History of economic thought

Economics is the social science that studies the production, distribution, and consumption of goods and services. The word 'economics' is from the Greek for οἶκος (oikos: house) and νόμος (nomos: custom or law), hence "rules of the house(hold)."

Origin of Economics takes its roots in the natural propensity of human beings to barter, to exchange or trade goods. Whilst there are no records of dogs ever having bartered bones, men has been bartering all sorts of goods since pre-history.

Economics as an independent science, and as we understand the word today, begins with the work of Adam Smith, The Wealth of the Nations. .

Before Smith, Economics was a chapter in political science, the art of managing a State. The list of acceptable definitions for Economics is enourmous. Economics is the study of those activities which, with or without money, involve exchange transactions among people. Economics is also the study of wealth. Several other definitions are acceptable

Paul Samuelson, in his famous book Economics - An Introductory Analysis, defines Economics as:"the study of how men and society 'choose', with or without the use of money, to employ 'scarce' productive resources to produce various commodities over time and distribute them for consumption, now an in the future, among various people and groups in society"

Introduction

In antiquity various philosophers have studied Economics, the most famous of which being Aristotle, who created some important economic concepts in his books Politics and Nicomachean Ethics , both written around 350 B.C.

Aristotle analysed the economic processes around him and was able to define the place of economy within a society that included commercial buying and selling. His economic thought (especially his value theory) is inspiring but sometimes contradictory and inconsistent.

In Book I of the Politics, Aristotle distinguishes between use value and exchange value, defines value as the ability to satisfy wants and demand as being governed by the desirability of a good (i.e., its use value). According to Aristotle, exchange value is derived from use value as communicated through market demand.

Xenophon (420?-355? BC) wrote a book called Economics in which he analyses Socrates' positions on the subject.

Ibn Khaldun (1332- 1406) was a famous historiographer and historian born in present-day Tunisia and is viewed as one of the forerunners of modern historiography, sociology and economics. His best known book is Muqaddimah "Prolegomenon" Khaldun was the first to understand the important interaction of forces between Sociology and Economics. Some researchers have compared Ibn Khaldun to Marx, based on economic theories in section 1, chapter V of the Muqaddimah about "The real meaning and explanation of sustenance and profit or profit is the value realized from human labour".

In the middle ages the economic thought was dominated by the teachings of Roman Catholic Church, with the Scholastics, divided in two main and fiercily opposing schools, the Dominicans (St. Thomas Aquinas and the School of Salamanca) and the Franciscans.