Medieval Economic Thought
There is no unanimity among writers, on the span of time covered by the middle ages which began with the fall of the Roman Empire in 476 A.D. According to Dr. Ingram and others the period came to close in 1300 A.D. at which time economic thought and essential society features had reached their climax. But the transition to the medieval society was not complete by that time. Some modern writers, therefore, believe that the period should end with the fall of Constantinople in 1453 still others believe that the geographical discoveries of economic thought. Moreover, the contributions made by Gabriel Biel the last of the school-men, should not be ignored. Hence the period should end roughly in 1500. The middle ages cover a vast span of about one thousand years which is divided into two parts-1) from 476 to the 11th century known as the dark ages in which static or stagnant economy prevailed and 2) from the 12th to the 15th century – the period which witnessed commercial and economic progress. Feudalism, Before we proceed to discuss the economic thought of the scholastic s or the famous school-men, it is imperative for us to know the structure of society and the influence of the church which had a great impact on contemporary economic thought. The social structure of the medieval period was raised on the foundation of feudalism which appeared in the Western Europe in the course of the 9th century which divided the entire society into two classes- those of feudal Lords and tenants called serfs. Nobles or feudal lords owned large estates and the dependence of people on them made them small sovereigns. The king was not in a position to control them, hence for practical purposes they had become independent rulers and made their own laws. The landless and the poor came under their patronage and they granted their requests for tilling the soil. The relationship between feudal lords and serfs was of a permanent nature. The latter had to pay taxes mostly in kind to the former for tilling their land nor else to pay them in the form of manual labor on their fields. Feudal lords in turn granted them hereditary right of tillage; ensured protection against probable attacks by barbarians and guaranteed justice to them. Another feature of feudal economy was the development of towns and cities which played an important role in stimulating commercial activities. Great cities became strong trading centers during the 11th and 12th centuries. It must be remembered in this connection that crusades or holy wars greatly contributed to the development of communications which considerably helped in promoting trade and commerce and industries opening new markets some of which came to attain international importance, but the most important feature of feudal economy was the predominance of agriculture. Emergence of capitalism, during this period, barter economy was disrupted and money economy was firmly established which gave rise to the problem of modern capitalism. Production began to be carried on in an organized way and the wage system came to be adopted.
Roman Economic Thought
Romans were the men of action.
They built institutions that profoundly influenced the development of law and
politics. They approached the economic problems of the day from the political
standpoints; thus their specific contribution to economic thought is very
little. Cicero commended the traditional roman virtue of public service. Though
he did not possess original ideas, this statements became incomparably the most
important single literary means for spreading them throughout Western Europe.
He said that though all men were not equal in learning , yet in the possession
of reason, in their psychological backstage and in their sentiment towards good
or bad they were alike. To him, equality was
a moral requirement and state , a moral community or corporate body
which existed to supply its mean less the advantages of mutual aid and just
government. There consequence follow from these observations:-
a) Since state in the common
property of people , it’s authority arises from their collective power.
b) Political power when exercised
rightfully and lawfully becomes the corporate power of people.
c) State is always subject to the law of God or to moral or natural law.
To Seneca, it was the moral duty
of a good man to offer his services in some capacity or the other. He
considered society more important than state. A good man renders services to
humanity even though he has no political power. He does so by piety of his
moral kinship to follows. According to
him , a man who by virtue of his thought becomes the teacher of mankind fills a
place nobler and more influential than the political ruler. Seneca’s thought
tended towards humanitarianism. Agriculture, Cato, Varro, Pliny, Columella and Paladius praised agriculture
and were chiefly interested in the improvement of agriculture technique. They
favored small scale farming and decried the maintenance of large estates which
were worked by slave labor. Cato regarded an agricultural estate of 150 acres
of olive groves and 62 acres of vine-yards as the ideal one. Varro advised crop
growing and stock breeding. All of them supported the back to nature movement
to increase food production and wrote semi-technical books on rural economy.
According to the Pedius, the prices of things were discerned neither with reference to fill, nor
to their utility to single individuals, but had a common validity. They did not
develop their ideas on value. According to them, price was determined by the
forces of demand and supply. In due course of time the concept of just price
developed which showed some regard for ethical considerations. They also
recognized the importance of wants and utility but not as a potential factor.
Cicero observed that the only limit to the valuation of such things was the
desire which anyone had for them for it was difficult to limit price unless
desire was first limited. Thus Roman state interfered with economic matters and
commercial regulations in difficult times. Fines were imposed on merchants who
had stored up food grains in the expectation of high prices, Officers were
appointed to inspect the goods which were put on sale and the entire quantity
was confiscated if a fraud was detected. The Exportation of precious metals was
banned. Instances of traffic regulation are not wanting. In times of financial
stringency the Government established a public bank to assist professional
bankers.
Greek Economic Thought
During the days of Homer, Greece
enjoyed complete economic self-sufficiency . A poem composed in the 7th
century B.C. by Hesiod, telling farmers the true principles of agricultural
economy, reveals the nature of economic thinking as theoretic. When tribal
bonds were broken, society was divided into classes, and came to be ruled by a
landed aristocracy. Agricultural exports led to the impoverishment of the
peasantry and the interests of merchants and landowners clashed. The Greek
economic was never treated as a separate subject. It was inextricably bound up
with political science and ethics. Religion was part of the machinery and the
mystery of the state. There was absence of a connected system of economic
thought because the state was founded on slavery and the work of craftsmen was
regarded as in incompatible with a life of virtue. The ordinary business of life,
excepting agriculture, was despised. The economic ideas of ancient Greeks are
contained in the teachings of Greek philosophers- Plato and Aristotle and in the
writings of the contemporary historian –Xenophon and Epicurus.
Plato and Aristotle sought a unified
science of society. Their economic ideas were embedded in the institutional
arrangements of the time. In a sense, they saw several key concept of the 18th
and 19th century discussions. Perhaps they seen better economists in
the 20th century, in which social students are becoming discontented
with the severe specialization of their subjects. Plato-the
world-renowned Greek philosopher and pupil of Socrates, who had traveled in
North Africa. Southern Italy and Sicily, was a teacher in the Athenian Academy.
He accepted patrimony only which was sufficient for this maintenance. His books
are in the form of philosophical dialogues. Two of them – The Republic and the
Laws are very important from the economic point of view as they reveal his ideas
about the origin of state, division of lab-our etc. The organized city of Greek
know as polis was equivalent to a modern state. Plato attributed the origin of
a city state to economic considerations. He stated in The Republic that a state
arose, out of the needs of mankind and as people had many wants, many persons
were needed to supply them and when helpers and partners lived together in one
habitation the body of inhabitants was termed a state. Plato based the
conception of a city state on the economic wants of human beings. The idea size
of a state, according to him, should be such as it can be conveniently
administered and in which all citizens may know each others. Thus, it should
neither be too big nor too small. A city state comprising 5,040 citizens was
considered an ideal organization . But if the number showed a decreasing
tendency, prizes might be offered to encourage the growth of population and if
it rose beyond the proposed number; new colonies could be established. The
ideal city state which was to be ruled only by an intelligent and planned
government should have classes. Among the ruling class were included
philosophers whose virtue was wisdom, aristocrats who were the man of culture
and high breed, and warriors whose virtue was courage. All these men enjoyed
common ownership of property. The main function of the idea city state was to
ensure happiness to every one. Which could be possible only with virtue and
justice.
Ancient Economic Thought
In the primitive society there was imbalance between wants and
satisfaction civilization being in its infancy, there was lack of effective
incentives towards economic activities. The old economic order was virtually
static which did not need any elaborate explanation. It was only during the
days of a highly development stages of tribal economy that division of labor
appeared due to an increase in population and productive skill and commodities
began to be produced for exchange. Anthropologists have failed to provide
information regarding the economic practices which accompanied this per-scientific complex economic transformation. Contemporary legends are the
treasure-house of those ideas and practices and their information is gleaned
from the archaeologists, from collections of myths and from history preserved
in cuneiform and hieroglyphic writings. The economic thought of Hebrews is
contained in the old testament the period of which covers a vast span of about
2,350 years . Theirs was an organized tribal economy functioning under normal
conditions. In comparison with the influence
of scientifically developed modern economic theories, the scattered
economic ideas of Hebrews and their economic practices exercised more control.
To quote Eric Roll-“the views of Hebrew prophets, set in the ethical system of
a patriarchal society, may appear extremely primitive to modern economist but
their power to influence men’s minds is not necessarily inferior to that of
many a refined and scientific theory actually, it is often great”. In those
biblical days land was the main form of property. Wealth was measured in land,
number of slaves, personal talents, animals and pieces of silver and other
precious metals. The owner of a plot of land was the owner of all resources
above and below the surface of land. People attached great important to
hereditary ownership and land could be sold only when all the members of the
family agreed. According to the inheritance laws, the first claim on property
went to the eldest son. If there was no son, it went to daughter and in the
absence of daughter it might go to brother, uncle etc. As people had passed
from the pastoral stage and had permanently settled, agriculture became their
main occupation. According to H.E. Barnes, settled agriculture with a certain
degree of permanence first appeared in Egypt. The usual practice was to leave
the land fallow during the 7th year for recuperation. It was a shower of “rest
unto the land” in modern economic agricultural economy it is necessary for soil
conservation. The sixth of agriculture productivity was exceptionally
productive which was generally expected to produce food for the next three
years.
Theoretical Approaches
There has been a , important
amount of difference, among scholars and philosophers as to the method of
approach that should be adopted for the study of the economic science, and its
scope. One group of economic thinkers emphasizes wealth-getting activities of
human beings, whereas the other laws emphasis on the effect of consumption on
the economic opportunity of national and door sill another thinkers, in the ability of collectivization and
capitalization. Thus there are several approaches to the study of the subject,
as detail below:-
1)Chronological approach,
2)Conceptual approach, 3)Motivational approach,
4)Philosophical approaches, 5)Classical deductive approach, 6)Historical
approach, 7)Neo-classical approach, 8)Welfare approach,9)Institutional
approaches, and 10)Keynesian approach.
According to the chronological
approach which follows the traditional historical method and does not admit of
any dominant principal, economic ideas can be presented in a chronological
sequence as there have been amplify by
different economists and school of thought. It enables the reader to study the
development of economic theories and institutions. The present economic ideas
are connected with the past ideas with the thread of continuity and on
examining their evolutionary process, he will find that they are part of a
continuous growth.
The conceptual approach traces the
evolution of economic concept or ideas without laying any special emphasis on
the dependence of thinking and
dominance. This may be called an ideological approach according to which the
development of concept is given more importance than a contributor or a school
of thought. But as is well-known, economic thinkers have not confined
themselves to the development of any one particular idea or theory. In fact ,
the majority of them have expressed their views on several issues.
The motivational approach aims at
rationalizing economic ideas and motives for the purpose of translating
“certain economic behavior”. It treats economic as a phase of socio economic
development and economic motives are given a materialistic interpretation. It
broadly explains that the three classes of society-landlord, laborers and capitalist-are always in struggle with one
another. While treating the problem of distribution Ricardo laid emphasis on
the same struggle which was later viewed by Karl Marx as part of economic development.
The philosophical approach is the
oldest in the history of economic thought which was first applied by the
world-renowned Greek philosopher –Plato. This theoretical approach was applied
by all thinkers and scholars up to Adam Smith, during a period of about 2,000
years in which moral and religious consideration reigned supreme, economic
ideas were based on ethical grounds.
The classical deductive approach
was adopted by classical economists from Ricardo to Chimes, who believed in
universally applicable laws moving from general to particular. But when their
generalizations did not fully conform to the realities of economic life,
variations were regarded as of temporary nature.
The historical approach was
against the abstract reasoning mentioned above. The universal character of
economic theories was challenged by the historical school which emphasized that
the formulation of economic laws should depend upon a comparative study of the
economic development of various countries. It stressed upon historical facts
and popularized induction.
Thus, the different approach
adopted by the economists of different countries provide to the students of the
subject, a diversified mental discipline, a comparative study of economic ideas
and solutions to embarrassing modern economic problems.
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