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ECN 3111 HISTORY OF ECONOMIC THOUGHT

ECN 3111 HISTORY OF ECONOMIC THOUGHT. Somebody says: "Of no school I am part, Never to living master lost my heart, Nor any more can I be said To have learned anything from the dead." That statement - subject to appeal - Means "I'm a self-made imbecile." (J.W. Geothe, Den Originalen , 1812).

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ECN 3111 HISTORY OF ECONOMIC THOUGHT

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  1. ECN 3111HISTORY OF ECONOMIC THOUGHT Somebody says: "Of no school I am part,Never to living master lost my heart,Nor any more can I be saidTo have learned anything from the dead."That statement - subject to appeal -Means "I'm a self-made imbecile." (J.W. Geothe, Den Originalen, 1812)

  2. INTRODUCTIONTHE HISTORY OF ECONOMIC THOUGHTOVERVIEWThe standard history of economic thought textbook tends to ignore much of the economic thought outside the American-British-Continental axis. The inclusion of economic ideas and thoughts of the Chinese/Arab/Islamic thinkers is important to overcome the ethnocentrism of the Western dominance in our economic affairs.

  3. Why study history of economic thoughts? • Provides understanding of our past, changing ideas, problems and direction of movement. • To give insights into how economic analysis has reached its present state. • To link with the content of standard economic courses • To appreciate the intellectual efforts that have been made in order to understand economic phenomena and the history of the analytic or scientific aspects of economic thoughts. • To be able to understand the most seminal publications in the history of economic thoughts.

  4. Economic of Thought in the ancient Greek • Economicus in ancient Greek meant “management of household.” • Aristotle (384–322 BC) engaged in economic thinking by distinguishing between “natural and unnatural arts of acquisition.” • Plato (427–347 BC) wrote of the benefits of human specialization within the ideal city-state. This later foreshadowed ideas of Adam Smith on the division of labor. • In the Middle Ages, St. Thomas Acquinas (1225–1274) advanced the idea of just price, neither buyer nor seller take advantage of each other.

  5. Economic of Thought in the Chinese Civilization • Ssu-ma Ch’ien who lived during the 2nd.Century BC was an advocate of laissez-faire. He believed that the goal of economic activity was the attainment of wealth and comfort. • A noted Taoist intellectual Chuang Tzu, lived in the 4th. and 3rd. Centuries BC said that the best way to improve the wealth of a nation is for a ruler to do nothing and leave things alone which is inline with the tenets of Western classical thought • The Book of Wan Tsu argues that the price of goods related to the quantity of money in circulation, which is similar to the modern quantity theory of money.

  6. In fact there are so many other concepts in the Chinese civilization that predate Western economies. These include the existence of a demand curve in ancient Chinese thought, law of diminishing utility, the importance mc = mu, advantage of price discrimination, and the disadvantage of fiat money. (Lecture Review: Chinese Economic Thought Before Adam Smith, Professor Zagros Sadjadi, Reviewed by William Dwyer)

  7. Economics Islamicus • Al-Farabi (870 – 950), a Turkish, a prolific writer who produced more than one hundred books of varying disciplines. His ideas on political economy demonstrated the influence of Plato’s Republic and Laws. Farabi’s views, “the rational ordering of one’s action should not be directed toward economic self-sufficiency but rather toward the achievement of ideal government” (Essid 1987:86)

  8. Al-Ghazali (1058 – 1110) • Born in Khurasan, Iran - is considered as “one of the most powerful personalities and possessed one of the best organized minds that Islam has ever known” (Corbin, 1996: 80-1). His 4 volumes, Ihya-Ulum-al-Din (The Restoration of the Religious Sciences), is the most widely read in Muslim world. In it he spells out his views on the objectives and conduct of economic life.

  9. Ibn Taimiya (1263 – 1328) • Born in Harran, Turkey but lived in Damascus. His vision of economic life is based on the self-interest of individuals. “Within the limits set by the Shari’ah, men know better what is good for them and they are free to make transactions, enter into contracts and conduct their worldly affairs in a just and fair manner” (Islahi, 1988: 15-16) However, self interest activity did not imply laissez-faire. The role of the state included welfare and economic planning.

  10. Ibn Khaldun (1332–1406) • His grandeur magnus opus of Al-Muqadimah is on his insights on the articulation of the Laffer Curve (which was latter picked and developed by Arthur Laffer in 1974). His explanation makes him a candidate for the originator of public choice analysis. Arnold Toynbee (British Historian) describe Al-Muqadimah as “the greatest work of its kind that has ever yet been created by any mind in any time or place”

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