"Plato feared that if wealth became too important people would start to compete for it. Eventually the state would be ruled by the rich who’d be envied by the poor. People would end up quarrelling and fighting." - Niall Kishtainy
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📌 Key Takeaways - A Little History of Economics
[🏺💰🤔 ] Role of money and merchants in early economics: The first topic of concern for early economists was the role of money and merchants. Ancient Greek philosopher Aristotle, for example, contemplated the concept of money and commerce, considering it unnatural for people to seek profit beyond the needs of their family. He was critical of moneylenders or those who used money to make more money, a concept we now understand as interest.
[👑💰] Emergence of banking and mercantilism: In the Middle Ages, the practice of money lending became increasingly widespread as the merchants of Venice and Genoa began to trade with other cities in Europe and the Mediterranean. This led to the emergence of the first banks, which allowed merchants to store their money and easily settle debts. This period also saw the rise of mercantilism, an economic system where the government controlled the economy to increase state power.
[🏭💭🇫🇷] Development of economic thought during the Industrial Age: François Quesnay, a pre-revolutionary French economist, proposed radical ideas like doing away with taxes on peasants and taxing the aristocrats instead, viewing peasants' work with nature as the ultimate source of a nation’s wealth.
[🎩💷⚖️] Nineteenth-century economic thought and wealth inequality: The industrial revolution in England led to the creation of vast wealth, but it was primarily landowners and capitalists who benefited. Economists like David Ricardo attempted to address this wealth inequality, with Ricardo advocating for free trade as a solution.
[🏛️⚒️🔴] Role of government in the economy and the rise of communism: The early twentieth century saw debates over the role of government in the economy, culminating in the establishment of the world’s first communist state by Vladimir Lenin in Russia. This gave rise to the concept of central planning, where the economy took direction from the government, not the markets.
[🏺💰💭] The role of money and merchants in the economy was the first question for early economists, with figures like Aristotle expressing concern about commerce and the concept of interest. An example is Aristotle's critique of olive farmers focusing on profit rather than sustenance.
[✝️💰🤝] Early Christian thinkers like St. Thomas of Aquinas also had apprehensions about money lending, or "usury". This sentiment eventually softened with the emergence of the first banks in Venice and Genoa, which facilitated trade across Europe and the Mediterranean.
[👑💎🌎] The onset of mercantilism marked the alliance between merchants and European rulers, bringing vast wealth to Europe through the exploitation of foreign lands rich in silver and gold. The establishment of companies like the East India Company further advanced this economic system.
[🏭🔁🌽] As the Industrial Age dawned, economists like François Quesnay proposed radical ideas, such as the abolition of taxes on peasants in favor of taxing the aristocrats, believing that the products of peasants working with nature constituted the true wealth of a nation.
[🎩⚖️🌐] The 19th century saw economists like David Ricardo advocating for free trade as a solution to wealth inequality caused by the privileges of landowners and factory owners. He criticized laws that inflated grain prices and enriched capitalists at the expense of workers.
[🏛️📊🇷🇺] The role of government in the economy became a central question in the 20th century, with Vladimir Lenin implementing Marx’s ideas to establish the world’s first communist state, the USSR. The Soviet economy was subject to central planning, taking direction from the government rather than the markets.
