HISTORY OF
ECONOMIC THOUGHT
DR. PETROS KOSMAS
LECTURER
C A S A C O L L E G E
ACADEMIC YEAR 2010 - 2011
LECTURE 2
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Early Pre-Classical Economic Thought:
Ancient Times
 Chanakya’s Arthashastra.
 Hediod’s Works and Days (Poem).
 Xenophon’s Oeconomicus.
 Plato’s Republic.
 Aristotle’s Politics.
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Early Pre-Classical Economic Thought in the
Middle Age: Thomas Aquinas (1225-1274)
 He was an Italian theologian and writer on economic issues.
 He dealt with the concept of a just price, which he considered
necessary for the reproduction of the social order.
 A just price was supposed to be one just sufficient to cover the
costs of production, including the maintenance of a worker and
his family.
 He argued it was immoral for sellers to raise their products
simply because buyers were in pressing need for a product.
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Early Pre-Classical Economic Thought in the
Middle Age: Thomas Aquinas (1225-1274)
 Aquinas discusses a number of topics in the format of questions
and replies, substantial tracts dealing with Aristotle’s theory.
 Two of his questions concern economic issues, mainly relate to
what a just price is, and to the fairness of a seller dispensing
faulty goods.
 He argued against any form of cheating and recommended
compensation always be paid in lieu of good service.
 In his opinion human laws might not impose sanctions for unfair
dealing, divine law did, in his opinion.
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Thomas Aquinas: Human Nature and the
Common Good and the Necessity of Government
 Tyranny should be avoided by the appropriate
selection of kings and construction of institutions.
 A ruler must temper his bodily or sexual powers with
his or her rational faculties.
 The good ruler rarely overpowers his subjects but
channels their activities for the common good.
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Thomas Aquinas: Tyranny and Tyrannicide
 A tyrant seeks to impose his or her own private interests by
force as opposed the legitimate political leader who seeks
peace, moral enhancement, and sufficient distribution of
material goods.
 The tyrant is guilty of sedition from Aquinas’ perspective.
 Resistance to the injustice of the tyrant must be proportional
to that injustice.
 Public authorities should remove a tyrant but appeal to divine
intervention could be an alternative if this option is not
available.
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Early Pre-Classical Economic Thought in the
Middle Age: Duns Scotus (1265-1308)
 One of Aquinas’ main critics in his work Sententiae (1295).
 He thought it possible to be more precise than Aquinas in calculating
a just price, emphasizing the costs of labour and expenses.
 Because buyer and seller usually have different ideas of what price
comprises.
 If people did not benefit from a transaction, in Scotus’ view, they
would not trade.
 He defended merchants as performing a necessary and useful social
role, transporting goods and making them available to the public.
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Feudalism
 Aim: How did feudalism restructure the society, government,
and economy of European countries?
 Do Now: What is feudalism? What was life like for the
peasants?
The socioeconomic system that preceded Capitalism in Western
Europe.
Development of Feudalism
 From 800-1000 Vikings invaded Western Europe constantly
which meant they would loot, steal, and kill if necessary.
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CONSTRUCTING THE PYRAMID OF THE SOCIAL
CLASSES IN THE PERIOD OF FEUDALISM
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CONSTRUCTING THE PYRAMID OF THE SOCIAL CLASSES
IN THE PERIOD OF FEUDALISM
SERFS AND FREEMEN
90% of the population
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CONSTRUCTING THE PYRAMID OF THE SOCIAL CLASSES
IN THE PERIOD OF FEUDALISM
LESSER NOBLES
(KNIGHTS)
LABOR
PROTECTION
SERFS AND FREEMEN
90% of the population
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CONSTRUCTING THE PYRAMID OF THE SOCIAL CLASSES
IN THE PERIOD OF FEUDALISM
POWERFUL
NOBLES OR LORDS
LAND AND
PROTECTION
LOYALTY AND
MILITARY SERVICE
LESSER NOBLES
(KNIGHTS)
LABOR
PROTECTION
SERFS AND FREEMEN
90% of the population
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CONSTRUCTING THE PYRAMID OF THE SOCIAL CLASSES
IN THE PERIOD OF FEUDALISM
KING
LOYALTY AND
SERVICE
LAND
POWERFUL
NOBLES
LAND AND
PROTECTION
LOYALTY AND
MILITARY SERVICE
LESSER NOBLES
(KNIGHTS)
LABOR
PROTECTION
SERFS AND FREEMEN
90% of the population
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Feudalism: An exchange system
 Political, social, and economic system that worked on the
basis of exchange between kings, nobles, knights, and
peasants.
 Kings gave land to nobles in exchange for money and nobles
allowed peasants to work this land in exchange for protection.
 Kings give land, nobles give protection, peasants give labor.
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Feudal Exchanges
 The Lord’s estate or the land he was given by the
King, was known as a Manor.
 Peasants worked / farmed all day long from sun up
until sun down without breaks in order to pay taxes
and survive.
 Serfs were taxed for everything! Taxes were used to
protect the peasants… (Church Tax, Marriage Tax,
Crops).
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Manorialism
 Manors had churches, mills, farms, and homes for
the peasants who were bound to the manor.
 The economic system or style of economy that
existed on the manors of Europe. It stressed selfsufficiency.
 The serfs/peasants on a manor rely on one another.
The manor becomes self-sufficient: able to function
without outsider help.
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Workers on the Manor
 There were two groups of peasant workers on the
manor:
 Freemen- skilled workers who paid rent and could
leave the manor whenever they wished. (They
usually had a skill needed by others on the manor.)
 Serfs – workers bound to the land by contract with
the nobles. (They had no freedom - they where the
noble’s property.)
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What is a Knight?
 Almost all nobles were knights.
 Training began at age 7, as a page, under the guidance
of the lady of the manor.
 Became squires at age 15 and were trained by other
knights.
 Those deemed worthy were “dubbed” knights.
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Relationship Between Lords and Vassals
 The relationship between lords and vassals made up
a big part of the political and social structure of the
feudal system.

 Vassals had certain duties to perform for the lord.
 All nobles were ultimately vassals of the king.
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Feudal Contract
LORDS
GIVE SERVICE TO
GIVE PROTECTION TO
VASSALS
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The growth of feudalism in Europe during the
Middle Ages was primarily caused by the
1. rivalry between the colonial empires.
2. suppression of internationalism.
3. decline of the Roman Catholic Church.
4. collapse of a strong central government.
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Knowledge Check…
 Why did the Kings give land to the Nobles?
 What did the Nobles do for the Peasants?
 How did the Peasants repay the Nobles?
 How does Feudalism work?
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REVIEW
1)
Everyone owed loyalty to the ________
2)
_______ were really the most powerful. They got _______
from the king.
3)
Lesser nobles (knights) gave _________ _________ in return
for land
4)
_______ were bound to the land. They worked in return for
____________.
5)
__________ were skilled workers. They paid rent to the
______ and were free to move if they wanted to.
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REVIEW
1)
Everyone owed loyalty to the king.
2)
Nobles were really the most powerful. They got land from the
king.
3)
Lesser nobles (knights) gave military service in return for land.
4)
Serfs were bound to the land. They worked in return for
protection.
5)
Freemen were skilled workers. They paid rent to the nobles
and were free to move if they wanted to.
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Feudalism influenced Europe by:
 providing social stability.
 fostering the growth of religion.
 eliminating warfare.
 encouraging formal education
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The traditional villages of India
 peasants were seldom able to change their social status.
 women dominated the political decisions of the local
councils.
 people could choose from a number of different
occupations.
 monarchs exerted absolute power over local governments.
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Feudalism in Japan
 Japan’s social hierarchy was similar but they did not
have knights, they had Samurai.
 The Way of the Warrior: Strict code of Samurai
conduct and loyalty until death.
 Bushido  The Way of the Warrior: Strict code of
Samurai conduct and loyalty until death.
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Exit Slips
 Why did people begin living on manors?
 Why did they accept feudalism?
 How did feudalism change the political, social,
and economic way of life in Europe?
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