Monday 14 March 2016

Lev 25:23 Ancient economics

The modern science of economics is said to have begun with Adam Smith and "The Wealth of Nations", published in 1776. But there were plenty of economists in the ancient world.

In the first cities:
The Erlenmeyer tablets give a picture of Sumerian production in the Euphrates Valley around 2200-2100 BC, and show an understanding of the relationship between grain and labor inputs (valued in "female labor days") and outputs and an emphasis on efficiency.
In ancient Greece: Xenophon for example published four books on the topic, usually focusing on how to run an household efficiently. One of them was even called "Oeconomicus" (Economics). Plato and Aristotle had lengthy dialogs on politics, which of course guides what is economically possible.

In the Roman world: the principles of trade and just economics were worked out. For example, "tantum bona valent, quantum vendi possunt" ("goods are worth as much as they can be sold for").

Buit in all this the blind spot was taxation. No ruler would let go of their ability to take whatever they wanted, when they wanted, and no land owner would pay more than they were forced to. This had a disastrous effect on economic growth. For example, the Roman Empire fell when the big land owners retreated to their great estates, little tax was paid, and the system collapsed. Pliny the Elder saw the problem in its early days, in his famous phrase,
"Latifundia Perdidere Italiam"
("The Great Estates destroyed Italy")

In my view the greatest ever economist was Moses, because he solved the problem of taxation. But kings and landowners didn't like his solution, so they invented Bible Goggles: "that is not what he really meant, his book was really about the supernatural". More on Moses in later posts.

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