A TABULAR PRESENTATION ON ECONOMIC HISTORY
PERIOD: CONTRIBUTORS: ECONOMIC INSIGHT:
Much concerned with the division of labor
Economic Theories:
Theory of Money money is used as a
medium of exchange in buying goods and
Plato services.
Theory of Market market is not capable of
self-regulation; it requires administrative
control -- proposed Communism -- equal or
just distribution of opportunities to individuals
ANCIENT PERIOD
One of the first thinkers, the very first to apply
his analytical methods to the study of
economic issues
Fairness in Exchange equality of proportion
Monopoly first to recognize the potential
Aristotle injustices caused by a monopoly power
Use Value and Exchange Value:
o Use Value relates to a goods
intrinsic characteristics
o Exchange Value how much the good
can fetch in return for other goods
Book Oiknomikos origin of the words
economists and economics
Xenophon Concept of the Division of Labor
CONTEMPORARY SIGNIFICANCE:
The division of labor is an idea still widely used
today. Its basic idea is that there are a certain
number of jobs that are vital in a state, builders
and farmer for example.
Though Aristotle's economic insights and
influence on the development of economic
thought were considerable, he did make some
errors and failed to fully appreciate that
markets and money-making activities could
provide a mechanism through which order in
society could be produced through individuals
pursuing their own ends. Nevertheless,
Aristotle is one of the great thinkers in the
history of economic thought.
Some scholars today as practically worthless
regard Xenophons works, while others like
Leo Strauss continue to hold them in high
regard.
 Laid the groundwork for Scholasticism The link between the economic ideas of
Lending and Interest to receive usury for Aquinas and modern economic theory is weak
MEDIEVAL
PERIOD

money lent is, in itself, unjust, since it is a sale at best. But despite this fact, some ideas like
Thomas Aquinas of what does not exist. the just price still exerts supporters of
The Just Price - attempted to measure the governments programs such as rent controls
conditions of fair trade or agricultural price owe a debt to the
arguments of Aquinas.

CLASSICAL PERIOD

Mercantilism stimulate industries and Adam Smith is often described as the

develop colonial areas
Capitalism the combination of self-interest,
private property, and competition among
sellers in markets will lead producers as by an
invisible hand to an end that they did not
intend, namely, the well being of society.
Laissez Faire in a market situation, there
Adam Smith should be an absence of government control
over business
Emergence of Capitalism
Free Trade
Liberalism
Nation Wealth Individualism
Subsistence Theory of Wages
Taxation
Jean-Baptiste Says Law supply creates its own demand
Say
"founding father of economics". Adam Smith
developed a great deal of what is now
considered standard theory about the theory
about markets. Two books, Theory of Moral
Sentiments and An Inquiry into the Nature and
Causes of the Wealth of Nations are of great
importance.
Say's Law, a landmark achievement of
integration in economic science, is an essential
foundation for a reality-based macroeconomic
theory. It reflects the interconnectedness,
reality, and harmony of human economic
behavior in a free market economy.
David Ricardo Classical Theory of Capital capital is a
store of values created by labor; part of capital
consists of consumers goods used to sustain
the workers engaged in producing items for
future consumption; part consists of producers
goods channeled into further production for the
sake of expected future returns
Radical Economics the removal of all
political and social restraints on economic
relations, believing that individuals are free to
the extent that their commercial life is
unrestricted
View of Foreign Trade principle of
comparative advantage; if each country
specializes in producing the goods in which it
has comparative advantages, more goods are
produced, and the wealth of both the buying
and selling nations increases
View of the Free Trade
View of Subsistence Theory of Wages
wages are determined by the loss of barely
sustaining laborers and their replacements;
wages cant long depart from the subsistence
level
Since Ricardo, economists have stressed the
importance of capital. Sometimes they have
overstressed it, as in the 1950s when they
worried that the Soviet Union would grow
faster than the United States because it
seemed to be investing more. However, they
have also expanded their understanding of
capital beyond factories and physical
machines. As important now is human capital,
the development of skills that make people
more produce. The two most important ways of
building human capital are by education and
on-the-job training. Today when economists
talk about economic development, human
capital is likely to be as important as physical
capital.
 Utilitarianism reduced all human
experiences to pleasures and a poem,
maintaining that the only function of the state
was to increase pleasure and reduce pain
and that legislation was acceptable as an evil
designed to reduce worse evils
Views on Capital
John Stuart Mill Wage
National Wealth
Free Trade the stronger the demand for the
exports of a country relative to its demand for
imports, the greater the gain from free trade
Final Utility Theory of Value the utility Value, said Jevons, depends entirely upon
or value to a consumer of an additional unit of
a product is inversely related to the number of
units of that product he already owns, at least
William Jevons beyond some critical quantity
Principles of Science, The Theory of
Political Economy and The State in
Relation to Labour
Mill's metaphysics is perhaps less influential
now than it was in his own day. Certainly, for
many decades it stood in the shadow of
idealism. His revival of formal logic inspired the
developments that now date it. In the
philosophy of science, his empiricism has for
the most part stood the test of time. But his
lasting influence has been in the areas of
political and social philosophy. His defenses of
utilitarianism and of liberty shaped the views of
his own generation, and they continue to this
day to inspire and to guide. There are many
who might be critical of details of, say, the
utilitarianism but who are moved by the same
general idea of the good.
utility.
This statement marked a significant departure
from the classical theory of value, which stated
that value derived from the labor used to
produce a product or from the cost of
production more generally. Thus began the
neoclassical school, which is still the dominant
one in economics today.
 Principles of Economics - Marshall
emphasized that the price and output of a
good are determined by both supply and
demand: the two curves are like scissor
blades that intersect at equilibrium.
NEO-CLASSICAL PERIOD
Capital
Alfred Marshall
Father of Austrian Economics
Mengerian System of Price Theory
essential aim is to discover the law of price
Carl Menger formation
When there is no competition among
individuals for a monopolized good it is the
competitor who places the highest value on it.
Modern economists trying to understand why
the price of goods changes still start by looking
for factors that may have shifted demand or
supply, an approach they owe to Marshall. To
Marshall also goes credit for the concept of
price elasticity of demand, which quantifies
buyers sensitivity to price. The concept of
consumer surplus is another of Marshalls
contributions. Although economists have
refined the measures since Marshalls time, his
basic approach to what is now called welfare
economics still stands.
Menger's theory developed economics as a
formal theoretical science that has the purpose
of understanding of the real world. In short,
Menger brilliantly demonstrated the possibility
of economics.
 Most influential and most controversial
economist of the first half of the 20th century
1930s he argued that preservation of ideas on inflation and government. Keynes
capitalism required a greater economic role for
governments, including large public work
programs financed by deficit spending
The General Theory of Employment,
Interest, and Money Keynes proposed that
John Maynard
government spending must compensate for
Keynes
insufficient business investment in times of
recession
MODERN PERIOD
Capital Keynes rejected the theory; it failed
to explain the discrepancy between money
saved and capital formed
Money Supply increased money supply
ultimately only affects prices leading to
inflation and that output is not increased
20th centurys most prominent economist
advocate of free markets
A Theory of the Consumption Function
peoples annual consumption is a function of
their expected lifetime earnings
Milton Friedman Capitalism and Freedom liberated the
study of market economics from its ivory
tower and brought it down to earth
Popularly recognized for monetarism
Quantity Theory of Money price level is
dependent upon the money supply
His ideas on macroeconomics are used today.
His monetary policy of fiat money is used, his
provided thus the theoretical framework for
government spending to achieve economic
recovery in recessions. It is by no means
coincidental that today governments around
the world follow Keynes' recommendation of
higher government spending financed by
higher budget deficits and higher government
debt in today's economic crises to avoid a
depression like the one the world experienced
in the 1930s. Involvement is used.
Milton Friedman's name is chiefly associated
with the renaissance of the role of money in
inflation and the consequent renewed
understanding of the instrument of monetary
policy. He has given us the terms "money
matters" or even, "only money matters", with
the emergence of monetarism