Economic Thought, History of Economics - Economics - Lecture Slides, Slides of Economics

Download Economic Thought, History of Economics - Economics - Lecture Slides and more Slides Economics in PDF only on Docsity! Early Non-Western and Western Economic Thought Docsity.com Guan Zhong • 725-645 B.C • First to discuss the law of demand • He argued that when a good was abundant, it became light, and its price would fall. When it was “locked away”, it became heavy, and its price would rise. There would be movements of goods into and out of markets based on their lightness or heaviness, with a definite tendency towards one price (or what we would call equilibrium) Docsity.com Main Concepts • Hedonic Calculus • Subjective Value • Diminishing Marginal Utility • Efficiency • Resource Allocation Docsity.com Socrates • Clearly a great thinker, however did not leave written word. • Must of our knowledge comes from two of his students: – Xenophon – Plato Docsity.com Xenophon • The term: Economics is attributed to Xenophon and NOT Aristotle (as some suggest) • OECONOMICUS a efficient management and leadership treatise by Xenophon • Main Concern: Microeconomics Docsity.com Plato • A more “macro” view • An Optimal State: – a rigid, static, ideal situation where any change would be “regressive” • Division of labor necessary to satisfy the many “wants” Docsity.com Plato’s Concept of Society • Specialization is the “NATURAL LAW” • Justice is important for all “CITIZENS” • Property allowed BUT CHECK CORRUPTION • Warriors in later age become “leaders” Docsity.com Aristotle • Plato’s MUST known student • Review “two-party” exchange in terms of marginal utility – Probably as review of legal system in Athens Docsity.com Money and Interest • Money only had one VALUE: Exchange • Thus, accumulation of money of its own sake was not “natural” • Thus, against interest rate Docsity.com Protagoras • Hinted a “democratic” process in the market place • “means” justify the “end” – Unlike Plato who view the “end” justifying the “means” Docsity.com Romans • Main Contributions were in the “empirical working” of business – Need for transportation infrastructure – Need for accurate measurements Docsity.com Scholastic • The Scholastic Methodology: – Pose a Question – Lengthy discussion (at least in appearance with both sides) – Citations – Conclusion (to large extent on the “weight” of the citations Docsity.com Scholastic • Scholastics had to content with four issues – Private Property – Profits – Usury Docsity.com Private Property • The Thomists took a practical stance: they argued that private property was a "conventional" human arrangement with no moral implications, and furthermore, it had the nice side-effect of stimulating economic activity and thus general welfare • Thomanist, those who followed: St. Thomas Aquinas Docsity.com Profit • Should a merchant be allowed to profit from differentials in prices? • The Scholastics replied with a qualified yes, provided the merchant is not motivated by pure gain and profit be only just enough to cover his labor expenses (sacrifices) of the merchant. Docsity.com Profit • They went on to argue that the trader, far from being a parasite, is performing a valuable service and increasing general welfare by meeting different needs. • What is the"just price" (justum pretium) of a good? • They Followed the Golden Rule ("Do unto others as you would have them do un to you") " Docsity.com Profit • The Scholastics decided that a person should not charge more for a good than what he would be willing to pay for it himself. • This not only to make ethical sense but also seemed like a good way to estimate the "usefulness" of a good. • If a bearskin is so useful to you that you would be willing to pay two deerskins for it, then if you own a bearskin you must sell it for two deerskins. Docsity.com