ECON301: History of Economic Ideas

Unit 1: Ancient Economic Thought   Historians are limited by the documents civilizations leave behind. The earliest examples of recorded history came from the Ancient Near East, between the Nile and the Euphrates, beginning around the 29th century, BCE. Texts from nearly five thousand years ago detail many of the same economic choices we make today, addressing issues like how to measure productivity and output, how to determine the standard unit of economic value, and how best to divide private property. In fact, one of the first known examples of writing was a tax receipt inscribed on a clay tablet in what is present-day Uzbekistan.

Economic ideas have been combined with political, philosophical, and social thought to create general observations about human society. The first economist may have been Fan Li, a pharmacist and royal adviser in the Chinese state of Yue in the 9th century BCE. In the 4th century BCE, the Greeks gave birth to the term oeconomicus, which described household economics, agriculture, and slavery. Around the same time, Indian thought on economics was chronicled by Kautilya, also known as Chanakya, in his lengthy work** Arthashastra. Later, in the 11th century, Islamic thought on economics emerged; the most notable scholar was a Persian, Al-Ghazali. From a historical perspective, you should work to recognize and trace this cross-cultural evolution of economic thought.

As you review the materials in this unit, think about the similarities and differences in the various approaches to economic thought. Remember that ideas may develop independently or may be influenced by earlier authors. Consider how our modern-day assumptions influence our perceptions of these ancient economists and philosophers.

Unit 1 Time Advisory
Time Advisory: Completing this unit should take approximately 11.75 hours.

☐    Subunit 1.1: 0.5 hours

☐    Subunit 1.2: 9.25 hours
☐    Subunit 1.2.1: 2.25 hours

☐    Subunit 1.2.2: 5 hours 

☐    Subunit 1.2.3: 1.25 hours

☐    Subunit 1.2.4: 0.75 hours

☐    Assessment: 2 hours

Unit1 Learning Outcomes
Upon successful completion of this unit, you will be able to: - explain how ancient cultures developed the concept of economics; - analyze similarities and differences in thought; and - examine economic ideas in cultural contexts.

1.1 Political, Economic, and Social Thought in Ancient Egypt and Mesopotamia   - Reading: André Dollinger’s “The Ancient Egyptian Economy” Link: André Dollinger’s “The Ancient Egyptian Economy” (PDF)
Instructions: Read this article, which presents an overview of economic life in ancient Egypt.
Reading this article should take approximately 30 minutes.

 Terms of Use: This material has been used with permission for
non-commercial use by André Dollinger. The original version can be

1.2 Greece and China   1.2.1 Overview   - Reading: The Ludwig von Mises Institute: Murray N. Rothbard’s Economic Thought before Adam Smith: “Chapter 1: The First Philosopher-Economists: The Greeks” Link: The Ludwig von Mises Institute: Murray N. Rothbard’s Economic Thought before Adam Smith: “Chapter 1: The First Philosopher-Economists: The Greeks”(PDF)
Instructions: Read the first chapter of the libertarian political philosopher Murray N. Rothbard’s Economic Thought before Adam Smith on pages 1–27. Although Rothbard is intent on presenting an interpretation of past scholarship that supports aspects of contemporary libertarian economic political thought, in this first chapter he gives a general overview of Hesiod on scarcity; Democritus on subjective value and utility, the influence of supply and demand on value and on time-preference; Plato and Xenophon on the division of labor; Plato on the functions of money; and Aristotle on supply and demand, money, exchange, and the imputation of valuefrom ends to means. Rothbard writes that all of these scholars were focusing on the logicalimplications of a few broadly empirical axioms of human life: the existenceof human action, the eternal pursuit of goals by employing scarce means, and thediversity and inequality among men. He concludes the chapter with a subsection on political and economic thought in ancient China.
Reading this chapter should take approximately 2 hours.

 Terms of Use: Please respect the copyright and terms of use
displayed on the webpage above.  
  • Reading: Wikipedia: “Fan Li” Link: Wikipedia: “Fan Li” (PDF)
    Instructions: Read the biography of Fan Li as well as the 24 rules for business. These rules were written in the 5th century BCE, about the same time as the classical Greek works to follow. The author was both an adviser to the imperial court and a practitioner of medicine. 
    Reading this article should take approximately 15 minutes.
    Terms of Use: This resource is licensed under a Creative Commons Attribution-ShareAlike License 3.0. It is attributed to Wikipedia and the original version can be found here.

1.2.2 Xenophon   - Reading: Project Gutenberg: Xenophon’s *The Economist* Link: Project Gutenberg: Xenophon’s The Economist (HTML)
Also available in:
Google Books
Instructions: Read The Economist, written as a dialogue between Socrates and Critobulus, the son of one of Socrates’s disciples. Socrates asks questions, and Critobulus answers them. This format is typical of many Greek writings designed to present and explain ideas. Notice that when Critobulus asks questions, Socrates replies with a story from Ischomachus, a gentleman farmer. Many historians believe that Ischomachus represents the author’s own thoughts. In other words, it does not matter much who the speakers are; the entire work is a way for Xenophon to express his ideas. Why wouldn’t Xenophon directly write his thoughts in his own voice? Remember what happened to Socrates, who was condemned to death; it was less risky to hide behind the mask of characters.
In the author’s translation, we learn about Xenophon: “Xenophon the Athenian was born 431 B.C. He was a pupil of Socrates. He marched with the Spartans and was exiled from Athens. Sparta gave him land and property in Scillus, where he lived for many years before having to move once more to settle in Corinth. He died in 354 B.C.”
In terms of economics, think about how Xenophon discusses managing a household and agriculture. Pay particular attention to how goods are valued and what constitutes a fair exchange.  
Reading this dialogue should take approximately 5 hours.
Terms of Use: The Economist is in the public domain.

1.2.3 Aristotle   - Reading: Project Gutenberg: Aristotle’s *Politics, Book VII* Link: Project Gutenberg: Aristotle’s Politics, Book VII (HTML)
Also available in:
Google Books
Instructions: Read book 7 of Aristotle’s Politics. Aristotle was born three to four generations after Xenophon. His work is best known for introducing the scientific method and for breaking down the complex into its basic parts. Aristotle’s writing style is direct. Note that he does not use the dialogue technique that we saw in Xenophon’s work.
Reflect on how Aristotle describes the nature of happiness and the role of material goods. As you read, consider the following study question: How does Aristotle’s view of social mobility reflect the concept of comparative advantage?
Reading this book and answering the study question should take approximately 1 hour and 15 minutes.
Terms of Use: Politics is in the public domain.

1.2.4 India   - Reading: Fordham University’s Internet Indian History Sourcebook: Excerpts from Kautilya’s *The Arthashastra* Link: Fordham University’s Internet Indian History Sourcebook: ** Excerpts from Kautilya’s The Arthashastra (PDF)
Also available in:


 Instructions: Read the selected excerpts from books 1–4 of
*Arthashastra.* The authorship of the work is the source of some
debate amongst historians. Kautilya, also known as Chanakya, may
have been the prime minister of an Indian empire in the
3<sup>rd</sup> century BCE, although some scholars trace the work to
some 500 years later.   
 As you read, consider the following study questions: How does the
author view the role of women and marriage? How may slaves have been
treated in their role as economic participants, as the work focuses
on economic punishments for disobeying ethical imperatives?  
 Reading these excerpts and answering the study questions should
take approximately 45 minutes.  
 Terms of Use: *The Arthashastra* is in the public domain. 

Unit 1 Reading Questions   - Assessment: The Saylor Foundation’s “Unit 1 Reading Questions” Link: The Saylor Foundation’s “Unit 1 Reading Questions” (PDF)
Instructions: Complete this set of reading questions, referring to the primary texts for this unit as needed in order to support your ideas. Try to locate a passage which you can draw from and expand upon in order to answer each question, and in your own words, sketch out a brief interpretation of the passage’s meaning. Post your responses to these questions on the ECON301 discussion forum, as well as review and respond to one or two other students’ posts. When you are done – or if you are stuck – check your work against The Saylor Foundation’s “Guide to Responding to Unit 1 Reading Questions” for some notes on possible answers.
Completing this assessment should take approximately 2 hours.