Introduction and Early Economic Thought
1.1 History of Economic Thought
The subject, the History of Economic Thought, may be defined as a critical account of the
development of economic ideas, searching into their origins, interrelations, and, in some cases, their
results. The history of economic thought concerns thinkers and theories in the field of political economy
and economics from the ancient world right up to the present day. Economics was not considered a
separate discipline until the nineteenth century. For example, Aristotle, the ancient Greek philosopher,
in his works on politics and ethics have thought of ‘art of wealth acquisition’. He also considered the
question whether property is best left in private or public hands. In medieval times, scholars like Thomas
Aquinas argued that it was a moral obligation of businesses to sell goods at a just price. Economic
thought evolved through feudalism in the Middle Ages to mercantilist theory during the Renaissance
(when people were concerned to orient trade policy to further the national interest). The modern
political economy of Adam Smith appeared during the industrial revolution, when technological
advancement, global exploration, and material opulence that had previously been unimaginable was
becoming a reality. All these and further developments are subject matter of history of economic
thought.Changes in economic thought have always accompanied changes in the economy, just as
changes in economic thought can propel change in economic policy. Economic thought has at times
focused on the aspects of human nature such as greed and selfishness that generally work against the
good of all; at other times, economic behaviour has been seen as self-regulating and working toward a
common purpose. As contemporary economic thought deals with the issues of globalization and the
emergence of a global economy, economists have turned to the multitude of other disciplines which, like
economics, developed independently. Building on their discoveries, and united with them in pursuit of
the common goal of benefiting human society, economic thought may be on the road to achieving a new
level of understanding.
There are several ways to present the history of economic thought. (i) to analyse the changing
nature of economic theory in conjunction with the social and economic development of society (ii) to
emphasize economic thinking as part of the main currents of philosophical and political ideas (iii) to
emphasize the internal dynamics of the science where new insights and results emerge as a
consequence of economists’ awareness of the shortcomings of the present state of the subject.
1.2 Economic History
Economic history is different from history of economic thought. Economic history is the study of
the economic aspects of societies in the past; the history of the economic use of resources land, labour
and capital; or the examination of the past performance of economies. It is concerned with how people
lived most of their lives, how many were born and died, how they earned and spent, worked and played.
Such variants, however, reveal little more than the definition which once said simply that it was the sort
of history which required a knowledge of economics; though they are an advance on that which defined
an economic historian as one who wrote as little history as possible for as much money as possible.
