Course Introduction
 Economics
Men undoubtedly behaved economically for many
centuries before they undertook to analyze
economic behavior and arrive at explanatory
principles. At first, this analysis was more implicit
than explicit, more inarticulate than articulate,
and more philosophical and political in mode
than economic. But in the face of ubiquitous and
inevitable scarcity, the study, in various forms
and for various proximate purposes, went on.
- Joseph Spengler and William Allen, Essays
in Economic Thought: Aristotle to Marshall,
Rand McNally, 1960, p. 2.
Why study the History of
Economic Thought?
 Why should one study the History
of Economic Thought?
A.Isnt modern economic theory (as found in
textbooks and taught in courses) the apex of the
progressive development of the science?

B.As a positive science, dont economists shed

false theories and adopt true theories?

If A and B are true, why study the mistakes of the

past?
Why should one study the History
of Economic Thought?
Come to appreciate that most modern ideas
have long histories - that there is little new
under the sun.
Recognize that many theories are short-lived
and that they often reflect the concerns of a
particular time period, and thereby come to a
critical understanding of contemporary theory.
- Bruce Caldwell, Syllabus, History of
Economic Thought, EC 555, Fall 2003,
UNC-Greensboro.
Why should one study the History
of Economic Thought?

the past has a useful purpose and, yes, study of the

history of economics is important for the
contemporary student of economics.
- Vaggi and Groenewegen, Prologue, p.xv,
A Concise History of Economic Thought
 My Biases
Politics
Individualist Anarchist
Free Market Anti-capitalist

Economics
Austrian Eclectic
 Acquiescence and Innovation
"Acquiescence means accepting the
framing of a problem, and working on it
from within the terms of the frame. It's a
kind of mental economy, but also a kind of
sloth."
Badim, in Kim Stanley Robinson's Aurora
Jewish, Greek and Roman
Contributions
Judaism: Scarcity and
Interest
 Genesis 3: 17-19
... "Because you listened to your wife and
ate from the tree about which I commanded
you, 'You must not eat of it,' "Cursed is the
ground because of you; through painful toil
you will eat of it all the days of your life. It
will produce thorns and thistles for you, and
you will eat the plants of the field. By the
sweat of your brow you will eat your food
until you return to the ground, since from it
you were taken; for dust you are and to dust
you will return."
 Interest prohibition
Exodus 22: 25-27
Leviticus 25: 35-37
Deuteronomy 23: 19-20
Psalm15
 Greeks: Specialization,
Organization, and Justice in
Exchange
 Hesiod and Xenophon
Hesiod
Works and Days
Scarcity, agricultural management
Xenophon
Oikonomikos
Household/Estate management
Efficient organization
Extension to the city-state and empires
Markets are peripheral
Plato and Aristotle
Plato
Problem of ethics lies in apparent
conflict between individual
pleasure and social good.
Justice defined as co-operation of
the parts in a whole.
Aristotle
Ethics is concerned with individual
happiness; Politics is concerned
with collective happiness.
 Plato
Plato
first recognizable economic theory
explanation of the division of labor in The
Republic
Nature of the ideal state The Laws
exclusion of traders and workers from
citizenship; slavery taken for granted
limitation of markets, private property and
money
 Aristotle
Aristotle
Origin of state does not arise from Platos
patriarchal family, nor the Sophist social
contract, but exchange (self-sufficiency)
ties men together.
Defense of private property against Platos
communism focuses on incentives, peaceful
coexistence, and the opportunity to act
benevolently.
Slavery defended on basis of natural
inequality.
(contra Cynics and Epicureans)
 Aristotle
Aristotle on Wealth-Getting
Differentiates between natural and unnatural
(agricultural and barter v. trade)
Differentiates between wealth and money
Theoretical explanation origin of money
money arises as medium of exchange to solve the
problems of barter
money arises as a commodity with preexisting
(intrinsic) value
Condemnation of usury (unnatural use of
money)
 Aristotle
Aristotle on Justice and Exchange
Types of Justice
distributive (spoils of war)
rectificatory (compensation for loss)
commutative or reciprocal (exchange)
What is Aristotles theory of exchange? Of
justice in exchange?
Is exchange an exchange of equals?
Is justice in exchange an exchange of equals?
Is money the medium by which unequals become
equalized?
 Philosophy
Epicureanism
Emphasis on happiness, pain and pleasure
(foreshadows later utilitarianism).
Stoicism
View that human science is working out of
that which is determined by the supreme
intelligence leads to natural law view of
nature and human action.
Romans: Law and Contract
 Law and Economics
Jurisprudence and Legal Concepts
Adoption of Stoic natural law into legal codes
Law of Corporation
Law of Contract
Justice in exchange as voluntary agreement
Fraud

Land and Political Economy

Commerce v. Agriculture
Slavery and serfdom
Roman conquest and