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
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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.Isn’t 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, don’t 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
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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 Plato’s
patriarchal family, nor the Sophist “social
contract,” but exchange (self-sufficiency)
ties men together.
– Defense of private property against Plato’s
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 Aristotle’s 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